AUO Corporation
2023 Annual Report
AUO Spokesperson
Name: Benjamin Tseng
Title: Chief Financial Officer
AUO Deputy Spokesperson
Name: Lydia Tsai
Title: Senior Manager of Corporate Governance.
TEL: 03-500-8800
Email: auo@auo.com
Corporate Headquarters, Branches, and Fabs
Corporate Headquarter: No. 1, Li-Hsin Rd. 2, East Dist., Hsinchu Science Park, Hsinchu City
Taoyuan Branch: No. 1, Xinhe Road, Longtan Dist., Taoyuan City
Address of Fabs: Fab L3B:
No. 1, Li-Hsin Rd. 2, East Dist., Hsinchu City
Fab L3C(L5):No. 23, Li-Hsin Rd., East Dist., Hsinchu City
Fab Longke:
No.228, Longke St./No.288, Longyuan 1st Rd./ No.338, Longyuan 1st Rd./ andNo.338-1, Longyuan 1st Rd., Longtan Dist.,Taoyuan City
Fab Longtan:
No. 1, Xinhe Road, Longtan Dist., Taoyuan CityFab Huaya:
No.189 Hwaya Rd. 2, Guishan Dist., Taoyuan CityFab Taichung:No.1, JhongKe Rd./ No.2, Keya Rd./ and No.3, Keya Rd., Xitun Dist., Taichung CityFab Houli:
No.1, Machang Rd., Houli Dist., Taichung CityFab Tainan:
No.36, Keji 1st Rd., Annan Dist., Tainan CityFab Kaohsiung: No.9, Luke 3rd Rd., Luzhu Dist., Kaohsiung City
TEL: 03-500-8800
Stock Transfer Agent
Company: Taishin Securities Co., Ltd. Stock Affairs Department
Address: B1, No. 96, Sec. 1, Jianguo N. Rd, Zhongshan Dist., Taipei City
Website:www.tssco.com.tw/stocktransfer
TEL:02-2504-8125
Certified Public Accountant (CPA) and accounting firm for the financial statements of the most recent year:
CPA: Chi-Lung Yu and Wan-Yuan Yu
Company: KPMG Certificated Public Accountants
Address: 68F, No.7, Sec.5, Xinyi Rd., Taipei (TAIPEI 101Tower)
Website: home.kpmg.com/tw
TEL: 02-8101-6666
Offshore secondary exchange and disclosure information available at:
Offshore secondary exchange: U.S. OTC market
Website: www.otcmarkets.com
Company code: AUOTY
Company website: www.auo.com

Contents

Contents
Chapter 1

Letter to Shareholders

2

Chapter 2

Company Profile

5

Chapter 3

Corporate Governance

6Chapter 4

Capital Overview

63

Chapter 5

Operational Highlights

68

Chapter 6

Financial Highlights

91

Chapter 7

Review of Financial Conditions, Operating Result, and Risk Management

99

Chapter 8

Corporate Sustainability

107

Chapter 9

Special Disclosure

122

Appendix 1

Consolidated Financial Statements with Independent Auditors' Reportfor the most recent years

137

Appendix 2

Parent Company Only Financial Statements with Independent Auditors'
Report for the most recent years

264

AUO Corporation
2023 Annual Report1Chapter 1 Letter to Shareholders
Dear Shareholders,
Looking back at 2023, efforts across the entire supply chain helped normalizing overall channel
inventories of consumer electronic products back to healthy levels, leading to gradual stabilization ofpanel prices. However, unfavorable factors such as war, inflation, and interest rate hikes continued toaffect global economy last year, hindering the full recovery of end demand. Despite the challenging
business environment, the Company's overall revenue increased by a modest 0.5% compared to 2022,
reaching NT$247.96 billion. The main driver was the revenue from vertical business, which grew bynearly 20% from the prior year, effectively offsetting the decline in revenue from panel business.
AUO’s overall loss also narrowed compared to 2022.
Although the panel industry has experienced fluctuations in recent years, the Company's operations
have consistently generated cash inflows, which have helped to lower the debt ratio and improve ourfinancial profile. A stable financial structure and ample cash resources give us the confidence toaccelerate our biaxial transformation strategy, continuing to focus on increasing the higher
value-added products and expanding our vertical business. We will elaborate the progress and pointout the highlights of our transformation over the past year from three perspectives: next-generation
display technology, mobility solution business, and vertical business.
 Next-generation display technology:
In the panel business, AUO mainly focuses on next-generation LED display technologies,
progressing from Mini LED backlight and high-end direct-view LED display to Micro LED. Thisapproach has offered us a comprehensive technology platform and ecosystem, enhancing AUO's
industry profile and solidifying our leadership as the primary supplier of display products.
 Mini LED backlight: Mini LED is used as the backlighting for LCD panels, offering advantages
such as high contrast, wide color gamut, and low power consumption. In the recent years,
AUO has applied this technology in automotive, high-end medical, and gaming displays, making
it a competitive technology against OLED.
 High-end direct-view LED display: Displays that use LED chips directly as pixel units canovercome the size limitations of existing display technology. It also offers many advantages,
including high brightness, wide color gamut, high contrast, low power consumption, and long
lifespan. AUO has applied this technology in spherical display, solution for situation room, LED
virtual production studio, and other field applications.
 Micro LED: In 2023, AUO led the market with the shipment of 1.39-inch Micro LED display forsmartwatches. This milestone demonstrates AUO's capability in advancing Micro LED
technology toward commercialization and mass production. In the future, Micro LED will be
introduced into applications such as automotive displays, super large-size tiling TV, andtransparent displays. These applications showcase the technology’s advantages, such as highbrightness, high reliability, longer lifetime, as well as ultra-high transparency, flexibility, andbendability.
2

AUO Corporation
2023 Annual ReportLetter to Shareholders

 Mobility solution business
Benefiting from the booming trend of electrical vehicles and autonomous driving, displays are
expected to play a crucial role as the human-machine interface in the next-generation smart
cockpits. AUO has been deeply committed to the automotive display market for years, and ranked
top three among global automotive display suppliers. With cutting-edge display technology as thecore and in-depth cooperation with ecosystem partners, we strive to develop the Company into a“Smart Cockpit Display Solution Provider.” In 2023, our revenue from mobility solution businessexceeded NT$43 billion, demonstrating strong momentum with an annual growth rate exceeding
25%. In our journey towards transformation, this sector is expected to become one of AUO's
important growth engines.
 In October 2023, AUO's Board of Directors approved the acquisition of Behr-Hella
Thermocontrol GmbH (BHTC) in Germany.
 BHTC specializes in human-machine interfaces and climate control systems for the automotive
industry. It possesses world-leading resources and R&D capabilities, with Tier 1 supplierabilities, and maintains deep collaborations with global automotive OEMs. The merger is
expected to be completed in the first half of 2024. AUO will leverage BHTC’s Tier 1 abilities,
track records with automotive OEMs, and global sales channel and production bases toaccelerate the goal to transform into a “Smart Cockpit Display Solution Provider.” AUO debuts at the US Consumer Electronics Show (CES) in January 2024
 The year 2024 marks AUO’s first-ever participation in CES as a Smart Cockpit Display Solution
Provider and its first entry into the main exhibition hall. The Company was proud of earning
two innovation awards recognizing our breakthroughs in transparent and rollable Micro LED
displays for automotive applications. Among them, the "Interactive Transparent Window"
integrates a highly transparent Micro LED display into vehicle side windows, equipped withtouch functionality. This exhibit won the Best of Innovation Honoree award. This also meansthat the market recognizes AUO team's strong R&D capabilities and the ability to meet
automotive customers' various needs in smart cockpits.
 Vertical businessIn the recent years, AUO has actively developed its vertical businesses in retail, healthcare,enterprise, education, intelligent services, green energy, and other areas. This has beenaccomplished through the establishment of subsidiaries, via mergers and acquisitions, etc. Revenue
from vertical businesses exceeded NT$40 billion in 2023, marking a nearly 20% increase compared
to 2022. The corresponding proportion of revenue also rose from 15% to 17%. This growth isanticipated to continue.
In the healthcare sector, AUO has been a critical player in the professional medical display market
for over a decade. We are positioned as the world's leading professional medical display supplier.
With a positive outlook on the smart healthcare sector, AUO Group saw its first-everparticipation in the “2023 Healthcare+ Expo Taiwan". Together with several industry partners, thisendeavor brought together our subsidiaries AUO Display Plus, AUO Health, and AUO Care to
AUO Corporation
2023 Annual Report3jointly showcase products, technologies, and solutions launched by the Group in smart healthcare.
These include products and services across five domains, including 3D surgical imaging, dental
digitization, traditional Chinese medicine digital detection, medical information integration andmanagement, and elderly care. AUO will leverage its current market dominance and panel
technology as a starting point to develop vertically and provides solutions that address users' needs
and solve the pain points.
Regarding the intelligent services, and with smart manufacturing as its starting point, AUO is
responding to global climate change and the trend toward global net-zero carbon emissions byinvesting in digital transformation. This transformation aims to implement ESG sustainable
development practices and apply successful transformation experiences to develop smart
sustainable service solutions for external clients. The "AUO Smart Expo 2023" brought together
our subsidiaries AUO Digitech, AUO Envirotech, and AUO Energy Business Headquarters todemonstrate the Group's smart sustainable solutions in smart manufacturing, net-zero carbon
emissions, and green energy to the public for the first time. These efforts align with our corporate
digital and net-zero transformation goals, aiming to create sustainable business opportunities andenhance AUO's competitiveness through ESG-driven value creation.
Looking forward to 2024, the global macro environment remains uncertain. Despite facing a highly
challenging operating environment, the Company remains cautiously optimistic, continues to closely
monitor the market dynamics, and remains cautious about the pace of demand recovery for various
applications. At this stage, the panel business still consumes majority of the Company’s capacity,
capital deployment, and human resources. Our primary goal for the panel business will be to optimize
its product portfolios and technology platforms to ensure stable positive cash flow. On the other hand,mobility solution and vertical businesses stand as key growth engines in the longer-term. The
Company plans to allocate more resources to accelerate the development in these two businesses,
aiming to be recognized as not just a panel maker, but a "Display-centric Solution Provider" by 2025,
moving toward for becoming a comprehensive sustainable enterprise.
Chairman and Group CSO

4

AUO Corporation
2023 Annual Report

CEO and President

Company Profile

Chapter 2 Company Profile(I)

Date of Incorporation: August 12, 1996

(II)

Company History:
Aug 1996

Acer Display Technology (ADT) was established. The Company specialized in the development and manufacturing of key

Apr 1999

Taiwan's first G3.5 TFT-LCD production line was completed and made a successful pilot run.

Sep 2000

ADT began initial public offering (IPO) on the Taiwan Stock Exchange (TWSE).

Feb 2001

Taiwan's first G4 TFT-LCD fab began mass production.

May 2001

ADT announced the merger with Unipac Optoelectronics Corporation and was renamed AU Optronics Corporation

Sep 2001

Merged with Unipac Optoelectronics Corporation.

components and systems of flat display panels.

(AUO)
May 2002

Listed on the New York Stock Exchange (NYSE) under the code AUO.

Jul 2002

AUO Suzhou module plant began mass production, leading the industry’s entry into the China market.

Dec 2002

Taiwan 1st G5 TFT-LCD production line pilot run.

Jan 2005

First 32” LCD TV panel produced at G6 fab successfully lit up.

Jul 2006

First 42” LCD TV panel produced at G7.5 fab successfully lit up.

Oct 2006

Merged with Quanta Display Inc. (QDI)

Sep 2007

AUO Xiamen module plant began mass production.

Dec 2008

First 46” LCD TV panel produced at G8.5 fab successfully lit up.

Jun 2009

Co-invested in module plant with Sichuan Changhong Electric Co., Ltd.

May 2010

Co-invested in solar cell plant with US-based SunPower Technology.

Jul 2010

Acquired 100% ownership of AFPD Pte., Ltd., subsidiary of Toshiba Mobile Display in Singapore.

Dec 2010

Subsidiary Darwin Precisions Corporation was authorized for IPO at the Taiwan Stock Exchange.

Jun 2011

AUO Slovakia module plant began mass production.

Sep 2011

Subsidiary Darwin Precisions Corporation was merged with subsidiary Briview Corporation. Darwin Precisions
Corporation, the remaining Company after the merger, was renamed Briview.

Apr 2014
Oct 2014

Founding Star River Energy Corporation to create an investment platform for solar power plants.
Subsidiary Briview was merged with Forhouse Corp. Briview, the remaining Company after the merger, was renamed
Darwin Precisions Corporation.

Dec 2015

AUO's Lungtan fab has completed Taiwan's first locally designed and integrated process water full-recycling system.

Oct 2016

Subsidiary Taiwan CFI Co., Ltd. (CFI) was merged with AUO, the remaining Company after the merger. The original siteof CFI was rebuilt to AUO Kaohsiung Plant and AUO Tainan Plant.

Nov 2016

AUO Kunshan G6 LTPS LCD fab announced its grand opening with successful mass production.

Aug 2017

Established Global Research Center (GRC).

Mar 2018

Acquired 100% ownership of ComQi, a content management service company.

Feb 2019

Entered into share conversion with subsidiary AUO Crystal Corp.; 100% of AUO Crystal's shares have been acquired by

Oct 2019

The Company voluntarily applied for delisting U.S. depositary receipts from the New York Stock Exchange and

AU Optronics.
transferring them to the U.S. OTC market under the code of AUOTY.
Feb 2020

Publicly acquired about 19.45% ownership of ADLINK Technology Inc.

Jan 2021

General Display and Public Information Display businesses were demerged to AUO Display Plus, an entity wholly owned

Dec 2021

Acquiring 49% equity of AU Optronics (Kunshan) Co., Ltd. (AUOKS) from the other party, AUO owned 100%Jun 2022

The Company rename from AU Optronics Corp. to AUO Corporation.

by AUO.
ownership of AUOKS.

Sep 2022

AUO establish ”AUO Research Center” at Asia New Bay Area to enhance the development of biaxial transformation
strategy.

Dec 2022

The Company has been selected as a component of DJSI Dow Jones World Sustainability Index for 13 consecutive years.

Oct 2023

Announced the acquisition of 100% ownership of Behr-Hella Thermocontrol GmbH (BHTC) in Germany.

Nov 2023

AUO Kunshan G6 LTPS LCD fab Phase II kick-starts production.

AUO Corporation
2023 Annual Report5Chapter 3 Corporate Governance
I. Organization(I)Organizational StructureDate: March 11, 2024

(2) Business operated by major departments
Department NameBusiness

Chief Consultant of Antitrust

To ensure compliance with domestic and international antitrust laws by the Company; assess,Compliancemitigate and provide strategic advices on a variety of antitrust related risk.

Strategic Investment, Merger &Value transformation strategy investment layout.

Acquisition
Sustainability Development

Consolidated management of corporate sustainability policies and strategic directions and establish
a strategic corporate sustainable development plan that is in line with international trends. With
net-zero carbon emissions as our core goal, we will develop proactive mitigation and adaptation
actions to meet stakeholders' expectations for corporate governance, environmental protection
and social care.

Auditing management

The management and supervision of internal audit and operating procedures.

Mobility Solution Business Group

Technical upgrades and comprehensive development of automotive display solutions.

Mobility Solution ProductWith display technology as the core advantage, assisting businesses in creating customer-centric

immersive consumption experiences.
Research & Development
Intelligent Service Business Group Providing comprehensive industrial automation solution services for cross-regional andmulti-venue management.
Smart Healthcare Business Group Focusing on fields such as smart operating rooms, diagnosis detection, and integrated medical
information management, providing intelligent healthcare solutions.

6

Smart Education & Enterprise

Integrating diverse display technologies to create diversified display solutions for enriching theBusiness Group

educational and corporate environments.

Solar & Semiconductor Material

Vertical integration of the solar energy value chain, managing solar energy, semiconductor

Business Unitmaterials research and development, and processing services.

Technology GroupThe R&D of advanced display technologies, design, and development of new products.

AUO Corporation
2023 Annual ReportCorporate Governance

Department Name
Manufacturing Group

Business
The planning and management of display manufacturing process, raw materials and finishedproducts.

Display Strategy Business GroupThe management of TV, information, mobile devices, automotive and other display businessdepartments, including product planning, marketing, businesses and customer service, and provisionof a full range of smart solutions.

Energy Business GroupThe provision of high-efficiency solar modules, all-round solar power plant service, and highly
integrated service platform concerning energy management & service.

Supply Chain Management

The management of procurement, export and import affairs.

Globalization Development Office The management of the regional market development, customer development and technicalservices of and for the display business of overseas companies.
ESH & Risk Management

Planning for environmental safety, health and operating risk management.

Operational Support Units

Finance, Legal, Human Resource, Digital Technology, Quality Management, Corporate Strategic
Planning, etc.

AUO Corporation
2023 Annual Report7II. Documents of directors, president, vice presidents, associate vice presidents, and managers
of each department and division(I) Director Information
March 11 2024; Unit of shares: 1,000 shares

Job title

ChairmanNationality
or Place ofRegistration

Name

Shares Held By
Shares held when Current Number of
Spouse and Minor
electedShares HeldChildrenDate Elected Term Date First(Note 1)
(Note 2)
Gender(Note 2)
(Appointed) ofElectedAgeService (Note 4)
ShareholdShareholdNo. ofNo. of Shareholding No. of
ing
ing
sharesshares ratio (%) shares
ratio (%)
ratio (%)

ROC

Shuang-Lang(Paul) Peng

Male
60-69

2022.06.17 3 years 2010.06.18

7,443

0.08 9,114

0.12

969

ROC

AUO
Foundation(Note 5)

N/A

2022.06.17 3 years 2019.06.14

312

0.00

0.00

0

250

Primary work or academic
experiences

Position concurrently
held in the Company andother companies(Note 3)

- M.B.A., Heriot-Watt- Group CSO, AUO

University, U.K.
- President, AUO
0.01 Corporation

0.00

-

ROC

Representative Male: Frank Ko
50-59

2022.06.17

2019.09.10

N/A

ROC

Ming Hua
Investment
Company
Limited(Note 5)2022.06.17 3 years 2022.06.17

9,969

N/A-

-

2,696

0.04

0

0.10 7,975

0.10

0

0.00-

N/A -

-

Director

CTO, E Ink Holdings Inc.

Director
ROC

8

Representative
Female: Chuang2022.06.17
70-79
ChuangTsai

N/A

RepresentativeMale: Han-Chou
60-69(Joe) Huang

AUO Corporation
2023 Annual Report-- Ph.D. in Physics, University - Science Advisor, E Inkof Chicago

Qisda
Corporation(Note 5)-- CEO and President,(Science), National Chiao
AUO Corp.
Tung University- Director, Darwin- Chairman and CEO, E Ink Precisions Corp.
Holdings Inc.
- Director, ADLINK
0.00- - Vice President, Strategic
Technology Inc.
Development Office, AUO
Corporation- Vice President, TV Display
Business Group, AUO
Corporation- Director, President and

ROC

President, Ennostar
Inc.(listed:3714)- Director, Qisda
Corp.(listed:2352)- PhD in Optoelectronics

Director

ROC

Corp.

- Chairman and- Independent Director, Bank-

2022.06.17

N/A

N/A-

0

0.00

0

0.00

Sinopac- Professor, Department of

Photonics and Display
Institute, National Yang
Ming Chiao Tung University- Senior Vice President,
Quanta Display Inc.

2022.06.17 3 years 2022.06.17 663,599

6.90 530,879

6.90

0

0.00

-

- EMBA, Tsing Hua

2022.06.17

Holdings
Inc.(OTC:8069)-

2022.06.17

N/A

N/A-

0

0.00

5

-

- Director andUniversity in Beijing
President, Qisda Corp.
(listed:2352)- MBA, Greenwich
University- Chairman, Simula- GM of Global Supply Chain, Tech Inc.(listed:3511)
Qisda- Chairman, Data Image
Corp.(OTC:3168)- COO, BenQ China- Chairman, Diva
0.00
Laboratories,
Ltd.(OTC:4153)- Director, Alpha
Networks
Inc.(listed:3380)- Director, BenQ
Foundation(OTC:495
3)

Corporate GovernanceJob title

Nationality
or Place ofRegistration

Name

Shares Held By
Shares held when Current Number of
Spouse and Minor
electedShares HeldChildrenDate Elected Term Date First(Note 1)
(Note 2)
Gender(Note 2)
(Appointed) ofElectedAgeService (Note 4)
ShareholdShareholdNo. ofNo. of Shareholding No. of
ing
ing
sharesshares ratio (%) shares
ratio (%)
ratio (%)

Primary work or academic
experiences

Position concurrently
held in the Company andother companies(Note 3)

- M.B.A, National Chengchi - Independent Director,
University

Apacer Technology
Inc.(listed:8271)
CFO, ACER Incorporated. - Director, WistronCorp.(listed:3231)- Director, Wistron
0.00
NeWeb
Corp.(listed:6285)- Director, Wistron
Information
Technology & Services
Corp.(OTC:4953)- Stanford Executive- ITRI Research Fellow,
Program, Stanford
Electronics &University, Graduate
Optoelectronics
School of Business
System Research Lab- Ph.D. in Polymer Material, and Industry, Science
NYU/Polytechnic
and Technology
University, U.S.A
International Strategy
Center- ITRI Fellow, Electronics &Optoelectronics System- Executive Supervisor,
Research Lab
SID Taipei Chapter- VP and DTC General- Managing Director,
Director, Display
Taiwan Display
Technology Center, ITRI
Material & Devices
0.00
Association- Adjunct Professor,
Department of Photonics, - Vice Chairman,
Taiwan Display Union
National Yang Ming Chiao
Association
Tung University- CTO, Kodak LCD- Chair Professor,
Polarizer Films Business
National Yang Ming
- Research Fellow, Eastman Chiao Tung University
Kodak Company- Honorary Professor,
Department ofEngineering and
System Science,
National Tsing Hua
University- Ph.D in Finance, University - President, Takmingof Connecticut
University of Science- Master in Finance, Louisiana and Technology
State University- Professor,
Department of- Master in Quantitative
Business Analysis, Louisiana
Finance, Takming
State University
University of Science- Associate Dean, College of and Technology
0.00 Management, National- Professor,
Department of
Taiwan University
International Business,- Department Chair,
Department of International National Taiwan
University
Business, National Taiwan
University- Independent Director,- Professor, Department of Chen Full International
Financial, National Chengchi Co., Ltd.(OTC:8383)
University- Senior Vice President andIndependent
Director

ROC

Chin-Bing(Philip) Peng

Male
70-79

2022.06.17 3 years 2013.06.19

97

0.00

77

0.00

0

Independent
Director

ROC

Jang-Lin (John) Male
Chen
70-79

2022.06.17 3 years 2019.06.14

0

0.00

0

0.00

0

Independent
Director

ROC

Female2022.06.17 3 years 2022.06.17
60-69

0

0.00

0

0.00

0

Chiu-LingLu

AUO Corporation
2023 Annual Report9Job title

Independent
Director

Nationality
or Place ofRegistration

ROC

Name

Cathy Han

Shares Held By
Shares held when Current Number of
Spouse and Minor
electedShares HeldChildrenDate Elected Term Date First(Note 1)
(Note 2)
Gender(Note 2)
(Appointed) ofElectedAgeService (Note 4)
ShareholdShareholdNo. ofNo. of Shareholding No. of
ing
ing
sharesshares ratio (%) shares
ratio (%)
ratio (%)

Female2022.06.17 3 years 2022.06.17
50-59

0

0.00

0

0.00

0

Primary work or academic
experiences

Position concurrently
held in the Company andother companies(Note 3)- MBA, University of- Independent Director,
Connecticut
WiwynnCorp.(listed:6669)- Executive Vice President,
Business Development- Independent Director,
Department, CDIB Capital
Apacer Technology
Group
Inc..(listed:8271)- Executive Vice President, - Independent Director,
Corporate Strategy andMacroblock,
0.00
Planning Department, China Inc.(listed:3527)
Development Industrial
Bank- Senior Vice President of
Principal Investment
Department, China
Development IndustrialBank Company shares held by directors in the name of other persons:
Director Frank Ko held the Company’s shares in the name of other persons in the number of 300 thousand shares, constituting 0.00% of shareholding.
Director Chin-Bing (Philip) Peng held the Company’s shares in the name of other persons in the number of 170 thousand shares, constituting 0.00% of
shareholding.
 Any Executive, Director, or supervisor who is a spouse or relative within the second degree of kinship: None.
 If the chairman, president or personnel with equivalent position (chief manager) are the same person, spouses or relatives within one degree of kinship, thereasons, reasonability, necessity and measures to be taken accordingly shall be addressed: None.

Note 1: The shareholding at the time of appointment is calculated based on the total issued shares of 9,624,245,115 as of the transfer
suspension date of April 19, 2022.
Note 2: The current shareholding is based on the actual number of shares held on February 29, 2024, and the total issued shares are
7,699,396,092.
Note 3: Only concurrent positions in public companies are listed; for the situation where a director concurrently holds a position in an
affiliated enterprise of the Company, please refer to the information of the director, supervisor, and general manager of eachaffiliated enterprise in IX. Special Disclosure of this annual report (pages128-132).
Note 4: The initial appointment date refers to the date of the first tenure as a director or supervisor of the Company.
Note 5: Major shareholders of corporate shareholders.
Name of corporate shareholders
Major Shareholders of the Corporate Shareholders
Shareholding ratio (%)
AUO Foundation
AUO Corporation (Note 6)
100.00C.C. Leung
66.67
11.11
Ming Hua Investment Company Jia-Min Leung
Limited (Note 7)
Sin-Min Leung
11.11
Yi-Min Leung
11.11
AUO Corporation (Note 6)
17.04
Acer Incorporated (Note 8)
4.55
Taishin International Bank entrusted with the Qisda Corporation Employee
3.38
Stock Ownership Trust Account
Konly Venture Corporation (Note 8)
2.55
Darfon Electronics Corporation (Note 8)
2.03
Qisda Corporation (Note 7)
Norges Bank
1.23
E.SUN Commercial Bank, LTD.
1.02
Vanguard Emerging Markets Stock Index Fund, a Series of Vanguard International
0.98
Equity Index Funds
National Pension Insurance Fund
0.97
Polunin Developing Countries Fund, LLC
0.97
Note 6: If the major shareholder is a Corporate Person, its major shareholder and shareholding ratio: please refer to the list of major
shareholders in this annual report (page 64).
Note 7: Source of data of Ming Hua Investment Company Limited is from the Department of Commerce, MOEA; Source of data of Qisda
Corporation is the data of the Company's cessation of transfer on March 31, 2023.

10

AUO Corporation
2023 Annual ReportCorporate Governance

Note 8: Major shareholders of the Corporate person.
Name of Corporate

Shareholding
ratio (%)

Major shareholder of Corporate
Cathay MSCI Taiwan ESG Sustainability High Dividend Yield ETF Fund under the

7.64

custody of Taishin Bank
Hung Rouan Investment Corporation

2.42

Vanguard Emerging Markets Stock Index Fund, a Series of Vanguard International
Equity Index Funds
iShares ESG Aware MSCI EM ETF
Acer Incorporated(Note 9)

1.31
1.26

JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International
Stock Index Fund, a series of Vanguard Star Funds

1.23

Stan Shih1.15

National Pension Insurance Fund

0.97

Acer GDR

0.93

JPMorgan Chase Bank N.A. Taipei Branch in custody for JPMorgan Asset Management

0.88

Norges Bank

0.86

Konly Venture Corporation(Note 9) AUO Corporation

100.00

Qisda Corporation

20.72

BenQ Corporation

5.01

Taishin International Bank entrusted with the Darfon Electronocs Corp, Employee
Stock Ownership Trust Account
Mega International Commercial Bank Co., Ltd.
Darfon Electronics Corporation(Note 9)

2.91
1.62

National Pension Insurance Fund

1.48

Andy Su

1.45

Chang Hwa Commercial Bank, Ltd.

1.21

Vanguard Emerging Markets Stock Index Fund, a Series of Vanguard International
Equity Index Funds
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International
Stock Index Fund, a series of Vanguard Star Funds
Norges Bank

1.20
1.06
0.69

Note 9: The source of the information of Acer Inc. is the Company's closureinformation on April 8, 2023; the source of the information of
Konly Venture Corporation is from the Department of Commerce, MOEA; the source of the information of Darfon Electronics Corp.
is the Company's closure information on April 11, 2023.

Professional qualifications for directors
Shuang-Lang (Paul) Peng
Mr. Peng has been Chairman of the Company since 2015, and Group CSO of the Company since March 1, 2023. Now, he also
acts as a Chairman of Ennostar Inc.(listed: 2409) and a director of Qisda Corp. (listed:2352) With over three decades ofexperience in the technology industry, he has extensive experience in display industry. Prior to his current position, Mr. Peng is
our CEO from November 2015 to February 2023 and was our President from 2012 to 2015, Executive Vice President from2008 to 2011, Senior Vice President from 2007 to 2008 and Vice President from 1998 to 2007. Mr. Peng is also appointed as theincumbent Chairman of the Taipei Computer Association and the former Chairman of the Taiwan Display Industry Union
Association. His steadfast devotion to promoting cross-disciplinary integration and resource sharing across the industry chain.
Now, he serves as a member of the Board of Science and Technology, Executive Yuan (BOST), responsible for promoting
national digital technology applications and innovation development policies. Mr. Peng holds an MBA from Heriot-Watt
University in the U.K. and an honorary degree of Doctor of Business Administration from National Taipei University ofTechnology.

AUO Corporation
2023 Annual Report11Frank Ko
Mr. Ko has served as the director and president at the Company since 2019, and CEO and President of the Company since
March. 1, 2023. Now, he is a director of Darwin Precisions (listed:6120) and ADLINK Technology Inc. (listed:6166) Mr. Ko
joined the Company in 2000 and has since then worked in various functions, including manufacturing, research anddevelopment. From 2005 to 2010, he headed the T.V. Display Business Group. After that, he also served as Vice President ofStrategic Development Office, leading the Company's advanced technology and strategic direction. In 2014 to 2019, he served
as Chairman and CEO of E Ink Holdings Inc. (OTC:8069), creating innovative applications of e-paper in multiple fields, alongwith many ecosystem partners. Mr. Ko also serves as the incumbent Chairman of the Taiwan Display Union Association and theincumbent Chairman of Smart Display Industrial Alliance. He actively promotes cross-industry and cross-field cooperation in
display technology and enhancing Taiwan's global competitiveness. He holds a Ph.D. degree in Photonics from National Chiao
Tung University.

Chuang- Chuang Tsai
Ms. Tsai has served as the director at the Company since 2022. Now, she also acts as a director of E Ink Holdings Inc.
(OTC:8069). She owns professional technology background and has considerable experience and achievements in improving
black and white electronic paper, developing flexible electronic paper, expanding color electronic paper and other new
electronic paper technologies and applications. At the Xerox Palo Alto Research Center in California, USA, we are engaged in
the development of amorphous and polycrystalline silicon in thin film transistors, solar cells and medical imaging technologies.
She served as the director, president and CTO of E Ink Holdings Inc.(OTC:8069), Independent Director of Bank SinoPac,
Professor of Department of Photonics and Display Institute of National Yang Ming Chiao Tung University, Senior Vice Presidentof Quanta Display Inc. She own background both management and technology research. She holds a Ph.D. degree in Physics,
University of Chicago.

Han-Chou (Joe) Huang
Mr. Huang has served as a director of the company since 2022. He is also the director and general manager of Qisda
Technology Co., Ltd. (listed: 2352), the chairman of Simula Technology Inc. (listed: 3511), and Data Image Corp. (OTC: 3168),
chairman of the Board of Directors of DIVA Laboratories, Ltd. (listed on the counter: 4153), director of Alpha Networks Inc.
(OTC: 3380), and director of the BenQ Foundation. Mr. Huang was the president of Qisda's global supply chain and the chief
operating officer of BenQ China. He has abunndant industry experience, is familiar with industry-related contacts and attaches
great importance to public welfare. Mr. Huang obtained an EMBA from Tsinghua University in Beijing and an MBA from the
University of Greenwich in the UK.

Chin-Bing (Philip) Peng
Mr. Peng has been an independent director of the Company since 2013. Concurrently, he acts as the director of Wistron Corp.
(listed: 3231), Wistron NeWeb Corp. (listed: 6285)and Wistron ITS Corp (OTC:4953) and independent director and memberof auditing committee and remuneration committee of Apacer Corp. (listed:8271)Mr. Peng served as the Senior Vice President
and Chief Financial Officer of ACER Incorporated (listed:2353) from 2001 to 2004. He possesses professional background intechnology industry, finance and accounting. Mr. Peng received his master’s degree in Business Administration from National
ChengChi University.

Jang-Lin (John) Chen
Dr. Chen has been an independent director of the Company since 2019. Concurrently, he acts as Chair Professor of National
Yang Ming Chiao Tung University and Honorary Professor of Department of Engineering and System Science, National Tsing
Hua University. He also served as ITRI Research Fellow of Electronics & Optoelectronics System Research Lab and Industry
and Science and Technology International Strategy Center, Executive Supervisor of SID Taipei Chapter, managing director of
Taiwan Display Material & Devices Association and vice chairman of Taiwan Display Union Association. Prior to his current
position, Mr. Chen was once serves as ITRI Fellow of Electronics & Optoelectronics System Research Lab, VP and DTC
General Director of Display Technology Center, ITRI, CTO of Kodak LCD Polarizer Films Business and Research Fellow of
Eastman Kodak Company. Mr. Chen has a Master degree in Chemistry, National Taiwan University, and PhD in Polymer Material,
NYU/Polytechnic University, U.S.A. He also attended Stanford Executive Program, Stanford University, and Graduate School ofBusiness.

12

AUO Corporation
2023 Annual ReportCorporate GovernanceChiu-Ling Lu
Dr. Lu has been an independent director of the Company since 2022. Concurrently, she acts as President and Professor of
Department of Banking and Finance, Takming University of Science and Technology, Professor of Department of International
Business, National Taiwan University, Independent Director and Member of Audit Committee and Remuneration Committee ofChen Full International Co., Ltd. (OTC:8383), and Director of ESG World Citizens & Digital Governance Foundation. She
served as Vice Dean of Department of Management, National Taiwan University, Department Head of Department ofInternational Business, National Taiwan University, Professor of Department of Finance, and National Chengchi University. She
has been working in the field of finance for many years and has accumulated rich financial knowledge. Dr. Lu has a Ph.D degree
in Finance, University of Connecticut.

Cathy Han
Ms. Han served as the Company director representative from 1997 to 2000, and has been an independent director of theCompany since 2022. She acts as the independent director, convener of Audit Committee and Nomination Committee ofWiwynn Corporation(listed:6669), independent director and member of Audit Committee and Remuneration Committee,
Apacer Technology Inc. (listed:8271) and independent director and member of Audit Committee and convener ofRemuneration Committee, Macroblock, Inc.(listed:3527) She own professor background of technology industry, sustainable
and risk management. She served as Vice President of Business Development Department, CDIB Capital Group, Vice Presidentof Business Development Department and Senior Vice President of Principal Investment Department, China Development
Industrial Bank. She own professor background of financial investment. Ms. Han has a MBA in Corporate Management,
University of Connecticut.

Yen-Hsueh (Sharon) Su
Ms. Su has served as an independent director of the company since 2019. She currently also serves as an Independent Director,
Audit committee, Remuneration committee and Investment review committee member of Taiwan Crystal Technology Co., Ltd.
(listed: 3042); Global Cement Co., Ltd. (listed: 1104) Independent director, member of the audit committee and remunerationcommittee; Eslite Lifestyle Co., Ltd. (listed: 2926) independent director, member of the audit committee and remunerationcommittee and Cayman Gaowei Electronics Holdings Co., Ltd. (01415.HK) is an independent non-executive director with aprofessional background in the technology industry. Ms. Su Chanxue served as the managing director of UBS Securities andhead of the Asia-Pacific Technology Industry Research Department, the investment director of ASUS Computer Co., Ltd. (listed:2357) and the investment director of Pegatron United Technologies Co., Ltd. (listed: 4938). Professional background in financial
investment.Ms. Su has a master’s degree in Industrial Administration from Carnegie Mellon University in the United States.
Yen-Hsueh Su due to personal factors resign from her positions of all functional Committees, effective from December 8, 2023.

The composition of the Board of Directors has diverse backgrounds
The board of directors of our company is composed of industry veterans and academic experts, all of whom possess
professional strength and ample industry experience or management experience. according on our own operating conditions,business models, and development needs, we conduct regular audits each year and set specific diversified management goals.
Nomination and Selection Procedure for the Tenth Board of Directors
According to the regulations of the "Articles of Incorporation" and the "Election of Directors", a candidate nomination system
is adopted to select the directors (including independent directors) of the next term. In accordance with the regulations,shareholders who hold 1% or more of the total issued shares of the company will have the right to submit a list of director
candidates to the company in written format during the nomination period. However, the number of director candidates
proposed by the shareholders shall not exceed the number of directors to be elected. When nominating director candidates,
shareholders must attach the candidate's name, education, and work experience. Furthermore, if nominating an independent
director, they should also include the candidate's written promise and declaration, and declare that the candidate does not
violate Article 30 of the Corporate Law, as well as other relevant certification documents. Finally, all director candidates will be

AUO Corporation
2023 Annual Report

13

voted on shareholders at the general meeting. Through the nomination and election process, shareholders will be able toactively participate in the director election process, achieving transparency in corporate governance.
The Corporate Governance and Nomination Committee of the Company (officially renamed on March 11, 2024) selects themost suitable director candidates based on standards of diverse backgrounds, including professional knowledge, skills,
experience, and gender diversity, as well as independence. On April 25, 2022, the Board of Directors proposed a recommended
list of members for the tenth Board of Directors, which includes four director candidates: Shuanglang Peng, Representative of
AUO Foundation: Frank Ko, Representative of Qisda Corporation: Han-Chou (Joe) Huang, Representative of Ming Hua
Investment Company Limited: Chuang Chuang Tsai; In addition, there are five independent director candidates: Chin-Bing(Philip) Peng, Yen-Hsueh (Sharon) Su, Jang-Lin (John) Chen, Chiu-Ling Lu, Cathy Han. Their appointment was approved during
the 2022 Annual General Meeting and their term will begin on June 17, 2022, and end on June 16, 2025.
During the nomination process for the board of directors, we have evaluated and considered the company's operating modeland development needs. Ensure that the nominated directors comply with the "Corporate Governance Principles" establishedby the company and the diversity elements of directors (including independent directors). For the selection of directors, inaddition to considering their professional qualifications and various necessary conditions, the company's future development
needs and management objectives will also be considered. For example: whether they have professional knowledge andexperience in ESG, the extent of their participation in company operations, and whether they attach importance to thecompany's sustainable operations. We hope that members of the board of directors can effectively perform their duties in linewith the characteristics of the industry in which they operate and their own core capabilities. This includes establishing a goodboard governance system, supervising, appointing and guiding the company's management, and strengthening management
functions to achieve the company's key influence and achieve the company's sustainable management goals.
The specific management objectives and achievements of the Company's diversification policy are as follows
The company insists on transparent operation, emphasizes shareholder rights, and continuously pursues better corporate
governance. The board of directors through the corporate governance and nomination committee regularly reviewing
constructing and establishes the direction of the board diversity policy in each year.
Item2023 Management Objective
New additions and adjustments in 2024 Achievements in 2023
Composition of Independent director seats account for half of all board
Achieved
Seats
seats.
GenderAt least two seats of Directors are different gender.
Adjust directors of either gender to reachAchieved
more than 1/3 of the director seats..
Term of Service  The independent directors shall not hold office for/age
more than 3 terms. Could be extended to fourtimes after review by the Corporate Governanceand Nomination Committee.
Achieved More than half of the independent directors serve
no more than three terms.
 Directors shall be under the age of 74 at the timeof appointment.
Concurrently It is advisable that the number of the directors who Newly added Non-independent directors
Situation
concurrently serve as the managers of the may concurrently serve as directors of no
Company should not exceed one-third of the board more than 5 publicly listed companies
seats.
(including our Company, up to 6).
 No independent director may concurrently serveas an independent director of more than three
Achievedother public companies. (Including our Company, up
to 4 companies.
 No
Independence
Directorserve
asdirector(including independence director) or
supervisor more than five other TWSE/TPEx listedcompanies at the same time.
Professional
Including Technology industry, Technical research, Newly added professional capabilities in
SkillsIndustrial Innovation, Financial Accounting, Financial risk management.
Achieved
investment, Corporate Sustainability.
Participation
None
Increase director attendance rate is not
Achieved
level
less than 80%.

14

AUO Corporation
2023 Annual ReportCorporate Governance1.

To strengthen the participation of women in the decision-making process, we will increase the representation ratio of either gender on

2.

To ensure that independent directors can perform their duties fairly and rationally, and to prevent them from losing their independence3.

In order to allow directors to focus and effectively participate in corporate decision-making and board operations, to achieve thethe board by 2024.
due to long tenures, we set management goals in 2023 to regulate the re-election terms of independent directors.
optimization of resource allocation, new management goals were set in 2024, stipulating the number of non-independent directors
concurrently serving in public companies and directors' attendance rates.
4.

To practice the goals of sustainable operation and development, and to stay in line with international trends, we will supervise risk
management through the board of directors (the highest governance body for risk management), to effectively allocate and determine
sufficient and appropriate resources. At the same time, we will establish a suitable risk management mechanism and cultivate a risk
management culture to ensure the comprehensive risk management mechanism of the enterprise can operate effectively. Therefore, wehave added the management goal that directors must possess "risk management" professional skills.

The Company’s directors have diversing backgrounds and professional qualifications (ability) conditions
The company regularly reviews the various diversity indicators set by the company each year, and reports to the board of directors on
whether the qualifications of independent directors meet the relevant laws and regulations during the nomination, election, and tenure.
Term of Office

Name

Title

Shuang-Lang(Paul) Peng

ChairmanFrank Ko

Director

ChuangDirector
Chuang Tsai
Han-Chou (Joe)Director
Huang
Chin-Bing
Independent(Philip) Peng Director
Jang-Lin (John) Independent
Chen
Director
Independent
Chiu-Ling Lu
Director
Independent
Cathy Han
Director

Professional knowledge and skills

Number of Other
Taiwanese PublicCompanies
Corpor
Employee
Technol
Industrial Financial Financial
Risk Independe
Gender Age Nationality Below 3-9 Exceed
Concurrently
Technical
ate
Positionogy
Innovatio Accoun investm
Manage nce Status
Serving as an
3 years years 9 years
research
Sustaina
industry
n
ting
ent
ment
Independent
bilityDirector
Not
Male 60-69
ROC
V
V
V
V
V
0
V
applicable
Not
Male 50-59
ROC
V
V
V
V
V
0
V
applicable
Not
Female 70-79
ROC
V
V
V
0
applicable
Not
Male 60-69
ROC
V
V
V
V
0
applicable
Details
Male 70-79
ROC
V
V
V
V
1
below
Details
Male 70-79
ROC
V
V
V
V
0
below
Details
Female 60-69
ROC
V
V
V
V
1
below
Details
Female 50-59
ROC
V
V
V
V
V
V
3
below

Currently, there are a total of 8 seats on the 10th incumbent board of directors, with independent directors occupying 4 seats, accounting forhalf of the total number of seats on the board. This complies with Article 30 of the Company Act, and there is no situation among thedirectors as stipulated in Article 26, Section 3 of the Securities and Exchange Act. There are 3 female directors making up 37.5% of the entire
board. By the end of 2023, all independent directors comply with the regulations of the Securities and Futures Bureau of the Financial
Supervisory Commission regarding independent directors. After examination by the Corporate Governance and Nomination Committee, it
was reported to the board of directors on January 31, 2024.

Independent directors who meet the qualifications for independence
Among the current 8 directors of our company, 4 are independent directors, accounting for half of the total seats in the boardof directors. All independent directors meet the independence regulations in Article 3 of the "Regulations Governing
Appointment of Independent Directors and Compliance Matters for Public Companies". This includes but is not limited to thefact that the individual members of our company's independent directors, their spouses, and relatives within the second degreeof kinship have not served as directors, supervisors, or employed persons of our company or its affiliated enterprises; and havenot acted as directors, supervisors, or employed persons of a company with a specific relationship with our company (refer toArticle 3, Item1, Paragraph 5~8 of the Regulations Governing Appointment of Independent Directors and Compliance Mattersfor Public Companies, and Article 6, Item1, Paragraph 5~8 of the Regulations Governing the Appointment and Exercise ofPowers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei
Exchange) ; In the past 2 years, they have not provided business, legal, financial, accounting, etc. services to our company or its

AUO Corporation
2023 Annual Report15

affiliated companies or get corresponding remuneration, and also comply with the regulations on the number of independent
directors holding other publicly listed companies stipulated in Article 4 of the Regulations Governing Appointment of
Independent Directors and Compliance Matters for Public Companies, and all independent directors have been given sufficient
powers to participate in decision-making and to express their opinions in accordance with Article 14-3 of the Securities andExchange Act. At the same time, they also comply with the policy direction of the diversified board of directors formulated byour company, that is, independent directors should not hold director (including independent directors) or supervisor positions
in more than 5 listed companies.

The average attendance rate of the Board of Directors and every Functional Committees in 2023
In order to ensure that each director/member can attend each board meeting and the committee meetings they serve, theclerical units of each meeting maintain good communication channels with each director/member. This is to ensure theeffectiveness of the resolution of each meeting's agenda, and to lay down regulations such as leave requests, delegation, and the
avoidance system for agendas involving conflicts of interests in the organization rules for compliance.
Board of directors

Audit Committee

Remuneration Committee

100%

100%

100%

Corporate Governance andNomination Committee (note1)100%Note 1: On March 11, 2024, the Board of Directors officially renamed it as the Corporate Governance and Nomination Committee.
Note 2: The attendance rate of reached 100%, demonstrating the active participation of all members in the company's operation.

16

AUO Corporation
2023 Annual ReportCorporate Governance(II) President, Vice Presidents, Associate Vice Presidents, and Managers of Each Department and Division
Information
Date: March 11, 2024

Job title(Note1)

Nationality

Name

Chairman &Group CSO

ROC

Shuang-Lang(Paul) Peng

Shares held by
spouse and minor
children(Note 2)

Shares held
Date of(Note 2)
appointment
Genderto position(Note 4) No. of Shareholding No. of Shareholding
sharesratio
sharesratio
Male

2003.03.27

9,114

0.12

969

0.01

Unit of shares: 1,000 shares
Positions concurrently heldin other companies
at present(Note 3)

Principal work experienceand academic qualifications- M.B.A., Heriot-Watt University, U.K.
- President, AUO Corp.

- Chairman and Director, Ennostar
Inc. (listed: 3714)- Director,Qisda Corp.(listed:2352)- PhD of Optoelectronics (Science), National Chiao
Tung University

CEO andPresident

ROC

Frank Ko

Male

2005.12.01

2,696

0.04

0-

- Director, Darwin Precisions Corp.
- Chairman and CEO,E Ink Holdings Inc.
(listed: 6120)
0.00- - Vice President, Strategic Development Office, AUO- Director, ADLINK Technology
Corporation

Inc. (listed: 6166)- Vice President, TV Display Business Group, AUO
Corporation- Ph.D. of Applied Chemistry, National Chiao Tung
SeniorVice
President

ROC

Wei-Lung
Liau

Male

2010.06.01

2,546

0.03

0-

0.00-

SeniorVice
President

ROC

Ting-Li Lin

Male

2016.06.01

1,475

0.02

26

0.00

ROC

James CP
Chen

University- Director, PlayNitride Inc. (listed:- Director,Qisda Corp.
- Director,Darwin Precisions Corp.

6584)

Master of Applied Chemistry, National Chiao Tung - Director, Daxin Materials Corp.
University(listed: 5234)- Master of Electrical and Control Engineering,
SeniorVice
PresidentMale2007.10.01

613

0.01

0-

0.00-

National ChiaoTung University- Section Manager at Electronics Research & Service- Director, Qisda Corp. (listed: 2352)

Organization, ITRI
SeniorVice
President

ROC

CS Hsieh

Male2012.05.01

2,595

0.03

18

Master of Electrical Engineering, National Tsing Hua
0.00
University

SeniorVice
President

ROC

Amy KuFemale 2009.11.01

2,432

0.03

0-

0.00-

SeniorVice
President

ROC

Hong-Jye
Hong

2008.12.01

624

0.01

146

0.00

Master of Human Resources Management, National - Director, Raydium Semiconductor
Central University
Corporation (listed: 3592)- Master of Electrical Engineering, University ofMale

Massachusetts, U.S.A.
- Director,Daxin Materials Corp.

- Director, Raydium Semiconductor
Corporation (listed: 3592)- Director, SINTRONES Technology
Corp. (OTC:6680)- Master of Industrial Engineering, Chung Yuan
Vice President

Vice President

ROC

ROC

TY LinTinaWuMale

2015.06.01

Female 2013.11.01

1,085

1,311

0.01

0.02

0

0

0.00

0.00

Christian University-- Director,BenQ Materials Corp.
- Master of Industrial Administration, Waseda -Director,ADLINKTechnology INC.
University(listed: 6166)- Master of Business Administration, George
Vice President

ROC

AndyYangMale2008.12.01

840

0.01

684

0.01

Vice President

ROC

Benjamin
Tseng

Male

2012.09.01

479

0.01

716

0.01

Vice President

ROC

Yu-Chieh Lin Female 2011.05.01

938

0.01

0

0.00

Vice President

ROC

IvanWuMale

2010.06.01

1,517

0.02

9

0.00

Senior
Associate Vice
President

ROC

Kun-Yu Lin

Male2005.12.01

181

0.00

383

0.00

SI JeongMale

2011.05.01

316

0.00

0

SeniorRepublic of
Associate Vice
Korea
President

Washington University, U.S.A.

- AssociateVice President at ABNAMRO Bank
- Director,Lextar Electronics Corporation- Master of Business Administration, University ofRochester, U.S.A.

- Vice President atABN AMRO Bank
- Derictor, Daxin Materials Corporation- Master of Science in Physics, National Central
University-- Director,Ennostar Inc.(listed:3714)- Master of Science in Optoelectronics, National
Chiao Tung University- Master of Science in Optoelectronics, National
ChiaoTung University

0.00 - Bachelor's Degree, Korea Aerospace University--

AUO Corporation
2023 Annual Report17

Job title(Note1)

Nationality

Name

Shares held by
Shares held
spouse and minor
Date of(Note 2)childrenappointment
Gender(Note 2)to position(Note 4) No. of Shareholding No. of Shareholding
sharesratio
sharesratio

Senior
Associate Vice
President

ROC/
UnitedStatesHank Liu

Male

2023.04.15

42

0.00

0

0.00 - PhD of Law, Pennsylvania State University

Associate Vice
President

ROC

CenterChen

Male2020.10.01

460

0.01

0

0.00

Associate Vice
President

ROC

Bryan Kuo

Male

2021.04.01

337

0.00

17

0.00

Associate Vice
President

ROC

KSTsengMale2022.05.01

492

0.01

-0

-

Associate Vice
President

ROC

Kenyj Chen

Male

2022.05.01

392

0.01

478

0.00

Associate Vice
President

ROC

CD LeeMale2022.05.01

336

0.00

0-

0.00-

Associate Vice
President

ROC

CHWu

Male

2022.05.01

455

0.01

130

0.00

Associate Vice
President

ROC

Paul Lee

Male

2023.08.01

24

0.00

0

0.00 - Bachelor's Degree of Law, Monash University-

Associate Vice
President

ROC

WH HsuMale

2023.08.01

44

0.00

0

0.00 - PhD of Photonics, National Taiwan University-

Associate Vice
President

ROC

Jenn-Jia Su

Male

2023.08.01

148

0.00

0

0.00

Associate Vice
President

ROC

KK LeeMale2023.08.01

300

0.00

0

0.00

Associate Vice
President

ROC

Cloud
Huang

Male

2023.08.01

1

0.00

0

0.00

Associate Vice
President

ROC

CKWu

Male

2023.08.05

13

0.00

0

0.00

AssociateVice
President

ROC

Jim LeeMale2024.02.01

153

0.00

0

0.00

Positions concurrently heldin other companies
at present(Note 3)

Principal work experienceand academic qualifications- B.S. of Electrical Engineering, National Central
University- Master of Psychology, National Chung Cheng
University- Master of Chemical Engineering, National Taiwan
University- Masterof Photonics, National SunYat-Sen

University- Master of Chemical Engineering, National Taiwan
University- B.S. of Electrical Engineering, National Yunlin
University of Science andTechnology- Master of Electrical Engineering, National Taiwan
University- Master of Nuclear Science, National Tsing Hua
University- Master of Polymer, National Taiwan University of
Science and technology- Master of Mechanical Engineering, National Cheng
Kung University- National Taiwan University of Science andTechnology

-

-

-

 The Company's shares held by managers in the name of other persons:

Director Frank Ko held the Company’s shares in the name of other persons in the number of 300 thousand shares, constituting 0.00% of shareholding.
 Any spouse or relative within the second degree of kinship of any manager who serves as the Company's executive: None.
 If the chairman, general manager or personnel with equivalent position (chief manager) are the same person, spouses or relatives within one degree of kinship, the reasons, reasonability, necessity andmeasures to be taken accordingly shall be addressed: None.

Note 1: Those who are in office on the date of publication of the annual report. Yu-Chieh Lin and Ivan Wu were promoted to Vice
President on August 1, 2023.
Note 2: The shareholding is based on the actual number of shares held as of February 29, 2024, and calculated based on the total number ofissued shares of 7,699,396,092.
Note 3: Only the positions of public companies are listed; please refer to (V) Directors, supervisors, and presidents of affiliates of Chapter 9,
Special Disclosure in this annual report (pages128-132).
Note 4: It is for the date of first appointment as a manager (associate vice president level or above) at AUO.

18

AUO Corporation
2023 Annual ReportIII. Remuneration to Directors, Supervisors, President and Vice Presidents in the latest year(I) Remuneration to Directors
Remuneration to directors

Job Title

Chairman

Name

Shuang-Lang(Paul) Peng
AUO
Foundation

Retirement pay
and pension (B)(Note 2)

6,400

6,400

0

0

0

0 2,676

2,676

2,000

2,000

0

0

0

0

0

0

0

0

0

0

0

0 2,200

2,240

2,200
(0.01%)

2,240(0.01%)

96,09896,098

108

108

0

0

0

0

98,407(0.54%)

98,447(0.54%)

40

2,000

2,000

0

0

0

0

0

0

2,000
(0.01%)

2,000(0.01%)

0

0

0

0

0

0

0

0

2,000
(0.01%)

2,000(0.01%)

0

0

0

0

0

0

0

150

150

150
(0.00%)

150(0.00%)

0

0

0

0

0

0

0

0

150
(0.00%)

150(0.00%)

0

2,000

2,000

0

0

0

0

0

0

2,000
(0.01%)

2,000(0.01%)

0

0

0

0

0

0

0

0

2,000
(0.01%)

2,000(0.01%)

0

0

0

0

0

0

0

150

150

150
(0.00%)

150(0.00%)

0

0

0

0

0

0

0

0

150
(0.00%)

150(0.00%)

40,180

3,000

3,000

0

0

0

0

150

150

0

0

0

0

0

0

0

2,800

0

0

0

0

160

160

0

0

0

0

0

0

0

0

2,562

2,562

0

0

0

0

160

160

0

0

0

0

0

0

0

0

2,600

2,600

0

0

0

0

160

160

0

0

0

0

0

0

0

0

3,186

3,186

0

0

0

0

160

160

3,150
(0.02%)
2,960(0.02%)
2,722(0.01%)
2,760(0.02%)
3,346(0.02%)

0

2,800

3,150
(0.02%)
2,960(0.02%)
2,722(0.01%)
2,760(0.02%)
3,346(0.02%)

0

0

0

0

0

0

0

0

3,150
(0.02%)
2,960(0.02%)
2,722(0.01%)
2,760(0.02%)
3,346(0.02%)

3,150(0.02%)
2,960(0.02%)
2,722(0.01%)
2,760(0.02%)
3,346(0.02%)

0
0
0
0
0

19

Corporate Governance2023 Annual Report

AUO Corporation

Corporate
Director
Corporate
Frank Ko
Director
Representative
Ming Hua
Investment
Corporate
Company
Director
LimitedCorporate
ChuangDirector
Chuang Tsai
Representative
Qisda
Corporate
Corporation
Director
Corporate
Han-Chou (Joe)Director
Huang
Representative
Chin-Bing
Independent(Philip) Peng
Director
Jang-Lin (John)
Independent
Chen
Director
Independent
Chiu-Ling Lu
Director
Independent
Cathy Han
Director
Yen Hsueh Su
Independent(Note 11)
Director

Director
profit-sharing
Expenses andcompensation perquisites (D)(Note 4)(C)
(Note 3)
All
All
All
All
Consolid
Consolid
Consolid
Consolid
AUO
ated
AUO
ated
AUO
ated
AUO
ated
Entities
Entities
Entities
Entities(Note 8)(Note 8)(Note 8)(Note 8)Base
compensation(A)(Note 1)

December 31, 2023 Unit: NT$ thousands; 1,000 shares
Remuneration received by directors for concurrent service
as an employee
Sum of
Sum ofRemuneration
A+B+C+D and
A+B+C+D+E+F+G
Salary, rewards,
received fromratio to net
and ratio to net
Retirement pay
Employee profit-sharing
and special
investeeincome (%)
income (%)
and pension (F)compensation (G)disbursements (E)enterprises(Note 9)(Note 9)(Note 6)(Note 7)(Note 5)other thansubsidiaries or
All
All
All
All
All
from the parent
Consolidated
Consolid
Consolid
Consolid
Consolidat
company
AUO
Entities
AUO
ated
AUO
ated
AUO
ated
AUO
ed
(Note 10)(Note 8)
Entities
Entities
Entities
Entities(Note 8)(Note 8)(Note 8) Cash Stock Cash Stock(Note 8)
114,757
114,757
9,076
9,076
0
0
0
0
0
0
105,681 105,681
6,440(0.63%)(0.63%)(0.05%) (0.05%)
2,000
2,000
2,000
2,000
0
0
0
0
0
0
0
0
0
(0.01%) (0.01%)(0.01%)(0.01%)

20
2023 Annual Report

AUO Corporation

Remuneration Range Table
Names of Directors
Ranges of remuneration paid to each of
the Company’s directors
Less than NT$ 1,000,000
NT$ 1,000,000 (incl.)~ NT$
2,000,000(excl.)
NT$ 2,000,000 (incl.)~ NT$
3,500,000(excl.)

Sum of A+B+C+D
All consolidated
AUO
entities
Chuang- Chuang Tsai and Han-Chou (Joe) Huang Chuang- Chuang Tsai、Han-Chou (Joe) Huang

Sum of A+B+C+D+E+F+G
AUO
Chuang- Chuang Tsai、Han-Chou (Joe) Huang

All consolidated
entities (Note 10)
Chuang- Chuang TsaiAUO Foundation, Frank Ko, Ming Hua Investment AUO Foundation, Frank Ko, Ming Hua Investment AUO Foundation, Ming Hua Investment Company AUO Foundation, Ming Hua Investment Company
Company Limited, Qisda Corporation, Chin-Bing Company Limited, Qisda Corporation, Chin-Bing Limited, Qisda Corporation, Chin-Bing (Philip) Peng, Limited, Qisda Corporation, Chin-Bing (Philip) Peng,(Philip) Peng, Jang-Lin (John) Chen, Chiu-Ling Lu, (Philip) Peng, Jang-Lin (John) Chen, Chiu-Ling Lu, Cathy Jang-Lin (John) Chen, Chiu-Ling Lu, Cathy Han, Yen Jang-Lin (John) Chen, Chiu-Ling Lu, Cathy Han, Yen
Cathy Han, Yen Hsueh Su
Han, Yen Hsueh Su
Hsueh Su
Hsueh Su

NT$ 3,500,000 (incl.)~ NT$
5,000,000(excl.)
NT$ 5,000,000 (incl.)~ NT$
Shuang-Lang (Paul) Peng
Shuang-Lang (Paul) Peng
10,000,000(excl.)
NT$ 10,000,000 (incl.)~ NT$
15,000,000(excl.)
NT$ 15,000,000 (incl.)~ NT$
30,000,000(excl.)
NT$ 30,000,000 (incl.)~ NT$
Han-Chou (Joe) Huang
50,000,000(excl.)
NT$ 50,000,000 (incl.)~ NT$
Frank Ko
Frank Ko
100,000,000(excl.)
NT$ 100,000,000 or above
Shuang-Lang (Paul) Peng
Shuang-Lang (Paul) Peng
12 individuals (including 3 corporate entities)
12 individuals (including 3 corporate entities)
Total
12 individuals (including 3 corporate entities)
12 individuals (including 3 corporate entities)
Note 1:
It refers to the base remuneration of directors in 2023 (including director's salary, position bonus, severance pay, various bonuses, incentives, etc.).
Note 2:
It is the pension withdraw/paid in accordance with the law in 2023.
Note 3: It is the director profit-sharing compensation approved by the boa
Note 3:
It is the director profit-sharing compensation approved by the board of directors in 2023.
Note 4:It refers to the directors' business execution expenses in 2023 (including the remuneration, travel expenses, special expenses, various allowances, dormitory, car allocation and other in-kind provision as Corporate Person directors or supervisors'
representatives appointed by the Company and its subsidiaries).
Note 5:It refers to the salary, post bonus, severance pay, various bonuses(including bonuses deferred from long-term incentive plans in past years), incentives, mobility expenses, special expenses, various allowances, dormitories, car allocation and other in-kindprovisions received by directors and part-time employees (including part-time general manager, deputy general manager, other managers and employees) in 2023. Salary expenses recognized in accordance with IFRS2 "Share-based Payment", including
acquisition of employee stock option certificates, new shares with restricted employee rights and participation in cash subscription for capital increase, are also included in remuneration.
Note 6:
It is the pension withdraw/paid in accordance with the law in 2023.
Note 7:
The amount of employee remuneration for the year of 2023, as approved by the board of directors, is calculated based on the distribution principles or actual distribution ratios used in previous years.
Note 8:The total amount of various remuneration paid to the directors of the Company by all companies (including the Company) in the consolidated report.
Note 9:After-tax net loss (NTD 18,203,274 thousands )refers to the after-tax net profit of individual financial reports in 2023.
Note 10: It refers to the base remuneration, profit-sharing remuneration (including employees', directors' and supervisors' profit-sharing compensation) and business execution expenses received by directors as directors, supervisors or managers of reinvested
enterprises of subsidiaries or parent companies in 2023.
Note 11: Resigned on December 8, 2023.
Note 12: The policy, system, standards and structure of independent directors' remuneration, as well as the connection between the amount of remuneration paid and director’s responsibilities, risks, time investment and other factors: the remuneration of thedirectors of the Company is determined by the board of directors in accordance with the Articles of Incorporation, issued based on the director's participation in the Company's operations and contribution, with reference to both domestic andforeign market standards. If the Company has a profit, the board of directors will determine the amount of directors' remuneration in accordance with the Company's Articles of Incorporation. Independent directors are ex-officio members of theaudit committee. In addition to the general remuneration paid to directors, the Company takes into account of each director’s individual responsibilities (such as serving as a member of various functional committees), risks and investment time, andalso determines different reasonable remunerations.
Note 13: In addition to the information disclosed in the table above, has any Director provided services to AUO Corp. and its subsidiaries and received remuneration for such services (e.g. serving as a consultant that is not an employee): None.

(II)

Remuneration to President and Vice Presidents

Date: December 31, 2024
Salary (A)(Note 1)
Job Title(Note 1)Name
AUO

Chairman & Group CSO

Shuang-Lang (Paul)
Peng

President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Senior Vice
President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President

All
consolidated
entities(Note 6)All
consolidated
entities(Note 6)

AUO

AUO

All
consolidated
entities(Note 6)

Employee profit-sharing compensation (D)(Note 4)All consolidated
entities (Note 6)

AUO
Cash

Stock

Cash

Stock

105,681(0.58%)
96,206(0.53%)

105,681(0.58%)
96,246(0.53%)

043,454(0.24%)

44,182(0.24%)

50

043,445(0.24%)

43,989(0.16%)

30

41,339(0.23%)

30

249,452(1.37%)

611

15,0780090,60390,603000012,484

12,484108

108

83,614

83,65400

00

Wei-Lung Liau

7,348

7,348

119

119

35,98736,7160

0

0

Ting-Li Lin

7,343

7,343

119

119

35,98336,527000James CP Chen

Unit: NT$ thousands; 1,000 shares

Sum of A+B+C+D and ratio Remuneration received
to net income (%)(Note 7)from Investee
enterprises other thansubsidiaries or from the
All consolidated
parent company
AUO
entities (Note 6)(Note 8)15,078CEO and President Frank Ko
Senior Vice

Rewards andspecial disbursements (C)(Note 3)Retirement pay andpension (B)(Note 2)

7,396

7,396

119

119

33,82433,824000041,339(0.23%)

51,664

51,664

1,032

1,032

194,767

196,755

0

0

0

0

247,463(1.36%)

6,440
40

CS Hsieh
Amy KuHong-Jye Hong
TY LinTina Wu
Andy Yang
Benjamin Tseng
Ivan Wu
YuChieh Lin

21

Corporate Governance2023 Annual Report

AUO Corporation

22
2023 Annual Report

AUO Corporation

Remuneration Range Table
Names of the President and Vice presidents
Remuneration range for each President and Vice President
in AUOAUO
All consolidated entities (Note 9)Less than NT$ 1,000,000
NT$ 1,000,000 (incl.)~ NT$ 2,000,000 (excl.)
NT$ 2,000,000 (incl.)~ NT$ 3,500,000 (excl.)
NT$ 3,500,000 (incl.)~ NT$ 5,000,000 (excl.)
NT$ 5,000,000 (incl.)~ NT$ 10,000,000 (excl.)
NT$ 10,000,000 (incl.) ~ NT$ 15,000,000 (excl.)
NT$ 15,000,000 (incl.) ~ NT$ 30,000,000 (excl.)
Hong-Jye Hong, Benjamin Tseng, Andy Yang, TY Lin, Ivan Wu,YuChieh Lin
Hong-Jye Hong Benjamin Tseng, Andy Yang, TY Lin, Ivan Wu,YuChieh Lin
NT$ 30,000,000 (incl.) ~ NT$ 50,000,000 (excl.)
Amy Ku, Tina Wu, James CP Chen, Wei-Lung Liau, TY Lin CS Hsieh
Amy Ku, Tina Wu, James CP Chen, Wei-Lung Liau, TY Lin, CS Hsieh
NT$ 50,000,000 (incl.) ~ NT$ 100,000,000 (excl.)
Frank Ko
Frank Ko
NT$ 100,000,000 or more
Shuang-Lang (Paul) Peng
Shuang-Lang (Paul) Peng
Total
14 individuals
14 individuals
Note 1: Salary, position bonus and severance pay of managers listed above the vice president in 2023.
Note 2: Pension subscribed/paid in accordance with the law in 2023.
Note 3: Listed are all kinds of bonuses(including bonuses deferred from long-term incentive plans over the years) for managers above the vice president in 2023, remuneration, bonus, travel expenses, special expenses, various
allowances, dormitory, car allocation and other remuneration for acting as Corporate Person directors or supervisors appointed by the Company and its subsidiaries. Salary expenses recognized in accordance withIFRS2 "share-based payment", including obtaining employee stock option certificates, restricting employees' rights to new shares and participating in cash capital increase subscription, shall also be included in the
remuneration.
Note 4: The amount of employee bonuses approved by the board of directors for the fiscal year 2023 is calculated based on the historical principles of distribution and the actual distribution ratio of this proposed year.
Note 5: Remuneration information listed for managers above the level of vice president in 2023 as of the end of 2023.
Note 6: The total amount of remuneration paid by all companies (including the Company) to managers above the level of vice president of the Company in the consolidated report.
Note 7: After-tax net profit(NTD 18,203,274 thousands)refers to the after-tax net profit of individual financial reports.
Note 8: Refers to the base compensation, profit-sharing compensation (including profit-sharing compensation for employees, directors and supervisors), business execution fees and other related compensation received by amanager above the level of vice president in 2023 as a director, supervisor or manager of a reinvestment enterprise outside the subsidiary or the parent company.
Note 9: The total amount of various compensation paid by the parent company and all reinvested enterprises (including the Company) to the managers above the level of vice president of the Company.

,

Corporate Governance(III) Names and Distributions of Employee Profit-Sharing Compensation to Managerial Officers
Date: December 31, 2023
Job Title(Note 1)Chairman & Group CSO
CEO and President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Senior Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Senior Associate Vice President
Senior Associate Vice President
Senior Associate Vice President

Name(Note 1)
Shuang-Lang (Paul) Peng
Frank Ko
Wei-Lung Liau
Ting-Li Lin
James CP Chen
CS Hsieh
Amy KuHong-Jye Hong
TY LinTina Wu
Andy Yang
Benjamin Tseng
Ivan Wu
Yu-Chieh Lin
Kun Yu Lin
SI Jeong

Amount instock(consolidated)(Note 2)

Amount in cash(consolidated)(Note 2)0

Total(consolidated)(Note 2)0

Unit: NT$ thousands

Ratio of total amount to the
net income after taxes (%)(Note3)0(0.00)

Hank Liu

Associate Vice President
Center Chen
Associate Vice President
Bryan Kuo
Associate Vice President
KS Tseng
Associate Vice President
Ken YJ Chen
Associate Vice President
CD LeeAssociate Vice President
CH Wu
Associate Vice President
Paul KP Lee
Associate Vice President
Simon WH Hsu
Associate Vice President
Jenn-Jia Su
Associate Vice President
KK LeeAssociate Vice President
Cloud Huang
Associate Vice President
Allen CK Wu
Associate Vice President
Jim CY Lee
Note 1: Refers to those who are in office on the date of publication of the annual report.
Note 2: Refers to the employee profit-sharing Compensation in 2023.
Note 3: After-tax net profit (NTD 18,203,274 thousands)refers to the after-tax net profit of the parent company only financial report in 2023.

(IV) Analysis of remuneration to directors, supervisors, president and vice president and presidents etc. as apercentage of the after-tax income of the Company and all companies’ consolidated statements in thestand-alone financial statements from the last two years, and description of the policy, standards andcombination of remunerations, procedure for making such decision, and correlation with businessperformance and future risks.
1. Analysis of remuneration to directors, supervisors, president and vice presidents as a percentage of the Company’s
after-tax income in the parent company only financial reports from the last two years:

Title
AUO

The total payment amount as a percentage (%) of the net income(loss)
after tax in the parent company only financial report
2023
2022
All companies within the
All companies within the
AUO
financial reportfinancial report(0.18)(0.18)(0.15)(0.15)

Directors
President and Vice
(3.17)(3.19)(2.08)(2.09)
President
Note 1: The net losses after tax in the parent company only financial report for the years 2023 and 2022 are NT$(18,203,274)
thousand and NT$(21,101,374) thousand, respectively.
Note 2: The manager remuneration ratio in 2023 has increased relative to 2022, due to the promotion of two vice presidents in 2023.

AUO Corporation
2023 Annual Report23

2. Policy, standards/packages, procedures, the linkage to operating performance and future risk exposure.
Item
Employee

Percentage or Range If the company makes profit for the year, no less than 5% should be set aside as employee remuneration.

remuneration

However, when the company still has accumulated losses, provision should be made in advance for the deficit.
(Article 15)
 Rewards can be given to employees in the form of shares or cash, and also include issuing employee stock option
certificates, issuing restricted employee rights new shares, legally buying back shares to transfer to employees,
and preserving shares for employees during the issuance of new shares. These privileges can also extend to theemployees of subsidiary companies that meet certain criteria. The conditions and allocation methods are to be

Director's

determined by the Board of Directors or a person authorized by the Board. (Article 15-3)
 If the company makes a profit for the year, no more than 1% should be allocated as director remuneration.

remuneration

However, if the company still has accumulated losses, an amount should be set aside in advance to offset the loss.
(Article 15)
 Directors' remuneration can only be in the form of cash.

Note 1: The Company accrued remuneration to employees based on the profit before income tax excluding the remuneration toemployees and Directors for each period, multiplied by the percentage resolved by the Board of Directors. Remuneration to
directors was estimated based on the amount expected to pay and recognized together with the remuneration to employees
as operating costs or operating expenses.
Note 2: Employee remuneration and director remuneration shall be determined by the board of directors with the attendance ofmore than two-thirds of the directors and the approval of more than half of the directors present, and shall be reported tothe shareholders' meeting.

(1) Director's remuneration
The remuneration of the directors of the Company shall be paid by the Board of Directors in accordance with theprovisions of the Regulations Governing the Remuneration of Directors and Members of Functional Committees,
which are formulated in accordance with the authorization of the Articles of Incorporation, based on theparticipation and value of contribution by the directors to the operation of the Company, and with reference to thestandards of domestic and foreign industry. The remuneration of the directors shall be increased in accordance withthe chairman, convener and members of the functional committees, and may be reduced at their discretion inaccordance with the results of operational performance or performance evaluation by the directors. Starting from2024, the director’s remuneration will be reported annually to the shareholders’ meeting including of remuneration
policy, personal remuneration and amount.
(2) Manager's remuneration(a) Manager's remuneration policy
The remuneration of the managers of the Company shall be paid in accordance with the principle of"Remuneration Policy of Managers" determined by the Remuneration Committee and the Board of Directors,
and shall be reviewed by the Remuneration Committee on an annual basis and submitted to the Board of
Directors for resolution. The Company has also cooperated with external professional consultants for a longtime to ensure that managers' remuneration policies, payment levels and market fluctuations are linked. The
remuneration of our company's manager is linked to the company's operational performance. The overall
reward composition consists of salary, short and long-term variable bonuses, and profit-sharing employee
bonuses. Among these, variable bonuses are determined based on operational performance, accounting for 70%
to 90% of the total remuneration depending on position and performance. At the same time, the managers'
long-term reward plan is assessed over a three-year period, with stock rewards accounting for more than 50%,and includes clawback provisions. The Remuneration Committee sets performance goals in line with thecompany's long-term development strategy. In addition to financial indicators such as EBITDA, revenue, grossprofit margin, and operating profit margin of strategic products, and contribution to shareholders, it also
incorporates ESG sustainability performance and major theme management goals, combining the three majoraxes of "environmental sustainability", "inclusive growth", and "agile innovation". centered around “environmental
sustainability”, “inclusive growth”, and “flexible innovation”, deepening the connection with shareholder interestsand fulfilling our commitment to sustainable management.

24

AUO Corporation
2023 Annual ReportCorporate Governance(b) Manager's remuneration policy
Part of the manager's remuneration is paid in the form of stock, and the Board of Directors had formulated the"Executive Stock Ownership Guidelines" on 23. Feb, 2023, after reviewed and revised on March 11, 2024,
which requires executives to own company shares in an amount equal to a multiple of their annual base salary:ten multiples for the chairman, CEO, and president; and five multiples for other executives. The executives are
required to achieve the shareholding target within five years of appointment or from the policy effective date,and maintain the value of the above shareholding during the term of the executive, so as to strengthen
corporate governance and reduce management risks.

IV. Operation of Corporate Governance(1) Operation of the Board of Directors
Total of 7 (A) meetings were held by the Board of Directors in 2023. The attendance of the directors as the following:
Title

Name

ChairmanPeng Shuang-Lang

Director

AUO Foundation

Representative: Frank Ko

Ming Hua Investment
Company Limited
Qisda Corporation

Representative: ChuangChuang Tsai
Representative: Han-Chou(Joe) Huang

Director
Director

Independent
Chin-Bing (Philip) Peng
Director
Independent
Jang-Lin (John) Chen
Director
Independent
Chiu-Ling Lu
Director
Independent
Cathy Han
Director
Independent
Yen-Hsueh (Sharon) Su
Director
Other information required to be disclosed

No. ofmeetings
attended inperson (Ｂ)No. ofmeetings
attendedby proxyIn-person
attendance
rate (%)(B/A)

7

0

100

7

0

100

7

0

100

7

0

100

7

0

100

7

0

100

7

0

100

7

0

100

7

0

100

Remarks

Resigned on
December 8, 2023

1. If any of the following circumstances exists, specify the board meeting date, meeting session number, content of the motion(s), theopinions of all the independent directors, and the measures taken by the Company based on the opinions of the independent
directors:(1) Any matter under Article 14-3 of the Securities and Exchange Act: The Company has set up an audit committee, and theprovisions of Article 14-3 are not applicable. Please refer to the "Operation of the Audit Committee" (pages 28-31) of this annual
report for relevant information.
(2) In addition to the matters referred to above, any dissenting or qualified opinion of an independent directory that is on record orstated in writing with respect to any board resolution : None.
2. The status of implementation of recusals of directors with respect to any motions with which they may have a conflict of interest:
specify the director’s name, the content of the motion, the cause for recusal, and whether and how the director voted:
Date of Board
Participation in
Name of Director
Content of Motion
Reasons for avoidance of interestsof Directors
voting2023.02.23 Director Han-Chou
Approved the case that AUO Director Han-Chou (Joe) Huang, the Did not participate(Joe) Huang
Display Plus Corporation, a representative of Qisda Corporation, in discussion andholding shares in the target company voting
100%-owned subsidiary of
because of Qisda Corporation.
the Company, intends topublicly acquire the commonshares of Crystalvue Medical
Corporation.
All of the directors abstain from taking Did not participate
Approved the 2022
2023.02.23 All the directors
part of personal interests.
in discussion andremuneration to directors
votingand senior managers.

AUO Corporation
2023 Annual Report25Date of Board
Name of Directorof Directors
2023.02.23 Chairman Shuang-Lang(Paul) Peng, AUO
Sustainable Foundation
director representative
Frank Ko
Chairman Shuang-Lang(Paul) Peng, AUO
Sustainable Foundation
director representative
Frank Ko2023.04.27 Chairman Shuang-Lang(Paul) Peng, AUO
Sustainable Foundation
director representative
Frank Ko

Participation in
votingApproved the list of treasury The recipient abstain from taking part Did not participate
stocks' granted managers and of his personal interests in accordance in discussion andwith Article 9 of the Rules of voting
the number of distribution
Procedure of the Board of Directors.
(subscription).
Content of Motion

Reasons for avoidance of interests

Approved the personnel case The appointee shall withdraw his Did not participate
of senior managers.
interests in accordance with Article in discussion and206 of the Company Act and Article 9 votingof the rules of Procedure of the Boardof Directors.
Approved the amendment of Where a director was chosen as an Did not participate“Decision-making authority applicable personnel, he shall withdraw in discussion andhis interests in accordance with Article voting
on senior manager
remuneration" and "Business 206 of the Company Act and Article 9
Transfer Protection Measures of the Rules of Procedure of the Boardof Directors.
" and the selection of
applicable personnel.

3. Assessment of the board of directors' performance
Evaluation Evaluation
Scope ofcycle
periodevaluation
Once a year 2022.10~
Board of2023.09
Directors
Once a year 2022.10~
2023.09

Individual
Directors

Once a year 2022.10~
2023.09

Audit
Committee

Self-evaluation
Method ofevaluation
1.
Board of Directors’
self-evaluation and executed by
the deliberative unit.
2.
Individual Directors’
self-evaluation and executed by
the deliberative unit.
3.
4.
5.
1.
Members’ self-evaluation and2.
executed by the deliberative
unit.
3.
4.

Evaluation contents
The level of participation in the company's
operation/Directors' sense of duty and level ofparticipation in the company's operation.
Enhancing the quality of board decision-making/graspof the company's goals and tasks as well as the
management and communication of internal relations.
Composition and Structure of the Board of Directors.
Appointment of Directors and Continuing Education.
Internal Control.
Degree of involvement in the company's operations
Understanding of the responsibilities of functional
committees.
Improving the decision-making quality of functional
committees.
Composition and appointment of functional
committee members.
Internal control.
Degree of involvement in the company's operations.
Understanding of the responsibilities of functional
committees.
Improving the decision-making quality of functional
committees.
Composition and appointment of functional
committee members.

5.
1.
Remuneration Independent Directors’Committee
self-evaluation and executed by 2.
the deliberative unit.
3.
Independent Directors’
Once a year 2022.10~
Corporate2023.09
Governance self-evaluation and executed by4.
the deliberative unit.
andNomination
Committee
External Evaluation
Evaluation Evaluation
Scope of
Method of
Evaluation contents
cycle
periodevaluation
evaluation
Taiwan Corporate Governance Association was entrusted
Once every 2020.09~
Board of
Evaluation was conducted by
to evaluate the effectiveness of the external board of
3 years2021.08
Directors
online self-assessment
directors in eight aspects, including composition, guidance,questionnaire and field visit.
authorization, supervision, communication, internal
control and risk management, self-discipline and support
system through online self-assessment questionnaire andfield visit.
Once a year 2022.10~
2023.09

Evaluation results and improvement plans(1) Self-evaluation
The self-evaluation results of the company's "Board of Directors", "Audit Committee", "Remuneration Committee" and"Corporate Governance and Nomination Committee" in 2023 are all above the standard, and there are no major improvement

26

AUO Corporation
2023 Annual ReportCorporate Governanceprojects. The evaluation results will be reviewed for the first time in 2024 The board of directors reports to the directors andserves as a reference for the performance, remuneration and nomination for renewal of members of the board of directors andfunctional committees.
(2) External evaluation
The Taiwan Corporate Governance Association (TCGA) and its assessment experts have no business dealings with the company
and are independent. Its report shows that five of the company's directors were independent directors, accounting for more thanhalf of the total seats on the board of directors. Female directors accounted for more than 1/5, and they were all appointed bypeople with professional experience and rich business management practices. Through semi-annual strategy meetings,
independent directors are invited to discuss the environment and major issues facing the company based on the company's"dual-axis transformation" strategy to form a consensus on major development goals and strategies. The company's board of
directors will report the evaluation results to the directors on February 10, 2022. The board of directors will use therecommendations of the Chinese Corporate Governance Association as a reference for continuing to improve the board of
directors' functions, including modifying the whistleblower system and channels to demonstrate the company's Pay attention to
the effectiveness (including trustworthiness) of the reporting system.
Reasons why external agencies and committee members are independent:
The Taiwan Corporate Governance Association is not a related person of the company or has an independent business
relationship. Participants and their second-degree relatives do not hold positions of significant influence in the company, nor dothey have direct or indirect financial ties with the company. Interested relationship or receiving gifts.
4. Give an evaluation of the targets that were adopted for strengthening of the functions of the board during the current and immediately
preceding fiscal years and the measures taken toward achievement thereof:(1) Since the company re-elected members of the seventh board of directors on June 19, 2013, independent directors have exceeded
one-half of all directors to strengthen the functions of the board of directors and corporate governance; among them, the tenthboard of directors will be re-elected on June 17, 2022. Members of the current board of directors, each gender accounts formore than one-third of the seats on the board of directors (3 seats of female directors currently), and the diversity policy isimplemented.
(2) Remuneration Committee was established on August 30, 2011, with three independent directors appointed by the Board of
Directors.
(3) The Corporate Governance Committee was established on October 29, 2019 (renamed the Corporate Governance andNomination Committee on March 11, 2024). Please refer to pages 32-34 of this annual report for its main powers and operations.
(4) On March 11, 2024, we formally established the Sustainability & ERM Committee under the Board of Directors. This is an
important step in our commitment to sustainable development, in line with international trends, and in proactively responding to
the risk assessment and response strategies of various stakeholders in environmental, social and corporate governance aspects. It
is also our goal to achieve sustainable operations. Through the Board of Directors, as the highest governance unit for risk
management, we supervise the management of risks, formulate risk management policies and procedures, and allocate and assign
appropriate and sufficient resources. At the same time, we are gradually establishing a corporate governance culture.

AUO Corporation
2023 Annual Report27

(2) Operation of the Audit Committee
The Audit Committee had 6 meetings (A) in 2023 and the attendance status of the independent directors is as follows:
Name

No. of meetings
attended in person (B)No. of meetings
attended by proxyIn-person attendance
rate (%) (B/A)

Convener Yen-Hsueh Su

6

0

100

Member

6

0

100

6
6
6

0
0
0

100
100
100

Title

Chin-Bing (Philip) Peng

Member Jang-Lin (John) Chen
Member Chiu-Ling Lu
Member Cathy Han
Other information required to be disclosed
1.

Remarks
Resigned on December
8, 2023.
Elected as the Convener
on January 30, 2024.

If any of the following circumstances exists, specify the date of Audit Committee meeting, meeting session number, content of the
motion(s), the content of any dissenting or qualified opinion or significant recommendation of the independent directors, theoutcomes of audit committee resolutions, as well as the measures taken by the Company in response to the opinions of the Audit
Committee:(1) Any matter under Article 14-5 of the Securities and Exchange Act (please refer to this Annual Report (pages 30-31):
All resolutions have been approved with the consent of more than one-half of the Audit Committee members before aresolution has been reached at the Board of Directors. There were no resolutions which had not been approved by the Audit
Committee members but were undertaken upon the consent of more than two-thirds of all directors.
(2) In addition to the matters referred to above, any matter that was not approved by the Audit Committee but was approved bya two-thirds or greater majority resolution of the board of directors: None.

2.

Implementation of recusals of independent directors with respect to any motions with which they may have a conflict of interest:
None.

3.

Closed-door communication between the independent directors, the head of Internal Auditor and the CPAs (which should include
material items, channels, and outcomes of the communication on the state of the Company’s finance and/or operations, etc.).
(1) The Company regularly holds Audit Committee meetings and as required, invites CPAs and the head of Internal Audit toattend the meetings respectively. The independent directors engage in separate communication at least once a year with
CPAs and the head of Internal Auditor on relevant matters.
(2) The head of Internal Audit regularly submits audit reports to the Audit Committee according to the annual audit plan and the
Audit Committee regularly evaluates the Company’s internal control system, internal auditors and their audit results.
(3) The Audit Committee communicates regularly with the Company’s CPAs regarding their quarterly review or audit of financial
statements and other matters required by relevant laws and regulations. The Audit Committee also conducts the reviews on
independence of the CPAs respect to their appointment and the audit and non-audit services they provide.
(4) Main communication matters in 2023
A. Excerpts from the communication between the independent directors and CPAs are as follows:
Date2023.02.07

Meeting

Key points of communication

Communication and opinions of Handling of opinions of
independent directors

independent directors

Audit

The findings of the audits on After review by the Audit Not applicable

Committee

theCompany’s

financial Committee,

statements for 2022.

allindependent

directors gave their approval
without any objections.

2023.04.26

Audit

The findings of the review on After review by the Audit Not applicable

Committee

theCompany’s

consolidated Committee,

allindependent

financial statements for the directors gave their approval
period ended March 31, 2023.
2023.07.25

without any objections.

Audit

The findings of the review on After review by the Audit Not applicable

Committee

theCompany’s

consolidated Committee,

allindependent

financial statements for the directors gave their approval
period ended June 30, 2023.

28

AUO Corporation
2023 Annual Report

without any objections.

Corporate GovernanceDate2023.10.30

Meeting

Key points of communication

Communication and opinions of Handling of opinions of
independent directors

independent directors

Audit

Communication between CPAs Noted, and there are no other Not applicable

Committee

and the Audit Committee.

suggestions.

(closed door
session)2023.10.30

Audit

The findings of the review on After review by the Audit Not applicable

Committee

theCompany’s

consolidated Committee,

allindependent

financial statements for the directors gave their approval
period ended September 30, without any objections.
2023.
B. Excerpts from the communication between independent directors and the head of internal audits are as follows:
Date2023.02.07

Meeting
Audit

Key points of communication

Communication and opinions Handling of opinions ofof independent directors

independent directors

1. The findings of the internal After review by the Audit Not applicable

Committee

audit reports for the fourth Committee, all independent
quarter of 2022.

directors gave their approval

2. 2022 Statement of Internal without any objections.
Control System.
2023.04.26

Audit

1. The findings of the internal After review by the Audit Not applicable

Committee

audit reports for the first Committee, all independent
quarter of 2023.
2. Thefindings

Self-Inspection

directors gave their approvalofthe without any objections.

Execution

Report for the second halfof 2022.
2023.07.25

Audit

The findings of the internal After review by the Audit Not applicable

Committee

audit reports for the second Committee, all independent
quarter of 2023.

directors gave their approval
without any objections.

2023.10.30

Audit

The

Committee

Self-Inspection

findings

ofthe Noted, and there are no other Not applicable

Execution suggestions.

(closed door Report for the first half of 2023.
session)2023.10.30

Audit

The findings of the internal After review by the Audit Not applicable

Committee

audit reports for the third Committee, all independent
quarter of 2023

directors gave their approval
without any objections.

4.

Annual work focus and operation(1) Regularly communicate the audit report results with the head of Internal Audit according to the annual audit plan.
(2) Regularly communicate with the Company's CPAs on the review or audit results of financial statements in each quarter.
(3) Review financial statements.
(4) Assess the effectiveness of the internal control system.
(5) Prior review of the appointment, dismissal, remuneration and services of CPAs.
(6) Evaluate the independence of CPAs in providing audit and non-audit services.
(7) Review the Company's operational procedures and material transactions of assets, derivatives, capital lending andendorsement/guarantees.
(8) Legal compliance.
(9) Handle any grievances/reporting incidents submitted to the Audit Committee Mailbox.

AUO Corporation
2023 Annual Report

29

5.

30

The meeting date, proposal contents and resolutions of the Audit Committee in 2023
Date/Term of
Resolutions andContent of motion
Audit Committee
member opinions
Approved
and6th Committee
1. Recognized the "Statement of Internal Control System". (Note 1)
submitted to the
3rd session
2. Approved the pre-approved non-assurance service policy. (Note 1)
2023.02.07
3. Approved the 2022 Parent Company Only and Consolidated Financial Statements. Board of Directors
for resolution.
(Note 1)
4. Approved the 2023 services and fees of CPA. (Note 1)
5. Approved the case of the Company’s investment in establishing a subsidiary in
Vietnam.
6. Approved the Company to lend capital to subsidiaries.
7. Approved the subsidiary, AUO Manufacturing (Shanghai) Co.,Ltd. to lend capital.
(Note 1)
8. Approved the overdue accounts receivable from non-related parties of AUO
Megalnsight (Suzhou) Co., Ltd. as a non-capital loan case.
9. Approved the Company to provide guarantee against the bank loan to AUO(Kunshan) Co., Ltd. (Note 1)
10. Approved of the subsidiary AUO (Xiamen) Co., Ltd. to issue a guarantee for the
additional bank quota of the company. (Note 1)
11. Approved the case of the Company’s capital increase for its subsidiaries Konly
Venture Corp. and Ronly Venture Corp. (Note 1)
12. Approved the case of the Company’s investment in common shares of energy projectcompanies. (Note 1)
and6th Committee
1. Approved the list of treasury stock’ granted managers and the number of Approved
submitted to the
4th session
distribution(subscription).
Board of Directors
2023.02.23
2. Approved the 2022 Business Report and 2023 Business Plan. (Note 1)
for resolution.
3. Approved the distribution of 2022 earnings.
4. Approved the case of that AUO Display Plus Corporation, a 100%-owned subsidiaryof the Company, intends to publicly acquire the common shares of Crystalvue
Medical Corporation. (Note 1)
and6th Committee
1. Approved the Consolidated Financial Statements for the period ended March 31, Approved
submitted to the
5th session
2023. (Note 1)
2023.04.26
2. Approved the subsidiaries to lend capital to the subsidiary, AUO (Kunshan) Co., Ltd. Board of Directors
for resolution(Note 1)
3. Approved the fund loans between subsidiaries, AUO(L) CORP, AUO (Suzhou)Co., Ltd, AUO (Xiamen) Co., Ltd. (Note 1)
1. Approved the Consolidated Financial Statements for the period ended June 30, 2023. Approved
and6th Committee(Note 1)
submitted to the
6th session
2. Approved the amendment of the investment structure of the Vietnamese subsidiary. Board of Directors
2023.07.25
3. Approved the amendment of the investment structure of the subsidiary, AUO for resolution(Kunshan) Co., Ltd.
4. Approval for the Company to cancel the bank credit guarantee case for its subsidiary
AUO (Kunshan) Co., Ltd., and approval for amendments to the "Authority Decision
Table" case.
1. Approved the acquisition of 100% ownership of Germany’s Behr-Hella Thermocontrol Approved
and6th CommitteeGmbH. (Note 1)
submitted to the
7th session
Board of Directors
2023.10.02
for resolution
1. Approved the signing of a production line construction contract with PlayNitride Except
forthe
6th Committee
Display Co., Ltd. (Note 1)
seventhproposal
8th session
2. Recognized the case of "2024 Annual Audit Plan". (Note 1)
thatwasn’t2023.10.30
3. Approved the amendment of "Internal Control System". (Note 1)
discussed due to the
4. Approved the Consolidated Financial Statements for the period ended September 30, needfor2023. (Note 1)
reassessment
and
5. Approved the Adjustments to the Investment Structure of the Mainland China the tenth proposal
Subsidiary. (Note 1)
that required partial
6. Approved the proposal for subsidiary AUO (Shanghai) Co., Ltd. to lend funds to the amendments to the

AUO Corporation
2023 Annual ReportCorporate Governance

Date/Term of
Audit Committee

Resolutions andmember opinions
subsidiary of the Smart Service Business Group. (Note 1)
description content,
7. Approved to lend capital to the subsidiary, Smart Services Business Group Subsidiary all other proposals
Case. (Note 1)
are approved as
8. Approved the company's indirect capital increase in Yo-Pei Water Corporation, proposedandthrough its subsidiary AUO Envirotech Inc. (Note 1)
submitted to the
9. Approved to lend capital to the subsidiary, AUO Crystal Corp. (Note 1)
Board of Directors
10. Approved the Establishment of Purchase and Sale Electronic Company Case. (Note 1) for resolution
Content of motion

Note 1: Matters listed in Article 14-5 of the Securities Exchange Act.

(3) Operation of the Remuneration Committee:
1. Information on Remuneration Committee Members (Professional Qualifications and Experience)
Conditions

Title

Name

Independent director(Convener)

Chin-Bing (Philip) Peng

Independent director

Yen-Hsueh (Sharon) Su(Note 1)

Independent director

Jang-Lin (John) Chen

Independent director

Cathy Han (Note 2)

Professional
qualifications andexperience

Independence
analysis

Number of other public companies atwhich the person concurrently serves asremuneration committee member
1

Please refer toPlease refer topages 15-16 ofpages 11-13 of thethe annual
annual report.
report.

302Note 1 : Resigned on December 8, 2023.
Note 2 : Newly elected on January 31, 2024.

2. Scope of Authority(1) Establish and regularly review the policies, systems, standards, and structures of the performance evaluation andpay remuneration for directors and managers.
(2) Regularly assess and determine the remuneration for directors and managers.
3. Implementation Status(1) The Company’s remuneration committee has a total of 3 members, all serving as independent directors.
(2) The 5th term of the members is from June 17, 2022 to June 16, 2025.
(3) Total of 4 (A) meetings were held by the Remuneration Committee in 2023. The attendance of the number as thefollowing:
Title

Name

No. of meetings
attended in person(B)No. of meetings
attended by proxyIn-person
attendance rate (%)(B / A)

Convener

Chin-Bing (Philip) Peng

4

0

100

MemberYen-Hsueh (Sharon) Su

4

0

100

MemberJang-Lin (John) Chen

4

0

100

Remarks

Resigned on
December 8, 2023.

AUO Corporation
2023 Annual Report31

Other information required to be disclosed:
A. If the board of directors does not accept, or amends, any recommendation of the remuneration committee, specify the board
meeting date, meeting session number, content of the recommendation(s), the outcome of the resolution(s) of the board of
directors, and the measures taken by the Company with respect to the opinions given by of the remuneration committee (e.g.,
if the salary/remuneration approved by the board is higher than the recommendation of the remuneration committee, specify
the difference(s) and the reasons): None.
B. With respect to any matter for resolution by the remuneration committee, if there is any dissenting or qualified opinion of acommittee member that is on record or stated in writing, specify the remuneration committee meeting date, meeting session
number, content of the motion, the opinions of all members, and the measures taken by the Company with respect to themembers’ opinion: None.
C. Reasons for discussion and resolution of the Remuneration Committee and the measures taken by the Company with respect
to the members’ opinion:
Date of
Remuneration
Committee

Content of motion

2023.02.07

1. Approved the amendments to "Remuneration Policy to the
Directors and Functional Committee Members".
2. Approved the selection of applicable personnel for the“Measures for the Protection and Conversion ofManagement Rights ".

2023.02.23

2023.04.26

2023.07.25

Resolution result andopinions of all members

Handling of theRemuneration
Committee's opinions by
the company (Board of
Directors)

1. Approved the “Shareholding Regulations to senior
executives ".
2. Approved the 2022 Remuneration to directors and senior
The board of directors
executives.
Approved and submitted approved all the proposals
3. Approved the list of treasury stocks' granted managers and to the Board of Directors accordingtothethe number of distribution (subscription).
for resolution.
recommendation of theRemuneration Committee.
1. Approved the amendments to "Decision-making authority
on senior executives’ remuneration".
2. Approved the amendments to " Measures for the Protection
and Conversion of Management Rights " and approved theselection of applicable personnel.
1. Approved the “2024 Senior Executives Remuneration
Policy".
2. Personnel Case of the senior executive.

(4) Information and operation of the members of the Corporate Governance and Nomination Committee
The Company established the Corporate Governance Committee on October 29, 2019, and changed its name to the
Corporate Governance and Nomination Committee on March 11, 2024.
1. Information of members (Professional qualifications and experience)
Title
Chairman(Convener)
Independent
Director
Independent
Director
Independent
Director
Independent
Director

32

Name
Shuang-Lang (Paul)
Peng
Chin-Bing (Philip)
Peng
Chiu-Ling Lu
Cathy Han
Jang-Lin (John) Chen

AUO Corporation
2023 Annual Report

Professional
qualifications andexperience

Independence
analysis
N/A

Number of members who concurrently serve as
corporate governance and nomination committee
members of other publicly traded companies
10

Please refer to pages
11-13 of this annual
report.

Please refer topages 15-16 of thisannual report.

010Corporate Governance

2. Scope of Authority(1) Establish the standard of the required professional knowledge, skills, gender diversity and autonomy background,and experience for the board members, and based on it, the search, examination, and nomination of board
candidates.
(2) Construct and develop the organizational structure of the board of directors and each committee, carry out theperformance assessment of the board of directors, each committee and each director, and evaluate theindependence of the independent directors.
(3) Formulate and review regularly the board of directors’ education and succession plan.
(4) Review the succession plan of top managers (including equivalent ranks) beyond the general manager.
(5) Provide appropriate briefing for the new directors to help them understand their responsibilities and become
familiar with the company operation and environment.
(6) Formulate the Company's Corporate Governance Principles.
(7) Other matters as directed by the Board of directors.
3. The operation of Corporate Governance and Nomination Committee(1) There are currently 5 members, consisting of at least 3 directors recommended by the board of directors, amongwhom more than half of the independent directors should participate.
(2) The term of service: June 17, 2022 to June 16, 2025.
(3) Total of 4 (A) meetings were held by the Corporate Governance and Nomination Committee in 2023. The
attendance of the number as the following:
Title

Name

Convener
MemberMemberMemberMemberShuang-Lang (Paul) Peng
Chin-Bing (Philip) Peng
Chiu-Ling Lu
Cathy Han
Jang-Lin (John) Chen

MemberYen-Hsueh Su

No. of actual No. of attendance
attendance (B)by proxy
4
0
4
0
4
0
4
0
4
0
4

Actual attendance (%)(B/ A)
100
100
100
100
100

0

100

Remarks

Resigned on
December 8, 2023

(4) The discussion reasons and resolution results of the Corporate Governance and Nomination Committee and thecompany’s handling of members’ opinions
Date

Key points of meeting

Results and opinionsfrom other members

Handling of opinions ofCorporate Governance andNomination Committee
Noted.

2023.02.08 Reporting items
Noted and no other Corporate Governance Blueprint and Annual suggestions.
Calendar Report.
 Internal performance evaluation report of the Boardof Directors, individual Board members andfunctional committees in the Republic of 2022
 Independence status report of independent directors
Discussion items
Passed as proposed and The board of directors
 Approval of the amendment to the “Organizational submitted to the board approves all resolutions based
Charter for Corporation Governance Committee”. of directors foron the recommendations of Approval of the amendment to the “Corporate resolution.
the Corporate Governance
Governance Principles”.
and Nomination Committee.
 Approval of the amendment of the "Director
Performance Evaluation Questionnaire".
2023.02.23 Discussion items
Noted and no other
The board of directors
 Approval of the senior manager personnel case.
suggestions.
approves all resolutions basedon the recommendations of
the Corporate Governanceand Nomination Committee.

AUO Corporation
2023 Annual Report

33

Date

Results and opinionsfrom other members

Key points of meeting2023.07.25 Reporting items
 Risk management report MSCI ESG Rating
2023.10.15 Discussion items
 Related legal compliance and response measurescases.

Noted and no othersuggestions.

Handling of opinions ofCorporate Governance andNomination Committee
Noted.

Passed as proposed and The board of directors
submitted to the board approves all resolutions basedof directors foron the recommendations ofresolution.
the Corporate Governanceand Nomination Committee.

(5) Information and operation of the members of the Sustainability & ERM Committee
On March 11, 2024, our company formally established the Sustainability & ERM Committee under the jurisdiction of theBoard of Directors. The committee is to assist the board in ongoingly pushing forward corporate sustainability and risk
governance, fulfilling the purposes of sustainable management, and integrating/improving risk management operations. Thisway, the board directors can understand operation status better, and allocate and assign ample and appropriate resources,
enabling effective execution of enterprise risk management. The mechanism and culture of suitable risk management are
established to oversee and ensure the functioning efficiency of the overall enterprise risk management mechanism.
1. Information of members (professional qualification and experience)

Title

Name

Chairman(Convener)

Shuang-Lang(Paul) Peng

Independent
Director

Chiu-ling Lu

Independent
Director

Jang-Lin(John) Chen

Independent Director

Independence analysis

Number of members who
concurrently serve as
Sustainability & ERM Committee
members of other publicly issued
companies

N/A

1

Please refer to pages 11-13 ofthis annual report.
Please refer to pages 15-16 of
this annual report.

00

2. Scope of Authority

Sustainable Development(1) Establish the Corporate Social Responsibility Principles and supervise the execution and effectiveness review,
tracking and revision, and report to the board of directors every year.
(2) Supervise the proposal and execution results of sustainable development policies, mechanisms, or related
management strategies and specific promotion plans, make decisions on significant sustainability issues of thecompany, including technology application, product value, energy development, green manufacturing, value chain
management, citizenship responsibility (including people and human rights), risk management, circular economy,carbon energy operation.
(3) Strengthen communication with various stakeholders and pay attention to their concerned issues.
(4) Ensure the timeliness and accuracy of the disclosed information related to sustainable development.
(5) Supervise other sustainability-related tasks decided by the board of directors.
Risk Governance(1) Review the risk management policies, procedures, and framework, and evaluate the effectiveness of risk strategies.
(2) Approve the qualitative and quantitative tolerance for risk, and allocate resources most effectively.
(3) Implement risk management decisions of the board of directors, supervise the company's risk management
mechanisms, and approve the priority of risk controls.
(4) Review the implementation of risk management, propose necessary improvement suggestions, and report to theboard of directors every year.

34

AUO Corporation
2023 Annual ReportCorporate Governance3. The situation of operation(1) The committee currently consists of 3 members, who are elected by the board of directors, with at least 3
directors, including at least 2 independent directors, for supervision.
(2) The tenure of the first term: From March 11, 2024, to June 16, 2025.
(3) The Sustainability & ERM Committee was formally established on March 11, 2024, and it will convene at least 2
meetings per year in accordance with the rules of the organization.
4. The authority of risk management operations is transferred from the "Corporate Governance and Nomination
Committee" to the "Sustainability & ERM Committee".
The Company's Board of Directors is the highest governance body for risk management. In 2023, the "Corporate
Governance Committee" (renamed the Corporate Governance and Nomination Committee on March 11, 2024) willoversee risk management and formulate risk management policies and procedures, and review the consistency of risk
strategies with the company's operating strategies. The "Sustainability & ERM Committee" was established on March
11, 2024 to continue to evaluate the operation of risk management, determine qualitative and quantitative risk
tolerance levels, and effectively allocate resources. This committee is composed of the chairman and two independent
directors . The operation level is led by the chief financial officer to implement risk management policies andprocedures, including reviewing the company's risk identification operations and handling issues related to risk
control. The management scope covers all aspects such as strategy, finance, operations, and hazards, and includes
emerging risks that may impact the company's operations in the future. The Risk Management Department is
responsible for overseeing and reviewing the effectiveness of risk management. The results of risk management
activities and risk reviews are reported to the Board at least annually.
The Company refers to the ISO 31000 risk management guidelines to establish an enterprise risk management
framework. We adjust and optimize the company's risk management policies and procedures based on internal andexternal situations, and passed amendments through the Board of Directors on January 31, 2024. The results of risk
management implementation will be reported to the Board of Directors annually. Under the guidance and supervisionof the Board of Directors, the corporate governance culture is gradually established.

