LTC - Annual Report 2013 | FinancialReports.eu

Lite-On Technology Corporation Annual Report

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03 Contact Information 05 Members of Top Management

Letter to Shareholders

Corporate Overview

09
09 Company Profile 10 Lite-On Corporate Values 11 Organization Chart

Corporate Governance

12 Corporate Governance 12 Mejor Resolutions of General Meeting 13 Board of Directors 16 Audit Committee 18 Compensation Committee 18 Growth Strategy Committee 19 Anti-Corruption 21 Corporate Risk Management 23 Information Regarding Board Members and Management Team 35 Statement of Internal Control System

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Capital and Shares

36 Capital and Shares 36 The Top-10 Shareholders and Information of Related Parties 37 The Structure of Shareholders 37 Change in the Proportion of Shareholding among the Directors, Managers and Major Shareholders

Financial Information

40
Standalone Financial Statements of 2013 Consolidated Financial Statements of 2013
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111

Lite-On Technology Corporation 2013 Annual Report

Contact Information

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Spokesperson: Brownson Chu Vice President, Finance Tel：886-2-8798-2888 e-mail：[email protected]

Acting Spokesperson :

Julia Wang

Director, Investor Relations/Public Relations Tel：886-2-8798-2888 e-mail：[email protected]

Global Headquarters:

No. 392, Ruey Kuang Road, Neihu, Taipei 114, Taiwan, R.O.C. Tel：886-2-8798-2888

Major Factory:

No. 90, Chien-I Road, Chung Ho City, Taipei 235, Taiwan, R.O.C. Tel：886-2-2222-6181

Stock Affairs Department:

1F, No. 392, Ruey Kuang Road, Neihu Taipei 114, Taiwan, R.O.C. Tel：886-2-8798-2301 www.liteon.com

CPAs:

Jr-Shian Ke and Ching-Fu Chang Deloitte & Touche

12F, No. 156, Sec. 3, Min-Sheng E. Road, Taipei 105, Taiwan, R.O.C. Tel：886-2-2545-9988

www.deloitte.com.tw

GDR and Related Information:

Citibank, N.A.

www.londonstockexchange.com & www.citi.com/dr

Lite-On Technology Corporation website: www.liteon.com

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Lite-On Technology Corporation 2013 Annual Report

Members of Top Management

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Raymond Soong Warren Chen
Chairman of Lite-On Group CEO of Lite-On Group
CEO of Lite-On Technology
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Vision

Mission

To become a Company of World Class Excellence

Short-term:

Leadership: Worldwide Absolute No. 1 Profitability: Top in the Industry Corporate Governance: Transparent, Independent and Fairness Corporate Citizenship: Globalization, Environmental

Prime Leader in Optoelectronic Components

Long-term: Global Leader in Sustainable Technology

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Lite-on Value

Strategy

Profitable Growth Value Creation

Customer Satisfaction Excellence in Execution Innovation Integrity

Profitable Growth Value Creation Maximum Positive Cash Flow

Friendliness, Corporate Social Responsibility

Business Philosophy

Lite-On Technology Corporation 2013 Annual Report

Letter to Shareholders

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Dear Shareholders,

Facing the rapid transformations in the global information and telecommunications industries, Lite-On has already started implementing strategic allocation and innovative transformation for product portfolio optimization. As a result, even with the harsh challenges in the global market, Lite-On has continued with its stellar operating performance by achieving a global consolidated revenue of NT$213.2 billion in 2013, a figure very close compared to last year’s. The six major growing NonPC-related products comprised 40% of the overall revenue, which in turn brought our net operating profit to NT$8.75 billion after taxes. The annual earnings per share (EPS) reached NT$3.83, the equivalent of an 18% annual growth.

At the same time, Lite-On is still standing firm as No.1 on the list of Top 1,000 Taiwanese Manufacturers in Common Wealth Magazine for the fifth consecutive year, clearly affirming Lite-On’s core competitiveness and our leading position in the global market.

in hosting the strictly charity-based Lite-On Awards or running the Xinyi Community College managed by the Lite-On Cultural Foundation, is highly valued and recognized by society.

To strengthen our communication channels with all employees, shareholders and stakeholders and to further reinforce information disclosure transparency, Lite-On Technology has published its annual CSR report every year starting from 2007. Its contents and structure have been certified as GRIG3.1 Application Level A+ and AA 1000 Type 1 Moderate Assurance Level by SGS Taiwan Ltd., an impartial third party. This shows how we are focused and dedicated to keeping the same standards as the international community. Furthermore, we have received the Taiwan Corporate Sustainability Report (CSR) Award conferred by the Taiwan Institute for Sustainable Energy (TISE) for the third consecutive year now.

Development and Outlook

Operating Performance

Lite-On’s core products continued to show strong growth potential in 2013. Thanks to the ever-growing global demand for the cloud-computing-capable high-end networking devices and server power management systems, mobile devices, LED and lighting applications, car electronics, solid state drives (SSD), and gaming consoles, not only did the power supply business group continue its strong growth but also the high-end camera modules expanded and delivered products smoothly. With the increase in tablet PCs’ and smartphones’s global marketshare, the annual revenue grew by a new record high of 30%. LEDs also saw an increase close to 2% in annual revenue growth aided by the demand in components and lighting application markets. LED street lights even reached an over 50% annual revenue growth due to the global demand in energysaving devices and our successful deliveries to Taiwanese and American customers. Sales of car lighting also increased over 20%. With the energy brought by the demand in end-markets and the increase in marketshare, storage devices have also had positive results--SSDs and gaming-related products saw a substantial increase. Annual growth doubled for both lines of products.

On the other hand, as the leading manufacturer of optoelectronic components, Lite-On has continued to invest heavily in the research and development of high-end products to actively enhance our R&D capabilities and increase production automation. We are now investing 3% of our annual revenue which marks a 10% increase from the previous year in order to ensure Lite-On’s global leading position and our core capabilities in optoelectronics and new businesses to satisfy the most pressing demands of our customers.

Honors and Recognitions

Apart from eye-opening results in operations, Lite-On received various recognitions from home and abroad, once again showing that besides striving for operational performance and continuous growth, Lite-On’s devotion to building transparent corporate governance and upholding corporate social responsibility.

After a long history of dedication to corporate social responsibility, Lite-On was recognized as the runner-up for CommonWealth Magazine’s Benchmark Enterprise Award for the fifth consecutive year. At the same time, it was selected as a leading member of the Dow Jones Sustainability Index (DJSI) for the third year in a row. Winning first prizes in both the global and emerging market computer hardware category is a big step up for Lite-On Technology, placing it above many famous companies in Asia, the Americas and Europe.

In Aisa’s financial media, CommonWealth Magazine placed Lite-On Technology on the “Excellence in Corporate Social Responsibility” list for the seventh consecutive year and the Global Views Magazine awarded us with the Overall Performance in Corporate Social Responsibility and the Paragon Prize for Education for the second year. Lite-On’s social involvement, either

2014 will mark the 40th year anniversary of Lite-On Technology. Along the way, Lite-On has reached two important milestones that established the foundation for the company’s sustainable growth. The first milestone happened in 2002. While the PC industry was reaching maturity, Lite-On consolidated four subsidiaries into one joint corporation in order to strengthen corporate competitiveness. The “four into one”consolidation was not only an unique action among the midsized enterprises in Taiwan, but also one which firmly rooted Lite-On’s leading position in the electronic industry in Taiwan, Hong Kong and China and led to the company’s grand success in the global telecommunications and networking industry. Faced with the changes in the industries in recent years, Lite-On decided to put forward the second phase of transformation. Starting in late 2013, Lite-On began the“seven into one”project to gradually consolidate its subsidiaries and transform them into 8 major business groups. The consolidated subsidiaries included Lite-On IT Corp., Leotek Electronics Corp., Li Shin International Enterprise Corp., Lite-On Clean Energy Technology Corp., Lite-On Mobile, Dong Guan G-Tech Computers Co., Ltd. and Dong Guan G-Pro Computer Co., Ltd.

This year, Lite-On Tech officially kicked off the “One Lite-On” project. The eight business groups after consolidation became the Mobile Mechanics, PID, Power system, Storage, MEC, CDSS, OPS and the New Business unit. Through organizational and level streamlining, we can effectively integrate all resources, enhance the overall utilization of assets and decrease financial and operational costs to elevate operational performance and increase return on equity. At the same time, the pushing forces of the eight business groups, including cloud computing, mobile devices, LED and lighting application, SSDs and car electronics will become the main driving forces for future profitability and revenue growth for the company.

Looking at 2014, the economic development of the European and emerging markets are showing positive signs. Lite-On Tech will continue to be cautiously optimistic while facing heavy competition from the global market. We will stand firm on our foundation of “innovation and execution” to consider our competitive niche and advantageous position in our environment. We will strive to find a world-class leading position for our core business and seek differentiation from our competitors. At the same time, profit increase will remain our main target and quality growth of the company will remain our main goal.

Last but not least, I would like to thank all of our employees for their contribution and dedication and all our customers, suppliers, shareholders and members of society for their long-term support and recognition. As we celebrate our 40th anniversary, we hope that through the “seven into one” project, the company will continue to grow under the One Lite-On structure and move a step closer to our vision of becoming a centenarian corporation.

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Warren Chen CEO of Lite-On Group

Raymond Soong Chairman of Lite-On Group

Lite-On Technology Corporation 2013 Annual Report

Corporate Overview

2.1 Company Profile

Established: 1975/6/2 Date of Listing: 1983/1/26 Company Code: 2301 Paid-in-Capital: NT$ 23.0 B (as of December 2013)

About Lite-On Technology

Driven by the strong belief that LED will change the way we live and enhance our life style, Lite-On Electronics was established in 1975 in a small apartment by the three original founders. There they created another garage legend.

Lite-On was the first company to produce LEDs. In the 30 years since its inception, it has gone through three major changes. In 1983, Lite-On had its IPO and was the first technology company to be listed on the Taiwan Exchange. In 2002, four public companies merged, including Lite-On Electronics, Lite-On Technology, Silitek and GVC, with the new entity becoming the Lite-On Technology that we know today. The merger of four public companies was considered revolutionary in the history of the Taiwan equities market.

Over the past few years, Lite-On Technology has successfully created the strategy of “Profitable Growth." Our chief business objective is no longer solely sales growth. Our company now endeavors to implement strategic improvement of products, and to focus on the development of core Opto-Electronic components, including Power Supply, Optoelectronics, Mechanical Competency, and Connected Devices & System Solution Business Groups. Lite-On products are widely used in the 4C industries, namely computers, communications, consumer electronics and car electronics. Considering future trend of industry and enviornmental issues, Lite-On Group leverges it’s advantage in ICT industry transferring to focus on new energy technology. The synergy brought from new energy supply chain has taken effect in the industry and has brought new growth momentum for Lite-On Group, which includes outdoor/indoor LED lighting, energy-efficient products such as power management in cloud computing system and energy storage solutions.

From 2005, Lite-On Technology has repeatedly earned the Corporate Social Responsibility Award from Global Views Monthly, and the Corporate Social Responsibility Award from CommonWealth Magazine. The company's contributions to society are highly recognized. The Lite-On Award aims at training talents and boosting competitiveness of Chinese on the world stage. It has successfully created many design elite and received much positive feedback from industrial design professionals. Established in 1993, the Lite-On Cultural Foundation has been involved in community services, such as helping minority entities and providing counseling services to teenagers.

2.2 Lite-On Corporate Values

Customer Satisfaction, Excellence in Execution, Innovation, and Integrity are the guiding principles, commitments, and beliefs of Lite-On Technology. These values are applied throughout the company’s daily business operations and management:

1. Customer Satisfaction

Customers are the ones who sign our paychecks. Identifying their needs and understanding their markets helps us create maximum value for them.

2. Excellence in Execution

First movers in the market always capture the value of future trends. Formulate strategies accordingly and execute effectively in advance of competitors.

3. Innovation

Innovation is fueled by daily renewal, and often ends because of complacency.

4. Integrity

Trust from shareholders, customers, employees and suppliers

Our business mergers have won favor from international investment firms. The company has transformed from a Taiwan optoelectronics leader into an international enterprise, with foreign investors holding around half of the shares. For five consecutive years 2003-2007, the company was listed in Business Week's Info Tech 100; while for three consecutive years 2005-2007, it was selected by Forbes as one the Asian Fab 50 companies. Not only does it possess business competency reaching to international standards, its creativity has been proved by the prestigious international awards it has won. From 2005-2012, it has received 44 international design prizes, comprising the German iF Award, the German red dot award and the U.S. IDEA Award. More than just an honoring of Lite-On Technology, these awards represent the glory of Chinese all over the world.

09 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

Corporate Governance

Lite-On values the transparency of operation and corporate governance. We have defined the corporate governance framework and practices in accordance with the Company Act, Securities and Exchange Act of the ROC, and other applicable laws and regulations, in order to continue improving our management performance and protecting the interests and rights of investors and other stakeholders.

The following solid corporate governance actions were taken:

2.3 Organization

Audit Committee	Audit Committee		Shareholder’s Meeting	Shareholder’s Meeting	Shareholder’s Meeting	Shareholder’s Meeting	Shareholder’s Meeting	Shareholder’s Meeting


Compensation Committee			Board of			Directors		Corporate Internal Audit
			Group C			hairman

Growth Strategic Committee			Group			CEO		Stock Affairs
CSER
		CSER					IR/PR
			Office


Regions		Business Units					Function Units


		Mobile Mechanics			MEC		Strategy & Investment	Legal
	S

E	U	PID			CDSS		FIN	MOE


S	GP	Power Syst		m	OPS		Operational Controlling	TRDC


China Operations		Storage			New Business		HR

Lite-On set up independent directors and established the “Audit Committee” in 2007, followed by the accomplishment of establishing “Compensation Committee” in 2008 and “Growth Strategy Committee” in 2010.
Highly values disclosure in compliance with the principles of integrity, timeliness, fairness and transparency. Further to disclosure at MOPS, all related financial information, annual report, and important messages are accessible through the Company corporate website of (www.liteon.com) for the reference of domestic and foreign investors.
We will continue to pursue good corporate governance and transparency, timeliness and fairness of financial information disclosure. In 2013, Lite-On was ranked a grade of A+ in the Information Disclosure Assessment by the Securities and Futures Institute.
Lite-On’s Opto Changzhou and PID Changzhou plants obtained the most credible auditing and certification system in the world, ACE’s Product Liability Insurance AAA Certification in 2013, and there were total accumulated 6 plants’ product manufacturing and sales risk performance have passed ACE’s AAA certification. Lite-On is targeting to have all of its plants certificated in coming years.

The Board of Directors, Audit Committee, Compensation Committee, and Growth Strategy Committee operate in accordance with the “Parliamentary Regulations for Board Meetings”, “Organizational rule for Audit Committee”, “Organizational rule for Compensation Committee”, and “Organizational rule for Growth Strategy Committee”. The committees' functions and responsibilities are specified respectively.

3.1.1 Major Resolutions of the General Meeting

The Company held a regular session of the General Meeting of 2012 on June 19th 2013 at the International Conference Center of Lite-On Technology Building located at No. 392, Rai Guang Road, 1/F, Neihu, Taipei. Major resolutions and the status of execution are shown below:

i. Adoption of 2012 Financial Statements
ii. Adoption of the Proposal for Appropriation of 2012 Earnings
iii. Proposal for dividends and employee bonuses payable in newly-issued shares of common stock
iv. Amendment to “Articles of Incorporation”
v. Amendment to “Rules for Election of Directors”
vi. Amendment to “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees”
vii. Amendment to “Rules of Procedure for Shareholders Meetings”
viii. Election of the Board of Directors of the 9th Term.
ix. Discussion of release of directors from non-competition restrictions.

All above resolutions have exceeded legal requirement of the voting numbers and been approved in the AGM.

Lite-On Technology Corporation 2013 Annual Report

3.1.2 Board of Directors

The company’s directors are elected in accordance with “Election Regulations for Directors” complying article 192 of the Company Act, the system of nominating candidates; to announce the acceptance of nomination for directors (including independent directors) with the numbers of seats to be elected before the closure date prior to shareholders’ meeting, while the acceptance period should not be less than 10 days. The board of directors will assess qualifications of the candidates for directors (including independent directors) in accordance with the regulations, and submit the qualified candidate list of directors (including independent directors) to the shareholders meeting for election.

Announcement of Board of Directors' resolution to dispose the real estate in Taoyuan County.
The Board of directors resolved to convene the 2013 Annual Shareholders' Meeting supplementary notice (Agenda adjustment).

6. BOD resolutions on 2013/05/13

Lite-On Technology Corp. announced the results of it's operations for Y2013 Q1.

7. BOD resolutions on 2013/06/19

Raymond Soong is elected as chairman unanimously by the Board of Directors.
Disclosure of Board's approval on release of competition restriction on officers in investment in China.

The Board of Lite-On consists of 11 directors and all directors were elected directly by in the shareholders. The Board is staffed with a Chairman, 6 representatives from institutional investors, namely, Lite-On Capital, Dorcas Investment Co., Ltd., Da-Song Investment and Yuan Pao Development, 1 natural director and 3 independent directors who are from different professional background or areas of works, and taking the responsibility efficiently. The responsibility of the Board of Directors include establishment of a good corporate governance system, monitoring, appointment and supervision of the management of the Company, reinforcement of the management mechanism. It is also responsible for the Company’s overall operations including economic dimension, social dimension and environmental dimension a dedicated to maximize the stockholders’ rights and interests.

8. BOD resolutions on 2013/07/15

The Company approve to acquire 100% shares of Power Innovations International, Inc. via Lite-On Technology USA, Inc.
Announcement of the record date for 2012 dividend.
Announced Lite-On's board has passed the post-delisting Lite-On IT shares purchase plan.

9. BOD resolutions on 2013/08/12

Lite-On Technology Corp. announced the results of it's operations for Y2013 H1.
BOD approved its subsidiary Lite-On Green Technologies B.V.to dispose 100% shares of Lite-On Green Technologies S.R.L.

10. BOD resolutions on 2013/11/12

Lite-On Technology Corp. announced the results of it's operations for the first three quarters of Y2013.

Major Resolutions of the Board Meetings

Following are the important resolutions from the board during 2013/01/01-2014/04/30.

1. BOD resolutions on 2013/01/30

Announced the Tender Offer to acquire 100% of Lite-On IT outstanding stake through 100% owned subsidiary Bao Yuan Corporation.
The 100% owned subsidiary Bao Yuan Corporation announced the Tender Offer to acquire Lite-On IT outstanding shares.
For the fund requirement of the acquisition, Lite-On Technology would loan to 100% owned subsidiary Bao Yuan Corporation.
For the fund requirement of the acquisition, Lite-On Technology would offer guarantee and endorsement to Bao Yuan Corporation’s syndication loan.

2. BOD resolutions on 2013/02/04

Adjust the structure of the acquisition to Lite-On IT.

3. BOD resolutions on 2013/03/20

Lite-On Technology to perform short-form merger with 100% owned subsidiary Bao Yuan Corporation.
Approved the request from100% owned subsidiary, Lite-On Technology (Chang Zhou) Co., Ltd., to purchase manufacturing facilities in accordance with its sustainable growth strategy.

4. BOD resolutions on 2013/03/29

Lite-On Technology Corp. announced Y2012 financial reports and consolidated financial reports.
Lite-On Technology Corp. announced Y2012 consolidated financial reports.
Announced the dividend distribution from year 2012
Issuance of new share for capital increase from year 2012 operation and distribution of employee bonus.
BOD resolute the schedule and agenda of year 2012shareholders' meeting.
BOD approved the subsidiary Guangzhou Lite-On Mobile Electronic Components Co., Ltd. to increase capital expenditure on manufacturing facilities.
Announced to acquire the remaining outstanding shares of Lite-On IT.
Approved the donation to Lite-On Cultural Foundation.

5. BOD resolutions on 2013/05/08

Announced Lite-On's Board of Directors has passed a resolution to finetune the follow-on consolidation plan.

