KINSUS — Annual Report 2015

Dec 22, 2015

English Translation of Financial Statements and a Report Originally Issued in Chinese

Ticker: 3189

KINSUS INTERCONNECT TECHNOLOGY CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS WITH AUDIT REPORT OF INDEPENDENT AUDITORS AS OF DECEMBER 31, 2015 AND 2014 AND FOR THE YEARS THEN ENDED

Address: 1245, Chung Hua Rd., Hsinwu District, Taoyuan City, Taiwan 32747 Telephone: (03)487-1919

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

English Translation of Financial Statements and a Report Originally Issued in Chinese Consolidated financial statements

$\ddot{\phantom{a}}$

Item	Page numbering
1. Cover sheet	1
2. Index	$\overline{2}$
Management representation letter 3.	3
4. Report of independent auditors	4
Consolidated balance sheets 5.	$5 - 6$
Consolidated statements of comprehensive incomes 6.	7
Consolidated statements of changes in equity 7.	8
Consolidated statements of cash flows 8.	9
Footnotes to the consolidated financial statements 9.
(1) History and organization	10
(2) Date and procedures of authorization of financial statements for issue	10
(3) Newly issued or revised standards and interpretations	$10 - 20$
(4) Summary of significant accounting policies	20-40
(5) Significant accounting judgments, estimates and assumptions	40-42
(6) Contents of significant accounts	$42 - 73$
(7) Related party transactions	$73 - 75$
(8) Assets pledged as collateral	76
(9) Significant contingencies and unrecognized contract commitments	76
(10) Losses due to major disasters	76
(11) Significant subsequent events	77
$(12)$ Others	$77 - 84$
(13) Other disclosures
1. Additional disclosures required by the R.O.C. Securities and Futures Bureau	84
2. Information on investees	85
3. Information on investments in Mainland China	86-89
(14) Operating segment	89-91

English Translation of Financial Statements and a Report Originally Issued in Chinese

MANAGEMENT REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of Kinsus Interconnect Technology Corp. as of December 31, 2015 and for the year then ended under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Accounting Standard No. 27, "Consolidated and Separate Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Kinsus Interconnect Technology Corp. and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

Kinsus Interconnect Technology Corp.

By

Guo, Ming-Dong Chairman February 1, 2016

English Translation of an Audit Report Originally Issued in Chinese REPORT OF INDEPENDENT AUDITORS

To: the Board of Directors and Shareholders of Kinsus Interconnect Technology Corp.

We have audited the accompanying consolidated balance sheets of Kinsus Interconnect Technology Corp. and Subsidiaries as of December 31, 2015 and 2014, the related consolidated statements of comprehensive income, changes in stockholders' equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company'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 auditing standards generally accepted in the Republic of China and "Guidelines for Certified Public Accountants' Examination and Reports on Financial Statements", which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based on our audits, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Kinsus Interconnect Technology Corp. and Subsidiaries as of December 31, 2015 and 2014, and the consolidated results of their operations and their cash flows for the years then ended in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee which are endorsed by Financial Supervisory Commission of the Republic of China.

We have audited and expressed an unqualified opinion on the parent-company-only financial statements of Kinsus Interconnect Technology Corp. as of December 31, 2015 and 2014 and for the years then ended.

Ernst & Young February 1, 2016 Taipei, Taiwan, Republic of China

Ernst & Yame

Notice to Readers

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

Kinsus Interconnect Technology Corp. and Subsidiaries

Consolidated Balance Sheets

As of December 31, 2015 and 2014

(In Thousands of New Taiwan Dollars)

	Assets			2015		2014
Code	Accounts	Notes	Amount	$\frac{0}{6}$	Amount	$\%$
	Current assets
1100	Cash and cash equivalents	4, 6(1)	\$12,746,307	30	\$11,541,615	28
1110	Financial assets at fair value through profit or loss	4, 6(2)	3,536,370	8	5,135,434	13
1125	Available-for-sale financial assets	4, 6(3)			40,369
1147	Bond investments with no active market	4, 6(4), 8	428,112		463,827
1150	Notes receivable, net	4, 6(6)	1,835		6,252
1170	Accounts receivable, net	4, 6(7)	3,590,193	8	3,040,343	8
1180	Accounts receivable - related parties	4, 6(7), 7	248,909		436,406
1200	Other receivables		336,543		452,265
1210	Other receivables - related parties		2,081		1,307
1310	Inventories, net	4, 6(8)	2,285,436	5	2,162,969	5
1410	Prepayments		159,205		98,501
1470	Other current assets		136,377		91,980
11XX	Total current assets		23,471,368	55	23,471,268	57
	Non-current assets
1544	Financial assets carried at cost	4, 6(5)	50,000		50,000
1600	Property, plant and equipment, net	4, 6(9), 8	16,150,904	38	15,429,778	38
1780	Intangible assets	4, 6(10)	30,280		19,982
1840	Deferred income tax assets	4, 6(25)	9,880		276
1915	Prepaid equipment	4, 6(9), 9	2,607,515	6	1,748,657	4
1995	Other non-current assets	6(11), 7, 8	318,785		331,713
15XX	Total non-current assets		19,167,364	45	17,580,406	43
	1XXX Total Assets		\$42,638,732	100	\$41,051,674	100

English Translation of Consolidated Financial Statements Originally Issued in Chinese Kinsus Interconnect Technology Corp. and Subsidiaries Consolidated Balance Sheets-(Continued) As of December 31, 2015 and 2014 (In Thousands of New Taiwan Dollars)

	Liabilities and Equity			2015		2014
Code	Accounts	Notes	Amount	%	Amount	$\frac{9}{6}$
	Current liabilities
2100	Short-term loans	6(12)	\$3,095,030	$\overline{7}$	\$1,806,896	4
2150	Notes payable		55,484		41,011
2170	Accounts payable		1,996,799	5.	1,986,749	5
2200	Other payables	6(13), 7	3,932,762	9	3,828,752	9
2230	Current income tax liabilities	4, 6(25)	569,378		896,540	$\overline{2}$
2250	Provisions	4, 6(14)	294		302
2300	Other current liabilities	6(15)	668,701	$\overline{2}$	1,542,931	4
21XX	Total current liabilities		10,318,448	$\overline{24}$	10,103,181	$\overline{24}$
	Non-current liabilities
2540	Long-term loans	6(16), 8	1,366,299	4	730,722	$\overline{2}$
2570	Deferred income tax liabilities	4, 6(25)	40,190		54,377
2600	Other non-current liabilities	4, 6(17), 6(18)	85,994	٠	110,620
25XX	Total non-current liabilities		1,492,483	$\overline{4}$	895,719	$\overline{2}$
	2XXX Total liabilities		11,810,931	28	10,998,900	26
	31XX Equity attributable to shareholders of the parent
3100	Capital	6(19)
3110	Common stock		4,460,000	10	4,460,000	11
3200	Capital surplus	6(19)	5,939,819	14	5,939,819	14
3300	Retained earnings	(6(19))
3310	Legal reserve		3,049,623	7	2,687,890	7
3350	Unappropriated earnings		14,780,095	35	14,030,597	34
3400	Other components of equity		194,484		279,703
3500	Treasury Stock	(6(19))	(32, 885)
	36XX Non-controlling interests	6(19)	2,436,665	6	2,654,765	7
	3XXX Total equity		30,827,801	$\overline{72}$	30,052,774	$\overline{74}$
	Total liabilities and equity		\$42,638,732	100	\$41,051,674	100

Kinsus Interconnect Technology Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2015 and 2014

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

			2015		2014
Code	Accounts	Notes	Amount	$\%$	Amount	℅
4000	Net revenue	4, 6(20), 7	\$23,061,311	100	\$24,943,834	100
5000	Cost of sale		(17,099,709)	(74)	(17,996,954)	(72)
5900	Gross profit		5,961,602	26	6,946,880	28
6000	Operating expenses	7
6100	Sales and marketing		(437, 849)	(2)	(593, 616)	(2)
6200	General and administrative		(975, 409)	(4)	(973, 136)	(4)
6300	Research and development		(1,484,620)	(7)	(1,370,969)	(6)
	Total operating expenses		(2,897,878)	(13)	(2,937,721)	(12)
6900	Operating income		3,063,724	13	4,009,159	16 1
7000	Non-operating incomes and expenses
7010	Other incomes	6(23), 7	309,476	L	133,961	1
7020	Other gains and losses	6(23), 7	(110, 984)		64,434
7050	Finance costs	6(23)	(56,968)	۰	(56.482)
	Total non-operating incomes and expenses		141,524	L	141,913	$\mathbf{1}$
7900	Income before income tax		3,205,248	14	4,151,072	17
7950	Income tax expense	4, 6(25)	(475, 722)	(2)	(660, 839)	(3)
8200	Net income		2,729.526	12	3,490,233	14
8300	Other comprehensive income (loss)	6(24)
8310	Item that may not be reclassified to profit or loss
8311	Actuarial gain (loss) from defined benefit plans		(8, 721)		15,710
8360	Items that may be reclassified subsequently to profit or loss
8361	Exchange differences arising on translation of foreign operations		(116, 596)	(1)	309,597	1
8362	Unrealized valuation gain (loss) on available-for-sale financial assets		(24, 694)		9,583
8399	Income tax related to items that may be reclassified subsequently to P/L		12.397	۰	(33,026)
	Total other comprehensive income, net of tax		(137, 614)	(1)	301,864	1
8500	Total comprehensive income		\$2,591.912	11	\$3,792,097	15 15
8600	Net income (loss) attributable to:
8610	Shareholders of the parent		\$2,903,952	13	\$3,617,327	15
8620	Non-controlling interests		(174, 426)	(1)	(127,094)	$\Omega$
8700	Total comprehensive income (loss) attributable to:		\$2,729,526	$12 \,$	\$3,490,233	14
8710	Shareholders of the parent		\$2,810,012	$12 \,$	\$3,803,861	15
8720	Non-controlling interests		(218, 100)	(1)	(11, 764)	$\bullet$
			\$2,591,912	$\mathbf{11}$	\$3,792,097	15
9750	Earnings per share - basic (In NT\$)	6(26)	\$6.51		\$8.11
9850	Earnings per share - diluted (In NT\$)	6(26)	\$6.38		\$7.98

Kinsus Interconnect Technology Corp. and Subsidiaries

Consolidated Statements of Changes in Equity

For the Years Ended December 31, 2015 and 2014

(In Thousands of New Taiwan Dollars)

								Equity Attributable to Shareholders of the Parent
						Retained Earnings		Others
	Items	Notes	Capital	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange differences arising on translation of foreign operations	Unrealized valuation gain (loss) on available-for-sale financial assets	Treasury Stock	Total	Non- controlling Interests	Total Equity
Code			3100	3200	3310	3320	3350	3410	3425	3500	31XX	36XX	3XXX
Al	Balance as of January 1, 2014		\$4,460,000	\$5,863,612	\$2,365,481	\$74,424	\$12,206,545	\$93,768	\$15,111	$S-$	\$25,078,941	\$2,450,199	\$27,529,140
	Appropriation and distribution of 2013 earnings:	(6(19)
B1	Legal reserve				322,409		(322, 409)
B5	Cash dividends - common shares						(1,561,000)				(1,561,000)		(1, 561, 000)
B 17	Reversal of special reserve					(74, 424)	74,424
DI.	Net income (loss) for 2014						3,617,327				3,617,327	(127, 094)	3.490,233
D3	Other comprehensive income (loss) for 2014	6(24)					15,710	161,241	9,583		186,534	115,330	301,864
D5	Total comprehensive income				$\sim$	$\overline{\phantom{a}}$	3,633,037	161,241	9,583	$\overline{\phantom{a}}$	3,803,861	(11,764)	3,792,097
M5	Differences between equity purchase price and carrying amount arising from acquisition or disposal of subsidiaries			50.925							50,925	(50, 925)
M7	Changes in equities of subsidiaries			25,282							25,282	(25, 282)
O 1	Changes in non-controlling Interests											292,537	292,537
AI	Balance as of December 31, 2014		4,460,000	5,939,819	2,687,890	$\sim$	14,030,597	255,009	24,694		27,398,009	2,654,765	30.052,774
	Appropriation and distribution of 2014 earnings:	6(19)
Bl	Legal reserve				361,733		(361, 733)
B5	Cash dividends - common shares						(1,784,000)				(1,784,000)		(1,784,000)
DI	Net income (loss) for 2015						2.903,952				2,903,952	(174, 426)	2.729,526
D3	Other comprehensive income (loss) for 2015	6(24)					(8, 721)	(60, 525)	(24, 694)		(93,940)	(43, 674)	(137, 614)
D5	Total comprehensive income				$\bullet$	$\overline{\phantom{a}}$	2,895,231	(60, 525)	(24, 694)	$\blacksquare$	2,810,012	(218, 100)	2,591,912
LI	Treasury stock repurchased									(32, 885)	(32, 885)		(32,885)
ΖI	Balance as of December 31, 2015		\$4,460,000	\$5,939,819	\$3,049,623	$S-$	\$14,780,095	\$194,484	\$-	S(32, 885)	\$28,391,136	\$2,436,665	\$30,827,801

English Translation of Consolidated Financial Statements Originally Issued in Chinese Kinsus Interconnect Technology Corp. and Subsidiaries Consolidated Statements of Cash Flows For the Years Ended December 31, 2015 and 2014 (In Thousands of New Taiwan Dollars)

Code	Items	2015	2014	Code	Items	2015	2014
AAAA	Cash flows from operating activities:			BBBB	Cash flows from investing activities:
A10000	Income before income tax	\$3,205,248	\$4,151,072	B00400	Disposal of available-for-sale financial assets	46,520	51,620
A20000	Adjustments:			B00700	Disposal of bond investments with no active market	35,715	43,601
A20010	Income and expense adjustments:			B01200	Acquisition of financial assets carried at cost		(50,000)
A20100	Depreciation	3,196,903	3,018,003	B02700	Acquisition of property, plant and equipment	(5,000,206)	(3,348,791)
A20200	Amortization	34,432	26,567	B02800	Disposal of property, plant and equipment	1,680	8,113
A20300	Bad debt expense (gain on recovery)	(19,603)	5.876	B03800	Decrease (increase) in refundable deposits	(363)	(3,661)
A20400	Net loss (gain) of financial assets (liabilities) at fair value through profit or loss	(24, 586)	(26, 395)	B04500	Acquisition of intangible assets	(44, 806)	(32, 271)
A20900	Interest expense	56,968	56,482	BBBB	Net cash provided by (used in) investing activities	(4,961,460)	(3,331,389)
A21200	Interest income	(86, 116)	(96, 170)
A22500	Loss (gain) on disposal of property, plant and equipment	108,807	724	CCCC	Cash flows from financing activities:
A23100	Gain on disposal of investment	(30, 845)	(26, 135)	C00100	Increase in (repayment of) short-term loans	1,288,134	225,442
A 23700	Impairment loss on non-financial assets	14,211		C01600	Increase in long-term loans	1,084,751	524,402
A30000	Changes in operating assets and liabilities:			C01700	Repayment of long-term loans	(1,310,123)	(1,238,051)
A31110	Financial assets at fair value through profit or loss	1,623,650	28,033	C04500	Payment of cash dividends	(1,784,000)	(1,561,000)
A31130	Notes receivable	4,417	63,131	C03000	Increase (decrease) in deposits received	(29, 106)	(33, 678)
A31150	Accounts receivable	(529, 703)	(32, 739)	C04900	Treasury stock purchased	(32,885)
A31160	Accounts receivable - related parties	187,497	124,063	C05800	Increase (decrease) in non-controlling interests		292,537
A31180	Other receivables	111,215	45,116	CCCC	Net cash provided by (used in) financing activities	(783, 229)	(1,790,348)
A31190	Other receivables - related parties	(774)	622
A31200	Inventories	(122, 467)	(157, 472)		DDDD Effect of exchange rate changes	10,806	(11, 563)
A31230	Prepayments	(60, 704)	14,168
A31240	Other current assets	(44, 397)	(26, 170)	EEEE	Increase (decrease) in cash and cash equivalents	1,204,692	1,753,788
A31990	Long-term prepaid rents	13,291	(9,195)		E00100 Cash and cash equivalents at beginning of period	11,541,615	9,787,827
A32130	Notes payable	14,473	942		E00200 Cash and cash equivalents at end of period	\$12,746,307	\$11,541,615
A32150	Accounts payable	10,050	101,197
A32160	Accounts payable - related parties		(163)
A32130	Other payables	73,374	411,866
A32200	Provisions	(8)	302
A32210	Unearned sales revenue	(11,246)	21,638
A32230	Other current liabilities	(2,035)	(2.478)
A32240 A33000	Accrued pension liabilities	(4,241)	(3,973)
	Cash generated from (used in) operations	7,717,811	7,688,412
A33100	Interest received	90,561	93,723
A33300 A33500	Interest paid Income tax paid	(55, 519)	(57, 162)
AAAA	Net cash provided by (used in) operating activities	(814, 278)	(837, 885) 6,887,088
		6,938,575

English Translation of Consolidated Financial Statements and Footnotes Originally Issued in Chinese Kinsus Interconnect Technology Corp. Notes to the Consolidated Financial Statements (Amounts Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

1. HISTORY AND ORGANIZATION

Kinsus Interconnect Technology Corp. (referred to "the Company") was established on September 11, 2000. Its main business activities include the manufacture of electronic products, the whole-sale and retail-sale of electronic materials, and the consultation services of business operation and management. The Company's stocks have been governmentally approved on May 20th, 2004 to be listed and traded in Taiwan Stock Exchange starting November 1st, 2004. The registered business premise and main operation address is at 1245, Chung Hua Rd., Hsinwu District, Taoyuan City, Taiwan 32747.

