CHROMA - Annual Report 2015 | FinancialReports.eu

Chroma Ate Inc. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2015 and 2014 and Independent Auditors’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The entities required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2015 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standards 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we have not prepared a separate set of consolidated financial statements of affiliates.

Very truly yours,

CHROMA ATE INC.

LEO HUANG Chairman February 23, 2016

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Chroma Ate Inc.

We have audited the accompanying consolidated balance sheets of Chroma Ate Inc. (the “Corporation”) and its subsidiaries (collectively referred to as the “Group”) as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2015 and 2014. These consolidated financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the Regulations Governing Auditing and Attention of Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Chroma Ate Inc. and its subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for the years then ended, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed by the Financial Supervisory Commission of the Republic of China.

As stated in Note 3 to the consolidated financial statements, effective January 1, 2015, the Group adopted the amended Regulations Governing the Preparation of Financial Reports by Securities Issuers and 2013 IFRSs, which were endorsed by the FSC of the ROC and had taken effect on January 1, 2015, and had adjusted the consolidated financial statements as of and for the year ended December 31, 2014 for the Effects of the retrospective application of the amended Regulations Governing the Preparation of Financial Reports by Securities Issuers and 2013 IFRSs.

We have also audited the financial statements of the parent company, Chroma Ate Inc., as of and for the years ended December 31, 2015 and 2014 on which we have issued an unqualified report.

February 23, 2016

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, consolidated financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language auditors’ report and consolidated financial statements shall prevail.

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Available-for-sale financial assets - current (Notes 4 and 8) Investments in bonds with no active market - current (Notes 4, 10 and 32) Notes receivable Accounts receivable, net (Notes 4 and 11) Accounts receivable - related parties (Notes 4, 11 and 31) Construction contracts receivable (Notes 4 and 12) Inventories (Notes 4 and 13) Prepayments Other current assets (Note 31) Total current assets NONCURRENT ASSETS Available-for-sale financial assets - noncurrent (Notes 4 and 8) Financial assets carried at cost - noncurrent (Notes 4 and 9) Investments accounted for using equity method (Notes 4 and 15) Property, plant and equipment (Notes 4, 16, 24 and 32) Goodwill (Notes 4 and 17) Other intangible assets (Notes 4 and 18) Deferred tax assets (Notes 4 and 25) Prepayments for equipment (Notes 4 and 33) Refundable deposits Prepayments for investments Other noncurrent assets Total noncurrent assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes19 and 32) Short-term bills payable (Note 19) Financial liability at fair value through profit or loss - current (Notes 4 and 7) Notes payable Notes payable - related parties (Note 31) Accounts payable Accounts payable - related parties (Note 31) Construction contracts payable (Notes 4 and 12) Dividends payable (Note 23) Other payables (Note 21) Current tax liabilities (Note 25) Receipts in advance (Note 12) Current portion of long-term liabilities (Notes 19 and 32) Other current liabilities - other Total current liabilities NONCURRENT LIABILITIES Bonds payable (Notes 4 and 20) Long-term borrowings (Notes 19 and 32) Deferred income tax liabilities (Notes 4 and 25) Net defined benefit liabilities - noncurrent (Notes 4 and 22) Guarantee deposits received Total noncurrent liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Notes 4, 23 and 27) Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equities Treasury stock Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS Total equity TOTAL		December 31, 2015 (Audited) Amount % $ 2,489,289 16 8,872 - 2,057,476 13 559,958 3 81,021 - 2,422,708 15 11,650 - 175,863 1 1,635,947 10 83,437 1 106,379 1 9,632,600 60 359,543 2 208,400 2 553,139 4 2,767,608 17 196,052 1 4,524 - 156,651 1 2,097,344 13 39,036 - - - 45,542 - 6,427,839 40 $ 16,060,439 100 $ 301,303 2 - - 1,483 - 19,173 - 3,311 - 1,348,781 9 5,789 - 255,218 2 2,298 - 665,640 4 208,745 1 229,955 2 30,083 - 40,875 - 3,112,654 20 1,758,093 11 1,384,040 8 123,827 1 149,691 1 838 - 3,416,489 21 6,529,143 41 3,791,699 24 1,302,269 8 1,600,920 10 86,888 - 2,264,377 14 3,952,185 24 399,665 2 (35,714) - 9,410,104 58 121,192 1 9,531,296 59 $ 16,060,439 100		December 31, 2014 (Audited after Restated) Amount % $ 1,847,648 12 8,638 - 1,873,734 12 398,993 3 33,316 - 3,152,006 21 9,950 - 95,945 1 1,604,773 11 56,178 - 103,523 1 9,184,704 61 468,575 3 185,349 1 508,702 4 2,712,962 18 193,939 1 6,533 - 154,847 1 1,431,534 10 43,348 - 33,000 - 46,483 1 5,785,272 39 $ 14,969,976 100 $ 332,725 2 16,000 - 927 - 44,029 - 15,279 - 1,277,344 9 2,377 - 3,796 - - - 745,593 5 229,301 2 84,231 1 75,138 - 44,035 - 2,870,775 19 1,731,006 11 757,200 5 109,425 1 127,702 1 780 - 2,726,113 18 5,596,888 37 3,787,821 25 1,256,654 9 1,469,276 10 86,888 1 2,180,919 14 3,737,083 25 507,104 3 (35,714) - 9,252,948 62 120,140 1 9,373,088 63 $ 14,969,976 100		January 1, 2014 (Audited after Restated)
						Amount % $ 1,619,532 13 45,635 - 250,700 2 448,600 3 18,556 - 2,901,386 23 4,580 - 43,890 - 1,530,689 12 65,650 1 76,220 1 7,005,438 55 534,668 4 167,555 1 454,677 4 2,695,664 21 190,618 2 10,461 - 123,134 1 1,503,327 12 29,199 - 2,767 - 52,911 - 5,764,981 45 $ 12,770,419 100 $ 710,233 6 80,000 1 - - 68,461 1 5,644 - 1,194,722 9 2,591 - 13,154 - - - 695,157 5 201,524 2 47,638 - 4,217 - 29,328 - 3,052,669 24 - - 819,160 6 91,608 1 109,129 1 1,206 - 1,021,103 8 4,073,772 32 3,767,599 29 960,198 7 1,348,787 11 86,888 1 1,951,324 15 3,386,999 27 478,800 4 (35,900) - 8,557,696 67 138,951 1 8,696,647 68 $ 12,770,419 100

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

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUES (Notes 4, 12 and 31) Sales revenues Less: Sales returns Sales allowances Net operating revenues OPERATING COSTS (Notes 4, 12, 13, 24 and 31) GROSS PROFIT UNREALIZED GROSS PROFIT EARNED OPERATING PROFIT OPERATING EXPENSES (Note 24) Selling General administrative Research and development Total operating expenses OPERATING INCOME NONOPERATING INCOME AND EXPENSE Interest income (Note 4) Rental income (Note 31) Dividend income (Note 4) Subsidy income Other income - other Share of profits of associates and joint ventures, net (Notes 4 and 15) Gain on disposal of investments, net Exchange gain, net (Notes 4 and 34) Impairment loss on financial assets (Notes 4 and 9) Valuation loss on financial assets (liabilities) at fair value through profit or loss, net (Note 4) Valuation gain on financial assets (liabilities) at fair value through profit or loss, net (Note 4) Gain on disposal of property, plant and equipment (Note 4)		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2015 Amount % $ 9,782,005 101 (74,896) (1) (14,744) - 9,692,365 100 5,470,761 57 4,221,604 43 264 - 4,221,340 43 1,421,138 15 707,237 7 872,966 9 3,001,341 31 1,219,999 12 28,503 - 26,538 - 35,620 - 18,302 - 69,806 1 76,166 1 381 - 61,260 1 (14,674) - (322) - - - 3,605 -		2014
				Amount % $ 10,374,332 101 (22,007) - (45,240) (1) 10,307,085 100 6,260,815 61 4,046,270 39 - - 4,046,270 39 1,288,660 12 706,252 7 829,958 8 2,824,870 27 1,221,400 12 24,192 - 27,497 - 34,325 - 37,840 - 46,432 1 82,578 1 17,325 - 94,921 1 (15,500) - - - 5,455 - 2,852 - (Continued)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Other expenses Interest expense (Notes 4 and 24) Total nonoperating income and expense CONSOLIDATED INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 25) CONSOLIDATED NET INCOME OTHER COMPREHENSIVE INCOME, NET Items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit plans Share of other comprehensive income of associates accounted for by the equity-method Items that will not be reclassified subsequently to profit or loss Exchange differences on translating foreign operations Unrealized loss on available-for-sale financial assets Share of other comprehensive income of associates and joint ventures, net Total other comprehensive income TOTAL COMPREHENSIVE INCOME NET INCOME ATTRIBUTED TO Owner of the Corporation Noncontrolling interests COMPREHENSIVE INCOME ATTRIBUTED TO: Owner of the Corporation Noncontrolling interests		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2015 Amount % $ (3,518) - (38,994) - 262,673 3 1,482,672 15 288,130 3 1,194,542 12 (27,368) - 732 - (14,736) - (98,651) (1) 8,283 - (131,740) (1) $ 1,062,802 11 $ 1,236,557 13 (42,015) (1) $ 1,194,542 12 $ 1,102,621 11 (39,819) - $ 1,062,802 11		2014
				Amount % $ (24,504) - (31,300) - 302,113 3 1,523,513 15 227,528 2 1,295,985 13 (24,245) - (1,888) - 92,057 1 (63,697) (1) 2,340 - 4,567 - $ 1,300,552 13 $ 1,318,373 13 (22,388) - $ 1,295,985 13 $ 1,320,288 13 (19,736) - $ 1,300,552 13

(Continued)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

EARNINGS PER SHARE (Notes 4 and 26) From continuing operating segment Basic Diluted	For the Years Ended December 31	For the Years Ended December 31
	2015 Amount % $3.28 $3.10	2014
		Amount % $3.51 $3.30

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars, Except Dividends Per Share)

	Equity Attributab	le to Owners of the	Corporation
Share Capital Capital Surplus $ 3,767,599 $ 960,198 - - 3,767,599 960,198 - - - - - 141,487 - 1,064 - - - - - - 20,222 115,283 - 555 - 4,789 - 33,278 3,787,821 1,256,654 - - - - - - - - - - - - 42 239 - 4,994 3,836 40,382 - - $ 3,791,699 $ 1,302,269	Retained Earnings	Total $ 3,406,913 (19,914) 3,386,999 - (941,900 ) - - 1,318,373 (26,389) 1,291,984 - - - - 3,737,083 - (987,433 ) (7,525 ) 1,236,557 (26,497) 1,210,060 - - - - $ 3,952,185		Other Equity	Total Treasury Stock $ 478,800 $ (35,900 ) - - 478,800 (35,900) - - - - - - - - - - 28,304 - 28,304 - - - - 186 - - - - 507,104 (35,714 ) - - - - - - - - (107,439) - (107,439) - - - - - - - - - $ 399,665 $ (35,714)
			Exchange Differences on G Translating A Foreign Operations F $ 44,755 - 44,755 - - - - - 92,001 92,001 - - - - 136,756 - - - - (8,788) (8,788) - - - - $ 127,968	Unrealized ain (Loss) from vailable-for-sale inancial Assets $ 434,045 - 434,045 - - - - - (63,697) (63,697) - - - - 370,348 - - - - (98,651) (98,651) - - - - $ 271,697
	Unappropriated Legal Reserve Special Reserve Earnings $ 1,348,787 $ 86,888 $ 1,971,238 - - (19,914) 1,348,787 86,888 1,951,324 120,489 - (120,489 ) - - (941,900 ) - - - - - - - - 1,318,373 - - (26,389) - - 1,291,984 - - - - - - - - - - - - 1,469,276 86,888 2,180,919 131,644 - (131,644 ) - - (987,433 ) - - (7,525 ) - - 1,236,557 - - (26,497) - - 1,210,060 - - - - - - - - - - - - $ 1,600,920 $ 86,888 $ 2,264,377

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

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Consolidated net income before income tax Adjustments for: Depreciation Allowance for bad debts Share of profits of associates and joint venture, net Exchange (gain) loss, net Impairment loss on nonderivative financial assets Interest expense Dividend income Interest income Compensation cost of shared-based payment Impairment loss on financial assets Gain on disposal and retirement of property, plant and equipment, net Amortization Gain on disposal of available-for-sale financial assets, net Unrealized gain on the transactions with associates and joint venture Net changes related to operating assets and liabilities Financial assets held for trading Notes receivable Accounts receivable Construction contracts receivable Inventories Prepayments Other current assets Financial liabilities held for trading Notes payable Accounts payable Construction contracts payable Other payables Receipts in advance Other current liabilities Net define benefit liabilities Cash generated from operations Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payment to acquire property, plant and equipment Payment to acquire available-for-sale financial assets Payment to acquire investment in bonds with no active market		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 1,482,672 329,582 86,551 (76,166) (58,015) 39,379 38,994 (35,620) (28,503) 25,768 14,674 (3,605) 2,009 (381) 264 (234) (47,705) 676,838 (79,918) (160,642) (27,119) 3,417 556 (36,841) 66,726 251,422 (48,725) 145,634 (3,569) (5,379) 2,552,064 (283,511) 2,268,553 (960,436) (300,000) (160,965)	2014 $ 1,523,513 297,188 18,699 (82,578) 30,233 62,450 31,300 (34,325) (24,192) 34,203 15,500 (2,852) 3,928 (17,325) - 38,398 (14,760) (271,946) (52,055) (253,889) 9,472 (30,267) (3,933) (14,797) 82,408 (9,358) 61,901 36,593 14,707 (5,672) 1,442,544 (214,887) 1,227,657 (118,170) (2,351,975) - (Continued)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

Proceeds of the disposal of available-for-sale financial assets Dividend received Interest received Payment to acquire financial assets carried at cost Proceeds of the disposal of property, plant and equipment Cash returned of capital reduction of financial assets carried at cost Net cash inflows from business combination Decrease in refundable deposits Decrease in other noncurrent assets Proceeds of the disposal of investment in bonds with no quoted market Increase in prepayments for investments Increase in refundable deposits Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends Proceeds of the issue of long-term debts Decrease in short-term borrowings Decrease in non-controlling interest Interest paid Employee stock options Decrease in short-term bills payable Repayment of long-term debts Proceeds of the issuance of convertible bonds payable Proceeds of disposal of treasury stock Decrease in guarantee deposits Net cash (used in) generated from financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 127,020 76,100 23,588 (16,140) 14,893 11,750 10,897 4,647 941 - - - (1,167,705) (982,439) 582,165 (84,000) 29,400 (24,064) 19,141 (16,000) (6,659) - - - (482,456) 23,249 641,641 1,847,648 $ 2,489,289	2014 $ 747,261 64,184 26,080 (30,000) 18,731 - - - 6,428 49,607 (33,000) (14,149) (1,635,003) (937,111) - (374,416) - (26,186) - (64,000) (4,970) 1,994,680 741 (426) 588,312 47,150 228,116 1,619,532 $ 1,847,648

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

(Concluded)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

CHROMA ATE INC. AND SUBSIDIARIES

1. GENERAL INFORMATION

Chroma Ate Inc. (the “Corporation”) was incorporated in the Republic of China (ROC) in November 1984. The Corporation mainly designs, assembles, calibrates, manufactures, sells, repairs and maintains software/hardware for computers and peripherals, computerized automatic test systems, electronic test instruments, signal generators, power supplies, telecom power supplies, etc. as well as serves as an agent to sell these products. The Corporation’s shares have been listed on the Taiwan Stock Exchange since December 21, 1996.

The Corporation’s functional currency is the New Taiwan dollar (NTD).

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Corporation’s Board of Directors on February 23, 2016.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 2013 version of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) endorsed by the FSC

Rule No. 1030029342 and Rule No. 1030010325 issued by the FSC on April 3, 2014, stipulated that the Group should apply the 2013 version of IFRS, IAS, IFRIC and SIC (collectively, the “IFRSs”) endorsed by the FSC and the related amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers starting January 1, 2015.

Except for the following, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 2013 IFRSs version did not have any material impact on the Group’s accounting policies:

1) IFRS 13 “Fair Value Measurement”

IFRS 13 establishes a single source of guidance for fair value measurements. It defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The disclosure requirements in IFRS 13 are more extensive than those required by the previous standards. For example, quantitative and qualitative disclosures based on the three-level fair value hierarchy previously required only for financial instruments will be extended by IFRS 13 to cover all assets and liabilities within its scope.

The fair value measurements under IFRS 13 are applied prospectively from January 1, 2015. Refer to Note 30 for related disclosures.

10 -
2) Amendments to IAS 1 “Presentation of Items of Other Comprehensive Income”

The amendments to IAS 1 requires items of other comprehensive income to be grouped into those items that (1) will not be reclassified subsequently to profit or loss; and (2) may be reclassified subsequently to profit or loss. Income taxes on related items of other comprehensive income are grouped on the same basis. Under previous IAS 1, there were no such requirements.

The Group retrospectively applied the above amendments starting in 2015. Items not expected to be reclassified to profit or loss are remeasurements of the defined benefit plans and the share of the remeasurements of the defined benefit plans of associates and joint ventures accounted for using the equity method. Items expected to be reclassified to profit or loss are the exchange differences on translating foreign operations, unrealized gain (loss) on available-for-sale financial assets and share of the other comprehensive income (except the share of the remeasurements of the defined benefit plans) of associates and joint ventures accounted for using the equity method. The application of the above amendments did not have any impact on the net profit for the period, other comprehensive income for the period (net of income tax), and total comprehensive income for the year.

3) Revision to IAS 19 “Employee Benefits”

Revised IAS 19 requires the recognition of changes in defined benefit obligations and in the fair value of plan assets when they occur, and hence eliminates the “corridor approach” permitted under previous IAS 19 and accelerates the recognition of past service costs. The revision requires all remeasurements of the defined benefit plans to be recognized immediately through other comprehensive income in order for the net pension asset or liability to reflect the full value of the plan deficit or surplus. Remeasurement of the defined benefit plans is presented separately as other equity.

Furthermore, the interest cost and expected return on plan assets used in previous IAS 19 are replaced with a “net interest” amount, which is calculated by applying the discount rate to the net defined benefit liability or asset. The revised IAS 19 introduces certain changes in the presentation of the defined benefit cost, and also includes more extensive disclosures.

In addition, revised IAS 19 changes the definition of short-term employee benefits as “employee benefits (other than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service”. The Group’s unused annual leave, which can be carried forward within 24 months after the end of the annual period in which the employee renders service previously classified as short-term employee benefits, will be classified as other long-term employee benefits under revised IAS 19. Related defined benefit obligation of such other long-term benefit is calculated using the Projected Unit Credit Method. However, this change did not affect unused annual leave presented as a current liability in the consolidated balance sheet.

On initial application of the revised IAS 19, as a result of the retrospective application, the changes in cumulative employee benefit costs as of December 31, 2013 are adjusted to net defined benefit liabilities, deferred tax assets and retained earnings; as of January 1, 2014 the carrying amounts of inventories are not adjusted. In addition, in preparing the consolidated financial statements for the year ended December 31, 2015, the Group elected not to present 2014 comparative information about the sensitivity of the defined benefit obligation.