11. BOD resolutions on 2013/12/16

For Support the subsidiary to get low interest rate of mid to long term operation capital, Lite-On Technology would offer guarantee and endorsement to Lite-On Mobile Pte Ltd,100% owned subsidiary’s syndication loan.
Merger in company`s China subsidiaries approved by BOD
A merger between Lite-On Technology Corp. and Li Shin International Enterprise Corp.
BOD announced the resolution regarding merger with its subsidiary, Leotek Electronics Corp.
BOD announced the resolution regarding merger with its subsidiary, Lite-On Clean Energy Technology Corp.

12. BOD resolutions on 2014/01/13

Announcement of Lite-On Technology Corporation's Board of Directors Resolution for acquisition of Lite-On Mobile Pte. Ltd. shares.

13. BOD resolutions on 2014/03/17

Domestic Chinese subsidiaries of Lite-On Mobile Oyj Zhuhai Lite-On Mobile Technology Co., Ltd. Beijing Lite-On Mobile Electronic and Telecommunication Components Co., Ltd. And Yantai Lite-On Mobile Electronic Components Co., Ltd. have been provided the Cash Pool of revolving credits for governing loaning of funds via Citibank (China) Company Limited, and have been increased to the following amounts (RMB): five hundred million, two hundred and sixty five million , and twenty five million, respectively.
The company on the behalf of subsidiary, LOM Pte. Ltd. announces the Board of Directors Resolution for capital injection to LOM Ind.e Comercio de Plasticos Ltda.

14. BOD resolutions on 2014/03/27

Lite-On Technology Corp. announced the results of it's operations for Y2013.
Announcement of Donation to Lite-On Culture Foundation.
The Company announced to proceed short-form merger with its subsidiary Lite-On IT.
Board of Directors Resolution for dividend distribution.
Board of directors resolution for issuance of new share for capital increase.
The Company approves to acquire LarView Technology Corp.
Lite-On Technology Corp. Board of Directors resolution to acquire 100% of the share capital of DunYoung.
Board of Directors' resolution on the schedule and agenda of year 2014 shareholders' meeting.

15. BOD resolutions on 2014/04/15

Lite-On Technology Corporation announcing commencement of simplified merger with DunYoung, a 100% owned subsidiary.

Lite-On Technology Corporation 2013 Annual Report

1. The Board and the Functional Committees

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Raymond Soong
David Lin
Dorcas Investment Co., Ltd. Representative: Joseph Lin
Lite-On Capital Inc. Representative: Warren Chen
The Board Director
Ta-Sung Investment Co., Ltd. Representative: Keh-Shew Lu
Ta-Sung Investment Co., Ltd. Representative: Rick Wu
Yuan Pao Development & Investment Co., Ltd. Representative: CH Chen
Yuan Pao Development & Investment Co., Ltd. Representative: David Lee
Independent Directors Kuo-Feng Wu, Harvey Chang, Edward Yang
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Audit Committee Since: 2007/06/21	Compensation Committee Since: 2008/08/27	Growth Strategy Committee Since: 2010/09/01


Chairperson: Kuo-Feng Wu Members: Harvey Chang, Edward Yang	Chairperson: Harvey Chang Members: Kuo-Feng Wu, Edward Yang	Chairperson: Edward Yang Members: Raymond Soong, Warren Chen, Keh-Shew Lu, David Lin

2. Board Meetings Attendance

The Board held 20 meetings (A) in the recent period of time (from January 1st, 2013 to April 30th, 2014) with the attendance of the directors specified as below:

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Title Name Attend (sit in) in person (B) Attend by proxy Attendance rate (%) 【A / B】
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Title	Name	Attend (sit in) in person (B)	Attend by proxy	Attendance rate (%)【A / B】

Director	Raymond Soong	17	2	85%
Director	David Lin	20	0	100%
Director	Dorcas Investment Co., Ltd. Representative:Joseph Lin	15	5	75%
Director	Lite-On Capital Inc. Representative:Warren Chen	18	2	90%
Director	Ta-Sung Investment Co., Ltd. Representative:Keh-Shew Lu	5	15	25%
Director	Ta-Sung Investment Co., Ltd.	20	0	100%
Director	Yuan Pao Development & Investment Co., Ltd. Representative: CH Chen	19	1	95%
Director	Yuan Pao Development & Investment Co., Ltd. Representative: David Lee	20	0	100%
Independent Director	Kuo-Feng Wu	20	0	100%
Independent Director	Harvey Chang	17	3	85%
Independent Director	Edward Yang	20	0	100%

Important Notice:

Minutes of Board meetings where Article 14-3 of the Securities and Exchange Act is applicable and contained information on the objection or qualified opinions of the independent directors on record or in writing: none.
The avoidance of the conflict of interest by the directors on relevant motions: seven occasions,
A. In the 8th session of the 25th Board Meeting, Director Mr. David Lin and Mr. Warren Chen avoided the discussion and did not vote the motion of the tender offer to Lite-On IT.
B. In the 8th session of the 25th Board Meeting, Director Mr. David Lin and Mr. Warren Chen avoided the discussion and did not vote the motion of the syndication loan for the Lite-On IT acquisition.
C. In the 8th session of the 25th Board Meeting, Director Mr. David Lin and Mr. Warren Chen avoided the discussion and did not vote the motion of the loan to Bao Yuan Corporation for the Lite-On IT acquisition.
D. In the 8th session of the 25th Board Meeting, Director Mr. David Lin and Mr. Warren Chen avoided the discussion and did not vote the motion to offer guarantee and endorsement to Bao Yuan Corporation for the Lite-On IT acquisition.
E. In the 8th session of the 26th Board Meeting, Director Mr. Raymond Soong, Mr. David Lin and Mr. Warren Chen avoided the discussion and did not vote the motion to Lite-On IT acquisition.
F. In the 8th session of the 28th Board Meeting, Director Mr. Raymond Soong, Mr. David Lin, Mr. Warren Chen and
- Mr. CH Chen avoided the discussion and did not vote the motion of donation to Lite-On Cultural Foundation.
G. In the 8th session of the 29th Board Meeting, independent directors Mr. Kuo-Feng Wu, Harvey Chang and Edward Yang avoided the discussion and did not vote the motion of the nomination to independent director candidates for 2013 AGM election.
H. In the 9th session of the 5th Board Meeting, Director Mr. Raymond Soong and Mr. David Lin avoided the discussion and did not vote the motion to dispose 100% shares of Lite-On Green Technologies S.R.L..
I. In the 9th session of the 9th Board Meeting, Director Mr. Raymond Soong and Mr. Warren Chen avoided the discussion and did not vote the motion to Li Shin International Enterprise Corp. merger.
J. In the 9th session of the 9th Board Meeting, Director Mr. Raymond Soong and Mr. Warren Chen avoided the discussion and did not vote the motion to Leotek Electronics Corp. merger.
K. In the 9th session of the 9th Board Meeting, Director Mr. Raymond Soong and Mr. Warren Chen avoided the discussion and did not vote the motion to Lite-On Clean Energy Technology Corp. merger.
L. In the 9th session of the 12th Board Meeting, Director Mr. Raymond Soong and Mr. Warren Chen avoided the discussion and did not vote the motion to DunYoung acquisition.
M. In the 9th session of the 12th Board Meeting, Director Mr. Raymond Soong, Mr. David Lin, Mr. Warren Chen and avoided the discussion and did not vote the motion to Lite-On IT merger.
N. In the 9th session of the 12th Board Meeting, Director Mr. Raymond Soong, Mr. David Lin, Mr. Warren Chen and Mr. CH Chen avoided the discussion and did not vote the motion of donation to Lite-On Cultural Foundation.
O. In the 9th session of the 13th Board Meeting, Director Mr. Raymond Soong and Mr. Warren Chen avoided the discussion and did not vote the motion to DunYoung merger.
For strengthening and accelerating the growth strategy of the Company and the whole business group, the Company has established the Growth Strategy Committee in 2010. The Committee is authorized by Board of Directors to direct and review the Company and the Group’s overall growth strategies, and to preview the important investment projects, and periodically reports the resolutions to the Board of Directors.

3.1.3 Audit Committee

Chairperson: Kuo-Feng Wu, independent director

Members: Harvey Chang, independent director; Edward Yao-Wu Yang, independent director

The Audit Committee consists of all 3 independent directors of the Company. They are responsible for assisting the Board of Directors to review the financial reports, internal control system, internal audits, accounting policy and procedure, transaction of major assets, appointment of Certified Public Accountant (CPA), and appointment and dismissal of executive officers dedicated to finance, accounting and internal audit, to ensure that the Company’s operation complies with the relevant governmental laws and regulations.

According to the “Audit Committee Organizational Rule” of Lite-On, the Audit Committee shall convene at least once quarterly. In 2013, the Audit Committee convened 9 times.

Lite-On Technology Corporation 2013 Annual Report

3. Audit Committee Attendance

The Audit Committee held 20 meetings (A) in the recent period of time (from January 1st 2013 to April 30th 2014) with the attendance of the independence directors specified below:

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Title Name Attend (sit in) in person (B) Attend by proxy Attendance rate (%) 【A / B】
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Title	Name	Attend (sit in) in person (B)	Attend by proxy	Attendance rate (%)【A / B】

Independent Director	Kuo-Feng Wu	20	0	100%
Independent Director	Harvey Chang	17	3	85%
Independent Director	Edward Yang	20	0	100%

4. The status of operation of the Audit Committee or the supervisors and the Board of Directors

(1) The operation of the Audit Committee

The Audit Committee held 20 meetings (A) in the recent period of time (from January 1st 2013 to April 30th 2014) and with the presence of the independent director as shown below:

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Title Name Attend (sit in) in person (B) Attend by proxy Attendance rate (%) 【A / B】
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Title	Name	Attend (sit in) in person (B)	Attend by proxy	Attendance rate (%)【A / B】

Independent Director	Kuo-Feng Wu	20	0	100%
Independent Director	Harvey Chang	17	3	85%
Independent Director	Edward Yang	20	0	100%

Important Notice:

Issues stated in Article 14-5 of the Securities and Exchange Act of the ROC and other issues not passed by the Audit Committee but resolved by more than two-thirds of the directors: none.
The act of the avoidance of the conflict of interest by the independent director: none.
The communications between the independent director and the Chief Audit Officer and the certified public accountants:

Note:

If a specific independent director resigned before the end of the fiscal year, specify the date of resignation in the relevant field. The attendance (sit in) rate of such director or supervisor in Board meetings shall be based on the actual attendance to meetings during his term of office.
If there is a newly elected independent director who filled in the vacancy of the relieved independent director, specify the names of and differentiate the old and new independent director, the date of office of the new independent director or the date of renewal. The attendance (sit in) rate of such independent director in Board meetings shall be based on the actual attendance to meetings during his term of office.

(2) The participation of the supervisors in the Board

The Company has established the Audit Committee on June 21 2007 to perform the functions of the supervisors as required by law.

3.1.4 The Compensation Committee

Chairperson: Harvey Chang, independent director

Members: Kuo-Feng Wu, independent director; Edward Yao-Wu Yang, independent director.

In order to continue strengthening the corporate governance meeting international standards, Lite-On established the Compensation Committee in 2009. The committee supervises and deliberates the Company’s overall compensation policy and plan, as well as makes resolutions with the authorization given from the Board of Directors. As the first one to establish the compensation committee and possessing a highly-authorized compensation committee system, Lite-On become a benchmark company with respect to corporate governance among domestic enterprises.

The Compensation Committee’s supervision extends to the compensation of directors, all high-rank management, and employee compensation policy system as well as incentive and bonus plans. The Compensation Committee consists of 3 members who are all independent directors to maintain the independence, professionalism and fairness of the committee avoiding potential risks from conflict of interest between the committee members and the Company.

The committee shall regularly review the Company’s compensation policy and plan to ensure recruiting, encouraging and retaining of professional human resources for the Company. The committee shall annually deliberate and resolves the performance appraisal and compensation of directors, presidents, vice presidents and CEO, as well as employee bonus.

According to the “Compensation Committee Organizational Rule” of Lite-On, the Compensation Committee shall convene at least once semi-annually. In 2013, the committee convened 3 times.

(1) The Chief Audit Officer reported to the Audit Committee on the establishment of and amendment to the internal control system.
(2) The Chief Audit Officer reported to the Audit Committee on the conduct of internal audits and the findings.
(3) The Chief Audit Officer reported to the Audit Committee on the annual audit plan and the implementation of the plan.
(4) The Chief Audit Officer reported to the Audit Committee on the findings of each audit and the tracking of corrective actions and preventive actions.
(5) The Chief Audit Officer provided information on the addition or amendment of laws governing securities and exchange to the Audit Committee.
(6) The Chief Audit Officer presented to the Audit Committee the report on the conduct of special audits prescribed by the committee and the findings.
(7) The certified public accountants reported to the Audit Committee on the planning, implementation, and result of the semi-annual and the annual external audits.
(8) The certified public accountants reported to the Audit Committee on newly established statement of financial accounting standards and related laws on securities and exchange any time as needed.

3.1.5 The Growth Strategic Committee

Chairperson: Edward Yao-Wu Yang, Independent Director

Members: Raymond Soong, director; David Lin, director; Warren Chen, director; Keh-Shew Lu, director.

In order to enhance and accelerate the growth strategy of Lite-On and the Group, the Growth Strategy Committee was established in 2010. The Committee is authorized by Board of Directors to direct and review the Company and the Group’s overall growth strategies, and to preview the important investment projects, and periodically reports the resolutions to the Board of Directors. The Committee’s instructions and assistance extend to Lite-On and its subsidiaries and business units designated by Lite-On. The Committee consists of at least 5 directors from Lite-On. The convener and members shall be nominated by the Board of Directors.

In 2013, the Growth Strategic Committee has convened 4 times.

17 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

3.2 Anti-corruption

Lite-On commits to and complies with the legal rules and ethic codes applicable to the countries of operation in order to maintain its goodwill and regulate its business activities. Lite-On does not allow any violation of the ethic code and laws in return for an increase in the size of revenues, profits, or sales performance. In addition, the Company has also provided relevant education on anti-corruption aiming at the operating procedures of routine business activities exposed to the risks of corruption to prevent corruption.

In light of the aforementioned pre-conditions, Lite-On has instituted the “employee code of conduct” further towards “integrity”, which is one of the four value systems of the Company. The employee code of conduct aims at helping the employees to understand certain situations and questions that may confront them in their routine operations. All new employees will also receive training on anti-corruption in their orientation so that the Company can maintain its reputation; comply with applicable laws and ethic code. The “Ethical Code of Conduct for Employees” contains the following ethical requirements:

I Gifts and treats:

The Company’s employees shall not give or accept any gifts intended to improperly influence normal business or decisions. The Company’s employees must immediately notify their supervisors, or return, any tangible gifts upon receipt of the same. Notwithstanding, this shall not apply, if the gift refers to a small gift usually exchanged in business conduct.
Customers and the Company’s employees may engage in reasonable social activities within the course of the business contact insofar as such activities are clearly for business purposes and are held respectable. Notwithstanding, any excessively generous treatment shall be subject to supervisor’s prior approval and reported to supervisor afterwards. While dining is a necessary accompaniment of meetings between the employees and suppliers or customers, treatment should be appropriate and emphasize reciprocity.
The Company’s employees should avoid any improper conduct, and in no event should give or accept any kickbacks in any form. While engaged in private shopping, the Company’s employees and their family members may not accept discounts from suppliers given due to their relationship with his company, unless such discounts are given to all employees of the Company.
Payments to civil service personnel: Payments prohibited by laws of the country in question may not be paid to any government officials or personnel of the country. Legitimate payments given to government officials must comply with all procedures specifically required by the Company.
Payment to consultants, distributors or agents: payment effected in favor of the consultants, distributors or agents shall be done in a manner relevant with the value of services being rendered.
Payment to customers: there shall be no direct or indirect payments to the customers or the employees of the customers of the Company with an attempt to influence such parties to engage in illicit acts.
Payment to any other parties: payment to persons who are not government officials or those who are not the customers of the Company and are made in compliance with the legal rules of the countries or regions of payment for non-business purposes shall be effected in accordance with the standard procedures of the Company.
Payment to countries outside the country of residence of the recipients: if payment or salary is requested to pay to the bank account of the recipients in countries outside the country of residence or operation of the recipients (also known as “appropriated funds”) is acceptable only on condition that such payment is not in violation of applicable laws and causes no damage to the ethnic code of the Company.
Forged record-keeping: When part of a payment is intentionally or knowingly used for some purpose not stated on the transaction certificate, the payment may not be approved, processed or accepted. When there is no disbursement explanation in the Company’s account books, all “kickback funds” or similar funds or account transfers are strictly forbidden.

The contents of the code of ethics is incorporated into the training of Electronic Industry Code of Conduct (EICC), including: business integrity, no illicit receipts or payment, transparency of information, intellectual property rights, fair trade and fair competition in advertising, fair trade, confidentiality, responsibility in buying minerals, privacy, fight any act of revenge, leading to 9 ethical standards as the subject of education.

For buttressing the education initiatives of anti-corruption, the Company has launched the e-Learning program. In the future, the Company will require all employees to engage in e-Learning on topics of anti-corruption so that they could understand the issues better and be alerted to any violations of the rules of the Company in its anti-corruption policies.

II Principles governing on-the-job payments:

Any employees who discover an abnormality affecting the Company’s assets or monies that may disrupt payments must immediately notify their supervisors. If the abnormalities involve a supplier, they shall notify the purchasing manager. No bribes of any kind may be given to any person. There are no excepts to this requirement. The so-called bribes refer to payments given to certain persons to induce them to violate their employers’ regulations or national laws.

Further to training, the inspections of corruption and violation of the code are verified through self-audit of “Electronic Industry Code of Conduct (EICC) Committee” in each business unit/site as well as the annual cross-site audits of EICC committees.

The payment by the vendors: Payments may be effected in favor of the vendors whose goods have been purchased by the Company following due procedure and are in compliance with relevant standards governing the origins.

Lite-On Technology Corporation 2013 Annual Report

3.3 Corporate Risk Management

Lite-On will continue sparing no effort to achieve the objective for creating economic, environmental and social sustainable value for such stakeholders as customers, shareholders, employees and communities. In the process of realizing the objective, Lite-On will identify and control the risk concerned by the corporate management with the complete risk management organizational framework and promotion, and mitigate the potential risk as possible as it could transfer, mitigation or avoidance of risk. This is one of the main reasons that Lite-On is able to continuing growing stably and achieving outstanding business performance.

Risk Management Organizational Structure

Lite-On complies with the system of management organization and internal control cycle to proactively confront and control the risks arising from the process of operation in the most cost-efficient manner. The head of risk management is the CEO.

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Board of Directors Audit Committee
Corporate Internal Audit
Group CEO
Function Units
Human Resources Legal Operational Controlling Manufacturing RegionsUnited States
Operation Europe
Strategy & Technical Research Finance / Excellence Singapore
Investment Development Center Accounting China Operations
Function Units
Mobile Mechanics Portable Image Devices Power System Storage
Mechanical Competence and System SolutionsConnected Devices Product SolutionOptoelectronic New Business
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Risk Management Cycle

With the many years of experience in operation management, Lite-On has developed a suitable risk classification framework from its explicit division of labor to ensure that it can cover risks at different levels and different areas in the process of risk identification, and summed out all risks into 3 categories, namely, “External risk”, “Operating risk”, and “Disclosure risk”.

“External risks” are derived from external factors, including poor sales of products, changes in the competitive power of the enterprise, softening of market demand, changes in the preferences of the consumers, technological innovations, competition from new products, international accidents, economic recession, undue mergers and acquisitions, changes in and control of foreign exchange, political party substitution, extortion, climate change, pollution and natural disasters. “Operating risks” are derived from the operation of related functional organizations, including delays in delivery, product defects, unresolved technical problems, high cost of purchases, excessive inventory, improper production design, facility failure, bad discipline of employees such as employee associations/aggregations agreements, occupational accidents, fires, employee relations problems such as child labor employment and forced labor, damaged and missing data, erroneous electronic information, and negligence in financial information. “Disclosure risks” are derived from the disclosure of information on operations, including pricing mistakes, disclosure of confidential information to the media, inaccurate financial forecasts, frequent and several revisions of financial forecasts, failure to provide financial statements on time, failure of disclosure and revision of errors.