2. DATE AND PROCEDURE OF AUTHORIZATION FOR FINANCIAL STATEMENTS ISSUANCE

The consolidated financial statements of the Company and its subsidiaries ("the Group") were authorized to be issued in accordance with a resolution of the Board of Directors' meeting held on February 1, 2016.

NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS $3₁$

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Group applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission ("FSC") and become effective for annual periods beginning on or after 1 January 2015. The nature and the impact of each new standard and amendment that has a material effect on the Group is described below:

IAS 19 Employee Benefits

The revised IAS 19 brought about the following changes to defined benefit plans which are summarized as below:

(a) The interest cost and expected return on plan assets used in the previous version of IAS 19 are replaced with a net-interest amount under the revised IAS 19, which is calculated by applying the discount rate to the net defined benefit liability or asset at the start of each annual reporting period.

• (b) In the previous version of IAS 19, past service cost is recognized as an expense immediately to the extent that the benefits are already vested, or on a straight-line basis over the average period until the benefits become vested. Under the revised IAS 19, all past service costs are recognized at the earlier of when the amendment/curtailment occurs or when the related restructuring or termination costs are recognized. Therefore unvested past service cost is no longer deferred over future vesting periods.
• (c) The revised IAS 19 required more disclosure. Please refer to Note 6.

IFRS 13 Fair Value Measurements

IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS. The Group re-assessed its policies for measuring fair values. Application of IFRS 13 has not materially impacted the fair value measurements of the Group.

Additional disclosures where required under IFRS 13, are provided in the individual notes relating to the assets and liabilities whose fair values were determined. Fair value hierarchy is provided in Note 12. According to the transitional provisions of IFRS 13, IFRS 13 is applied prospectively as of 1 January 2015; the disclosure requirements of IFRS 13 need not be applied in comparative information before 1 January 2015.

IAS 1 Presentation of Financial Statements - Presentation of items of other comprehensive income

Beginning 1 January 2014, the Group presented its items of other comprehensive income that will be reclassified to profit or loss separately from items that will not be reclassified in accordance with the amendments to IAS 1. The amendments affect presentation of statement of comprehensive income only and have no impact on the Group's financial position or performance.

IAS 1 Presentation of Financial Statements – Clarification of the requirement for comparative information

Beginning 1 January 2014, according to the amendments to IAS 1, when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in it financial statements, or when it reclassifies items in its financial statements, the opening statement of financial position does not have to be accompanied by comparative information in the related notes. The amendments affect notes accompanying the financial statements only and have no impact on the Group's financial position or performance.

• (2) The Company has not applied the following IFRSs issued by the International Accounting Standards Board ("IASB") but not endorsed by the FSC. As of the date that the consolidated financial statements were authorized for issue, the initial adoption to the following standards and interpretations is still subject to the effective date to be published by the FSC.
• (a) IAS 36 "Impairment of Assets" (Amendment)

This amendment relates to the amendment issued in May 2011 and requires entities to disclose the recoverable amount of an asset (including goodwill) or a cash-generating unit when an impairment loss has been recognized or reversed during the period. The amendment also requires detailed disclosure of how the fair value less costs of disposal has been measured when an impairment loss has been recognized or reversed, including valuation techniques used, level of fair value hierarchy of assets and key assumptions used in measurement. The amendment is effective for annual periods beginning on or after 1 January 2014.

(b) IFRIC 21 "Levies"

This interpretation provides guidance on when to recognize a liability for a levy imposed by a government (both for levies that are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and those where the timing and amount of the levy is certain). The interpretation is effective for annual periods beginning on or after 1 January 2014.

(c) IAS 39 "Financial Instruments: Recognition and Measurement" (Amendment)

Under the amendment, there would be no need to discontinue hedge accounting if a hedging derivative was novated, provided certain criteria are met. The interpretation is effective for annual periods beginning on or after 1 January 2014.

(d) IAS 19 "Employee Benefits" (Defined benefit plans: employee contributions)

The amendments apply to contributions from employees or third parties to defined benefit plans. The objective of the amendments is to provide a policy choice for a simplified accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary. The amendment is effective for annual periods beginning on or after 1 July 2014.

(e) Improvements to International Financial Reporting Standards (2010-2012 cycle):

IFRS 2 "Share-based Payment"

The annual improvements amend the definitions of 'vesting condition' and 'market condition' and add definitions for 'performance condition' and 'service condition' (which were previously part of the definition of 'vesting condition'). The amendment prospectively applies to share-based payment transactions for which the grant date is on or after 1 July 2014.

IFRS 3 "Business Combinations"

The amendments include: (1) deleting the reference to "other applicable IFRSs" in the classification requirements; (2) deleting the reference to "IAS 37 Provisions, Contingent Liabilities and Contingent Assets or other IFRSs as appropriate", other contingent consideration that is not within the scope of IFRS 9 shall be measured at fair value at each reporting date and changes in fair value shall be recognized in profit or loss; (3) amending the classification requirements of IFRS 9 Financial Instruments to clarify that contingent consideration that is a financial asset or financial liability can only be measured at fair value, with changes in fair value being presented in profit or loss depending on the requirements of IFRS 9. The amendments apply prospectively to business combinations for which the acquisition date is on or after 1 July 2014.

IFRS 8 "Operating Segments"

The amendments require an entity to disclose the judgements made by management in applying the aggregation criteria to operating segments. The amendments also clarify that an entity shall only provide reconciliations of the total of the reportable segments' assets to the entity's assets if the segment assets are reported regularly. The amendment is effective for annual periods beginning on or after 1 July 2014.

IFRS 13 "Fair Value Measurement"

The amendment to the Basis for Conclusions of IFRS 13 clarifies that when deleting paragraph B5.4.12 of IFRS 9 Financial Instruments and paragraph AG79 of IAS 39 Financial Instruments: Recognition and Measurement as consequential amendments from IFRS 13 Fair Value Measurement, the IASB did not intend to change the measurement requirements for short-term receivables and payables.

IAS 16 "Property, Plant and Equipment"

The amendment clarifies that when an item of property, plant and equipment is revalued, the accumulated depreciation at the date of revaluation is adjusted to equal the difference between the gross carrying amount and the carrying amount of the asset. The amendment is effective for annual periods beginning on or after 1 July 2014.

IAS 24 "Related Party Disclosures"

The amendment clarifies that an entity providing key management personnel services to the reporting entity or to the parent of the reporting entity is a related party of the reporting entity. The amendment is effective for annual periods beginning on or after 1 July 2014.

IAS 38 "Intangible Assets"

The amendment clarifies that when an intangible asset is revalued, the accumulated amortization at the date of revaluation is adjusted to equal the difference between the gross carrying amount and the carrying amount of the asset. The amendment is effective for annual periods beginning on or after 1 July 2014.

(f) Improvements to International Financial Reporting Standards (2011-2013 cycle):

IFRS 1 "First-time Adoption of International Financial Reporting Standards"

The amendment clarifies that an entity, in its first IFRS financial statements, has the choice between applying an existing and currently effective IFRS or applying early a new or revised IFRS that is not yet mandatorily effective, provided that the new or revised IFRS permits early application.

IFRS 3 "Business Combinations"

This amendment clarifies that paragraph $2(a)$ of IFRS 3 Business Combinations excludes the formation of all types of joint arrangements as defined in IFRS 11 Joint Arrangements from the scope of IFRS 3; and the scope exception only applies to the financial statements of the joint venture or the joint operation itself. The amendment is effective for annual periods beginning on or after 1 July 2014.

IFRS 13 "Fair Value Measurement"

The amendment clarifies that paragraph 52 of IFRS 13 includes a scope exception for measuring the fair value of a group of financial assets and financial liabilities on a net basis. The objective of this amendment is to clarify that this portfolio exception applies to all contracts within the scope of IAS 39 Financial Instruments: Recognition and Measurement or IFRS 9 Financial Instruments, regardless of whether they meet the definitions of financial assets or financial liabilities as defined in IAS 32 Financial Instruments: Presentation. The amendment is effective for annual periods beginning on or after 1 July 2014.

IAS 40 "Investment Property"

The amendment clarifies the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property; in determining whether a specific transaction meets the definition of both a business combination as defined in IFRS 3 Business Combinations and investment property as defined in IAS 40 Investment Property, separate application of both standards independently of each other is required. The amendment is effective for annual periods beginning on or after 1 July 2014.

(g) IFRS 14 "Regulatory Deferral Accounts"

IFRS 14 permits first-time adopters to continue to recognize amounts related to rate regulation in accordance with their previous GAAP requirements when they adopt IFRS. However, to enhance comparability with entities that already apply IFRS and do not recognize such amounts, the Standard requires that the effect of rate regulation must be presented separately from other items. IFRS 14 is effective for annual periods beginning on or after 1 January 2016.

(h) IFRS 11 "Joint Arrangements" (Accounting for Acquisitions of Interests in Joint Operations)

The amendments provide new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. The amendments require the entity to apply all of the principles on business combinations accounting in IFRS 3 "Business" Combinations", and other IFRS (that do not conflict with the guidance in IFRS 11), to the extent of its share in a joint operation acquired. The amendment also requires certain disclosure. The amendment is effective for annual periods beginning on or after 1 January 2016.

(i) IAS 16 Property, Plant and Equipment and IAS 38 "Intangible Assets" — Clarification of Acceptable Methods of Depreciation and Amortization

The amendment clarified that the use of revenue-based methods to calculate depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset, such as selling activities and change in sales volumes or prices. The amendment also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. This presumption, however, can be rebutted in certain limited circumstances. The amendment is effective for annual periods beginning on or after 1 January 2016.

(i) IFRS 15 "Revenue from Contracts with Customers"

The core principle of the new Standard is for companies to recognize revenue to depict the transfer of promised goods or services to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps:

• Step 1: Identify the contract(s) with a customer
• Step 2: Identify the performance obligations in the contract
• Step 3: Determine the transaction price
• Step 4: Allocate the transaction price to the performance obligations in the contract
• Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

The new Standard includes a cohesive set of disclosure requirements that would result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts with customers. The Standard is effective for annual periods beginning on or after 1 January 2018.

(k) IAS 16 "Property, Plant and Equipment and IAS 41 "Agriculture" - Bearer Plants

The IASB decided that bearer plants should be accounted for in the same way as property, plant and equipment in IAS 16 Property, Plant and Equipment, because their operation is similar to that of manufacturing. Consequently, the amendments include them within the scope of IAS 16, and the produce growing on bearer plants will remain within the scope of IAS 41. The amendment is effective for annual period beginning on or after 1 January 2016.

(1) IFRS 9 "Financial Instruments"

The IASB has issued the final version of IFRS 9, which combines classification and measurement, the expected credit loss impairment model and hedge accounting. The standard will replace IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9 Financial Instruments (which include standards issued on classification and measurement of financial assets and liabilities and hedge accounting).

Classification and measurement: Financial assets are measured at amortized cost, fair value through profit or loss, or fair value through other comprehensive income, based on both the entity's business model for managing the financial assets and the financial asset's contractual cash flow characteristics. Financial liabilities are measured at amortized cost or fair value through profit or loss. Furthermore there is requirement that 'own credit risk' adjustments are not recognized in profit or loss.

Impairment: Expected credit loss model is used to evaluate impairment. Entities are required to recognize either 12-month or lifetime expected credit losses, depending on whether there has been a significant increase in credit risk since initial recognition.

Hedge accounting: Hedge accounting is more closely aligned with risk management activities and hedge effectiveness is measured based on the hedge ratio.

The new standard is effective for annual periods beginning on or after 1 January 2018.

(m) IAS 27 "Separate Financial Statements" — Equity Method in Separate Financial Statements

The IASB restored the option to use the equity method under IAS 28 for an entity to account for investments in subsidiaries and associates in the entity's separate financial statements. In 2003, the equity method was removed from the options. This amendment removes the only difference between the separate financial statements prepared in accordance with IFRS and those prepared in accordance with the local regulations in certain jurisdictions.

The amendment is effective for annual periods beginning on or after 1 January 2016.

(n) IFRS 10 "Consolidated Financial Statements" and IAS 28 The vestments in Associates and Joint Ventures" — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors' interests in the associate or joint venture.

The amendment is effective for annual periods beginning on or after 1 January 2016.

(o) Improvements to International Financial Reporting Standards (2012-2014 cycle):

IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations"

The amendment clarifies that a change of disposal method of assets (or disposal groups) from disposal through sale or through distribution to owners (or vice versa) should not be considered to be a new plan of disposal, rather it is a continuation of the original plan. The amendment also requires identical accounting treatment for an asset (or disposal group) that ceases to be classified as held for sale or as held for distribution to owners. The amendment is effective for annual periods beginning on or after 1 January 2016.

IFRS 7 "Financial Instruments: Disclosures"

The amendment clarifies that a servicing contract that includes a fee can constitute continuing involvement in a financial asset and therefore the disclosures for any continuing involvement in a transferred asset that is derecognized in its entirety under IFRS 7 Financial Instruments: Disclosures is required. The amendment also clarifies that whether the IFRS 7 disclosure related to the offsetting of financial assets and financial liabilities are required to be included in the condensed interim financial report would depend on the requirements under IAS 34 Interim Financial Reporting. The amendment is effective for annual periods beginning on or after 1 January 2016.

IAS 19 "Employee Benefits"

The amendment clarifies the requirement under IAS 19.83, that market depth of high quality corporate bonds is assessed based on the currency in which the obligation is denominated, rather than the country where the obligation is located. The amendment is effective for annual periods beginning on or after 1 January 2016.

IAS 34 "Interim Financial Reporting"

The amendment clarifies what is meant by "elsewhere in the interim financial report" under IAS 34; the amendment states that the required interim disclosures must either be in the interim financial statements or incorporated by cross-reference between the interim financial statements and wherever they are included within the greater interim financial report. The other information within the interim financial report must be available to users on the same terms as the interim financial statements and at the same time. The amendment is effective for annual periods beginning on or after 1 January 2016.

(p) IAS 1 "Presentation of Financial Statements" (Amendment):

The amendments contain (1) clarifying that an entity must not reduce the understandability of its financial statements by obscuring material information with immaterial information or by aggregating material items that have different natures or The amendments reemphasize that, when a standard requires a specific functions. disclosure, the information must be assessed to determine whether it is material and, consequently, whether presentation or disclosure of that information is warranted, (2) clarifying that specific line items in the statement(s) of profit or loss and OCI and the statement of financial position may be disaggregated, and how an entity shall present additional subtotals, (3) clarifying that entities have flexibility as to the order in which they present the notes to financial statements, but also emphasize that understandability and comparability should be considered by an entity when deciding on that order, (4) removing the examples of the income taxes accounting policy and the foreign currency accounting policy, as these were considered unhelpful in illustrating what significant accounting policies could be, and (5) clarifying that the share of OCI of associates and joint ventures accounted for using the equity method must be presented in aggregate as a single line item, classified between those items that will or will not be subsequently reclassified to profit or loss. The amendment is effective for annual periods beginning on or after January 1, 2016.

(q) IFRS 10 "Consolidated Financial Statements", IFRS 12 "Disclosure of Interests in Other Entities", and IAS 28"Investments in Associates and Joint Ventures" — Investment Entities: Applying the Consolidation Exception

The amendments contain (1) clarifying that the exemption from presenting consolidated financial statements applies to a parent entity that is a subsidiary of an investment entity when the investment entity measures all of its subsidiary at fair value, (2) clarifying that only a subsidiary that is not an investment entity itself and provides support services to the investment entity is consolidated when all other subsidiaries of an investment entity are measured at fair value, and (3) allowing the investor, when applying the equity method, to retain the fair value measurement applied by the investment entity associate or joint venture to its interests in subsidiaries. The amendment is effective for annual periods beginning on or after 1 January 2016.

The abovementioned standards and interpretations issued by IASB have not yet recognized by FSC at the date of issuance of the Group's financial statements, the local effective dates are to be determined by FSC. As the Group is still currently determining the potential impact of the standards and interpretations listed under $(10)$ and $(12)$ , it is not practicable to estimate their impact on the Group at this point in time. All other standards and interpretations have no material impact on the Group.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 4.

(1)Statement of compliance

The consolidated financial statements for the year ended December 31, 2015 and 2014 have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, "Interim Financial Reporting," by the FSC of the Republic of China.

(2) Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are presented in thousands of New Taiwan Dollars ("NT\$") unless otherwise specified.

(3) Basis of consolidation

Preparation principle of consolidated financial statements

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

• (a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
• (b) exposure, or rights, to variable returns from its involvement with the investee, and
• (c) the ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• (a) the contractual arrangement with the other vote holders of the investee
• (b) rights arising from other contractual arrangements
• (c) the Group's voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the NCIs even if this results in a deficit balance of the NCIs.

If the Group loses control of a subsidiary, it:

• (a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;

• (b) derecognizes the carrying amount of any non-controlling interest;

• (c) recognizes the fair value of the consideration received;

• (d) recognizes the fair value of any investment retained;
• (e) recognizes any surplus or deficit in profit or loss; and
• (f) reclassifies the parent's share of components previously recognized in other comprehensive income to profit or loss.