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The impact on the prior reporting periods is set out below:

Impact on Assets, Liabilities and
Equity
As Originally
Stated
Adjustments
Arising from
Initial
Application
December 31, 2014
Deferred tax assets
$ 152,883
$ 1,964

Net defined benefit liabilities
$ 108,061
$ 19,641

Retained earnings
$ 2,198,596
$ (17,677)

January 1, 2014
Deferred tax assets
$ 120,960
$ 2,174

Net defined benefit liabilities
$ 87,041
$ 22,088

Retained earnings
$ 1,971,238
$ (19,914)

Impact on Total Comprehensive
Income
As Originally
Stated
Adjustments
Arising from
Initial
Application
For the year ended December 31, 2014
Operating cost
$ (6,261,181) $ 366

Operating expense
(2,826,643)
1,773

Income tax expense
(227,318)
(210)
Total effect on net income for the year

1,929
Item that will not be reclassified to profit
or loss:
Remeasurement of defined benefit plan
(27,360)
3,115
Share of the other comprehensive
income of associates adjust ventures
(1,888)
-
Total effect on other comprehensive
income for the year

3,115
Total effect on comprehensive income for
the year
$ 5,044
Impact on earnings per share
Basic
$ 3.51
$ -
Diluted
$ 3.30
$ -

Restated
$ 154,847
$ 127,702
$ 2,180,919
$ 123,134
$ 109,129
$ 1,951,324
Restated
$ (6,260,815)
(2,824,870)
(227,528)
(24,245)
(1,888)
$ 3.51
$ 3.30

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b. New IFRSs in issue but not yet endorsed by the FSC

The Group has not applied the following New IFRSs issued by the IASB but not yet endorsed by the FSC. As of the date the consolidated financial statements were authorized for issue, the FSC has not announced their effective dates.

New IFRSs Annual Improvements to IFRSs 2010-2012 Cycle Annual Improvements to IFRSs 2011-2013 Cycle Annual Improvements to IFRSs 2012-2014 Cycle IFRS 9 “Financial Instruments” Amendments to IFRS 9 and IFRS 7 “Mandatory Effective Date of IFRS 9 and Transition Disclosures” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” Amendments to IFRS 10, IFRS 12 and IAS 28 “Investment Entities: Applying the Consolidation Exception” Amendment to IFRS 11 “Accounting for Acquisitions of Interests in Joint Operations” IFRS 15 “Revenue from Contracts with Customers” IFRS 16 “Leases” Amendment to IAS 1 “Disclosure Initiative” Amendment to IAS 7 “Disclosure Initiative” Amendments to IAS 12“Recognition of Deferred Tax Assets for Unrealized Losses” Amendments to IAS 16 and IAS 38 “Clarification of Acceptable Methods of Depreciation and Amortization” Amendments to IAS 16 and IAS 41 “Agriculture: Bearer Plants” Amendment to IAS 19 “Defined Benefit Plans: Employee Contributions” Amendment to IAS 36 “Impairment of Assets: Recoverable Amount Disclosures for Non-financial Assets” Amendment to IAS 39 “Novation of Derivatives and Continuation of Hedge Accounting” IFRIC 21 “Levies”	Effective Date Announced by IASB (Note 1)
	July 1, 2014 (Note 2) July 1, 2014 January 1, 2016 (Note 3) January 1, 2018 January 1, 2018 To be determined by IASB January 1, 2016 January 1, 2016 January 1, 2018 January 1, 2019 January 1, 2016 January 1, 2017 January 1, 2017 January 1, 2016 January 1, 2016 July 1, 2014 January 1, 2014 January 1, 2014 January 1, 2014

New IFRSs
Annual Improvements to IFRSs 2010-2012 Cycle

Annual Improvements to IFRSs 2011-2013 Cycle

Annual Improvements to IFRSs 2012-2014 Cycle

IFRS 9 “Financial Instruments”

Amendments to IFRS 9 and IFRS 7 “Mandatory Effective Date of
IFRS 9 and Transition Disclosures”

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture”

Amendments to IFRS 10, IFRS 12 and IAS 28 “Investment Entities:
Applying the Consolidation Exception”

Amendment to IFRS 11 “Accounting for Acquisitions of Interests in
Joint Operations”

IFRS 15 “Revenue from Contracts with Customers”

IFRS 16 “Leases”

Amendment to IAS 1 “Disclosure Initiative”

Amendment to IAS 7 “Disclosure Initiative”

Amendments to IAS 12“Recognition of Deferred Tax Assets for
Unrealized Losses”

Amendments to IAS 16 and IAS 38 “Clarification of Acceptable
Methods of Depreciation and Amortization”

Amendments to IAS 16 and IAS 41 “Agriculture: Bearer Plants”

Amendment to IAS 19 “Defined Benefit Plans: Employee
Contributions”

Amendment to IAS 36 “Impairment of Assets: Recoverable Amount
Disclosures for Non-financial Assets”

Amendment to IAS 39 “Novation of Derivatives and Continuation of
Hedge Accounting”

IFRIC 21 “Levies”

Effective Date
Announced by IASB (Note 1)

July 1, 2014 (Note 2)
July 1, 2014
January 1, 2016 (Note 3)
January 1, 2018
January 1, 2018
To be determined by IASB
January 1, 2016
January 1, 2016
January 1, 2018
January 1, 2019
January 1, 2016
January 1, 2017
January 1, 2017
January 1, 2016
January 1, 2016
July 1, 2014
January 1, 2014
January 1, 2014
January 1, 2014

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.
Note 2: The amendment to IFRS 2 applies to share-based payment transactions with grant date on or after July 1, 2014; the amendment to IFRS 3 applies to business combinations with acquisition date on or after July 1, 2014; the amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014.
Note 3: The amendment to IFRS 5 is applied prospectively to changes in a method of disposal that occur in annual periods beginning on or after January 1, 2016; the remaining amendments are effective for annual periods beginning on or after January 1, 2016.
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The initial application of the above New IFRSs, whenever applied, would not have any material impact on the Group’s accounting policies, except for the following:

1) IFRS 9 “Financial Instruments”

Recognition and measurement of financial assets

With regards to financial assets, all recognized financial assets that are within the scope of IAS 39 “Financial Instruments: Recognition and Measurement” are subsequently measured at amortized cost or fair value. Under IFRS 9, the requirement for the classification of financial assets is stated below.

All financial assets are measured at fair value through profit or loss. However, the Group may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognized in profit or loss. No subsequent impairment assessment is required, and the cumulative gain or loss previously recognized in other comprehensive income cannot be reclassified from equity to profit or loss.

The impairment of financial assets

IFRS 9 requires that impairment loss on financial assets is recognized by using the “Expected Credit Losses Model”. The credit loss allowance is required for financial assets measured at amortized cost, financial assets mandatorily measured at FVTOCI, lease receivables, contract assets arising from IFRS 15 “Revenue from Contracts with Customers”, certain written loan commitments and financial guarantee contracts. A loss allowance for the 12-month expected credit losses is required for a financial asset if its credit risk has not increased significantly since initial recognition. A loss allowance for full lifetime expected credit losses is required for a financial asset if its credit risk has increased significantly since initial recognition and is not low. However, a loss allowance for full lifetime expected credit losses is required for trade receivables that do not constitute a financing transaction.

For purchased or originated credit-impaired financial assets, the Group takes into account the expected credit losses on initial recognition in calculating the credit-adjusted effective interest rate. Subsequently, any changes in expected losses are recognized as a loss allowance with a corresponding gain or loss recognized in profit or loss.

2) IFRS 15 “Revenue from Contracts with Customers”

IFRS 15 establishes principles for recognizing revenue that apply to all contracts with customers, and will supersedes IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of revenue-related interpretations.

When applying IFRS 15, an entity shall recognize revenue by applying the following steps:

Identify the contract with the customer;
Identify the performance obligations in the contract;
Determine the transaction price;
Allocate the transaction price to the performance obligations in the contracts; and
Recognize revenue when the entity satisfies a performance obligation.

When IFRS 15 is effective, an entity may elect to apply this Standard either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this Standard recognized at the date of initial application.

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Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance, and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS as endorsed by the FSC.

Basis of Preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values.

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

a. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
b. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
c. Level 3 inputs are unobservable inputs for the asset or liability.

Classification of Current and Noncurrent Assets and Liabilities

Current assets include:

a. Assets held primarily for the purpose of trading;
b. Assets expected to be realized within twelve months after the reporting period; and
c. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current liabilities include:

a. Liabilities held primarily for the purpose of trading;
b. Liabilities due to be settled within twelve months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
c. Liabilities for which the Group does not have an unconditional right to defer settlement for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Assets and liabilities that are not classified as current are classified as noncurrent.

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Basis of Consolidation

Principle of preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Corporation and entities controlled by the Corporation (its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

Total comprehensive income of subsidiaries is attributed to the owners of the Group and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Corporation.

Refer to Note 14 and Table 7 for the detail information of subsidiaries, including the equity interest and main business.

Business Combinations

Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized in profit or loss as incurred.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value.

Foreign Currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

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Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including of the subsidiaries, associates, joint ventures or branches operations in other countries or currencies used different with the Corporation) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income (attributed to the owners of the Corporation and non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Corporation’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Corporation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Corporation losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Inventories

Inventories consist of raw materials, supplies, semifinished goods, finished goods and work-in-process, which are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at standard cost and adjusted to approximate weighted-average cost on the balance sheet date.

Investments in Associates and Joint Ventures

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Joint venture is a joint arrangement whereby the Group and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

The Group uses the equity method to account for its investments in associates and joint ventures.

Under the equity method, investments in an associate and a joint venture are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture after the date of acquisition. Besides, the Group also recognizes the Group’s share of the changes in other equity of associates and joint venture.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

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When the Group subscribes for additional new shares of the associate and joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate and joint venture. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in the Group’s share of equity of associates and joint ventures. If the Group’s ownership interest is reduced due to the additional subscription of the new shares of associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for by the equity method is insufficient, the shortage is debited to retained earnings.

When the Group’s share of losses of an associate and a joint venture equals or exceeds its interest in that associate and joint venture (which includes any carrying amount of the investment accounted for by the equity method and long-term interests that, in substance, form part of the Group’s net investment in the associate and joint venture), the Group discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate and joint venture.

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. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and the joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and the joint venture. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate and the joint venture on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Group continues to apply the equity method and does not remeasure the retained interest.

When a group entity transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Group’ consolidated financial statements only to the extent of interests in the associate and the joint venture that are not related to the Group.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, less subsequent accumulated depreciation and subsequent accumulated impairment loss.

Properties, plant and equipment in the course of construction are carried at cost, less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such properties are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.

Depreciation is recognized using the straight-line method. Each significant part is depreciated separately. If the lease term is shorter than the useful lives, assets are depreciated over the lease term. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

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On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

Goodwill

Goodwill arising from the acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units (referred to as cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

If goodwill has been allocated to a cash-generating unit and the entity disposes of an operation within that unit, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal, and is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Intangible Assets

a. Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

b. Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

c. Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset are recognized in profit or loss.

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Impairment of Tangible and Intangible Assets Other Than Goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets (other than goodwill) to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGUs to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

Financial Instruments

Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

a. Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

1) Measurement category

Financial assets are classified into the following categories: Financial assets at fair value through profit or loss (FVTPL), available-for-sale (AFS) financial assets, and loans and receivables.

a) Financial assets at fair value through profit or loss

Financial assets are classified as at fair value through profit or loss when the financial asset is held for trading.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Note 30.

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b) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.

Available-for-sale financial assets are measured at fair value. Changes in the carrying amount of available-for-sale monetary financial assets relating to changes in foreign currency exchange rates, interest income calculated using the effective interest method and dividends on available-for-sale equity investments are recognized in profit or loss. Other changes in the carrying amount of available-for-sale financial assets are recognized in other comprehensive income and will be reclassified to profit or loss when the investment is disposed of or is determined to be impaired.

Dividends on available-for-sale equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established.

Available-for-sale equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment loss at the end of each reporting period and are presented in a separate line item as financial assets carried at cost. If, in a subsequent period, the fair value of the financial assets can be reliably measured, the financial assets are remeasured at fair value. The difference between carrying amount and fair value is recognized in profit or loss or other comprehensive income on financial assets. Any impairment losses are recognized in profit and loss.

c) Loans and receivables

Loans and receivables (including trade receivables, cash and cash equivalent, and debt investments with no active market) are measured at amortized cost using the effective interest method, less any impairment, except for short-term receivables when the effect of discounting is immaterial.

Cash equivalent includes time deposits with original maturities within three months from the date of acquisition and, highly liquid, readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

2) Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For financial assets carried at amortized cost, such as trade receivables and other receivables assets are assessed for impairment on a collective basis even if they were assessed not to be impaired individually. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortized cost, the amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

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For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

For available-for-sale equity investments, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

For all other financial assets, objective evidence of impairment could include significant financial difficulty of the issuer or counterparty, breach of contract, such as a default or delinquency in interest or principal payments, it becoming probable that the borrower will enter bankruptcy or financial re-organization, or the disappearance of an active market for that financial asset because of financial difficulties.

When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period.

In respect of available-for-sale equity securities, impairment loss previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. In respect of available-for-sale debt securities, the impairment loss is subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

For financial assets that are carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss except for uncollectible trade receivables that are written off against the allowance account.

3) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.

b. Equity instruments

Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

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Equity instruments issued by a group entity are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Corporation’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Corporation’s own equity instruments.

c. Financial liabilities
1) Subsequent measurement

Except the following situation, all the financial liabilities are measured at amortized cost using the effective interest method:

Financial liabilities at fair value through profit or loss

Financial liabilities are classified as at fair value through profit or loss when the financial liability is either held for trading or it is designated as at fair value through profit or loss.

Financial liabilities held for trading are stated at fair value, with any gain or loss arising on remeasurement recognized in profit or loss. Fair value is determined in the manner described in Note 30.

A financial liability may be designated as at fair value through profit or loss upon initial recognition when doing so results in more relevant information and if:

a) Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
b) The financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or
c) The contract contains one or more embedded derivatives so that the entire combined contract (asset or liability) can be designated as at fair value through profit or loss.

For a financial liability designated as at fair value through profit or loss, the amount of changes in fair value attributable to changes in the credit risk of the liability is presented in other comprehensive income, and it will not be subsequently reclassified to profit or loss. The remaining amount of changes in the fair value of that liability which incorporates any interest or dividend paid on the financial liability is presented in profit or loss. The gain or loss accumulated in other comprehensive income will be transferred to retained earnings when the financial liabilities are derecognized. If this accounting treatment related to credit risk would create or enlarge an accounting mismatch, all changes in fair value of the liability are presented in profit or loss. Fair value is determined in the manner described in Note 30.

2) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

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d. Convertible bonds

The component parts of compound instruments (convertible bonds) issued by the Group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

On initial recognition, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or the instrument’s maturity date. Any embedded derivative liability is measured at fair value.

The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to capital surplus - share premium. When the conversion option remains unexercised at maturity, the balance recognized in equity will be transferred to capital surplus - share premium.

Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component.

Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable and reduced for estimated customer returns, rebates and similar allowances.

a. Sale of goods

Revenue from the sale of goods is recognized when all the following conditions are satisfied:

1) The Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
2) The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
3) The amount of revenue can be measured reliably;
4) It is probable that the economic benefits associated with the transaction will flow to the Group; and
5) The costs incurred or to be incurred in respect of the transaction can be measured reliably.

The Group does not recognize sales revenue on materials delivered to subcontractors because this delivery does not involve a transfer of risks and rewards of materials ownership.

b. Dividend and interest income

Dividend income from investments is recognized when the shareholder’s right to receive payment has been established provided that it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably.

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

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Construction Contracts

When the outcome of a construction contract can be estimated reliably, revenue and costs are recognized by referring to the stage of completion of the contract activity at the end of the reporting period. The stage of completion of contract activity is expressed as the percentage of contract costs incurred for work performed as of the balance sheet date relative to the estimated total contract costs, except where this percentage would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that the amount can be determined reliably and its receipt is considered probable.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately.

When contract costs incurred to date plus recognized profits less recognized losses exceed progress billings, the surplus is presented as construction contracts receivable. For contracts where progress billings exceed contract costs incurred to date plus recognized profits less recognized losses, the surplus is presented as construction contracts payable. Amounts received before the related work is performed are recognized as advances received in the consolidated balance sheet. Amounts billed for work performed but not yet paid by the customer are recognized as accounts receivable in the consolidated balance sheet.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, are added to the cost of those assets, until such time that the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

Government Grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire noncurrent assets are recognized as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are used to compensate for expenses or losses already incurred or to give the Group immediate financial support with no future related costs are recognized in profit or loss in the period in which they become receivable.

Employee Benefits

a. Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

25 -

b. Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost as well as past service cost, and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur, or when the plan amendment or curtailment occurs/when the settlement occurs. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Group’s defined benefit plan.

Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

Employee Stock Options

Equity-settled share-based payments arrangements granted to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.

The fair value determined at the grant date of the employee share options is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of employee share options that will eventually vest, with a corresponding increase in capital surplus - employee share options. The fair value determined at the grant date of the employee share options is recognized as an expense in full at the grant date when the share options granted vest immediately.

At the end of each reporting period, the Group revises its estimate of the number of employee share options expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the capital surplus - employee share options.

Taxation

Income tax expense represents the sum of the current tax payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period pretax income the tax rate that would be applicable to expected total annual earnings.

a. Current tax

According to the Income Tax Law, an additional tax at 10% of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain the earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from in the current year’s tax provision.

b. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.

26 -

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all (deductible temporary differences, unused loss carry forward and unused tax credits for purchases of machinery, equipment and research and development expenditures to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Previously unrecognized deferred tax assets are also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

c. Current and deferred taxes for the period

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from a business combination, the tax effect is included in the accounting for business combination.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Key Sources of Estimation and Uncertainty

The following are the key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

27 -

a. Impairment of tangible and intangible assets other than goodwill

In the valuation of assets for impairment, on assets, the Group uses subjective judgment to determine the individual cash flows, useful lives and future revenues and expenses of specific asset groups based on subjective judgment, the assets’ useful model and industrial specific. Any changes in estimation due to economic circumstances and the Group’s strategies could result in significant impairment of tangible and intangible assets.

b. Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires management to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. The information on the measurement of goodwill impairment is show in Note 17.

c. Impairment of investments in associates and joint ventures

The Group immediately recognizes impairment loss on its net investment in associates and joint ventures when there is any indication that the investment may be impaired and the carrying amount may not be recoverable. The Group’s management evaluates the impairment based on the estimated future cash flow expected to be generated by the associate and joint ventures, including the assumptions about the growth rate of sale and capacity of production facilities estimated by the associate’s management, etc. The Group also takes into consideration the market conditions and industry development to evaluate the appropriateness of assumptions.

d. Reliability of deferred tax assets

Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be used. The management’s significant accounting judgment and estimation should be taken into consideration when measuring the reliability of deferred tax assets, including assumptions on the predicted growth rate of sales and gross profit rate, tax-exempt period, unused tax credits and tax planning, etc. Any changes in industrial circumstances and tax laws could result in significant adjustments to deferred tax assets.

e. Valuation of inventories

Net realizable value of inventory is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The estimation of net realizable value was based on current market conditions and the historical experience of selling products of a similar nature. Changes in market conditions may have a material impact on the estimation of net realizable value.

f. Recognition and measurement of defined benefit plans

Net defined benefit liabilities and the resulting pension expense under defined benefit pension plans are calculated using the Projected Unit Credit Method. Actuarial assumptions comprise the discount rate, rate of employee turnover, and long-term average future salary increase. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability.