Board of Directors

ReportBoard of Directors
Sustainability & ERM Committee

Execution Unit

Sustainability & ERM Executive Committee
Risk Governance(Implemented by the Vice General Level)

Audit

Risk Management
Department

AUO Corporation
2023 Annual Report35

(6) Corporate Governance – Implementation Status and Deviations from the Corporate GovernanceBest-Practice Principles for TWSE/TPEx Listed Companies and the Reasons
Deviations fromthe Corporate
GovernanceBest-PracticeEvaluation item
Principles for
TWSE/TPEx
Yes NoSummary description
ListedCompanies andthe reasons
1. Has the Company established and
The Company has a "Corporate Governance Principles", which has relevant norms for No difference
disclosed its Corporate Governanceprotecting shareholders' rights and interests, strengthening the functions of the board
Best-Practice Principles based on theof directors, giving full play to the functions of various functional committees of the
Corporate Governance Best-Practiceboard of directors, respecting the rights and interests of stakeholders, and enhancing
Principles for TWSE/TPEx Listed
information transparency. For the Company's corporate governance Principles, please
Companies?
visit the Market Observation Post System (MOPS) or the Company's website.
2. Shareholding (1) Does the Company 
The Company has formulated the "Operational Measures for Handling Shareholders' No difference
Structure andhave Internal Operation
Suggestions, Doubts, Disputes and Litigation Matters", set up a spokesperson and an
Shareholders’
Procedures for handling
deputy spokesperson system to ensure that information that may affect shareholders'
Rightsshareholders’decision-making can be disclosed in a timely. The stock and Investor Relations aresuggestions, concerns,
dedicated departments to handle shareholders' suggestions, doubts and disputes
disputes and litigation
through special mailboxes The legal department shall properly handle the case thatmatters. If yes, haveshareholders file a lawsuit according to law.
these procedures been
implemented
accordingly?
(2) Does the Company Changes in the shareholding of directors, managers and major shareholders holding No difference
know the identity of its
more than 10% of the shares of the Company are required to be reported to themajor shareholders andMarket Observation Post System(MOPS) before the 10th of each month (inclusive) onthepartieswiththe changes in the internal holding shares in the previous month according to the law.
ultimate control of the
major shareholders?
(3) Has the Company built 
The company has established procedures such as "Processing Procedures for Acquiring No difference
and implemented a risk
or Disposing of Assets", "Subsidiary Management Measures", and "Operational
management system
Standards Related to Financial Business Between Related Parties" to establish andand a firewall between
implement firewalls and risk control mechanisms for related companies, including thethe Company and its
implementation of The management procedures for transactions such as selling goods,
affiliates?
acquiring or disposing of assets, and related major transactions should be submitted tothe board of directors for approval/shareholders' meeting approval or report, andbased on operational management needs, the board of directors will review from time
to time whether there is a need to amend the measures.
(4) Has the Company 
The company's "Internal Material Information Handling and Insider Trading Prevention No difference
establishedinternal
Management Operating Procedures" establishes an internal material information
rules prohibiting insider
handling and disclosure mechanism to strengthen the company's internal personnel to
trading of securities
exercise their duties with the care and loyalty of a good manager. The "Corporatebased on undisclosed
Governance Code" stipulates that directors shall not trade the company's stocks
information?
during the closed period 30 days before the announcement of the annual financial
report and 15 days before the announcement of the quarterly financial report. For new
directors and managers, the Company will provide education and promotion on insider
trading prevention management within one month after taking office. The company willconduct a 0.5-hour compliance promotion on June 1, 2022 for all candidates for the
10th term of directors(including prohibition on insider trading).
3. Composition (1) Have a diversity policy 
For details about diversification policy of the board of directors of the Company, please No differenceandandspecific
refer to II. Information of directors, presidents, vice presidents, associate vice presidents,
responsibilitie
management objectives
directors of various departments and branches (I) Information of directors (pages 13-15).
s of the board
been adopted for theof directors
board and have they
been fully implemented?
(2) Has the Company 
We voluntarily set up various functional committees under the Board of Directors, and No difference
voluntarily establishedmost of them appoint independent directors to serve as members of various functionalotherfunctional
committees. For its operation, please refer to pages 32-35 of this annual report.
committees in addition
1. The Corporate Governance Committee was established on October 29, 2019
to the remuneration(renamed Corporate Governance and Nomination Committee on March 11, 2024)
committee and the2. The Sustainability & ERM Committee will be established on March 11, 2024.
audit committee?
Implementation status (Note 1)

36

AUO Corporation
2023 Annual ReportCorporate GovernanceDeviations fromthe Corporate
GovernanceBest-PracticeEvaluation item
Principles for
TWSE/TPEx
Yes NoSummary description
ListedCompanies andthe reasons(3) Has the Company 
1. The company conducts internal performance evaluations at least once a year in No difference
established rules andaccordance with the "Board of Directors Performance Evaluation Methods" approved
methodology
forby the board of directors, and at least once every three years by an external
evaluating
theindependent agency or a team of external experts and scholars. Please refer to pageperformance of its
27 of this annual report for the evaluation results.
Board of Directors,
2. According to Article 15 of the Articles of Incorporation, the remuneration of
implemented
thedirectors of The Company shall no more than 1% of the remaining profit. The
performance
Remuneration Committee and the Board of Directors shall determine the directors'
evaluations on an
remuneration according to The Company's operating results and the "Remuneration
annualbasis,
andMeasures for Directors and Members of Functional Committees" and with reference tosubmitted the results
the results of directors' performance evaluation. In 2023, the internal self-evaluation ofof
performance
the Board of Directors above the standard, and the directors' remuneration in 2023 wasevaluations to thepaid in full according to the Remuneration Measures for Directors and Members ofboard of directors andFunctional Committees through the resolution of the Remuneration Committee andused them as reference
the Board of Directors.
indetermining
salary/remuneration
for individual directors
and their nomination
and additional officeterms?
(4) Does the Company 
The Company's Audit Committee refers to the Audit Quality Indicators (AQIs) every No difference
regularly evaluate its
year and evaluates the independence and competency of certified accountants
external
auditors’
regularly. The evaluation results are then reported to the Board of Directors which
independence?
serves as a reference for them when appointing certified accountants. Please refer topage 59 of this Annual Report.
4. Does the TWSE/TPEx listed company have 
The board of directors of The Company appointed Mr. Benjamin Tseng, the vice No differencein place an adequate number of qualified
president, as the Corporate Governance supervisor, who is responsible for the
corporate governance officers and has itsupervision and planning of corporate governance, and his qualifications meet theappointed a chief corporate governancerequirements of Article 3-1, Item 1 of Corporate Governance Best Practice Principles
officer with responsibility corporate
for TWSE/TPEx Listed Companies. Although the chief financial officer holds thegovernance practices (including but notconcurrent position of corporate governance officer, he is able to effectively perform
limited to providing information necessary
his duties and maintain independence when performing his duties and concurrent
for directors and supervisors to perform
duties. There is no conflict of interest or violation of the internal control system.The
their duties, aiding directors andfunctions and powers of the Corporate Governance supervisor include:
supervisors in complying with laws and1. Provide directors and the audit committee with the information needed toregulations, organizing board meetings andperform their duties and the latest regulatory developments related to company
annual general meetings of shareholders as
operations.
required by law, and compiling minutes of
2. Assist directors and the audit committee to comply with laws and regulations.
board meetings and annual general
3. Regularly report corporate governance operations to the Corporate Governancemeetings)?
and Nomination Committee and the Board of Directors every year. Handle
matters related to board of directors and shareholders' meetings in accordancewith the law.
4. Prepare minutes of board of directors and shareholders meetings.
5. Assist directors and audit committee members in their appointment andcontinuing education, and the execution is handled by the board secretary unit.
The key points of corporate governance-related affairs in 2023 are as follows:
1. Convened 7 meetings of the Board of Directors, 6 meetings of the Audit
Committee, 4 meetings of the Remuneration Committee and 4 meetings of the
Corporate Governance and Nomination Committee.
2. Convene one regular shareholders’ meeting.
3. All board members shall complete at least 6 hours of further training every year
during their term of office.
4. The company insures liability insurance for directors and key employees andreports to the board of directors after renewal.
5. Conduct internal performance evaluations of the Board of Directors and functional
committees. The evaluation results of the Board of Directors, Audit Committee,
Remuneration Committee, Corporate Governance and Nomination Committee
and their individual members are all above the standard.
6. The external effectiveness evaluation of the board of directors is conducted every
three years. For relevant information, please refer to page 27 of this annual report.
7. The total number of training hours for corporate governance managers in 2023 is
Implementation status (Note 1)

AUO Corporation
2023 Annual Report37Implementation status (Note 1)

Evaluation item
Yes No5. Has the Company established channels for communicating with its stakeholders
including but not limited to shareholders,
employees, customers, suppliers, etc.) andcreated a stakeholders section on its
company website? Does the Company
appropriately respond to stakeholders’questions and concerns on important
corporate social responsibility issues?
6. Has the Company appointed a professional shareholder services agent to handle
matters related to its shareholder
meetings?
(1) Has the Company
7. Information
established a corporate
disclosure
website to disclose
information regarding
its financials, business,and corporate
governance status?

(2) Does the Company use other information
disclosure channels (e.g.,maintaining an
English-language
website, designating staff
to handle informationcollection anddisclosure, appointing
spokespersons,
webcasting investors
conference etc.)?

(3) Does the Company
publish and report its
annual financial report
within two months after
the end of the fiscal
year, and publish andreport its financial
reports for the first,
second, and third
quarters as well as its
operating statements
for each month before
the specified deadlines?

38

AUO Corporation
2023 Annual Report

Summary description

Deviations fromthe Corporate
GovernanceBest-PracticePrinciples for
TWSE/TPEx
ListedCompanies andthe reasons

24 hours. Please refer to page 53 of this annual report for complete training course
information.
The Company has a spokesperson system, and at the same time, it provides the latest No difference
news of the Company and the important achievements of corporate social
responsibility issues through various ways and channels such as stakeholder areas,seminars, investor conference, industry-government-university consultation meetings,
customer satisfaction surveys, mailboxes, and sustainable reports on the Company
website.

The Company appoints the stock affairs agency of Taishin Comprehensive Securities No differenceCo., Ltd. as the Company's stock affairs agency and handles the shareholders' meeting
affairs.
1. Disclosure of financial information
No difference
The company's Chinese and English websites have special areas for investors, andfinancial information and corporate briefing information are regularly updated forinvestors' reference.
2. Disclosure of business information
The company's website contains company product introductions and technicaldescriptions, provides real-time business information on various products, anduploads the latest business activity information at any time for public reference.
3. Disclosure of corporate governance information
The company has a corporate governance area, which includes the operation of theboard of directors and various functional committees, board performance
evaluation and corporate governance-related information, including the intellectual
property office's report to the directors on the implementation status of
intellectual property rights at the first board meeting every year, and on the
directors' opinions. Suggest improvement measures. In addition, the company's
policies, regulations and important measures are also posted on the company's
website.
1. Designate a person to be responsible for the collection and disclosure of company No difference
information:
The collection and disclosure of the Company's information are carried out by
designated personnel, and the latest and correct information of the Company isirregularly disclosed to the public through press releases or major messages.
2. Implement the spokesperson system:
Benjamin Tseng, Chief Financial Officer, is the spokesperson of The Company, andLydia Tsai, Manager of Corporate Governance Department, is the deputy
spokesperson.
3. The investor conference will be placed on The Company website:
The Company hold the investor conference by physical meeting or tel meeting
quarterly. The audio files and materials of The Company's investor conference areplaced in the investor area of The Company's website for easy inquiry; the financial
and business operation information of the investor conference has been publishedin the investor zone, and has also been entered into the Market Observation Post
System (MOPS) according to the provisions of TWSE.
The Company's financial reports were approved by the Audit Committee and No difference
submitted to the Board of Directors for discussion and resolution. The 2023
consolidated and parent company only financial reports were approved by the Audit
Committee and the Board of Directors in January 2024. The respective announcements
and filings were completed on February 29, 2024. The financial reports for the first,
second, and third quarters of 2023, along with the monthly revenue status, have all beenannounced and reported on the Market Observation Post System (MOPS) ahead of the
stipulated deadline. These reports have also been currently uploaded to our Company's
website.

Corporate GovernanceDeviations fromthe Corporate
GovernanceBest-PracticePrinciples for
TWSE/TPEx
Yes NoSummary description
ListedCompanies andthe reasonsWith the management philosophy of respecting human nature and caring for No difference
employees, the Company has formulated various welfare plans, and a welfarecommittee has been formed by the Company's colleagues. For the rights and interests
No differenceof employees, please refer to V. Operational Highlights on employer-employee relationsin the annual report (pages 82-87).
The Company appoints a special person to be responsible for immediately announcing No difference
information about finance, business, changes in insider's shareholding, etc. on theMarket Observation Post System (MOPS) in accordance with relevant regulations. The
Company's website also has an investor area, so as to achieve openness andtransparency of information.
The Company has established a supplier audit and evaluation procedure. The supplier's No difference
product quality, design, cost, green products, environmental, safety and health risks,
ethics and social responsibilities are examined by relevant internal departments, andonly those who pass the audit can become partners. In addition, in order to strengthen
the smooth communication with suppliers, the Company has set up a reporting systemfor professional ethics violations (http://integrity.ab1.auo.com) as a communication andcomplaint channel with the Company. At the same time, through the supply-demand
module, BCP monitoring, and ePO order process in the Supplier RelationshipManagement (SRM) system, a complete communication platform is achieved forinventory management, risk control and efficiency improvement. Under the principle ofinformation transparency, it enhances the communication efficiency between eachother.
The Company sets up different and diversified interaction modes for different No difference
stakeholders, and discloses them in the sustainability report every year; in addition, atthe beginning of each year, the communication with various stakeholders is reported tothe board of directors so that the board of directors can understand the voices of
stakeholders.

1. The company has handled the requirements in accordance with Taiwan Stock No difference
Exchange’s "Directions for the Implementation of Continuing Education for
Directors and Supervisors of TWSE Listed and TPEx Listed Companies ". For
details, please refer to the following table “Continuing Education/Training of
Directors in 2023”(page 52).
2. For managers’ continuing education , please refer to page 53 of the annual report.

Please refer to Chapter 7. Review of Financial Conditions, Operating Result and Risk No differenceManagement of this Annual Report (pages 100-106).
Implementation status (Note 1)

Evaluation item

(1) Employee rights
8. Has theCompany
disclosed(2) Employee wellness
other
information
to facilitate a (3) Investor relations
betterunderstandingof itscorporate
governance (4) Supplier relations
practices?

(5) Rights of stakeholders(6) Directors' continuing
education(7) The implementation ofrisk management
policies and risk
evaluation standards.
(8)The Implementation ofcustomer relations
policies.

The Company always keeps close contact with customers, and keeps informed of the No difference
products that meet their interests at any time, and ensures that the products reach the
expected reliability and quality. In addition, the Company also actively participates in thecustomer's social responsibility implementation plan, and actually integrates new ideas
and practices into the Company management system.
(9) Purchasing liability
The Company has purchased liability insurance for directors and managers, regularly No difference
insurance forassessed the insured amount every year, and reported the renewal of directors' liability
directors?
insurance to the Board of Directors. The insured amount, coverage and premium rateof the renewed liability insurance were reported to the board of directors on October
31, 2023. For insurance information, please refer to the information under "Directors'
liability insurance coverage" on the Market Observation Post System (MOPS).
9. Succession planning and operation status of board members and key management levels
The company has a diversity policy for board members, which is formulated by the company's corporate governance and nomination committee, detailing therequired professional knowledge, skills, experience, gender, and other diverse backgrounds and independence standards for board members. Based on thesestandards, potential board member candidates are sourced, reviewed, and nominated. Concurrently, the corporate governance and nomination committee willconsider the professional knowledge, skills, and experience required by the company's directors based on the company's size, business nature, future strategic
development, and transformation planning, and develop a director training plan. Regularly review the number of board members and the conditions they must
meet, and take into consideration the results of the board performance evaluation, to plan the director's succession plan and candidate. The company has atalent development committee, which regularly convenes meetings to discuss and review succession planning and nurturing for key management levels, andbased on their individual abilities and job requirements, establishes an Individual Development Program (IDP). The IDP will be adjusted according to the needsof the organization and individuals, and includes training courses, cross-industry learning, job rotation, and mentorship system, with the goal to cultivate
management, leadership, and business capabilities of key management levels. The training courses are planned by the company's training system, in addition tointernal training courses, also integrates resources from renowned external institutions, assisting the management team in broadening their external
perspectives. To foster a multi-faceted strategic viewpoint for the management level, the talent development committee formulates a management rotation plan
based on organizational needs, and has a mentorship system to assist new management, not only through planned cross-disciplinary nurturing of a well-rounded

AUO Corporation
2023 Annual Report39

Deviations fromthe Corporate
GovernanceBest-PracticeEvaluation item
Principles for
TWSE/TPEx
Yes NoSummary description
ListedCompanies andthe reasonsmanagement succession team, but also through the mentorship system enabling close proximity learning of company management strategies. The company also
arranges key management levels to serve as board members of invested businesses, enabling them to be familiar with the operation of the board and participate
in the planning of the long-term strategic direction and vision of the company or invested businesses, implementing the succession plan; The corporate
governance and nomination committee, acting on the authority of the board, fulfills the duty of good management, reviews the succession plan for senior
management (including equivalent positions), regularly assesses the development and execution of this plan, and submits recommendations to the board for
discussion.
10. Please describe improvements that have already been made based on the Corporate Governance Evaluation results released for the most recent fiscal year by
the Corporate Governance Center, Taiwan Stock Exchange, and specify the priority enhancement objectives and measures planned for any matters still
awaiting improvement:(1) Corporate governance1. AUO has been affirmed by the inclusion in the Dow Jones Sustainability World Index for 13 years, and in reference to the corporate governanceevaluation indicators and the suggestions of the Board on Board performance evaluation, the Board of Directors approved the establishment of the
Corporate Governance Committee (renamed the Corporate Governance and Nomination Committee on March 11, 2024), composed of the Chairman
and all Independent Directors. The aim is to strengthen corporate governance and enhance the effectiveness of the Board of Directors.
2. AUO was ranked in the top 5% in the 9th corporate governance evaluation results on the Taiwan Stock Exchange (evaluation for the year 2022). As ofthe publication date of the annual report, the 10th (evaluation for the year 2023) has not yet been announced.
(2) Energy management and invest energy saving equipment
The Company is the first manufacturing industry in the world to introduce ISO 50001 energy management system. Every year, we invest hundreds ofenergy-saving improvement schemes to improve efficiency. Taking 2023 as an example, the amount of investment in energy-saving equipment in 2023
estimated annual electricity saving is 138 million kWh and in 2022 is 117 million kWh.
(3) Environmental management
The Company has been introducing ISO 14001 environmental management system for a long time to ensure environmental sustainability and meet theneeds of stakeholders through continuous improvement cycle mechanism, including implementing water-saving technology in production process,promoting sludge waste reduction project, improving material recycling, supporting government policies, promoting the use of reclaimed water, and working
together with suppliers.
1. Greenhouse Gases
Since 2003, AUO has begun to measure the greenhouse gas emissions of its global manufacturing operations, introducing the ISO14064 standard, passing
external verification and transparently disclosing emissions information. Since 2010, the company has continuously developed an internal digital platformto systematize their greenhouse gas management, a measure to manage long-term operational carbon emissions reduction. AUO set its science-basedtargets in 2021 and was approved by the Science Based Targets initiative (SBTi), promising that under a scenario of less than 2°C warming, it would
reduce its total carbon emissions by 25% by 2025, using 2018 as the baseline year (the total of direct emissions and indirect energy emissions was 3,568.8
thousand tons of CO2 equivalent), which means the target of AUO in 2025 is to reduce the total global greenhouse gas emissions to below 2,676.6
thousand tons of CO2 equivalent.
In 2023, AUO's direct greenhouse gas emissions globally amounted to 68 thousand tonnes of CO2 equivalent, with energy indirect emissions of 2,363
thousand tonnes of CO2 equivalent, greenhouse gas emissions of 44.11 kg of CO2 equivalent per square meter input sheet substrate area, and otherindirect emissions of 2,170 thousand tonnes of CO2 equivalent. Compared to the previous year, direct emissions decreased by 1.7 thousand tonnes of
CO2 equivalent and energy indirect emissions decreased by 11 thousand tonnes of CO2 equivalent. The sum of direct greenhouse gas emissions andenergy indirect emissions is 2,431 thousand tonnes of CO2 equivalent, reaching 128% of the absolute carbon reduction target of 25% for 2025, with acontinued commitment to making improvements in organizational absolute carbon reduction. The greenhouse gas emissions data of AUO over the years
has been verified by DNV according to ISO 14064-1: 2018.
2. Water Resources
In order to avoid the impacts of heavy rainfall or drought caused by climate change, AUO assesses water resource risks and develops water-saving
technology to reduce water usage, aiming to gradually reduce the amount of tap water used each year. The target for 2023 is to use less than 65,000 tonsof tap water per day. The total factory water usage was 23.81 million tons, with daily usage of tap water is 56,897 tons, achieving a goal completion rate of
100%. AUO will continue to strive for absolute water reduction in the future. The water resource usage data over the years has been assured by KPMG inaccordance with ISAE 3000 with limited assurance.
3. Waste
The waste management principles of AUO prioritize source reduction (Reduce) and reuse in processes (Reuse), followed by resourceful production fromby products or hiring qualified businesses for recycling (Recycling). The final course of action is to dispose waste by incineration or landfill, ensuring that
resources are effectively used. The goal is to gradually decrease the annual production of non-recycled waste. The goal for 2022 is to have less than 12,000
metric tons of non-recycled waste produced annually. For 2023, AUO's total non-hazardous waste amounts to 61.1 thousand metric tons, with hazardous
waste at 21.0 thousand metric tons. Out of this, 91.69% of waste is recycled and disposed. The annual production of non-recycled waste is 6,108 metrictons, with a goal achievement rate of 100%. We will continue to strive for absolute reduction of non-recycled waste production annually. AUO's historicalwaste usage data is assured with limited assurance by KPMG in accordance with ISAE 3000.
(4) Investment in green energy
By the end of 2023, the cumulative investment amounted to 2.61 billion for Star River Energy Corporation (Star River) and Star Shining Energy
Corporation (Star Shining). This investment was used to reinvest the solar energy plant companies by Star River and Star Shining thus resulting in theestablishment of the solar energy system with a combined power generation capacity of 411.5 MWp. Additionally, an investment totaling to 950 million
was made in Da Ping Green Energy Corporation.
Implementation status (Note 1)

40

AUO Corporation
2023 Annual ReportCorporate Governance

Implementation status (Note 1)

Evaluation item
Yes NoSummary description

Deviations fromthe Corporate
GovernanceBest-PracticePrinciples for
TWSE/TPEx
ListedCompanies andthe reasons(5) Participate sustainability development and demonstrate sustainable value with flexible use of fund
AUO actively participate sustainable financial products as following ,including 25 billion of loan facility and 1 billion of Green Deposit in 2023:
1. Sustainability-linked loans
Sustainability-linked loans are based on the assessment of sustainability performance validated by an independent ESG rating agency or verification party.
(e.g., ESG rating agencies, consultation firms).Since 2019, AUO has signed the sustainability-linked loan with DBS Bank, Mega International Commercial
Bank, Bank of Taiwan and First Commercial Bank, and an additional loan facility granted by the Export-Import Bank of the Republic of China in 2022. In
2023, AUO again signed a sustainability index-linked loan with Taiwan Bank and 12 other banks, demonstrating the banking industry's support andaffirmation of AUO operating philosophy and sustainable development strategy, and their tangible actions to support the growth of AUO.
2. Green Deposit
Green deposits are project deposits collected by banks, all of which are used in green financing projects and plans related to issues such as renewableenergy and energy technology development, energy efficiency improvement and conservation, pollution prevention and control, water resource
conservation and cleanliness, or recycling. The bank regularly provides reports on the use of funds reviewed by an independent third party, and disclose
the use of project funds.
In 2023, AUO and the Land Bank of Taiwan undertook green deposits, collaborating with banks to promote green transformation, embodying sustainable
operations.

Note 1: The Company is the main body of the operation.

(7) Promotion of Sustainable Development – Implementation Status and Deviations from the Sustainable
Development Best Practice Principles for TWSE/TPEx Listed Companies and the Reasons:
Implementation status (Note 1)

Deviations from the Sustainable
Development Best Practice
Item
Principles for TWSE/TPEx
Yes NoSummary description
Listed Companies and the
Reasons
Please refer to Chapter 8. Corporate No difference
1. Has the Company established a governance 
Sustainability of this Annual Report (pages
framework for promoting sustainable development,
108-121).
and established an exclusively (or concurrently)
dedicated unit to be in charge of promoting
sustainable development? Has the board of
directors authorized senior management to handle
related matters under the supervision of the board?
2. Does the company conduct risk assessments of 
Please refer to Chapter 8. Corporate No difference
environmental, social and corporate governance
Sustainability of this Annual Report (pages(ESG) issues related to the company's operations in
108-121).
accordance with the materiality principle, andformulate relevant risk management policies or
strategies? (Note 2)
3.Environmental (1) Has the Company set anPlease refer to Chapter 8. Corporate No difference
Issuesenvironmental management
Sustainability of this Annual Report (pages
system designed to industry
108-121).
characteristics?
(2) Does the Company endeavor to 
Please refer to Chapter 8. Corporate No difference
Sustainability of this Annual Report (pages
use energy more efficiently and108-121).
to use renewable materials withlow environmental impact?
(3) Has the Company evaluated the Please refer to Chapter 8. Corporate No difference
potential risks and opportunities
Sustainability of this Annual Report, andposed by climate change for its
TCFD Report for more informations (pages
business now and in the future108-121).
and adopted relevant measures
to address them?

AUO Corporation
2023 Annual Report41Implementation status (Note 1)

Deviations from the Sustainable
Development Best Practice
Item
Principles for TWSE/TPEx
Yes NoSummary description
Listed Companies and the
Reasons
Please refer to Chapter 8. Corporate No difference(4) Did the company collect data for 
Sustainability of this Annual Report (pages
the past two years on
108-121). Please refer to Chapter 3
greenhousegasemissions,
Environmental
Sustainabilityofthevolume of water consumption,
Corporate's Sustainability Report for theand the total weight of waste,annual achievements of greenhouse gas
and establish policies foremissions, water resources management
greenhousegas
reduction,
and waste reduction, and the achievement
reduction of water consumption,of environmental objectives and related
or management of other wastes?
data.
Please refer to Chapter 8. Corporate No difference
４. Social issues (1) Has the company formulated 
Sustainability of this Annual Report (pages
relevant management policies
108-121).
and procedures in accordancewithrelevantlaws
andregulations and international
human rights conventions?
Please refer to Chapter 5. Operational No difference(2) Has the Company established Highlights and Chapter 8. Corporate
and implemented reasonable
Sustainability of this Annual Report (pages
employee welfare measures
82-83 and pages 108-121).
(includesalary/remuneration,
leave, and other benefits), andare business performance or
results appropriately reflected in
employee salary/remuneration?
Please refer to Chapter 5. Operational No difference(3) Does the Company provide Highlights and Chapter 8. Corporate
employees with a safe andSustainability of this Annual Report (pages
healthy working environment,
84-85 and pages 108-121).
and implement regular safety andhealth education for employees?
(4) Has the Company established Please refer to Chapter 5. Operational No difference
effective career development
Highlights and Chapter 8. Corporate
training
programsforSustainability of this Annual Report (pages
employees?
83-84 and pages 108-121).
Please refer to Chapter 8. Corporate No difference(5) Does the company comply with 
Sustainability of this Annual Report (pages
therelevantlaws
and108-121).
international standards withregards to customer health andsafety, customer privacy, andmarketing and labeling ofproducts and services, andimplement consumer protection
and grievance policies?
Please refer to Chapter 8. Corporate No difference(6) Has the company formulated 
Sustainability of this Annual Report (pages
supplier management policies
108-121).
requiring suppliers to comply
with relevant regulations on
issues such as environmental
protection, occupational safety
and health, or labor rights, andwhat is the status of theirimplementation?

42

AUO Corporation
2023 Annual ReportCorporate Governance

Implementation status (Note 1)

Deviations from the Sustainable
Development Best Practice
Item
Principles for TWSE/TPEx
Yes NoSummary description
Listed Companies and the
Reasons
5.
Does the company refer to international 
The Company published its first corporate No difference
reporting standards or guidelines when preparing
social responsibility report in 2006. Since
its sustainability report and other reports
2017, it has adopted the Global
disclosing non-financial information? Does theSustainability Report Guidelines (GRI
company obtain third party assurance or
STANDARDS), SASB Hardware Industry
certification for the reports above?
Standards, Recommendations of the
TCFD (Task Force on Climate-Related
Financial Disclosures) reported theCompany's economic, environmental andsocial strategies and activities tostakeholders, and independently verified
them by third parties (KPMG). Since 2016,it has adopted the accounting system ISAE
3000 for limited assurance, which not only
enhances the transparency of the report
but also improves the accuracy of internal
operations..
6. If the Company has adopted its own sustainable development best practice principles based on the Sustainable Development Best PracticePrinciples for TWSE/TPEx Listed Companies, please describe any deviation from the principles in the Company’s operations:
The Company has a "Code of Sustainable Development", which contains relevant regulations on environmental protection, community
participation, social contribution, social service, social welfare, customer rights, human rights, safety and health, etc., and can be
downloaded from the Company website (https://csr.auo.com/tw/operating/policy-person); please refer to this Annual Report Chapter 8.
Corporate Sustainability (pages 108-121) and the Sustainability Report for the Company sustainable development strategy andimplementation.
7. Other important information to facilitate better understanding of the company’s promotion of sustainable development:
Please refer to Chapter 8. Corporate Sustainability (pages 108-121), or refer to the sustainable information on our website athttps://csr.auo.com/.
Note 1: The Company is the main body of the operation.
Note 2: The principle of materiality refers to issues related to environment, society and corporate governance that have a significant impact
on company investors and other stakeholders

AUO Corporation
2023 Annual Report43Implementation of Climate-Related Information
Item

Implementation status

1. Describe the board of directors' and The risk management organization of AUO is led by the Board of Directors as the highest
management's
oversight
and management and decision-making unit. Each year, the execution results are reported to thegovernance of climate-related risks directors at the Board of Directors meeting or strategy meeting, including an explanation ofand opportunities.
climate change issues. The risk governance of the Sustainability & ERM Committee of AUO is led
by the CFO, who is responsible for executing the risk management policy approved by the Boardof Directors and managing the key risk issues of the organization.
2. Describe how the identified climate Please refer to AUO's climate-related financial disclosure report (TCFD report)risks and opportunities affect the Website：https://csr.auo.com/tw/download/file/2022-tcfd-reportbusiness, strategy, and finances of the Aspect Term
Risks
Opportunities
business (short, medium, and long
Disruption of organization and supply chain
Short termterm).
operations.
MediumTransformation risks such as laws, product Develop green solutions, suchBusiness term
standards, and carbon finance.
as green manufacturing, green
The transformation of products and services energy, and green products.
Long term towards low carbon and the establishmentof necessary infrastructure conditions.
Operational resilience preparation required
Actively negotiate with clientsfor net zero transition (SSP1-1.9) and
Short term
and jointly develop green
extreme entity (RCP8.5) scenarios, including
products.
SBT and RE100.
Stategy
Medium Use of renewable energy and low carbon Seize
keystrategic
term
technology capabilities.
opportunities for net zero in
the public sector and develop
Arrangesolutions
under
the
and
deepenecosystemLong termtransformation/physical risk.
partnerships.
Under the investment in
low-carbon transformation,
The need to internalize climate external
Short term
the technologies, tools, andcosts.
services needed by theindustry.
FinanceMedium The impact on operating costs due toStabledevelopment
andterm
external regulations such as carbon fees,
creation of high-value green
international carbon border adjustment
solutions.
Long term
taxes, etc.
3. Describe the financial impact of AUO conducts an annual inventory of potential climate risks, launching assessments andextremeweather
eventsand management of six risk topics in 2022, with three examples discussed below.
transformative actions.
 Case 1: Rising raw material prices affect the supply chain
Global energy price fluctuations and decarbonization policies may disrupt raw material
production and raise costs. AUO chose a key chemical material as the target for assessing thefinancial impact. In the short term, the impact of rising raw materials will account for 3.3% of
the company's revenue.
 Case 2: Low-carbon trends cause changes in market demand
Failing to meet customer needs for low-carbon products can result in loss of profitability andmarket competitiveness. After comprehensive assessments of market demand, production
costs, and profit losses, AUO found that the introduction of new technology could reduce thefinancial impact from 25% to 12.5%.
 Case 3: China’s decarbonization policies affect the supply chain
China's measures to adjust industrial structure and energy structure may cause industries tofail to adapt in time, leading to operational disruption, impacting AUO's outsourcers andsuppliers in mainland China in terms of delivery and cost transfer. AUO assumed that if the
production capacity of key process outsourcers is limited, and the supply chain is disrupted forone month in a year, the cost transfer of each module along with the increase in electricity
costs will cause about a 0.6% impact on turnover.

44

AUO Corporation
2023 Annual ReportCorporate Governance

Item

Implementation status

4. Describe how climate risk
identification, assessment, andmanagement processes are integrated
into the overall risk management
system.

In 2019, AUO established the foundation of the TCFD operation management framework and set
up a TCFD working group. The following year, AUO integrated the TCFD mechanism with thecompany's annual risk identification, which was jointly reviewed by factory-level managers
regarding climate issues related to the company's business operations. After categorization andconvergence, they produced annual key risk issues, which were then incorporated into the annual
TCFD risk project management plan, with the working group coordinating subsequent tracking
and management.
5. If scenario analysis is used to assess The financial impacts of extreme climate events and transition actions are combined in point 3
resilience to climate change risks, the above.
scenarios, parameters, assumptions,analysis factors and major financial
impacts used should be described.
6. If there is a transition plan for The approach of adjustment taken by AUO for the transformation and physical risk scenarios aremanaging
climate-relatedrisks, based on the most severe circumstances. It identifies the substantial impacts and quantified
describe the content of the plan, and indicators of risk issues according to 5 categories: Man, Machine, Material, Method, Environment.
the indicators and targets used to  Physical Risk Scenarios
identify and manage physical risks and
AUO assumes severe climate deterioration in RCP 8.5. The company's analysis indicates thattransition risks.
rainfall could potentially cause the lower-lying factory areas to flood due to severe rain,
thereby interrupting operations; uneven rainfall could cause production activities to stop or
costs to rise because of the large amount of water needed for production operations;furthermore, unstable power grids caused by climate warming could also disrupt production
activities.
 Transition Risk Scenarios
AUO uses the "Taiwan 2050 Net-Zero Emission Path and Strategy", international climate
standards, stakeholder expectations, and net-zero commitments as scenarios for transition
risk and sets objectives accordingly.
7. If internal carbon pricing is used as a Since the implementation of the Paris Agreement in 2016, AUO has begun promoting an internal
planning tool, the basis for setting the carbon pricing mechanism, monetizing the carbon costs derived from external climate control
price should be stated.
policies into internal carbon prices within the company. They also make annual adjustments basedon changes in international carbon prices and publicize them. This also serves as a basis forassessing operational impacts under the TCFD management mechanism. Besides considering theprices in the international carbon trading market, the company also takes into account the impactof public sector policies, such as the "Climate Change Response Act" and the carbon fee system. In
2022, AUO announced that the internal carbon price is 6,242 NTD.
8. If climate-related targets have been  Target of reducing 6.5 million tons of carbon
set, the activities covered, the scope of
In 2018, AUO proposed a carbon reduction target: based on the life cycle, continuously
greenhouse gas emissions, thereducing the carbon emissions of the organization, products, supply chain, and raw materials
planning horizon, and the progress(including Scope 1, 2, and 3). Accumulated until 2023, the total carbon reduction has reachedachieved each year should be
10.05 million tons of carbon dioxide equivalent, achieving the target ahead of schedule andspecified. If carbon credits orexceeding the original target.
renewable energy certificates (RECs)  SBT absolute carbon reduction target by 25%
are used to achieve relevant targets,
AUO has set the WB2C (Well Below 2℃) scenario, taking 2018 as the benchmark, and set a
the source and quantity of carbon
goal of achieving absolute carbon reduction by 25% in 2025. The 2023 carbon reduction pathcredits or RECs to be offset should be
is in line with the established target development.
specified RE100 target
AUO committed to achieving 30% renewable energy usage by 2030, and 100% renewableenergy usage by 2050. It reached RE 2.2 in 2023.
In our plants in mainland China, we used the idle roof space of the plant to establish aself-generated and self-used solar power supply solution. In 2023, we produced nearly 56.04
million kWh of green energy, and also purchased 30 million kWh of green power certificatesthrough the mainland China green power certificate trading platform. In the future, we will supply
green power to the organization through large-scale offshore and land wind power purchase andsale contracts, and actively seek other renewable energy sources with more economic scale.
9. Greenhouse gas inventory and Please refer to the information in sections 1-1 and 1-2 below.
assurance status (separately fill out inpoint 1-1 and 1-2 below).

AUO Corporation
2023 Annual Report45

1-1 Greenhouse Gas Inventory and Assurance Status of the recent two years
Emission
Source(Note1)
Scope 1Company

AUO Corporation
AUO (Kunshan)Co., Ltd. (AUOKS)AUO (Xiamen)
Co., Ltd.
(AUOXM)
AUO (Suzhou)Co., Ltd. (AUOSZ)
AFPD Pte. Ltd.

Scope 2

AUO (Slovakia)
s.r.o.
(AUOSK)AUO Corporation
AUO (Kunshan)Co., Ltd. (AUOKS)AUO (Xiamen)
Co., Ltd.
(AUOXM)
AUO (Suzhou)Co., Ltd. (AUOSZ)
AFPD Pte. Ltd.
AUO (Slovakia)
s.r.o.
(AUOSK)

Parent/Subsidiary
Company

Parent Company
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Parent Company
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company

Scope 3
Total

Total emissions(Metric tons CO2e)

Intensity(Metric tons CO2e /NT$ 1 million)
2023
2022
0.239
0.226

Assurance
body

2023
51,395.82

2022
48,622.91

8,387.03

8,296.83

0.389

0.339

DNV

1,928.59

1,982.47

0.042

0.053

DNV

3,726.13

2,491.81

0.091

0.059

DNV

2,765.62

8,224.16

0.721

2.128

DNV

91.58

127.17

0.546

0.671

DNV

1,928,533.04

1,957,801.13

8.983

9.099

DNV

230,490.37

213,455.67

10.69

8.722

DNV

57,660.76

62,893.78

1.261

1.696

DNV

79,748.99

72,967.07

1.943

1.719

DNV

67,541.26

66,135.81

17.6

17.113DNV

43.22

70.1984

0.258

0.370

DNV

2,169,995
4,602,307.41

1,004,486
3,447,555.01

-

-

DNV

DNV

[Det Norske Veritas, abbreviated as DNV, complies with the " Directions for the Implementation of Assurance Institutions for the
Sustainability Report of TWSETPEx Listed Companies ".]Note 1:

Note 2:

Note 3:Note 4:46

Direct emissions (Category 1, that is, directly from emission sources owned or controlled by the company), indirect energy
emissions (Category 2, that is, indirect greenhouse gas emissions from the input of electricity, heat or steam) and Other indirectemissions (Category 3, i.e. emissions generated by company activities, are not indirect emissions from energy, but come fromemission sources owned or controlled by other companies).
The coverage of direct emissions and indirect energy emissions data shall be handled in accordance with the schedule specified in
Article 10, Paragraph 2 of the Standards for Matters to Be Recorded in the Annual Reports of Publicly Issuing Companies. Other
indirect emissions information may be disclosed voluntarily.
Greenhouse gas inventory standard: Greenhouse Gas Protocol (GHG Protocol) or ISO 14064-1 issued by the International
Organization for Standardization (ISO).
The intensity of greenhouse gas emissions can be calculated per unit of product/service or sales, but at least the data calculated bysales (in millions of NTD) must be stated.

AUO Corporation
2023 Annual ReportCorporate Governance

Information of Greenhouse Gas Assurance Status(Describe the assurance situation for the two most recent fiscal years up to the date of the annual reportprinting, including the scope of assurance, assurance body, assurance standards, and assurance opinions)
In 2023, the company disclosed that the total greenhouse gas emissions from direct and energy indirect emissions summed up to
2.43 million metric tons of CO2 equivalent (accounting for 100% of total emissions).
 In 2022, the company disclosed that the total greenhouse gas emissions, including both direct emissions and energy indirectemissions, totaled 2.44 million metric tons of CO2 equivalent (accounting for 100% of total emissions).
 The above information has been verified according to ISO 14064-3 standards by DNV and completed ISO 14064-1 verification withreasonable level of assurance.
[Det Norske Veritas, abbreviated as DNV, complies with the " Directions for the Implementation of Assurance Institutions for the
Sustainability Report of TWSETPEx Listed Companies ".]

1-2 Greenhouse gas reduction goals, strategies and specific action plans(Describe the greenhouse gas reduction base year and its data, reduction targets, strategies, specificaction plans and achievement of reduction targets.)
Based on the Science-Based Targets initiative (SBTi), AUO has initially achieved the first phase of the WB2C scenario goal of reducing
carbon emissions by 25% from 2018 to 2025. After carefully assessing the impact of climate transition risks, the company has continued
to set more aggressive low-carbon actions in response, using 2021 as the baseline year and under the scenario of a temperature rise of
1.5 degrees.
In the face of the international tide of low-carbon transition, the company, as a major domestic carbon emitter, initiated strategies andmeasures for greenhouse gas reduction in the early years. Especially through past efforts, the direct carbon emissions (Scope 1) part has
been reduced to only 2.85% of the organization's carbon emissions; mainly of low-carbon natural gas fuel; and also in the reduction offluorinated gases specifically used in the technology industry, in 2014 achieved the effectiveness of a 100% installation rate for destruction
removal devices. Therefore, the company's mid-to-long term decarbonization strategy will mainly focus on Scope 2 in the future.
The latest report from the IEA, "Net Zero by 2023 Roadmap," points out that enhancing the capacity of renewable energy installations
and energy efficiency are key in reducing the demand for fossil fuels. However, due to the constraints on the development of green
energy infrastructure in Taiwan, it is even more important for businesses to increase their own energy efficiency. Our company's ISO
50001 energy management system has been in operation for over 10 years, and it has developed key technologies in smart manufacturingfrom this system. Therefore, we have set an ambitious goal of reducing electricity consumption by 30% by 2030 compared to the baseyear of 2021. In addition, besides power reduction, AUO is also participating in the RE100 international initiative, pledging to achieve 30%
of green electricity usage by 2030, thereby increasing overall carbon reduction efforts of Scope 2. In 2023, in addition to self-generated
power from rooftop solar power plants, Corporate Power Purchase Agreement (CPPA) were also initiated to supply green energy, andrenewable energy certificates from overseas plants were purchased. The overall use of renewable energy (including certificates) has
reached 2.2%.
Under the aforementioned energy-saving and carbon reduction measures, the total verified carbon emissions in 2023 decreased to 2.43
million tons, achieving the first phase of the SBT reduction target ahead of schedule.
Note 1: It should be handled in accordance with the timetable specified in Article 10, Paragraph 2 of the Guidelines for Matters to Be
Recorded in the Annual Report of Publicly Offering Companies.
Note 2: The base year should be the year in which the review is completed based on the boundaries of consolidated financial reporting. For
example, according to the provisions of Article 10, Paragraph 2 of the Standards for Matters to Be Recorded in the Annual Reportsof Publicly Offered Companies, companies with a capital of more than 10 billion yuan should report in 2025. The review of theconsolidated financial report for 2024 has been completed, so the base year is 2024. If the company has completed the review of theconsolidated financial report in advance, the earlier year can be used as the base year. In addition, the data in the base year can becalculated as the average of a single year or several years.

AUO Corporation
2023 Annual Report47

(8) Ethical Corporate Management – Implementation Status and Deviations from the Ethical Corporate
Management Best Practice Principles for TWSE/TPEx Listed Companies and the Reasons
Implementation status (Note 1)

I. Formulating
policies andplans forintegrity
operation.

48

Deviations from the
Ethical Corporate
Management Best PracticeEvaluation item
Principles for TWSE/TPEx
Yes NoSummary description
Listed Companies and the
Reasons
The "Ethical Corporate Management Principles" No difference(1) Has the Company formulated an 
published on the Company's website is an
integrity management policy
integrity management policy adopted by theapproved by the board ofboard of directors. In addition, the Company has
directors, and clearly stated thealso formulated an enterprise integrity
policies and practices of integrity
handbook, and all board members andmanagement in the regulations
employees are required to sign the "Declarationand external documents, as wellof Integrity".
In addition, report theas the commitment of the board
effectiveness of the code of integrityofdirectors
andseniormanagement to the board of directors regularly
management
toactively
every year, and publicly disclose the results ofimplement the business policy?
integrity management in that year through theannual report and corporate social responsibility
report.
The Company has established an assessment No difference(2) Does the Company establish an 
assessment mechanism for themechanism for the risk of dishonest behavior,risk of dishonest behavior,and stated the following preventive measures forregularly analyze and assess thedishonest behavior in the enterprise integrity
business activities with high risk
handbook:of dishonest behavior within its
 Bribery or accepting bribes, offering or
business scope, and formulate a
accepting illegitimate interests
plan to prevent dishonest
 Providing illegal political contributions
behavior based on this, which at Improper charitable donation or sponsorshipleast covers the preventive
 Unreasonable gifts, entertainment or othermeasures for the behaviors in
improper benefits
Article 7, Paragraph 2, of the Violate antitrust compliance
Code of Integrity for Listed and Infringe on intellectual property rights
OTC Companies?
And in the "information security management
regulations" approach, preventive measures are No difference(3) Does the Company clearly 
drawn up against infringement of business
define the operating procedures,
secrets.
behavior guidelines, disciplinary
The Company regularly analyzes and evaluatesand complaint systems forbusiness activities with high risk of dishonest
violations in the scheme forbehavior within its business scope, conducts job
preventing dishonest behaviors,
inventory and arranges mandatory training
and implement them, andcourses on law compliance for supervisors, andregularly review and revise theabides by the necessary norms when dealing
aforementioned scheme?
with related businesses at work.
Those who violate the Corporate integrity
policy will be punished according to theseriousness of the case, including admonition,
minor offense, major offense, salary reduction or
dividend
cancellation,
terminationofemployment, and legal action will be taken
according to law if there are any violations. In
addition to the above, those who violate theintegrity policy should be recovered andreturned to the respondent or company if they
are involved in obtaining illegitimate personal
interests.

AUO Corporation
2023 Annual ReportCorporate Governance

Implementation status (Note 1)

Deviations from the
Ethical Corporate
Management Best PracticeEvaluation item
Principles for TWSE/TPEx
Yes NoSummary description
Listed Companies and the
Reasons
The
Companyrequiresall
contract No difference(1) Does the Company evaluate the 2. Themanufacturers to sign the "integrity clause"
implementati
integrity
recordofthebefore they can file their data and conduct
on of integrity
counterparty, and specify thetransactions.
management
terms of integrity behavior in thecontract signed with thecounterparty?
In order to improve the management of honest No difference(2) Does the Company set up a business, the human resources center is
special unit under the board of
responsible for formulating and supervising thedirectors to promote theimplementation of honest business plans, andintegrity
operationofreporting the implementation of honest businessenterprises, and regularly (atpolicies to the board of directors at least once aleast once a year) report to theyear, taking inventory of honest job groups every
board of directors on its
year, conducting education and training andintegrity
operation
policy,declaring conflicts of interest.
dishonest behavior prevention
At the annual supplier meeting, the Company
plan and supervision andpublicizes the promise of honest trading, andimplementation?
confirms whether the key manufacturers meetthe specifications through the external audit
system of the responsible business alliance(RBA).
In 2023, the implementation of integrity
management included 4,887 suppliers who
promised to publicize and sign the code of conduct,
and 66 suppliers audited the integrity
implementation.
The signing rate of integrity training courses andintegrity declaration for newcomers is 100%.
In order to accurately implement the relevant No difference(3) Does the Company formulate provisions on conflicts of interest in thepolicies to prevent conflicts ofenterprise integrity handbook and prevent
interest, provide appropriate
colleagues from causing damage to the Company
channels for statements, anddue to conflicts of interest, the Company has
implement them?
formulated the "AUO Measures for Reporting
ConflictsofInterest".
This
includesintegrity-related staff and global managers who
must report annually, as well as voluntary
reporting by colleagues. In 2023, a total of 2,466
people completed their reports.
The Company has an "internal control system". No difference(4) Has the Company established an 
effective accounting system and
The internal audit unit regularly evaluates risksinternal control system for theand draws up an audit plan, carries out relevant
implementationofhonestaudits according to the plan, and carries out
operation, and the internal audit
special audits as necessary, and regularly reports
unit has drawn up relevant audit
the audit results to the audit committee and theplans based on the assessment
board of directors, so that the management can
results of dishonest behavior
understand the implementation of therisks, so as to check theCompany's internal control and achievecompliance of the scheme formanagement purposes.
preventing dishonest behavior, or
has entrusted an accountant tocarry out the audit?

AUO Corporation
2023 Annual Report49Implementation status (Note 1)

Deviations from the
Ethical Corporate
Management Best PracticeEvaluation item
Principles for TWSE/TPEx
Yes NoSummary description
Listed Companies and the
Reasons
In 2023, corporate integrity training courses No difference(5) Does the Company regularly were arranged for directors, all employees andhold internal and external
new employees in the Company to educate andeducation and training on
publicize the prevention of dishonest behavior. A
integrity management?
total of 9 directors and more than 35,000
employees completed the Corporate integrity
training courses with a completion rate of morethan 99.03%, while 1,575 and the new employees
completed the signing of the declaration of
integrity (the signing rate was 100%). In addition,
before the publication of quarterly operating
results, the Company conducted education andpublicity on the provisions of Article 157-1 of
the Securities Exchange Act to insiders andsupervisors and colleagues in specific positions,so as to specifically prevent insider trading. In
each quarter of 2023, the Company conductedpublicity to 160 people.
Relevant persons of various businesses of the No difference
3. Operation of (1) Has the Company established a 
the Company
specific reporting and reward
Company may report violations of honesty andReportingsystem, established a convenient
integrity in the course of business execution
Systemreporting channel, and assigned
through the following channels:
appropriate personnel to handle
 Internal: mailbox of immediate supervisor,
the accused?
president, and legal compliance reporting External: Professional Ethics Violation
Reporting System(http://integrity.ab1.auo.com)
After the report is made, the investigation
procedure will be started by audit unit, business
unit, purchasing unit and hr supervisor, or set up
the committee in accordance with the
Administrative Measures for the Investigation
Committee of Major Disciplinary Cases to
conduct the investigation.
There is also an audit Committee mailbox toaccept internal and external complaints.
The Company's “Handling Procedures for No difference(2) Has the Company established 
professional ethics violations ”, "Handlingtheinvestigation
standard
operatingprocedures
forProcedures for Accounting, Internal Control andaccepting the reported matters,
Auditing Complaints" and "Complaint Measures"the follow-up measures to be
set out the complaint operation procedures, thetaken after the investigation is
power and responsibility units for accepting
completed and the relevantcases and the incident handling procedures, andconfidentiality mechanism?
kept the information confidential, and noretaliation against colleagues was allowed.
No difference(3) Does the Company take 
measures to protect thewhistleblower from improper
handling due to exposure?

The Company's "Sustainability Report" on the No difference
4. Strengthen information disclosure
Does the Company disclose the content of its code
Company's website contains the contents of theof integrity management and promote its
code of integrity management and its promotion
effectiveness on its website and public information
effect; the Company's "Integrity Management
observatory?
Code" is also exposed on the Company's
website, and the results of integrity management
are updated regularly every year.

50

AUO Corporation
2023 Annual ReportCorporate Governance

Implementation status (Note 1)

Deviations from the
Ethical Corporate
Management Best PracticeEvaluation item
Principles for TWSE/TPEx
Yes NoSummary description
Listed Companies and the
Reasons
5. If the Company has its own code of integrity operation in accordance with the Ethical Corporate Management Best Practice Principles for
TWSE/GTSM Listed Companies, please state the differences between its operation and the code:
The Company has formulated the Code of Integrity Management in accordance with Ethical Corporate Management Best PracticePrinciples for TWSE/GTSM Listed Companies, and there is no significant difference between the Company's operating conditions ofintegrity management and the Code of Integrity Management.
6. Other important information that helps to understand the Company's integrity operation (such as the Company's review and revision of its
established integrity operation code, etc.):
Since 2012, the Company has promoted the establishment of the "Integrity AUO folks Series", including the signing of the integrity
declaration, online integrity test, integrity manual reading and antitrust law course, making "integrity" the most important and basic coreculture of AUO.
The Company regularly promotes integrity propaganda, so that employees can be familiar with the integrity culture within the Company
through internal newsletter email and electronic bulletin boards. In 2023, it was publicized three times in total, and education, training andpublicity were conducted for suppliers and contractors. Based on the contents of the seven dishonest behaviors, the concept of honesty
was strengthened, and the integrity culture was created hand in hand with stakeholders.
In addition, the publication of the integrity manual is the highest Code of Conduct for all AUO folks, which provides behavioral guidanceand case descriptions for corporate integrity policies, cooperation norms with business partners, cooperation norms with government
agencies, intellectual property rights, conflicts of interest, information system security, insider trading and antitrust laws, and ensures that all
employees will implement integrity in their work.
At the same time, in order to comply with the laws and regulations of the country where the business is located and engage in businessactivities with the highest ethical standards, and to help colleagues establish correct legal concepts, indirect employees are required to takeonline compliance courses and compliance tests every two years, and sign a compliance declaration regularly.
In addition, in order to let all employees know about The Antitrust Laws and regulations, in addition to setting up The Antitrust Laws area
through the internal website, we also set up the mobile phone mobile device APP, so that employees can check online at any time.
In addition, the Company defines the supervisor of the unit that handles supplier matters and has close contacts with manufacturers as animportant honest position. Considering that the supervisor needs to conduct business with high moral standards in order to protect theCompany and individuals, the "AUO conflict of interest declaration method" is formulated, and colleagues of honest positions must declare
it every year. In 2023, a total of 2,467 people declared it, with a completion rate of 100%. And arrange a mandatory training course on law
compliance for honest job supervisors, which covers the actual case sharing in the industry and the norms that must be observed when
dealing with related business at work.
Note 1: The Company is the main body of the operation.

(9) Inquiry method for Corporate Governance Principles and related regulations disclosure
For rules and regulations related to corporate governance, please visit the TSE Market Observation Post System (MOPS) or the"Investor Relations" on the AUO website for more information.
 Board Meeting Rules Organizational Charter for Audit Committee
 Organizational Charter for Remuneration Committee
 Organizational Charter for Corporate Governance andNomination Committee
 Organizational Charter for Sustainability & Risk Management
Committee
 Handling Procedures for Acquisition or Disposition of Assets
 Handling Procedures for Capital Lending Handling Procedures for Providing Endorsements andGuarantees for Third Parties
 Handling Procedures for Conducting Derivative Transactions
 Methods to Evaluate Performance of the Board of Directors
 Corporate Governance Principles

 Corporate Social Responsibilty Principles
 Enterprise Integrity Handbook
 Ethical Corporate Management Principles
 Guidelines for the Adoption of Codes of Ethical Conduct for
Directors and Senior Management
 Antitrust Compliance Policy
 Tax Policy
 Risk Management Policy and Procedures
 Financial and Business Matters Between AUO Corp. and its
Related Parties
 Management Procedure for Insider Trading Prevention
 Policy and Procedures for Complaints and Concerns Regarding
Accounting, Internal Accounting Controls or Auditing Matters Procedures for reporting ethical violations(10) Other important information that can enhance the understanding of corporate governance operation.
1. On October 29, 2019, the Corporate Governance Committee was established under the Board of Directors (renamed the
Corporate Governance and Nomination Committee on March 11, 2024), and the "Organizational Charter for Corporate
Governance and Nomination Committee " was formulated. For relevant information, please refer to the Market Observation Post
System (MOPS) or our company’s website for inquiries. For the main functions and operations, please refer to pages 32-34 of thisannual report.

AUO Corporation
2023 Annual Report51

2. The company officially established the Sustainability and Risk Management Committee under the Board of Directors on March 11,2024, to assist the Board of Directors in continuing to promote the sustainable development and risk governance of the enterprise,in order to implement the purpose of sustainable operations and strengthen/combine risks Manage operations so that directors canbetter understand the operational status, allocate and assign sufficient and appropriate resources to enable enterprise risk
management to operate effectively, and supervise and ensure the operation of the enterprise's overall risk management mechanism
by establishing an appropriate risk management mechanism and forming a risk management culture. effectiveness.
3. Continuing Education/Training of Directors in 2023
Title

Name

Date

Sponsoring unit

2023.07.04 Taiwan Stock Exchange
ChairmanShuang-Lang (Paul)
Peng

Director

AUO Sustainability
Foundation
Representative:
Frank Ko

Director

Qisda Corporation
Representative:
Han-Chou (Joe)
Huang

Director

2023.09.01

Taiwan Corporate
2023.09.01 Governance Association
2023.09.01
Taiwan Corporate
2023.09.01 Governance Association
Taiwan Investor Relation
Institute
Corporate Operating and2023.07.06 Sustainable Development
Association
2023.09.01
2023.06.01

Ming Hua
Investment
Taiwan Corporate
Company Limited
2023.09.01 Governance Association
Representative: Tsai
Juan-Juan
Chinese National
2023.06.12 Association of Industry
and Commerce

IndependentPeng Chin-Bingdirector

Independent
Chen Jang-Lin
director
Independent
Chiu-Ling Lu
director

2023.07.04 Taiwan Stock Exchange
2023.09.01
Taiwan Corporate
2023.09.22
Governance Association
2023.09.22
2023.09.01
Taiwan Corporate
2023.09.01 Governance Association
2023.09.01

Taiwan Corporate
2023.09.01 Governance Association
2023.08.09
2023.09.01

Independent
Cathy Han
director

Taiwan Corporate
2023.09.01
Governance Association
2023.09.22
2023.09.22
2023.08.07

2023.08.14
Taiwan Corporate
Independent Yen-Hsueh (Sharon)
director(note1)2023.09.01 Governance Association
2023.09.01

Course2023 Cathay Sustainable Finance and Climate Change
SummitRisk Management of Corporate Reputation
The impact and influence of climate change risks on
corporate financial disclosures
Risk Management of Corporate Reputation
The impact and influence of climate change risks on
corporate financial disclosures
Establishment and relationship of corporate
intellectual property rights management system
Corporate Governance and Securities RegulationThe senior executives of listed companies’
understanding of supervision by competent authorities
Risk Management of Corporate Reputation

No. of
hours
3
3
3
3
3
3
3
3

The impact and influence of climate change risks on
corporate financial disclosures

3

Generative AI Situation Room – Take the Lead and
Seize Business Opportunities

32023 Cathay Sustainable Finance and Climate Change
SummitRisk Management of Corporate Reputation
Key global ESG trends and practical cases for the
futureThe key to improving board of directors’ effectiveness
Risk Management of Corporate Reputation
The impact and influence of climate change risks on
corporate financial disclosures
Risk Management of Corporate Reputation
The impact and influence of climate change risks on
corporate financial disclosures
Innovation, digital technology and competitive
advantage
Risk Management of Corporate Reputation
The impact and influence of climate change risks on
corporate financial disclosures
Key global ESG trends and practical cases for the
futureThe key to improving board of directors’ effectiveness
The Trends and Risk Management of Generative AI
The application of smart manufacturing trends anddigital technology in business management.
Risk Management of Corporate Reputation
The impact and influence of climate change risks on
corporate financial disclosures

3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3

Note 1：Resigned on December 8, 2023.
Note 2：The continuing education hours of the directors meets the requirements of the “Directions for the Implementation of Continuing
Education for Directors of TWSE Listed and TPEx Listed Companies”.

52

AUO Corporation
2023 Annual ReportCorporate Governance4. Senior managers participated in corporate governance and other related courses in 2023
Title

Chairman &Group CSO

Name

Shuang-Lang(Paul) Peng

Date

3
3

2023.09.01
2023.09.01

Wei-Lung Liau

2023.09.01
2023.07.07

Hong-Jye Hong
Senior vicepresident

2023.09.01
2023.09.01
Ting-Li Lin

2023.09.01
2023.09.01

Amy Ku2023.09.01
2023.09.01

Tina Wu
2023.09.01
2023.09.01
Ivan Wu

2023.09.01
2023.09.01

TY Lin2023.09.01

Vice president
2023.08.02

Yu-Chieh Lin

2023.11.02
2023.11.10
2023.12.26

Chief financial
officer
Accountant
Benjamin Tsengsupervisor
Corporate
governancesupervisor

2023 Cathay Sustainable Finance and Climate
Change Summit
Risk Management of Corporate Reputation
Taiwan Corporate Governance
The impact and influence of climate change risks
Associationon corporate financial disclosures
Risk Management of Corporate Reputation
Taiwan Corporate
The impact and influence of climate change risks
Governance Associationon corporate financial disclosures
Risk Management of Corporate Reputation
Taiwan Corporate
The impact and influence of climate change risks
Governance Associationon corporate financial disclosures
Technology development and business
Securities and Futures Institute opportunity models of electric vehicles andintelligent vehicles
Taiwan Corporate
Risk Management of Corporate Reputation
Governance Association
Risk Management of Corporate Reputation
Taiwan Corporate
The impact and influence of climate change risks
Governance Associationon corporate financial disclosures
Risk Management of Corporate Reputation
Taiwan Corporate
The impact and influence of climate change risks
Governance Associationon corporate financial disclosures
Taiwan Corporate
Risk Management of Corporate Reputation
Governance Association
Taiwan Corporate
The impact and influence of climate change risks
Governance Associationon corporate financial disclosures
Risk Management of Corporate Reputation
Taiwan Corporate
The impact and influence of climate change risks
Governance Associationon corporate financial disclosures
Risk Management of Corporate Reputation
Taiwan Corporate
The impact and influence of climate change risks
Governance Associationon corporate financial disclosures
Looking at the information security governancestrategies of listed companies from theperspective of sustainable development of ESG
companies
How directors and supervisors supervise risk
Taiwan Corporate
management and crisis management toGovernance Association
strengthen corporate
governance
American Corporate Governance: Historical
Evolution and Recent Developments
Circular economic benefits and sustainablefinancial business opportunities

2023.09.01

2023.09.01
Frank Ko

Training
hours

Course2023.07.04 Taiwan Stock Exchange

2023.09.01
CEO &President

Sponsor unit

2023.06.02

Chinese National Associationof Industry and Commerce

2023.07.07

Taiwan Accounting Researchand Development Foundation

2023.09.01

Taiwan Corporate
2023.09.01 Governance Association
2023.11.16

The Institute of Internal
Auditors, R.O.C.

2023.12.20 Taipei Foundation of Finance2023 Taishin Net-Zero Electricity Summit
Forum
Common internal control management
deficiencies in enterprises and analysis ofpractical cases
Risk Management of Corporate Reputation
The impact and influence of climate change risks
on corporate financial disclosures
Regulations and practical analysis on capitalloans, endorsement guarantees and acquisitionand diposal of assets
Path planning for low-carbon transformation –carbon credits and carbon pricing

3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3

3

3
3
3
3
6
3
3
6
3

AUO Corporation
2023 Annual Report53

(11) Implementation of Internal Control System
1. Statement of Internal Control System
AUO Corporation
Statement of Internal Control System
Date: January 31, 2024

Based on the findings of a self-assessment, AUO Corporation (hereinafter “The Company”) states the following
pertaining to its internal control system during year 2023:
1. The Company is fully aware that establishing, operating and maintaining an internal control system are theresponsibilities of its Board of Directors and managers. The Company has established such a system with an aim
to providing reasonable assurance for the achievement of the following objectives:The effectiveness and efficiencyof business operation (including profitability, performance, and safe-guarding of company assets; the reliability,
timeliness, transparency, and regulatory compliance of financial reporting and other related reports; and thecompliance with applicable laws, regulations and rulings.
2. An internal control system has inherent limitations. No matter how perfectly it is designed, an effective internal
control system can provide only reasonable assurance of achieving the three above-mentioned objectives.
Moreover, the effectiveness of the internal control system may be subject to changes of environment or
circumstances. Nonetheless, the Company's internal control system comprises of self-monitoring mechanisms,
and the Company immediately undertakes corrective measures once a deficiency is identified.
3. The Company assesses the design and operating effectiveness of its internal control system in accordance withthe criteria stated in the “Regulations Governing Establishment of Internal Control Systems by PublicCompanies” (hereinafter referred to as “the Regulations”). The criteria stipulated in the Regulations identify fiveessential elements of an internal control system based on managerial control process: 1) Control environment, 2)
Risk assessment, 3) Control activities, 4) Information and communication, and 5) Monitoring activities. Eachessential element further contains several items. Please see the Regulations for the aforementioned items.
4. The Company has evaluated the design and operating effectiveness of its internal control system according to theaforesaid criteria.
5. Based on the results of the above mentioned assessment, the Company believes that, as of December 31, 2023,
its internal control system, including its supervision and management of subsidiaries, was effective in design andoperation and provided reasonable assurance of achievement of operational effectiveness and efficiency, reliability,
timeliness, transparency of reporting, and compliance with applicable laws, regulations and rulings.
6. This Statement constitutes an integral part of the Annual Report for the year 2023 and the Prospectus of theCompany and will be made public. Any falsehood, concealment, or other illegality in the content made public willentail legal liability under Articles 20, 32, 171, and 174 in the Securities and Exchange Act.
7. This Statement has been approved by the Board of Directors in their meeting held on January 31, 2024, withnone of the eight attending directors expressing dissenting opinions, and the remainder all affirming the contentsof this Statement.

AUO Corporation

Chairman: Shuang-Lang (Paul)

President: Frank Ko
2. Companies which CPAs to professionally review the internal control system shall disclose the review report provided
by the accountants: None.

54

AUO Corporation
2023 Annual ReportCorporate Governance(12) In recent years and up to the date of publication of the annual report, the Company and its internal staff
have been punished according to law, or the Company has punished its internal staff for violating theprovisions of the internal control system, and the punishment result may have a significant impact onshareholders' rights and interests or securities prices, the contents of the punishment, major deficiencies
and improvement shall be listed: None.
(13) Important resolutions of the shareholders' meeting and the board of directors in the latest year and up to
the publication date of the annual report.
1. Important resolutions of the shareholders' meeting in 2023 and their implementation.
Item
1

Major Resolutions
Recognized the annual
business report and financial
statements of 2022.

2

Recognized the case of
surplus distribution in 2022.

3

Approved the case of lifting
the director's
non-competition restriction

Implementation Situation
The resolution to approve that the consolidated revenue for 2022 is NT$249,956,539
thousand; the operating net loss is NT$23,970,396 thousand; the net loss after tax is
NT$20,973,180 thousand; and the loss per share is NT$2.39.
The resolution was passed, and the ex-dividend benchmark date was August 18, 2023.
On May 26 2023, according to the resolution of the shareholder meeting, the cash
distribution of NT$6,134,304,778 will be made from the capital surplus. (amounting toNT$0.8 per share, or NT$800 per thousand shares).
The resolution was passed. The non-competition restrictions of Qisda Corporation’s
representative, Han-Chou (Joe) Huang and the independent director, Chin-Bing (Philip)
Peng, were lifted by resolution. please refer to the meeting minutes of the 2023 Annual
General Shareholders’ Meeting for details.

2. Important resolutions of the Board of Directors
Date/Term










Tenth
Committee
4th session
2023.02.08

















Tenth
Committee
5th session
2023.02.23









Important Resolution
Approved the Internal Control Declaration for 2022.
Approved the 2022 Parent Company Only and Consolidated Financial Statements.
Approved the accountant service project and public expense case in 2023.
Approved and formulated the Company's policy of pre-approving unconfirmed services.
Approved the increase/decrease in capital expenditure budget.
Approved the case of the Company's investment in establishing a subsidiary in Vietnam.
Approved the Company to lend capital to subsidiaries.
Approved the Company to lend capital to AUO (Shanghai) Co., Ltd.
Approved the overdue accounts receivable from non-related parties of AUO MegaInsight (Suzhou) Co., Ltd. asa non-capital loan case.
Approved the Company to provide guarantee against the bank loan to AUO (Kunshan) Co., Ltd.
Approved the letter of guarantee issued by AUO (Xiamen) Co., Ltd., a subsidiary, for the newly-increased bankline of the Company.
Approved the acquisition of machinery equipment from AUO Envirotech Inc., a subsidiary of the Company.
Approved the case of the Company's capital increase for its subsidiaries Konly Venture Corp. and Ronly
Venture Corp.
Approved the case of the Company's investment in common shares of energy project companies.
Approved the amendments to "Remuneration Policy to the Directors and Functional Committee Members"
Approved the amendment of “Organizational Charter for Corporation Governance Committee”, “Corporate
Governance Princples” and “Corpora”, and formulate “Measures for the Leave of absence of the Chairman”.
Approved the selection of applicable personnel for the "Business Transfer Protection Measures".
Approved the addition and renewal of banking facilities.
Approved the 2022 Business Report and 2023 Business Plan.
Approved the distribution of 2022earnings.
Approved the case of cash distribution from capital surplus.
Approved to lift non-competition restrictions on board members.
Approved the date of convening 2022 Annual General Shareholders' Meeting, meeting agenda, and submission
period of shareholder proposals.
Approved the case that AUO Display Plus Corporation, a 100%-owned subsidiary of the Company, intends topublicly acquire the common shares of Crystalvue Medical Corporation.
Approved the 2022 remuneration to directors and senior managers.
Approved the list of treasury stocks' granted managers and the number of distribution (subscription).

AUO Corporation
2023 Annual Report55Date/Term

Important Resolution
Approved and formulated the case of "Regulations on Managers' Stock Ownership".
Approved the personnel case of senior managers.
Approved the Consolidated Financial Statements for the period ended March 31, 2023.
Approved the subsidiaries to lend capital to the subsidiary, AUO (Kunshan) Co., Ltd.
Approved the fund loans between subsidiaries, AUO (L) CORP, AUO (Suzhou) Co., Ltd, AUO (Xiamen) Co.,
Ltd, and AUO (Kunshan) Co., Ltd.
Approved the increase in capital expenditure budget.
Approved the addition and renewal of banking facilities.
Approved the donations.
Approved the amendments of the "Decision-making authority on senior manager remuneration" and the"Business Transfer Protection Measures" and the selection of applicable personnel.
Approved the Consolidated Financial Statements for the period ended June 30, 2023.
Approved the amendment of the investment structure of the Vietnamese subsidiary.
Approved the amendment of the investment structure of the subsidiary, AUO (Kunshan) Co., Ltd.
Approved the Company to cancel the bank guarantee against the bank loan to the subsidiary, AUO (Kunshan)Co., Ltd.
Approved the formulation of "Financial and Business Matters Between AUO Corp. and its Related Parties".
Approved the amendments to the Authorization Matrix.
Approved the formulation of record date for cash distribution from capital surplus.
Approved the addition and renewal of banking facilities.
Approved the distribution of “2024 employees’ remuneration for senior managers”.
Approved the personnel case of managers.



Approved the company's plan to submit a Binding Offer and participate in the equity auction case.



Approved the acquisition of 100% ownership of Germany's Behr-Hella Thermocontrol GmbH.



Approved 2024 Annual Audit Plan.
Approved the amendments to Internal Control Systems.
Approved the Consolidated Financial Statements for the period ended September 30, 2023.
Approved the adjustment of the investment structure of the Chinese subsidiary.
Approved the subsidiary, AUO (Shanghai) Co., Ltd. to lend capital to Smart Services Business Group Subsidiary
Case.
Approved to lend capital to the subsidiary, Smart Services Business Group Subsidiary Case.
Approved to lend capital to the subsidiary, AUO Crystal Corp.
Approved the Establishment of Purchase and Sale Electronic Company Case.
Approved the signing of a production line construction contract with PlayNitride Display Co., Ltd.
Approved the increase in capital expenditure budget.
Approved the addition and renewal of banking facilities.
Approved the internal control system statement in 2023.
Approved the financial statements in 2023.
Approved the accountant service projects and public expense cases in 2024.
Approved the appointment of members of the remuneration committee.
Approved the equipment sale case of our company AFPD Pte. Ltd.
Approved the new additions and additional reductions to the capital expenditure budget.
Approved the disposal of common shares of Qisda Corporation.
Approved the syndicated loan case from a consortium of banks.
Approved the case of additional and renewal of bank credit limits.
Approved the amendment of "Risk Management Policies and Procedures" and "Environmental Safety and
Health, Water Resources and Energy Policy".
Approved the business report in 2023 and the business plan in 2024.
Approved the surplus distribution plan in 2023.
Approved the cash disbursement from capital reserves.






Tenth
Committee
6th session
2023.04.27












Tenth
Committee
7th session
2023.07.26









Tenth
Committee
8th session
2023.08.31
TenthCommittee
9th session
2023.10.02





Tenth
Committee
10th session 
2023.10.31 









Tenth

Committee
th
11 session2024.01.31




Tenth
Committee
12th

56





AUO Corporation
2023 Annual ReportCorporate Governance

Date/Termsession2024.03.11
















Important Resolution
Approved and set the date, agenda and proposal period for the 2024 Shareholders' Regular Meeting.
Approved the company’s indirect capital increase in Yo-Pei Water Corporation.
Approved subsidiary AUO (Slovakia) s.r.o. capital loan and Behr-Hella Thermocontrol GmbH.
Approved the capital increase of subsidiary AUO (L) Corp. Subsidiary AUO (Slovakia) s.r.o.
Approved the company’s capital increase in Behr-Hella Thermocontrol GmbH.
Approved the capital loans from subsidiaries AUO (Suzhou) Co., Ltd. and AUO (Xiamen) Co., Ltd. to
Behr-Hella Thermocontrol (Shanghai) Co. Ltd.
Approved the amendment to the “Manager’s shareholding regulations”.
Approved the remuneration of directors and managers in 2023.
Approved the selection of applicable personnel for the Business Transfer Protection Measures.
Approved the donation case.
Approved the “Organizational Charter for the Sustainability & ERM Committee” and the proposed list of thefirst committee members.
Approved the amendment of the “Organizational Charter for Corporate Governance Committee”.

(14) In recent years and up to the date of publication of the annual report, directors or supervisors havedifferent opinions on important resolutions passed by the board of directors, and there are records or
written statements, the main contents are: None.
(15) Summary of resignation and dismissal of the Company's chairman, president, accounting supervisor, financial
supervisor, internal audit supervisor, Corporate Governance supervisor and R&D supervisor in recent years
and up to the publication date of the annual report.
Title
CEO
CSO

Name
Shuang-Lang (Paul) Peng
Frank Ko
Shuang-Lang (Paul) Peng

Date of Appointment
2015.11.01
2023.03.01
2023.03.01

Date of Dismissal
2023.03.01
Not applicable.
Not applicable.

Cause of Resignation or Dismissal
Job Adjustment
Newly elected (not applicable)(16)Certification obtained by the Company and its personnel related to financial information transparency fromcompetent authorities:
December 31, 2023
Title of License

Number of persons
Financial Accounting

AuditsR.O.C. CPA

51

US CPA

1

0

Chartered Financial Analyst (CFA)

00

Financial Risk Manager (FRM)

1

0

Certified Internal Auditor (CIA)0

1

Certified Information Systems Auditor (CISA)

8

1

Senior Securities Processing Personnel

20

Stock Affairs Personnel

3

7

Basic Ability Test for Corporate Internal Control organized by the Securities andFutures Institute

10

AUO Corporation
2023 Annual Report57

V. Auditor fee information
Unit: NT$ thousand
Name ofaccounting firm

Name of CPA

CPA’s audit period

Audit fee
(Note 1)

Non-audit fee(Note 2)Total

Chi-Lung Yu
13,8004,968
18,7682023.1.1~2023.12.31
Wan-Yuan Yu
Note 1：The audit fees refer to the fees paid by the Company to the certified public accountants for the review and audit of financial
reports.
Note 2：It mainly include tax compliance audit, CSR assurance consultation and Country-by-Country Reporting (CbCR) service fee.
Note 3：If the accounting firm is changed and the audit fee paid in the year of change is less than that in the year prior to the change,
the amounts of audit fees before and after the change and the reasons should be disclosed: Not applicable.
Note 4：If the audit fee decreased by more than 10% compared to the previous year, the amount, proportion and reasons for thedecrease in audit fees should be disclosed: Not applicable.
KPMG

VI. Information on replacement of CPA:
(1) Former CPA
Date of replacement
Replacement reasons and explanations
Describe whether the Company isterminated or the CPA did not accept theappointment
The Opinions other than Unmodified
Opinion Issued within the last 2 years andthe reason for the Said Opinion (Note)

January 31, 2024
The CPAs are changed from Yu, Chi-Lung and Yu, Wan-Yuan to Yu, Chi-Lung and Lu, Chien-Hui
due to the internal adjustment from the accounting firms.
Party
CPA
Consignor
Condition
Engagement terminated automatically
Not applicableNot applicable
Engagement discontinued
V
Not applicableNone

Any disagreement in Opinion with the issuer None
Supplementary Disclosure(Regulations Governing Information to be
Published in Annual Reports of PublicCompanies Article 10.6.1.4~7 of theRegulation)None(2) Succeeding CPA
Name of the firm
Name of CPA
Date of appointment
Prior to the Formal Engagement, Any Inquiry or Consultation on the Accounting Treatment or
Accounting Principles for Specific Transactions, and the Type of Audit Opinion that Might beRendered on the Financial Report
Written Opinions from the Successor CPA that are Different from the Former CPA Opinions

KPMG
Lu, Chien-Hui
January 31, 2024
None
None

(3) The Reply of Former CPAs on Article 10.6.1 and Article 10.6.2.3 of the Regulations Governing
Information to be Published in Annual Reports of Public Companies: Not applicable.

VII. Did the Company’s Chairman, President, Chief Financial Officer, or Managers in Chargeof its Financial and Accounting Operations hold any positions within the Company’s
Independent Audit Firm or its Affiliates in the most recent year: None.

58

AUO Corporation
2023 Annual ReportCorporate Governance

VIII. Assessment of CPA’s Independence and Suitability(1) Evaluation Mechanism
The Company's Audit Committee refers to the Audit Quality Indicators (AQIs) every year to evaluate theindependence and competency of the certified public accountants appointed, and then submits the evaluation
results to the Board of Directors as a reference for the Board of Directors' evaluation of the appointed
accountants.
1. The Company’s CPAs are not related parties to the Company and the directors.
2. The Company abides by the Corporate Governance Principles to handle the rotation of CPAs.
3. Prior to the appointment of annual audit services, the firm of CPAs is required to obtain the approval of the
Audit Committee. Before the appointment of non-audit services, the firm of CPAs shall confirm therequirements for independence are met and report to the independent directors in quarterly Audit
Committee meeting.
4. The CPAs shall report to the Audit Committee on the compliance with the independent standards and theirreview or audit results on a quarterly basis.
5. Obtain an independent statement issued by CPAs on a regular basis.
6. The Company includes the Audit Quality Indicators (AQIs) in the CPAs annual appointment evaluation and
the CPAs are required to report with the Audit Committee accordingly.

(2) Evaluation Result
1. The annual evaluation was completed by the Audit Committee on February 7, 2023 and the result wasreported to the Board of Directors and approved on February 8, 2023.
2. The annual evaluation was completed by the Audit Committee on January 30, 2024 and the result wasreported to the Board of Directors and approved on January 31, 2024.
3. The independence between the CPAs and the Company complies with the Accounting Act of the Republicof China, The Norm of Professional Ethics for Certified Public Accountant and other relevant regulations.
4. The Company has not appointed the same CPA for certification for five consecutive years.

IX. The change of equity transfer or changes to equity pledge of Directors, managers or
shareholders holding more than 10% of Company shares(1) Changes in shares held by Directors, managers, and shareholders holding 10% or more of shares
Unit: 1,000 shares
2023
Title(Note1)

Name

Chairman and GroupCSO

Shuang-Lang (Paul) Peng

Corporate Director

AUO Foundation

Representative of Corporate
Frank Ko
Director, CEO andPresident
Ming Hua Investment Company
Corporate Director
LimitedRepresentative of Corporate
Chuang- Chuang Tsai
Director
Corporate Director

Qisda Corporation

For the year 2024 up till 2/29

Increase(decrease) of
shares held

Increase(decrease) of
shares pledged

Increase(decrease) of
shares held

Increase(decrease) of
shares pledged

2,159

0

0

0

0

0

0

0

1,140

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Representative of Corporate
Han-Chou (Joe) Huang
Director

0

0

0

0

Independent Director

Chin-Bing (Philip) Peng

0

0

0

0

Independent Director

Jang-Lin (John) Chen

0

0

0

0

AUO Corporation
2023 Annual Report

59

2023
Title(Note1)

Name

Increase(decrease) of
shares held

Increase(decrease) of
shares held

Increase(decrease) of
shares pledged

Independent Director

Chiu-Ling Lu

0

0

0

0

Independent Director

Cathy Han

0

0

0

0

Senior Vice President

Wei-Lung Liau

429

0

0

0

Senior Vice President

Ting-Li Lin

325

0

0

0

Senior Vice President

James CP Chen

312

0

0

0

Senior Vice President

CS Hsieh

318

0

0

0

Senior Vice President

Amy Ku

247

0

0

0

Senior Vice President

Hong-Jye Hong

42

0

0

0

Vice President

TY Lin

302

0

0

0

Vice President

Tina Wu

298

0

0

0

Vice President

Andy Yang

187

0

0

0

Vice President

Benjamin Tseng

202

0

0

0

Vice President

Yu-Chieh Lin(Note2)

411

0

0

0

Vice President

Ivan Wu(Note2)

315

0

0

0

Senior Associate Vice President Kun-Yu Lin

(180)

0

0

0

Senior Associate Vice President SI Jeong

149

0

0

0

Senior Associate Vice President Hank Liu(Note2)

0

0

0

0

Associate Vice President

Center Chen

155

0

0

0

Associate Vice President

Bryan Kuo

174

0

(9)

0

Associate Vice President

KS Tseng

184

0

0

0

Associate Vice President

Kenyj Chen

184

0

0

0

Associate Vice President

CD Lee

201

0

0

0

Associate Vice President

CH Wu

198

0

0

0

Associate Vice President

Paul KP Lee(Note2)

0

0

0

0

Associate Vice President

Simon WH Hsu(Note2)

10

0

0

0

Associate Vice President

Jenn-Jia Su(Note2)

0

0

0

0

Associate Vice President

KK Lee(Note2)

0

0

0

0

Associate Vice President

Cloud Huang(Note2)

0

0

0

0

Associate Vice President

Allen CK Wu(Note2)

0

0

0

0

Associate Vice President

Jim Lee

0

0

0

0

Note 1: Those who are in office as of the publication date of the annual report.
Note 2: Promoted on August 1, 2023.
Note 3: Taking office on February 1, 2024.

(2) Where the counterpart of the equity transfer is a related party: None.
(3) Where the counterpart of the equity pledge is a related party: None.

60

For the year 2024 up till 2/29

Increase(decrease) of
shares pledged

AUO Corporation
2023 Annual ReportCorporate Governance

X.

Information of relationships between TOP 10 shareholders are related parties
Unit: 1,000 shares
Familial relationships
between top 10
shareholders who are either
Total shares held in
Shares held by spouserelated parties, spouses, orthe name of otheror underage children
relatives within the second
persons
degree of kinship, his/her/its
title (or name) andrelationships

Shares held
NO

Name

Number of
SharesQisda Corporation
Qisda Corporation
Representative: Peter Chen
Trust Holding for Employees for
2
AUO
Quanta Computer Inc.
3 Quanta Computer Inc.
Representative: Barry Lam
4 Yuanta Taiwan Dividend Plus ETF
5 ADR of AUO
6 New Labor Pension FundNan Shan Life Insurance Company,
Ltd.
7 Nan Shan Life Insurance Company,
Ltd.
Representative: Chong-Yao Yin
HSBC Bank in Custody for Morgan
8 Stanley & Co. International Plc
Account
JPMorgan Chase Bank N.A.,Taipei
Branch infor
Vanguard
Total
9 custody
International Stock Index Fund, aseries of Vanguard Star Funds
JPMorgan Chase Bank N.A. Taipei
10 Branch in custody for JPMorgan Asset

530,879

Shareholding
percentage
(%)

6.90

Number of
SharesN/A

1

Shareholding
percentage
(%)

N/A

Number of
SharesShareholding
percentage

N/A

(%)

Title
(or name)

Relationships

N/A

None.

None.

Information not available
391,169

5.08

N/A

N/A

N/A

N/A

None.

None.

355,144

4.61

N/A

N/A

N/A

N/A

None.

None.

Information not available
230,270
187,493
151,727

2.99
2.44
1.97

N/A
N/A
N/A

N/A
N/A
N/A

N/A
N/A
N/A

N/A
N/A
N/A

None.
None.
None.

None.
None.
None.

124,551

1.62

N/A

N/A

N/A

N/A

None.

None.

Information not available

104,087

1.35

N/A

N/A

N/A

N/A

N/A

N/A

71,747

0.93

N/A

N/A

N/A

N/A

None.

None.

65,706

0.85

N/A

N/A

N/A

N/A

None.

None.

Management

Note: Information recorded on the shareholder roster as of the latest suspension of stock transfer (August 18, 2023) of the Company.

AUO Corporation
2023 Annual Report61

XI. Number of shares held and shareholdings percentage in the same investment business by
the Company, the Company's Directors, Managers, and companies directly or indirectly
controlled by the Company
Data: December 31, 2023

Unit: 1,000 shares

Investment by Directors,
Investment by the Company
Investment businessSupervisors, Managers, anddirectly or indirectly controlled

Comprehensive investment

business
Number of

Shareholding

Number of

Shareholding

Number of

Shareholding

Sharespercentage

Sharespercentage

Sharespercentage

Qisda Corporation(listed: 2352)

335,23117.04%

50,145

2.55%

385,376

19.59%

Ennostar Inc. (listed: 3714)

93,56912.43%

37,1004.93%

130,668

17.35%

Raydium Semiconductor
Corporation(listed: 3592)

0

0.00%

12,12315.98%

12,12315.98%

Daxin Materials Corp. (listed: 5234)

0

0.00%

25,42624.75%

25,42624.75%ADLINK Technology Co., Ltd. (listed:
6166)

42,31019.45%

29,11913.39%

71,42932.84%

Darwin Corp. (listed: 6120)(Note 2)

190,108

28.56%

83,10712.49%

273,215

41.05%

SINTRONES Technology Corp. (OTC:
6680)

1,471

6.99%

2,730

12.97%

4,201

19.96%

Darwin Summit Corporation Ltd. (DSC)

0

0.00%

40

40.00%

40

40.00%

Ichijo Seisakusyo Co., Ltd. (Japan)

0

0.00%

0

38.46%

038.46%

Shine Biomedical Technology
Corporation

0

0.00%

3,672

34.00%

3,672

34.00%

Galaxy Energy Corp. (Note 2)

28,88332.01%

1,353

1.50%

30,23633.51%Star Shining Energy Corp.

217,000

31.00%

14,0002.00%

231,000

33.00%YTTEK Technology Corp.

0

0.00%

6,673

27.52%

6,673

27.52%

Renovatio Pictures, Inc.

0

0.00%

315

21.39%

315

21.39%

Naidun-tech Co., Ltd.

0

0.00%

8,733

22.03%

8,733

22.03%

Mega Green Energy Corp.

0

0.00%

16,00020.00%

16,00020.00%

Note 1: Invested by the Consolidated Company using the equity method.
Note 2: Although the merging company does not hold more than half of the company's voting shares, it is included in the consolidated
financial report as a consolidated entity because the merging company has control over its main operating activities and otherdecisions.

62

AUO Corporation
2023 Annual ReportCapital Overview

Chapter 4 Capital Overview
I. Capital and shares(I) Sources of Capital
Unit: Shares; NT$
Authorized Share Capital

Paid-in capital

Year/
month

Issuedprice

SharesAmount(NT$)

2022.0810

12,000,000,000

120,000,000,000

Remarks

Amount(NT$)

Shares

Sources of Capital

7,699,396,092 76,993,960,920

Capital Reduction
19,248,490,230

Capital increase byassets other than cash

Other

none.

Note 2

Note 1: The above information is as of the publication date of the annual report.
Note 2: National Science and Technology Council Hsinchu Science Park Bureau 08.18.2022 Certificate No. 1110026474.
Unit: Shares
Authorized Share Capital ( AUO Corporation is a TWSE Listed Company.)

Type of Stock

Outstanding shares (Note)

Unissued shares

Total

7,699,396,092

4,300,603,908

12,000,000,000

Registered common shares

Amount of corporate bondsthat can be converted
725,000,000

Note: Include 31,515 thousand treasury shares held by the Company.
Shelf registration: Not applicable.

(II) Composition of Shareholders
Unit: Shares
Type of shareholders
Quantity
Number of shareholders

Government
Angencies

shareholding

Financial
Institutions

Foreign
Other Juridical Domestic Natural
Institutions andPersons
Persons
Natural Persons
664
457,338
1,347

Total

9

114

170,478,851

913,161,139

1,045,207,589

3,566,218,677

2,004,329,836

7,699,396,092

2.21 %

11.86 %

13.58 %

46.32 %

26.03 %

100.00 %shareholding percentage

459,472

Note: The stock transfer was not suspended before the publication date of the annual report; therefore, said record date was intended forthe quantity of shares held before the latest suspension of stock transfer (August 18, 2023) and the total number of shares.

(III) Distribution of Shareholding
Unit: Shares
Shareholding Range(Common Shares)

Number of Shareholders

Shareholding

Shareholding percentage

1 to 999

157,80267,623,192

0.88%

1,000 to 5,000

190,510476,041,924

6.18%

5,001 to 10,000

52,200394,993,436

5.13%

10,001 to 15,000

15,819194,306,464

2.52%

15,001 to 20,000

13,988242,035,488

3.14%

20,001 to 30,000

9,792

242,858,388

3.15%

30,001 to 40,000

5,862

208,281,523

2.71%

40,001 to 50,000

2,872

131,944,092

1.71%

50,001 to 100,000

5,866

421,514,548

5.47%

100,001 to 200,000

2,615

368,375,568

4.78%

200,001 to 400,000

1,115

313,067,857

4.07%

400,001 to 600,000

336

163,591,140

2.12%

600,001 to 800,000

154

106,255,482

1.38%

800,001 to 1,000,000

107

96,423,519

1.25%Over 1,000,001

434

4,272,083,471

55.49%

459,472

7,699,396,092

100.00 %Total

Note1: The Company does not issue preferred shares.
Note2 : The stock transfer was not suspended before the publication date of the annual report. Therefore, said record date was intended forthe quantity of shares held before the latest suspension of stock transfer (August 18, 2023) and the total number of shares.

AUO Corporation
2023 Annual Report63

(IV) List of Major Shareholders (Top 10 shareholders who own the most shares)
SharesShareholding

Shareholding

Names of major shareholders

percentage

Qisda Corporation

530,878,896

6.90%

Trust Holding for Employees for AUO

391,169,439

5.08%

Quanta Computer Inc.

355,144,245

4.61%

Yuanta Taiwan Dividend Plus ETF

230,269,569

2.99%

ADR of AUO

187,493,055

2.44%

New Labor Pension Fund

151,726,900

1.97%

Nan Shan Life Insurance Company, Ltd.

124,550,800

1.62%Morgan Stanley & Co. International Plc

104,086,956

1.35%

71,746,699

0.93%

65,706,222

0.85%

J.P. Morgan Chase Bank N.A.,Taipei Branch in custody for Vanguard Total International
Stock Index Fund, a series of Vanguard Star Funds
JPMorgan Securities PLC

Note: The stock transfer was not suspended before as of March 11,2024; therefore, said record date was intended for the quantity ofshares held before the latest suspension of stock transfer (August 18, 2023) and the total number of shares. After record date ofApril 1, 2024 and it will be further disclosed on AUO Corporation's official website(V) Market Price, Net Worth, Earnings, and Dividends in the Past Two Years
Unit: NT$
Fiscal Year
Item
Market Priceper Share

Dividends
per share

Return on
Investment
Analysis

2023

2022

Highest

19.75

21.65

23.30

Lowest

16.70

14.95

13.00

Average

18.07

17.54

17.67

Net Worth per Before distribution
Share
After distribution
Earnings per
share (EPS)

As of March 11, 2024

(Note5)

20.76

24.16

(Note5)(Note 4) 19.86

23.36(Note5)

7,666,437

8,819,096(Note5)(2.37)(2.39)Cash dividends－(Note4) 0.90

0.80

Stock dividends Dividends from retained earnings

－

0.00

0.00

Weighted average shares(thousand shares)
Earnings per share (EPS)(Shares)

－

0.00

0.00

Accumulated undistributed dividends

－

0.00

0.00

Price/Earnings Ratio (Note 1)－(7.40)(7.39)

Price/Dividend Ratio (Note 2)－(Note 4) 19.49

22.09

Cash Dividend Yield (%) (Note 3)－(Note 4) 5.13

4.53

Dividends from capital surplus

Note 1: Price/Earnings Ratio = Average closing price per share in the current year/earnings per share.
Note 2: Price/Dividend Ratio = Average closing price per share in the current year/cash dividends per share.
Note 3: Cash Dividend Yield = Cash dividends per share/average closing price per share in the current year.
Note 4: The cash distribution from capital surplus of NT$ 0.9 per share for 2023 were approved by the Board of Directors on March 11,2024.
Note 5: As of the printed date of the Annual Report, there have been no data audited or reviewed by CPAs.

64

AUO Corporation
2023 Annual ReportCapital Overview(VI) Dividend Policy and Implementation Status
1. Dividend policy
The Company's dividend policy is to pay dividends from surplus considering factors such as the Company's current andfuture investment environment, cash requirements, domestic and overseas competitive conditions and capital budget
requirements, and taking into account the shareholders' interest, maintenance of a balanced dividend and theCompany's long-term financial plan.
(1) If the retained earnings available for distribution of the current year reaches 2% of the paid-in capital of theCompany, no less than 20% of the retained earnings available for distribution of the current year shall be
distributed as dividend.
(2) If the retained earnings available for distribution of the current year does not reach 2% of the paid-in capital of theCompany, the Company may distribute no dividend.
(3) The cash portion of the dividend shall not be less than 10% of the total dividend in the form of cash and stock.
(4) The dividend distribution ratio in the preceding paragraph could be adjusted taking into consideration finance,business and operations, etc.
(5) Where the Company incurs no loss, the Company may distribute the portion of legal reserve which exceeds 25%of the Company’s paid-in capital and the capital reserves permitted for distribution under the Company Act, inwhole or in part, in the form of cash, to the shareholders in proportion to their shareholdings by the resolution
adopted by the Board and a report of such distribution shall be submitted to the shareholders’ meeting.
2. Dividend payout plans proposed in 2024 Shareholders’ Meeting
Unit: NT$
Shares Year

Directors Approved thedividend distribution date

2023

2024.03.11

Cash dividend0(NTD 0 per share)

Shareholders dividend
Capital surplus Cashdistribution
6,901,092,875(NTD 0.9 per share)

Stock dividends from
earnings0(NTD 0 per share)

Note: In accordance with Dividend policy stipulated in Article 15-1 of the Articles of Incorporation and distribution in cash. The boardof directors of the Company passed a resolution and will report to the 2024 Annual General shareholders' meeting.

3. Major changes expected in the dividend policy: none(VII) Effect upon business performance and earnings per share of any stock dividend distribution proposed or
adopted at the most recent shareholders' meeting: not applicable.
(VIII) Remuneration of employees and directors
1. The percentage and scope of the employees, directors, and supervisor's remuneration as stated in the Company's
Articles of Incorporation.
Item
Employees
emuneration

Percentage and scope Where the Company has a profit before tax for each fiscal year, the Company shall first reserve certain
amount of the profit to recover losses for preceding years, and then set aside no less than 5% of theremaining profit for distribution to employees as remuneration. (Article 15)
 The employees who are entitled to employees remunerations in the form of shares or cash, employee
stock option, restricted employee stock, the bought back shares to be transferred by the Company and the
new shares reserved for employees subscription in the Company’s share offering include employees ofsubsidiaries of the Company meeting certain specificqualifications and the Board or the person duly

designated by the Board is authorized to decide such qualifications and allocation. (Article 15-3)
Directors
remuneration

 Where the Company has a profit before tax for each fiscal year, the Company shall first reserve certain
amount of the profit to recover losses for preceding years, and then set aside no more than 1% of theremaining profit for distribution to directors as remuneration. (Article 15)
 The director's remuneration can only be paid in the form of cash.

Note: The employee and directors’ remuneration shall be approved by two-thirds or more of the directors in a meeting attended bymore than half of all directors, and the resolution shall be reported to the shareholder's meeting.

AUO Corporation
2023 Annual Report652. The basis for estimating the remuneration of employees and directors in this period, the basis for calculating thenumber of shares of employees' remuneration distributed by shares, and the accounting treatment if the actual
distribution amount is different from the estimated amount.
The Company accrued remuneration to employees based on the profit before income tax excluding the remuneration
to employees and Directors for each period, multiplied by the percentage resolved by the Board of Directors.
Remuneration to directors was estimated based on the amount expected to pay and recognized together with the
remuneration to employees as operating costs or operating expenses. If remuneration to employees is resolved to be
distributed in stock, the number of shares is determined by dividing the amount of remuneration by the closing priceof the shares (ignoring ex-dividend effect) on the day preceding the Board of Directors’ meeting. If there is a change inthe proposed amounts after the annual financial statements are authorized for issue, the differences are accounted for
as a change in accounting estimate and adjusted prospectively to next year’s profit or loss.
3. The board of directors approved the distribution of remuneration in 2023.
Unit: NT$
Item
Directors remuneration (Cash)

Board Resolution (2024.01.31)
0

Employees emuneration (Cash)
Total

0
0

Note 1: The amount of the remuneration and recognized expense to employees and directors is the same as the estimated of theyear.
Note 2: The amount of any employees profit-sharing remuneration and directors profit-sharing remuneration distributed in cash orstocks: None.

4. The actual distribution of employee and director remuneration in 2022 (including the number of shares distributed,
price and stock price), the number of differences between the remuneration of recognized employees and directors
for reasons and the handling situation.
Unit: NT$
Item
Directors Remuneration (Cash)
Employees Remuneration (Cash)
Total

Board Resolution (2023.02.08)

Variance
0
0
0

0
0
0

Cause of variance
None.
None.
None.

(IX) The Company buyback of Common Stock situation
Buyback no.
Purpose of the share buyback
Buyback period
Buyback price range (Note1)
Type and number of shares bought backTotal monetary amount of shares bought backNumber of shares bought back as a percentage of the approved number of shares to bebought back (%)
Number of shares cancelled and/or transferred (Note 2)
Cumulative number of the company’s treasury shares held (Note 2)
Cumulative number of the company’s treasury shares as a percentage of the total
number of the Company’s issued shares (%) (Note3)

Third
Transfer to Employees
2019.09.17～2019.11.04
NT$5.71～11.84
125,000,000 common shares
NT$1,013,422,848
100.00%93,484,880 shares
31,515,120 shares
0.41%

Note 1：If buyback price range is less than NT$5.71then could be continuing buyback.
Note 2：The calculation scope includes the number of shares reduced in August 2022 (reduction ratio is 20%).
Note 3：As of March 11, 2024 the issued shares is 7,699,396,092 common shares.

II. Handling of corporate bonds (including outstanding corporate bonds and corporate
bonds under processing)
None.

66

AUO Corporation
2023 Annual ReportCapital Overview

III. Handling of preferred shares (including outstanding and ongoing preferred shares)
None.

IV. Handling of overseas depositary receipts (including overseas deposit receipts that haveparticipated in the issuance and have not been fully redeemed and overseas depositary
receipts that have still been processed)
2002.05.29/ 2003.07.31/ 2004.06.23/ 2004.07.12/ 2005.07.22/ 2005.08.26/

Date of issuance (placement)

2006.08.30/ 2006.10.01/ 2007.09.06/ 2008.08.22/ 2009.09.09/ 2013.05.07 (Note 1)

Issuance and Listing

U.S. OTC market (Note 2)

Total Amount (US$)

1,996,807,815

Units Issued (US$)

11.57；16.00；15.35；4.4

Total number of units issued as of February 29,
2024 (units)
Underlying Securities

51,036,874 (Note 3)
Common shares of the Company

Quantity of underlying securities

510,368,769 (Note 3)

as of February 29, 2024 (shares)
Rights and obligations of ADR holders

Rights and obligations are the same as common shares

Trustee

Not applicable

Depositary bank

Citibank,N.A.

Custodian bank

Citibank Taiwan Ltd.

Outstanding balance as of February 29
2024 (unit)

18,361,718
The issue-related expenses were proportionally allocated by the Company and theApportionment of expenses for issuance &selling shareholder according to the actual number of shares sold. After the

maintenanceissuance, except where otherwise agreed by the Company and the Depositary, thecosts of all overseas depositary receipts shall be borne by the Company.

Terms and conditions in the deposit

Details such as depositary and custody contracts

agreement & custody agreement

Highest 8.20
2023

Marketunit(US$)

Lowest 4.60
Average 5.76

Price per
As of March 11, 2024

Highest 6.24
Lowest 5.40
Average 5.84

Note 1:2003.07.31, 2004.07.12, 2005.08.26, 2006.08.30, 2007.09.06, 2008.08.22 and 2009.09.09 were new issues after the merger
with Guanghui in 2006.10.01.
Note 2: The Company's overseas depositary receipts will be transferred to the US over-the-counter market from the New York
Stock Exchange as of October 1, 2019.
Note 3: In accordance with the FSC's instructions, the Company's American Depositary shares will not be issued after redemption asof December 3, 2019, New York time, and the outstanding balance as of December 2, 2019, New York time, will be used as thetotal number of the Company's American Depositary shares issued for trading in the US over-the-counter market.

V.

Employee stock option handling status: None.

VI. Operations of new restricted employee shares: None.
VII. Issuance of new shares in connection with the merger or acquisition of othercorporations: None.
VIII. Implementation status of fund application: None.
AUO Corporation
2023 Annual Report67Chapter 5 Operational Highlights
I. Business Content(1) Business scope
AUO is one of the world's leading providers of optoelectronic solutions. Based on its extensive panel R&D andmanufacturing experience, AUO offers a full range of display applications and smart solutions integrating software andhardware and leverages its core expertise to expand into smart retail, smart healthcare, smart education & business,
smart mobility, and smart manufacturing) and solar power, to deliver high-quality products and services in thesesegments. In 2023, revenues of display division accounted for about 92.5% of the consolidated turnover.
For the main business scope of the Company's subsidiaries, please refer to Chapter 9 Special Disclosure of this annual
report (pages 124-128).

(II) Overview of the industry.
1. Industry Status and Development
At present, thin film transistor liquid crystal display (TFT-LCD) is still the mainstream in the development of flat panel
display industry. TFT-LCD has the advantages of wide product application and economies of scale, which meets theneeds of comprehensive information products and consumer electronics in the digital era.
Overview the historical development of TFT-LCD industry, we can conclude that it has the industrial characteristics ofbusiness cycle, capital and technology intensive. At present, the world's major TFT-LCD producers include Taiwan,
South Korea, Japan and Mainland China. According to the survey report of Omdia, by 2023, Mainland China and Taiwan
will be the top two TFT-LCD producing regions in the world. Large size (according to the definition by Omdia report,
large size includes tablet and laptop screens, desktop displays, LCD TV screens and public displays, etc.)With the
popularization of comprehensive digital information products and consumer electronics, TFT-LCD, as a key component,
represents as the strategic hub of flat panel display supply chain, it not only leads the growth of upstream materials andcomponents industry and technology growth, but also supports the global information electronics industry to expand
the downstream application market. Since the manufacturers’ mass production of TFT-LCD in Taiwan, its industrial
clustering effect has promoted the vigorous development of local upstream related materials and components
industries.
2. Upstream, midstream and downstream relevance of the industry
Upstream Glass substrates, color filters, polarizers, driver ICs, printed circuit boards, backlight modules, liquidindustry crystals, etc.
Midstream
LCD panels, LCD modules, etc.
industry
Downstream LCD TVs, tablets, notebooks, desktop monitors, mobile communication, commercial displays andindustry other electronic products.
3. Various development trends of products
TFT-LCD production technology is currently widely applied to various flat-panel displays, including televisions, desktop
monitors, laptops, tablets, mobile phones, in-vehicle displays, commercial displays, and other applications. Taking the
television market as an example, televisions no longer just provide TV broadcasts. They have been given diversified
audio-video interactive entertainment functions and have become the center of digital home development. In responseto the popularity of networking and smart functions, televisions have become a more important role in homeentertainment, advancing towards ultra-narrow bezels, high-definition picture quality, and size upgrades. Looking at thelaptop market, panel technology specifications have been strengthening, including higher screen-to-body ratios, higher
resolutions, lighter and more energy-efficient displays, screen privacy, touch controls, and flexibility, which are all
becoming the directions of technological competition.
The new technology, Micro LED, possesses numerous advantages including ultra-high resolution and color saturation,
wide viewing angles, low power consumption, high brightness, high speed response, energy-saving, long product life, andhigh efficiency. It is suitable for applications such as digital signage and vehicular displays. This allows all devices totransfer content to each other and express it realistically in a smart streaming environment.

68

AUO Corporation
2023 Annual ReportOperational Highlights

On the other hand, as environmental awareness increases, ESG issues are also fermenting in the LCD display industry.
Improving panel transparency, reducing energy consumption in the production process, using recycled materials andrenewable energy, etc., are gradually becoming trends. Low carbon emission will be an issue that the entire industry
chain must face.
The development of major application products is described as follows:TV
Under the consensus of the panel factory and the set factory, large-size TVs continue to move towards the
public-friendly development. They are expected to reach an average size of 50.8 inches in 2023 and 51.5 inches in
2024, with the future hoping to progress towards growing an average of 1 inch per year. In addition, with the
popularity of esports and sports broadcasts, high-refresh-rate panels are gradually becoming standard. Along withthe successive launch of online streaming, network connections, and platform application-added services, theconcept of the Internet of Things is gradually taking shape. TV no longer just provides TV program broadcasts, butalso endows diversified audio-visual interactive entertainment functions, becoming the core of digital homedevelopment.
Looking into the future, the next-generation Micro LED display technology creates a true HDR experience with
precise contrast, while presenting 100% DCI color gamut and Adobe RGB color gamut. With an extremely realisticcolor presentation paired with a 99.99% screen ratio, it delivers an unparalleled immersive experience. It is
expected to stimulate a new wave of demand in the high-end domestic market. On the other hand, ESG issues arealso fermenting in the television industry. Adopting initiatives such as increasing panel transmittance, reducing
energy consumption, using recycled materials and renewable energy is gradually becoming a trend. Low carbon
emissions will be an issue that the entire supply chain must face.



Desktop monitor
Consumers are gradually shifting towards purchases that accommodate diverse needs such as entertainment,
information browsing, work, etc. The proportion of diverse application/dual-resolution products is gradually
increasing. Display product specifications are still advancing towards high resolution, high image quality, high refreshrate, curved design, borderless, and other high-end products to meet diverse application scenario requirements, andthe market share will also steadily increase. In addition to technical specification improvements, how to reducecarbon emissions during the production process, increase the proportion of product recycling materials, and other
ESG environmental protection topics, are also gradually being raised among various brand customers.



Notebooks and tablets
In the first half of 2023, notebook and tablet brands will still be in the final stage of inventory adjustment, and theoverall market demand will gradually recover in the second quarter. Consumers are influenced by the sluggish
overall economy and shift their focus from technical specifications to cost-effective products, therefore the demandfor consumer laptops is increasing more slowly than that for high-end laptops. The demand for lightweight, thin,
narrow, and power-saving laptops is still standard, and brands continue to launch ultralight and ultra-power-saving
models. In addition, large viewing area is still favored by consumers, and 16:10 large-screen laptops will become themainstream in the 2024 market. The specifications are aimed at higher screen occupancy ratio, higher brightness,
faster response speed, endurance and lightness, in addition to incorporating finger touch screen features andlaptops with touch pens or 2-in-1 laptops (combination of laptop and tablet). This is also gradually penetrating the
mid-to-high-end market. In the commercial customer group, they emphasize office efficiency and professional usageneeds which include: power saving, high resolution and color saturation, large screen, screen privacy and otherspecial specifications. Therefore, the LTPS technology platform that can meet these high specifications has also
become an important part of the mid-to-high-end commercial market. In addition, various companies have also
begun to promote sustainability and environmental protection. Energy saving and carbon reduction have become
long-term goals for major companies. To this end, green laptops made with recyclable or carbon-reducing materials
have also become a part of product development.