The consolidated entities are listed as follows:

			Percentage of Ownership (%)
Investor		Main businesses	As of December 31, 2015	2014
The Company	Subsidiary KINSUS CORP. (USA)	Designing substrates, formulating marketing strategy analysis, developing new customers, researching and development new product technology	100.00%	100.00%
The Company	KINSUS HOLDING (SAMOA) LIMITED	Investing activities	100.00%	100.00%
The Company	KINSUS INVESTMENT CO., LTD.	Investing activities	100.00%	100.00%
KINSUS HOLDING (SAMOA) LIMITED	KINSUS HOLDING (CAYMAN) LIMITED	Investing activities	100.00%	100.00%
KINSUS HOLDING PIOTEK (SAMOA) LIMITED	HOLDINGS LTD. (CAYMAN)	Investing activities	51.00%	51.00%
KINSUS INVESTMENT CO., LTD.	PEGAVISION CORPORATION	Manufacture of medical equipment	36.81% (Note)	36.81% (Note)

Kinsus Interconnect Technology Corp.	Notes to Consolidated Financial Statements (Continued)	English Translation of Consolidated Financial Statements and Footnotes Originally Issued in Chinese
KINSUS HOLDING (CAYMAN) LIMITED	KINSUS INTERCONNECT TECHNOLOGY SUZHOU CORP.	Manufacturing and selling printed circuit board (PCB) (not high-density fine-line)	100.00%	100.00%
KINSUS HOLDING (CAYMAN) LIMITED	XIANG-SHOU (SUZHOU) TRADING LIMITED	Trading of PCB related products and materials (not high-density fine-line)	100.00%	100.00%
PIOTEK HOLDINGS LTD. (CAYMAN)	PIOTEK HOLDING LIMITED	Investing activities	100.00%	100.00%
PIOTEK HOLDING LIMITED	PIOTEK COMPUTER (SUZHOU) CO., LTD.	Researching, developing, producing and selling electronic components, PCBs and related products and providing after-sale services	100.00%	100.00%
PIOTEK HOLDING LIMITED	PIOTEK (H.K.) TRADING LIMITED	Trading activities	100.00%	100.00%
PEGAVISION CORPORATION	PEGAVISION HOLDINGS CORPORATION	Investing activities	100.00%	100.00%
PEGAVISION	PEGAVISION	Selling medical	100.00%	-%
CORPORATION	JAPAN INC.	equipment	(Notel)	(Notel)
PEGAVISION HOLDINGS	PEGAVISION CONTACT	Selling medical equipment	100.00%	100.00%

CORPORATION

LENSES

(SHANGHAI) CORPORATION

• Note: The Group owned 36.81% of ownership of Pegavision Corporation as of December 31, 2015 and 2014. The management decide to include Pegavision Corporation as a consolidated entity because the Group, in substance, possess the control over this entity.
• Note1: Pegavision Corporation has increased its investment in PEGAVISION JAPAN INC. in amount of JP\$9,900 thousand on April 28, 2015.
• (4) Foreign currency transactions

The Group's consolidated financial statements are presented in New Taiwan Dollar, which is the parent company's functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. At the reporting date, monetary items denominated in foreign currencies are retranslated at the prevailing functional currency closing rate of exchange; non-monetary items measured at fair value in a foreign currency are retranslated using the exchange rates at the date when the fair value is determined; and non-monetary items measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising from the settlement or translation of monetary items are taken to profit or loss in the period in which they arise, except for the following:

• A. Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
• B. Foreign currency items within the scope of IAS 39 "Financial Instruments: Recognition and Measurement" are accounted for based on the accounting policy for financial instruments.
• C. Exchange differences arising on a monetary item that forms part of a reporting entity's net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

(5) Foreign currency transactions and translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated into New Taiwan dollar at the closing rate of exchange prevailing at the balance sheet date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income under exchange differences on translation of foreign operations. On disposal of the foreign operation, cumulative amount of the exchange differences recognized in other comprehensive income under separate component of equity is reclassified from equity to profit or loss when recognizing the disposal gain/loss.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the NCIs in that foreign operation, instead of recognized in profit or loss. In partial disposal of an associate or jointly controlled entity that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

(6) Current and non-current distinction for assets and liabilities

An asset is classified as current when:

• (a) The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
• (b) The Group holds the asset primarily for the purpose of trading
• (c) The Group expects to realize the asset within twelve months after the reporting period
• (d) The asset is cash or cash equivalent, unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

• (a) The Group expects to settle the liability in its normal operating cycle

• (b) The Group holds the liability primarily for the purpose of trading

• (c) The liability is due to be settled within twelve months after the reporting period

• (d) The Group does not have an unconditional right to defer settlement of the liability 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.

All other liabilities are classified as non-current.

(7) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (including fixed-term deposits that have maturities equal to or less than three months from the date of acquisition).

(8) Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IAS 39 "Financial Instruments: Recognition and Measurement" are recognized initially at fair value plus or minus, in the case of financial assets and financial liabilities not at fair value through profit or loss, directly attributable transaction costs.

A. Financial assets

The Group accounts for regular way purchase or sales of financial assets on the settlement date basis.

Financial assets of the Group are classified as financial assets at fair value through profit or loss, available-for-sale financial assets, and loans and receivables. The Group determines the classification of its financial assets at initial recognition based on their natures and purposes.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss.

A financial asset is classified as held for trading if:

• (a) it is acquired principally for the purpose of selling in short term;
• (b) on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or
• (c) it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial asset at fair value through profit or loss; or a financial asset may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

• (a) it eliminates or significantly reduces measurement or recognition inconsistency; or
• (b) a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

Financial assets at fair value through profit or loss are measured at fair value with changes in fair value recognized in profit or loss. Dividends or interests on financial assets at fair value through profit or loss are recognized in profit or loss (including those received during the period of initial investment).

If financial assets do not have quoted prices in an active market and their far value cannot be reliably measured, then they are classified as financial assets measured at cost on balance sheet and carried at cost net of accumulated impairment losses, if any, as at the reporting date.

Available-for-sale financial assets

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

Foreign exchange gains and losses and interest calculated using the effective interest method relating to monetary available-for-sale financial assets, or dividends on an available-for-sale equity instrument, are recognized in profit or loss. Subsequent measurement of available-for-sale financial assets at fair value is recognized in equity until the investment is derecognized, at which time the cumulative gain or loss is reclassified to profit or loss.

If equity instrument investments do not have quoted prices in an active market and their far value cannot be reliably measured, then they are classified as financial assets measured at cost on balance sheet and carried at cost net of accumulated impairment losses, if any, as at the reporting date.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than those that the Group classifies as at fair value through profit or loss, upon initial recognition designates as available-for-sale, or those for which the holder may not recover substantially all of its initial investment due to credit worsening.

Loans and receivables are separately presented on the balance sheet as receivables or bond investments with no active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or transaction costs. The effective interest method amortization is recognized in profit or loss.

Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset other than the financial assets at fair value through profit or loss is impaired. A financial asset is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more loss events that has occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the financial asset. The carrying amount of the financial asset is reduced through the use of an allowance account and the amount of the loss is recognized in profit or loss.

A significant or prolonged decline in the fair value of an available-for-sale equity instrument below its cost is considered a loss event.

Other loss events include:

• (a) significant financial difficulty of the issuer or obligor; or

• (b) breach of contract, such as a default or delinguency in interest or principal payments; or

• (c) it becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or

• (d) the disappearance of an active market for that financial asset due to financial difficulties of the issuer.

For held-to-maturity financial assets and loans and receivables measured at amortized cost, the Group first assesses individually whether objective evidence of impairment exists individually for financial asset that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exits for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows. The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. Interest income is accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

Receivables together with the associated allowance are written off when there is no realistic prospect of future recovery. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to profit or loss.

In the case of equity investments classified as available-for-sale, where there is evidence of impairment, the amount recorded for impairment is the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss. The impairment amount is reclassified from equity to profit or loss. Impairment losses on equity investments are not reversed through profit or loss. Increases in their fair value after impairment are recognized directly in equity.

In the case of debt instruments classified as available-for-sale, the amount recorded for impairment is the cumulative loss measured as the difference between the amortized cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss. Future interest income is based on the reduced carrying amount of assets and calculated using the effective interest rate which is the discount rate for measuring impairment loss. Interest income is recognized in profit or loss. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed through profit or loss.

Derecognition of financial assets

A financial asset is derecognized when:

• (a) The rights to receive cash flows from the asset have expired
• (b) The Group has transferred the asset and substantially all the risks and rewards of the asset have been transferred
• (c) The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

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

B. Financial liabilities and equity instruments

Classification between liabilities or equity

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract of the Group that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities within the scope of IAS 39 "Financial Instruments: Recognition and Measurement" are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

A financial liability is classified as held for trading if:

• (a) it is acquired principally for the purpose of selling it in short term;
• (b) on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or
• (c) it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated upon initial recognition as at fair value through profit or loss when doing so results in more relevant information, because either:

• (a) it eliminates or significantly reduces measurement or recognition inconsistency; or
• (b) a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

Gains or losses from subsequent measurement on liabilities at fair value through profit or loss, including interests, are recognized in profit or loss.

If the financial liabilities at fair value through profit or loss do not have quoted prices in an active market and their far value cannot be reliably measured, then they are classified as financial liabilities measured at cost on balance sheet and carried at cost as at the reporting date.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include payables and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Relevant gains or losses and amortization amounts are recognized in profit or loss when the liabilities are derecognized and amortized through the effective interest rate method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(9) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• (a) In the principal market for the asset or liability, or
• (b)In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

$(10)$ Inventories

Inventories are valued at lower of cost or net realizable value item by item.

Costs incurred in bringing each inventory to its present location and conditions are accounted for as follows:

Raw materials - At actual purchase cost, using weighted average method Finished goods and work in progress - Including cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity, using weighted average method.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

$(11)$ Property, plant and equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 "Property, plant and equipment". When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings	10 to 25 years
Machinery	5 to 10 years
Transportation	2 to 6 years
Office equipment	3 to 6 years
Other equipment	3 to 25 years

An item of property, plant and equipment or any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The property, plant and equipment's residual values, useful lives and methods of depreciation are reviewed at each financial year. If the expected values differ from the estimates, the differences are recorded as a change in accounting estimate.

$(12)$ Leasing

Group as a lessee

Finance leases which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the commencement of the lease at the fair value of the leased item or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognized as an expense on a straight-line basis over the lease term.

Group as a lessor

Leases in which the Group does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Rental incomes under operating lease are recognized on a straight-line basis over the lease term. Contingent rents are recognized as revenue in the period in which they are earned.

(13) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, not meeting the recognition criteria, are not capitalized and expenditure is

reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit (CGU) level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are recognized in profit or loss.

The Group's accounting policies for intangible assets are as follows:

	Cost of Computer Software
Useful economic life	1 to 5 years
Amortization method	Straight-line method during the contract term
Internally generated or acquired externally Acquired externally

(14) Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 "Impairment of Assets" may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group would conduct impairment tests at individual or CGU level. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired. An asset's recoverable amount is the higher of an asset's net fair value or its value in use.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the recoverable amount of the asset or CGU. A previously recognized impairment loss is reversed only if there has been

an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed the carrying amount that would have been determined, net of depreciation or amortization, had no impairment loss been recognized for the asset in prior years.

Impairment loss or reversals of continuing operations are recognized in profit or loss.

$(15)$ Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Provisions for sales returns and allowances

The Group estimates provisions for sales returns and allowances based on past experience and other known factors.

(16) Treasury Stock

The Company's own equity instruments repurchased (treasury shares) are recognized at repurchase cost and deducted from equity. Any difference between the carrying amountand the consideration is recognized in equity.

(17) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. Conditions and methods for the recognition of various types of revenue are listed below:

Sale of goods

Revenue from the sale of goods is recognized when all the following conditions have been satisfied: significant risks and rewards of ownership of the goods have passed to the buyer;

neither continuing managerial involvement nor effective control over the goods sold have been retained; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the entity; and the costs incurred in respect of the transaction can be measured reliably.

Customer Loyalty Program

When the fair value of award credits is measured based on the value of the awards for which they could be redeemed, the amount of discounts or incentives otherwise granted to customers not participating in the award credit scheme is to be taken into account.

Interest income

Interest incomes from financial assets at amortized costs (including loans and receivables and held-to-maturity financial assets) and available-for-sale financial assets are estimated using the effective interest method and recognized in profit or loss.

Dividend income

Dividend incomes are recognized only when the Group has the right to receive the dividends.

(18) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(19) Post-employment benefits

All regular employees of the Company and its domestic subsidiaries are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee's name in the specific bank account and hence, not associated with the Company and its domestic subsidiaries. Therefore, fund assets are not included in the Group's consolidated financial statements. Pension benefits for employees of the overseas subsidiaries and the branches are provided in accordance with the respective local regulations.

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due. Overseas subsidiaries and branches make contribution to the plan based on the requirements of local regulations and the contribution is expensed as incurred.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur. Past service costs are recognized in profit or loss on the earlier of:

• (a) the date of the plan amendment or curtailment, and
• (b) the date that the Group recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted and disclosed for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events

$(20)$ Income tax

Income tax expense (benefit) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The 10% income tax for undistributed earnings of the Company and its subsidiaries is

recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders' meeting.

Deferred income tax

Deferred income tax is a temporary difference between the tax bases of assets and liabilities and their carrying amounts in balance sheet at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

• (a) Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit (loss);
• (b) In respect of taxable temporary differences associated with investments in subsidiaries, and associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, any unused tax losses and carry forward of unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

• (a) Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
• (b) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will be reversed in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

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

loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed and recognized at each reporting date.

Deferred tax assets and liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Interim period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim period.

5. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Group's consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that would have a significant risk for a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year are discussed below.

(1) Fair value of financial instruments

Where the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including income approach (for example, the discounted cash flows model) or the market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

(2) Post-employment benefits

The cost of post-employment benefit pension plan and the present value of the defined benefit obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions, including the change in the discount rate and expected salary level. The assumptions used for measuring pension cost and defined benefit obligation are disclosed in Note 6.

(3) Revenue recognition - customer loyalty programmes

The Group uses statistical techniques to estimate the fair value of award credits under customer loyalty programmes. Parameters used in the estimation include: assumptions on the expected exchange rate, commodity portfolio available for future exchange and customer preference. Before the points issued under the programme expire, the estimates have material uncertainty. Please refer to Note 6 for more details.

$(4)$ Revenue recognition – sale returns and allowances

The Group estimates sales returns and allowances based on past experience and other known factors as reductions of sales revenue upon sales. Please refer to Note 6 for more details.

$(5)$ Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax benefit and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provision is based on various factors, such as past experience in tax audit and different interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective company's domicile.

Deferred tax assets are recognized for all carryforward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies. As of December 31, 2015, the un-recognized portion of the Company's defferred tax assets was disclosed in Note 6.

6. CONTENTS OF SIGNIFICANT ACCOUNTS

(1)Cash and cash equivalents

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Cash and petty cash	6,234	4,574
Checking and saving	3,379,804	2,661,078
Time deposit	9,360,269	8,875,963
Total	12,746,307	11,541,615

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

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Held for trading:
Money market fund	3,453,872	5,033,763
Valuation adjustment	82,498	101,671
Total	3,536,370	5,135,434

No financial asset at fair value through profit or loss was pledged as collateral.

(3) Available-for-sale financial assets

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Stocks		15,675
Valuation adjustment	$\blacksquare$	24,694
Total		40,369

No available-for-sale financial asset was pledged as collateral.

(4) Bond investments with no active market

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Time deposits	428,112	463,827
Current	428,112	463,827
Non-current	-

There was no bond investments with no active market pledged as collateral.

(5) Financial assets carried at cost

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Stocks	50,000	50,000
Non-current	50,000	50,000

• A. Because the interval of reasonable estimates of the fair value of unlisted stocks held by the Group is significantly variable and the probabilities of each estimate cannot be reasonably evaluated, these stocks cannot be measured in fair value. Thus they are carried at cost.
• B. No financial assets carried at cost were pledged as collateral.

(6) Notes receivable

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Notes receivable $-$ from operations	1,835	6,252
Less: allowance for doubtful accounts
Net	1,835	6,252

No notes receivable was pledged by the Group as collateral.

(7) Accounts receivable and accounts receivable - related parties, net

A. Accounts receivable, net

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Accounts receivable, gross	3,642,703	3,108,413
Less: allowance for doubtful accounts	(47, 799)	(67, 946)
Less: allowance for return & discount	(4,711)	(124)
Net of allowances	3,590,193	3,040,343
Accounts receivable - related parties, gross	248,909	436,406
Less: allowance for doubtful accounts
Net of allowances	248,909	436,406
Total accounts receivable, net	3,839,102	3,476,749

B. The Group evaluated sales return and discount based on experiences and other known factors and recorded it as a reduction against sales at the time of recognizing revenue.

C. The Company entered into factoring agreements with banks. Accounts receivables from selected customers are transferred to banks without recourse. Details of the agreed credit limits and accounts receivables transferred were as follows:

	Financial Institution	Accounts receivable de-recognized (NT\$'000)	Advance received (NT\$'000)	Collateral	Credit Limit
12/31/2015	Mega International	251,600	$\tilde{\phantom{a}}$	None	Note
	Commercial Bank - LanYa Branch
12/31/2014	Mega International	509,292	153,968	None	Note
	Commercial Bank -
	LanYa Branch

Note: The credit limits were US\$30,000 thousand as of December 31, 2015 and 2014.

D. The collection term of accounts receivables are generally on 60 to 120 day after monthly closing. The movement schedule of the impairment provision for accounts receivable, including related parties, was presented as below. (Please also refer to Note 12 for credit risk disclosure)

	Impaired Individually (NT\$'000)	Impaired Collectively (NT\$'000)	Total (NT\$'000)
As of January 1, $2015$		67,946	67,946
Provision (reversal)		(19,603)	(19,603)
Effect of exchange rate changes		(544)	(544)
As of December 31, 2015		47,799	47.799
As of January 1, 2014		61,910	61,910
Provision (reversal)		5,876	5,876
Effect of exchange rate changes		160	160
As of December 31, 2014		67,946	67,946

Aging analysis for the net accounts receivable, including related parties, were as follows.

				Accounts receivable $-$ past due, but not impaired
	Neither past due	Less than			Longer than
	nor impaired	61 days	61 to 90 days	91 to $120 \text{ days}$	120 days	Total
	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)
12/31/2015	3,639,724	199,378	$\blacksquare$	۰		3,839,102
12/31/2014	3,143,727	330,265	2,358	۰	399	3,476,749

(8) Inventory

A. Details of inventory:

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Raw material	638,897	675,961
Supplies	41,027	33,609
Work in process	815,704	691,073
Finished goods	759,271	725,697
Merchandises	30,537	36,629
Total	2,285,436	2,162,969

B. For the year ended December 31, 2015 and 2014, the Group recognized NT\$17,099,709 thousand and NT\$17,996,954 thousand under the caption of costs of sale, respectively. The following items were also included in cost.