28 -

g. Impairment of accounts receivable

When there is objective indication of impairment, the Group takes into consideration the estimation of future cash flows. The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not been incurred, discounted at the financial asset’s original effective interest rate. Where the actual future cash flows are less than expected, a material impairment loss may arise.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits with maturities less than 3 months from date of investments		December 31
		2015 2014 $ 4,547 $ 4,253 2,206,259 1,437,592 278,483 405,803 $ 2,489,289 $ 1,847,648

The market rate intervals of cash in bank and time deposits with maturities less than 3 months from date of investments at the balance sheet were as follows:

Bank deposits Time deposits with maturities less than 3 months from date of investments	December 31
	2015 2014 0.001%-0.65% 0.01%-1.50% 0.58%-4.00% 0.05%-3.25%

Cash equivalents include time deposits with maturities less than three months from the date of acquisition are readily convertible to a known amount of cash, and are subject to an insignificant risk of change in value; these were held for the purpose of meeting short-term cash commitments.

As of December 31, 2015 and 2014, time deposits with maturities more than 3 months from date of investments were $559,958 thousand and $398,993 thousand, respectively, which is classified to investment in bonds with no active market (see Notes 10 and 30).

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current Nonderivative financial assets Domestic listed stocks Investment in debt instrument Financial assets at fair value through profit or loss		December	31
		2015 $ 7,921 951 $ 8,872	2014 $ 7,663 975 $ 8,638 (Continued)

29 -

Financial liabilities at FVTPL-current Derivative instruments Call and put option of convertible bonds payable (Note 20)		December	31
		2015 $ 1,483	2014 $ 927 (Concluded)

8. AVAILABLE-FOR-SALE FINANCIAL ASSETS

Domestic investments Listed stocks Open-end beneficial certificates Current Noncurrent		December 31	December 31
		2015 $ 359,543 2,057,476 $ 2,417,019 $ 2,057,476 359,543 $ 2,417,019	2014 $ 468,575 1,873,734 $ 2,342,309 $ 1,873,734 468,575 $ 2,342,309

9. FINANCIAL ASSETS CARRIED AT COST - NONCURRENT

Domestic unlisted common stocks Foreign unlisted common stocks Foreign open-end beneficial certificates Foreign unlisted preferred stock Classification by measurement of financial instruments Available-for-sale financial assets		December 31	December 31
		2015 $ 171,718 26,530 10,152 - $ 208,400 $ 208,400	2014 $ 134,328 28,606 10,152 12,263 $ 185,349 $ 185,349

The above unlisted stock investments were measured at cost less impairment at the balance sheet date. The Group thought the fair value of these investments could not be estimated reliably because the range of reasonable fair value estimates is significant and the probabilities of various estimates cannot be reasonably assessed.

For the years ended December 31, 2015 and 2014, the Group recognized impairment losses of $2,411 thousand and $2,410 thousand, respectively, on Qualitysource S.A.S. These impairment losses were recognized to reflect an other-than-temporary decline in value of these investments.

30 -

For the year ended December 31, 2014, the Group recognized an impairment loss of $3,090 thousand on EVT Technology Co., Ltd. These impairment losses were recognized to reflect an other-than-temporary decline in value of these investments. In 2015, the Corporation acquired control over EVT Technology Co., Ltd.; EVT Technology Co., Ltd. was included in the consolidate financial statement since the day the Corporation acquired control over it.

For the years ended December 31, 2015 and 2014, the Group recognized impairment losses of $12,263 thousand and $10,000 thousand on Lasfocus Corporation. These impairment losses were recognized to reflect an other-than-temporary decline in value of these investments.

The Group did not sell financial assets carried at cost for the years ended December 31, 2015 and 2014.

10. DEBT INVESTMENTS WITH NO ACTIVE MARKET

Time deposits with maturities more than 3 months from date of investments Interest rate		December 31
	2015 2014 $ 559,958 $ 398,993 0.45%-5.00% 0.50%-3.75%

As of December 31, 2015 and 2014, the amounts of the Group’s investment in bonds with no quoted price in active market which had been mortgaged or pledged as collaterals were $14,985 thousand and $24,442 thousand, respectively (refer to Note 32).

11. ACCOUNTS RECEIVABLE, NET - THIRD PARTIES

Accounts receivable Less: Allowance for doubtful accounts Accounts receivable - related parties		December 31	December 31
		2015 $ 2,608,385 (185,677) 2,422,708 11,650 $ 2,434,358	2014 $ 3,252,170 (100,164) 3,152,006 9,950 $ 3,161,956

The average credit period for sales of goods is 60 to 90 days after the goods were approved, and no interest was charged on accounts receivable. In determining the recoverability of a receivable, the Group considered any change in the credit quality of the accounts receivable since the date when credit was initially granted to the end of the reporting period. Allowances for doubtful accounts are based on estimated irrecoverable amounts determined by referring to the counterparty’s past default and an analysis of the counterparty’s current financial position.

The Group did not recognize an allowance accounts against accounts receivable which were past due at the end of the reporting period because there was not a significant change in credit quality and the amounts were still considered recoverable. In addition, the Group did not hold any collateral or other credit enhancements for those accounts receivable.

31 -

The aging of receivables was as follows:

The aging of receivables was as follows:
0-60 days 61-180 days Over 180 days		December 31
		2015 $ 2,126,796 125,032 356,557 $ 2,608,385	2014 $ 2,711,073 289,726 251,371 $ 3,252,170

The above aging analysis was based on the past due date.

Before accepting any new customer, the Group uses an external credit scoring system to assess the potential customer’s credit quality and defines credit limits by customer. Customers’ limits and scores are reviewed a periodically every year. Most of the accounts receivable that are neither past due nor impaired have the best credit score under the external credit scoring system used by the Group.

Age of receivables that were past due but not impaired was as follows:

1-60 days 61-180 days Over 180 days		December 31	December 31
		2015 $ 313,015 114,727 207,023 $ 634,765	2014 $ 537,127 252,580 136,149 $ 925,856

The above aging schedule was based on the past due date.

The movements of the allowance for doubtful accounts receivable were as follows:

Individual
Assessment of
Impairment
Loss
Collective
Assessment of
Impairment
Loss
Balance at January 1, 2014
$ 33,477
$ 47,634

Add: Bad debts expense recognized (reversed)
on accounts receivable
(3,530)

22,229
Deduct: Amounts written off as uncollectible
(1,766)

(623)

Reclassification of impairment loss from
collective assessment to individual assessment
1,153
(1,153)
Foreign exchange translation gains and losses

1,590

1,153

Balance at December 31, 2014
$ 30,924
$ 69,240

Balance at January 1, 2015
$ 30,924
$ 69,240

Add: Bad debts expense recognized (reversed)
on receivable
96,841

(10,290)

Deduct: Amounts written off as uncollectible
(1,956)

(200)

Reclassification of impairment loss from
collective assessment to individual assessment
25,931
(25,931)
Foreign exchange translation losses

532

586

Balance at December 31, 2015
$ 152,272
$ 33,405

Total
$ 81,111
18,699

(2,389)
-
2,743
$ 100,164
$ 100,164

86,551

(2,156)
-
1,118
$ 185,677

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The impairment recognized represent the difference between the carrying amount of these trade receivables and the present value of the expected proceeds received from liquidation. Included in the allowance for impairment loss were individually impaired trade receivable amount to $152,272 thousand and $30,924 thousand as of December 31, 2015 and 2014, respectively. The Group did not hold any collateral over these balances.

12. CONSTRUCTION CONTRACTS RECEIVABLE (PAYABLE)

Construction contracts receivable Accumulated contract costs incurred to date plus recognized profits (less recognized losses) Less: Accumulated progress billings Due from customers for contract work Construction contracts payable Accumulated progress billings Less: Accumulated contract costs incurred to date plus recognized profits less recognized losses Due to customers for contract work Receipts in advance		December 31	December 31
		2015 $ 178,277 (2,414) $ 175,863 $ 383,303 (128,085) $ 255,218 $ -	2014 $ 95,954 (9) $ 95,945 $ 15,883 (12,087) $ 3,796 $ 980

The Group recognized contract revenue of $1,260,831 thousand and $680,091 thousand for the years ended December 31, 2015 and 2014, respectively.

13. INVENTORIES

Finished goods Semifinished products Work in process Raw materials		December 31	December 31
		2015 $ 389,914 300,641 369,696 575,696 $ 1,635,947	2014 $ 434,242 248,444 448,897 473,190 $ 1,604,773

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2015 and 2014 was $5,470,761 thousand and $6,260,815 thousand, respectively.

The costs of inventories recognized as cost of goods sold for the years ended December 31, 2015 and 2014 were $39,379 thousand and $62,450 thousand due to write-downs of inventories, respectively.

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14. SUBSIDIARIES

The following direct and indirect subsidiaries of the Corporation were all included in the consolidated financial statement:

Investor
Investee
Business
The Corporation
Neworld Electronics Ltd.
Sale and maintenance of electronic test
instruments, etc.
Chroma Investment Co., Ltd.
Investment
Sensational Holding Ltd.
Investment
Chroma Ate Europe B.V.
Sale and maintenance of electronic test
instruments, etc.
Chroma Ate Inc.
Sale and maintenance of electronic test
instruments, etc.
CHEN HWA Technology Inc.
Test of inductance, capacitance and resistance
equipment and sale of parts.
CHI Incorporation Ltd.
Test of inductance, capacitance and resistance
equipment and sale of parts.
Chroma New Material Corporation
Processing and sale of gold wire
San Eagle Development Corp.
Investment
Wei Kuang Automatic Equipment Co., Ltd.
Design, manufacturing, installment and testing
of automated factory conveyor systems.
Testar Electronic Corporation
Testing of LED products
Deep Red Holding Co., Ltd.
Investment
Chroma Japan Corp.
Sale and maintenance of electronic test
instruments, etc.
Chroma Systems Solutions Inc.
Sale and maintenance of electronic test
instruments, etc.
Adivic Technology Co.
Sale and research of RF device
EVT Technology Co., Ltd.
Manufacturing of motorcycles and its parts
Neworld Electronics Ltd.
Chroma Electronics (Shenzhen) Co., Ltd.
Sale of computerized automatic test systems,
peripherals and electronic test instruments.
Chroma Electronics (Shanghai) Co., Ltd.
Sale of computerized automatic test systems,
peripherals and electronic test instruments.
Chroma Ate Inc.
Chroma Systems Solutions Inc.
Sale and maintenance of electronic test
instruments, etc.
CHEN HWA Technology
Inc.
Chroma (Shanghai) Trading Co., Ltd.
International and transit trading, simple
commercial processing, commercial
consulting services, etc.
CHI Incorporation Ltd.
Chroma Ate (Suzhou) Co., Ltd.
Sale of computerized automatic test systems,
peripherals and electronic test instruments.
San Eagle Development
Corp.
Wei Kuang Mech Eng Inc.
Investment
Wei Kuang Mech Eng Inc.
Mou Kuan Technologies (Nanjin) Co., Ltd.
Assembly, sale and maintenance of factory
conveyors and related systems and rendering
after-sales services.
Wei Kuang Automatic Equipment (Nanjin)
Co., Ltd.
Sale and maintenance of electronic equipment
and factory conveyor systems
Wei Kuang Automatic Equipment (Xiamen)
Co., Ltd.
Sale and maintenance of electronic equipment
and factory conveyor systems
Deep Red Holding Co., Ltd. Saject System Technology (Suzhou) Co., Ltd. Research, development and design of
computer network security systems and
information management
EVT Technology Co., Ltd.
Wei Da Electric Vehicle Co., Ltd.
Sale and lease of motorcycles
Adivic Technology Co.
Advic Holding Corporation
Sale and research of RF device

Percentage of Ownership
as of December 31
2015
2014
Explanation
100.0
100.0
Chroma Investment Co., Ltd.
had 1,916 thousand shares of
the Corporation’s common
stock as of December 31,
2015, which accounted for
0.5% of the Corporation’s
outstanding shares
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Note 5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
67.2
67.2
100.0
100.0
100.0
100.0
Note 3
25.0
25.0
Note 1
51.0
51.0
Note 2
53.2
17.9
Note 4
100.0
100.0
100.0
100.0
50.0
50.0
Note 1
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
75.0
75.0
Note 4
100.0
-
Note 6

Note 1: The Corporation acquired 25% equity interest in Chroma Systems Solutions Inc. for US$900 thousand on September 1, 2009. The Corporation’s subsidiary, Chroma Ate Inc. (U.S.A.), held 50% equity interest in Chroma Systems Solutions Inc.; thus, the Corporation directly and indirectly held 75% equity interest in Chroma Systems Solutions Inc. and controlled the investee.
Note 2: In April 2015, Advic Technology increased its capital by $60,000 thousand to strengthen its financial structure. The Corporation’s Board of Director resolved to participate proportionately in the capital increase by buying shares amounting to $30,600 thousand at the same percentage as its original equity interest in Advic Technology. The Corporation’s equity interest in Advic was still 51%.
Note 3: To enhance its financial structure and maintain the sufficiency of its operating capital, Chroma Japan reduced its capital by 100% to offset its deficit and increased its capital by ￥ 199,000 thousand in April 2014. The Corporation’s Board of Directors resolved to fully participate in the capital increase of Chroma Japan Corp. Chroma Japan Corp. is still a 100% held subsidiary of the Corporation.
34 -
Note 4: In May 2015, EVT Technology Co., Ltd. (“EVT”), the Corporation’s investee (originally recognized as financial assets carried at cost), increased its capital by $30,000 thousand to strengthen its financial structure. The Corporation’s Board of Directors resolved to participate in the capital increase of EVT by buying $23,000 but at a higher percentage than its previous equity interest; thus, the Corporation equity interest rose to 53.2% and acquired control over EVT.
Note 5: In February 2015, Chroma (Shanghai) Trading Co., Ltd., the Corporation’s grandson company increase its capital by US$2,500 thousand to purchase plants and expand its operating scale. The Corporation’s Board of Directors resolved to fully participate in the capital increase of Chroma (Shanghai) Trading Co., Ltd. through Chen Hwa Technology Inc. by buying shares. As of December 31, 2015, the investment amount has been fully paid.
Note 6: In June 2015, Adivic Technology Co. (“Adivic”), the Corporation’s subsidiary set up Advic Holding Corporation to develop radio frequency identification (RFID) technology in USA.

15. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates Investments in joint ventures		December 31	December 31
		2015 $ 535,634 17,505 $ 553,139	2014 $ 491,291 17,411 $ 508,702

a. Investments in associates

Associates that are not individually material Adlink Technology Inc. Dynascan Technology Corp.		December 31	December 31
		2015 $ 457,674 77,960 $ 535,634	2014 $ 418,932 72,359 $ 491,291

Aggregate information of associates that are not individually material:

The Group’s share of: Income from continuing operations Other comprehensive income Total comprehensive income for the year		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 76,072 9,015 $ 85,087	2014 $ 82,518 452 $ 82,970

Refer to Table 7 “Information on Investees” for the nature of activities, principal place of business and country of incorporation of the associates.

The Group is able to exercise significant influence over Adlink Technology Inc. although the percentage of shares held is less than 20%. Therefore, the Group recognizes the gain and loss under the equity method.

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Fair values (Level 1) of investments in associates with available published price quotation are summarized as follows:

Name of Associate Adlink Technology Inc.		December 31	December 31
		2015 $ 1,763,821	2014 $ 1,590,351

The investments in associates accounted for by the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2015 and 2014 was based on the associates’ financial statements audited by the auditors for the same years.

b. Investment in joint venture

Joint venture that are not individually material Chih Ho Shun Development Co., Ltd.		December	31
		2015 $ 17,505	2014 $ 17,411

Aggregate information of joint ventures that are not individually material:

The Group’s share of: Income from continuing operations Other comprehensive income Total comprehensive income for the year		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 94 - $ 94	2014 $ 60 - $ 60

Refer to Table 7 “Information on Investees” for the nature of activities, principal place of business and country of incorporation of the associates.

For the investment and development plan, “The Action Plan for Developing Land Surrounding the MRT Airport Station to Improve Civilians’ Life,” the Board of Directors decided to invest jointly with Dynapack International Corporation and Heran Tech. Co., Ltd. (originally named Heran Co., Ltd.) to set up Chih Ho Shun Development Co., Ltd. (“Chih Ho Shun”). The Corporation invested $17,500 thousand for a 35% entity interest in Chih Ho Shun but did not have control over this investee.

The investments in joint ventures accounted for by the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2015 and 2014 was based on the joint ventures’ financial statements audited by the auditors for the same years.

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16. PROPERTY, PLANT AND EQUIPMENT

Cost Balance, January 1, 2014 Addition Disposals Transferred from inventories Reclassification Net effect of exchange differences Balance, December 31, 2014 Accumulated depreciation and impairment Balance, January 1, 2014 Disposals Depreciation Reclassification Net effect of exchange differences Balance, December 31, 2014 Net amounts on December 31, 2014 Cost Balance, January 1, 2015 Addition Disposals Acquisition through business combinations (refer to Note 28) Transferred from inventories Reclassification Net effect of exchange differences Balance, December 31, 2015 Accumulated depreciation and impairment Balance, January 1, 2015 Depreciation Disposals Acquisition through business combinations (refer to Note 28) Reclassification Net effect of exchange differences Balance, December 31, 2015 Net amounts on December 31, 2015	Land $ 505,530 - - - - 3,402 $ 508,932 $ - - - - - $ - $ 508,932 $ 508,932 14,787 - - - - 2,787 $ 526,506 $ - - - - - - $ - $ 526,506	Buildings $ 2,223,536 16,313 (7,343) - 70,518 15,602 $ 2,318,626 $ (700,021) (92,256) 2,970 - (2,192) $ (791,499) $ 1,527,127 $ 2,318,626 142,853 (307) 126 - - 5,775 $ 2,467,073 $ (791,499) (96,262) 304 (37) - (2,388) $ (889,882) $ 1,577,191	Machinery Miscellaneous Equipment $ 932,319 $ 1,154,198 52,281 78,031 (30,146) (54,922) 27,641 61,949 (208) 2,885 5,950 11,269 $ 987,837 $ 1,253,410 $ (582,938) $ (836,960) (110,571) (94,361) 29,421 44,142 346 (2,879) (4,681) (5,863) $ (668,423) $ (895,921) $ 319,414 $ 357,489 $ 987,837 $ 1,253,410 38,641 84,799 (13,924) (44,656) 13,024 20,948 47,535 62,524 (5,222) 5,222 1,690 (39,475) $ 1,069,581 $ 1,342,772 $ (668,423) $ (895,921) (122,024) (111,296) 13,485 33,810 (9,222) (16,708) 2,063 (2,063) 123 27,734 $ (783,998) $ (964,444) $ 285,583 $ 378,328	Total $ 4,815,583 146,625 (92,411) 89,590 73,195 36,223 $ 5,068,805 $ (2,119,919) (297,188) 76,533 (2,533) (12,736) $ (2,355,843) $ 2,712,962 $ 5,068,805 281,080 (58,887) 34,098 110,059 - (29,223) $ 5,405,932 $ (2,355,843) (329,582) 47,599 (25,967) - 25,469 $ (2,638,324) $ 2,767,608

The following useful lives are used in the calculation of depreciation:

Building Primary buildings 55 years Mechanical and electrical equipment 10 years Duty-free rooms equipment 10 years Others 6-50 years Machinery 2-12 years Miscellaneous equipment 3-15 years

37 -

Refer to Note 32 for property, plant and equipment have been pledged to secure borrowings of the Group.