Automotive displays and others
The development of automotive displays in 2023 has several key trends. Firstly, the size of the displays is gradually
increasing, and there are also advances in the specifications and technology. This is because large-sized displays canprovide a more intuitive and comfortable driving experience. In terms of applications, automotive displays are nolonger merely for displaying basic vehicle information, but more smart features have been integrated. It is envisionedthat in 2024, these trends will continue to evolve, and there will be more breakthroughs. Specifications and

AUO Corporation
2023 Annual Report69resolution will be further improved to provide drivers with clearer and more realistic visual experiences. In terms
of applications, the advantages of the smart cockpit will be more obvious. Automotive displays will be better
combined with the vehicle space, and more personalized options will be integrated. For example, drivers can adjust
the contents and style of the display according to their preferences and needs. Moreover, the design will be moreexquisite to provide a higher-quality feel.
At the Consumer Electronics Show (CES 2024) in the United States, AUO presented its theme of "Driving the
Future of Smart Mobility", showcasing AUO's new smart cockpit and a host of newly developed automotive display
technologies to the world. Among them, the 'Interactive Transparent Smart Car Window', integrates a hightransparency, high brightness, clear Micro LED display into the car side window, combined with touch function, it
can meet the diverse needs of passengers, from basic entertainment functions, online video conferencing tointeractive AR experiences; By connecting with the external camera of the car, it can remind passengers to notice
the rearcoming cars and surrounding environment before getting off the car, thereby enhancing safety. The 'Rollable
Rear Seat Entertainment Display' is the world's first rollable, retractable display. Utilizing the flexible and bendable
characteristic of Micro LED, the display can be rolled up and hidden in the back of the front seat when not in use by
the rear passengers, providing a higher design flexibility in limited space, allowing rear passengers to enjoy a more
spacious and comfortable ride experience while still possessing high-definition, brightly clear image quality. We
believe that with advances in technology and changes in market demands, automotive displays will have greater
development space. We will devote ourselves to developing more advanced, user-friendly products to meet
consumer needs and provide the best driving experience.
Wearable Devices
The ever-increasing demand for health monitoring and fitness tracking, coupled with the progressive technology, hasturned wearable devices from merely fashion accessories to an integral part of personal life. In 2024, the technicalfocus of wearable devices will be to increase resolution and energy efficiency while adding more sensing capabilities.
For instance, smaller sensors will be able to more accurately track consumers' health indicators. In addition, newenergy-saving technology will enable wearable devices to have longer battery life. Our technology is in sync withmarket trends, enabling our customers to maintain their competitive advantage in the market.

Industrial and commercial displays
Commercial displays are widely used in various smart fields, including smart retail, smart healthcare, smart
manufacturing, smart mobility, smart education and enterprise, etc. With the popularity of 5G communication
technology and IoT, as well as the development of AI technology, it has accelerated the Internet of Things andhuman-machine smart collaboration. The display is an important medium for communication and interaction
between humans and machines, and it helps to visualize the results of edge computing and reflect the benefits ofsmart technology. In order to provide more complete and high value-added products and services, it has been
extended to various touch integration and one-stop services, strengthening system integration design. At the sametime, it has strengthened the visualization needs of the industrial and commercial vertical fields, and emphasized thedevelopment of medical field image-related solutions, creating a better display usage experience.
The development of new generation public display technology is becoming more closely aligned with various
commercial field requirements. Advanced display technologies of diversified sizes and proportions meet the field
applications for various public spaces. Coupled with touch integration and edge computing technology, they provide
a range of display and software-hardware integrated solutions focused on visual products. These field terminal smart
solutions meet diverse public space display applications such as real-time public messages, product promotions,promotional advertisements, food-ordering services, ride information, navigation guidance, interactive education,interactive entertainment, large-scale presentation meetings, smart action meetings, meeting room environmental
control and management, etc. Information is ubiquitous, providing people with a richer and more convenient smart
life, driving the annual growth of public display demand.



Energy business
Global net-zero trend is intensifying, the utilization of renewable energy such as solar and wind energy will continue
to grow as they are considered key methods to reduce carbon emissions and address climate change. The
advancement of energy storage technology (such as battery technology) will drive the broader application ofrenewable energy and solve the intermittency issue of renewable energy. The demand for energy conservation andenergy efficiency will continue to increase, especially in the fields of construction, transportation, and industry. The
application of digitalization and intelligent technologies will promote the development of intelligent energy systems,
including smart grids, smart homes, and smart city projects. New energy business can provide sustainable solutions

70

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2023 Annual ReportOperational Highlightsthat encompass both net-zero carbon emissions and smart energy management. Targeting the trend of international
zero-carbon constructions, the new energy business is building integrated photovoltaic construction services with
abundant power plant construction achievements. By integrating architectural design from the source, we are
actively developing SunSteel photovoltaic integrated wave plate, realizing quick installation, avoiding secondary
construction, reducing the overall weight of the photovoltaic system, lowering the load burden of the building
structure, further achieving the effect of reducing carbon footprint, achieving the triple win effect of roof insulation,waterproofing, green energy supply, and urban aesthetics. At the same time, we have obtained the double
certification of the German Rhine solar module performance standard and safety standard from the internationallyrenowned inspection and verification institution, making rooftop photovoltaic the new standard for future buildings.
In addition, in pursuit of more clean energy applications entering the public daily life, we have developed SunBelloaesthetic green energy solar modules, implanting customized patterns into photovoltaic building materials, helping
users combine art with photovoltaics to create an aesthetic gallery that can also generate electricity. By introducing
lightweight module materials, we have developed SunCurva flexible, lightweight solar panels that reduce the module
weight by 70%, can be extensively used in various fields, including transportation vehicles, camping, etc., and have
won the Taiwan Excellence Award 2024.
In the management of solar power plants, the SunVeillance solution employs artificial intelligence to diagnose plant
abnormalities and automatically assign work for repairs, reducing maintenance costs and ensuring plant revenue,
thus achieving autonomous management of the plant. With the development of energy transformation trends, it isalso accelerating the prosperity of electric vehicles, charging piles and other energy storage and power carriers.
New energy businesses invest in the research and development of the EnLink smart energy management solution
through the integration of hardware and software technologies, which can collect energy information from different
field devices, including energy storage systems, solar energy systems, electric vehicle charging poles and otherequipment. The data is analyzed and integrated, and visual management is achieved through mobile devices anddisplay dashboards, dynamic simulation of instantaneous power consumption, clear display of energy proportion,
remote monitoring, energy dispatch and control of the use of different power sources, effectively saving energy, andimproving the self-generation and self-use rate of green energy, electricity cost optimization, in order to achieve
more immediate, suitable and highly efficient energy management benefits.
4. Competition status
TFT-LCD is the mainstream technology of flat panel display products. At present, the global TFT-LCD manufacturers
are mainly BOE, CSOT, HKC and Tianma in Mainland China, LGD in South Korea, AUO, Innolux and HannStar in Taiwan,
as well as SHARP and JDI in Japan.
Observe market trends of panel makers in various regions, Korean panel factories have been committed to thedevelopment and production of AMOLED/QDOLED/Micro LED/panel technology in recent years, and havesuccessively closed part of old-generation LCD production lines; higher-generation TFT-LCD production lines ofmanufacturers in Mainland China are mainly based on bulk consumption panels, and also set up AMOLED panel factory;
Given the limited growth of production capacity, Taiwan manufacturers continue to launch products with differentiatedsizes and high-tech content to explore niche product lines.
Recently, the old panel factories have been closed and transformed one after another, Korean factories gradually
withdraw from the TFT-LCD market. In Taiwan the next generation line under G6 of panel factory not only produces IT
and automotive panels, but also actively transforms and develops new technologies, such as Mini LED, Micro LED,
fingerprint on display (FoD) sensor and panel-level packaging.
In the small and medium-sized market, in response to the development of smart phones in the direction of higher
aspect ratio, larger size, higher resolution, special-shaped cutting, lightweight and power saving, each panel factory has alayout of LTPS and AMOLED production capacity, while Korean panel manufacturers mainly build AMOLED production
capacity, Japan and Taiwan add more on LTPS, whereas Mainland China have invested in both.
At present, the competition in the panel industry has shifted the competition from the capacity expansion to newtechnologies and high value-added products, such as 8K ultra-high resolution, curved desktop display panels, highrefresh rate panels, adjustable privacy control technology or full-plane borderless panels etc., all of which have theproduction techniques of entry barriers and a long learning curve, which can meet the diverse needs of consumers
thus creates higher value.

AUO Corporation
2023 Annual Report71Currently, Taiwan panel manufacturers are creating differentiation with technical strength, committing to high-end
technical ability, layout in the high-value market such as Mini LED, Micro LED, etc., Taiwan, which has a complete LED
supply chain, as a technology leader is expected to accelerate the introduction of products into the market continuing
to reduce costs and enhance market competitiveness through R&D capabilities.

(III) Technology and R&D overview
AUO continues to invest in technological innovation and, driven by new technologies such as 5G, AI, and IoT, extends
the value chain of intelligent display applications through diverse products and solutions. AUO combines innovative
display technologies with the development of smart retail, smart healthcare, smart entertainment, smart transportation,and smart manufacturing applications to explore new business opportunities in various fields. The important products
and technologies for AUO in the year 2023 are as follows:

Development of Full range of Micro LED premium panel technologies
AUO has long been committed to advancing next-generation display technologies and integrating the Micro LED
industry chain across different domains. It has taken a leading position in establishing a complete ecosystem forintelligent displays.
At Touch Taiwan 2023, AUO showcased its collaboration with ecosystem partners in theMicro LED industry chain, covering LED chips, mass transfer technology, packaging, as well as providing a series ofmodules, systems, and solutions. It marked a critical milestone in advancing Micro LED technology towards
commercialization. AUO took the lead in mass producing the 1.39-inch Micro LED smart watch, ushering in theyear of mass production for Micro LED. AUO also showcased a 60-inch Micro LED transparent window display,taking advantage of the high transparency and seamless tiling capabilities of Micro LED technology. This display canbe customized in size to suit various applications in different domains, such as automotive side windows, homeentrances, smart shop windows, and commercial displays. This product has been recognized with the 2023 Gold
Award for its innovative features and contributions to the display industry.
Besides, AUO has applied multiple next-generation Micro LED technologies to in-vehicle display systems, leveraging
their high brightness, transparency, and flexibility to seamlessly integrate them into the vehicle cabin space. At theConsumer Electronics Show (CES) 2024 in the United States, AUO won two CES 2024 Innovation Awards for its
breakthrough transparent and rollable Micro LED in-vehicle display applications. The "Interactive Transparent
Window" even received the highest honor of "Best of Innovation Honoree". These accolades recognize AUO's
innovative achievements in the automotive display field.



The full range of Mini LED backlight panel product
AUO's new generation AmLED (Adaptive mini LED) advanced display technology has evolved through exclusive
dynamic control technology and mini LED backlight design.
Precise real-time dynamic dimming zoom modulation can be performed in terms of backlight brightness, contrast,
color, refresh rate, and power consumption, based on the image on the screen, further enhancing brightness andachieving a million-level dynamic contrast. It has been favored by many brands and widely adopted in high-end
models.
One of the notable products is the 49-inch DQHD 360Hz R1000 curved gaming display panel. It features a 360Hz
ultra-high refresh rate, 5K ultra-high resolution, and is equipped with OverDrive (OD) liquid crystal driving
acceleration technology. This effectively improves response speed, providing gamers with motion blur free andimmersive gaming visual experience. It has received the "CTSP Excellent Company Innovative Product Awards" in2023 from the National Science and Technology Council.
As the global electric vehicle market continues to expand rapidly, AUO is developing display solutions forautomotive applications, enabling a more diversified future for in-vehicle displays. Among them, the "30.4-inch
Curved AmLED Automotive Display System" stands out from conventional products that consist of two separate
screens. Instead, it uses a single screen that extends from the driver's seat to the center console area. It combines a
2400R curved panel with slim bezels, offering an aesthetic design. The exclusive AmLED display technology enableshigh resolution, high brightness, wide color gamut, and high dynamic contrast. For these advancements, AUO wasawarded “Gold Panel Award 2023” by the Taiwan Display Union Association (TDUA).

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2023 Annual ReportOperational Highlights

Museum-grade realistic art display solution from AUO FindARTs.
The 32-inch FindARTs high fidelity ART display is an integration of novel hardware and software technologies. It
serves the art ecosystem, realizing the enduring value of art appreciation. It has been awarded “the Silver Award at
the 32nd Taiwan Excellence Awards”. The FindARTs display employs AUO's exclusive A.R.T. (Advanced Reflection
Tech.) anti-glare technology, providing a gentle interface for optimal art viewing. It features internationally certified
color reproduction technology, faithfully reproducing the true colors and brush textures of artworks as intended
by the artists. It further ensures the utmost security and preservation of top-tier masterpiece digital assets throughadvanced encryption technology on cloud platforms, safeguarding the authenticity of original artworks.
AUO's FindARTs provides a comprehensive digital transformation solution for art appreciation and has beensuccessfully implemented in various prestigious art venues such as Chimei Museum, Tainan Art Museum, andcommercial applications like the Twin Oaks Estate exhibition in the United States, as well as displays at First Bank.
With diverse artistic expression and vitality, FindARTs was invited to participate in the 2023 Taipei International
Art Expo, where it received high praise from domestic and international artists and collectors.

Integration of Smart driving cockpit display interface
With the popularization of electric vehicles, the elimination of combustion engines frees up cabin space andaccelerates the development of smart cabins. AUO incorporates cutting-edge display technology into various
automotive display devices and expands into integrated smart cabin system services. The "Display HMI Integrated
Display Solution," equipped with a 55-inch ultra-large curved display from A-pillar to A-pillar, combines hidden
cameras, IR LED, ambient light sensors, and a large-sized embedded touch panel, enabling seamless multi-screen
sharing and interaction. It includes features like facial recognition for direct customization of driver preferences,displaying the driver's personal calendar, and further personalizing functions such as navigation based on the driver's
itinerary. It can actively detect the driver's gaze and fatigue state during the journey and provide safety warnings.
Besides, AUO integrates AR-HUD immersive head-up display technology to the windshield, turning it into anotherdisplay interface that provides an ultra-wide display image. Road and navigation information are directly projected
onto the windshield. In the passenger seat, AUO has equipped an active privacy panel, allowing passengers to enjoy
audio-visual entertainment during the vehicle's operation. To avoid affecting the driver's attention, the passenger
display can be switched to privacy mode in real-time, significantly enhancing driving safety. The 55-inch Curve
Extra-Large Display HMI system has received the Gold Medal Award at the 32nd Taiwan Excellence Awards.



Customization of Extra-Large ALED Display Screen
With respect to the development and manufacturing of cutting-edge display technologies, AUO has worked closelywith partners in the ecosystem to create innovative smart solution applications that bring added value. Using
seamless ALED advanced display technology, AUO has joined forces with Brogent Technologies, a motion-sensing
gaming equipment manufacturer, to launch a project at the Aniverse Keelung, Taiwan. This project features thelargest outdoor naked-eye 3D LED curved screen in Taiwan, measuring 23 meters wide and 6 meters high. It
creates a 3D visual experience that takes users through a virtual universe, combining technology and art to provide
a new visual feast. This project has transformed the location into a transportation and entertainment hub,connecting the real city with futuristic elements.
With ALED technology, AUO has created a spherical LED simulation cabin with a P1.25 small pixel pitch. Pairedwith Brogent's precision six-axis dynamic seats and AUO's professional image calibration technology, it presents alifelike simulated flight experience. Players can immerse themselves in a spherical environment and experience thesimulated flight of the famous Epsilon Course. And, the Delta Airship with curved LED display screens, measuring awidth of 6 meters and a height of 4 meters, is the largest and only motion-based airship in Taiwan. Passengers canenjoy a unique experience onboard the hot air balloon, with immersive 3D effects that make them feel like they are
touring different countries without leaving their seats.



Development and Deployment of Smart Healthcare Technology
In the realm of smart healthcare, AUO is committed to fostering long-term development and delivering on-site
solutions to advance the trajectory of intelligent healthcare. AUO, through its subsidiary AUO Health Inc., is at theforefront of digitizing traditional Chinese medicine healthcare. Leveraging its expertise in sensing technology andcolor management, AUO has successfully developed a state-of-the-art tongue image acquisition system. This
provides digitized and visualized test results, assisting physicians and healthcare professionals in clinical research,evaluation of test results, and retention of test records.

AUO Corporation
2023 Annual Report73Another "pulse detection system" developed by AUO converts pulse perception into data through precise controlof the computer-controlled lifting system, achieving smart healthcare and accuracy. AUO has signed amemorandum of cooperation with the College of Chinese Medicine at China Medical University (CMU) to
collaborate on the digitization and standardization of traditional Chinese medicine diagnostic methods such as pulse
diagnosis and tongue diagnosis, thereby advancing the development of smart traditional Chinese medicine
healthcare.
Furthermore, AUO has targeted the digital transformation trend in the dental industry and developed a smart
dental shade solution. AUO has launched an industry-leading digital dental technology management system thathelps dental technicians to grasp the comprehensive production process from dental clinics placing orders to thedental laboratory. This system includes key steps such as scanning, designing, manufacturing, coloring, and shade
matching. Dental technicians can instantly access the status and treatment preferences for order adjustments madeby dentists, thereby enhancing the quality management of denture production processes and effectively reducing
operational costs.
In the healthcare sector, AUO has successfully developed the Smart Non-Contact Vital Signals Monitor. This
innovative device incorporates AUO's proprietary millimeter-wave LCD array antenna technology. This monitor
has an effective range of over 2.5 meters, making it the industry leader in detecting respiratory rate and heart rate
at a distance. With the patented millimeter-wave control technology, the product's signal-to-noise ratio is
improved, thereby increasing the detection distance and achieving a detection accuracy of over 90% for heartbeat
vibrations. By incorporating AI real-time status recognition technology, AUO has achieved an increase of over 30%
in the recognition rate of physiological signals. This significant advancement greatly enhances monitoring efficiency
and accuracy.


Sustainable Circular / Environmental Green Energy Solutions
AUO is actively aligned with the United Nations Sustainable Development Goals (SDGs) and is committed topromoting green manufacturing practices while driving the expansion of the circular economy. Internally, AUO
focuses on aspects such as designing and selling circular products, recycling process materials, and reducing waste.
Externally, AUO collaborates with partners to promote packaging material recycling, research and develop
technologies for recycled materials, and implement the recycling of process materials. AUO's efforts in green
manufacturing and resource circulation have been recognized with the Outstanding Product Award in the Taiwan
Circular Economy Awards for 2023.
Regarding the energy-saving technology, the LTPS (Low Temperature Poly-silicon) laptop panel developed by AUO
holds the leading market share worldwide, maintaining a dominant position in the market. The LTPS panel featuresenergy-saving and low power-consumption characteristics, which can contribute to achieving energy-saving andcarbon reduction standards for green products and meet the standard and demand for green products frominternational customers.
AUO is passionate about the continuous development of energy-saving and carbon reduction display technologies
and solutions. One of them is the reflective Cholesteric Liquid Crystal Super Low Power Consumption Outdoor
Full-Color Display which does not require a backlight module. It can achieve zero power consumption during
display using bi-stable technology. It supports off-grid solar power systems to achieve ultra-low power consumption
and meets the demand for energy saving and environmental protection. The Cholesteric Liquid Crystal display canwithstand harsh outdoor environments and has the advantage of wide temperature usage from -30 degrees Celsius
to 85 degrees Celsius. The display exhibits better color saturation and display effects when exposed to stronger
light, making it the new preferred choice for outdoor electronic billboards.
Solar energy technology research and development, AUO aims to provide high performance and differentiatedsolar module products and total energy management solutions. In 2023, we have continued to enhance the powerof solar modules, develop photovoltaic (PV) applications, provide energy management solutions, and advance themonitoring and information system of smart solar power plants. In response to the market’s need, we develop
corporate green power management platforms to conduct the management of corporate power purchaseagreement (CPPA), green power transfer, usage and certificate declaration, as well as to optimize green power
matching and dispatching. AUO realizes its commitment to green energy through differentiated product design andall-round value-added services.

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

SunVeillance Solar Power Plant Management Solution
SunVeillance solar power plant management solution uses artificial intelligence (AI) to diagnose power plant
abnormalities and automatically dispatch workers for maintenance. AUO has achieved 100% AI-automatedoperation and maintenance of solar power plants. All operation and maintenance work is automatically assigned by
AI, reducing expenses and ensuring power plant revenue. AUO takes the lead in launching such a solar power plant
asset management system that uses unique digital information and AI technology to provide simple and executable"smart insights" and "key financial indicators" to help investors maximize power plant asset returns. SunVeillancehas been adopted by bankers as well as large green power investors.



EnLink Smart Energy Management Solution
EnLink manages both power generation and power load ends, and integrates software and hardware to do thecontrol according to customers' application scenarios. EnLink provides customers with suitable and complete
energy management solutions for solar power and energy storage plants, as well as for enterprise users’ energy
storage and electric vehicle charging stations.

High-performance solar photovoltaic module technology
In the standard module part, AUO completed the development and mass production of M10 P-type half-cut
monocrystalline silicon solar modules in 2023, with a conversion efficiency of up to 21.3% and a maximum output
power of 460 watts. Besides, AUO has begun to develop SunAlto double-glass module with the next-generation
N-type TOPCon technology, which has the advantages of higher bifacial power generation rate, low temperature
coefficient and low degradation.
With respect to niche solar category, AUO SunSteel, a corrugated metal-sheet integrated PV product, has been
granted Taiwan Excellence Award 2023. With the introduction of M10 cells and dual-glass structure, it further
increased the power density by 6% and also enhanced the robustness and durability. On the other hand, AUO
lightweight PV module, SunCurva, uses special composite material to replace conventional front glass, reducing theweight by 70% to 3 kg/m2. It can be easily applied to areas such as transportations and camping. SunCurva obtained
an invention patent and won Taiwan Excellence Award 2024.

Research and Development plan, expenses, and patent status:
Research and development expenses and patent status in 2023
AUO continues to layout advanced technology, enhancing the added value of existing capacity through newtechnology and new applications, strengthening AUO Corporation's competitiveness in the high-end and new
application product market.
Unit: NTD
Year
2023

Research expenses
13.2 billion

The proportion of revenue (%)
5.34%

As of the end of 2023, AUO has accumulated more than 31,000 patent applications, and the total number ofapproved global patents exceeds 23,900. 97% of R&D patents are invention patents. Taiwan Intellectual Property
Office (TIPO) of the Ministry of Economic Affairs announced the statistical ranking of patent applications andannouncements and issuances in 2023. In terms of patent applications for inventions, new models, and designs, thecompany ranked second in the number of domestic legal person patent certifications and ranked third in thenumber of patent applications. AUO's deep cultivation of patented technologies and the layout of its patent map
have strengthened its leading position in flat panel displays.

AUO Corporation
2023 Annual Report75

Future research and development plans and estimated costs
In 2024, AUO plans to allocate NT$11.6 billion for research and development expenditures. However, AUO will
adjust this amount based on the global market conditions and the company's actual operational situation. The
summary of AUO's main future research and development projects are as follows:
Project Name
Project Description
Cutting-edge Display Technology: Micro Transparent High-Brightness, Micro LED Backplane 
LED ProjectCircuit Design, LED Mass Transfer Technology,
Image Algorithm, Module Tiling Technology
Mini LED Backlight Project (AmLED)
Curved Gaming Display, High Dynamic Contrast,
High Brightness, High dimming Zoom, Slim andLightweight, Backlight Efficiency Enhancement,
Energy-saving Technology.
Smart Cockpit Display Technology AR-HUD, Pillar to Pillar 55-inch Multi-screen
Project
Display Technology, Automotive Privacy Security
and Protection, DMS (Driver Monitoring System) 
Driver Detection.
LED Display Technology Project
LED Controller, High Contrast Technology, Curved
Screen,Virtual Studio Applications.
A.R.T. (Advanced Reflection Tech.)
ART Standard Anti-glare Low Reflectance, TV and
Display Technology Project
Professional
Medical
Display
Application
Technology, Digital Simulation Algorithm.
Advanced Smart Healthcare Sensing Traditional Chinese Medicine Pulse Diagnosis, LCD
Technology
Physiological Radar, X-ray Sensing Technology(Oxide Device).
Smart Retail/Medical/Education and Field Applications, Hardware and Software
Integration, Autonomous Mobile Robot (AMR) andEnterprise/Transport/Manufacturing
more.
Field Applications
SunAlto M10 N-type Bifacial
Developing N-type solar modules, which have the 
Photovoltaic Module
advantages of high double-sided power generation,
low-temperature coefficient, and low attenuation
rate.
The Niche Optoelectronic P.roducts of Develop photonic integrated waveplates and
SunSteel and SunCurva
lightweight photonic modules that meet the local
requirements and specifications of the Europeanand American markets.
Development of smart electrical box and Develop smart electric box and residential 
integrated energy management
photovoltaic and energy storage systems, as well as
technology for residential use
electric vehicle charging pile integration technology.
Through power flow source integration control, and monitor each circuit of electricity, real-time
control of power switching, to achieve theoptimization of home energy management dispatch.

Main Factors for Success
By independently developing
new architectures andmanufacturing process
technologies, AUO
collaborates closely with key
material suppliers, equipmentvendors, and customers tojointly develop solutions andestablish high technicalbarriers through dedicated
R&D efforts.
AUO has establishedcomprehensive technology
planning and patent portfolio
to achieve differentiation inboth technology and products.

Mastery over the technologyof high efficiency
opto-electronic module.
Integration capability of
optoelectronics in nicheapplication fields.

Experience in the integration
andmonitoring
platform
development of photovoltaic
combined energy storage.
Experience in enterprise andcommunity microgrid energy
management systems.

(4) Short/long-term business development plans
As a leading manufacturer of TFT-LCD, AUO is committed to applications such as LCD TVs, desktop monitors,
notebooks, tablets, automotive displays, industrial and commercial displays and other small and medium-sized displays.
AUO’s short-term business development plan is to enhance its product competitiveness by adjusting the proportion ofhigh-end production. In terms of products, AUO will combine a-Si (amorphous silicon) and LTPS with innovativetechnology and product design to produce competitive value-added products. Applications to large-sized products
include 8K, curved products, wide color gamut, high dynamic range HDR, A.R.T., curved products and bezel-lessproducts; dashboard panels for cars with high-resolution and high-brightness features, as well as solutions for low
reflection and on-cell touch panel for gaming and commercial notebook panels. Besides, AUO also has completed
generations of production lines that provide clients with diverse products of various sizes. AUO is determined to satisfy

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2023 Annual ReportOperational Highlights

clients' requests for instant supply. It will keep strengthening strategic alliances with clients, creating a win-win situation.
In this way, AUO continues to lead in a pivotal position in the panel supply chain.
In the long-term business development plan of AUO, in addition to developing advanced display technologies such as
Mini LED, Micro LED, and enhancing advanced anti-reflective technology and process capabilities, the company willcontinue to invest in research and development resources to cultivate independent development technology. This helps
maintain a leading position in technology. Furthermore, the company has a complete layout of patents. Besides using
technology to increase competitive barriers, it can also become a strong support for brand customers when they are
expanding globally. In terms of products, the company will emphasize more on value chain integration and value-added
enhancement. With its flexibility and product development capabilities, AUO can provide customers with morevalue-added solutions and services. Adhering to the direction of product differentiation, quality, and high value, AUO
Corporation can maintain its long-term competitiveness. In the future, automotive service solutions and vertical fieldbusinesses will serve as long-term important engines for revenue growth. In terms of automotive, AUO is one of the
top three automotive display suppliers globally, and is partnering deeply with ecosystem partners with its cutting-edge
display technology at its core, accelerating its progression towards becoming the go-to automotive display solution
provider in the global mobility vehicle industry. Meanwhile, it applies a variety of next-generation Micro LED
technologies flexibly to the smart cockpit, utilizing its high brightness, high contrast, wide color gamut, wide viewing
angle, transparency, flexibility, and other advantageous characteristics, seamlessly integrating them into the cockpit
space. In terms of vertical field business, as forward-looking technologies such as 5G and AI are gradually becoming
popular, AUO has transformed its 20 years of experience in the display industry into the dynamism to seize the industry
transformation and smart field business opportunities. In partnership with the ecosystem, it is gradually becoming asolution provider in smart mobility, smart retail, smart services, smart healthcare, smart education and enterprises. In
addition, in the face of the increasingly severe climate change, AUO has launched specific climate actions, providing a
one-stop solution, which includes AI, digitalisation, and green product and process innovation technologies. It has also
set out a complete layout in green energy, energy management, water purification, and carbon management platform,
adhering to the responsibility of environmental sustainability, and reducing the total carbon emissions year by year.
For the long-term business development plan in response to each product development trend, please refer to thesection of various trends of products in Chapter 5 Operational Highlights in this Annual Report (pages 68-71).

II. Market analysis and production and marketing survey(1) Market analysis
1. Regions of major sales
The clients of AUO comprise global information technology, consumer electronics manufacturers and industrial
electronics manufacturers, among which are international well-known brands, and system integrators or systemvendors. Therefore, the TFT-LCD products are well sought-after in global markets, from Asia, the United States, andEurope, to emerging markets.
2. Market share
As the panel industry has entered the value competition from scale competition, AUO has specialized in launching highvalue-added products. According to the Omdia survey report, in 2023, the top five global TFT-LCD large-size panel
shipment were ranked as BOE, Innolux, LGD, AUO and , accounting for approximately 36%, 15%, 10.2%, 10.1% and 9.8%of the global market shares. According to Omdia survey, a market research organization, in terms of large-size 8K panel
shipments, the top two manufacturers are HKC and AUO; in terms of desktop display panel shipments, the shipment
rankings were BOE (28%), LGD (18%), HKC(17%), AUO(16%): in terms of the top three notebook panel shipments, theshipment rankings were BOE (34%), AUO (21%), Innolux (19%). In terms of automobile monitors, the ranking of center
stack display shipments were AUO (19%), BOE (17%), and LGD (15%)

AUO Corporation
2023 Annual Report773. Future market supply and demand situation and growth(The aspect of demand)
In 2023, factors such as inflation and high interest rates in various countries will have a crowding-out effect on
consumer demand. The panel industry has also started to reduce production in response to declining demand, anddynamically adjust production capacity according to customer demand. According to data from Omdia, a market
research agency, the overall display industry panel required for shipments decreased by 1% annually. It is estimated thatdemand will continue to recover in 2024, and the demand for display shipment will increase by approximately 9%.
(The aspect of supply)
Looking at the panel supply side, according to market research agency Omdia, although Korean panel factories havesuccessively closed LCD production lines in recent years, it has been observed that there is no new investment inlarge-generation TV lines. In addition, the average size of TVs continues to grow. It is expected that the next In recent
years, the annual growth rate of production capacity area of the TFT-LCD industry has been smaller than the annual
growth rate of demand area.
In addition, products in various application markets are developing towards higher value demands, such as large size,
high resolution, thinner and lighter designs, narrow borders, touch panel integrated products, software/hardware system
integration, etc. Looking to the future development of the panel industry, has moved from production capacity
competition to breakthroughs in technical capabilities and value integration. It is expected that the overall TFT-LCD
industry will move towards a health supply and demand situation in the future.
4. Advantages, disadvantages and countermeasures of competitive niche and development prospect(1) Competitive niche

78Technology and product strength: In the face of the increasing complex of industrial competition, AUO
continues to focus on product quality upgrades and new product development, such as integrated touch panel,
ultra-high resolution panel, curved panel and commercial professional display panel. By providing differentiatedproducts of higher added value, AUO aims to strategically raise the bar for the competition.



Talent, R&D capability and patent quality: AUO continues to pour R&D resources into cultivating technicaltalents. Its long-term accumulated R&D and manufacturing experience helps curtailing the learning curve for
new products effectively. Moreover, AUO's long-term layout in patent quantity and quality also creates asufficient reserve of technology capability to support the superiority of the AUO products.

Highly flexible management and mass production capacity: AUO has leading advantages in many technologies
and has complete generation production lines, which can make the most efficient production configuration in
response to various products. In order to provide cost-competitive products, AUO relies on a solid mass
production experience along with complete upstream-to-downstream industrial supply chain management toestablish a comprehensive integrated platform that covers marketing, product management, customer service,
manufacturing efficiency, yield quality, and material logistics management. This in turn optimizes the wholeprocess management of the Company.

Complete customer portfolio: AUO's ever-advancing technology expands the first-tier clients of various
applications worldwide. At the present stage, our customer base covers China, Japan, Korea brands, including
system integrators and clients from Europe, America, and emerging markets. In addition to completing ourglobal customer layout, we also achieved a balanced customer portfolio.

With the gradual popularization of forward-looking technologies such as 5G and AI, AUO expects to turn theaccumulation of many years in all aspects into the powerful forward momentum for partners to seize theindustrial transformation and business opportunities in the smart field, and collaborate with the partners in thebusiness ecosystem to find the best solution and open up a new blue ocean in the vast and unknown smart
field.

AUO Corporation
2023 Annual ReportOperational Highlights(2) Favorable factors for development prospects


Development of advanced new-generation and high-resolution display technology: AUO's simultaneousdevelopment of Micro LED technology has the characteristics of high brightness, high contrast, long service life,
flexibility and transparency, which can overcome the influence of ambient light on the display effect. It can clearly
display information indoors and outdoors, and is regarded as an ideal choice for the next generation of vehicle
display applications, and is also suitable for wearable devices, spliced super-large TVs and other products. AUO
also takes display technology as the core, and cooperates with the ecosystem to develop products that meet
the application value of the field, covering many aspects such as smart retail, smart medical care, smart
entertainment, smart transportation and smart manufacturing. In 2023, AUO is leading the way in the mass
production of Micro LED technology, having been the first to mass produce a 1.39-inch smartwatch,demonstrating AUO's key ability to advance Micro LED technology for viable products and mass production. In
the future, this technology will be rapidly introduced for use in vehicles, splicing ultra-large TVs, and transparent
displays, highlighting its high brightness, high reliability, and longer lifespan, as well as its ultra-high transparency
and flexible, bendable characteristics.

Growth market: In the industry of TFT-LCD, potential growth products including automobile, commercial display,and digital signage (PID) market. Customers of commercial display regard the reliability and the capacity oflong-term supply due to the diversity, small quantity and high entry barrier. AUO has been cultivating thecommercial market for a long time, holding the lead of multiple non-consumer electronics such as IPC(industrial PC), ATM (Automated Teller Machine), POS (Point of sale) and arcade cabinet, etc. Moreover, AUO,
except being stable at the top of steadily grown automotive market, leading the launch of an integrated solution
for automotive panels with touch sensor but actively entering the high-end market with advanced technology,
successfully opened up the supply chains of major car manufacturers of Japan, Europe, America, Korea and China
etc. To meet the new trends of the market and respond the demand of long-term customers, by continuously
upgrading the techniques, from the traditional LCD to Mini LED backlit technology of automotive display whichcurrently increasing its penetration rate, and the capability of Micro LED development, no doubt will brings thegrowth to AUO’s automotive business.

Business opportunities in the Internet of Things: With the implementation of 5G, combines AI to create
unlimited possibilities, ranging from face recognition, human flow analysis, usage behavior analysis, intelligent
finance, and health care, even including robots and self-driving. These technologies will subvert our imagination,
drive innovation and application in various industries and change human life. The business models shall movewith the times. The commercial operation will also be gradually launched to support more efficient datatransmission, ultra-reliability, and low latency communication, as well as speed and stability of service
applications through dense network coverage. With IoT's trend, various connected devices are rapidly
increasing. Moreover, new business models and applications will possibly accelerate development and bringabout a more diverse and extensive application of displays. In addition, various applications are demanding large
sizes, which in turn will prompt the panel demand area. AUO targets smart retail, smart healthcare, smart
education &enterprise, smart transportation, and smart manufacturing applications by launching products withhigh-resolution, curved design, high dynamic range, on-cell touch, and other value-added applications. We greet
the business opportunities of the IoT era by utilizing our integral strengths in a combination of virtual and real,
software and hardware development to enhance the value-added and create high-valued differentiated productswith technological diversity.

(3) Unfavorable factors and countermeasures

Mainland China progressively expanding capacities
In recent years, competitors in China have focused on high generation production lines and have steadily
expanded production capacities. This has affected the supply/demand conditions of the panel industry. It should
be noted, however, that in the TFT-LCD industry, production capacity is no longer the only competitive factor. In

AUO Corporation
2023 Annual Report79the future, the demand for displays will be diversified, and the demand for customized specifications will
increase. Strengthening technology, operation management, and customer development will be the key points ofthe panel fab layout. To stand against the challenge of capacity expansion, AUO will continue to leverage its
technology and product strengths and strengthen strategies, combined with technology, flexibility, patent quality,
and a complete layout of clientele. Its advanced technologies and differentiated products shall create greater
value. The layout is vertically integrated, together with emphasizing high-end products such as e-gaming andautomobile, which is also expected to maintain profits. In recent years, Taiwanese manufacturers have actively
adjusted its business strategy, strengthened its upstream and downstream vertical integration capability, andlocked in a small number of diversified product distribution, which helps to maintain industrial competitivenessand strengthen its profitability.
Consumer willingness to pay is affected by the global economy
Overall consumer spending may be affected by uncertain factors such as inflation, high interest rates, energy
shortages caused by war, and unstable international situations. In the past, the stay-at-home economic demandbrought by working from home, distance learning and online entertainment has gradually decreased ascountries around the world have adopted a more open attitude towards the pandemic. In 2022, brands haveprioritized adjusting inventory as their primary goal. After more than a year of inventory adjustment, theinventory level in 2023 has gradually returned to a healthy level. AUO will continue to strictly control inventory,
optimize product portfolio, expand market applications, and accelerate transformation to reduce the impact offluctuations in consumer willingness on operations.

(II) The important uses of the main products and the production process
1. Important uses
TFT-LCD products are display devices for transmitting digital information, and their wide applications includecommercial and industrial information display devices, computers, telecommunications-related and consumer
electronic products. With the development of 3C integrated market in the digital age, the main application fields of
TFT-LCD products at present include LCD TV, desktop LCD, tablet computer, notebook computer, mobile phone,
automotive display, wearable device, and general industrial and commercial applications such as ATMs, vending
machines, public information displays, traffic information billboards and other touch screen products.
2. Production process
Theproduction processes of TFT-LCD:(1) Array or TFT process:
Similar to semiconductor process, the difference is that thin film transistors are fabricated on glass instead ofsilicon wafer.
(2) Cell or LCD Process:Taking the glass of the front Array as the substrate, combining it with the glass substrate of the color filter, andinjecting liquid crystal between the two glass substrates.
(3) Module Assembly or LCM Process:The production operation of assembling the glass after Cell process with various components such as backlightboard, circuit, outer frame, etc.

80

AUO Corporation
2023 Annual ReportOperational Highlights(III) Supply status of main raw materials
Because the manufacturing process of TFT-LCD is relatively complicated, it needs a lot of raw materials and components.
Its main raw materials and key components include: glass substrate, driver IC, polarizer, backlight module, liquid crystal,printed circuit board, color filter and flexible board, etc. AUO has long strengthened its supplier management ability,
maintained good cooperative relations with domestic and foreign raw material manufacturers, and maintained more than
two manufacturers in the procurement of key materials and components, so as to maintain purchasing flexibility andavoid the risk of excessive concentration of raw materials.

(IV) A list of any suppliers and clients.
1. Major Customer
As a result of changes in product mix, no single customers accounts for more than 10% of net sales in both 2023 and2022.
2. Major purchasing suppliers
AUO consistently upholds its strategy of diversifying suppliers. Consequently, no single supplier accounted for more than 10% of net
purchases in both 2023 and 2022.

(V) Production value and volume for the past two years
Unit: NT$ 100 million; 1,000 pieces
Year
Main products

2023
Production
capacity (Note)

TFT-LCD

2022

Production
Quantity

13,262

Production value

Production
capacity (Note)

1,962

12,967

172,645

Others

-

-

70

Total

13,262

172,645

2,032

Production
Quantity

Production value

177,616-

1,929-

12,967

99

177,616

2,028

Note: Calculated by Glass substrate (mother glass).

(VI) Sales volume and value for the past two years
Unit: NT$ 100 million; 1,000 pieces
Year
Main
products
TFT-LCD

2023
Domestic sales
VolumeOthers
Total

631
-

38,319

Export salesValue

38,3192022

Volume811

Value

133,677

180

Volume1,488-

133,677

Domestic sales

1,669

Value

40,129181

Volume585

40,129

Export sales

137,981

180
765

Value
1,501
-

137,981

202
1,703

AUO Corporation
2023 Annual Report81III. Employee Information
2023

2022

Production

Year

As of February 29, 2024
38,99540,864

26,196

Technical

9,790

9,9628,136

8,136

Total number ofSales and marketing

1,379

1,376

1,14

employees (persons)Management and

4,481

4,463

3,159

54,64556,66538,635

Average age (years)

34.5

34.2

34.8

Average duration of service (years)

7.4

7.1

7.8

Director of Philosophy

0.3

0.3

0.5

Master's Degree

13.0

12.6

16.1

Bachelor's Degree

33.9

34.1

39.4

Senior High School

35.6

36.7

29.5

senior high school or below

17.2

16.3

14.5

administrative
Total

Educational
distribution ratio (%)

IV. Disbursements for environmental protection
Loss due to environmental pollution incidents, including compensation and the violations of environmental protection
laws or regulations, should specify related information (disposition dates, disposition reference numbers, the articles oflaw violated, and the content of the dispositions) and disclose the estimation of expense and measures which might
happen recently or in the future. Please explain the fact when reasonable estimations are not available: No such incident
happened in recent years (as of the publication date of this report).

V. Labor relations(1) Confirm the implementation of welfare, further education, training, retirement institution, collective
bargaining, and the security of employee rights.
1. Welfare measures and implementation(1) Employees are entitled to labor insurance, national health insurance and group insurance from the date of arrival.
(2) The Company has set up the "employee stock ownership trust Plan", which provides relatively allocated bonuses tohelp employees save small amounts for a long time and establish personal short, medium and long-term flexible fundutilization or financial planning.
(3) In addition to the basic monthly salary, annual bonuses such as Mid-Autumn Festival, Dragon Boat Festival and Spring
Festival are provided. According to the company's overall operation, team and individual performance, various
short-term and long-term reward and incentive schemes are designed according to different job flexibility, and the
profit surplus is shared with employees, so as to attract, retain, motivate and plan to cultivate high-quality talents.
(4) All the factories of the Company have staff canteens, which provide breakfast, lunch, dinner and midnight snack, andprovide meal subsidies.
(5) The Company has a life plaza, including convenience store, coffee shop, bakery, fruit bar and laundry. In addition,
special sales activities are also launched from time to time to provide affordable consumption.

82

AUO Corporation
2023 Annual ReportOperational Highlights(6) The Company has set up "Wellness Center" in each factory, and the medical team composed of professional doctors
and nurses will provide health care for colleagues through various health promotion activities, and create an
all-round physical, mental and spiritual health care mechanism.
(7) The Company has a fitness center in each factory, which is managed by a professional health management team. In
addition to the permanent stadium, fitness equipment and sports classroom, various sports courses are offeredirregularly according to the needs of colleagues.
(8)The Company has established the Employee Welfare Committee, which is responsible for the planning andimplementation of various welfare programs with the aim of taking care of employees' living, promoting physical andmental health and maintaining harmony between employers and employees. Through a complete welfare system andvarious employee activities, it has continuously promoted employee welfare business, such as sports season, festivals,
community activities, employee travel, etc., and provided various welfare subsidies such as emergency assistance,
hospitalization condolences, weddings, funerals and celebrations.

2. Education and training
Since employees joined AUO, the Company has provided the new employee training program (AUO Elite Camp) to
explain the Company's corporate policy, including the concept of corporate social responsibility and related policies.
AUO UNIVERSITY is the main axis of the Company's staff learning system, and every colleague can participate invarious training courses and plans through the AUO Learning System, ALS. AUO University has launched an all-roundtalent cultivation plan according to the training planned in various professional fields.
AUO provides employees with further education and training as follows:(1) New recruit training: This training covers two stages. The first stage includes the official environmental safety/healthcourse, management guidelines, and related policies. In line with AUO Elite Camp, we will help newcomers quickly
become familiar with their colleagues and with the organizational culture and guidelines. The second stage focuseson professional skills and knowledge corresponding to individual job positions.
(2) Personal competency development: Based on the collaborative competency among colleagues, with physical courses
as the main and online learning as the supplement, provide the management related knowledge and skills (forexample: cross-functional communication skills, project management, business skills, legal knowledge). Also, advanced
elective courses are provided in line with various service years of colleagues.
(3) Professional knowledge improvement: In coordination with the Company's strategy, colleagues are appointed toparticipate in domestic/international industrial and management seminars and forums. Trainings are provided by the
consultant companies and manufacturers, it also help the Company improve industrial technology, develop new
products, introduce innovative ideas, and enhance management skills.
(4) External training program: The Company provides information on external training programs for colleagues to apply
for due to job requirements or professional skills development needs to help improve the staff's working or
professional skills, thus boosting the organizational competitiveness.
(5) Manager training: For employees at the management level, AUO conducts a series of management training courses
to improve the management ability. Newly appointed senior managers receive about 24 hours of education andtraining on average every year, newly appointed manager receive around 40 hours training, while 7.5 hours of general
education for assistant managers.

AUO Corporation
2023 Annual Report

83The implement on AUO Global Learning and Development Platform in 2023 as follows:Type

AUO University
course internal
training

College category

Total classes Total participants

Total no. of

Total costs (NTD thousand)hours

Engineering college

405

41,719Future college

35

11,15929,945.0
93.5

College of science

32

3,836

293.0

Sustainability college

34

8,423

37.6

Business college

14

1,882

23.3

College of Liberal Studies

48

64,291

217.6

Leadership College

53

2,061

470.5

Academic Affairs Center

8

284

67.5

External training

-

1,016

-

36,764

AUO University
course external
training
Learning Development System _ Maintenance and Project Execution Expenses

3. Retirement system and implementation(1) The Company has a retirement policy for employees.
(2) In August 1997, the Labor Retirement Reserve Supervision Committee was established, and in May 1998, thepension was set aside, and the monthly pension was set aside at 2%~15% of the total monthly salary.
(3) Since July, 2005, the new system of labor pension has been implemented according to law.
(4) In accordance with the provisions of Bulletin No.19 of International Accounting Standards, an actuary is entrusted toevaluate and calculate the labor retirement reserve and submit an actuarial evaluation report.

4. Labor agreement and implementation:
The Company has always attached importance to labor relations, and besides complying with the labor law and related
laws and regulations, there are many benefits and measures superior to the laws and regulations to establish
harmonious labor relations. In addition, the Company regularly holds quarterly/monthly meetings, labor-management
meetings, business briefings and other two-way meetings with employees to convey important information and policies.
At the same time, it also provides all-weather communication platforms such as "audit committee mailbox", "generalmanager mailbox", "sexual harassment complaint mailbox" and "internal communication mailbox" to collect, understandand solve employees' problems, and establish an environment for mutual participation and full communication between
employers and employees.

5. Protection measures for working environment and personal safety of employees
The Company has been devoting itself to environmental protection, energy conservation and employee care for a longtime, expecting to fulfill its social responsibilities with growing enterprise and move toward to sustainable management.
In addition to complying with relevant domestic laws and regulations, we have passed the internationally recognized
ISO45001, Occupational Health and Safety Management System, certification in all factories. Specific measures are as
follows:(1)Focus on source management
When building a new construction, the factory is designed according to“Risk Engineering Guideline for New
Construction”, and the preventive measures are considered for all possible hazards in the building.During operation,
the best practicable technologies (BAT) are adopted to prevent hazards and control risks after hazardous
identification and evaluation for on-site safety. In the view of equipment safety, the Company established “Tool
Safety Common Specification” according to the process characteristics and referring to other important safety
specifications in Europe, America and Taiwan. Also, we communicated and discussed with suppliers at the design stage
while taking control of procurement process. After the equipment enters the factory, it must meet the safety
inspection standard of equipment installation before operation to ensure the safety of employees. In the view ofchemical management, AUO established a chemical control inventory (ACF, AUO Chemical Filter) in line with84

AUO Corporation
2023 Annual ReportOperational Highlights

international trends and screens high-risk substances to strengthen source management, which indeed protect
employees' health and avoid environmental impact.
(2)Promote safety culture
The Company continues to promote safety culture, encourage affirming employees, and foster positive thinking.
Through mutual care and reminders among colleagues, establish a working environment of partner assistance, aiming
to achieve the vision of zero hazard for the team.
(3)Strengthen communication and training of hazard prevention.
In order to effectively enhance all employees' awareness of safety and health, the Company has planned relevant
subject courses for colleagues at all levels, including environmental protection, safety and health, emergency response,management system, risk management, social responsibility and green products, so that employees can recognize thehazards and implement safety standard procedures. In addition to training, a departmental environmental safety
officer mechanism is established to regularly collect employees' working safety and health needs, and to pass on
safety and health management measures and messages to achieve good two-way communication.
(4)Promote health of employees
The Company has professional nursing staff to establish a complete health management plan. Besides healthcheck-ups, medical consultation and various health promotion activities are held regularly. In order to enable
employees to obtain relevant health information and personal health data at any time, an e-health management
platform is constructed. In addition, there are professional staff assistance programs, and professional teams provide
psychological and legal consultation. In order to cope with the possible impact of infectious diseases on enterprises
and employees in recent years, the Company not only continuously monitors relevant information but established acomplete response organization and procedures to carry out epidemic prevention or disaster reduction operations
while protecting employees' health and avoiding operational impact.
(5) Establish an emergency response framework
In order to avoid a major impact to operation caused by emergencies, daily emergency response team and training
course are established. The Company also has a 24-hour emergency response center equipped with completemonitoring facilities to keep abreast of the situation in the factory. The Company has introduced a contingency
module mechanism in 2022, setting up eight major modules such as fire and chemical disaster control, etc. We
continuously adjust the content through verification drills to establish a complete emergency response plan andcarry out relevant drills to familiarize personnel with various procedures, so as to reduce the impact on personnel
and property in case.
To avoid major impacts on operations caused by emergencies, in addition to daily emergency response organizationand training, the company also has a 24-hour emergency response center equipped with complete monitoring
facilities to keep abreast of the factory situation at all times. The company will introduce the emergency response
module mechanism in 2022 and formulate eight major modules such as fire & chemical disaster control... andcontinue to adjust the content through verification drills to establish a complete emergency response plan andperform relevant drills so that personnel can become familiar with various procedures. Procedures to reduce theimpact on people and property during emergencies.
(6)Continuous monitoring and auditing
Regarding environmental safety operations in the factory, in addition to carrying out various environmental tests andpersonnel working environment measurements in accordance with the law, we also draw up inspection blueprints
and establish complete audit procedures. In addition to daily autonomous inspections by each unit and inspections bysupervisors, on-site implementation is also verified through inspections by the ESH department and factory director,
and we accept relevant audits from domestic and foreign third-party verification units or customers from time totime. In addition, management review organizations at company level and site level are set up respectively, which areconvened by senior supervisors or the top supervisors of each site to set up goals, directions, and conduct regularreviews of various environmental and safety affairs to implement continuous improvement and promotion ofenvironmental and safety performance.

AUO Corporation
2023 Annual Report85

(II) Labor/employer dispute loss in 2023 and as of the publication date of the annual report
During 2023 and as of the date of this Annual Report, the Company has not incurred any labor-dispute related losses.
However, the Company was fined for the following labor inspection results:
Company
name
AUO
Corporation

86

Description of event

Countermeasures and improvement measures

1. During the resignation process, we confirm
1. Disposition date: February 7, 2023
the email address with departing
2. Disposition reference No.: Zhonghuanzi No.1120002774
employees for the monthly salary of the
3. The articles of law violated: Article 23, item 1 of the Labor
resignation, and provide an electronicStandards Act
payslip or paper details as required to
4. Violation of regulations: The Company did not proactively provide
make sure they are aware.
the salary calculation items for the month when the employees left.
2. The company actively provides work hour
5. Amount of fines/compensation: NT$20,000
reports to management for staff care and
1. Disposition date: July 3, 2023
work allocation for the management of
2. Disposition reference No.: Nan Shih Lao An Zih No.1120833306
employee working hours.
3. The articles of law violated: Article 24, item 1 of the Labor
3. Supervisors have knowledge of their
Standards Act
subordinates' overtime hours and regularly
4. Violation of regulations: The Tainan City Government Labor
check in on their situations.
Bureau dispatched personnel to the factory in Tainan to conduct alabor inspection and discovered the failure to pay employees in 4. We regularly enhance the promotion of
overtime application rules and procedures.
accordance with the regulations for overtime work on weekdays.
5. Amount of fines/compensation: NT$50,000
1. Disposition date: July 20, 2023
2. Disposition reference No.: Zhonghuanzi No. 1120016302
3. The articles of law violated: Article 24, item 1 and Article 32, item 2of the Labor Standards Act
4. Violation of regulations: The Central Taiwan Science Park
Administration conducted labor inspections at the Taichung factoryon June 16 and June 30. It was found that colleagues were not given
overtime pay for extended work hours on regular days, and somecolleagues were found to have worked more than 12 hours in asingle day.
5. Amount of fines/compensation: NT$200,000
1. Disposition date: October 16, 2023
2. Disposition reference No.: Zhonghuanzi No. 1120023430
3. The articles of law violated: Article 32, item 2 of the Labor
Standards Act
4. Violation of regulations: The Central Taiwan Science Park
Administration conducted labor inspections at the Taichung factoryon August 24th and September 13th, and found cases of employees
working more than 12 hours in a single day.
5. Amount of fines/compensation: NT$150,000
1. Hardware improvement: Machine gap stop
1. Disposition date: March 9, 2023
and warning light settings.
2. Disposition reference No.: Zhonghuanzi No. 1120005310
3. The articles of law violated: Paragraph 1, item 1 of Article 6 of the 2. Standardized training: SOP production andeducation training.
Occupational Safety and Health Act
4. Violation of regulations: Employers should have necessary safety
and health equipment and measures that comply with regulations
for the following matters: 1. Prevent hazards caused by machinery,equipment or appliances, etc.
5. Amount of fines/compensation:NT$30,000
1. Disposition date: March 22, 2023
1. Standardized training: SOP for abnormal
2. Disposition reference No.: Lao Jhih Shou Zih No.1120200610
maintenance is optimized, and all safety
3. The articles of law violated: Article 54 of the Occupational Safety
officers are retrained.
and Health Facilities Rules and Paragraph 1, item 1 of Article 6 of 2. Warning signs: Clear areas and post
the Occupational Safety and Health Act
reminders.

AUO Corporation
2023 Annual ReportOperational Highlights

Company
nameDescription of event

Countermeasures and improvement measures

4. Violation of regulations: Article 54 of the Occupational Safety and Health Facilities Rules
Employers should provide fixed signals and designatecommanders to take command if machinery starts to operate,
which may endanger workers.
 Article 6 of the Occupational Safety and Health Act
Employers should have necessary safety and health equipment
and measures that comply with regulations for the following
matters: 1. Prevent hazards caused by machinery, equipment
or appliances, etc.
5. Amount of fines/compensation: NT$100,000
1.
1. Disposition date: July 17, 2023
2. Disposition reference No.: Nan Shih Lao An Zih No. 1120911022
3. The articles of law violated: Paragraph 3, item 1 of Article 27 of the2.
Occupational Safety and Health Act
4. Violation of regulations: When the business unit and the contractor
hired workers separately to work together, in order to prevent
occupational accidents, the original business unit failed to take3.
necessary measures to inspect the workplace.
5. Amount of fines/compensation: NT$100,000.

4.

Strengthen on-site inspections: assign
dedicated personnel to manage andimplement safety inspections.
Strengthensupervision
management:
Implement the daily reporting mechanism
for supervisors in each work area andimplement the agency system.
Understand the construction status:
Understandanddeterminetheconstruction project before construction,and focus on supervising construction
safety.
Optimize hazard notification: Based on theconstruction environment and content,
clearly explain the matters and promote
them effectively.

VI. Information security governance(I)

Information Security Committee:
The Company set up an Information Security Committee to promote information security management, with thechairman as the chairman, the general manager as the deputy chairman, the Chief Digital Officer as the convener,
and the first-level supervisors of all units as members. The information security management review meeting is held
semiannually, through which they formulated information security management policies and objectives, reviewed theperformance and implementation of information security management objectives and management measures. In
addition, in order to implement information security management, an information security executive group is set up
under the Information Security Committee, which is divided into control technology group, education and training
group, audit investigation group, risk management group and product security group. Senior managers of relevant
departments are the leaders of each group. The execution team is the information security task promotion team topromote the information security operation decided by the Information Security Committee and conduct regularreview meetings every two months.
In 2022, the Company established the Chief Information Security Officer, the Information Security Management
Division, a specialized information security unit, and dedicated information security personnel, who were
responsible for information security governance and overall management of information security-related business.

AUO Corporation
2023 Annual Report87

(II) Information security policies:
The Company's information security policy is "to protect the Company's intellectual property, raise the awarenessof information security in an all-round way, and create a win (profit) opportunity". The company actively strengthens
the protection of confidential information and corporate information risk management, and continues to deepenand ensure the effectiveness of various management measures from the technical aspects, procedural aspects andpersonnel training aspects, including information security control measures, management procedures, regular
information security promotion and activities such as employee information security education and training. In
order to comply with international information security management trends and respond to customer information
security requirements, we began to introduce the ISO27001 information security management system in 2017 andcontinue to ensure the effectiveness of management measures and management systems in accordance with the
PDCA management cycle. The company passed the annual renewal verification of the ISO27001 information
security management system in June 2023, and the certificate is valid from June 2023 to May 2026.
The company continues to strengthen the network's multi-layered architecture and in-depth defense capabilities,
and continues to introduce and optimize various security protection measures in response to the external threat
environment and internal risk assessment results, such as next-generation firewalls, intrusion prevention systems,
application firewalls, network Route traffic analysis, anti-virus software, advanced endpoint defense detection, email
filtering, Internet protection and 7*24 information security monitoring center. In order to strengthen external risk
management, we regularly conduct vulnerability scanning, penetration testing and red team drills on the website andnetwork environment. The budget for each information security measure shall not be less than 5% of the overall IT
budget.
The Company regularly conducts email social engineering drills and training to enhance employees’information
security awareness and prevent commercial email fraud.

88

AUO Corporation
2023 Annual ReportOperational Highlights(III) Information security innovations(IV) Information security risk management framework
Information security risk assessment follows the ISO 27001 information security management system framework
for identification. The risk analysis strategy uses three kinds of analysis aspect, respectively for the operation, asset
and process, for carrying out risk analysis.
Operational risk analysis, according to the system structure, system change management, project and resource
management, system and service outsourcing management, software and hardware authorization and legality,
general maintenance, information security, confidentiality and data protection, system and service outsourcing
management, and system architecture are ten issues-oriented information security risk assessment. Process risk
analysis, risk assessment according to the operating processes of internal units. Then, the information assets used ineach operation process are evaluated for asset risk. The information security management unit will carry out risk
management and improvement measures based on the risk assessment results.
The company has arranged an information security insurance policy since 2022 to cover insurance claims that may
incur related expenses (such as recovery and forensics) when major information security incidents occur.

(V) In recent years and up to the date of publication of the annual report, the Company has not had any
major cyber-attacks that have impacted the Company's operations.

AUO Corporation
2023 Annual Report89VII. Important contracts
Up to the annual report publication date, the important long-term loan contracts and technical cooperation
contracts of the Company that are still valid and expired in the latest year are listed as follows:
Loan contract
Contract start andCharacter

Party

FinanceFirst Bank and other banking
groupsFinanceBank of Taiwan and otherbanking groups

FinanceBank of Taiwan and otherbanking groups

Finance

Main content

end date

Bank of Taiwan and otherbanking groups

2024.01~2029.01
2023.04~2028.04
2021.07~2029.04
2020.04~2025.10

Restrictive clause

Repaying bank debts and increase

Pledged by the building,operating capital

equipment and machinery

Increase operating capital

Pledged by the building,

Repaying bank debts

Pledged by the building,equipment and machinery
equipment and machinery
Increase operating capital

Pledged by the building,equipment and machinery

Technical cooperation contracts
Character
Patent licensing
Patent/technology
licensing
PatentParty
Fujitsu Limited (former FDTC)
Toppan Printing

licensing Semiconductor Energy

Patent licensing

Laboratory Co., Ltd.

Contract start andMain content

end date
According to thecontract

Specific TFT-LCD patent licensing

Restrictive clause
According to thecontract

According to theSpecific color filter

According to thecontract

patent/technology licensing

contract

According to theSpecific LCD and OLED products

According to thecontract

patent licensing

contract

Japan Display Inc. (that is formerly
Japan Display East Inc., Hitachi
Cross-licensing of

Displays, and Ltd.), PanasonicAccording to theSpecific TFT-LCD and OLED

According to thepatents

Liquid Crystal Display, Co., Ltd.

contract

products cross-licensing of patents

contract

According to theSpecific TFT-LCD cross-licensing of According to thecontract

patents

According to theSpecific TFT-LCD cross-licensing of According to thecontract

patents

contract

According to theSpecific LCD and OLED products

According to thecontractcross-licensing of patents

contract(that is formerly IPS Alpha
Technology, Ltd.)
Cross-licensing ofpatents
Cross-licensing ofpatents
Cross-licensing ofpatents

Sharp Corporation
LG Display Co., Ltd.
Seiko Epson Corporation

contract

Note 1: In addition to the above contracts, the Company also entered into licensing or cross-licensing contracts with other third
parties for specific patents owned or controlled by the Company.
Note 2: For other important contracts of the Company and important contracts of the Company’s subsidiaries, please refer to the2023 Consolidated Financial Report and Accountant’s Audit Report90

AUO Corporation
2023 Annual ReportFinancial Highlights

Chapter 6 Financial Highlights
I. Condensed Balance Sheets and Statements of Comprehensive Income for the Most
Recent Five Fiscal Years(I) Consolidated Condensed Balance Sheet
Unit: NT$ thousands
Year

Financial data for the most recent five years (Note 1)

Item2023.12.31

2022.12.31

Current assets

144,210,713

140,176,807

192,026,398

168,317,673

143,200,211

Property, plant and equipment

171,172,804

178,833,837

171,222,045

185,480,116

206,734,543

Intangible assets

11,268,867

11,396,241

11,756,955

12,801,358

12,808,326

Other assets(Note 2)

56,818,353

56,433,789

49,805,648

40,671,148

34,894,511

407,270,295

397,637,591
90,528,089

Total assets

2021.12.31

2020.12.31

2019.12.31

383,470,737

386,840,674

424,811,046

Current

Before distribution

94,574,967

97,168,161

123,754,502

98,338,179

liabilities

After distribution

101,476,060

103,302,466

133,330,326

101,189,146

90,528,089

123,538,234

98,261,865

63,090,073

115,141,751

119,132,753

Before distribution

218,113,201

195,430,026

186,844,575

213,479,930

209,660,842

After distribution

225,014,294

201,564,331

196,420,399

216,330,897

209,660,842

159,167,207

185,099,091

231,787,040

182,804,691

176,671,840

76,993,961

76,993,961

96,242,451

96,242,451

96,242,451

Before distribution

54,998,829

61,942,210

60,057,001

60,587,684

60,544,474

Noncurrent liabilities
Total liabilities

Equity attributable to shareholders of
AUO Corporation
Common Stock
Capital surplus

After distribution

48,097,736

55,807,905

60,057,001

60,587,684

60,544,474

Retained

Before distribution

31,899,740

50,078,752

80,669,998

30,258,282

22,903,722

earnings

After distribution

31,899,740

50,078,752

71,094,174

27,407,315

22,903,722(4,484,899)(3,620,305)(4,743,182)(3,270,303)(2,005,384)(240,424)(295,527)(439,228)(1,013,423)(1,013,423)

Other components of equity
Treasury shares
Non-controlling Interests
Total equity
Note 1:

6,190,329

6,311,557

6,179,431

10,985,674

11,304,909

Before distribution

165,357,536

191,410,648

237,966,471

193,790,365

187,976,749

After distribution

158,456,443

185,276,343

228,390,647

190,939,398

187,976,749

The financial data for the most recent five years has been audited and attested by CPAs. As of the ptinted date of thisAnnual Report, the 2024 financial data has not been audited or reviewed by CPAs.

Note 2:Other assets are noncurrent assets excluding property, plant and equipment, and intangible assets.

AUO Corporation
2023 Annual Report91(Il) Consolidated Condensed Statement of Comprehensive Income
Unit: NT$ thousands (except for earnings per share: NT$)
Year
Item

Financial data for the most recent five years (Note1)
2023

Net revenue
Gross profit
Profit (loss) from operations
Non-operating income and expenses
Profit (loss) before income tax
Profit (loss) from continuing
operations for the year
Loss from discontinued operations
Profit (loss) for the year
Other comprehensive income (loss),
net of tax
Total comprehensive income (loss)
for the year
Profit (loss) attributable toshareholders of AUO Corporation
Profit (loss) attributable tonon-controlling interests

2022

2021

2020

2019

247,964,437

245,792,674

370,685,141

270,955,381

268,791,694

4,610,368

1,567,508

90,767,757

22,765,339

455,943(21,962,015)(23,970,396)

63,075,616

2,083,042(20,467,948)

279,955

4,464,204

3,331,179

704,629

623,194(21,682,060)(19,506,192)

66,406,795

2,787,671(19,844,754)(18,151,154)(20,973,180)

63,459,098

2,907,427(21,599,416)

-

-

-

-

-

(18,151,154)(20,973,180)

63,459,098

2,907,427(21,599,416)(910,831)

1,202,270(763,022)

2,862,980(1,411,771)(19,061,985)(19,770,910)

62,696,076

5,770,407(23,011,187)(18,203,274)(21,101,374)

61,330,628

3,376,324(19,185,258)

52,120128,194

2,128,470(468,897)(2,414,158)(19,043,606)(19,892,545)

60,644,766

6,089,641(20,192,454)(18,379)

121,635

2,051,310(319,234)(2,818,733)(2.37)(2.39)

6.44

0.36(2.00)

Total comprehensive income (loss)
attributable to shareholders of AUO
Corporation
Total comprehensive income (loss)
attributable to non-controllinginterests
Earnings (loss) per share (EPS)

Note 1: The financial data for the most recent five years has been audited and attested by CPAs. As of the date of printing of this Annual
Report, the 2024 financial data has not been audited or reviewed by CPAs.

92

AUO Corporation
2023 Annual ReportFinancial Highlights(lll) Parent-company-only Condensed Balance Sheet
Unit: NT$ thousands
Year

Financial data for the most recent five years (Note 1)

Item2023.12.31

Current assets

73,374,505

83,252,087

129,654,779

121,044,855

96,317,458

Property, plant and equipment

116,683,030

118,164,834

117,565,260

129,554,205

144,142,738

Intangible assets

2022.12.31

2021.12.31

2020.12.31

2019.12.31

9,426,902

9,464,184

10,688,986

11,806,450

12,051,761

Other assets (Note 2)

145,323,029

141,079,598

127,694,510

101,595,066

93,152,910

Total assets

344,807,466

351,960,703

385,603,535

364,000,576

345,664,867

Current

Before distribution

78,313,579

76,249,526

102,911,656

84,124,305

73,270,709

liabilities

After distribution

85,214,672

82,383,831

112,487,480

86,975,272

73,270,709

Noncurrent liabilities
Total liabilities

107,326,680

90,612,086

50,904,839

97,071,580

95,722,318

Before distribution

185,640,259

166,861,612

153,816,495

181,195,885

168,993,027

After distribution

192,541,352

172,995,917

163,392,319

184,046,852

168,993,027

159,167,207

185,099,091

231,787,040

182,804,691

176,671,840

Equity attributable to shareholders of
AUO Corporation
Common Stock
Capital surplus

76,993,961

76,993,961

96,242,451

96,242,451

96,242,451

Before distribution

54,998,829

61,942,210

60,057,001

60,587,684

60,544,474

After distribution

48,097,736

55,807,905

60,057,001

60,587,684

60,544,474

Retained

Before distribution

31,899,740

50,078,752

80,669,998

30,258,282

22,903,722

earnings

After distribution

31,899,740

50,078,752

71,094,174

27,407,315

22,903,722(4,484,899)(3,620,305)(4,743,182)(3,270,303)(2,005,384)(240,424)(295,527)(439,228)(1,013,423)(1,013,423)

-

-

-

-

-

Before distribution

159,167,207

185,099,091

231,787,040

182,804,691

176,671,840

After distribution

152,266,114

178,964,786

222,211,216

179,953,724

176,671,840

Other components of equity
Treasury shares
Non-controlling Interests
Total equity

Note 1: The financial data for the most recent five years has been audited and attested by CPAs. As of the printed date of this Annual
Report, the 2024 financial data has not been audited or reviewed by CPAs.
Note 2: Other assets are noncurrent assets excluding property, plant and equipment, and intangible assets.

AUO Corporation
2023 Annual Report93

(lV) Parent-company-only Condensed Statement of Comprehensive Income
Unit: NT$ thousands (except for earnings per share: NT$)Year

Financial data for the most recent five years (Note)

Item

2023

2022

2021

2020

2019

Revenue

214,680,794

215,170,366

331,230,555

256,089,345

255,167,176

Gross profit(8,125,677)(10,606,401)

70,923,406

16,018,967(2,618,924)

Profit (loss) from operations(26,180,838)(28,397,062)

50,932,678

1,123,075(17,726,245)

3,622,553

7,304,230

11,502,821

1,373,510(620,419)(22,558,285)(21,092,832)

62,435,499

2,496,585(18,346,664)(18,203,274)(21,101,374)

61,330,628

3,376,324(19,185,258)

-

-

-

-

-

(18,203,274)(21,101,374)

61,330,628

3,376,324(19,185,258)(840,332)

1,208,829(685,862)

2,713,317(1,007,196)(19,043,606)(19,892,545)

60,644,766

6,089,641(20,192,454)(18,203,274)(21,101,374)

61,330,628

3,376,324(19,185,258)

-

-

-

-

-

(19,043,606)(19,892,545)

60,644,766

6,089,641(20,192,454)

-

-

-

-

-

(2.37)(2.39)

6.44

0.36(2.00)

Non-operating income andexpensesProfit (loss) before income tax
Profit (loss) from continuing
operations for the year
Loss from discontinued operations
Profit (loss) for the year
Other comprehensive income(loss), net of tax
Total comprehensive income (loss)
for the year
Profit (loss) attributable to
Shareholders of AUO Corporation
Profit (loss) attributable tonon-controlling interests
Total comprehensive income (loss)
attributable to shareholders of
AUO Corporation
Total comprehensive income (loss)
attributable to non-controllinginterests
Earnings per share (EPS)

Note: The financial data for the most recent five years has been audited and attested by CPAs. As of the printed date of this Annual
Report, the 2024 financial data has not been audited or reviewed by CPAs

(V) The Names of CPAs and Their Audit Opinions for the Most Recent Five Years
Year
2023
2022
2021
2020
2019

94

AUO Corporation
2023 Annual ReportCPA
KPMG/Yu, Chi-Lung
KPMG/Yu, Wan-Yuan
KPMG/Yu, Chi-Lung
KPMG/Yu, Wan-Yuan
KPMG/ Yu, Chi-Lung
KPMG/ Yu, Wan-Yuan
KPMG/Wei, Shing-Hai
KPMG/Lu, Chien-Hui
KPMG/Wei, Shing-Hai
KPMG/Lu, Chien-Hui

Opinion content
Unqualified opinion
Unqualified opinion
Unqualified opinion
Unqualified opinion
Unqualified opinion

Financial Highlights

II.Financial Analysis for the Most Recent five years(I)

Financial Analysis on Consolidated Basis
Year
Item analyzed
Financial
structure

Solvency

Profitability

Cash flow

2021

2020

2019

50.5

44.0

52.4

52.7

Ratio of long-term capital to property, plantand equipment (%)

155.9

147.8

161.1

158.3

140.5

Current ratio (%)

152.5

144.3

155.2

171.2

158.2

Quick ratio (%)

119.0

110.6

125.7

142.4

130.7

(Note2)(Note2)31.6

1.9(Note2)

11.3

6.1

6.8

6.9

6.8

Average collection days for receivables

32

60

53

53

54

Inventory turnover rate (times)

8.2

7.6

9.1

9.9

10.8

Payables turnover rate (times)

5.1

4.4

4.7

4.7

4.9

Average days for sales of goods

44

48

40

37

34

Property, plant and equipment turnover rate
(times)

1.4

1.4

2.1

1.4

1.3

Total asset turnover rate (times)

0.6

0.6

0.9

0.7

0.7

Return on assets (%)

(4.2)

(4.9)

15.7

1.3

(4.7)

Return on equity (%)(10.2)

(9.8)

29.4

1.5

(10.7)

Ratio of profit before income tax to paid-in
capital (%)(28.2)(25.3)

69.0

2.9(20.6)

Profit margin (%)

(7.3)

(8.5)

17.1

1.1

(8.0)

Earnings (loss) per share (NT$)(2.37)(2.39)

6.44

0.36(2.00)Cash flow ratio (%)

10.6

27.8

84.6

26.2

22.9

Cash flow adequacy ratio (%)

109.3

114.6

145.5

99.9

109.1

Cash reinvestment ratio (%)
Leverage

2022

56.9

Receivables turnover rate (times)

ability2023

Ratio of debts to assets (%)

Interest coverage ratio

Operating

Financial analysis for the most recent five years (Note 1)

0.3

1.5

9.1

2.3

1.5

Operating leverage(Note 3)(Note 3)

1.8

26.3

(Note 3)Financial leverage(Note 3)(Note 3)1.0

(Note 2)

(Note 3)Note 1: The accompanying financial data for the years stated has been audited and attested by CPAs. As of the printed date of thisAnnual Report, the 2024 financial data has not been audited or reviewed by CPAs.
Note 2: The ratio was zero or negative.
Note 3: The ratio was not applicable due to operating losses.
Note 4: Please refer to the Glossary under Table (2) below for calculation formula used in this table.
Explain the reasons for the changes in financial ratios in the last two years:
1.

The increase in the ratio of debts to assets was mainly due to an increase in long-term borrowings for the current year.

2.

The increase in receivables turnover rate and the decrease in average collection days for receivables were mainly due to anincrease in factoring of accounts receivable in the current year. The increase in payables turnover rate was mainly due to adecrease in purchases in the fourth quarter of the current year compared to the same period of last year, resulting in a decreasein the average accounts payable.

3.

The improvement of return on assets and net profit margin were mainly due to the assessment of tax loss carryforwards inaccordance with International Financial Reporting Standards (“IFRSs”), resulting in the recognition of income tax benefits in thecurrent year.

4.

The decrease in various ratios regarding to cash flow was mainly due to an increase in loss before income tax for the current year,
which led to a reduction in the net cash inflow from operating activities.

AUO Corporation
2023 Annual Report95

(II) Parent-Company-Only Financial Analysis
Year
Item analyzed
Financial
structure

Solvency

Leverage

2020

2019

53.8

47.4

39.9

49.8

48.9

212.9

214.4

221.3

206.3

179.4

Current ratio (%)

93.7

109.2

126.0

143.9

131.5

Quick ratio (%)

69.8

84.6

103.5

119.7

106.3

(Note 2)

(Note 2)

45.3

2.4

(Note 2)

11.6

5.8

6.6

7.0

6.8

32

63

55

52

54

Inventory turnover rate (times)

12.9

11.6

12.8

13.2

13.8

Payables turnover rate (times)

5.1

4.5

4.6

4.6

4.7

Average days for sales of goods

28

32

29

28

27

Property, plant and equipment turnover rate
(times)

1.8

1.8

2.7

1.9

1.7

Average collection days for receivables

Cash flow

2021

Ratio of debts to assets (%)

Receivables turnover rate (times)

Profitability

2022

Ratio of long-term capital to property, plantand equipment (%)

Interest coverage ratio

Operatingability

Financial analysis for the most recent five years (Note 1)
2023

Total asset turnover rate (times)

0.6

0.6

0.9

0.7

0.7

Return on assets (%)

(4.7)

(5.5)

16.7

1.3

(5.2)

Return on equity (%)(10.6)(10.1)

29.6

1.9(10.1)

Ratio of profit before income tax to paid-in
capital (%)(29.3)(27.4)

64.9

2.6(19.1)

Profit margin (%)

(8.5)

(9.8)

18.5

1.3

(7.5)

Earnings (loss) per share (NT$)(2.37)(2.39)

6.44

0.36(2.00)Cash flow ratio (%)

(6.9)

15.4

81.5

17.0

15.1

Cash flow adequacy ratio (%)

82.3

93.5

137.2

110.5

107.9

Cash reinvestment ratio (%)

(1.2)

0.2

8.3

1.5

0.7

Operating leverage(Note 3)(Note 3)

1.7

32.7

(Note 3)Financial leverage(Note 3)(Note 3)1.0

(Note 2)

(Note 3)Note 1: The accompanying financial data for the years stated has been audited and attested by CPAs. As of the date of this Annual
Report, the 2024 financial data has not been audited or reviewed by CPAs.
Note 2: The ratio is zero or negative.
Note 3: The ratio was not applicable due to operating losses.
Explain the reasons for the changes in financial ratios in the last two years:
1. The decrease in current ratio and quick ratio was mainly due to a decrease in current assets resulting from an increased cash
outflow from operating activities, driven by capital expenditure, cash dividend paid out, and losses of this year.
2.

The increase in accounts receivable turnover rate and the decrease in average collection days for receivables were mainly due tothe effect of factoring accounts receivable in the current year. Excluding the impact of this factor, the accounts receivable turnoverrate and the average collection days for receivables was 7.5 times and 49 days, respectively.

3.

The decrease in various ratios regarding to cash flow was mainly due to an increase in loss in the current year, which led to anincrease in net cash outflow from operating activities.

96

AUO Corporation
2023 Annual ReportFinancial Highlights

Calculated as follows:
1. Financial structure(1) Ratio of debts to asset = Total liabilities/Total assets.
(2) Ratio of long-term capital to property, plant and equipment = (Total equity + Long-term borrowings) / Net property, plant andequipment.
2. Solvency(1) Current ratio = Current assets/Current liabilities.
(2) Quick ratio = (Current assets - Inventories - Prepaid expenses) / Current liabilities.
(3) Interest coverage ratio = Net income before income tax and interest expense/Interest expenses over this period.
3. Operating ability(1) Receivable (including accounts receivable and notes receivable due to business operations) turnover rate = Net sales/Balance of
average accounts receivable for various periods (including accounts receivable and notes receivable due to business operations).
(2) Average collection days for receivable = 365/Receivables turnover.
(3) Inventory turnover rate = Cost of goods sold/Average inventory.
(4) Payable (including accounts payable and notes payable due to business operations) turnover rate = Cost of goods sold/Balanceof average accounts payable of various periods (including accounts payable and notes payable due to business operations).
(5) Average days for sales = 365/Inventory turnover.
(6) Property, plant and equipment turnover rate = Net sale/Average net property, plant and equipment.
(7) Total asset turnover rate = Net sales/Average total assets.
4. Profitability(1) Return on assets = [Net income after taxes + interest expense x (1 - tax rate)] / Average total assets.
(2) Return on equity = Net income after taxes/Average total equity.
(3) Profit margin = Net income after taxes/Net sales.
(4) Earnings per share = (Net income attributable to shareholders of the parent company - preferred stock dividend) / Weighted
average number of shares outstanding.
5. Cash flow
(1) Cash flow ratio = Net cash flow of operating activities/Current liabilities.
(2) Cash flow adequacy ratio = Net cash flow from operating activities for the most recent five years/(Capital expenditures +inventory increase + cash dividend) for the most recent five years.
(3) Cash flow reinvestment ratio = (Net cash flow from operating activities - cash dividends)/ (Gross value of property, plant, andequipment + Long-term investments + other non-current assets + working capital).
6. Leverage:(1) Operating leverage = (Net operating revenue - variable operating cost and expenses)/Operation profit.
(2) Financial leverage = Operating profit/ (Operating profit - interest expenses).

AUO Corporation
2023 Annual Report97III. The Audit Committee's Review Report
Audit Committee’s Review Report
The Board of Directors has prepared the Company’s Business Report, Financial Statements, and Earnings
Distribution Proposal for the year of 2023. Yu, Chi-Lung and Yu, Wan-Yuan, Certified Public Accountants of
KPMG, have audited the Financial Statements. The 2023 Business Report, Financial Statements, and Earnings
Distribution Proposal have been reviewed and determined to be correct and accurate by the Audit Committeeof AUO Corporation. I, as the Chair of the Audit Committee, hereby submit this report according to Article
14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

AUO Corporation

Chair of the Audit Committee

Chin-Bing (Philip) Peng
March 11, 2024

IV. Consolidated Financial Statements with Independent Auditors' Report forthe most recent year:
Please refer to Appendix I pages 137-263.

V. Parent Company Only Financial Statements with Independent Auditors'
Report for the most recent year:
Please refer to Appendix 2 pages 264-367.

VI. Any financial difficulties experienced by the Company and its affiliate
businesses during the most recent year up to the printed date of this Annual
Report need to be stated as well as the impact on the Company's financial
position need to be outlined:
None.

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Review of Financial Conditions,Operating Result, and Risk Management

Chapter 7 Review of Financial Conditions, Operating Result, and Risk
Management
I.Financial position analysis:
Unit: NT$ thousands
Year
Item

Difference
2023.12.31

Current assets

202.12.31%

140,176,807

4,033,906

2.9

31,215,648

33,644,483(2,428,835)(7.2)

171,172,804

178,833,837(7,661,033)(4.3)

9,770,626

9,800,458(29,832)(0.3)

1,320,901

1,393,244(72,343)(5.2)

Intangible assets

11,268,867

11,396,241(127,374)(1.1)

Deferred tax assets

10,201,660

6,649,457

3,552,203

53.4

Other assets

4,309,518

4,946,147(636,629)(12.9)(3,369,937)(0.9)

Long-term investment
Property, plant and equipment
Right-of-use assets
Investment property

Total assets

144,210,713

Increase(decrease) amount383,470,737

386,840,674

Current liabilities

94,574,967

97,168,161(2,593,194)(2.7)

Noncurrent liabilities

123,538,234

98,261,865

25,276,369

25.7

Total liabilities

218,113,201

195,430,026

22,683,175

11.6

Common Stock76,993,961

76,993,961-

0.0Capital surplus

54,998,829

61,942,210(6,943,381)(11.2)

Retained earnings

31,899,740

50,078,752(18,179,012)(36.3)

Other components of equity(4,484,899)(3,620,305)(864,594)

23.9(240,424)(295,527)

55,103(18.6)

159,167,207

185,099,091(25,931,884)(14.0)

Treasury shares
Equity attributable to shareholders of
AUO Corporation
Non-controlling Interests
Total equity

6,190,329

6,311,557(121,228)(1.9)

165,357,536

191,410,648(26,053,112)(13.6)

Analysis of items that have major changes:
1. The increase in deferred income tax was mainly due to the assessment of tax loss carryforwards in accordance with IFRSs, resulting
in the recognition of an increase in deferred tax assets for this year.
2. The decrease in other assets was mainly due to a decrease in the maturity of time deposits expired beyond three months, restrictedcash in bank and prepayments for purchases.
3. The increase in non-current liabilities was mainly due to an increase in long-term borrowings.
4. The decrease in capital surplus was mainly due to the distribution of cash from capital surplus, and the recognition of the Company’s
share of the deduction from the associated companies’ capital surplus. The aforementioned deduction resulted from the purchase of
a portion of their subsidiaries’ shares, where the portion of the purchase price exceeding the book value of the acquired shares was
acknowledged as a deduction from the associated companies ' capital surplus, and then the Company recognized its share of thesededuction.
5. The decrease in retained earnings was mainly due to losses for the current year.
6. The decrease in other components of equity was mainly due to currency exchange losses incurred during the conversion of foreign
operations due to exchange rate fluctuations.
7. The decrease in treasury shares mainly resulted from the transfer of treasury shares to its employees in accordance with Securities& Exchange Act.
8. The decrease in equity attributable to shareholders of AUO was mainly due to the distribution of cash from the capital surplus andlosses for the current year.

AUO Corporation
2023 Annual Report99II.Financial performance(I)Financial performance analysis
Unit: NT$ thousands
Year
Item
RevenueLess: sales return and discount

Change in proportion

2023

2022

250,048,326

249,956,539

91,7870.0

Increase (decrease) amount%

2,083,889

3,163,865(1,079,976)(34.1)Net revenue

247,964,437

246,792,674

1,171,763

0.5

Cost of sales

243,354,069

245,225,166(1,871,097)(0.8)

Gross profit (loss)

4,610,368

1,567,508

3,042,860

194.1

Operating expenses

26,572,383

25,537,904

1,034,479

4.1

Profit (loss) from operations(21,962,015)(23,970,396)

2,008,381(8.4)

Non-operating income and expenses
Profit (loss) before income tax for the year

279,955

4,464,204(4,184,249)(93.7)(21,682,060)(19,506,192)(2,175,868)

11.2

Less: income tax expenses (benefits)(3,530,906)

1,466,988(4,997,894)(340.7)

Profit (loss) for the year

(18,151,154)(20,973,180)

2,822,026(13.5)

Analysis of items that have major changes:
1. The decrease in sales return and discount was mainly due to the stabilization of market prices, which consequently led to a decreasein sales discount.
2. The increase in gross profit was mainly due to the destocking of overall market, the recovery in brand stock-up demand, a gradualstabilization of panel prices and increased demand, along with the rise in overall capacity utilization.
3. The decrease in non-operating income and expenses was mainly due to investment losses under the equity method this year, an
increase in interest on bank loans due to rising interest rates, and the provision for losses from litigation.
4. Income tax expenses (benefits): The income tax benefits for this year was mainly due to the assessment of tax loss carryforwards inaccordance with IFRSs.

(II)The special key performance indicators (KPI) of the panel industry
Year
Item

2023
First Quarter

SecondThird Quarter

Quarter

FourthFull year

Quarter

Consolidated shipment (Kilometer squared)

4,300

5,706

5,893

5,086

20,985

Operating margin (%)(21.8)

(7.0)

(1.9)

(8.0)

(8.9)

EBITDA (Note 1) Margin (%)

(6.8)

5.65

10.0

5.4

4.3

Inventory turnover (days)

484

42

41

44

44

Net debt to equity (%)

14.9

14.1

16.7

16.9

16.9

Note1: EBITDA =Operating profit + D&A.

(III)Estimated sales volume and supporting information
With display technology as its core, AUO combines AIoT to become a solution provider in various fields. Its main
product line covers a full range of large, medium, and small TFT-LCD panels, with panel sizes ranging from 0.98 inches to
85 inches. Its application range and sizes are very comprehensive. However, when the product combinations change, thecompany's panel shipment fluctuates significantly, so it is not appropriate to use only the sales volume as a measurement
basis. Nevertheless, the company continues to strive to enhance the value of its products and optimize productcombinations, constantly strengthening product technical leadership, vigorously promoting the shipment of integrated
and high-value-added products, and striving to maintain product competitiveness in the fast-changing industry
environment. The future development direction is towards advanced technology in panels. As the foresight technologies
such as 5G and AI gradually become popular, AUO transforms it more than 20 years of experience in the display industry
into the motivation to seize the industry transformation and smart field business opportunities. Collaborating withecosystem partners, it gradually transforms in the fields of smart retail, smart medical, smart mobility, smart services andsmart education and enterprise to become a solution provider with display technology as its core.

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Review of Financial Conditions,Operating Result, and Risk Management

III.Cash flow(I) Analysis of changes in consolidated cash flows in 2023
Unit: NT$ thousands

Cash balance at the
beginning of the year

Net cash flow fromoperating activities

80,613,120

Net cash flow frominvesting activities

9,993,563(24,054,384)

Net cash flow fromfinancing activities
18,366,527

Cash balance(effect by exchange
rate)
83,969,463

Operating activities: The main changes were net profit plus depreciation and amortization of non-cash expenses andchanges in working capital.
Investing activities: The main changes were changes in capital expenditures and financial assets.
Financing activities: The main changes are from borrowing and repaying long-term loans.
(II) Liquidity improvement plan:
The Company showed no signs of liquidity deficit.

(III) Analysis of cash liquidity in the coming year:
The Company, on the premise of maintaining stable cash liquidity, will carefully plan and manage cash
expenditures related to investments and operations while taking, cash balances on accounts, cash flows fromoperating activities and investing activities and the status of financial markets into consideration.

IV. Material capital expenditures of the most recent year and impact on the Company's
finances and operations
In 2023, the Company's major capital expenditure was to pay for the expansion of the high-end production capacity andinvestment of the upgrading technology to maintain the long-term dominant position of the Company. Based on the
consolidated financial statements, the amount paid for the purchase of fixed assets in 2023 was NT$268 billion,
accounting for approximately 11% of net sales, which had no significant impact on the Company's financial operations.

V. Reinvestment policy for the most recent fiscal year, the main reasons for the profits/losses
generated thereby, the improvement plan, and investment plans for the coming year.
In recent years, our investment policy has been in line with AUO’s “Biaxial Transformation” strategy and needs. We keep
seeking and engaging with strategic partners to maximize the added value of display technology and deepen applications
in vertical markets. For the scope of our investment, we mainly focus on eight fields, which are "Display", "Smart Mobility","Smart Retail", "Intelligence Service", "Smart Healthcare", "Education and Enterprise", "Energy" and "Solar andSemiconductor Materials". The share of loss of equity-accounted investees was NT$518,049 thousand in the consolidated
financial statements of 2023, mainly due to some of our investees have experienced decline in profits or asset impairment
loss given the impact of market demand. In the future, we will continue to invest prudently through equity investment,
joint ventures, mergers and acquisitions or strategic alliances to accelerate the transformation.

AUO Corporation
2023 Annual Report101VI. Risk Matters(1)The impacts of interest rate, foreign exchange rate fluctuations and inflation situation on the Company's
profit and loss and future countermeasuresInterest rate fluctuation
The interest rate risk of the Company and its subsidiaries is mainly from floating-rate long-term borrowings
borrowed for operating and investing activities, and the future cash flow of interest expense will fluctuate due tochanges in interest rates. The consolidated interest expense in 2023 is NT$2,724,883 thousand. Based on thelong-term borrowings of the Company and its subsidiaries in 2022, if the interest rate is increased by 0.25% in the
future, the net profit before tax will be reduced by approximately NT$275,318 thousand.
In terms of assets, the Company and its subsidiaries allocate funds in a conservative and prudent manner, mainly inbank deposits and highly liquid short-term government bonds with reverse repurchase agreements, so as to ensure
the safety of principal and maintain liquidity.

Foreign exchange rate fluctuation
The currency risk of the Company and its subsidiaries mainly comes from cash and cash equivalents, accounts
receivable, borrowings and accounts payable denominated in foreign currency, so the fluctuation of foreignexchange rate may affect the operating income, operating costs and expenses, and even profit denominated inforeign currencies. In order to avoid the adverse impact of foreign exchange rate fluctuation on the operating
results of the Company and its subsidiaries, the Company and its subsidiaries hedge with forward contracts to
reduce the impact of currency risk on the profits and losses of the Company and its subsidiaries. On the basis of
consolidated financial statements, the gains (losses) on valuation of forward contracts at FVTPL and foreignexchange gains (losses) in 2023 are a net loss of NT$225,237thousand. In the future, hedging will be continued toreduce currency risk. Based on the cost structure of the Company and its subsidiaries in 2023, if the NT dollar
appreciates by 1% against the US dollar, the consolidated gross margin may decrease by about 0.5%.

Inflation situation
According to the statistics of Directorate General of Budget, Accounting and Statistics, Executive Yuan and Central
Bank of the Republic of China (Taiwan) in 2023, the domestic economic growth rate was 1.31%, and the annual
gross rate of the Consumer Price Index (CPI) was 2.49%. Such price increase was relatively moderate comparedwith the economies of the United States, Britain and the Eurozone, which should not have a significant impact on
the consolidated operating results of the Company and its subsidiaries in 2023. Based on the consolidated amountof raw materials purchased in NT$, If the inflation rate is increased by 1% (that is, the Consumer Price Index
increases by 1%), the consolidated purchase amount of the Company and its subsidiaries will increase by about
NT$150 million.

(2)The policies to engage in high-risk, highly leveraged investment, lending funds to others, endorsement
guarantee and derivative transactions, the main reasons for policy, profit or loss and the futurecountermeasures
1. Engage in high-risk and high-leverage investments
The Company and its subsidiaries are mainly engaged in their main businesses and do not engage in high-risk or
high-leverage investments. They conduct capital allocation and hedging activities based on the principle of being
conservative and prudent.
2. Endorsements and Guarantees
The Company and its subsidiaries are limited to providing endorsements and guarantees for the Company andsubsidiaries in which the Company holds more than 50% of ownership of such subsidiaries’ total shares.
3. Capital lending to others
The Company and its subsidiaries’ capital lendings are limited to the Company and its subsidiaries.

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Review of Financial Conditions,Operating Result, and Risk Management

4. Derivative transactions
The Company and its subsidiaries engage in derivatives transactions based on the positions arising from theCompany’s business exposed to currency risk, with the purpose of avoiding market risks and reducing theCompany's operating risks. On the basis of consolidated financial statements, the gains (losses) on valuation of
forward contracts at FVTPL and foreign exchange gains (losses) in 2023 were a net profit of NT$225,237 thousand. ,indicating that hedging strategies was still appropriate. In the future, the Company and its subsidiaries will follow the
principle of avoiding risks caused by foreign exchange rate and interest rate fluctuations, and regularly evaluate andadjust relevant hedging strategies in a timely manner according to the Company's operating conditions and market
trends. In addition, the Company's subsidiaries have invested in convertible bonds. The gains (losses) on valuation of
convertible bonds at FVTPL in 2023 were a net profit of NT$953 thousand.

(3) Future R&D plans and estimated R&D expenses
Please refer to the Annual Report of Capter 5, Operational Highlights in (lll) Technology and R&D status. (pages
75-76).

(4)The impact of major domestic and foreign policies and legal changes on the Company's financial businessand the corresponding measures
The Company has always paid close attention to and mastered the policies and decrees that may affect the Company's
operation, and cooperated with the revision of relevant internal systems. The legal changes in 2023 have not had asignificant impact on the operation of the Company.

(5)The impact of technological changes (including information security risks) on the Company's financial
business and the corresponding measures
Market application of flat panel display is more and more extensive. It is an important man-machine interface into
smart application era and display will affect life from all aspects such as food, clothing, housing, entertainment and soon. From a technical point of view, TFT-LCD is still the most mature and competitive technology, while AUO has been
deeply involved in this field for a long time, accumulating wide, deep R&D patents and skilled manufacturing
technology.
At present, the market demand for panel product AUO continues to develop towards larger size, ultra-highresolution 8K, wide color gamut, high contrast, wide viewing angle, fast response time, zero border, thinness,fashionable appearance and low power consumption. Based on the existing TFT-LCD, AUO has developed relevant
processes and product technologies accordingly, such as AHVA (advanced hyper-viewing angle), MIP (Memory in Pixel),
High refresh rate, HDR, curved design, special-shaped cutting, on-cell/in-cell Touch and A.R.T , etc., to meet the needsof market development, meanwhile AUO continues to develop new technologies, such as Mini LED, Micro LED, underdisplay Fingerprint, X-Ray sensor, Seamless Tiled ALED Displays and other related ino innovative technologies.
Continuing to build a highly flexible, digitalized smart manufacturing model that incorporates 5G and AIoT; and iscommitted to being a solution provider that extends technological innovations across applications in diverse domains.
Through providing smart sustainable solutions for smart manufacturing, net-zero emissions, and green energy.
Assisting companies by use leveraging digital empowerment to strategize sustainable business opportunities andstrengthening their industrial competitiveness and embark on a value-added road different from competitors.
In recent years, the frequent occurrence of ransomware and various types of cybersecurity attacks has demonstrated
that information systems are not impervious to targeted network attacks from malicious third parties. Throughtactics such as spear-phishing, phishing, and brute-force password cracking, these attackers may gain access to acompany's internal network. Once inside, they can then implant malware for sabotage or data theft, or they may lay
low within the internal network, waiting for the perfect moment to strike. After obtaining control of the internal
network domain, they can enact network paralysis or encryption ransom. Disruptive and ransom-driven attacks may
cause our company's operations to be interrupted, while data theft attacks could result in the leakage of confidential
operational data or personal data of employees and clients. AUO Corporation has undertaken proactive efforts tostrengthen its information security. In addition to the phased implementation of a range of cybersecurity defense
systems and mechanisms, regular backups and cybersecurity incident response exercises are conducted for the
production equipment in each factory. These measures help to reduce response times and optimize processes in the

AUO Corporation
2023 Annual Report103event of an unforeseen attack, minimizing the impact. We have also established a cybersecurity maturity dashboard toenable real-time monitoring and autonomous management and improvement of cybersecurity status across all
factories and business units. Every quarter, cybersecurity-related risks are assessed through our internal risk
management system. The risk control and improvement status are then reported regularly at the Sustainability & ERM
Committee meetings to control and mitigate related network risks.

(6) The influence of corporate image change on corporate crisis management and the countermeasures
In view of the crisis events and external potential risks, if there is any danger of affecting AUO's operation andcorporate reputation, the Company will immediately start the crisis management mechanism, and the emergency
response team will know the situation of the events as soon as possible, conduct risk assessment on various impacts
and take necessary actions. This emergency response team is composed of senior executives from various businessgroups, supply chain management, finance, environmental protection, human resources, information security, sales andmarketing, who will examine the Company's crisis management principles to ensure the safety of employees and theenvironment and ensure the efficiency of ongoing production operations. The Company's crisis communication planalso adheres to the principle of open communication to ensure that employees, customers, competent authorities,
investors, news media and relevant stakeholders can know the latest situation in time.
The Company has continuously demonstrated its sustainable strength in all aspects of economy, environment andsociety, and will continue to uphold the core values of honesty and integrity, and shoulder long-term and sustainable
responsibilities to all stakeholders and society.

(7) Expected benefits, possible risks and countermeasures of merger and acquisition
AUO's Board of Directors resolved on October 2, 2023 that it has entered into a definitive agreement under which
AUO will acquire 100% equity interest in the German company Behr-Hella Thermocontrol GmbH (hereinafterreferred to as “BHTC”) at an enterprise value of €600 million (approximately NT$20.4 billion).Through the
combination, the company will be able to integrate resources from both platforms and generate significant synergies
through future operations, underscoring AUO’s commitment to its globalization and development strategy ofcultivating a smart mobility ecosystem. The transaction is expected to lead to sustainable growth and create
long-term value for AUO’s shareholders.

(8) Expected benefits, possible risks and countermeasures of expanding the plant
AUO is committed to providing customers with an innovative product portfolio with high added-value. AUO has theflexibility to adjust and develop various application products with the competitive advantages of the complete
generations of production lines. Small-and-medium-sized TFT-LCD panels will move toward higher specifications suchas wearable displays with ultra-high resolution and low energy consumption, notebooks, and gaming products in thenext few years. Based on its past experience in LTPS, the Company invested in the construction of the LTPS
Generation 6 line phase II through AUKS in 2021, and plans to develop full capacity in 2023 to meet the growth indemand for high-end value-added products and smart vehicle applications.
In addition, the TV product production line of Taiwan 8.5 generation line completed phase III of capacity expansion
and product transformation investment in 2021. At year of 2023 start using Taiwan 8.5 generation line with phase III
to expanding in desktop monitors and high level notebook computers product, which cope with product lines tomake a difference from other manufacturers, so as to create market differences in response to the changes of market
and continue to planning the overall capacity optimization adjustment and transformation.
In 2023 the Vietnam subsidiary was established for strengthen customer cooperation relationships and respond to
the supply strategy layout of important customers. Investment in Vietnam is mainly to meet the Europe and American
markets' demanding to achieve diversified production locations around the world also for IT panels, system products
and mass production in the first half of 2024.

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Review of Financial Conditions,Operating Result, and Risk Management(9) Risks in purchasing or concentrating sales and countermeasures
The aspect of sales
No single supplier accounted for more than 10% of net purchases in both 2023 and 2022.
AUO is committed to maintaining a close relationship with our customers and will continue to provide services thatsatisfy their needs. The Company will also strictly monitor the changes in customers' credit status and is committed
to the development of potential customers in order to reduce the risk of concentrated sales. The main customers of
the company have adjusted over the years with the change in product portfolio.
The aspect of purchase
There were no suppliers in both the 2023 and 2022 fiscal years that accounted for more than 10% of the net
purchase amount.
1. Raw materials
The Company needs to adequately procure raw materials needed for production purposes. If supplying raw
materials from the suppliers' end or its upstream manufacturers in our purchased raw materials happens on
shortage meanwhile the Company fails to find alternative materials in time that will cause the risk of not being able
to meet the needs of customers. As well, the Company's revenue and profit may be effective it. Therefore, theCompany continues to decentralized supply sources and bring in local suppliers to reduce the proportion ofimported raw materials. Being effectively reducing supply chain costs, risks and moving on arrangement to shortchains. On the other hand, focusing on suupliers proving the raw materials the Company cooperation with existing
suppliers to multi-production plans also committing to seperate on upstream raw materials purchasing and bring in
new suppliers, expecting to minimize the risks.
2. Equipment
The suppliers of key process equipment are often supplied by limited suppliers, and the equipment preparation
lasts for 6 ~ 12 months or more. In recent years, the delivery period of some electronic parts and components has
been prolonged due to the vigorous development of various industries. Therefore, the Company will consider theneeds for operational growth and capacity expansion and actively seek equipment and services that can meetproduction requirements. The Company will also discuss various business models with suppliers to shorten the
pre-procurement period of the machines. Thus, the suppliers can be expected to provide equipment and related
services on time to reduce the risks arising from limited and concentrated suppliers.

(10)The impacts and risks arising from major transfer or exchange of shares by directors or shareholders withover 10 percent of shares in the Company and the countermeasures
In the most recent year up to the publication date of this Annual Report, the Company is not aware of any risk of
substantial transfer or replacement of shares of directors or large shareholders holding more than 10% of shares,(11)Impact, risk, and response measures related to any change in the administrative authority towards theCompany's operations
In the most recent year up to the publication date of this Annual Report, the Company has not had any operatingrights changes.

(12)Litigation or non-litigation events
The results of major litigation, non-litigation or administrative disputes that have been decided or are still pending forthe company and its directors, supervisors, general managers, substantive persons in charge, major shareholders witha shareholding ratio of more than 10% and affiliated companies. For those that may have a significant impact onshareholders' rights and interests or securities prices, disclose the facts of the dispute, the amount of the subject
matter, the start date of the litigation, the main parties involved in the litigation, and the disposition up to the date of
publication of the annual report.
1. Major litigation, non-litigation or administrative litigation in the Company's recent year and up to the date of
publication of the annual report, the outcome of which may have a significant impact on shareholders' rights andinterests or securities prices:

AUO Corporation
2023 Annual Report105Patent action.
Phenix Longhorn LLC (“Phenix”) filed a lawsuit against two companies, including AUO to the Eastern District ofTexas with the U.S. District Court in in October 2012, claiming that had infringed certain U.S. patent related to LCD
panel manufacturing held by Phenix. AUO intends to vigorously defend this lawsuit, but the final result of this casecannot be determined, and the Company is continuously evaluating the substance of this lawsuit.
Antitrust civil action
In May 2014, Nanjing LG Xingang Display Co., Ltd. and seven of its affiliated companies (plaintiffs) filed a civil lawsuit
against certain LCD manufacturers, including AUO, in the Seoul Central District Court, South Korea, claiming
overcharge and damages compensation. The South Korean Court of First Instance ruled in November 2023 that
AUO must pay the plaintiff a total of approximately 29.099 billion won plus interest. This case is a derivative civil
lawsuit from the LCD antitrust case that ended in 2006. It has been ongoing for many years since the plaintiff filed
the lawsuit in 2014. AUO filed an appeal in December 2023 and deposited the aforementioned 29.099 billion wonplus interest deposit to the court in January 2024. The Plaintiffs also filed an appeal in March 2024. At this stage, thefinal outcome of this case cannot be determined, and AUO is continuing to evaluate the substance of this lawsuit.
Explanation of Influence
As of the publication date of the annual report, AUO evaluates the rationality of the recognized expenses in eachfinancial reporting period according to the nature of the case, whether the possible loss amount is significant, theprogress of the case and the opinions of professional consultants, and make necessary adjustments in the way theCompany thinks fit, but the final amount will not be determined until the relevant cases are concluded. AUO wants
to actively defend the aforementioned unsettled or ongoing litigation cases, but the final results of these cases
cannot be determined, and the possible losses (if any) cannot be accurately estimated at present. AUO iscontinuously evaluating the substance of these lawsuits. In addition to the above litigation events, there are otherlitigation cases arising from the normal operation of the merged company, but other litigation cases should not havea significant adverse impact on the operation of AUO.
2. Directors, supervisors, general managers, substantive responsible persons, shareholders holding more than 10% of
the shares and affiliated companies of the Company: None.
3. Please refer tothe consolidated financial statements with Independent Auditors’Report for the most recent year
for a description of the litigation events of the Company's subsidiaries.

(13) Other significant risks and countermeasures: None.

VII. Other material matters: None.

106

AUO Corporation
2023 Annual ReportCorporate Sustainability

Chapter 8 Corporate Sustainability
1. Overview
AUO adheres to the core concept of the Company's sustainable operation, attaches importance to the management andcommunication of stakeholders, shows financial and non-financial performance at the same time, draws up the strategic
blueprint of AUO CSR (Corporate Social Responsibility), and implements AUO's sustainable vision by "Go Beyond CSR,
Create Shared Values".
 Auo's sustainability policy
Considering the international trends and relevant standards, the Company formulated the "AUO Sustainability Policy",
which was formally submitted to the board of directors in 2015. It covers three major aspects, including corporate
governance, environment and society, with a total of 12 items, which is the highest spiritual guide for the Company's
sustainable development, and accordingly echoes the Company's sustainable development principles and implements
the road to sustainability.
(1) Sustainable management organization Operation
The balanced development of corporate management and sustainability is AUO's sustainable management
philosophy. While pursuing strong enterprise physique, in order to invest more long-term resources inenvironmental protection and social participation issues, the CSR Committee established in 2013 is the highest
governance body of AUO's sustainable development operation, closely linking the United Nations Sustainable
Development Goals (SDGs) with the core competitive strategies of enterprises, attaching importance to value chain
cooperation, actively practicing global partnership, expecting to play a leading role in enterprise sustainable
development and strive to create more shared value. In 2021, in response to global climate action toward net zerocarbon emission, it was renamed ESG and Climate Committee.
To implement corporate sustainable governance, and actively respond to stakeholders' concerns regarding
environmental, social, and corporate governance issues, as well as promote global operational risk management andresponse strategies, in order to achieve sustainable operation goals. In 2024, the "ESG and Climate Committee" wasupgraded to the "Sustainability and ERM Committee," directly under the operation of the Board of Directors.
According to the committee's organizational regulations, there are three committee members, including the
Chairman (serving as the convener) and two independent directors, and at least two meetings are held annually.
In the fiscal year 2023, a total of three board and strategy meeting reports were conducted, including identifying
sustainability issues to be addressed, developing corresponding action plans, goals, and policy revisions onsustainability topics, overseeing the implementation of sustainable management, and evaluating the execution status.
For detailed information of "Sustainability and ERM Committee’s" objectives and execution status, please refer to
Chapter III, Corporate Governance and IV. Operation of Corporate Governance.
Under our company's "Sustainability and ERM Committee," the "Sustainability and ERM Execution Team" isestablished, chaired by the Chairman, with a post of Chief Sustainability Officer, and operated by the Sustainable
Development Strategy Department. Depending on operational substantively materiality, the Sustainability and ERM
Execution Team has eight groups, led by senior-level executives, to oversee their operation and facilitate
interdepartmental cooperation, translating the vision into objectives and plans for each group. The Sustainability and
ERM Execution Team holds quarterly meetings to regularly report to the Sustainability and ERM Committee andensure the development of major issues, and annually reports the operational effectiveness to the Board of
Directors in accordance with sustainability development regulations. In addition for responding to new issues,sustainable policies and development, we will discuss to managers and relative departments for gathering creativeideas and communicate with project resources.