	For the year ended December 31,
Item	2015	2014
	(NT\$'000)	(NT\$'000)
Loss from (Gains on recovery of) inventory market decline	(104, 357)	234,517
Loss (gain) from physical	(2,118)	38,239
Loss in inventory write-off obselencense	1,319,081	988,930
Total	1,212,606	1,261,686

The Group recognized gains on recovery of inventory market decline because some of the inventories previously provided with market loss or obsolescence were disposed.

C. The inventories were not pledged.

(9) Property, plant and equipment

						Construction in progress
						and equipment awaiting
			Office	Transportat	Other	inspection (including
Land	Buildings	Machinery	Equipment	ion	Equipment	prepaid equipment)	Total
(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)
1,366,426	5,614,222	17,202,285	118,946	14,700	3,958,417	3,107,645	31,382,641
	10,654	58.908	11,408	1,355	86,105	4,861,010	5,029,440
$\blacksquare$	(71, 944)	(2, 442, 452)	(17,968)		(342, 406)		(2,874,770)
	(70, 843)	(154, 054)	(1, 428)	(246)	(33,606)	(2,755)	(262, 932)
191,374	74,654	2,116,389	20,618		324,398	(2,727,433)
1,557,800	5,556,743	16,781,076	131,576	15,809	3,992,908	5,238,467	33,274,379
1,237,179	5,462,460	15,077,543	90,558	12,370	3,766,802	1,402,631	27,049,543
8,939	20,165	54,596	7,851	830	68,416	3,756,295	3,917,092
	(52, 159)	(78, 757)	(492)		(89, 826)		(221, 234)
	174,048	364.245	3.780	595	86.648	7,924	637,240
120,308	9,708	1,784,658	17,249	905	126,377	(2,059,205)
1,366,426	5,614,222	17,202,285	118,946	14,700	3,958,417	3,107,645	31,382,641
Depreciation and impairment:
	1,521,919	10,235,466	73,772	8,679	2,364,370		14,204,206
	266,238	2,390,247	24,444	3,055	512,919		3,196,903
		13,425	391		395		14,211
	(26, 551)	(2,402,650)	(16, 642)		(318, 440)		(2,764,283)

	(18,060)	(96,305)	(1, 126)	(182)	(19, 404)		(135,077)
$\blacksquare$		8,737			(8, 737)
	1,743,546	10,148,920	80,839	11,552	2,531,103		14,515,960
	1,263,101	7,839,150	52,142	5,727	1,922,338		11,082,458
	266,758	2,248,030	19,130	2,563	481,522		3,018,003
	(50, 929)	(72, 720)	(492)		(88, 256)		(212, 397)
	42,989	220,926	2,992	389	48,846		316,142
		80			(80)
	1,521,919	10.235,466	73,772	8,679	2,364,370		14.204,206
1,557,800	3,813,197	6,632,156	50,737	4,257	1,461,805	5,238,467	18,758,419
1,366,426	4,092,303	6,966,819	45,174	6,021	1,594,047	3,107,645	17,178,435

• A. On the December 31, 2015, the Group evaluated the recoverable amount of certain idle property, plant and equipment to be zero and, therefore, recognized an impairment loss of NT\$14,211 thousand in the statement of comprehensive income.
• B. "Significant components" of buildings primarily comprised the main buildings and the facilities, which are depreciated based on their respective useful economic life of 20 to 25 years and 3 to 20 years.
• C. Details of property, plant & equipment and prepayment for machinery is as follows:

		As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Property, plant and equipment	16,150,904	15,429,778
Prepaid equipment	2,607,515	1,748,657
Total	18,758,419	17,178,435

D. Please refer to Note 8 for details on property, plant and equipment pledged as collaterals.

E. The Company purchased 40 parcels of land with a total area of 36,287.15 square meters. Lands are located at the addresses of No. 1113, 1114, 1438 to 1443, 1479, 1486 to 1487 at ShiLeiZi Sub-section, ShiLeiZi Section, No. 1044, 1047 to 1049 at QingHua Section, and No. 0001, 697 to 700 and 712 to 726 at RongHua Section, XinFeng Village. Due to regulatory restrictions, land cannot be registered under the Company's name while it has been temporarily registered under the general manager's name and, to secure the Company's right to the land, mortgage registration has been set aside with the Company being the obligee.

(10) Intangible assets

	Computer software
	(NT\$'000)
Cost:
As of January 1, 2015	40,101
Additions – acquired separately	44,806
Derecognized upon retirement	(29,007)
Effect of exchange rate changes	(278)
As of December 31, 2015	55,622
As of January 1, 2014	43,568
Additions - acquired separately	32,271
Derecognized upon retirement	(36, 644)
Effect of exchange rate changes	906
As of December 31, 2014	40,101
Amortization and Impairment:
As of January 1, 2015	20,119
Amortization	34,432
Derecognized upon retirement	(29,007)
Effect of exchange rate changes	(202)
As of December 31, 2015	25,342
As of January 1, 2014	29,409
Amortization	26,567
Derecognized upon retirement	(36, 644)
Effect of exchange rate changes	787
As of December 31, 2014	20,119
Carrying amount, net:
As of December 31, 2015	30,280
As of December 31, 2014	19,982

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Operating expense		292
Sales and marketing	1,107	543
General and administrative	31,257	23,248
Research and development	2,068	2,484
Total	34,432	26,567

Amounts of amortization recognized for intangible assets are as follows:

(11) Other non-current assets

$\hat{\phantom{a}}$
2015 2014
(NT\$'000) (NT\$'000)
Refundable deposits 45,106	44,743
286,970 273,679 Long-term prepaid rent
Total 318,785 331,713

As of December 31, 2015 and 2014, the line of unused short-term loan credit for the Group amounted to NT\$273,679 thousand and NT\$286,970 thousand, respectively.

(12) Short-term loans

			As of December 31,
	Interest interval	2015	2014
	$\%$	(NT\$'000)	(NT\$'000)
Unsecured bank loans	$0.8 - 1.5331$	3.095,030	1,806,896

As of December 31, 2015 and 2014, the line of unused short-term loan credit for the Group amounted to NT\$3,156,970 thousand and NT\$3,826,804 thousand, respectively.

(13) Other payable

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Accrued expense	2,662,966	2,589,592
Equipment payable	1,265,758	1,236,524

	English Translation of Consolidated Financial Statements and Footnotes Originally Issued in Chinese
	Kinsus Interconnect Technology Corp.
	Notes to Consolidated Financial Statements (Continued)

Accrued interest	4,038	2,636
Total	3,932,762	3,828,752

(14) Provisions

	Sales Returns and Allowances (NT\$'000)
As of January 1, 2015	302
Additions
Used
Reversal	(8)
Adjustment to present value due to discount rate
change and passage of time
As of December 31, 2015	294

		As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Current	294	302
Non-current	$\blacksquare$	۰
Total	294	302

Sales returns and allowances

The Group incurred sales returns and allowances based on past experience and other known factors as reductions against sales revenue upon sale, recording it under the caption of provisions.

(15) Other current liabilities

	۰.
.

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Other current liabilities	73,152	75,708
Unearned sales revenue	21,607	32,853
Deferred revenue - Customer	1,302	781
Loyalty Programmes
Current portion of long-term loans	572,640	1,433,589
Total	668.701	1,542,931

B. Customer loyalty programs

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Balance, beginning	781
Deferred during the period	637	781
Recognized in profit or loss	(116)
Balance, ending	1,302	781

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Current	1,302	781
Non-current
Total	1,302	781

(16) Long-term loans

Details of long-term loans were as follows:

		Loan Balance
Type of Loan	Maturity	As of	Repayment
		Dec. 31, 2015
		(NT\$'000)
		123,081	Notes 1, 2 and 11
loan	2016.12.15
Credit loan	$2016.01.17-$	1,162,006	Notes $2, 3$ and $4$
	2010.12.04
		181,953	Notes 6, 7 and 10
loan	2019.01.15
Credit loan	2016.01.24-	15,000	Notes 6 and 10
	2017.04.15
		Secured bank 2016.05.07- Secured bank 2016.07.15-

$\hat{\mathbf{r}}$

English Translation of Consolidated Financial Statements and Footnotes Originally Issued in Chinese Kinsus Interconnect Technology Corp. Notes to Consolidated Financial Statements (Continued)
Land Bank of Taiwan - ZhongLi Branch	Credit Ioan	2016.04.27	62,999	Notes 2 and 5
Taipei Fubon Commercial Bank - BeiTou Branch	Credit loan	2017.12.14	393,900	Note 12
Total			1,938,939
Less: current portion			(572, 640)
Non-current portion			1,366,299
			Loan Balance
Debtor	Type of Loan	Maturity	As of	Repayment
			Dec. 31, 2014
			(NT\$'000)
Mega International	Secured bank 2015.10.27-		186,159	Notes 1, 2 and 8
Commercial Bank - LanYa Branch	loan	2016.12.15
Mega International	Credit loan	2015.10.27-	754,324	Notes $1, 3$ and $10$
Commercial Bank -		2018.08.12
LanYa Branch
The Shanghai	Secured bank 2015.07.15-		224,040	Notes 2, 6, 7 and 10
Commercial & Savings Bank - ZhongLi Branch	loan	2019.01.15
The Shanghai	Credit loan	2014.12.24-	109,125	Notes 6 and 10
Commercial & Savings Bank - ZhongLi Branch		2017.04.15
Land Bank of Taiwan - ZhongLi Branch	Credit loan	2015.12.23- 2016.11.27	415,913	Notes 2, 5 and 9
Taipei Fubon Commercial Bank - BeiTou Branch	Credit loan	2017.12.15	474,750	Note 12
Total			2,164,311
Less: current portion			(1,433,589)
Non-current portion			730,722

Note 1: A term is defined as every 3 months starting from the initial draw-down date. Grace period is 2 years (8 terms). The rest is repayable in installments of equal amount for 20 terms.

Note 2: Interest shall be paid for the first 12 months from the initial draw-down date. Starting from the 13th month, interest shall be paid monthly with principal repaid every 3 months.

Note 3: A term is defined as every 3 months starting from the initial draw-down date. The loan is repayable in

installments of equal amount for 20 terms.

• Note 4: A term is defined as every 3 months starting from the initial draw-down date. The loan is repayable in installments of equal amount for 12 terms.
• Note 5: A term is defined as every 1 months starting from the initial draw-down date. The principal and interest are repayable in installments of equal amount.
• Note 6: A term is defined as every 3 months starting from the initial draw-down date. Grace period is 2 years (8 terms). The rest is repayable in installments of equal amount for 12 terms.
• Note 7: Starting from the $25^th$ month, a term is defined as every 3 months. The loan is repayable in installments of equal amount for 11 terms.
• Note 8: A term is defined as every 3 months starting from the initial draw-down date. Grace period is 1 years (4 terms). The rest is repayable in installments of equal amount for 8 terms.
• Note 9: Interest shall be paid monthly starting from the initial draw-down date. Principal is repaid in one lump sum when due.
• Note 10: A term is defined as every 3 months starting from the initial draw-down date. Grace period is 1 years (4 terms). The rest is repayable in installments of equal amount for 16 terms.
• Note 11: Monthly payment is calculated using the annuity method. The principal and interest are repayable in installments of equal amount for 36 terms.
• Note 12: One year after the initial draw-down date is considered term one and the following terms are defined as every 6 months since then. The principal and interest are repayable in installments of equal amount for 5 terms.
• A. A portion of property, plant and equipment were pledged to Mega International Commercial Bank and Shanghai Commercial & Savings Bank (the first-priority mortgagors) as collaterals for secured bank loans. Please refer to Note 8 for more details.
• B. As of December 31, 2015 and 2014, the interest rate intervals for long-term loans were 1.02%~2.1923% and 0.72%~1.60%, respectively.
• (17) Other non-current liabilities

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Accrued pension costs	34,148	29,668
Deposits received	51,846	80,952
Total	85,994	110,620

(18) Post-employment benefits

Defined contribution plan

The Company and its domestic subsidiaries adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company and its domestic subsidiaries will make monthly contributions of no less than 6% of the employees' monthly wages to the employees' individual pension accounts. The Company and its domestic subsidiaries have made monthly contributions of 6% of each individual employee's salaries or wages to employees' pension accounts.

Subsidiaries located in the People's Republic of China will contribute social welfare benefits based on a certain percentage of employees' salaries or wages to the employees' individual pension accounts.

Pension benefits for employees of overseas subsidiaries and branches are provided in accordance with the local regulations.

Expenses under the defined contribution plan for the years ended December 31, 2015 and 2014 were NT\$112,096 thousand and NT\$103,867 thousand, respectively.

Defined benefits plan

The Company and its domestic subsidiaries adopt a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company and its domestic subsidiaries and its domestic subsidiaries contribute an amount equivalent to 2% of the employees' total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee.

The fund is operated in a potofolio basis by Governance Committee on Labor Retirement Fund in accordance with the Rule for Custody and Operating the Labor Retirement Fund. The investment of the Fund may be executed either by the Committee itself or by outsourced other profession institutions with its investment stategy, including both active and passive management, targeting in a medium or longer term. In considering the risks of market, credit and liquidity, the Committee establishes the ceiling of fund investment and control plan, in one hand, to reduce investment risk to an affordable extent and, in the other hand, to achieve the targeted return flexibly. As of December 31, 2015, the Company plans to contribute

NT\$5,061 thousand to the funds under its defined benefit scheme during the following fiscal year.

As of December 31, 2015 and 2014, the maturities of the Company's defined benefit plan were expected in 2036 and 2037 and the detail information is listed as below.

	As of December 31,
	2015 (NT\$'000)	2014 (NT\$'000)
Less than one year	14,162	8,440
More than one year but less than five years	3,038	8,142
More than five years	22,213	16,321
Total	39,413	32,903

Pension costs recognized in profit or loss were as follows:

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Current period service costs	152	232
Net interest of defined benefit liability (asset)	668	987
Previous period service costs
Settlement		$\blacksquare$
Total	820	1,219

Reconciliation of liability (asset) of the defined benefit plan is as follows:

	As of
	Dec. 31, 2015 Dec. 31, 2014		Jan. 1, 2014
	(NT\$'000)	(NT\$'000)	(NT\$'000)
Defined benefit obligation	127,707	116,697	132,275
Plan assets at fair value	(93, 559)	(87,029)	(82, 924)
Other non-current liabilities – net defined
benefit liability	34,148	29,668	49,351

	Present value of		Net defined
	defined benefit	Fair value of	benefit
	obligation	plan assets	liability (asset)
	(NT\$'000)	(NT\$'000)	(NT\$'000)
2014.01.01	132,275	(82, 924)	49,351
Current service cost	232		232
Interest expense(revenue)	2,645	(1,658)	987
Past service cost and settlement
Total	2,877	(1,658)	1,219
Re-measurment on defined benefit
liability/assets:
Actuarial gain/loss due to change in
population statistic assumptions	519		519
Actuarial gian/loss due to change in
financial assumptions	(6,277)		(6,277)
Experience adjustments	(9,704)	(248)	(9,952)
Re-measurement on defined benefit assets
Total	(15, 462)	(248)	(15, 710)
Benefits paid	(2,993)	2,993
Contributions by employer		(5,192)	(5,192)
Effect of exchange rate
2014.12.31	116,697	(87,029)	29,668
Current service cost	152		152
Interest expense(revenue)	2,626	(1,958)	668
Past service cost and settlement
Total	2,778	(1,958)	820
Re-measurment on defined benefit
liability/assets:
Actuarial gain/loss due to change in
population statistic assumptions	2,453		2,453
Actuarial gian/loss due to change in
financial assumptions	6,154		6,154
Experience adjustments	474	(360)	114
Re-measurement on defined benefit assets
Total	9,081	(360)	8,721
Benefits paid	(849)	849
Contributions by employer		(5,061)	(5,061)
Effect of exchange rate
2015.12.31	127,707	(93, 559)	34,148

Reconciliation of liability (asset) of the defined benefit liability is as follows:

The major categories as a percentage of the fair value of total plan assets are as follows:

		Pension plan (%) as of December 31,
	2015	2014
Cash	100.00%	100.00%

The actuarial assumptions used for the Group's defined benefit plan are shown below:

	As of December 31,
	2015	2014
Discount rate	2.00%	2.25%
Expected rate of salary increases	3.00%	3.00%

Sensitivity analysis:

	For the year ended December 31,
		2015	2014
		(NT\$'000)	(NT\$'000)
	Increase	Decrease in	Increase	Decrease in
	in defined	defined	in defined	defined
	benefit	benefit	benefit	benefit
	obligation	obligation	obligation	obligation
Discount rate increase by 0.5%		(12.150)		(11, 487)
Discount rate decrease by 0.5%	13,746		13,023
Expected salary level increased by 0.5%	13,534	$\qquad \qquad \blacksquare$	12,855	۰
Expected salary level decreased by 0.5%		(12,095)		(11, 461)

For the purpose of sensitivity analysis above, the Company calculated the impact on defined benefit obligation due to a reasonable and feasible change of one singal assumption (i.e. discount rate or expected salary level) with other assumptions remaining equal. Please note that the sensitivity analysis has its limitation due to the co-relation between different actuarial assumptions and the rarity that only one assumption changes at a time. The method used in the analysis is consistent for both current and prior years.

$(19)$ Equity

A. Common shares

As of December 31, 2015 and 2014, the Company's authorized capital and paid-in capital were NT\$5,500,000 thousand and NT\$4,460,000 thousand, respectively, each share at par value of NT\$10, divided into 446,000 thousand shares. Each share represents a voting right and a right to receive dividends.