Lite-On identified the risks by category as high, medium and low, and built up the Risk Map for facilitating subsequent risk identification so that the organization can take further action in the transfer, acceptance, reduction and avoidance of risks. Through the management cycle of PDCA, Lite-On continues to improve and control the factors that cause the risks and to minimize the probability and intensity of losses caused by the risks.

Occurrence	Risk Map	Risk Map	Risk Map
High	Business operation (negligence of safety in operation/personal injury and property damage) Safety for health (lighting)	Environment (chemical substances) Human resources (orders/juve- nile workers/rest) Finance (Electricity bill) Business strategy (shareholder relation)	Market risk (customer needs and satisfaction)
Medium	Business operation (Water consumption/operation error) Human assets (Dangerous works) Environment (Noise) Finance (Carbon tax)	Safety and health (High temperature of tin furnace) Human resources (Work hours/channels for complaints) Business dimension (Budgeted expenditure) Business operation (Products and services)	Politice (Political situation) Safety and health (Corrosion of chemicals) Business (Sales performance) Finance (Liquidity) Legal affairs (Law and brand risk) Business strategy (Operational execution/organization)
Low	Legal affairs (Local environmen- tal protection laws) Human resources (Protection of informers)	Business dimension (Pension) Human resources (Bribery) Safety and health (Irritation/ex- haustion/burns)	Health and safety (Oil tank safety) Environment and safety (Toxic gas and fire) Human resources (Restriction of freedom) Finance (Derivatives)
Impact	Low	Medium	High

Continued improvement in risk management through PDCA cycle (see chart)

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Audit Department Board (Audit Committee)
Risk management activities of indepen- Ensure the establishment of appropriate
dent audits. risk management system and culture.
Report to the Audit Committee on Risk management decision and resource
audit findings. allocation.
Continued
improvement
Functional Departments Business Groups Corporate Management (CEO)
Risk management activities self-evalua- Risk management decision of the
tion and control. executive committee of the Board.
Refinement and improvement of Risk management decision and resource
management practice. allocation.
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Lite-On Technology Corporation 2013 Annual Report

3.4 Information Regarding Board Members and Management Team

3.4.1 . The profiles of the directors and the independent directors

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Title Name Date of Tenure Date of initial Proportion of Proportion of Proportion of Proportion of Important experience (education) Other
appointment (year) appointment shareholding at the time shareholding at present shareholding by spouse shareholding under the positions
(office) of appointment and underage children title of a third party of the
company
or other
Quantity % Quantity % Quantity % Quantity %
companies
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Title	Name	Date of appointment (offce)	Tenure (year)	Date of initial appointment	Proportion of shareholding at the time of appointment	Proportion of shareholding at the time of appointment	Proportion of shareholding at present	Proportion of shareholding at present	Proportion of shareholding by spouse and underage children	Proportion of shareholding by spouse and underage children	Proportion of shareholding under the title of a third party	Proportion of shareholding under the title of a third party	Important experience (education)	Other positions of the company or other companies
					Quantity	%	Quantity	%	Quantity	%	Quantity	%

Chairman	Raymond Soong	2013.6.19	3	1992.05.20	77,738,111	3.37%	78,125,249	3.36%	14,743,882	0.63%	0	0%	Honorary DBA, National Chiao Tung University	Note 1
Director	David Lin	2013.6.19	3	1998.05.19	8,783,494	0.38%	12,778,670	0.55%	514,176	0.02%	0	0%	Tulane University MBA Chairman, Lite-On (Finland) Oy, Lite-On Mobile Oyj. Chairman, representative of Lite-On Green Technologies Inc., and Lite- On Green Technologies (Nanjing) Ltd. Vice Chairman, Lite-On Group and Lite-On technology Corp.	Note 2
Director	Lite-On Capital Inc. Representative: Warren Chen	2013.6.19	3	2001.04.19 1998.05.19	14,817,672 0	0.64% 0%	14,891,464 9,443,967	0.64% 0.41%	0 655,322	0% 0.03%	0 0	0% 0%	Bachelor, Dept. Chemical Engineering University of Chinese Culture, Manufacturing Supervisor, Texas Instrument Inc.	Note 3
Director	LDorcas Investment Co., Ltd. Representative: Joseph Lin	2013.6.19	3	2001.04.19 2007.06.21	5,930,283 0	0.26 % 0%	5,959,816 292,237	0.26% 0.01%	0 0	0% 0%	0 0	0% 0%	MBA, University of South California Bachelor, Dept of Mechanical Engineering, UCLA Director, EzNoBo Corporation CEO, Dorcas Investment Co., Ltd.	Note 4
Director	Ta-Sung Investment Co., Ltd. Representative: Keh-Shew Lu	2013.6.19	3	1998.05.19 2002.09.01	46,159,459 0	2.00% 0%	46,389,334 0	1.99% 0%	0 0	0% 0%	0 0	0% 0%	Bachelor, EE, National Cheng Kung University Master, EE, Texas Institute of Technology PhD, EE, Texas Institute of Technology Asian Regional President, Senior VP, Texas Instruments Director, VArmour Corp. Ltd.	Note 5
Director	Ta-Sung Investment Co., Ltd. Representative : Rick Wu	2013.6.19	3	1998.05.19 2001.04.19	46,159,459 0	2.00% 0%	46,389,334 983,209	1.99% 0.04%	0 50,590	0% 0%	0 0	0% 0%	Bachelor, Dept. of Commerce, Tamkang University; VP, Offce of Group President, Lite-On Technology Corporation Director, Silitech Technology Corporation Supervisor, Leotek Corp., Co-tech Copper Foil Corporation and Lite-On IT Corporation.	Note 6
Director	Yuan Pao Development & Investment Co. Ltd. Representative : CH Chen	2013.6.19	3	2004.06.15 2004.06.15	36,527,518 0	1.58% 0%	36,709,426 0	1.58% 0%	0 0	0% 0%	0 0	0% 0%	Bachelor, Dept of Mechanical Engineering, National Taiwan University Vice CEO, Texas Instrument Inc. Taiwan Branch	Note 7
Director	Yuan Pao Development & Investment Co. Ltd. Representative : David Lee	2013.6.19	3	2004.06.15 2003.06.1	36,527,518 0	1.58% 0%	36,709,426 17,420	1.58% 0%	0 0	0% 0%	0 0	0% 0%	Graduate Institute of Accounting, National Cheng Chi University; Director, Dynacard Co.,Ltd. Director, representative of ADDtek Corporation CFO, Lite-On Semiconductor Corp.	Note 8

Lite-On Technology Corporation 2013 Annual Report

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Title	Name	Date of appointment (offce)	Tenure (year)	Date of initial appointment	Proportion of shareholding at the time of appointment	Proportion of shareholding at the time of appointment	Proportion of shareholding at present	Proportion of shareholding at present	Proportion of shareholding by spouse and underage children	Proportion of shareholding by spouse and underage children	Proportion of shareholding under the title of a third party	Proportion of shareholding under the title of a third party	Important experience (education)	Other positions of the company or other companies
					Quantity	%	Quantity	%	Quantity	%	Quantity	%

Independent Director	Kuo-Feng Wu	2013.6.19	3	2007.6.21	0	0%	0	0%	0	0%	0	0%	Bachelor, Dept of Economics, National Chung Hsing University, Chairman, KPMG; Senior CPA, KPMG Director, Taipei CPA Association Executive Director, ROC CPA Independent Supervisor, Wistron Corporation, Supervisor, Darfon Corporation Vice Chairman, Financial Accounting Standards Committee, Accounting Research and Development Foundation, Convener, Accounting Practice Committee, Taiwan Accounting Association. Supervisor, Tynsolar Corporation. Chairman, International affairs committee of ROCCPA	Note 9
Independent Director	Harvey Chang	2013.6.19	3	2007.6.21	0	0%	0	0%	0	0%	0	0%	MBA, The Wharton School, Pennsylvania State University; Bachelor, Dept of Geology, National Taiwan University; President and CEO, Taiwan Mobile; Senior VP and CFO, TSMC; Chairman, China Securities Investment Trust Corp. President, China Development Trust Co. Ltd. ; President, Grand Cathay Securities; Manager, Trust Dept, International Dept, Chiao Tung Bank; Manger, Banking Dept, Morgan Bank Taipei Branch; Associate Manger, Multinational Corporation Dept, Citibank Taipei.	Note 10
Independent Director	Edward Yang	2013.6.19	3	2007.6.21	0	0%	0	0%	0	0%	0	0%	Stanford Executive Program (SEP), Stanford University, USA; Master of EE, Oregon State University, USA; Bachelor of EE, National Cheng Kung University; Independent Director, Focal Tech. Independent Director, Silicon Storage Technology Independent Director, Pericom Semiconductor Commissioner, Advanced Research Advisory Committee, ITRI Commissioner, Research & Development Advisory committee, Institute for Information Industry Commissioner, Advisory Committee of Engineer Department, San Jose State University. VP and CTO, Personal System Product Division, HP Corporation; VP and CTO, Corporate System Product Division, HP Corporation; President, Singapore Network and Telecommunications Business Unit, HP Corporation; Managing Director, Monte Jade Science and Technology Association: Managing Director, China Institute of Engineering; Managing Director, Information Service Association of R.O.C. Director, U-System Inc.	Note 11

Lite-On Technology Corporation 2013 Annual Report

Note 1: Chairman, Lite-On Technology Corp., Lite-on Li Shin Technology (Ganzhou) Co., Ltd., Lite-On (Finland) Oy, Lite-On Mobile Oyj, Logah Technology Co., Ltd., Logah Electronics (Su Zhou) Co., Ltd., Logah Technology (HK) Co., Ltd. DIODES,INC., DYNA International Holding Co., Ltd., DYNA International Co. Ltd., Lite-On Semiconductor(HK) LTD, Lite-On Semi (Wuxi) Co., Ltd., Lite-On Semi Electrocis (Wuxi) Co., Ltd., and G-Pro Electronics (SH) Co., Ltd.

Chairman, representative of Lite-On Semi Corp., Lite-On Electronics H.K. Ltd., Lite-On Electronics Co., Ltd. (HK), Lite-On Capital Inc., Lite-On Electronics Tianjin Co., Ltd., Lite-On Electronics (DG) Co., Ltd., Lite-On Tech. (Guang-Zhou) Co., Ltd., Dong Guan G-Tech Computers Co., Ltd., Dong Guan G-Com Computers Co., Ltd., Lite-On IT Corp., Lite-On IT Guangzhou Ltd., Lite-On IT Trading (Guangzhou) Ltd., Lite-On IT Opto Tech (BH) Co., Ltd., Silitech Technology Corp., Lite-On Automotive Corp., Lite-On Technology (Xianing) Co., Ltd., Leotek Electronics Corp., Lite-On Green Technologies Inc., Lite-On

Director, Lite-On Singapore Pte. Ltd., Lite-On IT Singapore. Pte. Ltd., EAGLE ROCK INVESTMENT LTD., LI SHIN INTERNATIONAL ENTERPRISE CORP., Huizhou Li Shin Electronic Co., Ltd., Lite-on Power Technology (Changzhou ) Co., Ltd., Li Shin Technology (Huizhou) Ltd., FORDGOOD ELECTRONIC LTD., Lite-On Mobile Pte. Ltd., Actron Technology Corporation, Ta-Rong Investment Co. Ltd., Yuan Pao Development & Investment Co. Ltd., MingShing Investment Co. Ltd., Eagle Rock Investment Ltd., Ta-Sung Investment Co., Ltd., and On-Bright Electronics Incorporated.

Director, representative of Lite-On Technology (Europe)B.V., Lite-On Electronics (Europe) Ltd., Lite-On, Inc. (USA), Lite-On Technology USA, Inc., LiteOn Trading USA, Inc., Lite-On Service USA, Inc., Lite-On Electronics Co., Ltd.(Thailand), LTC Group Ltd. (BVI), Lite-On International Holding Co., Ltd. (BVI), Lite-On Overseas Trading Co. Ltd., Titanic Capital Services Ltd., LTC International Ltd., Lite-On China Holding Co. Ltd.(BVI), I-Solutions Ltd., LiteOn Communications (GZ) Co., Ltd., Lite-on Electronics and Wireless (Guangzhou) Ltd., Silitek Elec. (DG) Co., Ltd., Lite-On Elec. (GuangZhou) Co., Ltd., Yet Foundate Ltd., Lite-On Computer Tech (DG), Dong Guan G-pro Computer Co., Ltd., China Bridge (China) Co., Ltd., Lite-on (Guangzhou) Infotech Inc., Lite-On (Guang Zhou) Precision Tooling Co., Ltd., Lite-On IT (HK), Lite-On Digital Electronics (DG) Co., Ltd., High Yield Group Co., Ltd., Lite-On Sales & istribution Inc., Silitech (BVI) Holding Ltd., Silitech (Bermuda) Holding Ltd., Silitech Technology Corp. Ltd., Silitech Technology Corp. Sdn. Bhd. Silitech Technology (Europe) Ltd. Silitech (Hong Kong) Holding Ltd. Silitech Technologuy(Su Zhou) Ltd., Xurong Electroinc (Shenzhen) Co., Ltd., Silitech International (India) Private Ltd. , Lite-On Automotive International(Cayman)Co., Ltd., Lite-On Automotive Electronics (Guang Zhou) Co., Ltd., Lite-On Automotive Electronics(Europe) BV, Lite-On Automotive (Wuxi) Co., Ltd., Lite-On Automotive Holdings (Hong Kong) Ltd., Lite-On Automotive Nortn America Inc., Leotek Electronics USA LLC, Leotek Electronics Holding Limited, Logah Technology Corp., Lite-On Green Energy S.R.L., Lite-On Automotive Service USA, Inc., Romeo Tetti PV1 S.R.L., Lite-On Green Technology B.V. ,Co-tech Copper Foil Corporation, and Dunhung Technology Corp.

Note 2: Director, Lite-On Technology Corp.

Director, representative of Lite-On IT Corporation, Silitech Technology Corp.

Note 5: Chairman of LedEngin Corporation.

Director of Lorenz Co., Ltd.

Director, representative of Lite-On Technology Corp., Nuvoton Technology Corp.

President and CEO of Diodes Incorporated Co., Ltd.

Note 6: Director, representative of Lite-On Technology Corp.

Supervisor, Lite-On Automotive Corp.

Supervisor, representative of Lite-On Semiconductor Corp.

Note 7: Chairman, On-Bright Electronics (SH), On-Bright Electronics (Guangzhou), and Co-Tech Copper Foil Corporation.

Chairman, representative of Lite-On Semiconductor (Philippines), On-Bright Electronics Incorporated Co., Ltd., Taiwan On-Bright Electronics., Ltd., SyncMOS Technologies International, Inc, and Dunhong Technology Corporation.

Vice Chairman, DIODES, INC. and Lite-On Semiconductor Corp.

Director, Smart Power Holding Group Co. Ltd., G-Pro Electronics (SH) Corp., Ltd., DYNA International Holding Co., Ltd., DYNA International Co., Ltd., Lite-On semi (Wuxi) Ltd., Lite-On semiconductor (Wuxi) Ltd, Lite-On semiconductor (HK) Ltd, On-Bright Electronics (Hong Kong) Co., Ltd, ZePoly Pte Ltd., On-Brilliant(Hong Kong) Co., Ltd., and Kwong Lung Enterprise Co, Ltd..

Director, representative of Lite-On Technology Corp., Dynacard Corporation Ltd., Actron Technology Corporation Ltd., Honghua Venture Capital Ltd., and DIODES, Inc.

Note 8: Director, Lite-On Semiconductor (HK) Ltd., On-Bright Electronics (Hong Kong), On-Bright Electronics (Shanghai).and On-Bright Electronics (Guangzhou). Director, representative of Lite-On Technology Corp., DYNA International Holding Co., Ltd., DYNA International Co., Ltd., Smart Power Holding Group Co., Ltd. And Lu Zhu Development Co., Ltd.

Supervisor, SyncMOS Technologies International Inc., and On-Bright Electronics Co., Ltd.

Note 3: Chairman, Lite-On Young Fast Pte. Ltd.

Chairman, representative of Lite-On Integrated Service Inc. and Lite-on (Guangzhou) Infotech Inc.

Director, Lite-On IT Singapore Pte. Ltd., Lite-on Li Shin Technology (Ganzhou) Co., Ltd., Lite-On (Finland) Oyj, Lite-On Mobile Oyj, Lite-On Mobile Pte. Ltd., Silitech International (India) Private Ltd.

Director, representative of Lite-On Technology Corp., Lite-On Semiconductor Corp., Lite-On Technology (Europe)B.V., Lite-On Electronics (Europe) Ltd., Lite-On Electronics H.K. Ltd., Lite-On Electronics Co., Ltd. (HK), Lite-On Technology USA, Inc., Lite-On Electronics Co., Ltd. (Thailand), Lite-On Capital Inc., LTC Group Ltd. (BVI), Lite-On International Holding Co., Ltd. (BVI), Lite-On Overseas Trading Co., Ltd., Titanic Capital Services Ltd., LTC International Ltd., Lite-On China Holding Co., Ltd. (BVI) I-Solutions Ltd., Lite-On Electronics Tianjin Co., Ltd., Ze Poly Pte. Ltd., Lite-On Electronics (DG) Co., Ltd., Lite-On Tech. (Guang-Zhou) Co., Ltd., Dong Guan G-Tech Computers Co., Ltd., Dong Guan G-Tech Computers Co., Ltd. Lite-On IT Corporation, Philip & Lite-On Digital Solutions Corp., High Yield Group Co., Ltd., Silitech Technology Corp., Silitech (BVI) Holding Ltd., Silitech (Bermuda) Holding Ltd., Silitech Technology Corp. Ltd., Silitech Technology Corp. Sdn. Bhd., Silitech (Hong Kong) Holding Ltd., Xurong Electroinc (Shenzhen) Co., Ltd., Li Shin International Enterprise Corp., Lite-On IT Trading (Guangzhou) Ltd., Lite-On Lighting Technology (Zhenjiang) Corp., Lite-On IT Opto Tech (BH) Co., Ltd., Auria, Lite-On Green Energt S.R.L, Romeo Tetti PV1 S.R.L., Lite-On Japan Ltd., Lite-On Automotive International(Cayman)Co., Ltd., Lite-On Automotive Electronics(Europe) BV, Lite-On Automotive Holdings (Hong Kong) Ltd., Lite-On Automotive Service USA, Inc., Lite-On Vietnam Co., Ltd, Lite-On Green Technologies (HK) Limited, Lite-On Green Energy (HK) Limited, Lite-On Green Energy B.V., Lite-On Green Energy (Singapore) Pte.Ltd., Lite-On Green Technology B.V.

Supervisor, representative of Dunhong Technology Co. Ltd.

CEO, Lite-On Semiconductor Corp.

Note 9: Independent Director, Lite-On Technology Corp., Wistron Corp.

Independent supervisor, Advantech Corp. and Finance and Economy Research for Education Fund.

Note 10: Chairman, TVBS, Weiwang Investment Corp. and Shinchu Broadcasting Corp.

Independent Director, Lite-On Technology Corp.

Director, CX Technology Corp.

Note 11: Independent director, Lite-On Technology Corp.

Director, iD Ventures America, LLC Partner, Sifotonics Technologies, GVT fund and Applied BioCode

Note 4: Director, representative of Lite-On Technology Corp.

Director of Essence Technology Solution Inc.

