AUO : 3Q2023(English)

Stock Code:2409

AUO CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors' Review Report

For the Nine Months Ended September 30, 2023 and 2022

The independent auditors' review report and the accompanying consolidated financial statements are the English translation of the Chinese version 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' review report and consolidated financial statements, the Chinese version shall prevail.

Independent Auditors' Review Report

To the Board of Directors of AUO Corporation:

Introduction

We have reviewed the accompanying consolidated balance sheets of AUO Corporation and its subsidiaries ("the Company" ) as of September 30, 2023 and 2022, and the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2023 and 2022, as well as the changes in equity and cash flows for the nine months ended September 30, 2023 and 2022, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34, "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with the Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" of the Republic of China. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the Standards on Auditing of the Republic of China and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Company as of September 30, 2023 and 2022, its consolidated financial performance for the three months and nine months ended September 30, 2023 and 2022, as well as its consolidated cash flows for the nine months ended September 30, 2023 and 2022 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34, "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors' review report are Yu, Chi-Lung and Yu, Wan-Yuan.

KPMG

Hsinchu, Taiwan (Republic of China)

October 31, 2023

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 and with the International 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 consolidated financial statements are those generally accepted and applied in the Republic of China.

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

AUO CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2023, December 31, 2022, and September 30, 2022

(Expressed in thousands of New Taiwan dollars)