Treasury stocks brought back by the Company for the purpose of transfer to employee during the period from August 18, 2015 to September 25, 2015 totaled to 550 thousand shares. Please refer to Note $6(19)$ -C to the financial statements for more details.

B. Capital surplus

	As of December 31,
	2015 (NT\$'000)	2014 (NT\$'000)
Additional paid-in capital	5,850,000	5,850,000
Differences between equity purchase price and carrying amount arising from actual acquisition or disposal of subsidiaries	50,925	50,925
All changes in interests in subsidiaries	38,894	38,894
Total	5,939,819	5,939,819

According to the Taiwan Company Act, the capital surplus shall not be used except for making good the deficit of the Company. When a company incurs no loss, it may distribute the capital surplus related to the income derived from the issuance of new shares at a premium or income from endowments received by the company up to a certain percentage of paid-in capital. The said capital surplus could be distributed in cash to its shareholders in proportion to the number of shares being held by each of them. Capital surplus related to long-term equity investments cannot be used for any purpose.

C. Treasury stock

As of December 31, 2014, no treasury stock was held by the Group while treasury stock amounted to NT\$32,885 thousand, divided into 550 thousand shares, as of December 31, 2015.

As of December 31, 2014, no treasury stock moved. The movement schedule of treasury stock on December 31, 2015 was as below (in thousand shares).

Purpose of	Beginning			Ending
repurchase	balance	Addition	Decrease	balance
To be transfered to
employees	$\bullet$	550	$\blacksquare$	550

According to the Securities and Exchange Law of the R.O.C., the total shares of treasury stock shall not exceed 10% of the Company's issued stock, and the total purchase amount shall not exceed the sum of the retained earnings, additional paid-in capital-premiums and realized additional paid-in capital. As such, the ceiling number of shares of treasury stock that the Company could hold as of December 31, 2015 were 44,600 thousand shares, with the maximum payments of NT\$23,679,718 thousand.

In compliance with Securities and Exchange Law of the R.O.C., treasury stock should not be pledged, nor should it be entitled to voting rights or receiving dividends.

D. Appropriation of earnings and dividend policies

(a) Earning distribution

The rule enacted in the Company's original Article of Incorporation before an amendment was proposed by the borad of directors on December 28, 2015 is as follows.

The Company's earnings in current year, if any, shall firstly be made to pay all taxes and dues and then to offset prior year's operation losses. 10% of the remaining amount shall be set aside as legal reserve and special reserve shall be provided pursuant to Article 41 of the Securities and Exchange Act. Any remaining earnings after the said deductions shall be appropriated as follows:

• a. 1% as remuneration to directors
• b. Bonues to employees cannot be less than 1% of the total bonus to employees and shareholders. Bonus to employees can be distributed in cash or stocks. The parties receiving the stock dividends shall include employees in affiliated companies who met certain conditions stipulated by the Board of Directors.
• c. The Board of Directors would propose an earning distribution plan based on the remaining balance combined with the undistributed earnings accumulated during previous years to be resolved at the shareholders' meeting.

The Company's borad of directors proposed to amend the Article of Incporation in a meeting held on December 28, 2015. The articles to be amended regarding employee and directors' compension as well as eraning distribution are as follows.

The Company, if making profits in current year, shall provide employee and directors' compensation in accordance with the following rules, provided that all accumulated deficits, if any, are fully offset:

1. Employee Compensation:

The ratio of employee compensation to "income before tax and the employee and directors' compensation to be provided" shall not be less than 10% and the amount of employee compensation can be paid by cash or shares. Qualified employee may include the employee from the Company's subsidiaries who meets certain qualifications set forth by the Company's Board of Directors.

1. Directors' compensation:

The ratio of directors' compensation to "income before tax and the employee and directors' compensation to be provided" shall not be more than 1%.

Based on Article 235-1 of Company Act amended on May 20, 2015, the Company shall incur a portion of current year's profit as employees' compensation after offsetting the cumulative losses, if any. The aforementioned employees' compensation distributed in the form of shares or in cash shall be approved by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors and reported at annual stockholders' meeting. Qualification requirements of employees, including the employees of the Company's subsidiaries, entitled to receive the employees' compensation may be specified in the Articles of Incorporation.

The Company plans to revise the Company's Article in responding to the amendment to the Company Act as mentioned in above paragraph at annual shareholders' meeting to be held on 2016. As to the details of estimation regarding employee's and directors' compensation, please refer to Note $6(22)$ to the financial statements.

(b)Dividend policies

The Company is in an industry with versatile environment. For long-term finance planning requirements and to meet the shareholders' demand for cash, dividend policy aims for a steady balance. Cash dividends distributed each year cannot be less than 10% of the total dividends paid.

(c)Legal reserve

According to the Company Act, legal reserve shall be set aside until such amount equal total authorized capital. Legal reserve can be used to offset deficits. If the Company does not incur any loss, the portion of legal reserve exceeding 25% of the paid-in capital may be distributed to shareholders by issuing new shares or by cash in proportion to the number of shares held by each shareholder.

(d)Special reserve

Following the adoption of Taiwan IFRS, the Company complies with Order No. Jin-Guan-Zheng-Fa 1010012865 issued by FSC on April 6, 2012. On the Company's first-time adoption of the Taiwan IFRS, for any unrealized revaluation gains and cumulative translation adjustments recorded under shareholders' equity that the Company elects to transfer to retained earnings by application of the exemption under IFRS 1, an equal amount of special capital reserve shall be set aside. After the adoption of Taiwan IFRS for the preparation of financial statements, the Company shall set aside supplemental special reserve based on the difference between the amount already set aside according to the requirements in the preceding point and other net deductions from shareholders' equity when appropriating distributable earnings. For any subsequent reversal of other net deductions from shareholders' equity, the amount reserved may be distributed as earnings.

The Company did not incur any special reserve upon the first-time adoption of Taiwan IFRS.

(e) The appropriations of earnings for the Year 2015 and 2014 were approved through the Board of Directors' meetings and shareholders' meetings held on February 1, 2016 and June 11, 2015, respectively. The details of the distributions are as follows:

	Appropriation of earnings		Dividend per share (in NTS)
	2015 (NT\$'000)	2014 (NT\$'000)	2015	2014
Legal reserve	290,395	361,733
Cash dividends - common stock	1,559,075	1,784,000	3.50	4.00
Remuneration to directors and supervisors	(Note)	32,556
Employee bonus - cash	(Note)	545,679
Total	1,849,470	2,723,968

The information about employees' bonuses and remuneration to directors and supervisors which were resolved by the Board of Directors' meeting and shareholders' meeting is available at the Market Observation Post System website.

The actual payment of 2013 earning distribution comprised the employees' bonuses of NT\$492,104 thousand and the remuneration to directors and supervisors of NT\$29,761 thousand. The difference of NT\$814 thousand between the actual payment and the accrual of NT\$492,104 thousand for employees' bonuses and NT\$28,947 thousand for remuneration to directors and supervisors for the year ended December 31, 2013 was recorded in the profit or loss for the year ended December 31, 2014.

The actual payment of 2014 earning distribution comprised the employees' bonuses of NT\$545,679 thousand and the remuneration to directors and supervisors of NT\$32,556 thousand. The difference of NT\$457 thousand between the actual payment and the accrual of NT\$545,679 thousand for employees' bonuses and NT\$32,099 thousand for remuneration to directors and supervisors for the year ended December 31, 2014 was recorded in the profit or loss for the year ended December 31, 2015.

Note: For 2015 employee and directors' compensation under the new Article to be amended, please refer to Note 6(22) for details.

E. Non-controlling interests

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Beginning balance	2,654,765	2,450,199
Net loss attributable to NCIs	(174, 426)	(127,094)
Other comprehensive income attributable to NCIs:
Exchange differences arising on translation of foreign operations	(43, 674)	115,330
Capital increase at subsidiary by issuing new shares		200,966
The difference between the consideration and the carrying value from disposal of subsidiaries' equity		15,364
Ending balance	2,436,665	2,654,765

$(20)$ Sale

	For the year ended December 31,
	2015 2014
	(NT\$'000)	(NT\$'000)
Sale of goods	23, 155, 396	24,750,695
Less: sales returns and allowances	(491, 745)	(345, 496)

Services rendered	190,589	186,656
Other operating revenue	207,071	351,979
Total	23,061,311	24,943,834

• (21) Operating lease
• A. Group as a lessee

The commercial leasing agreements that the Group entered into for buildings and plants have an average term of one to five years. There are no restrictive covenants for the Group in the contracts.

Total future minimum lease payments due to irrevocable leasing contracts were as follows:

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Less than one year	84.745	40,146
More than one year but less than five years	394,056
Total	478,801	40,146

Expenses under operating lease were as follows:

	For the year ended December 31,
	2015 2014
	(NT\$'000)	(NT\$'000)
Minimum lease payment	149,112	136,263

B. Group as a lessor

The leasing agreements that the Group entered into for plants have an average term of one year.

As of December 31, 2015 and 2014, the total future minimum lease payments from the leasees due to irrevocable leasing contracts were both NT\$0.

For the years ended December 31, 2015 and 2014, rent incomes of the Group amounted to NT\$22,716 thousand and NT\$20,407 thousand, respectively.

	(22) Summary statement of employee benefits, depreciation and amortization by function is as
follows:

Function		2015 (NT\$'000)			2014 (NT\$'000)
Nature	Cost of goods sold	Operating expense	Total	Cost of goods sold	Operating expense	Total
Employee benefit
Salaries & wages	3,182,359	921,541	4,103,900	3,294,081	808,920	4.103,001
Labor and health insurance	189,146	67,082	256,228	169,967	58,018	227,985
Pension	79,690	33,226	112,916	76,253	28,833	105,086
Other employee benefit	214,987	93,195	308,182	172,313	54,112	226,425
Depreciation	2,952,612	244,291	3,196,903	2,785,951	232,052	3,018,003
Amortization		34,432	34,432	292	26,275	26,567

The Company estimated the amounts of the employee and directors' compensation based on the profit for the year ended December 31, 2015 in accordance to the new Article to be amended. If the board subsequently modifies the estimates significantly, the Company will recognize the change as an adjustment in the profit or loss retroactively. For the year ended December 31, 2015, the amounts of employee and directors' compensation were NT\$442,444 thousand and NT\$26,026 thousand, respectively.

For the year ended December 31, 2014, the Company estimated the amounts of the employee bonuses and the remuneration to directors based on the net income for the period and the percentage stated in the Article of Incorporation, after taking into account factors such as legal reserves. The estimated employee bonuses and remuneration to directors were recognized as operating costs or operating expense for the period. If the board modified the estimates significantly in the subsequent periods, the Company will recognize the change as an adjustment to current income retroactively. The difference between the estimates and the resolution of shareholders' meeting will be recognized in profit or loss of the subsequent year. If the shareholders' meeting resolves to pay the employee bonus in the form of stocks, the number of shares distributed is determined by dividing the amount of bonuses by the closing price (after considering the effect of dividends) of shares on the day preceding the shareholders' meeting. For the year ended December 31, 2014, the amounts of the employee compensation & remuneration to directors were NT\$545,679 thousand & NT\$32,099 thousand.

(23) Non-operating incomes and expenses

A. Other incomes

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Interest income	86,116	96,170
Dividend income		1,531
Other income $-$ others	223,360	36,260
Total	309,476	133,961

B. Other gains and losses

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Gain (loss) from disposal of property, plant and	(108, 807)	(724)
equipment
Foreign exchange gains, net	(14, 925)	32,414
Financial assets at fair value through profit	24,586	26,895
Gain from disposal of investment	30,845	26,135
Impairment loss on non-financial assets	(14,211)
Other expenses	(28, 472)	(20,286)
Total	(110, 984)	64,434

C. Finance costs

		For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Interests on bank loans	56.968	56,482

(24) Components of other comprehensive income (OCI)

For the year ended December 31, 2015

		Reclassification		Income tax
	Arising during	during the		benefit	OCI,
	the period	period	Subtotal	(expense)	Net of tax
	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)
Not reclassified to profit or loss:
Actuarial gains or losses on
defined benefits plan	(8, 721)		(8, 721)		(8, 721)
To be reclassified to profit or loss
in subsequent period:
Exchange differences arising on	(116, 596)		(116, 596)	12,397	(104, 199)
translation of foreign
operations
Unrealized valuation gain (loss)	6,151	(30, 845)	(24, 694)		(24, 694)
on available-for-sale financial
assets
Total OCI	(119, 166)	(30, 845)	(150, 011)	12,397	(137, 614)

For the year ended December 31, 2014

$\bar{\bar{z}}$

		Reclassification		Income tax
	Arising during	during the		benefit	OCI,
	the period	period	Subtotal	(expense)	Net of tax
	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)
Not reclassified to profit or loss:
Actuarial gains or losses on
defined benefits plan	15,710		15,710		15,710
To be reclassified to profit or loss
in subsequent period:
Exchange differences arising on	309,597		309,597	(33,026)	276,571
translation of foreign
operations
Unrealized valuation gain (loss)	34,474	(24, 891)	9,583		9,583
on available-for-sale financial
assets
Total OCI	359,781	(24, 891)	334,890	(33,026)	301,864

$(25)$ Income tax

A. The major components of income tax expense (income) are as follows:

Income tax expense (benefit) recognized in profit or loss

	For the year ended December 31,
	2015 (NT\$'000)	2014 (NT\$'000)
Current income tax expense (benefit):
Current income tax expense	687,692	759,501
Reversal of uncertain tax position upon finalization	(210, 169)	(93, 355)
Deferred tax expense (benefit):
Deferred tax expense (benefit) relating to origination and reversal of temporary differences	(1, 801)	(5,307)
Total income tax expense	475,722	660,839

B. Income tax recognized in other comprehensive income

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Deferred tax expense (benefit):
Exchange differences arising on translation of
foreign operations	12.397	33,026

C. A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:

		For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Accounting profit (loss) before tax from
continuing operations	3,205,248	4, 151, 072

Tax payable at the enacted tax rates	501,265	645,428
10% surtax on Undistributed earnings	157,191	141,511
Tax effect of income tax-exempted	(112, 954)	(103, 339)
Tax effect of expenses not deductible for tax purposes	506	13,493
Tax effect of deferred tax assets/liabilities	139,883	57,101
Reversal of uncertain tax position upon
finalization	(210, 169)	(93,355)
Total income tax expense (income)
recognized in profit or loss	475,722	660,839

D. Deferred tax assets (liabilities) relate to the following:

For the year ended December 31, 2015

		Deferred tax	Deferred tax	Deferred tax
		income	income	income
		(expense)	(expense)	(expense)	Increase from		Ending balance
	Beginning balance	recognized in	recognized in	recognized in	business	Exchange	as of Dec. 31,
	as of Jan. 1, 2015	P/L	OCI	equity	acquisition	adjustment	2015
	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)
Temporary differences
Prepaid appreciation tax on agricultural land		9,593					9,593
Unrealized loss on inventory valuation	276	11					287
Unrealized exchange loss (gain)	(2,146)	1,790					(356)
Cumulative translation adjustment	(52, 231)		12,397				(39, 834)
Deferred tax income/ (expense)		11,394	12,397
Net deferred tax assets/(liabilities)	(54, 101)						(30, 310)
Reflected in balance sheet as
follows:
Deferred tax assets	276						9,880
Deferred tax liabilities	(54, 377)						(40, 190)

For the year ended December 31, 2014

		Deferred tax income	Deferred tax income	Deferred tax income
		(expense)	(expense)	(expense)	Increase from		Ending balance
	Beginning balance	recognized in	recognized in	recognized in	business	Exchange	as of Dec. 31,
	as of Jan. 1, 2014	P/L	OCI	equity	acquisition	adjustment	2014
	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)
Temporary differences
Unrealized loss on inventory valuation	20	256					276
Unrealized exchange loss (gain)	(7, 197)	5,051					(2,146)
Cumulative translation adjustment	(19,205)		(33,026)				(52, 231)
Deferred tax income/ (expense)		5,307	(33, 026)
Net deferred tax assets/(liabilities)	(26, 382)						(54, 101)
Reflected in balance sheet as
follows:
Deferred tax assets	20						276
Deferred tax liabilities	(26, 402)						(54, 377)

E. Unrecognized deferred tax assets

As of December 31, 2015 and 2014, deferred tax assets that have not been recognized as they may not be used to offset future taxable income amounted to NT\$1,078,696 thousand and NT\$1,016,063 thousand, respectively.

F. The investments and capital additions of the Company and its subsidiary, Pegavision, are qualified as the investment on manufacture or technology service industry during the period from July 1, 2008 to December 31, 2009 and, therefore, entitled to a 5-year tax holidays/exemption enjoyed by the Group are listed as below.

Item	Approval authority	Approval document	Exemption period
	Ministry of	No. 10005112010 issued at Aug. 25, 2011	Jan. 1, $2013-$
	Economic Affairs		Dec. 31, 2017
	Ministry of	No. 10005116950 issued at Dec. 27, 2011	Jan. 1, 2014 $\sim$
	Economic Affairs		Dec. 31, 2018

		Unused balance
	Accumulated	As of December 31,
	net operating
Occurrence	loss	2015	2014	Expiration
year	(NT\$'000)	(NT\$'000)	(NT\$'000)	Year
2011	95,522		27,445	2021
2012	135,158	98,751	126,986	2022
Total		98,751	154,431

G. Unused balance of deductible net operating loss within the Group was listed as following.

H. Imputation credit information

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Balances of imputation credit	1,942,384	1,431,359

The Company's expected/actual creditable ratio for 2015 and 2014 were 15.18% and 13.34%. However, effective January 1, 2015, the creditable ratio for the individual shareholders residing in the Republic of China will be half of the original creditable ratio according to the revised Article 66-6 of the Income Tax Law.