AUO Corporation
2023 Annual Report107(2)CSR EPS 2025 goal
AUO is in line with the sustainable development goal of the United Nations, and takes "Go Beyond CSR, Create
Shared Values " as the blueprint for the development of the enterprise's sustainable vision, and has drawn up threesustainable development themes of AUO EPS (Environment, People & Society), which are environmental
sustainability, inclusive growth, agile innovation, and actively promises to achieve the short-, medium- and long-termgoals of sustainable development in 2025. In the goal, AUO pays attention to the environmental issues of climatechange and the consumption of the earth's resources, and is also committed to the long-term social vulnerable
groups and improving the demand for quality education, and welcomes new opportunities of energy, intelligent
manufacturing and convenient life through agile innovation.
Theme

Implement
low-carbon
Environment production andresource recycling inEnvironmental the value chain tosustainability achieve the goal ofenvironmental
sustainability.

PeopleIntegrating
growth108

Corporate growth
should take into
account the diverse
development of key
stakeholders in orderto achieve theinfluence of common
inclusive growth

AUO Corporation
2023 Annual Report

AspectMeaning2025 goal

Optimize product life-cycle Set reduction targets basedand energy consumption on life-cycle and reducecarbon emissions by up to
through technology andEnergy6.5 million tones CO2emanagement; work with
Optimization
value chain partners tocumulatively.
create even greater
environmental benefits.
Optimize product life-cycle Work with the value chain
to combat the threat ofand water resources
water resource shortages
through technology andWater
and conserve up to 100,000
management; work with
Optimization
CMD in tap water
value chain partners tocumulatively.
create even greater
environmental benefits.
Reduce the environmental Spearhead the development
impact of the production of the circular value chain,
expand its economic
process; take circular
Circularperformance and achieve a
Production economy value andextended applications into growth rate of 135%.
account.
Increase the resilience ofReduce the risk tocompany operations from climate adaptation andClimatecontinue to reduce the risk
the climate and Improve
Adaptationof financial impact from
adaptability to build aclimate change issues.
resilient value chain.
Provide diversified
Improve employee
educational opportunities tocompetency, promote
more than 600,000 people
industry-academic
collaboration, popularize and increase employee
Quality
participation in AUO quality
basic education and
Education
education by 20% each year.
provide disadvantaged
students with equal accessto education.
Support employment for Support the disadvantaged
youths and theand ally with industry chain
disadvantage, and include partners to grow inclusive
Inclusive
them in the value chain to employment and learning
Growthpromote national
opportunities more thaneconomic growth.
eight-fold.
Become the preferred
Build a quality working
enterprise and reach 80% in
environment that helps
employee identification with
employee balance work
the four dimensions inand family; invite value
Enjoyable
Primary demand,
Workplace chain partners toManagement support, Teamparticipate as well.
work and Learning andgrowth.

Cumulative Cumulative
targettargetcompliance in compliance2023
in 2025

>100%

>100%

>100%

>100%

>100%

84%

>100%

Continue tomanagefinancial risk

>100%

85%

>100%

98%

>100%

Continueachieved in
3 years

Corporate Sustainability

ThemeSocietyAgile
Innovation

AspectMeaning2025 goal

Cumulative Cumulative
targettargetcompliance in compliance2023
in 2025

Popularize renewable
Improve capability inenergy to make it more
renewable technology,
affordable and easy to use; expand the installed capacity
Affordable and increase market share in of renewable energy around
Clean Energy Taiwan and become athe world and double theprofessional global
cumulative growth rate.
provider of renewable(100% cumulative growth)energy.
Boost industry
Improve manufacturing
Continue to applycompetitiveness through competitiveness and overallcore technologies toperformance by 50% throughintelligent management;enhance the resilience
intelligent manufacturing andplay a key role inSmartoftechnology integration.
Manufacturing technology (IIoT) andhuman life style andservices to help with thepromote agiletransformation of other
innovationindustries.
Development products andCombine industry
integrated services toadvantages with AI
technology to create smart expand the cumulative reachof education, health, finance,
living and smart cities.
Intelligent Life
shopping, lifestyle, transportand other smart city
applications to a one billion
people.

>100%

89%

93%

84%

>100%

95%

(3) Stakeholder Engagement and Communication
AUO attaches great importance to stakeholder communication and its feedback. With reference to AA100SES
stakeholder negotiation standard and GRI Universal Standards 2021, it defines the categories of stakeholders thathave a deep impact on the Company, and adopts customized short-, medium-, and long-term deep-rooted plans
based on the principles of complementarity, cooperation and co-creation. Through regular cross-departmental
communication, the overall resources can be quickly integrated, two-way interaction with stakeholders can be
implemented, feedback, needs and risks can be grasped, and mutually beneficial business opportunities can be
explored.
Stakeholder communication topics and channels:
Stakeholder

Topic of Communication

Channel of Communication

Technology research and development, productGovernment/

health and safety, environmental safety andAcademic

health practices, industry-university

expertcooperation, talent development, regulatory

Expert consultation meetings and seminars, and external
communication mailbox

consultation, brand image, climate change
Supplier
Customer

Circular economy, net zero carbon emission,

Project meeting, field communication, co-prosperity course,

operational risk, stable supply chain

supplier audit, supply chain ESG platform, complaint mailbox

Sustainable products, circular economy,

Project meeting, customer satisfaction survey, customer service

renewable energy business opportunities

website system

Environmental education promotion, popularNGO

science education promotion, social welfare
practiceMedia

Operational performance, dual-axis
transformation strategy, ESG brand

Project meetings, external seminars, AUO Sustainable
Foundation, external communication mailbox.
Exhibitions, press conferences, press releases, social media
Internal publications, community activities, labor meetings,

Employee

Operating status, public welfare activities

questionnaires, secretaries' meetings, welfare committees,internal communication mailboxes, various complaint andconsultation lines, and business briefings

AUO Corporation
2023 Annual Report109

Stakeholder

Topic of Communication

Channel of Communication

Bio-axis transformation strategy, ESG strategy Website investor zone, annual general meeting of shareholders,
Investor

Student

and performance, solar energy businessquarterly briefings, investor relations department, shareholder

strategy, communication on risk issues

mailbox, financial reportIndustrial Internship, Appointment and Benefits,
Brand Image

A+ summer internship program, GOLF platform, campus
recruitment, external communication mailbox, job search
webpage

Promotion of culture and education,
Community &neighborhood

promotion of popular science education,

Regular on-site visits and care, factory venues, project meetings,

communication in photoelectric field,

irregular neighborhood activities, factory complaint lines, andcommunication in factory environment

external communication mailboxes

maintenance(4) Enterprise risk identification and operation management
The risk management organization of AUO is overseen by the board of directors, which serves as the supreme
governing and decision-making body. Each year, our performance is reported to the board either in board meetings
or in strategic meetings. This includes discussions on climate change issues. According to internal and external
circumstances, AUO's Board of Directors approved the amendment to the Risk Management Policy and Procedures
on January 31, 2024.The risk governance group of Sustainability & ERM Executive Committee under the
Sustainability & ERM Committee is tasked with implementing the risk management policy approved by the board of
directors. The risk management policy follows the ISO 31000 risk management principle to establish relevant
policies and processes. The mainly as the company to assessment boundary, including operating bases in Taiwan,
mainland China, other parts of Asia, Europe and the USA meanwhile consider subsidiaries of AUO (Kunshan) Co.,
Ltd, AUO (Suzhou) Co., Ltd. and AUO (Xiamen) Co., Ltd to assessment. By using quantitatively evaluates thefrequency, impact degree and control degree of the Company's risks through the processes of identification, analysis
and evaluation. The strategic framework includes external political economy, climate and environmental protection,and compliance with laws and regulations, as well as internal risks such as operation and manufacturing, R&D
business, information security, finance, etc. If the evaluation results of risk projects have high impact and control
uncertainty, the risks will be included in the tracking management. In addition, every year, AUO conducts regularmateriality analyses to assess the relevance of issues based on global sustainability trends and GRI guidelines.
Through surveys, the company gathers stakeholders' perspectives on AUO's environmental, social (including humanrights), and corporate governance aspects. AUO also establishes a double materiality assessment method andimplements an impact-based materiality analysis process to identify material issues. The results of the materiality
analysis are incorporated into the organization's Enterprise Risk Management (ERM) process and become the core
issues for AUO's sustainability blueprint and the development of short, medium, and long-term goals. In the 2023,
AUO's risk identification process ultimately identified 10 categories of high-concern risks, including disasters andemergencies, climate change, operational continuity management, and supplier management.
AUO continuously monitor the development of external trends, consider the risks that may impact the operation inreal time, establish operation emergency procedures in series with the responsible units, improve the efficiency ofprocess improvement, and enhance the ability of crisis emergency handling, so as to ensure stable operation. For
further and newest details please regarding in AUO sustainability report.
(5) Customer management
AUO is committed to being the best partner of customers' long-term cooperation, with innovative technology andintelligent service, immediately approaching customers' needs, and constructing a set of meticulous quality
management system with a cautious attitude, with the goal of creating excellent products and becoming customers'
trusted long-term partners. AUO regularly arranges meetings to communicate with customers, and conducts a
customer satisfaction survey every year. In 2023, the customer satisfaction result was 96%, showing customers'
affirmation of AUO's quality ability and intelligent management achievements. AUO also conducts review and110

AUO Corporation
2023 Annual ReportCorporate Sustainability

improvement according to customers' irregular appraisal and individual customer needs. Facing the industrial cycle,
we should actively adjust our physique, continuously observe the industrial trend and master the pulse of customers,
with customer satisfaction as the ultimate goal.
Under AUO's quality policy, we provide cross-border e-quality after-sales service through service points around theworld. During the product warranty period, customers can apply for RMA service or contact customer service
personnel to arrange product return, repair and delivery, and they can also track the progress of maintenance andreturn through CSS system. In addition to improving customer satisfaction, it can also reduce waste and achieve thebenefit of reducing environmental impact. In addition, in order to support the Company's development in the smart
field, international standards related to automotive and medical industries, such as AIAG-VDAFMEA (Failure Modeand Effect Analysis) and ISO 14971:2019 risk management guidelines, have been introduced to make complete
preparations to bring customers high-value technology and high-quality products and services.
An important part of maintaining the trust of stakeholders, AUO implements privacy protection for customers andall stakeholders. Comply with privacy and information security laws and regulatory requirements when collecting,storing, processing, disseminating, sharing personal data moreover having an information security policy andinformation security committee to protect the information of stakeholders. In order to implement the protection
and management of personal data, AUO has formulated personal data protection management measures andprivacy statements as the highest principles for the protection of customers' personal data. In company internal
website established area of GDPR and PIPL. Offering employee with reference to relevant policies and public
documents, and following the regulatory of requirements.
(6) Supplier management
AUO adheres to the principle of sustainable and balanced development in three aspects, grasps the performance of
supply chain in three aspects: economy, society and environment, and formulates specific methods and objectives forsustainable management of suppliers. Through communication, counseling and audit training, AUO will work withpartners to jointly improve their capabilities and reduce risks, fulfill their responsibilities and grow together.
AUO adopts "Responsible Business Alliance (RBA)" as the implementation criterion of corporate social
responsibility policy, and has formulated "AUO Supplier/Subcontractor Code of Conduct ", and requires all suppliers
and outsourcers to sign "AUO Supplier/ Subcontractor Code of Conduct Conformity Statement", which includes
occupational safety, industrial hygiene, environmental protection and labor human rights, etc., to ensure that
suppliers and outsourcers abide by the behavior of responsible business alliance or relevant local laws andregulations. .
AUO conducts ESG risk assessment of supply chain every year, and understands the risk level and control status of
suppliers in ESG environment, society and economy through self-assessment of questionnaires, so as to identify
high-risk manufacturers and list them as the audit targets every other year. The audit team is composed of
procurement, quality, environmental safety and human resources departments. Through on-site audit, document
review and employee interviews, the audit team ensures that suppliers and outsourcers abide by the code of
conduct and relevant laws and regulations. If suppliers or outsourcers violate social and environmental
responsibilities, their business cooperation relationship with the Company will be affected. At the same time,
suppliers are also arranged to participate in a series of courses such as society, environment and energy
conservation. In 2023, four series of co-prosperity activities were held, including government policies, productcarbon footprint practical experience sharing, drill transformation strategy practical sharing, energy saving andcarbon reduction and practical case observation meeting, and invite supply chain partners to participate in thelearning. For further and newest details please regarding in AUO sustainability report.

AUO Corporation
2023 Annual Report111

(7) 2023 ESG Awards and Recognition
 Top 5% in Taiwan Stock Exchange 9th Corporate of Governance Evaluation Systems.
 Selected in the Bloomberg Gender Equality Index for six consecutive years.
 Selected in the MSCI ESG Leaders Indexes.
 ISS ESG corporate ratings Prime Status Eco Vadis Silver Level Nine awards including Taiwan Corporate Sustainability Award (TCSA), Top Hundred Model Enterprises in
Manufacturing Industry and Global Corporate Sustainability Award (GCSA).
 Won the CommonWealth Magazine CSR large enterprises prize.
 Won the MSCI ESG rating A.
 Manufacturing Leadership Awards (MLA) of American Manufacturing Association.
 Taiwan Circular Economy Award Product Excellence Award.
 Clarivate Top 100 Global Innovators Award.
 Taiwan Excellence Golden Award Smart Display Application Awards in Excellence in Technology Award and Outstanding Product Award Smart Display Industrial Alliance Awards in Golden quality

II.Environmental(1) Environmental Policy
 AUO formulates environmental safety, health and energy policies based on the expectation of overall environmental
safety, health and energy performance, taking into account the Company's business philosophy, environmental
identification results, legal requirements, resource requirements, pollution prevention and the needs of stakeholders,
and requires the supply chain to comply with the regulations on hazardous substances management. AUO continuously
improves manufacturing efficiency, creates environmentally-friendly production, promotes green manufacturing, andfocuses on green factories, energy saving and carbon reduction, resource reuse, waste reduction and environmentalload reduction, and continues to make efforts in the fields of sustainable production and clean manufacturing.
 Environmental management system
AUO has introduced ISO 14001 environmental management system since 2002, covering all factories domestic andoverseas, and ensuring that all factories meet the specifications through third-party verification, and updating thecertificates regularly. AUO takes into account the thinking of life cycle and the voice of stakeholders, and makes
continuous improvement with PDCA [Plan (P) - Do (D) - Check (C) - Action (A)] cycle. It systematically manages
environmental affairs from policy, management organization, documented management to management review, which
not only ensures the effectiveness and compliance of the environmental management system, but also prevents theopportunity of environmental damage or pollution, so as to promote environmental protection objectives.

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2023 Annual ReportCorporate Sustainability

 Environmental accounting
AUO began to promote the environmental accounting system in 2009, and completed the global system construction
in 2012. In 2023, the total expenditure on environmental protection was about NT$1.82 billion, including recurrent
expenditure of NT$ 1.78 billion and capital expenditure of NT$33 million. For further and newest details please
regarding in AUO sustainability report.
Unit: NT$ Thousand
Environmental accounting

Description

Costs related toprevention of various
pollution, such as air
Pollution
pollution prevention andprevention
control, water pollution
cost
prevention and control,etc.
Costs related to global
Operating Global
environmental protection
cost
environmental
such as preventing climate
protectionchange and ozone layer
costdepletion.
Improve the efficiency of
Cost ofresource use or reducesustainableutilization of or avoid waste generation
and affect related costs.
resources

Upstream anddownstream associatedcostsManagement cost

R&D costs

Social activity cost

Loss and remedial cost

Other environmental
protection costs

Total of itemized costs
Total cost

Reduce the related costsof environmental impact
in upstream anddownstream activities,
such as green
procurement, productpackaging recycling andother related costs.
Related costs incurred forthe development andimplementation ofenvironmental
management.
In order to reduce thecost related to theprocess and productenvironmental impact.
Promote theenvironment, communityand social environment toimprove the publicwelfare-related derivative
expenses.
The expenses derived
from solving
environmental problems,compensation,
punishment and litigation.
Other environmental
protection costs, such as
related environmental
permit fees, energy andgreenhouse gas related
taxes and fees.

2023
2022
2021
Current
CapitalCurrent
CapitalCurrent
Capitalexpenditure expenditure expenditure expenditure expenditure expenditure696,295

29,732

658,432

73,826

629,756

282,714

143,628

1,921

53,88651,92029,192

3,486

473,080

747

531,796

10,540591,935-

192,693

2,155

209,635-

219,661-

46,434710

58,931-

52,743-

20,719-11,308

-

3,696

-

5,527

-

3,880

-

3,197

-

-

-

88

-

-

-

177,395-

158,922-

177,089-

1,782,739

33,1101,815,849

1,669,936

138,441
1,808,377

1,697,243

286,200
1,983,443

AUO Corporation
2023 Annual Report113

(2) Climate management/climate change
In the face of global climate change issues, in the Paris Agreement's goal of keeping the global temperature rise below 2℃,
and paying attention to the growth risks and potential market opportunities of enterprises, AUO has set four policy
directions for climate change management, and actively prepares for and faces challenges through informationtransparency, mitigation and adjustment, responsible participation and cooperative development. As the decision-making
platform of the Company's climate issues, Sustainability & ERM Committee echoes SDGs to formulate the Company's
goals and implications, and manages the complicated issues of climate change, such as cherishing water resources, savingenergy and reducing carbon, climate adaptation and operational resilience, and energy popularization, etc., and through thecarbon energy working group, according to the current situation and trend of the organization's operation, timely andappropriately formulate and implement annual goals. ESG and Climate Committee will include climate management
effectiveness in the annual report of the board of directors, and if there are major climate change issues, it can be added to
the report of the board of directors.
AUO faces up to the issue of net zero, and participates in domestic and foreign initiative organizations to set sustainable
goals:
1. Science Based Target
AUO set a Science Based Target, which was approved by Science Based Target initiative in 2021, to achieve an absolute
25% carbon reduction by 2025 with well below 2°C scenario and use 2018 as the base year.
2. RE100
AUO joined the Global Renewable Energy Initiative RE100 in 2022. AUO is committed to using 30% renewable energy
by 2030 and 100% renewable energy by 2050. AUO is also the first company in the global display industry to commit tousing renewable energy by 2050.
3. Net zero commitment• Taiwan Climate Partnership: AUO worked with enterprises in 2021 to establish Taiwan Climate Partnership topromote the implementation of energy saving and carbon reduction in the industry and drive industry chain
suppliers towards the "RE 100" and "EV 100” targets.
• Taiwan Alliance for Net Zero Emission: Joined the Taiwan Alliance for Net Zero Emission in 2021 to achieve net zeroin the corporate headquarters building by 2023, net zero in all offices by 2030, and net zero in the Company's
operating boundary by 2050 through energy saving and carbon reduction in office facilities, installation of solar
panels, and purchase of renewable energy certificates or offset by AUO's own carbon credits.
 TCFD Identification of Climate Risks and Opportunities
AUO incorporated the topic of climate change into the Company's CSR target and carried out adaptation andmitigation activities. In 2019, the foundation of the TCFD operation management framework was established and the
TCFD working group was set up. The following year, AUO integrated the TCFD mechanism with the company's annual
risk identification through gathering manager level to reviewing with climate issues related to the company's corporate
operations. After classify with annual key risk issues entered into annual TCFD risk project management and let TCFD
working group to following-up. In terms of adaptation, AUO established the PDCA cycle management of climate
related risk and opportunity scenarios of AUO based on the framework of Task Force on Climate-Related Financial
Disclosure (TCFD), which became a long-term and continuous operating mechanism. TCFD risk scenario case isconsolidated with annual risk identification work, and the director of the responsible unit makes an in-depth evaluationon the topic of "Climate Change-Carbon Management" to converge the challenges and opportunities that theorganization may face in the short and medium term in the future, and identify the contents of risks through the TCFD
framework. After the risk identification, the focus issues that converge include increased interest from stakeholders,emission reduction, changes in raw material costs, and customer dynamics. AUO continuously monitors thedevelopment of external trends, considers the risks that may impact the operation in real time, and establishes operation

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emergency procedures in series with the responsible units, so as to improve the efficiency of process improvement andenhance the ability of crisis emergency handling, so as to ensure stable operation. For details of AUO's climate strategy,
identification results and management information, please refer to AUO's climate-related financial disclosure report.
AUO TCFD Framework:Coreelements

Description

Disclosure items

Roles and responsibilities
Supervisory process of the• Sustainability & ERM Committee consists of the CSO
Board of Directors
and level-one executives who report to the Chairman• Regularly report the results
directly.
to the board of directors.
• Major topic, project report • Climate change topic project management and progress
report• Target review and monitor external trends
Scenario and analysis
Strategy of risk and opportunity Financial impact on risk &• Transition risk:• Carbon reduction in theopportunity
Disclose the actual
IPCC 6th SSP1-1.9
value chain• Categorization based on people,
and potential impacts• Physical risk:• Renewable energy
machine, and material-relatedof climate-related
SSP5-8.5 drastic
development & market
laws
risks and
Strategytemperaturedevelopment• Regularly updates the financial
opportunities on theincrease scenario• Climate actions linked to
impactorganization's
the CSR goals• Evaluate the acceptance based
businesses, strategy,
on the magnitude of financial
and financial planning.
impacts
Management process
Annual risk
Identification and evaluation• Annual project of PDCA
management systemprocess
management• High-risk topics• Cooperate with theDisclose the• Confirm risk scenario andare included inCompany's risk
processes used by the
hypothesis
high-level
identification operations
Risk
organization tomeetings for• Establish a risk management • Clarify the responsible
Management identify, assess, anddepartment based on the
management
working groupmanage climate
scenario• Opportunity topics are
related risks• Financial impact assessment andreviewed by the
management
Sustainability & ERM• Annual achievement report
Committee
Target setting andCarbon emission management
Evaluation indicator
review• Conduct a greenhouse gas• Reduce carbon emissions• Quantitative
inventory in accordance with
by 6.5 million tons
targetISO 14064(2018-2025), SBT path andmanagement• Organizational boundaries:
RE100 goal
1. Renewable
Scope 1 and scope 2• Adaptation: Increase climate
energy and• Other indirect emissions: Scoperesilience, continue toDisclose the metrics
power quality
3: total 8 types of emissions,lower climate related
and targets used to
2. Reclaimed
completed external verification
financial impacts and risks
Metrics and assess and manage
water and water
Targets
relevant
resources are
climate-related risks
stableand opportunities
3. Carbon
emission
reduction• Create a value
chain ecosystemwith operational
resilience
Disclose theorganization's
Governance governance aroundclimate related risks
and opportunities.

AUO Corporation
2023 Annual Report115 Greenhouse gas emission reduction and energy management
Since 2003, AUO has been conducting greenhouse gas emissions inventories at its global manufacturing facilities andhas implemented ISO 14064 standards. Every year, the company undergoes external verification and transparently
discloses emission information. Since 2010, the Company carbon inventory system and eco-efficiency index systemhave been developed and built internally as the management tool for long-term carbon reduction targets. AUO
launched the ISO 50001 Energy Management System in 2011 and was fully introduced at all sites. In 2018, AUO
introduced the IPMVP (International Performance Measurement & Verification Protocol) and conducted theperformance verification of large-scale energy conservation projects through the third-party professional testing andverification agency, to improve the objectivity and correctness of data. In 2020, AUO took the lead in implementing thelatest standard ISO14064 and continuously enhance AUO's greenhouse gas emissions management. The company
directly operate all of our facilities and complete the greenhouse gas inventory for Scope 1, 2, and 3 emissions inaccordance with ISO 14064-1 by 2023, which has been verified by DNV.
AUO continues to improve energy efficiency through the management and investment of energy-saving measures, andindependently sets the annual energy-saving rate of 1.5%, while meeting the requirements of government energy
regulations and self-goal setting. In 2023, AUO's global power consumption totaled 4.64 billion KWH, with 2.2%
renewable energy usage and annual electricity saving rate of approximately to 3.3%, simultaneously meetinggovernment energy regulations and self-set target.
In 2023, AUO's global direct greenhouse gas emissions is 68.0 thousand metric tons of carbon dioxide equivalent andindirect emissions from the generation of purchased energy is 2.36 million metric tons of carbon dioxide equivalent.
The greenhouse gas emissions per square meter input sheet were 44.11 kg of carbon dioxide equivalent, and otherindirect emissions (not included purchased energy) is 2.17 million metric tons of carbon dioxide equivalent. Comparedto the previous year, there was a reduction of 1.7 thousand metric tons of carbon dioxide equivalent in directemissions and a reduction of 11.0 thousand metric tons of carbon dioxide equivalent in indirect emissions from energy
sources. The total greenhouse gas emissions from direct and indirect sources amounted to 2.43 million metric tons ofcarbon dioxide equivalent. This achievement corresponds to a 128% attainment of the 25% absolute carbon reduction
target by 2025. Moving forward, we will continue our efforts to further improve and achieve absolute carbon reduction
within our organization.In 2022, AUO's global direct greenhouse gas emissions is 69.7 thousand metric tons of carbon
dioxide equivalent and indirect emissions from the generation of purchased energy is 2.37 million metric tons ofcarbon dioxide equivalent. The greenhouse gas emissions per square meter input sheet were 51.47 kg of carbon
dioxide equivalent, and other indirect emissions (not included purchased energy) is 1.00 million metric tons of carbon
dioxide equivalent. For further and newest details please regarding in AUO sustainability report.
 Internal carbon pricing
After the Paris Agreement came into effect, AUO began to promote the carbon price mechanism based on theinternational carbon trading market price. The carbon price is announced every year as the reference index of external
cost internalization and is applied to the evaluation of investment benefit of the energy-saving scheme and thecalculation of carbon emission cost of employees' travel so that employees can feel the impact of the external cost of
the Company and their activities. In 2023 AUO announced that internal of carbon price is NTD 6,242 each metric ton.
For further and newest details please regarding in AUO sustainability report.
(3) Water resources management
In order to avoid the impacts of heavy rainfall or drought caused by climate change, AUO assesses water resource risks
and develops water-saving technology to reduce water usage, aiming to gradually reduce the amount of tap water usedeach year. The target for 2023 is to use less than 65,000 tons of tap water per day, and the actual daily usage of tap water is
56,897 tons, achieving a goal completion rate of 100%. In 2023, the total water consumption of the whole plant was 23.81
million tons, the recovery rate of process water was 95.02%, and the process water consumption per square meter input
sheet was 0.43 metric tons. In 2022, the total water consumption of the whole plant was 21.55 million tons, the recovery

116

AUO Corporation
2023 Annual ReportCorporate Sustainability

rate of process water was 94.89%, and the process water consumption per square meter input sheet was 0.35 metric tons.
AUO will continue to strive for absolute water reduction in the future.In waste water management, the output of waste
water is reduced, the waste water discharged from the factory will be tested regularly, and the water quality of waste
water will be ensured to meet the standard through automatic monitoring facilities.

The water resource usage data over

the years has been assured by KPMG in accordance with ISAE 3000 with limited assurance. For further and newest details
please regarding in AUO sustainability report.
(4) Circular production
AUO promotes the green commitment in an all-round way, actively draws a blueprint for circular economy and echoes
SDG-12 responsible production, continuously examines and improves the reduction management of raw materials in
production links, actively forms an alliance with upstream and downstream value chains, and combines technology andinnovation to implement and continuously expand the benefits of circular economy. AUO set up a "Circular Economy
Working Group" and operated in a cross-departmental horizontal integration mode, striving for source reduction,
product recycling certification, material recycling rate increase and process waste reduction, and cooperating withpartners to recycle materials, research and develop recycled materials technology and process material recycling, so as toimplement the circular economy goal with practical actions. In order to practice sustainable product innovation and design
capacity. AUO continuously evaluates the high-value application of different recycled materials based on 2021, andexpecting proportion of recycled materials actually used in special products is 30% in 2024.
 Waste management
AUO's waste management principle prioritizes Reduction at source and Reuse in production process, followed by
Recycling as a by-product or by a qualified contractor, and finally incineration or burial to ensure efficient use ofresources. In addition, a "Whole Waste Management Process" has been established, which focuses on the addition anduse of raw materials at the source and the adjustment and change of manufacturing process, so that new wastes can be
dealt with and disposed of in advance. In addition, keep abreast of market changes of waste removal and disposal of
manufacturers. In addition, it can avoid the random dumping event by monitoring the cleaning track of the
manufacturer. The integrity of the overall management mechanism ensures that waste removal has no impact on
operations, and that waste can be disposed of legally and properly, thus reducing the public's doubts about the disposalof technological waste.
AUO's goal is to annually reduce the total waste generated, which is not reusable, over the years. The target for 2023
was to have a total non-reusable waste generation of less than 8,900 metric tons, and the actual amount generated was
6,108 metric tons, achieving a 100% attainment rate. Moving forward, we will continue to improve and strive for an
absolute reduction in the total non-reusable waste generation. In 2023, there were 59.6 thousand metric tons of
non-hazardous waste and 13.8 thousand metric tons of hazardous waste in AUO plant, of which 91.69% was recycled,
and the amount of waste per square meter input sheet was 1.33 kg. In 2022, there were 62.8 thousand metric tons of
non-hazardous waste and 13.4 thousand metric tons of hazardous waste in AUO plant, of which 82.86% was recycled,
and the amount of waste per square meter input sheet was 1.35 kg. The waste data over the years has been assured by
KPMG in accordance with ISAE 3000 with limited assurance. For further and newest details please regarding in AUO
sustainability report.
 Green product
AUO Hazardous Substances Management policy adopts the three aspects of sustainable business philosophy. Throughproviding high-quality green products and services, AUO hazardous substances management regulations areformulated, and hazardous substances management procedures are implemented to reduce the impact on theenvironment and ecology and fulfill corporate social responsibility. AUO hazardous substances management policy
continues to aim at no hazardous substances in products. And follow the spirit of the Basel Convention to recycle anddispose of hazardous waste. The sources of AUO's hazardous substances regulations include the requirements of

AUO Corporation
2023 Annual Report117international regulations, customers and environmental protection trends. AUO will collect information about
hazardous substances regularly and update the contents of AUO's hazardous substances regulations regularly. In 2024,
AUO controlled a total of 153 categories of hazardous substances to cover customers' specification requirements.

III. Social aspect(1) Human rights policy
AUO is committed to safeguarding employees' human rights. In 2006, it comprehensively referred to international
standards, such as Social Accountability 8000, Global Sullivan Principles and the United Nations Guiding Principles on
Business and Human Rights, and the code of conduct of Responsible Business Alliance, etc., to establish a four-stage
human rights management system that meets the requirements of various laws and regulations, such as freedom of
employment, humane treatment, prohibition of improper discrimination and sexual harassment, and to establish adiversified and effective communication mechanism, protect employees' rights and interests in filing complaints, improvewages and benefits, training and development opportunities and course selection, and ensure that employees' rights andinterests are protected and fulfill their social responsibilities. For detailed information, please refer to the human rights
policy under the sustainability policy concept of our company website: https://csr.auo.com/tw/operating/policy-person.
In accordance with the principle of equal treatment, AUO does not affect its employment, salary and promotion
opportunities due to differences in gender, race, nationality, religion, age, physical disability, political stance, marital status
and union associations. Through a fair and equitable recruitment and selection mechanism, it aims to create agender-equal, multicultural and cross-generation friendly workplace environment.
AUO conducts quarterly human rights risk assessment, aiming at eight major human rights issues, including sexual
harassment, working hours, workplace safety and health, discrimination, personal information risk, salary and welfare,obstruction of free choice of occupation and obstruction of freedom of association, and evaluates the risk value borne byenterprises. AUO also conducted on-site audit, document review and employee interviews in accordance with the audit
standards of the RBA (Responsible Business Alliance) Code of Conduct, so as to ensure that no human rights violations
occurred.

118

AUO Corporation
2023 Annual ReportCorporate Sustainability(2) Talent retention
AUO has bases all over Asia, America, Europe and other places, and strives to create a diverse working environment ofequality, integration and development for employees in many countries around the world, with an open and inclusive
atmosphere to encourage employees to respect differences, learn together and enhance team cohesion. In 2023, female
employees accounted for 34.16%, of which female in management positions is accounted for 28.04% and female in senior
management positions is accounted for 8.8%.
AUO firmly believes that employees are the biggest asset of the enterprise, and provide diversified and competitive
salary and career development opportunities. The salary is approved according to the academic background, professional
knowledge and technology, professional experience, etc. of employees in global operation bases, and there is nodifference in gender, race, nationality, religion, age, physical disability, political stance, marital status and unions associations.
In order to ensure market competitiveness, we participate in salary survey in international market every year, and adjust
salary according to the market level of each job and individual performance. The average standard salary of grassroots
employees is better than the legal minimum salary. In accordance with the overall operation of the Company, team andindividual performance, according to the flexibility of different positions to design a variety of short - and long-term
reward incentive schemes, share profit and surplus with employees, in order to achieve the purpose of talent attraction,
retention, incentive and planned cultivation of high-quality talents. In accordance with Chapter Six, Accounting, andArticle 15 of the Company's bylaws, it is stipulated that if the company makes a profit for the year, a provision of no lessthan 5% shall be allocated for employee compensation, and no more than 1% shall be allocated for director
remuneration. For detailed information, please refer to Section I, Capital and Shares, subsection 8, Profit-sharing
compensation of employees and directors, in Chapter 4, Capital Overview.
In order to enable colleagues to give full play to their strengths in a good and friendly workplace environment andimmerse themselves in a healthy and happy corporate atmosphere, AUO provides comprehensive systems and facilities
in the aspects of "work, life, study and career development," including labor insurance, national health insurance andgroup insurance, annual bonus, staff restaurant, life plaza, Health Fit Center, fitness center, staff welfare committee; forexample, AUO Taiwan Employee Welfare Committee is responsible for the planning and implementation of various
welfare programs, continuously promoting employee welfare business, such as sports season, festivals, community
activities, employee travel, etc., and providing various welfare subsidies such as emergency relief, hospital condolences,wedding and funeral celebrations. AUO also has an "employee Stock Ownership Trust plan", which provides relative
incentive funds to help employees save small amounts in the long term, and establish individual flexible fund use or
financial planning in the short, medium and long term. In addition, in order to encourage employees to provide professional
services and settle down after retirement, there is an "Employee Pension Regulation", and according to the statutory
provisions of each operating base, various social insurance benefits such as labor retirement, medical care and old-age
pension are allocated and paid for each employee. For detailed information, please refer to Chapter V, Operation Overview
and V. Labor Relations or AUO's Sustainability Report.

(3) Occupational safety and health
For a long time, AUO has devoted itself to environmental protection, energy conservation and employee care, hoping tofulfill our social responsibilities while the enterprise is established, and move towards the road of sustainable
management. The global factories have passed the ISO45001 occupational health and safety management system
certification in an all-round way, and independently monitor the operation exposure risk, biological detection indicators
and working environment monitoring every year, formulate a health classification management mechanism, andstrengthen work safety. In 2023, the ratio of recordable occupational injuries was 0.49, with 40 recordable occupational
injuries, none of serious occupational injuries and none of occupational injury fatality.The main types of occupational injuries
were slip and fall, and pinching, rolling and crushing injuries.The main types of occupational injuries were slip and fall, twist
and facture, and pinching, rolling and crushing injuries. Therefore, AUO keep advocacy “Positive Safety Culture”, encourage

AUO Corporation
2023 Annual Report119manager and colleagues actively proposals, discover hidden dangers in advance and make relevant preparations in advance.
For detailed information, please refer to V. Labor Relations or AUO's Sustainability Report in Chapter V Operation
Overview.

(4) Employee development
AUO has established the "Education and Training Procedure" as the basis for employees' education and training, which
enriches employees' knowledge and skills, improves work efficiency and quality, and combines employees' growth andenterprise development goals. Since joining the Company, the Company has invested sufficient resources to colleagues indifferent positions and ranks, and adopted different training plans for systematic learning and development at various stages,
including new personnel training, personal function development, professional knowledge upgrading, external training plans,
supervisor training, etc. Based on people-oriented thinking, it also provides resources such as employee referral or career
consultation window for retiring or terminating the employment relationship to promote workplace employability.
Simultaneously we set up the academic affairs center of AUO University, and hold regular education and training meetings
to check the training effect and optimize and improve the countermeasures. In 2023, AUO global learning development
stage is using over 31,000 hours and total cost is NTD 36,764,000. For detailed information, please refer to V. Labor
Relations or AUO's Sustainability Report in Chapter V Operation Overview(5) Employee engagement and communication
 Labor relations management
In addition to complying with the provisions of the Labor Standards Law and relevant laws and regulations, AUO also
provides benefits and measures that are superior to those specified by laws and regulations to establish harmonious
labor relations. There are union organizations in factories such as Suzhou, Xiamen and Singapore. In Taiwan, AUO hasformulated the "Measures for the Implementation of Labor Meetings" in accordance with Article 83 of the Labor
Standards Law and the measures promulgated by the Ministry of Internal Affairs, and regularly holds labor-management
conferences according to law to carry out labor consultation and labor discussion. All employees can makerecommendations to the Company through their representatives. Quarterly labor-management conferences provide
labor representatives with a clear picture of the Company's latest operation situation, manpower situation, andlabor-related communication issues.
 Communication channels and employee engagement survey
AUO actively establishes positive employee relations and various open and positive communication channels.
Employees can respond to any opinions through various channels, including internal communication mailbox, president
mailbox, audit committee mailbox, sexual harassment complaint mailbox and 7885 (please help me) hotline. In addition,
all factories have set up special personnel for employee relations to conduct random telephone sampling interviews tocare for employees' physical and mental health.
In order to create a friendly working environment and enhance employees' recognition, AUO uses the comprehensive
index of "Q12 Employee Engagement Survey" to detect the organizational atmosphere, grasp employees' voices, anddraw up strengthening countermeasures, such as employee experience, education and training, departmental
communication, etc., and regularly track employees' average recognition in four aspects: basic needs, management
support, teamwork and learning and growth, reaching 84%.

(6) Social participation
AUO believes that the sustainable development of an enterprise must balance the needs of the economic, environmental,
and social aspects. The AUO Foundation was founded in 2019 to fulfill our Green Corporate Commitment and cultivate
the vision of sustainable society citizenship. The AUO Foundation is develop in the four key areas and four volunteer
systems to protect natural ecology, improve the quality of life, promote environmental education and practicephilanthropy. Employees were encouraged to take part in volunteer service. We hope this will help solve social problems

120

AUO Corporation
2023 Annual ReportCorporate Sustainability

and support government policies, and work with stakeholders to build a better society by complementarity,
collaboration and co-creation.
The actual implementation includes AUO Sustainability Literacy Scholarship, AUO Wish Program, charitable club
services which caring the society through the way of companionship for the disadvantaged, emergency assistance,
supplementary assistance and material injection; Protect the Green Forest of Taiwan, No Plastic Green Activity,
summer-time energy saving action, Sustainable Agriculture Teams which investing in environmental protection actions
and caring for local agriculture; Dada's Magic World, optoelectronics science education, energy environmental education
and water environmental education which popularize science and environmental education and cultivate scientific talents
and environmental literacy; Hsi Ta Tun Kiln Cultural Museum, Fuke Walk-Study, Shantou Village, Quatang Barns which pass
the local cultural treasures to the public; continue to join The GOLF (Gap of Learning & Field)(Note 1) participate inpromoting the integration of learning and application, and cultivate the employability of young people. In 2023, thecumulative volunteer service hours exceed 9,000 hours, the number of science popularization and environmental
education promotion exceed 20,000 people, 11 million NTD of public welfare funds be raised, and 10 million NTD be
subscribed for sustainable agricultural products. For detailed information, please refer to AUO's Sustainability Report.
Note 1: The GOLF (Gap of Learning & Field) alliance was jointly initiated by AUO, Compal Electronics, and WistronCorporation.

AUO Corporation
2023 Annual Report121Chapter 9 Special Disclosure
I. Information about affiliates(I) Organization chart of affiliate

AUO Corporation
December 31, 2023

AUONL：100%

KONLY：100%
AUES：100%

FYPC：100%

RONLY：100%
S4M：100%

ZYPC:100%

AET-YP
AUO：8.82%

AETTW：100%

AETTW：72.97%

ACTTW：100%
AHTW：100%ADTCM：78.89%
ADTHLD
AUO：88.75%
ADTCM：11.25%

ADTSG：100%

ADTTW：100%

ADTSZ：100%

AMIXM：100%
AMISZ：100%

ACTW：100%

ATISZ：100%

SDMC：100%
M. Setek：99.99%

CQCA：100%
CQIL：100%

CQHLD：100%
CQUS：100%

DPTW
AUO：28.56%
KONLY：6.40%
RONLY：6.09%

JRUS：100%
JRUK：100%

DPLB：100%

DPHK：100%

FFMI：100%

FHWJ：100%

DPXM：100%

FHVI：100%FPWJ
FWSA：65.52%
FTMI：34.48%

FWSA：100%
FTMI：100%

122

AUO Corporation
2023 Annual Report

FTWJ：100%

PFSZ：51%

Special Disclosure

AUOLB：100%

ADPHQ：100%

DPGE：100%
SREC
AUO：32.01%

AUOJP：100%

ADPSZ：100%

AUOKR：100%

Talenda：51%

AUOUS：100%

Jector：78.43%

SGPC：100%

AUVI：100%ADPNL：100%

EGPC：100%

AUOSK：100%

ADPUS：100%

AUST：100%ADPJP：100%

AUOSG：100%
AEUS：100%
AUOVN：100%

KONLY：1.5%

RVI：100%
RVU：100%
DentLabX：85%

AUOKS：100%
AUOSZ：100%
AUOSJ：100%
AUOXM：100%
BVXM：100%
AUOSH：100%
ACTSZ：100%
AETSZ：100%
AETSD：100%

AUO Corporation
2023 Annual Report123(II) Basic information of affiliates
December 31, 2023; Unit: thousands of dollar
Name of business

Address

Paid-in Capitala.u. Vista Inc.
(AUVI)

2014/12/18

8915 Research Drive, Suite 100, Irvine, CA
USD
92618, USA

AFPD Pte. Ltd.
(AUST)

2001/3/14

10 Tampines Industrial Avenue 3
Singapore 528798

AUO (L) Corp.
(AUOLB)
AUO (Slovakia) s.r.o.
(AUOSK)AUO Corporation America(AUOUS)AUO Corporation Japan(AUOJP)AUO Digitech (CAYMAN)
Limited(ADTCM)
AUO Digitech Holding Limited(ADTHLD)AUO Digitech Pte. Ltd.
(ADTSG)AUO Display Plus America
Corp.
(ADPUS)AUO Display Plus Japan Corp.
(ADPJP)AUO Display Plus Netherlands
B.V.(ADPNL)AUO Europe B.V.
(AUONL)AUO Green Energy America
Corp.(AEUS)
AUO Korea Ltd.
(AUOKR)AUO Singapore Pte. Ltd.
(AUOSG)
ComQi Canada Inc.
(CQCA)
ComQi Holdings Ltd.
(CQHLD)
ComQi Inc.
(CQUS)
ComQi Ltd.
(CQIL)
Darwin Precisions (Hong Kong)
Limited(DPHK)

124

Date ofincorporation

AUO Corporation
2023 Annual Report

SGD

Unit Level 3(J), Main Office Tower,
Financial Park Labuan Complex, Jalan
2000/9/7
USD
Merdeka, Federal Territory of Labuan,
87000, Malaysia
Bratislavská 517, 911 05 Trenčín, Slovak
2009/1/24
EUR
Republic
37085 Grand River Avenue, Suite 340,
2000/9/11
USD
Farmington, MI 48335, USA
3-24-21 Sanwa Bld. 5F, Shiba, Minato-Ku,
2001/9/11
JPY
Tokyo 105-0014, Japan
P.O. Box 31119 Grand Pavilion, Hibiscus
2020/8/5 Way, 802 West Bay Road, Grand Cayman, USD
KY1-1205, Cayman Islands
P.O. Box 31119 Grand Pavilion, Hibiscus
2020/8/11 Way, 802 West Bay Road, Grand Cayman, USD
KY1-1205, Cayman Islands

2020/10/8

10 Tampines Industrial Avenue 3,
Singapore 528798

2020/10/26

35 Corporate Drive, Suite 170, Burlington,
USD
MA 01803, USA

Sanwa Bld. 5F 3-24-21 Shiba, Minato-Ku,
Tokyo 105-0014, Japan
Zekeringstraat 39, 1014BV Amsterdam,
2010/9/29
Netherlands
Zekeringstraat 39, 1014BV Amsterdam,
2004/5/24
Netherlands
37085 Grand River Avenue, Suite 340,
2010/7/6
Farmington, MI 48335, USA
No.906, 907, 156, Gwanggyo-ro,
2004/7/1 Yeongtong-gu, Suwon-si, Gyeonggi-do,
Republic of Korea
10 Tampines Industrial Avenue 3
2006/9/20
Singapore 528798

2020/11/18

2007/3/6

1425 Norjohn Court, Unit 7, Burlington,
ON L7L 0E6

Suite 305, Stanmore Bic Howard Road,
Stanmore, UK, HA7 1BT
134 West 26th Street Suite 900, New
2007/3/5
York, NY 10001

2007/2/27

USD

JPY
EUR
EUR
USD

Research and development
and IP related business
Manufacturing TFT-LCD
panels based on low
561,182
temperature polysilicon
technology
5,000

2,539,189 Holding company
Repairing of TFT-LCD
modules
Sales and sales support of
1,000
TFT-LCD panels
Sales support of TFT-LCD
40,000panels1,000

2,700 Holding Company

24,000 Holding Company
Holding company, and salesof software and hardware
22,300 integration system relating tointelligent manufacturing andsoftware development
1,500

Sales and sales support ofdisplays

Sales and sales support ofdisplays
Sales and sales support of43
displays and holding company
Sales support of TFT-LCD
50
panelsSupport of solar-related
1,194
products

25,000KRW

173,075

SGD

2,530,435

CAD

Main Activities

Sales support of TFT-LCD
panelsHolding company and sales
support of TFT-LCD panels
Research and development
1,016 of content management
system

GBP

27,129 Holding Company

USD

25,857

2010/2/15 30 Ha-Kishor St. ,Holon, Israel 5886600

USD

44,909 Holding Company

Room 1204, Yu Sung Boon Building,
2007/11/21 107-111 Des Voeux Road Central, Hong
Kong

USD

57,786 Holding Company

Sales of content management
system and hardware

Special Disclosure

Name of business
Darwin Precisions (L) Corp.
(DPLB)
Forefront Corporation(FFMI)
Forhouse International Holding
Ltd.
(FHVI)
Fortech International Corp.
(FTMI)
Forward Optronics
International Corporation(FWSA)

Date ofincorporation

Address

Paid-in Capital

Unit Level 3(J), Main OfficeTower,Financial Park Complex
2005/11/18
USD
Labuan,Jalan Merdeka, 87000 W.P.
Labuan,Malaysia
Level 3, Alexander House, 35 Cybercity,
2001/6/20
USD
Ebene, Mauritius
Portcullis Chambers, 4th Floor, Ellen
Skelton Building, 3076 Sir Francis Drake
1999/9/17
USD
Highway, Road Town, Tortola, VG1110,
Virgin Islands, British
Level 3, Alexander House, 35 Cybercity,
2002/7/26
USD
Ebene, Mauritius
Vistra Corporate Services Centre, Ground2004/12/13 Floor NPF Building, Beach Road, Apia,
USD
Samoa

JohnRyan Inc.
(JRUS)

2019/10/7 404 2nd Street, Excelsior, MN 55331

JohnRyan Limited(JRUK)

2019/10/11

M.Setek Co., Ltd.
(M.Setek)

1978/2/3

Sanwa Build 5F, 3-24-21 Shiba, Minato-ku
JPYTokyo 105-0014, Japan

Rise Vision Incorporated(RVI)

2001/8/31

2967 Dundas St. W #632 Toronto ON,
M6P 1Z2, Canada

CAD

Rise Vision USA Inc.
(RVU)

2001/10/2

216 N Mosley street, #126, Wichita, KS
67202-2808, USA

USD

Yo-Pei Water Corporation(AET-YP)

2022/3/17

1F., No. 45, Ln. 313, Sec. 3, Minsheng Rd.,
TWD
Daya Dist., Taichung City

AUO Manufacturing (Shanghai)Co., Ltd.
(AUOSJ)

2001/12/20

No. 3, Alley 58, Sanzhuang Rd., Songjiang
Export Processing Zone, Shanghai

Suite 305, Stanmore Bic Howard Road,
Stanmore, UK, HA7 1BT

USD

GBP

USD

AUO (Shanghai) Co., Ltd.
(AUOSH)No. 6, Longteng Road, Kunshan Economic
2009/8/21 and Technological Development Zone,
USD
Jiangsu Province,
No.1689, Xiang’An North Road, Xiang’An
2005/12/13 Branch,Torch Hi-tech Industrial
USD
Development Zone Xiamen
No.398, SuHong Zhong Road, Suzhou
2001/6/19 Industrial Park, China (Jiangsu) Pilot Free USD
Trade Zone.
5th Floor, Building B, No. 33, Guangshun
2005/9/22
USD
Road, Shanghai

AUO Envirotech (Suzhou) Co.,
Ltd.
(AETSZ)

No.398, SuHong Zhong Road, Suzhou
2018/2/24 Industrial Park, China (Jiangsu) Pilot Free
Trade Zone.

AUO (Kunshan) Co., Ltd.
(AUOKS)
AUO (Xiamen) Co., Ltd.
(AUOXM)
AUO (Suzhou) Co., Ltd.
(AUOSZ)

CNY

Main Activities

76,846 Holding Company

6,526 Holding Company

22,006 Holding Company

6,503 Holding Company
19,000 Holding Company
Development and sales ofcontent management systemand sales of the related
hardwareDesign and sales support of
1,500 digital signage content
management system
Manufacturing and sale of
18,000ingotsDesign, sales and sales
5,528 support of digital signage
content management system
Design and sales support of
1 digital signage content
management system
Invest in the construction of
public construction industry,
17,000waste (sewage) water
treatment industry
8,000

108,000 Leasing

1,071,000

Manufacturing and sale of
TFT-LCD panels

454,000

Manufacturing, assembly, andsales of TFT-LCD modules

466,000

Manufacturing, assembly, andsales of LCD modules

Sales support of TFT-LCD
panelsPlanning, design anddevelopment of construction
12,000 for environmental protection
and related project
management

15,000AUO Corporation
2023 Annual Report125Name of business

Address

Paid-in Capital

AUO Envirotech Inc.
(AETTW)

2017/1/23

9F., No. 198, Jingmao 2nd Rd., Nangang
Dist., Taipei CityTWD

AUO Envirotech (Shandong )Co., Ltd.
(AETSD)South Zone, 2nd Floor, Building 7, No.
299 Zidong Avenue, New Material
2019/5/27
Industrial Park, Tianqiao District, Jinan
City

CNY

AUO Health Inc.
(AHTW)

2020/9/21

No. 6-6 Mabushupai, Beipu Township,
Hsinchu County

TWD

AUO Crystal Corp.
(ACTW)AUO MegaInsight (Xiamen)Corp., Ltd.
(AMIXM)

No. 335, Sec. 2, Houke Road, Houli
TWD
District, Taichung City
1F Building T1,No.1689,North of Xiang'an
Road,Xiang'an Branch,Torch Hi-tech
CNY
2021/4/20
Industrial Development
Zone,Xiamen,China
2009/5/22

Main Activities

Planning and design of Water
Treatment Technology and
EPC Project, Energy saving
Equipment and Energy
Efficiency Project, Facility
424,050
Intelligent Management andEnvironmental Sustainability
Solution.Carbon emission
management consulting andapplication software services
Planning, design anddevelopment of construction
2,000 for environmental protection
and related project
management
Manufacturing, development
5,000 and sales of medical
equipments
Manufacturing and sale of
2,425,646
ingots and solar wafers
Sales of software andhardware relating to
12,000intelligent manufacturing, andrelated consulting services
Development, sales andlicensing of software and57,000 hardware relating tointelligent manufacturing, andrelated consulting services
Business management
consulting, technology
18,000 promotion, and application
services,Industrial cloud
platform services
Design and sales of softwareand hardware integration
system and equipment,
60,000software development andconsulting services relating
to intelligent manufacturing
Design, development andsales of software and43,000
hardware for health careindustry
Design, development andsales of software and30,000
hardware for health careindustry

AUO MegaInsight (Suzhou) Co.,Ltd.
(AMISZ)

No.398, SuHong Zhong Road, Suzhou
2018/8/28 Industrial Park, China (Jiangsu) Pilot Free
Trade Zone.

CNY

AUO Digitech (Suzhou) Co.,Ltd.
(ADTSZ)

Floor 4 , Building 9, No.398, SuHong
2020/12/7 Zhong Road, Suzhou Industrial Park,
China(Jiangsu) Pilot Free Trade Zone.

USD

AUO Digitech Taiwan Inc.
(ADTTW)

2021/3/22

5F., No. 288, Longyuan 1st Rd., Longtan
Dist., Taoyuan City,TWD

AUO Care Information
Tech.(Suzhou) CO., Ltd.
(ACTSZ)

No.398, SuHong Zhong Road, Suzhou
2017/9/22 Industrial Park, China (Jiangsu) Pilot Free
Trade Zone.

CNY

AUO Care Inc.
(ACTTW)

2021/2/8

No. 6-6 Mabushupai, Beipu Township,
Hsinchu County

TWD

Evergen Power Corporation(EGPC)

2015/7/14

No. 23,Lixing Rd., Hsinchu Science Park,
Hsinchu City

TWD

245,000 Solar power generation

CNY

Design and sales of softwareand hardware integration
31,500 system and equipment
relating to intelligent
manufacturingTWD

902,208 Investment

AEdgetech Data Technologies(Suzhou) Corp., Ltd.
(ATISZ)Star River Energy Corporation(SREC)
Sanda Materials Corporation(SDMC)

126

Date ofincorporation

AUO Corporation
2023 Annual Report

2018/8/28

No.398, SuHong Zhong Road, Suzhou
Industrial Park, China

1F., No.20-1, Guangfu N. Rd., Hukou
Township, Hsinchu County
1F., No.20-1, Guangfu N. Rd., Hukou
2014/4/23
Township, Hsinchu County

2014/4/24

TWD

1,672,160 Holding company

Special Disclosure

Name of business

Date ofincorporation

Address

Konly Venture Corp.
(KONLY)

2002/7/29

Jector Digital Corporation(Jector)

2F.-1, No. 268, Liancheng Rd., Zhonghe
2021/4/15
Dist., New Taipei City

TWD

Space Money Inc.
(S4M)

2015/10/5

9F., No. 198, Jingmao 2nd Rd., Nangang
Dist., Taipei City

TWD

BriView (Xiamen) Corp.
(BVXM)
Sungen Power Corporation(SGPC)
Ronly Venture Corp.
(RONLY)
Heilongjiang Talenda Smart
Display Technology Co., Ltd.
(Talenda)

9F., No. 198, Jingmao 2nd Rd., Nangang
Dist., Taipei City

Paid-in Capital

No. 1998, Fangshan West Road,
2008/12/2 (Xiang'An) Industrial Area Xiamen Torch
Hi-tech Zone
No. 1, JhongKe Rd., Central Taiwan
2011/1/13
Science Park, Taichung City
9F., No. 198, Jingmao 2nd Rd., Nangang
2005/1/11
Dist., Taipei City
Building B, Former Liuhe Passenger
Transport Hub, Suihua Economic and2022/6/10
Technological Development Zone,
Heilongjiang, China

TWD

CNY
TWD
TWD

Introduction of smart field
construction and other153,300
related software andhardware solutions
Sales and leasing of content
management system and
50,000 hardware, and design ofdigital signage content andfield curation
Sales of liquid crystal
600,000 products and related parts;
leasing
568,109 Solar power generation
4,532,760 Investment
Manufacturing of electronic
components

15,000412,500 Solar power generation

2020/8/27

4F., No. 20-1, Guangfu N. Rd., Hukou
Township, Hsinchu County

TWD

AUO Education Service Corp.
(AUES)

2020/12/10

No. 6-6 Mabushupai, Beipu Township,
Hsinchu County

TWD

Darwin Precisions (Xiamen)Corp.
(DPXM)

No. 3089, Xiangan North Road, Torch
High-Tech (Xiangan) Industrial
2006/3/31
Development Zone, Xiangan District,
Xiamen City., Fujian Province

USD

Darwin Precisions Corporation(DPTW)

1989/10/13

No.20-1, Guangfu N. Rd., Hukou
Township, Hsinchu County

TWD

2020/5/28

5F, No. 1, Gongye E. 3rd Rd., East Dist.,
Hsinchu City

TWD

2021/2/26

9-4, No. 398, Suhong Zhong Road, Suzhou
USD
Industrial Park, Suzhou, China

AUO (Vietnam) Company
Limited(AUOVN)4,324,320 Investment

CNY

Da Ping Green Energy
Corporation(DPGE)AUO Display Plus Corporation(ADPHQ)AUO Display Plus Technology(Suzhou) Co., Ltd.
(ADPSZ)
Fortech Electronics (Suzhou)Co., Ltd.
(FTWJ)
Forhouse Electronics (Suzhou)Co., Ltd.
(FHWJ)
Suzhou Forplax Optronics Co.,Ltd.
(FPWJ)
Zheng Yao Power Corporation(ZYPC)
Feng Yao Power Corporation(FYPC)

Main Activities

No. 399, Jinhu Road, Wujiang Economic
2002/8/30 and Technological Development Zone,
USD
Suzhou City, Jiangsu Province
No. 399, Jinhu Road, Wujiang Economic
2001/10/9 and Technological Development Zone,
USD
Suzhou City, Jiangsu Province
No. 399, Jinhu Road, Wujiang Economic
2005/2/28 and Technological Development Zone,
USD
Suzhou City, Jiangsu Province
1F., No.20-1, Guangfu N. Rd., Hukou
TWD
2023/3/3
Township, Hsinchu County
1F., No.20-1, Guangfu N. Rd., Hukou
2023/3/3
TWD
Township, Hsinchu County
RBF 3 - GNP Dong Van III Industrial
Center, Dong Van III Supporting Industrial
USD
2023/11/21
Park, Dong Van Ward, Duy Tien Town,
Ha Nam Province, Vietnam

Services related to
4,000 educational activities and site
rentalManufacturing and sales ofliquid crystal products,
70,000backlight modules andrelated parts
Design, manufacturing, andsales of TFT-LCD modules,
6,655,551
backlight modules, TV set
and related parts
Research, development and2,000,000
sales of displays
2,000

Sales and sales support ofdisplays

Manufacturing and sales of
35,000 backlight modules andrelated parts
Manufacturing and sales of
6,500 backlight modules andrelated parts
29,000

Manufacturing and sales ofprecision plastic parts

Renewable energy power
generating industry
Renewable energy power
11,000
generating industry
3,000

20,922

Manufacturing, assembly, andsales of TFT-LCD modules

AUO Corporation
2023 Annual Report127Name of business

Date ofincorporation

Address

ProfetAI(Suzhou) Co.,Ltd.
(PFSZ)

Room 310, Building 1, Xinhong Industrial
2023/2/15 Park Project, No.9 Suhong West Road,
Suzhou Industrial Park

DentLabX Company Limited(DentLabX)

2023/7/17

No. 6-6, Mabushupai, Beipu Township,
Hsinchu County

Paid-in Capital

CNY

TWD

Main Activities

Design and sale of intelligent
manufacturing related
6,500
software systems andequipment
Sales of dental digital
20,000 operation management
system and solution(III) Shareholders of the companies presumed to have a relationship of control and affiliation: None.
(IV) Industries covered by all affiliates
The industries covered by the overall business operations of our company mainly include the advanced display technologies
and various field application solutions primarily based on eight business groups: "Display Strategy Business Group","Intelligent Mobility Business Group", "Intelligent Retail Business Group", "Intelligent Services Business Group", "Intelligent
Healthcare Business Group", "Intelligent Education and Corporate Business Group", "Green Energy Business Group", and"Solar Energy and Semiconductor Materials Business Group". Overall, the main purpose is to take display technology as thecore, enhance its added value (Go Premium), and at the same time deepen vertical market applications (Go Vertical),thereby stabilizing the competitive advantage of the industry in which the company operates.

(V) Directors, supervisors, and presidents of affiliates
December 31, 2023; Unit: in thousand shares; thousands of dollar; %128

Name ofbusiness
AUVI

Director

Paul KP Lee、Wei-Lung Liau、Hong-Jye Hong

AUST

Director

Ting-Li Lin、Yi-Cheng Chen

AUOLB

DirectorFrank Ko

AUOSK

Director

Ivan Ting

AUOUS

Director

James Chen、Mett Ke、Linh Ha

AUOJP

Director

James Chen、Yao-Tung Chen、Ishibashi Koji

ADTCM

Director

Shuang-Lang (Paul) Peng、Andy Yang

ADTHLD

Director

Shuang-Lang (Paul) Peng、Andy Yang

ADTSG

Director

Shuang-Lang (Paul) Peng、Daniel Yang、
Yi-Cheng Chen

ADPUS

DirectorFrank Ko、Simon Nip

ADPJP

Director

Seki Shih、Simon Nip

ADPNL

DirectorFrank Ko、Simon Nip

AUONL

Director

James Chen

AEUS

Director

TY LinTitle

AUO Corporation
2023 Annual Report

Name

Shareholding
Shares (Investment Amount)%

AUOLB holds 5,000
AUOLB holds 907,114
AUO holds 2,539,189
AUOLB’s investment EUR1,000
AUOLB holds 1,000
AUOLB holds 1
AUO holds 2,130
AUO holds 21,300
ADTCM holds 2,700

100
100
100
100
100
100
78.89
88.75
11.25

-

-

ADTHLD holds 22,300
ADPNL holds 1
ADPNL holds 1
ADPHQ holds AUO holds 50
AUOSG holds 1,194

100
100
100
100
100
100

Special Disclosure

Name ofbusiness
AUOKR

Director

James Chen

AUOSG

Director

Shuang-Lang (Paul) Peng、Chee Koi Lin

CQCA

Director

Hank Liu、Andy Yang、Simon Nip、Gregory Galvin

CQHLD

Director

Hank Liu、Andy Yang、Simon Nip

CQUS

Director

Hank Liu、Andy Yang、Simon Nip

CQIL

Director

Hank Liu、Andy Yang、Simon Nip

DPHK

Director

DPLB

Director

Darwin Precisions (L) Corp.
Kuo-Hsin (Michael) Tsai
Kuo-Hsin (Michael) Tsai、Sheng-Kai (SK) Huang

FFMI

Director

Kuo-Hsin (Michael) Tsai、Sheng-Kai (SK) Huang

FHVI

Director

Kuo-Hsin (Michael) Tsai、Sheng-Kai (SK) Huang

FTMI

Director

Kuo-Hsin (Michael) Tsai、Sheng-Kai (SK) Huang

FWSA

Director

Kuo-Hsin (Michael) Tsai、Sheng-Kai (SK) Huang

JRUS

Director

Hank Liu、Andy Yang、Simon Nip

JRUK

Director

Hank Liu、Andy Yang、Simon Nip

M.Setek

Director
Shih-Kun Chen、Jim Lee、Hiroyuki Saito
Supervisor Betty Chen

RVI

DirectorFrank Ko、Jerry Lee、Simon Nip、Brian Loosbrock

RVU

Director

Jerry Lee、Simon Nip、Brian Loosbrock

AET-YP

Director

Title

Name

Representative of AUO Envirotech Inc.：HC Lee、Andy
Yang、Mark Wu
Supervisor Representative of Zhensheng Construction Co., Ltd：
Jun-YI Lee
President HC Lee

AUOSJDirectorFrank Ko、Wei-Lung Liau、Ting-Li Lin
Supervisor Mark Wu
President Robert Kuo

AUOKS

DirectorFrank Ko、James Chen、Vincent Lin
Supervisor Mark Wu

AUOXM

Frank Ko、Wei-Lung Liau、Ting-Li Lin
Director
Supervisor Mark Wu
President David Lee

AUOSZ

DirectorFrank Ko、Wei-Lung Liau、Ting-Li Lin
Supervisor Mark Wu
President Robert Kuo

Shareholding
Shares (Investment Amount)%

AUOLB’s investment KRW173,075
AUOLB holds 2,777,106
CQHLD holds 110
CQIL holds 635,730
CQHLD holds 13
AUO holds 39,974
DPLB holds 10
DPTW holds 76,846
DPTW holds 653
DPTW holds 22,006
FHVI holds 6,503
FHVI holds 19,000
CQUS holds 18
CQUS holds 1
SDMC holds 11,404,184
ADPNL holds 29,564
ADPNL holds 1

100
100
100
100
100
100
100
100
100
100
100
100
100
100
99.9991
100
100

-

-

-

-

AUO holds 15,000
AET holds 124,050
Zhensheng holds 1,595
AUOSG’s investment USD108,000

8.8
72.97
9.38
100

AUOSG’s investment USD1,071,000
AUOSG’s investment USD454,000
-

100
100
-

AUOSG’s investment USD466,000

100

AUO Corporation
2023 Annual Report

129Name ofbusiness
AUOSH

Title
Director
Shuang-Lang (Paul) Peng
Supervisor
Mark Wu
President Robert Kuo

AETSZ

Director
HC Lee、Daniel Yang、Kenny Yang
Supervisor Mark Wu
President Kenny Yang

AETTW

Director
President

AETSD

Director
HC Lee、Andy Yang、Kenny Yang
Supervisor Mark Wu
President Kenny Yang

AHTW

Director
President

Representative of AUO Corporation：Frank Ko
SH Liao

ACTW

Director

Representative of AUO Corporation：Shih-Kun Chen

AMIXM

Director

AMISZ

Representative of AUO Corporation：HC Lee
HC LeeShuang-Lang (Paul) Peng、Daniel Yang、
Linda Zhao
Supervisor Mark Wu
President Golden Shen

Director

Shuang-Lang (Paul) Peng、Daniel Yang、
Linda Zhao
Supervisor Mark Wu
President Judy He

ADTSZ

Director
Shuang-Lang (Paul) Peng、Daniel Yang、Benjamin TsengSupervisor Mark Wu
President Linda Zhao

ADTTW

Director
President

130

Name

Representative of AUO DIGITECH PTE. LTD. ：Shuang-Lang (Paul) Peng
Daniel Yang

ACTSZ

Director
Daniel Yang、Benjamin Tseng、Alex JJ Yeh
Supervisor Mark Wu
President DC Liu

ACTTW

Director
President

Representative of AUO Corporation：Alex JJ Yeh
Jay Ferng

EGPC

Director

Representative of SREC：Clair Chang

ATISZ

Director

Shuang-Lang (Paul) Peng、Daniel Yang、
Linda Zhao
Supervisor Mark Wu
President Michael Lai

AUO Corporation
2023 Annual Report

Shareholding
Shares (Investment Amount)%--

AUOSG’s investment USD15,000
AUOSH investment CNY12,000
-

100
100
-

AUO holds 42,405
AETSZ investment CNY2,000
-

100
100
-

AUO holds 500
AUO holds 242,565

100
100

-

-

ADTSZ’s investment CNY12,000

100

-

-

ADTSZ’s investment CNY57,000
ADTSG’s investment USD 18,000

100
100

-

-

ADTSG holds 6,000
AUOSH’s investment CNY43,000
-

100
100
-

AUO holds 3,000
SREC holds 24,500

100
100

-

-

ADTSZ’s investment CNY31,500

100

Special Disclosure

Name ofbusiness
SREC

Title

Name

Director

Representative of AUO Corporation：TY Lin、Clair
Chang
Representative of Fubon Financial Holding Venture
Capital Corp：Carey Lin
Supervisor Representative of Konly Venture Corp：Mark Wu

SDMC

Director

Representative of AUO Crystal Corp：Shih-Kun Chen

KONLY

Director

Representative of AUO Corporation ： Shuang-Lang(Paul) Peng

JectorDirector

Representative of AUO Display Plus Corporation：Jerry
Lee、SH Liao
Representative of Jector Digital System Inc.：Wells Tong
Supervisor Eddie Ke
President Angela Weng

S4M

Director

BVXM

Director
Ting-Li Lin、Wei-Lung Liau、David Lee
Supervisor Mark Wu
President David Lee

SGPC

Director
President

Representative of AUO Corporation：PH Lin

Representative of Star River Energy Corporation：Clair
Chang
Clair Chang

RONLY

Director

Representative of AUO Corporation ： Shuang-Lang(Paul) Peng

TalendaDirector

DPGE

Director

Representative of AUO Corporation：TY Lin

AUES

Director
President

Representative of Konly Venture Corp：Amy Ku
Fran.Yang

DPXM

Director
Sheng-Kai (SK) Huang、Kuo-Tai Ching、Limbo FJ
Supervisor Cheng-Cho Tsao
President Limbo FJ

DPTW

Director

SH Liao、Frank Ko、Apple Jiang
Wen-Bo Wang、Dong-Fang Lu
Supervisor Eunice Lin、Hong-Liang Wen
President Dong-Fang Lu

President

Representative of AUO Corporation ： Kuo-Hsin(Michael) Tsai、Sheng-Kai Huang、Frank Ko
Feng-Cheng Su
Independent Director：I-Shih Chen、Cheng-Chung Li、
Huei-Shih Lung
Sheng-Kai (SK) Huang

Shareholding
Shares (Investment Amount)

%
-

-

-

-

AUO holds 28,883
Fubon Financial Holding Ventureholds 1,341
Konly holds 1,353
ACTW holds 167,216

32.01

-

-

AUO holds 432,320

100

-

-

ADPHQ holds 12,000
Jector Digital System Inc.
holds 3,330
AUO holds 5,000
AUOXM’s investment CNY600,000

78.28

-

-

SREC holds 56,811

100

-

-

AUO holds 453,276
ADPSZ’s investment CNY7,650
TYW’s investment CNY7,350
AUO holds 41,250
Konly holds 400
DPHK’s investment USD70,000

100
51
49
100
100
100

-

-

holds 100

0.02

-

-

holds 296
AUO holds 190,108
Konly holds 42,598
Ronly holds 40,509

0.04
28.56
6.40
6.09

1.49
1.5
100

21.72
100
100

AUO Corporation
2023 Annual Report131Name ofbusiness

132

Title

Name

ADPHQ

Director

Representative of AUO Corporation：Frank Ko、Jim Liu

ADPSZ

Director
SH LiaoSupervisor Jerry Liu
President Apple Jiang

FTWJ

Director
Sheng-Kai (SK) Huang、CC Lee、Kuo-Tai Ching
Supervisor Cheng-Cho Tsao
President CC Lee

FHWJ

Director
Sheng-Kai (SK) Huang、CC Lee、Kuo-Tai Ching
Supervisor Cheng-Cho Tsao
President CC Lee

FPWJ

Director
Sheng-Kai (SK) Huang、CC Lee、Kuo-Tai Ching
Supervisor Cheng-Cho Tsao
President CC Lee

ZYPC

Director

Representative of Ronly Venture Corp.：TY Lin

FYPC

Director

Representative of Ronly Venture Corp.：TY Lin

AUOVN

DirectorFrank Ko

PFSZ

Director
Linda Zhao、Michael Lai、Jerry Huang
Supervisor Forster Lin
President Harold Cheng

DentLabX

Director

Representative of AUO Display Plus Corporation：SH
Liao、David Chen、Jerry Chen
Representative of Hsiao Lin Chia Enterprise Ltd.：
Hui-Chin Lin
Supervisor Richard Lee
President Jerry Chen

AUO Corporation
2023 Annual Report

Shareholding
Shares (Investment Amount)%

AUO holds 200,000
-

100
-

ADPHQ’s investment USD2,000
FTMI’s investment USD35,000
FFMI’s investment USD 6,500
FTMI’s investment USD 10,000
FWSA’s investment USD 19,000
Ronly holds 300
Ronly holds 1,100
AUOSG’s investment USD20,922
ATISZ’s investment CNY3,315

100
100
100
34.48
65.52
100
100
100
51

-

-

ADPHQ holds 1,700
Hsiao Lin Chia Enterpriseholds 30085
15

Special Disclosure(VI) Overview of subsidiaries’ operations
December 31, 2023; Unit: NT$ thousands except for earnings per share
Name ofbusiness
AUVI
AUST
AUOLB
AUOSK
AUOUS
AUOJP
ADTCM
ADTHLD
ADTSG
ADPUS
ADPJP
ADPNL
AUONL
AEUS
AUOKR
AUOSG
CQCA
CQHLD
CQUS
CQIL
DPHK
DPLB
FFMI
FHVI
FTMI
FWSA
JRUS
JRUK
M.Setek
RVI
RVU
AET-YP
AUOSJ
AUOKS
AUOXM
AUOSZ
AUOSH
AETSZ
AETTW
AETSD
AHTW
ACTW
AMIXM
AMISZ
ADTSZ
ADTTW
ACTSZ
ACTTW
EGPC
ATISZ

Curre
ncy

Capital

USD
USD
USD
EUR
USD
JPY
USD
USD
USD
USD
JPY
USD
EUR
USD
KRW
USD
CAD
GBP
USD
USD
USD
USD
USD
USD
USD
USD
USD
GBP
JPY
CAD
USD
TWD
CNY
CNY
CNY
CNY
CNY
CNY
TWD
CNY
TWD
TWD
CNY
CNY
CNY
TWD
CNY
TWD
TWD
CNY

5,000
348,8672,539,189
1,000
1,000
40,0002,700
24,00022,3001,500
25,00053
50
1,194
173,075
1,838,757
1,385
27,63825,85744,90957,786
76,846
6,526
22,006
6,503
19,0008,000
1,141
18,0005,528
1170,000
866,978
6,741,072
3,103,670
3,406,990
98,231
12,000424,050
2,000
5,000
2,425,646
12,00057,000122,707
60,00043,00030,000245,000
31,500Total assets

Total
liabilities

Net assets

Revenue

6,640
103,1442,552,638
12,544
7,137
302,060
889
7,900
6,353
2,887
94,06146,0901,701
565
2,654,944
1,964,807
1,743
20,79917,726
26,605
154,088
154,089
2,418
66,05049,944
16,104
6,698
1,446
10,879,541
6,890
972
389,744988,168
10,197,842
7,285,666
7,133,925
70,242
97,054
678,369551
2,803
5,377,160
19,69536,38135,711
123,901
16,987
12,445800,099
21,79452
71,574
204
7,713
3,705
75,215
0
0
192
1,098
35,5395,404
634
3
908,899
316
205
1
3,157
18
0
0
0
0
0
0
395
80
1,010,290
6,732
707
561,133
3,349
5,251,590
3,509,865
3,042,949
11,98994,869639,328346
2,007,752
14,07624,938
11,355
116,652
10,273
8,255
506,533
13,9496,587
31,5702,552,434
4,830
3,432
226,845
889
7,900
6,161
1,790
58,522
40,685
1,066
562
1,746,045
1,964,491
1,538
20,79814,56926,587
154,088
154,089
2,418
66,05049,944
16,1046,303
1,366
9,869,251
158
265(171,389)
984,819
4,946,252
3,775,801
4,090,976
58,254
2,184
39,041551
2,457
3,369,408
5,619
11,44324,356
7,249
6,714
4,190
293,566
7,846

1,271
123,058
0
4,976
18,381
412,225
0
0
1,691
5,418
219,245
53,1502,630
02,883,683
1,014
5,630
0
17,859
0
0
0
0
0
0
0
3,369
913
5,643,964
10,3103,045
273,950
04,905,535
10,401,148
9,339,619
61,19531,976
1,141,045
0
1,217
4,814,906
36,57825,083
8,646
170,414
8,551
20,829126,036
26,799Profit or loss
Earnings per Sharefor the(Note 1)year(After(dollar; after tax)
income tax)
308
193
0.04
(18,268)(36,554)(0.04)(108)
113,954
0.05
797
305
768
686
0.69
19,63012,377
15,470.94
0(814)(0.30)(14)(5,685)(0.30)
44(5,751)(0.34)
259
148
147.58
11,483
3,346
3,345.80
701(624)(1,451.45)
125
72
1.44
(9)
(11)
(0.01)
137,007116,22353
84,0210258
270
2,456.99
(5)
(5)
0
77
(14)
(1.06)
(10)
(108)
0
0
25,2182,521.80
025,218
0.33
0
323
0.50
0
2,981
0
2,415
0.37
0
567
0.03
(241)
(238)
(13.25)20(32)(31.53)360,709
1,067,948
0.09(1,409)(400)(0.01)
213
258
258.08(339,550)(340,281)(20.02)(4,871)
25,032(92,553)
156,977
246,207
460,777
224,836
271,651
3,460(10,042)(3,420)(6,176)8,595(242,127)(5.71)
(2)
(1)
(351)
(333)
(0.67)(675,649)(398,798)(1.64)(794)(615)(12,184)(11,898)(19,130)(37,783)(16,567)(15,719)(2.62)(8,319)(7,147)(10,538)(10,436)(3.48)
47,06927,007
1.10(5,561)(6,256)-

Profit fromoperations

AUO Corporation
2023 Annual Report133Name ofbusiness

Curre
ncy

SREC
SDMC
KONLY
Jector
S4M
BVXM
SGPC
RONLY
Talenda
DPGE
AUES
DPXM
DPTW
ADPHQ
ADPSZ
FTWJ
FHWJ
FPWJ
DentLabX
PFSZ
FYPC
ZYPC
AUOVN

TWD
TWD
TWD
TWD
TWD
CNY
TWD
TWD
CNY
TWD
TWD
CNY
TWD
TWD
CNY
CNY
CNY
CNY
TWD
CNY
TWD
TWD
USD

Capital

Total assets

Total
liabilities

Net assets

Revenue902,208
1,672,160
4,324,320
153,000
50,000600,000
568,109
4,532,760
15,000412,500
4,000
505,962
6,655,551
2,000,000
13,302
279,158
53,779223,933
20,0006,500
11,0003,000
20,922

1,056,068
98
2,157,877
456
8,926,294
206
363,936 199,377
186,453 171,196
321,189
5,897
1,356,028 666,928
4,635,215
120
18,607
4,656
1,055,846 103,533
57,64845,164
1,827,122 730,237
17,455,788 8,234,016
11,354,542 5,309,383
45,14924,431
1,071,332 772,353
18,120913
171,924742
18,260
231
5,824
1,316
10,76120
2,860
20
31,762
11,015

1,055,970
2,157,421
8,926,088
164,559
15,256315,292
689,099
4,635,095
13,952
952,313
12,484
1,096,885
9,221,772
6,045,159
20,718298,979
17,207
171,183
18,0294,507
10,741
2,840
20,748000478,885
154,159
0236,719
0
12,106
064,7952,611,391
8,027,530
30,845,080
125,026
1,099,986
0
0
0
466
0
0
0

Profit or loss
Earnings per Sharefor the(Note 1)year(After(dollar; after tax)
income tax)
(1,176)80,2170.89(562)
236,318
1.41(26,267)
184,9030.42(2,171)
9,853
0.64(2,239)(1,256)(0.25)(13,414)
5,342
90,82360,4201.06(1,321)(287,446)(0.63)(999)(845)(1,524)2,232
0.06
10,841
8,199
20.50
108,999
172,954(890,396)
114,659
0.17
4,214,719
3,526,660
17.63
6,537
4,601
3,898
15,017(6,023)
2,294(5,105)6,135(2,058)(1,971)(2,057)(1,993)(307)(259)(0.24)(173)(160)(0.53)
(178)
(174)
-

Profit fromoperations

Note 1: Calculated based on the number of outstanding shares for each company on Dec. 31, 2023

134

AUO Corporation
2023 Annual ReportSpecial Disclosure(VII)Combined Financial Statements

Representation Letter
The entities that are required to be included in the combined financial statements of
AUO Corporation as of and for the year ended December 31, 2023 under the Criteria
Governing Preparation of Affiliation Reports, Consolidated Business Reports, andConsolidated Financial Statements of Affiliated Enterprises are the same as thoseincluded in the consolidated financial statements prepared in conformity with theInternational Financial Reporting Standard No. 10, "Consolidated Financial Statements"
endorsed by the Financial Supervisory Commission of the Republic of China. In
addition, the information required to be disclosed in the combined financial statements
is included in the consolidated financial statements. Consequently, AUO Corporationand Subsidiaries do not prepare a separate set of combined financial statements.
Hereby declared

AUO Corporation
Chairman: Shuang-Lang (Paul) Peng
January 31, 2024

(VIII)Affiliation Reports
AUO Corporation is not a subsidiary of another company as defined in the specific chapter of the Company Act, thus we are
exempted from preparing a report on the relationships between control and subsidiary companies.

AUO Corporation
2023 Annual Report135ll. Privately placed securities handling status in the most recent year up to the publication dateof this Annual Report: None.
lll. Holding or disposition of the Company shares by subsidiaries in the most recent year up
to the publication date of this Annual Report: None.
lV. Other items that must be included: None.
V. Any event that results in substantial impact on the shareholders’ equity or prices of theCompany’s securities as prescribed by Subparagraph 2, Paragraph 3, Article 36 of the
Securities and Exchange Act that have occurred in the most recent year up to the
publication date of this Annual Report:
AUO close the 5A plant.
To optimize production efficiency and maximize the benefit of the overall production capability, the Company will combine
manufacturing of products of Fab 5A specs/applications with those of similar in other sites. The Fab 5A will be capable of corresponding
the market demand for new technologies and high-value products in the future.
AUO close the C5D and C6C production lines.
The Company adopts a flexible operation strategy and focuses on deploying new technologies and high-value products. After carefulconsideration, the Company will close its color filter fabs, C5D and C6C, in Tainan. The manufacturing of color filters will be centralizedon the other production lines to optimize production efficiency and maximize the benefit of the overall production capability.
AUO will close the L4B line in Singapore.
To enhance global operational efficiency, AUO ceased local manufacturing operations in Singapore by closing the L4B line in the end of
December 2023. The AUO Singapore site specializes in Gen 4.5 LTPS technology, manufactures LCD panels for Smart Phones,
Notebooks, Automotive and other Mobile Electronics Devices; the production capacity has successively redirected to other AUO’s
production lines. AUO complies with local regulations for the employees affected due to the closure of L4B line. The communication isprocessing thoroughly to keep in line with the benefits to be provided for around 500 employees at AUO Singapore site. AUO willtransform the Singapore site as a service hub for providing intelligent manufacturing solutions, and extend the pivotal role of the site in
the region to give AUO group a broader outreach in APAC.

136

AUO Corporation
2023 Annual ReportAppendix 1

Stock Code:2409

AUO CORPORATION AND SUBSIDIARIES
Consolidated Financial Statements
With Independent Auditors’ Report
For the Years Ended December 31, 2023 and 2022

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chineseversion prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English
and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

AUO Corporation
2023 Annual Report137Representation Letter
The entities that are required to be included in the combined financial statements of AUO Corporation as of andfor the year ended December 31, 2023 under the Criteria Governing Preparation of Affiliation Reports,
Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as
those included in the consolidated financial statements prepared in conformity with the International Financial
Reporting Standard No. 10, “ Consolidated Financial Statements” endorsed by the Financial Supervisory
Commission of the Republic of China. In addition, the information required to be disclosed in the combined
financial statements is included in the consolidated financial statements. Consequently, AUO Corporation andSubsidiaries do not prepare a separate set of combined financial statements.
Hereby declare

Company name: AUO Corporation
Chairman: Shuang-Lang (Paul) Peng
Date: January 31, 2024

138

AUO Corporation
2023 Annual ReportAppendix 1

Independent Auditors’ Report
To the Board of Directors of AUO Corporation:
OpinionWe have audited the consolidated financial statements of AUO Corporation (formerly AU Optronics Corp.) andits subsidiaries (“the Company”), which comprise the consolidated balance sheets as of December 31, 2023 and2022, the consolidated statements of comprehensive income, consolidated statements of changes in equity andconsolidated statements of cash flows for the years ended December 31, 2023 and 2022, and notes to theconsolidated financial statements, including a summary of material accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Company as of December 31, 2023 and 2022, and its consolidated
financial performance and its consolidated cash flows for each of the years then ended, in accordance with theRegulations Governing the Preparation of Financial Reports by Securities Issuers and with the International
Financial Reporting Standards (“IFRS”), International Accounting Standards (“IAS”), Interpretations developedby the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing
Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of
the Republic of China.
Basis for Opinion
We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial
Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of theConsolidated Financial Statements section of our report. We are independent of the Company in accordancewith the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we havefulfilled our other ethical responsibilities in accordance with these requirement. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of ouraudit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters. We have determined the matters described below to be the key
audit matters to be communicated in our report.
1. Impairment of long-term non-financial assets (including goodwill)
Refer to Note 4(15) “ Impairment – non-financial assets” , Note 5(1) and Note 5(2) “ Critical Accounting
Judgments and Key Sources of Estimations and Assumptions Uncertainty”, Note 6(9) “Property, Plant andEquipment” , Note 6(10) “ Lease Arrangements” and Note 6(12) “ Intangible Assets” to the consolidated
financial statements.

AUO Corporation
2023 Annual Report139Description of key audit matter:
The Company operates in an industry with high investment costs, has goodwill through the acquisition ofsubsidiaries, and may experience volatility in response to changes in the external market; hence, it isimportant to assess the impairment of its long-term non-financial assets (including goodwill). The
impairment assessment includes identifying cash-generating units, determining a valuation model,
determining significant assumptions, and computing recoverable amounts. With the complexity of theimpairment assessment process and the involvement of significant management judgment regarding
assumptions used, this is one of the key areas our audit focused on.
How the matter was addressed in our audit:
In relation to the key audit matter above, our principal audit procedures included understanding and testing
the Company’s controls surrounding the impairment assessment and testing process; assessing whether there
are impairment indications for the identified cash-generating units of the Company and its related assets;
understanding and assessing the appropriateness of the valuation model used by the management in the
impairment assessment and the significant assumptions used to determine related assets’ future cash flows
projection, useful lives, and weighted-average cost of capital; retrospectively reviewing the accuracy ofassumptions used in prior-period estimates and performing a sensitivity analysis of key assumptions andresults; in addition to the above audit procedures, appointing specialists to evaluate the appropriateness of
the weighted-average cost of capital used and related assumptions; performing an inquiry of the management
and identifying any event after the balance sheet date if able to affect the results of the impairment
assessment; and assessing the adequacy of the Company’ s disclosures of its policy on impairment of
noncurrent non-financial assets and other related disclosures.
2. Revenue recognition
Refer to Note 4(18) “Revenue from contracts with customers” and Note 6(20) “Revenue from Contracts with
Customers” to the consolidated financial statements.
Description of key audit matter:
Revenue is recognized when the control over a product has been transferred to the customer as specified ineach individual contract with customers. The Company recognizes revenue depending on the various sales
terms in each individual contract with customers to ensure the performance obligation has been satisfied bytransferring control over a product to a customer. In addition, the Company operates in an industry in whichrevenue is considered to be complex in determining the timing of revenue recognition. Consequently, this is
one of the key areas our audit focused on.
How the matter was addressed in our audit:
In relation to the key audit matter above, our principal audit procedures included understanding and testing
the Company’s controls surrounding revenue recognition; assessing whether appropriate revenue recognition
policies are applied through comparison with accounting standards and understanding the Company’s main
revenue types, its related sales agreements, and sales terms; on a sample basis, inspecting contracts withcustomers or customers’ orders and assessing whether the accounting treatment of the related contracts(including sales terms) is applied appropriately; performing a test of details of sales revenue andunderstanding the rationale for any identified significant sales fluctuations and any significant reversals ofrevenue through sales discounts and sales returns which incurred within a certain period before or after thebalance sheet date; and assessing the adequacy of the Company’ s disclosures of its revenue recognition
policy and other related disclosures.

140

AUO Corporation
2023 Annual ReportAppendix 1

Other Matters
AUO Corporation has additionally prepared its parent-company-only financial statements as of and for the years
ended December 31, 2023 and 2022, on which we have issued an unmodified audit opinion.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the
IFRS, IAS, IFRIC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the
Republic of China, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company’ sability to continue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance (inclusive of the Audit Committee) are responsible for overseeing theCompany’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise
professional judgment and professional skepticism throughout the audit. We also:
1. Identified and assessed the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtained an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control.
3. Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
4. Concluded on the appropriateness of management’s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future
events or conditions may cause the Company to cease to continue as a going concern.

AUO Corporation
2023 Annual Report1415. Evaluated the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.
6. Obtained sufficient and appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Company to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicated with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that
we identified during our audit.
We also provided those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicated with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determined those matters that were ofmost significance in the audit of the consolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
The engagement partners on the audit resulting in this independent auditors’ report are Yu, Chi-Lung and Yu,
Wan-Yuan.

KPMG
Hsinchu, Taiwan (Republic of China)
January 31, 2024

Notes to Readers
The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial
performance and cash flows in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers andwith the IFRS, IAS, IFRIC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. The
standards, procedures and practices to such consolidated financial statements are those generally accepted and applied in the Republic ofChina.

142

AUO Corporation
2023 Annual ReportAUO Corporation

2023 Annual Report

Total Assets

See accompanying notes to consolidated financial statements.

1535
1550
1600
1755
1760
1780
1840
1920
1990

1517

1510

1100
1110
1136
1170
1180
1210
1220
130X
1410
1460
1476
1479

Assets
Current assets:Cash and cash equivalents (Note 6(1))
Financial assets at fair value through profit or losscurrent (Note 6(2))
Financial assets at amortized costcurrent (Note 6(4))
Notes and accounts receivable, net (Note 6(5))
Accounts receivable from related parties, net (Notes 6(5)&7)Other receivables from related parties (Note 7)
Current tax assets
Inventories (Note 6(6))
Prepayments (Note 6(13))
Noncurrent assets held for sale (Note 6(9))
Other current financial assets (Notes 6(5),(9),(20)&8)Other current assets (Note 6(13))
Noncurrent assets:
Financial assets at fair value through profit or lossnoncurrent (Notes
6(2)&7)
Financial assets at fair value through other comprehensive incomenoncurrent (Note 6(3))
Financial assets at amortized costnoncurrent (Note 6(4))
Investments in equity-accounted investees (Notes 6(7)&7)
Property, plant and equipment (Notes 6(9),7&8)
Right-of-use assets (Notes 6(10)&8)
Investment property (Note 6(11))
Intangible assets (Notes 6(8)&(12))
Deferred tax assets (Note 6(24))
Refundable deposits (Note 7)
Other noncurrent assets (Notes 6(13),(17)&8)


$

$

8
45
2
3
3
1
62

-

22
6
8
1
1
38

383,470,737 100

1,832,068
680,107
29,383,580
171,172,804
9,770,626
1,320,901
11,268,867
10,201,660
1,102,087
2,388,154
239,260,024

139,170

83,969,463
176,492584,217
22,798,408
1,244,546
15,305
307,874
29,003,121
2,654,523
3,130,373
326,391
144,210,713

December 31, 2023
Amount
%

1
8
46
3
3
2
1
64

-

21
5
8
1
1
36

386,840,674 100

1,900,581
1,142,218
31,743,902
178,833,837
9,800,458
1,393,244
11,396,241
6,649,457
925,517
2,878,412
246,663,867-

80,613,120
365,037
18,620,248
1,255,503
6,139
41,18630,263,713
3,440,926
586,406
4,593,094
391,435
140,176,807

December 31, 2022
Amount
%

36XX

3100
3200
3300
3400
3500

2527
2540
2550
2570
2580
2600

2170
2180
2213
2220
2230
2250
2280
2399
2322

2100
2120

Non-controlling interests
Non-controlling interests
Total equity
Total Liabilities and Equity

Liabilities and Equity
Current liabilities:
Short-term borrowings (Note 6(14))
Financial liabilities at fair value through profit or losscurrent (Notes
6(2)&(8))
Notes and accounts payable
Accounts payable to related parties (Note 7)
Equipment and construction payable (Note 7)
Other payables to related parties (Note 7)
Current tax liabilities
Provisionscurrent (Note 6(16))
Lease liabilitiescurrent (Note 6(10))
Other current liabilities (Notes 6(9),(20)&(21))
Current installments of long-term borrowings (Notes 6(15)&8)
Noncurrent liabilities:
Contract liabilitiesnoncurrent (Note 6(20))
Long-term borrowings, excluding current installments (Notes 6(15)&8)
Provisionsnoncurrent (Note 6(16))
Deferred tax liabilities (Note 6(24))
Lease liabilitiesnoncurrent (Note 6(10))
Other noncurrent liabilities (Note 6(17))
Total liabilities
Equity (Note 6(18)):
Equity attributable to shareholders of AUO Corporation:
Common stock
Capital surplus
Retained earnings
Other components of equity
Treasury shares(Expressed in thousands of New Taiwan dollars)

December 31, 2023 and 2022

Consolidated Balance Sheets

AUO CORPORATION AND SUBSIDIARIES(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

$

$

20
14
8
(1)
41
6,190,329
2
165,357,536 43
383,470,737 100

76,993,961
54,998,829
31,899,740(4,484,899)(240,424)
159,167,207

2
26
1
2
1
32
57

11
1
2
1
7
3
25

11,14343,433,269
5,203,290
6,135,421
48,281
1,083,671
2,399,306
644,259
25,291,133
10,062,194
94,574,967
6,239,558
101,524,840
881,394
3,936,644
8,684,270
2,271,528
123,538,234
218,113,201-

263,000

December 31, 2023
Amount
%

20
16
13
(1)
48

3
19
1
2
1
26
51

11
2
2
6
4
25

-

6,311,557
1
191,410,648 49
386,840,674 100

76,993,961
61,942,210
50,078,752(3,620,305)(295,527)
185,099,091

8,739,846
72,930,817
909,405
5,101,186
8,661,640
1,918,971
98,261,865
195,430,026

351,825
41,479,524
5,890,185
7,882,627
27,853
1,567,623
559,654583,251
24,812,498
13,884,634
97,168,161

128,487

December 31, 2022
Amount%Appendix 1

143

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

AUO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2023 and 2022
(Expressed in thousands of New Taiwan dollars, except for Earnings (loss) per share)

4110
4190
5000
6100
6200
6300

7100
7010
7020
7050
7060
7900
7950
8200
8300
8310
8311
8316
8320
8349
8360
8361
8370
8399
8300
8500

RevenueLess: sales return and discountNet revenue (Notes 6(20)&7)
Cost of sales (Notes 6(6),(10),(17),(21),(22)&7)Gross profit (loss)
Operating expenses (Notes 6(8),(10),(17),(19),(21),(22)&7):
Selling and distribution expenses
General and administrative expenses
Research and development expenses
Total operating expenses
Loss from operations
Non-operating income and expenses:
Interest income (Note 6(23))
Other income (Notes 6(3),(7),(9),(10),(12),(23)&7)
Other gains and losses (Notes 6(8),(23)&7)
Finance costs (Notes 6(9)&(23))
Share of profit of equity-accounted investees (Note 6(7))
Total non-operating income and expenses
Loss before income tax
Less: income tax expense (benefit) (Note 6(24))
Loss for the year
Other comprehensive income (Notes 6(7),(17),(18)&(24)):
Items that will never be reclassified to profit or loss
Remeasurement of defined benefit obligations
Unrealized loss on equity investments at fair value through othercomprehensive income
Equity-accounted investees – share of other comprehensive
incomeRelated tax
Items that are or may be reclassified subsequently to profit orloss
Foreign operations – foreign currency translation differences
Equity-accounted investees – share of other comprehensive
incomeRelated tax

8610
8620

Other comprehensive income, net of tax
Total comprehensive income (loss) for the year
Profit (loss) attributable to:Shareholders of AUO Corporation
Non-controlling interests

8710
8720

Total comprehensive income (loss) attributable to:Shareholders of AUO Corporation
Non-controlling interests

9750
9850

Earnings (loss) per share (NT$, Note 6(25))
Basic earnings (loss) per share
Diluted earnings (loss) per share

See accompanying notes to consolidated financial statements.

144

AUO Corporation
2023 Annual Report2023
Amount$250,048,326
2,083,889
247,964,437
243,354,069
4,610,368

2022%
Amount101 249,956,539
1
3,163,865
100 246,792,674
98 245,225,166
2
1,567,508

%
101
1
100
99
1

5,019,739
8,321,194
13,231,450
26,572,383(21,962,015)

2
4,817,426
4
7,852,697
5 12,867,781
11 25,537,904(9) (23,970,396)

2
3
5
10
(9)

1,915,078
1,999,172(391,363)(2,724,883)(518,049)
279,955(21,682,060)(3,530,906)(18,151,154)

1
1878,975
3,211,169(121,274)(1,507,963)
2,003,297
4,464,204(19,506,192)
1,466,988(20,973,180)

-

(1)
1
(8)
(1)
(7)

-

1

1
2
(7)
1
(8)

4,074

-

58,455-(36,180)-

57,359-446,924(1,725)413,093-(1,362,377)(11,691)(1,258,254)

(1)
(1)

(1,540,996)(1)

2,388,106

1(73,173)290,245(1,323,924)(910,831)$ (19,061,985)

562,474(490,056)(1)2,460,524(1)
1,202,270(8) (19,770,910)-$ (18,203,274)
52,120$ (18,151,154)(7) (21,101,374)
128,194(7) (20,973,180)

(8)
(8)

$ (19,043,606)(18,379)$ (19,061,985)(8) (19,892,545)
121,635(8) (19,770,910)

(8)
(8)

$
$

(2.37)(2.37)

1(8)(2.39)(2.39)

2023 Annual Report

See accompanying notes to consolidated financial statements.

54,998,829

13,753,412-(16,137)(874,755)
78,104-76,993,961-(6,134,305)
3,712

-

13,753,412-

5,326,268-

Legal Reserve
8,427,144--

61,942,210

76,993,961

-

1,095
1,812,907
71,207(19,248,490)---

Balance at January 1, 2022
Appropriation of earnings:
Legal reserve
Special reserve
Cash dividends distributed to shareholders
Profit (loss) for the year
Other comprehensive income (loss), net of tax
Total comprehensive income (loss) for theyear
Donations from shareholders
Adjustments for changes in investees’ equity
Capital reduction
Share-based payments
Disposal of equity investments measured atfair value through other comprehensive
incomeChanges in non-controlling interests
Balance at December 31, 2022
Appropriation of earnings:
Reversal of special reserve
Profit (loss) for the year
Other comprehensive income (loss), net of tax
Total comprehensive income (loss) for theyear
Cash distribution from capital surplus
Donations from shareholders
Differences between consideration andcarrying amount arising from acquisition or
disposal of interest in subsidiary
Adjustments for changes in investees' equity
Share-based payments
Disposal of equity investments measured atfair value through other comprehensive
incomeChanges in non-controlling interests
Balance at December 31, 2023$

Capital Surplus
60,057,001

Capital Stock
CommonStock$96,242,451

3,620,305--(1,122,876)-

4,743,181-

1,472,878-(20,497)
14,526,023-(18,158,515)-

1,122,876(18,203,274)
44,75941,654
31,582,159(21,057,076)-(5,326,268)(1,472,878)(9,575,824)(21,101,374)
44,298(20,497)
31,899,740-(18,158,515)-(18,203,274)
44,75941,65450,078,752(21,057,076)-(9,575,824)(21,101,374)
44,298(3,651,762)-(1,245,272)-(1,245,272)(2,406,490)

2,467,083-

2,467,083

20,497(833,137)-

360,181-360,181(41,654)(1,213,815)(1,302,552)-(1,302,552)

20,497(4,484,899)-(885,091)-(885,091)(41,654)(3,620,305)

1,164,531-

1,164,531

Equity Attributable to Shareholders of AUO Corporation
Other Components of Equity
Unrealized
Gains (Losses)
on Financial
Assets at Fair
Value throughRetained Earnings
Cumulative
Other
UnappropriatedTranslation
Comprehensive
Special Reserve
Subtotal
Subtotal
Earnings
Differences
Income3,270,303
68,972,551
80,669,998(4,873,573)
130,391(4,743,182)(Expressed in thousands of New Taiwan dollars)

For the years ended December 31, 2023 and 2022

Consolidated Statements of Changes in Equity

AUO CORPORATION AND SUBSIDIARIES(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

96,842
46,85955,103(240,424)---(295,527)--

159,167,207(16,137)(874,755)
133,207(19,043,606)(6,134,305)
3,712(18,203,274)(840,332)

185,099,091(19,892,545)
1,095
1,812,907(19,151,648)
118,066(9,575,824)(21,101,374)
1,208,829

EquityAttributable to
Shareholders
of AUO
TreasuryCorporation
Shares(439,228)
231,787,040(94,178)
6,190,329

16,137(25,675)867(18,379)-

52,120(70,499)-(2,812)
6,311,557

121,635
604
12,699128,194(6,559)Noncontrolling
Interests
6,179,431(94,178)
165,357,536(900,430)
134,074(19,061,985)(6,134,305)
3,712(18,151,154)(910,831)(2,812)
191,410,648(19,770,910)
1,095
1,813,511(19,151,648)
130,765(9,575,824)(20,973,180)
1,202,270

Total Equity
237,966,471

Appendix 1

AUO Corporation

145

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

AUO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2023 and 2022
(Expressed in thousands of New Taiwan dollars)

Cash flows from operating activities:
Loss before income tax$
Adjustments for:- depreciation- amortization- net gains on financial instruments at fair value through profit orloss- interest expense- interest income- dividend income- compensation costs of share-based payments- share of loss (profit) of equity-accounted investees- gains on disposal of property, plant and equipment- gains on disposal of noncurrent assets held for sale- gains on disposal of investments- impairment losses on assets- unrealized foreign currency exchange losses (gains)- others
Changes in operating assets and liabilities:- notes and accounts receivable- receivables from related parties- inventories- other operating assets- contract liabilities- notes and accounts payable- payables to related parties- provisions- other operating liabilities
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

2023

2022

(21,682,060)(19,506,192)

32,379,064
126,480(53,869)

31,281,587
184,766(85,959)

2,660,885(1,915,078)(2,585)61,066
518,049(53,350)(1,069,530)(116)
210,771(364,148)
101,025

1,349,724(878,975)(6,571)
84,085(2,003,297)(1,024,832)
1,179,565
158,438
82,019(4,844,979)
1,791
1,266,186
385,546(440,614)
2,755,404(666,467)
1,832,878(395,560)
10,810,789
1,855,266
1,599,601(2,632,179)(1,639,914)
9,993,563

39,381,310
1,238,452
4,214,575(48,157)(1,507,156)(12,705,469)(2,979,734)(489,391)(9,677,630)
28,241,158
782,513
1,827,279(1,522,704)(2,357,288)
26,970,958(Continued)

See accompanying notes to consolidated financial statements.

146

AUO Corporation
2023 Annual ReportAppendix 1(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

AUO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
For the years ended December 31, 2023 and 2022
(Expressed in thousands of New Taiwan dollars)
2023
Cash flows from investing activities:
Acquisitions of financial assets at fair value through othercomprehensive income
Disposals of financial assets at fair value through othercomprehensive income
Acquisitions of financial assets at amortized cost
Disposals of financial assets at amortized cost
Acquisitions of financial assets at fair value through profit or loss
Disposals of financial assets at fair value through profit or loss
Acquisitions of equity-accounted investees
Disposals of equity-accounted investees
Proceeds from disposal of noncurrent assets held for sale
Acquisitions of property, plant and equipment
Disposals of property, plant and equipment
Increase in receipts in advance due to disposal of assets
Decrease (increase) in refundable deposits
Acquisitions of intangible assets
Decrease (increase) in other financial assets
Net cash outflow arising from acquisition of subsidiaries
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Payment of lease liabilities
Decrease in received guarantee deposits
Cash dividends and cash distribution from capital surplus
Capital reduction
Treasury shares sold to employees
Net change of non-controlling interests
OthersNet cash provided by financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at January 1
Cash and cash equivalents at December 31

$

2022

(217,183)(544,218)

74,79910,002(878,405)
770,824(138,231)(105,904)
808,694(26,786,572)
2,293,768(106,096)
315,501(85,579)(24,054,384)(660,262)
10,000,000
5,440(5,183,707)
83,152(35,950,205)
845,768
848,008
83,193(2,929)(743,153)(704,049)(31,912,960)

3,241,000(3,104,249)
63,124,446(38,134,307)(606,200)(2,403)(6,134,305)
73,011(94,178)
3,712
18,366,527(949,363)
3,356,343
80,613,120
83,969,463

539,963(457,499)
64,168,996(32,619,345)(574,590)(20,819)(9,575,824)(19,151,648)
46,718(2,812)
1,095
2,354,235
3,256,201
668,434
79,944,686
80,613,120

See accompanying notes to consolidated financial statements.
AUO Corporation
2023 Annual Report147

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
For the years ended December 31, 2023 and 2022
(Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

1.

Organization
AUO Corporation (“AUO”) was founded on August 12, 1996 and is located in Hsinchu Science Park, theRepublic of China (“ROC”). AUO’s main activities are the research, development, production and sale ofthin film transistor liquid crystal displays (“ TFT-LCDs” ) and other flat panel displays used in a wide
variety of applications. AUO also engages in the production and sale of solar modules and systems.
AUO’s common shares have been publicly listed on the Taiwan Stock Exchange since September 2000,
and its American Depositary Shares (“ ADSs” ) have been listed on the New York Stock Exchange(“NYSE”) since May 2002. On and from October 1, 2019, AUO’s ADSs has delisted from the NYSE andbegun trading on the over-the-counter (“OTC”) market. Further on January 27, 2021, AUO’s ADSs andunderlying ordinary shares was officially cancelled from the registration of the United States Securities
and Exchange Commission and its reporting obligations under the U.S. Securities Exchange Act was
terminated.
On September 1, 2001, October 1, 2006 and October 1, 2016, Unipac Optoelectronics Corp. (“Unipac”),
Quanta Display Inc. (“ QDI” ) and Taiwan CFI Co., Ltd. (“ CFI” ) were merged with and into AUO,
respectively. AUO is the surviving Company, whereas Unipac, QDI and CFI were dissolved.
In order to advance AUO’ s value transformation strategy, to accelerate the extension of the value chain
and enhance the overall operating performance, upon the resolution of the shareholders’ meeting held on
June 17, 2020, AUO demerged and transferred the business of the General Display and the PublicInformation Display, including assets, liabilities and the operations, to its wholly-owned subsidiary, AUO
Display Plus Corporation (“ ADP” ). ADP issued new shares to AUO as the consideration. The effective
date of the demerger was set on January 1, 2021.
The consolidated financial statements comprise AUO and its subsidiaries (collectively as “the Company”).

2.

The Authorization of Financial Statements
These consolidated financial statements were authorized for issue by the Board of Directors on January
31, 2024.

3.

Application of New and Revised Standards, Amendments and Interpretations(1)

Impact of adoption of new, revised or amended standards and interpretations endorsed by the
Financial Supervisory Commission, ROC (“FSC”).
The Company has adopted the amendments to the International Financial Reporting Standards,
International Accounting Standards, IFRIC Interpretations, and SIC Interpretations (collectively,“IFRSs”) with effective date from January 1, 2023. The adoption does not have a material impact on
the Company’s consolidated financial statements.
k Amendments to IAS 1, Disclosure of Accounting Policies
k Amendments to IAS 8, Definition of Accounting Estimates(Continued)

148

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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statementsk Amendments to IAS 12, Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
k Amendments to IAS 12, International Tax Reform—Pillar Two Model Rules(2)

Impact of the IFRSs that have been endorsed by the FSC but not yet in effect
The Company assessed that the adoption of the following new amendments, effective for annual
period beginning on January 1, 2024, would not have a material impact on its consolidated financial
statements:
k Amendments to IAS 1, Classification of Liabilities as Current or Non-current
k Amendments to IAS 1, Non-current Liabilities with Covenants
k Amendments to IAS 7 and IFRS 7, Supplier Finance Arrangementsk Amendments to IFRS 16, Lease Liability in a Sale and Leaseback(3)

The IFRSs issued by International Accounting Standards Board (“IASB”) but not yet endorsed by
the FSC
New, revised or amended standards and interpretations issued by the IASB but not yet
endorsed by the FSC are listed below:
k Amendments to IFRS 10 and IAS 28, Sale or Contribution of Assets Between an Investor and
Its Associate or Joint Venture
k IFRS 17, Insurance Contracts and amendments to IFRS 17
k Amendments to IAS 21, Lack of Exchangeability
As of the date that the accompanying consolidated financial statements were issued, the Company
continues in assessing the impact on its financial position and results of operations as a result of theapplication of abovementioned standards and interpretations except for IFRS 17, Insurance
Contracts and the amendments to IFRS 17 that are not relevant to the Company. The related impact
will be disclosed when the assessment is complete.