17. GOODWILL

Cost Balance, beginning of the period Net effect of exchange differences Balance, end of the period		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 193,939 2,113 $ 196,052	2014 $ 190,618 3,321 $ 193,939

For assessing goodwill for impairment at the end of reporting period, the Group took value in use as basis for calculating the recoverable amount of goodwill. The Group used the cash flows of a five-year financial forecast as the basis for calculating value in use to reflect the specific risk of cash-generating units. After this evaluation, the Group did not recognize any impairment loss on goodwill for the years ended December 31, 2015 and 2014.

18. OTHER INTANGIBLE ASSETS

Sales Channel
Core
Technology
Cost
Balance, January 1 and December 31, 2014
$ 14,388
$ 317,931

Accumulated amortization and impairment losses
Balance, January 1, 2014
$ (12,469)
$ (309,389)

Amortization

(1,919)

(2,009)

Balance, December 31, 2014
$ (14,388)
$ (311,398)

Net amounts on December 31, 2014
$ -
$ 6,533

Cost
Balance, January 1 and December 31, 2015
$ 14,388
$ 317,931

Accumulated amortization and impairment losses
Balance, January 1, 2015
$ (14,388)
$ (311,398)

Amortization

-

(2,009)

Balance, December 31, 2015
$ (14,388)
$ (313,407)

Net amounts on December 31, 2015
$ -
$ 4,524

Total
$ 332,319
$ (321,858)

(3,928)
$ (325,786)
$ 6,533
$ 332,319
$ (325,786)

(2,009)
$ (327,795)
$ 4,524

38 -

Other intangible assets are depreciated on a straight-line basis over the estimated useful lives as follows:

Sales channel 5 years Core technology 5 years

19. BORROWINGS

Short-term Borrowings

Secured borrowings Bank loans (a) Unsecured borrowings Bank loans (b)		December 31	December 31
		2015 $ 78,400 222,903 $ 301,303	2014 $ 82,400 250,325 $ 332,725

a. Secured by Testar Electronic Corporation’s Machinery (refer to Note 32). As of December 31, 2015 and 2014, the interest rate on the bank loans was 1.32%-1.35% and 1.32% per annum, respectively.
b. As of December 31, 2015 and 2014, the interest rate on the bank loans was 1.01%-3.25% and 1.15%-3.25% per annum, respectively.

Short-term Bills Payable

Commercial paper Interest rate (%) Due date Long-term Borrowings Secured borrowings Bank loans (a) Bank loans (b) Bank loans (c) Unsecured borrowings Syndicated bank loans (d) Bank loans (e) Less: Current portion Long-term borrowings			December	December	31
			2015 2014 $ - $ 16,000 - 1.39% - 2015.03.25 December 31
		2015 $ 108,886 52,964 12,481 174,331 1,230,000 9,792 1,414,123 (30,083) $ 1,384,040		2014 $ 107,905 24,433 - 132,338 700,000 - 832,338 (75,138) $ 757,200

39 -
a. Secured by Chroma Systems Solutions Inc.’s land and buildings (refer to Note 32). The bank loan is due on November 16, 2019 and repayable from November 2012 to November 2019 in equal monthly installments with additional interest. As of December 31, 2015 and 2014, the effective interest rate on the bank loans was 4.00% per annum.
b. Secured by Chroma U.S.A.’s buildings in California (refer to Note 32). The bank loan is due on July 15, 2022 and repayable in equal monthly installments with additional interest. As of December 31, 2015 and 2014, the effective interest rate on the bank loans was 0.9%-4.25% and 4.25% per annum.
c. Secured by Chroma Japan’s properties (refer to Note 32). The Bank loan is due on April 30, 2025 and repayable in equal monthly installments with additional interest. As of December 31, 2015, the effective interest rate on the Bank loans was 2.25% per annum.
d. On August 30, 2012, the Corporation applied to E.SUN and other banks for syndicated bank loans with $2,000,000 thousand credit line. In September 2013, the Corporation borrowed $700,000 thousand to pay the second installment of “The Action Plan for Developing Land surrounding the MRT Airport Station to Improve Civilians Life” (refer to Note 33). The syndicated bank loan is due on September 3, 2018 and repayable from March 2017 to March 2018 in three equal semiannual installments ($246,000 thousand per one installment), the remaining $492,000 thousand will be paid on September 3, 2018 (which is the due date), and the interest is payable monthly. In November 2015, the Corporation acquired new borrowing in the amount of $530,000 thousand to pay the first part of the third installment of the land. As of December 31, 2015, the interest rate per annum was 1.60% and 1.69% (floating interest rate), respectively.
e. EVT Technology Co., Ltd applied for the bank loan due to on December 16, 2019. As of December 31, 2015, the interest rate on the bank loan was 1.4 per annum.

20. BONDS PAYABLE

Unsecured domestic convertible bonds Less: Current portion		December 31	December 31
		2015 $ 1,854,100 96,007 $ 1,758,093	2014 $ 1,854,400 123,394 $ 1,731,006

On May 23, 2014, the Corporation issued its second domestic unsecured 0% convertible bonds with aggregate par value of $2,000,000 thousand and face value of $100 thousand. These bonds were listed on the GreTai Securities Market at the same date. Except for the book closure period, bondholders are entitled to convert bonds into the Chroma Ate. Inc.’s common stock at $74.2 (conversion price) per share since June 24, 2014 to May 13, 2019. Due to the appropriation of 2015 and 2014 earnings approved at the annual shareholders meeting for 2016 and 2015, the shareholders approved to distribute dividend of NT$2.6 and NT$2.5 per share, respectively; thus, the conversion price was adjusted to NT$69.3 and NT$72 per share, respectively.

If the closing price of the Corporation’s common share exceeds 30% of the conversion price of the bonds payable for 30 consecutive days or the aggregate outstanding amounts of bonds payable is less than 10% of the amounts of original issuance, the Corporation has the right to redeem all of the outstanding bonds payable at face value during the period begin 1 month after the issuance date (June 24, 2014) to 40 days before the maturity date (April 13, 2019).

At end of the third year from the bond issuance date, bondholders have the right to request the Group to redeem the convertible bonds at face value.

40 -

The convertible bonds contain both liability and equity components. The equity components was presented in equity under the heading of “capital surplus - option” and recognized of $141,487 thousand. The liability components were recognized into embedded-derivative and nonderivative liability of $4,989 thousand and $1,849,108 thousand, respectively. The estimated fair value of derivative instruments as of December 31, 2015 was loss $556 thousand.

Proceeds of the issue (less transaction costs $5,320 thousand) Equity component Deferred tax assets Derivative financial liability component Liability component at the date of issue Interest charged at an effective interest rate of 1.57% Current portion of long-term borrowings and bonds payable Liability component as of December 31, 2015	$ 1,994,680 (141,487) 904 (4,989) 1,849,108 44,642 (135,657) $ 1,758,093

21. OTHER PAYABLES - CURRENT

Other payables Payable on construction and equipment Salaries payable and bonus payable (including employee bonus payable and remuneration to directors and supervisors) Other payables and accrued expense		December 31	December 31
		2015 $ 18,771 532,015 114,854 $ 665,640	2014 $ 50,598 537,521 157,474 $ 745,593

22. RETIREMENT BENEFIT PLANS

Defined Contribution Plans

The Labor Pension Act (LPA) provides for a defined contribution pension plan. Based on the LPA, the rate of the monthly contributions of the Corporation to the employees’ individual pension accounts is at 6% of monthly salaries and wages.

Employees of the Group’s subsidiaries in the U.S.A., Europe and Japan are under the retirement benefit plans operated by their respective local governments. Subsidiaries have to contribute amounts at certain percentages of salaries to retirement benefit plans to provide capital for the plans.

Subsidiaries in the People’s Republic of China take part in the defined contribution pension plans established by the local governments, to which the subsidiaries make monthly contributions.

The Group recognized pension costs of $65,258 thousand and $63,589 thousand for the years ended December 31, 2015 and 2014, respectively.

41 -

Defined Benefit Plans

The Corporation and its subsidiaries, Chroma New Material Corp. and Adivic Technology Co., have defined benefit plans based on the Labor Standards Act (LSA) which is operated by government. Pension benefits are calculated on the basis of length of service and average monthly salaries of the six month before retirement. The Corporation and its ROC subsidiaries mentioned above contribute amount equal to 4% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of year, the Corporation and its ROC subsidiaries assesses the balances in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Corporation and its ROC subsidiaries are required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Corporation has no right to influence the investment policy and strategy.

The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Deficit (surplus) Others Net defined benefit liability		December 31	December 31
		2015 $ 409,891 (260,200) 149,691 - $ 149,691	2014 $ 372,684 (244,982) 127,702 - $ 127,702

Movements in net defined benefit liability were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of	Benefit
	Obligation	the Plan Assets	Liability (Asset)
Balance at January 1, 2014	$ 350,604	$ (241,475)	$ 109,129
Service cost
Current service cost	4,301	-	4,301
Net interest expense (income)	6,487	(4,638)	1,849
Recognized in profit or loss	10,788	(4,638)	6,150
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(1,183)	(1,183)
Actuarial loss - changes in demographic
assumptions	5,020	-	5,020
Actuarial loss - changes in financial
assumptions	10,694	-	10,694
Actuarial loss - experience adjustments	9,714	-	9,714
Recognized in other comprehensive income	25,428	(1,183)	24,245
Contributions from the employer	-	(11,822)	(11,822)
Benefits paid	(14,136)	14,136	-
Balance at December 31, 2014	372,684	(244,982)	127,702
			(Continued)

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	Present Value	Present Value
	of the Defined				Net Defined
		Benefit	Fair Value of			Benefit
	Obligation		the Plan Assets		Liability
Service cost
Current service cost	$	4,217	$	-	$	4,217
Net interest expense (income)		6,923		(4,706)		2,217
Recognized in profit or loss		11,140		(4,706)		6,434
Remeasurement
Return on plan assets (excluding amounts
included in net interest)		-		(1,881)		(1,881)
Actuarial loss - changes in demographic
assumptions		10,148		-		10,148
Actuarial loss - changes in financial
assumptions		12,969		-		12,969
Actuarial loss - experience adjustments		6,132		-		6,132
Recognized in other comprehensive income		29,249		(1,881)		27,368
Contributions from the employer		-		(11,813)		(11,813)
Benefits paid		(3,182)		3,182		-
Balance at December 31, 2015	$	409,891	$ (260,200)		$	149,691
						(Concluded)

Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:

a. Investment risk: The plan assets are invested in domestic/and foreign/equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
b. Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.
c. Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s) Expected rate(s) of salary increase	December 31
	2015 2014 1.00%-1.75% 1.50%-2.00% 1.50%-2.50% 1.50%-2.50%

43 -

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would (decrease/increase) as follows:

	December 31,
	2015
Discount rate(s)
0.25% increase	$ (23,165)
0.25% decrease	$ 24,610
Expected rate(s) of salary increase
0.25% increase	$ 35,111
0.25% decrease	$ (32,968)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December	31
		2015 $ 11,705 15.8 years	2014 $ 11,737 15.0 years

23. EQUITIES

Capital Stock

a. Common stock

Authorized shares (shares in thousands) Authorized capital stock Shares issued and fully received (in thousands) Issued capital		December 31	December 31
		2015 450,000 $ 4,500,000 379,170 $ 3,791,699	2014 450,000 $ 4,500,000 378,782 $ 3,787,821

30,000 thousand shares of the Corporation’s shares authorized were reserved for the employee share options.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note) Additional paid-in capital Treasury stock From merger	December 31
	2015 2014 $ 769,143 $ 748,329 160,514 155,520 146,976 146,976 (Continued)

44 -

Used to offset a deficit Employee stock options expired May not be used for any purpose Share of changes of subsidiaries, associates or joint ventures’ capital surplus Convertible bonds payable options Employee stock options		December 31	December 31
		2015 $ 1,640 24,725 131,166 68,105 $ 1,302,269	2014 $ - 24,725 131,187 49,917 $ 1,256,654 (Concluded)

Note: Such capital surplus may be used to offset a deficit; in addition, when the Group has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Group’s capital surplus and once a year).

c. Appropriation of earnings and dividend policy

The Corporation’s Articles of Incorporation provide that a 10% legal reserve should be set aside from the annual net income less any deficit. The remainder, special reserve appropriation or reverse appropriation based on regulations or relevant laws, together with unappropriated earnings of prior years, should be distributed as follows:

1) Remuneration to directors and supervisors
2) Bonus to employees - 5%-20%
3) Dividends

Taking into account future capital expenditure requirements and its cash position, the total of cash dividends paid in any given year may not be less than 20% of total dividends distributed in that year. The final amount, type and percentage of the cash dividends and stock dividends are subject to actual earnings and capital requirements of the Corporation in a particular year.

In accordance with the amendments to the Company Act in May 2015, the recipients of dividends and bonuses are limited to shareholders and do not include employees. The consequential amendments to the Corporation’s Articles of Incorporation had been proposed by the Corporation’s board of directors on December 23, 2015 and are subject to the resolution of the shareholders in their meeting to be held on June 7, 2016. For information about the accrual basis of the employees’ compensation and remuneration to directors and supervisors and the actual appropriations for the years ended December 31, 2015 and 2014, please refer to Note 24 employee benefits expense.

Under Rule No. 1010012865 and Rule No. 1010047490 issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”, the Group should appropriate or reverse to a special reserve. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and thereafter distributed.

Legal reserve should be appropriated until the reserve equals the Corporation’s paid-in capital. The reserve may be used to offset a deficit. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash.

45 -

Except for non-ROC resident shareholders, all shareholders receiving the dividends are allowed a tax credit equal to their proportionate share of the income tax paid by the Group.

The appropriations of earnings, including bonus to employees, and the remuneration to directors and supervisors for 2014 and 2013, have been approved at the annual shareholders’ meeting on June 10, 2015 and June 11, 2014, respectively. The appropriations and dividends per share were as follows:

Legal reserve Cash dividends	Appropriation of Earnings For Fiscal Year 2014 For Fiscal Year 2013 $ 131,644 $ 120,489 987,433 941,900	Dividend Per Share (NT$)
		For Fiscal Year 2014 For Fiscal Year 2013 $ 2.6 $ 2.5

The appropriations of earnings for 2015 had been proposed by the Corporation’s board of directors on February 23, 2016. The appropriations and dividends per share were as follows:

	Appropriation	Dividends Per	Dividends Per
	of Earnings	Share	(NT$)
Legal reserve	$ 123,656	$	-
Cash dividends	910,200		2.4

The appropriations of earnings for 2015 are subject to the resolution of the shareholders’ meeting to be held on June 7, 2016.

d. Non-controlling interests

Balance, beginning of the year Share of non-controlling interests Capital increase of subsidiaries in cash Net loss Exchange differences on the translation of foreign financial statements Compensation cost of employee share options - subsidiaries (Note 27) Actuarial gains (loss) on defined benefit plans Non-controlling interest arising from acquisition of subsidiaries Share of changes of associates and joint ventures accounted for by the equity method Decrease in non-controlling interest - declaration of cash dividends Balance, end of the year		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 120,140 36,400 (42,015) 2,335 691 (139) (1,447) 7,525 (2,298) $ 121,192	2014 $ 138,951 - (22,388) 2,396 925 256 - - - $ 120,140

46 -

e. Treasury stock

		Corporation’s
		Shares Held by
		Its Subsidiaries
		(In Thousand
		Shares)
Balance,	January 1, 2014	1,926
Decrease	during the year ended December 31, 2014	(10)
Balance,	December 31, 2014	1,916
Balance,	January 1, 2015	1,916
Decrease	during the year ended December 31, 2015	-
Balance,	December 31, 2015	1,916

	Shares Held
	(In Thousand
Subsidiaries	Shares)	Carrying Value		Market Price
December 31, 2015
Chroma Investment Co., Ltd.	1,916	$	35,714	$ 122,405
December 31, 2014
Chroma Investment Co., Ltd.	1,916	$	35,714	$ 157,627

For the year ended December 31, 2014, the Corporation’s subsidiary - Chroma Investment Co., Ltd. sold 10 thousand common shares of Corporation held by it for $741 thousand.

Under the Securities and Exchange Act, the Corporation shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends and to vote. The subsidiaries holding treasury shares, however, retain shareholders’ rights, except the rights to participate in any share issuance for cash and to vote.

24. ADDITIONAL INFORMATION ON EXPENSES

The following items were included in net income for the years ended December 31, 2015 and 2014:

Finance cost Interest on bank loans Interest on convertible bonds Less: Amount included in the cost of qualifying assets		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 24,279 27,368 51,647 (12,653) $ 38,994	2014 $ 25,706 17,274 42,980 (11,680) $ 31,300 (Continued)

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Information about capitalized interest was as follows: Capitalized interest Capitalization rate Depreciation and amortization expense Depreciation of property, plant and equipment Amortization of intangible assets Depreciation expense by function Operating cost Operating expense Amortization expense by function Operating expense Employee benefits expense Short-term employee benefits Share-based payments Equity-settled share-based payments Post-employment benefits (see Note 22) Defined contribution plans Defined benefit plans Other employee benefit Salaries and bonuses Summarized by function Operating cost Operating expense		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 12,653 1.60%-1.69% $ 329,582 2,009 $ 331,591 $ 132,784 196,798 $ 329,582 $ 2,009 $ 2,272,814 25,768 65,349 6,434 51,065 $ 2,421,430 $ 495,613 1,925,817 $ 2,421,430	2014 $ 11,680 1.66%-1.69% $ 297,188 3,928 $ 301,116 $ 124,228 172,960 $ 297,188 $ 3,928 $ 2,113,963 33,278 63,589 6,150 51,146 $ 2,268,126 $ 520,137 1,747,989 $ 2,268,126 (Concluded)

The existing (2014) Articles of Incorporation of the Corporation stipulate to distribute bonus to employees at 5%-20% and remuneration to directors and supervisors at a fixed amount, respectively, of net income (net of the bonus and remuneration). For the year ended December 31, 2014, the employees’ compensation estimated on the basis of past experience was at 13.6% of net income, or $195,000 thousand. For the year ended December 31, 2014, the remuneration to directors and supervisors was $8,000 thousand in cash.

To be in compliance with the Company Act as amended in May 2015, the proposed amended Articles of Incorporation of the Corporation stipulate to distribute employees’ compensation at 5%-20% and remuneration to directors and supervisors at the rates no higher than 1.5%, respectively, of net profit before income tax, employees’ compensation, and remuneration to directors and supervisors. For the year ended December 31, 2015, the employees’ compensation and the remuneration to directors and supervisors were $135,000 thousand and $8,000 thousand, respectively, representing 8.9% and 0.5%, respectively, of the base net profit. The bonus to employees and remuneration to directors and supervisors for the year ended

48 -

December 31, 2015 have been proposed by the Corporation’s board of directors on February 23, 2016 and are subject to the resolution of the shareholders in their meeting to be held on June 7, 2016.

Material differences between such estimated amounts and the amounts proposed by the board of directors on or before the date the annual consolidated financial statements are authorized for issue are adjusted in the year the bonus and remuneration were recognized. If there is a change in the proposed amounts after the annual consolidated financial statements were authorized for issue, the differences are recorded as a change in accounting estimate.