Lite-On Technology Corporation 2013 Annual Report

3.4.2 Independent Status of the Directors

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With at least 5 years of working experience and the Eligibility of independent status (Note 2) Also a
following professional designations director
to other
A lecturer of A judge, district Work companies
(number of
private or public attorney, lawyer, experience
institutions of certified public in business, firms)
higher education accountant, or legal affairs,
specialized in professional finance,
business, legal or technician accounting, 1 2 3 4 5 6 7 8 9 10
affairs, finance, who has passed or in an area
accounting, or relevant national required by
the expertise examination the business
required by the and properly of the
business of the licensed. Company
Company
----- End of picture text -----

	With at least 5 years of working experience and the following professional designations	With at least 5 years of working experience and the following professional designations	With at least 5 years of working experience and the following professional designations	Eligibility of independent status (Note 2)	Eligibility of independent status (Note 2)	Eligibility of independent status (Note 2)	Eligibility of independent status (Note 2)	Eligibility of independent status (Note 2)	Eligibility of independent status (Note 2)	Eligibility of independent status (Note 2)	Eligibility of independent status (Note 2)	Eligibility of independent status (Note 2)	Eligibility of independent status (Note 2)	Also a director to other companies (number of frms)
	A lecturer of private or public institutions of higher education specialized in business, legal affairs, fnance, accounting, or the expertise required by the business of the Company	A judge, district attorney, lawyer, certifed public accountant, or professional or technician who has passed relevant national examination and properly licensed.	Work experience in business, legal affairs, fnance, accounting, or in an area required by the business of the Company	1	2	3	4	5	6	7	8	9	10

Raymond Soong	No	No	Yes	-	-	-	-	-	-	V	V	V	V	0
David Lin	No	No	Yes	V	-	-	V	V	V	V	V	V	V	0
Representative of Lite-On Capital Inc.: Warren Chen	No	No	Yes	-	-	-	V	-	-	V	V	V	-	0
Representative of Dorcas Investment Co., Ltd.: Joseph Lin	No	No	Yes	V	-	V	V	V	V	V	V	V	-	0
Representative of Ta-Sung Investment Co., Ltd.: Keh-Shew Lu	No	No	Yes	V	-	V	V	V	-	V	V	V	-	0
Representative of Ta-Sung Investment Co., Ltd.: Rick Wu	No	No	Yes	V	-	V	V	V	-	V	V	V	-	0
Representative of Yuan Pao Development & Investment Co., Ltd.: CH Chen	No	No	Yes	-	-	V	V	V	-	V	V	V	-	0
Representative of Yuan Pao Development & Investment Co., Ltd.: David Lee	No	No	Yes	-	-	V	V	V	-	V	V	V	-	0
Kuo-Feng Wu	No	Yes	Yes	V	V	V	V	V	V	V	V	V	V	1
Harvey Chang	No	No	Yes	V	V	V	V	V	V	V	V	V	V	0
Edward Yang	No	No	Yes	V	V	V	V	V	V	V	V	V	V	0

Note : The directors and the supervisors meeting the following conditions in the period of two years before the appointment and during the term of office. Select the appropriate box by putting a “•”.
(1) Not an employee of the Company or the affiliates of the Company.
(2) Not a director or supervisor of the Company or the affiliates of the Company (except of the Company or the parent of the Company, or an independent director of the companies where the Company directly or indirectly holding more than 50% of the shares bearing voting rights).
(3) The person, the spouse, and underage children, who hold more than 1% of the shares or hold more than 1% of the shares under the title of a third party, or who is among the top-10 natural person shareholders.
(4) Not a spouse, a kindred within the 2nd tier under the Civil Code, or a next of kin to a kindred within the 5th tier under the Civil Code of the aforementioned people stated in (1) through (3).
(5) Not a director, supervisor, or employee of an institutional shareholder that directly hold more than 5% of the outstanding shares of the Company, or a director, supervisor, or employee of the top-5 institutional shareholders of the Company.
(6) Not a director (trustee), supervisor(monitor), or manager of specific company or institution that has financial or business transactions with the Company, or a shareholder holding more than 5% of the shares of such company or institution.
(7) Not a professional, sole proprietor, partner, company or the owner, partner, director (trustee), supervisor(monitor), manager of the group enterprise that provide business, legal, financial , or accounting services or consultation to the Company, or a spouse to the aforementioned people.
(8) Not a spouse to or kindred within the 2nd tier under the Civil Code to another director.
(9) None of the provisions in Article 30 of the Company Law is applicable.
(10) Not being elected as the government, institution of their representative as stated in Article 27 of the Company Law.

Lite-On Technology Corporation 2013 Annual Report

3.4.3 Profile of the Management Team

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Title Name Date of Proportion of shareholding Proportion of shareholding by Proportion of shareholding Major Background Information (note 2) Other positions of other companies Manager who is the spouse or kin
(Note 1) appointment spouse and underage children under the title of a third party within the 2nd tier of the Civil Code
(office)
shares % shares % shares % Title Name Relationship
Group CEO/ Lite-On Warren Chen 2002.11.04 9,443,967 0.41% 655,322 0.03% 0 0% Dept of Chemical Engineering/University of Chinese Culture, Refer to profile of director for detail None None None
----- End of picture text -----

Title (Note 1)	Name	Date of appointment (offce)	Proportion of shareholding	Proportion of shareholding	Proportion of shareholding by spouse and underage children	Proportion of shareholding by spouse and underage children	Proportion of shareholding under the title of a third party	Proportion of shareholding under the title of a third party	Major Background Information (note 2)	Other positions of other companies	Manager who is the spouse or kin within the 2nd tier of the Civil Code	Manager who is the spouse or kin within the 2nd tier of the Civil Code	Manager who is the spouse or kin within the 2nd tier of the Civil Code
			shares	%	shares	%	shares	%			Title	Name	Relationship
Group CEO/ Lite-On	Warren Chen	2002.11.04	9,443,967	0.41%	655,322	0.03%	0	0%	Dept of Chemical Engineering/University of Chinese Culture,	Refer to profle of director for detail	None	None	None
Technology CEO									Manager of Manufacturing Dept, Texas Instruments.
New Business CEO	Danny Liao	2013.06.19	2,009,960	0.09%	0	0%	0	0%	MBA, Lake Superior State University; CEO, Lite-On IT Corporation	Note 3	None	None	None
New Business CEO	Cor Saris	2014.01.13	0	0%	0	0%	0	0%	CEO of Lite-On Mobile Oyj, MSc Chemical Engineering	Chairman of Philip & Lite-On Digital Solution corp., Director, representative of Philips & Lite-On Digital Solutions Netherlands B.V., Philips & Lite-On Digital Solutions GermanyGmbH
Business Group President	Alexander Huang	2010.06.01	17,094	0%	100,366	0%	0	0%	Dept of Information Engineering (previously Computer Dept), Microsoft Greater China Regional President, President of Microsoft Taiwan.	None	None	None	None
Business Group President	Shilung Chiang	2002.11.04	819,555	0.04%	0	0%	0	0%	MBA, University of Pittsburgh; President, Computer Business Division, Digital Corporation.	Director, Lite-On Singapore Pte. Ltd., Director, representative of Lite-On Electronics Co., Ltd	None	None	None
Business Group CEO	Peter Chiu	2002.11.04	1,044,845	0.04%	0	0%	0	0%	Master of Finance, National Taiwan University; Master of Production System Engineering and Management Study, Taipei Technology University; Vice President, First International Computers.	Director, representative of Silitech Technology Corp. & Lite-On Vietnam Co., Ltd.	None	None	None
VP	DI Wang	2002.11.04	1,454,043	0.06%	16,883	0%	0	0%	PhD, Northeastern University/Mathematics; VP in Sales Engineering, Potrans Electrical Corp.	Director, representative of Lite-On Integrated Service Inc., Supervisor, representative of Baoyuan Corporation	None	None	None
Senior VP	Albert Chang	2002.11.04	772,404	0.03%	138,076	0.01%	0	0%	Master of Industrial Management, National Cheng Kung University; ABIT U.S. Branch President	Note4	None	None	None
Business Group President	Rex Chuang	2002.11.04	1,369,745	0.06%	431,088	0.02%	0	0%	"Electronic Engineering, Hsin Pu Industrial Vocational School VP of Production, Lite-On Electronics Corp.	Director, representative of Lite-On Electronics Co., Ltd.(Thailand) & Leotek Electronics Corp.	None	None	None
VP	Sonny Chao	2002.11.04	1,120,298	0.05%	2,549	0%	0	0%	School of Industrial Engineering, Polytechnic Institute of N.Y.; Philips Taiwan Global Marketing & Sales Sr. Program Manager	Note 5	None	None	None
Business Group President	TC Huang	2002.11.04	1,173,758	0.05%	2,891	0%	0	0%	University of Leicester/Business Administration Manager , Yu long Corporation	None	None	None	None
Business Group CEO	Johnson Sun	2002.11.04	2,138,067	0.09%	557	0%	0	0%	Dept of Electrical Engineering, Feng Chia University; Safety Engineer, Sony Corporation.	Note 6	None	None	None
Business Unit General Manager	Henry Chen	2003.11.01	150,679	0.01%	0	0%	0	0%	Graduate Institute of Electrical Engineering, Tatung University; Project Manager, Mustek Systems.	None	None	None	None
VP	Wing Eng	2002.11.04	2,243,590	0.10%	0	0%	0	0%	Master of Electrical Engineering, Stanford University; Director of Design Dept, AT&T Bell Lab.	None	None	None	None
VP	Tom Tang	2002.11.04	635,013	0.03%	1,673	0%	0	0%	Department of Electical Engineers, Chung Yung Christian University. Vice President, Pacifc Image Electronic Co., Ltd.	None	None	None	None
VP	HY Lee	2002.11.04	537,899	0.02%	25,629	0%	0	0%	Master of Industrial Engineering, National Ching Hua University; Asst VP, Universal Microelectronics	None	None	None	None

Lite-On Technology Corporation 2013 Annual Report

==> picture [1079 x 47] intentionally omitted <==

Title (Note 1)	Name	Date of appointment (offce)	Proportion of shareholding	Proportion of shareholding	Proportion of shareholding by spouse and underage children	Proportion of shareholding by spouse and underage children	Proportion of shareholding under the title of a third party	Proportion of shareholding under the title of a third party	Major Background Information (note 2)	Other positions of other companies	Manager who is the spouse or kin within the 2nd tier of the Civil Code	Manager who is the spouse or kin within the 2nd tier of the Civil Code	Manager who is the spouse or kin within the 2nd tier of the Civil Code
			shares	%	shares	%	shares	%			Title	Name	Relationship

VP	CH Lei	2009.02.02	148,661	0.01%	0	0%	0	0%	Dept of Physics, Christian Chung Yuan University; Asst VP, Hon Hai Precision Industrial Corp.	None	None	None	None
Business Unit General Manager	Charlie Wang	2012.01.02	70,788	0%	0	0%	0	0%	MBA, National Cheng Chi University; VP of Lite-On Technology	None	None	None	None
VP	Victor Hsu	2012.11.27	10,000	0%	0	0%	0	0%	University of Illinois at Urbana-Champaign/MBA; Group CFO of Samson Holding Ltd.	Director, representative of Baoyuan Corporation, Supervisor, Leotek Electronics Corp.	None	None	None
VP	Joseph SK Chen	2013.01.02	6,424	0%	23,601	0%	0	0%	Department of Electronics, Taipei Tech College. VP of CPBU, Sysgration Corporation Ltd.	None	None	None	None
VP	Mike MH Wu	2014.03.10	0	0%	0	0%	0	0%	Department of Industrial Engineering, National Tsing Hua University. COO of Lite-On Mobile	None	None	None	None
VP	Johnson Wang	2013.06.03	125,000	0.01%	0	0%	0	0%	Master of Chemistry, National Ching Hua University; SCM VP, EATON PHOENIXTEC MMPL CO., LTD.	None	None	None	None
VP	CY Chung	2013.10.02	0	0%	0	0%	0	0%	Industrial Management, National Cheng Kung University; Acting SBG Head, Hon Hai Precision Industrial Corp.	None	None	None	None
Business Unit General Manager	Anson Chiu	2013.08.19	19,040	0%	0	0%	0	0%	Department of Industrial Management, Lunghwa University of Science and Technology. Procurement Specialist, Crownpo TechnologyInc.	None	None	None	None
Business Unit General Manager	Jerry Hsu	2013.08.19	697,899	0.03%	1,538	0%	0	0%	Department of Electronics, Lunghwa University of Science and Technology. Engineer of power support design, ALITECH CO., LTD	None	None	None	None
Business Unit General Manager	BC Liao	2013.08.19	174,777	0.01%	15,024	0%	0	0%	Industrial Management, Chung Yuan Christian University; Procurement Manager, Philips;	None	None	None	None
VP	Joe Wu	201.03.20	10,334	0%	0	0%	0	0%	Biomedical Engineering , Chung Yuan Christian University. AVP, First International Computer, Inc.	None	None	None	None
Chief Finance and Accounting Offcer	Brownson Chu	2004.10.22	864,873	0.04%	582	0%	0	0%	Dept of Accounting, Feng Chia University; CFO, Finance Dept, Lite-On IT Corporation	Note 7	None	None	None
Chief Audit Offcer	James Ho	2002.11.04	824,606	0.04%	0	0%	0	0%	Santa Clara University/MBA, Asia Source In(USA)	None	None	None	None

Note 1: Management information shall include CEO, Vice CEO, General Manager and Supervisor of each department. For those managers with equivalent position to CEO, Vice CEO, or General Managers should be all disclosed.

Note 2: Experience relate to current position. If the person had worked in the company’s appointed auditing firm or affiliates during the reporting period, please specify the job field and job title in above form.

Note 3: Director, representative of Lite-On Capital Inc., Lite-On IT Corporation, LET (HK) Limited, LET (HK) Limited, High Yield Group Co., Ltd., Lite-On Sales & Distribution Inc., Lite-On Americas Inc., Lite-On Information Technology GmbH, Lite-On Opto Technology (Guangzhou) Co., Ltd., Lite-On IT Trading (Guangzhou) Co., Ltd., Lite-On IT Opto Tech (BH) Co., Ltd., Philip & Lite-On Digital Solution corp., Lite-On Automotive Corp., Romeo Tetti PV1 S.R.L, Leotek Electronics Corp., Director, Lite-On IT Singapore Pte. Ltd.

Note 4: Director, representative of LTC Group Ltd. (BVI), Titanic Capital Services Ltd., LTC International Ltd., Lite-On China Holding Co. Ltd. (BVI), I-Solutions Ltd., Lite-On Electronics (Tianjin) Co., Ltd., Lite-On Electronics (Dongguan) Co., Ltd., Lite-On Tech. (Guangzhou) Co., Ltd., Dong Guan G-Tech Computers Co., Ltd., Dong Guan G-Com Computers Co., Ltd., Lite-On Communications (Guangzhou) Co., Ltd, Lite-On Elec and Wire (Guangzhou) Co., Ltd., Silitek Elec. (Dongguan) Co., Ltd., Yet Foundate Ltd., Lite-On Computer Tech (Dongguan) Co., Ltd., DongGuan G-pro Computer Co., Ltd., China Bridge (China) Co., Ltd., China Bridge Express (Wuxi) Co., Ltd., Lite-On (Guang Zhou) Infortech Co., Ltd., Lite-On (Guang Zhou) Precision Tooling Co., Ltd., Lite-On Digital Electronics (Dongguan) Co., Ltd., Lite-On Technology (Guangzhou)

Co., Ltd., Lite On Power Technology (Dongguan) Co., Ltd., Dongguan Lite-On Computer Co., Ltd., Li Shin International Enterprise Corp., LiteOn Technology (Ying Tan) Co., Ltd., Lite-On Li shin Technology (Xianing) Co., Ltd., Director of LI SHIN INTERNATIONAL ENTERPRISE CORP., Suzhou Fordgood Electronic Co., Ltd., Huizhou Li Shin Electronic Co., Ltd., Lite On Power Technology (Chang Zhou) Co., Ltd. (Original Name: Li Shin Enterprise (Su Zhou) Co., Ltd.), Suzhou Fordgood Electronic Co., Ltd., Li Shin Technology (Huizhou) Ltd, Lite-On Li shin Technology (Ganzhou) Co., Ltd., Logah Electronics (Su Zhou) Co., Ltd, Lippo Electronics (Su Zhou) Co., Ltd.

Note 5: Director, representative of Lite-On, Inc. (USA), Lite-On Technology USA, Inc., Lite-On Trading USA, Inc., Lite-On Service USA, Inc.

Note 6: Director, representative of Li Shin International Enterprise Corp., Logah Technology Corp., Lite-On Clean Energy Technology Corp., Lite-On Japan Ltd., Director of Logah Electronics (Su Zhou) Co., Ltd, Lippo Electronics (Su Zhou) Co., Ltd., Logah Technology Co., Ltd., Logah Technology (HK) Corp. Ltd.

Note 7: Director, representative of G&W Technology (BVI) Limited, G&W Technology Ltd., Baoyuan Corporation, Supervisor, representative of Lite-On Integrated Service Inc., Li Shin International Enterprise Corp., Lite-On Green Technologies Inc., Lite-On Clean Energy Technology Corp., Lite-On Vietnam Co., Ltd., Supervisor, Lite-On Automotive Corp., Leotek Electronics Corp.

Lite-On Technology Corporation 2013 Annual Report

==> picture [582 x 770] intentionally omitted <==

Capital and Shares

4.1 The Top-10 Shareholders and Information of Related Parties

==> picture [483 x 94] intentionally omitted <==

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

Name Shareholding by self Shareholding by spouse Shareholding under the Specify the names and relations of
(note 1) and underage children title of a third party the top-10 shareholders who are
related-parties as stated in SFAS
No. 6, or spouse or kindred within
the 2nd tier under the Civil Code
(note 3)
Quantity of Proportion of Quantity of Proportion of Quantity of Proportion of Title (or name) Relation
shares shareholding shares shareholding shares shareholding
----- End of picture text -----

Name (note 1)	Shareholding by self	Shareholding by self	Shareholding by spouse and underage children	Shareholding by spouse and underage children	Shareholding under the title of a third party	Shareholding under the title of a third party	Specify the names and relations of the top-10 shareholders who are related-parties as stated in SFAS No. 6, or spouse or kindred within the 2nd tier under the Civil Code (note 3)	Specify the names and relations of the top-10 shareholders who are related-parties as stated in SFAS No. 6, or spouse or kindred within the 2nd tier under the Civil Code (note 3)
	Quantity of shares	Proportion of shareholding	Quantity of shares	Proportion of shareholding	Quantity of shares	Proportion of shareholding	Title (or name)	Relation

NAN SHAN LIFE INSURANCE CO.,LTD	87,952,532	3.78%	0	0%	0	0%	None	None
NAN SHAN LIFE INSURANCE CO.,LTD Representative: Wen-Te Kuo	0	0%	0	0%	0	0%	None	None
Raymond Soong	78,125,249	3.36%	14,743,882	0.63%	0	0%	Ta-Rong / Ta-Sung / Yuan Pao ( Investment Co., Ltd)	Director
Ta-Rong Investment Co., Ltd.	68,316,604	2.94%	0	0%	0	0%	Raymond Soong	Director
Ta-Rong Investment Co., Ltd. Representative: Shu-Yan Tsai	48,970	0%	0	0%	0	0%	Ta-Sung / Yuan Pao Development (Investment Co., Ltd. )	Director
FUBON LIFE INSURANCE CO.,LTD	67,135,349	2.88%	0	0%	0	0%	None	None
FUBON LIFE INSURANCE CO.,LTD Representative: Pen-Yuan Cheng	0	0%	0	0%	0	0%	None	None
CAPITAL SECURITIES NOMINEE LIMITED	49,023,669	2.11%	0	0%	0	0%	None	None
Government of Singapore	48,003,352	2.06%	0	0%	0	0%	None	None
Ta-Sung Investment Co., Ltd.	46,389,334	1.99%	0	0%	0	0%	Raymond Soong, Shu-Yan Tsai	Director
Ta-Sung Investment Co., Ltd. Representative: Keh-Shew Lu	0	0%	0	0%	0	0%	None	None
Ta-Sung Investment Co., Ltd. Representative: Rick Wu	983,209	0.04%	50,590	0%	0	0%	None	None
VANGUARD EMERGING MARKETS STOCK INDEX FUND, A SERIES OF VANGUARD INTERNATIONAL EQUITY INDEX FUNDS	38,999,607	1.68%	0	0%	0	0%	None	None
Yuan Pao Development & Investment Co. Ltd.	36,709,426	1.58%	0	0%	0	0%	Raymond Soong、 Shu- Yan Tsai	Director
Yuan Pao Development & Investment Co. Ltd. Representative : CH Chen	0	0%	0	0%	0	0%	None	None
Yuan Pao Development & Investment Co. Ltd. Representative : David Lee	17,420	0%	0	0%	0	0%	None	None
The Master Trust Bank of Japan, Ltd. as trustee of Eastspring Investments Asia Oceania High Dividend Equity Mother Fund	34,016,614	1.46%	0	0%	0	0%	None	None