4.

Summary of Significant Accounting Policies
The significant accounting policies applied in the preparation of these consolidated financial statements
are set out as below. The significant accounting policies have been applied consistently to all periods
presented in these consolidated financial statements.
(1)

Statement of compliance
The consolidated financial statements have been prepared in accordance with the Regulations
Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “theRegulations” ) and the IFRSs endorsed by the FSC with effective dates (hereinafter referred to as“TIFRSs”).

(Continued)
AUO Corporation
2023 Annual Report149

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(2)

Basis of preparationa.

Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except
for the following material items in the consolidated balance sheets:(i)Financial instruments at fair value through profit or loss (including derivative financial
instruments) (Note 6(2));(ii)

Financial assets at fair value through other comprehensive income (Note 6(3));(iii) Defined benefit asset (liability) is recognized as the fair value of the plan assets less thepresent value of the defined benefit obligation (Note 6(17)).
b.

Functional and presentation currency
The functional currency of each individual consolidated entity is determined based on the
primary economic environment in which the entity operates. The Company’ s consolidated
financial statements are presented in New Taiwan Dollar (“ NTD” ), which is also AUO’ sfunctional currency. All financial information presented in NTD has been rounded to thenearest thousand, unless otherwise noted.

(3)

Basis of consolidationa.

Principle of preparation of the consolidated financial statements
The Company includes in its consolidated financial statements the results of operations of allcontrolled entities in which the Company is exposed to, or has rights to, variable returns fromits involvement with the entity and has the ability to affect those returns through its power overthe entity. All significant inter-company transactions, income and expenses are eliminated in
the consolidated financial statements.
The financial statements of subsidiaries are included in the consolidated financial statementsfrom the date that control commences until the date that control ceases. Total comprehensive
income (loss) in a subsidiary is allocated to the shareholders of AUO and the non-controllinginterests even if this results in the non-controlling interests having a deficit balance.
Subsidiaries’ financial statements are adjusted to align the accounting policies with those of
the Company.
Changes in the Company’ s ownership interests in a subsidiary that do not result in a loss ofcontrol are accounted for as equity transactions. The carrying amounts of the Company’ s
investment and non-controlling interests are adjusted to reflect the changes in their relativeinterests in the subsidiary. Any difference between such adjustment and the fair value of theconsideration paid or received is recognized directly in equity and attributed to shareholders of
AUO.

(Continued)

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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Upon the loss of control, the Company derecognizes the carrying amounts of the assets andliabilities of the subsidiary and non-controlling interests. Any interest retained in the former
subsidiary is remeasured at fair value when control is lost. The gain or loss is measured as thedifference between: (i) the aggregate of the fair value of the consideration received and the fairvalue of any retained investment in the former subsidiary at the date when the Company loses
control; and (ii) the aggregate of the carrying amount of the former subsidiary’ s assets(including goodwill), liabilities and non-controlling interests at the date when the Company
loses control. The Company accounts for all amounts previously recognized in othercomprehensive income in relation to that subsidiary on the same basis as would be required if
the Company had directly disposed of the related assets or liabilities.
b.

List of subsidiaries in the consolidated financial statements was as follows:

Name ofInvestor
AUO
AUO
AUO
AUO
AUO
AUO
AUO
AUO
AUO
AUO
AUO
AUO
AUO
AUO and
Konly
AUO and
ADTCM
AUO, Konly
and Ronly

Name of Subsidiary
AUO (L) Corp. (AUOLB)
Konly Venture Corp.
(Konly)Ronly Venture Corp.
(Ronly)Space Money Inc. (S4M)

Main Activities and Location
Holding company (Malaysia)
Investment (Taiwan ROC)

Percentage of Ownership(%)
December
December31, 2023
31, 2022
100.00100.00100.00100.00Investment (Taiwan ROC)

100.00100.00Design, sales and leasing activities(Taiwan ROC)
Construction project and related
project management (Taiwan ROC)
Holding company (Israel)
Sales support activities (Netherlands)

100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.0078.89(5)100.00100.00100.0033.51(2)33.51(2)100.00100.0041.05(2)41.05(2)AUO Envirotech Inc.
(AETTW)
ComQi Ltd. (CQIL)
AUO Europe B.V.
(AUONL)AUO Crystal Corp.
Manufacturing and sales company(ACTW)(Taiwan ROC)AUO Display Plus
Research and development and sales
Corporation (ADP)
activities (Taiwan ROC)
Da Ping Green Energy
Solar power generation (Taiwan ROC)
Corporation (DPGE)AUO Health Corporation Manufacturing, development and sales(AHTW)
company (Taiwan ROC)AUO Digitech (CAYMAN) Holding company (Cayman Islands)
Limited (ADTCM)AUO Care Inc. (ACTTW) Intelligent health care services (Taiwan
ROC)
Star River Energy Corp.
Investment (Taiwan ROC)(SREC)AUO Digitech Holding
Holding company (Cayman Islands)
Limited (ADTHLD)
Darwin Precisions
Manufacturing and sales company
Corporation (DPTW)(Taiwan ROC)(Continued)
AUO Corporation
2023 Annual Report151

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Name ofInvestor
AUO and
AETTW
Konly
Ronly
Ronly
ADTHLD
ADTSG
ADTSG
ACTW
ACTW
SDMC
AUOLB
AUOLB
AUOLB
AUOLB
AUOLB
AUOLB
AUOLB
AUOLB and
DPTW
SREC
SREC
AUOSG
AUOSG
AUOSG and
AUOLB

Name of Subsidiary
Main Activities and Location
Yo-Pei Water Corporation Investment and construction in public(AET-YP)
construction, and wastewater (sewage)
treatment (Taiwan ROC)AUO Education Service
Leasing and service company (Taiwan
Corp. (AUES)
ROC)
Feng Yao Power
Renewable energy power generation
Corporation (FYPC)(Taiwan ROC)
Zheng Yao Power
Renewable energy power generation
Corporation (ZYPC)(Taiwan ROC)AUO Digitech Pte. Ltd.
Holding and sales company, and(ADTSG)
software development (Singapore)
AUO Digitech (Suzhou)
Consulting and technology service
Co., Ltd. (ADTSZ)(PRC)
AUO Digitech Taiwan Inc. Design, sales and consulting (Taiwan(ADTTW)
ROC)
Sanda Materials
Holding company (Taiwan ROC)
Corporation (SDMC)
AUO Crystal (Malaysia)
Manufacturing and sales company(Malaysia)
Sdn. Bhd. (ACMK)(3)
M.Setek Co., Ltd.
Manufacturing and sales company(M.Setek)(Japan)AUO Corporation America Sales and sales support activities(AUOUS)(United States)
AUO Corporation Japan
Sales support activities (Japan)(AUOJP)
AUO Korea Ltd. (AUOKR) Sales support activities (South Korea)
AUO Singapore Pte. Ltd. Holding company and sales support(AUOSG)
activities (Singapore)
AUO (Slovakia) s.r.o
Repairing activities (Slovakia(AUOSK)
Republic)
AFPD Pte., Ltd. (AUST)(7) Manufacturing company (Singapore)
a.u. Vista Inc. (AUVI)
Research and development and IP
related business (United States)
BriView (L) Corp.
Holding company (Malaysia)(BVLB)(3)Sungen Power Corporation Solar power generation (Taiwan ROC)(SGPC)
Evergen Power Corporation Solar power generation (Taiwan ROC)(EGPC)
Sales support activities (United States)
AUO Green Energy
America Corp. (AEUS)
AUO (Vietnam) Company Manufacturing and sales company
Limited (AUOVN)(Vietnam)
AUO (Shanghai) Co., Ltd. Sales support activities (PRC)(AUOSH)(6)Percentage of Ownership(%)
December
December31, 2023
31, 2022
81.79
81.79(1)100.00100.00100.00(1)-100.00(1)-100.00100.00100.00100.00100.00100.00100.00100.00-100.0099.9991

99.9991

100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00-100.00100.00100.00100.00100.00100.00100.00100.00(1)-100.00100.00(Continued)

152

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Notes to Consolidated Financial Statements

Name ofInvestor
AUOSG andAUOLB
AUOSG andAUOLB
AUOSG andAUOLB
AUOSG and
AUOLB
ADP
ADP
ADP
ADP
ADPNL
ADPNL
ADPNL
ADPNL
ADPSZ
AUOXM
AUOSH
AUOSH
ADTSZ
ADTSZ
ADTSZ

Name of Subsidiary
AUO (Xiamen) Co., Ltd.
(AUOXM)(6)
AUO (Suzhou) Co., Ltd.
(AUOSZ)(6)
AUO Manufacturing(Shanghai) Co., Ltd.
(AUOSJ) (6)AUO (Kunshan) Co., Ltd.
(AUOKS)(6)Jector Digital Corporation(Jector)Main Activities and Location
Manufacturing and sales company(PRC)
Manufacturing and sales company(PRC)
Leasing activities (PRC)

Manufacturing and sales company(PRC)
Introduction of smart field
construction and other solutions(Taiwan ROC)
Holding, sales and sales support
AUO Display Plus
Netherlands B.V. (ADPNL) activities (Netherlands)
Sales activities (Taiwan ROC)
DentLabX Company
Limited (DentLabX)AUO Display Plus
Sales and sales support activities
Technology (Suzhou) Co., (PRC)
Ltd. (ADPSZ)AUO Display Plus America Sales and sales support activities
Corp. (ADPUS)(United States)
AUO Display Plus Japan
Sales and sales support activities
Corp. (ADPJP)(Japan)Rise Vision Incorporated
System design, sales and sales support
activities (Canada)(RVI)
Rise Vision USA Inc.
System design and sales support
activities (United States)(RVU)
Heilongjiang Talenda Smart Manufacturing of electronic
components (PRC)
Display Technology Co.,
Ltd. (Talenda)
BriView (Xiamen) Corp.
Sales and leasing activities (PRC)(BVXM)AUO Care Information
Intelligent health care services (PRC)
Tech. (Suzhou) Co., Ltd.
(ACTSZ)AUO Envirotech (Suzhou) Construction project and relatedCo., Ltd. (AETSZ)
project management (PRC)
AUO MegainsightSales of software and hardware and(Xiamen) Co., Ltd.
consulting services (PRC)(AMIXM)
Aedgetech Data
Integration service of software andTechnologies (Suzhou)
hardware (PRC)
Corp., Ltd. (ATISZ)
AUO MegaInsightDevelopment, sales and licensing ofsoftware and hardware and consulting(Suzhou) Co., Ltd.
services (PRC)(AMISZ)

Percentage of Ownership(%)
December
December31, 2023
31, 2022
100.00100.00100.00100.00100.00100.00100.00100.00

78.43

78.43

100.00100.0085.00(1)-100.00100.00100.00100.00100.00100.00100.00100.00(4)100.00100.00(4)51.00

51.00(1)100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00(Continued)
AUO Corporation
2023 Annual Report

153

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Name ofInvestor
ATISZ
AETSZ
CQIL
CQHLD
CQHLD
CQHLD
CQUS
CQUS
DPTW
DPTW
DPTW
FHVI
FHVI
FFMI
FTMI
FWSA and
FTMI
DPLB
DPHK
DPHK

Name of Subsidiary
Main Activities and Location
ProfetAI (Suzhou) Co., Ltd. Sales and consulting services (PRC)(PFSZ)AUO Envirotech
Construction project and related(Shandong) Co., Ltd.
project management (PRC)(AETSD)
ComQi Holdings Ltd.
Holding company (United Kingdom)(CQHLD)
ComQi UK Ltd. (CQUK)(3) Sales support activities (United
Kingdom)
ComQi Inc. (CQUS)Sales company (United States)
ComQi Canada Inc.
Research and development activities(CQCA)(Canada)JohnRyan Limited (JRUK) Development and sales activities(United Kingdom)
JohnRyan Inc. (JRUS)
Development and sales activities(United States)
Darwin Precisions (L)Holding company (Malaysia)
Corp. (DPLB)
Forhouse International
Holding company (BVI)
Holding Ltd. (FHVI)
Forefront Corporation
Holding company (Mauritius)(FFMI)
Fortech International Corp. Holding company (Mauritius)(FTMI)
Forward Optronics
Holding company (Samoa)
International Corp. (FWSA)
Forhouse Electronics
Manufacturing and sales company(Suzhou) Co., Ltd. (FHWJ) (PRC)
Fortech Electronics
Manufacturing and sales company(Suzhou) Co., Ltd. (FTWJ) (PRC)
Suzhou Forplax Optronics Manufacturing, sales and trading
Co., Ltd. (FPWJ)
company (PRC)
Darwin Precisions (Hong Holding company (Hong Kong)
Kong) Limited (DPHK)
Darwin Precisions (Suzhou) Manufacturing and sales company(PRC)
Corp. (DPSZ)(3)
Darwin Precisions
Manufacturing and sales company(Xiamen) Corp. (DPXM) (PRC)

Percentage of Ownership(%)
December
December31, 2023
31, 2022
51.00(1)100.00100.00100.00100.00-100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00-100.00100.00100.00Note 1: AET-YP was incorporated in March 2022. Talenda was incorporated in June 2022. PFSZ
was incorporated in February 2023. FYPC and ZYPC were incorporated in March 2023.
DentLabX was incorporated in July 2023. AUOVN was incorporated in November 2023.

(Continued)

154

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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Note 2: Although the Company did not own more than 50% of the DPTW’s and SREC’s ownershipinterests, it was considered to have de facto control over the main operating policies of
DPTW and SREC. As a result, DPTW and SREC were accounted for as subsidiaries of theCompany.
Note 3: As of December 31, 2023, CQUK, ACMK, BVLB and DPSZ have completed liquidation.
Note 4: In July 2022, the Company acquired 100% of shareholdings of RVI and RVU from third
parties. Refer to Note 6(8) for the relevant information.
Note 5: In connection to the employee restricted stock plan, actual vesting occurred in March 2023,
as a result, AUO’ s ownership interest in ADTCM went down to 78.89%. Refer to Note6(19) for the relevant information.
Note 6: As part of a business restructuring, AUOLB sold all its shareholdings in AUOSH, AUOXM,AUOSZ, AUOSJ and AUOKS to AUOSG in November 2023.
Note 7: AUST ceased production at end of December 2023 and made relevant provisions andimpairment loss.
(4)

Foreign currency transactions and operationsa.

Transactions in foreign currencies are translated to the respective functional currencies of theindividual entities of the Company at exchange rates at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies at the reporting date are retranslated to
the functional currency at the exchange rate at that date and the resulting exchange differences
are included in profit or loss for the year. Non-monetary assets and liabilities denominated inforeign currencies that are measured at fair value are retranslated to the functional currency atthe exchange rate at the date when the fair value was determined. The resulting exchange
differences are included in profit or loss for the year except for those arising from theretranslation of non-monetary items in respect of which gains and losses are recognizeddirectly in other comprehensive income, in which case, the exchange differences are also
recognized directly in other comprehensive income. Non-monetary items in foreign currencies
that are measured at historical cost are translated using the exchange rate at the date of thetransaction.
Exchange differences arising from the effective portion of changes in the fair value ofderivatives that are designated and qualified as cash flow hedges are recognized in othercomprehensive income.

b.

For the purpose of presenting consolidated financial statements, the assets and liabilities of theCompany’ s foreign operations are translated into NTD using exchange rates at the reporting
date. Income and expenses of foreign operations are translated at the average exchange rates
for the period unless the exchange rates fluctuate significantly during the period; in that case,the exchange rates at the dates of the transactions are used. Foreign currency differences arerecognized in other comprehensive income and accumulated in equity.

(Continued)
AUO Corporation
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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(5)Classification of current and non-current assets and liabilities
An asset is classified as current when:a.

The asset expected to realize, or intends to sell or consume, in its normal operating cycle;b.

The asset primarily held for the purpose of trading;c.

The asset expected to realize within twelve months after the reporting date; ord.

Cash and cash equivalent excluding the asset restricted to be exchanged or used to settle aliability for at least twelve months after the reporting date.

All other assets are classified as non-current.
A liability is classified as current when:a.

The liability expected to settle in its normal operating cycle;b.

The liability primarily held for the purpose of trading;c.

The liability is due to be settled within twelve months after the reporting date; ord.

The Company does not have an unconditional right to defer settlement of the liability for atleast twelve months after the reporting date. Terms of a liability that could, at the option of thecounterparty, result in its settlement by the issue of equity instruments, do not affect its
classification.

All other liabilities are classified as non-current.
(6)

Cash and cash equivalents
Cash comprises cash balances and demand deposits. Cash equivalents comprise short-term highly
liquid investments that are readily convertible into known amount of cash and are subject to an
insignificant risk of changes in their fair value. Time deposits with short-term maturity but not forinvestments and other purposes and are qualified with the aforementioned criteria are classified as
cash equivalent.

(7)

Financial instrumentsa.

Financial assets(i)Classification of financial assets
The Company classifies financial assets into the following categories: financial assets at
amortized cost, financial assets at fair value through other comprehensive income andfinancial assets at fair value through profit or loss. When, and only when, the Company
changes its business model for managing financial assets it shall reclassify all affectedfinancial assets.

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Notes to Consolidated Financial Statements(a)Financial assets at amortized cost
A financial asset is measured at amortized cost if it meets both of the following
conditions and is not designated as measured at fair value through profit or loss:i.

it is held within a business model whose objective is to hold financial assets
to collect contractual cash flows; andii.

its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

Such financial assets are initially recognized at fair value, plus any directly
attributable transaction costs. Subsequently, these assets are measured at amortizedcost using the effective interest method, less any impairment losses. Interest
income, foreign exchange gains and losses, and recognition (reversal) of
impairment losses, are recognized in profit or loss.
(b)

Financial assets at fair value through other comprehensive income
On initial recognition, the Company is able to make an irrevocable election topresent subsequent changes in the fair value of investments in equity instrumentsthat is not held for trading in other comprehensive income. This election is made on
an instrument-by-instrument basis.
Such financial assets are initially recognized at fair value, plus any directly
attributable transaction costs. Subsequent to initial recognition, they are measured
at fair value and changes therein are recognized in other comprehensive income andaccumulated in equity unrealized gains (losses) on financial assets at fair value
through other comprehensive income, except for dividends deriving from equity
investments which are recognized in profit or loss unless the dividend clearly
represents a recovery of part of the cost of the investment. When an investment isderecognized, the cumulative gain or loss in equity will not be reclassified to profit
or loss, instead, is reclassified to retained earnings.
Dividends on investments in equity instruments are recognized on the date that theCompany’s right to receive the dividends is established.

(c)Financial assets at fair value through profit or loss
All financial assets not classified as at amortized cost or at fair value through othercomprehensive income as described above are measured at fair value through profit
or loss. This includes all derivative financial assets.
Such financial assets are initially recognized at fair value, and attributabletransaction costs are recognized in profit or loss as incurred. Subsequent to initialrecognition, they are measured at fair value and changes therein are recognized in
profit or loss.

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Notes to Consolidated Financial Statements(ii)

Impairment of financial assets
The Company recognizes loss allowances for expected credit losses on financial assets at
amortized cost, including cash and cash equivalents, receivables, refundable deposits andother financial assets, etc., and contract assets. Loss allowances for financial assets are
deducted from the gross carrying amount of the assets. The recognition or reversal of theloss allowance is recognized in profit or loss.
The expected credit loss is the weighted average of credit losses with the respective risksof a default occurring on the financial instrument as the weights.
The Company measures the loss allowance for a financial instrument at an amount equal
to lifetime expected credit losses, except for the financial instrument that is determined
to have low credit risk at the reporting date and the credit risk thereof has not increased
significantly since initial recognition, which is measured at an amount equal to the 12month expected credit losses. For trade receivables and contract assets, the Company
measures their loss allowances at an amount equal to lifetime expected credit losses.
When determining whether the credit risk of a financial asset has increased significantly
since initial recognition, the Company considers reasonable and supportable informationthat is relevant. This includes both qualitative and quantitative information and analysis,
based on the Company’s historical experience and credit assessment as well as forwardlooking information.
In the circumstance that a financial asset is past due or the borrower is unlikely to pay its
credit obligations to the Company in full, the Company considers the credit risk on that
financial asset has significantly increased, or further, to be in default.
At each reporting date, the Company assesses whether financial assets at amortized costare credit-impaired. A financial asset is “credit-impaired” when one or more events thathave a detrimental impact on the estimated future cash flows of the financial asset haveoccurred.

(iii) De-recognition of financial assets
The Company derecognizes financial assets when the contractual rights to the cash flows
from the asset expire, or when the Company transfers substantially all the risks andrewards of ownership of the financial assets to another entity.
b. Financial liabilities(i)Classification of financial liabilities
The Company classifies financial liabilities into the following categories: financial
liabilities at fair value through profit or loss and other financial liabilities.

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Notes to Consolidated Financial Statements(a)Financial liabilities at fair value through profit or loss
The Company designates financial liabilities as held for trading for the purpose ofhedging exposure to foreign exchange risk arising from operating and financing
activities. When a financial liability is not effective as a hedge, the Company
accounts for it as a financial liability at fair value through profit or loss.
The Company accounts for financial liabilities, other than the one mentioned
above, as at fair value through profit or loss at initial recognition. Attributabletransaction costs are recognized in profit or loss as incurred. Financial liabilities inthis category are subsequently measured at fair value and changes therein, whichtakes into account any interest expense, are recognized in profit or loss.

(b)

Other financial liabilities
Financial liabilities not classified as held for trading, or not designated as at fairvalue through profit or loss (including loans and borrowings, trade and otherpayables), are measured at fair value, plus any directly attributable transaction costat the time of initial recognition. Subsequent to initial recognition, they aremeasured at amortized cost calculated using the effective interest method, except
for insignificant recognition of interest expense from short-term borrowings andpayables. Interest expense not capitalized as an asset cost is recognized in profit or
loss.

(ii)

De-recognition of financial liabilities
The Company derecognizes financial liabilities when the contractual obligation has beendischarged, cancelled or expired. The difference between the carrying amount and theconsideration paid or payable, including any non-cash assets transferred or liabilities
assumed is recognized in profit or loss.

c.

Offsetting of financial assets and liabilities
The Company presents financial assets and liabilities on a net basis in the consolidated balance
sheet when the Company has the legally enforceable rights to offset, and intends to settle suchfinancial assets and liabilities on a net basis or to realize the assets and settle the liabilities
simultaneously.

(8)

Inventories
The cost of inventories includes all necessary expenditures and charges for bringing the inventory toa stable, useable and marketable condition and location. The production overhead is allocated tofinished goods and work in progress based on the normal capacity of the production facilities.
Subsequently, inventories are measured at the lower of cost and net realizable value. Cost isdetermined using the weighted-average method. Net realizable value is calculated based on theestimated selling price less all estimated costs of completion and the estimated costs necessary to
make the sale.

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Notes to Consolidated Financial Statements(9)

Investments in associates and joint ventures
Associates are those entities in which the Company has the power to exercise significant influence,but not control or joint control, over their financial and operating policies.
Joint venture is a joint arrangement whereby the Company and other parties agreed to share thecontrol of the arrangement, and have rights to the net assets of the arrangement. Unanimous consent
from the parties sharing control is required when making decisions for the relevant activities of thearrangement.
Investments in associates or joint ventures are accounted for using the equity method and arerecognized initially at cost. The consolidated financial statements include the Company’ s share of
the profit or loss and other comprehensive income of associates or joint ventures, after adjustments
are made to align their accounting policies with those of the Company. When an associate or a joint
venture incurs changes in its equity not derived from profit or loss and other comprehensive income,the Company recognizes all the equity changes in proportion to its ownership interest in theassociate or joint venture as capital surplus provided that the ownership interest in the associate or
joint venture remains unchanged.
The difference between acquisition cost and fair value of associates’ or joint ventures’ identifiable
assets and liabilities as of the acquisition date is accounted for as goodwill. Goodwill is included in
the original investment cost of acquired associates or joint ventures and is not amortized. If the fairvalue of identified assets and liabilities is in excess of acquisition cost, the remaining excess overacquisition cost is recognized as a gain in profit or loss.
The Company discontinues the use of the equity method from the date when its investment ceases tobe an associate or a joint venture, and then measures the retained interests at fair value at that date.
The difference between the carrying amount of the investment at the date the equity method was
discontinued and the fair value of the retained interests along with any proceeds from disposing of apart interest in the associate or joint venture is recognized in profit or loss. Moreover, the Company
accounts for all amounts previously recognized in other comprehensive income in relation to thatinvestment on the same basis as would be required if the investee had directly disposed of the related
assets or liabilities.
When the Company subscribes for additional shares in an associate or a joint venture at a percentage
different from its existing ownership percentage, the resulting carrying amount of the investment
differs from the amount of the Company’s proportionate interest in the net assets of the associate or
joint venture. The Company records such a difference as an adjustment to investments with thecorresponding amount charged or credited to capital surplus. If the capital surplus arising frominvestment accounted for under the equity method in associates or joint ventures is insufficient tooffset with the said corresponding amount, the differences will be charged or credited to retained
earnings.

(Continued)

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Notes to Consolidated Financial Statements

If the Company’s ownership interest in an associate or a joint venture is reduced due to disposal ofor disproportionate subscription to the shares, but the Company continues to apply the equity
method, the Company shall reclassify to profit or loss the proportion of the gain or loss that had
previously been recognized in other comprehensive income relating to that reduction in ownershipinterest on the same basis as would be required if the investee had directly disposed of the related
assets or liabilities.
At the end of each reporting period, if there is any indication of impairment, the entire carrying
amount of the investment including goodwill is tested for impairment as a single asset, by comparing
its recoverable amount with its carrying amount. An impairment loss recognized forms part of thecarrying amount of the investment in associates or joint ventures. Accordingly, any reversal of that
impairment loss is recognized to the extent that the recoverable amount of the investment
subsequently increases.
Profits and losses resulting from the transactions between the Company and associates or joint
ventures are recognized in the Company’ s consolidated financial statements only to the extent ofinterests in the associate or joint venture that are not related to the Company.
When the Company’ s share of losses exceeds its interest in an associate or a joint venture, thecarrying amount of that interest, including any long-term investments that form part thereof, isreduced to zero, and the recognition of further losses is discontinued except to the extent that theCompany has a legal or constructive obligation, or has made payments on behalf of the investee.
(10) Investment property
Investment property is the property held either to earn rental income or for capital appreciation or for
both, but not for sale in the ordinary course of business, use in the production or supply of goods orservices or for administrative purposes. Investment property is measured at cost on initialrecognition. Subsequent to initial recognition, investment properties are measured using the costmodel. Depreciation is charged and recognized in non-operating income and expenses based on the
depreciable amount. Depreciation methods, useful lives and residual values are in accordance withthe policy of property, plant and equipment. Cost includes expenditure that is directly attributable tothe acquisition of the investment property.
An investment property is reclassified to property, plant and equipment at its carrying amount when
the use of the investment property changes.

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Notes to Consolidated Financial Statements(11) Property, plant and equipmenta.

Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation andaccumulated impairment losses. Cost includes expenditure that is directly attributed to theacquisition of the asset, any cost directly attributable to bringing the asset to the location andcondition necessary for it to be capable of operating in the manner intended by management,
the initial estimate of the costs of dismantling and removing the item and restoring the site on
which it is located, and any borrowing cost that is eligible for capitalization. The cost of thesoftware is capitalized as part of the equipment if the purchase of the software is necessary forthe equipment to be capable of operating.
When part of an item of property, plant and equipment with a cost that is significant in relation
to the total cost of the item and the useful life or the depreciation method of the significant partis different from another significant part of that same item, it is accounted for as a separate
item (significant component) of property, plant and equipment.
The gain or loss arising from the derecognition of an item of property, plant and equipment isdetermined as the difference between the net disposal proceeds, if any, and the carrying
amount of the item, and is recognized in profit or loss.

b.

Subsequent costs
Subsequent expenditure is capitalized only when it is probable that the future economic
benefits associated with the expenditure will flow to the Company and the cost of the item canbe measured reliably. Ongoing repairs and maintenance expenses are recognized in profit orloss as incurred.

c.

Depreciation
Depreciation is determined by depreciable amount allocated over the estimated useful lives of
the respective assets, considering significant components of an individual asset on a straightline basis. If a component has a useful life that is different from the remainder of that asset,that component is depreciated separately. Depreciation charge is recognized in profit or loss.
Leased assets are depreciated over their useful lives if it is reasonably certain that theCompany will obtain ownership by the end of the lease term. Otherwise, leased assets are
depreciated over the shorter of the lease term and their useful lives.
Except for land, which is not depreciated, the estimated useful lives of the assets are as
follows:(i)

Buildings: 20~50 years(ii)

Machinery and equipment: 3~10 years(iii) Other equipment: 3~6 years(Continued)

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Notes to Consolidated Financial Statements

Depreciation methods, useful lives, and residual values are reviewed at each annual reporting
date and, if necessary, adjusted as appropriate. Any changes therein are accounted for aschanges in accounting estimates.
d.

Reclassification to investment property
A property is reclassified to investment property at its carrying amount when the use of theproperty changes from owner-occupied to investment purpose.

(12) Leasesa.

Identifying a lease
A contract is, or contains, a lease when all the following conditions are satisfied:(i)the contract involves the use of an identified asset, and the supplier does not have asubstantive right to substitute the asset; and(ii)

the Company has the right to obtain substantially all of the economic benefits from use of
the identified asset throughout the period of use; and(iii) the Company has the right to direct the use of the identified asset throughout the periodof use.
b.

As a lessee
Payments for leases of low-value assets and short-term leases are recognized as expenses on astraight-line basis during the lease term for which the recognition exemption is applied. Except
for leases described above, a right-of-use asset and a lease liability shall be recognized for allother leases at the lease commencement date.
The Company recognizes a right-of-use asset and a lease liability at the lease commencement
date. The lease liability is initially measured at the present value of the lease payments(including fixed payments and variable lease payments that depend on an index or a rate),
discounted using the lessee’ s incremental borrowing rate. The right-of-use asset is initiallymeasured at cost, which comprises the initial amount of the lease liability, adjusted for any
lease payments made at or before the commencement date, less any lease incentives received,
plus any initial direct costs incurred and an estimate of costs to be incurred in restoring theunderlying asset.

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Notes to Consolidated Financial Statements

The right-of-use asset is subsequently depreciated using the straight-line method over the
shorter of the useful life of the right-of-use asset or the lease term. The lease liability issubsequently measured at amortized cost using the effective interest method. It is remeasured(i) if there is a change in the lease term; (ii) if there is a change in future lease payments arisingfrom a change in an index or a rate; (iii) if there is a change in the amounts expected to bepayable under a residual value guarantee; or (iv) if the Company changes its assessment of
whether it will exercise a purchase, extension or termination option. When the lease liability isremeasured in the circumstances aforementioned, a corresponding adjustment is made to thecarrying amount of the right-of-use asset. However, if the carrying amount of the right-of-use
asset is reduced to zero, any remaining amount of the remeasurement is recognized in profit orloss.
Moreover, the lease liability is remeasured when lease modifications occur that decrease thescope of the lease. The Company accounts for the remeasurement of the lease liability bydecreasing the carrying amount of the right-of-use asset to reflect the partial or full terminationof the lease, and recognizes in profit or loss any gain or loss relating to the partial or fulltermination of the lease.
c.

As a lessor
Lease income from an operating lease is recognized in profit or loss on a straight-line basis
over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the asset leased to others and recognized as an expense on
a straight-line basis over the lease term.

(13) Intangible assetsa.

Goodwill
Goodwill is recognized when the purchase price exceeds the fair value of identifiable net
assets acquired in a business combination. Goodwill is measured at cost less accumulated
impairment losses.
Equity-method goodwill is included in the carrying amounts of the equity investments. The
impairment losses for the goodwill within the equity-accounted investees are accounted for as
deductions of carrying amounts of investments in equity-accounted investees.

b.

Research and development
During the research phase, activities are carried out to obtain and understand new scientific ortechnical knowledge. Expenditures during this phase are recognized in profit or loss as
incurred.

(Continued)

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Notes to Consolidated Financial Statements

Expenditure arising from development is capitalized as an intangible asset when the Company
demonstrates all of the following:(i)the technical feasibility of completing the intangible asset so that it will be available foruse or sale;(ii)

its intention to complete the intangible asset and use or sell it;(iii) its ability to use or sell the intangible asset;(iv) the probability that the intangible asset will generate probable future economic benefits;(v)

the availability of adequate technical, financial and other resources to complete thedevelopment and to use or sell the intangible asset; and(vi) its ability to measure reliably the expenditure attributable to the intangible asset during
its development.
Development expenditure which fails to meet the criteria for recognition as an intangible asset
is reflected in profit or loss when incurred. Capitalized development expenditure is measured
at cost less accumulated amortization and any accumulated impairment losses.
c.

Other intangible assets
Other intangible assets acquired are measured at cost less accumulated amortization and any
accumulated impairment losses.

d.

Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, including expenditure
on internally generated goodwill and brands, is recognized in profit or loss as incurred.

e.

Amortization
The depreciable amount of an intangible asset is the cost less its residual value. Other than
goodwill and intangible assets with indefinite useful life, an intangible asset with a finite
useful life is amortized over 3 to 20 years using the straight-line method from the date that theasset is made available for use. The amortization charge is recognized in profit or loss.
The residual value, amortization period, and amortization method are reviewed at least
annually at each annual reporting date, and any changes therein are accounted for as changes inaccounting estimates.

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Notes to Consolidated Financial Statements(14) Noncurrent assets held for saleNoncurrent assets are classified as held for sale when their carrying amounts are expected to be
recovered primarily through sale rather than through continuing use. Such noncurrent assets must be
available for immediate sale in their present condition and the sale is highly probable within one
year. When classified as held for sale, the assets are measured at the lower of their carrying amountand fair value less costs to sell. Impairment losses on initial classification as held for sale andsubsequent gains or losses on re-measurement are recognized in profit or loss. However, subsequent
gains are not recognized in excess of the cumulative impairment loss that has been recognized.
When property, plant and equipment and right-of-use assets are classified as held for sale, they are
no longer depreciated.
(15) Impairment – non-financial assets
Other than inventories, deferred tax assets and noncurrent assets held for sale, the carrying amountsof the Company’ s investment property measured at cost and other long-term non-financial assets(property, plant and equipment, right-of-use assets and other intangible assets with finite useful
lives), are reviewed at the reporting date to determine whether there is any indication of impairment.
When there is an indication of impairment exists for the aforementioned assets, the recoverable
amount of the asset is estimated. If it is not possible to estimate the recoverable amount of anindividual asset, the Company estimates the recoverable amount of the cash-generating unit(“CGU”) to which the asset has been allocated to.
In performing an impairment test for other long-term non-financial assets, the estimated recoverable
amount is evaluated in terms of an asset or a CGU. Any excess of the carrying amount of the asset or
its related CGU over its recoverable amount is recognized as an impairment loss. The recoverable
amount of an asset or a CGU is the higher of its fair value less costs of disposal and its value in use.
If there is evidence that the accumulated impairment loss of an asset other than goodwill andintangible assets with indefinite useful lives in prior years no longer exists or has decreased, theamount previously recognized as an impairment loss is reversed, and the carrying amount of theasset or CGU is increased to the revised estimate of its recoverable amount. The increased carrying
amount shall not exceed the carrying amount that would have been determined (net of depreciationor amortization) had no impairment loss been recognized for the asset in prior years.
For goodwill and intangible assets with indefinite useful lives or that are not yet available for use,are required to be tested for impairment at least annually. Any excess of the carrying amount of theasset over its recoverable amount is recognized as an impairment loss.
For the purpose of impairment test, goodwill acquired in a business combination is allocated to
CGUs that are expected to benefit from the synergies of the combination. If the recoverable amountof a CGU is less than its carrying amount, the difference is allocated first to reduce the carrying
amount of any goodwill allocated to the unit, then the carrying amounts of the other assets in the unit
on a pro rata basis. The impairment loss recognized on goodwill is not reversed in a subsequent
period.

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Notes to Consolidated Financial Statements(16) Provisions
A provision is recognized when the Company has a present obligation arising from a past event, it isprobable that the Company will be required to make an outflow of resources embodying economic
benefits to settle the obligation, and the amount of the obligation can be estimated reliably.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
the current market assessments of the time value of money and the risks specific to the liability. The
unwinding of the discount is recognized as interest expense.
a.

Warranties
A provision for warranties is recognized when the underlying products or services are sold.
The provision is weighting factors based on historical experience of warranty claims rate andother possible outcomes against their associated probabilities.

b.

Decommissioning obligation
The Company is subject to decommissioning obligations related to certain items of property,
plant and equipment. Such decommissioning obligations are primarily attributable to clean-up
costs, including deconstruction, transportation, and recover costs. The unwinding of the
discount based on original discount rate is recognized in profit or loss as interest expense overthe periods with corresponding increase in the carrying amounts of the accrued
decommissioning costs. The carrying amount of the accruals at the end of the assets’ useful
lives is the same as the estimated decommissioning costs.

c.

Litigation
Management periodically assesses the obligation of all litigation and claims and relative legal
costs. Provision for loss contingencies arising from claims, assessments, litigation, fines, andpenalties and other sources are recognized when it is probable the present obligation as a resultof a past event will result in an outflow of resources and the amount can be reasonably
estimated.

d.

Restructuring
A provision for restructuring is recognized when the Company has approved a detailed andformal restructuring plan, and the restructuring has either commenced or has been announced
publicly. Provisions shall not be recognized for future operating losses.

e.

Onerous contracts
A provision for onerous contracts is recognized when the unavoidable costs of meeting theobligations under the contract exceed the economic benefits expected to be received under it.
The provision is measured at the present value of the lower of the expected cost of terminating
the contract and the expected net cost of continuing with the contract. Before a provision isestablished, the Company recognizes any impairment loss on the assets associated with that
contract.

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Notes to Consolidated Financial Statements

Provisions recognized are the best estimates of the expenditure for settling the present obligation ateach reporting date.
(17) Treasury shares
Where the Company repurchases its common stock that has been issued, the consideration paid,
including all directly attributable costs is recorded as treasury share and deducted from equity. Whentreasury share is reissued, the excess of sales proceeds over cost is accounted for as capital surplus –treasury shares. If the sales proceeds are less than cost, the deficiency is accounted for as a reductionof capital surplus arising from similar types of treasury shares. If such capital surplus is insufficient
to cover the deficiency, the remainder is recorded as a reduction of retained earnings. The carrying
amount of treasury share is calculated using the weighted-average cost of different types ofrepurchase.
If treasury share is retired, the weighted-average cost of the retired treasury share is written off
against the par value and the capital surplus premium, if any, of the stock retired on a pro rata basis.
If the weighted-average cost written off exceeds the sum of the par value and the capital surplus
premium, the difference is accounted for as a reduction of capital surplus – treasury shares, or areduction of retained earnings for any deficiency where capital surplus – treasury shares isinsufficient to cover the difference. If the weighted-average cost written off is less than the sum of
the par value and the capital surplus premium, if any, of the stock retired, the difference is accounted
for as an increase in capital surplus – treasury shares.
(18) Revenue from contracts with customers
Revenue is measured based on the consideration that the Company expects to be entitled in thetransfer of goods or services to a customer. The Company recognizes revenue when it satisfies a
performance obligation by transferring control over a product or service to a customer. The
following is a description of the Company’s major revenues:a.

Sales of goods
Revenue is recognized when the control over a product has been transferred to the customer.
The transfer of control refers to the product has been delivered to and accepted by thecustomer without remaining performance obligations from the Company. Delivery occurs
when the product has been shipped to the specified location and the risk of loss over the
product has been transferred to the customer, as well as when the product has been accepted by
the customer according to the terms of sales contract, or when the Company has objective
evidence that all criteria for acceptance have been satisfied.
For certain contracts with volume discounts offer to customers, revenue is recognized on a net
basis of contract price less estimated volume discounts, and only to the extent that it is highly
probable that a significant reversal will not occur. The amount of volume discounts is
estimated based on the expected value with reference to the historical experience, and isrecorded as refund liability (presented under other current liabilities).

(Continued)

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Notes to Consolidated Financial Statements

Trade receivable is recognized when the Company is entitled for unconditional right to receive
payment upon delivery of goods to customers. The consideration received in advance from thecustomer according to the sales contract but without delivery of goods is recognized as acontract liability, for which revenue is recognized when the control over the goods istransferred to the customer.
The Company provides standard warranties for goods sold and has obligation to refund
payments for defective goods, in which the Company has recognized provisions for warranties
to fulfill the obligation. Refer to Note 4(16) for further details.
b.

Construction contracts
For construction contracts, revenue is recognized progressively based on the progress towards
complete satisfaction of contract activities, and only to the extent that it is highly probable thata significant reversal in the amount of cumulative revenue recognized will not occur.
If the Company cannot reasonably measure its progress towards complete satisfaction of
performance obligations in accordance with the construction contracts, revenue is recognized
only to the extent of contract costs incurred that it is expected to be recoverable.
The consideration is paid by the customer according to the agreed payment terms. The excessof the amount that has been recognized as revenue over the amount that the Company has
issued a bill is recognized as a contract asset. When the entitlement to the payment becomes
unconditional, the contract asset is transferred to receivables.
A contract liability is recognized for an advance consideration that the Company has billed tocustomers arising from construction contracts. When the construction is completed andaccepted by the customers, the contract liability is transferred to revenue.
If there are changes in circumstances, the estimates of revenue, cost and the progress towards
complete satisfaction of contract will be amended. Any changes therein are recognized in
profit or loss during the period in which the changes and amendments are made.
The Company provides standard warranties for construction contracts and has recognizedprovisions for warranties to fulfill the obligation. Refer to Note 4(16) for further details.

c.

Financing components
The Company expects that the length of time when the Company transfers the goods orservices to the customer and when the customer pays for those goods or services will be lessthan one year. Therefore, the amount of consideration is not adjusted for the time value ofmoney.

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Notes to Consolidated Financial Statements(19) Government grantsa.

Grants for compensating the research and development expenditures
Grants that compensate the Company for research and development expenditures arerecognized in profit or loss on a systematic basis in the periods in which the expenses arerecognized.

b.

Grants related to the purchase of assets
Grants related to the purchase of assets are set up as deferred income and are recognized in
profit or loss on a systematic basis over the useful life of the assets.

c.

Other grants
Other grants from government that becomes receivable as compensation for expenses or losses
already incurred or for the purpose of giving immediate financial support to the Company withno future related costs are recognized in profit or loss of the period in which it becomesreceivable.

(20) Employee benefitsa.

Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognized as an
employee benefit expense in profit or loss in the periods during which services are rendered by
employees.

b.

Defined benefit plans
The Company’ s net obligation in respect of defined benefit pension plans is calculated
separately for each benefit plan by estimating the amount of future benefit that employees haveearned in the current and prior periods, discounting that amount and deducting the fair value ofany plan assets. Discount rate is determined by reference to the yield rate of Taiwan
government bonds at the reporting date. The calculation of defined benefit obligations is
performed annually by a qualified actuary using the Projected Unit Credit Cost Method.
Remeasurements of the net defined benefit liability (asset) which comprise actuarial gains andlosses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any,excluding interest), are recognized in other comprehensive income in the period in which theyoccur, and which then are reflected in retained earnings and will not be reclassified to profit orloss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change inbenefit that relates to past service or the gain or loss on curtailment is recognized immediately
in profit or loss. The Company recognizes gains and losses on the settlement of a defined
benefit plan when the settlement occurs.

(Continued)

170

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Notes to Consolidated Financial Statementsc.

Short-term employee benefits
Short-term employee benefit obligations, which are due to be settled within twelve months aremeasured on an undiscounted basis and are expensed as the related service is provided.
The expected cost of cash bonus or profit-sharing plans, which is anticipated to be paid within
one year, are recognized as a liability when the Company has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee, and theobligation can be estimated reliably.

(21) Share-based payment arrangements
The fair value of equity-settled share-based payment arrangements at the grant date is recognized ascompensation cost, together with a corresponding increase in equity, over the periods in which theemployees become unconditionally entitled to the awards. The amount of the compensation cost
recognized as an expense is adjusted to reflect the number of awards whose related service and nonmarket performance conditions are expected to be met, such that the amount ultimately recognized
as an expense is based on the number of awards that meet the related service and non-market
performance conditions at the vesting date.
For share-based payment awards with non-vesting conditions, the fair value of the share-based
payment at the grant date is measured to reflect such conditions, and there is no true-up fordifferences between expected and actual outcomes.
(22) Income taxes
Income tax expense comprises current and deferred taxes.
The Company has determined that the global minimum top-up tax, which is required to pay under
Pillar Two legislation, is in the scope of IAS 12, Income taxes. The Company has applied atemporary mandatory exception to deferred tax accounting for the impacts of the top-up tax andaccounts for it as a current tax when it is incurred.
a.

Current taxes
Current taxes comprise the expected tax payable or receivable on the taxable income or losses
for the year and any adjustments to tax payable or receivable in respect of previous years. It ismeasured using the statutory tax rate or the actual legislative tax rate at the reporting date.
In accordance with the ROC Income Tax Act, undistributed earnings from the companies
located in the Republic of China, if any, is subject to an additional surtax. The surtax onunappropriated earnings is expensed in the year the shareholders approved the distributions
which is the year subsequent to the year the earnings arise.

(Continued)
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2023 Annual Report

171

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statementsb.

Deferred taxes
Deferred taxes are recognized in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used forincome tax purposes at the reporting date. Deferred tax liabilities are recognized for temporary
difference of future taxable income. Deferred tax assets are recognized for unused tax losses,
unused tax credits and deductible temporary differences to the extent that it is probable that
future taxable profits will be available against which they can be utilized.
Deferred tax assets are reviewed at annual reporting date, by considering global economic
environment, industry environment, statutory tax deduction years and projected future taxable
income, and reduced to the extent that it is no longer probable that future taxable profits will
be available to allow all or part of the deferred tax asset to be recovered. Deferred tax assets
which originally not recognized is also reviewed at annual reporting date and recognized to theextent that it is probable that future taxable profits will be available to allow all or part of thedeferred tax asset to be recovered.
Deferred taxes liabilities for taxable temporary differences related to investments in
subsidiaries, associates and joint arrangements are recognized, unless the Company is able tocontrol the timing of the reversal of the taxable temporary differences and it is probable thatthey will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary
differences when the reverse, using the statutory tax rate or the actual legislative tax rate on thereporting date. Deferred tax assets and liabilities are offset only if certain criteria are met.
Current taxes and deferred taxes are recognized in profit or loss except to the extent that it
relates to items recognized directly in equity or other comprehensive income.

(23) Business combinations
The consideration transferred in the acquisition is measured at fair value, as are identifiable net
assets acquired. Goodwill is measured as the excess of the aggregate of the fair value ofconsideration transferred and the amount of any non-controlling interests in the acquiree over the net
identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is inexcess of the aggregate consideration transferred and the amount of any non-controlling interests inthe acquiree, after reassessing all of the assets acquired and all of the liabilities assumed being
properly identified, the difference is recognized in profit or loss as a gain on bargain purchase.
Acquisition-related costs are expensed as incurred, except that the costs are related to the issue ofdebt or equity instruments.
Non-controlling interests in an acquiree that are present ownership interests and entitle their holders
to a proportionate share of the entity’s net assets in the event of liquidation are measured, on a caseby-case basis, at either fair value or the present ownership instruments’ proportionate share in therecognized amounts of the acquiree’ s net identifiable assets. All other components of noncontrolling interests shall be measured at their acquisition-date fair values, unless anothermeasurement basis is required by TIFRSs.

(Continued)

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Notes to Consolidated Financial Statements

Any contingent consideration included in the consideration transferred is recognized at fair value atthe date of acquisition. Subsequent changes to the fair value of the contingent consideration during
the measurement period shall adjust to the cost of the acquisition and the resulting goodwill
retrospectively. An adjustment made during the measurement period is to reflect additional
information obtained by the Company about facts and circumstances that existed as of theacquisition date. The measurement period shall not exceed one year from the acquisition date. The
accounting treatment for those changes to the fair value of the contingent consideration that are notmeasurement period adjustments is depending on the classification of the contingent consideration.
If the contingent consideration is classified as equity, it is not remeasured and the subsequent
settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured atfair value at each reporting date and subsequent changes in the fair value are recognized in profit orloss.
If the initial accounting for a business combination is incomplete by the end of the reporting period
in which the combination occurs, the provisional amounts for the items for which the accounting has
not yet completed are reported in financial statements. During the measurement period, theprovisional amounts are retrospectively adjusted, or additional assets or liabilities are recognized, toreflect new information obtained about facts and circumstances that existed as of the acquisition
date. The measurement period shall not exceed one year from the acquisition date.
(24) Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing profit or loss attributable to the shareholders
of AUO by the weighted-average number of common shares outstanding during the period. In
computing diluted earnings per share, profit or loss attributable to the shareholders of AUO and theweighted-average number of common shares outstanding during the period are adjusted for theeffects of dilutive potential common stock, assuming dilutive share equivalents had been issued. The
Company’s potential dilutive common shares comprise the estimate of employee compensation to be
distributed in the form of stock.
The weighted-average outstanding shares are retroactively adjusted for the effects of stock dividends
transferred from retained earnings or capital surplus to common stock.
(25) Segment information
An operating segment is a component of an entity that engages in business activities from which it
may earn revenue and incur expenses (including revenues and expenses relating to transactions withother components of the same entity). Operating results of the operating segments are reviewed
regularly by the Company’s chief operating decision maker (“CODM”) to make decisions pertaining
to the allocation of resources to the segment and to assess its performance. Meanwhile, discrete
financial information for operating results is available.

(Continued)
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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

5.

Critical Accounting Judgments and Key Sources of Estimations and Assumptions Uncertainty
The preparation of the consolidated financial statements in conformity with the Regulations and TIFRSs
requires management to make judgments, estimates and assumptions that affect the application of theaccounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may
differ from these estimates.
Estimates and underlying assumptions are reviewed by management on an ongoing basis. Revisions toaccounting estimates are recognized in the period in which the estimates are revised and in any future
periods affected.
Information about critical judgments, estimates and assumptions in applying accounting policies that havethe significant effect on the amounts recognized in the consolidated financial statements is included in thefollowing notes:(1)

Impairment of long-term non-financial assets, other than goodwill
In the process of evaluating the potential impairment of tangible and intangible assets other than
goodwill, the Company is required to make subjective judgments in determining the independent
cash flows, useful lives, expected future income and expenses related to the specific asset groups
with the consideration of the usage mode of asset and the nature of industry. Any changes in theseestimates based on changed economic conditions or business strategies could result in significant
impairment charges or reversal in future years.

(2)

Impairment of goodwill
The assessment of impairment of goodwill requires the Company to make subjective judgment todetermine the identified CGUs, allocate the goodwill to relevant CGUs and estimate the recoverable
amount of relevant CGUs. Any changes in these estimates based on changed economic conditions orbusiness strategies could result in significant adjustments.

(3)

Recognition of deferred tax assets
Deferred tax assets are recognized to the extent that it is probable that future taxable profits will beavailable against which those deferred tax assets can be utilized. Assessment of the realization of thedeferred tax assets requires management’ s subjective judgment and estimate, including the future
revenue growth and profitability, the sources of taxable income, the amount of tax credits can beutilized and feasible tax planning strategies. Changes in the global economic environment, theindustry trends and relevant laws and regulations may result in adjustments to the deferred tax
assets.

(4)

Valuation of inventories
As inventories are stated at the lower of cost or net realizable value, the Company estimates the net
realizable value of inventories for obsolescence and unmarketable items at the end of reporting
period and then writes down the cost of inventories to net realizable value. The net realizable valueof the inventory is mainly determined based on assumptions of future demand within a specific time
horizon. Due to the rapid industrial transformation, there may be significant changes in the net
realizable value of inventories.

(Continued)

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Notes to Consolidated Financial Statements

6.

Description of Significant Accounts(1)

Cash and Cash Equivalents

Cash on hand, demand deposits and checking accounts
Time deposits

December 31, December 31,
2022
2023
$
61,838,715
48,151,084
22,130,748
32,462,036$
83,969,463
80,613,120

Refer to Note 6(28) for the disclosure of credit risk, currency risk and sensitivity analysis of thefinancial instruments of the Company.
As at December 31, 2023 and 2022, no cash and cash equivalents were pledged with banks as
collaterals.
(2)

Financial Assets and Liabilities at Fair Value through Profit or Loss (“FVTPL”)

Financial assets mandatorily measured at FVTPL:
Current
Foreign currency forward contracts
Noncurrent
Convertible bonds
Financial liabilities measured at FVTPL:
Contingent consideration from business combination
Financial liabilities held for trading:Foreign currency forward contracts

December 31,
2023

December 31,
2022$

176,492

365,037$

139,170-$-

99,222$

11,143
11,143

252,603351,825

The Company entered into derivative contracts to manage the exposure to currency risk arising fromoperating activities. Refer to Note 6(28) for the disclosure of the Company’ s credit and currency
risks related to financial instruments.
As at December 31, 2023 and 2022, the Company’s outstanding foreign currency forward contracts
were as follows:
Contract item
Sell USD / Buy NTD
Sell USD / Buy JPY
Sell USD / Buy CNY

December 31, 2023
Maturity dateJan. 2024~Feb. 2024
Jan. 2024~Feb. 2024
Jan. 2024~Jun. 2024

Contract amountUSD 108,650 / NTD 3,426,726
USD 68,053 / JPY 9,789,458
USD 86,000 / CNY 610,112(Continued)
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2023 Annual Report175

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(3)

Contract item
Sell USD / Buy SGD
Sell NTD / Buy JPY
Sell CNY / Buy USD
Sell JPY / Buy NTD
Sell CNY / Buy NTD

December 31, 2023
Maturity dateJan. 2024~Mar. 2024
Jan. 2024~Mar. 2024
Feb. 2024~Mar. 2024
Jan. 2024
Feb. 2024

Contract amountUSD 39,508 / SGD 52,750
NTD 525,860 / JPY 2,400,000
CNY 319,382 / USD 44,885
JPY 200,000 / NTD 43,380
CNY 5,000 / NTD 21,594

Contract item
Sell USD / Buy NTD
Sell USD / Buy JPY
Sell USD / Buy CNY
Sell USD / Buy SGD
Sell NTD / Buy USD
Sell NTD / Buy JPY
Sell JPY / Buy NTD
Sell CNY / Buy USD
Sell EUR / Buy JPY

December 31, 2022
Maturity dateJan. 2023~Feb. 2023
Jan. 2023~Feb. 2023
Jan. 2023~Mar. 2023
Jan. 2023~Feb. 2023
Apr. 2023~May 2023
Jan. 2023~Mar. 2023
Jan. 2023
Jan. 2023~May 2023
Jan. 2023

Contract amountUSD 208,700 / NTD 6,465,622
USD 93,000 / JPY 12,527,074
USD 68,000 / CNY 487,743
USD 26,938 / SGD 36,770
NTD 2,779,971 / USD 89,000
NTD 1,939,137 / JPY 8,600,000
JPY 1,000,000 / NTD 232,086
CNY 2,700,000 / USD 387,616
EUR 1,000 / JPY 140,530

Financial Assets at Fair Value through Other Comprehensive Income (“FVTOCI”)

Investments in equity instruments at FVTOCI:
Equity securities – listed stocks
Equity securities – non-listed stocks

December 31,
2023
$
$

1,090,875
741,193
1,832,068

December 31,
2022
1,305,625
594,956
1,900,581

The purpose that the Company invests in the abovementioned equity securities is for long-term
strategies, but rather for trading purpose. Therefore, those equity securities are designated as
financial assets at FVTOCI.
In consideration of the Company’ s operational strategy, the Company increased its ownershipinterest in SINTRONES Technology Corp. (“SINTRONES”) in February 2023. Upon re-assessment,
the Company considers that it has obtained the ability to exercise significant influence over
SINTRONES; consequently, the Company derecognized the investment in SINTRONES as deemed
disposal, and further recognized an investment accounted for using the equity method at fair value.
The related cumulative loss of $3,596 thousand previously recognized in other comprehensive
income was reclassified to retained earnings.

(Continued)

176

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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

If the value of these equity securities appreciates or depreciates by 10% at the reporting date, othercomprehensive income would increase or decrease by $183,207 thousand and $190,058 thousand forthe years ended December 31, 2023 and 2022, respectively.
Dividends recognized from the investments in equity instruments at FVTOCI held by the Company
were disclosed as follows:

Investments held at the balance sheet date$

For the years ended
December 31,
2023
2022
2,585
6,571

As at December 31, 2023 and 2022, none of the Company’ s financial assets abovementioned waspledged as collateral.
(4)

Financial Assets at Amortized Cost

Domestic and foreign time deposits
Less: current
Noncurrent

December 31, December 31,
2022
2023
$
1,264,324
1,142,218(584,217)$
680,107
1,142,218

The Company has assessed that these financial assets are held-to-maturity to collect contractual cash
flows, which consist solely of receivables of principal and interest on principal amount outstanding.
Therefore, these investments were classified as financial assets at amortized cost.
As at December 31, 2023 and 2022, none of the Company’s domestic and foreign time deposits waspledged as collateral.
(5)

Notes and Accounts Receivable, net (Including Related and Unrelated Parties)

Notes receivable
Accounts receivablemeasured at amortized costAccounts receivablemeasured at fair value through othercomprehensive income
Less: loss allowance
Notes and accounts receivable, net
Accounts receivable from related parties, net

December 31, December 31,
2022
2023
$
55,237
5,366
16,029,165
19,887,995
7,989,097-$$$(30,545)
24,042,954
22,798,408
1,244,546(17,610)
19,875,751
18,620,248
1,255,503(Continued)
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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The Company has assessed that part of its accounts receivable were held within a business model
whose objective is achieved by both collecting contractual cash flows and selling financial assets.
Therefore, those accounts receivable were measured at fair value through other comprehensive
income.
The Company measures loss allowance for notes and accounts receivable using the simplified
approach under IFRS 9 with the lifetime expected credit losses. Analysis of expected credit losses
which was measured based on the aforementioned method, was as follows:

Not past due
Past due less than 60 days
Past due 61~180 days
Past due over 180 days

Not past due
Past due less than 60 days
Past due 61~180 days
Past due over 180 days

December 31, 2023
Carrying
Loss allowanceamount of notes
for lifetime
Weightedand accounts
expected credit
average loss
receivable
lossesrate$
22,833,577
0.00%
943,8230.00%
259,236
0.49%
1,272
10,77229.54%
3,182$
24,047,408
4,454
December 31, 2022
Carrying
Loss allowanceamount of notes
for lifetime
Weightedand accounts
expected credit
average loss
receivable
lossesrate$
19,081,287
0.00%
655,603
0.00%
137,9630.00%
3,287
72.68%
2,389$
19,878,140
2,389

In addition, there was objective evidence indicating that, under reasonable expectation, some of thenotes and accounts receivable would not be recovered in total; therefore, the Company recognized aloss allowance of $26,091 thousand and $15,221 thousand as of December 31, 2023 and 2022,
respectively.

(Continued)

178

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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The movement of the loss allowance for notes and accounts receivable was as follows:

Balance at beginning of the year
Provisions charged to expense
Write-offs
Effect of changes in foreign currency exchange rates
Balance at end of the year$$

For the years ended
December 31,
2023
2022
17,61016,05322,893
1,513(9,711)(247)
4430,545
17,610The payment terms granted to customers are generally 25 to 60 days from the end of the month
during which the invoice is issued. This term is consistent with practices in our industry, and thus,
no financing components involved.
Information about the Company’s exposure to credit risk is included in Note 6(28).
As at December 31, 2023 and 2022, the Company’ s accounts receivables sold and derecognized
were as follows:

Underwriting bank
CTBC Bank
DBS Bank
Taipei Fubon Bank
Bank of Taiwan

Underwriting bank
CTBC Bank
DBS Bank
Taipei Fubon Bank
Bank of Taiwan
E. SUN Bank
Note (a):December 31, 2023
Amountsold and
Factoring
derecognized
limit(in thousands)(in thousands)
USD 175,000 USD 152,483
USD 220,000 USD 148,227
USD 100,000 USD
93,179USD 250,000-

Amountadvanced(in thousands)
NTD 4,319,000
NTD 4,159,000
NTD 2,599,000-

December 31, 2022
Amount soldandFactoring
derecognized
limit(in thousands)(in thousands)
USD
78,000 USD
38,091
USD 170,000 USD 111,137
USD 100,000 USD
55,938
USD 250,000 USD
15,219
EUR
3,984
USD
35,000 USD
35,000

Amountadvanced(in thousands)
NTD 1,056,000
NTD 3,049,000
NTD 1,529,000
USD
13,830
EUR
3,620
USD
31,490Principal
terms
See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)Principal
terms
See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)Under these facilities, the Company transferred accounts receivable to the respective
underwriting banks, which are without recourse subject to the underwriting consents.

(Continued)
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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Note (b): The Company informed its customers pursuant to the respective facilities to makepayment directly to the respective underwriting banks.
Note (c):As of December 31, 2023 and 2022, total outstanding receivables after the abovetransactions, net of fees charged by underwriting banks, of $1,022,482 thousand and$862,484 thousand, respectively, were recognized under other current financial assets. In
addition, interest rates for the balance of advanced amount as of December 31, 2023 and2022, were ranging from 1.26%~2.04% and 1.48%~5.48%, respectively.

Note (d): To the extent of the amount transferred to the underwriting banks, risks of non-collection
or potential payment default by customers in the event of insolvency are borne byrespective banks. The Company is not responsible for the collection of receivables
subject to these facilities, or for any legal proceedings and costs thereof in collecting
these receivables. In case any commercial dispute between the Company and customers
or other reasons results in the Company’s failure to perform the obligation under thesefacilities, the banks have requested the Company to issue promissory notes in theamounts equal to 10 percent of respective facilities or to transfer receivables in theamounts equal to 10 percent of respective facilities. Other than such arrangements, nocollaterals were provided by the Company.
(6)

Inventories

Finished goods
Work-in-progress
Raw materials

December 31, December 31,
2023
2022
$
10,523,060
10,126,618
11,360,501
10,161,992
7,119,560
9,975,103$
29,003,121
30,263,713

For the years ended December 31, 2023 and 2022, the amounts recognized as cost of sales in relation
to inventories were $243,354,069 thousand and $245,225,166 thousand, respectively. The net ofprovisions (reversals) for inventories written down (increased) to net realizable value, which werealso included in cost of sales, amounted to $2,030,133 thousand in reversals and $1,804,332
thousand in provisions for the years ended December 31, 2023 and 2022, respectively.
As at December 31, 2023 and 2022, none of the Company’s inventories was pledged as collateral.

(Continued)

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Notes to Consolidated Financial Statements(7)

Investments in Equity-accounted Investeesa.

Associates

Qisda Corporation (“Qisda”)
Ennostar Inc. (“Ennostar”)
ADLINK Technology Inc. (“ADLINK”)
Star Shining Energy Corporation. (“SSEC”)
Raydium Semiconductor Corporation (“Raydium”)
Daxin Materials Corp. (“Daxin”)
Others

December 31, December 31,
2022
2023
$
11,262,543
12,056,578
8,490,597
9,858,062
3,860,539
4,104,562
2,496,895
2,390,435
1,882,618
2,194,517
775,934
729,966
614,454409,782$
29,383,580
31,743,902

None of the above associates is considered individually material to the Company. The
following table summarized the amount recognized by the Company at its share of those
associates.

The Company’s share of associates’:Profit (loss)
Other comprehensive income (loss)
Total comprehensive income

For the years ended
December 31,
2023
2022
$
$

(518,049)
373,751(144,298)

1,991,642(799,903)
1,191,739

In connection with the Company’s operational strategy, the Company continually increased its
shareholdings in Ennostar and ADLINK with total investments of $5,183,707 thousand for theyear ended December 31, 2022. Among those, in July 2022, the Company participated in
Ennostar’s capital increase through a private placement offering with consideration of$3,484,895 thousand. Due to the disproportionate subscription to the shares, the Company’ sownership interest in Ennostar increased from 9.30% to 17.38%. The difference between theconsideration and the carrying amount arising from the acquisition of interest was recognizedin capital surplus with amount of $1,398,054 thousand.
For the year ended December 31, 2023, Qisda acquired additional shares of its subsidiary,
BenQ BM Holding Cayman Corp. and recognized a difference between consideration andcarrying amount arising from the acquisition of interest in subsidiary. The Company, upon theequity method, recognized a decrease in capital surplus of $927,316 thousand accordingly.

(Continued)
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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

As of December 31, 2023, the Company held 32.84% of the voting rights of ADLINK andbecame the sole largest shareholder of it. Although the remaining voting rights are notconcentrated in particular shareholders, the Company is still unable to obtain more than half ofdirectors, and has not obtained more than half of the voting rights of the shareholders present
in the shareholders’ meeting. Moreover, ADLINK’s key management is not designated by theCompany. In view of the aforementioned facts, the Company only has significant influence,but not control, over ADLINK. Therefore, ADLINK is still accounted for using the equity
method.
In February 2023, the Company derecognized the investment in SINTRONES that previouslyclassified as financial assets at FVTOCI, and further recognized an investment accounted forusing the equity method. Refer to Note 6(3) for the relevant information.
b.

Joint ventures
The joint venture has dissolved in January 2022, and resolved the liquidation date set on May
18, 2022. The Company received the liquidation payment in November 2022.
The Company did not have joint ventures accounted for using equity method as at December
31, 2023 and 2022. For the year ended December 31, 2022, none of the joint ventures is
considered individually material to the Company. The following table summarized the amountrecognized by the Company at its share of those joint ventures.

The Company’s share of joint ventures’:
ProfitOther comprehensive income
Total comprehensive income

For the year ended
December 31,
2022$

11,655-$

11,655As at December 31, 2023 and 2022, none of the Company’ s investments in equity-accounted
investees was pledged as collateral.
(8)

Acquisition of Subsidiaries
The Company obtained control over RVI and RVU (collectively as “ RV Company”) in July 2022
through acquisition of 100% equity interest of them. RV Company is engaged in the design andintegration service of digital signage content management system. By taking an equity investment in
RV Company, the Company expects to become the preferred supplier of field solutions via providing
software and hardware integrated solutions and enhancing product competitiveness. Acquisitionrelated costs are at approximately $8,820 thousand on legal fees and due diligence fees and wererecognized in operating expenses in the consolidated statement of comprehensive income for theyear ended December 31, 2022.

(Continued)

182

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AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following table summarized each major class of consideration transferred, the assets acquired
and liabilities assumed at the acquisition date and the amount of goodwill recognized.
a.

Consideration transferred (translated at the exchange rates on December 31, 2022)

Amounts
Cash
Contingent consideration (recognized in financial liabilities at
FVTPLcurrent)$

756,529$85,579842,108

The cash consideration above includes an adjustment to the purchase price on an agreed
calculation basis within four months after the closing date upon the share purchase and saleagreement.
In accordance with the terms of the contingent consideration, in the event that the acquired
entity achieves the conditions stated in the agreement within twelve months after the closing,
the Company shall pay additional consideration of USD2,750 thousand or in pro rata to theoriginal shareholders of RV Company. Under the arrangement of the contingent consideration,
the potential undiscounted amount of the contingent payment that the Company may have to
pay in the future is between USD0 thousand and USD2,750 thousand.
The fair value of the contingent consideration estimated using Monte Carlo simulation was$78,427 thousand. The fair value measurement was based on the significant unobservable
inputs in the market and categorised as a Level 3 fair value under IFRS 13. The significant
inputs in the valuation technique used are discount rate of 9.6% and revenue volatility rate of
20.0%.
As RV Company achieved the conditions stated in the agreement within twelve months after
the closing, the Company remeasured the fair value of the contingent consideration in
December 2023 and determined the value was $84,475 thousand. The change in the fair valueof the contingent consideration of $6,048 thousand was not a measurement period adjustment,
and therefore, was recognized under other gains and losses in the consolidated statement ofcomprehensive income for the year ended December 31, 2023.
In addition, both parties agreed that RV Company’s possible tax refund that existed as of theacquisition date will be fully paid to the original shareholders of RV Company, provided thatthe tax refund is approved by the tax authority in the future. Under the aforesaid agreement, thepotential undiscounted amount that the Company may have to pay in the future is between
USD0 thousand and USD236 thousand. The Company estimated the fair value thereof at$7,152 thousand based on the expected value. In 2023, the Company already paid it out, andthere is no difference compared with the estimated amount.

(Continued)
AUO Corporation
2023 Annual Report183

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statementsb.

Identifiable assets acquired and liabilities assumed
The following table summarized the fair value of identifiable assets acquired and liabilities
assumed recognized at the acquisition date (translated at the exchange rates on December 31,2022):
Fair value
52,48034,540279,863(135,963)$
230,920

Cash
Accounts receivable and other current assets
Intangible assets
Accounts payable and other current liabilitiesc.

$

Goodwill
Goodwill arising from the acquisition has been recognized as follows (translated at theexchange rates on December 31, 2022):

Amounts
Consideration transferred
Less: Fair value of identifiable net assets

$
$

d.

842,108(230,920)
611,188

Intangible assets
Technology in development and customer relationship that are recognized as intangible assets
are amortized using the straight-line method over its economic useful life of 7 and 10 years,
respectively.
Goodwill is primarily derived from merger synergies, customer and technology integrations aswell as employee value. However, such benefits do not meet the criteria for recognition ofidentifiable intangible assets, and are therefore not recognized separately.

(9)

Property, Plant and Equipment

Balance,
Beginningof YearFor the year ended December 31, 2023
Reclassification,effect of change
Disposal orin exchange
write off
Additionsrate and others

Balance,End of Year

Cost:
Land

$

7,757,962--(13,024)

7,744,938(101,654)(355,573)

116,390,938

3,092,382(7,277,720)

25,818,563

869,042,506

3,874,526(5,555,127)

1,374,556

39,445,684(12,934,501)

26,824,522

1,032,624,066

Buildings

116,844,362

Machinery and equipment

847,409,281

Other equipment

39,751,729
1,011,763,334

6,970,711



3,803

(Continued)

184

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Balance,
Beginningof YearFor the year ended December 31, 2023
Reclassification,effect of change
Disposal orin exchange
write off
Additionsrate and others

Balance,End of Year

Accumulated depreciation and impairment
loss:
Buildings

45,437,618

2,531,998(100,625)(234,304)

47,634,687

Machinery and equipment

780,394,294

24,046,305(7,270,597)(1,661,621)

795,508,381

Other equipment

31,209,485

5,316,568(5,553,701)(164,313)

30,808,039

Prepayments for purchase of land andequipment, and construction in progress

857,041,397

31,894,871(12,924,923)(2,060,238)

873,951,107

24,111,900

18,196,872

Net carrying amounts$

Balance,
Beginningof YearCost:
Land
Buildings
Machinery and equipment
Other equipment
Accumulated depreciation and impairment
loss:
Buildings
Machinery and equipment
Other equipment
Prepayments for purchase of land andequipment, and construction in progress
Net carrying amounts

$

$

-

(29,808,927)

178,833,837

12,499,845
171,172,804

For the year ended December 31, 2022
Reclassification,effect of change
in exchange
Additions
Disposal orrate and others(Deductions)write off

Balance,End of Year8,763,260
117,475,024
832,882,543
37,174,884
996,295,711(80,777)
1,491,613
4,308,684
5,719,520(996,049)(425,603)(4,893,149)(4,097,513)(10,412,314)(9,249)(124,282)
17,928,274
2,365,674
20,160,417

7,757,962
116,844,362
847,409,281
39,751,729
1,011,763,334

42,819,944
758,531,143
29,723,444
831,074,531

2,698,962
22,534,747
5,431,251
30,664,960(86,632)(4,705,029)(4,078,401)(8,870,062)

5,344
4,033,433
133,191
4,171,968

45,437,618
780,394,294
31,209,485
857,041,397

6,000,865
171,222,045

33,683,927(15,572,892)

24,111,900
178,833,837-

As of December 31, 2023 and 2022, a non irrigated farmland located in LongTan plant amounted to$23,671 thousand was registered in the name of a farmer due to regulations. An agreement of pledge
had been signed between the Company and the farmer clarifying the rights and obligations of eachparty.
In 2023 and 2022, the Company wrote down certain long-term assets with extremely low capacity
utilization associated with its display segment and recognized impairment losses of $210,771
thousand and $70,686 thousand, respectively.
In 2022, the Company wrote down certain long-term assets with extremely low capacity utilization
associated with its energy segment and recognized an impairment loss of $2,879 thousand.
Impairment losses as mentioned above were recognized under other gains and losses in the
consolidated statements of comprehensive income.

(Continued)
AUO Corporation
2023 Annual Report

185

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

AUO decided to dispose of part of its plants and related appendages to Vanguard International
Semiconductor Corporation pursuant to the resolution of Board of Directors’ meeting held on April
28, 2021. Both parties have completed the transaction in December 2021. The consideration of
disposal (net of related transaction costs) and gain on disposal were $808,662 thousand and$787,460 thousand, respectively. The consideration aforementioned is to be received in installments.
As of December 31, 2021, outstanding receivables totaled $509,524 thousand (recognized in othercurrent financial assets), which were fully received in January 2022.
On June 22, 2022, the Board of Directors of DPTW resolved to dispose of part of real estate. DPTW
has entered into an agreement with a non-related party on June 24, 2022 for the disposal of therelated land and buildings. The aforementioned assets have been disposed of on December 28, 2022.
The consideration of disposal (net of related transaction costs) and gain on disposal were $2,285,894
thousand and $950,874 thousand, respectively. Such cash consideration was entrusted by a bankwith its real estate values trust service. As of December 31, 2022, outstanding receivables totaled$2,230,840 thousand (recognized in other current financial assets), which were fully received on
January 3, 2023.
In order to enhance the utilization of assets and to strengthen the efficient use of working capital,
AUOXM resolved to dispose of part of its land classified in right-of-use assets and employee
dormitories on October 26, 2022. The aforementioned assets have been reclassified as noncurrent
assets held for sale totaling $586,406 thousand. The consideration of disposal (net of relatedtransaction costs) and gain on disposal were $1,654,220 thousand and $1,069,530 thousand,respectively. As of December 31, 2022, such consideration received in advance amounted to$848,008 thousand (recognized in other current liabilities). In December 2023, the transaction wascompleted, and the consideration was fully received.
The following table summarized the Company’ s capitalized borrowing costs and the interest rate
range applied for the capitalization:

Capitalized borrowing costs
The interest rates applied forthe capitalization

For the years ended
December 31,
2023
2022
198,062
114,671
1.50%~
0.90%~
2.50%
2.05%

Certain property, plant and equipment were pledged as collateral, see Note 8.

(Continued)

186

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(10) Lease Arrangementsa.

Lessee(i)

Right-of-use assets

Carrying amount of right-of-use assets
Land
Buildings
Other equipment

Additions to right-of-use assets
Depreciation charge for right-of-use assets
Land
Buildings
Other equipment

December 31,
2023
$

$

8,925,915
838,2026,509
9,770,626$

For the years ended
December 31,
2023
2022
695,382
285,806$$(ii)

December 31,
2022

534,042
154,859
6,063
694,964

9,492,758
295,209
12,4919,800,458

535,949
148,584
5,659
690,192

Lease liabilities

Less than one year
Between one and five years
More than five years

December 31, 2023
FuturePresent value
minimum leaseof minimum
payments
lease payments
Interests$
804,126
159,867
644,259
3,006,596
529,870
2,476,726
7,034,404
826,860
6,207,544$
10,845,126
1,516,597
9,328,529

Lease liabilitiescurrent$

644,259

Lease liabilitiesnoncurrent$

8,684,270(Continued)
AUO Corporation
2023 Annual Report187

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Less than one year
Between one and five years
More than five years

December 31, 2022
FuturePresent value
minimum leaseof minimum
payments
lease payments
Interests$
746,377
163,126
583,251
2,667,019
549,425
2,117,594
7,487,223
943,1776,544,046$
10,900,619
1,655,728
9,244,891

Lease liabilitiescurrent$

583,251

Lease liabilitiesnoncurrent$

8,661,640(iii) Significant lease agreements
AUO has entered into various land lease agreements with Hsinchu Science Park Bureau,
Central Science Park Administration Bureau and Southern Taiwan Science Park Bureau,
respectively, for the construction of plant for operations. All lease amounts are adjusted
in accordance with the land value announced by the government from time to time.
In 2022, AUO modified some of its lease contracts due to the decrease of the scope of thelease, and therefore, the carrying amount of the right-of-use asset was reduced by$273,932 thousand. The difference between the remeasurement of the lease liability andthe reduction of the right-of-use asset was recognized in profit or loss.
(iv) Sublease of right-of-use assets
The Company subleased part of its right-of-use assets under operating leases. For theyears ended December 31, 2023 and 2022, income from sublease were $4,944 thousand
and $4,973 thousand, respectively. Right-of-use assets that meet the definition of
investment properties are reclassified to investment properties. Refer to Note 6(11) for
further information on investment properties.
(v)

Additional lease information
The Company applies the recognition exemption to account for short-term leases andleases of low-value assets, primarily for some leases of office buildings and othersporadic leasing. The amounts recognized in profit or loss during the lease term were as
follows:

Expenses relating to short-term leases
Expenses relating to leases of low-value assets,
excluding short-term leases of low-value assets
Variable lease payments not included in themeasurement of the lease liability$

For the years ended
December 31,
2023
2022
11,02519,883

$

34

206

$

2,642

2,363

(Continued)

188

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Total cash outflow for the Company’ s leases in which it acts as a lessee for the years
ended December 31, 2023 and 2022, were $785,800 thousand and $760,957 thousand,respectively.
b.

Lessor
The Company leased out its investment properties and part of its land, buildings and equipment
and did not transfer substantially all the risks and rewards incidental to their ownership to thelessee, therefore, those leases were recognized as operating leases. Refer to Note 6(23) for the
information of rental income from operating leases. In addition, the direct costs relating to theaforementioned operating leases for the years ended December 31, 2023 and 2022 were $877
thousand and $893 thousand, respectively.
The maturity analysis of undiscounted operating lease receivable for the abovementioned
assets are as follows:
December 31, December 31,
2022
2023
$
149,909
98,387
101,808
102,522
97,446
102,458
89,597
94,59589,597
94,492
1,338,989
1,449,382$
1,867,346
1,941,836

Year 1
Year 2
Year 3
Year 4
Year 5
Year 6 onwards
Total undiscounted operating lease receivable(11) Investment Property

Cost:
Land
Buildings
Right-of-use assets

For the year ended December 31, 2023
Reclassificationand effect ofBalance,change in
Beginningexchange rateof Year
Additions$

Accumulated depreciation:
Buildings
Right-of-use assets
Net carrying amounts$
Fair Value$

686,090
1,448,929
29,1792,164,198
763,805
7,149
770,954
1,393,244
4,065,791

43,403
1,782
45,185

Balance,End ofYear(13,150)(30,375)(612)(44,137)

672,940
1,418,554
28,5672,120,061(16,797)(182)(16,979)

790,411
8,749
799,160
1,320,901
4,422,302(Continued)
AUO Corporation
2023 Annual Report

189

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Cost:
Land
Buildings
Right-of-use assets

For the year ended December 31, 2022
Reclassificationand effect ofBalance,change in
Beginningexchange rateof Year
Additions$

Accumulated depreciation:
Buildings
Right-of-use assets
Net carrying amounts
Fair Value$$

695,429
1,429,270
28,784
2,153,483
710,5025,289
715,791
1,437,692
4,119,728

43,693
1,794
45,487

Balance,End ofYear(9,339)19,659395
10,715686,090
1,448,929
29,1792,164,198

9,610
66
9,676

763,805
7,149
770,954
1,393,244
4,065,791

The fair value of investment property is based on a valuation performed by a qualified independent
appraiser who holds a recognized and relevant professional qualification and has recent valuation
experience in the location and category of the investment property being valued. The valuation is
performed using income approach, sales comparison approach and land development analysis
approach with reference to available market information.
The fair value measurement was categorized as a level 3 fair value based on the inputs in thevaluation techniques used. Income approach determines the fair value of the investment property
based on the projected cash flows from the Company’ s estimated future rentals collected anddiscounted using the capitalization rate of the property. Sales comparison approach is throughcomparison, analysis, adjustment and other means of value for comparable properties to estimate thevalue of the investment property. Land development analysis approach determine the fair value ofinvestment property based on the value prior to development or construction, after deducting thedirect cost, indirect cost, capital interest and profit during the development period, and also consider
total sales price of properties after completion of development or construction. It also incorporates
the possibility of changes in utility of land through development or improvement in accordance withlegal use and density of the land. The overall capital interest rate and the rate of return used in thevaluation were 1.91% and 15.00%, respectively. The capitalization rate was ranging from 8.00% to
12.00%.
As at December 31, 2023 and 2022, there was no investment property that was pledged as collateral.

(Continued)

190

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(12) Intangible Assets
For the year ended December 31, 2023

Cost:
Goodwill$Patent and technology
feeOthersAccumulated
amortization andimpairment loss:
GoodwillPatent and technology
feeOthersNet carrying amounts $Additions

Effect ofchange inconsolidated
entities

12,809,944
12,269,529

-

-

3,487
(3,979)12,813,431
12,265,550

697,504
25,776,977--(2,816)(3,308)694,688
25,773,669

2,228,270
11,910,192

48,856-(1,608)2,228,270
11,957,440

242,274
14,380,736
11,396,241

77,624
126,480-

Balance,
Beginningof YearCost:
Goodwill$Patent and technology
feeOthersAccumulated
amortization andimpairment loss:
GoodwillPatent and technology
feeOthersNet carrying amounts $Balance,
Beginningof Year12,190,064
12,266,954

Reclassificationand effect ofchange inexchange rate

Balance,End of Year

-

(806)
(2,414)

For the year ended December 31, 2022
Effect of
Effect ofchange inchange inconsolidated
exchange
entities
rate
Additions-

319,092
14,504,802
11,268,867

Balance,End of Year

611,188
-

8,692
2,575

12,809,944
12,269,529

296,234
907,422

12,59923,866

697,504
25,776,977-

2,228,270
11,910,192

385,742
24,842,760

2,929
2,929

1,122,270
11,778,742

1,106,000
130,745-

184,793
13,085,805
11,756,955

54,021
1,290,766

-

705
3,460
4,165

242,274
14,380,736
11,396,241(Continued)
AUO Corporation
2023 Annual Report

191

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The Company acquired goodwill and other intangible assets from the acquisition of subsidiaries in
July 2022. See Note 6(8) for further details.
For the purpose of impairment test, the following table shows the information of the operating
business that the Company’s goodwill allocating to:

Display business

December 31, December 31,
2022
2023
$
10,585,161
10,581,674

The Company’ s goodwill has been tested for impairment at least once at the end of the annual
reporting period. The recoverable amount was determined based on value in use of the operating
business.
The key assumptions used in the estimation of the recoverable amount included discount rate andterminal growth rate. The annual discount rates for the years ended December 31, 2023 and 2022
were 11.14% and 11.44%, respectively, based on industry weighted average cost of capital. The cash
flow projections were determined based on the financial budgets approved by management covering
the future five-year period and extrapolated with a steady annual terminal growth rate for subsequent
years, which were negative 1% for both 2023 and 2022. The key assumptions abovementioned
represents the management’s forecast of the future for the related industry by considering the history
information from internal and external sources.
Based on the impairment assessment in 2022, as the recoverable amount of display CGU was lower
than its carrying value, the Company recognized an impairment loss of $1,106,000 thousand on
goodwill of display segment.
For the year ended December 31, 2023, no impairment loss was recognized as the recoverable
amount of display CGU was higher than its carrying value.
(13) Prepayments, Other Current Assets and Other Noncurrent Assets

Prepayments for purchases
Refundable and overpaid tax
Restricted cash in banksnoncurrent
OthersLess: current
Noncurrent

December 31, December 31,
2022
2023
$
1,172,077
1,687,836
919,306
957,798
467,998
766,226
2,809,687
3,298,913
5,369,068
6,710,773(2,980,914)(3,832,361)$
2,388,154
2,878,412(Continued)

192

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(14) Short-term Borrowings

Unsecured borrowings
Unused credit facilities

December 31, December 31,
2022
2023
$
263,000
128,487$
24,377,681
29,118,096

Interest rate range

1.75%~2.05%

1.38%~4.00%

December 31,
2023

December 31,
2022(15) Long-term Borrowings
Bank or agent bank
DurationsSyndicated loans:
Bank of Taiwan and others From Apr. 2022 to Apr. 2029
Bank of Taiwan and others From Oct. 2021 to Oct. 2025
Agricultural Bank of China From Aug. 2023 to Aug. 2028
and others
Bank of China and others From Jul. 2023 to Jul. 2028
Bank of China and others From Nov. 2015 to May 2023
Unsecured bank loans
From Oct. 2020 to Oct. 2031
Unsecured other loans
From Sep. 2022 to Sep. 2024
Secured bank loans
From Apr. 2017 to Apr. 2032
Secured other loans
From Apr. 2022 to Mar. 2026
Less: transaction costs
Less: current portion
Unused credit facilities
Interest rate range$

50,000,000
19,125,000
335,450

20,000,000
32,500,000-

294,296
2,001,456
24,428,480
6,126,000
20,843
21,333
16,969,742
25,509,945
921,960
691,155
111,864,966
87,080,694(265,243)(277,932)
111,587,034
86,815,451(13,884,634)(10,062,194)$ 101,524,840
72,930,817$ 58,011,646
54,984,115
1.50%~4.00% 1.25%~7.95%

The Company entered into the aforementioned long-term loan arrangements with banks and financial
institutions to finance capital expenditures for purchase of machinery and equipment, and to fulfill
working capital, as well as to repay the matured debts. A commitment fee is negotiated with theleading banks of syndicated loans and is calculated based on the committed-to-withdraw but unusedbalance, if any. No commitment fees were paid for the year ended December 31, 2023.
These credit facilities contain covenants that require the Company to maintain certain financial
ratios, calculating based on the Company’ s annual audited consolidated financial statements
prepared in accordance with IFRSs endorsed and issued into effect by the FSC, such as current ratio,
leverage ratio, interest coverage ratio, tangible net worth and others as specified in the loan
agreements. As of December 31, 2023 and 2022, the Company complied with all financial covenantsrequired under each of the loan agreements.

(Continued)
AUO Corporation
2023 Annual Report

193

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Refer to Note 6(28) for detailed information of exposures to interest rate, currency, and liquidity
risks. Refer to Note 8 for assets pledged as collateral to secure the aforementioned long-termborrowings.
(16) Provisions

Balance at January 1, 2023
Additions
Usage
Effect of change in exchange rate
Balance at December 31, 2023
Less: current
Noncurrent
Balance at January 1, 2022
Additions (reversals)
Usage
Effect of change in exchange rate
Balance at December 31, 2022
Less: current
Noncurrent

Warranties(i)$869,256
269,300(83,439)(753)
1,054,364(375,942)$
678,422$
1,184,514(177,597)(137,978)317
869,256(245,513)$
623,743

Litigation,
claims andothers
307,320
1,058,435(20,285)
1,345,470(1,345,470)
453,820(152,755)(38,500)
44,755
307,320(307,320)-

Others(ii)292,483
714,991(126,409)(199)
880,866(677,894)
202,972
249,974
24,641(7,202)25,070292,483(6,821)
285,662

Total
1,469,059
2,042,726(209,848)(21,237)
3,280,700(2,399,306)
881,394
1,888,308(305,711)(183,680)
70,142
1,469,059(559,654)
909,405(i)

The provisions for warranties were estimated based on historical experience of warranty claims
rate associated with similar products and services. The Company expects most warranty claims
will be made within two years from the date of the sale of the product.

(ii)

Primarily including provisions for onerous contracts and decommissioning obligation.

(17) Employee Benefitsa.

Defined benefit plans
Pursuant to the ROC Labor Standards Act, AUO and ADP have established defined benefit
pension plans covering their full-time employees in the ROC. Such plans provide forretirement benefits to retiring employees based on years of service and the average salaries andwages for the six-month period before the employee’ s retirement. The funding of theseretirement plans by AUO and ADP are contributed monthly based on a certain percentage of
their respective employees’ total salaries and wages. The funds are deposited with Bank of
Taiwan.
M.Setek has established defined benefit pension plans providing for retirement benefits toretiring employees based on years of service, position, and certain other factors in accordancewith the regulations of its country of establishment.

(Continued)

194

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(i)

Reconciliation of the present value of defined benefit obligation and the fair value ofplan assets for AUO, ADP and M.Setek
December 31, December 31,
2022
2023
$
(148,339)(152,421)
325,111322,137$
176,772
169,716

Present value of defined benefit obligation
Fair value of plan assets
Net defined benefit asset

The recognition of net defined benefit asset was as follows:
December 31, December 31,
2022
2023
$
206,943
202,114

Other noncurrent assets(30,171)(32,398)

176,772

169,716

Other noncurrent liabilities$(ii)

Movement in net defined benefit asset (liability)

Present value of defined
benefit obligation
2023
2022
Balance at January 1$(152,421)(188,699)
Service cost
(6,285)(6,529)Interest cost
(1,649)(1,011)
Expected return on plan
assetsIncluded in profit or loss
(7,934)(7,540)
Actuarial (loss) gain
arising from:- demographic
assumptions(1,318)22- financial
assumptions(1,628)31,110- experience
adjustment
5,942
958
Return on plan assets
excluding interest
incomeIncluded in other
2,996
32,090comprehensive
incomeContributions paid by
the employer
Benefits paid
7,036
10,419Others
1,984
1,309
9,020
11,728
Balance at December 31 $
(148,339)(152,421)

Fair value of plan assets
2023
2022
322,137
301,790
4,413
1,962

Net defined benefit asset(liability)
2023
2022
169,716
113,091(6,285)(6,529)(1,649)(1,011)
4,413
1,962

4,413

1,962

(3,521)(5,578)--(1,318)22--(1,628)31,110

-

-

5,942

958

1,078
1,078

26,36526,365

1,078
4,074

26,36558,455

357

339

357

339

(2,874)(2,517)
325,111(8,319)(7,980)322,137

4,162
1,984
6,503
176,772

2,100
1,309
3,748
169,716(Continued)
AUO Corporation
2023 Annual Report

195

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(iii) Plan assets
Pursuant to the ROC Labor Standards Act, AUO and ADP contribute an amount basedon a certain percentage of employees’ total salaries and wages paid every month to theirrespective pension funds (the “ Funds” ), which are administered by the Labor Pension
Fund Supervisory Committee (the “Committee”) and deposited in the Committee’s namewith Bank of Taiwan. Under the ROC Regulations for Revenues, Expenditures,
Safeguard and Utilization of the Labor Retirement Fund, the minimum return on the plan
assets should not be lower than the average interest rate on two-year time deposits
published by the local banks.
As of December 31, 2023 and 2022, the Funds deposited in AUO Committee’s name and
ADP Committee’ s name in the Bank of Taiwan amounted to $325,111 thousand and$322,137 thousand, respectively. Information on utilization of labor pension funds,
including the yield rate of funds and the component of plan assets are available at the
Bureau of Labor Funds, Ministry of Labor website.
Under the defined benefit plans in Japan, M.Setek is responsible to pay to employees
when they are retired.
(iv) Present value of defined benefit obligation(a)Principal actuarial assumptions from AUO and ADP

Discount rate
Rate of increase in future salary

December 31,
2023
1.26%
3.00%

December 31,
2022
1.37%
3.00%

The Company anticipates contributing $144 thousand to the defined benefit plansin the year starting from January 1, 2024.
As of December 31, 2023, the weighted-average duration of the defined benefit
obligation was between 10 years to 12 years.

(Continued)

196

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(b)

Sensitivity analysis
Reasonably possible changes at December 31, 2023 and 2022 to one of the relevant
actuarial assumptions, holding other assumptions constant, would have affected thedefined benefit obligation by the amounts shown below.
December 31, 2023
Changes in assumptions+ 0.25%-0.25%$(4,477)
4,678

Discount rate
Rate of increase in
future salary
$

4,618

(4,433)

December 31, 2022
Changes in assumptions+0.25%-0.25%(4,849)
5,065
4,986

(4,785)

In practical, the relevant actuarial assumptions are correlated to each other. The
approach to develop the sensitivity analysis as above is the same approach torecognize the net defined benefit asset (liability) in the balance sheet.
The approach to develop the sensitivity analysis and its relevant actuarial
assumptions are the same as those in previous year.
b.

Defined contribution plans
Commencing July 1, 2005, pursuant to the ROC Labor Pension Act (the “ Act” ), employees
who elected to participate in the Act or joined the Company after July 1, 2005, are subject to adefined contribution plan under the Act. Under the defined contribution plan, AUO and its
subsidiaries located in the ROC contribute monthly at a rate of no less than six percent of theemployees’ monthly salaries and wages to the employee’s individual pension fund account at
the ROC Bureau of Labor Insurance. Besides, matters that are not addressed in the Company’s
defined contribution plan should be governed by the Act. The Company’s foreign subsidiaries
have set up their retirement plans, if necessary, based on their respective local government
regulations.
AUO and its subsidiaries in the ROC have set up defined contribution plans in accordance with
the Act. For the years ended December 31, 2023 and 2022, these companies set aside,$977,825 thousand and $1,022,581 thousand, respectively, of the pension costs under thepension plan to the ROC Bureau of Labor Insurance. Except for the aforementioned
companies, other foreign subsidiaries recognized pension expenses of $1,478,484 thousand and$1,224,046 thousand for the years ended December 31, 2023 and 2022, respectively, for thedefined contribution plans based on their respective local government regulations.

(Continued)
AUO Corporation
2023 Annual Report197

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(18) Capital and Other Components of Equitya.

Common stock
AUO’ s authorized common stock, with par value of $10 per share, both amounted to$120,000,000 thousand as at December 31, 2023 and 2022.
AUO’s issued common stock, with par value of $10 per share, both amounted to $76,993,961
thousand as at December 31, 2023 and 2022.
In order to adjust AUO’s capital structure to correspond with its corporate transformation, on
June 17, 2022, AUO’ s shareholders’ meeting resolved to reduce capital and refund cash toshareholders. Total amount of capital reduction is $19,248,490 thousand, which translates to
1,924,849 thousand cancelled shares and represents approximately 20% capital reduction ratio.
The record date of capital reduction was set on August 10, 2022 and the relevant legal
registration procedures have been completed. The date of returning cash in relation to theaforementioned capital reduction was October 11, 2022.
As of December 31, 2023, AUO has issued 18,362 thousand ADSs, which represented 183,617
thousand shares of its common stock.

b.

Capital surplus
The components of capital surplus were as follows:

From common stock
From convertible bonds
From others

December 31, December 31,
2022
2023
$
46,621,786
52,756,091
6,049,862
6,049,862
2,327,181
3,136,257$
54,998,829
61,942,210

According to the ROC Company Act, capital surplus, including premium from stock issuingand donations received, may be used to offset a deficit. When a company has no deficit, suchcapital surplus may be distributed by issuing common stock as stock dividends or by cash
according to the proportion of shareholdings. In accordance with AUO’ s Articles ofIncorporation, cash distribution from capital surplus should be approved by AUO’s Board of
Directors and reported to AUO’s shareholders in its meeting. Pursuant to the ROC Regulations
Governing the Offering and Issuance of Securities by Securities Issuers, the total sum ofcapital surplus capitalized per annum shall not exceed 10 percent of the paid-in capital.

(Continued)

198

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statementsc.

Retained earnings and dividend policy
In accordance with AUO’s Articles of Incorporation, distribution of earnings by way of cash
dividends should be approved by AUO’ s Board of Directors and reported to AUO’ s
shareholders in its meeting. After payment of income taxes and offsetting accumulated deficits,
the legal reserve shall be set aside until the accumulated legal reserve equals AUO’s paid-in
capital. In addition, a special reserve in accordance with applicable laws and regulations shallalso be set aside or reversed. The remaining current-year earnings together with accumulated
undistributed earnings from preceding years can be distributed according to relevant laws and
AUO’s Articles of Incorporation.
Legal reserve may be used to offset a deficit. When the Company incurs no loss, it may
distribute its legal reserve by issuing new shares or by cash in accordance with the proportionof shareholdings for the portion in excess of 25% of the paid-in capital.
AUO’ s dividend policy is to pay dividends from surplus considering factors such as AUO’ scurrent and future investment environment, cash requirements, domestic and overseas
competitive conditions and capital budget requirements, while taking into accountshareholders’ interest, maintenance of balanced dividend and AUO’s long-term financial plan.
If the current-year retained earnings available for distribution reach 2% of the paid-in capital of
AUO, dividend to be distributed shall be no less than 20% of the current-year retained earnings
available for distribution. If the current-year retained earnings available for distribution do notreach 2% of the paid-in capital of AUO, AUO may decide not to distribute dividend. The cash
portion of the dividend, which may be in the form of cash and stock, shall not be less than 10%of the total dividend distributed during the year. The dividend distribution ratio
aforementioned could be adjusted after taking into consideration factors such as finance,business and operations, etc.
Pursuant to relevant laws or regulations or as requested by the local authority, total net debit
balance of the other components of equity shall be set aside from current earnings as special
reserve, and not for distribution. Subsequent decrease pertaining to items that are accounted for
as a reduction to the other components of equity shall be reclassified from special reserve toundistributed earnings.
On February 23, 2023, AUO’ s Board of Directors resolved not to distribute dividends for2022. On May 26, 2023, the annual shareholders’ meeting resolved the distribution of otherearnings for 2022, comprising a reversal of special reserve of $1,122,876 thousand and no
dividend distribution. Details of cash distribution from capital surplus were as follows:

Cash distribution from capital surplus

Cash distribution
from capital
Cash distributed
surplusper share (NT$)$
6,134,305
0.80(Continued)
AUO Corporation
2023 Annual Report

199

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

AUO’s appropriation of earnings for 2021 by way of cash dividends has been approved in the
Board of Directors’ meeting held on March 28, 2022. The appropriation of 2021 earnings byother ways has been approved in the annual shareholders’ meeting held on June 17, 2022.
Details of distribution were as follows:

Legal reserve
Special reserve
Cash dividends to shareholders

Appropriationof earnings$
5,326,268
1,472,878
9,575,824$
16,374,970

Dividends per
share (NT$)

1.00

The aforementioned appropriation of earnings for 2021 was consistent with the resolutions of
the Board of Directors’ meeting held on March 28, 2022.
Information on the approval of Board of Directors and shareholders for AUO’s appropriationsof earnings are available at the Market Observation Post System website.
d.

Treasury shares
AUO repurchased 125,000 thousand shares as treasury shares transferred to employees inaccordance with Securities and Exchange Act requirements. The related information ontreasury share transactions was as follows (shares in thousands):
For the year ended December 31, 2023
Number ofshares,Beginningof YearReason for reacquisition
Additions
Reductions
Transferring to employees
38,737(7,222)

Reason for reacquisition
Transferring to employees

For the year ended December 31, 2022
Number ofshares,Beginning
Additions
Reductionsof Year54,199(5,778)

CapitalReduction(9,684)

Number ofshares,End of Year
31,515

Number ofshares,End of Year38,737

Refer to Note 6(19) for information on employee treasury shares plan for 2023 and 2022. A
total of 7,222 thousand and 5,778 thousand shares were transferred with total costs for treasury
shares of $55,103 thousand and $46,859 thousand, respectively, and with cost per share of$7.63 and $8.11, respectively.

(Continued)

200

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Pursuant to the Securities and Exchange Act, the number of shares repurchased shall not
exceed 10 percent of the number of the company’s issued and outstanding shares, and the total
amount repurchased shall not exceed the sum of the company’ s retained earnings, sharepremium, and realized capital surplus. Also, the shares repurchased for transferring toemployees shall be transferred within five years from the date of reacquisition and those shares
not transferred within the five-year period are to be retired.
In accordance with the Securities and Exchange Act, treasury shares held by AUO shall not bepledged, and do not hold any shareholder rights before their transfer.
e.

Other components of equity
Unrealized
gains(losses)Cumulativeon financialtranslation
assets at
differences
FVTOCI$ (2,406,490)(1,213,815)

Balance at January 1, 2023
Foreign operations – foreign currencytranslation differences
Net change in fair value of financial assets at
FVTOCI
Equity-accounted investees – share of othercomprehensive income
Cumulative unrealized loss of equity
instruments transferred to retained earnings
due to disposal
Realized gain on sales of securities reclassified
to profit or loss
Related tax
Balance at December 31, 2023$

(1,438,194)

-

Total
(3,620,305)(1,438,194)-(44,333)(44,333)(72,800)

405,424

332,624-

20,497

20,497(4,984)
270,706(3,651,762)(910)(833,137)(4,984)
269,796(4,484,899)(Continued)
AUO Corporation
2023 Annual Report

201

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Unrealized
gains(losses)
on financial
Cumulative
assets attranslation
FVTOCI
differences$ (4,873,573)
130,391

Balance at January 1, 2022
Foreign operations – foreign currencytranslation differences
Net change in fair value of financial assets at
FVTOCI
Equity-accounted investees – share of othercomprehensive income
Cumulative unrealized gain of equity
instruments transferred to retained earnings
due to disposal
Realized gain on sales of securities reclassified
to profit or loss
Related tax
Balance at December 31, 2022$f.

2,508,167
-

-

Total
(4,743,182)
2,508,167

57,35957,359562,474(1,359,911)(797,437)(111,862)(41,654)-(41,654)(111,862)(491,696)(2,406,490)(1,213,815)(491,696)(3,620,305)

Non-controlling interests, net of tax

Balance at beginning of the year
Equity attributable to non-controlling interests:
Profit for the year
Foreign currency translation differences, net of tax
Differences between consideration and carrying amountarising from disposal of interest in subsidiaryCash dividends from subsidiaries
Effect of disproportionate subscription to shares
Subsidiaries capital increaseUnrealized gain on financial assets at FVTOCI
Effect of share-based payments
Balance at end of the year$

For the years ended
December 31,
2023
2022
6,311,557
6,179,431
52,120(78,652)
16,137$(110,921)(25,675)
16,743
8,153
867
6,190,329

128,194(6,559)(66,458)
604
63,646
12,6996,311,557(Continued)

202

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(19) Share-based Paymentsa.

Employee treasury shares plan
AUO granted the treasury shares to eligible employees, including those of AUO and its
subsidiaries in accordance with the relevant plan. The key terms and conditions related to the
grants were disclosed as follows:

Grant dateFeb. 23, 2022
Feb. 23, 2023

Total shares
granted
Vesting(in thousands)
conditions
5,778
Vest immediately
7,222
Vest immediately

Share
price
20.7
18.3

Exercise
price
8.11
10.14

Fair value
per unit
12.59
8.16

The fair value of the share-based payments granted by AUO was measured at the date of grantusing the Black-Scholes option pricing model. For the years ended December 31, 2023 and2022, the related compensation costs recognized for the abovementioned plan amounted to$58,931 thousand and $72,744 thousand, respectively. The capital surplus generated from thedifference between the subscription price and the repurchase cost of the abovementioned
treasury shares for the year ended December 31, 2023 amounted to $18,127 thousand.
b.

Employee restricted stock plan
As of December 31, 2023, information about the share-based payment rewards plan that
ADTHLD, a subsidiary of AUO, granted to employees of AUO and its subsidiaries was asfollows:
Plan
Employee restricted stock plan

Grant date
Apr. 1, 2021

Granted units
850,000

Vesting conditions
Note

Employee restricted stock plan

Dec. 2, 2021

400,000

Note

Employee restricted stock plan

Apr. 1, 2022

150,000

Note

Note: Employees are granted restricted stocks without consideration, and are eligible to vest
100% of 400,000 units when they provide two years of service subsequent to the grant
date. Further employees who provide two years and five years of service, respectively,
subsequent to the grant date as well as fulfill specific performance conditions are
eligible to vest 40% and 60% of 1,000,000 units, respectively.
ADTCM’s special shares without voting right which are held by AUO are the subject for the
execution of the aforementioned plan. According to the relevant plan, one special sharewithout voting right of ADTCM represents one common share right of ADTHLD. The
weighted average fair value per share estimated using the income approach for theabovementioned plan was USD1.105. The weighted average cost of capital which is theprincipal parameter was between 18.1% and 20.1%.

(Continued)
AUO Corporation
2023 Annual Report203

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

For the year ended December 31, 2023, 400,000 units abovementioned were fully vested uponcompletion of two years’ service; 400,000 units which are based on completion of two years’service and bound with specific performance conditions were all unvested. Among the grantbound with five years of service and specific performance conditions, 360,000 units were earlyterminated in the first quarter of 2023, of which 170,000 units were vested immediately upon
the agreement with employees. The difference between share price and carrying amountarising from the aforesaid employee vesting was recognized as a deduction of capital surplus
with amount of $16,137 thousand. Moreover, in the second quarter of 2023, the remaining
240,000 units vesting were replaced in the form of bonuses upon the agreement with
employees and therefore early terminated. As of December 31, 2023, the abovementioned
employee restricted stock plans have been fully settled.
For the years ended December 31, 2023 and 2022, the compensation costs recognized were$2,135 thousand and $11,341 thousand, respectively.
(20) Revenue from Contracts with Customersa.

Disaggregation of revenue
For the years ended December 31,

Primary geographicalmarkets:
PRC (including Hong
Kong)
TaiwanUnited States
SingaporeJapan
Others
Major products:
Products for Televisions
Products for Monitors
Products for Mobile PCs
and Devices
Products for Automotive
Solutions
Products for PID andGeneral Display
Products for VerticalBusiness(i)(i)

Display
segment

2023
Energysegment

Total
segments

Display
segment

2022
Energysegment

Total
segments$ 84,685,029
66,471,767
23,474,258
15,256,468
10,768,725
28,605,793$ 229,262,040

887,977
14,635,472
4,298
294,606
2,880,044
18,702,397

85,573,006
81,107,239
23,478,556
15,256,468
11,063,331
31,485,837
247,964,437

80,041,681
62,020,560
26,233,911
19,845,620
13,474,576
24,274,086
225,890,434

1,815,017
14,543,895
1,256
115,877
4,426,195
20,902,240

81,856,698
76,564,455
26,235,167
19,845,620
13,590,453
28,700,281
246,792,674$ 47,724,530
32,689,398-

47,724,530
32,689,398

37,827,491
36,258,856-

37,827,491
36,258,856

55,873,912-

55,873,912

67,782,440-

67,782,440

38,812,605-

38,812,605

33,194,444-

33,194,444

29,707,578-

29,707,578

35,317,853-

35,317,853

18,702,397
18,702,397

43,156,414
247,964,437

15,509,350
225,890,434

20,902,240
20,902,240

36,411,590
246,792,674

24,454,017$ 229,262,040

Including energy, system design manufacturing service, display HMI business, LED display,smart vertical applications and others.