The bonuses to employees and remuneration to directors and supervisors for 2014 and 2013 which have been approved in the shareholders’ meetings on June 10, 2015 and June 11, 2014, respectively, were as follows:

Bonus to employees Remuneration of directors and supervisors	For the Years Ended December 31	For the Years Ended December 31
	2014 Cash Dividends Share Dividends $ 195,000 $ - 8,000 -	2013
		Cash Dividends Share Dividends $ 132,000 $ - 8,000 -

There was no difference between the amounts of the bonus to employees and the remuneration to directors and supervisors approved in the shareholders’ meetings on June 10, 2015 and June 11, 2014 and the amounts recognized in the consolidated financial statements for the years ended December 31, 2014 and 2013, respectively.

Information on the bonus to employees, directors and supervisors proposed by the Company’s board of directors is available on the Market Observation Post System website of the Taiwan Stock Exchange.

25. INCOME TAXES

a. Income tax recognized in profit or loss

The major components of income tax expensed were as follows:

Current tax In respect of the current period In respect of unappropriated earnings (10%) In respect of prior year’s adjustment Deferred tax In respect of the current period Total income tax expense recognized in profit or loss		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 268,077 17,147 (23,285) 261,939 26,191 $ 288,130	2014 $ 228,774 21,645 (13,166) 237,253 (9,725) $ 227,528

49 -

Reconciliation of accounting profit and income tax expenses the applicable tax rate is as follows:

Profit before tax from continuing operations Income tax expense calculated at the statutory rate Adjustment Adjustment items in determining taxable income Tax-exempt income Temporary difference Income tax on unappropriated earnings Investment tax credits Other Effect of different tax rates on the Group entities Prior year’s adjustments Income tax expense recognized in profit or loss		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 1,482,672 $ 252,054 (46,536) (12,201) 26,191 17,147 (23,182) 7,373 90,569 (23,285) $ 288,130	2014 $ 1,523,513 $ 258,997 (49,233) (15,619) (9,935) 21,645 (28,820) 4,702 58,957 (13,166) $ 227,508

The applicable tax rate used above is the corporate tax rate of 17% payable by the Group in ROC, while the applicable tax rate used by subsidiaries in China is 25%. Tax rates used by other group entities operating in other jurisdictions are based on the tax laws in those jurisdictions.

As the status of 2016 appropriations of earnings is uncertain, the potential income tax consequences of 2015 unappropriated earnings are not reliably determinable.

b. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2015

	Balance,	Balance,			Exchange	Exchange
	Beginning of		Recognized in		Differences		Balance, End
Deferred Tax Assets	the Year		Profit or Loss		and	Other	of	the Year
Unrealized intercompany gain	$	38,112	$	4,175	$	-	$	42,287
Accrued pension liabilities		9,856		(717)		60		9,199
Allowance for reduction
inventory		19,741		3,413		-		23,154
Tax credit		10,148		246		385		10,779
Impairment loss		12,691		1,467		-		14,158
Unrealized loss on exchange
difference		1,539		(1,539)		-		-
Allowance for impaired
receivables		2,180		201		15		2,396
Tax losses		59,389		(21,409)		12,892		50,872
Others		1,191		2,565		50		3,806
	$	154,847	$	(11,598)	$	13,402	$	156,651

50 -

	Balance,	Balance,			Exchange	Exchange
	Beginning of		Recognized in		Differences		Balance, End
Deferred Tax Liabilities	the Year		Profit or Loss		and	Other	of	the Year
Investment income on foreign
investments accounted for by
the equity method	$	89,044	$	12,835	$	-	$	101,879
Unrealized gain on exchange
difference		6,137		(2,360)		-		3,777
Goodwill		8,794		1,302		-		10,096
Others		5,450		2,816		(191)		8,075
	$	109,425	$	14,593	$	(191)	$	123,827
For the year ended December 31,	2014
	Balance,				Exchange
	Beginning of		Recognized in		Differences		Balance, End
Deferred Tax Assets	the Year		Profit or Loss		and	Other	of	the Year
Unrealized intercompany gain	$	35,986	$	2,126	$	-	$	38,112
Accrued pension liabilities		8,567		1,289		-		9,856
Allowance for reduction
inventory		13,840		5,901		-		19,741
Tax credit		9,556		-		592		10,148
Impairment loss		11,819		872		-		12,691
Unrealized loss on exchange
difference		1,261		278		-		1,539
Allowance for impaired
receivables		586		1,594		-		2,180
Tax losses		39,768		16,720		2,901		59,389
Others		1,751		(1,464)		904		1,191
	$	123,134	$	27,316	$	4,397	$	154,847
	Balance,				Exchange
	Beginning of		Recognized in		Differences		Balance, End
Deferred Tax Liabilities	the Year		Profit or Loss		and	Other	of	the Year
Investment income on foreign
investments accounted for by
the equity method	$	79,882	$	9,162	$	-	$	89,044
Unrealized gain on exchange
difference		2,758		3,379		-		6,137
Goodwill		2,990		5,804		-		8,794
Others		5,978		(754)		226		5,450
	$	91,608	$	17,591	$	226	$	109,425

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c. Deductible temporary differences, unused loss carryforwards and unused investment credits for which no deferred tax assets have been recognized in the consolidated balance sheets

Loss carryforwards Expire in 2016 Expire in 2017 Expire in 2018 Expire in 2019 Expire in 2020 Expire in 2021 Expire after 2022 Investment credits Purchase of machinery and equipment Deductible temporary differences Impairment loss Valuation loss on financial assets		December 31	December 31
		2015 $ 12,721 4,627 30,003 47,327 45,690 68,584 369,647 $ 578,599 $ 8,711 $ 405 (245) $ 160	2014 $ - - - 28,686 45,690 68,584 265,622 $ 408,582 $ 8,711 $ 405 (205) $ 200

The unrecognized Investment credits will expire in 2015.

d. Information about unused investment credits, unused loss carry-forward and tax-exemption

As of December 31, 2015, investment tax credits comprised of:

	Remaining
	Creditable	Expiry
Laws and Statutes Tax Credit Source	Amount	Year
Statute for Upgrading Industries Purchase of machinery and equipment	$ 8,711	2015
Loss carryforwards as of December 31, 2015 comprised of:

	Unused
Amount		Expiry Year
$	50,600	After 2015
	15,286	2016
	8,881	2017
	33,726	2018
	50,540	2019
	53,999	2020
	61,860	2021
	98,654	2022
	44,898	2023
	55,728	2024
	5,151	2025
		(Continued)

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	Unused Amount Expiry Year $ 9,763 2028 13,281 2029 9,566 2030 71,260 2031 27,970 2032 2033 $ 651,970

(Concluded)

As of December 31, 2015, profits attributable to the following expansion projects were exempted from income tax for a four- or five-year period:

Expansion of Construction Project Profits on expansion and construction projects for year 2009 Profits on expansion and construction projects for year 2010	Tax-exemption Period
	2011.1.1-2015.12.31 2013.1.1-2017.12.31

e. Integrated income tax information is as follows:

Balance of imputation credit account (ICA) The Corporation Chroma New Material Corp. Chroma Investment Co., Ltd. Wei Kuang Automatic Equipment Co., Ltd.		December 31	December 31
		2015 $ 250,190 $ 8,723 $ 10,664 $ 31,791	2014 $ 214,254 $ 5,144 $ 9,780 $ 30,599

The expected and actual creditable ratios for the appropriation of the Corporation’s earnings of 2015 and 2014, respectively, were 15.76% and 16.73%, respectively. The expected and actual creditable ratios for the appropriation of Chroma New Material Corp.’s earnings of 2015 and 2014, respectively, were 20.77% (expect) and 20.54%, respectively. As of 2015 and 2014, Chroma Investment Co., Ltd., Adivic Technology Co., EVT Technology Co., Ltd. and Wei Da Electric Vehicle Co., Ltd. had no retained earnings to be distributed, so the creditable ratios were not calculated. he expected and actual creditable ratios for the appropriation of Wei Kuang Automatic Equipment Co., Ltd.’s earnings of 2015 and 2014, respectively, were 22.75% and 28.00%, respectively.

f. Assessment of income tax returns

As of December 31, 2015, the Corporation’s tax returns through 2013 had been examined and cleared by the tax authorities.

The tax return through 2014 of the Corporation subsidiary - Advic Technology Co. had been examined and cleared by the tax authorities.

The tax returns through 2013 of the Corporation’s subsidiaries - Wei Kuang Automatic Equipment Co., Chroma New Material Corp., Chroma Investment Co., Testar Electronic Corp., Adivic Technology Co., EVT Technology Co., and Wei Da Electric Vehicle Co. - had been examined and cleared by the tax authorities.

53 -

26. EARNINGS PER SHARE

Earnings and weighted average shares used to calculate earnings per share were as follows:

Net Income

Income attributed to the parent Dilutive effect of potential common shares: Interest on unsecured convertible bonds and valuation gain on conversion option Income used to calculate dilutive earnings per share		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 1,236,557 27,924 $ 1,264,481	2014 $ 1,318,373 13,341 $ 1,331,714

Weighted average shares used to calculate basic earnings per share Dilutive effect of potential common shares: Convertible bonds Bonus or employee remuneration Employee share option Weighted average shares used to calculate dilutive earnings per share		(In Thousands of Shares) For the Years Ended December 31	(In Thousands of Shares) For the Years Ended December 31
		2015 376,984 26,755 2,974 1,292 408,005	2014 375,496 22,677 3,109 1,487 402,769

Since the Group offered to settle bonuses or employee remuneration paid to employees in cash or shares, the Group assumed the entire amount of the bonus or employee remuneration would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, if the effect as dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

27. SHARE-BASED PAYMENT ARRANGEMENTS

a. Employee share option plan of Chroma Ate Inc.

The Corporation’s Board of Directors approved Chroma Ate Inc.’s Employee Stock Option Plan on August 7, 2012. The plan was approved by the Securities and Futures Bureau (SFB) on September 17, 2012. The maximum number of options authorized to be granted under the Plan was 8,000 thousand units, with each option eligible to subscribe for one common share of the Corporation when exercised. The options may be granted to qualified employees of the Corporation or any of its subsidiaries, in which the Corporation’s shareholding with voting rights, directly or indirectly, is more than fifty percent (50%). The options are valid for six years and exercisable at certain percentages subsequent to the second anniversary of the grant date. Under the terms of the plan, the options were granted at an exercise price equal to the closing price of the Corporation’s common shares listed on the TWSE on the grant date. The number of outstanding options and the exercise prices had been adjusted to reflect the

54 -

distribution of earnings by the Corporation in accordance with the plan. Exercise price was $53.5 per share at the issuance date. Due to the appropriation of 2014 and 2013 earnings approved at the annual shareholders meeting for 2015 and 2014, the shareholders approved to distribute dividend of NT$2.6 and NT$2.5 per share, respectively; thus, the exercise price was adjusted to NT$49.9 and NT$51.9 per share, respectively.

The Corporation did not issue additional options for the years ended December 31, 2015 and 2014. Information about Chroma Ate Inc.’s outstanding options for the years ended December 31, 2015 and 2014 was as follows:

		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2015		2014
			Weighted-		Weighted-
			average			average
	Number of		Exercise	Number of		Exercise
	Options	(In	Price	Options (In		Price
	Thousands)		(NT$)	Thousands)		(NT$)
Balance, January 1	5,794		$ 49.9	6,000		$ 51.90
Options forfeited	(118)		-	(206)		-
Options exercised	(384)		49.9	-		-
Balance, December 31	5,292			5,794
Options exercisable, end of
December 31	1,887			-
Weighted-average fair value of options
granted (NT$)			$ 17.88			$ 17.88
Information about outstanding options as follows:
				December 31
				2014		2013
Range of exercise price (NT$)				$ 49.90	$	51.90
Weighted-average remained contractual life (years)				3.45		4.45
The grant date of aforementioned stock options		was July 8, 2013. Chroma Ate			Inc. used the
Black-Scholes model to determine the fair value of the options. The				valuation assumptions were as
follows:
Stock price on grant date (NT$/share)						$53.5
Exercise price (NT$/share)						$53.5
Expected volatility				36.43%-41.74%
Expected life						4-5 years
Expected dividend rate						0%
Risk-free interest rate					1.12%-1.23%

The Group recognized compensation cost of $25,077 thousand and $33,278 thousand for the years ended December 31, 2015 and 2014.

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b. Employee share option plan of Adivic Technology Co.

The Adivic’s board of directors approved Adivic Technology Co.’s Employee Stock Option Plan in 2013. The maximum number of options authorized to be granted under the Plan was 1,360 thousand units, with each option eligible to subscribe for one common share of Adivic Technology Co. when exercised. The option may be granted to qualified employees of Adivic Technology Co. The options granted are valid for 8 years and exercisable at certain percentages after the second anniversary from the grant date. Under the terms of the plan, the options were granted at $10 per common shares.

Adivic Technology Co. did not issue additional options for the year ended December 31, 2015.

Information on employee share options was as follows:

Balance, January 1 Options granted Options exercised Balance, December 31 Options exercisable, end of December 31 Weighted-average fair value of options granted (NT$)	For the Years Ended December 31	For the Years Ended December 31
	2015 Number of Options (In Thousands) Weighted- average Exercise Price (NT$) 1,135 $ 10.00 - - (205) - 930 - - - $ 2.47	2014
		Number of Options (In Thousands) Weighted- average Exercise Price (NT$) - $ - 1,360 10.00 (225) - 1,135 - - - $ 2.47

Adivic Technology Co. used the Black-Scholes model to determine the fair value of the options. The valuation assumptions were as follows:

Stock price on grant date (NT$/share) $8.02 Exercise price (NT$/share) $10 Expected volatility 38.75%-40.84% Expected life 5-8 years Expected dividend rate 0% Risk-free interest rate 1.18%-1.52%

Adivic Technology Co. recognized compensation cost of $691 thousand and $925 thousand for the years ended December 31, 2015 and 2014, respectively.

28. BUSINESS COMBINATION

a. Subsidiary acquired

The Corporation’s Board of Directors resolved to participate in the capital increase of EVT Technology Co., Ltd. on June 2, 2015. The investment was originally recorded as financial asset carried at cost. The Corporation’s equity interest in EVT Technology Co., Ltd. rose to 53.2% and the Corporation acquired control over EVT Technology Co., Ltd.; EVT Technology Co., Ltd. was included in the consolidate financial statement since the day the Corporation acquired control over it.

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b. Assets acquired and liabilities assumed at the date of acquisition

	EVT
	Technology Co.,
	Ltd. and
	Subsidiaries
Current assets
Cash	$ 33,897
Accounts receivable	7,210
Inventories	26,241
Prepayments	140
Other current assets	544
Noncurrent assets
Property, plant and equipment	8,131
Refundable deposits	335
Deferred tax assets	11,285
Current liabilities
Short-term borrowing	(49,000)
Notes payable	(17)
Accounts payable	(9,330)
Other payables	(384)
Receipts in advance	(90)
Other current liabilities	(409)
	$ 28,553
Net cash outflow on acquisition of subsidiaries
	EVT
	Technology Co.,
	Ltd. and
	Subsidiaries
Consideration paid in cash	$ (23,000)
Less: Cash and cash equivalent balances acquired	33,897
	$ 10,897

c. Net cash outflow on acquisition of subsidiaries
d. Impact of acquisitions on the results of the Group

The results of acquires since the acquisition date included in the consolidated statement of comprehensive income were as follows:

	For the Year	For the Year
		Ended
	December 31,
		2015
Revenue
EVT Technology Co., Ltd. and subsidiaries	$	1,228
Profit
EVT Technology Co., Ltd. and subsidiaries	$	(13,435)

57 -

Had these business combinations been in effect at the beginning of the annual reporting period, the Group’s revenue from continuing operations would have been $9,693,239 thousand, and the income from continuing operations would have been $1,186,661 thousand for the year ended December 31, 2015. This pro-forma information is for illustrative purposes only and is not necessarily an indication of revenue and results of operations of the Group that actually would have been achieved had the acquisition been completed on January 1, 2015, nor is it intended to be a projection of future results.

In determining the pro-forma revenue and profit of the Group had EVT Technology Co. been acquired at the beginning of the current reporting period, the management has:

1) Calculated depreciation of plant and equipment acquired on the basis of the fair values arising in the initial accounting for the business combination rather than the carrying amounts recognized in the pre-acquisition financial statements; and
2) Calculated borrowing costs on the funding levels, credit ratings and debt/equity position of the Group after the business combination.

29. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance. The Group’s capital management is aims to maintain the sufficiency of financial resources and the soundness of operating strategies to meet the needs for operating capital, capital expenditure, R & D expenses, debt handling, dividend disbursement, etc.

30. FINANCIAL INSTRUMENTS

Information for Fair Value

a. Fair value of financial instrument that are not measured at fair value

The fair values of some financial assets and liabilities were not presented because they have no quoted prices in active market or their cost is close to fair value.

b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy:

December 31, 2015 Financial assets at FVTPL Securities listed in ROC Equity securities Debt securities	Level 1 $ 7,921 951 $ 8,872	Level 2 $ - - $ -	Level 3 $ - - $ -	Total $ 7,921 951 $ 8,872 (Continued)

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Available-for-sale financial assets Securities listed in ROC Equity securities Open-end beneficial certificate Financial liability at value through profit or loss December 31, 2014 Financial assets at FVTPL Securities listed in ROC Equity securities Debt securities Available-for-sale financial assets Securities listed in ROC Equity securities Open-end beneficial certificate Financial liability at value through profit or loss	Level 1 $ 359,543 2,057,476 $ 2,417,019 $ - $ 7,663 975 $ 8,638 $ 468,575 1,873,734 $ 2,342,309 $ -	Level 2 $ - - $ - $ 1,483 $ - - $ - $ - - $ - $ 927	Level 3 $ - - $ - $ - $ - - $ - $ - - $ - $ -	Total $ 359,543 2,057,476 $ 2,417,019 $ 1,483 $ 7,663 975 $ 8,638 $ 468,575 1,873,734 $ 2,342,309 $ 927 (Concluded)

There were no transfers between Levels 1 and 2 for the years ended December 31, 2015 and 2014.

2) Valuation techniques and inputs applied for the purpose of measuring level fair value measurement:

Financial Instruments Valuation Techniques and Inputs Derivatives - convertible bonds Binomial tree valuation model of convertible bonds: The fair value of the derivative financial assets embedded in convertible bonds was determined based on the observable closing price of the stocks at balance sheet date and risk-free interest rate with risk premium.

59 -

Categories of Financial Instruments

Financial assets Financial assets at fair value through profit or loss Loans and receivables (a) Available-for-sale financial assets (b) Financial liabilities Financial liabilities at fair value through profit or loss Amortized cost (c)	December 31
	2015 2014 $ 8,872 $ 8,638 5,603,662 5,485,261 2,625,419 2,527,658 1,483 927 5,519,349 4,997,471

a. The balances included loans and receivables measured at amortized cost, which comprise cash and cash equivalents, debt investments with no active market, notes receivable, accounts receivable and refundable deposits, and trade and other receivables. Those reclassified to held-for-sale disposal groups are also included.
b. The balances included the carrying amount of available-for-sale financial assets measured at cost.
c. The balances included financial liabilities measured at amortized cost, which comprise short-term and long-term loans, short-term bills payable, accounts payable, other payables, bonds payable and guarantee deposits received.

Financial Risk Management Objectives and Strategies

The Group’s major financial instruments consist of equity and debts investment, cash and cash equivalents, accounts receivable, long-term and short-term borrowings, short-term bills payable, account payable and unsecured domestic convertible bonds. The Group’s financial risk management pertains to financial risks relating to the operations of the Group, including currency risk, interest rate risk, credit risk and liquidity risk. The Group seeks to identify, evaluate and hedge against market uncertainties to lower the effect of market changes on the Group’s financial performance.