Lite-On Technology Corporation 2013 Annual Report

4.2 The Structure of Shareholders

2014 / 4 / 21

	Governmental Organizations	Financial Institutions	Other Institutional Investors	Individuals	Foreign Institutional Shareholders and Individuals	Total
Numbers of Shareholders	9	21	294	146,566	829	147,719
Holding Shares	171	257,977,845	444,678,795	523,705,108	1,101,263,802	2,327,625,721
Holding Stake	0%	11.08%	19.11%	22.50%	47.31%	100%

4.3 Change in the Proportion of Shareholding among the Directors, Managers and Major Shareholders

Title (note 1)	Name	2013	2013	Current period to April 21	Current period to April 21
		Change in number of shareholdings	Change in number of shares pledged under lien	Change in number of shareholdings	Change in number of shares pledged under lien
Chairman	Raymond Soong	387,138	0	0	0
Vice Chairman	David Lin	695,176	0	0	0
Director	Dorcas Investment Co., Ltd	73,792	0	0	0
	Representative: Warren Chen	1,390,108	0	0	0
Director	Dorcas Investment Co., Ltd	29,533	0	0	0
	Representative:Joseph Lin	1,448	0	0	0
Director	Ta0Sung Investment Co., Ltd.	229,875	0	0	0
	Representative: Keh Shew Lu	0	0	0	0
Director	Ta Sung Investment Co., Ltd.	229,875	0	0	0
	Representative: Rick Wu	4,872	0	0	0
Director	Yuan Pao Development & Investment Co., Ltd.:	181,908	0	0	0
	Representative: CH Chen	0	0	0	0
Director	Yuan Pao Development & Investment Co., Ltd.:	181,908	0	0	0
	Representative: David Lee	(13,865)	0	0	0
Independent Director	Kuo0Feng Wu	0	0	0	0
Independent Director	Harvey Chang	0	0	0	0
Independent Director	Edward Yang	0	0	0	0
Group CEO/ Lite-On Technology CEO	Warren Chen	1,390,108	0	0	0
New Business CEO	Danny Liao	9,960	0	0	0
New Business CEO	Cor Saris	0	0	0	0
Group Chief Technology Offcer	Paul Lo (Retired on 2013/10/12)	(487,695)	0	0	0

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

Title (note 1) Name 2013 Current period to April 21
Change in number of Change in number of Change in number of Change in number of
shareholdings shares pledged under shareholdings shares pledged under
lien lien
----- End of picture text -----

Title (note 1)	Name	2013	2013	Current period to April 21	Current period to April 21
		Change in number of shareholdings	Change in number of shares pledged under lien	Change in number of shareholdings	Change in number of shares pledged under lien

Business Group President	Alexander Huang	118,094	0	(150,000)	0
Business Group President	Shilung Chiang	(61,311)	0	0	0
Business Group CEO	Peter Chiu	444,285	0	0	0
VP	DI Wang	281,635	0	0	0
VP	Weber Su (Retired on 2014/04/02)	250,760	0	0	0
Senior VP	Albert Chang	379,021	0	0	0
Business Group President	Rex Chuang	281,118	0	0	0
VP	Sonny Chao	129,684	0	(105,000)	0
Business Group President	TC Huang	(130,002)	0	0	0
Business Group CEO	Johnson Sun	185,918	0	0	0
Business Unit General Manager	Henry Chen	(45,605)	0	(20,000)	0
VP	Wing Eng	324,556	0	0	0
VP	Tom Tang	52,155	0	0	0
VP	HY Lee	(196,839)	0	0	0
VP	CH Lei	(53,393)	0	(16,000)	0
Business Unit General Manager	Jason Tzeng (Leave of absence on 2013/11/30)	2,490	0	0	0
Business Unit General Manager	Charlie Wang	70,003	0	0	0
VP	Victor Hsu	10,000	0	0	0
VP	Joseph SK Chen	31	0	0	0
VP	Mike MH Wu	0	0	0	0
VP	Johnson Wang	15,000	0	110,000	0
VP	CY Chung	0	0	0	0
Business Unit General Manager	Anson Chiu	94	0	0	0
Business Unit General Manager	Jerry Hsu	3,458	0	0	0
Business Unit General Manager	BC Liao	65,593	0	0	0
VP	Joe Wu	0	0	0	0
Chief Finance and Accounting Offcer	Brownson Chu	77,625	0	0	0
Chief Audit Offcer	James Ho	(265,344)	0	(5,000)	0

Lite-On Technology Corporation 2013 Annual Report

Financial Information

Lite-On Technology Corporation

Financial Statements for the Years Ended December 31, 2013 and 2012 and Independent Auditors’ Report

39 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

LITE-ON TECHNOLOGY CORPORATION

BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Lite-On Technology Corporation

We have audited the accompanying balance sheets of Lite-On Technology Corporation as of December 31, 2013, December 31, 2012 and January 1, 2012, and the related statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2013 and 2012. These financial statements are the responsibility of Lite-On Technology Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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, the financial statements referred to above present fairly, in all material respects, the financial position of Lite-On Technology Corporation as of December 31, 2013, December 31, 2012 and January 1, 2012, and its financial performance and its cash flows for the years ended December 31, 2013 and 2012, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

We have also audited the consolidated financial statements of Lite-On Technology Corporation and subsidiaries as of and for the years ended December 31, 2013 and 2012 and have issued an unqualified opinion thereon in our report dated March 27, 2014.

March 27, 2014

Notice to Readers

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

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

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Notes receivable, net (Note 7) Trade receivables, net (Note 7) Trade receivables from related parties (Note 26) Other receivables Other receivables from related parties (Note 26) Inventories, net (Notes 5 and 8) Prepayments Total current assets NONCURRENT ASSETS Available-for-sale financial assets - noncurrent (Notes 5 and 9) Investments accounted for using equity method (Note 11) Property, plant and equipment, net (Notes 5 and 12) Intangible assets (Notes 5 and 13) Deferred tax assets (Notes 5 and 20) Refundable deposits Prepayments for pension fund (Notes 5 and 17) Other noncurrent assets Total noncurrent assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 14) Notes payable Trade payables Trade payables to related parties (Note 26) Other payables Other payables to related parties (Note 26) Current tax liabilities (Notes 5 and 20) Provisions - current (Notes 5 and 16) Advance receipts Current portion of long-term borrowings (Note 14) Finance lease payables - current (Note 15) Total current liabilities NONCURRENT LIABILITIES Derivative financial liabilities for hedging - noncurrent (Notes 5 and 10) Long-term borrowings, net of current portion (Note 14) Deferred tax liabilities (Notes 5 and 20) Finance lease payables, net of current portion (Note 15) Accrued pension liabilities (Notes 5 and 17) Guarantee deposits Credit balance of investments accounted for using equity method (Note 11) Total noncurrent liabilities Total liabilities EQUITY Share capital Ordinary share Advance receipts for share capital Total share capital Capital surplus Additional paid-in capital from share issuance in excess of par value Bond conversion Treasury stock transactions Difference between consideration and carry amounts adjusted arising from changes in percentage of ownership in subsidiaries Arising from share of changes in capital surplus of associates Merger Employee stock options Total capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unrealized gain (loss) on available-for-sale financial assets Unrealized loss on cash flow hedging Total other equity Treasury shares Total equity TOTAL		December 31, 2013		December 31, 2012		January 1, 2012
		Amount % $ 6,924,714 6 7,518 - 18,074,101 14 5,307,083 4 223,612 - 372,160 - 2,575,272 2 453,873 - 33,938,333 26 717,171 1 87,132,748 68 4,758,177 4 646,137 - 921,841 1 87,784 - - - 5,512 - 94,269,370 74 $ 128,207,703 100 $ 5,484,120 4 7,134 - 2,408,170 2 20,668,164 16 4,352,868 3 465,963 - 720,462 1 133,230 - 713,778 1 6,350,000 5 - - 41,303,889 32 46,969 - 12,125,000 10 1,523,571 1 - - 11,173 - 16,165 - 144,632 - 13,867,510 11 55,171,399 43 23,246,552 18 29,705 - 23,276,257 18 9,096,489 7 7,540,388 6 430,851 - - - 15,487 - 10,120,217 8 8,587 - 27,212,019 21 8,601,391 7 689,913 1 12,172,082 9 21,463,386 17 2,383,040 2 83,231 - (46,969) - 2,419,302 2 (1,334,660) (1) 73,036,304 57 $ 128,207,703 100		Amount % $ 10,324,378 9 - - 14,980,406 14 3,241,115 3 160,143 - 309,504 - 2,214,716 2 270,930 - 31,501,192 28 660,080 1 72,538,973 65 5,262,397 5 640,801 - 790,151 1 84,129 - - - 4,000 - 79,980,531 72 $ 111,481,723 100 $ 2,787,840 3 500 - 1,457,394 1 15,591,993 14 3,732,425 3 449,867 1 409,454 - 175,712 - 562,187 1 3,125,000 3 453 - 28,292,825 26 101,563 - 12,575,000 11 998,046 1 - - 37,458 - 16,531 - - - 13,728,598 12 42,021,423 38 22,953,154 20 6,840 - 22,959,994 20 8,551,730 8 7,540,388 7 370,703 - 146,193 - 16,645 - 10,120,217 9 6,112 - 26,751,988 24 7,847,905 7 - - 13,654,612 12 21,502,517 19 128,872 - (446,848) - (101,563) - (419,539) - (1,334,660) (1) 69,460,300 62 $ 111,481,723 100		Amount % $ 9,750,349 9 - - 13,894,932 12 5,121,231 4 180,982 - 853,564 1 4,474,796 4 202,556 - 34,478,410 30 2,255,870 2 69,729,781 61 5,481,271 5 687,177 1 789,049 1 86,371 - 79,234 - - - 79,108,753 70 $ 113,587,163 100 $ 1,050,000 1 1,962 - 6,656,629 6 14,560,064 13 3,815,817 3 663,986 1 441,682 - 181,346 - 560,101 1 - - 504 - 27,932,091 25 165,225 - 15,700,000 14 1,071,098 1 322 - - - 18,101 - - - 16,954,746 15 44,886,837 40 23,099,801 20 - - 23,099,801 20 8,533,185 8 7,641,499 7 416,974 - - - - - 10,255,921 9 4,602 - 26,852,181 24 7,125,313 6 - - 12,392,930 11 19,518,243 17 1,625,560 1 (142,004) - (165,225) - 1,318,331 1 (2,088,230) (2) 68,700,326 60 $ 113,587,163 100

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

41 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

LITE-ON TECHNOLOGY CORPORATION

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

OPERATING REVENUE Sales (Notes 5, 19 and 26) Less: Sales returns Sales allowance Total operating revenue OPERATING COSTS Cost of goods sold (Notes 8, 17 and 26) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES REALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES GROSS PROFIT, NET OPERATING EXPENSES (Notes 17 and 26) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses OPERATING INCOME NONOPERATING INCOME AND EXPENSES Share of profit of subsidiaries and associates (Note 11) Interest income Dividend income Other income Gain on disposal of property, plant and equipment Gain on disposal of investments Interest expense Other expenses Loss on disposal of property, plant and equipment Loss on disposal of investments		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2013 Amount % $ 81,058,390 102 323,820 1 1,100,791 1 79,633,779 100 71,585,095 90 8,048,684 10 4,938 - - - 8,043,746 10 1,380,316 2 2,703,984 3 1,758,838 2 5,843,138 7 2,200,608 3 7,002,137 9 61,927 - 14,435 - 815,170 1 342,674 - - - (488,234) (1) (369,106) - (235,277) - (33,419) -		2012
				Amount % $ 78,151,418 102 313,787 - 1,093,294 2 76,744,337 100 69,655,055 91 7,089,282 9 - - 89,525 - 7,178,807 9 1,421,078 2 2,493,950 3 1,529,054 2 5,444,082 7 1,734,725 2 5,568,989 7 83,130 - 21,459 - 948,584 1 16,848 - 310,085 1 (337,129) - (225,930) - (242) - - - (Continued)

LITE-ON TECHNOLOGY CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

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

Net loss on foreign currency exchange Impairment loss (Notes 9 and 12) Total nonoperating income and expenses OPERATING PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 5 and 20) NET PROFIT FOR THE PERIOD OTHER COMPREHENSIVE INCOME (Notes 11, 17, 18 and 20) Exchange differences on translating foreign operations Unrealized gain (loss) on available-for-sale financial assets Cash flow hedges Share of other comprehensive income of subsidiaries and associates Actuarial gains (losses) on defined benefit plans Income tax relating to the components of other comprehensive income (expense) Other comprehensive income (loss) for the period, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE PERIOD EARNINGS PER SHARE (NEW TAIWAN DOLLARS; Note 22) Basic Diluted		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2013 Amount % $ (12,039) - - - 7,098,268 9 9,298,876 12 544,028 1 8,754,848 11 1,962,895 3 84,664 - 54,594 - 1,111,461 1 18,043 - (377,841) - 2,853,816 4 $ 11,608,664 15 $3.83 $3.79		2012
				Amount % $ (11,068) - (652,857) (1) 5,721,869 8 7,456,594 10 54,171 - 7,402,423 10 (1,068,528) (2) (28,704) - 63,662 - (888,040) (1) (127,212) - 206,008 - (1,842,814) (3) $ 5,559,609 7 $3.25 $3.20

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

43 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

LITE-ON TECHNOLOGY CORPORATION

STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

Issue of	Share Capital(Note 1				Capital Surplus	(Note 18)				Retained Earning	s(Note 18)		Other Equity (	Note 18)
		Additional Paid-in Capital from Share Issuance in Excess of Par Value $ 8,533,185 - - - - - 111,865 19,589 - - - - (112,909) 8,551,730 - - - - - - 134,320 410,439 - - - - $ 9,096,489	Bond Conversion $ 7,641,499 - - - - - - - - - - - (101,111) 7,540,388 - - - - - - - - - - - - $ 7,540,388	Treasury Stock Transactions $ 416,974 - - - - (3,928 ) - - 55,853 - - - (98,196) 370,703 - - - - - - - - 60,148 - - - $ 430,851	Difference Between Consideration and Carry Amounts Adjusted Arising from Change in Percentage of Ownership in Subsidiaries $ - - - - 146,193 - - - - - - - - 146,193 - - - - (146,193 ) - - - - - - - $ -	Arising from Share of Changes in Capital Surplus of Associates $ - - - - - 16,645 - - - - - - - 16,645 - - - - - (1,158 ) - - - - - - $ 15,487	Merger $ 10,255,921 - - - - - - - - - - - (135,704) 10,120,217 - - - - - - - - - - - - $ 10,120,217	Employee Stock Options $ 4,602 - - - - 1,510 - - - - - - - 6,112 - - - - - 2,475 - - - - - - $ 8,587
												Exchange Differences on Translating Foreign Operations $ 1,625,560 - - - (2,430 ) - - - - - (1,494,258) (1,494,258) - 128,872 - - - - - - - - - - 2,254,168 2,254,168 $ 2,383,040	Unrealized Gain (Loss) on Available- for-sale Financial Assets $ (142,004 ) - - - - - - - - - (304,844) (304,844) - (446,848 ) - - - - - - - - - - 530,079 530,079 $ 83,231	Cash Flow Hedges $ (165,225 ) - - - - - - - - - 63,662 63,662 - (101,563 ) - - - - - - - - - - 54,594 54,594 $ (46,969)
Shares (In Thousands) 2,309,980 - - 11,397 - - 4,421 82 - - - - (30,565) 2,295,315 - - - 11,490 - - 3,669 14,181 - - - - 2,324,655	Amount $ 23,099,801 - - 113,972 - - 44,215 816 - - - - (305,650) 22,953,154 - - - 114,899 - - 36,689 141,810 - - - - $ 23,246,552
									Legal Reserve $ 7,125,313 722,592 - - - - - - - - - - - 7,847,905 753,486 - - - - - - - - - - - $ 8,601,391	Special Reserve $ - - - - - - - - - - - - - - - 689,913 - - - - - - - - - - $ 689,913	Unappropriated Earnings $ 12,392,930 (722,592 ) (5,174,335 ) (113,972 ) - (22,468 ) - - - 7,402,423 (107,374) 7,295,049 - 13,654,612 (753,486 ) (689,913 ) (5,400,265 ) (114,899 ) (3,293,007 ) (783 ) - - - 8,754,848 14,975 8,769,823 $ 12,172,082

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

45 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

LITE-ON TECHNOLOGY CORPORATION

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

LITE-ON TECHNOLOGY CORPORATION

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Reversal of impairment loss on trade receivable Finance costs Interest income Dividend income Share of profit of subsidiaries and associates Gain on disposal of property, plant and equipment (Gain) loss on disposal of available-for-sale financial assets (Gain) loss on disposal of associates Impairment loss recognized on financial assets Impairment loss recognized on non-financial assets Reversal of impairment loss recognized on non-financial assets Unrealized loss on transactions with subsidiaries and associates Realized gain on transactions with subsidiaries and associates Unrealized net gain on foreign currency exchange Recognition (reversal) of provisions Changes in operating assets and liabilities Notes receivable Trade receivables Trade receivables from related parties Other receivables Other receivables from related parties Inventories Prepayments Notes payable Trade payables Trade payables from related parties Other payable Other payable from related parties Provisions Advance receipts Accrued pension liabilities Cash generated from operations Interest received Dividend received Interest paid Income tax paid Net cash generated from operating activities		For the Years Ended December 31 2013 2012 $ 9,298,876 $ 7,456,594 259,545 339,360 71,591 89,071 (9,781) (16,640) 488,234 337,129 (61,927) (83,130) (14,435) (21,459) (7,002,137) (5,568,989) (107,397) (16,606) 27,394 (295,694) 6,025 (14,391) - 651,697 55,334 1,160 - (130,127) 4,938 - - (89,525) (267,175) (226,465) (14,550) 22,794 (7,518) - (3,083,914) (1,068,834) (2,065,968) 1,880,116 (66,440) 22,583 (62,656) 544,060 (415,890) 2,390,207 (182,943) (68,374) 6,634 (1,462) 1,217,951 (4,980,358) 5,076,171 1,031,929 869,714 143,208 16,096 (214,119) (27,932) (28,428) 151,591 2,086 (8,242) (10,520) 4,151,189 2,076,873 64,898 81,386 14,435 21,459 (525,382) (335,080) (131,276) (143,539) 3,573,864 1,701,099 (Continued) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds on sales of available-for-sale financial assets Proceeds from capital reduction of investments accounted for using equity method Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Payments for intangible assets Increase in other noncurrent assets Dividend received from subsidiaries and associates Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Proceeds of long-term borrowings Refund of guarantee deposits received Decrease in finance lease payables Payment cash interests Proceeds of the exercise of employee stock options Partial acquisition of subsidiaries Partial disposal of interests in subsidiaries without losing control loss Net cash used in financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR The accompanying notes are an integral part of the financial statements.		For the Years Ended December 31	For the Years Ended December 31
		2013 $ 9,298,876 259,545 71,591 (9,781) 488,234 (61,927) (14,435) (7,002,137) (107,397) 27,394 6,025 - 55,334 - 4,938 - (267,175) (14,550) (7,518) (3,083,914) (2,065,968) (66,440) (62,656) (415,890) (182,943) 6,634 1,217,951 5,076,171 869,714 16,096 (27,932) 151,591 (8,242) 4,151,189 64,898 14,435 (525,382) (131,276) 3,573,864		2013 $ 179 4,554,526 (265,087) 593,439 (3,655) (66,344) (1,512) 4,742,294 9,553,840 2,696,280 2,775,000 (366) (453) (5,400,265) 575,114 (17,172,678) - (16,527,368) (3,399,664) 10,324,378 $ 6,924,714	2012 $ 1,215,604 - (195,173) 28,538 2,242 (42,729) (4,000) 1,349,833 2,354,315 1,737,840 - (1,570) (373) (5,174,335) 27,245 (358,390) 288,198 (3,481,385) 574,029 9,750,349 $ 10,324,378 (Concluded)

Lite-On Technology Corporation 2013 Annual Report

LITE-ON TECHNOLOGY CORPORATION

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Lite-On Technology Corporation (the “Company”) was established in March 1989. Its shares are traded on the Taiwan Stock Exchange. The Company manufactures and markets (1) computer software, hardware, peripherals and components and (2) multifunction and all-in-one printers, cameras and Internet systems and image-processing equipment.