		September 30, 2023	December 31, 2022	September 30, 2022			September 30, 2023	December 31, 2022	September 30, 2022
	Assets		Amount	%		Amount	%		Amount	%		Liabilities and Equity		Amount	%				Amount	%			Amount	%
	Current assets:														Current liabilities:
1100	Cash and cash equivalents (Note 6(1))	$	78,515,683	20		80,613,120	21		80,613,403	21	2100	Short-term borrowings (Note 6(14))	$	145,688		-			128,487		-			180,391		-
1110	Financial assets at fair value through profit or loss－													2120	Financial liabilities at fair value through profit or
	current (Note 6(2))		77,591	-		365,037	-		595,797	-		loss－current (Notes 6(2)&(8))		234,014		-			351,825		-			831,018		-
1136	Financial assets at amortized cost－current (Note													2170	Notes and accounts payable		48,623,790		12		41,479,524		11		33,784,974		9
	6(4))		317,621	-		-	-		-	-	2180	Accounts payable to related parties (Note 7)		6,338,569		2		5,890,185		2		4,621,539		1
1170	Notes and accounts receivable, net (Note 6(5))		28,720,239	8		18,620,248	5		18,122,805	5	2213	Equipment and construction payable (Note 7)		6,647,070		2		7,882,627		2		6,349,903		2
1180	Accounts receivable from related parties, net (Notes													2220	Other payables to related parties (Note 7)		35,798		-			27,853		-			49,289		-
	6(5)&7)		788,026	-		1,255,503	-		1,161,687	-	2230	Current tax liabilities		769,021		-			1,567,623		-			2,650,330		1
1210	Other receivables from related parties (Note 7)		30,875	-		6,139	-		6,598	-	2250	Provisions－current (Note 6(16))		512,450		-			559,654		-			819,687		-
1220	Current tax assets		57,024	-		41,186	-		78,037	-	2280	Lease liabilities－current (Note 6(10))		615,473		-			583,251		-			577,567		-
130X	Inventories (Note 6(6))		29,714,213	8		30,263,713	8		29,813,800	8	2399	Other current liabilities (Notes 6(9),(20)&(21))		25,393,469		7		24,812,498		6		24,477,455		6
1410	Prepayments (Note 6(13))		2,778,664	1		3,440,926	1		3,686,462	1	2322	Current installments of long-term borrowings (Notes
1460	Noncurrent assets held for sale (Note 6(9))		586,951	-		586,406	-		-	-		6(15)&8)		10,312,156		3		13,884,634		4		9,261,745		3
1476	Other current financial assets (Notes 6(5),(9),(20)													2219	Capital reduction payable (Notes 6(18)		-		-				-		-			19,248,490		5
	&8)		4,168,606	1		4,593,094	1		3,710,906	1				99,627,498		26		97,168,161		25		102,852,388		27
1479	Other current assets (Note 6(13))		487,311		-		391,435		-		984,226		-		Noncurrent liabilities:
			146,242,804	38		140,176,807	36		138,773,721	36	2527	Contract liabilities－noncurrent (Note 6(20))		6,864,630		2		8,739,846		3		6,864,630		2
	Noncurrent assets:													2540	Long-term borrowings, excluding current
1510	Financial assets at fair value through profit or loss－														installments (Notes 6(15)&8)		96,312,121		25		72,930,817		19		58,331,924		15
	noncurrent (note 6(2))		145,269	-		-	-		-	-	2550	Provisions－noncurrent (Note 6(16))		955,806		-			909,405		-			882,659		-
1517	Financial assets at fair value through other													2570	Deferred tax liabilities		5,312,108		1		5,101,186		1		5,046,831		1
	comprehensive income－noncurrent (Note 6(3))		1,743,799	-		1,900,581	1		1,541,447	-	2580	Lease liabilities－noncurrent (Note 6(10))		8,560,542		2		8,661,640		2		8,785,638		2
1535	Financial assets at amortized cost－noncurrent													2600	Other noncurrent liabilities		2,320,231		1			1,918,971		1		1,834,035		1
	(note 6(4))		1,240,945	-		1,142,218	-		1,153,004	-				120,325,438		31			98,261,865		26		81,745,717		21
1550	Investments in equity-accounted investees (Notes														Total liabilities		219,952,936		57		195,430,026		51		184,598,105		48
	6(7)&7)		30,098,696	8		31,743,902	8		31,873,635	8		Equity (Note 6(18)):
1600	Property, plant and equipment (Notes 6(9),7&8)		176,732,053	45		178,833,837	46		179,351,456	47		Equity attributable to shareholders of AUO
1755	Right-of-use assets (Notes 6(10)&8)		9,678,437	3		9,800,458	3		10,259,216	3		Corporation :
1760	Investment property (Note 6(11))		1,345,397	-		1,393,244	-		1,407,497	-	3100	Common stock		76,993,961		20		76,993,961		20		76,993,961		20
1780	Intangible assets (Notes 6(8)&(12))		11,354,963	3		11,396,241	3		12,561,381	3	3200	Capital surplus		54,979,857		14		61,942,210		16		61,899,611		16
1840	Deferred tax assets		6,659,192	2		6,649,457	2		6,584,764	2	3300	Retained earnings		33,414,234		9		50,078,752		13		60,226,540		16
1920	Refundable deposits		1,065,274	-		925,517	-		910,806	-	3400	Other components of equity		(2,269,985)	(1)	(3,620,305)	(1)	(2,189,532)	(1)
1990	Other noncurrent assets (Notes 6(13)&8)		2,674,628		1		2,878,412		1		2,848,612		1	3500	Treasury shares		(240,424)	-			(295,527)	-			(392,370)	-
			242,738,653		62		246,663,867		64		248,491,818		64				162,877,643		42			185,099,091		48		196,538,210		51
															Non-controlling interests
														36XX	Non-controlling interests		6,150,878		1			6,311,557		1		6,129,224		1
															Total equity		169,028,521		43			191,410,648		49		202,667,434		52
	Total Assets	$	388,981,457	100		386,840,674	100		387,265,539	100		Total Liabilities and Equity	$	388,981,457		100		386,840,674		100		387,265,539		100

See accompanying notes to consolidated financial statements.

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

AUO CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the Three and Nine Months Ended September 30, 2023 and 2022

(Expressed in thousands of New Taiwan dollars, except for Earnings (loss) per share)