The Group manages foreign exchange risk through setting up of foreign currency deposit bank accounts and through the use of foreign currency directly received from sale to pay for purchases in foreign currency to reduce the impact of foreign exchange fluctuation and to achieve a natural hedge effect. The Group actively observes the exchange rate information to fully control the foreign currency hedge.

a. Market risk

The Group’s activities expose it primarily to the financial risks of changes in exchange rates (see Item (1) below), interest rates (see Item (2) below) and price (see Item (3) below).

There has been no change to the Group’s exposure to market risks or the manner in which these risks are managed and measured.

60 -

The sensitivity analysis of exchange rates and interest rates is as follows:

1) Exchange rate sensitivity analysis

The Group is exposed to foreign currencies arising from engagement in foreign-currency sales and purchases. To avoid the decrease in foreign-currency assets and adverse fluctuations in future cash flow resulting from exchange rate changes, the Group used derivative financial instruments (forward exchange contracts) to hedge against adverse risks pertaining to exchange rates. The forward exchange contracts which the Group used were less than six months so they were not subject to hedge accounting.

The carrying values of the Group’s monetary assets and liabilities denominated in nonfunctional currency (including the monetary items denominated in nonfunctional currency and had been excluded from consolidated financial statements) were as follows:

Assets USD JPY RMB EUR HKD Liabilities USD RMB	December 31
	2015 2014 $ 2,720,899 $ 3,000,405 111,698 102,432 889,238 601,696 53,300 74,748 18,136 11,453 1,029,054 1,334,284 405,923 119,910

Foreign currency sensitivity analysis

The Group was mainly exposed to USD, EUR, HKD, JPY and RMB.

Had the NTD strengthened/weakened by 5% against the relevant currency, the income before tax would have decreased/increased by $117,915 thousand and $116,827 thousand for the years ended December 31, 2015 and 2014, respectively. The 5% sensitivity rate is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency-denominated monetary items and their translation at period-end is adjusted for a 5% change in foreign-currency rates.

2) Interest rate risk

The Group is exposed to interest rate risk because entities in the Group borrow funds both at fixed and floated interest rates. The Group evaluates hedging activities regularly to align with interest rate views and defined risk appetite and ensures that the most cost-effective hedging strategies are applied.

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The carrying amounts of the financial assets and liabilities exposed to interest rates were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities Interest rate sensitivity analysis	December 31
	2015 2014 $ 838,441 $ 804,796 2,133,726 2,062,069 2,191,155 1,437,593 1,339,793 850,000

The sensitivity analyses below have been determined on the basis of the exposure to interest rates for both derivative and nonderivative instruments at balance sheet dates. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the balance sheet dates outstanding for the entire period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates been 50 basis points higher/lower and all other variables been held constant, the Group’s pre-tax profit for the years ended December 31, 2015 and 2014 would decreased/increased by $4,257 thousand and $2,938 thousand, respectively. These pre-tax profit changes would be mainly due to the Group’s exposure to interest rates on its variable rate deposits and bank loans.

3) Price risk

The Group is exposed to equity price risks arising from the following:

a) Investment in available-for-sale financial assets (mainly investment in open-end beneficial certificates and listed stocks in Taiwan), which are held for strategic rather than trading purposes. The Group does not actively trade these investments.
b) Financial assets at fair value through profit or loss (mainly investment in open-end beneficial certificates and listed stocks in Taiwan)

The Group manages risk through holding various portfolios of investments and having every equity investment get prior approval from the Group’s management.

Price sensitivity analysis

Had equity prices been 5% higher/lower, the income before tax would have increased/decreased by $444 thousand and $433 thousand as a result of the changes in fair values of financial assets held by the Group for trading purposes for the years ended December 31, 2015 and 2014, respectively; and other comprehensive income would have increased/decreased by $120,851 thousand and $117,116 thousand because of changes in fair values of available-for-sale financial assets held by the Group for the years ended December 31, 2015 and 2014, respectively.

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b. Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure of counterparties to discharge an obligation and financial guarantees provided by the Group could arise from:

1) The carrying amount of the respective recognized financial assets as stated in the balance sheets; and
2) The amount of contingent liabilities in relation to financial guarantee issued by the Group.

The Group adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

Accounts receivables involve a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable, including the evaluation of internal credits, historical transaction records, present economic circumstances, etc. which affect the customers’ payment ability.

Except for the major customers of the Group, Company A and Company B, the Group does not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are related entities.

The credit risk of bank deposits, fixed-income financial instruments and other financial instruments are evaluated, managed and controlled by the Group’s financial department. The Group’s exposure to credit risk was limited because the Group adopted a policy of only dealing with creditworthy counterparties.

c. Liquidity risk

The Group manages liquidity risk by managing and maintaining sufficient cash and cash equivalents to supply the Group’s demand and lighten the effects of cash flow fluctuations. The Group continuously monitors the use of credit lines and conformity to loan terms.

Bank loans are a significant source of the Group’s liquidity risk. As of December 31, 2015 and 2014, the Group’s unused bank credit lines in bank were $3,505,123 thousand and $3,444,900 thousand, respectively.

Liquidity and interest risk tables

The following tables detail the Group’s remaining contractual maturity for its nonderivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay.

The bank loans are listed on the earliest date on which the Group may be required to pay without considering the probability of the lending bank’s executing its rights; other nonderivative financial liabilities are listed at their contract repayment dates.

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Nonderivative financial
liabilities
Notes payable (including
related parties)
Accounts payable (including
related parties)
Dividends payable
Other payable
Unsecured convertible bonds
Fixed interest rate instruments
Floating interest rate
instruments
Nonderivative financial
liabilities
Short-term bills payable
Notes payable (including
related parties)
Accounts payable (including
related parties)
Other payable
Unsecured convertible bonds
Fixed interest rate instruments
Floating interest rate
instruments

December 31, 2015

Weighted
Average
Effective
Interest Rate
(%)
Within 1 Year
Over 1 Year to
5 Years
More Than 5
Years
-
$ 22,484 $ - $ -
-
1,354,570
-
-
-
2,298
-
-
-
665,640
-
-
-
-
1,854,100
-
2.31
233,620
124,095
33,079
1.02

122,945

1,258,831

-
$ 2,401,557
$ 3,237,026
$ 33,079
December 31, 2014

Weighted
Average
Effective
Interest Rate
(%)
Within 1 Year
Over 1 Year to
5 Years
More Than 5
Years
1.38
$ 16,000 $ - $ -
-
59,308
-
-
-
1,279,721
-
-
-
745,593
-
-
-
-
1,854,100
-
2.43
244,076
143,307
-
1.62

181,429

649,522

-
$ 2,526,127
$ 2,646,929
$ -

The amounts included in the column “within 1 year” in the above table for bank loans are the maximum amounts the Group could be forced repay immediately if repayment is demanded by the banks. As of December 31, 2015 and 2014, the undiscounted principal amounts of the above bank loans were $360,495 thousand and $425,473 thousand, respectively. After considering the financial position of the Group, management does not think the banks will execute their rights of requiring the Group to repay the bank loans. In addition, management believes the operating funds of the Group and subsidiaries are sufficient to meet cash flow demand; thus, liquidity risk is not considered significant.

64 -

The Group’s operating funds are sufficient to meet the cash flow demand; the Group does not make use of its overdraft limit.

31. RELATED-PARTY TRANSACTIONS

a. The related parties and relationships with the Group were as follows:

Related Party
Dynascan Technology Corp. (“Dynascan Technology”)

Adlink Technology Inc. (“Adlink”)

Chih Ho Shun Development Co., Ltd. (“Chih Ho Shun”)

EVT Technology Co., Ltd. (“EVT”)

Wei Da Electric Vehicle Co., Ltd.

Dynascan Electronics (Shanghai) Co., Ltd. (“Dynascan Shanghai”)
Dynascan Technology Inc. (“Dynascan U.S.A.”)

Dynascan Japan Inc.

Mou Kuan Industry Co., Ltd. (“Mou Kuan”)

Relationship with the Group

Associate
Associate
Joint venture
Other related party (the
Corporation acquired control
over the subsidiary since
June 1, 2015, refer to Note 14)
Other related party (the subsidiary
of EVT)
Associate
Associate
Associate
Other related party

Balances and transactions between the Corporation and its subsidiaries, which are related parties of the Corporation, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and its related parties are disclosed below.

The related-party transactions were conducted under normal terms unless specified otherwise.

b. Sales Associates c. Purchase Associates Other related parties		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 19,363 $ 20,721 37,932 $ 58,653	2014 $ 10,995 $ 27,198 20,255 $ 47,453

d. The balances of accounts receivable at balance sheet date were as follows:

Associates		December	31
		2015 $ 11,650	2014 $ 9,950

Outstanding trade receivables from related parties are unsecured. In the years ended December 31, 2015 and 2014, there was no impairment of trade receivables from related parties; thus, no impairment allowance was recognized.

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e. The balances of notes payable at the balance sheet date were as follows:

Other related parties Associates		December	31
		2015 $ 3,311 - $ 3,311	2014 $ 4,128 11,151 $ 15,279

f. The balances of accounts payable at balance sheet date were as follows:

Associates Other related parties		December	31
		2015 $ 5,789 - $ 5,789	2014 $ 2,003 374 $ 2,377

The outstanding trade payables from related parties are unsecured.

g. Others

1) Rental income Associates Other related parties		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 1,260 218 $ 1,478	2014 $ 1,260 623 $ 1,883

2) The balances of other current assets - other at balance sheet date were as follows:

Associates Other related parties		December	31
		2015 $ 136 - $ 136	2014 $ 1,753 92 $ 1,845

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h. Compensation of key management personnel

The remunerations of directors and other members of key management personnel for the years ended December 31, 2015 and 2014 and were as follows:

Short-term employee benefits Post-employment benefits		For the Years Ended December 31	For the Years Ended December 31
		2015 $ 88,569 2,022 $ 90,591	2014 $ 95,919 1,456 $ 97,375

The remuneration of directors and key executives is determined by the remuneration committee on the basis of the performance of individuals and market trends.

32. ASSETS PLEDGED

The assets pledged as collaterals for bank loans and for product warranty were as follows:

Property, plant and equipment, net Used bank loans Unused bank loans Restricted time deposit		December 31	December 31
		2015 $ 293,492 540,255 14,985 $ 848,732	2014 $ 225,775 730,213 24,442 $ 980,430

33. OTHER SIGNIFICANT EVENTS

On January 17, 2012, the Corporation, Dynapack International Corporation and Heran Tech. Co., Ltd. (originally named Heran Co., Ltd.) won a bid for the ownership of land and the building and related facilities to be built on the land pertaining to “The Action Plan for Developing Land Surrounding the MRT Airport Station to Improve Civilians’ Life,” which had been reviewed and approved by the Ministry of the Interior (MOI).

The total bid price was $10,088,890 thousand, covering land with an area of 222,300 square meters. As a result of winning the above bid, the Corporation acquired 35%, or 77,805 square meters, of a certain piece of land for $3,531,112 thousand. On April 18, 2012, the Corporation signed the land purchase contract with the MOI; the payment schedule for this purchase is as follows:

a. The first installment of the bid amount (10% of the total bid amount, or $353,111 thousand) should be paid within 10 days from the contract date. The Corporation paid the first installment using the bid deposit ($353,040 thousand) and by adding cash.
b. To meet the schedule for zone expropriation, the Corporation should pay the second installment (30% of the total bid amount) within 10 days of receiving the payment notice from the MOI. The MOI will approve the Corporation’s land usage rights as the payment is made. On September 3, 2013, the Corporation has paid the second installment $1,059,333 thousand.
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c. To help the MOI provide the compensations for land expropriation and complete the demolition and relocation of structures on the land, the Corporation should pay the third installment (40% of the total bid amount) within 10 days of the payment notice from the MOI. The MOI will then check with the Corporation to see if the demolition and relocation are completed as the payment is made. In November 2015, the Corporation has paid the first part of the third installment $536,729 thousand.
d. The Corporation should accomplish the following things within four years from the time of obtaining the approval of the land usage rights:
1) Open up the main road system and build related public facilities.
2) Acquire the building license for over 50% percent of all industrial land and register with the authorities to go into operation.

After completing the above requirements, the Corporation should apply to the MOI for the approval to acquire real property rights to the structures and facilities built. The Corporation should pay the fourth installment (20% of the total bid amount) within 10 days upon obtaining the approval and receipt of the payment notice from the MOI. The MOI will issue the transfer-certificate of property rights over the land.

The Corporation has agreed to comply with the MOI’s requirement for the MOI’s placing of caution on undeveloped land before ownership of real property is turned over to the Corporation. The MOI will cancel this caution once it determines that the Corporation has completed all the required land development, building and facility construction and land improvements.

34. EXCHANGE RATE INFORMATION OF FOREIGN-CURRENCY FINANCIAL ASSETS AND LIABILITIES

The monetary assets or liabilities denominated in foreign currencies that have a material effect on the Corporation and subsidiaries’ financial statements are as follows:

Financial assets Monetary items USD JPY RMB EUR HKD Financial liabilities Monetary items USD RMB	December 31	December 31
	2015 Foreign Currencies Exchange Rate (In Thousands) (Note) $ 82,891 32.825 409,149 0.273 178,026 4.995 1,486 35.88 4,282 4.235 31,350 32.825 81,266 4.955	2014
		Foreign Currencies Exchange Rate (In Thousands) (Note) $ 94,800 31.65 389,326 0.265 118,165 5.09 1,932 38.68 2,807 4.08 42,157 31.65 23,549 5.09

Note: Exchange rate represents the number of N.T. dollars for which one foreign currency could be exchanged.

68 -

For the years ended December 31, 2015 and 2014, (realized and unrealized) net foreign exchange gains were $61,260 thousand and $94,921 thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies.

35. ADDITIONAL DISCLOSURES

Following are the additional disclosures required by the Securities and Futures Bureau for the Group and its investees:

a. Financing provided: Table 1 (attached).
b. Endorsement/guarantee provided: Table 2 (attached).
c. Marketable securities held (excluding investment in subsidiaries, associates and joint controlled entities): Table 3 (attached).
d. Marketable securities acquired and disposed of at costs or prices of at least $300 million or 20% of the paid-in capital: None.
e. Acquisition of individual real estate properties at costs of at least $300 million or 20% of the paid-in capital: Table 4 (attached).
f. Disposal of individual real estate properties at prices of at least $300 million or 20% of the paid-in capital: None.
g. Total purchase from or sale to related parties amounting to at least $100 million or 20% of the paid-in capital: Table 5 (attached).
h. Receivable from related parties amounting to at least $100 million or 20% of the paid-in capital: Table 6 (attached).
i. Information about derivative instrument transactions: Note 7.
j. Names, locations, and related information of investees on which the Group exercised significant influence: Table 7 (attached).
k. Information on investment in Mainland China:
1) The name of the investee in Mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area: Table 8 (attached).
2) Significant transactions with investee companies in Mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: None.
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: Table 5 (attached).
69 -
c) The amount of property transactions and the amount of the resultant gains or losses: None.
d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: None.
e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds: None.
f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services: None.
l. Business relationship and significant intercompany transactions for year ended December 31, 2015: Table 9 (attached).

36. SEGMENT INFORMATION

The information provided to the Group’s chief operating decision maker to allocate resources to the segments and assess their performance focuses on types of products delivered or services provided. The Group’s reportable segments are as follows:

a. Special materials department.
b. Test instrument department.
c. Automatic equipment department.
d. Other
1) Segment revenues and results

For the year ended December 31, 2015 Revenues from external customers Intersegment revenues Segment revenues Consolidated revenues Segment income Share of profits of associates accounted for using the equity method Rental income Interest income Dividend income Gain on disposal of property, plant and equipment, net Impairment losses on financial assets Gain on disposal of investments, net Exchange gain, net Valuation loss on financial assets (liabilities) at fair value through profit or loss, net Other revenue and expense, net Interest expense Operating income before tax	Special Materials Department $ 2,328,151 - $ 2,328,151 $ 58,639	Test Instrument Department $ 5,666,173 3,539,092 $ 9,205,265 $ 973,445	Automatic Equipment Department $ 1,260,831 90,468 $ 1,351,299 $ 258,246	Other $ 437,210 5,723 $ 442,933 $ (125,825)	Elimination Total $ - $ 9,692,365 (3,635,283) - $ (3,635,283) 9,692,365 $ 9,692,365 $ 55,494 $ 1,219,999 76,166 26,538 28,503 35,620 3,605 (14,674 ) 381 61,260 (322 ) 84,590 (38,994) $ 1,482,672 (Continued)

70 -

For the year ended December 31, 2014 Revenues from external customers Intersegment revenues Segment revenues Consolidated revenues Segment income Share of profits of associates accounted for using the equity method Rental income Interest income Dividend income Gain on disposal of property, plant and equipment, net Gain on disposal of investments, net Impairment loss on financial assets Exchange gain, net Valuation gain on financial assets (liabilities) at fair value through profit or loss, net Other revenue and expense, net Interest expense Operating income before tax	Special Materials Department $ 2,982,980 - $ 2,982,980 $ 75,744	Test Instrument Department $ 6,175,051 2,973,521 $ 9,148,572 $ 1,042,999	Automatic Equipment Department $ 680,091 210,942 $ 891,033 $ 122,919	Other $ 468,963 1,866 $ 470,829 $ (61,556)	Elimination Total $ - $ 10,307,085 (3,186,329) - $ (3,186,329) 10,307,085 $ 10,307,085 $ 41,294 $ 1,221,400 82,578 27,497 24,192 34,325 2,852 17,325 (15,500 ) 94,921 5,455 59,768 (31,300) $ 1,523,513 (Concluded)

The sales between segments are based on fair value.

The above revenues were generated through transactions with external customers and among segments. The intersegment revenues for the years ended December 31, 2015 and 2014 had been adjusted and eliminated from the consolidated financial statements.

Segment operating income refers to profits earned by each segment, excluding remuneration to directors, share of profits or loss of associates and joint venture, gain (loss) on disposal of investment, rental income, interest income, gain (loss) on disposal and retirement of property, plant and equipment, gain (loss) on disposal of investment, foreign exchange gain (loss), valuation gain (loss) on financial instrument and interest expense. This is the measure reported to the Group’s chief operating decision maker to allocate resources to each segment and evaluate its performance.