The Company merged with Lite-On Electronics, Inc., Silitek Corp. and GVC Corp., with the Company as the survivor entity. The merger took effect on November 4, 2002, and the Company thus assumed all rights and obligations of the three merged companies on that date. The Company merged with its subsidiary, Lite-On Enclosure Inc., with the Company as the survivor entity. The merger took effect on April 1, 2004, and the Company thus assumed all rights and obligations of the three merged companies on that date.

The financial statements are presented in the Company’s functional currency, New Taiwan dollars. For greater comparability and consistency of financial reporting, the financial statements are presented in New Taiwan dollars since the Company’s stocks are listed on the Taiwan Stock Exchange.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the board of directors and authorized for issue on March 27, 2014.

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

a. New, amended and revised standards and interpretations (the “New IFRSs”) in issue but not yet effective

The Company have not applied the following International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) issued by the IASB. On January 28, 2014, the Financial Supervisory Commission (FSC) announced the framework for the adoption of updated IFRSs version in the ROC. Under this framework, starting January 1, 2015, the previous version of IFRSs endorsed by the FSC (the 2010 IFRSs version) currently applied by companies with shares listed on the Taiwan Stock Exchange or traded on the Taiwan GreTai Securities Market or Emerging Stock Market will be replaced by the updated IFRSs without IFRS 9 (the 2013 IFRSs version). However, as of the date that the financial statements were authorized for issue, the FSC has not endorsed the following new, amended and revised standards and interpretations issued by the IASB (the “New IFRSs”) included in the 2013 IFRSs version. Furthermore, the FSC has not announced the effective date for the following New IFRSs that are not included in the 2013 IFRSs version.

The New IFRSs Included in the 2013 IFRSs Version Not Yet Endorsed by the FSC Improvements to IFRSs (2009) - amendment to IAS 39 Amendment to IAS 39 “Embedded Derivatives” Improvements to IFRSs (2010) Annual Improvements to IFRSs 2009-2011 Cycle Amendment to IFRS 1 “Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters” Amendment to IFRS 1 “Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters” Amendment to IFRS 1 “Government Loans” Amendment to IFRS 7 “Disclosure- Offsetting Financial Assets and Financial Liabilities” Amendment to IFRS 7 “Disclosure-Transfer of Financial Assets” IFRS 10 “Consolidated Financial Statements” IFRS 11 “Joint Arrangements” IFRS 12 “Disclosure of Interests in Other Entities” Amendments to IFRS 10, IFRS 11 and IFRS 12 “Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance” Amendments to IFRS 10 and IFRS 12 and IAS 27 “Investment Entities” IFRS 13 “Fair Value Measurement” Amendment to IAS 1 “Presentation of Other Comprehensive Income” Amendment to IAS 12 “Deferred Tax: Recovery of Underlying Assets” IAS 19 (Revised 2011) “Employee Benefits” IAS 27 (Revised 2011) “Separate Financial Statements” IAS 28 (Revised 2011) “Investments in Associates and Joint Ventures” Amendment to IAS 32 “Offsetting Financial Assets and Financial Liabilities” IFRIC 20 “Stripping Costs in Production Phase of a Surface Mine” The New IFRSs Not Included in the 2013 IFRSs Version Annual Improvements to IFRSs 2010-2012 Cycle Annual Improvements to IFRSs 2011-2013 Cycle IFRS 9 “Financial Instruments” Amendments to IFRS 9 and IFRS 7 “Mandatory Effective Date of IFRS 9 and Transition Disclosures” IFRS 14 “Regulatory Deferral Accounts” Amendment to IAS 19 “DefinedBenefit Plans: Employee Contributions” Amendment to IAS 36 “Impairment of Assets: Recoverable Amount Disclosures for Non-financial Assets” Amendment to IAS 39 “Novation of Derivatives and Continuation of Hedge Accounting” IFRIC 21 “Levies”	Effective Date Announced by IASB (Note 1)
	January 1, 2009 and January 1, 2010, as appropriate Effective for annual periods ending on or after June 30, 2009 July 1, 2010 and January 1, 2011, as appropriate January 1, 2013 July 1, 2010 July 1, 2011 January 1, 2013 January 1, 2013 July 1, 2011 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2014 January 1, 2013 July 1, 2012 January 1, 2012 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2014 January 1, 2013 Effective Date Announced by IASB (Note 1)
	July 1, 2014 (Note 2) July 1, 2014 Note 3 Note 3 January 1, 2016 July 1, 2014 January 1, 2014 January 1, 2014 January 1, 2014

The New IFRSs Included in the
2013 IFRSs Version Not Yet Endorsed by the FSC
Improvements to IFRSs (2009) - amendment to IAS 39

Amendment to IAS 39 “Embedded Derivatives”

Improvements to IFRSs (2010)

Annual Improvements to IFRSs 2009-2011 Cycle

Amendment to IFRS 1 “Limited Exemption from Comparative IFRS 7
Disclosures for First-time Adopters”

Amendment to IFRS 1 “Severe Hyperinflation and Removal of Fixed
Dates for First-time Adopters”

Amendment to IFRS 1 “Government Loans”

Amendment to IFRS 7 “Disclosure- Offsetting Financial Assets and
Financial Liabilities”

Amendment to IFRS 7 “Disclosure-Transfer of Financial Assets”

IFRS 10 “Consolidated Financial Statements”

IFRS 11 “Joint Arrangements”

IFRS 12 “Disclosure of Interests in Other Entities”

Amendments to IFRS 10, IFRS 11 and IFRS 12 “Consolidated
Financial Statements, Joint Arrangements and Disclosure of
Interests in Other Entities: Transition Guidance”

Amendments to IFRS 10 and IFRS 12 and IAS 27 “Investment
Entities”

IFRS 13 “Fair Value Measurement”

Amendment to IAS 1 “Presentation of Other Comprehensive Income”
Amendment to IAS 12 “Deferred Tax: Recovery of Underlying
Assets”

IAS 19 (Revised 2011) “Employee Benefits”

IAS 27 (Revised 2011) “Separate Financial Statements”

IAS 28 (Revised 2011) “Investments in Associates and Joint
Ventures”

Amendment to IAS 32 “Offsetting Financial Assets and Financial
Liabilities”

IFRIC 20 “Stripping Costs in Production Phase of a Surface Mine”

The New IFRSs Not Included in the 2013 IFRSs Version
Annual Improvements to IFRSs 2010-2012 Cycle

Annual Improvements to IFRSs 2011-2013 Cycle

IFRS 9 “Financial Instruments”

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

IFRS 14 “Regulatory Deferral Accounts”

Amendment to IAS 19 “DefinedBenefit Plans: Employee
Contributions”

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

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

IFRIC 21 “Levies”

Effective Date
Announced by IASB (Note 1)

January 1, 2009 and January 1,
2010, as appropriate
Effective for annual periods
ending on or after June 30,
2009
July 1, 2010 and January 1,
2011, as appropriate
January 1, 2013
July 1, 2010
July 1, 2011
January 1, 2013
January 1, 2013
July 1, 2011
January 1, 2013
January 1, 2013
January 1, 2013
January 1, 2013
January 1, 2014
January 1, 2013
July 1, 2012
January 1, 2012
January 1, 2013
January 1, 2013
January 1, 2013
January 1, 2014
January 1, 2013
Effective Date
Announced by IASB (Note 1)

July 1, 2014 (Note 2)
July 1, 2014
Note 3
Note 3
January 1, 2016
July 1, 2014
January 1, 2014
January 1, 2014
January 1, 2014

49 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

2) New issued and revised standards related to Associates and Disclosure

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after the respective effective dates.
Note 2: The amendment to IFRS 2 applies to share-based payment transactions for which the grant date is on or after July 1, 2014; the amendment to IFRS 3 applies to business combinations for which the acquisition date is on or after July 1, 2014; the amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014.
Note 3: IASB tentatively decided that an entity should apply IFRS 9 for annual periods beginning on or after January 1, 2018.
b. Significant changes in accounting policy that would result from adoption of New IFRSs in issue but not yet effective

Except for the following, the impending initial application of the above New IFRSs, whenever applied, would not have any material impact on the Company’s accounting policies:

1) IFRS 9 “Financial Instruments”

Recognition and measurement of financial assets

With regards to financial assets, all recognized financial assets that are within the scope of IAS 39 “Financial Instruments: Recognition and Measurement” are subsequently measured at amortized cost or fair value. Specifically, financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of subsequent accounting periods. All other financial assets are measured at their fair values at the end of reporting period. However, the Company may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognized in profit or loss.

Hedge accounting

The main changes in hedge accounting amended the application requirements for hedge accounting to better reflect the entity’s risk management activities. Compared with IAS 39, the main changes include: (1) enhancing types of transactions eligible for hedge accounting, specifically broadening the risk eligible for hedge accounting of non-financial items; (2) changing the way hedging derivative instruments are accounted for to reduce profit or loss volatility; and (3) replacing retrospective effectiveness assessment with the principle of economic relationship between the hedging instrument and the hedged item.

Effective date

The mandatory effective date of IFRS 9, which was previously set at January 1, 2015, was removed and will be reconsidered once the standard is complete with a new impairment model and finalization of any limited amendments to classification and measurement.

a) Revised to IAS 28 “Investments in Associates and Joint Ventures”

Revised IAS 28 requires when a portion of an investment in associates meets the criteria to be classified as held for sale, that portion is classified as held for sale. Any retained portion that has not been classified as held for sale is accounted for using the equity method. Previously, when a portion of an investment in associates meets the criteria to be classified as held for sale, the entire investment is classified as held for sale and ceases to apply the equity method.

b) IFRS 12 “Disclosure of Interests in Other Entities”

IFRS 12 is a new disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than in the current standards.

3) IFRS 13 “Fair Value Measurement”

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

4) Amendment to IAS 1 “Presentation of Items of Other Comprehensive Income”

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

5) Amendment to IAS 36 “Recoverable Amount Disclosures for Non-financial Assets”

In issuing IFRS 13 “Fair Value Measurement”, the IASB made some consequential amendments to the disclosure requirements in IAS 36 “Impairment of Assets”, introducing a requirement to disclose in every reporting period the recoverable amount of an asset or each cash-generating unit. The amendment clarifies that the disclosure of such recoverable amount is required when an impairment loss has been recognized or reversed during the period. Furthermore, the Company is required to disclose the discount rate used in measurements of the recoverable amount based on fair value less costs of disposal measured using a present value technique.

6) Revision to IAS 19 “Employee Benefits”

Revised IAS 19 changes the definition of short-term employee benefits. The revised definition is “employee benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service”. The Company’s unused annual leave, which can be carried forward within 18 months after the end of the annual period in which the employee renders service and which is currently classified as short-term employee benefits, will be classified as other long-term employee benefits under revised IAS 19. Related defined benefit obligation of such other long-term benefit is calculated using the Projected Unit Credit Method. However, this change does not affect unused annual leave to be presented as a current liability in the consolidated balance sheet.

Lite-On Technology Corporation 2013 Annual Report

7) Annual Improvements to IFRSs: 2010-2012 Cycle

Several standards including IFRS 2 “Share-Based Payment”, IFRS 3 “Business Combinations” and IFRS 8 “Operating Segments” were amended in this annual improvement.

The amended IFRS 2 changes the definitions of ‘vesting condition’ and ‘market condition’ and adds definitions for 'performance condition' and 'service condition'. The amendment clarifies that a performance target can be based on the operations (i.e. a non-market condition) of the Company or another entity in the same group or the market price of the equity instruments of the Company or another entity in the same group (i.e. a market condition); that a performance target can relate either to the performance of the Company as a whole or to some part of it (e.g. a division); and that the period for achieving a performance condition must not extend beyond the end of the related service period. In addition, a share market index target is not a performance condition because it not only reflects the performance of the Company, but also of other entities outside the Group.

IFRS 3 was amended to clarify that contingent consideration should be measured at fair value, irrespective of whether the contingent consideration is a financial instrument within the scope of IFRS 9 or IAS 39. Changes in fair value should be recognized in profit or loss.

The amended IFRS 8 requires an entity to disclose the judgments made by management in applying the aggregation criteria to operating segments, including a description of the operating segments aggregated and the economic indicators assessed in determining whether the operating segments have ‘similar economic characteristics’. The amendment also clarifies that a reconciliation of the total of the reportable segments’ assets to the entity’s assets should only be provided if the segments’ assets are regularly provided to the chief operating decision-maker.

IFRS 13 was amended to clarify that the issuance of IFRS 13 did not remove the ability to measure short-term receivables and payables with no stated interest rate at their invoice amounts without discounting, if the effect of not discounting is immaterial.

IAS 24 was amended to clarify that a management entity providing key management personnel services to the Company is a related party of the Company. Consequently, the Company is required to disclose as related party transactions the amounts incurred for the service paid or payable to the management entity for the provision of key management personnel services. However, disclosure of the components of such compensation is not required.

8) Annual Improvements to IFRSs: 2011-2013 Cycle

Several standards including IFRS 3 “Business Combination”, IFRS 13 “Fair Value Measurement” and IAS 40 “Investment Property” were amended in this annual improvement.

IFRS 3 was amended to clarify that IFRS 3 does not apply to the accounting for the formation of all types of joint arrangements in the financial statements of the joint arrangement itself.

c. The impact of the application of New IFRSs and the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the “Regulations”) in issue but not yet effective on the Company’s financial statements is as follows:

As of the date the financial statements were authorized for issue, the Company is continuingly assessing the possible impact that the application of the above New IFRSs will have on the Company's financial position and operating result, and will disclose the relevant impact when the assessment is complete.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s financial statements for the year ended December 31, 2013 is the first financial statements prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

a. Statement of compliance

The financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the “Accounting Standards Used in the Preparation of Parent Company Only Financial Statements”).

b. Basis of preparation

The financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

When preparing the Company’s financial statements, the Company account for subsidiaries and associates by using the equity method. For the consistency with net income, other comprehensive income and equity attributable to Company in the consolidated financial statements, the differences of the accounting treatment between Company basis and the consolidated basis are adjusted under “investments accounted for using equity method”, “share of profit or loss of subsidiaries and associates” and “share of other comprehensive income of subsidiaries and associates.”

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

c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;

The scope in IFRS 13 of the portfolio exception for measuring the fair value of a group of financial assets and financial liabilities on a net basis was amended to clarify that it includes all contracts that are within the scope of, and accounted for in accordance with, IAS 39 or IFRS 9, even if those contracts do not meet the definitions of financial assets or financial liabilities within IAS 32.

IAS 40 was amended to clarify that IAS 40 and IFRS 3 are not mutually exclusive and application of both standards may be required to determine whether the investment property acquired is acquisition of an asset or a business combination.

2) Assets expected to be realized within 12 months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;

53 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Assets and liabilities that are not classified as current are classified as non-current.

d. Foreign currencies

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

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period. Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income. Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purposes of presenting financial statements, the assets and liabilities of the Company’s foreign operations (including of the subsidiaries and associates, in other countries or currencies used different with the Company) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income.

On the disposal of a foreign operation, and the disposal involving loss of control, loss of joint control and loss of significant influence, all of the exchange differences accumulated in equity are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences is merged to the calculation of equity transaction and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

e. Inventories

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

f. Investments accounted for using equity method

Investments in subsidiaries and associates are accounted for using equity method.

1) Investments in subsidiaries

Subsidiaries are the entities controlled by the Company.

Under the equity method, the investment is initially recognized at cost and the carrying amount is increased or decreased to recognize the Company's share of the profit or loss and other comprehensive income of the subsidiary after the date of acquisition. Besides, the Company also recognizes the Company’s share of the change in other equity of the subsidiary.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company’s loss of control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amounts of the investment and the fair value of the consideration paid or received is recognized directly in equity.

When the Company’s share of losses of a subsidiary equals or exceeds its interest in that subsidiary, the Company continues recognizing its share of further losses.

The acquisition cost in excess of the acquisition-date fair value of the identifiable net assets acquired is recognized as goodwill. Goodwill is not amortized. The acquisition-date fair value of the net identifiable assets acquired in excess of the acquisition cost is recognized immediately in profit or loss.

Profits and losses from downstream transactions are eliminated in full. Profits and losses from upstream and sidestream transactions are recognized in the Company’s financial statements only to the extent of interests in the subsidiary that are not related to the Company.

2) Investments in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate. Besides, the Company also recognizes the Company’s share of the change in equity of the associate.

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

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Lite-On Technology Corporation 2013 Annual Report

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

The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

When the Company transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s financial statements only to the extent of interests in the associate that are not related to the Company.

g. Property, plant and equipment

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

i. Intangible assets

1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Company expects to dispose of the intangible asset before the end of its economic life. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

2) Derecognition of intangible assets

Intangible asset is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

j. Impairment of tangible and intangible assets other than goodwill

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

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

Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

h. Goodwill

For the purpose of impairment testing, goodwill is allocated to each of the Company’s cash-generating units or groups of cash-generating units that are expected to benefit.

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

When testing for impairment loss for investments in equity, the cash-generating unit is determined based on the financial statements. If the recoverable amount of the asset subsequently increases, the reversal of the impairment loss is recognized as a gain, but the increased carrying amount of an asset after a reversal of an impairment loss shall not exceed the carrying amount that would have been determined net of amortization had no impairment loss been recognized on the asset in prior years.

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

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

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

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

k. Financial instruments

Financial assets and financial liabilities are recognized in Balance Sheet when a company becomes a party to the contractual provisions of the instruments.

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

Lite-On Technology Corporation 2013 Annual Report

1) Financial assets

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

a) Measurement category

Financial assets are classified into the following categories: Available-for-sale financial assets, and loans and receivables.

i. Available-for-sale financial assets

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

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

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

ii. Loans and receivables

Loans and receivables (primarily including cash and cash equivalent, note receivables, trade receivables, and other receivables) are measured at amortized cost using the effective interest method, less any impairment, except for short-term receivables when the effect of discounting is immaterial.

Cash equivalent includes time deposits with original maturities within 3 months from the date of acquisition, highly liquid, readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

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

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

When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period. In respect of available-for-sale equity securities, impairment loss previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income.

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

c) Derecognition of financial assets

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

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

2) Financial liabilities and equity instruments

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

b) Impairment of financial assets

a) Financial liabilities subsequent measurement

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

For financial assets carried at amortized cost, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. The Company assesses the collectability of receivables by performing the account aging analysis and examining current trends in the credit quality of its customers.

Financial liabilities are measured at amortized cost using the effective interest method.

b) Derecognition of financial liabilities

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

c) Equity instruments

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

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

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Lite-On Technology Corporation 2013 Annual Report

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

l. Hedge accounting

The Company designates derivative hedging instruments to conduct cash flow hedges. The effective portion of changes in the fair value of derivatives is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss. The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as a reclassification adjustment in the line item relating to the hedged item in the same period when the hedged item affects profit or loss.

Hedge accounting is discontinued prospectively when the Company revokes the designated hedging relationship, or when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer meets the criteria for hedge accounting. The cumulative gain or loss on the hedging instrument that has been previously recognized in other comprehensive income from the period when the hedge was effective remains separately in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

m. Provisions

Provisions are measured at the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

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

Income from properties developed for sale is recognized when construction is complete, rewards of ownership of the properties are transferred to buyers, and collectability of the related receivables is reasonably assured. Deposits received from sales of properties and installment payments are carried in balance sheets under current liabilities.

2) Rendering of services

Service income is recognized when services are provided.

3) Royalties

Royalty revenue is recognized on an accrual basis in accordance with the substance of the relevant agreement provided that it is probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably. Royalties determined on a time basis are recognized on a straight-line basis over the period of the agreement. Royalty arrangements that are based on production, sales and other measures are recognized by reference to the underlying arrangement.

4) Rental revenue

The operation of leasing business was in accordance with IAS 17- Leases, that is, the possible situation related to leasing (ex. the condition of leasing, and the burden of future cost) would treat as operating lease.