I. The assessment of income tax return

As of December 31, 2015, the assessment status of income tax returns of the Company and subsidiaries were as follows:

	The assessment of income tax returns
The Company	Assessed and approved up to 2013
Subsidiary - Pegavision Corporation	Assessed and approved up to 2013
Subsidiary - Kinsus Investment Co., Ltd.	Assessed and approved up to 2013

(26) Earnings per share

Basic earnings per share is calculated by dividing net profit for the year attributable to the common shareholders of the parent entity by the weighted average number of common shares outstanding during the year.

Diluted earnings per share are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

A. Basic earnings per share

	For the year ended December 31,
	2015	2014
Net income available to common shareholders
of the parent (in NT\$'000)	2,903,952	3,617,327
Weighted average number of common shares
outstanding (in thousand shares)	445,822	446,000
Basic earnings per share (in NT\$)	\$6.51	\$8.11

B. Diluted earnings per share

	For the year ended December 31,
	2015	2014
Net income available to common shareholders
of the parent (in NT\$'000)	2,903,952	3,617,327
Net income available to common shareholders
of the parent after dilution (in NT\$'000)	2,903,952	3,617,327
Weighted average number of common shares
outstanding (in thousand shares)	445,822	446,000
Effect of dilution:
Employee bonus – stock (in thousand shares)	9,611	7,305
Weighted average number of common shares
outstanding after dilution (in thousand
shares)	455,433	453,305
Diluted earnings per share (in NT\$)	6.38	7.98

No other transactions that would significantly change the outstanding common shares or potential common shares incurred during the period subsequent to reporting date and up to the approval date of financial statements.

(27) Subsidiary that has material non-controlling interests

Proportion of equity interest held by non-controlling interests:

		As of December 31,
Name	Country	2015	2014
PIOTEK HOLDINGS LTD. and its subsidary	China	51.00%	51.00%
		As of December 31,
	Accumulated balances of material non-controlling interest:	2015	2014
		(NT\$'000)	(NT\$'000)
PIOTEK HOLDINGS LTD. and its subsidary		1,777,880	2,076,348
	Profit/(loss) allocated to material non-controlling interest:	For the year ended December 31, 2015 (NT\$'000)	2014 (NT\$'000)
PIOTEK HOLDINGS LTD. and its subsidary		(254, 741)	(168, 254)

The summarized financial information of this subsidiary is provided below. This information is based on amounts before inter-company eliminations.

Summarized information of profit or loss is as follows:

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Operating revenue	4,700,977	5,675,578
Profit/loss from continuing operation	(520, 173)	(343, 377)
Total comprehensive income for the period	(609, 370)	(108, 482)

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Current assets	2,516,463	2,390,493
Non-current assets	3,336,563	4,005,340
Current liabilities	1,188,561	1,526,385
Non-current liabilities	1,036,121	631,734

Summarized information of financial position is as follows:

Summarized cash flow information is as follows:

	For the year ended Deceember 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Operating activities	123,821	282,292
Investing activities	(171, 773)	(124, 952)
Financing activities	404.416	(613, 554)
Net increase/(decrease) in cash and cash equivalents	349,218	(427, 630)

7. RELATED PARTY TRANSACTIONS

(1) Significant transactions with related parties

A. Sales to

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Parent company	1,452,652	1,834,138
Other related parties	62,426	59,169
Total	1,515,078	1,893,307

Selling prices and collection terms to related parties are similar to those to third party customers for the years ended December 31, 2015 and 2014. The collection terms are 30 to 60 days from the end of delivery month by telegraphic transfer.

B. For the years ended December 31, 2015 and 2014, the Group recognized travelling expenses of NT\$340 thousand and NT\$498 thousand, respectively, for commissioning other related parties to handle travelling logistics.

C. For the years ended December 31, 2015 and 2014, the Group recognized rent expenses of NT\$50,460 thousand and NT\$27,109 thousand, respectively, for plants leased from the Parent.

Moreover, for the years ended December 31, 2015 and 2014, the Group recognized rent expenses of NT\$7,769 thousand and NT\$19,338 thousand, respectively, for plants leased from other related parties.

In addition, for the years ended December 31, 2015 and 2014, the Group recognized rent expenses of NT\$183 thousand and NT\$2,537 thousand (tax included), respectively, for various facilities leased from the Parent.

D. For the years ended December 31, 2015 and 2014, the Group recognized operating expenses of NT\$7,554 thousand and NT\$6,486 thousand, respectively, for services provided by other related parties.

Moreover, for the years ended December 31, 2015 and 2014, the Group recognized operating expenses of NT\$1,261 thousand and NT\$753 thousand (tax included), respectively, for services provided by the Parent.

In addition, for the years ended December 31, 2015 and 2014, the Group incurred operating expenses of NT\$91,965 thousand and NT\$57,945 thousand (tax included), respectively, for utility bills paid by the Parent on behalf of the Group.

• E. For the years ended December 31, 2015 and 2014, the Group recognized rent income of NT\$7,243 thousand and NT\$5,150 thousand, respectively, for plants leased to other related parties.
• F. Accounts receivable related parties

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Parent company	227,150	435,398
Other related parties	21,759	1,008
Total	248,909	436,406
Less: allowance for doubtful accounts
Net	248,909	436,406

G. Salaries and rewards to key management of the Group

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Short-term employee benefits	90,101	88.704
Post-employee benefits	819	838
Total	90,920	89,542

H. Other receivables

		As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Other related parties	2,081	1,307

I. Refundable deposits

As of December 31,
2015	2014
(NT\$'000)	(NT\$'000)
5,700	5,700

J. Accrued expenses

l,

٠		As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Ultimate parent company	22,971	15,855
Other related parties	1,607	5,719
Total	24,578	21,574

8. PLEDGED ASSETS

The following assets of the Group are pledged as collaterals:

	Carrying Amount As of December 31,
	2015	2014
Item	(NT\$'000)	(NT\$'000)	Purpose
Property, plant and equipment - machinery (carrying amount)	332,913	285,931	Long-term secured loans
Property, plant and equipment - other equipment (carrying) amount)	13,400	16,401	Long-term secured loans
Refundable deposits		3,057	Bonded factory
Total	346,313	305,389

9. SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) The Group's unused letters of credit (LC) as of December 31, 2015 were as follows:

Currency		LC Amount (in thousand)	Security (in thousand)
JPY	JPY	3,262,883	$\blacksquare$
USD	JSD	7,160
Euro	FUR		$\overline{\phantom{a}}$

(2) Details of significant constructions in progress and outstanding contracts of property, plant and equipment as of December 31, 2015 were as follows:

			Outstanding
	Contract Amount	Amount Paid	Balance
Nature of Contract	(NT\$'000)	(NT\$'000)	(NT\$'000)
Machinery and
contruction contracts	5,011,696	3,388,654	1,623,042

10. SIGNIFICANT DISASTER LOSS

None

11. SIGNIFICANT SUBSEQUENT EVENT

None

12. OTHERS

(1) Categories of financial instruments

Financial assets

	As of December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Financial assets at fair value
through profit or loss:
Held for trading	3,536,370	5,135,434
Available-for-sale financial		40,369
assets
Loans and receivable
Cash and cash equivalents	12,740,073	11,510,041
(excluding cash on hand)
Bond investments with no active	428,112	463,827
market
Notes receivable	1,835	6,252
Accounts receivable	3,590,193	3,040,343
Accounts receivable - related	248,909	436,406
parties
Other receivable	336,543	452,265
Other receivable - related parties	2,081	1,307
Total	20,884,116	21,086,244

Financial liabilities

	As of December 31,
	2015 (NT\$'000)	2014 (NT\$'000)
Financial liabilities measured at amortized cost: Short-term loans	3,095,030	1,806,896

Payables Long-term loans (including	5,985,045	5,856,512
current portion)	1,938,939	2,164,311
Total	11,019,014	9,827,719

(2) Objectives and policies of financial risk management

The Group's principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Group identifies, measures, and manages the aforementioned risks based on its policy and risk preferences.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market risk comprises currency risk, interest rate risk and other price risk (e.g. equity instruments).

In practice, it is rarely the case that a single risk variable will change independently from other risk variables. There are usually interdependencies between risk variables. However, the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Group's exposure to foreign currency risk relates primarily to the Group's operating activities (when revenue or expense are denominated in a different currency from the Group's functional currency) and the Group's net investments in foreign operations. The Group has certain foreign currency receivables denominated in the same foreign currency as certain foreign currency payables, therefore natural hedge is achieved. Thus, hedge accounting is not adopted.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group's profit (loss) and equity is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. The Group's foreign currency risk is mainly related to the volatility in the exchange rates of US dollars. The sensitivity analysis is as follows:

If NT dollars appreciates/depreciates against US dollars by 1%, net income (loss) for the years ended December 31, 2015 and 2014 would increase/decrease by NT\$11,442 thousand and NT\$13,613 thousand, respectively.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to interest rate risk relates primarily to the Group's investments with variable interest rates and loans with fixed and variable interest rates, which are all categorized as loans and receivables.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as of the end of the reporting period and presumed to be held for one accounting year, including investments and loans with variable interest rates. If interest rate increases/decreases by 0.1%, the net income (loss) for the years ended December 31, 2015 and 2014 would decrease/increase by NT\$7,383 thousand and decrease/increase by NT\$1,320 thousand, respectively.

Equity price risk

The Group's domestic listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The listed equity securities held by the Group is classified as available-for-sale. The Group manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on equity portfolio are submitted to the Group's senior management on a regular basis. The Group's Board of Directors reviews and approves all equity investment decisions.

For available-for-sale listed equity securities, 1% decrease in their prices would impact on the Group's equity by NT\$0 thousand and NT\$404 thousand for the years ended December 31, 2015 and 2014, respectively; and 1% increase in their prices would merely impact on the Group's equity.

(4) Credit risk management

Credit risk is the risk that counterparty will not meet its obligations under a contract and result in a financial loss. The Group is exposed to credit risk from operating activities (primarily for accounts and notes receivable) and financing activities (primarily for bank deposits and other financial instruments).

Customer credit risk is managed by each business unit subject to the Group's established policy, procedures and control relating to customer credit risk management. Credit risk of all customers are assessed based on a comprehensive review of the customers' financial status, credit ratings from credit institutions, past transactions, current economic conditions and the Group's internal credit ratings. The Group also employs some credit enhancement instruments (e.g. prepayment or insurance) to reduce certain customers' credit risk.

As of December 31, 2015 and 2014, receivables from the top ten customers were accounted for 51.71% and 45.65% of the Group's total accounts receivable, respectively. The concentration of credit risk is relatively insignificant for the remaining receivables.

Credit risk from balances with banks, fixed-income securities and other financial instruments is managed by the Group's finance division in accordance with the Group's policy. The counterparties that the Group transacts with are determined by internal control procedures. They are banks with fine credit ratings and financial institutions, corporate and government agencies with investment-grade credit ratings. Thus, there is no significant default risk. Conclusively, no significant credit risk is expected by the Group.

(5) Liquidity risk management

The Group maintains financial flexibility through the use of cash and cash equivalents, highly-liquid marketable securities, bank loans, etc. The table below summarizes the maturity profile of the Group's financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted interest payment relating to borrowings with variable interest rates is extrapolated based on the estimated yield curve as of the end of the reporting period.

Non-derivative financial instruments

	Less than				Less than
	1 year	2 to 3 years	3 to 4 years	4 to 5 years	5 years	Total
	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)
As of December 31, 2015
Loans	3,734,453	831,211	228,215	252,199	117,342	5,163,420
Payables	5,985,045	-	$\,$			5,985,045
As of December 31, 2014
Loans	3,290,131	694,452	63,266	5,495	$\overline{\phantom{a}}$	4,053,344
Payables	5,856,512	۰				5,856,512

• (6) Fair values of financial instruments
• A. The evaluation methods and assumptions applied in determining the fair value

Fair value is the price that would be received to sell a financial asset or paid to transfer a financial liability in an orderly transaction between willing market participants (not under coercion or liquidation). The following methods and assumptions are used by the Group in estimating the fair values of financial assets and liabilities:

• (a) The carrying amount of cash and cash equivalents, receivables, payables and other current liabilities approximate their fair value due to their short maturity terms.
• (b) For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (e.g. listed stocks and bonds).
• (c) Fair value of equity instruments without active markets (including listed companies' shares from private placement, stocks of public companies not traded in an active market and unlisted stocks) are estimated using the market approach. Under the approach, factors, such as the trading prices of comparable equity instruments in an active market, and other relevant informations (i.e. discount due to lack of liquidity, stock price-to-earning ratio (PER) and price-to-book ratio (PBR) of similar companies) are input into the pricing model for its fair value.
• B. Fair value of financial instruments measured at amortized cost

The carrying amount of the Group's financial assets and liabilities measure at amortized cost approximates their fair value.

C. Fair value measurement hierarchy for financial instruments

Please refer to Note 12(7) for fair value measurement hierarchy for financial instruments of the Group.

• (7) Fair value measurement hierarchy
• A. Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level $1 -$ Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level $3$ – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

B. Fair value measurement hierarchy of the Group's assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group's assets and liabilities measured at fair value on a recurring basis is as follows:

As of December 31, 2015

	Level 1	Level 2 (NT\$'000) (NT\$'000)	Level 3 (NT\$'000)	Total (NT\$'000)
Financial assets:
Financial assets at fair value through
profit or loss
Funds	3,536,370		$\blacksquare$	3,536,370
Financial liabilities:
None
As of December 31, 2014	Level 1	Level 2 (NT\$'000) (NT\$'000)	Level 3 (NT\$'000)	Total (NT\$'000)
Financial assets:
Financial assets at fair value through
profit or loss
Funds	5,135,434			5,135,434
Available-for-sale financial assets
Stocks	40,369			40,369

i evel 1	Level 2	Level 3	Total
(NT\$'000) (NT\$'000)		(NT\$'000)	(NT\$'000)

Financial liabilities:

None

Transfers between Level 1 and Level 2 during the period

For the years ended December 31, 2015 and 2014, there were no transfers between Level 1 and Level 2 fair value hierarchy.

(8) Significant financial assets and liabilities denominated in foreign currencies

Information regarding the Group's significant financial assets and liabilities denominated in foreign currencies was listed below:

	2015			2014
Foreign	Exchange		Foreign	Exchange
Currencies (\$'000)	Rate	NTD (NT\$'000)	Currencies $($^{\circ}000)$	Rate	NTD (NT\$'000)
139,277	32.83	4,571,767	128,682	31.65	4,072,131
93,723	5.05	473,750	104,450	5.17	540,089
Financial liabilities
166,990	32.83	5,482,634	162,457	31.65	5,141,564
118,755	5.05	600,304	144,860	5.17	749,274
				As of December 31,

The above information is disclosed based on the carrying amount of foreign currency (after being converted to functional currency).

Foreign exchange gain/loss on monetary financial assets and liabilities is shown as below.

Foreign currency	For the year ended December 31,
resulting in exchange gain or loss	2015	2014
	(NT\$'000)	(NT\$'000)
USD.	(17, 421)	(13, 854)
Other	2,497	18,560

(9) Capital management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages and adjusts its capital structure in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

13. ADDITIONAL DISCLOSURES

• (1) Information on significant transactions
• A. Financing provided to others: None.
• B. Endorsement/Guarantee provided to others: Please refer to attachment 1.
• C. Marketable securities held as of December 31, 2015 (excluding investments in subsidiaries, associates and joint ventures): Please refer to attachment 2.
• D. Individual securities acquired or disposed of with accumulated amount of at least NT\$ 300 million or 20 percent of the paid-in capital for the year ended December 31, 2015: None.
• E. Acquisition of individual real estate with amount of at least NT\$300 million or 20 percent of the paid-in capital for the year ended December 31, 2015: Please refer to attachment 3.
• F. Disposal of individual real estate with amount of at least NT\$100 million or 20 percent of the paid-in capital for the year ended December 31, 2015: None.
• G. Related party transactions with purchase or sales amount of at least NT\$100 million or 20 percent of the paid-in capital for the year ended December 31, 2015: Please refer to attachment 4.
• H. Receivables from related parties of at least NT\$100 million or 20 percent of the paid-in capital as of Decemer 31, 2015: None.
• I. Derivative instrument transactions: None.

• J. Intercompany relationships and significant intercompany transactions for the year ended December 31, 2015: Please refer to attachment 9.

• (2) Information on investees

• A. Investees over whom the Company exercises significant influence or control (excluding investees in Mainland China): Please refer to attachment 5.
• B. Investees over which the Company exercises control shall be disclosed of information under Note $13(1)$ :
  • (a) Financing provided to others: None.
  • (b) Endorsement/Guarantee provided to others: None.
  • (c) Marketable securities held as of December 31, 2015 (excluding investments in subsidiaries, associates and joint ventures): Please refer to attachment 6
  • (d) Individual securities acquired or disposed of with accumulated amount of at least NT\$300 million or 20 percent of the paid-in capital for the year ended December 31, 2015: None.
  • (e) Acquisition of individual real estate with amount of at least NT\$300 million or 20 percent of the paid-in capital for the year ended December 31, 2015: None.
  • (f) Disposal of individual real estate with amount of at least NT\$300 million or 20 percent of the paid-in capital for the year ended December 31, 2015: None.
  • (g) Related party transactions with purchase or sales amount of at least NT\$100 million or 20 percent of the paid-in capital for the year ended December 31, 2015: Please refer to attachment 7.
  • (h) Receivables from related parties of at least NT\$100 million or 20 percent of the paid-in capital as of December 31, 2015: Please refer to attachment 8.
  • (i) Derivative instrument transactions: None.