2) Segment assets

Segment assets Special materials department Test instrument department Automatic equipment department Other Adjustments and eliminations Total segment assets Financial assets at fair value through profit or loss - current Available-for-sale financial assets - current Investment in bonds with no active market Available-for-sale financial assets - noncurrent Financial assets carried at cost - noncurrent		December 31	December 31
		2015 $ 958,336 11,904,615 1,052,305 641,493 (2,400,349) 12,156,400 8,872 2,057,476 559,958 359,543 208,400	2014 $ 991,370 10,793,934 977,395 723,920 (2,148,481) 11,338,138 8,638 1,873,734 398,993 468,575 185,349 (Continued)

71 -

Investments accounted for by the equity method Prepayments for investments Deferred tax assets Total segment assets Segment liabilities Special material departments Test instrument departments Automatic equipment department Other Adjustments and eliminations Total segment liabilities Short-term borrowings Short-term bills payable Financial liabilities at fair value through profit or loss - current Long-term borrowings and current portion of long-term liabilities Bonds payable Deferred income tax liabilities Consolidated total liabilities		December 31	December 31
		2015 $ 553,139 - 156,651 $ 16,060,439 $ 694,925 3,454,229 505,502 318,419 (2,042,761) 2,930,314 301,303 - 1,483 1,414,123 1,758,093 123,827 $ 6,529,143	2014 $ 508,702 33,000 154,847 $ 14,969,976 $ 722,192 3,011,644 351,994 322,368 (1,833,731) 2,574,467 332,725 16,000 927 832,338 1,731,006 109,425 $ 5,596,888 (Concluded)

For the purpose of monitoring segment performance and allocating resources between segments:

a) All assets were allocated to reportable segments other than interests in associates accounted for using the equity method, other financial assets, and current and deferred tax assets. Goodwill was allocated to reportable segments. Assets used jointly by reportable segments were allocated on the basis of the revenues earned by individual reportable segments; and
b) All liabilities were allocated to reportable segments other than borrowings, other financial liabilities, current and deferred tax liabilities. Liabilities for which reportable segments are jointly liable were allocated in proportion to segment assets.
3) Revenue from major product

The following is an analysis of the Group’s revenue from continuing operations from its major products and services:

Special material equipment Test instrument equipment Automatic equipment		December 31	December 31
		2015 $ 2,328,151 5,666,173 1,260,831 $ 9,255,155	2014 $ 2,982,980 6,175,051 680,091 $ 9,838,122

72 -

4) Geographical information

The Group operates in three principal geographical areas - Republic of China, other Asia countries, and other.

The Group’s revenue from continuing operations from external customers and information on its noncurrent assets by geographical location are shown below.

Republic of China Asia Other		Revenue from External Customers December 31 2015 2014 $ 5,542,291 $ 6,132,685 2,423,594 2,666,702 1,726,480 1,507,698 $ 9,692,365 $ 10,307,085		Non-current Assets	Non-current Assets
				December 31
		2015 $ 5,542,291 2,423,594 1,726,480 $ 9,692,365		2015 $ 4,298,284 457,730 394,092 $ 5,150,106	2014 $ 3,807,335 298,252 329,212 $ 4,434,799

Non-current assets exclude non-current assets classified as financial instruments, investments accounted for by the equity method, and deferred tax assets.

5) Information about major customers

Company A		For the Year Ended December 31, 2014	For the Year Ended December 31, 2014
		Special Material Test Instrument Equipment $ 1,090,663 $ 11,721	Total $ 1,102,384

There were no revenue from any individual customer exceeded 10% of the Group’s revenue for the year ended December 31, 2015.

Except for Company A, no revenue from any individual customer exceeded 10% of the Group’s revenue for the year ended December 31, 2014.

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TABLE 1

CHROMA ATE INC. AND SUBSIDIARIES

FINANCING PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2015 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Financing Company Name	Counterparty	Financial Statement Account	Related Parties	Maximum Balance for the Period (Note 5)	Ending Balance (Note 5)	Balance Used (Note 5)	Interest Rate	Financing Provided (Note 6)	Transaction Amounts	Reasons for Short-term Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limit for Each Borrowing Company	Financing Company’s Financing Amount Limits
													Item	Value
0	Chroma Ate Inc. (the “Corporation”)	Chroma Systems Solutions Inc. Chroma Japan Corp.	Other receivable Other receivable	Y Y	$ 157,118 44,803	$ 127,576 42,414	$ 127,576 41,278	3.25%-4% -	a a	$ 353,916 107,565	- -	$ - -	- -	$ - -	$ 941,010 (Note 1) 941,010 (Note 1)	$ 1,882,021 (Note 2) 1,882,021 (Note 2)
1	Chroma Electronics (Shenzhen) Co., Ltd.	Chroma (Shanghai) Trading Co., Ltd.	Other receivable	Y	54,945	-	-	2.6%	b	-	Purchase for PPE	-	-	-	297,968 (Note 3)	297,968 (Note 3)
2	Wei Kuang Automatic Equipment (Xiamen) Co., Ltd.	Chroma (Shanghai) Trading Co., Ltd.	Other receivable	Y	34,965	3,996	3,996	2.6%	b	-	Purchase for PPE	-	-	-	198,341 (Note 4)	198,341 (Note 4)

Note 1: Based on 10% of the net value of the Corporation ($9,410,104 × 10% = $941,010).

Note 2: Based on 20% of the net value of the Corporation ($9,410,104 × 20% = $1,882,021).

Note 3: Based on 70% of the net value calculated based on the latest financial statements of borrowing company that have been audited ($425,668 × 70% = $297,968).

Note 4: Based on 70% of the net value calculated based on the latest financial statements of borrowing company that have been audited ($283,344 × 70% = $198,341).

Note 5: The amounts listed in columns were translated into New Taiwan dollars at the exchange rate of US$1=NT$32.825, RMB1=NT$4.995 and JPY1 = NT$0.273 as of December 31, 2015.

Note 6: Financing provided:

a. For transactions.

b. For short-term financing.
74 -

TABLE 2

CHROMA ATE INC. AND SUBSIDIARIES

ENDORSEMENT/GUARANTEE PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2015

(In Thousands of New Taiwan Dollars or Foreign Currency, Unless Stated Otherwise)

No.	Endorsement/ Guarantee Provider	Counterparty	Counterparty	Limits on Each Counter-party’s Endorsement/ Guarantee Amount (Note 1)	Highest Amount of Guarantee Provided for the Year	Ending Balance	Amount of Guarantee Actually Used	Value of Collateral	Ratio of Accumulated Amount of Collateral to Net Equity Shown in the Latest Financial Statements	Maximum Collateral/ Guarantee Amounts Allowable (Note 2)	Endorsed/ Guaranteed to Subsidiaries by Parent Company	Endorsed/ Guaranteed to Parent Company by Subsidiaries	Endorsed/ Guaranteed to Investees in Mainland China
		Name	Nature of Relationship
0	Chroma Ate Inc.	Chroma Ate Inc. Chroma Japan Corp.	Subsidiary Subsidiary	$ 1,411,516 1,411,516	$ 131,300 33,280	$ 131,300 33,280	$ 65,650 21,840	$ - -	1.40% 0.35%	$ 2,823,031 2,823,031	Y Y	- -	- -

Note 1: According to Regulation of the “Procedures for Endorsement/Guarantee and lending of Funds”, the Corporation limits the endorsement/guarantee amount on each entity to (a) within 15% of the net value of the Corporation ($9,410,104 × 15% = $1,411,516) and (b) the capital issued of the entity endorsed/guaranteed, but 100% held subsidiary is not limited by the regulation.

Note 2:

According to Regulation of the “Procedures for Endorsement/Guarantee and Lending of Funds”, the Corporation limits the endorsement/guarantee amount within the 30% of the net value of the Corporation ($9,410,104 × 30% = $2,823,031).

Note 3:

The amounts listed in columns were translated into New Taiwan dollars at the exchange rate of US$1=NT$32.825, JPY1 = NT$0.273 as of December 31, 2015.

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TABLE 3

CHROMA ATE INC. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD (EXCLUDING INVESTMENT IN SUBSIDIARIES, ASSOCIATES AND JOINT CONTROLLED ENTITIES) FOR THE YEAR ENDED DECEMBER 31, 2015

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Marketable Securities Type and Issuer	Relationship with the Holding Company	Financial Statement Account		December	31, 2015		Note
				Shares/Units (Thousands)	Carrying Value	Percentage of Ownership	Market Value or Net Asset Value
Chroma Ate Inc. (the “Corporation”) Chroma New Material Corp. Chroma Investment Co., Ltd. Chenhwa Technology Inc.	Fund The RSIT Enhanced Money Market Fund Paradigm Pion Money Market Yuanta Wan Tai Money Market Fuh Hwa You Li Money Market Fund Cathay Taiwan Money Market Mega Diamond Money Market Union Money Market Stocks DynaColor, Inc. Chunghwa Telecom Co., Ltd. China Communications Media Group Co., Ltd. WK Technology Fund IX Ltd. Twoway Catv Service Inc. Tian Zheng International Precision Machinery Co., Ltd. WK Technology Fund IV Ltd. WK Technology Fund VI Ltd. WI Harper INC Fund VII LP Lasfocus Corporation Qualitysource SAS Fund Fuh Hwa You Li Money Market Fund The RSIT Enhanced Money Market Fund Paradigm Pion Money Market Fund Hua Nan Kirin Money Market Fund Stocks Greatek Electronics Inc. Adlink Technology Inc. ICHIA Tech. 2nd Unsecured Convertible Bond Chroma Ate Inc. Fei Hong Industrial Co., Ltd. Cosmactive Broadband Networks Co., Ltd. Prance System Technology Co., Ltd. Hangzhou New Material Chroma Co., Ltd.	- - - - - - - - - - - - - - - - - - - - - - - - The Corporation - - - -	Available for sale financial assets - current Available for sale financial assets - current Available for sale financial assets - current Available for sale financial assets - current Available for sale financial assets - current Available for sale financial assets - current Available for sale financial assets - current Available for sale financial assets - noncurrent Available for sale financial assets - noncurrent Available for sale financial assets - noncurrent Financial assets carried at cost - noncurrent Financial assets carried at cost - noncurrent Financial assets carried at cost - noncurrent Financial assets carried at cost - noncurrent Financial assets carried at cost - noncurrent Financial assets carried at cost - noncurrent Financial assets carried at cost - noncurrent Financial assets carried at cost - noncurrent Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Available for sale financial assets - noncurrent Financial assets carried at cost - noncurrent Financial assets carried at cost - noncurrent Financial assets carried at cost - noncurrent Financial assets carried at cost - noncurrent	24,722 24,732 18,863 21,184 21,282 20,373 13,098 6,050 412 26 4,614 3,561 2,300 3,200 2,125 - 2,179 9 6,829 4,525 2,642 4,925 85 64 10 1,916 4,174 26 111 285	$ 292,341 282,411 282,320 282,295 262,135 252,149 170,870 317,642 40,867 1,034 46,140 39,218 33,000 32,000 21,250 10,152 - - 90,997 53,513 30,171 58,274 3,049 4,872 951 122,405 17,175 110 - 9,355	- - - - - - - 6.0 - - 4.6 4.7 9.9 1.9 1.4 - - 12.2 - - - - - - - - 10.3 1.5 5.1 19.0	$ 292,341 282,411 282,320 282,295 262,135 252,149 170,870 317,642 40,867 1,034 - - - - - - - - 90,997 53,513 30,171 58,274 3,049 4,872 951 122,405 - - - -	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 1 Note 1 Note 1 - - - - - - - - Note 2 Note 2 Note 2 Note 2 Note 1 Note 1 Note 1 Note 1 - - - -

Note 1: Based on the closing price as of December 31, 2015.

Note 2: Based on the net asset value of the fund as of December 31, 2015.

76 -

TABLE 4

CHROMA ATE INC. AND SUBSIDIARIES

ACQUISITION OF INDIVIDUAL REAL ESTATE PROPERTIES AT COST OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITA L FOR THE YEAR ENDED DECEMBER 31, 2015

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Type of Property	Transaction Date	Transaction Amount	Payment Term	Counter-party	Nature of Relationship	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Price Reference	Purpose of Acquisition	Other Terms
							Owner	Relationship	Transfer Date	Amount
Chroma Ate Inc.	Construction in progress and prepayments for equipment.	2015.11.16	$ 536,729	Based on a contract; the first part of third installment had been paid.	Ministry of the Interior, Republic of China	-	-	-	-	$ -	Public bidding	Manufacturing, R&D, operating and building employee dormitories	Note

Note: Please see Note 33 to the financial statements for related information.

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TABLE 5

CHROMA ATE INC. AND SUBSIDIARIES

TOTAL PURCHASE FROM OR SALE TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2015

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Nature of Relationship		Transaction	Transaction	Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase (Sale)	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
Chroma Ate Inc. (the “Corporation”) Neworld Electronics Ltd. Chroma Ate Inc. (the “Corporation”) Chroma Ate Inc. (U.S.A.) Chroma Ate Inc. (the “Corporation”) Chroma Systems Solutions Inc. Chroma Ate Inc. (the “Corporation”) Chroma Ate Europe B.V. Chroma Ate Inc. (the “Corporation”) Chroma Electronics (Shenzhen) Co., Ltd. Chroma Ate Inc. (the “Corporation”) Chroma Japan Corp.	Neworld Electronics Ltd. Chroma Ate Inc. (the “Corporation”) Chroma Ate Inc. (U.S.A.) Chroma Ate Inc. (the “Corporation”) Chroma Systems Solutions Inc. Chroma Ate Inc. (the “Corporation”) Chroma Ate Europe B.V. Chroma Ate Inc. (the “Corporation”) Chroma Ate Inc. ((Shenzhen) Co., Ltd. Chroma Ate Inc. (the “Corporation”) Chroma Japan Corp. Chroma Ate Inc. (the “Corporation”)	Subsidiary Parent company Subsidiary Parent company Subsidiary Parent company Subsidiary Parent company Subsidiary Parent company Subsidiary Parent company	(Sale) Purchase (Sale) Purchase (Sale) Purchase (Sale) Purchase (Sale) Purchase (Sale) Purchase	$ (1,194,767) 1,194,767 (461,646) 461,646 (353,916) 353,916 (215,646) 215,646 (217,182) 217,182 (107,565) 107,565	(26) 100 (10) 100 (8) 100 (5) 100 (5) 100 2 100	Net 90 days after delivery Net 90 days after delivery Net 180 days after delivery Net 180 days after delivery Net 90 days after delivery Net 90 days after delivery Net 90 days after delivery Net 90 days after delivery Net 90 days after monthly closing Net 90 days after monthly closing Net 90 days after delivery Net 90 days after delivery	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	- - Note 2 Note 2 - - - - - - - -	$ 210,900 (210,900) 326,335 (326,335) 126,671 (126,671) 51,545 (51,545) 55,065 (55,065) 106,782 (106,782)	13 (100) 20 (100) 8 (100) 3 (100) 3 (100) 6 100	- - - - - - - - - - - -

Note 1: The prices were determined after taking the selling and post sale services expenses into consideration.

Note 2: The actual credit period longer than other customers, approximately 12 months.

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TABLE 6

CHROMA ATE INC. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2015

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Nature of Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amount Received in Subsequent Period (Note)	Allowance for Bad Debts
					Amount	Action Taken
Chroma Ate Inc.	Neworld Electronics Ltd. Chroma Ate Inc. (U.S.A.) Testar Electronic Corporation Chroma System Solutions Inc. Chroma System Solutions Inc. Chroma Japan Corp. Chroma Japan Corp.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	Accounts receivable $ 210,900 Accounts receivable 326,335 Accounts receivable 139,857 Accounts receivable 126,671 Other receivable - financing provided 127,576 Accounts receivable 106,782 Other receivable - financing provided 41,278	3.17 1.58 0.57 2.79 - 1.15 -	$ - - - - - - -	- - - - - - -	$ 165,422 109,351 - 42,053 - 17,349 -	$ - - - - - - -

Note: The amounts had been accrued as of February 23, 2016.

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TABLE 7

CHROMA ATE INC. AND SUBSIDIARIES

NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES ON WHICH THE CORPORATION EXERCISES SIGNIFICANT INFLUENCE FOR THE YEAR ENDED DECEMBER 31, 2015

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance	as of December 31, 2015	as of December 31, 2015	Net Income (Loss) of the Investee	Investment Gain (Loss)	Note
				December 31, 2015	December 31, 2014	Shares (Thousands)	Percentage of Ownership	Carrying Value
Chroma Ate Inc. (the “Corporation”) Chroma Ate Inc. (U.S.A.) San Eagle Development Corp. EVT Technology Co., Ltd. Advic Technology Co., Ltd.	Neworld Electronics Ltd. San Eagle Development Corp. Chroma New Material Corporation Adlink Technology Inc. Wei Kuang Automatic Equipment Co., Ltd. CHI Incorporation Ltd. Chroma Investment Co., Ltd. Chroma Ate Europe B.V. DynaScan Technology Corp. Chroma Systems Solutions, Inc. Sensational Holding Ltd. Chroma Ate Inc. (U.S.A.) Deep Red Holding Co., Ltd. Chen Hwa Technology Inc. Adivic Technology Co. Testar Electronic Corporation Chroma Japan Corp. Chih Ho Shun Development Co., Ltd. EVT Technology Co., Ltd. Chroma Systems Solutions Inc. Wei Kuang Mech Eng Inc. Wei Da Electric Vehicle Co., Ltd. Advic Holding Corporation	Hong Kong British Virgin Islands Taoyuan, Taiwan New Taipei, Taiwan Hsinchu, Taiwan British Virgin Islands New Taipei, Taiwan The Netherlands Taoyuan, Taiwan U.S.A. British Virgin Islands U.S.A. Mauritius British Virgin Islands Taipei, Taiwan Taoyuan, Taiwan Japan Taoyuan, Taiwan Taoyuan, Taiwan U.S.A. Mauritius Pingtung, Taiwan Samoa	Sale and maintenance of electronic test instruments, etc. Investment Sale and processing of gold wire Manufacturing, processing and retailing of software/hardware of computers and peripherals Design, manufacturing, installment and testing of automated factory conveyor systems Test of inductance, capacitance and resistance, and sale of parts Investment Sale and maintenance of electronic test instruments etc. Research and manufacture of LED generators Sale and maintenance of electronic test instruments, etc. Investment Sale and maintenance of electronic test instruments, etc. Investment Test of inductance, capacitance and resistance, and sale of parts Sale and research of RF device Testing of LED products Sale and maintenance of electronic test instruments, etc. Construction and development of residence, buildings and specialized field; construction and investment of public works Manufacturing of motorcycles and its parts Sale and maintenance of electronic test instruments, etc. Investments Sale and lease of motorcycles Sale and research of RF device	$ 271,873 186,514 480,715 82,325 533,000 122,884 80,000 54,026 238,746 29,628 38,301 29,895 12,217 98,217 112,200 247,096 147,125 17,500 27,623 64 185,686 3,750 15,223	$ 271,873 186,514 480,715 82,325 533,000 122,884 80,000 54,026 238,746 29,628 38,301 29,895 12,217 19,977 81,600 247,096 147,125 17,500 4,623 64 185,686 3,750 -	64,013 2,050 25,000 23,208 10,000 3,830 14,000 1 9,841 120 1,200 1,000 215 3,085 11,220 20,160 9 1,750 2,658 240 4,475 375 500	100.0 100.0 100.0 11.5 100.0 100.0 100.0 100.0 27.3 25.0 100.0 100.0 100.0 100.0 51.0 67.2 100.0 35.0 53.2 50.0 100.0 75.0 100.0	$ 705,291 624,769 437,683 457,674 446,591 133,231 102,030 84,939 77,960 (56,946) 52,699 68,577 45,408 111,655 36,119 10,446 (24,387) 17,505 8,275 104,745 616,683 (3,567) 5,496	$ 85,873 11,571 49,527 606,101 220,615 (19,416) 5,358 20,710 21,788 41,021 1,165 31,094 961 4,173 (60,023) (48,424) (5,965) 269 (20,756) 41,021 11,648 (3,251) (10,556)	$ 85,873 11,571 49,527 70,124 222,533 (19,416) 365 20,710 5,948 10,255 1,165 31,090 961 4,173 (32,621) (32,541) (5,965) 94 (7,200) NA NA NA NA	Subsidiary Subsidiary Subsidiary Associate Subsidiary Subsidiary Subsidiary Subsidiary Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Joint venture Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