5) Dividend and interest income

Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, at the best estimate of the expenditure required to settle the Company’s obligation by the management of the Company

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

n. Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Sales returns are recognized at the time of sale provided the seller can reliably estimate future returns and recognizes a liability for returns based on previous experience and other relevant factors.

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

o. Leasing

1) Sale of goods

Revenue from the sale of goods is recognized when the goods are delivered and titles have passed, at which time all the following conditions are satisfied:

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

1) The Company as lessor
a) The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
b) The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
c) The amount of revenue can be measured reliably;
d) It is probable that the economic benefits associated with the transaction will flow to the Company; and
e) The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

2) The Company as lessee

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

p. Retirement benefit costs

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

Lite-On Technology Corporation 2013 Annual Report

3) Current and deferred tax for the year

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method. All actuarial gains and losses on the defined benefit obligation are recognized immediately in other comprehensive income.

The retirement benefit obligation recognized in the balance sheets represents the present value of the defined benefit obligation and reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the plan.

Curtailment or settlement gains or losses on the defined benefit plan are recognized when the curtailment or settlement occurs.

q. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

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

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

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, research and development expenditures, and personnel training expenditures to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

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

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

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

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company's accounting policies (Note 4), management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

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

a. Impairment of goodwill

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

b. Estimated impairment of trade receivables

When there is objective evidence of impairment loss, the Company takes into consideration the estimation of future cash flows. The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. Where the actual future cash flows are less than expected, a material impairment loss may arise.

c. Income taxes

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred tax assets can be utilized. Assessment of the realization of the deferred tax assets requires the Company’s subjective judgment and estimation, including the future revenue growth and profitability, tax holidays, the amount of tax credits that can be utilized and feasible tax planning strategies. Any changes in the global economic environment, industry trends and relevant laws and regulations could result in significant adjustments to the deferred tax assets.

d. Derivative instruments and other fair value of financial instruments

As described in Note 25, the Company’s management uses its judgment in selecting an appropriate valuation technique for financial instruments that do not have quoted market price in an active market. Valuation techniques commonly used by market practitioners are applied. For derivative financial instruments, assumptions were based on quoted market rates adjusted for specific features of the instruments. Other financial instruments were valued using a discounted cash flow analysis based on assumptions supported, where possible, by observable market prices or rates. The estimation of fair value of unlisted equity instruments including assumptions based on unobservable market prices or rates. The Company’s management believes that the chosen valuation techniques and assumptions used are appropriate in determining the fair value of financial instruments.

63 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

e. Impairment of property, plant and equipment

The impairment of equipment in relation to the production of handsets was based on the recoverable amount of those assets, which is the higher of fair value less costs to sell or value-in-use of those assets. Any changes in the market price or future cash flows will affect the recoverable amount of those assets and may lead to recognition of additional or reversal of impairment losses.

f. Write-down of inventory

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

As of December 31, 2013, December 31, 2012 and January 1, 2012, the Company did not have the age of the trade receivables that were past due but not impaired.

Movements in the allowance for impairment loss recognized on trade receivables were as follows:

Balance at January 1 Impairment losses reversed Reclassification Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 30,890 (9,781) - $ 21,109	2012 $ 29,415 (16,640) 18,115 $ 30,890

g. Recognition and measurement of defined benefit plans

8. INVENTORIES, NET

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

6. CASH AND CASH EQUIVALENTS

Cash on hand Demand deposits Cash equivalent Time deposits with original maturities less than 3 months	December 31, 2013 $ 881 3,493,573 3,430,260 $ 6,924,714	December 31, 2012 January 1, 2012 $ 887 $ 850 2,222,756 2,740,724 8,100,735 7,008,775 $ 10,324,378 $ 9,750,349

7. TRADE RECEIVABLES, NET

Notes receivable Notes receivable - operating Allowance for impairment loss Trade receivables Trade receivables Allowance for impairment loss	December 31, 2013 $ 7,518 - $ 7,518 $ 18,095,210 (21,109) $ 18,074,101	December 31, 2012 January 1, 2012 $ - $ - - - $ - $ - $ 15,011,296 $ 13,924,347 (30,890) (29,415) $ 14,980,406 $ 13,894,932

INVENTORIES, NET
	December	31,	December	31,
	2013		2012		January 1, 2012
Merchandise	$ 2,575,272		$ 2,214,716		$ 2,451,313
Finished goods		-		-	1,563,429
Raw materials		-		-	284,584
Work in progress		-		-	175,470
	$ 2,575,272		$ 2,214,716		$ 4,474,796

The cost of allowance for inventory write-downs for the years ended December 31, 2013 and 2012 was NT$218,025 thousand and NT$162,691 thousand, respectively.

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2013 and 2012 was NT$71,585,095 thousand and NT$69,655,055 thousand, respectively.

The cost of inventories recognized as cost of goods sold for the year ended December 31, 2013 included inventory write-downs of NT$55,334 thousand, which resulted from write-downs of inventory to net realizable value. The cost of inventories recognized as cost of goods sold for the year ended December 31, 2012 included reversal of inventory write-downs of NT$130,127 thousand. Inventory write-down made through allowance account was reversed after the inventory had been disposed of by direct write off.

9. AVAILABLE-FOR-SALE FINANCIAL ASSETS

	December	December	31,	December	December	31,
		2013			2012		January 1, 2012
Non-current
Domestic investments
Quoted shares	$	698,162		$	583,654		$ 1,708,728
Unquoted shares			-			-	460,187
Emerging market shares			-		56,434		56,434
		698,162			640,088		2,225,349
							(Continued)

Lite-On Technology Corporation 2013 Annual Report

January 1, 2012

	December 31,	December 31,	December 31,	December 31,
		2013		2012	January 1, 2012
Foreign investments
Unquoted shares	$	19,009	$	19,009	$	19,009
Quoted shares		-		983		11,512
		19,009		19,992		30,521
	$	717,171	$	660,080	$	2,255,870
						(Concluded)

Refer to Note 25 for information relating to the fair values of on available-for-sale financial assets determined.

There was objective evidence that the fair values of some financial assets were below their carrying costs and will permanently decline. As a result, the Company recognized impairment losses of NT$651,697 thousand in the statements of comprehensive income for the year ended December 31, 2012.

January 1, 2012
Notional Amounts		Range of	Range of Interest
(In Thousands)	Maturity Date	Interest Rates Paid	Rates Received
NT$6,000,000	2008.9.23-2015.9.23	1.895%	0.861%

11. INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD

Investments in subsidiaries Investments in associates	December 31, 2013 $ 84,685,063 2,447,685 $ 87,132,748	December 31, 2012 January 1, 2012 $ 70,253,370 $ 67,445,842 2,285,603 2,283,939 $ 72,538,973 $ 69,729,781

a. Investments in subsidiaries

10. DERIVATIVE FINANCIAL INSTRUMENTS FOR HEDGING

	December 31,	December 31,	December 31,
		2013	2012	January 1, 2012
Derivative financial assets under hedge
accounting-non-current
Cash flow hedges - interest rate swaps	$	46,969	$ 101,563	$ 165,225

The Company’s liabilities with floating interest rate might be affected by changes in the market rate. Thus, future cash flows on those liabilities might fluctuate, exposing the Company to cash flow risk. To hedge against this risk, the Company entered into an interest rate swap contract with a bank to change the floating rate of its liabilities to fixed rate. The cash flow hedge transactions are deemed sufficient.

The outstanding interest rate swap contracts of the Company at the end of the reporting period were as follows:

December 31, 2013

December 31, 2013
Notional Amounts		Range of	Range of Interest
(In Thousands)	Maturity Date	Interest Rates Paid	Rates Received
NT$4,800,000	2008.9.23-2015.9.23	1.895%	0.863%
December 31, 2012
Notional Amounts		Range of	Range of Interest
(In Thousands)	Maturity Date	Interest Rates Paid	Rates Received
NT$6,000,000	2008.9.23-2015.9.23	1.895%	0.900%

Lite-On International Holding Co., Ltd. Lite-On IT Corporation Lite-On Singapore Pte. Ltd. Lite-On Electronics H.K. Ltd. Lite-On Capital Corp. Lite-On Technology (Europe) B.V. Li Shin International Enterprise Corp. Silitech Technology Corp. Lite-On Technology USA, Inc. Lite-On Automotive Corp. Lite-On Electronics (Thailand) Co., Ltd. LTC Group Ltd. (BVI) Lite-On Japan Ltd. Lite-On Overseas Tradings Co., Ltd. Logah Technology Corp. Lite-On Integrated Service Inc. Lite-On Electronics (Europe) Ltd. Lite-On Clean Energy Technology Corp. Add: Credit balance of investments accounted for using equity method	December 31, 2013 $ 20,412,910 19,032,107 9,440,364 9,257,407 8,743,042 6,048,666 4,268,292 1,989,559 1,727,197 1,440,627 1,065,618 350,789 324,371 250,541 246,170 45,219 42,184 (144,632) 84,540,431 144,632 $ 84,685,063	December 31, 2012 January 1, 2012 $ 16,150,949 $ 14,754,273 9,896,862 9,817,780 5,759,750 3,355,348 11,509,512 11,351,593 8,964,426 9,540,289 6,280,740 6,643,131 4,198,270 4,280,019 2,030,771 2,249,156 1,670,954 1,877,497 1,243,283 1,204,843 979,833 954,613 578,424 374,338 327,308 370,703 225,470 191,515 328,405 377,815 44,084 43,073 64,329 59,856 - - 70,253,370 67,445,842 - - $ 70,253,370 $ 67,445,842

67 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

At the end of the reporting period, the proportion of ownership and voting rights in subsidiaries held by the Company were as follows:

the Company were as follows:
	December 31,	December 31,
Name of Associate	2013	2012	January 1, 2012
Lite-On International Holding Co., Ltd.	100.00%	100.00%	100.00%
Lite-On Electronics H.K. Ltd.	100.00%	100.00%	100.00%
Lite-On Capital Corp.	100.00%	100.00%	100.00%
Lite-On Singapore Pte. Ltd.	100.00%	100.00%	100.00%
Li Shin International Enterprise Corp.	100.00%	100.00%	100.00%
Lite-On Technology USA, Inc.	100.00%	100.00%	100.00%
Lite-On Electronics (Thailand) Co., Ltd.	100.00%	100.00%	100.00%
LTC Group Ltd. (BVI)	100.00%	100.00%	100.00%
Lite-On Overseas Tradings Co., Ltd.	100.00%	100.00%	100.00%
Lite-On Electronics (Europe) Ltd.	100.00%	100.00%	100.00%
Lite-On Integrated Service Inc.	100.00%	100.00%	100.00%
Lite-On Clean Energy Technology Corp.	100.00%	100.00%	100.00%
Lite-On IT Corporation	99.13%	42.33%	42.70%
Lite-On Automotive Corp.	82.26%	84.89%	84.89%
Lite-On Technology (Europe) B.V.	54.00%	54.00%	54.00%
Lite-On Japan Ltd.	49.49%	49.49%	49.49%
Silitech Technology Corp.	32.14%	32.37%	34.90%
Logah Technology Corp.	18.97%	18.97%	18.97%

The combined equities of the Company and its subsidiaries were more than 20% of the outstanding common stocks of Logah Technology Corp. as of December 31, 2013 and 2012. Thus, the investee was accounted for by the equity method.

The Company holds less than 50% interest in Lite-On Japan Ltd., Silitech Technology Corp. and Logah Technology Corp. In the context of the written agreements between the shareholders of Lite-On Japan Ltd., Silitech Technology Corp. and Logah Technology Corp., the Company can control the composition of the board of directors; hence, Lite-On Japan Ltd., Silitech Technology Corp. and Logah Technology Corp. is deemed as a subsidiary of the Company.

Refer to Note 28 to the consolidated financial statements for the year ended December 31, 2013 for the disclosures of the Company’s acquisition of Lite-On IT Corporation and disposal of Silitech Technology Corp.

The investments accounted for by the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2013 and 2012 were based on the subsidiaries’ financial statements audited by auditors for the same years.

b. Investments in associates

As the end of the reporting period, the proportion of ownership and voting rights in associates held by the Company were as follows:

the Company were as follows:
	December 31,	December 31,
Name of Associate	2013	2012	January 1, 2012
Lite-On Semiconductor Corp.	18.37%	18.37%	18.37%
Dragonjet Corporation	29.66%	29.74%	29.74%

The combined equities of the Company and its subsidiaries were more than 20% of the outstanding common stocks of Lite-On Semiconductor Corp. as of December 31, 2013 and 2012. Thus, the investee was accounted for by the equity method.

Publicly traded investments accounted for using the equity method were priced based on the closing price of those investments at the balance sheet date and were summarized as follows:

	December 31,	December 31,	December 31,	December 31,
Name of Associate		2013		2012	January 1, 2012
Silitech Technology Corp.	$	2,141,891	$	2,986,880	$	4,331,825
Lite-On Semiconductor Corp.	$	1,579,493	$	1,257,064	$	983,612
Lite-On Japan Ltd.	$	332,719	$	294,337	$	295,804
Logah Technology Corp.	$	252,364	$	221,353	$	220,284
Lite-On IT Corporation	$	-	$	9,686,175	$	9,618,737

The summarized financial information in respect of the Company’s interests in the jointly controlled entities which are accounted for using equity method is set out below:

Total assets Total liabilities Operating revenue Net profit Other comprehensive income (loss) Share of profit of subsidiaries and associates	December 31, 2013 $ 17,911,944 $ 8,421,692	December 31, 2012 January 1, 2012 $ 16,496,757 $ 15,736,339 $ 7,850,928 $ 6,880,460 For the Year Ended December 31	December 31, 2012 January 1, 2012 $ 16,496,757 $ 15,736,339 $ 7,850,928 $ 6,880,460 For the Year Ended December 31	December 31, 2012 January 1, 2012 $ 16,496,757 $ 15,736,339 $ 7,850,928 $ 6,880,460 For the Year Ended December 31
			2013 $ 7,274,832 $ 247,208 $ 427,680 $ 678,732	2012 $ 7,033,186 $ 337,101 $ (341,821) $ 666,865

The investments accounted for by the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2013 and 2012 were based on the associates’ financial statements audited by auditors for the same years.

Investments in associates
	December 31,	December 31,
Name of Associate	2013	2012	January 1, 2012
Lite-On Semiconductor Corp.	$ 1,416,172	$ 1,286,158	$ 1,318,494
Dragonjet Corporation	1,031,513	999,445	965,445
	$ 2,447,685	$ 2,285,603	$ 2,283,939

Lite-On Technology Corporation 2013 Annual Report

12. PROPERTY, PLANT AND EQUIPMENT, NET

Carrying amounts of each class Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment January 1, 2013 Cost Freehold land $ 2,280,117 Buildings 3,674,272 Machinery equipment 2,454,974 Tooling equipment 386,930 Transportation equipment 1,137 Office equipment 497,190 Equipment held under finance lease 5,515 Other equipment 348,749 9,648,884 Accumulated depreciation Buildings 1,058,046 Machinery equipment 2,287,732 Tooling equipment 372,372 Transportation equipment 942 Office equipment 382,391 Equipment held under finance lease 4,851 Other equipment 265,124 4,371,458 Accumulated impairment Freehold land - Buildings 8,082 Machinery equipment 6,947 Tooling equipment - Transportation equipment - Office equipment - Equipment held under finance lease - Other equipment - 15,029 $ 5,262,397	Carrying amounts of each class Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment January 1, 2013 Cost Freehold land $ 2,280,117 Buildings 3,674,272 Machinery equipment 2,454,974 Tooling equipment 386,930 Transportation equipment 1,137 Office equipment 497,190 Equipment held under finance lease 5,515 Other equipment 348,749 9,648,884 Accumulated depreciation Buildings 1,058,046 Machinery equipment 2,287,732 Tooling equipment 372,372 Transportation equipment 942 Office equipment 382,391 Equipment held under finance lease 4,851 Other equipment 265,124 4,371,458 Accumulated impairment Freehold land - Buildings 8,082 Machinery equipment 6,947 Tooling equipment - Transportation equipment - Office equipment - Equipment held under finance lease - Other equipment - 15,029 $ 5,262,397	Carrying amounts of each class Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment January 1, 2013 Cost Freehold land $ 2,280,117 Buildings 3,674,272 Machinery equipment 2,454,974 Tooling equipment 386,930 Transportation equipment 1,137 Office equipment 497,190 Equipment held under finance lease 5,515 Other equipment 348,749 9,648,884 Accumulated depreciation Buildings 1,058,046 Machinery equipment 2,287,732 Tooling equipment 372,372 Transportation equipment 942 Office equipment 382,391 Equipment held under finance lease 4,851 Other equipment 265,124 4,371,458 Accumulated impairment Freehold land - Buildings 8,082 Machinery equipment 6,947 Tooling equipment - Transportation equipment - Office equipment - Equipment held under finance lease - Other equipment - 15,029 $ 5,262,397	December 31, 2013 December 31, 2012 January 1, 2012 $ 2,033,482 $ 2,280,117 $ 2,280,117 2,224,075 2,608,144 2,693,420 209,698 160,295 250,427 5,607 14,558 18,800 57 195 333 115,175 114,799 128,415 265 664 1,845 169,818 83,625 107,914 $ 4,758,177 $ 5,262,397 $ 5,481,271 For the Year Ended December 31, 2013	December 31, 2013 December 31, 2012 January 1, 2012 $ 2,033,482 $ 2,280,117 $ 2,280,117 2,224,075 2,608,144 2,693,420 209,698 160,295 250,427 5,607 14,558 18,800 57 195 333 115,175 114,799 128,415 265 664 1,845 169,818 83,625 107,914 $ 4,758,177 $ 5,262,397 $ 5,481,271 For the Year Ended December 31, 2013	December 31, 2013 December 31, 2012 January 1, 2012 $ 2,033,482 $ 2,280,117 $ 2,280,117 2,224,075 2,608,144 2,693,420 209,698 160,295 250,427 5,607 14,558 18,800 57 195 333 115,175 114,799 128,415 265 664 1,845 169,818 83,625 107,914 $ 4,758,177 $ 5,262,397 $ 5,481,271 For the Year Ended December 31, 2013
		January 1, 2013 $ 2,280,117 3,674,272 2,454,974 386,930 1,137 497,190 5,515 348,749 9,648,884 1,058,046 2,287,732 372,372 942 382,391 4,851 265,124 4,371,458 - 8,082 6,947 - - - - - 15,029 $ 5,262,397	Additions $ - - 139,670 4,627 - 47,216 - 128,177 $ 319,690 $ 80,305 87,627 13,578 138 46,749 399 30,749 $ 259,545 $ - - - - - - - - $ -	Disposals Reclassification $ 246,635 $ - 434,059 - 267,337 (56,690) 99,311 (25,960) 310 - 19,232 (7,157) - - 6,045 (10,583) $ 1,072,929 $ (100,390) $ 122,213 $ - 264,705 (56,682) 99,311 (25,960) 310 - 19,141 (7,157) - - 5,393 - $ 511,073 $ (89,799) $ - $ - 8,082 - - - - - - - - - - - - - $ 8,082 $ -	December 31, 2013 $ 2,033,482 3,240,213 2,270,617 266,286 827 518,017 5,515 460,298 8,795,255 1,016,138 2,053,972 260,679 770 402,842 5,250 290,480 4,030,131 - - 6,947 - - - - - 6,947 $ 4,758,177

Cost Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment Accumulated depreciation Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment Accumulated impairment Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment			For the Year	Ended December 31, 2012
		January 1, 2012 $ 2,280,117 3,674,272 3,013,943 388,170 1,137 480,810 5,515 332,159 10,176,123 972,770 2,756,569 369,370 804 352,395 3,670 224,245 4,679,823 - 8,082 6,947 - - - - - 15,029 $ 5.481.271	Additions $ - - 52,489 21,557 - 34,792 - 16,590 $ 125,428 $ 85,276 131,252 31,577 138 49,057 1,181 40,879 $ 339,360 $ - - 1,160 - - - - - $ 1,160	Disposals Reclassification December 31, 2012 $ - $ - $ 2,280,117 - - 3,674,272 601,849 (9,609) 2,454,974 29,172 6,375 386,930 - - 1,137 16,592 (1,820) 497,190 - - 5,515 - - 348,749 $ 647,613 $ 5,054 9,648,884 $ - $ - 1,058,046 590,963 (9,126) 2,287,732 28,575 - 372,372 - - 942 16,143 (2,918) 382,391 - - 4,851 - - 265,124 $ 635,681 $ (12,044) 4,371,458 $ - $ - - - - 8,082 - (1,160) 6,947 - - - - - - - - - - - - - - - $ - $ (1,160) 15,029 $ 5,262,397

For the year ended December 31, 2012, as the result of the declining sale of one of the products in the market, the estimated future cash flows expected to arise from the related equipment was decreased. The Company carried out a review of the recoverable amount of that related equipment and determined that the carrying amount exceeded the recoverable amount. The review led to the recognition of an impairment loss of NT$1,160 thousand. The Company determined the recoverable amount of the relevant assets on the basis of their value in use. No impairment assessment was performed for the year ended 2013 as there was no indication of impairment.