			Three Months Ended September 30	Nine Months Ended September 30
			2023					2022					2023					2022
			Amount			%		Amount			%		Amount			%		Amount			%
4110	Revenue	$	70,712,441		101		50,571,418		102		186,076,664		101		196,625,449		101
4190	Less: sales return and discount		602,615			1		839,077			2		1,458,024			1		2,480,804			1
	Net revenue (Notes 6(20)&7)		70,109,826		100		49,732,341		100		184,618,640		100		194,144,645		100
5000	Cost of sales (Notes 6(6),(10),(17),(21),(22)&7)		64,768,231			92		56,996,483			115		182,141,840			99		187,989,812			97
	Gross profit (loss)		5,341,595		8		(7,264,142)	(15)	2,476,800		1		6,154,833		3
	Operating expenses (Notes 6(8),(10),(17),(19),(21),
	(22)&7):
6100	Selling and distribution expenses		1,294,065		2		1,237,583		3		3,816,201		2		3,656,660		2
6200	General and administrative expenses		1,969,328		3		1,997,899		4		5,682,105		3		5,954,968		3
6300	Research and development expenses		3,409,725			5		3,215,007			6		9,872,102			5		9,604,693			5
	Total operating expenses		6,673,118			10		6,450,489			13		19,370,408			10		19,216,321			10
	Loss from operations		(1,331,523)	(2)	(13,714,631)	(28)	(16,893,608)	(9)	(13,061,488)	(7)
	Non-operating income and expenses:
7100	Interest income (Note 6(23))		459,606		1		199,303		-		1,301,341		1		483,127		-
7010	Other income (Notes 6(23)&7)		569,917		1		1,181,323		2		1,129,285		1		2,392,287		1
7020	Other gains and losses (Notes 6(23)&7)		109,530		-		(37,881)	-		148,337		-		38,280		-
7050	Finance costs (Notes 6(9)&(23))		(723,711)	(1)	(330,927)	-		(2,011,895)	(2)	(1,004,896)	-
7060	Share of profit of equity-accounted investees (Note
	6(7))		151,665			-		1,301,391			3		4,614			-		2,122,458			1
	Total non-operating income and expenses		567,007			1		2,313,209			5		571,682			-		4,031,256			2
7900	Loss before income tax		(764,516)	(1)	(11,401,422)	(23)	(16,321,926)	(9)	(9,030,232)	(5)
7950	Less: income tax expense (Note 6(24))		158,511			-		(911,660)	(2)	421,947		-		1,982,117		1
8200	Loss for the period
	(923,027)	(1)	(10,489,762)	(21)	(16,743,873)	(9)	(11,012,349)	(6)
8300	Other comprehensive income (Notes 6(7),(18)&(24)):
8310	Items that will never be reclassified to profit or
	loss
8316	Unrealized loss on equity investments at fair value
	through other comprehensive income		(172,881)	-		(24,586)	-		(7,875)	-		(72,102)	-
8320	Equity-accounted investees - share of other
	comprehensive income		(223,158)	-		(239,547)	(1)	350,199		-		(1,374,883)	-
8349	Related tax		-			-		-			-		-			-		-			-
8360	Items that are or may be reclassified subsequently		(396,039)	-		(264,133)	(1)	342,324		-		(1,446,985)	-
	to profit or loss
8361	Foreign operations - foreign currency translation
	differences		2,798,796		4		2,024,850		4		988,010		1		4,163,566		2
8370	Equity-accounted investees - share of other
	comprehensive income		326,799		-		405,860		1		260,428		-		775,567		-
8399	Related tax		(556,504)	(1)	(389,637)	(1)	(215,888)	-		(849,661)	-
8300	Other comprehensive income, net of tax		2,569,091			3		2,041,073			4		1,032,550			1		4,089,472			2
	2,173,052			3		1,776,940			3		1,374,874			1		2,642,487			2
8500	Total comprehensive income (loss) for the period	$	1,250,025			2		(8,712,822)			(18)		(15,368,999	)		(8)	(8,369,862)			(4)
	Profit (loss) attributable to:
8610	Shareholders of AUO Corporation	$	(975,348)	(1)	(10,425,620)	(21)	(16,693,303)	(9)	(10,893,703)	(6)
8620	Non-controlling interests	$	52,321			-		(64,142)	-		(50,570)	-		(118,646)	-
								)					)					)
	Total comprehensive income (loss) attributable to:	(923,027)	(1)	(10,489,762	(21)	(16,743,873	(9)	(11,012,349	(6)
8710	Shareholders of AUO Corporation	$	1,103,522		2		(8,699,016)	(18)	(15,314,198)	(8)	(8,313,984)	(4)
8720	Non-controlling interests	$	146,503			-		(13,806)	-		(54,801)	-		(55,878)	-
													)
	Earnings (loss) per share (NT$, Note 6(25))	1,250,025		2		(8,712,822)	(18)	(15,368,999	(8)	(8,369,862)	(4)
	$			(0.13)			(1.23)			(2.18)			(1.18)
9750	Basic earnings (loss) per share
9850	Diluted earnings (loss) per share	$
		(0.13)			(1.23)			(2.18)			(1.18)

See accompanying notes to consolidated financial statements.