(3) Information on investments in Mainland China:

A. Name of investee in China, main business, paid-in capital, method of investment, investment flows, percentage of ownership, investment gain or loss, carrying amount at the end of reporting period, inward remittance of earning or loss and the upper limit on investment in China:

Name of Investee in China	Main Business	Paid-in Capital (NT\$'000)	Method of Investment	Accumulated Outflow of Investment from Taiwan as of Jan. 1,2014 (NT\$'000)	Investment Flows Outflow (NT\$'000) (NT\$'000)	Inflow	Accumulate d Outflow of Investment from Taiwan as of December 31, 2015 (NT\$'000)	Profit/Loss of Investee (NT\$'000)	Percentage of Ownership (Direct or Indirect Investment)	Share of Profit/Loss (NT\$'000)	Carrying Amount as of Remittance December 31, of Earnings 2014 (NT\$'000)	Accumulat ed Inward as of Dec. 31, 2014 (NT\$'000)	Accumulated Outflow of Investment from Taiwan to Mainland China as of Dec. 31, 2014 (NT\$'000)	Investment Amounts Authorized by Investment Commission, MOEA (NT\$'000)	Upper Limit on Investment in China by Investment Commission, MOEA (NT\$'000)
Kinsus Interconnect Technology Suzhou Corp.	Manufacturing and selling PCB (not high-density fine-line)	2,297,750 (Note 2)	(Note 1)	2,297,750 (Note 2)			2,297,750 (Note 2)	(113,792) (Note 2 and Note 4)	100%	(113, 792) (Note $2 \cdot$ Note 4 and Note 7)	1,092,219 (Note $2 -$ Note 4 and Note 7)		2,297,750 (Note 2)	2,297,750 (Note 2)	No upper limit (Note 5)

(In Thousands of New Taiwan Dollars)

	Researching,
	developing,
	producing and
	selling
Piotek	electronic
Computer	components,	5,471,928	(Note 1)	3,093,888		3,093,888	(544, 556)	51%	(277, 724)	1,820,119	3,093,888	3,093,888	No upper limit
(Suzhou) Co.,	PCBs and	(Note 2)		(Note 2)		(Note 2)	(Note 2 and		(Note $2 \cdot$	(Note $2 -$	(Note 2)	(Note 2)	(Note 5)
Ltd.	related						Note 4)		Note 4 and	Note 4
	products and								Note 7)	and
	providing									Note 7)
	after-sale
	services
	Trading of PCB
	(not
Xiang-Shuo	high-density
(Suzhou)	fine-line) and	65,650	(Note 1)	65,650		65,650	3,219 (Note 2)	100%	3,219	69,621	65,650	65,650	No upper limit
Trading	material for	(Note 2)		(Note 2)		(Note 2)	and Note 4)		(Note $2 \cdot$	(Note $2 \cdot$	(Note 2)	(Note 2)	(Note 5)
Limited	related								Note 4 and	Note 4 and
	products								Note 7)	Note 7)
Pegavision
	Contact Lenses Selling medical	65,062	(Note 1)	10,598	54,464	\$65,062	(16,263)	100%	(16, 263)	44,250	65,062	65,062	625,574
(Shanghai)	equipment	(Note 3)		(Note 2)			(Note 2 and		(Note $2 \cdot$	(Note $2 -$			(Note 6)
Corporation							Note 4)		Note 4 and	Note 4 and
									Note 7)	Note 7)

Note 1: Investment in Mainland China through companies in the third area.

• Note 2: Amounts in foreign currencies are translated into New Taiwan dollars using the exchange rates on the balance sheet date.
• Note 3: The paid-in capital is USD2,100 thousand, equivalent to NT\$65,062 thousand.
• Note 4: Gain/loss on investment is recognized based on the audited financial statements of the parent company in Taiwan.
• Note 5: The Company meets the conditions of corporate operation headquarter in the Principle of Evaluation for Investment and Technical Cooperation in Mainland China. Thus, there is no upper limit on investment amount.
• Note 6: The upper limit on investment for Pegavision Contact Lenses (Shanghai) Corporation is calculated as 60% of Pegavision Corporation's net equity.

• Note 7: Transactions are eliminated upon preparation of consolidated financial statements.

• B. Significant transactions with investees in China:

• (a) Purchase and balances of related accounts payable as of December 31, 2015: Please refer to attachment 9 for details.
• (b) Sale and balance of related accounts receivable as of December 31, 2015: Please refer to attachment 9 for details.
• (c) Property transaction amounts and resulting gain or loss:
  • a. Details of property transaction between Piotek Computer (Suzhou) Co., Ltd. and related partiesas follow:

Type of		Book value	Selling price	Gain
Assets	Related Parties	(\$'000)	(S'000)	(S'000)	Price reference
Other	Kinsus Interconnect
equipment	Technology Suzhou	RMB 318	RMB 329	RMB 11	Negotiated

• (d) Ending balance of endorsements/guarantees or collateral provided and the purposes: Please refer to attachment 1.
• (e) Maximum balance, ending balance, interest rate range and total interest for current period from financing provided to others: None.
• (f) Transactions that have significant impact on profit or loss of current period or the financial position, such as services provided or rendered: Please refer to attachment 9 for details.
• (g) Above transactions are eliminated upon preparation of consolidated financial statements. Please refer to attachment 9 for details.

14. OPERATING SEGMENT

For management purposes, the Group is organized into operating segments based on different products and services and has two reportable operating segments as follows:

IC Substrate: This segment produces and manufactures BGA substrates and sells the products to manufacturers of electronic products.

Printed Circuit Board (PCB): This segment produces and manufactures PCBs and sells the products to manufacturers of electronic products.

No operating segments have been aggregated to form the above reportable operating segments.

The Group's operating segments adopts the same accounting policies as the ones in Note 4. Management monitors the operating results of its business units separately for the purpose of decision-making on resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and measured consistently with methods applied to operating profit or loss in the consolidated financial statements.

(1) Segment income (loss), assets and liabilities

For the year ended December 31, 2015

	IC Substrate (NT\$'000)	PCB (NT\$'000)	Elimination (NT\$'000)	Consolidated (NT\$'000)
External customer Inter-segment	17,820,429	5,240,882 -	-	23,061,311
Total revenue	17,820,429	5,240,882		23,061,311
Segment income (loss)	3,179,452	(449,926)		2,729,526

For the year ended December 31, 2014

	IC Substrate (NT\$'000)	PCB (NT\$'000)	Elimination (NT\$'000)	Consolidated (NT\$'000)
External customer	19,285,334	5,658,500		24,943,834
Inter-segment	$\bullet$
Total revenue	19,285,334	5,658,500		24,943,834
Segment income (loss)	3,778,380	(288,147)		3,490,233

Details of assets and liabilities under the Group's operating segments are as follows:

(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)
35,118,866	7,519,866	$\overline{\phantom{a}}$	42,638,732
33,202,296	7,849,378	$\overline{\phantom{a}}$	41,051,674

Segment liabilities	IC Substrate	PCB	Elimination	Consolidated
	(NT\$'000)	(NT\$'000)	(NT\$'000)	(NT\$'000)
As of Dec. 31, 2015	9,012,667	2,798,264	$\overline{\phantom{a}}$	11,810,931
As of Dec. 31, 2014	8,371,561	2,627,339	$\overline{\phantom{a}}$	10.998,900

(2)Geographical information

Revenues from external customers

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Taiwan	9,184,614	10,924,071
Other countries	13,876,697	14,019,763
Total	23,061,311	24,943,834

Note: The revenue information above is based on the location of the customers.

Non-current assets

	As of December 31,
2015	2014
	(NT\$'000)
13,829,327	11,246,007
243	251
5,337,759	6,334,148
35	-
19,167,364	17,580,406
	(NT\$'000)

(3) Information about major customers

	For the year ended December 31,
	2015	2014
	(NT\$'000)	(NT\$'000)
Customer A from IC Substrate	1,435,632	1,898,187
Customer B from IC Substrate	1,363,364	2,258,344
Total	2,798,996	4,156,531

Kinsus Interconnect Technology Corp. and Subsidiaries

Endorsement/Guarantee Provided to Others

For the Year Ended December 31, 2015

$\hat{\mathbf{r}}$

Table 1

(In Thousands of Foreign Currency / New Taiwan Dollars)

	Endorsement/ Guarantee Provider		Guaranteed Party					Amount of	Ratio of Accumulated	Maximum
No.			Nature of	Limits on Endorsement/ Guarantee Amount	Maximum Balance for the		Amount	Endorsement/ Guarantee secured by	Endorsement/ Guarantee to Net Worth per Latest	Endorsement/ Guarantee Amount	Endorsement provided by parent company	Endorsement provided by subsidiaries to	Endorsement provided to entities in China
(Note 1	Name	Name	Relationship	Provided to Each Guaranteed Party	Period	Ending Balance Actually Drawn		Properties	Financial Statements	Allowed	to subsidiaries v	parent company N	Y
$\Omega$	Kinsus Interconnect Technology	Kinsus Interconnect Technology	Investee accounted for using equity	The overall amount of guarantees/ endorsements provided to a subsidiary in which the Company holds directly over 50%	\$4,595,500 (USD 140,000)	\$3,118,375 (USD 95,000)	\$1,359,586	\$-	10.98%	Shall not exceed 150% of the net worth in the
	Согр.	Suzhou Corp.		method indirectly (inclusive) of common equity interest shall not exceed 20% of the net worth in the current financial statements. \$5,678,227	(Note 2)	(Note 2)				current financial statements.
$\mathbf{0}$	Kinsus Interconnect Technology Corp.	Piotek Computer Investee (Suzhou) Co., Ltd.	laccounted for using equity	The overall amount of guarantees/ endorsements provided to a subsidiary in which the Company holds directly over 50% method indirectly (inclusive) of common equity interest shall not exceed 20% of the net worth in the current financial statements. \$5,678,227	\$2,762,224 (USD 84,150) (Note 2)	\$1,004,445 (USD 30,600) (Note 2)	\$502,223	\$-	3.54%	514,195,568 Shall not exceed 50% of the net worth in the current financial statements. \$14,195,568	$\mathbf{Y}$	N	v

Note 1: Kinsus Interconnect Technology Corp. is coded "0".

Note 2: Amounts in foreign currencies are converted to New Taiwan Dollars using the exchange rates as of the balance sheet date.

Kinsus Interconnect Technology Corp. and Subsidiaries

Marketable Securities Held as of December 31, 2015

Table 2

(In Thousands of New Taiwan Dollars)
--------------------------------------	--	--

					December 31, 2014
		Relationship with			Carrying		Fair Value
Name of Held Company	Type and Name of Marketable Securities	the Issuer	Financial Statement Account	Shares / Units	Amount	Shareholding %	(Note)	Note
Kinsus Interconnect	Money market funds:
Technology Corp.	Capital Money Market Fund	$\overline{\phantom{a}}$	Financial assets at fair value through profit or loss	32,783,435	\$510,667	$-26$	\$522,365
	Yuanta De-Bao Money Market Fund	$\blacksquare$	Financial assets at fair value through profit or loss	13,551,601	157,637	$-96$	160,894
	Yuanta Wan Tai Money Market Fund	$\overline{\phantom{a}}$	Financial assets at fair value through profit or loss	31,765,626	458,515	$-96$	475,420
	Fuh Hwa Money Market Fund	$\bullet$	Financial assets at fair value through profit or loss	4,066,994	56,495	$-$ %	58,088
	Taishin Ta Chong Money Market Fund	$\blacksquare$	Financial assets at fair value through profit or loss	18,812,748	255,796	$-96$	263,858
	Taishin 1699 Money Market Fund	$\hat{\phantom{a}}$	Financial assets at fair value through profit or loss	30,522,218	400,000	$-2/2$	407,673
	FSITC Money Market Fund	$\blacksquare$	Financial assets at fair value through profit or loss	1,168,258	200,000	$-9/6$	205,771
	Mega Diamond Money Market Fund	$\blacksquare$	Financial assets at fair value through profit or loss	41,465,474	500,000	$-%$	513,214
	Jih Sun Money Market	$\overline{\phantom{a}}$	Financial assets at fair value through profit or loss	31,315,952	450,000	$-9/2$	457,886
	Union Money Market Fund	$\overline{\phantom{a}}$	Financial assets at fair value through profit or loss	15,838,553	203,448	$-26$	206,617
	UPAMC James Bond Fund	$\blacksquare$	Financial assets at fair value through profit or loss	15,322,946	250,000	$-26$	252,956
	Subtotal				3,442,558		\$3,524,742
	Add: Valuation adjustments of financial assets held for trading				82,184
	Total				\$3,524,742

Note: Companies without quotes in the open markets are valued at net equities.

$\mathcal{A}$

Kinsus Interconnect Technology Corp. and Subsidiaries

Acquisition of Individual Real Estate with Amount of at Least NT\$ 300 million or 20% of the Paid-in Capital

For the Year Ended December 31, 2015

Table 3

(In Thousands of New Taiwan Dollars)

								Prior Transaction of Related Counter-party
								Relationship
Acquiring			Transaction Transaction		Counter-			with the	Transfer		Price	Purpose and Use	Other
Company	Name of Property	Date	Amount	Payment Status	party	Relationship Owner		Company	Date		Amount Reference	of Acquisition	Terms
Kinsus	Houses and buildings
Interconnect		2015.03.24	\$486,186	NT\$ 405,860	Guo-Gong	None	None	None	None	None		Bidding Production	None
Technology	Construction of			thousand was	Construction							expansion and
Corp.	XinFeng Plant			paid as of	Co., Ltd.							operation
				December 31,								planning
				2015

Kinsus Interconnect Technology Corp. and Subsidiaries

Related Party Transactions with Purchase or Sales Amount of At least NT\$ 100 Million or 20% of the Paid-in Capital

For the Year Ended December 31, 2015

Table 4

(In Thousands of New Taiwan Dollars)

					Transaction Details		Abnormal Transaction		Notes/ Accounts Payable or Receivable
		Nature of	Purchase/			Payment/		Payment/ Collection
Company Name	Related Party	Relationship	Sale	Amount	% to Total	Collection Term	Unit Price	Term	Ending Balance	% to Total	Note
Kinsus	Kinsus Interconnect	Investee	Purchase	\$1,795,044		27.06% Payment within 60 Specs of goods		Other vendors	Accounts payable	$(27.95)\%$	Note
Interconnect Technology Corp. Corp.	Technology Suzhou	accounted for using equity				days from the end purchased are of delivery month	different from	also enjoy payment within	\$(413,130)
		method indirectly					others. Cannot be reasonablely	60 days from the end of
							compared.	delivery month

Note: Transactions are eliminated when preparing the consolidated financial statements.

Kinsus Interconnect Technology Corp, and Subsidiaries

Investees over Which the Company Exercise Significant Influence or Control Directly or Indirectly (Excluding Investees in Mainland China)

As of December 31, 2015

Table 5 (In Thousands of Foreign Currency / New Taiwan Dollars)

					Original Investment Amount	Balance as of December 31, 2015			Net Income Share of Income
			Main Business and	December	December 31.				(Loss) of the	(Loss) of the
Investor	Investee	Business Location	Product	31, 2014	2015	Shares	$\%$	Carrying Value	Investee	Investee	Note
Kinsus Interconnect Technology Corp.	KINSUS CORP. (USA)	CA. U.S.A.	Designing substrates, formulating marketing strategy analysis, developing new customers, researching and development new product technology	USD500	USD500	500,000 shares	100.00%	\$33,462	\$1,776	\$1,776	Note
Kinsus Interconnect Technology Corp.	IKINSUS HOLDING (SAMOA) LIMITED	Samoa	Investing activities	USD166,309	USD166,309	166,308,720 shares	100.00%	\$3,011,949	\$(371,975)	\$(371,975)	Note
Kinsus Interconnect Technology Corp.	Kinsus Investment Co., Ltd.	Taoyuan City	Investing activities	\$398,000 (Notel)	\$398,000 (Notel)	39,800,000 shares	100,00%	\$566,385	\$44,413	\$44,413	Note
Kinsus Investment Co., Ltd.	Pegavision Corporation	Taoyuan City	Manufacturing medical equipment	\$286,418	\$286,418	22,088,736 shares	36.81%	\$383,837	\$127,110	\$46,795	Note
KINSUS HOLDING (SAMOA) LIMITED	KINSUS HOLDING (CAYMAN) LIMITED	Cayman Islands	Investing activities	USD72,000	USD72,000	72,000,000 shares	100.00%	USD 35,385	USD (3,369)	USD (3,369)	Note
KINSUS HOLDING (SAMOA) LIMITED	PIOTEK HOLDINGS LTD. (CAYMAN)	Cayman Islands	Investing activities	USD94,309	USD94,309	95,755,000 shares	51.00%	USD 56,373	USD (16,392)	USD (8,360)	Note
PIOTEK HOLDINGS LTD. (CAYMAN)	PIOTEK HOLDING LIMITED	British Virgin Islands	Investing activities	USD139,841	USD139.841	139,840,790 shares		100.00% USD 110.535	USD (16,401)	USD (16,401)	Note
PIOTEK HOLDING LIMITED	PIOTEK (H.K.) TRADING LIMITED	Hong Kong	Trading activities	USD26	USD 26	200,000 shares	$100.00\%$	USD 1.777	USD 196	USD 196	Note
Pegavision Corporation	PEGAVISION HOLDINGS CORPORATION	Samoa	Investing activities	USD380	USD2,130	2,130,000 shares	100.00%	\$37,229	\$(16, 293)	\$(16, 293)	Note
Pegavision Corporation	PEGAVISION JAPAN	JAPAN	Selling Medical facility	JPY-	JPY 9,900	198 shares	100.00%	\$2,744	\$42	\$42	Note

Note: Transactions are eliminated when preparing the consolidated financial statements.

Note 1: The Company's original investment in Kinsus Investment Co., Ltd. was NT\$ 500,000 thousand. Kinsus Investment Co., Ltd. reduced capital by NT\$ 102,000 thousand to offset deficits in 2013.

After the reduction, investment amount reduced to NT\$ 398,000 thousand.