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TABLE 8

CHROMA ATE INC. AND SUBSIDIARIES

INVESTMENT IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2015 (In Thousands of New Taiwan Dollars or Foreign Currency, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital (Note 2)	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2015 (Note 3)	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2015 (Note 3)	Net Income (Loss) of the Investee	Percentage of Ownership in Investment	Investment Gain (Loss) (Notes 4 and 5)	Carrying Value as of December 31, 2015 (Note 2)	Accumulated Inward Remittance of Earnings as of December 31, 2015
						Outflow	Inflow
Chroma Electronics (Shenzhen) Co., Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma (Shanghai) Trading Co., Ltd. Hangzhou New Material Chroma Co., Ltd. Chroma Ate (Suzhou) Ltd. Wei Kuang Automatic Equipment (Nanjin) Co., Ltd. Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Mou Kuan Technologies (Nanjin) Co., Ltd. Sajet System Technology (Suzhou) Co., Ltd.	Sale of power supplies automatic test systems, signal generators, DC electronic load, color analyzer, uninterruptible power supply, switching mode rectifier and etc. Sale of power supplies automatic test systems, signal generators, DC electronic load, uninterruptible power supply, switching mode rectifier and etc. International and transit trading, commercial simple processing and commercial consulting service and etc. Production and sale of semiconductor connecting materials Sale of power supplies automatic test systems, signal generators, DC electronic load, uninterruptible power supply, switching mode rectifier and etc. Sale and maintenance of electronic equipment and factory conveyor systems Sale and maintenance of electronic equipment and factory conveyor systems Assembly, sale and maintenance of factory conveyors and related systems and renders related after-sales services Research, development and design of computer network security systems and information management		$ 127,050 (HK$ 30,000) 98,475 (US$ 3,000) 88,628 (US$ 2,700) 49,238 (US$ 1,500) 124,735 (US$ 3,800) 59,296 (RMB 11,871) 57,028 (RMB 11,417) 8,676 (RMB 1,737) 8,671 (RMB 1,736)	b. Subsidiary of Neworld Electronics Ltd. b. Subsidiary of Neworld Electronics Ltd. b. Subsidiary of Chen Hwa Technology Inc. b. Subsidiary of Chen Hwa Technology Inc. b. Subsidiary of Chi Incorporation Ltd. b. Subsidiary of Wei Kuang Mech Eng Inc. b. Subsidiary of Wei Kuang Mech Eng Inc. b. Subsidiary of Wei Kuang Mech Eng Inc. b. Subsidiary of Deep Red Holding Co., Ltd.	$ 132,178 (HK$ 1,200 US$ 3,853) 101,993 (US$ 3,000) 6,748 (US$ 200) 9,091 (US$ 285) 121,115 (US$ 3,800) 43,751 (US$ 1,338) 49,935 (US$ 1,500) 92,000 (US$ 2,836) (Note 9)	$ - - 78,240 (US$ 2,500) - - - - - -	$ - - - - - - - - -	$ 132,178 (HK$ 1,200 US$ 3,853) 101,993 (US$ 3,000) 84,988 (US$ 2,700) 9,091 (US$ 285) 121,115 (US$ 3,800) 43,751 (US$ 1,338) 49,935 (US$ 1,500) 92,000 (US$ 2,836) (Note 9)	$ 35,684 1,132 (710) 30,339 (19,105) 1,923 9,880 35 946	100 100 100 19 100 100 100 100 100	$ 35,684 1,132 (710) - (19,105) 1,923 9,880 35 946	$ 425,503 59,315 99,230 9,355 164,223 238,736 286,759 48,056 45,397	$ - - - 12,065 (US$ 368) - - - - -

Accumulated Investment in Mainland China as of December 31, 2015		Investment Amounts Authorized by the Investment Commission, MOEA		Upper Limit on Investment
$635,051 (HK$1,200, US$19,312)		$695,162 (HK$1,400, US$21,086) (Note 6)		$5,646,062 (Note 7)

(Continued)

81 -

Note 1: Methods of investment have following types:

a. Direct investment in mainland China. b. Indirect investment in the Company of Mainland China through a third place. c. Other

Note 2: The amounts of paid-in capital and carrying value as of December 31, 2015 were translated into New Taiwan dollars at the rates of HK$1=NT$4.235, US$1=NT$32.825, RMB1=NT$4.995 vailing on December 31, 2015.

Note 3: The amounts of accumulated outflow of investment from Taiwan as of January 1, 2015 and December 31, 2015 were translated into New Taiwan dollars on the original outflow day.
Note 4: Based on audited financial statements.

Note 5: Investment income (loss) was translated into New Taiwan dollars at the average rate of HK$1=NT$4.094, US$1=NT$31.739, RMB1=NT$5.033 for the year ended December 31, 2015.

Note 6:

	Approval Letter	Approved Amount	Approved Amount
a.	Letter (1998) II-87710585 of Investment Commission of MOEA	$	5,852
		(HK$	1,400)
b.	Letter (2000) II-89014726 and 89037430 of Investment Commission of MOEA		63,180
		(US$	2,000)
c.	Letter (2001) II-89037430 of Investment Commission of MOEA		33,160
		(US$	1,000)
d.	Letter II-91048640 of Investment Commission of MOEA		63,984
		(US$	1,853) (Note 7)
e.	Letter II-90025170 of Investment Commission of MOEA		60,240
		(US$	1,750)
f.	Letter II-092020235 of Investment Commission of MOEA		19,230
		(US$	560)
g.	Letter II-092043358 of Investment Commission of MOEA		6,748
		(US$	200)
h.	Letter II-093004076 of Investment Commission of MOEA		3,158
		(US$	95)
i.	Letter II-094006092 of Investment Commission of MOEA		6,896
		(US$	219)
j.	Letter II-09500052120 of Investment Commission of MOEA		81,528
		(US$	2,500)
k.	Letter II-09600175700 of Investment Commission of MOEA		120,000
		(US$	3,699)
l.	Letter II-096000006020 of Investment Commission of MOEA		66,580
		(US$	2,000)
m.	Letter II-09600310110 of Investment Commission of MOEA		33,160
		(US$	1,000)
n.	Letter II-09700186010 of Investment Commission of MOEA		46,110
		(US$	1,500)
o.	Letter II-09700403210 of Investment Commission of MOEA		7,096
		(US$	210) (Note 8)
p.	Letter II-10400042770 of Investment Commission of MOEA		78,240
		(US$	2,500)

Note 7: The upper limit on investment was calculated in accordance with the regulations of the Investment Commission of the Ministry of Economic Affairs for 60% of the net equity or consolidated net equity.

Note 8: Chroma Ate Inc. invested accounts receivable amounting to US$853 thousand in Chroma Electronics (Shenzhen) Co., Ltd. through Neworld Electronics Ltd.

Note 9: The investment in Sajet Technology Inc. (liquidated on September 15, 2008) was authorized by the Investment Commission in 2004.

(Concluded)

82 -

TABLE 9

CHROMA ATE INC. AND SUBSIDIARIES

BUSINESS RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2015 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Number	Company Name	Counterparty	Flow of Transactions (Note 1)	Transaction Details	Transaction Details		Percentage to Consolidated Total Operating Revenues or Total Assets
				Account	Amount	Transaction Terms
0	Chroma Ate. Inc. (the “Corporation”)	Neworld Electronics Ltd. Chroma U.S.A. Chroma Systems Solutions Inc. Chroma Electronics (Shenzhen) Co., Ltd. Chroma Europe Chroma Japan Testar Electronic Co. Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shanghai) Co., Ltd. Wei Kuang Automatic Equipment Co., Ltd. Adivic Technology Co. Wei Kuang Automatic Equipment Co., Ltd. Chroma U.S.A. Chroma Electronics (Shanghai) Co., Ltd. Chroma Systems Solutions Inc. Chroma Japan Testar Electronic Co. Chroma New Material Corporation EVT Technology Co., Ltd. Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shanghai) Co., Ltd. CHROMA USA Chroma Electronics (Shenzhen) Co., Ltd. Chroma Japan Chroma Electronics (Shenzhen) Co., Ltd. Neworld Electronics Ltd. Chroma U.S.A. Chroma Japan Testar Electronic Co. Chroma Systems Solutions Inc. Neworld Electronics Ltd. Chroma New Material Corporation Testar Electronic Co. Wei Kuang Automatic Equipment Co., Ltd. Neworld Electronics Ltd. Chroma U.S.A.	a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a	Operating revenue Operating revenue Operating revenue Operating revenue Operating revenue Operating revenue Operating revenue Operating revenue Operating revenue Operating revenue Operating revenue Operating costs Operating costs Operating costs Operating costs Operating costs Rental income Rental income Rental income Commissions expense Commissions expense Commissions expense Commissions expense Commissions expense Operating expense Operating expense Operating expense Operating expense Operating expense Interest revenue Non-operating income Non-operating income Non-operating income Notes receivable Accounts receivable Accounts receivable	$ 1,194,767 461,646 353,916 217,182 215,646 107,565 81,042 72,646 29,571 7,468 12 14,456 15,273 145 82 15 14,049 672 305 13,469 12,119 3,296 2,197 797 4,112 3,005 2,100 98 6 5,067 14,701 6,000 650 3,920 210,900 326,335	Note 2 Note 2 Note 2 Note 2 Note 2 Based on regular terms Based on regular terms Note 2 Note 2 Based on regular terms Based on regular terms Based on regular terms Note 2 Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Note 3	12 5 4 2 2 1 1 1 - - - - - - - - - - - - - - - - - - - - - - - - - - 1 2

(Continued)

83 -

Number	Company Name	Counterparty	Flow of Transactions (Note 1)	Transaction Details	Transaction Details		Percentage to Consolidated Total Operating Revenues or Total Assets
				Account	Amount	Transaction Terms
		Testar Electronic Co. Chroma Systems Solutions Inc. Chroma Japan Chroma Electronics (Shenzhen) Co., Ltd. Chroma Europe Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shanghai) Co., Ltd. Adivic Technology Co. Chroma Systems Solutions Inc. Chroma Systems Solutions Inc. Chroma Systems Solutions Inc. Chroma Japan Testar Electronic Co. Neworld Electronics Ltd. Chroma New Material Corporation EVT Technology Co., Ltd. Wei Kuang Automatic Equipment Co., Ltd. Chroma U.S.A. Chroma Europe Chroma Systems Solutions Inc. Chroma Japan Chroma U.S.A. Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shanghai) Co., Ltd. Neworld Electronics Ltd. Chroma Japan Chroma U.S.A.	a a a a a a a a a a a a a a a a a a a a a a a a a a a	Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Interest receivable Dividends receivable Other receivable - financing provided Other receivable - financing provided Other receivable Other receivable Other receivable Other receivable Account payable Account payable Account payable Account payable Account payable Accrued expense Accrued expense Accrued expense Accrued expense Accrued expense Temporary receipts	$ 139,857 126,671 106,782 55,065 51,545 22,560 12,126 13 373 2,298 127,576 41,278 85,876 3,591 1,182 92 25,466 3,327 33 21 11 1,169 292 4,081 2 82 3,909	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	1 1 1 - - - - - - - 1 - 1 - - - - - - - - - - - - - -
1	Chroma U.S.A.	Advic Holding Corp. Testar Electronic Co. Wei Kuang Automatic Equipment Co., Ltd. Chroma Electronics (Shenzhen) Co., Ltd. Advic Holding Corp. Testar Electronic Co. Chroma Systems Solutions Inc. Testar Electronic Co.	b b b b b b a b	Operating revenue Operating revenue Operating revenue Operating costs Accounts receivable Accounts receivable Dividends receivable Other receivable	10,557 319 8 320 3,397 121 4,596 120	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - - - - -
2	Neworld Electronics Ltd.	Chroma Electronics (Shenzhen) Co., Ltd. Wei Kuang Automatic Equipment Co., Ltd. Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shanghai) Co., Ltd. Wei Kuang Automatic Equipment (Nanjin) Co., Ltd. Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shenzhen) Co., Ltd. Chroma Electronics (Shenzhen) Co., Ltd.	a b b a b b a a	Operating revenue Operating revenue Operating revenue Operating revenue Operating costs Operating costs Operating costs Commissions expense	378,291 115,790 82,445 20,515 45,418 565 36 42,459	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	4 1 1 - - - - -

(Continued)

84 -

Number	Company Name	Counterparty	Flow of Transactions (Note 1)	Transaction Details	Transaction Details		Percentage to Consolidated Total Operating Revenues or Total Assets
				Account	Amount	Transaction Terms
		Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma Electronics (Shenzhen) Co., Ltd. Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma Electronics (Shenzhen) Co., Ltd. Wei Kuang Automatic Equipment Co., Ltd. Chroma Electronics (Shenzhen) Co., Ltd. Chroma Electronics (Shenzhen) Co., Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma Ate (Suzhou) Ltd. Wei Kuang Automatic Equipment (Nanjin) Co., Ltd.	b a a b a a b a a a b b	Commissions expense Commissions expense Accounts receivable Accounts receivable Accounts receivable Other receivable Prepayments Account payable Other payable Other payable Other payable Receipts in advance	$ 24,575 17,751 82,541 33,495 4,131 154,530 138,982 37 3,120 2,855 2,869 139,643	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - 1 - - 1 1 - - - - 1
3	Chroma Electronics (Shenzhen) Co., Ltd.	Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shanghai) Co., Ltd. Sajet System Technology (Suzhou) Co., Ltd. Chroma Systems Solutions Inc. Adivic Technology Co. Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shanghai) Co., Ltd. Sensational Chroma (Shanghai) Trading Co., Ltd. Chroma Ate (Suzhou) Ltd. Sajet System Technology (Suzhou) Co., Ltd. Chroma Ate (Suzhou) Ltd. Chroma Electronics (Shanghai) Co., Ltd. Chroma (Shanghai) Trading Co., Ltd. Chroma (Shanghai) Trading Co., Ltd. Chroma Ate (Suzhou) Ltd.	b b b b b b b b b b b b b b b b	Operating revenue Operating revenue Operating revenue Operating revenue Operating revenue Operating costs Operating costs Rent expense Rent expense Commissions expense Commissions expense Accounts receivable Accounts receivable Prepayments Other receivable Account payable	18,409 14,579 540 176 1,253 4,212 3 303 1,793 3,926 3,798 39,628 39,086 223 445 1,925	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - - - - - - - - - - - - -
4	Chroma Electronics (Shanghai) Co., Ltd.	Chroma Ate (Suzhou) Ltd. Chroma Ate (Suzhou) Ltd.	b b	Operating costs Account payable	6,214 6,445	Based on regular terms Based on regular terms	- -
5	Wei Kuang Automatic Equipment Co., Ltd.	Wei Kuang Automatic Equipment (Nanjin) Co., Ltd. Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Wei Kuang Automatic Equipment (Nanjin) Co., Ltd. Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Wei Kuang Automatic Equipment (Nanjin) Co., Ltd.	b b b b b b	Operating revenue Operating revenue Operating costs Operating costs Non-operating income Non-operating income	2,587 14,006 2,655 266 5,408 1,903	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - - -
6	Wei Kuang Automatic Equipment (Xiamen) Co., Ltd.	Wei Kuang Automatic Equipment (Nanjin) Co., Ltd. Chroma Ate (Suzhou) Ltd. Mou Kuan Technologies (Nanjin) Co., Ltd. Wei Kuang Automatic Equipment (Nanjin) Co., Ltd. Wei Kuang Automatic Equipment (Nanjin) Co., Ltd.	b b b b b	Operating revenue Operating revenue Operating costs Operating costs Accounts receivable	5,688 19 2,251 738 675	Based on regular terms Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - - -
							(Continued)

85 -

Number	Company Name	Counterparty	Flow of Transactions (Note 1)	Transaction Details	Transaction Details		Percentage to Consolidated Total Operating Revenues or Total Assets
				Account	Amount	Transaction Terms
		Chroma Ate (Suzhou) Ltd. Chroma (Shanghai) Trading Co., Ltd. Wei Kuang Automatic Equipment (Nanjin) Co., Ltd.	b b b	Accounts receivable Other receivable Receipts in advance	$ 22 3,996 17,532	Based on regular terms Based on regular terms Based on regular terms	- - -
7	Wei Kuang Automatic Equipment (Nanjin) Co., Ltd.	Mou Kuan Technologies (Nanjin) Co., Ltd. Chroma Ate (Suzhou) Ltd. Mou Kuan Technologies (Nanjin) Co., Ltd. Mou Kuan Technologies (Nanjin) Co., Ltd.	b b b b	Operating revenue Operating revenue Operating costs Accounts receivable	1,090 187 1,016 349	Based on regular terms Based on regular terms Based on regular terms Based on regular terms	- - - -
8	Chroma Ate (Suzhou) Ltd.	Sajet System Technology (Suzhou) Co., Ltd. Sajet System Technology (Suzhou) Co., Ltd. Sajet System Technology (Suzhou) Co., Ltd.	b b b	Commissions expense Operating costs Account payable	377 1,510 1,726	Based on regular terms Based on regular terms Based on regular terms	- - -
9	EVT Technology Co., Ltd.	Wei Da Electric Vehicle Co., Ltd. Wei Da Electric Vehicle Co., Ltd.	a a	Operating revenue Accounts receivable	38 4,910	Based on regular terms Based on regular terms	- -

Note 1: a. From parent to subsidiary. b. Between subsidiaries.

Note 2: The prices were determined after taking the selling and post-sale service expenses into consideration.

Note 3: The collection periods of about 12 months were longer than those for third parties.

(Concluded)

86 -

AI assistant

CHROMA — Annual Report 2015

52029_rns_2015-11-13_7630440c-b017-40d2-935b-7909b5aae7ba.pdf

Chroma Ate Inc. and Subsidiaries

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS’ REPORT

Notice to Readers

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHROMA ATE INC. AND SUBSIDIARIES

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CHROMA ATE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CHROMA ATE INC. AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

1) IFRS 13 “Fair Value Measurement”

Recognition and measurement of financial assets

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

Basis of Preparation

Classification of Current and Noncurrent Assets and Liabilities

Basis of Consolidation

Principle of preparing consolidated financial statements

Business Combinations

Foreign Currencies

Inventories

Investments in Associates and Joint Ventures

Property, Plant and Equipment

Goodwill

Intangible Assets

Impairment of Tangible and Intangible Assets Other Than Goodwill

Financial Instruments

b) Available-for-sale financial assets

c) Loans and receivables

2) Impairment of financial assets

Financial liabilities at fair value through profit or loss

d. Convertible bonds

Revenue Recognition

Construction Contracts

Borrowing Costs

Government Grants

Employee Benefits

b. Retirement benefits

Employee Stock Options

Taxation

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Key Sources of Estimation and Uncertainty

a. Impairment of tangible and intangible assets other than goodwill

b. Impairment of goodwill

e. Valuation of inventories

g. Impairment of accounts receivable

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. AVAILABLE-FOR-SALE FINANCIAL ASSETS

9. FINANCIAL ASSETS CARRIED AT COST - NONCURRENT

10. DEBT INVESTMENTS WITH NO ACTIVE MARKET

11. ACCOUNTS RECEIVABLE, NET - THIRD PARTIES

12. CONSTRUCTION CONTRACTS RECEIVABLE (PAYABLE)

13. INVENTORIES

14. SUBSIDIARIES

15. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

16. PROPERTY, PLANT AND EQUIPMENT

17. GOODWILL

18. OTHER INTANGIBLE ASSETS

19. BORROWINGS

Short-term Borrowings

Short-term Bills Payable

20. BONDS PAYABLE

CHROMA Annual Report 2015