(Continued)

204

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

For the years ended December 31, 2023 and 2022, the Company did not have major customer,that is, there was no such condition that the revenue from a single customer is greater than 10%of the Company’s revenue.
b.

Contract balances

Contract assetscurrent (recorded in other current
financial assets)
Contract liabilitiescurrent (recorded in other current
liabilities)
Contract liabilitiesnoncurrent

December 31,
2023

December 31,
2022$

1,317,949

877,375$

3,878,283
6,239,558
10,117,841

1,818,609
8,739,846
10,558,455$

The amounts of revenue recognized for the years ended December 31, 2023 and 2022 that
previously included in the contract liability balance at the beginning of the years were$1,307,458 thousand and $3,498,784 thousand, respectively. Additionally, in the first quarterof 2021, AUO entered into long-term sales agreements with customers and has received
payments in advance. AUO accounted for such obligation as contract liabilities.
(21) Remuneration to Employees and Directors
According to AUO’ s Articles of Incorporation, AUO should distribute remuneration to employees
and directors no less than 5% and no more than 1% of annual profits before income tax, respectively,
after offsetting accumulated deficits, if any. Only employees, including employees of affiliatecompanies that meet certain conditions are entitled to the abovementioned remuneration which to be
distributed in stock or cash. The said conditions and distribution method are decided by Board of
Directors or the personnel authorized by Board of Directors.
AUO accrues remuneration to employees based on the profit before income tax excluding the
remuneration to employees and directors for the period, multiplied by the percentage resolved by
Board of Directors. Remuneration to directors is estimated based on the amount expected to pay andrecognized together with the remuneration to employees as cost of sales or operating expenses. If
remuneration to employees is resolved to be distributed in stock, the number of shares is determinedby dividing the amount of remuneration by the closing price of the shares (ignoring ex-dividend
effect) on the day preceding the Board of Directors’ meeting. If there is a change in the proposed
amounts after the annual consolidated financial statements are authorized for issue, the differences
are accounted for as a change in accounting estimate and adjusted prospectively to next year’s profit
or loss.
AUO did not accrue remuneration to employees and directors due to the loss making position for theyears ended December 31, 2023 and 2022.

(Continued)
AUO Corporation
2023 Annual Report

205

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Remuneration to employees and directors for 2021 in the amounts of $6,339,435 thousand and$206,946 thousand, respectively, in cash for payment had been approved in the meeting of Board of
Directors held on March 28, 2022. The aforementioned approved amounts are the same as theamounts charged against earnings of 2021.
The information about AUO’ s remuneration to employees and directors is available at the Market
Observation Post System website.
(22) Additional Information of Expenses by Nature

Employee benefits
expenses:
Post-employment
benefits
Salaries and other
employee benefits
Depreciation
Amortization

Recognizedin cost ofsales

For the years ended December 31,
2023
2022
Recognized
Recognized
Recognizedininin cost ofoperatingoperating
Total
sales
expenses
expensesTotal$ 1,828,358

631,472

2,459,830

1,686,657

565,548

2,252,205

27,990,938

12,482,526

40,473,464

28,552,896

11,750,466

40,303,362

28,230,115
54,933

4,148,949
71,54732,379,064
126,480

27,080,628
136,823

4,200,959
47,94331,281,587
184,766(23) Non-Operating Income and Expensesa.

Interest income

Interest income on bank deposits
Other interest income

$
$

b.

For the years ended
December 31,
2023
2022
1,868,709
849,230
46,36929,745
1,915,078
878,975

Other income

GrantsRental income, net
Dividend income
Others$$For the years ended
December 31,
2023
2022
944,086
2,032,775
444,969
491,9542,585
6,571
607,532
679,869
1,999,172
3,211,169(Continued)

206

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statementsc.

Other gains and losses

Foreign exchange gains, net$
Losses on valuation of financial instruments at FVTPL, net
Gains on disposal of property, plant and equipment
Gains on disposal of investments
Gains on liquidation of subsidiaries, net
Impairment losses on assets
Gains on disposal of noncurrent assets held for sale
Litigation loss
Others$d.

For the years ended
December 31,
2023
2022
458,035
937,064(231,845)(1,069,905)
53,3501,024,832
116
4,868
111,862(210,771)(1,179,565)
1,069,530(1,058,435)(476,211)
54,438(391,363)(121,274)

Finance costs

Interest expense on bank borrowings
Interest expense on lease liabilities
Other interest expense
Finance expense$$

For the years ended
December 31,
2023
2022
2,439,058
1,138,211
165,899
163,91555,92847,59863,998158,2392,724,883
1,507,963(24) Income Taxes
AUO and its subsidiary ADP have filed a combined business income tax return since 2021. Other
subsidiaries filed their income tax return individually. The Company cannot file a consolidated tax
return under local regulations; therefore, AUO and its subsidiaries calculate their income taxes
liabilities individually on a stand-alone basis using the enacted tax rates in their respective tax
jurisdictions.

(Continued)
AUO Corporation
2023 Annual Report

207

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statementsa.

Income tax expense
The components of income tax expense (benefit) for the years ended December 31, 2023 and2022 were as follows:

Current income tax expense (benefit):Current year
Tax on undistributed earningsAdjustment to prior years and others

For the years ended
December 31,
2023
2022
$

Deferred tax expense:Temporary differences$

1,303,943(367,210)
936,733

932,272510,244(201,190)
1,241,326(4,467,639)(3,530,906)

225,662
1,466,988

Income taxes expense recognized directly in other comprehensive income for the years ended
December 31, 2023 and 2022 were as follows:

Items that will never be reclassified to profit or loss:
Remeasurement of defined benefit obligations$
Valuation gains on debt instrument measured at FVTOCI$
Items that are or may be reclassified subsequently to profit
or loss:
Foreign operations – foreign currency translationdifferences$

For the years ended
December 31,
2023
2022
815
910
1,725

11,691
11,691(290,245)

490,056(Continued)

208

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Reconciliation of the expected income tax expense (benefit) calculated based on the ROC
statutory income tax rate compared with the actual income tax expense as reported in the
consolidated statements of comprehensive income for the years ended December 31, 2023 and2022, was as follows:

Income tax expense (benefit) at AUO’s statutory tax rate
Tax on undistributed earnings
Effect of different subsidiaries income tax rate
Share of profit of equity-accounted subsidiaries
Net of non-taxable income from domestic investments andnon-deductible expense
Change of unrecognized deductible temporary differences
Effect of combined business income tax return
Adjustments to prior years
OthersIncome tax expense (benefit)$$

For the years ended
December 31,
2023
2022
(4,336,412)(3,901,238)
510,244
212,423
489,505
2,828,528
2,259,866(1,639,737)
606,184(871,053)(313,662)(17,177)(3,530,906)(2,091,387)
4,666,296(261,574)(202,529)(2,195)
1,466,988

The above reconciliation is prepared based on each individual entity of the Company andpresented on an aggregate basis.
b.

Deferred tax assets and liabilities
Deferred tax assets have not been recognized in respect of the following items.

Deductible temporary differences
Unused investment tax credits
Unused tax losses carryforwards

December 31, December 31,
2022
2023
$
2,482,767
2,544,698
12,2011,140,038
18,650,897
21,992,267$
21,145,865
25,677,003

Tax loss carryforwards is utilized in accordance with the relevant jurisdictional tax laws andregulations. Net losses from foreign subsidiaries are approved by tax authorities in respective
jurisdiction to offset future taxable profits. Under the ROC tax laws, approved tax losses of
AUO and its domestic subsidiaries can be carried forward for 10 years to offset future taxable
profits.

(Continued)
AUO Corporation
2023 Annual Report

209

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

As of December 31, 2023, the expiration period for abovementioned unrecognized deferred tax
assets of unused tax losses carryforwards were as follows:Year of assessment
2012

Unrecognizeddeferred tax
assets
$
9,230

2014

1,104,008

2024

2015

1,547,888

2024 ~ 2025

2016

3,208,026

2025 ~ 2026

2017

782,3662026~ 2027(i)2018

25,3372028(i)

2019

2,784,449

2023~ 2029(i)2020

410,8122025 ~ 2030

2021

192,2962026~ 2031(i)2022

4,778,268

2027 ~ 2032(i)2023

3,808,217

2028 ~ 2033(i)$(i)

Expiration in year2032

18,650,897

As of December 31, 2023, the unrecognized deferred tax assets of unused tax losses
carryforwards include $1,502 thousand with no expiration.

(Continued)

210

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The components of and changes in deferred tax assets and liabilities were as follows:
Deferred tax assets
Deferred tax liabilities
Total
December 31, December 31, December 31, December 31, December 31, December 31,
2023
2022
2023
2022
2023
2022
Investment tax credits $259,993259,993
Tax losses
carryforwards

5,719,269

2,313,338--

Unrealized loss andexpenses

220,584

208,723

Inventories writedown(67,524)

658,705

1,097,026

Foreign investment
gains under theequity method-

Accumulated
amortization of
goodwill inaccordance withlocal tax laws
Remeasurement ofdefined benefit
plans
Foreign operations –foreign currencytranslationdifferences
Valuation gains on
debt instrument
measured at
FVTOCI
Others5,719,269

2,313,338(63,053)

153,060

145,670--

658,705

1,097,026-(1,879,617)(3,099,695)(1,879,617)(3,099,695)--(1,802,891)(1,802,891)(1,802,891)(1,802,891)

112,449

112,905--

112,449

112,905

1,019,470

731,679(4,259)(6,713)

1,015,211

724,966--

2,471,183

1,925,793(181,443)(910)(128,834)-

2,289,740(910)

1,796,959-$ 10,201,660

6,649,457(3,936,644)(5,101,186)

6,265,016

1,548,271(Continued)
AUO Corporation
2023 Annual Report

211

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

January 1,
2022
Deferred tax assets (liabilities):
Investment tax
credits

299,861(70,740)-

30,872259,993(263,783)-

Tax losses
carryforwards

1,289,775

1,025,126-(1,563) 2,313,338

3,435,627-

Unrealized loss andexpenses

158,768(13,256)-

158

145,670

7,494

-

(104)

153,060

Inventories writedown

740,795

356,188-43

1,097,026(437,908)

-

(413)

658,705

Foreign investment
losses (gains)
under the equity
method(2,007,545)(1,092,149)-(1) (3,099,695)

1,220,078--(1,879,617)

Accumulated
amortization of
goodwill inaccordance withlocal tax laws

(2,024,091)

221,200--(1,802,891)

-

-

-

(1,802,891)

Remeasurement ofdefined benefit
plans

124,596-(11,691)-

112,905

Foreign operations–foreign
currencytranslationdifferences

1,215,022-(490,056)-

724,966-

Valuation gains on
debt instrument
measured at
FVTOCI
Othersc.

$

Effect of
Effect ofchange inchange inconsolidated
consolidated
entities,
entities,
Recognized
Recognizedexchangeexchangein otherin other
Recognized
Recognized
rate
rate
in profit or comprehensive
December in profit or comprehensive
Decemberand others
and others
incomeincomeloss
loss
31, 2022
31, 2023

366

-

3,790

(29,696) 5,719,269(815)

290,245

-

-

-

-

-

2,444,687(652,031)

-

4,303

1,796,959

505,765$ 2,241,868(225,662)(501,747)

33,812

1,548,271

4,467,639

-

(910)

(7)

112,449-

1,015,211

-

(910)

-

(12,984) 2,289,740

288,520(39,414) 6,265,016

Assessments by the tax authorities
As of December 31, 2023, the tax authorities have completed the examination of income tax
returns of AUO through 2020.

(25) Earnings (loss) per Share
For the years ended
December 31,
2023
2022

Basic earnings (loss) per share
Loss attributable to AUO’s shareholders$

Weighted-average number of common shares outstanding
during the year
Basic earnings (loss) per share (NT$)$(18,203,274)(21,101,374)

7,666,437

8,819,096(2.37)(2.39)(Continued)

212

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Since AUO incurred net loss for the years ended December 31, 2023 and 2022, there were no
potential ordinary shares with dilutive effect for the period.
(26) Non-cash Transactions of Investing and Financing Activities
Except for otherwise disclosed in other notes to the consolidated financial statements, thereconciliation of liabilities to cash flows arising from financing activities for the years ended
December 31, 2023 and 2022, were as follows:

Balance at January 1, 2023

Long-term
borrowings(including
current
installments)$
86,815,451

Short-termborrowings
128,487

Guarantee
deposits
778,426

Leaseliabilities
9,244,891

Total
liabilities
fromfinancing
activities
96,967,255

24,990,139

136,751(2,403)(606,200)

24,518,287

695,382

695,382

Cash flows
Non-cash changes:
Additions
Changes in exchange rate andothersBalance at December 31, 2023-$

Balance at January 1, 2022
Cash flows
Non-cash changes:
Additions
Changes in consolidated entities
Changes in exchange rate andothers$Balance at December 31, 2022

$

-

-

(218,556)
111,587,034(2,238)263,000

24,151
800,174(5,544)(i)
9,328,529(202,187)
121,978,737

54,654,864
31,549,651

45,32482,464

771,877(20,819)

9,725,241(574,590)

65,197,306
31,036,706--

285,806-

285,806
506

699
128,487

26,862
778,426(191,566)(ii)
9,244,891

446,931
96,967,255

610,936
86,815,451(i)Including decrease in the current year of $17,131 thousand.

(ii)

Including decrease in the current year of $284,460 thousand.

506(27) Financial Instrumentsa.

Fair value and carrying amountThe carrying amounts of the Company’ s current non-derivative financial instruments,
including financial assets and financial liabilities at amortized cost, were considered toapproximate their fair value due to their short-term nature. This methodology applies to cash
and cash equivalents, receivables or payables (including related parties), other current financial
assets, and short-term borrowings.

(Continued)
AUO Corporation
2023 Annual Report213

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Disclosures of fair value are not required for the financial instruments abovementioned andlease liabilities. Other than those, the carrying amount and fair value of other financial
instruments of the Company as of December 31, 2023 and December 31, 2022 were as follows:

Financial assets:
Financial assets at FVTPL:
Financial assets mandatorily measured at
FVTPL
Current
Foreign currency forward contracts
Noncurrent
Convertible bonds
Financial assets at FVTOCI:
Listed stocks
Non-listed stocks
Financial assets at amortized cost:
Domestic and foreign time deposits
Refundable deposits (including current andnoncurrent)
Financial liabilities:
Financial liabilities at FVTPL:
Contingent consideration from businesscombination
Foreign currency forward contracts
Financial liabilities at amortized cost:
Long-term borrowings (including current
installments)
Guarantee deposits
Long-term payables (including current
installments)b.

December 31, 2023
Carrying
Fair Value
Amount$December 31, 2022
Carrying
Fair Value
Amount176,492

176,492

365,037

365,037

139,170

139,170--

1,090,875
741,193

1,090,875
741,193

1,305,625
594,956

1,305,625
594,956

1,264,324
1,102,415

1,264,324
1,102,415

1,142,218
985,770

1,142,218
985,770

99,222

99,222-

11,143

11,143

252,603

252,603

111,587,034

111,587,034

86,815,451

86,815,451

800,174
625,020

800,174
625,020

778,426
968,520

778,426
968,520

Valuation techniques and assumptions applied in fair value measurement
The fair values of financial assets and financial liabilities with standard terms and conditions
and traded in active markets are determined with reference to quoted market prices. The fairvalues of other financial assets and financial liabilities without quoted market prices are
estimated using valuation approach. The estimates and assumptions used are the same as thoseused by market participants in the pricing of financial instruments.
Fair value of foreign currency forward contract is measured based on the maturity date of eachcontract with quoted spot rate and quoted swap points from Reuters quote system.
For domestic and foreign time deposits, their fair value approximate to their carrying amount.

(Continued)

214

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Fair value of long-term payable, which approximates to its carrying value is determined bydiscounting the expected cash flows at a market interest rate.
The refundable deposits and guarantee deposits are based on carrying amount as there is no
fixed maturity.
Long-term borrowings are mainly at floating rate, whose fair value approximates to theircarrying value.
c.

Fair value measurements recognized in the consolidated balance sheets
The Company determines fair value based on assumptions that market participants would use
in pricing an asset or a liability in the principal market. When considering market participant
assumptions in fair value measurements, the following fair value hierarchy distinguishes
between observable and unobservable inputs, which are categorized in one of the following
levels:(i)

Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active
markets.

(ii)

Level 2 inputs: Other than quoted prices included within Level 1, inputs are observablefor the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived fromprices).

(iii) Level 3 inputs: Derived from valuation techniques that include inputs for the asset or
liability that are not based on observable market data (unobservable inputs).
The fair value measurement level of an asset or a liability within their fair value hierarchy isbased on the lowest level of any input that is significant to the fair value measurement. The
Company uses valuation techniques that maximize the use of observable inputs and minimize
the use of unobservable inputs.
December 31, 2023
Financial assets at FVTPL:
Financial assets mandatorily
measured at FVTPL
Current
Foreign currency forward
contracts
Noncurrent
Convertible bonds
Financial assets at FVTOCI:
Listed stocks
Non-listed stocks$

Level 1

Level 2

Level 3

Total-

176,492-

176,492--

139,170

139,170

1,090,875--

741,193

1,090,875
741,193(Continued)
AUO Corporation
2023 Annual Report

215

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Level 1
Financial assets at amortized cost:
Domestic and foreign time deposits
Financial liabilities at FVTPL:
Foreign currency forward contracts
Financial liabilities at amortized cost:
Long-term payables (including
current installments)
December 31, 2022
Financial assets at FVTPL:
Financial assets mandatorily
measured at FVTPL$
Financial assets at FVTOCI:
Listed stocks
1,305,625
Non-listed stocks
Financial assets at amortized cost:
Domestic and foreign time deposits
Financial liabilities at FVTPL:
Contingent consideration frombusiness combination
Foreign currency forward contracts
Financial liabilities at amortized cost:
Long-term payables (including
current installments)

Level 2

Level 3

Total

1,264,324-

1,264,324

11,143-

11,143625,020-

625,020

365,037-

365,037-

594,956

1,142,218--

1,305,625
594,956
1,142,218

99,222

99,222

252,603-

252,603

968,520-

968,520

There were no transfers between Level 1 and 2 for the years ended December 31, 2023 and
2022.
d.

Reconciliation for fair value measurements categorized within Level 3

Financial assets at FVTOCIequity instruments without
active market
Balance at beginning of the year
Net gain included in other comprehensive income
Purchases
Disposals
Reclassification
Effect of exchange rate change
Balance at end of the year

For the years ended
December 31,
2023
2022

$

$

594,956
4,811
217,183(74,799)(958)
741,193

1,158,980
354,603(10,002)(909,473)
848
594,956(Continued)

216

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Financial assets at FVTPLconvertible bonds
Balance at beginning of the year
Net gain included in profit or loss
Purchases
Effect of exchange rate change
Balance at end of the year
Financial liabilities at FVTPLcontingent considerationfrom business combination
Balance at beginning of the year
Net loss included in profit or loss
Contingent consideration derived from businesscombination
Payment
Balance at end of the yeare.

For the years ended
December 31,
2023
2022
$

-

$

953
138,231(14)
139,170-

99,222(13,643)-

99,222(85,579)-

99,222$$

Description of valuation processes and quantitative disclosures for fair value measurements
categorized within Level 3
The Company’s management reviews the policy and procedures of fair value measurements atleast once at the end of the annual reporting period, or more frequently as deemed necessary.
When a fair value measurement involves one or more significant inputs that are unobservable,
the Company monitors the valuation process discreetly and examines whether the inputs areused the most relevant market data available.

Item
Financial assets at
FVTOCI–equity
instruments without
active market

Financial assets at
FVTPLconvertible
bonds

ValuationtechniqueMarketapproach

Optionpricing
modelInter-relationshipbetween significant
unobservable inputs andSignificant unobservable inputs
fair value measurement
q Price-Book ratio (0.85~15.72 at
q The higher the priceDec. 31, 2023 and 1.00~6.52 atbook ratio is, the higher
Dec. 31, 2022 )the fair value is.
q Price-Earnings ratio (11.65~33.90 q The higher the priceat Dec. 31, 2023 and 7.57~23.38
earnings ratio is, theat Dec. 31, 2022 )higher the fair value is.
q Discount for lack of marketability q The greater degree of(15%~33% at Dec. 31, 2023 andlack of marketability is,16%~22% at Dec. 31, 2022)
the lower the fair valueis.
q Volatility rate: 41.5%
q Not applicable(Continued)
AUO Corporation
2023 Annual Report

217

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Item
Financial liabilities at
FVTPLcontingent
consideration frombusiness combination
Financial liabilities at
FVTPLcontingent
consideration frombusiness combination

Valuationtechnique
Monte
Carlo
simulation
Binominal
optionpricingmodel

Significant unobservable inputs
q Discount rate: 9.6%
q Revenue volatility rate: 20.0%
q Expected stock price volatility
rate: 42.57%

Inter-relationshipbetween significant
unobservable inputs andfair value measurement
q Not applicableq Not applicableq Expected dividend yield: 0.0%
q Risk-free rate: 0.4%

(28) Financial Risk Managementa.

Risk management framework
The managerial officers of related divisions are appointed to review, control, trace and monitor
the strategic risks, financial risks and operational risks faced by the Company. The managerial
officers report to executive officers the progress of risk controls from time to time and, if
necessary, report to the board of directors, depending on the extent of impact of risks.

b.

Financial risk information
Hereinafter discloses information about the Company’ s exposure to variable risks, and thegoals, policies and procedures of the Company’s risk measurement and risk management.
The Company is exposed to the following risks due to usage of financial instruments:(i)

Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to afinancial instrument fails to meet its contractual obligations. The Company’s exposures
to credit risk are mainly from:(a)

The carrying amount of financial assets recognized in the consolidated balance
sheets.

(b)

The amount of contingent liabilities as a result from the Company providing
financial guarantee to its customers.

The Company’ s potential credit risk is derived primarily from cash in bank, cash
equivalents and trade receivables. The Company deposits its cash with various reputablefinancial institutions of high credit quality. Management performs periodic evaluations of
the relative credit standing of these financial institutions and limits the amount of credit
exposure with any one institution. Management believes that there is a limited
concentration of credit risk in cash and cash equivalent investments.

(Continued)

218

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The majority of the Company’ s customers are in high technology industries.
Management continuously evaluates and controls the credit quality, credit limit andfinancial strength of its customers to ensure any overdue receivables are taken necessary
procedures. The Company also flexibly makes use of advance receipts, accounts
receivable factoring and credit insurance as credit enhancement instruments. If necessary,
the Company will request collaterals or assurance from its customers in order to reducethe credit risk from particular customers.
Additionally, on the reporting date, the Company reviews the recoverability of its
receivables to provide appropriate valuation allowances. Consequently, management
believes there is a limited concentration of its credit risk.
For the years ended December 31, 2023 and 2022, the Company’s five largest customers
accounted for 36.6% and 37.6%, respectively, of the Company’ s consolidated net
revenue. There is no other significant concentration of credit risk.
Refer to Note 6(5) for expected credit loss analysis of accounts receivable and the
movement in the loss allowance of accounts receivable.
For credit of guarantee, the Company’s policy is to provide financial guarantees only to
subsidiaries. Refer to Note 13(1)b. for information about endorsements or guarantees
provided by the Company to its subsidiaries as of December 31, 2023.
(ii)

Liquidity risk
Liquidity risk is the risk that the Company has no sufficient working capital and unused
credit facilities to meet its obligations associated with matured financial liabilities, that
may resulting from an economic downturn or uneven demand and supply in the market
and cause a significant decrease in product selling prices and market demands.
Liquidity risk of the Company is monitored through its corporate treasury department
which tracks the development of the actual cash flow position for the Company and uses
input from a number of sources in order to forecast the overall liquidity position both ona short and long term basis. Corporate treasury invests surplus cash in money market
deposits with appropriate maturities to ensure sufficient liquidity is available to meet
liabilities when due, without incurring unacceptable losses or risking damage to theCompany’s reputation.

(Continued)
AUO Corporation
2023 Annual Report219

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following, except for payables (including related parties) and equipment andconstruction payable, are the contractual maturities of other financial liabilities. The
amounts include estimated interest payments (except for short-term borrowings) but
exclude the impact of netting agreements.
Contractual
cash flows

2024.1.1~
2024.12.31

2025.1.1~
2026.12.31

2027.1.1~
2028.12.31

2029 and
thereafter

December 31, 2023
Non-derivative financial liabilities
Short-term borrowings$

Long-term borrowings(including current
installments)
Guarantee deposits

263,000

263,000---

129,692,922

12,863,411

56,592,237

41,538,894

18,698,380

800,174

44,022548-

755,604

Long-term payables (including
current installments)
Derivative financial instruments

625,020

312,510

312,510--Foreign currency forward
contractsinflows
Foreign currency forward
contractsoutflows(8,031,501)(8,031,501)

-

-

-

7,904,551

7,904,551---$ 131,254,166

13,355,993

56,905,295

41,538,894

19,453,984

Contractual
cash flows

2023.1.1~
2023.12.31

2024.1.1~
2025.12.31

2026.1.1~
2027.12.31

2028 and
thereafter

128,487

128,487---

93,260,848

16,104,803

49,964,973

14,791,410

12,399,662

3,640

734,608

December 31, 2022
Non-derivative financial liabilities
Short-term borrowings$

Long-term borrowings(including current
installments)
Guarantee deposits

778,426

40,178-Long-term payables (including
current installments)
Derivative financial instruments

968,520

343,500

625,020--

Foreign currency forward
contractsinflows
Foreign currency forward
contractsoutflows(9,961,496)(9,961,496)

-

-

-

9,783,507

9,783,507---

94,958,292

16,438,979

50,589,993

14,795,050

13,134,270$

The Company is not expecting that the cash flows included in the maturity analysis could
occur significantly earlier or at significantly different amounts.
As at December 31, 2023, the management believes the Company’ s existing unused
credit facilities under its existing loan agreements, together with net cash flows expected
to be generated from its operating activities, will be sufficient for the Company to fulfill
its payment obligations. Therefore, management believes that the Company does nothave significant liquidity risk.

(Continued)

220

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(iii) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates,interest rates and equity prices, which will affect the Company’s income or the value of
its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable range.
The Company buys and sells derivatives, and also incurs financial assets and liabilities,
in order to manage market risks. All such transactions are executed in accordance with
the Company’ s handling procedures for conducting derivative transactions, and also
monitored by internal audit department.
(a)Currency risk
The Company is exposed to currency risk on foreign currency denominatedfinancial assets and liabilities arising from operating, financing and investing
activities such that the Company uses forward exchange contracts to hedge its
currency risk. Gains and losses derived from the foreign currency fluctuations onunderlying assets and liabilities are likely to offset. However, transactions ofderivative financial instruments help minimize the impact of foreign currency
fluctuations, but the risk cannot be fully eliminated.
The Company periodically examines portions exposed to currency risks forindividual asset and liability denominated in foreign currency and uses forward
contracts as hedging instruments to hedge positions exposed to risks. The contracts
have maturity dates that do not exceed one year, and do not meet the criteria forhedge accounting.
I.

Exposure of currency risk
The Company’s significant exposure to foreign currency risk was as follows:
December 31, 2023
Foreigncurrency
amounts

Exchangerate

December 31, 2022
NTD

Foreigncurrency
amounts

Exchange
rate

NTD

Financial assets
Monetary items
1,199,754

30.7180

36,854,043

1,417,706

30.7320

43,568,941

JPY

13,862,787

0.2173

3,012,384

9,536,579

0.23112,203,903

EUR

20,16133.9710684,889

23,19232.7634

759,849

42,63130.7180

1,309,539

42,91430.7320

1,318,833

USD

1,183,915

30.7180

36,367,501

1,284,636

30.7320

39,479,434

JPY

16,539,194

0.2173

3,593,967

15,658,556

0.2311

3,618,692

EUR

66

33.9710

2,242

319

32.7634

10,452

USD$

Non-monetary items
USD
Financial liabilities
Monetary items(Continued)
AUO Corporation
2023 Annual Report221

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

II.

Sensitivity analysis
The Company’ s exposure to foreign currency risk arises mainly from thetranslation of the foreign currency exchange gains and losses on cash andcash equivalents, trade receivables, loans and borrowings and trade payables
that are denominated in foreign currency. Depreciation or appreciation of the
NTD by 1% against the USD, EUR and JPY at December 31, 2023 and 2022,
while all other variables were remained constant, would have increased or
decreased the net profit before tax for the years ended December 31, 2023
and 2022 as follows:

1% of depreciation
1% of appreciation
III.

$

For the years ended
December 31,
2023
2022
5,876
34,241(5,876)(34,241)

Foreign exchange gain (loss) on monetary items
With varieties of functional currencies within the Company, the Company
disclosed foreign exchange gain (loss) on monetary items in aggregate. The
aggregate of realized and unrealized foreign exchange gains for the years
ended December 31, 2023 and 2022, were $458,035 thousand and $937,064
thousand, respectively.

(b)Interest rate risk
The Company’ s exposure to changes in interest rates is mainly from floating-ratelong-term debt obligations. Any change in interest rates will cause the effective
interest rates of long-term borrowings to change and thus cause the future cash
flows to fluctuate over time. The Company will, depending on the market
condition, enter into and designate interest rate swaps as hedges of the variability incash flows attributable to interest rate risk.
Assuming the amount of floating-rate debts at the end of the reporting period had
been outstanding for the entire year and all other variables were remained constant,an increase or a decrease in the interest rate by 0.25% would have resulted in adecrease or an increase in the net profit before tax for the years ended December
31, 2023 and 2022 by $275,318 thousand and $214,330 thousand, respectively.

(c)

Equity price risk
See Note 6(3) for disclosure of equity price risk analysis.

(Continued)

222

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(29) Capital Management
Through clear understanding and managing of significant changes in external environment, relatedindustry characteristics, and corporate growth plan, the Company manages its capital structure toensure it has sufficient financial resources to sustain proper liquidity, to invest in capital
expenditures and research and development expenses, to repay debts and to distribute dividends inaccordance to its plan. The management pursues the most suitable capital structure by monitoringand maintaining proper financial ratios as below. The Company aims to enhance the returns of its
shareholders through achieving an optimized debt-to-equity ratio from time to time.

Short-term borrowings
Long-term borrowings (including current installments)
Total liabilities
Total equity
Debt-to-equity ratio
Net debt-to-equity ratio(i)
(i)

7.

$

December 31,
2023
2022
263,000
128,487
111,587,034
86,815,451
218,113,201
195,430,026
165,357,536
191,410,648
132 %
102 %
17 %
3%

Net debt-to-equity ratio is defined as short-term borrowings plus long-term borrowings less cash
and cash equivalents and divided by total equity.

Related-party Transactions
All inter-company transactions and balances between AUO and its subsidiaries have been eliminated upon
consolidation, and therefore, are not disclosed in this note. The transactions between the Company andother related parties are set out as follows:(1)

Name and relationship of related parties
The following is a summary of related parties that have had transactions with the Company during
the periods presented in the consolidated financial statements.
Name of related party
Ennostar Inc. (“Ennostar”)
Lextar Electronics Corporation (“Lextar”)
Lextar Electronics (Suzhou) Co., Ltd. (“LESZ”)
Lextar Electronics (Chuzhou) Corp. (“LEXCZ”)
Epistar Corporation (“Epistar”)
Yenrich Technology Corporation (“Yenrich”)
Trendylite Corporation (“Trendylite”)
Unikorn Semiconductor Corporation (“USC”)
Raydium Semiconductor Corporation (“Raydium”)
Raydium Semiconductor (Kunshan) Co., Ltd. (“RKS”)
Star Shining Energy Corporation (“SSEC”)

Relationship with the Company
Associate
Subsidiary of Ennostar
Subsidiary of Ennostar
Subsidiary of Ennostar
Subsidiary of Ennostar
Subsidiary of Ennostar
Subsidiary of Ennostar
Subsidiary of Ennostar
Associate
Subsidiary of Raydium
Associate(Continued)
AUO Corporation
2023 Annual Report

223

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Name of related party
Fargen Power Corporation (“FGPC”)
Sheng Li Energy Corporation (“SLEC”)
ChampionGen Power Corporation (“CGPC”)
TronGen Power Corporation (“TGPC”)
Ri Ji Power Corporation (“RJPC”)
Ri Jing Power Corporation (“RGPC”)
Mao Zheng Energy Corporation (“MZEC”)
Mao Xin Energy Corporation (“MXEC”)
Sheng Feng Power Corporation (“SFPC”)
Sheng He Power Corporation (“SHPC”)
Sheng Yao Power Corporation (“SYPC”)
Sheng Da Power Corporation (“SDPC”)
Shin Sheng Feng Investment Corp. (“SSFI”)
He Shuo Agricultural Biotech Corporation (“HSNC”)
Renovatio Pictures Co., Ltd. (“RP”)
YTTEK Technology Corp. (“YTTEK”)
Daxin Materials Corp. (“Daxin”)
Darwin Summit Corporation Ltd. (“DSC”)
ADLINK Technology Inc. (“ADLINK”)
ADLINK Technology (China) Co., Ltd. (“ADLINKCN”)
ADLINK Technology GmbH (“ATG”)
IRIS Optronics Co., Ltd. (“IOC”)
SINTRONES Technology Corp. (“SINTRONES”)
Shine Biomedical Technology Corporation (“SBTC”)
Qisda Corporation (“Qisda”)
Qisda Vietnam Co., Ltd (“QVH”)
BenQ Corporation (“BenQ”)
BenQ Materials Corp. (“BMC”)
BenQ Healthcare Corporation (“BHS”)
Qisda (Suzhou) Co., Ltd. (“QCSZ”)
Qisda Electronics (Suzhou) Co., Ltd. (“QCES”)
Qisda Optronics (Suzhou) Co., Ltd. (“QCOS”)
Qisda Precision Industry (Suzhou) Co., Ltd. (“QCPS”)
Global Intelligence Network Co., Ltd. (“GINNET”)
Standard Technology Corp. (“STC”)

Relationship with the Company
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Associate
Associate
Associate
Associate
Associate
Subsidiary of ADLINK
Subsidiary of ADLINK
Associate(iv)Associate(i)Associate
Associate
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda(Continued)

224

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Name of related party
BenQ Europe B.V. (“BQE”)
BenQ America Corporation (“BQA”)
BenQ Asia Pacific Corp. (“BQP”)
BenQ Co., Ltd. (“BQC”)
BenQ Technology (Shanghai) Co., Ltd. (“BQls”)
Guru Systems (Suzhou) Co., Ltd. (“GSS”)
Metaguru Corporation (“Metaguru”)
BenQ Material (WuHu) Co., Ltd. (“DNT”)
BenQ Material (Suzhou) Co., Ltd. (“BMS”)
Suzhou BenQ Hospital Co., Ltd. (“QCHS”)
DFI Inc. (“DFI”)
Data Image Corporation (“DIC”)
Data Image (Suzhou) Corporation (“DICSZ”)
Partner Tech Corp. (“PTT”)
Webest Solution Corp. (“WEBEST”)
ACE Pillar Co., Ltd. (“ACE”)
Tianjin ACE Pillar Co., Ltd. (“ACETJ”)
Golden Spirit Co., Ltd. (“GSC”)
Alpha Networks Inc. (“Alpha”)
Hitron Technologies Inc. (“Hitron”)
AdvancedTEK International Corp. (“AdvancedTEK”)
BenQ Intelligent Technology (Shanghai) Co., Ltd.
(“BQC_RO”)
Metaage Corporation (“MTG”)
Concord Medical Co., Ltd. (“Concord”)
Partner Tech Asia Pacific Corporation (“PTAP”)
Transnet Corporation (“Transnet”)
AUO Foundation
WishMobile, Inc. (“WMI”)
WiBASE Industrial Solutions Inc. (“WIS”)
ToYou Display (Suzhou) Co., Ltd. (“TYSZ”)
Jector Digital System Inc. (“JDSI”)
Heilongjiang Tianyouwei Electronics Co., Ltd. (“TYW”)

Relationship with the Company
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Substantive related party
Konly represented as a director of
WMI
DPTW represented as a director of
WIS(ii)
AUOSZ represented as a director of
TYSZ(iii)
Director of Jector
Director of Talenda(Continued)
AUO Corporation
2023 Annual Report

225

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Name of related party
Play Nitride Inc. (“PlayNitride”)
Carota Corporation (“Carota”)
Profet Al Shanghai Co., Ltd. (“PFSH”)
Profet AI Technology Co., Ltd. (“PFTW”)
PlayNitride Display Co., Ltd. (“PND”)
Mega Green Energy Corporation (“MGE”)
Avocor Technologies USA Inc. (“Avocor”)
Zhensheng construction Co., Ltd. (“Zhensheng”)(2)

Relationship with the Company
Konly represented as a director of
PlayNitride
Konly represented as a director of
CarotaDirector of PFSZPFTW and PFSH are members of thesame Group
Subsidiary of PlayNitride
Subsidiary of ZFE
ADPNL represented as a director of
AvocorSupervisor of AET-YP(i)

The Company has had significant influence over SINTRONES since February 2023; therefore,
SINTRONES was changed from other related party to associate.

(ii)

DPTW sold all of its ownership interests in WIS in May 2023. Therefore, WIS is no longer a
related party of the Company starting from the date of disposal.

(iii)

TYSZ held its director re-election in September 2023, and AUOSZ ceased to serve as its
director. Therefore, TYSZ is no longer a related party of the Company staring from the date ofre-election.

(iv)

The Company ceased to apply the equity method over IOC from December 2023; therefore, IOC
is no longer a related party of the Company starting from the date of the cease.

Compensation to key management personnel
Key management personnel’s compensation comprised:

Short-term employee benefits
Post-employment benefits
Share-based payments$$

For the years ended
December 31,
2023
2022
578,796471,604
1,411
1,359
35,301
39,592615,508
512,555

Refer to Note 6(19) for information on share-based payments.

(Continued)

226

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(3)

Except for otherwise disclosed in other notes to the consolidated financial statements, the Company’s significant related party transactions and balances were as follows:
a.

Sales
Accounts receivablefrom related parties

Sales
For the years ended
December 31,
Associates
Others$$2023
11,624,308
105,798
11,730,106

2022
12,869,886
8,306
12,878,192

December 31,
2023
1,123,379
121,167
1,244,546

December 31,
2022
1,254,686
817
1,255,503

The collection terms for sales to related parties were 25 to 55 days from the end of the month
during which the invoice is issued. The pricing for sales to related parties were not materiallydifferent from those with third parties.
b.

Purchases
Purchases
For the years ended
December 31,
Associates
Others$$2023
17,861,976
134,523
17,996,499

2022
20,938,477
5,999
20,944,476

Accounts payable to relatedparties
December 31,
2023
5,161,865
41,4255,203,290

December 31,
2022
5,889,460
725
5,890,185

The payment terms for purchases from related parties were 45 to 120 days. The pricing andpayment terms with related parties were not materially different from those with third parties.
c.

Acquisition of property, plant and equipment

Associates$

Acquisition prices
For the years ended
December 31,
2023
2022
33,38862,306(Continued)
AUO Corporation
2023 Annual Report227

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statementsd.

Disposal of property, plant and equipment

Associatese.

$Gains on disposal
For the years ended
December 31,
2023
2022
383
550

Proceeds from disposal
For the years ended
December 31,
2023
2022
383
550

Other related party transactions
Transaction
type
Rental income

Other income

Associates
BMC
Others

For the years ended
December 31,
2023
2022

Type ofrelatedparty

Associates
Others$$$$Cost of sales and operating
expenses

Associates
Others$$101,546
35,688137,234
59,70359,70396,39135,547
131,938
64,106142
64,24871,177
164,442
235,619

107,342
157,204
264,546

The Company leased portion of its offices and plants to related parties. The collection term
was receipts in advance, and the pricing was not materially different from that with third
parties.
Transaction typeType of related party
Other receivables due from
related parties
Associates
Other payables due to relatedparties, including payables Associates
for equipment
Others

December 31, December 31,
2023
2022
$

15,305

6,139$

36,71911,562
48,281

20,177
11,614
31,791$The Company paid deposits to related parties for the purchase of renewable energy. The
amount as of December 31, 2023 was $62,605 thousand and was recorded under refundable
deposits.

(Continued)

228

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

In 2023, the Company obtained convertible bonds issued by Avocor in the amount of $138,231
thousand. The Company participated in capital increase of related parties, including SBTC for
2023 by $24,720 thousand and Ennostar for 2022 by $3,484,895 thousand, respectively. In
addition, for the years ended December 31, 2023 and 2022, the Company entitled for cash
dividends declared by related parties of $1,597,016 thousand and $1,824,694 thousand,respectively. As of December 31, 2023 and 2022, the aforementioned dividends were allreceived.
8.

Pledged Assets
The carrying amounts of the assets which the Company pledged as collateral were as follows:
Pledged assets
Restricted cash in banks(i)Land and buildings
Machinery and equipment
Right-of-use assets

Pledged to secure
Customs duties,
guarantee forwarranties, long-termborrowings limit, andoutstanding letters ofcreditLong-term borrowings
limit
Long-term borrowings
limit
Long-term borrowings
limit

December 31, December 31,
2023
2022

$

$

775,179

1,109,414

58,951,937

60,580,031

29,301,933

21,373,787

73,94089,102,989

77,821
83,141,053(i) Classified as other current financial assets and other noncurrent assets by its liquidity.

9.

Significant Contingent Liabilities and Unrecognized Commitments
The significant commitments and contingencies of the Company as of December 31, 2023, in addition to
those disclosed in other notes to the consolidated financial statements, were as follows:(1)

Outstanding letters of credit
As at December 31, 2023, the Company had the following outstanding letters of credit for the
purpose of purchasing machinery and equipment and materials:

USD
JPY
EUR

Currency

December 31,
2023(in thousands)
45,865
6,599,400
2,047(Continued)
AUO Corporation
2023 Annual Report229

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(2)

Technology licensing agreements
Starting in 1998, AUO has entered into technical collaboration, patent licensing, and/or patent crosslicensing agreements with Fujitsu Display Technologies Corp. (subsequently assumed by Fujitsu
Limited), Toppan Printing Co., Ltd. (“Toppan Printing”), Semiconductor Energy Laboratory Co.,
Ltd., Japan Display Inc. (formerly Japan Display East Inc./Hitachi Displays, Ltd.), Panasonic Liquid
Crystal Display Co., Ltd. (formerly IPS Alpha Technology, Ltd.), LG Display Co., Ltd., Sharp
Corporation, Samsung Electronics Co., Ltd., Hydis Technologies Co., Ltd., Sanyo Electronic Co.,
Ltd., Seiko Epson Corporation and others. AUO believes that it is in compliance with the terms andconditions of the aforementioned agreements.

(3)

(4)

Purchase commitmentsa.

In 2021, AUO entered into a long-term materials supply agreement with a supplier, underwhich, AUO and the supplier agreed on the supply of certain IC chip at agreed prices andquantities.

b.

Starting from the third quarter of 2022, ACTW has entered into long-term materials supply
agreements with suppliers. Under the agreements, ACTW and the suppliers agreed on the
supply of silicon materials at respective agreed prices and quantities.

c.

As at December 31, 2023, significant outstanding purchase commitments for construction inprogress, property, plant and equipment totaled $23,927,353 thousand.

Litigation
In May 2014, LG Electronics Nanjing Display Co., Ltd. and seven of its affiliates (collectively, the“Plaintiffs”) filed a lawsuit in Seoul Central District Court against certain LCD manufacturers
including AUO, alleging overcharge and claiming damages. In November 2023, the court of first
instance in Korea has found AUO liable to the Plaintiffs for a total amount of KRW 29,099 million
plus interest. This antitrust civil case has been ongoing for many years since the Plaintiffs filed theirlawsuit in 2014 which resulted from the LCD antitrust meetings that ended in 2006. AUO filed an
appeal in December 2023 and made a security deposit of the aforementioned amount plus interest at
the Korean court in January 2024. At this stage, the final outcome of these matters is uncertain. AUO
is reviewing the merits of the lawsuits on an on-going basis.
In October 2023, Phenix Longhorn LLC (“Phenix”) filed a lawsuit in the United States District
Court for the Eastern District of Texas against two companies including AUO, claiming infringementof certain of Phenix’s patents in the United States relating to the manufacturing of LCD panels. In
the complaint, Phenix seeks, among other things, unspecified monetary damages and injunctive relief.
While AUO intends to defend the suits vigorously, the ultimate outcome of the three matters is
uncertain. AUO is reviewing the merits of the lawsuits on an on-going basis.

(Continued)

230

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

As of January 31, 2024, the Company has made certain provisions with respect to certain of theabove lawsuits as the management deems appropriate, considering factors such as the nature of thelitigation or claims, the materiality of the amount of possible loss, the progress of the cases and theopinions or views of legal counsel and other advisors. Management will reassess all litigation andclaims at each reporting date based on the facts and circumstances that exist at that time, and will
make additional provisions or adjustments to previous provisions. The ultimate amount cannot be
ascertained until the relevant cases are closed. The ultimate resolution of the legal proceedings
and/or lawsuits cannot be predicted with certainty. While management intends to defend certain of
the lawsuits described above vigorously, there is a possibility that one or more legal proceedings orlawsuits may result in an unfavorable outcome to the Company. In addition to the matters describedabove, the Company is also a party to other litigations or proceedings that arise during the ordinary
course of business. Except as mentioned above, the Company, to its knowledge, is not involved as adefendant in any material litigation or proceeding which could be expected to have a material
adverse effect on the Company’s business or results of operations.
10. Significant Disaster Losses: None
11. Subsequent Event: None
12. Others(1)

Since 2010, there have been environmental proceedings relating to the development project of theCentral Taiwan Science Park in Houli, Taichung, which AUO’s second 8.5 generation fab is locatedat (the “Project”). The Environmental Protection Administration (“EPA”) of the Executive Yuan of
Taiwan issued the environmental assessment and development approval on November 6, 2018. On
October 24, 2019, the Appeal Review Committee of the Executive Yuan rejected the administrative
appeal filed by five local residents. On December 24, 2019, the residents filed an administrative
action for invalidating the environmental assessment again and the Appeal Review Committee of the
Executive Yuan ruled in the residents’ favor on July 21, 2022 and invalidated the environmental
assessment approval. The EPA filed an appeal in the Supreme Administrative Court on August 17,
2022. The Company will continue to monitor the development of this event.

(2)

On October 2, 2023, AUO has entered into an agreement with MAHLE Behr GmbH & Co. KG andHELLA GmbH & Co. KGaA; under which AUO will acquire 100% equity interest in the German
company Behr Hella Thermocontrol GmbH at an enterprise value of EUR 600 million(approximately NT$20.4 billion), subject to price adjustments, including changes in net working
capital, net debt, and other related adjustments, set forth in the share purchase agreement. Thistransaction is subject to the clearance of customary antitrust and regulatory approvals.

13. Additional Disclosures(1)

Information on significant transactions:
Following are the additional disclosures required by the Regulations for the Company for the year
ended December 31, 2023.
a.

Financings provided: Please see Table 1 attached.

(Continued)
AUO Corporation
2023 Annual Report231

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statementsb.

Endorsements/guarantees provided: Please see Table 2 attached.

c.

Marketable securities held (excluding investment in subsidiaries, associates and joint
ventures): Please see Table 3 attached.

d.

Individual marketable securities acquired or disposed of with costs or prices exceeding
NT$300 million or 20% of the paid-in capital: Please see Table 4 attached.

e.

Acquisition of individual real estate with costs exceeding NT$300 million or 20% of thepaid-in capital: Nonef.

Disposal of individual real estate with prices exceeding NT$300 million or 20% of the paid-in
capital: None.

g.

Purchases from or sales to related parties with amounts exceeding NT$100 million or 20% of
the paid-in capital: Please see Table 5 attached.

h.

Receivables from related parties with amounts exceeding NT$100 million or 20% of thepaid-in capital: Please see Table 6 attached.

i.

Information about trading in derivative instruments: Please see Note 6(2).

j.

Business relationship and significant intercompany transactions: Please see Table 7 attached.

(2)

Information on investees (excluding information on investment in Mainland China): Please see
Table 8 attached.

(3)

Information on investment in Mainland China:a.

The related information on investment in Mainland China: Please see Table 9.1 and 9.2
attached.

b.

Upper limit on investment in Mainland China: Please see Table 9.1 and 9.2 attached.

c.

Significant transactions:
Significant direct or indirect transactions with the investees in Mainland China for the year
ended December 31, 2023, for which intercompany transactions were eliminated upon
consolidation, are disclosed in Note 13(1) “Information on significant transactions”.

(4)

Major shareholders:Major Shareholder
Qisda
Trust Holding for Employees of AUO Corporation

SharesTotal Shares
Ownership
Owned
Percentage
530,878,896
6.89 %
407,919,675

5.29 %(Continued)

232

AUO Corporation
2023 Annual ReportAppendix 1

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

Note: This table discloses the information that shareholders who hold in total, more than 5% of
AUO’ s common shares and preferred shares that are in dematerialized form and with theregistration being completed. The aforesaid information was provided by Taiwan Depository& Clearing Corporation and calculated based on the data on the last business day at the end ofeach quarter.
14.

Segment Information(1)

Operating segment information
The Company has two operating segments: display and energy. The display segment generally is
engaged in the research, development, design, manufacturing and sale of flat panel displays and mostof our products are TFT-LCD panels. The energy segment primarily is engaged in the design,
manufacturing and sale of ingots, solar wafers and solar modules, as well as providing technicalengineering services and maintenance services for solar system projects.
Segment results are excluding non-operating income and expenses and income tax expense (benefit).
There are no differences between the consolidated financial statements for the years ended
December 31, 2023 and 2022 with the financial results received by the Company’s chief operating
decision maker. The accounting policies for the operating segments are the same as those used in
preparation of the consolidated financial statements of the Company. The Company uses the net
revenue, profit (loss) from operations and segment profit (loss) excluding depreciation andamortization as the basis of segment performance assessment.
For the year ended December 31, 2023
Display
EnergyTotal
segment
segment
segments
Net revenue from external customers$ 229,262,040
18,702,397
247,964,437
Segment profit (loss)$ (22,587,557)
625,542(21,962,015)
Net non-operating income and expenses
279,955
Consolidated net profit (loss) before income tax$ (21,682,060)
Segment profit (loss) excluding depreciation andamortization$
9,424,391
1,119,138
10,543,529
Segment assets$ 383,470,737
For the year ended December 31, 2022
Display
EnergyTotal
segment
segment
segments$ 225,890,434
20,902,240
246,792,674$ (25,346,461)
1,376,065(23,970,396)
4,464,204$ (19,506,192)

Net revenue from external customers
Segment profit (loss)
Net non-operating income and expenses
Consolidated profit (loss) before income tax
Segment profit (loss) excluding depreciation andamortization$
Segment assets

5,634,505

1,861,452

7,495,957$ 386,840,674(Continued)
AUO Corporation
2023 Annual Report233

AUO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements(2)

Geographic informationa.

Net revenue from external customers: See Note 6(20).

b.

Consolidated noncurrent assets(i)RegionTaiwanPRC (including Hong Kong)
Others

December 31, December 31,
2023
2022
$ 142,840,919
145,471,577
49,745,628
55,329,413
4,229,949
4,224,605$ 196,816,496
205,025,595(i) Noncurrent assets are not inclusive of financial instruments, deferred tax assets and prepaid

pension.

(3)

Major customer and product information: See Note 6(20).

(Continued)

234

AUO Corporation
2023 Annual ReportAETTW

AET-YP

ADTTW

0 AUO

0 AUO

0 AUO

S4M

AUOKS

0 AUO

0 AUO

ACTW

Financing Borrowing
Company Company

0 AUO

No.

Table 1

Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties

Financial
Statement
Account(Note 5)

Yes

Yes

Yes

Yes

Yes

Yes

RelatedParty

300,000

100,000

200,000

400,000

7,562,450

2,500,000

Maximum
Balance for
the Period(Note 3)300,000

100,000

200,000

400,000-

1,300,000

Markup rate on
short-term
financing cost

110,000 Markup rate on
short-term
financing cost

20,000 Markup rate on
short-term
financing cost

15,000 Markup rate on
short-term
financing cost

200,000 Markup rate on
short-term
financing cost-

800,000 Markup rate on
short-term
financing cost

AmountEnding Balance
Actually
Interest Rate
(Notes 1 and 2) Drawn Down
(Notes 1 and 4)

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing---OperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapital--Operatingcapital

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

15,916,721

15,916,721

15,916,721

15,916,721

15,916,721

63,666,883

63,666,883

63,666,883

63,666,883

63,666,883

Limits on
FinancingCompanys
Total
FinancingAmount(Notes 1 and 6)
15,916,721
63,666,883

Financing
Collateral
Allowance
Limits for Each
Nature of Transaction Reason forfor BadBorrowing
Financing Amounts Financing
Debt
Company
Item Value (Notes 1 and 6)(Amount in thousands of New Taiwan Dollars)

AUO CORPORATION AND SUBSIDIARIES
Financings Provided
For the year ended December 31, 2023

Appendix 1

AUO Corporation

2023 Annual Report

235

236

AUO Corporation

2023 Annual Report

Financing Borrowing
Company Company

4 BVXM

AUOKS

3 AUOXM AUOSZ

3 AUOXM AUOKS

2 AUOKS AUOSZ

2 AUOKS AUOXM

1 AUOLB AUOKS

1 AUOLB AUOXM

1 AUOLB AUOSZ

No.

Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties

Financial
Statement
Account(Note 5)

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

RelatedParty

889,700

1,772,520

6,203,820

2,658,780

3,545,040

16,459,450

886,260

886,260

Maximum
Balance for
the Period(Note 3)

431,520

863,040

4,315,200

1,726,080

1,726,080

8,198,880

863,040

863,040

Markup rate on
short-term
financing costMarkup rate on
short-term
financing costMarkup rate on
short-term
financing costMarkup rate on
short-term
financing costMarkup rate on
short-term
financing cost

431,520 Markup rate on
short-term
financing cost-

1,726,080 Markup rate on
short-term
financing cost--

1,294,560 Markup rate on
short-term
financing cost--

AmountEnding Balance
Actually
Interest Rate
(Notes 1 and 2) Drawn Down
(Notes 1 and 4)

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

-

-

-

-

-

-

-

-

OperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapital

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,360,548

16,293,338

16,293,338

21,344,066

21,344,066

78,405,680

78,405,680

1,360,548

16,293,338

16,293,338

21,344,066

21,344,066

78,405,680

78,405,680

Limits on
FinancingCompanys
Total
FinancingAmount(Notes 1 and 6)
78,405,680
78,405,680

Financing
Collateral
Limits for EachAllowance
Nature of Transaction Reason for
Borrowingfor BadFinancing Amounts Financing
Company
Debt
Item Value (Notes 1 and 6)

ACTSZ

ADTSZ

AETSZ

AMISZ

AMIXM

AUOKS

ATISZ

AUOXM

5 AUOSJ

5 AUOSJ

5 AUOSJ

5 AUOSJ

5 AUOSJ

5 AUOSJ

6 AUOSZ

Financing Borrowing
Company Company

5 AUOSJNo.

Otherreceivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties

Financial
Statement
Account(Note 5)

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

RelatedParty

1,772,520

88,6282,658,780

141,302132,471883,140

264,942

185,459

Maximum
Balance for
the Period(Note 3)863,040

86,304

1,726,080

138,086

129,456

863,040

215,760

129,456

Markup rate on
short-term
financing costMarkup rate on
short-term
financing cost--Markup rate on
short-term
financing costMarkup rate on
short-term
financing cost

1,726,080 Markup rate on
short-term
financing cost--

366,792 Markup rate on
short-term
financing cost

21,576 Markup rate on
short-term
financing cost

21,576 Markup rate on
short-term
financing cost

AmountEnding Balance
Actually
Interest Rate
(Notes 1 and 2) Drawn Down
(Notes 1 and 4)

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

-

-

-

-

-

-

-

-

OperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapital

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

17,653,379

1,699,877

4,249,693

1,699,877

1,699,877

4,249,693

1,699,877

17,653,379

1,699,877

4,249,693

1,699,877

1,699,877

4,249,693

1,699,877

Limits on
FinancingCompanys
Total
FinancingAmount(Notes 1 and 6)
4,249,693
4,249,693

Financing
Collateral
Limits for EachAllowance
Nature of Transaction Reason for
Borrowingfor BadFinancing Amounts Financing
Company
Debt
Item Value (Notes 1 and 6)

Appendix 1

AUO Corporation

2023 Annual Report

237

238

AUO Corporation

2023 Annual ReportFTWJ

7 FPWJ

Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties

Financial
Statement
Account(Note 5)

Yes

Yes

RelatedParty

444,850

15,287,985

Maximum
Balance for
the Period(Note 3)

431,520

6,041,280--

Needs forshort-term
financing

215,760 Based on China Needs for
LPR
short-term
financing

2,157,600 Markup rate on
short-term
financing cost

AmountEnding Balance
Actually
Interest Rate
(Notes 1 and 2) Drawn Down
(Notes 1 and 4)

OperatingcapitalOperatingcapital

-

-

-

-

-

-

738,687

738,687

Note 1: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.
Note 2: The ending balance represents the amounts approved by the Board of Directors.
Note 3: The maximum balance for the period represents the highest amount in New Taiwan Dollars announced or occurred during the period.
Note 4: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.
Note 5: According to the maturity date of individual contracts, financings provided are classified under current or non-current items based on their liquidity.
Note 6: The policy for the limit on total financing amount and the financing limit for any individual entity are prescribed as follows:a. AUO: The amount available for lending to an investee or a company with needs for short-term financing shall not exceed 10% of AUO’s net worth as stated in its latest
financial statement. The aggregate amount available for lending to borrowers shall not exceed 40% of AUO’s net worth as stated in its latest financial statement.
b. AUOLB, AUOKS, AUOSZ, AUOXM, AUOSJ and BVXM: The amount available for lending to an investee or a company with needs for short-term financing and theaggregate amount available for lending to borrowers both shall not exceed 40% of the net worth of the lending company as stated in its latest financial statement.
c. In the event that the financing is between foreign subsidiaries whose voting shares are 100% owned, directly or indirectly, by AUO, the amount lendable to each of suchborrowers and the aggregate amount available for lending to such borrowers both shall not exceed the net worth of the lending company as stated in its latest financial
statement.
d. In the event that the financing is between foreign subsidiaries whose voting shares are 100% owned, directly or indirectly, by DPTW, the amount lendable to each of suchborrowers and the aggregate amount available for lending to such borrowers both shall not exceed the net worth of the lending company as stated in its latest financial
statement.
e. FPWJ and FTWJ are foreign subsidiaries whose voting shares are 100% owned, directly or indirectly, by DPTW.

AUOKSFinancing Borrowing
Company Company

6 AUOSZ

No.

Limits on
FinancingCompanys
Total
FinancingAmount(Notes 1 and 6)
17,653,379
17,653,379

Financing
Collateral
Limits for EachAllowance
Nature of Transaction Reason for
Borrowingfor BadFinancing Amounts Financing
Company
Debt
Item Value (Notes 1 and 6)

AUOXM

FPWJ

2

FTWJ

AUO

AUOKS

4

3

2
295,475

16,293,338

79,583,604
222,425

8,862,800

32,406,097

Party (Notes 4 and 5) Period (Note 2)

Guarantee
Balance for theProvided for EachEndorsement/

Endorsement/
Guarantee AmountMaximum

Limits on
Actually-

8,630,400

12,945,600-

3,020,640

8,630,400(Note 4)(Notes 3 and 4) Drawn Down

Ending Balance

AmountRatio of

Guarantee to Net

Endorsement/

Accumulated

-

-

-

by Properties-

52.97%

8.13%

Statements

Financial

Collateralized Worth per Latest

Guarantee

Endorsement/

Amount ofMaximum

295,475

16,293,338

No

No

Yes

Subsidiary(Notes 4 and 5)
159,167,207

Company toParentProvided by

Guarantee

Guarantee
Provided to

No

Yes

No

Company

Parent

Yes

No

Yes

China

in Mainland

Subsidiary to Subsidiaries

Provided by

Guarantee

Endorsement/ Endorsement/ Endorsement/

Allowable

AmountGuarantee

Endorsement/

Note 1: The relationship between the endorser/guarantor and the guaranteed party:
1. A company with which it does business.
2. A company in which the Company directly and indirectly holds more than 50% of the voting shares.
3. A company that directly and indirectly holds more than 50% of the voting shares in the Company.
4. Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares.
5. A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposesof undertaking a construction project.
6. A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.
7. Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant
to the Consumer Protection Act for each other.
Note 2: The maximum endorsement/guarantee balance for the period represents the highest amount in New Taiwan Dollars announced or occurred during the period.
Note 3: The ending balance represents the amounts approved by the Board of Directors.
Note 4: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.
Note 5: The policy for the limit of total endorsement/guarantee amount and the limit on endorsement/guarantee amount provided to each party are prescribed as follows:a. AUO: The total endorsement/guarantee amount provided shall not exceed the net worth of AUO as stated in its latest financial statement. The aggregate amount ofendorsement/guarantee provided to each guaranteed party shall not exceed 50% of AUO’s net worth as stated in its latest financial statement.
b. AUOXM: The total endorsement/guarantee amount provided and the aggregate amount of endorsement/guarantee provided to each guaranteed party both shall not exceed
the net worth of the endorser/guarantor as stated in its latest financial statement.
c. FPWJ: The total endorsement/guarantee amount provided and the aggregate amount of endorsement/guarantee provided to each guaranteed party both shall not exceed
40% of the net worth of the endorser/guarantor as stated in its latest financial statement.

AUO

1(Note 1)

Relationship

Name

Guarantor

0No.

Nature ofGuaranteed Party

Endorser/

Table 2

(Amount in thousands of New Taiwan Dollars)

AUO CORPORATION AND SUBSIDIARIES
Endorsements/Guarantees Provided
For the year ended December 31, 2023

Appendix 1

AUO Corporation

2023 Annual Report

239

240

AUO Corporation

2023 Annual Report

PlayNitride's stock
SkyREC Ltd.'s stock

SnapBizz CloudTech Pte. Ltd.'s stock
Azotek Co., Ltd.'s stock

WMI's stock
Chenfeng Optronics Corporation's stock

GCS Holdings, Inc.'s stock
a2peak power Co., Ltd.'s stock

IOC's stock

Imedtac Co., Ltd.'s stock
Disign Incorporated's stock

Evertrust Technology Ltd.'s stock
D8AI Inc.'s stock

HUAI I Precision Technology Co., Ltd.'s
stock
PlayNitride's stock

Konly
Konly

Konly
Konly

Konly
Konly

Konly

ADP
DPTW

DPTW
DPTW

DPTW

Ronly

Mindtronic AI Co. Ltd.'s stock

Konly
Konly

Related party--

Related party---

Related party--

Related party--

Related party

AUOSH TOLYY Optronics Co., Ltd.'s stock
Konly Carota's stock

Konly

Related party
Related party-

Relationship with
the Securities
IssuerADPNL Avocor's stock
AUOLB Abakus Solar AG's stock

Type and Nameof Marketable Securities

ADPNL Avocor's convertible bondName of
HolderTable 3Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTPLnoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTPLnoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTPLnoncurrent

Financial assets at FVTPLnoncurrent

Financial Statement Account
-

2,011

2,914

150
8,400

2,500
2

1,000

1,119
4,000

8,625
1,500

13
2,407

7,535
188

36

1,293 CNY
3,216

793 USD
3

Shares198,645

34,9681,500
11,149125,000
10,714-35,808-

16,531-

7,345

744,421-29,9436,250
247,038

5,150
-

1.88%

10.00%

16.13%
4.64%

14.17%
19.89%

3.62%

1.01%
10.87%

14.38%
1.49%

4.61%
3.93%

7.03%
16.12%

3.17%

1.58%
8.64%

10.30%
2.22%

CNY

USD

198,645

34,9681,500
11,149125,000
10,714-35,808-

16,531-

7,345

744,421-29,9436,250
247,038

5,150
-

1.88%

10.00%

16.13%
4.91%

14.17%
19.89%

5.00%

1.01%
10.87%

14.38%
1.60%

4.61%
3.96%

7.03%
16.12%

3.17%

1.58%
8.64%

10.35%
2.22%
Note 1

December 31, 2023
Maximum
Shareholding Note
Carrying
Percentage ofFair Value
AmountOwnershipin the Interim
USD
4,531
USD
4,531
-

AUO CORPORATION AND SUBSIDIARIES
Marketable Securities Held (Excluding Investment in Subsidiaries, Associates and Joint Ventures)
December 31, 2023
(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

Prognosis Technology Inc.'s stock
GCS Holdings, Inc.'s stock

IOC's stock

Ronly
Ronly

Ronly

-

-

-

Related party

Relationship with
the Securities
Issuer

Note 1: Formerly known as T-powertek Optronics Co., Ltd.

ProfetAI Inc.'s stock

Exploit Technology Co., Ltd.'s stock
Cruise10 Co., Ltd.'s stock

Ronly
Ronly

Type and Nameof Marketable Securities

Ronly

Name of
HolderFinancial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTPLnoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent

Financial Statement Account

3,420

245
3,500

41
1,250

911

Shares-11,025
112,000

20,00012.37%

11.16%
3.15%

0.49%
10.53%

December 31, 2023
Carrying
Percentage ofAmountOwnership
40,82312.89%-

11,025
112,000

20,00017.10%

11.16%
3.16%

0.49%
10.53%

Maximum
Shareholding Note
Fair Valuein the Interim
40,823 13.58%

Appendix 1

AUO Corporation

2023 Annual Report

241

242

AUO Corporation

2023 Annual Report

AUOSG

AUOLB

AUOLB

AUOLB

AUOLB

AUOLB

AUO

AUO

AUO

Company
Name

Table 4

Financial
Statement
Account

Investments inequity-accounted
investees
Konly's stock Investments inequity-accounted
investees
DPGE's stock Investments inequity-accounted
investees
AUOKS's
Investments inequityequity-accounted
investees
AUOSG's
Investments inequity-accounted
stock
investees
AUOSJ's
Investments inequityequity-accounted
investees
AUOSZ's
Investments inequity-accounted
equityinvestees
AUOXM's
Investments inequityequity-accounted
investees
AUOKS's
Investments inequity-accounted
equityinvestees

AUOLB'sstockType and
Name ofMarketable
Securities

-

-

-

Subsidiary of
AUO
Subsidiary of
AUO
Subsidiary of
AUO

AUOSG
AUOSG
AUOLB

-

-

Subsidiary of
AUO

AUOSG

USD

USD

USD

USD

-

-

6,250

39,27432,000SharesUSD

110,000

600,000

800,001

992,480

AmountAcquisition

511,623

622,841

119,972

-

-

-

-

USD

627,394---

6,920 2,510,838 USD 1,830,970

573,171

350,7319,565,450

75,152,215

Amount266,268 USD--

35,000469,558

2,507,189

SharesBeginning Balance-

Notes 2&4 Subsidiary of
AUO

-

-

Counterparty Relationship

-

-

-

-

-

-

-

-

-

Shares

-

-

-

-

-

-

USD 480,490 USD 480,490

USD 549,192 USD 549,192

USD 133,749 USD 133,749-

USD 627,394 USD 627,394

-

-

-

AmountCarrying
AmountDisposal

-

-

-

-

-

-

-

-

-

Gain/Losson Disposal

-

-

-

-

USD

Note

Note 4Note 4Note 4

694,839 Notes
1&5

-

-

-

1,964,491 Notes
1&6-

944,794 Notes
1&2

8,926,088 Notes
2&3

78,405,680 Notes
1&2

Amount2,777,106 USD-

41,250432,432

2,539,189

SharesEnding Balance

AUO CORPORATION AND SUBSIDIARIES
Individual Marketable Securities Acquired or Disposed of with Costs or Prices Exceeding
NT$300 Million or 20% of the Paid-in Capital
For the year ended December 31, 2023
(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

AUOSZ's
equityAUOVN'sequityAUOXM'sequityADPNL's
stock

AUOSG

AUOSG

AUOSG

ADP

Investments inequity-accounted
investees
Investments inequity-accounted
investees
Investments inequity-accounted
investees
Investments inequity-accounted
investees
Investments inequity-accounted
investees

Financial
Statement
Account-

Subsidiary of
AUO

AUOLB
-

-

Subsidiary of
AUO

AUOLB
-

Subsidiary of
AUO

AUOLB

Counterparty Relationship

-

-

-

-

-

Shares881,401

-

-

-

-

AmountBeginning Balance

-

-

-

-

-

Shares

USD

USD

USD

USD

393,695

480,490

20,922

549,192

133,749

AmountAcquisition

-

-

-

-

-

Shares

-

-

-

-

-

Amount

-

-

-

-

-

Carrying
AmountDisposal

-

-

-

-

-

Gain/Losson Disposal

-

-

-

-

-

Shares

USD

USD

USD

USD

Note

1,249,767 Notes
1&2

530,417 Notes
1&5

20,748 Notes
1&2

571,783 Notes
1&5

120,665 Notes
1&5

AmountEnding Balance

Note 1: The ending balance includes the recognition of investment gain (loss) and other related adjustments under the equity method.
Note 2: The acquisition amount refers to the participation in the investee’s capital increase.
Note 3: The ending shares include shares from the investee’s capital decrease. The ending balance includes cash return from the investee’s capital decrease, cash dividends, therecognition of investment gain (loss) and other related adjustments under the equity method.
Note 4: The disposal amount refers to the equity of the investee sold by AUOLB to AUOSG under business restructuring.
Note 5: The acquisition amount refers to the equity of the investee obtained by AUOSG from AUOLB under business restructuring.
Note 6: The acquisition amount includes the participation in the investee’s capital increase and the equity of the investee obtained by AUOSG from AUOLB under business restructuring.

AUOSJ'sequityType and
Name ofMarketable
Securities

AUOSG

Company
Name

Appendix 1

AUO Corporation

2023 Annual Report

243

244

AUO Corporation

2023 Annual Report

AUOUS

AUOXM

QCSZ

Qisda

AETTW

CGPC

BenQ

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

DPTW

BMC

AUO

AUO

Qisda

AUO

Raydium

AUST

AUO

Daxin

AUOXM

AUO

AUO

AUOSZ

AUO

AUO

AUOKS

AUOSK

AUO

CompanyCounterparty
Name

Table 5

Subsidiary of Qisda

Subsidiary of SSEC

Subsidiary of AUO

Associate

Subsidiary of Qisda

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Associate

Associate

Subsidiary of Qisda

Associate

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Relationship

Sales

Sales

Sales

Sales

Sales

Sales

Sales

Purchases

Purchases

Purchases

Purchases

Purchases

Purchases

Purchases

Purchases

Purchases(1,120,256)(689,193)(104,899)(160,365)(2,824,828)(1,647,954)(294,312)

2,772,196

2,029,409

923,423

3,371,627

2,954,207

3,873,001

37,179,061

40,213,759

112,496

16,018,158(Note 2)

/SalesPurchases

AmountPurchases

(1)%

-

-

-

(1)%

(1)%

-

2%

1%

1%

2%

2%

2%

22%

24%

-

10%

Percentage of
Total
Purchases/SalesTransaction Details

EOM 55 days

EOM 25 days

EOM 25 days

EOM 55 days

EOM 55 days

EOM 45 days

EOM 75 days

EOM 60 days

EOM 120 days

EOM 120 days

EOM 90 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 30 days

Credit Terms

Credit
Terms

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(Note 1) (Note 1)

Unit
Price

1,988
81,002-

48,40948,515-65,395(540,881)(692,813)(301,418)(779,128)(367,106)(597,315)(10,477,599)(11,305,260)(18,126)(2,309,534)(Note 2)Ending Balance

-

-

-

-

-

-

-

(1)%

(2)%

(1)%

(2)%

(1)%

(1)%

(24)%

(26)%

-

(5)%

Percentage ofTotal Notes/Accounts
Receivable(Payable)

Transactions withTerms Different Notes/Accounts Receivable (Payable)from Others(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

AUO CORPORATION AND SUBSIDIARIES
Purchases from or Sales to Related Parties with Amounts Exceeding NT$100 Million or 20% of the Paid-in Capital
For the year ended December 31, 2023

Note

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

ADP

ADP

AUOKS

ADPSZ

ADPUS

AETSZ

AMIXM AUOXMAUOKS AUOSZ

Subsidiary of AUO

Subsidiary of AUO

Ultimate parent company Sales

Subsidiary of AUO

Ultimate parent company Sales

AUOKS DPTWAUOKS AUO

AUOKS AUOXM

AUOSH AUO

Purchases

BMC

Raydium

AUOSZ

AUOSZ

Associate

Subsidiary of Qisda

Qisda

AUOSZ
Purchases

Purchases

Purchases

Ultimate parent company Sales

Associate

AUOSK AUO

Sales

Purchases

Purchases

Associate

Associate

AUOKS Raydium

Purchases

Sales

Sales

Sales

Sales

Purchases

Purchases

Sales

Sales

Sales

Sales

Sales

USD

CNY

CNY

CNY

EUR

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

USD

CNY

CNY

435,412210,150

297,130(3,664)(55,999)(1,061,605)(3,621,643)

133,305

40,67073,010231,494(28,538)(23,353)(5,400)(29,793)

54,86049,395(24,472,225)(150,395)(3,207,272)(2,132,007)(781,067)(125,281)(Note 2)

/SalesSales

AmountPurchases

AUOKS Qisda

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

ADP

ADP

Subsidiary of AUO

ADPSZ

ADP

AUO

Subsidiary of AUO

Subsidiary of SSEC

Subsidiary of SSEC

Subsidiary of SSEC

Subsidiary of SSEC

Relationship

ADPNL

MZEC

DPGE

MXEC

AUO

AUO

SFPC

AUO

AUO

SLEC

AUO

CompanyCounterparty
Name

6%

3%

4%

(74)%

(92)%

(22)%

(74)%

5%

2%

3%

9%

(78)%

(73)%

(100)%

(24)%

63%

100%

(11)%

-

(1)%

(1)%

-

-

Percentage of
Total
Purchases/SalesTransaction Details

EOM 120 days

EOM 90 days

EOM 120 days

EOM 45 days

EOM 25 days

EOM 30 days

EOM 30 days

EOM 120 days

EOM 120 days

EOM 120 days

EOM 60 days

EOM 30 days

EOM 30 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 25 days

EOM 25 days

EOM 25 days

EOM 25 days

EOM 25 days

Credit Terms

Credit
Terms

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(Note 1) (Note 1)

Unit
Price

USD

CNY

CNY

CNY

EUR

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

957

(159,232)(55,493)(127,872)-

212,708

538,626(64,756)(18,031)(41,912)(50,015)

7,449

10,066--(11,283)(4,270)3,401,535

102,795

422,776-

301,347

164,712(Note 2)Ending Balance

(6)%

(2)%

(5)%

79%

-

28%

71%

(7)%

(2)%

(4)%

(5)%

87%

100%

-

-

(67)%

(100)%

18%

1%

2%

-

2%

1%

Percentage ofTotal Notes/Accounts
Receivable(Payable)

Transactions withTerms Different Notes/Accounts Receivable (Payable)from Others
Note

Appendix 1

AUO Corporation

2023 Annual Report

245

246

AUO Corporation

2023 Annual Report

Purchases

Subsidiary of AUO

Subsidiary of AUO

M.Setek ACTW

Jector

Sales

Ultimate parent company Sales

AETTW AUO

Purchases

Subsidiary of AUO

Purchases

Sales

Sales

Purchases

AET-YP AETTW

ADP

Subsidiary of AUO

DPTW

FTWJ

Subsidiary of AUO

FTWJ

Subsidiary of Ennostar

DPTW

Lextar

DPXM

Sales

AUOXM

DPXM

Subsidiary of AUO

Ultimate parent company Sales

Ultimate parent company Sales

Purchases

AUO

Subsidiary of AUO

AUOXM DPTW

AUST

Associate

AUOXM Raydium

Purchases

Purchases

Purchases

AUOXM AUO

Subsidiary of Qisda

Subsidiary of Qisda

AUOXM BMC

Subsidiary of AUO

AUOXM DPXMAUOXM QCOS

Subsidiary of AUO

Purchases

Ultimate parent company Purchases

AUOXM AUOKSSales

AUOXM AUO

Subsidiary of AUO

Ultimate parent company Sales

AUOSZ

Ultimate parent company Sales

Purchases

Purchases

CNY

JPY

CNY

CNY

CNY

CNY

USD

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

USD

USD

CNY

CNY

CNY

(483,414)

371,725

211,799(4,497,416)(1,090,013)

84,784(403,409)(34,894)(122,289)(8,399,757)

345,814401,322

186,540

101,652

35,346

1,062,446

373,094(8,418)9,452(231,494)(9,086,098)

40,150324,063(Note 2)

/Sales

AUOUS AUO

AUOKS

AUOSZ

Subsidiary of AUO

Subsidiary of Ennostar

AmountPurchases

Ultimate parent company Purchases

AUO

AUOSZ

Relationship

AUOUS AUO

DPTW

Lextar

AUOSZCompanyCounterparty
Name

(42)%

99%

53%

(80)%

(99)%

13%

(15)%

(1)%

(99)%

(81)%

4%

5%

2%

1%

-

12%

4%

(46)%

100%

(2)%

(97)%

1%

4%

Percentage of
Total
Purchases/SalesTransaction Details

EOM 60 days

EOM 30 days

EOM 45 days

EOM 45 days

EOM 90 days

EOM 120 days

EOM 90 days

EOM 120 days

EOM 45 days

EOM 45 days

EOM 120 days

EOM 120 days

EOM 90 days

EOM 120 days

EOM 120 days

EOM 30 days

EOM 45 days

EOM 30 days

EOM 75 days

EOM 60 days

EOM 45 days

EOM 120 days

EOM 120 days

Credit Terms

Credit
Terms

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(Note 1) (Note 1)

Unit
Price

JPY

CNY

CNY

CNY

CNY

USD

CNY

CNY

CNY

CNY

CNY

CNY

CNY

USD

CNY

CNY

CNY

CNY

98,266(139,255)(67,067)

1,605,805

370,847(26,457)

109,095

15,97819,4452,420,133(111,080)(126,619)(47,162)(46,946)(15,978)(212,708)--(2,129)50,0152,614,257(17,769)(108,842)(Note 2)Ending Balance

36%

(99)%

(60)%

97%

100%

(4)%

19%

3%

99%

86%

(4)%

(5)%

(2)%

(2)%

(1)%

(8)%

-

-

(100)%

2%

98%

(1)%

(4)%

Percentage ofTotal Notes/Accounts
Receivable(Payable)

Transactions withTerms Different Notes/Accounts Receivable (Payable)from Others
NoteAUOKS

AUOSZ

AUOXM

DPTW

DPTW

DPTW

Subsidiary of AUO

Sales

Purchases

Purchases

Sales

Sales

Sales

Sales

Sales

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO
Sales

Sales

Sales

Ultimate parent company Sales

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of Qisda

ADPNL represented as adirector of Avocor

Subsidiary of AUO(1,511,810)(1,418,307)(584,857)(2,780,342)

4,805,636

1,777,682(100,572)(198,298)(335,474)(103,720)(218,299)(1,550,289)

24,328,447

983,024

(19)%

(18)%

(7)%

(35)%

60%

22%

-

(1)%

(1)%

-

(1)%

(5)%

96%

33%

(28)%

Percentage of
Total
Purchases/SalesEOM 120 days

EOM 120 days

EOM 120 days

EOM 60 days

EOM 90 days

EOM 90 days

EOM 45 days

EOM 45 days

EOM 45 days

OA 90 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 30 days

Credit Terms

Credit
Terms

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(Note 1) (Note 1)

Unit
Price

480,463

472,024

279,949

409,822(1,607,699)(472,779)

18,67763,56939,841

120,859

47,741

127,471(3,305,015)(348,456)

139,255(Note 2)Ending Balance

22%

22%

13%

19%

(70)%

(21)%

1%

2%

1%

3%

1%

4%

(94)%

(80)%

52%

Percentage ofTotal Notes/Accounts
Receivable(Payable)

Transactions withTerms Different Notes/Accounts Receivable (Payable)from Others
Note

Note 1: Transaction terms with related parties were similar to those with third parties, except for particular transactions with no similar transactions to compare with. For thosetransactions, transaction terms were determined in accordance with mutual agreements.
Note 2: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

FTWJ

AUO

DPTW

DPTW

DPTW

DPTW

DPXM

ADP

QCOS

JectorADP

ADP

Avocor

ADP

ADP

ADPNL

ADPSZ

ADP

AUO

ADP

Purchases(320,606)(Note 2)

/SalesSales

AmountPurchases

Ultimate parent company Purchases

Subsidiary of AUO

Subsidiary of AUO

M.Setek

ACTW

Relationship

AETTW AET-YP

CompanyCounterparty
Name

Transaction Details

Appendix 1

AUO Corporation

2023 Annual Report

247

248

AUO Corporation

2023 Annual Report

Subsidiary of AUO

AUO

Ultimate parent company

AUOSZ

Ultimate parent company

AUST

AUOKS

AUOSZ

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

AUO

AUOSJ

AUOXM AUOKS

AUOKS

AUOSJ

Subsidiary of AUO

Subsidiary of AUO

Ultimate parent company

AETSZ

AUOLB

Ultimate parent company

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of SSEC

Subsidiary of SSEC

Subsidiary of SSEC

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Relationship

AUOXM AUO

AUOXM

AUOKS

AUOKS

AUO

AUOKS

AUO

DPGE

MZEC

AUO

ADP

SFPC

AUO

AUO

SLEC

AUO

AUO

AETTW

ACTW

AUO

S4M

AUO

CompanyCounterparty
Name

Table 6

USD

CNY

CNY

CNY

CNY

CNY

CNY

USD

CNY

CNY

19,445405,8152,420,133

555,2852,616,898

402,568

86,80442,887

212,708

538,626

4,366,847

102,795

422,776

301,347

164,712802,015205,132

112,930

CNY

CNY

CNY
6.01

(Note 2) CNY

3.86(Note 2) CNY(Note 2) CNY(Note 2)

(Note 2)

(Note 2)

6.21

7.29

(Note 2)

2.93

5.80

5.18

1.55

(Note 2)

(Note 2)

(Note 2)Ending Balance ofTurnover
Receivables
Rate(Note 3)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

127 Will be collected in next period

Action Taken-

321 Collected in subsequent period

3,835 Collected in subsequent period

15,344 Collected in subsequent period

21,705 Collected in subsequent period

-

-

-

15,200 Collected in subsequent period

15,917 Collected in subsequent period

31,880 Collected in subsequent period

AmountOverdue Receivables(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

USD

CNY

CNY

CNY

CNY

CNY

CNY

-

-

-

-

-

-

-

-

9,329

335

1,217,242

19,740834,100

126,916

312,463

1,542,431

102,795

151,739(Note 1)

Amounts
Received in
Subsequent
PeriodAUO CORPORATION AND SUBSIDIARIES
Receivables from Related Parties with Amounts Exceeding NT$100 Million or 20% of the Paid-in Capital
December 31, 2023

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Allowance for
Bad Debts

AUO

AUOKS

AUOSZ

AUOXM

FTWJ

DPTW

DPTW

DPTW

DPTW

DPTW

JPY

CNY

CNY

CNY

CNY

1,405,622

480,463

472,024

279,949

409,822

120,859

127,471

139,255

1,605,805

792,91750,648116,305

100,326(Note 2)

3.46

3.42

3.20

6.34

1.72

15.08

4.54

1.81

(Note 2)

(Note 2)

(Note 2)

(Note 2)

JPY

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Action Taken

CNY

-

-

-

-

25,328 Will be collected in next period

18,873 Collected in subsequent period

-

-

-

-

-

-

-

-

-

489,370

22,89870,758139,255

403,583

219,941(Note 1)

Amounts
Received in
Subsequent
Period967,739 Will be collected in next period JPY

AmountOverdue Receivables

Note 1: Until the late of January 2024.
Note 2: The ending balance includes other receivables from transactions not related to ordinary sales.
Note 3: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Ultimate parent company

ADPNL represented as a directorof Avocor

AvocorADP

Subsidiary of AUO

Subsidiary of AUO

ACTW

M.Setek

Subsidiary of AUO

Subsidiary of AUO

ADPNL

DPTW

FTWJ

ADP

FTWJ

FPWJ

Subsidiary of AUO

Subsidiary of AUO

DPTW

DPXM

Subsidiary of AUO

Relationship

AETTW AET-YP

AUOKS

BVXM

CompanyCounterparty
Name

Ending Balance ofTurnover
Receivables
Rate(Note 3)

-

-

-

-

-

-

-

-

-

-

-

-

-

Allowance for
Bad Debts

Appendix 1

AUO Corporation

2023 Annual Report

249

250

AUO Corporation

2023 Annual Report

AUOXM

ADP

ADP

AUO

AUO

AUOXM

AUO

AUO

AUOKS

0 AUO

0 AUO

1 AUOKS

1 AUOKS

1 AUOKS

2 AUOSZ

2 AUOSZ

2 AUOSZ

Receivables from
related parties
Net revenue

Net revenue

Net revenue

Net revenue

Receivables from
related parties
Subsidiary to subsidiary Receivables from
related parties

Subsidiary to parent

Subsidiary to parent

Receivables from
related parties
Subsidiary to subsidiary Net revenue

Subsidiary to parent

Subsidiary to parent

Parent to subsidiary

Parent to subsidiary

Parent to subsidiary

CompanyCounterparty Nature of Relationship Financial Statement
Name
Account

0 AUO

No.

Table 7

CNY

CNY

CNY

CNY

CNY

CNY

Trading Terms

555,285-

1,061,605 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 30 days.
9,086,098 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 45 days.
2,616,898-

3,621,643 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 30 days.
538,626-

1,647,954 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 45 days.
24,472,225 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 45 days.
4,366,847-

AmountInter-company Transactions

AUO CORPORATION AND SUBSIDIARIESBusiness Relationship and Significant Intercompany Transactions
For the year ended December 31, 2023
(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

1%

3%

16%

2%

1%

6%

1%

10%

1%

Percentage ofConsolidated
Net Revenue or
Total Assets

Subsidiary to parent

Subsidiary to parent

3 AUOXM AUO

AUO

DPTW

DPTW

DPTW

ADPNL

AUO

AUOSZ

AUOXM

4 AUST

5 DPXM

6 FTWJ

6 FTWJ

7 ADP

8 DPTW

8 DPTW

8 DPTW

Receivables from
related parties
Net revenue

Net revenue

Trading Terms

1,550,289 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 45 days.
2,780,342 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 60 days.
1,418,307 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 120 days.
1,511,810 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 120 days.

122,289 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 45 days.
403,409 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 90 days.
1,090,013 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 90 days.
792,917-

8,399,757 The prices of inter-company sales are not comparable withthose of third parties. The credit term is EOM 45 days.
2,420,133-

Amount

1%

1%

1%

1%

1%

2%

1%

2%

3%

15%

Percentage ofConsolidated
Net Revenue or
Total Assets

Note 1: This table discloses the information on inter-company sales and receivables which are accounted for 1% or more of the consolidated net revenue or the consolidated total
assets, respectively. The information of the corresponding inter-company purchases and payables is no more disclosed herein.
Note 2: All inter-company transactions have been eliminated in the consolidated financial statements.

Subsidiary to subsidiary Net revenue

Subsidiary to subsidiary Net revenue

Net revenue

CNY

Subsidiary to subsidiary Receivables from
related parties
Subsidiary to subsidiary Net revenue

Subsidiary to parent

CNY

CNY

USD

CNY

CNY

Subsidiary to subsidiary Net revenue

Subsidiary to subsidiary Net revenue

Subsidiary to parent

CompanyCounterparty Nature of Relationship Financial Statement
Name
Account

3 AUOXM AUO

No.

Inter-company Transactions

Appendix 1

AUO Corporation

2023 Annual Report

251

252

AUO Corporation

2023 Annual Report

AUOLB
AUONL

Konly
Ronly
DPTW

ACTW

Qisda

AUO
AUO
AUO

AUO

AUO

InvesteeCompany

AUO
AUO

Investor
Company

Table 8

Taiwan ROC

Taiwan ROC

Taiwan ROC
Taiwan ROC
Taiwan ROC

Malaysia
Netherlands

Location

Holding company
Sales support of TFT-LCD
panelsInvestment
Investment
Design, manufacturing, andsales of TFT-LCD modules,
backlight modules, TV set andrelated parts
Manufacturing and sale ofingots and solar wafers
Manufacturing, sales andservice of high-end displays,
optical precision electronic
products and functional film
products; manufacturing, sales
and service of products related
to intelligent solutions;medical equipment andservices; research,development, design,
manufacturing and sales of
network communication
products

Main Activities
Shares

15,687,921
9,505,477

9,505,477

7,226,603
5,078,047
3,569,155

335,231242,565

432,432
453,276
190,108

76,491,558 2,539,189
24,27550

December 31,
2022

15,687,921

7,262,604
5,078,047
3,569,155

77,484,038
24,275

December 31,
2023

Original Investment Amount17.04%

100.00%100.00%100.00%28.56%

100.00%100.00%Percentage
ofOwnership

9,797,059

3,369,408

8,926,088
4,635,095
2,634,090

78,405,680
36,222Carrying
Amount(Notes 1 and 2)

December 31, 2023

17.04%

100.00%100.00%100.00%28.56%

100.00%100.00%Maximum
Shareholdingin the Interim

2,962,492(398,798)

184,903(287,446)
114,659

3,553,086
2,434

Net Income(Loss) ofInvestee

Note375,147 Associate(398,798) Subsidiary

184,903 Subsidiary(287,446) Subsidiary
32,751 Subsidiary

3,553,086 Subsidiary
2,434 Subsidiary

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)

AUO CORPORATION AND SUBSIDIARIES
Information on Investees (Excluding Information on Investment in Mainland China)
For the year ended December 31, 2023
(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

SSEC
CQIL
ADLINKDPGE
ADTHLD
ADTCM
AHTW

ADP

SREC
Ennostar
ACTTW

AUO
AUO
AUO

AUO
AUO
AUO
AUO

AUO

AUO
AUO
AUO

AET-YP

AETTW

AUO

AUO

S4M

InvesteeCompany

AUO

Investor
Company
Main Activities

Sales and leasing of content
management system andhardware, and design of digital
signage content and field
curation
Taiwan ROC
Planning and design of water
treatment technology and EPC
project, energy saving
equipment and energy
efficiency project, facility
intelligent management andenvironmental sustainability
solution, management
consulting and software
services relating to carbon
emission.
Taiwan ROC
Investment
IsraelHolding company
Taiwan ROC
Manufacturing and sales of
hardware, software andperipheral devices of industrial
computers
Taiwan ROC
Solar power generation
Cayman Islands Holding company
Cayman Islands Holding company
Manufacturing, development
Taiwan ROC
and sales of medical
equipments
Taiwan ROC
Research, development andsales of display
Taiwan ROC
Investment
Taiwan ROC
Holding company
Taiwan ROC
Design, development and salesof software and hardware forhealth care industry
Taiwan ROC
Investment and construction in
public construction, andwastewater (sewage) treatment

Taiwan ROC

Location

15,000288,828
4,764,942
30,000369,555

950,000
635,429
60,3005,000

15,000288,828
4,764,942
30,000369,555

350,000
462,008
76,4375,000

2,170,000
1,182,621
2,411,693

424,050424,050

2,170,000
1,182,621
2,411,693

50,000December 31,
2022

50,000December 31,
2023

Original Investment Amount

1,500

28,88393,5693,000

200,000

41,25021,3002,130
500

217,000
39,97442,31042,4055,000

Shares

8.82%

32.01%
12.45%
100.00%100.00%100.00%88.75%
78.89%
100.00%31.00%
100.00%19.45%

100.00%100.00%Percentage
ofOwnership(15,123)

338,053
6,015,186
4,190

6,045,158

944,794
215,362
21,5372,457

2,345,568
887,092
2,195,010

23,257

15,257

Carrying
Amount(Notes 1 and 2)

December 31, 2023

8.82%

32.01%
12.45%
100.00%100.00%100.00%88.75%
100.00%100.00%31.00%
100.00%19.45%

100.00%100.00%Maximum
Shareholdingin the Interim(340,281)

80,217(6,782,678)(10,436)3,526,660

2,232(177,249)(25,365)(333)

501,534(3,368)276,249(242,127)(1,256)Net Income(Loss) ofInvestee

Note(30,025) Subsidiary

25,681 Subsidiary(896,939) Associate(10,436) Subsidiary

3,526,660 Subsidiary(5,287) Subsidiary(151,884) Subsidiary(22,640) Subsidiary(333) Subsidiary

155,476 Associate(3,368) Subsidiary(15,211) Associate(257,911) Subsidiary(1,256) Subsidiary

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)

Appendix 1

AUO Corporation

2023 Annual Report

253

254

AUO Corporation

2023 Annual Report

Raydium
Daxin

Qisda

SSEC
Taiwan ROC
SkyREC Ltd. BVI

ADLINK

AUES

IOC

SREC

Konly
Konly

Konly

Konly
Konly

Konly

Konly

Konly

Konly

Taiwan ROC

Taiwan ROC

Taiwan ROC

Taiwan ROC

Taiwan ROC

Taiwan ROC
Taiwan ROC

Taiwan ROC

DPTW

Konly

Location

SINTRONES Taiwan ROC

InvesteeCompany

AUO

Investor
Company

R&D, manufacturing and salesof in-vehicle computers andperipherals and otherapplications
Design, manufacturing, andsales of TFT-LCD modules,
backlight modules, TV set andrelated parts
IC Design
Research, development,
manufacturing and sales ofdisplay and semiconductor
related fine chemicals
Manufacturing, sales andservice of high-end displays,
optical precision electronic
products and functional film
products; manufacturing, sales
and service of products related
to intelligent solutions;medical equipment andservices; research,development, design,
manufacturing and sales of
network communication
products
Investment
Business intelligence and AI
video management system
Manufacturing and sales of
hardware, software andperipheral devices of industrial
computers
Services related to educational
activities and site rental
R&D of color e-paper related
technology, and processing
product design anddevelopment
Investment

Main Activities

13,53320,000-13,5334,000

988,837

988,8374,000

140,000
46,016

1,363,481

1,363,481

140,000-

175,857
154,748703,795-

December 31,
2022

175,857
154,748703,795

91,507

December 31,
2023

Original Investment Amount

1,353

-

400

15,94414,000-50,145

11,454
19,114

42,598

1,471

Shares1.50%-

100.00%

7.33%

2.00%
-

2.55%

15.10%
18.61%

6.40%

7.02%

Percentage
ofOwnership

15,840-12,484865,239

151,327-

1,465,483

1,693,983
583,305590,229

84,514

Carrying
Amount(Notes 1 and 2)

December 31, 2023

1.50%

5.00%

100.00%

7.33%

2.00%
16.12%

2.55%

15.10%
18.61%

6.40%

7.06%

Maximum
Shareholdingin the Interim

80,217(129,531)

8,199

276,249

501,534(3,005)2,962,492

1,442,791
523,354

114,659

68,662Net Income(Loss) ofInvestee

Note

1,203 Subsidiary(7,990) (Note 7)

8,199 Subsidiary(37,457) Associate

10,031 Associate(Note 7)

56,116 Associate

217,867 Associate
97,388 Associate

7,339 Subsidiary

1,802 Associate(Note 6)

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)

BVLB
DPLB
FHVI
FFMI
DSC
Shine
Biomedical
Technology
Corporation
ACMK

SDMC
M.Setek

ADPNL

Jector

DentLabX

SGPC
EGPC

DPTW
DPTW
DPTW
DPTW
DPTW
DPTW

ACTW

ACTW
SDMC

ADP

ADP

ADP

SREC
SREC

Taiwan ROC
Taiwan ROC

Taiwan ROC

Taiwan ROC

Netherlands

Taiwan ROC
Japan

Malaysia

Malaysia
Malaysia
BVI
Mauritius
ThailandTaiwan ROC

SINTRONES Taiwan ROC

Konly

Taiwan ROC
Taiwan ROC

Location

Ennostar
Naidun-tech
Co., Ltd.

InvesteeCompany

Konly
Konly

Investor
Company

Manufacturing and sale ofsolar wafers
Holding company
Manufacturing and sale ofingotsSales and sales support ofdisplay and holding company
Introduction of smart field
construction and other related
software and hardware
solutions
Sales of management platform
and solutions relating to dental
digital information
Solar power generation
Solar power generation

Holding company
Solution provider to improve
the performance and reliabilityof semiconductor components
R&D, manufacturing and salesof in-vehicle computers andperipherals and otherapplications
Holding company
Holding company
Holding company
Holding company
International trade
Development, design,
manufacturing and sales of
facial masks and cosmetics

Main Activities

120,000

120,000

820,000
280,000

820,000
280,000-

811,798

17,000-76,84622,006
653
40
3,672

2,730

16,413
8,733

Shares56,811
24,5001,700

12,000-1,988,488
167,216
23,596,398 11,404,184

121,444

1,205,493

1,988,488
23,596,398-

1,051,289
4,350,631
2,362,321
274,700
3,740--

155,233

3,877,666
2,362,321
274,700
3,740
36,7201,180,491
39,997

December 31,
2022

1,180,491
39,997

December 31,
2023

Original Investment Amount

100.00%100.00%85.00%

78.43%

100.00%100.00%99.9991%-

100.00%100.00%100.00%40.00%
34.00%

13.03%

2.18%
22.03%

Percentage
ofOwnership

725,438
317,423

15,324

128,792

1,249,767

2,201,771
2,144,568-

4,683,810
1,983,341
123,788
12,462
36,676

157,352

1,088,766
10,837

Carrying
Amount(Notes 1 and 2)

December 31, 2023

100.00%100.00%85.00%

78.43%

100.00%100.00%99.9991%

100.00%29.71%
100.00%100.00%100.00%40.00%
40.00%

13.10%

2.18%
22.03%

Maximum
Shareholdingin the Interim

60,42027,007(1,971)

9,853(19,460)

236,318
236,764(370)

786,298
92,96010,0832,165(130)

68,662(6,782,678)(20,668)

Net Income(Loss) ofInvestee

Note

56,345 Subsidiary
25,005 Subsidiary(1,676) Subsidiary

7,579 Subsidiary(19,460) Subsidiary317,312 Subsidiary236,762 Subsidiary(369) (Note 5)(Note 5)
798,676 Subsidiary
91,817 Subsidiary
9,913 Subsidiary
866 Associate(48) Associate

3,343 Associate(Note 6)

(174,113) Associate(4,552) Associate

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)

Appendix 1

AUO Corporation

2023 Annual Report

255

256

AUO Corporation

2023 Annual Report

ADLINKIOC

Ennostar
Zhao Feng
Energy Co.,
Ltd.
RP

YTTEK

FYPC

ZYPC

Ronly

Ronly

Ronly
Ronly

Ronly

Ronly

Ronly

AUOLB AUOUS

Ronly

Raydium
Daxin

Ronly
Ronly

United States

Taiwan ROC

Taiwan ROC

Taiwan ROC

Taiwan ROC

Taiwan ROC
Taiwan ROC

Taiwan ROC

Taiwan ROC

Taiwan ROC
Taiwan ROC

Taiwan ROC

DPTW

Ronly

Location

Taiwan ROC

InvesteeCompany

AETTW AET-YP

Investor
Company

1,000 USD

3,000

1,000

-

-

146,812

146,812

11,00050,0001,245,456
160,000

50,0001,245,456
160,000

68,400809,508

809,508-240,647
70,021

845,510845,510240,647
70,021

124,050

December 31,
2022

124,050

December 31,
2023

Production/visual effects/LED
virtual production
5G SDR platform-a pure
software platform, 5G nonsignaling tester, 5G mm wave
FEM, 28GHz 2-way up/down
converter, beam calibration
solution
Renewable energy power
generation
Renewable energy power
generation
Sales and sales support of
USD
TFT-LCD panels

Investment and construction in
public construction, andwastewater (sewage) treatment
Design, manufacturing, andsales of TFT-LCD modules,
backlight modules, TV set andrelated parts
IC Design
Research, development,
manufacturing and sales ofdisplay and semiconductor
related fine chemicals
Manufacturing and sales of
hardware, software andperipheral devices of industrial
computers
R&D of color e-paper related
technology, and processing
product design anddevelopment
Holding company
Energy technical services

Main Activities

Original Investment Amount

1,000

300

1,100

6,673

315

20,686
16,000-13,175669
6,312

40,50912,405

Shares100.00%100.00%100.00%27.53%

21.39%

2.75%
20.00%

-

6.06%

0.88%
6.15%

6.09%

72.97%

Percentage
ofOwnership

USD

3,432

2,840

10,741

115,40747,571

1,386,646
149,636-

800,289

188,635
192,629561,284(125,063)

Carrying
Amount(Notes 1 and 2)

December 31, 2023

100.00%100.00%100.00%27.81%

23.95%

2.75%
20.00%

17.10%

6.06%

0.88%
6.15%

6.09%

72.97%

Maximum
Shareholdingin the Interim

USD

Note

686 Subsidiary(160) Subsidiary(259) Subsidiary(27,084) Associate(5,486) Associate(224,891) Associate(6,649) Associate(27,324) (Note 7)(16,108) Associate(24,392) Associate
32,161 Associate

6,979 Subsidiary(248,305) Subsidiary

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)

686 USD

(160)

(259)

(28,187)

6,292(6,782,678)(33,243)(129,531)

276,249

1,442,791
523,354

114,659(340,281)

Net Income(Loss) ofInvesteeUnited States

Malaysia
Singapore

United States

VietnamHong Kong

AUOLB AUVIAUOLB BVLBAUOLB AUOSG

AUOSG AEUS

AUOSG AUOVNDPLBADPNL RVU

ADPNL RVIADPNL ADPJP

FHVI
FTMI
FHVI
FWSA
ADTCM ADTHLDADPNL ADPUS

DPHK

1

5,000

907,114--

Shares508
27,204
198

29,454 USD
198 USD

6,503
19,0002,700
1,500

103,785

-

1,194

10

1

29,5641

6,503
19,000
2,700
1

-

1,194

85,171
9,958 2,777,106

508 USD

6,503 USD
19,000 USD
2,700 USD
1,500 USD

87,785 USD

20,922

1,194 USD

USD
1,840,928 USD

5,000

241,487

222,365 USD

5,000 USD

1,359

155

1,359 USD

155 USD

276

December 31,
2022

276 USD

December 31,
2023

Sales support of TFT-LCD
USD
panelsSales support of TFT-LCD
USD
panelsRepairing of TFT-LCD
USD
modules
Manufacturing TFT-LCD
USD
panels based on low
temperature polysilicon
technology
Research and development
USD
and IP related businessHolding company
Holding company and sales USD
support of TFT-LCD panels
Support of solar-related
USD
products
Manufacturing, assembly and USD
sales of TFT-LCD modules
Holding company
USD

Main Activities

Original Investment Amount

Mauritius
Holding company
USD
Samoa
Holding company
USD
Cayman Islands Holding company
USD
Sales and sales support of
United States
USD
displayJapan
Sales and sales support ofUSD
display
CanadaDesign, sales and sales support USD
of digital signage content
management system
Design and sales support of USD
United States
digital signage content
management system

Slovakia
Republic
Singapore

AUOLB AUOSKAUOLB AUSTSouth Korea

AUOLB AUOKR

LocationJapan

InvesteeCompany

AUOLB AUOJPInvestor
Company

100.00%100.00%100.00%100.00%100.00%11.25%
100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%Percentage
ofOwnership

USD

USD

USD

USD
USD
USD
USD

USD

USD

USD

USD

USD

USD

USD

USD

USD

484

27,083414

49,944
16,104889
1,790

154,088

20,748562

1,964,491

6,587

31,570

5,342

1,353

1,605

Carrying
Amount(Notes 1 and 2)

December 31, 2023

100.00%100.00%100.00%100.00%100.00%14.59%
100.00%100.00%100.00%100.00%70.29%
100.00%100.00%100.00%100.00%100.00%100.00%Maximum
Shareholdingin the Interim

USD

USD

USD

USD
USD
USD
USD

USD

USD

USD

USD

USD

USD

USD

USD

USD
89 USD

88 USD258 USD(296) USD

24 USD

2,415 USD
567 USD(5,685) USD
148 USD

25,218 USD(174) USD

(11) USD

84,021 USD

193 USD(36,554) USD

Note

258 Subsidiary(1,576) Subsidiary

24 Subsidiary

25,218 Subsidiary(Note 4)
2,415 Subsidiary
567 Subsidiary(814) Subsidiary
148 Subsidiary(174) Subsidiary(11) Subsidiary(Note 5)84,021 Subsidiary

193 Subsidiary(36,554) Subsidiary

329 Subsidiary

89 Subsidiary

88 Subsidiary

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)

329 USDNet Income(Loss) ofInvestee

Appendix 1

AUO Corporation

2023 Annual Report

257

258

AUO Corporation

2023 Annual Report

InvesteeCompany

JRUS

CQUS

Main Activities

Singapore

798
1,500

8,000

798 GBP
1,500 USD

8,000 USD

19,94826,548
1,874

26,548 USD
GBP
19,948 GBP

5,000

2,013

2,013 USD

5,000 JPY

16,800December 31,
2022

22,300 USD

December 31,
2023

Holding company, and sales of USD
software and hardware
integration system relating tointelligent manufacturing andsoftware development
Taiwan ROC
Design and sales of software USD
and hardware integration
system and equipment,
software development andconsulting services relating tointelligent manufacturing
Manufacturing of automatic JPY
Japan
machinery and equipment andrelated parts
United Kingdom Holding company
USD
United Kingdom Sales and sales support ofcontent management system
United States
Sales of content management GBP
system and hardware
Research and development of GBP
Canadacontent management system
USD
United Kingdom Development and sales ofcontent management systemand sales of the related
hardwareDevelopment and sales of
USD
United States
content management systemand sales of the related
hardware

Location

Original Investment Amount

-

18

1

13

635,730
-

-

6,000

22,300Shares100.00%100.00%100.00%100.00%100.00%-38.46%

100.00%100.00%Percentage
ofOwnership

USD

USD

GBP

GBP

USD

USD

USD

6,303

1,724

899

11,542

26,251
-

-

236

6,161

Carrying
Amount(Notes 1 and 2)

December 31, 2023

100.00%100.00%100.00%100.00%100.00%100.00%38.46%

100.00%100.00%Maximum
Shareholdingin the Interim

USD

USD

GBP

GBP

USD
GBP

USD

USD

-

(238) USD

(41) USD

163 GBP(17) GBP(6) USD(74) GBP(504) USD

Note(41) Subsidiary

163 Subsidiary(17) Subsidiary(6) Subsidiary(74) (Note 5)

Associate(Note 3)(238) Subsidiary-(504) Subsidiary(5,751) Subsidiary

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)(5,751) USD

Net Income(Loss) ofInvestee

Note 1: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.
Note 2: Inclusive of the amortization of differences between the investment cost and the entity’s share of the net value of investee, and the effect of upstream and sidestream transactions.
Note 3: The carrying amount includes accumulated impairment loss.
Note 4: The registration of the alteration of DPHK’s common stock has not been completed.
Note 5: The liquidation process of CQUK, ACMK and BVLB were completed in February 2023, June 2023 and September 2023, respectively.
Note 6: On and from February 2023, the investment in SINTRONES has been accounted for using the equity method. See Note 6(3) for the relevant information.
Note 7: Ceased applying the equity method over SkyREC Ltd. and IOC in March 2023 and December 2023, respectively.