Kinsus Interconnect Technology Corp. and Subsidiaries

Marketable Securities Held as of December 31, 2015 (Excluding Investments in Subsidiaries, Associates and Jointly Controlled Entities)

As of December 31, 2015

Table 6

									(In Thousands of New Taiwan Dollars)
									Guarantee, Pledge or Other
					December 31, 2015				Restricted Conditions
	Type and Name of Marketable	Relationship with the	Financial Statement		Carrying		Fair Value		Carrying
Name of Held Company	Securities	Issuer	Account	Shares (Unit)	Amount	%	(Net Equity)	Shares	Amount	Note
Kinsus Investment Co., Ltd. Money market funds:	Taishin Ta Chong Money Market Fund	$\blacksquare$	Financial assets at fair	829,070	\$11,315	$-2/6$	\$11,628		\$-
	Valuation adjustments of financial		value through profit or
	assets held for trading		iloss		313
	Total				\$11,628
Kinsus Investment Co., Ltd. Stocks:	Yi-Shuo Creative Co., Ltd.	$\blacksquare$	Financial assets carried at cost	5,000,000	\$50,000	7.49%	\$-		\$-

Note: No quotes in active markets and fair values cannot be measured reliably.

Kinsus Interconnect Technology Corp. and Subsidiaries

Related Party Transactions with Purchase or Sales Amount of At least NT\$ 100 Million or 20% of the Paid-in Capital

For the Year Ended December 31, 2015

Table 7

(In Thousands of US Dollars)

			Transaction Details		Abnormal Transaction		Notes/Accounts Pavable or Receivable
Company Name	Related Party	Nature of Relationship	Purchase/ Sale	Amount	$%$ to Total	Payment/ Collection Tem	Unit Price	Payment/ Collection Term	Ending Balance	% to Total Note
Piotek Computer (Suzhou) Co., Ltd.	Pegatron Corporation	Parent company	Sales	USD 45,802	36.90%	Payment within 60 days from the end of delivery month	Specs of goods sold are different from others. Cannot be reasonably compared.	No non-related parties to be compared with.	Accounts receivable USD 6.920	27.65%
Piotek Computer (Suzhou) Co., Ltd.	Xiang-Shuo (Suzhou) Trading Limited	Also a subsidiarv under the Company's control	Sales	USD 13,064	10.53%	Payment within 60 days from the end of delivery month	Specs of goods sold are different from others. Cannot be reasonably compared.	No non-related narties to be compared with.	Accounts receivable USD 1.176	4.70%	Note
Xiang-Shuo (Suzhou) Trading Limited	Piotek Computer (Suzhou) Co., Ltd.	Also a subsidiary under the Company's control	Purchase	USD 13,064	73.26%	Payment within 60 days from the end of delivery month	Specs of goods sold are different from others. Cannot be reasonably compared.	No non-related parties to be compared with.	Accounts payable USD (1,176)	$(36.80)\%$	Note
Piotek Computer (Suzhou) Co., Ltd.	Piotek (H.K.) Trading Limited	Also a subsidiarv under the Company's control	Sales	USD 22.666	18.26%	Payment within 60 days from the end of delivery month	Specs of goods sold are different from others. Cannot be reasonably compared.	No non-related parties to be compared with.	Accounts receivable USD 4,277	17.09%	Note
Piotek (H.K.) Trading Limited	Piotek Computer (Suzhou) Co., Ltd.	Also a subsidiary under the Company's control	Purchase	USD 22.666		100,00% Payment within 60 days from the end of delivery month	Specs of goods sold are different from others. Cannot be reasonably compared.	No non-related parties to be compared with.	Accounts payable USD (4,277)	$(100,00)\%$	Note
Xiang-Shuo (Suzhou) Trading Limited	Piotek Computer (Suzhou) Co., Ltd.	Also a subsidiary under the Company's control	Sales	RMB 27,693		24.66% Payment within 60 days from the end of delivery month	Specs of goods sold are different from others. Cannot be reasonably compared.	No non-related parties to be compared with.	Accounts receivable RMB 5,407	37.83%	Note
Piotek Computer (Suzhou) Co., Ltd.	Xiang-Shuo (Suzhou) Trading Limited	Also a subsidiary under the Company's control	Purchase	RMB 27,693	5,73%	Payment within 60 days from the end of delivery month	Specs of goods sold are different from others. Cannot be reasonably compared.	No non-related parties to be compared with.	Accounts payable RMB (5,407)	(3.81)%	Note
Kinsus Interconnect Technology Suzhou Corp.	Kinsus Interconnect Technology Corp.	Parent company	Sales	USD 57,138		100.00% Payment within 60 days from the end of delivery month	Specs of goods sold are ldifferent from others. Cannot be reasonably compared.	lNo non-related parties to be compared with.	Accounts receivable USD 12,695	100.00%	Note

Note: Transactions are eliminated when preparing the consolidated financial statements.

Kinsus Interconnect Technology Corp. and Subsidiaries

Receivables from Related Parties of at Least NT\$ 100 Million or 20% of the Paid-in Capital

As of December 31, 2015

Table 8

								(In Thousands of US Dollars)
					Overdue		Amount Received in	Allowance for
		Nature of		Turnover		Action
Company Name	Related Party	Relationship	Ending Balance	Ratio	Amount	Taken	Subsequent Periods	Doubtful Debts
Piotek Computer	Pegatron Corporation	Parent company	USD 6,920	4.43	\$-		\$-	$S-$
(Suzhou) Co., Ltd.			(Note)
Piotek Computer (Suzhou) Co., Ltd.	Piotek (H.K.) Trading Limited	Also a subsidiary under the Company's control	USD 4,277 (Note and Note 1)	4.10	$S-$		$S-$
Technology Suzhou Technology Corp. Corp.	Kinsus Interconnect Kinsus Interconnect	Parent company	USD 12,695 (Note and Note 1)	5.49	\$-		\$-

Note: Accounts receivable

Note 1: Transactions are eliminated when preparing the consolidated financial statements.

English Translation of Consolidated Financial Statements Originally Issued in Chinese Kinsus Interconnect Technology Corp. and Subsidiaries

Intercompany Relationships and Significant Intercompany Transactions for the Year Ended December 31, 2015

						(In Thousands of Foreign Currency / New Taiwan Dollars)
No.			Nature of			Intercompany Transaction	Percentage to Consolidated Net
(Note 1)	Company Name	Counter-Party	Relationship (Note 2)	Financial Statement Account	Amount	Terms	Revenue or Total Assets (Note 3)
0	Year 2015 Kinsus Interconnect Technology Corp.	Xiang-Shuo (Suzhou) Trading Limited	ı	Other receivables		Payment within 60 days from the \$817 \ end of delivery month	-%
0	Kinsus Interconnect Technology Corp.	Xiang-Shuo (Suzhou) Trading Limited	$\mathbf{1}$	Sales revenue	\$827	◡	-%
0	Kinsus Interconnect Technology Corp.	KINSUS CORP. (USA)	$\mathbf{1}$	Accrued expense	\$3,397	Payment within 30 days from the end of delivery month by TT	0.01%
э. 0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	1	Accrued expense	\$1,034	Payment within 30 days from the end of delivery month by TT	-%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	$\mathbf{1}$	Accounts payable	\$413,130	Payment within 60 days from the end of delivery month by TT	0.97%
0	Kinsus Interconnect Technology Corp.	Protek Computer (Suzhou) Co., Ltd.	ı	Accounts payable	\$15,747	Payment within 60 days from the end of delivery month by TT	0.04%
0	Kinsus Interconnect Technology Corp.	Piotek Computer (Suzhou) Co., Ltd.	ı	Other receivables	\$2.191		-%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	ı	Other receivables	\$4 481		0.01%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	ı	Purchase	\$1,795,044	Payment within 60 days from the end of delivery month by TT	7.78%
0	Kinsus Interconnect Technology Corp.	Piotek Computer (Suzhou) Co., Ltd.	ı	Purchase	\$50,100	Payment within 60 days from the end of delivery month by TT	0.22%
0	Kinsus Interconnect Technology Corp.	KINSUS CORP. (USA)	1	Commission expense	\$40,798	Payment within 60 days from the end of delivery month by TT	0.18%
0	Kinsus Interconnect Technology Corp.	KINSUS CORP. (USA)	1	Travel expense	\$64		-%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	1	Manufacturing - processing	\$15,350	Payment within 60 days from the end of delivery month by TT	0.07%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	$\bf{l}$	Sales revenue	\$5,995	Payment within 60 days from the end of delivery month by TT	0.03%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	1	Other income	\$10,925		0.05%
0	Kinsus Interconnect Technology Corp.	Piotek Computer (Suzhou) Co., Ltd.	$\mathbf{1}$	Other income	\$4,343		0,02%
o	Kinsus Interconnect Technology Corp.	PIOTEK (H.K.) TRADING LIMITED	÷	Other income	\$3,253		0.01%
1	Piotek Computer (Suzhou) Co., Ltd.	PIOTEK (H.K.) TRADING LIMITED	3	Sales revenue	USD 22,666	Payment within 60–90 days from the end of delivery month	3.23%
1	Piotek Computer (Suzhou) Co., Ltd.	PIOTEK (H.K.) TRADING LIMITED	3	Accounts receivable	USD 4,277	Payment within 60~90 days from the end of delivery month	$0.33\%$
1	Piotek Computer (Suzhou) Co., Ltd.	Xiang-Shuo (Suzhou) Trading Limited	3	Accounts receivable	USD 1,176	Payment within 60 days from the end of delivery month	0.09%
1	Piotek Computer (Suzhou) Co., Ltd.	Xiang-Shuo (Suzhou) Trading Limited	3	Sales revenue	USD 13,064	Payment within 60 days from the end of delivery month	1.86%
	Piotek Computer (Suzhou) Co., Ltd.	Kinsus Interconnect Technology Suzhou Corp.	3	Other income	USD 254	Payment within 60~90 days from the end of delivery month	0.04%
$\mathbf{1}$	Piotek Computer (Suzhou) Co., Ltd.	Kinsus Interconnect Technology Suzhou Corp.	3	Other receivables	USD 86	Payment within 60~90 days from the end of delivery month	0.01%
1	Piotek Computer (Suzhou) Co., Ltd.	Kinsus Interconnect Technology Suzhou Corp.	3	Purchase	USD 6	Payment within 60~90 days from the end of delivery month	-%
$\overline{\mathbf{2}}$	Xiang-Shuo (Suzhou) Trading Limited	Piotek Computer (Suzhou) Co., Ltd.	3	Accounts receivable	RMB 5,407	Payment within 60 days from the end of delivery month	0.06%
2	Xiang-Shuo (Suzhou) Trading Limited	(Piotek Computer (Suzhou) Co., Ltd.	3	Other receivables	RMB 56	Payment within 60 days from the end of delivery month	-%
2	Xiang-Shuo (Suzhou) Trading Limited	Piotek Computer (Suzhou) Co., Ltd.	3	Sales revenue	RMB 27,693	Payment within 60 days from the end of delivery month	0.61%
2	Xiang-Shuo (Suzhou) Trading Limited	Kinsus Interconnect Technology Suzhou Corp.	3	Sales revenue	RMB 3,076	Payment within 60 days from the end of delivery month	0.07%
$\mathbf{2}$	Xiang-Shuo (Suzhou) Trading Limited	Kinsus Interconnect Technology Suzhou Corp.	3	Accounts receivable	RMB 675	Payment within 60 days from the end of delivery month	0.01%
4	PIOTEK (H.K.) TRADING LIMITED	KINSUS CORP. (USA)	3	Commission expense	USD 132	Payment within 60 days from the end of delivery month	0.02%

Note 1: Transaction information between Parent company and its subsidiaries should be disclosed by codes below.

(1) Parent company is coded "0".

(2) The subsidiaries are coded from "1" in the order presented in the table above.

Note 2: Relationship are divided into the following three types and the types are required to be indicated:

(1) From the parent company to a subsidiary. (2) From a subsidiary to the parent company.

(3) Between subsidiaries.

Note 3: Regarding the percentage of transaction amount to consolidated operating revenues or total assets, it is computed based on the ending balance to consolidated total assets for balance sheet items; and based on interim accumulated amount to consolidated net revenue for income statement items.

English Translation of Consolidated Financial Statements Originally Issued in Chinese Kinsus Interconnect Technology Corp. and Subsidiaries Intercompany Relationships and Significant Intercompany Transactions for the Year Ended December 31, 2015

Table 9

						(In Thousands of Foreign Currency / New Taiwan Dollars)
No.						Intercompany Transaction
			Nature of				Percentage to Consolidated Net
			Relationship	Financial Statement			Revenue or Total
(Note 1)	Company Name Year 2014	Counter-Party	(Note 2)	Account	Amount	Terms	Assets (Note 3)
0	Kinsus Interconnect Technology Corp.	KINSUS CORP. (USA)	T	Accrued expense	\$3,387	Payment within 30 days from the end of delivery month by TT	$0.01\%$
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	-1	Accrued expense	\$9,318	Payment within 30 days from the end of delivery month by TT	0.02%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	1	Accounts payable	\$247,315	Payment within 60 days from the end of delivery month by TT	0.60%
0	Kinsus Interconnect Technology Corp.	Xiang-Shuo (Suzhou) Trading Limited	-1	Sales revenue	\$1,484	Payment within 30~60 days from the end of delivery month	0.01%
0	Kinsus Interconnect Technology Corp.	Piotek Computer (Suzhou) Co., Ltd.	-1	Other receivables	\$8,210		0.02%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	1	Other receivables	5987		0.00%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	-1	Purchase	\$1,526,521	Payment within 60 days from the end of delivery month by TT	6.12%
o	Kinsus Interconnect Technology Corp.	KINSUS CORP. (USA)	л	Commission expense	\$36,895	Payment within 60 days from the end of delivery month by TT	0.15%
0	Kinsus Interconnect Technology Corp.	KINSUS CORP. (USA)	-1	Travel expense	\$47		$-26$
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	-1	Manufacturing - processing	\$51,319	Payment within 60 days from the end of delivery month by TT	0.21%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	-1	R&D - testing	\$152	Payment within 60 days from the end of delivery month by TT	$-\frac{6}{2}$
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	$\mathbf{1}$	Sales revenue	\$3,419	Payment within 60 days from the end of delivery month by TT	0.01%
0	Kinsus Interconnect Technology Corp.	Kinsus Interconnect Technology Suzhou Corp.	-1	Other income	\$490		-%
0	Kinsus Interconnect Technology Corp.	Piotek Computer (Suzhou) Co., Ltd.	1	Other income	\$1,610		-%
0	Kinsus Interconnect Technology Corp.	Xiang-Shuo (Suzhou) Trading Limited	-1	Other income	\$45		-%
0	Kinsus Interconnect Technology Corp.	PIOTEK (H.K.) TRADING LIMITED		Other income	\$3,845		0,02%
-1	Piotek Computer (Suzhou) Co., Ltd.	PIOTEK (H.K.) TRADING LIMITED	3	Sales revenue	USD30,268	-ayment within 60~90 days from the end of delivery month	3.84%
1	Piotek Computer (Suzhou) Co., Ltd.	PIOTEK (H.K.) TRADING LIMITED	-3	Accounts receivable	USD6,770	Payment within 60~90 days from the end of delivery month	0.52%
1	Piotek Computer (Suzhou) Co., Ltd.	Xiang-Shuo (Suzhou) Trading Limited	3	Accounts receivable	USD1,491	Payment within 60 days from the end of delivery month	0.11%
	Piotek Computer (Suzhou) Co., Ltd.	Xiang-Shuo (Suzhou) Trading Limited	3	Sales revenue	USD19.059	Payment within 60 days from the end of delivery month	2.42%
$\mathbf{2}$	Xiang-Shuo (Suzhou) Trading Limited	Piotek Computer (Suzhou) Co., Ltd.	3	Accounts receivable	RMB3,889	Payment within 60 days from the end of delivery month	0.05%
$\overline{2}$	Xiang-Shuo (Suzhou) Trading Limited	Piotek Computer (Suzhou) Co., Ltd.	3	Other receivables	RMB24	Payment within 60 days from the end of delivery month	-%
$\mathbf{2}$	Xiang-Shuo (Suzhou) Trading Limited	Piotek Computer (Suzhou) Co., Ltd.	з	Sales revenue	RMB24,544	Payment within 60 days from the end of delivery month	0.51%
2	Xiang-Shuo (Suzhou) Trading Limited	Kinsus Interconnect Technology Suzhou Corp.	3	Sales revenue	RMB4.439	Payment within 60 days from the end of delivery month	0.09%
2	Xiang-Shuo (Suzhou) Trading Limited	Kinsus Interconnect Technology Suzhou Corp.	3	Accounts receivable	RMB649	Payment within 60 days from the end of delivery month	0.01%
3	Kinsus Interconnect Technology Suzhou Corp.	Piotek Computer (Suzhou) Co., Ltd.	3	Accounts receivable	RMB 2	Payment within 60 days from the end of delivery month	-%
3	Kinsus Interconnect Technology Suzhou Corp.	Piotek Computer (Suzhou) Co., Ltd.	3	Other income	RMB16	Payment within 60 days from the end of delivery month	-%
4	PIOTEK (H.K.) TRADING LIMITED	KINSUS CORP. (USA)	3	Commission expense	USD 88	Payment within 60 days from the end of delivery month	0.01%

Note 1: Transaction information between Parent company and its subsidiaries should be disclosed by codes below:

(1) Parent company is coded "0".

(2) The subsidiaries are coded from "1" in the order presented in the table above.

Note 2: Relationship are divided into the following three types and the types are required to be indicated:

(1) From the parent company to a subsidiary.

(2) From a subsidiary to the parent company.

(3) Between subsidiaries.

Note 3: Regarding the percentage of transaction amount to consolidated operating revenues or total assets, it is computed based on the ending balance to consolidated total assets for balance sheet items; and based on interim accumulated amount to consolidated net revenue for income statement items.