4

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

AUO CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the Nine Months Ended September 30, 2023 and 2022

(Expressed in thousands of New Taiwan dollars)

											Equity Attributable to Shareholders of AUO Corporation
																		Other Components of Equity
																				Unrealized
																				Gains (Losses)
																				on Financial
																				Assets at Fair					Equity
			Capital Stock					Retained Earnings					Value through					Attributable to
									Cumulative	Other					Shareholders	Non-
			Common								Unappropriated			Translation	Comprehensive			Treasury	of AUO	controlling
Balance at January 1, 2022			Stock	Capital Surplus	Legal Reserve		Special Reserve		Earnings	Subtotal	Differences	Income	Subtotal	Shares	Corporation	Interests	Total Equity
$	96,242,451			60,057,001		8,427,144	3,270,303		68,972,551			80,669,998		(4,873,573)		130,391		(4,743,182)		(439,228)		231,787,040		6,179,431		237,966,471
Appropriation of earnings:
Legal reserve			-			-		5,326,268		-			(5,326,268)	-		-		-		-		-		-		-		-
Special reserve
		-			-		-		1,472,878			(1,472,878)	-		-		-		-		-		-		-		-
Cash dividends distributed to shareholders
		-			-		-		-			(9,575,824)	(9,575,824)	-		-		-		-		(9,575,824)	-		(9,575,824)
Loss for the period
		-			-		-		-			(10,893,703)	(10,893,703)	-		-		-		-		(10,893,703)	(118,646)	(11,012,349)
Other comprehensive income (loss), net of tax			-			-		-	-		(14,987)	(14,987)	4,026,704		(1,431,998)	2,594,706		-		2,579,719		62,768		2,642,487
Total comprehensive income (loss) for the
period			-			-		-		-			(10,908,690)	(10,908,690)	4,026,704		(1,431,998)	2,594,706		-		(8,313,984)	(55,878)	(8,369,862)
Donations from shareholders
		-			(114)	-	-		-			-		-		-		-		-		(114)	-		(114)
Adjustments for changes in investees' equity			-			1,770,121		-		-			-			-		-		-		-		-		1,770,121		14		1,770,135
Capital reduction			(19,248,490)	-		-	-		-			-		-		-		-		-		(19,248,490)	-		(19,248,490)
Share-based payments			-			72,603		-		-			-			-		-		-		-		46,858		119,461		8,181		127,642
Changes in non-controlling interests			-			-		-	-		-			-		-		-		-		-		-		(2,524)	(2,524)
Disposal of equity investments measured at
fair value through other comprehensive
income			-			-		-		-			41,056			41,056		-		(41,056)	(41,056)	-		-		-		-
Balance at September 30, 2022	$
76,993,961			61,899,611		13,753,412		4,743,181			41,729,947			60,226,540		(846,869)	(1,342,663)	(2,189,532)	(392,370)	196,538,210		6,129,224		202,667,434
Balance at January 1, 2023
$	76,993,961			61,942,210		13,753,412	4,743,181		31,582,159			50,078,752		(2,406,490)	(1,213,815)	(3,620,305)	(295,527)	185,099,091		6,311,557		191,410,648
Appropriation of earnings:
Reversal of special reserve			-			-		-		(1,122,876)	1,122,876			-		-		-		-		-		-		-		-
Loss for the period
		-			-		-		-			(16,693,303)	(16,693,303)	-		-		-		-		(16,693,303)	(50,570)	(16,743,873)
Other comprehensive income (loss), net of tax			-			-		-	-		39,925			39,925		1,044,934		294,246		1,339,180		-		1,379,105		(4,231)	1,374,874
Total comprehensive income (loss) for the
period			-			-		-		-			(16,653,378)	(16,653,378)	1,044,934		294,246		1,339,180		-		(15,314,198)	(54,801)	(15,368,999)
Cash dividends from capital surplus
		-			(6,134,305)	-	-		-			-		-		-		-		-		(6,134,305)	-		(6,134,305)
Donations from shareholders			-			(142)	-	-		-			-		-		-		-		-		(142)	-		(142)
Differences between consideration and
carrying amount arising from acquisition or
disposal of interest in subsidiary			-			(16,137)	-	-		-			-		-		-		-		-		(16,137)	16,137		-
Adjustments for changes in investees' equity
		-			(889,873)	-	-		-			-		-		-		-		-		(889,873)	(29,012)	(918,885)
Share-based payments			-			78,104		-		-			-			-		-		-		-		55,103		133,207		867		134,074
Disposal of equity investments measured at
fair value through other comprehensive
income			-			-		-		-			(11,140)	(11,140)	-		11,140		11,140		-		-		-		-
Changes in non-controlling interests
		-			-		-		-			-			-		-		-		-		-		-		(93,870)	(93,870)
Balance at September 30, 2023	$
76,993,961			54,979,857		13,753,412		3,620,305			16,040,517			33,414,234		(1,361,556)	(908,429)	(2,269,985)	(240,424)	162,877,643		6,150,878		169,028,521

See accompanying notes to consolidated financial statements.