JRUK

CQUS

CQHLD CQCACQHLD CQUS

M.Setek Ichijo
Seisakusyo
Co., Ltd.
CQIL
CQHLD
CQHLD CQUKADTSG ADTTWADTHLD ADTSG

Investor
CompanyInvestee

Development, sales andlicensing of software andhardware relating to intelligent
manufacturing, and related
consulting services

AMISZ(Note 1)

(Note 1)

51,782

Planning, design anddevelopment of construction
project for environmental
protection and related project
management

AETSZ

245,966(Note 1)

(Note 1)

552,924

8,630

Business management
consulting, services oftechnology promotion andapplication, and platform
services of industrial cloud

ADTSZ(Note 1)

185,554(Note 2)

Capitalof Paid-in

-

-

-

-

-

-

-

414,693 138,231

-

-

-

-

-

-

-

-

-

552,924-(52,290)(27,140)(3)(166,046)(31,408)

Accumulated
Accumulated
Net Income
Outflow of
Outflow of Investment Flows(Loss) ofInvestment
Investment
Method ofInvesteefrom Taiwan
from Taiwan
Investment as of January
as of December (Notes 4 andOutflow Inflow
31, 2023
1, 2023
5)(Note 2)
(Note 2)

AETSD Planning, design anddevelopment of construction
project for environmental
protection and related project
management

Design, development and salesof software and hardware forhealth care industry

Main Activities

ACTSZ

Company

Total
Amount(1) Related information on investment in Mainland China

1. AUO

Table 9Investor’s

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

(52,290)(27,140)(3)(166,046)(31,408)

49,380

9,426

2,377

105,099

28,971

-

-

-

-

-

Carrying
Amount of Accumulated
InwardtheMaximum
Share ofthrough
Investment Remittance ofShareholding Profit (Loss)
Earnings as of Note
as of
Direct orin the Interim of Investee December 31, December 31,
Indirect2023
2023(Notes 4 and 5)
Investment(Note 2)
Ownership%(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

AUO CORPORATION AND SUBSIDIARIES
Information on Investment in Mainland China
For the year ended December 31, 2023

Appendix 1

AUO Corporation

2023 Annual Report

259

260

AUO Corporation

2023 Annual Report

Investee

Main Activities(Note 1)
(Note 1)2,589,120
28,049

Sales of liquid crystal products
and related parts; leasing

Sales and consulting servicesof virtual data scientist
platform for manufacturing

BVXM

PFSZ

(Note 1)

13,945,972(Note 1)

(Note 1)AUOXM Manufacturing, assembly andsales of TFT-LCD modules

3,317,544

14,314,588

Leasing(Note 1)

AUOSZ Manufacturing, assembly andsales of TFT-LCD modules

AUOSJ

460,770

AUOSH Sales support of TFT-LCD
panels(Note 1)

(Note 1)

135,929

32,898,978

Design and sales of softwareand hardware integration
system and equipment relating
to intelligent manufacturing(Note 1)--

7,679,500

6,143,600

2,457,440

30,71834,253,949

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

7,679,500

6,143,600

2,457,440

30,71834,253,949--(8,757)23,4782,024,9781,193,825

110,009(44,131)

689,866(27,492)(2,701)

Accumulated
Accumulated
Net Income
Outflow of
Outflow of Investment Flows(Loss) ofInvestment
Investment
Method offrom Taiwan
from Taiwan
Investee
Investment as of January
as of December (Notes 4 andOutflow Inflow
31, 2023
1, 2023
5)(Note 2)
(Note 2)

51,782(Note 2)

Capitalof Paid-in

AUOKS Manufacturing and sales of
TFT-LCD panels

ATISZ

AMIXM Sales of software and hardware
relating to intelligent
manufacturing, and related
consulting services

Company

Total
Amount

51%

100%

100%

100%

100%

100%

100%

100%

100%

51%

100%

100%

100%

100%

100%

100%

100%

100%

(4,466)23,4782,024,9781,193,825

110,009(44,131)

689,866(27,492)(2,701)

Investor’s

9,920

1,360,548

16,293,338

17,564,029

3,706,575

251,376

21,344,066

33,85524,246

-

-

-

-

-

-

-

-

-

Carrying
Amount of Accumulated
InwardtheMaximum
Share ofthrough
Investment Remittance ofShareholding Profit (Loss)
Earnings as of Note
as of
Direct orin the Interim of Investee December 31, December 31,
Indirect2023
2023(Notes 4 and 5)
Investment(Note 2)%

Ownership

99,214,522

80,907,452 (USD1,702,948 and HKD60,000 and
CNY6,572,210)

51,118,131 (USD1,664,110)

Note 1: Indirect investments in Mainland China through companies registered in a third region.
Note 2: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.
Note 3: Pursuant to the Regulations Governing Permission for Investment and Technical Cooperation in the Mainland Area, AUO’s accumulated investments
in Mainland China did not exceed the upper limit on investment amount or ratio stipulated by the Investment Commission, Ministry of Economic Affairs(“MOEA”).
Note 4: Amounts were recognized based on the investees’ audited financial statements.
Note 5: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the average exchange rates for the year of 2023.

Upper Limit on Investment Stipulated by
Investment Commission, MOEA (Note 3)

Investment Amounts Authorized by
Investment Commission, MOEA (Note 2)

Accumulated Investment in Mainland China
as of December 31, 2023 (Note 2)(2) Upper limit on investment in Mainland China

Appendix 1

AUO Corporation

2023 Annual Report

261

262

AUO Corporation

2023 Annual Report

Main Activities

Sales and sales support ofdisplay
DPSZ
Manufacturing and sale ofbacklight modules and related
parts
DPXM Manufacturing and sales ofliquid crystal products,
backlight modules and related
parts
FHWJ
Manufacturing and sale ofbacklight modules and related
parts
FPWJ
Manufacturing, sales andtrading of precision plastic
parts
FTWJ
Manufacturing and sale ofbacklight modules and relatedparts
Talenda Manufacturing of electronic
components

ADPSZ

InvesteeCompany

2,150,260

251,888583,642
199,667-(Note1(2))(Note1(2))(Note1(2))(Note1(2))(Note1(1))

2,150,260

199,667
890,822

1,075,130
64,728

460,770(Note1(2))-

61,436(Note1(1))

61,436

Accumulated
Outflow of
Total
Investment
Amount
Method offrom Taiwanof Paid-in
Investment
as of January
Capital1, 2023(Note 4)(Note 4)(1) Related information on investment in Mainland China

2. DPTW and ADP:

-

-

-

-

-

-

-

Outflow

-

-

-

-

-

(460,770)-

Inflow

Investment Flows-

199,667

583,642

251,888

2,150,260-(3,711)

65,997

26,962

10,083760,082

3,939

Accumulated
Outflow of
Net Income
Investment(Loss) of
from Taiwan
Investee
as of(Notes 2 andDecember
5)31, 2023(Note 4)61,436
20,221

51%

100%

100%

100%

100%

-

100%

%
Ownership
throughDirect orIndirect
Investment

-

100%

100%

100%

100%

100%

100%

(1,893)65,997

26,962

10,083760,082

3,939

20,22130,704

1,290,154

738,687

74,253

4,733,277-

89,404Note(Note 7)-432,342 (Note 6)--

1,931,982

2,563,941 (Note 8)-

Carrying
Accumulated
Amount ofInvestor’s
InwardMaximumtheShare of Profit
Remittance ofShareholding
Investment as(Loss) of
Earnings as ofin theof December
Investee
December 31,
Interim(Notes 2 and 5) 31, 2023
2023(Note 4)(Note 4)

3,185,457 (USD103,700)

61,436 (USD2,000)

DPTW

ADP

153,590 (USD5,000)

5,142,511 (USD167,410)

3,667,878

5,533,063

Investment Amounts Authorized by theUpper Limit on Investment Stipulated by theInvestment Commission, MOEA (Notes 4 and 9) Investment Commission, MOEA (Note 3)

Note 1: (1) Direct investments in Mainland China.
(2) Indirect investments in Mainland China through companies registered in a third region.
Note 2: Amounts were recognized based on the investees’ audited financial statements.
Note 3: Pursuant to the Regulations Governing Permission for Investment and Technical Cooperation in the Mainland Area, DPTW’s and ADP’s accumulated
investments in Mainland China did not exceed the upper limit on investment amount or ratio stipulated by the Investment Commission, Ministry of
Economic Affairs (“MOEA”).
Note 4: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.
Note 5: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the average exchange rates for the year of 2023.
Note 6: The amount of paid-in capital includes the capitalization of retained earnings amounting to USD28,500 thousand for the years from 2005 to 2007.
Note 7: The amount of paid-in capital includes the capital injection of USD10,000 thousand from the offshore holding company, which was originally fromFTWJ’s appropriation of earnings.
Note 8: The liquidation process was completed in December 2023.
Note 9: The accumulated approved amount over the years amounted to USD248,526 thousand (including the capitalization of retained earnings of USD81,116
thousand). In addition, the surplus repatriated amounted to USD194,050 thousand, which can be used to deduct the accumulated amount of investment.

Accumulated Investment in Mainland China
as of December 31, 2023 (Note 4)

Entity(2) Upper limit on investment in Mainland China

Appendix 1

AUO Corporation

2023 Annual Report263

Stock Code:2409

AUO CORPORATION
Parent Company Only Financial Statements
With Independent Auditors’ Report
For the Years Ended December 31, 2023 and 2022

The independent auditors’ report and the accompanying arent company only financial statements are the English translation of theChinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of thepEnglish and Chinese language independent auditors’ report and arent company only financial statements, the Chinese version shallrevail.
p
p

264

AUO Corporation
2023 Annual ReportAppendix 2

Independent Auditors’ Report
To the Board of Directors of AUO Corporation:
OpinionWe have audited the parent company only financial statements of AUO Corporation (“the Company”), which
comprise the balance sheets as of December 31, 2023 and 2022, the statements of comprehensive income,statements of changes in equity and statements of cash flows for the years ended December 31, 2023 and 2022,
and notes to the parent company only financial statements, including a summary of significant accounting
policies.
In our opinion, the accompanying parent company only financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial
performance and its cash flows for each of the years then ended, in accordance with the Regulations Governing
the Preparation of Financial Reports by Securities Issuers.
Basis for Opinion
We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial
Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of the Company in accordance with the Norm ofProfessional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our otherethical responsibilities in accordance with these requirement. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis of our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the parent company only financial statements of the current period. These matters were addressed in the context
of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters. We have determined the matters described below tobe the key audit matters to be communicated in our report.
1. Impairment of long-term non-financial assets (including goodwill)
Refer to Note 4(14) “ Impairment – non-financial assets” , Note 5(1) and Note 5(2) “ Critical Accounting
Judgments and Key Sources of Estimations and Assumptions Uncertainty”, Note 6(7) “Property, Plant andEquipment” , Note 6(8) “Lease Arrangements” and Note 6(10) “Intangible Assets” to the parent company
only financial statements.

AUO Corporation
2023 Annual Report265Description of key audit matter:
The Company operates in an industry with high investment costs, has goodwill through the acquisition ofsubsidiaries, and may experience volatility in response to changes in the external market; hence, it isimportant to assess the impairment of its long-term non-financial assets (including goodwill). The
impairment assessment includes identifying cash-generating units, determining a valuation model,
determining significant assumptions, and computing recoverable amounts. With the complexity of theimpairment assessment process and the involvement of significant management judgment regarding
assumptions used, this is one of the key areas our audit focused on.
How the matter was addressed in our audit:
In relation to the key audit matter above, our principal audit procedures included understanding and testing
the Company’s controls surrounding the impairment assessment and testing process; assessing whether there
are impairment indications for the identified cash-generating units of the Company and its related assets;
understanding and assessing the appropriateness of the valuation model used by the management in the
impairment assessment and the significant assumptions used to determine related assets’ future cash flows
projection, useful lives, and weighted-average cost of capital; retrospectively reviewing the accuracy ofassumptions used in prior-period estimates and performing a sensitivity analysis of key assumptions andresults; in addition to the above audit procedures, appointing specialists to evaluate the appropriateness of
the weighted-average cost of capital used and related assumptions; performing an inquiry of the management
and identifying any event after the balance sheet date if able to affect the results of the impairment
assessment; and assessing the adequacy of the Company’s disclosures of its policy on impairment of
noncurrent non-financial assets and other related disclosures.
2. Revenue recognition
Refer to Note 4(17) “Revenue from contracts with customers” and Note 6(17) “Revenue from Contracts with
Customers” to the parent company only financial statements.
Description of key audit matter:
Revenue is recognized when the control over a product has been transferred to the customer as specified ineach individual contract with customers. The Company recognizes revenue depending on the various sales
terms in each individual contract with customers to ensure the performance obligation has been satisfied bytransferring control over a product to a customer. In addition, the Company operates in an industry in whichrevenue is considered to be complex in determining the timing of revenue recognition. Consequently, this is
one of the key areas our audit focused on.
How the matter was addressed in our audit:
In relation to the key audit matter above, our principal audit procedures included understanding and testing
the Company’s controls surrounding revenue recognition; assessing whether appropriate revenue recognition
policies are applied through comparison with accounting standards and understanding the Company’s main
revenue types, its related sales agreements, and sales terms; on a sample basis, inspecting contracts withcustomers or customers’ orders and assessing whether the accounting treatment of the related contracts(including sales terms) is applied appropriately; performing a test of details of sales revenue andunderstanding the rationale for any identified significant sales fluctuations and any significant reversals ofrevenue through sales discounts and sales returns which incurred within a certain period before or after thebalance sheet date; and assessing the adequacy of the Company’ s disclosures of its revenue recognition
policy and other related disclosures.

266

AUO Corporation
2023 Annual ReportAppendix 2

Responsibilities of Management and Those Charged with Governance for the Parent Company Only
Financial Statements
Management is responsible for the preparation and fair presentation of the parent company only financial
statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers
and for such internal control as management determines is necessary to enable the preparation of parent
company only financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the parent company only financial statements, management is responsible for assessing theCompany’ s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.
Those charged with governance (inclusive of the Audit Committee) are responsible for overseeing theCompany’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements
Our objectives are to obtain reasonable assurance about whether the parent company only financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these parent company only financial statements.
As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise
professional judgment and professional skepticism throughout the audit. We also:
1. Identified and assessed the risks of material misstatement of the parent company only financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtained an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control.
3. Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by management.
4. Concluded on the appropriateness of management’s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in theparent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future
events or conditions may cause the Company to cease to continue as a going concern.

AUO Corporation
2023 Annual Report267

5. Evaluated the overall presentation, structure and content of the parent company only financial statements,
including the disclosures, and whether the parent company only financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
6. Obtained sufficient and appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Company to express an opinion on the parent company only financial
statements. We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.
We communicated with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that
we identified during our audit.
We also provided those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicated with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determined those matters that were ofmost significance in the audit of the parent company only financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, we determine that amatter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partners on the audit resulting in this independent auditors’ report are Yu, Chi-Lung and Yu,
Wan-Yuan.

KPMG
Hsinchu, Taiwan (Republic of China)
January 31, 2024

Notes to Readers
The accompanying parent company only financial statements are intended only to present the financial position, financial performanceand cash flows in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with theInternational Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory
Commission of the Republic of China. The standards, procedures and practices to such parent company only financial statements arethose generally accepted and applied in the Republic of China.

268

AUO Corporation
2023 Annual Report

37
34
2
3
2
1
79

9
4
1
1
5
1
21

344,807,466 100$

30,581,959
132,527
14,795,145
4,612,869
2,137,997
280,343
17,158,208
1,531,715
2,068,906
74,83673,374,505

Total Assets$

126,941,076
116,683,030
7,352,001
465,868
9,426,902
7,765,164
2,798,920
271,432,961

See accompanying notes to parent company only financial statements.

1550
1600
1755
1760
1780
1840
1900

1517

1100
1110
1170
1180
1210
1220
130X
1410
1476
1479

Assets
Current assets:Cash and cash equivalents (Note 6(1))
Financial assets at fair value through profit or losscurrent (Note 6(2))
Notes and accounts receivable, net (Note 6(4))
Accounts receivable from related parties, net (Notes 6(4)&7)
Other receivables from related parties (Note 7)
Current tax assets
Inventories (Note 6(5))
Prepayments (Note 6(11))
Other current financial assets (Notes 6(4)&(17))
Other current assets (Note 6(11))
Noncurrent assets:
Financial assets at fair value through other comprehensive incomenoncurrent (Note 6(3))
Investments in equity-accounted investees (Notes 6(6)&7)
Property, plant and equipment (Notes 6(7),7&8)
Right-of-use assets (Notes 6(8))
Investment property (Note 6(9))
Intangible assets (Notes 6(10))
Deferred tax assets (Notes 6(21))
Other noncurrent assets (Notes 6(11),(14),7&8)


December 31, 2023
Amount
%

35
33
2
3
2
1
76

12
4
2
5
1
24

351,960,703 100

85,362
124,210,952
118,164,834
7,810,704
465,868
9,464,184
5,656,311
2,850,401
268,708,616

42,441,718
169,455
12,408,519
5,347,662
2,050,395
21,306
17,295,755
1,833,558
1,530,474
153,245
83,252,087

December 31, 2022
Amount
%

3100
3200
3300
3400
3500

2527
2540
2550
2570
2580
2600

2120
2170
2180
2213
2220
2230
2250
2280
2399
2322

$

76,993,961 22
54,998,829 16
31,899,740
9(4,484,899) (1)(240,424) 159,167,207 46
344,807,466 100

2
26
1
2
31
54

5
8
1
1
5
3
23

Equity (Note 6(15)):
Common stock
Capital surplus
Retained earnings
Other components of equity
Treasury shares
Total equity
Total Liabilities and Equity

6,817
16,836,244
27,432,932
4,366,588
224,275
1,828,855
409,888
18,189,980
9,018,000
78,313,579
6,239,558
89,289,344
642,4612,860,412
7,233,981
1,060,924
107,326,680
185,640,259

December 31, 2023
Amount%Liabilities and Equity
Current liabilities:
Financial liabilities at fair value through profit or losscurrent (Notes 6(2))
Notes and accounts payable
Accounts payable to related parties (Note 7)
Equipment and construction payable (Note 7)
Other payables to related parties (Note 7)
Current tax liabilities
Provisionscurrent (Note 6(13))
Lease liabilitiescurrent (Note 6(8))
Other current liabilities (Notes 6(17)&(18))
Current installments of long-term borrowings (Notes 6(12)&8)Noncurrent liabilities:
Contract liabilitiesnoncurrent (Note 6(17))
Long-term borrowings, excluding current installments (Notes 6(12)&8)
Provisionsnoncurrent (Note 6(13))
Deferred tax liabilities (Note 6(21))
Lease liabilitiesnoncurrent (Note 6(8))
Other noncurrent liabilities
Total liabilities(Expressed in thousands of New Taiwan dollars)

December 31, 2023 and 2022

Balance Sheets

AUO CORPORATION(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

3
19
1
2
1
26
47

5
7
1
5
3
21

76,993,961 22
61,942,210 18
50,078,752 14(3,620,305) (1)(295,527) 185,099,091 53
351,960,703 100

8,739,846
68,197,393
609,175
4,078,266
7,654,368
1,333,038
90,612,086
166,861,612

89,77618,037,634
24,231,794
4,002,367
249,047
509,975
443,197401,297
17,913,439
10,371,000
76,249,526

December 31, 2022
Amount%Appendix 2

AUO Corporation

2023 Annual Report269

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AUO CORPORATIONStatements of Comprehensive Income
For the years ended December 31, 2023 and 2022
(Expressed in thousands of New Taiwan dollars, except for Earnings (loss) per share)

4110
4190
5000

6100
6200
6300

7100
7010
7020
7050
7060
7900
7950
8200
8300
8310
8311
8316
8330
8349
8360
8361
8380
8399
8300
8500
9750
9850

RevenueLess: sales return and discountNet revenue (Notes 6(17)&7)
Cost of sales (Notes 6(5),(8),(14),(18),(19)&7)
Gross loss
Operating expenses (Notes 6(8),(14),(16),(18),(19)&7):
Selling and distribution expenses
General and administrative expenses
Research and development expenses
Total operating expenses
Loss from operations
Non-operating income and expenses:
Interest income (Notes 6(20)&7)
Other income (Notes 6(3),(20)&7)
Other gains and losses (Notes 6(6),(7),(10),(20)&7)
Finance costs (Notes 6(7),(8)&(20))
Share of profit of equity-accounted investees (Note 6(6))
Total non-operating income and expenses
Loss before income tax
Less: income tax expense (benefit) (Note 6(21))
Loss for the year
Other comprehensive income (Notes 6(3),(6),(14)&(21)):
Items that will never be reclassified to profit or loss
Remeasurement of defined benefit obligations
Unrealized gain (loss) on equity investments at fair value throughother comprehensive income
Equity-accounted investees – share of other comprehensive
incomeRelated tax
Items that are or may be reclassified subsequently to profit orloss
Foreign operations – foreign currency translation differences
Equity-accounted investees – share of other comprehensive
incomeRelated tax
Other comprehensive income (loss), net of tax
Total comprehensive income (loss) for the year
Earnings (loss) per share (NT$, Note 6(22))
Basic earnings (loss) per share
Diluted earnings (loss) per share

See accompanying notes to parent company only financial statements.
270

AUO Corporation
2023 Annual Report

2023
2022
Amount%Amount%$216,433,131 101 217,686,089 101
12,515,723
1
1,752,337
214,680,794 100 215,170,366 100
222,806,471 104 225,776,767 105(8,125,677)(4) (10,606,401)(5)
3,008,733
4,970,709
10,075,719
18,055,161(26,180,838)

1
3,029,807
2
4,631,479
5 10,129,375
8 17,790,661(12) (28,397,062)

1
2
5
8
(13)

421,509849,906(1,127,151)(2,298,117)
5,776,406
3,622,553(22,558,285)(4,355,011)(18,203,274)

386,558
862,214(1) (1,200,499)(1) (1,127,843)
38,383,800
1
7,304,230(11) (21,092,832)
(2)
8,542
(9) (21,101,374)

(1)
4
3
(10)
(10)

4,260

-

58,558

-

(401)

-

19,373-401,933(852)
404,940-(1,324,473)(11,712)(1,258,254)

(1)
(1)

(96,911)-

7,463,944

3(4,511,574)(485,287)
2,467,083
1,208,829(9) (19,892,545)

(2)
1
(10)

(1,403,006)
254,645(1,245,272)(840,332)$ (19,043,606)$$(2.37)(2.37)(2.39)(2.39)

$76,993,961

54,998,829(16,137)(874,755)
78,104

13,753,412--

61,942,210

76,993,961(6,134,305)
3,712

13,753,412

1,095
1,812,907
71,207-

5,326,268--

Legal Reserve
8,427,144(19,248,490)-

Capital Surplus
60,057,001

See accompanying notes to parent company only financial statements.

Balance at January 1, 2022
Appropriation of earnings:
Legal reserve
Special reserve
Cash dividends distributed to shareholders
Loss for the year
Other comprehensive income (loss), net of tax
Total comprehensive income (loss) for the year
Donations from shareholders
Adjustments for changes in investees’ equity
Capital reduction
Share-based payments
Disposal of equity investments measured at fairvalue through other comprehensive income
Balance at December 31, 2022
Appropriation of earnings:
Reversal of special reserve
Loss for the year
Other comprehensive income (loss), net of tax
Total comprehensive income (loss) for the year
Cash distribution from capital surplus
Donations from shareholders
Differences between consideration and carrying
amount arising from acquisition or disposal ofinterest in subsidiary
Adjustments for changes in investees' equity
Share-based payments
Disposal of equity investments measured at fairvalue through other comprehensive income
Balance at December 31, 2023

Capital Stock
CommonStock$96,242,451

3,620,305-(1,122,876)-

4,743,181

1,472,878-(20,497)
14,526,023-

1,122,876(18,203,274)
44,759(18,158,515)-

41,654
31,582,159(5,326,268)(1,472,878)(9,575,824)(21,101,374)
44,298(21,057,076)-

Retained Earnings
UnappropriatedEarnings
68,972,551

Special Reserve
3,270,303(20,497)
31,899,740-(18,203,274)
44,759(18,158,515)-

41,65450,078,752(9,575,824)(21,101,374)
44,298(21,057,076)-

Subtotal
80,669,998(Expressed in thousands of New Taiwan dollars)

For the years ended December 31, 2023 and 2022

Statements of Changes in Equity

AUO CORPORATION(3,651,762)-(1,245,272)(1,245,272)-(2,406,490)

2,467,083
2,467,083-

360,181360,181

20,497(833,137)---(41,654)(1,213,815)(1,302,552)(1,302,552)-

20,497(4,484,899)-(885,091)(885,091)-(41,654)(3,620,305)

1,164,531
1,164,531-

Other Components of Equity
Unrealized
Gains (Losses)
on Financial
Assets at Fair
Value throughCumulative
Other
Translation
Comprehensive
Differences
IncomeSubtotal(4,873,573)
130,391(4,743,182)(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

96,842
46,85955,103(240,424)--(295,527)-

Treasury Shares(439,228)

159,167,207(16,137)(874,755)
133,207(18,203,274)(840,332)(19,043,606)(6,134,305)
3,712

185,099,091(9,575,824)(21,101,374)
1,208,829(19,892,545)
1,095
1,812,907(19,151,648)
118,066

Total Equity
231,787,040

Appendix 2

AUO Corporation

2023 Annual Report271

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AUO CORPORATIONStatements of Cash Flows
For the years ended December 31, 2023 and 2022
(Expressed in thousands of New Taiwan dollars)

Cash flows from operating activities:
Loss before income tax$
Adjustments for:- depreciation- amortization- losses (gains) on financial instruments at fair value through profit
or loss, net- interest expense- interest income- dividend income- compensation costs of share-based payments- share of profit of equity-accounted investees- gains on disposals of property, plant and equipment- impairment losses on assets- unrealized foreign currency exchange losses (gains)- others
Changes in operating assets and liabilities:- accounts receivable- receivables from related parties- inventories- net defined benefit assets- other operating assets- contract liabilities- notes and accounts payable- payables to related parties- provisions- other operating liabilities
Cash inflow (outflow) generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

2023

2022

(22,558,285)(21,092,832)

20,541,130
37,282(46,031)

19,845,290
118,802
11,461

2,239,466(421,509)
53,357(5,776,406)(24,783)
126,460(282,867)
58,651

976,170(386,558)(1,559)70,352(8,383,800)(3,192)
1,121,772
560,099
138,935(3,253,947)
1,001,917
137,547(569)(9,850)(476,498)(163,676)
3,176,366
1,439,229(2,025,796)(6,228,812)
423,2312,949,113(2,210,241)(346,641)(5,413,350)

36,027,128
2,550,124
4,395,797
3,090
255,505(1,551,093)(7,438,696)(9,207,644)(449,572)(9,058,509)
8,501,070
389,937
3,810,426(930,473)(6,244)
11,764,716(Continued)

See accompanying notes to arent company only financial statements.
p272

AUO Corporation
2023 Annual ReportAppendix 2(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AUO CORPORATIONStatements of Cash Flows (Continued)
For the years ended December 31, 2023 and 2022
(Expressed in thousands of New Taiwan dollars)

Cash flows from investing activities:
Disposals of financial assets at fair value through profit or loss
Disposals of financial assets at amortized cost
Acquisitions of equity-accounted investees
Proceeds from capital reduction of equity-accounted investees
Acquisitions of property, plant and equipment
Disposals of property, plant and equipment
Decrease (increase) in refundable deposits
Decrease (increase) in other receivables from related party
Decrease in other financial assets
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Payment of lease liabilities
Increase in received guarantee deposits
Cash dividends and cash distribution from capital surplus
Capital reduction payments to shareholders
Treasury shares sold to employees
OthersNet cash provided by financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at January 1
Cash and cash equivalents at December 31

$

2023

2022

(2,565,902)
764,000(18,294,568)
25,880(86,731)505,000
6,035(19,646,286)

5,440
10,000,000(5,993,878)(18,135,881)
516,127
95,645(140,000)(13,652,547)

2,800,000(2,800,000)
50,723,300(31,043,000)(405,769)
1,375(6,134,305)
73,011
3,712
13,218,324(18,447)(11,859,759)
42,441,718
30,581,959

59,583,475(21,814,000)(401,791)(9,575,824)(19,151,648)
46,7181,095
8,688,025
20,5866,820,780
35,620,938
42,441,718

See accompanying notes to parent company only financial statements.
AUO Corporation
2023 Annual Report273

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AUO CORPORATION
Notes to the Parent Company Only Financial Statements
For the years ended December 31, 2023 and 2022
(Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

1.

Organization
AUO Corporation (“AUO” or “the Company”) was founded on August 12, 1996 and is located in Hsinchu
Science Park, the Republic of China (“ ROC” ). AUO’ s main activities are the research, development,
production and sale of thin film transistor liquid crystal displays (“ TFT-LCDs” ) and other flat panel
displays used in a wide variety of applications. AUO also engages in the production and sale of solar
modules and systems. AUO’ s common shares have been publicly listed on the Taiwan Stock Exchange
since September 2000, and its American Depositary Shares (“ADSs”) have been listed on the New York
Stock Exchange (“ NYSE” ) since May 2002. On and from October 1, 2019, AUO’ s ADSs has delistedfrom the NYSE and begun trading on the over-the-counter (“OTC”) market. Further on January 27, 2021,
AUO’s ADSs and underlying ordinary shares was officially cancelled from the registration of the UnitedStates Securities and Exchange Commission and its reporting obligations under the U.S. Securities
Exchange Act was terminated.
On September 1, 2001, October 1, 2006 and October 1, 2016, Unipac Optoelectronics Corp. (“Unipac”),
Quanta Display Inc. (“ QDI” ) and Taiwan CFI Co., Ltd. (“ CFI” ) were merged with and into AUO,
respectively. AUO is the surviving Company, whereas Unipac, QDI and CFI were dissolved.
In order to advance AUO’ s value transformation strategy, to accelerate the extension of the value chain
and enhance the overall operating performance, upon the resolution of the shareholders’ meeting held on
June 17, 2020, AUO demerged and transferred the business of the General Display and the PublicInformation Display, including assets, liabilities and the operations, to its wholly-owned subsidiary, AUO
Display Plus Corporation (“ADP” ). ADP issued new shares to AUO as the consideration. The effective
date of the demerger was set on January 1, 2021.

2.

The Authorization of Financial Statements
These parent company only financial statements were authorized for issue by the Board of Directors of
AUO on January 31, 2024.

3.

Application of New and Revised Standards, Amendments and Interpretations(1)

Impact of adoption of new, revised or amended standards and interpretations endorsed by the
Financial Supervisory Commission, ROC (“FSC”).
The Company has adopted the amendments to the International Financial Reporting Standards,
International Accounting Standards, IFRIC Interpretations, and SIC Interpretations (collectively,“IFRSs”) with effective date from January 1, 2023. The adoption does not have a material impact on
the Company’s parent company only financial statements.
k Amendments to IAS 1, Disclosure of Accounting Policies
k Amendments to IAS 8, Definition of Accounting Estimates(Continued)
274

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AUO CORPORATION
Notes to the Parent Company Only Financial Statementsk Amendments to IAS 12, Deferred Tax related to Assets and Liabilities arising from a Single
Transactionk(2)

Amendments to IAS 12, International Tax Reform—Pillar Two Model Rules

Impact of the IFRS that have been endorsed by the FSC but not yet in effect
The Company assessed that the adoption of the following amendments, effective for annual period
beginning on January 1, 2024, would not have a material impact on its parent company only
financial statements:
k Amendments to IAS 1 Classification of Liabilities as Current or Non-current
k Amendments to IAS 1 Non-current Liabilities with Covenants
k Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangementsk Amendments to IFRS 16 Lease Liability in a Sale and Leaseback(3)

The IFRSs issued by International Accounting Standards Board (“IASB”) but not yet endorsed by
the FSC
New, revised or amended standards and interpretations issued by the IASB but not yet endorsed by
the FSC are listed below:
k Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets Between an Investor and
Its Associate or Joint Venture
k IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts
k Amendments to IAS 21 Lack of Exchangeability
As of the date that the accompanying parent company only financial statements were issued, theCompany continues in assessing the impact on its financial position and results of operations as aresult of the application of abovementioned standards and interpretations except for IFRS 17,
Insurance Contracts and the amendments to IFRS 17 that are not relevant to the Company. The
related impact will be disclosed when the assessment is complete.

4.

Summary of Significant Accounting Policies
The significant accounting policies applied in the preparation of these parent company only financial
statements are set out as below. The significant accounting policies have been applied consistently to all
periods presented in these parent company only financial statements.
(1)

Statement of compliance
The parent company only financial statements have been prepared in accordance with theRegulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafterreferred to as “the Regulations”).

(Continued)
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AUO CORPORATION
Notes to the Parent Company Only Financial Statements(2)

Basis of preparationa.

Basis of measurement
The parent company only financial statements have been prepared on the historical cost basis
except for the following material items in the balance sheets:(i)Financial instruments at fair value through profit or loss (including derivative financial
instruments) (Note 6(2));(ii)

Financial assets at fair value through other comprehensive income (Note 6(3));(iii) Defined benefit asset (liability) is recognized as the fair value of the plan assets less thepresent value of the defined benefit obligation (Note 6(14)).
b.

Functional and presentation currency
The functional currency of the Company is determined based on the primary economic
environment in which the entity operates. The parent company only financial statements arepresented in New Taiwan Dollar (“NTD”), which is also the Company’s functional currency.
All financial information presented in NTD has been rounded to the nearest thousand, unlessotherwise noted.

(3)

Foreign currency transactions and operationsa.

Transactions in foreign currencies are translated to the functional currencies of the Company at
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated inforeign currencies at the reporting date are retranslated to the functional currency at theexchange rate at that date and the resulting exchange differences are included in profit or loss
for the year. Non-monetary assets and liabilities denominated in foreign currencies that aremeasured at fair value are retranslated to the functional currency at the exchange rate at thedate when the fair value was determined. The resulting exchange differences are included in
profit or loss for the year except for those arising from the retranslation of non-monetary items
in respect of which gains and losses are recognized directly in other comprehensive income, inwhich case, the exchange differences are also recognized directly in other comprehensive
income. Non-monetary items in foreign currencies that are measured at historical cost aretranslated using the exchange rate at the date of the transaction.
Exchange differences arising from the effective portion of changes in the fair value ofderivatives that are designated and qualified as cash flow hedges are recognized in othercomprehensive income.

b.

For the purpose of presenting parent company only financial statements, the assets andliabilities of the Company’s foreign operations are translated into NTD using exchange rates at
the reporting date. Income and expenses of foreign operations are translated at the averageexchange rates for the period unless the exchange rates fluctuate significantly during theperiod; in that case, the exchange rates at the dates of the transactions are used. Foreign
currency differences are recognized in other comprehensive income and accumulated in equity.

(Continued)
276

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2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(4)Classification of current and non-current assets and liabilities
An asset is classified as current when:a.

The asset expected to realize, or intends to sell or consume, in its normal operating cycle;b.

The asset primarily held for the purpose of trading;c.

The asset expected to realize within twelve months after the reporting date; ord.

Cash and cash equivalent excluding the asset restricted to be exchanged or used to settle aliability for at least twelve months after the reporting date.

All other assets are classified as non-current.
A liability is classified as current when:a.

The liability expected to settle in its normal operating cycle;b.

The liability primarily held for the purpose of trading;c.

The liability is due to be settled within twelve months after the reporting date; ord.

The Company does not have an unconditional right to defer settlement of the liability for atleast twelve months after the reporting date. Terms of a liability that could, at the option of thecounterparty, result in its settlement by the issue of equity instruments, do not affect its
classification.

All other liabilities are classified as non-current.
(5)

Cash and cash equivalents
Cash comprises cash balances and demand deposits. Cash equivalents comprise short-term highly
liquid investments that are readily convertible into known amount of cash and are subject to an
insignificant risk of changes in their fair value. Time deposits with short-term maturity but not forinvestments and other purposes and are qualified with the aforementioned criteria are classified as
cash equivalent.

(6)

Financial instrumentsa.

Financial assets(i)Classification of financial assets
The Company classifies financial assets into the following categories: financial assets at
amortized cost, financial assets at fair value through other comprehensive income andfinancial assets at fair value through profit or loss. When, and only when, the Company
changes its business model for managing financial assets it shall reclassify all affectedfinancial assets.

(Continued)
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AUO CORPORATION
Notes to the Parent Company Only Financial Statements(a)Financial assets at amortized cost
A financial asset is measured at amortized cost if it meets both of the following
conditions and is not designated as measured at fair value through profit or loss:i.

it is held within a business model whose objective is to hold financial assets
to collect contractual cash flows; andii.

its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

Such financial assets are initially recognized at fair value, plus any directly
attributable transaction costs. Subsequently, these assets are measured at amortizedcost using the effective interest method, less any impairment losses. Interest
income, foreign exchange gains and losses, and recognition (reversal) of
impairment losses, are recognized in profit or loss.
(b)

Financial assets at fair value through other comprehensive income
On initial recognition, the Company is able to make an irrevocable election topresent subsequent changes in the fair value of investments in equity instrumentsthat is not held for trading in other comprehensive income. This election is made on
an instrument-by-instrument basis.
Such financial assets are initially recognized at fair value, plus any directly
attributable transaction costs. Subsequent to initial recognition, they are measured
at fair value and changes therein are recognized in other comprehensive income andaccumulated in equity unrealized gains (losses) on financial assets at fair value
through other comprehensive income, except for dividends deriving from equity
investments which are recognized in profit or loss unless the dividend clearly
represents a recovery of part of the cost of the investment. When an investment isderecognized, the cumulative gain or loss in equity will not be reclassified to profit
or loss, instead, is reclassified to retained earnings.
Dividends on investments in equity instruments are recognized on the date that theCompany’s right to receive the dividends is established.

(c)Financial assets at fair value through profit or loss
All financial assets not classified as at amortized cost or at fair value through othercomprehensive income as described above are measured at fair value through profit
or loss. This includes all derivative financial assets.
Such financial assets are initially recognized at fair value, and attributabletransaction costs are recognized in profit or loss as incurred. Subsequent to initialrecognition, they are measured at fair value and changes therein are recognized in
profit or loss.

(Continued)
278

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AUO CORPORATION
Notes to the Parent Company Only Financial Statements(ii)

Impairment of financial assets
The Company recognizes loss allowances for expected credit losses on financial assets at
amortized cost, including cash and cash equivalents, receivables, refundable deposits andother financial assets, etc., and contract assets. Loss allowances for financial assets are
deducted from the gross carrying amount of the assets. The recognition or reversal of theloss allowance is recognized in profit or loss.
The expected credit loss is the weighted average of credit losses with the respective risksof a default occurring on the financial instrument as the weights.
The Company measures the loss allowance for a financial instrument at an amount equal
to lifetime expected credit losses, except for the financial instrument that is determined
to have low credit risk at the reporting date and the credit risk thereof has not increased
significantly since initial recognition, which is measured at an amount equal to the 12month expected credit losses. For trade receivables and contract assets, the Company
measures their loss allowances at an amount equal to lifetime expected credit losses.
When determining whether the credit risk of a financial asset has increased significantly
since initial recognition, the Company considers reasonable and supportable informationthat is relevant. This includes both qualitative and quantitative information and analysis,
based on the Company’s historical experience and credit assessment as well as forwardlooking information.
In the circumstance that a financial asset is past due or the borrower is unlikely to pay its
credit obligations to the Company in full, the Company considers the credit risk on that
financial asset has significantly increased, or further, to be in default.
At each reporting date, the Company assesses whether financial assets at amortized costare credit-impaired. A financial asset is “credit-impaired” when one or more events thathave a detrimental impact on the estimated future cash flows of the financial asset haveoccurred.

(iii) De-recognition of financial assets
The Company derecognizes financial assets when the contractual rights to the cash flows
from the asset expire, or when the Company transfers substantially all the risks andrewards of ownership of the financial assets to another entity.
b.

Financial liabilities(i)Classification of financial liabilities
The Company classifies financial liabilities into the following categories: financial
liabilities at fair value through profit or loss and other financial liabilities.

(Continued)
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AUO CORPORATION
Notes to the Parent Company Only Financial Statements(a)Financial liabilities at fair value through profit or loss
The Company designates financial liabilities as held for trading for the purpose ofhedging exposure to foreign exchange risk arising from operating and financing
activities. When a financial liability is not effective as a hedge, the Company
accounts for it as a financial liability at fair value through profit or loss.
The Company accounts for financial liabilities, other than the one mentioned
above, as at fair value through profit or loss at initial recognition. Attributabletransaction costs are recognized in profit or loss as incurred. Financial liabilities inthis category are subsequently measured at fair value and changes therein, whichtakes into account any interest expense, are recognized in profit or loss.

(b)

Other financial liabilities
Financial liabilities not classified as held for trading, or not designated as at fairvalue through profit or loss (including loans and borrowings, trade and otherpayables), are measured at fair value, plus any directly attributable transaction costat the time of initial recognition. Subsequent to initial recognition, they aremeasured at amortized cost calculated using the effective interest method, except
for insignificant recognition of interest expense from short-term borrowings andpayables. Interest expense not capitalized as an asset cost is recognized in profit or
loss.

(ii)

De-recognition of financial liabilities
The Company derecognizes financial liabilities when the contractual obligation has beendischarged, cancelled or expired. The difference between the carrying amount and theconsideration paid or payable, including any non-cash assets transferred or liabilities
assumed is recognized in profit or loss.

c.

Offsetting of financial assets and liabilities
The Company presents financial assets and liabilities on a net basis in the balance sheet when
the Company has the legally enforceable rights to offset, and intends to settle such financial
assets and liabilities on a net basis or to realize the assets and settle the liabilities
simultaneously.

(7)

Inventories
The cost of inventories includes all necessary expenditures and charges for bringing the inventory toa stable, useable and marketable condition and location. The production overhead is allocated tofinished goods and work in progress based on the normal capacity of the production facilities.
Subsequently, inventories are measured at the lower of cost and net realizable value. Cost isdetermined using the weighted-average method. Net realizable value is calculated based on theestimated selling price less all estimated costs of completion and the estimated costs necessary to
make the sale.

(Continued)
280

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2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(8)

Investments in associates and joint ventures
Associates are those entities in which the Company and its subsidiaries have the power to exercise
significant influence, but not control or joint control, over their financial and operating policies.
Joint venture is a joint arrangement whereby the Company and other parties agreed to share thecontrol of the arrangement, and have rights to the net assets of the arrangement. Unanimous consent
from the parties sharing control is required when making decisions for the relevant activities of thearrangement.
Investments in associates or joint ventures are accounted for using the equity method and arerecognized initially at cost. The parent company only financial statements include the Company’ sshare of the profit or loss and other comprehensive income of associates or joint ventures, after
adjustments are made to align their accounting policies with those of the Company. When an
associate or a joint venture incurs changes in its equity not derived from profit or loss and othercomprehensive income, the Company recognizes all the equity changes in proportion to its
ownership interest in the associate or joint venture as capital surplus provided that the ownershipinterest in the associate or joint venture remains unchanged.
The difference between acquisition cost and fair value of associates’ or joint ventures’ identifiable
assets and liabilities as of the acquisition date is accounted for as goodwill. Goodwill is included in
the original investment cost of acquired associates or joint ventures and is not amortized. If the fairvalue of identified assets and liabilities is in excess of acquisition cost, the remaining excess overacquisition cost is recognized as a gain in profit or loss.
The Company discontinues the use of the equity method from the date when its investment ceases tobe an associate or a joint venture, and then measures the retained interests at fair value at that date.
The difference between the carrying amount of the investment at the date the equity method was
discontinued and the fair value of the retained interests along with any proceeds from disposing of apart interest in the associate or joint venture is recognized in profit or loss. Moreover, the Company
accounts for all amounts previously recognized in other comprehensive income in relation to thatinvestment on the same basis as would be required if the investee had directly disposed of the related
assets or liabilities.
When the Company subscribes for additional shares in an associate or a joint venture at a percentage
different from its existing ownership percentage, the resulting carrying amount of the investment
differs from the amount of the Company’s proportionate interest in the net assets of the associate or
joint venture. The Company records such a difference as an adjustment to investments with thecorresponding amount charged or credited to capital surplus. If the capital surplus arising frominvestment accounted for under the equity method in associates or joint ventures is insufficient tooffset with the said corresponding amount, the differences will be charged or credited to retained
earnings.

(Continued)
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AUO CORPORATION
Notes to the Parent Company Only Financial Statements

If the Company’s ownership interest in an associate or a joint venture is reduced due to disposal ofor disproportionate subscription to the shares, but the Company continues to apply the equity
method, the Company shall reclassify to profit or loss the proportion of the gain or loss that had
previously been recognized in other comprehensive income relating to that reduction in ownershipinterest on the same basis as would be required if the investee had directly disposed of the related
assets or liabilities.
At the end of each reporting period, if there is any indication of impairment, the entire carrying
amount of the investment including goodwill is tested for impairment as a single asset, by comparing
its recoverable amount with its carrying amount. An impairment loss recognized forms part of thecarrying amount of the investment in associates or joint ventures. Accordingly, any reversal of that
impairment loss is recognized to the extent that the recoverable amount of the investment
subsequently increases.
Profits and losses resulting from the transactions between the Company and associates or joint
ventures are recognized in the Company’ s parent company only financial statements only to theextent of interests in the associate or joint venture that are not related to the Company.
When the Company’s share of losses exceeds its interest in an associate or a joint venture, thecarrying amount of that interest, including any long-term investments that form part thereof, isreduced to zero, and the recognition of further losses is discontinued except to the extent that theCompany has a legal or constructive obligation, or has made payments on behalf of the investee.
(9)

Investment in subsidiaries
The investees which are controlled by the Company are measured under equity method in preparing
the parent company only financial statement. The profit or loss, other comprehensive income andequity in the parent company only financial statement are equal to the profit or loss, othercomprehensive income and equity attributable to the shareholders of parent in the consolidated
financial statement. The Company prepares the consolidated financial statement quarterlycomprising of the Company and its subsidiaries.
Changes in the Company’ s ownership interests in subsidiaries that do not result in the Company
losing of control over the subsidiary are accounted for as equity transaction.

(10) Investment property
Investment property is the property held either to earn rental income or for capital appreciation or for
both, but not for sale in the ordinary course of business, use in the production or supply of goods orservices or for administrative purposes. Investment property is measured at cost on initialrecognition. Subsequent to initial recognition, investment properties are measured using the costmodel. Depreciation is charged and recognized in non-operating income and expenses based on the
depreciable amount. Depreciation methods, useful lives and residual values are in accordance withthe policy of property, plant and equipment. Cost includes expenditure that is directly attributable tothe acquisition of the investment property.
An investment property is reclassified to property, plant and equipment at its carrying amount when
the use of the investment property changes.

(Continued)
282

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AUO CORPORATION
Notes to the Parent Company Only Financial Statements(11) Property, plant and equipmenta.

Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation andaccumulated impairment losses. Cost includes expenditure that is directly attributed to theacquisition of the asset, any cost directly attributable to bringing the asset to the location andcondition necessary for it to be capable of operating in the manner intended by management,
the initial estimate of the costs of dismantling and removing the item and restoring the site on
which it is located, and any borrowing cost that is eligible for capitalization. The cost of thesoftware is capitalized as part of the equipment if the purchase of the software is necessary forthe equipment to be capable of operating.
When part of an item of property, plant and equipment with a cost that is significant in relation
to the total cost of the item and the useful life or the depreciation method of the significant partis different from another significant part of that same item, it is accounted for as a separate
item (significant component) of property, plant and equipment.
The gain or loss arising from the derecognition of an item of property, plant and equipment isdetermined as the difference between the net disposal proceeds, if any, and the carrying
amount of the item, and is recognized in profit or loss.

b.

Subsequent costs
Subsequent expenditure is capitalized only when it is probable that the future economic
benefits associated with the expenditure will flow to the Company and the cost of the item canbe measured reliably. Ongoing repairs and maintenance expenses are recognized in profit orloss as incurred.

c.

Depreciation
Depreciation is determined by depreciable amount allocated over the estimated useful lives of
the respective assets, considering significant components of an individual asset on a straightline basis. If a component has a useful life that is different from the remainder of that asset,that component is depreciated separately. Depreciation charge is recognized in profit or loss.
Leased assets are depreciated over their useful lives if it is reasonably certain that theCompany will obtain ownership by the end of the lease term. Otherwise, leased assets are
depreciated over the shorter of the lease term and their useful lives.
Except for land, which is not depreciated, the estimated useful lives of the assets are as
follows:(i)

Buildings: 20~50 years(ii)

Machinery and equipment: 6~9 years(iii) Other equipment: 3~6 years(Continued)
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AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Depreciation methods, useful lives, and residual values are reviewed at each annual reporting
date and, if necessary, adjusted as appropriate. Any changes therein are accounted for aschanges in accounting estimates.
d.

Reclassification to investment property
A property is reclassified to investment property at its carrying amount when the use of theproperty changes from owner-occupied to investment purpose.

(12) Leasesa.

Identifying a lease
A contract is, or contains, a lease when all the following conditions are satisfied:(i)the contract involves the use of an identified asset, and the supplier does not have asubstantive right to substitute the asset; and(ii)

the Company has the right to obtain substantially all of the economic benefits from use of
the identified asset throughout the period of use; and(iii) the Company has the right to direct the use of the identified asset throughout the periodof use.
b.

As a lessee
Payments for leases of low-value assets and short-term leases are recognized as expenses on astraight-line basis during the lease term for which the recognition exemption is applied. Except
for leases described above, a right-of-use asset and a lease liability shall be recognized for allother leases at the lease commencement date.
The Company recognizes a right-of-use asset and a lease liability at the lease commencement
date. The lease liability is initially measured at the present value of the lease payments(including fixed payments and variable lease payments that depend on an index or a rate),
discounted using the lessee’ s incremental borrowing rate. The right-of-use asset is initiallymeasured at cost, which comprises the initial amount of the lease liability, adjusted for any
lease payments made at or before the commencement date, less any lease incentives received,
plus any initial direct costs incurred and an estimate of costs to be incurred in restoring theunderlying asset.

(Continued)
284

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AUO CORPORATION
Notes to the Parent Company Only Financial Statements

The right-of-use asset is subsequently depreciated using the straight-line method over the
shorter of the useful life of the right-of-use asset or the lease term. The lease liability issubsequently measured at amortized cost using the effective interest method. It is remeasured(i) if there is a change in the lease term; (ii) if there is a change in future lease payments arisingfrom a change in an index or a rate; (iii) if there is a change in the amounts expected to bepayable under a residual value guarantee; or (iv) if the Company changes its assessment of
whether it will exercise a purchase, extension or termination option. When the lease liability isremeasured in the circumstances aforementioned, a corresponding adjustment is made to thecarrying amount of the right-of-use asset. However, if the carrying amount of the right-of-use
asset is reduced to zero, any remaining amount of the remeasurement is recognized in profit orloss.
Moreover, the lease liability is remeasured when lease modifications occur that decrease thescope of the lease. The Company accounts for the remeasurement of the lease liability bydecreasing the carrying amount of the right-of-use asset to reflect the partial or full terminationof the lease, and recognizes in profit or loss any gain or loss relating to the partial or fulltermination of the lease.
c.

As a lessor
Lease income from an operating lease is recognized in profit or loss on a straight-line basis
over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the asset leased to others and recognized as an expense on
a straight-line basis over the lease term.

(13) Intangible assetsa.

Goodwill
Goodwill is recognized when the purchase price exceeds the fair value of identifiable net
assets acquired in a business combination. Goodwill is measured at cost less accumulated
impairment losses.
Equity-method goodwill is included in the carrying amounts of the equity investments. The
impairment losses for the goodwill within the equity-accounted investees are accounted for as
deductions of carrying amounts of investments in equity-accounted investees.

b.

Research and development
During the research phase, activities are carried out to obtain and understand new scientific ortechnical knowledge. Expenditures during this phase are recognized in profit or loss as
incurred.
Expenditure arising from development is capitalized as an intangible asset when the Company
demonstrates all of the following:(i)the technical feasibility of completing the intangible asset so that it will be available foruse or sale;(Continued)
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AUO CORPORATION
Notes to the Parent Company Only Financial Statements(ii)

its intention to complete the intangible asset and use or sell it;(iii) its ability to use or sell the intangible asset;(iv) the probability that the intangible asset will generate probable future economic benefits;(v)

the availability of adequate technical, financial and other resources to complete thedevelopment and to use or sell the intangible asset; and(vi) its ability to measure reliably the expenditure attributable to the intangible asset during
its development.
Development expenditure which fails to meet the criteria for recognition as an intangible asset
is reflected in profit or loss when incurred. Capitalized development expenditure is measured
at cost less accumulated amortization and any accumulated impairment losses.
c.

Other intangible assets
Other intangible assets acquired are measured at cost less accumulated amortization and any
accumulated impairment losses.

d.

Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, including expenditure
on internally generated goodwill and brands, is recognized in profit or loss as incurred.

e.

Amortization
The depreciable amount of an intangible asset is the cost less its residual value. Other than
goodwill and intangible assets with indefinite useful life, an intangible asset with a finite
useful life is amortized over 3 to 20 years using the straight-line method from the date that theasset is made available for use. The amortization charge is recognized in profit or loss.
The residual value, amortization period, and amortization method are reviewed at least
annually at each annual reporting date, and any changes therein are accounted for as changes inaccounting estimates.

(14) Impairment – non-financial assets
Other than inventories, deferred tax assets and noncurrent assets held for sale, the carrying amountsof the Company’ s investment property measured at cost and other long-term non-financial assets(property, plant and equipment, right-of-use assets and other intangible assets with finite useful
lives), are reviewed at the reporting date to determine whether there is any indication of impairment.
When there is an indication of impairment exists for the aforementioned assets, the recoverable
amount of the asset is estimated. If it is not possible to estimate the recoverable amount of anindividual asset, the Company estimates the recoverable amount of the cash-generating unit(“CGU”) to which the asset has been allocated to.

(Continued)
286

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AUO CORPORATION
Notes to the Parent Company Only Financial Statements

In performing an impairment test for other long-term non-financial assets, the estimated recoverable
amount is evaluated in terms of an asset or a CGU. Any excess of the carrying amount of the asset or
its related CGU over its recoverable amount is recognized as an impairment loss. The recoverable
amount of an asset or a CGU is the higher of its fair value less costs of disposal and its value in use.
If there is evidence that the accumulated impairment loss of an asset other than goodwill andintangible assets with indefinite useful lives in prior years no longer exists or has decreased, theamount previously recognized as an impairment loss is reversed, and the carrying amount of theasset or CGU is increased to the revised estimate of its recoverable amount. The increased carrying
amount shall not exceed the carrying amount that would have been determined (net of depreciationor amortization) had no impairment loss been recognized for the asset in prior years.
For goodwill and intangible assets with indefinite useful lives or that are not yet available for use,are required to be tested for impairment at least annually. Any excess of the carrying amount of theasset over its recoverable amount is recognized as an impairment loss.
For the purpose of impairment test, goodwill acquired in a business combination is allocated to
CGUs that are expected to benefit from the synergies of the combination. If the recoverable amountof a CGU is less than its carrying amount, the difference is allocated first to reduce the carrying
amount of any goodwill allocated to the unit, then the carrying amounts of the other assets in the unit
on a pro rata basis. The impairment loss recognized on goodwill is not reversed in a subsequent
period.
(15) Provisions
A provision is recognized when the Company has a present obligation arising from a past event, it isprobable that the Company will be required to make an outflow of resources embodying economic
benefits to settle the obligation, and the amount of the obligation can be estimated reliably.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
the current market assessments of the time value of money and the risks specific to the liability. The
unwinding of the discount is recognized as interest expense.
a.

Warranties
A provision for warranties is recognized when the underlying products or services are sold.
The provision is weighting factors based on historical experience of warranty claims rate andother possible outcomes against their associated probabilities.

b.

Onerous contracts
A provision for onerous contracts is recognized when the unavoidable costs of meeting theobligations under the contract exceed the economic benefits expected to be received under it.
The provision is measured at the present value of the lower of the expected cost of terminating
the contract and the expected net cost of continuing with the contract. Before a provision isestablished, the Company recognizes any impairment loss on the assets associated with that
contract.

(Continued)
AUO Corporation
2023 Annual Report287

AUO CORPORATION
Notes to the Parent Company Only Financial Statementsc.

Litigation
Management periodically assesses the obligation of all litigation and claims and relative legal
costs. Provision for loss contingencies arising from claims, assessments, litigation, fines, andpenalties and other sources are recognized when it is probable the present obligation as a resultof a past event will result in an outflow of resources and the amount can be reasonably
estimated.

Provisions recognized are the best estimates of the expenditure for settling the present obligation ateach reporting date.
(16) Treasury shares
Where the Company repurchases its common stock that has been issued, the consideration paid,
including all directly attributable costs is recorded as treasury share and deducted from equity. Whentreasury share is reissued, the excess of sales proceeds over cost is accounted for as capital surplus –treasury shares. If the sales proceeds are less than cost, the deficiency is accounted for as a reductionof capital surplus arising from similar types of treasury shares. If such capital surplus is insufficient
to cover the deficiency, the remainder is recorded as a reduction of retained earnings. The carrying
amount of treasury share is calculated using the weighted-average cost of different types ofrepurchase.
If treasury share is retired, the weighted-average cost of the retired treasury share is written off
against the par value and the capital surplus premium, if any, of the stock retired on a pro rata basis.
If the weighted-average cost written off exceeds the sum of the par value and the capital surplus
premium, the difference is accounted for as a reduction of capital surplus – treasury shares, or areduction of retained earnings for any deficiency where capital surplus – treasury shares isinsufficient to cover the difference. If the weighted-average cost written off is less than the sum of
the par value and the capital surplus premium, if any, of the stock retired, the difference is accounted
for as an increase in capital surplus – treasury shares.
(17) Revenue from contracts with customers
Revenue is measured based on the consideration that the Company expects to be entitled in thetransfer of goods or services to a customer. The Company recognizes revenue when it satisfies a
performance obligation by transferring control over a product or service to a customer. The
following is a description of the Company’s major revenues:a.

Sales of goods
Revenue is recognized when the control over a product has been transferred to the customer.
The transfer of control refers to the product has been delivered to and accepted by thecustomer without remaining performance obligations from the Company. Delivery occurs
when the product has been shipped to the specified location and the risk of loss over the
product has been transferred to the customer, as well as when the product has been accepted by
the customer according to the terms of sales contract, or when the Company has objective
evidence that all criteria for acceptance have been satisfied.

(Continued)
288

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

For certain contracts with volume discounts offer to customers, revenue is recognized on a net
basis of contract price less estimated volume discounts, and only to the extent that it is highly
probable that a significant reversal will not occur. The amount of volume discounts is
estimated based on the expected value with reference to the historical experience, and isrecorded as refund liability (presented under other current liabilities).
Trade receivable is recognized when the Company is entitled for unconditional right to receive
payment upon delivery of goods to customers. The consideration received in advance from thecustomer according to the sales contract but without delivery of goods is recognized as acontract liability, for which revenue is recognized when the control over the goods istransferred to the customer.
The Company provides standard warranties for goods sold and has obligation to refund
payments for defective goods, in which the Company has recognized provisions for warranties
to fulfill the obligation. Refer to Note 4(15) for further details.
b.

Construction contracts
For construction contracts, revenue is recognized progressively based on the progress towards
complete satisfaction of contract activities, and only to the extent that it is highly probable thata significant reversal in the amount of cumulative revenue recognized will not occur.
If the Company cannot reasonably measure its progress towards complete satisfaction of
performance obligations in accordance with the construction contracts, revenue is recognized
only to the extent of contract costs incurred that it is expected to be recoverable.
The consideration is paid by the customer according to the agreed payment terms. The excessof the amount that has been recognized as revenue over the amount that the Company has
issued a bill is recognized as a contract asset. When the entitlement to the payment becomes
unconditional, the contract asset is transferred to receivables.
A contract liability is recognized for an advance consideration that the Company has billed tocustomers arising from construction contracts. When the construction is completed andaccepted by the customers, the contract liability is transferred to revenue.
If there are changes in circumstances, the estimates of revenue, cost and the progress towards
complete satisfaction of contract will be amended. Any changes therein are recognized in
profit or loss during the period in which the changes and amendments are made.
The Company provides standard warranties for construction contracts and has recognizedprovisions for warranties to fulfill the obligation. Refer to Note 4(15) for further details.

c.

Financing components
The Company expects that the length of time when the Company transfers the goods orservices to the customer and when the customer pays for those goods or services will be lessthan one year. Therefore, the amount of consideration is not adjusted for the time value ofmoney.

(Continued)
AUO Corporation
2023 Annual Report289

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(18) Employee benefitsa.

Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognized as an
employee benefit expense in profit or loss in the periods during which services are rendered by
employees.

b.

Defined benefit plans
The Company’s net obligation in respect of defined benefit pension plans is calculated
separately for each benefit plan by estimating the amount of future benefit that employees haveearned in the current and prior periods, discounting that amount and deducting the fair value ofany plan assets. Discount rate is determined by reference to the yield rate of Taiwan
government bonds at the reporting date. The calculation of defined benefit obligations is
performed annually by a qualified actuary using the Projected Unit Credit Cost Method.
Remeasurements of the net defined benefit liability (asset) which comprise actuarial gains andlosses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any,excluding interest), are recognized in other comprehensive income in the period in which theyoccur, and which then are reflected in retained earnings and will not be reclassified to profit orloss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change inbenefit that relates to past service or the gain or loss on curtailment is recognized immediately
in profit or loss. The Company recognizes gains and losses on the settlement of a defined
benefit plan when the settlement occurs.

c.

Short-term employee benefits
Short-term employee benefit obligations, which are due to be settled within twelve months aremeasured on an undiscounted basis and are expensed as the related service is provided.
The expected cost of cash bonus or profit-sharing plans, which is anticipated to be paid within
one year, are recognized as a liability when the Company has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee, and theobligation can be estimated reliably.

(19) Share-based payment arrangements
The fair value of equity-settled share-based payment arrangements at the grant date is recognized ascompensation cost, together with a corresponding increase in equity, over the periods in which theemployees become unconditionally entitled to the awards. The amount of the compensation cost
recognized as an expense is adjusted to reflect the number of awards whose related service and nonmarket performance conditions are expected to be met, such that the amount ultimately recognized
as an expense is based on the number of awards that meet the related service and non-market
performance conditions at the vesting date. For share-based payment awards with non-vesting
conditions, the fair value of the share-based payment at the grant date is measured to reflect suchconditions, and there is no true-up for differences between expected and actual outcomes.

(Continued)
290

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

For cash-settled share-based payment transactions, a liability equal to the portion of the goods orservices received is recognized at its current fair value determined at each reporting date and at thedate of settlement, with any changes in the fair value recognized in profit or loss of the period.
(20) Income taxes
Income tax expense comprises current and deferred taxes.
a.

Current taxes
Current taxes comprise the expected tax payable or receivable on the taxable income or losses
for the year and any adjustments to tax payable or receivable in respect of previous years. It ismeasured using the statutory tax rate or the actual legislative tax rate at the reporting date.
In accordance with the ROC Income Tax Act, undistributed earnings is subject to an additionalsurtax. The surtax on unappropriated earnings is expensed in the year the shareholders
approved the distributions which is the year subsequent to the year the earnings arise.

b.

Deferred taxes
Deferred taxes are recognized in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used forincome tax purposes at the reporting date. Deferred tax liabilities are recognized for temporary
difference of future taxable income. Deferred tax assets are recognized for unused tax losses,
unused tax credits and deductible temporary differences to the extent that it is probable that
future taxable profits will be available against which they can be utilized.
Deferred tax assets are reviewed at annual reporting date, by considering global economic
environment, industry environment, statutory tax deduction years and projected future taxable
income, and reduced to the extent that it is no longer probable that future taxable profits will
be available to allow all or part of the deferred tax asset to be recovered. Deferred tax assets
which originally not recognized is also reviewed at annual reporting date and recognized to theextent that it is probable that future taxable profits will be available to allow all or part of thedeferred tax asset to be recovered.
Deferred taxes liabilities for taxable temporary differences related to investments in
subsidiaries, associates and joint arrangements are recognized, unless the Company is able tocontrol the timing of the reversal of the taxable temporary differences and it is probable thatthey will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary
differences when the reverse, using the statutory tax rate or the actual legislative tax rate on thereporting date. Deferred tax assets and liabilities are offset only if certain criteria are met.
Current taxes and deferred taxes are recognized in profit or loss except to the extent that it
relates to items recognized directly in equity or other comprehensive income.

(Continued)
AUO Corporation
2023 Annual Report291

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(21) Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing profit or loss attributable to the shareholdersof the Company by the weighted-average number of common shares outstanding during the period.
In computing diluted earnings per share, profit or loss attributable to the shareholders of theCompany and the weighted-average number of common shares outstanding during the period are
adjusted for the effects of dilutive potential common stock, assuming dilutive share equivalents had
been issued. The Company’ s potential dilutive common shares comprise the estimate of employeecompensation to be distributed in the form of stock.
The weighted-average outstanding shares are retroactively adjusted for the effects of stock dividends
transferred from retained earnings or capital surplus to common stock.
(22) Operating segments
The Company has provided the operating segments disclosure in the consolidated financial
statements. Thus, disclosure of the segment information in the parent company only financial
statements is waived.
5.

Critical Accounting Judgments and Key Sources of Estimations and Assumptions Uncertainty
The preparation of the parent company only financial statements in conformity with the Regulations
requires management to make judgments, estimates and assumptions that affect the application of theaccounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may
differ from these estimates.
Estimates and underlying assumptions are reviewed by management on an ongoing basis. Revisions toaccounting estimates are recognized in the period in which the estimates are revised and in any future
periods affected.
Information about critical judgments, estimates and assumptions in applying accounting policies that havethe significant effect on the amounts recognized in the parent company only financial statements is
included in the following notes:(1)

Impairment of long-term non-financial assets, other than goodwill
In the process of evaluating the potential impairment of tangible and intangible assets other than
goodwill, the Company is required to make subjective judgments in determining the independent
cash flows, useful lives, expected future income and expenses related to the specific asset groups
with the consideration of the usage mode of asset and the nature of industry. Any changes in theseestimates based on changed economic conditions or business strategies could result in significant
impairment charges or reversal in future years.

(2)

Impairment of goodwill
The assessment of impairment of goodwill requires the Company to make subjective judgment todetermine the identified CGUs, allocate the goodwill to relevant CGUs and estimate the recoverable
amount of relevant CGUs. Any changes in these estimates based on changed economic conditions orbusiness strategies could result in significant adjustments.

(Continued)
292

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(3)

Recognition of deferred tax assets
Deferred tax assets are recognized to the extent that it is probable that future taxable profits will beavailable against which those deferred tax assets can be utilized. Assessment of the realization of thedeferred tax assets requires management’ s subjective judgment and estimate, including the future
revenue growth and profitability, the sources of taxable income, the amount of tax credits can beutilized and feasible tax planning strategies. Changes in the global economic environment, theindustry trends and relevant laws and regulations may result in adjustments to the deferred tax
assets.

(4)

Valuation of inventories
As inventories are stated at the lower of cost or net realizable value, the Company estimates the net
realizable value of inventories for obsolescence and unmarketable items at the end of reporting
period and then writes down the cost of inventories to net realizable value. The net realizable valueof the inventory is mainly determined based on assumptions of future demand within a specific time
horizon. Due to the rapid industrial transformation, there may be significant changes in the net
realizable value of inventories.

6.

Description of Significant Accounts(1)

Cash and Cash Equivalents

Cash on hand, demand deposits and checking accounts
Time deposits

December 31, December 31,
2023
2022
$
30,581,959
36,177,290
6,264,428$
30,581,959
42,441,718

Refer to Note 6(25) for the disclosure of credit risk, currency risk and sensitivity analysis of thefinancial instruments of the Company.
As at December 31, 2023 and 2022, no cash and cash equivalents were pledged with banks as
collaterals.
(2)

Financial Assets and Liabilities at Fair Value through Profit or Loss (“FVTPL”)

Financial assets mandatorily measured at FVTPL:
Foreign currency forward contracts
Financial liabilities measured at FVTPL:
Financial liabilities held for trading:Foreign currency forward contracts

December 31,
2023

December 31,
2022$

132,527

169,455$

6,817

89,776(Continued)
AUO Corporation
2023 Annual Report293

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

The Company entered into derivative contracts to manage the exposure to currency risk arising fromoperating activities. Refer to Note 6(25) for the disclosure of the Company’ s credit and currency
risks related to financial instruments.
As at December 31, 2023 and 2022, the Company’s outstanding foreign currency forward contracts
were as follows:(3)

Contract item
Sell USD / Buy NTD
Sell USD / Buy JPY
Sell NTD / Buy JPY

December 31, 2023
Maturity date
Jan.2024
Jan. 2024~Feb. 2024
Jan. 2024~Mar. 2024

Contract amountUSD 84,000 / NTD 2,660,062
USD 64,000 / JPY 9,218,354
NTD 525,860 / JPY 2,400,000

Contract item
Sell USD / Buy NTD
Sell USD / Buy JPY
Sell NTD / Buy USD
Sell NTD / Buy JPY
Sell EUR / Buy JPY

December 31, 2022
Maturity dateJan. 2023~Feb. 2023
Jan. 2023~Feb. 2023
Apr. 2023~May 2023
Jan. 2023~Mar. 2023
Jan. 2023

Contract amountUSD 194,000 / NTD 6,014,753
USD 68,000 / JPY 9,193,140
NTD 2,779,971 / USD 89,000
NTD 1,939,137 / JPY 8,600,000
EUR 1,000 / JPY 140,530

Financial Assets at Fair Value through Other Comprehensive Income (“FVTOCI”)

Investments in equity instruments at FVTOCI:
Equity securities – listed stocks

December 31,
2023
$

-

December 31,
2022
85,362The purpose that the Company invests in the abovementioned equity securities is for long-term
strategies, but rather for trading purpose. Therefore, those equity securities are designated as
financial assets at FVTOCI.
In consideration of the Company’s operational strategy, the Company increased its ownershipinterest in SINTRONES Technology Corp. (“SINTRONES”) in February 2023. Upon re-assessment,
the Company considers that it has obtained the ability to exercise significant influence over
SINTRONES; consequently, the Company derecognized the investment in SINTRONES as deemed
disposal, and further recognized an investment accounted for using the equity method at fair value.
The related cumulative loss of $6,546 thousand previously recognized in other comprehensive
income was reclassified to retained earnings.
If the value of these equity securities appreciates or depreciates by 10% at the reporting date, othercomprehensive income would increase or decrease by $8,536 thousand for the years ended
December 31, 2022.

(Continued)
294

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Dividends recognized from the investments in equity instruments at FVTOCI held by the Company
were disclosed as follows:

Investments held at the balance sheet date$

For the years ended
December 31,
2023
2022
1,559

As at December 31, 2023 and 2022, none of the Company’ s financial assets abovementioned waspledged as collateral.
(4)

Accounts Receivable, net (Including Related and Unrelated Parties)

Accounts receivablemeasured at amortized costAccounts receivablemeasured at fair value through othercomprehensive income
Less: loss allowance
Accounts receivable, net
Accounts receivable from related parties, net

December 31, December 31,
2022
2023
$
11,421,962
17,757,640
7,989,097-$$$(3,045)
19,408,014
14,795,145
4,612,869(1,459)17,756,181
12,408,519
5,347,662

The Company has assessed that part of its accounts receivable were held within a business model
whose objective is achieved by both collecting contractual cash flows and selling financial assets.
Therefore, those accounts receivable were measured at fair value through other comprehensive
income.
The Company measures loss allowance for accounts receivable using the simplified approach under
IFRS 9 with the lifetime expected credit losses. Analysis of expected credit losses which wasmeasured based on the aforementioned method, was as follows:

Not past due
Past due less than 60 days
Past due 61~180 days

December 31, 2023
Carrying
Loss allowanceamount offor lifetime
Weightedaccounts
expected credit
average loss
receivable
lossesrate$
18,507,761
0.00%
733,9150.00%
166,338
0.00%$
19,408,014-(Continued)
AUO Corporation
2023 Annual Report295

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

December 31, 2022
Carrying
Loss allowanceamount offor lifetime
Weightedaccounts
expected credit
average loss
receivable
lossesrate$
17,213,247
0.00%
513,823
0.00%
29,1110.00%
1,459
100.00%1,459$
17,757,640
1,459

Not past due
Past due less than 60 days
Past due 61~180 days
Past due over 180 days

In addition, the Company expected that upon objective evidence, some accounts receivable would
not be recovered in total for which amounted to $3,045 thousand as of December 31, 2023.
Consequently, the Company recognized a loss allowance of $3,045 thousand.
The movement of the loss allowance for accounts receivable was as follows:

Balance at beginning of the year
Provisions charged to expense
Balance at end of the year$$

For the years ended
December 31,
2023
2022
1,459
485
1,586
974
3,045
1,459

The payment terms granted to customers are generally 25 to 60 days from the end of the month
during which the invoice is issued. This term is consistent with practices in our industry, and thus,
no financing components involved.
Information about the Company’s exposure to credit risk is included in Note 6(25).
As at December 31, 2023 and 2022, the Company’ s accounts receivables sold and derecognized
were as follows:

Underwriting bank
CTBC Bank
DBS Bank
Taipei Fubon Bank
Bank of Taiwan

December 31, 2023
Amountsold and
Factoring
derecognized
limit(in thousands)(in thousands)
USD 175,000 USD 152,483
USD 220,000 USD 148,227
USD 100,000 USD
93,179USD 250,000-

Amountadvanced(in thousands)
NTD 4,319,000
NTD 4,159,000
NTD 2,599,000-

Principal
terms
See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)(Continued)
296

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Underwriting bank
CTBC Bank
DBS Bank
Taipei Fubon Bank
Bank of Taiwan
E.SUN Bank
Note (a):December 31, 2022
Amount soldandFactoring
derecognized
limit(in thousands)(in thousands)
USD
78,000 USD
38,091
USD 170,000 USD 111,137
USD 100,000 USD
55,938
USD 250,000 USD
15,219
EUR
3,984
USD
35,000 USD
35,000

Amountadvanced(in thousands)
NTD 1,056,000
NTD 3,049,000
NTD 1,529,000
USD
13,830
EUR
3,620
USD
31,490Principal
terms
See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)See Notes(a)~(d)Under these facilities, the Company transferred accounts receivable to the respective
underwriting banks, which are without recourse subject to the underwriting consents.

Note (b): The Company informed its customers pursuant to the respective facilities to makepayment directly to the respective underwriting banks.
Note (c):As of December 31, 2023 and 2022, total outstanding receivables after the abovetransactions, net of fees charged by underwriting banks, of $1,022,482 thousand and$862,484 thousand, respectively, were recognized under other current financial assets. In
addition, interest rates for the balance of advanced amount as of December 31, 2023 and2022, were ranging from 1.26%~2.04% and 1.48%~5.48%, respectively.

Note (d): To the extent of the amount transferred to the underwriting banks, risks of non-collection
or potential payment default by customers in the event of insolvency are borne byrespective banks. The Company is not responsible for the collection of receivables
subject to these facilities, or for any legal proceedings and costs thereof in collecting
these receivables. In case any commercial dispute between the Company and customers
or other reasons results in the Company’s failure to perform the obligation under thesefacilities, the banks have requested the Company to issue promissory notes in theamounts equal to 10 percent of respective facilities or to transfer receivables in theamounts equal to 10 percent of respective facilities. Other than such arrangements, nocollaterals were provided by the Company.
(5)

Inventories

Finished goods
Work-in-progress
Raw materials

December 31, December 31,
2023
2022
$
6,829,973
7,075,387
8,627,981
7,251,319
1,700,254
2,969,049$
17,158,208
17,295,755(Continued)
AUO Corporation
2023 Annual Report297

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

For the years ended December 31, 2023 and 2022, the amounts recognized as cost of sales in relation
to inventories were $222,806,471 thousand and $225,776,767 thousand, respectively. The net ofprovisions (reversals) for inventories written down (increased) to net realizable value, which werealso included in cost of sales, amounted to $1,935,202 thousand in reversals, and $1,403,390
thousand in provisions for the years ended December 31, 2023 and 2022, respectively.
As at December 31, 2023 and 2022, none of the Company’s inventories was pledged as collateral.
(6)

Investments in Equity-accounted Investees

Subsidiaries
Associatesa.

December 31,
2023$ 106,503,739
20,437,337$ 126,941,076

December 31,
2022
102,200,251
22,010,701
124,210,952

Subsidiaries
Refer to consolidated financial statements for the years ended December 31, 2023 and 2022 forthe details.

b.

Associates

Qisda Corporation (“Qisda”)
Ennostar Inc. (“Ennostar”)
ADLINK Technology Inc. (“ADLINK”)
Star Shining Energy Corporation. (“SSEC”)
SINTRONES Technology Corp. (“SINTRONES”)

December 31, December 31,
2022
2023
$
9,797,059
10,487,775
6,015,186
6,963,339
2,195,010
2,314,027
2,345,568
2,245,560
84,514$
20,437,337
22,010,701

None of the above associates is considered individually material to the Company. The
following table summarized the amount recognized by the Company at its share of those
associates.

The Company’s share of associates’:Profit (loss)
Other comprehensive income (loss)
Total comprehensive income (loss)

For the years ended
December 31,
2023
2022
$
$

(379,725)
341,472(38,253)

1,190,297(673,241)
517,056(Continued)
298

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

In July 2022, the Company participated in Ennostar’s capital increase through a private
placement offering with consideration of $3,484,895 thousand. Due to the disproportionate
subscription to the shares, the Company’s ownership interest in Ennostar increased from
3.86% to 12.45%. The difference between the consideration and the carrying amount arisingfrom the acquisition of interest was recognized in capital surplus with amount of $1,398,054
thousand.
During the nine months ended September 30, 2023, Qisda acquired additional shares of its
subsidiary, BenQ BM Holding Cayman Corp. and recognized a difference between
consideration and carrying amount arising from the acquisition of interest in subsidiary. The
Company, upon the equity method, recognized a decrease in capital surplus of $806,654
thousand accordingly.
In February 2023, the Company derecognized the investment in SINTRONES that previouslyclassified as financial assets at FVTOCI, and further recognized an investment accounted forusing the equity method. Refer to Note 6(3) for the relevant information.
As at December 31, 2023 and 2022, none of the Company’s investments in equity-accounted
investees was pledged as collateral.
(7)

Property, Plant and Equipment
For the year ended December 31, 2023
Balance,
Beginningof Year

Additions(Deductions)

Disposal or
write off

Reclassification

-

-

-

Balance,End of Year

Cost:
Land

$

6,344,658-

Buildings

87,177,660(1,258)

Machinery and equipment

703,115,051

2,572,969(1,845,797)

Other equipment

27,686,259

2,483,120(4,088,852)

1,193,651

27,274,178

Accumulated depreciation and impairment
loss:

824,323,628

5,054,831(5,934,649)

21,639,814

845,083,624--

6,344,658

20,446,163

87,176,402
724,288,386

Buildings

29,167,362

1,722,624-

30,889,986

Machinery and equipment

666,994,513

14,961,201(1,845,442)-

680,110,272

Other equipment

22,521,787

3,531,089(4,088,110)-

21,964,766

Prepayments for purchase of land andequipment, and construction in progress

718,683,662

20,214,914(5,933,552)-

732,965,024

12,524,868

13,679,376

Net carrying amounts$

118,164,834-(21,639,814)

4,564,430
116,683,030(Continued)
AUO Corporation
2023 Annual Report299

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

For the year ended December 31, 2022
Balance,
Beginningof YearCost:
Land
Buildings
Machinery and equipment
Other equipment
Accumulated depreciation and impairment
loss:
Buildings
Machinery and equipment
Other equipment
Prepayments for purchase of land andequipment, and construction in progress
Net carrying amounts$$

Additions-

Disposal or
write off

6,344,658
87,174,995
698,506,521
26,845,509
818,871,683

1,750
919,2032,884,449
3,805,402(2,336,719)(3,086,750)(5,423,469)

27,444,229
655,460,473
21,785,709
704,690,411

1,723,133
13,869,717
3,820,459
19,413,309(2,335,677)(3,084,381)(5,420,058)

3,383,988
117,565,260

16,210,892-

Reclassification
915
6,026,046
1,043,051
7,070,012(7,070,012)

Balance,End of Year6,344,658
87,177,660
703,115,051
27,686,259
824,323,628

29,167,362
666,994,513
22,521,787
718,683,662
12,524,868
118,164,834

As of December 31, 2023 and 2022, a non-irrigated farmland located in LongTan plant amounted to$23,671 thousand was registered in the name of a farmer due to regulations. An agreement of pledge
had been signed between the Company and the farmer clarifying the rights and obligations of eachparty.
In 2023 and 2022, the Company wrote down certain long-term assets with extremely low capacity
utilization associated with its display segment and recognized impairment losses of $126,460
thousand and $12,893 thousand, respectively.
In 2022, the Company wrote down certain long-term assets with extremely low capacity utilization
associated with its energy segment and recognized impairment losses of $2,879 thousand.
Impairment losses as mentioned above were recognized under other gains and losses in thestatements of comprehensive income.
The Company decided to dispose of part of its plants and related appendages to VanguardInternational Semiconductor Corporation pursuant to the resolution of Board of Directors’ meeting
held on April 28, 2021. Both parties have completed the transaction in December 2021. The
consideration of disposal (net of related transaction costs) and gain on disposal were $808,662
thousand and $787,460 thousand, respectively. The consideration aforementioned is to be received
in installments. As of December 31, 2021, outstanding receivables totaled $509,524 thousand(recognized in other current financial assets), which were fully received in January 2022.

(Continued)
300

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

The following table summarized the Company’ s capitalized borrowing costs and the interest rate
range applied for the capitalization:

Capitalized borrowing costs
The interest rates applied for the capitalization$

For the years ended
December 31,
2023
2022
197,878
114,533
2.05%~
1.50%~
2.50%
2.01%

Certain property, plant and equipment were pledged as collateral, see Note 8.
(8)

Lease Arrangementsa.

Lessee(i)

Right-of-use assets

Carrying amount of right-of-use assets
Land
Buildings
Other equipment

Additions to right-of-use assets
Depreciation charge for right-of-use assets
Land
Buildings
Other equipment

December 31,
2023$

December 31,
2022$

7,280,134
71,441426
7,352,001$

For the years ended
December 31,
2023
2022
7,986
206,700$$

409,089
43,318269
452,676

7,703,236
106,773695
7,810,704

406,887
40,754
112
447,753(Continued)
AUO Corporation
2023 Annual Report

301

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(ii)

Lease liabilities

Less than one year
Between one and five years
More than five years

December 31, 2023
FuturePresent value
minimum leaseof minimum
payments
lease payments
Interests$
544,825
134,937
409,888
1,968,712
469,683
1,499,029
6,551,872
816,920
5,734,952$
9,065,409
1,421,540
7,643,869

Lease liabilitiescurrent$

409,888

Lease liabilitiesnoncurrent$

7,233,981

Less than one year
Between one and five years
More than five years

December 31, 2022
FuturePresent value
minimum leaseof minimum
payments
lease payments
Interests$
543,678
142,381401,297
2,058,685
498,357
1,560,328
7,020,717
926,677
6,094,040$
9,623,080
1,567,415
8,055,665

Lease liabilitiescurrent$

401,297

Lease liabilitiesnoncurrent$

7,654,368(iii) Significant lease agreements
AUO has entered into various land lease agreements with Hsinchu Science Park Bureau,
Central Science Park Administration Bureau and Southern Taiwan Science Park Bureau,
respectively, for the construction of plant for operations. All lease amounts are adjusted
in accordance with the land value announced by the government from time to time.
In 2022, AUO modified some of its lease contracts due to the decrease of the scope of thelease, and therefore, the carrying amounts of the right-of-use assets were reduced by$273,932 thousand. The difference between the remeasurement of the lease liability andthe reduction of the right-of-use asset was recognized in profit or loss.
Total cash outflow for the Company's leases in which it acts as a lessee for the years
ended December 31, 2023 and 2022 were $544,111 thousand and $541,730 thousand,respectively.

(Continued)
302

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statementsb.

Lessor
The Company leased out part of its land, recognized as investment properties, and did nottransfer substantially all the risks and rewards incidental to their ownership to the lessee,
therefore, those leases were recognized as operating leases. Refer to Note 6(20) for the
information of rental income from operating leases. In addition, the direct costs relating to theaforementioned operating leases for the years ended December 31, 2023 and 2022 were both$236 thousand.
The maturity analysis of undiscounted operating lease receivable for the abovementioned
assets are as follows:
December 31, December 31,
2022
2023
$
13,014
8,879
13,01413,01413,01413,01413,01413,01413,01413,01462,901
10,845$
127,971
71,780Year 1
Year 2
Year 3
Year 4
Year 5
Year 6 onwards
Total undiscounted operating lease receivable(9)

Investment Property
For the year ended December 31, 2023

Cost:
Land
Fair Value

Balance,
Beginningof Year$$465,868
1,705,905

Additions

Reclassification--

Balance,End ofYear465,868
2,137,336

For the year ended December 31, 2022

Cost:
Land
Fair Value

Balance,
Beginningof Year$$465,868
1,705,905

Additions

Reclassification--

Balance,End ofYear465,868
1,705,905(Continued)
AUO Corporation
2023 Annual Report303

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

The fair value of investment property is based on a valuation performed by a qualified independent
appraiser who holds a recognized and relevant professional qualification and has recent valuation
experience in the location and category of the investment property being valued. The valuation is
performed using sales comparison approach in 2023, and sales comparison approach and landdevelopment analysis approach in 2022, with reference to available market information.
The fair value measurement was categorized as a level 3 fair value based on the inputs in thevaluation techniques used. Sales comparison approach is through comparison, analysis, adjustment
and other means of value for comparable properties to estimate the value of the investment property.
Land development analysis approach determine the fair value of investment property based on thevalue prior to development or construction, after deducting the direct cost, indirect cost, capitalinterest and profit during the development period, and also consider total sales price of properties
after completion of development or construction. It also incorporates the possibility of changes inutility of land through development or improvement in accordance with legal use and density of theland. The overall capital interest rate and the rate of return used in the valuation were 1.91% and15.00%, respectively
As at December 31, 2023 and 2022, there was no investment property that was pledged as collateral.
(10) Intangible Assets
For the year ended December 31, 2023
Balance,
Beginningof Year

Cost:

Balance,End of Year

Additions

Reclassification

11,280,595-

11,280,595

Patent and technologyfee

12,078,767--

23,359,362--

23,359,362

Accumulated amortizationand impairment loss:
Goodwill

2,052,689--

2,052,689

Goodwill$Patent and technologyfeeNet carrying amounts$

11,842,489

37,282

13,895,178

37,282

9,464,184(37,282)-

12,078,767

11,879,771
13,932,460
9,426,902(Continued)
304

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

For the year ended December 31, 2022

Cost:
Goodwill$Patent and technologyfee
Accumulated amortizationand impairment loss:
GoodwillPatent and technologyfeeNet carrying amounts $Balance,
Beginningof YearBalance,End of Year

Additions

Reclassification

11,280,595
12,078,767--

11,280,595
12,078,767

23,359,362--

23,359,362

946,689
11,723,687

1,106,000
118,802-2,052,689
11,842,489

12,670,376
10,688,986

1,224,802(1,224,802)-

13,895,178
9,464,184

For the purpose of impairment test, the following table shows the information of the operating
business that the Company’s goodwill allocating to.

Display business

December 31, December 31,
2022
2023
$
9,227,906
9,227,906

The Company’ s goodwill has been tested for impairment at least once at the end of the annual
reporting period. The recoverable amount was determined based on value in use of the operating
business.
The key assumptions used in the estimation of the recoverable amount included discount rate andterminal growth rate. The annual discount rates for the years ended December 31, 2023 and 2022
were 11.14% and 11.44%, respectively, based on industry weighted average cost of capital. The cash
flow projections were determined based on the financial budgets approved by management covering
the future five-year period and extrapolated with a steady annual terminal growth rate for subsequent
years, which were negative 1% for both 2023 and 2022. The key assumptions abovementioned
represents the management’s forecast of the future for the related industry by considering the history
information from internal and external sources.
Based on the impairment assessments in 2022, as the recoverable amount of display CGU was lower
than its carrying value, the Company recognized an impairment loss of $1,106,000 thousand on
goodwill of display segment.
For the year ended December 31, 2023, no impairment loss was recognized as the recoverable
amount of display CGU was higher than its carrying value.

(Continued)
AUO Corporation
2023 Annual Report305

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(11) Prepayments, Other Current Assets and Other Noncurrent Assets

Prepayments for purchases
Refundable deposits
Refundable and overpaid tax
OthersLess: current
Noncurrent

December 31, December 31,
2022
2023
$
772,951
935,038
1,014,946
915,464
373,136
372,1122,244,438
2,614,590
4,405,471
4,837,204(1,606,551)(1,986,803)$
2,798,920
2,850,401(12) Long-term Borrowings
Bank or agent bank
DurationsSyndicated loans:
Bank of Taiwan and others From Apr. 2022 to Apr. 2029
Bank of Taiwan and others From Oct. 2021 to Oct. 2025
Unsecured bank loans
From Jun. 2021 to Dec. 2030
Secured bank loans
From Nov. 2019 to Dec. 2030
Less: transaction costs
Less: current portion
Unused credit facilities
Interest rate range

December 31,
2023

December 31,
2022$

20,000,000
32,500,000
3,680,000
22,646,000
78,826,000(257,607)
78,568,393(10,371,000)
68,197,393
50,430,000
1.2500%~2.4198%50,000,000
19,125,000
14,100,000
15,358,000
98,583,000(275,656)
98,307,344(9,018,000)$ 89,289,344$ 50,506,195
1.7950%~2.6777%The Company entered into the aforementioned long-term loan arrangements with banks and financial
institutions to finance capital expenditures for purchase of machinery and equipment, and to fulfill
working capital, as well as to repay the matured debts. A commitment fee is negotiated with theleading banks of syndicated loans and is calculated based on the committed-to-withdraw but unusedbalance, if any. No commitment fees were paid for the year ended December 31, 2023.
These credit facilities contain covenants that require the Company to maintain certain financial
ratios, calculating based on the Company’s annual audited consolidated financial statements
prepared in accordance with IFRSs endorsed and issued into effect by the FSC, such as current ratio,
leverage ratio, interest coverage ratio, tangible net worth and others as specified in the loan
agreements. As of December 31, 2023 and 2022, the Company complied with all financial covenantsrequired under each of the loan agreements.

(Continued)
306

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Refer to Note 6(25) for detailed information of exposures to interest rate, currency, and liquidity
risks. Refer to Note 8 for assets pledged as collateral to secure the aforementioned long-termborrowings.
(13) Provisions

Balance at January 1, 2023
Additions (reversals)
Usage
Effect of change in exchange rate
Balance at December 31, 2023
Less: current
Noncurrent
Balance at January 1, 2022
Additions (reversals)
Usage
Effect of change in exchange rate
Balance at December 31, 2022
Less: current
Noncurrent(i)

Warranties(i)$745,052
266,355(76,623)
934,784(292,323)$
642,461$
1,003,369(171,742)(86,575)745,052(135,877)$
609,175

Litigation,
claims
307,320
1,058,435(20,285)
1,345,470(1,345,470)
453,820(152,755)(38,500)
44,755
307,320(307,320)-

Others191,062
191,062(191,062)-

Total
1,052,372
1,515,852(76,623)(20,285)
2,471,316(1,828,855)
642,461
1,457,189(324,497)(125,075)
44,755
1,052,372(443,197)
609,175

The provisions for warranties were estimated based on historical experience of warranty claims
rate associated with similar products and services. The Company expects most warranty claims
will be made within two years from the date of the sale of the product.

(14) Employee Benefitsa.

Defined benefit plans
Pursuant to the ROC Labor Standards Act, the Company has established a defined benefit
pension plan covering their full-time employees in the ROC. This plan provides for retirement
benefits to retiring employees based on years of service and the average salaries and wages forthe six-month period before the employee’s retirement. The funding of this retirement plan by
the Company is contributed monthly based on a certain percentage of employees’ total salaries
and wages. The fund is deposited with Bank of Taiwan.

(Continued)
AUO Corporation
2023 Annual Report307

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(i)

Reconciliation of the present value of defined benefit obligation and the fair value ofplan assets for the Company.
December 31, December 31,
2022
2023
$
(115,290)(117,333)
322,233
319,447$
206,943
202,114

Present value of defined benefit obligation
Fair value of plan assets
Net defined benefit asset (recognized in othernoncurrent assets)(ii)

Movement in net defined benefit asset (liability)

Balance at January 1
Service cost
Interest cost
Expected return on plan
assetsIncluded in profit or loss
Actuarial (loss) gain
arising from:- demographic
assumptions- financial
assumptions- experience
adjustment
Return on plan assets
excluding interest
incomeIncluded in othercomprehensive
incomeContributions paid by
the employer
Benefits paid

Present value of defined
benefit obligation
2023
2022
$
(117,333)(152,728)(2,414)(4,257)(1,607)(993)

Balance at December 31 $(4,021)(5,250)(1,236)

Fair value of plan assets
2023
2022
319,447
299,374-

Net defined benefit asset(liability)
2023
2022
202,114
146,646(2,414)(4,257)(1,607)
(993)

4,376
4,376

1,946
1,946

4,376
355

1,946
(3,304)20--(1,236)20(1,549)30,644--(1,549)30,644

5,975

1,663

-

-

5,975

1,663

-

1,070

26,231

1,070

26,231

3,190

32,327

1,070

26,231

4,260

58,5582,874
2,874(115,290)

8,318
8,318
(117,333)

214(2,874)(2,660)322,233

214(8,318)(8,104)319,447

-

-

214

214

-

-

214
206,943

214
202,114(Continued)
308

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(iii) Plan assets
Pursuant to the ROC Labor Standards Act, the Company contributes an amount based ona certain percentage of employees’ total salaries and wages paid every month to its
pension fund (the “ Fund” ), which is administered by the Labor Pension FundSupervisory Committee (the “Committee”) and deposited in the Committee’s name withBank of Taiwan. Under the ROC Regulations for Revenues, Expenditures, Safeguard andUtilization of the Labor Retirement Fund, the minimum return on the plan assets should
not be lower than the average interest rate on two year time deposits published by the
local banks.
As of December 31, 2023 and 2022, the Fund deposited in the Committee’s name in the
Bank of Taiwan amounted to $322,233 thousand and $319,447 thousand, respectively.
Information on utilization of labor pension funds, including the yield rate of funds andthe component of plan assets are available at the Bureau of Labor Funds, Ministry ofLabor website.
(iv) Present value of defined benefit obligation(a)Principal actuarial assumptions

Discount rate
Rate of increase in future salary

December 31,
2023
1.26%
3.00%

December 31,
2022
1.37%
3.00%

The Company anticipates to make zero contribution to the defined benefit plans in
the next year starting from January 1, 2024.
As at December 31, 2023, the weighted-average duration of the defined benefit
obligation was 12 years.
(b)

Sensitivity analysis
Reasonably possible changes at December 31, 2023 and 2022 to one of the relevant
actuarial assumptions, holding other assumptions constant, would have affected thedefined benefit obligation by the amounts shown below.
December 31, 2023
Changes in assumptions+ 0.25%-0.25%$(3,510)3,676

Discount rate
Rate of increase in
future salary
$

3,603

(3,461)

December 31, 2022
Changes in assumptions+0.25%-0.25%(3,762)
3,941
3,868

(3,713)(Continued)
AUO Corporation
2023 Annual Report309

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

In practical, the relevant actuarial assumptions are correlated to each other. The
approach to develop the sensitivity analysis as above is the same approach torecognize the net defined benefit asset (liability) in the balance sheet.
The approach to develop the sensitivity analysis and its relevant actuarial
assumptions are the same as those in previous year.
b.

Defined contribution plans
Commencing July 1, 2005, pursuant to the ROC Labor Pension Act (the “ Act” ), employees
who elected to participate in the Act or joined the Company after July 1, 2005, are subject to adefined contribution plan under the Act. Under the defined contribution plan, the Company
contributes monthly at a rate of no less than six percent of the employees’ monthly salaries andwages to the employee’s individual pension fund account at the ROC Bureau of Labor
Insurance. Besides, matters that are not addressed in the Company’s defined contribution planshould be governed by the Act.
The Company has set up defined contribution plan in accordance with the Act. For the years
ended December 31, 2023 and 2022, $886,438 thousand and $933,629 thousand, respectively,of the pension costs under the pension plan to the ROC Bureau of Labor Insurance.

(15) Capital and Other Components of Equitya.

Common stock
The Company’s authorized common stock, with par value of $10 per share, both amounted to$120,000,000 thousand as at December 31, 2023 and 2022.
The Company’s issued common stock, with par value of $10 per share, both amounted to and$76,993,961 thousand as at December 31, 2023 and 2022.
In order to adjust the Company’s capital structure to correspond with its corporatetransformation, on June 17, 2022, the Company’ s shareholders’ meeting resolved to reduce
capital and refund cash to shareholders. Total amount of capital reduction is $19,248,490
thousand, which translates to 1,924,849 thousand cancelled shares and represents
approximately 20% capital reduction ratio. The record date of capital reduction was set on
August 10, 2022 and the relevant legal registration procedures have been completed. The dateof returning cash in relation to the aforementioned capital reduction was October 11, 2022.
As of December 31, 2023, the Company has issued 18,362 thousand ADSs, which represented
183,617 thousand shares of its common stock.

(Continued)
310

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statementsb.

Capital surplus
The components of capital surplus were as follows:

From common stock
From convertible bonds
From others

December 31, December 31,
2022
2023
$
46,621,786
52,756,091
6,049,862
6,049,862
2,327,181
3,136,257$
54,998,829
61,942,210

According to the ROC Company Act, capital surplus, including premium from stock issuingand donations received, may be used to offset a deficit. When a company has no deficit, suchcapital surplus may be distributed by issuing common stock as stock dividends or by cash
according to the proportion of shareholdings. In accordance with the Company’ s Articles ofIncorporation, cash distribution from capital surplus should be approved by the Company’ sBoard of Directors and reported to the Company’s shareholders in its meeting. Pursuant to the
ROC Regulations Governing the Offering and Issuance of Securities by Securities Issuers, thetotal sum of capital surplus capitalized per annum shall not exceed 10 percent of the paid-in
capital.
c.

Retained earnings and dividend policy
In accordance with the Company’s Articles of Incorporation, distribution of earnings by way ofcash dividends should be approved by the Company’s Board of Directors and reported to theCompany’s shareholders in its meeting. After payment of income taxes and offsetting
accumulated deficits, the legal reserve shall be set aside until the accumulated legal reserve
equals the Company’s paid-in capital. In addition, a special reserve in accordance withapplicable laws and regulations shall also be set aside or reversed. The remaining current-year
earnings together with accumulated undistributed earnings from preceding years can be
distributed according to relevant laws and the Company’s Articles of Incorporation.
Legal reserve may be used to offset a deficit. When the Company incurs no loss, it may
distribute its legal reserve by issuing new shares or by cash in accordance with the proportionof shareholdings for the portion in excess of 25% of the paid-in capital.
The Company’s dividend policy is to pay dividends from surplus considering factors such as
the Company’ s current and future investment environment, cash requirements, domestic andoverseas competitive conditions and capital budget requirements, while taking into accountshareholders’ interest, maintenance of balanced dividend and the Company’s long-term
financial plan. If the current-year retained earnings available for distribution reach 2% of thepaid-in capital of the Company, dividend to be distributed shall be no less than 20% of thecurrent-year retained earnings available for distribution. If the current-year retained earnings
available for distribution do not reach 2% of the paid-in capital of the Company, the Company
may decide not to distribute dividend. The cash portion of the dividend, which may be in theform of cash and stock, shall not be less than 10% of the total dividend distributed during theyear. The dividend distribution ratio aforementioned could be adjusted after taking into
consideration factors such as finance, business and operations, etc.

(Continued)
AUO Corporation
2023 Annual Report311

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Pursuant to relevant laws or regulations or as requested by the local authority, total net debit
balance of the other components of equity shall be set aside from current earnings as special
reserve, and not for distribution. Subsequent decrease pertaining to items that are accounted for
as a reduction to the other components of equity shall be reclassified from special reserve toundistributed earnings.
On February 23, 2023, the Company’s Board of Directors resolved not to distribute dividends
for 2022. On May 26, 2023, the annual shareholders’ meeting resolved the distribution of otherearnings for 2022, comprising a reversal of special reserve of $1,122,876 thousand and no
dividend distribution. Details of cash distribution from capital surplus were as follows:

Cash distribution from capital surplus

Cash distribution
from capital
Cash distributed
surplusper share (NT$)$
6,134,305
0.80

The Company’s appropriation of earnings for 2021 by way of cash dividends has been
approved in the Board of Directors’ meeting held on March 28, 2022. The appropriation of2021 earnings by other ways has been approved in the annual shareholders’ meeting held on
June 17, 2022. Details of distribution were as follows:

Legal reserve
Special reserve
Cash dividends to shareholders

Appropriation of
earnings$
5,326,268
1,472,878
9,575,824$
16,374,970

Dividends per
share (NT$)

1.00

The aforementioned appropriation of earnings for 2021 was consistent with the resolutions of
the Board of Directors’ meeting held on March 28, 2022.
Information on the approval of Board of Directors and shareholders for the Company’s
appropriations of earnings are available at the Market Observation Post System website.
d.

Treasury shares
The Company repurchased 125,000 thousand shares as treasury shares transferred to
employees in accordance with Securities and Exchange Act requirements. The related
information on treasury share transactions was as follows (shares in thousands):
For the year ended December 31, 2023
Number ofshares,Beginningof YearReason for reacquisition
Additions
Reductions
Transferring to employees
38,737(7,222)

Number ofshares,End of Year
31,515(Continued)
312

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Reason for reacquisition
Transferring to employees

For the year ended December 31, 2022
Number ofshares,Beginning
Additions
Reductionsof Year54,199(5,778)

CapitalReduction(9,684)

Number ofshares,End of Year38,737

Refer to Note 6(16) for information on employee treasury shares plan for 2023 and 2022. A
total of 7,222 thousand and 5,778 thousand shares were transferred with total costs for treasury
shares of $55,103 thousand and $46,859 thousand, respectively, and with cost per share of$7.63 and $8.11, respectively.
Pursuant to the Securities and Exchange Act, the number of shares repurchased shall not
exceed 10 percent of the number of the Company’s issued and outstanding shares, and the total
amount repurchased shall not exceed the sum of the Company’s retained earnings, sharepremium, and realized capital surplus. Also, the shares repurchased for transferring toemployees shall be transferred within five years from the date of reacquisition and those shares
not transferred within the five-year period are to be retired.
In accordance with the Securities and Exchange Act, treasury shares held by the Company
shall not be pledged, and do not hold any shareholder rights before their transfer.
e.

Other components of equity
Unrealized
gains(losses)Cumulativeon financialtranslation
assets at
differences
FVTOCI$ (2,406,490)(1,213,815)

Balance at January 1, 2023
Foreign operations – foreign currencytranslation differences
Net change in fair value of financial assets at
FVTOCI
Equity-accounted investees – share of othercomprehensive income
Cumulative unrealized loss of equity
instruments transferred to retained earnings
due to disposal
Related tax
Balance at December 31, 2023$

(96,911)
-

-

Total
(3,620,305)(96,911)

(401)

(401)

(1,403,006)

360,582(1,042,424)

254,645(3,651,762)

20,497(833,137)

20,497
254,645(4,484,899)(Continued)
AUO Corporation
2023 Annual Report313

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Unrealized
gains(losses)
on financial
Cumulative
assets attranslation
FVTOCI
differences$ (4,873,573)
130,391

Balance at January 1, 2022
Foreign operations – foreign currencytranslation differences
Net change in fair value of financial assets at
FVTOCI
Equity-accounted investees – share of othercomprehensive income
Cumulative unrealized gain of equity
instruments transferred to retained earnings
due to disposal
Related tax
Balance at December 31, 2022$

7,463,944-

Total(4,743,182)
7,463,944-

19,373

19,373(4,511,574)(1,321,925)(5,833,499)(485,287)(2,406,490)(41,654)(1,213,815)(41,654)(485,287)(3,620,305)(16) Share-based Paymentsa.

Employee treasury shares plan
AUO granted the treasury shares to eligible employees, including those of AUO and its
subsidiaries in accordance with the relevant plan. The key terms and conditions related to the
grants for the ended December 31, 2023 and 2022 were disclosed as follows:

Grant dateFeb. 23, 2022

Total shares
granted(in thousands)
5,778

Feb. 23, 2023

7,222

Vesting
conditions
Vest
immediately
Vest
immediately

Share
price
20.7

Exercise
price
8.11

Fair value
per unit
12.59

18.3

10.14

8.16

The fair value of the share-based payments granted by AUO was measured at the date of grantusing the Black Scholes option pricing model. For the years ended December 31, 2023 and2022, the related compensation costs recognized for the abovementioned plan amounted to$55,308 thousand, and $68,551 thousand, respectively. In addition, for the years ended
December 31, 2023 and 2022, the related compensation costs for transferring to employees ofsubsidiaries were recognized in share of profit of equity-accounted investees with amount of$3,623 thousand and $4,193 thousand, respectively. The capital surplus generated from thedifference between the subscription price and the repurchase cost of the abovementioned
treasury shares for the ended December 31, 2023 amounted to $18,127 thousand.

(Continued)
314

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statementsb.

Employee restricted stock plan
As of December 31, 2022, the share based payment rewards plan that AUO Digitech Holding
Limited (ADTHLD), a subsidiary of AUO, granted to employees of AUO and its subsidiaries
was totaled 1,400,000 units. Employees are granted restricted stocks without consideration,
and are eligible to vest 100% of 400,000 units when they provide two years of service
subsequent to the grant date. Further employees who provide two years and five years ofservice, respectively, subsequent to the grant date as well as fulfill specific performance
conditions are eligible to vest 40% and 60% of 1,000,000 units, respectively.
For the year ended December 31, 2023, 400,000 units abovementioned were fully vested uponcompletion of two years’ service; 400,000 units which are based on completion of two years’service and bound with specific performance conditions were all unvested. Among the grantbound with five years of service and specific performance conditions, 360,000 units were earlyterminated in the first quarter of 2023, of which 170,000 units were vested immediately upon
the agreement with employees. The difference between share price and carrying amountarising from the aforesaid employee vesting was recognized as the deduction of capital surplus
with amount of $16,137 thousand. Moreover, in the second quarter of 2023, the remaining
240,000 units vesting were replaced in the form of bonuses upon the agreement with
employees and therefore early terminated. As of December 31, 2023, the abovementioned
employee restricted stock plans have been fully settled.
For the years ended December 31, 2023 and 2022, the related compensation costs recognized
for the abovementioned employee restricted stock plan amounted to $(1,951) thousand and$1,801 thousand, respectively.
The special shares of AUO Digitech (CAYMAN) Limited (ADTCM) without voting rightwhich are held by AUO are the subject for the execution of the aforementioned plan.
According to the relevant plan, one special share without voting right of ADTCM represents
one common share right of ADTHLD. As of December 31, 2023 and 2022, the carrying
amount recognized for abovementioned employee restricted stock plan liabilities amounted to$0 and $17,117 thousand, respectively.

(17) Revenue from Contracts with Customersa.