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

AUO CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2023 and 2022

(Expressed in thousands of New Taiwan dollars)

		Nine Months Ended September 30,
			2023		2022
Cash flows from operating activities:
Loss before income tax	$	(16,321,926)	(9,030,232)
Adjustments for:
-	depreciation		23,914,647		23,591,671
-	amortization		96,667		145,000
-	losses on financial instruments at fair value through profit or loss,		177,147		180,409
	net
-	interest expense		1,962,708		876,690
-	interest income		(1,301,341)	(483,127)
-	dividend income		(2,585)	(6,571)
-	compensation costs of share-based payments		61,064		80,966
-	share of profit of equity-accounted investees		(4,614)	(2,122,458)
-	gains on disposals of property, plant and equipment		(27,777)	(139,815)
-	gains on disposals of investments		(116)	-
-	unrealized foreign currency exchange (gains) losses		(195,535)	422,892
-	others		81,364		42,484
Changes in operating assets and liabilities:
-	notes and accounts receivable		(7,554,631)	44,272,129
-	receivables from related parties		442,741		1,331,809
-	inventories		546,727		4,657,942
-	other operating assets		(1,175,097)	(2,609,487)
-	contract liabilities		766,992		(1,148,479)
-	notes and accounts payable		4,637,309		(24,824,762)
-	payables to related parties		456,329		(4,226,944)
-	provisions		(30,316)	(283,401)
-	other operating liabilities		(2,664,411)	(11,736,446)
Cash inflow generated from operations		3,865,346		18,990,270
Interest received		1,238,386		467,832
Dividends received		1,599,544		1,827,279
Interest paid		(1,933,888)	(1,078,071)
Income taxes paid		(1,259,865)	(2,182,202)
	Net cash provided by operating activities		3,509,523		18,025,108

(Continued)

See accompanying notes to consolidated financial statements.

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

AUO CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the Three and Nine Months Ended September 30, 2023 and 2022

(Expressed in thousands of New Taiwan dollars)

	Nine Months Ended September 30,
		2023		2022
Cash flows from investing activities:
Acquisitions of financial assets at fair value through other		(96,877)	(313,412)
comprehensive income
Disposals of financial assets at fair value through other		63,863		10,002
comprehensive income
Acquisitions of financial assets at amortized cost		(378,769)	(675,443)
Disposals of financial assets at amortized cost		-		10,000,000
Acquisitions of financial assets at fair value through profit or loss		(145,269)	-
Disposals of financial assets at fair value through profit or loss		-		5,440
Acquisitions of equity-accounted investees		(81,184)	(5,036,895)
Acquisitions of property, plant and equipment		(22,461,395)	(27,966,482)
Disposals of property, plant and equipment		2,268,134		783,088
Increase in receipts in advance due to disposal of assets		873,655		150,000
Decrease (increase) in refundable deposits		(28,864)	89,921
Acquisitions of intangible assets		-		(344)
Decrease (increase) in other financial assets		206,708		(679,650)
Increase in prepayments for investments		(125,000)	-
Net cash outflow arising from acquisition of subsidiaries		(7,512)	(710,018)
Net cash used in investing activities
	(19,912,510)	(24,343,793)
Cash flows from financing activities:
Proceeds from short-term borrowings		188,000		496,691
Repayments of short-term borrowings		(170,899)	(363,122)
Proceeds from long-term borrowings		53,103,239		38,441,624
Repayments of long-term borrowings		(33,176,713)	(26,433,706)
Payment of lease liabilities		(457,175)	(432,363)
Increase (decrease) in received guarantee deposits		8,629		(14,905)
Cash dividends		(6,134,305)	(9,575,824)
Treasury shares sold to employees		73,011		46,718
Net change of non-controlling interests		(93,870)	(2,524)
Others		(142)	(114)
Net cash provided by financing activities		13,339,775		2,162,475
Effect of exchange rate change on cash and cash equivalents		965,775		4,824,927
Net increase (decrease) in cash and cash equivalents		(2,097,437)	668,717
Cash and cash equivalents at January 1		80,613,120		79,944,686
Cash and cash equivalents at September 30	$	78,515,683		80,613,403

See accompanying notes to consolidated financial statements.

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

AUO CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Nine Months Ended September 30, 2023 and 2022

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

1. Organization

AUO Corporation ("AUO", formerly AU Optronics Corp.) 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 delisted from 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 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 Public Information 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

The consolidated financial statements were authorized for issue by the Board of Directors of AUO on October 31, 2023.

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.
2. • Amendments to IAS 1, Disclosure of Accounting Policies
   • Amendments to IAS 8, Definition of Accounting Estimates

(Continued)

2

AUO CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

1. • Amendments to IAS 12, Deferred Tax related to Assets and Liabilities arising from a Single Transaction
   • 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:
3. • Amendments to IAS 1, Classification of Liabilities as Current or Noncurrent
   • Amendments to IAS 1, Noncurrent Liabilities with Covenants
   • Amendments to IAS 7 and IFRS 7, Supplier Finance Arrangements
   • Amendments to IFRS 16, Lease Liability in a Sale and Leaseback
4. 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:
5. • Amendments to IFRS 10 and IAS 28, Sale or Contribution of Assets Between an Investor and its Associate or Joint Venture
   • IFRS 17, Insurance Contracts and amendments to IFRS 17
   • Amendments to IFRS 17, Initial Application of IFRS 17 and IFRS 9 - Comparative Information
   • 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 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

1. Statement of compliance
   The accompanying consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as " the Regulations" ) and the IAS 34, Interim Financial Reporting, as endorsed and issued into effect by the FSC. The consolidated financial statements do not present all the disclosures required for a complete set of annual consolidated financial statements prepared under the IFRSs endorsed by the FSC with effective dates.

(Continued)

3

AUO CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Except as described below, the significant accounting policies applied in the consolidated financial statements are the same as those applied in the consolidated financial statements for the year ended December 31, 2022 and have been applied consistently to all periods presented in the consolidated financial statements. Refer to Note 4 of the consolidated financial statements for the year ended December 31, 2022 for the details.

1. Basis of consolidation
   Principles of preparation of the consolidated financial statements are the same as those applied in the consolidated financial statements for the year ended December 31, 2022. Refer to Note 4(3) of the consolidated financial statements for the year ended December 31, 2022 for the details.
   List of subsidiaries in the consolidated financial statements was as follows:

Name of				Main Activities and	Percentage of Ownership (%)
			September		December 31,		September
Investor		Name of Subsidiary		Location	30, 2023	2022	30, 2022
AUO		AUO (L) Corp. (AUOLB)		Holding company		100.00		100.00		100.00
				(Malaysia)
AUO		Konly Venture Corp.		Investment (Taiwan	100.00	100.00	100.00
		(Konly)		ROC)
AUO		Ronly Venture Corp.		Investment (Taiwan	100.00	100.00	100.00
		(Ronly)		ROC)
AUO		Space Money Inc. (S4M)		Design, sales and	100.00	100.00	100.00
				leasing activities
				(Taiwan ROC)
AUO		AUO Envirotech Inc.		Construction project	100.00	100.00	100.00
		(AETTW)		and related project
				management (Taiwan
				ROC)
AUO		ComQi Ltd. (CQIL)		Holding company	100.00	100.00	100.00
				(Israel)
AUO		AUO Europe B.V.		Sales support	100.00	100.00	100.00
		(AUONL)		activities
				(Netherlands)
AUO		AUO Crystal Corp.		Manufacturing and	100.00	100.00	100.00
		(ACTW)		sales company
				(Taiwan ROC)
AUO		AUO Display Plus		Research and	100.00	100.00	100.00
		Corporation (ADP)		development and sales
				activities (Taiwan
				ROC)
AUO		Da Ping Green Energy		Renewable energy	100.00	100.00	100.00
		Corporation (DPGE)		power generation
				(Taiwan ROC)
AUO		AUO Health Corporation		Manufacturing,	100.00	100.00	100.00
		(AHTW)		development and sales
				company (Taiwan
				ROC)

(Continued)