Disaggregation of revenue
For the years ended December 31,

Primary geographicalmarkets:
PRC (including Hong
Kong)



Display
segment

2023
Energysegment

Total
segments

Display
segment

2022
Energysegment

Total
segments$ 59,051,121

4,468

59,055,589

57,724,848

5,963

57,730,811

Taiwan77,826,067

13,686,524

91,512,591

76,465,187

13,515,699

89,980,886

Singapore

15,107,806-

15,107,806

19,491,217-

19,491,217

United States

21,610,305-

21,610,305

24,609,592-

Others27,393,854

649

27,394,503

23,356,553

1,307

23,357,860$ 200,989,153

13,691,641

214,680,794

201,647,397

13,522,969

215,170,366

24,609,592(Continued)
AUO Corporation
2023 Annual Report

315

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

For the years ended December 31,
Display
segment

2023
Energysegment

Total
segments

2022
Energysegment

Display
segment

Total
segments

Major products:
Products for Televisions$ 47,725,100-

47,725,100

37,827,491-

37,827,491

Products for Monitors
Products for Mobile PCs
and Devices
Products for Automotive
Solutions
Products for PID andGeneral Display
Products for VerticalBusiness(i)32,689,444-

32,689,444

36,258,948-

36,258,948

54,892,736-

54,892,736

66,986,388-

66,986,388

35,400,822-

35,400,822

29,348,628-

29,348,628

24,068,536-

24,068,536

27,890,526-

27,890,526

Major customers:
Customer A(i)

6,212,515

13,691,641

19,904,156

3,335,416

13,522,969

16,858,385$ 200,989,153

13,691,641

214,680,794

201,647,397

13,522,969

215,170,366$ 24,472,369-

24,472,369

24,710,610-

24,710,610

Customer B

20,424,852-

20,424,852

13,137,204-

13,137,204

Customer C
Others (individually not
greater than 10%)

19,113,020-

19,113,020

21,732,304-

21,732,304

136,978,912

13,691,641

150,670,553

142,067,279

13,522,969

155,590,248$ 200,989,153

13,691,641

214,680,794

201,647,397

13,522,969

215,170,366

Including energy, system design manufacturing service, display HMI business, LED display,smart vertical applications and others.

b.

Contract balances

Contract assetscurrent (recorded in other current
financial assets)
Contract liabilitiescurrent (recorded in other current
liabilities)
Contract liabilitiesnoncurrent

December 31,
2023

December 31,
2022$

864,226585,261$

3,531,909
6,239,558
9,771,467

1,535,180
8,739,846
10,275,026$(Continued)
316

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

The amounts of revenue recognized for the years ended December 31, 2023 and 2022 that
previously included in the contract liability balance at the beginning of the year were$1,178,591 thousand and $3,427,592 thousand, respectively. Additionally, in the first quarterof 2021, the Company entered into long-term sales agreements with customers and hasreceived payments in advance. The Company accounted for such obligation as contract
liabilities.
(18) Remuneration to Employees and Directors
According to the Company’s Articles of Incorporation, the Company should distribute remuneration
to employees and directors no less than 5% and no more than 1% of annual profits before income
tax, respectively, after offsetting accumulated deficits, if any. Only employees, including employees
of affiliate companies that meet certain conditions are entitled to the abovementioned remuneration
which to be distributed in stock or cash. The said conditions and distribution method are decided by
Board of Directors or the personnel authorized by Board of Directors.
The Company accrues remuneration to employees based on the profit before income tax excluding
the remuneration to employees and directors for the period, multiplied by the percentage resolved by
Board of Directors. Remuneration to directors is estimated based on the amount expected to pay andrecognized together with the remuneration to employees as cost of sales or operating expenses. If
remuneration to employees is resolved to be distributed in stock, the number of shares is determinedby dividing the amount of remuneration by the closing price of the shares (ignoring ex dividend
effect) on the day preceding the Board of Directors’ meeting. If there is a change in the proposed
amounts after the annual financial statements are authorized for issue, the differences are accounted
for as a change in accounting estimate and adjusted prospectively to next year’s profit or loss.
The Company did not accrue remuneration to employees and directors due to the loss making
position for the years ended December 31, 2023 and 2022.
Remuneration to employees and directors for 2021 in the amounts of $6,339,435 thousand and$206,946 thousand, respectively, in cash for payment had been approved in the meeting of Board of
Directors held on March 28, 2022. The aforementioned approved amounts are the same as theamounts charged against earnings of 2021.
The information about the Company’s remuneration to employees and directors is available at theMarket Observation Post System website.

(Continued)
AUO Corporation
2023 Annual Report317

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(19) Additional Information of Expenses by Nature

Employee benefits
expenses:
Salaries and wages
Labor and healthinsurances
Retirement benefits
Compensation to
directors
Other employee
benefits
Depreciation
Amortization

Recognizedin cost ofsales

For the years ended December 31,
2023
2022
Recognized
Recognized
Recognizedininin cost ofoperatingoperating
Total
sales
expenses
expenses

Total$13,368,772
1,231,168

6,848,527
535,887

20,217,299
1,767,055

14,270,007
1,314,083

6,731,184
508,327

21,001,191
1,822,410

580,330-

305,753
39,829886,083
39,829638,709-298,224
34,760936,933
34,760872,706

332,346

1,205,052

1,036,255

348,462

1,384,717

17,791,112
37,2822,750,018-

20,541,130
37,282

17,023,013
118,8022,822,277-

19,845,290
118,802

Additional information on the number of the Company’s employees and the average employee
benefit expenses of the Company for the years ended December 31, 2023 and 2022 were as follows:

Number of employees
Number of non-employee directors
Average employee benefit expenses
Average salaries expenses$$

Average salary expense adjustment
Remuneration to supervisor$

For the years ended
December 31,
2023
2022
18,91019,687
6
7
1,274
1,278
1,069
1,067
(26)%
0%
-

-

The Company’s compensation policies (including directors, managers and employees) were as
follows:a.

Directors: compensation for directors have been authorized for distribution by the Board of
Directors pursuant to the Company’s Articles of Incorporation, based on individual Director’slevel of participation and contributions to the Company operations, and have been paid
pursuant to the “Compensation Policy to the Directors and Functional Committee Members”
which is in reference to domestic and overseas industry standards. If the Company has a profit,
the Board of Directors will determine the amount of Directors’ remunerations in accordancewith the Company’s Articles of Incorporation.

(Continued)
318

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statementsb.

Managers and employees:(i)

The Company provides diversified and competitive overall remuneration and careerdevelopment opportunities. Apart from basic salary (including principal salary, meal
allowance, etc.), various allowances and rewards, such as work allowances, duty
allowances, performance bonuses, incentive bonuses and remuneration to employees
based on annual profit, are designed for difference job nature and reward purpose.

(ii)

The Company participates in international market salary surveys every year, and makes
salary adjustment based on the market level of each job and individual performance tosustain our market competitiveness. Under the premise of enhancing the Company's
overall operations and performance from team work and individual, the Company
designs various short-term or long-term reward plans and profit sharing with employees
to achieve the purpose of talent attraction, retention, motivation and programmatic
cultivation of high-quality talents.

(iii) The remuneration for the managers is linked to the Company’s operating performanceand job duties. While designing the salary package, the Company refers to the salarymarket level and cooperates with long-term external professional consultants. According
to the laws, the remuneration for the managers is proposed by the Remuneration
Committee and approved by the Board of Directors. It is driven to build up a
management team that focuses on creating long-term shareholders’ value and has
entrepreneurial spirit.
(iv) Salaries for employees are determined by the factors such as the employees’ educational
background, professional knowledge and technology, and professional years ofexperience. Employees would not be discriminated regardless of their gender, race,
religious beliefs, political stance, marital status and unions they participate.
(20) Non-Operating Income and Expensesa.

Interest income

Interest income on bank deposits
Other interest income$$

For the years ended
December 31,
2023
2022
384,745
192,747
36,764
193,811
421,509386,558(Continued)
AUO Corporation
2023 Annual Report319

AUO CORPORATION
Notes to the Parent Company Only Financial Statementsb.

Other income$

For the years ended
December 31,
2023
2022
281,716
281,407
1,559
568,190579,248
849,906
862,214

Foreign exchange gains , net$
Losses on valuation of financial instruments at FVTPL, net
Gains on disposals of property, plant and equipment
Impairment losses on assets
Litigation losses and Others$

For the years ended
December 31,
2023
2022
245,295
1,079,369(209,328)(1,294,731)
24,783
3,192(126,460)(1,121,772)(1,061,441)
133,443(1,127,151)(1,200,499)

Rental income, net
Dividend income
Grants and others
c.

d.

$

Other gains and losses

Finance costs

Interest expense on bank borrowings
Interest expense on lease liabilities
Other interest expense
Finance expense$$

For the years ended
December 31,
2023
2022
2,044,315
808,150
138,342
139,939
56,80928,081
58,651
151,6732,298,117
1,127,843(Continued)
320

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(21) Income Taxesa.

Income tax expense
The components of income tax expense for the years ended December 31, 2023 and 2022 wereas follows:

Current income tax expense (benefit):Tax on undistributed earnings, net
Effect of combined business income tax returnAdjustment to prior years
Deferred tax expense:Temporary differences
Income tax expense (benefit)

For the years ended
December 31,
2023
2022
$

$

(871,053)(411,044)(1,282,097)

509,975(261,574)(361,991)(113,590)(3,072,914)(4,355,011)

122,132
8,542

Income taxes expense (benefit) recognized directly in other comprehensive income for the years
ended December 31, 2023 and 2022 were as follows:

Items that will never be reclassified to profit or loss:
Remeasurement of defined benefit obligations
Items that are or may be reclassified subsequently to profit
or loss:
Foreign operations – foreign currency translationdifferences
Equity-accounted investees – share of othercomprehensive income

For the years ended
December 31,
2023
2022
$

852

11,712$(19,382)

1,492,789$(235,263)(254,645)(1,007,502)
485,287(Continued)
AUO Corporation
2023 Annual Report

321

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Reconciliation of the expected income tax expense (benefit) calculated based on the ROC
statutory income tax rate compared with the actual income tax expense as reported in thestatements of comprehensive income for the years ended December 31, 2023 and 2022, was asfollows:

Income tax expense (benefit) at statutory tax rate
Tax on undistributed earnings, net
Net of non-taxable income from domestic investments andnon-deductible expense
Change of unrecognized deductible temporary differences
Effect of combined business income tax return and others
Adjustments to prior years
Income tax expense (benefit)
b.

$

$

For the years ended
December 31,
2023
2022
(4,511,657)(4,218,566)
509,975(444,177)
1,881,890(870,023)(411,044)(4,355,011)(733,598)
5,074,296(261,574)(361,991)
8,542

Deferred tax assets and liabilities
Deferred tax assets have not been recognized in respect of the following items.
December 31, December 31,
2022
2023
$
317,638
292,346
9,476,418
8,916,492$
9,794,056
9,208,838

Deductible temporary differences
Unused tax losses carryforwards

Under the ROC tax laws, approved tax losses can be carried forward for 10 years to offset
future taxable profits.
As of December 31, 2023, the expiration period for abovementioned unrecognized deferred tax
assets of unused tax losses carryforwards were as follows:
Unrecognizeddeferred tax assets
1,455,130

Year of assessment
2019 (assessed)

Expiration in year2029

2020 (assessed)

102,6322030

2022 (filed)

4,631,385

2032

2023 (estimated)

3,287,271

2033$

9,476,418(Continued)
322

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

The components of and changes in deferred tax assets and liabilities were as follows:

Tax losses
carryforwards

Deferred tax assets
Deferred tax liabilities
Total
December 31, December 31, December 31, December 31, December 31, December 31,
2023
2022
2023
2022
2023
2022
$

4,260,400

2,239,878--

4,260,400

2,239,878

Unrealized loss andexpenses

186,957

138,086--

186,957

138,086

Inventories writedown

590,114

1,039,656--

590,114

1,039,656

Accumulated
amortization of
goodwill inaccordance withlocal tax laws--

(1,802,891)(1,802,891)(1,802,891)(1,802,891)

Remeasurement ofdefined benefit
plans

111,945

112,797--

111,945

112,797

Foreign investment
losses (gains)
Others$--(967,657)(2,197,962)(967,657)(2,197,962)

2,615,748

2,125,894(89,864)(77,413)

2,525,884

2,048,481

7,765,164

5,656,311(2,860,412)(4,078,266)

4,904,752

1,578,045

January 1,
2022

Recognized
Recognized
Recognized
Recognizedin otherin otherin profit or comprehensive December in profit or comprehensive December
loss
loss
incomeincome31, 2022
31, 2023

Deferred tax assets (liabilities):
Tax losses carryforwards$ 1,210,727

1,029,151-

2,239,878

2,020,522-

4,260,400

Unrealized loss and expenses

189,749(51,663)-

138,086

48,871-

186,957

Inventories write-down

696,184

343,472-

1,039,656(449,542)-

590,114

Accumulated amortization of goodwill inaccordance with local tax laws

(2,024,091)

221,200-(1,802,891)--

Remeasurement of defined benefit plans

124,509-112,797-(1,168,811)(1,029,151)(2,197,962)

1,230,305

3,168,909(635,141)(485,287) 2,048,481$ 2,197,176(122,132)(496,999) 1,578,045

Foreign investment losses (gains)
Othersc.

(11,712)-(1,802,891)(852)

111,945-(967,657)

222,758

254,645

2,525,884

3,072,914

253,793

4,904,752

Assessments by the tax authorities
As of December 31, 2023, the tax authorities have completed the examination of income tax
returns of the Company through 2020.

(Continued)
AUO Corporation
2023 Annual Report323

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(22) Earnings (loss) per Share
For the years ended
December 31,
2023
2022

Basic earnings (loss) per share
Loss attributable to common shareholders$(18,203,274)(21,101,374)

7,666,437

8,819,096(2.37)(2.39)

Weighted-average number of common shares outstanding
during the year
Basic earnings (loss) per share (NT$)$

Since the Company incurred net loss for the years ended December 31, 2023 and 2022, there wereno potential common shares with dilutive effect for the year.
(23) Non-cash Transactions of Investing and Financing Activities
Except for otherwise disclosed in other notes to the parent company only financial statements, thereconciliation of liabilities to cash flows arising from financing activities for the years ended
December 31, 2023 and 2022, were as follows:

Balance at January 1, 2023

Long-term
borrowings(including
current
installments)$
78,568,393

Guarantee
deposits
708,221

Leaseliabilities
8,055,665

Total
liabilities
fromfinancing
activities
87,332,279

19,680,300

1,375(405,769)

19,275,906

Cash flows
Non-cash changes:
Additions

-

-

7,986

7,986

Deductions--(14,013)(14,013)

Changes in exchange rate and others
Balance at December 31, 2023$

Balance at January 1, 2022
Cash flows
Non-cash changes:
Additions
Deductions
Changes in exchange rate and others$

Balance at December 31, 2022$

58,65198,307,344

24,152
733,748

7,643,869

82,803
106,684,961

40,647,245
37,769,475

681,359-

8,531,986(401,791)

49,860,590
37,367,684

151,673
78,568,393

26,862
708,221

206,700(281,230)
8,055,665

206,700(281,230)
178,535
87,332,279(Continued)
324

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(24) Financial Instrumentsa.

Fair value and carrying amountThe carrying amounts of the Company’s current non-derivative financial instruments,
including financial assets and financial liabilities at amortized cost, were considered toapproximate their fair value due to their short-term nature. This methodology applies to cash
and cash equivalents, receivables or payables (including related parties) and other current
financial assets.
Disclosures of fair value are not required for the financial instruments abovementioned andlease liabilities. Other than those, the carrying amount and fair value of other financial
instruments of the Company as of December 31, 2023 and 2022 were as follows:

Financial assets:
Financial assets at FVTPL:
Financial assets mandatorily measured at
FVTPL
Financial assets at FVTOCI
Financial assets at amortized cost:
Refundable deposits
Financial liabilities:
Financial liabilities at FVTPL:
Financial liabilities held for trading
Financial liabilities at amortized cost:
Long-term borrowings (including current
installments)
Guarantee deposits
Long-term payables (including current
installments)b.

December 31, 2023
Carrying
Fair Value
Amount$December 31, 2022
Carrying
Fair Value
Amount132,527

132,527

169,455

169,455--

85,36285,362

1,014,946

1,014,946

915,464

915,464

6,817

6,817

89,776

89,77698,307,344

98,307,344

78,568,393

78,568,393

733,748
625,020

733,748
625,020708,221968,520708,221968,520

Valuation techniques and assumptions applied in fair value measurement
The fair values of financial assets and financial liabilities with standard terms and conditions
and traded in active markets are determined with reference to quoted market prices. The fairvalues of other financial assets and financial liabilities without quoted market prices are
estimated using valuation approach. The estimates and assumptions used are the same as thoseused by market participants in the pricing of financial instruments.
Fair value of foreign currency forward contract is measured based on the maturity date of eachcontract with quoted spot rate and quoted swap points from Reuters quote system.

(Continued)
AUO Corporation
2023 Annual Report325

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Fair value of long-term payable, which approximates to its carrying value is determined bydiscounting the expected cash flows at a market interest rate.
The refundable deposits and guarantee deposits are based on carrying amount as there is no
fixed maturity.
Long-term borrowings are mainly at floating rate, whose fair value approximates to theircarrying value.
c.

Fair value measurements recognized in the balance sheets
The Company determines fair value based on assumptions that market participants would use
in pricing an asset or a liability in the principal market. When considering market participant
assumptions in fair value measurements, the following fair value hierarchy distinguishes
between observable and unobservable inputs, which are categorized in one of the following
levels:(i)

Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active
markets.

(ii)

Level 2 inputs: Other than quoted prices included within Level 1, inputs are observablefor the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived fromprices).

(iii) Level 3 inputs: Derived from valuation techniques that include inputs for the asset or
liability that are not based on observable market data (unobservable inputs).
The fair value measurement level of an asset or a liability within their fair value hierarchy isbased on the lowest level of any input that is significant to the fair value measurement. The
Company uses valuation techniques that maximize the use of observable inputs and minimize
the use of unobservable inputs.
December 31, 2023
Financial assets at FVTPL:
Financial assets mandatorily$
measured at FVTPL
Financial liabilities at FVTPL:
Financial liabilities held for trading
Financial liabilities at amortized cost:
Long term payables (including
current installments)

Level 1

Level 2

Level 3

Total-

132,527-

132,527

-

6,817

-

6,817

-

625,020-

625,020(Continued)
326

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

December 31, 2022
Financial assets at FVTPL:
Financial assets mandatorily$
measured at FVTPL
Financial assets at FVTOCI
Financial liabilities at FVTPL:
Financial liabilities held for trading
Financial liabilities at amortized cost:
Long-term payables (including
current installments)

Level 1

Level 2

Level 3

Total-

169,455-

169,455

85,362--85,362-

89,776-

89,776-

968,520-

968,520

There were no transfers between Level 1 and 2 for the years ended December 31, 2023 and2022.
(25) Financial Risk Managementa.

Risk management framework
The managerial officers of related divisions are appointed to review, control, trace and monitor
the strategic risks, financial risks and operational risks faced by the Company. The managerial
officers report to executive officers the progress of risk controls from time to time and, if
necessary, report to the board of directors, depending on the extent of impact of risks.

b.

Financial risk information
Hereinafter discloses information about the Company’ s exposure to variable risks, and thegoals, policies and procedures of the Company’s risk measurement and risk management.
The Company is exposed to the following risks due to usage of financial instruments:(i)

Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to afinancial instrument fails to meet its contractual obligations. The Company’s exposures
to credit risk are mainly from:(a)

The carrying amount of financial assets recognized in the balance sheets.

(b)

The amount of contingent liabilities as a result from the Company providing
financial guarantee to its customers.

(Continued)
AUO Corporation
2023 Annual Report327

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

The Company’s potential credit risk is derived primarily from cash in bank, cash
equivalents and trade receivables. The Company deposits its cash with various reputablefinancial institutions of high credit quality. There should be no major concerns for the
performance capability of trading counterparts. Management performs periodic
evaluations of the relative credit standing of these financial institutions and limits theamount of credit exposure with any one institution. Management believes that there is alimited concentration of credit risk in cash and cash equivalent investments.
The majority of the Company’s customers are in high technology industries.
Management continuously evaluates and controls the credit quality, credit limit andfinancial strength of its customers to ensure any overdue receivables are taken necessary
procedures. The Company also flexibly makes use of advance receipts, accounts
receivable factoring and credit insurance as credit enhancement instruments. If necessary,
the Company will request collaterals or assurance from its customers in order to reducethe credit risk from particular customers.
Additionally, on the reporting date, the Company reviews the recoverability of its
receivables to provide appropriate valuation allowances. Consequently, management
believes there is a limited concentration of its credit risk.
For the years ended December 31, 2023 and 2022, the Company’s five largest customers
accounted for 44.4% and 46.1%, respectively, of the Company’s net revenue. There is noother significant concentration of credit risk.
Refer to Note 6(4) for expected credit loss analysis of accounts receivable and the
movement in the loss allowance of accounts receivable.
For credit of guarantee, the Company’s policy is to provide financial guarantees only to
subsidiaries. Refer to Note 13(1)b. for information about endorsements or guarantees
provided by the Company to its subsidiaries as of December 31, 2023.
(ii)

Liquidity risk
Liquidity risk is the risk that the Company has no sufficient working capital and unused
credit facilities to meet its obligations associated with matured financial liabilities, that
may resulting from an economic downturn or uneven demand and supply in the market
and cause a significant decrease in product selling prices and market demands.
Liquidity risk of the Company is monitored through its corporate treasury department
which tracks the development of the actual cash flow position for the Company and uses
input from a number of sources in order to forecast the overall liquidity position both ona short and long term basis. Corporate treasury invests surplus cash in money market
deposits with appropriate maturities to ensure sufficient liquidity is available to meet
liabilities when due, without incurring unacceptable losses or risking damage to theCompany’s reputation.

(Continued)
328

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

The following, except for payables (including related parties) and equipment andconstruction payable, are the contractual maturities of other financial liabilities. The
amounts include estimated interest payments but exclude the impact of netting
agreements.
Contractual
cash flows

2024.1.1~
2024.12.31

2025.1.1~
2026.12.31

2027.1.1~
2028.12.31

2029 and
thereafter

107,277,036

11,417,652

49,472,374

28,152,744

18,234,266

625,020

312,510

312,510--

733,748---733,748

December 31, 2023
Non-derivative financial liabilities
Long-term borrowings (including
current installments)
Long-term payables (including
current installments)
Guarantee deposits
Derivative financial instruments
Foreign currency forward
contractsinflows
Foreign currency forward
contractsoutflows(5,184,730)(5,184,730)

-

-

-

5,072,124

5,072,124---$ 108,523,198

11,617,556

49,784,884

28,152,744

18,968,014

Contractual
cash flows

2023.1.1~
2023.12.31

2024.1.1~
2025.12.31

2026.1.1~
2027.12.31

2028 and
thereafter

84,646,112

11,968,270

46,561,613

14,316,617

11,799,612

968,520

343,500

625,020--708,221---708,221(12,894,372)(12,894,372)

-

-

-

12,803,655

12,803,655

-

-

-

86,232,136

12,221,053

47,186,633

14,316,617

12,507,833

December 31, 2022
Non-derivative financial liabilities
Long-term borrowings (including $current installments)
Long-term payables (including
current installments)
Guarantee deposits
Derivative financial instruments
Foreign currency forward
contractsinflows
Foreign currency forward
contractsoutflows$

The Company is not expecting that the cash flows included in the maturity analysis could
occur significantly earlier or at significantly different amounts.
As at December 31, 2023, the management believes the Company’s existing unused
credit facilities under its existing loan agreements, together with net cash flows expected
to be generated from its operating activities, will be sufficient for the Company to fulfill
its payment obligations. Therefore, management believes that the Company does nothave significant liquidity risk.

(Continued)
AUO Corporation
2023 Annual Report329

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(iii) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates,interest rates and equity prices, which will affect the Company’s income or the value of
its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable range.
The Company buys and sells derivatives, and also incurs financial assets and liabilities,
in order to manage market risks. All such transactions are executed in accordance with
the Company’s handling procedures for conducting derivative transactions, and also
monitored by internal audit department.
(a)Currency risk
The Company is exposed to currency risk on foreign currency denominatedfinancial assets and liabilities arising from operating, financing and investing
activities such that the Company uses forward exchange contracts to hedge its
currency risk. Gains and losses derived from the foreign currency fluctuations onunderlying assets and liabilities are likely to offset. However, transactions ofderivative financial instruments help minimize the impact of foreign currency
fluctuations, but the risk cannot be fully eliminated.
The Company periodically examines portions exposed to currency risks forindividual asset and liability denominated in foreign currency and uses forward
contracts as hedging instruments to hedge positions exposed to risks. The contracts
have maturity dates that do not exceed one year, and do not meet the criteria forhedge accounting.
I.

Exposure of currency risk
The Company’s significant exposure to foreign currency risk was as follows:
December 31, 2023
Foreigncurrency
amounts

Financial assets
Monetary items
USD
JPY
EUR
Non-monetary items
USD
Financial liabilities
Monetary items
USD
JPY
EUR

$

Exchangerate

December 31, 2022
NTD

Foreigncurrency
amounts

Exchangerate

NTD893,636
10,223,402
19,75830.71800.217333.971027,450,711
2,221,545
671,199

992,991
5,767,124
22,52430.73200.231132.7634

30,516,599
1,332,782
737,9632,569,482

30.7180

78,929,348

2,462,641

30.732075,681,883

1,151,694
19,049,031
2,95030.71800.217333.971035,377,736
4,139,354
100,214

1,127,240
21,050,067
1,992

30.73200.231132.7634

34,642,340
4,864,670
65,265(Continued)
330

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

II.

Sensitivity analysis
The Company’s exposure to foreign currency risk arises mainly from thetranslation of the foreign currency exchange gains and losses on cash andcash equivalents, trade receivables, and trade payables that are denominatedin foreign currency. Depreciation or appreciation of the NTD by 1% against
the USD, EUR and JPY at December 31, 2023 and 2022, while all othervariables were remained constant, would have increased or decreased the net
profit before tax for the years ended December 31, 2023 and 2022 as follows:

1% of depreciation
1% of appreciation
III.

$

For the years ended
December 31,
2023
2022
(92,738)(69,849)
92,73869,849Foreign exchange gain (loss) on monetary items
With varieties of functional currencies within the Company, the Company
disclosed foreign exchange gain (loss) on monetary items in aggregate. The
aggregate of realized and unrealized foreign exchange gains for the years
ended December 31, 2023 and 2022, were $245,295 thousand and $1,079,369
thousand, respectively.

(b)Interest rate risk
The Company’s exposure to changes in interest rates is mainly from floating-rate longterm debt obligations. Any change in interest rates will cause the effective interest rates
of long-term borrowings to change and thus cause the future cash flows to fluctuate overtime. The Company will, depending on the market condition, enter into and designate
interest rate swaps as hedges of the variability in cash flows attributable to interest rate
risk.
Assuming the amount of floating-rate debts at the end of the reporting period had beenoutstanding for the entire year and all other variables were remained constant, an
increase or a decrease in the interest rate by 0.25% would have resulted in a decrease or
an increase in the net profit before tax for the years ended December 31, 2023 and 2022
by $246,458 thousand and $197,065 thousand, respectively.

(c)

Equity price risk
See Note 6(3) for disclosure of equity price risk analysis.

(Continued)
AUO Corporation
2023 Annual Report

331

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(26) Capital Management
Through clear understanding and managing of significant changes in external environment, relatedindustry characteristics, and corporate growth plan, the Company manages its capital structure toensure it has sufficient financial resources to sustain proper liquidity, to invest in capital
expenditures and research and development expenses, to repay debts and to distribute dividends inaccordance to its plan. The management pursues the most suitable capital structure by monitoringand maintaining proper financial ratios as below. The Company aims to enhance the returns of its
shareholders through achieving an optimized debt-to-equity ratio from time to time.

Long-term borrowings (including current installments)
Total liabilities
Total equity
Debt-to-equity ratio
Net debt-to-equity ratio(i)
(i)

7.

$

December 31,
2023
2022
98,307,344
78,568,393
185,640,259
166,861,612
159,167,207
185,099,091
117 %
90 %
43 %
20 %

Net debt-to-equity ratio is defined as long-term borrowings less cash and cash equivalents anddivided by total equity.

Related-party Transactions(1)

Name and relationship of related parties
The following is a summary of subsidiaries and related parties that have had transactions with theCompany during the periods presented in the parent company only financial statements.
Name of related party
Konly Venture Corp. (“Konly”)
Ronly Venture Corp. (“Ronly”)
Darwin Precisions Corporation (“DPTW”)
AUO Crystal Corp. (“ACTW”)
AUO Display Plus Corporation (“ADP”)
AUO Digitech Taiwan Inc. (“ADTTW”)
Jector Digital Corporation (“Jector”)
Space Money Inc. (“S4M”)
Da Ping Green Energy Corporation (“DPGE”)
AUO Health Corporation (“AHTW”)
AUO Envirotech Inc. (“AETTW”)
AUO Care Inc. (“ACTTW”)
AUO Education Service Corp. (“AUES”)

Relationship with the Company
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary(Continued)
332

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Name of related party
Relationship with the Company
Yo-Pei Water Corporation (“AET-YP”)
SubsidiaryStar River Energy Corp. (“ SREC” )Subsidiary
Evergen Power Corporation (“EGPC”)
Subsidiary
Sungen Power Corporation (“SGPC”)
Subsidiary
Zheng Yao Power Corporation (“ZYPC”)
SubsidiaryFeng Yao Power Corporation (“FYPC”)
Subsidiary
AUO Corporation America (“AUOUS”)
Subsidiary
AUO Corporation Japan (“AUOJP”)
Subsidiary
AUO Europe B.V. (“AUONL”)
Subsidiary
AUO Singapore Pte. Ltd. (“AUOSG”)
Subsidiary
AUO (Shanghai) Co., Ltd. (“AUOSH”)
Subsidiary
AUO (Xiamen) Corp. (“AUOXM”)
Subsidiary
AUO (Suzhou) Corp., Ltd. (“AUOSZ”)
Subsidiary
AUO (Slovakia) s.r.o. (“AUOSK”)
Subsidiary
AFPD Pte., Ltd. (“AUST”)
Subsidiary
AUO (Kunshan) Co., Ltd. (“AUOKS”)
Subsidiary
a.u.Vista Inc. (“AUVI”)
Subsidiary
Fortech Electronics (Suzhou) Co., Ltd. (“FTWJ”)
Subsidiary
Darwin Precisions (Xiamen) Corp. (“DPXM”)
Subsidiary
ComQi Inc. (“CQUS”)
Subsidiary
Aedgetech Data Technologies (Suzhou) Corp., Ltd. (“ATISZ”, Subsidiary
formerly Edgetech Data Technologies (Suzhou) Corp., Ltd.)AUO Display Plus Japan Corp.(“ADPJP”)
Subsidiary
AUO Korea Ltd. (“AUOKR”)
Subsidiary
AUO Display Plus Netherlands B.V.(“ADPNL”)
Subsidiary
DentLabX CompanyLimited (“DentLabX”)
Subsidiary
ProfetAI (Suzhou) Co., Ltd.(“PFSZ”)
Subsidiary
Ennostar Inc. (“Ennostar”)
Associate
Epistar Corporation (“Epistar”)
Subsidiary of Ennostar
Yenrich Technology Corporation (“Yenrich”)
Subsidiary of Ennostar
Lextar Electronics Corporation (“Lextar”)
Subsidiary of Ennostar
Trendylite Corporation (“Trendylite”)
Subsidiary of Ennostar
Unikorn Semiconductor Corporation (“USC”)
Subsidiary of Ennostar
Raydium Semiconductor Corporation (“Raydium”)
AssociateStar Shining Energy Corporation (“SSEC”)
Associate(Continued)
AUO Corporation
2023 Annual Report333

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Name of related party
Fargen Power Corporation (“FGPC”)
Sheng Li Energy Corporation (“SLEC”)
ChampionGen Power Corporation (“CGPC”)
TronGen Power Corporation (“TGPC”)
Ri Ji Power Corporation (“RJPC”)
Ri Jing Power Corporation (“RGPC”)
Mao Zheng Energy Corporation (“MZEC”)
Mao Xin Energy Corporation (“MXEC”)
Sheng Feng Power Corporation (“SFPC”)
Sheng Da Power Corporation (“SDPC”)
Sheng He Power Corporation (“SHPC”)
Sheng Yao Power Corporation (“SYPC”)
He Shuo Agricultural Biotech Corporation ( “HSNC”)
Shin Sheng Feng Investment Corp. (“SSFI”)
Zhao Feng Energy Co., Ltd. (“ZFE”)
Mega Green Energy Corporation (“MGE”)
Renovatio Pictures Co., Ltd. (“RP”)
YTTEK Technology Corp. (“YTTEK”)
Daxin Materials Corp. (“Daxin”)
ADLINK Technology Inc. (“ADLINK”)
Qisda Corporation (“Qisda”)
Qisda (Suzhou) Co., Ltd. (“QCSZ”)
Qisda Electronics (Suzhou) Co., Ltd. (“QCES”)
Qisda Optronics (Suzhou) Co., Ltd. (“QCOS”)
BenQ Corporation (“BenQ”)
BenQ Materials Corp. (“BMC”)
BenQ Asia Pacific Corp. (“BQP”)
BenQ America Corporation (“BQA”)
DFI Inc. (“DFI”)
Data Image Corporation (“DIC”)
Data Image (Suzhou) Corporation (“DICSZ”)
ACE Pillar Co., Ltd. (“ACE”)
Qisda Vietnam Co., Ltd (“QVH”)
Golden Spirit Co., Ltd. (“GSC”)
AdvancedTEK International Corp. (“AdvancedTEK”)

Relationship with the Company
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Subsidiary of SSEC
Associate
Subsidiary of ZFE
Associate
Associate
Associate
Associate
Associate
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda(Continued)
334

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

Name of related party
Metaage Corporation (“MTG”)
Global Intelligence Network Co., Ltd. (“GINNET”)
Concord Medical Co., Ltd. (“Concord”)
Standard Technology Corp. (“STC”)
Metaguru Corporation (“Metaguru”)
IRIS Optronics Co., Ltd. (“IOC”)
SINTRONES Technology Corp. (“SINTRONES”)
Play Nitride Inc. (“PlayNitride”)
Carota Corporation (“Carota”)
PlayNitride Display Co., Ltd. (“PND”)
Profet Al Shanghai Co., Ltd. (“PFSH”)
Profet AI Technology Co., Ltd. (“PFTW”)(2)

Relationship with the Company
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Subsidiary of Qisda
Associate(ii)Associate(iii)
Konly represented as a director of
PlayNitride
Konly represented as a director of
CarotaSubsidiary of PlayNitride
Director of PFSZPFTW and PFSH are members of thesame Group(i)

For the information in respect of the Company’s subsidiaries and related parties, please refer tothe consolidated financial statements for the years ended December 31, 2023 and 2022.

(ii)

The Company’s subsidiaries ceased to apply the equity method over IOC from December 2023;
therefore, IOC is no longer a related party of the Company starting from the date of the cease.

(iii)

The Company has had significant influence over SINTRONES since February 2023; therefore,
SINTRONES was changed from other related party to associate.

Compensation to key management personnel
Key management personnel’s compensation comprised:

Short-term employee benefits
Post-employment benefits
Share-based payments$$

For the years ended
December 31,
2023
2022
575,494
468,841
1,411
1,359
35,301
39,592
612,206
509,792

Refer to Note 6(16) for information on share-based payments.

(Continued)
AUO Corporation
2023 Annual Report335

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(3)

Except for otherwise disclosed in other notes to the parent company only financial statements, theCompany’s significant related party transactions and balances were as follows:
a.

Sales
Accounts receivablefrom related parties

Sales
For the years ended
December 31,
Subsidiaries
Associates
Others$$$2023
26,794,747
11,102,611
37,897,358

2022
30,184,785
12,229,610
4,196
42,418,591

December31, 2023
3,582,844
1,030,025
4,612,869

December31, 2022
4,215,367
1,132,295
5,347,662

The collection terms for sales to related parties were 25 to 55 days from the end of the month
during which the invoice is issued. The pricing for sales to related parties were not materiallydifferent from those with third parties.
b.

Purchases
Accounts payable to relatedparties

Purchases
For the years ended
December 31,
Subsidiaries
Associates
Others2023$ 100,195,913$
9,357,673
35,940$ 109,589,526

2022
91,052,727
11,678,909
102,731,636

December31, 2023
25,255,679
2,163,051
14,202
27,432,932

December31, 2022
21,619,710
2,612,084
24,231,794

The payment terms for purchases from related parties were 30 to 120 days. The pricing andpayment terms with related parties were not materially different from those with third parties.
c.

Acquisition of property, plant and equipment

Subsidiaries
Associates$$

Acquisition prices
For the years ended
December 31,
2023
2022
659,953
619,377
29,982
61,358689,935
680,735(Continued)
336

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statementsd.

Disposal of property, plant and equipment

Subsidiaries
Associates

$
$

e.

Gains on disposal
For the years ended
December 31,
2023
2022
649
375
550
649
925

Proceeds from disposal
For the years ended
December 31,
2023
2022
1,392
2,117
550
1,392
2,667

Other related party transactions

Transaction type
Rental income

Type of related party
Subsidiaries
Associates$$

Interest and other income

Subsidiaries
Associates
Others$$Cost of sales and operatingexpenses

Subsidiaries
Associates
Others$$Transaction type
Other receivables due from
related parties(i) (ii)Type of related party
Subsidiaries
Associates

Other payables due to related Subsidiaries
parties, including payables Associates
for equipment
Others(i)

For the years ended
December 31,
2023
2022
43,07952,261135,099
129,504
178,178
181,765
147,730
38,824
186,554

307,683
36,277
69
344,029

939,760
46,372
163,963
1,150,095

749,553
83,233
156,440989,226

December 31, December 31,
2023
2022
$
2,123,381
2,045,101
14,616
5,294$
2,137,997
2,050,395$
467,270
376,018
26,97912,305
11,475
11,608$505,724
399,931

The Company’s receivables from related parties arising from the consolidated settlementwith its subsidiary ADP have filed a combined business income tax return at December
31, 2023 and 2022 were $871,053 thousand and $261,574 thousand, respectively.

(Continued)
AUO Corporation
2023 Annual Report337

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(ii)

The Company provided financings to its subsidiaries in the aggregate of $1,145,000
thousand and $1,650,000 thousand, respectively, as of December 31, 2023 and 2022.

The Company leased portion of its offices and plants to related parties. The collection term
was receipts in advance, and the pricing was not materially different from that with third
parties.
The Company paid deposits to related parties for the purchase of renewable energy. The
amount as of December 31, 2023 was $88,244 thousand and was recorded in other noncurrent
assets.
The Company participated in capital increase of related parties in the aggregate of $2,565,902
thousand and $5,993,878 thousand, respectively, for 2023 and 2022. In addition, for the years
ended December 31, 2023 and 2022, the Company entitled for cash dividends declared byrelated parties of $2,949,113 thousand and $3,810,426 thousand, respectively. As of December
31, 2023 and 2022, the aforementioned dividends were all received.
8.

Pledged Assets
The carrying amounts of the assets which the Company pledged as collateral were as follows:
Pledged assets
Restricted cash in banks(i)Land and buildings
Machinery and equipment

Pledged to secure
Guarantee for warranties
Long-term borrowings limit
Long-term borrowings limit

December 31,
2023
$
2,412
56,752,636
29,301,933$ 86,056,981

December31, 2022
8,657
58,264,107
19,550,802
77,823,566(i) Classified as other noncurrent assets.

9.

Significant Contingent Liabilities and Unrecognized Commitments
The significant commitments and contingencies of the Company as of December 31, 2023, in addition to
those disclosed in other notes to the parent company only financial statements, were as follows:(1)

Outstanding letters of credit
As at December 31, 2023, the Company had the following outstanding letters of credit for the
purpose of purchasing machinery and equipment and materials:

USD
JPY
EUR

Currency

December 31,
2023(in thousands)
23,2586,501,300
2,047(Continued)
338

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(2)

Technology licensing agreements
Starting in 1998, AUO has entered into technical collaboration, patent licensing, and/or patent crosslicensing agreements with Fujitsu Display Technologies Corp. (subsequently assumed by Fujitsu
Limited), Toppan Printing Co., Ltd. (“Toppan Printing”), Semiconductor Energy Laboratory Co.,
Ltd., Japan Display Inc. (formerly Japan Display East Inc./Hitachi Displays, Ltd.), Panasonic Liquid
Crystal Display Co., Ltd. (formerly IPS Alpha Technology, Ltd.), LG Display Co., Ltd., Sharp
Corporation, Samsung Electronics Co., Ltd., Hydis Technologies Co., Ltd., Sanyo Electronic Co.,
Ltd., Seiko Epson Corporation and others. AUO believes that it is in compliance with the terms andconditions of the aforementioned agreements.

(3)
3)

(4)
4)

Purchacommitmentsa.

In 2021, AUO entered into a long-term materials supply agreement with a supplier, underwhich, AUO and the supplier agreed on the supply of certain IC chip at agreed prices andquantities.

b.

As at December 31, 2023, significant outstanding purchase commitments for construction inprogress, property, plant and equipment totaled $13,847,316 thousand.

Litigat
In May 2014, LG Electronics Nanjing Display Co., Ltd. and seven of its affiliates (collectively, the“Plaintiffs”) filed a lawsuit in Seoul Central District Court against certain LCD manufacturers
including AUO, alleging overcharge and claiming damages. In November 2023, the court of first
instance in Korea has found AUO liable to the Plaintiffs for a total amount of KRW 29,099 million
plus interest. This antitrust civil case has been ongoing for many years since the Plaintiffs filed theirlawsuit in 2014 which resulted from the LCD antitrust meetings that ended in 2006. AUO filed an
appeal in December 2023 and made a security deposit of the aforementioned amount plus interest at
the Korean court in January 2024. At this stage, the final outcome of these matters is uncertain. AUO
is reviewing the merits of this lawsuits on an on-going basis.
In October 2023, Phenix Longhorn LLC (“Phenix” ) filed a lawsuit in the United States District
Court for the Eastern District of Texas against two companies including AUO, claiming infringementof certain of Phenix’s patents in the United States relating to the manufacturing of LCD panels. In
the complaint, Phenix seeks, among other things, unspecified monetary damages and injunctive relief.
While AUO intends to defend the suits vigorously, the ultimate outcome of the three matters is
uncertain. AUO is reviewing the merits of the lawsuits on an on-going basis.

(Continued)
AUO Corporation
2023 Annual Report339

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

As of January 31, 2024, the Company has made certain provisions with respect to certain of theabove lawsuits as the management deems appropriate, considering factors such as the nature of thelitigation or claims, the materiality of the amount of possible loss, the progress of the cases and theopinions or views of legal counsel and other advisors. Management will reassess all litigation andclaims at each reporting date based on the facts and circumstances that exist at that time, and will
make additional provisions or adjustments to previous provisions. The ultimate amount cannot be
ascertained until the relevant cases are closed. The ultimate resolution of the legal proceedings
and/or lawsuits cannot be predicted with certainty. While management intends to defend certain of
the lawsuits described above vigorously, there is a possibility that one or more legal proceedings orlawsuits may result in an unfavorable outcome to the Company. In addition to the matters describedabove, the Company is also a party to other litigations or proceedings that arise during the ordinary
course of business. Except as mentioned above, the Company, to its knowledge, is not involved as adefendant in any material litigation or proceeding which could be expected to have a material
adverse effect on the Company’s business or results of operations.
10. Significant Disaster Losses: None
11. Subsequent Event: None
12. Others(1)

Since 2010, there have been environmental proceedings relating to the development project of theCentral Taiwan Science Park in Houli, Taichung, which AUO’s second 8.5 generation fab is locatedat (the “Project”). The Environmental Protection Administration (“EPA”) of the Executive Yuan of
Taiwan issued the environmental assessment and development approval on November 6, 2018. On
October 24, 2019, the Appeal Review Committee of the Executive Yuan rejected the administrative
appeal filed by five local residents. On December 24, 2019, the residents filed an administrative
action for invalidating the environmental assessment again and the Appeal Review Committee of the
Executive Yuan ruled in the residents’ favor on July 21, 2022 and invalidated the environmental
assessment approval. The EPA filed an appeal in the Supreme Administrative Court on August 17,
2022. The Company will continue to monitor the development of this event.

(2)

On October 2, 2023, the Company has entered into an agreement with MAHLE Behr GmbH & Co.
KG and HELLA GmbH & Co. KGaA; under which the Company will acquire 100% equity interestin the German company Behr Hella Thermocontrol GmbH at an enterprise value of EUR 600 million(approximately NT$20.4 billion), subject to price adjustments, including changes in net working
capital, net debt, and other related adjustments, set forth in the share purchase agreement. Thistransaction is subject to the clearance of customary antitrust and regulatory approvals.

(Continued)
340

AUO Corporation
2023 Annual ReportAppendix 2

AUO CORPORATION
Notes to the Parent Company Only Financial Statements

13. Additional Disclosures(1)

Information on significant transactions:
Following are the additional disclosures required by the Regulations for the Company for the years
ended December 31, 2023.
a.

Financings provided: Please see Table 1 attached.

b.

Endorsements/guarantees provided: Please see Table 2 attached.

c.

Marketable securities held (excluding investment in subsidiaries, associates and joint
ventures): Please see Table 3 attached.

d.

Individual marketable securities acquired or disposed of with costs or prices exceeding
NT$300 million or 20% of the paid-in capital: Please see Table 4 attached.

e.

Acquisition of individual real estate with costs exceeding NT$300 million or 20% of the paidin capital: Nonef.

Disposal of individual real estate with prices exceeding NT$300 million or 20% of the paid-in
capital: None.

g.

Purchases from or sales to related parties with amounts exceeding NT$100 million or 20% of
the paid-in capital: Please see Table 5 attached.

h.

Receivables from related parties with amounts exceeding NT$100 million or 20% of the paidin capital: Please see Table 6 attached.

i.

Information about trading in derivative instruments: Please see Note 6(2).

(2)

Information on investees (excluding information on investment in Mainland China): Please see
Table 7 attached.

(3)

Information on investment in Mainland China:a.

The related information on investment in Mainland China: Please see Table 8.1 and 8.2
attached.

b.

Upper limit on investment in Mainland China: Please see Table 8.1 and 8.2 attached.

c.

Significant transactions:
Significant direct or indirect transactions with the investees in Mainland China for the years
ended December 31, 2023, are disclosed in Note 13(1) “ Information on significant
transactions”.

(Continued)
AUO Corporation
2023 Annual Report341

AUO CORPORATION
Notes to the Parent Company Only Financial Statements(4)

Major shareholders:Major Shareholder
Qisda
Trust Holding for Employees of AUO Corporation

SharesTotal Shares
Ownership
Owned
Percentage
530,878,896
6.89 %
407,919,675

5.29 %

Note: This table discloses the information that shareholders who hold in total, more than 5% of theCompany’s common shares and preferred shares that are in dematerialized form and with theregistration being completed. The aforesaid information was provided by Taiwan Depository& Clearing Corporation and calculated based on the data on the last business day at the end ofeach quarter.
14.

Segment Information
The Company has provided the operating segments disclosure in the consolidated financial statements.
Disclosure of the segment information in the parent company only financial statements is waived.

(Continued)
342

AUO Corporation
2023 Annual ReportAETTW

AET-YP

ADTTW

0 AUO

0 AUO

0 AUO

S4M

AUOKS

0 AUO

0 AUO

ACTW

0 AUO

Financing Borrowing
No.
Company Company

Table 1

Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties

Financial
Statement
Account(Note 5)100,000

Yes

300,000

200,000

Yes

Yes

400,000

7,562,450

2,500,000

Maximum
Balance for
the Period(Note 3)

Yes

Yes

Yes

RelatedParty

300,000

100,000

200,000

400,000-

1,300,000

Markup rate on
short-term
financing cost

110,000 Markup rate on
short-term
financing cost

20,000 Markup rate on
short-term
financing cost

15,000 Markup rate on
short-term
financing cost

200,000 Markup rate on
short-term
financing cost-

800,000 Markup rate on
short-term
financing cost

AmountEnding Balance
Actually
Interest Rate
(Notes 1 and 2) Drawn Down
(Notes 1 and 4)

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

-

-

-

-

-

-

OperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapital

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

15,916,721

15,916,721

15,916,721

15,916,721

15,916,721

63,666,883

63,666,883

63,666,883

63,666,883

63,666,883

Limits on
FinancingCompanys
Total
FinancingAmount(Notes 1 and 6)
15,916,721
63,666,883

Financing
Collateral
Allowance
Limits for Each
Nature of Transaction Reason forfor BadBorrowing
Financing Amounts Financing
Debt
Company
Item Value (Notes 1 and 6)(Amount in thousands of New Taiwan Dollars)

AUO CORPORATION AND SUBSIDIARIES
Financings Provided
For the year ended December 31, 2023

Appendix 2

AUO Corporation

2023 Annual Report

343

344

AUO Corporation

2023 Annual Report

4 BVXM

AUOKS

3 AUOXM AUOSZ

3 AUOXM AUOKS

2 AUOKS AUOSZ

2 AUOKS AUOXM

1 AUOLB AUOKS

1 AUOLB AUOXM

1 AUOLB AUOSZ

Financing Borrowing
No.
Company Company

Otherreceivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties

Financial
Statement
Account(Note 5)

1,772,520

889,700

Yes

6,203,820

Yes

Yes

2,658,780

3,545,040

Yes

Yes

16,459,450

886,260

886,260

Maximum
Balance for
the Period(Note 3)

Yes

Yes

Yes

RelatedParty

431,520

863,040

4,315,200

1,726,080

1,726,080

8,198,880

863,040

863,040

Markup rate on
short-term
financing costMarkup rate on
short-term
financing costMarkup rate on
short-term
financing costMarkup rate on
short-term
financing costMarkup rate on
short-term
financing cost

431,520 Markup rate on
short-term
financing cost-

1,726,080 Markup rate on
short-term
financing cost--

1,294,560 Markup rate on
short-term
financing cost--

AmountEnding Balance
Actually
Interest Rate
(Notes 1 and 2) Drawn Down
(Notes 1 and 4)

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

-

-

-

-

-

-

-

-

OperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapital

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,360,548

16,293,338

16,293,338

21,344,066

21,344,066

78,405,680

78,405,680

1,360,548

16,293,338

16,293,338

21,344,066

21,344,066

78,405,680

78,405,680

Limits on
FinancingCompanys
Total
FinancingAmount(Notes 1 and 6)
78,405,680
78,405,680

Financing
Collateral
Limits for EachAllowance
Nature of Transaction Reason for
Borrowingfor BadFinancing Amounts Financing
Company
Debt
Item Value (Notes 1 and 6)

AETSZ

AMISZ

AMIXM

AUOKS

ATISZ

5 AUOSJ

5 AUOSJ

5 AUOSJ

5 AUOSJ

5 AUOSJ

AUOXM

ADTSZ

5 AUOSJ

6 AUOSZ

ACTSZ

5 AUOSJ

Financing Borrowing
No.
Company Company

Otherreceivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties

Financial
Statement
Account(Note 5)

Yes

Yes

Yes

1,772,520

88,6282,658,780

141,302132,471

Yes

Yes

883,140

264,942

185,459

Maximum
Balance for
the Period(Note 3)

Yes

Yes

Yes

RelatedParty

863,040

86,304

1,726,080

138,086

129,456

863,040

215,760

129,456

Markup rate on
short-term
financing costMarkup rate on
short-term
financing cost--Markup rate on
short-term
financing costMarkup rate on
short-term
financing cost

1,726,080 Markup rate on
short-term
financing cost--

366,792 Markup rate on
short-term
financing cost

21,576 Markup rate on
short-term
financing cost

21,576 Markup rate on
short-term
financing cost

AmountEnding Balance
Actually
Interest Rate
(Notes 1 and 2) Drawn Down
(Notes 1 and 4)

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

Needs forshort-term
financing

-

-

-

-

-

-

-

-

OperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapitalOperatingcapital

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

17,653,379

1,699,877

4,249,693

1,699,877

1,699,877

4,249,693

1,699,877

17,653,379

1,699,877

4,249,693

1,699,877

1,699,877

4,249,693

1,699,877

Limits on
FinancingCompanys
Total
FinancingAmount(Notes 1 and 6)
4,249,693
4,249,693

Financing
Collateral
Limits for EachAllowance
Nature of Transaction Reason for
Borrowingfor BadFinancing Amounts Financing
Company
Debt
Item Value (Notes 1 and 6)

Appendix 2

AUO Corporation

2023 Annual Report

345

346

AUO Corporation

2023 Annual ReportFTWJ

7 FPWJ

Other
receivablesfrom relatedparties
Other
receivablesfrom relatedparties

Financial
Statement
Account(Note 5)

Yes

Yes

RelatedParty

444,850

15,287,985

Maximum
Balance for
the Period(Note 3)

431,520

6,041,280--

Needs forshort-term
financing

215,760 Based on China Needs for
LPR
short-term
financing

2,157,600 Markup rate on
short-term
financing cost

AmountEnding Balance
Actually
Interest Rate
(Notes 1 and 2) Drawn Down
(Notes 1 and 4)

OperatingcapitalOperatingcapital

-

-

-

-

-

-

738,687

738,687

Note 1: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.
Note 2: The ending balance represents the amounts approved by the Board of Directors.
Note 3: The maximum balance for the period represents the highest amount in New Taiwan Dollars announced or occurred during the period.
Note 4: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.
Note 5: According to the maturity date of individual contracts, financings provided are classified under current or non-current items based on their liquidity.
Note 6: The policy for the limit on total financing amount and the financing limit for any individual entity are prescribed as follows:a. AUO: The amount available for lending to an investee or a company with needs for short-term financing shall not exceed 10% of AUO’s net worth as stated in its latest
financial statement. The aggregate amount available for lending to borrowers shall not exceed 40% of AUO’s net worth as stated in its latest financial statement.
b. AUOLB, AUOKS, AUOSZ, AUOXM, AUOSJ and BVXM: The amount available for lending to an investee or a company with needs for short-term financing and theaggregate amount available for lending to borrowers both shall not exceed 40% of the net worth of the lending company as stated in its latest financial statement.
c. In the event that the financing is between foreign subsidiaries whose voting shares are 100% owned, directly or indirectly, by AUO, the amount lendable to each of suchborrowers and the aggregate amount available for lending to such borrowers both shall not exceed the net worth of the lending company as stated in its latest financial
statement.
d. In the event that the financing is between foreign subsidiaries whose voting shares are 100% owned, directly or indirectly, by DPTW, the amount lendable to each of suchborrowers and the aggregate amount available for lending to such borrowers both shall not exceed the net worth of the lending company as stated in its latest financial
statement.
e. FPWJ and FTWJ are foreign subsidiaries whose voting shares are 100% owned, directly or indirectly, by DPTW.

AUOKS

6 AUOSZ

Financing Borrowing
No.
Company Company

Limits on
FinancingCompanys
Total
FinancingAmount(Notes 1 and 6)
17,653,379
17,653,379

Financing
Collateral
Limits for EachAllowance
Nature of Transaction Reason for
Borrowingfor BadFinancing Amounts Financing
Company
Debt
Item Value (Notes 1 and 6)

AUOXM

FPWJ

2

FTWJ

AUO

AUOKS

4

3

2
295,475

16,293,338

79,583,604
222,425

8,862,800

32,406,097

Party (Notes 4 and 5) Period (Note 2)

Guarantee
Balance for theProvided for EachEndorsement/

Endorsement/
Guarantee AmountMaximum

Limits on
Actually-

8,630,400

12,945,600-

3,020,640

8,630,400(Note 4)(Notes 3 and 4) Drawn Down

Ending Balance

AmountRatio of

Guarantee to Net

Endorsement/

Accumulated

-

-

-

by Properties-

52.97%

8.13%

Statements

Financial

Collateralized Worth per Latest

Guarantee

Endorsement/

Amount ofMaximum

295,475

16,293,338

No

No

Yes

Subsidiary(Notes 4 and 5)
159,167,207

Company toParentProvided by

Guarantee

Guarantee
Provided to

No

Yes

No

Company

Parent

Yes

No

Yes

China

in Mainland

Subsidiary to Subsidiaries

Provided by

Guarantee

Endorsement/ Endorsement/ Endorsement/

Allowable

AmountGuarantee

Endorsement/

Note 1: The relationship between the endorser/guarantor and the guaranteed party:
1. A company with which it does business.
2. A company in which the Company directly and indirectly holds more than 50% of the voting shares.
3. A company that directly and indirectly holds more than 50% of the voting shares in the Company.
4. Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares.
5. A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposesof undertaking a construction project.
6. A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.
7. Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant
to the Consumer Protection Act for each other.
Note 2: The maximum endorsement/guarantee balance for the period represents the highest amount in New Taiwan Dollars announced or occurred during the period.
Note 3: The ending balance represents the amounts approved by the Board of Directors.
Note 4: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.
Note 5: The policy for the limit of total endorsement/guarantee amount and the limit on endorsement/guarantee amount provided to each party are prescribed as follows:a. AUO: The total endorsement/guarantee amount provided shall not exceed the net worth of AUO as stated in its latest financial statement. The aggregate amount ofendorsement/guarantee provided to each guaranteed party shall not exceed 50% of AUO’s net worth as stated in its latest financial statement.
b. AUOXM: The total endorsement/guarantee amount provided and the aggregate amount of endorsement/guarantee provided to each guaranteed party both shall not exceed
the net worth of the endorser/guarantor as stated in its latest financial statement.
c. FPWJ: The total endorsement/guarantee amount provided and the aggregate amount of endorsement/guarantee provided to each guaranteed party both shall not exceed
40% of the net worth of the endorser/guarantor as stated in its latest financial statement.

AUO

1(Note 1)

Relationship

Name

Guarantor

0No.

Nature ofGuaranteed Party

Endorser/

Table 2

(Amount in thousands of New Taiwan Dollars)

AUO CORPORATION AND SUBSIDIARIES
Endorsements/Guarantees Provided
For the year ended December 31, 2023

Appendix 2

AUO Corporation

2023 Annual Report

347

348

AUO Corporation

2023 Annual Report

WMI's stock

Chenfeng Optronics Corporation's stock
GCS Holdings, Inc.'s stock

a2peak power Co., Ltd.'s stock
IOC's stock

Imedtac Co., Ltd.'s stock
Disign Incorporated's stock

Evertrust Technology Ltd.'s stock
D8AI Inc.'s stock

HUAI I Precision Technology Co., Ltd.'s stock

PlayNitride's stock

Konly
Konly

ADP
DPTW

DPTW
DPTW

DPTW

Ronly

SnapBizz CloudTech Pte. Ltd.'s stock
Azotek Co., Ltd.'s stock

Konly
Konly

Konly
Konly

PlayNitride's stock
SkyREC Ltd.'s stock

Konly
Konly

Konly

Carota's stock
Mindtronic AI Co. Ltd.'s stock

Konly
Konly

AUOLB Abakus Solar AG's stock
AUOSH TOLYY Optronics Co., Ltd.'s stock

Related party--

Related party---

Related party-

Related party-

Related party--

Related party
Related party

Relationship with the
Securities Issuer

ADPNL Avocor's stock

Type and Nameof Marketable Securities

ADPNL Avocor's convertible bondName of
HolderTable 3Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTPLnoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTPLnoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTPLnoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent

Financial assets at FVTPLnoncurrent

Financial Statement Account
-

2,011

2,914

150
8,400

2,500
2

4,000
1,000

1,500
1,119

8,625

13
2,407

7,535
188

3,216
36

3
1,293 CNY

793 USD

Shares198,645

34,9681,500
11,149125,000
10,714-35,808

16,531

7,345

744,421-247,038
29,943

6,250

5,150

1.88%

10.00%

16.13%
4.64%

14.17%
19.89%

10.87%
3.62%

1.49%
1.01%

14.38%

4.61%
3.93%

7.03%
16.12%

8.64%
3.17%

2.22%
1.58%

10.30%

CNY

USD

Note

198,645

34,9681,500
11,149125,000
10,714-35,808

16,531

7,345

744,421-247,038
29,9436,250 Note 1

5,150

December 31, 2023
Carrying
Percentage ofFair Value
AmountOwnership
USD
4,531
USD
4,531

AUO CORPORATION AND SUBSIDIARIES
Marketable Securities Held (Excluding Investment in Subsidiaries, Associates and Joint Ventures)
December 31, 2023
(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

Exploit Technology Co., Ltd.'s stock
Cruise10 Co., Ltd.'s stock

Prognosis Technology Inc.'s stock

GCS Holdings, Inc.'s stock
IOC's stock

Ronly
Ronly

Ronly

Ronly
Ronly

-

-

-

Related party

Relationship with the
Securities Issuer

Note 1: Formerly known as T-powertek Optronics Co., Ltd.

ProfetAI Inc.'s stock

Type and Nameof Marketable Securities

Ronly

Name of
HolderFinancial assets at FVTOCInoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent

Financial assets at FVTPLnoncurrent
Financial assets at FVTOCInoncurrent

Financial assets at FVTOCInoncurrent

Financial Statement Account

3,500
3,420

245

41
1,250

911

Shares112,000-

11,02520,0003.15%
12.37%

11.16%

0.49%
10.53%

December 31, 2023
Carrying
Percentage ofAmountOwnership
40,82312.89%

112,000-

11,02520,00040,823

Fair Value

Note

Appendix 2

AUO Corporation

2023 Annual Report

349

350

AUO Corporation

2023 Annual Report

AUOSG

AUOLB

AUOLB

AUOLB

AUOLB

AUOLB

AUO

AUO

AUO

Company
Name

Table 4

Financial
Statement
Account

Investments inequity-accounted
investees
Konly's stock Investments inequity-accounted
investees
DPGE's stock Investments inequity-accounted
investees
AUOKS's
Investments inequityequity-accounted
investees
AUOSG's
Investments inequity-accounted
stock
investees
AUOSJ's
Investments inequityequity-accounted
investees
AUOSZ's
Investments inequity-accounted
equityinvestees
AUOXM's
Investments inequityequity-accounted
investees
AUOKS's
Investments inequity-accounted
equityinvestees

AUOLB'sstockType and
Name ofMarketable
Securities

-

-

-

Subsidiary of
AUO
Subsidiary of
AUO
Subsidiary of
AUO

AUOSG
AUOSG
AUOLB

-

-

Subsidiary of
AUO

AUOSG

USD

USD

USD

USD

-

-

6,250

39,27432,000SharesUSD

110,000

600,000

800,001

992,480

AmountAcquisition

511,623

622,841

119,972

-

-

-

-

USD

627,394---

6,920 2,510,838 USD 1,830,970

573,171

350,7319,565,450

75,152,215

Amount266,268 USD--

35,000469,558

2,507,189

SharesBeginning Balance-

Notes 2&4 Subsidiary of
AUO

-

-

-

-

Counterparty Relationship

-

-

-

-

-

-

-

-

-

Shares---Carrying
Amount---USD 480,490 USD 480,490

USD 549,192 USD 549,192

USD 133,749 USD 133,749-

USD 627,394 USD 627,394

-

-

-

AmountDisposal

-

-

-

-

-

-

-

-

-

Gain/Losson Disposal

-

-

-

-

USD

Note

Note 4Note 4Note 4

694,839 Notes
1&5

-

-

-

1,964,491 Notes
1&6-

944,794 Notes
1&2

8,926,088 Notes
2&3

78,405,680 Notes
1&2

Amount2,777,106 USD-

41,250432,432

2,539,189

SharesEnding Balance

AUO CORPORATION AND SUBSIDIARIES
Individual Marketable Securities Acquired or Disposed of with Costs or Prices Exceeding
NT$300 Million or 20% of the Paid-in Capital
For the year ended December 31, 2023
(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

AUOSZ's
equityAUOVN'sequityAUOXM'sequityADPNL's
stock

AUOSG

AUOSG

AUOSG

ADP

Investments inequity-accounted
investees
Investments inequity-accounted
investees
Investments inequity-accounted
investees
Investments inequity-accounted
investees
Investments inequity-accounted
investees

Financial
Statement
Account

-

AUOLB
-

Subsidiary of
AUO-

Subsidiary of
AUO

AUOLB
-

Subsidiary of
AUO

AUOLB

Counterparty Relationship

-

-

-

-

-

Shares881,401

-

-

-

-

AmountBeginning Balance

-

-

-

-

-

Shares

USD

USD

USD

USD

393,695

480,490

20,922

549,192

133,749

AmountAcquisition

-

-

-

-

-

Shares

-

-

-

-

-

Amount

-

-

-

-

-

Carrying
AmountDisposal

-

-

-

-

-

Gain/Losson Disposal

-

-

-

-

-

Shares

USD

USD

USD

USD

Note

1,249,767 Notes
1&2

530,417 Notes
1&5

20,748 Notes
1&2

571,783 Notes
1&5

120,665 Notes
1&5

AmountEnding Balance

Note 1: The ending balance includes the recognition of investment gain (loss) and other related adjustments under the equity method.
Note 2: The acquisition amount refers to the participation in the investee’s capital increase.
Note 3: The ending shares include shares from the investee’s capital decrease. The ending balance includes cash return from the investee’s capital decrease, cash dividends, therecognition of investment gain (loss) and other related adjustments under the equity method.
Note 4: The disposal amount refers to the equity of the investee sold by AUOLB to AUOSG under business restructuring.
Note 5: The acquisition amount refers to the equity of the investee obtained by AUOSG from AUOLB under business restructuring.
Note 6: The acquisition amount includes the participation in the investee’s capital increase and the equity of the investee obtained by AUOSG from AUOLB under business restructuring.

AUOSJ'sequityType and
Name ofMarketable
Securities

AUOSG

Company
Name

Appendix 2

AUO Corporation

2023 Annual Report

351

352

AUO Corporation

2023 Annual Report

AUOKS

AUOSK

AUOSZ

AUOXM

AUST

Qisda

BMC

Raydium

Daxin

DPTW

AUOUS

AUOXM

QCSZ

Qisda

AETTW

CGPC

BenQ

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

AUO

CompanyCounterparty
Name

Table 5

Subsidiary of Qisda

Subsidiary of SSEC

Subsidiary of AUO

Associate

Subsidiary of Qisda

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Associate

Associate

Subsidiary of Qisda

Associate

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Relationship

Sales

Sales

Sales

Sales

Sales

Sales

Sales

Purchases

Purchases

Purchases

Purchases

Purchases

Purchases

Purchases

Purchases

Purchases(1,120,256)(689,193)(104,899)(160,365)(2,824,828)(1,647,954)(294,312)

2,772,196

2,029,409

923,423

3,371,627

2,954,207

3,873,001

37,179,061

40,213,759

112,496

16,018,158(Note 2)

/SalesPurchases

AmountPurchases

(1)%

-

-

-

(1)%

(1)%

-

2%

1%

1%

2%

2%

2%

22%

24%

-

10%

Percentage of
Total
Purchases/SalesTransaction Details

EOM 55 days

EOM 25 days

EOM 25 days

EOM 55 days

EOM 55 days

EOM 45 days

EOM 75 days

EOM 60 days

EOM 120 days

EOM 120 days

EOM 90 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 30 days

Credit Terms

Credit
Terms

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(Note 1) (Note 1)

Unit
Price

1,988
81,002-

48,40948,515-65,395(540,881)(692,813)(301,418)(779,128)(367,106)(597,315)(10,477,599)(11,305,260)(18,126)(2,309,534)(Note 2)Ending Balance

-

-

-

-

-

-

-

(1)%

(2)%

(1)%

(2)%

(1)%

(1)%

(24)%

(26)%

-

(5)%

Percentage ofTotal Notes/Accounts
Receivable(Payable)

Transactions withTerms Different Notes/Accounts Receivable (Payable)from Others(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

AUO CORPORATION AND SUBSIDIARIES
Purchases from or Sales to Related Parties with Amounts Exceeding NT$100 Million or 20% of the Paid-in Capital
For the year ended December 31, 2023

Note

Subsidiary of AUO

Subsidiary of AUO

ADP

AMIXM AUOXMAssociate

Subsidiary of AUO

Ultimate parent company Sales

AUOKS Raydium

AUOKS DPTWAUOKS AUO

BMC

Raydium

AUOSZ

AUOSZ

Associate

Subsidiary of Qisda

Qisda

AUOSZ
Purchases

Purchases

Purchases

Ultimate parent company Sales

Associate

AUOSK AUO

AUOSH AUO

Sales

Subsidiary of AUO

Ultimate parent company Sales

AUOKS AUOXM

Purchases

Purchases

Purchases

Purchases

Subsidiary of AUO

Associate

AUOKS Qisda

Sales

Sales

Sales

Sales

Purchases

Purchases

Sales

Sales

Sales

Sales

Sales

USD

CNY

CNY

CNY

EUR

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

USD

CNY

CNY

435,412210,150

297,130(3,664)(55,999)(1,061,605)(3,621,643)

133,305

40,67073,010231,494(28,538)(23,353)(5,400)(29,793)

54,86049,395(24,472,225)(150,395)(3,207,272)(2,132,007)(781,067)(125,281)(Note 2)

/SalesSales

AmountPurchases

AUOKS AUOSZ

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

AUOKS

ADP

ADPNL

Subsidiary of AUO

Subsidiary of AUO

AETSZ

ADP

AUO

ADPUS

DPGE

AUO

Subsidiary of SSEC

Subsidiary of SSEC

ADP

MZEC

AUO

ADP

MXEC

AUO

Subsidiary of SSEC

Subsidiary of SSEC

ADPSZ

SFPC

AUO

Relationship

ADPSZ

SLEC

AUO

CompanyCounterparty
Name

6%

3%

4%

(74)%

(92)%

(22)%

(74)%

5%

2%

3%

9%

(78)%

(73)%

(100)%

(24)%

63%

100%

(11)%

-

(1)%

(1)%

-

-

Percentage of
Total
Purchases/SalesTransaction Details

EOM 120 days

EOM 90 days

EOM 120 days

EOM 45 days

EOM 25 days

EOM 30 days

EOM 30 days

EOM 120 days

EOM 120 days

EOM 120 days

EOM 60 days

EOM 30 days

EOM 30 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 25 days

EOM 25 days

EOM 25 days

EOM 25 days

EOM 25 days

Credit Terms

Credit
Terms

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(Note 1) (Note 1)

Unit
Price

CNY

CNY

CNY

EUR

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

USD

957

(159,232)(55,493)(127,872)-

212,708

538,626(64,756)(18,031)(41,912)(50,015)

7,449

10,066--(11,283)(4,270)3,401,535

102,795

422,776-

301,347

164,712(Note 2)Ending Balance

(6)%

(2)%

(5)%

79%

-

28%

71%

(7)%

(2)%

(4)%

(5)%

87%

100%

-

-

(67)%

(100)%

18%

1%

2%

-

2%

1%

Percentage ofTotal Notes/Accounts
Receivable(Payable)

Transactions withTerms Different Notes/Accounts Receivable (Payable)from Others
Note

Appendix 2

AUO Corporation

2023 Annual Report

353

354

AUO Corporation

2023 Annual Report

Purchases

Subsidiary of AUO

Subsidiary of AUO

Lextar

DPTW

FTWJ

FTWJ

M.Setek ACTW

JectorUltimate parent company Sales

AETTW AUO

Purchases

Purchases

Sales

Sales

Purchases

Sales

Subsidiary of AUO

Subsidiary of Ennostar

Subsidiary of AUO

Sales

Purchases

Purchases

AET-YP AETTW

ADP

Subsidiary of AUO

DPTW

Subsidiary of AUO

DPXM

Ultimate parent company Sales

AUO

AUOXM

Ultimate parent company SalesAUOXM AUO

DPXM

Subsidiary of AUO

AUOXM DPTW

AUST

Associate

AUOXM Raydium

Purchases
Purchases

Subsidiary of Qisda

Subsidiary of Qisda

Purchases

AUOXM BMCAUOXM DPXMAUOXM QCOS

Subsidiary of AUO

Subsidiary of AUO

AUOXM AUOKS

Ultimate parent company Purchases

Sales

AUOXM AUO

Subsidiary of AUO

Ultimate parent company Sales

Ultimate parent company Purchases

AUOSZ

Purchases

Purchases

CNY

JPY

CNY

CNY

CNY

CNY

USD

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

USD

USD

CNY

CNY

CNY

(483,414)

371,725

211,799(4,497,416)(1,090,013)

84,784(403,409)(34,894)(122,289)(8,399,757)

345,814401,322

186,540

101,652

35,346

1,062,446

373,094(8,418)9,452(231,494)(9,086,098)

40,150324,063(Note 2)

/SalesUltimate parent company Sales

AUOKS

AUOSZ

Subsidiary of AUO

Subsidiary of Ennostar

AmountPurchases

AUOUS AUO

AUO

AUOSZ

Relationship

AUOUS AUO

DPTW

Lextar

AUOSZCompanyCounterparty
Name

(42)%

99%

53%

(80)%

(99)%

13%

(15)%

(1)%

(99)%

(81)%

4%

5%

2%

1%

-

12%

4%

(46)%

100%

(2)%

(97)%

1%

4%

Percentage of
Total
Purchases/SalesTransaction Details

EOM 60 days

EOM 30 days

EOM 45 days

EOM 45 days

EOM 90 days

EOM 120 days

EOM 90 days

EOM 120 days

EOM 45 days

EOM 45 days

EOM 120 days

EOM 120 days

EOM 90 days

EOM 120 days

EOM 120 days

EOM 30 days

EOM 45 days

EOM 30 days

EOM 75 days

EOM 60 days

EOM 45 days

EOM 120 days

EOM 120 days

Credit Terms

Credit
Terms

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(Note 1) (Note 1)

Unit
Price

JPY

CNY

CNY

CNY

CNY

USD

CNY

CNY

CNY

CNY

CNY

CNY

CNY

USD

CNY

CNY

CNY

CNY

98,266(139,255)(67,067)

1,605,805

370,847(26,457)

109,095

15,97819,4452,420,133(111,080)(126,619)(47,162)(46,946)(15,978)(212,708)--(2,129)50,0152,614,257(17,769)(108,842)(Note 2)Ending Balance

36%

(99)%

(60)%

97%

100%

(4)%

19%

3%

99%

86%

(4)%

(5)%

(2)%

(2)%

(1)%

(8)%

-

-

(100)%

2%

98%

(1)%

(4)%

Percentage ofTotal Notes/Accounts
Receivable(Payable)

Transactions withTerms Different Notes/Accounts Receivable (Payable)from Others
Note

FTWJ

AUO

AUOKS

AUOSZ

AUOXM

DPTW

DPTW

DPTW

DPTW

DPTW

Purchases

Purchases

Sales

Sales

Sales

Sales

Sales

Sales

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO
Sales

Sales

Sales

Ultimate parent company Sales

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of Qisda

ADPNL represented as adirector of Avocor

Subsidiary of AUO

Subsidiary of AUO(1,511,810)(1,418,307)(584,857)(2,780,342)

4,805,636

1,777,682(100,572)(198,298)(335,474)(103,720)(218,299)(1,550,289)

24,328,447

983,024

(19)%

(18)%

(7)%

(35)%

60%

22%

-

(1)%

(1)%

-

(1)%

(5)%

96%

33%

(28)%

Percentage of
Total
Purchases/SalesEOM 120 days

EOM 120 days

EOM 120 days

EOM 60 days

EOM 90 days

EOM 90 days

EOM 45 days

EOM 45 days

EOM 45 days

OA 90 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 45 days

EOM 30 days

Credit Terms

Credit
Terms

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(Note 1) (Note 1)

Unit
Price

480,463

472,024

279,949

409,822(1,607,699)(472,779)

18,67763,56939,841

120,859

47,741

127,471(3,305,015)(348,456)

139,255(Note 2)Ending Balance

22%

22%

13%

19%

(70)%

(21)%

1%

2%

1%

3%

1%

4%

(94)%

(80)%

52%

Percentage ofTotal Notes/Accounts
Receivable(Payable)

Transactions withTerms Different Notes/Accounts Receivable (Payable)from Others
Note

Note 1: Transaction terms with related parties were similar to those with third parties, except for particular transactions with no similar transactions to compare with. For thosetransactions, transaction terms were determined in accordance with mutual agreements.
Note 2: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

DPTW

DPXM

DPTW

ADP

ADP

QCOS

JectorADP

ADPSZ

Avocor

ADP

ADPNL

ADP

ADP

AUO

ADP

Purchases(320,606)(Note 2)

/SalesSales

AmountPurchases

Ultimate parent company Purchases

Subsidiary of AUO

Subsidiary of AUO

M.Setek

ACTW

Relationship

AETTW AET-YP

CompanyCounterparty
Name

Transaction Details

Appendix 2

AUO Corporation

2023 Annual Report

355

356

AUO Corporation

2023 Annual Report

Ultimate parent company

AUST

AUO

Subsidiary of AUO

AUOXM AUOKS

Subsidiary of AUO

Ultimate parent company

AUOKS

AUOSZ

Ultimate parent company

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Ultimate parent company

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of SSEC

Subsidiary of SSEC

Subsidiary of SSEC

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Relationship

AUOXM AUO

AUOKS

AETSZ

AUOSJ

AUO

AUOKS

AUOLB

AUOSZ

AUOXM

AUOKS

AUOSJ

AUO

AUOKS

AUO

DPGE

MZEC

AUO

ADP

SFPC

AUO

AUO

SLEC

AUO

AUO

AETTW

ACTW

AUO

S4M

AUO

CompanyCounterparty
Name

Table 6

CNY

USD

CNY

CNY

CNY

CNY

CNY

CNY

USD

CNY

19,445405,8152,420,133

555,2852,616,898

402,568

86,80442,887

212,708

538,626

4,366,847

102,795

422,776

301,347

164,712802,015205,132

112,930

CNY

CNY

CNY
6.01

(Note 2) CNY

3.86(Note 2) CNY(Note 2) CNY(Note 2)

(Note 2)

(Note 2)

6.21

7.29

(Note 2)

2.93

5.80

5.18

1.55

(Note 2)

(Note 2)

(Note 2)Ending Balance ofTurnover
Receivables
Rate(Note 3)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

127 Will be collected in next period

Action Taken-

321 Collected in subsequent period

3,835 Collected in subsequent period

15,344 Collected in subsequent period

21,705 Collected in subsequent period

-

-

-

15,200 Collected in subsequent period

15,917 Collected in subsequent period

31,880 Collected in subsequent period

AmountOverdue Receivables(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

USD

CNY

CNY

CNY

CNY

CNY

CNY

-

-

-

-

-

-

-

-

9,329

335

1,217,242

19,740834,100

126,916

312,463

1,542,431

102,795

151,739(Note 1)

Amounts
Received in
Subsequent
PeriodAUO CORPORATION AND SUBSIDIARIES
Receivables from Related Parties with Amounts Exceeding NT$100 Million or 20% of the Paid-in Capital
December 31, 2023

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Allowance for
Bad Debts

Subsidiary of AUO

Avocor

AUO

AUOKS

AUOSZ

AUOXM

FTWJ

ADP

DPTW

DPTW

DPTW

DPTW

DPTW

JPY

CNY

CNY

CNY

CNY

1,405,622

480,463

472,024

279,949

409,822

120,859

127,471

139,255

1,605,805

792,91750,648116,305

100,326(Note 2)

3.46

3.42

3.20

6.34

1.72

15.08

4.54

1.81

(Note 2)

(Note 2)

(Note 2)

(Note 2)

JPY

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Action Taken

CNY

-

-

-

-

-

25,328 Will be collected in next period

18,873 Collected in subsequent period

-

-

-

-

-

-

-

-

489,370

22,89870,758139,255

403,583

219,941(Note 1)

Amounts
Received in
Subsequent
Period967,739 Will be collected in next period JPY

AmountOverdue Receivables

Note 1: Until the late of January 2024.
Note 2: The ending balance includes other receivables from transactions not related to ordinary sales.
Note 3: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

Ultimate parent company

ADPNL represented as a directorof Avocor

Subsidiary of AUO

Subsidiary of AUO

Subsidiary of AUO

M.Setek

ADPNL

FTWJ

Subsidiary of AUO

Subsidiary of AUO

ADP

DPTW

ACTW

FPWJ

Subsidiary of AUO

Relationship

AETTW AET-YP

DPTW

FTWJ

DPXM

AUOKS

BVXM

CompanyCounterparty
Name

Ending Balance ofTurnover
Receivables
Rate(Note 3)

-

-

-

-

-

-

-

-

-

-

-

-

-

Allowance for
Bad Debts

Appendix 2

AUO Corporation

2023 Annual Report

357

358

AUO Corporation

2023 Annual Report

AUOLB
AUONL
Konly
Ronly
DPTW

ACTW

Qisda

S4M

AETTW

AUO

AUO

AUO

AUO

InvesteeCompany

AUO
AUO
AUO
AUO
AUO

Investor
Company

Table 7

Taiwan ROC

Taiwan ROC

Taiwan ROC

Taiwan ROC

Malaysia
Netherlands
Taiwan ROC
Taiwan ROC
Taiwan ROC

Location

Holding company
Sales support of TFT-LCD panels
Investment
Investment
Design, manufacturing, and sales of TFTLCD modules, backlight modules, TV set
and related parts
Manufacturing and sale of ingots and solar
wafersManufacturing, sales and service of highend displays, optical precision electronic
products and functional film products;
manufacturing, sales and service of products
related to intelligent solutions; medical
equipment and services; research,development, design, manufacturing andsales of network communication products
Sales and leasing of content management
system and hardware, and design of digital
signage content and field curation
Planning and design of water treatment
technology and EPC project, energy saving
equipment and energy efficiency project,facility intelligent management andenvironmental sustainability solution,
management consulting and software
services relating to carbon emission.

Main Activities
Shares

15,687,921
9,505,477

50,000424,050

9,505,477

50,000424,050

42,4055,000

335,231242,565

76,491,558 2,539,189
24,27550
7,226,603
432,432
5,078,047
453,276
3,569,155
190,108

December 31,
2022

15,687,921

77,484,038
24,275
7,262,604
5,078,047
3,569,155

December 31,
2023

Original Investment Amount

100.00%100.00%17.04%

100.00%100.00%100.00%100.00%100.00%28.56%

Percentage
ofOwnership

23,257

15,257

9,797,059

3,369,408

78,405,680
36,222
8,926,088
4,635,095
2,634,090

Carrying
Amount(Notes 1 and 2)

December 31, 2023

(242,127)(1,256)

2,962,492(398,798)

3,553,086
2,434
184,903(287,446)
114,659

Net Income(Loss) ofInvestee

Note(257,911) Subsidiary(1,256) Subsidiary375,147 Associate(398,798) Subsidiary

3,553,086 Subsidiary
2,434 Subsidiary
184,903 Subsidiary(287,446) Subsidiary
32,751 Subsidiary

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)

AUO CORPORATION AND SUBSIDIARIES
Information on Investees (Excluding Information on Investment in Mainland China)
For the year ended December 31, 2023
(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

ADP
SREC
Ennostar
ACTTW

AET-YP

SINTRONES Taiwan ROC

DPTW

Raydium
Daxin

Qisda

AUO
AUO
AUO
AUO

AUO

AUO

Konly

Konly
Konly

Konly

Taiwan ROC

Taiwan ROC
Taiwan ROC

Taiwan ROC

Taiwan ROC

Taiwan ROC
Taiwan ROC
Taiwan ROC
Taiwan ROC

Taiwan ROC
Cayman Islands
Cayman Islands
Taiwan ROCDPGEADTHLD
ADTCM
AHTW

AUO
AUO
AUO
AUO

Taiwan ROC
IsraelTaiwan ROC

LocationSSEC
CQIL
ADLINK

InvesteeCompany

AUO
AUO
AUO

Investor
Company
Investment
Holding company
Manufacturing and sales of hardware,
software and peripheral devices of industrial
computers
Solar power generation
Holding company
Holding company
Manufacturing, development and sales of
medical equipments
Research, development and sales of display
Investment
Holding company
Design, development and sales of softwareand hardware for health care industry
Investment and construction in publicconstruction, and wastewater (sewage)
treatment
R&D, manufacturing and sales of in-vehicle
computers and peripherals and otherapplications
Design, manufacturing, and sales of TFTLCD modules, backlight modules, TV set
and related parts
IC Design
Research, development, manufacturing andsales of display and semiconductor related
fine chemicals
Manufacturing, sales and service of highend displays, optical precision electronic
products and functional film products;
manufacturing, sales and service of products
related to intelligent solutions; medical
equipment and services; research,development, design, manufacturing andsales of network communication products

Main Activities

175,857
154,748
1,363,481

1,363,481

703,795

175,857
154,748703,795-

15,00015,00091,507369,555
288,828
4,764,942
30,000350,000
462,008
76,4375,000

2,170,000
1,182,621
2,411,693

December 31,
2022

369,555
288,828
4,764,942
30,000950,000
635,429
60,3005,000

2,170,000
1,182,621
2,411,693

December 31,
2023

Original Investment Amount

50,145

11,454
19,114

42,598

1,471

1,500

200,000
28,88393,5693,000

41,25021,3002,130
500

217,000
39,97442,310Shares2.55%

15.10%
18.61%

6.40%

7.02%

8.82%

100.00%32.01%
12.45%
100.00%100.00%88.75%
78.89%
100.00%31.00%
100.00%19.45%

Percentage
ofOwnership

1,465,483

1,693,983
583,305590,229

84,514(15,123)

6,045,158
338,053
6,015,186
4,190

944,794
215,362
21,5372,457

2,345,568
887,092
2,195,010

Carrying
Amount(Notes 1 and 2)

December 31, 2023

2,962,492

1,442,791
523,354

114,659

68,662(340,281)

3,526,660
80,217(6,782,678)(10,436)

2,232(177,249)(25,365)(333)

501,534(3,368)276,249

Net Income(Loss) ofInvestee

Note

56,116 Associate

217,867 Associate
97,388 Associate

7,339 Subsidiary

1,802 Associate(Note 6)(30,025) Subsidiary

3,526,660 Subsidiary
25,681 Subsidiary(896,939) Associate(10,436) Subsidiary(5,287) Subsidiary(151,884) Subsidiary(22,640) Subsidiary(333) Subsidiary

155,476 Associate(3,368) Subsidiary(15,211) Associate

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)

Appendix 2

AUO Corporation

2023 Annual Report

359

360

AUO Corporation

2023 Annual Report

AUES

IOC

SREC
Ennostar
Naidun-tech
Co., Ltd.

SINTRONES Taiwan ROC

BVLB
DPLB
FHVI
FFMI
DSC
Shine
Biomedical
Technology
Corporation
ACMK
SDMC
M.Setek
ADPNL

Jector

Konly

Konly

Konly
Konly
Konly

Konly

DPTW
DPTW
DPTW
DPTW
DPTW
DPTW

ACTW
ACTW
SDMC
ADP

ADP

Taiwan ROC

Malaysia
Taiwan ROC
Japan
Netherlands

Malaysia
Malaysia
BVI
Mauritius
ThailandTaiwan ROC

Taiwan ROC
Taiwan ROC
Taiwan ROC

Taiwan ROC

Taiwan ROC

Taiwan ROC

ADLINK

Konly

Location

SSEC
Taiwan ROC
SkyREC Ltd. BVI

InvesteeCompany

Konly
Konly

Investor
Company

Manufacturing and sale of solar wafers
Holding company
Manufacturing and sale of ingots
Sales and sales support of display andholding company
Introduction of smart field construction andother related software and hardware
solutions

Investment
Business intelligence and AI video
management system
Manufacturing and sales of hardware,
software and peripheral devices of industrial
computers
Services related to educational activities andsite rental
R&D of color e-paper related technology,
and processing product design anddevelopment
Investment
Holding company
Solution provider to improve theperformance and reliability ofsemiconductor components
R&D, manufacturing and sales of in-vehicle
computers and peripherals and otherapplications
Holding company
Holding company
Holding company
Holding company
International trade
Development, design, manufacturing andsales of facial masks and cosmetics

Main Activities

120,000

1,988,488
23,596,398
1,205,493

3,877,666
2,362,321
274,700
3,740
36,72076,84622,006
653
40
3,672

2,730

1,353
16,413
8,733

-

400

15,94414,000-Shares120,000

12,000

121,444
1,988,488
167,216
23,596,398 11,404,184
811,798-

1,051,289
4,350,631
2,362,321
274,700
3,740--

155,233

20,00013,533
1,180,491
39,997

4,000

4,000

13,533
1,180,491
39,997

988,837

140,000
46,016

December 31,
2022

988,837

140,000-

December 31,
2023

Original Investment Amount78.43%

100.00%99.9991%
100.00%100.00%100.00%100.00%40.00%
34.00%

13.03%

1.50%
2.18%
22.03%-

100.00%

7.33%

2.00%
-

Percentage
ofOwnership

128,792

2,201,771
2,144,568
1,249,767

4,683,810
1,983,341
123,788
12,462
36,676

157,352

15,8401,088,766
10,837-

12,484865,239

151,327-

Carrying
Amount(Notes 1 and 2)

December 31, 2023

9,853

(370)
236,318
236,764(19,460)

786,298
92,96010,0832,165(130)

68,66280,217(6,782,678)(20,668)(129,531)

8,199

276,249

501,534(3,005)Net Income(Loss) ofInvestee

Note7,579 Subsidiary(369) (Note 5)
317,312 Subsidiary236,762 Subsidiary(19,460) Subsidiary(Note 5)
798,676 Subsidiary
91,817 Subsidiary
9,913 Subsidiary
866 Associate(48) Associate

3,343 Associate(Note 6)

1,203 Subsidiary(174,113) Associate(4,552) Associate(7,990) (Note 7)

8,199 Subsidiary(37,457) Associate

10,031 Associate(Note 7)

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)

SGPC
EGPC
AET-YP

DPTW

Raydium
Daxin

ADLINKIOC

Ennostar
Zhao Feng
Energy Co.,
Ltd.
RP

YTTEK

FYPC
ZYPC
AUOUS
AUOJP
AUOKR
AUOSK

SREC
SREC
AETTW

Ronly

Ronly
Ronly

Ronly

Ronly

Ronly
Ronly

Ronly

Ronly
Ronly
AUOLB
AUOLB
AUOLB
AUOLB

Ronly

DentLabX

InvesteeCompany

ADP

Investor
Company
Sales of management platform and solutions
relating to dental digital information
Solar power generation
Solar power generation
Investment and construction in publicconstruction, and wastewater (sewage)
treatment
Design, manufacturing, and sales of TFTLCD modules, backlight modules, TV set
and related parts
IC Design
Research, development, manufacturing andsales of display and semiconductor related
fine chemicals
Manufacturing and sales of hardware,
software and peripheral devices of industrial
computers
R&D of color e-paper related technology,
and processing product design anddevelopment
Holding company
Energy technical services

Main Activities

Taiwan ROC

1,000
276
155
1,359

146,812

146,812

11,0003,000
1,000 USD
276 USD
155 USD
1,359 USD

50,0001,245,456
160,000

68,400809,508240,647
70,021

845,510820,000
280,000
124,050-

December 31,
2022

50,0001,245,456
160,000-

809,508240,647
70,021

845,510820,000
280,000
124,050

17,000December 31,
2023

Production/visual effects/LED virtual
production
Taiwan ROC
5G SDR platform-a pure software platform,
5G non-signaling tester, 5G mm wave FEM,
28GHz 2-way up/down converter, beam
calibration solution
Taiwan ROC
Renewable energy power generation
Taiwan ROC
Renewable energy power generation
United States
Sales and sales support of TFT-LCD panels USD
Japan
Sales support of TFT-LCD panels
USD
South Korea
Sales support of TFT-LCD panels
USD
Slovakia Republic Repairing of TFT-LCD modules
USD

Taiwan ROC
Taiwan ROC

Taiwan ROC

Taiwan ROC

Taiwan ROC
Taiwan ROC

Taiwan ROC

Taiwan ROC
Taiwan ROC
Taiwan ROC

Taiwan ROC

Location

Original Investment Amount

1,100
300
1,000
1
-

6,673

315

20,686
16,000-13,175669
6,312

40,50956,811
24,50012,405

1,700

Shares100.00%100.00%100.00%100.00%100.00%100.00%27.53%

21.39%

2.75%
20.00%

-

6.06%

0.88%
6.15%

6.09%

100.00%100.00%72.97%

85.00%

Percentage
ofOwnership

USD
USD
USD
USD

Note

(259) Subsidiary(160) Subsidiary
686 Subsidiary
88 Subsidiary
89 Subsidiary
329 Subsidiary(27,084) Associate(5,486) Associate(224,891) Associate(6,649) Associate(27,324) (Note 7)(16,108) Associate(24,392) Associate
32,161 Associate

6,979 Subsidiary

56,345 Subsidiary
25,005 Subsidiary(248,305) Subsidiary(1,676) Subsidiary

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)

(259)
(160)
686 USD
88 USD89 USD329 USD(28,187)

6,292(6,782,678)(33,243)(129,531)

276,249

1,442,791
523,354

114,659

60,42027,007(340,281)(1,971)Net Income(Loss) ofInvestee

10,741
2,840
3,432 USD
1,605 USD
1,353 USD
5,342 USD

115,40747,571

1,386,646
149,636-

800,289

188,635
192,629561,284

725,438
317,423(125,063)

15,324

Carrying
Amount(Notes 1 and 2)

December 31, 2023

Appendix 2

AUO Corporation

2023 Annual Report

361

362

AUO Corporation

2023 Annual Report

AUVI

BVLB
AUOSG

AEUS
AUOVN

DPHK

FTMI
FWSA
ADTHLD
ADPUS
ADPJP
RVI

RVU

ADTSG

ADTTW

IchijoSeisakusyo
Co., Ltd.
CQHLD
CQUK

AUOLB

AUOLB
AUOLB

AUOSG
AUOSG

DPLB

FHVI
FHVI
ADTCM
ADPNL
ADPNL
ADPNL

ADPNL

ADTHLD

ADTSG

M.Setek

CQIL
CQHLD

AUST

InvesteeCompany

AUOLB

Investor
Company

United Kingdom
United Kingdom

Japan

Taiwan ROC

Singapore

United States

Mauritius
Samoa
Cayman Islands
United States
Japan
CanadaHong Kong

United States
Vietnam

Malaysia
Singapore

United States

Singapore

Location

Holding company
Sales and sales support of content
management system

USD

Holding company
USD
Holding company
USD
Holding company
USD
Sales and sales support of display
USD
Sales and sales support of display
USD
Design, sales and sales support of digital
USD
signage content management system
Design and sales support of digital signage USD
content management system
Holding company, and sales of software and USD
hardware integration system relating tointelligent manufacturing and softwaredevelopment
Design and sales of software and hardware USD
integration system and equipment, softwaredevelopment and consulting services
relating to intelligent manufacturing
Manufacturing of automatic machinery and JPY
equipment and related parts
26,548 USD
GBP

5,000 JPY

26,548
1,874

5,000

2,013

16,80022,300 USD

6,503
19,000
2,700
1,500
508
27,204

103,785

1,194
-

198

2,013 USD

5,000

907,114

Shares635,730
-

-

6,000

22,3001

6,503
19,0002,700
1
129,564

10

1,194
-

85,171
9,958 2,777,106

5,000

198 USD

6,503 USD
19,000 USD
2,700 USD
1,500 USD
508 USD
29,454 USD

87,785 USD

1,194 USD
20,922USD
1,840,928 USD

5,000 USD

241,487

December 31,
2022

222,365 USD

December 31,
2023

Manufacturing TFT-LCD panels based on USD
low temperature polysilicon technology
Research and development and IP related USD
business
Holding company
Holding company and sales support of TFT- USD
LCD panels
Support of solar-related products
USD
Manufacturing, assembly and sales of TFT- USD
LCD modules
Holding company
USD

Main Activities

Original Investment Amount

100.00%-38.46%

100.00%100.00%100.00%100.00%100.00%11.25%
100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%Percentage
ofOwnership

USD

USD

USD

USD

USD
USD
USD
USD
USD
USD

USD

USD
USD

USD

USD

USD

26,251 USD
GBP-

236 USD

6,161 USD

484 USD

49,944 USD
16,104 USD
889 USD
1,790 USD
414 USD
27,083 USD

154,088 USD

562 USD
20,748 USD

1,964,491 USD

6,587 USD

(6) USD(74) GBP(504) USD

(5,751) USD

258 USD

2,415 USD
567 USD(5,685) USD
148 USD
24 USD(296) USD

25,218 USD(11) USD(174) USD

84,021 USD

193 USD

Note-(6) Subsidiary(74) (Note 5)

Associate(Note 3)(504) Subsidiary(5,751) Subsidiary

258 Subsidiary

25,218 Subsidiary(Note 4)
2,415 Subsidiary
567 Subsidiary(814) Subsidiary
148 Subsidiary
24 Subsidiary(1,576) Subsidiary(11) Subsidiary(174) Subsidiary(Note 5)84,021 Subsidiary

193 Subsidiary(36,554) Subsidiary

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)(36,554) USD

Net Income(Loss) ofInvestee

31,570 USD

Carrying
Amount(Notes 1 and 2)

December 31, 2023

CQCA

JRUK

JRUS

CQHLD

CQUS

CQUS

United States

United Kingdom

CanadaUnited States

Location

798
1,500
8,000

798 GBP
1,500 USD
8,000 USD

19,948December 31,
2022

19,948 GBP

December 31,
2023

Sales of content management system andGBP
hardwareResearch and development of content
GBP
management system
USD
Development and sales of content
management system and sales of the related
hardware
USD
Development and sales of content
management system and sales of the related
hardware

Main Activities

Original Investment Amount

-

18

1

13

Shares100.00%100.00%100.00%100.00%Percentage
ofOwnership

USD

USD

GBP

GBP

6,303 USD

1,724 USD

899 GBP(238) USD

(41) USD

163 GBPNote(238) Subsidiary(41) Subsidiary

163 Subsidiary(17) Subsidiary

Investor’s Shareof Profit (Loss)of Investee(Notes 1 and 2)(17) GBPNet Income(Loss) ofInvestee

11,542 GBP

Carrying
Amount(Notes 1 and 2)

December 31, 2023

Note 1: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.
Note 2: Inclusive of the amortization of differences between the investment cost and the entity’s share of the net value of investee, and the effect of upstream and sidestream transactions.
Note 3: The carrying amount includes accumulated impairment loss.
Note 4: The registration of the alteration of DPHK’s common stock has not been completed.
Note 5: The liquidation process of CQUK, ACMK and BVLB were completed in February 2023, June 2023 and September 2023, respectively.
Note 6: On and from February 2023, the investment in SINTRONES has been accounted for using the equity method. See Note 6(3) for the relevant information.
Note 7: Ceased applying the equity method over SkyREC Ltd. and IOC in March 2023 and December 2023, respectively.

CQUS

InvesteeCompany

CQHLD

Investor
Company

Appendix 2

AUO Corporation

2023 Annual Report

363

364

AUO Corporation

2023 Annual Report

Investee

552,924

8,630

51,782245,966

51,782Business management consulting, services oftechnology promotion and application, andplatform services of industrial cloud

Planning, design and development of construction
project for environmental protection and related
project management

Planning, design and development of construction
project for environmental protection and related
project management

Development, sales and licensing of software andhardware relating to intelligent manufacturing, andrelated consulting services

Sales of software and hardware relating tointelligent manufacturing, and related consulting
services

Design and sales of software and hardware
integration system and equipment relating tointelligent manufacturing

Manufacturing and sales of TFT-LCD panels

ADTSZ

AETSD

AETSZ

AMISZ

AMIXM

ATISZ

AUOKS

32,898,978

135,929

185,554

Design, development and sales of software andhardware for health care industry

Main Activities

ACTSZ

Company

Total
Amount(Note 1)

(Note 1)

(Note 1)

(Note 1)

(Note 1)

(Note 1)

(Note 1)

(Note 1)-

34,253,949

-

-

-

-

-

-

-

-

-

-

-

414,693 138,231

-

-

-

-

-

-

-

-

-

34,253,949

-

-

-

-

-

552,924-

689,866(27,492)(2,701)(52,290)(27,140)(3)(166,046)(31,408)

100%

100%

100%

100%

100%

100%

100%

100%

689,866(27,492)(2,701)(52,290)(27,140)(3)(166,046)(31,408)

21,344,066

33,85524,24649,380

9,426

2,377

105,099

28,971

-

-

-

-

-

-

-

-

Carrying
Accumulated%
Accumulated
Investor’s
Amount of Accumulated
Outflow of
Net Income Ownership
Outflow of Investment Flows
InwardtheInvestment
Share of
(Loss) of
Remittance ofthrough
Method of Investment
Investment
from
Taiwanof Paid-in
Investee
Profit (Loss)from Taiwan
Earnings as of Note
as of
as of
Direct or
Investment as of January
Capital(Notes4
andofInvestee
December
December
31,
December 31,
Outflow Inflow
1, 2023
Indirect5)2023(Note 2)2023
(Notes 4 and 5) 31, 2023
(Note 2)
Investment(Note 2)
(Note 2)

(1) Related information on investment in Mainland China

1. AUO

Table 8(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

AUO CORPORATION AND SUBSIDIARIES
Information on Investment in Mainland China
For the year ended December 31, 2023

Investee

13,945,972
2,589,120

Manufacturing, assembly and sales of TFT-LCD
modules

Manufacturing, assembly and sales of TFT-LCD
modules

Sales of liquid crystal products and related parts;
leasing

Sales and consulting services of virtual data
scientist platform for manufacturing

AUOSZ

AUOXM

BVXM

PFSZ

460,770(Note 1)30,718--30,718(8,757)23,4782,024,9781,193,825

110,009(44,131)

100%

51%

100%

100%

100%

100%

(4,466)23,4782,024,9781,193,825

110,009(44,131)251,376

9,920

1,360,548

16,293,338

17,564,029

3,706,575

-

-

-

-

-

-

Note 1: Indirect investments in Mainland China through companies registered in a third region.
Note 2: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.
Note 3: Pursuant to the Regulations Governing Permission for Investment and Technical Cooperation in the Mainland Area, AUO’s accumulated investments
in Mainland China did not exceed the upper limit on investment amount or ratio stipulated by the Investment Commission, Ministry of Economic Affairs(“MOEA”).
Note 4: Amounts were recognized based on the investees’ audited financial statements.
Note 5: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the average exchange rates for the year of 2023.

99,214,522--

7,679,500

6,143,600

2,457,440

80,907,452 (USD1,702,948 and HKD60,000 and
CNY6,572,210)

-

-

-

-

-

51,118,131 (USD1,664,110)

-

-

-

-

-

Upper Limit on Investment Stipulated by
Investment Commission, MOEA (Note 3)--

7,679,500

6,143,600

2,457,440

Investment Amounts Authorized by
Investment Commission, MOEA (Note 2)(Note 1)

(Note 1)

(Note 1)

(Note 1)

(Note 1)

Accumulated Investment in Mainland China
as of December 31, 2023 (Note 2)(2) Upper limit on investment in Mainland China

28,04914,314,588

3,317,544

Sales support of TFT-LCD panels

Leasing

AUOSJ

Main Activities

AUOSH

Company

Carrying
Accumulated%
Accumulated
Investor’s
Amount of Accumulated
Outflow of
Net Income Ownership
Outflow of Investment Flows
InwardtheInvestment
Share of
(Loss) of
through
Method of Investment
Investment Remittance offrom Taiwanof Paid-infrom Taiwan
Investee
Profit (Loss)
Earnings as of Note
as of
as of
Direct or
Investment as of January
Capital(Notes4
andofInvestee
December December 31,
Outflow Inflow December 31,
1, 2023
Indirect5)2023(Note 2)2023
(Notes 4 and 5) 31, 2023
(Note 2)
Investment(Note 2)
(Note 2)
Total
AmountAppendix 2

AUO Corporation

2023 Annual Report

365

366

AUO Corporation

2023 Annual Report(Note1(2))

3,185,457 (USD103,700)

61,436 (USD2,000)

DPTW

ADP

-

-

-

-

-

(460,770)-

199,667

583,642

251,888

2,150,260-(3,711)

65,997

26,962

10,083760,082

3,939

51%

100%

100%

100%

100%

-

(1,893)65,997

26,962

10,083760,082

3,939

30,704

1,290,154

738,687

74,253

4,733,277-(Note 7)-432,342 (Note 6)--

1,931,982

2,563,941 (Note 8)

153,590 (USD5,000)

5,142,511 (USD167,410)

3,667,878

5,533,063

Investment Amounts Authorized by theUpper Limit on Investment Stipulated by theInvestment Commission, MOEA (Notes 4 and 9) Investment Commission, MOEA (Note 3)

-

-

-

-

-

-

Note

Note 1: (1) Direct investments in Mainland China.
(2) Indirect investments in Mainland China through companies registered in a third region.
Note 2: Amounts were recognized based on the investees’ audited financial statements.
Note 3: Pursuant to the Regulations Governing Permission for Investment and Technical Cooperation in the Mainland Area, DPTW’s and ADP’s accumulated
investments in Mainland China did not exceed the upper limit on investment amount or ratio stipulated by the Investment Commission, Ministry of
Economic Affairs (“MOEA”).

Accumulated Investment in Mainland China
as of December 31, 2023 (Note 4)

Entity-199,667

1,075,130 (Note1(2))
64,728 (Note1(1))

583,642

251,888

2,150,260

460,770

890,822 (Note1(2))

199,667 (Note1(2))

2,150,260 (Note1(2))-(2) Upper limit on investment in Mainland China

Talenda

FTWJ

FPWJ

FHWJ

DPXM

Sales and sales support of display

Manufacturing and sale of backlight modules
and related parts
Manufacturing and sales of liquid crystal
products, backlight modules and related parts
Manufacturing and sale of backlight modules
and related parts
Manufacturing, sales and trading of precision
plastic parts
Manufacturing and sale of backlight modules
and related parts
Manufacturing of electronic components

DPSZ

Main Activities

ADPSZ

InvesteeCompany

Accumulate
Carrying
Accumulated
Investment Flows d Outflow ofAmount of Accumulated%
Outflow of
Total
Investor’s
Net Income
Investment
InwardOwnership
theInvestment
AmountShare of Profit(Loss) offrom
Method ofthrough
Investment Remittance offrom Taiwan(Loss) ofof Paid-in
Investee
Taiwan as ofEarnings as ofInvestment
Direct or
as of
as of January Outflow Inflow
Investee
Capital(Notes 2 andIndirect
December December 31,
December
1, 2023(Notes 2 and 5)(Note 4)
5)Investment
31, 2023
2023(Note 4)
31, 2023(Note 4)(Note 4)(Note 4)100%
61,436 (Note1(1))
61,43661,436
20,221
20,221
89,404(1) Related information on investment in Mainland China

2. DPTW and ADP:

Note 4: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.
Note 5: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the average exchange rates for the year of 2023.
Note 6: The amount of paid-in capital includes the capitalization of retained earnings amounting to USD28,500 thousand for the years from 2005 to 2007.
Note 7: The amount of paid-in capital includes the capital injection of USD10,000 thousand from the offshore holding company, which was originally fromFTWJ’s appropriation of earnings.
Note 8: The liquidation process was completed in December 2023.
Note 9: The accumulated approved amount over the years amounted to USD248,526 thousand (including the capitalization of retained earnings of USD81,116
thousand). In addition, the surplus repatriated amounted to USD194,050 thousand, which can be used to deduct the accumulated amount of investment.

Appendix 2

AUO Corporation

2023 Annual Report367

AUO Corporation

Representative: Shuang-Lang (Paul) Peng