The above items of property, plant and equipment were depreciated on a straight-line basis over the estimated useful life of the asset:

Buildings 2-61 years Machinery equipment 1-11 years Tooling equipment 1-3 years Transportation equipment 6 years Office equipment 1-9 years Equipment held under finance lease 3-5 years Other equipment 1-10 years

Lite-On Technology Corporation 2013 Annual Report

13. INTANGIBLE ASSETS, NET

Carrying amounts of each class		December 31, 2013 December 31, 2012 January 1, 2012 $ 544,918 $ 544,918 $ 544,918 5,653 10,175 14,698 - 10,239 51,193 95,566 75,469 76,368 $ 646,137 $ 640,801 $ 687,177 For the Year Ended December 31, 2013	December 31, 2013 December 31, 2012 January 1, 2012 $ 544,918 $ 544,918 $ 544,918 5,653 10,175 14,698 - 10,239 51,193 95,566 75,469 76,368 $ 646,137 $ 640,801 $ 687,177 For the Year Ended December 31, 2013	December 31, 2013 December 31, 2012 January 1, 2012 $ 544,918 $ 544,918 $ 544,918 5,653 10,175 14,698 - 10,239 51,193 95,566 75,469 76,368 $ 646,137 $ 640,801 $ 687,177 For the Year Ended December 31, 2013
Goodwill Patents Client relationships Software Cost Goodwill Patents Client relationships Software Accumulated amortization Goodwill Patents Client relationships Software Accumulated impairment Goodwill Patents Client relationships Software Cost Goodwill Patents Client relationships Software Accumulated amortization Goodwill Patents Client relationships Software
	January 1, 2013 $ 622,152 27,134 163,819 563,090 1,376,195 77,234 16,959 153,580 487,621 735,394 - - - - - $ 640,801	Additions $ - - - 66,344 $ 66,344 $ - 4,522 10,239 56,830 $ 71,591 $ - - - - $ - For the Year	Disposals Reclassification $ - $ - - - - - 1,286 10,583 $ 1,286 $ 10,583 $ - $ - - - - - 1,286 - $ 1,286 $ - $ - $ - - - - - - - $ - $ - Ended December 31, 2012	December 31, 2013 $ 622,152 27,134 163,819 638,731 1,451,836 77,234 21,481 163,819 543,165 805,699 - - - - - $ 646,137
	January 1, 2012 $ 622,152 27,134 163,819 520,361 1,333,466 77,234 12,436 112,626 443,993 646,289	Additions $ - - - 42,729 $ 42,729 $ - 4,523 40,954 43,594 $ 89,071	Disposals Reclassification $ - $ - - - - - - - $ - $ - $ - $ - - - - - - 34 $ - $ 34	December 31, 2012 $ 622,152 27,134 163,819 563,090 1,376,195 77,234 16,959 153,580 487,621 735,394 (Continued)

Accumulated impairment Goodwill Patents Client relationships Software			For the Year	Ended December 31, 2012
		January 1, 2012 $ - - - - - $ 687,177	Additions $ - - - - $ -	Disposals Reclassification December 31, 2012 $ - $ - $ - - - - - - - - - - $ - $ - - $ 640,801

(Concluded)

The above items of other intangible assets were amortized on a straight-line basis over the estimated useful life of the asset:

Patents 6 years Client relationships 4 years Software 1-14 years

14. BORROWINGS

a. Short-term borrowings

Short-term borrowings
	December 31,	December 31,
	2013	2012	January 1, 2012
Unsecured borrowings
Line of credit borrowings	$ 5,484,120	$ 2,787,840	$ 1,050,000

The range of weighted average effective interest rate on bank loans was 0.72%-0.76%, 0.76%-0.79% and 1.54%-1.71% per annum as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively.

b. Long-term borrowings

Long-term borrowings
	December 31,	December 31,
	2013	2012	January 1, 2012
Unsecured borrowings
Syndicated loan with Citi Bank	$ 16,000,000	$ 12,500,000	$ 12,500,000
Taiwan Cooperative Bank	1,275,000	1,700,000	1,700,000
Taipei Fubon Commercial Bank	700,000	1,000,000	1,000,000
Chang Hwa Bank	500,000	500,000	500,000
	18,475,000	15,700,000	15,700,000
Less: Current portion	6,350,000	3,125,000	-
Long-term borrowings: Non-current	$ 12,125,000	$ 12,575,000	$ 15,700,000

73 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

As of December 31, 2013, December 31, 2012 and January 1, 2012, the Company had 6, 4 and 4 long-term bank loans with contract terms between September 23, 2008 and September 23, 2018. The floating interest rates are (1.448% to 1.663% and 1.518% to 1.694% and as of December 31, 2013 and 2012, respectively) payable monthly or quarterly. These loans should be repaid in 3, 5 or 8 installments or at lump sum on loan maturity.

On September 23, 2008, the Company signed the contract for a five-year syndicated loan with Citibank and 14 other financial institutions, and on May 16, 2011 changed the contract period to seven years from 2008. The repayment period is between September 23, 2008 and September 22, 2015. The credit line is NT$15 billion, consisting of:

1) NT$12 billion, which is a refinancing of existing credit lines to improve financial structure, which should be used as a medium-term loan and may not be used on a revolving basis; and
2) NT$3 billion, which is for supporting operations and may be used on a revolving basis.

The principal of this syndication loan should be repaid in five semiannual installments from September 23, 2013, and the interest rate is the 90-day Taiwan subprime commercial paper interest rate plus 61 points.

Under the syndicated loan agreement, the Company should maintain certain financial ratios based on the most recent semiannual or annual consolidated financial statements.

As of December 31, 2013, December 31, 2012 and January 1, 2012, the Company used a) NT$12 billion, NT$12 billion and NT$12 billion, respectively and b) NT$0, NT$0.5 billion, and NT$0.5 billion of the credit line of the above syndicated loan.

On March 19, 2013, the Company signed a contract for a five-year syndicated loan with Citibank and 10 other financial institutions. The credit line is NT$15 billion, consisting of (a) NT$6 billion and (b) NT$9 billion. This loan was obtained for the purposes of supporting operations and completing an acquisition and should be used as a medium-term loan but may not be used on a revolving basis.

At December 31, 2013, the Company used a) NT$1.23 billion and b) NT$2.77 billion of the credit line of the above syndicated loan.

The minimum payment of principal should be repaid at NT$4 billion by March 19, 2014. The remaining principal of this syndication loan should be repaid in five semiannual installments from March 19, 2016, and the interest rate is the 90-day Taiwan subprime commercial paper interest rate plus 65 points.

Under the syndicated loan agreement, the Company should maintain certain financial ratios based on the most recent semiannual or annual consolidated financial statements.

As of December 31, 2013, December 31, 2012 and January 1, 2012, the Company did not violate the financial ratios stated above.

15. FINANCE LEASE PAYABLES

FINANCE LEASE PAYABLES
	December	31,	December		31,
	2013			2012		January 1, 2012
Minimum lease payments
Not later than one year	$	-	$	453		$	504
Later than one year and not later than five years		-			-		504
Later than five years		-			-		-
		-		453			1,008
Less: Future finance charges		-			-		182
Present value of minimum lease payments	$	-	$	453		$	826
Present value of minimum lease payments
Not later than one year	$	-	$	453		$	504
Later than one year and not later than five years		-			-		322
Later than five years		-			-		-
	$	-	$	453		$	826

The Company leased machinery and equipment under capital leases valid from September 1, 2009 to June 1, 2013. The terms of these leases were between 3 and 5 years, with 15.6% interest rate. The payments of these leases were between NT$42 thousand and NT$120 thousand. The ownership of the leased assets will be transferred to the Company at the end of the lease term.

16. PROVISIONS

PROVISIONS
December 31, 2013 Warranties $ 133,230 Movements in the provisions were as follow: Balance at January 1 Additional provisions recognized Usage Reversing un-usage balances Balance at December 31	December 31, 2012 January 1, 2012 $ 175,712 $ 181,346 For the Year Ended December 31
		2013 $ 175,712 59,396 (27,932) (73,946) $ 133,230	2012 $ 181,346 49,569 (28,428) (26,775) $ 175,712

The provision for warranty claims represents the present value of management’s best estimate of the future outflow of economic benefits that will be required under the Company’s obligations for warranties under local sale of goods legislation. The estimate had been made on the basis of historical warranty trends and may vary as a result of new materials, altered manufacturing processes or other events affecting product quality.

75 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

17. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages. As of December 31, 2013 and December 31, 2012, the Company recognized expenses in statements of comprehensive income were NT$105,144 thousand and NT$95,195 thousand, respectively.

An analysis by function Operating cost Operating expenses	For the Year Ended	For the Year Ended	December 31
		2013 $ 7,714 97,430 $ 105,144	2012 $ 6,860 88,335 $ 95,195

b. Defined benefit plans

The Company adopted the defined benefit plan under the Labor Standards Law, under which pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contributes amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name.

The plan assets are invested in domestic (foreign) equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of Bureau of Labor Funds, Ministry of Labor or under the mandated management. However, in accordance with Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund the return generated by employees' pension contribution should not be below the interest rate for a 2-year time deposit with local banks.

The actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out by qualifying actuaries. The principal assumptions used for the purposes of the actuarial valuations were as follows:

valuations were as follows:
	December 31,	December 31,
	2013	2012	January 1, 2012
Discount rate(s)	1.75%	1.30%	1.60%
Expected return on plan assets	1.75%	1.30%	1.60%
Expected rate(s) of salary increase	3.00%	3.00%	3.00%

Amounts recognized in profit or loss in respect of these defined benefit plans are as follows:

Current service cost Interest cost Expected return on plan assets	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 6,720 11,559 (11,170) $ 7,109	2012 $ 6,221 12,261 (13,653) $ 4,829 (Continued)

An analysis by function Operating cost Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 1,957 5,152 $ 7,109	2012 $ 2,056 2,773 $ 4,829 (Concluded)

Pre-tax actuarial gains and losses recognized in other comprehensive income for the years ended December 31, 2013 and 2012 were NT$18,043 thousand and NT$127,212 thousand, respectively. The cumulative amount of pre-tax actuarial losses recognized in other comprehensive income as of December 31, 2013 and 2012 was NT$109,169 thousand and NT$127,212 thousand, respectively.

The amount included in the balance sheet arising from the Company’s obligation in respect of its defined benefit plans was as follows:

defined benefit plans was as follows:
	December 31,		December 31,
		2013		2012	January 1, 2012
Present value of funded defined benefit
obligation	$	870,102	$	889,166	$ 766,333
Fair value of plan assets		(858,929)		(851,708)	(845,567)
Accrued pension liabilities (prepayments for
pension fund)	$	11,773	$	37,458	$ (79,234)

Movements in the present value of the defined benefit obligations were as follows:

Balance at January 1 Current service cost Interest cost Actuarial losses/(gains) Benefits paid Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2013 $ 889,166 6,720 11,559 (18,324) (19,019) $ 870,102	2012 $ 766,333 6,221 12,261 121,945 (17,594) $ 889,166

Movements in the fair value of the plan assets were as follows:

Movements in the fair value of the plan assets were as follows:
Balance at January 1 Expected return on plan assets Actuarial losses Contributions from the employer Benefits paid Balance at December 31	For the Year Ended		December 31
		2013 $ 851,708 11,170 (281) 15,351 (19,019) $ 858,929	2012 $ 845,567 13,653 (5,267) 15,349 (17,594) $ 851,708

Lite-On Technology Corporation 2013 Annual Report

The major categories of plan assets at the end of the reporting period for each category were disclosed based on the information announced by Bureau of Labor Funds, Ministry of Labor:

	December 31,	December 31,
	2013	2012	January 1, 2012
Equity instruments	-	-	-
Debt instruments	-	-	-
Others	100%	100%	100%
	100%	100%	100%

The Company chose to disclose the history of experience adjustments as the amounts determined for each accounting period prospectively from the date of transition to IFRSs:

			December 31,	December 31,	December 31,	December 31,
				2013		2012	January 1, 2012
Experience	adjustments	on plan liabilities	$	10,775	$	61,224	$	-
Experience	adjustments	on plan assets	$	281	$	5,267	$	-

The Company expects to make contributions of NT$15,300 thousand to the defined benefit plans in the next year starting from December 31, 2013.

18. EQUITY

a. Share capital
1) Ordinary shares

Numbers of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued	December 31, 2013 3,500,000 $ 35,000,000 2,324,655 $ 23,246,552	December 31, 2012 January 1, 2012 3,500,000 3,500,000 $ 35,000,000 $ 35,000,000 2,295,315 2,309,980 $ 22,953,154 $ 23,099,801

Fully paid ordinary shares, which have a par value of NT$10, carry one vote per share and carry a right to dividends.

Of the Company’s authorized shares, 120,000 thousand shares and 100,000 thousand shares had been reserved for the issuance of convertible bonds and employee share options, respectively.

2) Issued global depositary receipts

On September 25, 1996, the Company issued 4,900 thousand units of global depositary receipts (GDRs) on the London Stock Exchange. These GDRs represented 49,000 thousand common shares of the Company.

On April 3, 1995, GVC Corp. issued 5,000 units of GDRs on the London Stock Exchange. These GDRs represented 25,000 thousand common shares of GVC Corp., which were assumed by the Corporation as a result of a merger, with the Company as the survivor entity. As of November 4, 2002, the outstanding GDRs were 7,627 thousand units, or 38,136 thousand common shares of GVC Corp. For merger purposes, these GDRs were exchanged for the Company’s 1,478 thousand marketable equity securities, which represented the Company’s 14,781 thousand common shares.

As of December 31, 2013, December 31, 2012 and January 1, 2012, the outstanding marketable equity securities were 5,206 thousand units, 5,201 thousand units, and 5,196 thousand units, representing 52,064 thousand common share, 52,006 thousand common share, and 51,957 thousand common shares of the Company, respectively. The rights and obligation of security holders are the same as those of common shareholders, except for voting rights. As of December 31, 2013, December 31, 2012 and January 1, 2012, the unredeemed GDRs amounted to 1,194 thousand units, 984 thousand units, and 1,141 thousand units.

b. Capital surplus

The premium from shares issued in excess of par (including share premium from issuance of common shares, conversion of bonds, treasury share transactions, and excess of the consideration received over the carrying amount of the subsidiaries’ net assets during disposal or acquisition) and donations may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to capital (limited to a certain percentage of the Company’s capital surplus and once a year).

The capital surplus from long-term investments, employee share options and share warrants may not be used for any purpose.

c. Retained earnings and dividend policy

To ensure the availability of cash for the Company’s present and future expansion plans and to meet shareholders’ cash flow requirements, the Company prefers to distribute more stock dividends. In principle, cash dividends are limited to 10% of total dividends distributed.

The Company’s Articles of Incorporation provide that the annual net income, less any deficit, and 10% legal reserve as well as special reserve equal to the debit balances of the shareholders’ equity accounts, together with the distributable unappropriated earnings of prior years, can be retained partially on the basis of operating requirements. The remainder should be distributed as follows:

1) Bonus to employees: At least 1%.
2) Bonus to directors: 1.5% or less.
3) Others, as dividends.

In their meeting on August 27, 2008, the Company’s Board of Directors approved a plan to repurchase up to 30,000 thousand shares listed on the Taiwan Stock Exchange (TSE) between September 28, 2008 and October 27, 2008, with the buyback price ranging from NT$20.48 to NT$43.60. On October 28, 2008, the Company’s Board of Directors approved the repurchase of up to 40,000 thousand shares listed on the TSE between October 29, 2008 and December 28, 2008, with the buyback price ranging from NT$13.00 to NT$37.10. The Company bought back a total of 30,565 thousand shares during the repurchase periods and retired all these shares in January 2012.

If the bonus to employees is in the form of shares, it may be distributed to the employees’ subsidiaries. The requirements and the method of distribution of these share bonuses are based on resolutions passed by the board of directors.

79 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

For the year ended December 31, 2013, the bonus to employees were estimated on the basis of net income after considering the effect of partial profit on share of subsidiaries and associates at 15%; the remuneration to directors were estimated on the basis of net income at 0.85%. For the year ended December 31, 2012, the bonus to employees and remuneration to directors and supervisors represented 14.18% and 0.82%, respectively of net income. Material differences between these estimates and the amounts proposed by the Board of Directors in the following year are adjusted in the year of the proposal. If the actual amounts subsequently resolved by shareholders differ from the proposed amounts, the differences are recorded in the year of the shareholders’ resolution as a change in accounting estimate. If stock bonuses are resolved to be distributed to employees, the number of shares is determined by dividing the amount of bonuses by the closing price (after considering the effect of cash and stock dividends) of the shares on the day preceding the shareholders’ meeting.

Under Rule No. 100116 and Rule No. 0950000507 issued by the FSC, an amount equal to the net debit balance of shareholders’ other equity items (including exchange differences on translating foreign operations, unrealized gain (loss) on available-for-sale financial assets, and the gain or loss on the hedging instrument relating to the effective portion of cash flow hedge) shall be transferred from unappropriated earnings to a special reserve before any appropriation of earnings generated before January 1, 2012 shall be made. Any special reserve appropriated may be reversed to the extent of the decrease in the net debit balance.

Under Rule No. 1010012865 issued by the FSC on April 6, 2012 and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”, on the first-time adoption of IFRSs, a company should appropriate to a special reserve of an amount that was the same as these of unrealized revaluation increment and cumulative translation differences (gains) transferred to retained earnings as a result of the company’s use of exemptions under IFRS 1. However, at the date of transitions to IFRSs, if the increase in retained earnings that resulted from all IFRSs adjustments is not sufficient for this appropriation, only the increase in retained earnings that resulted from all IFRSs adjustments will be appropriated to special reserve. The special reserve appropriated as above may be reversed in proportion to the usage, disposal or reclassification of the related assets and thereafter distributed. The special reserve appropriated on the first-time adoption of IFRSs may be used to offset deficits in subsequent years. No appropriation of earnings shall be made until any shortage of the aforementioned special reserve is appropriated in subsequent years if the company has earnings and the original need to appropriate a special reserve is not eliminated.

Appropriation of earnings to legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

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

The appropriations of earnings for 2012 and 2011 had been approved in the shareholders’ meetings on June 19, 2013 and 2012, respectively. The appropriations and dividends per share were as follows:

Legal reserve Special reserve Share dividends Cash dividends	Appropriation of Earnings 2012 2011 $ 753,486 $ 722,592 689,913 - 114,899 113,972 5,400,265 5,174,335	Dividends Per Share (NT$)
		2012 2011 $ 0.05 $ 0.05 2.35 2.27

The bonus to employees and the remuneration to directors for 2012 and 2011 approved in the shareholders’ meetings on June 19, 2013 and 2012, respectively, were as follows:

Bonus to employees Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2012 Cash Dividends Stock Dividends $ 897,799 $ 171,009 61,420 -	2011
		Cash Dividends Stock Dividends $ 819,420 $ 156,080 61,420 -

The 4,421 thousand shares for 2011 was determined by dividing the amount of share bonus resolved in 2012 by the closing price of NT$35.3 (after considering the effect of cash and stock dividends) on the day immediately preceding the shareholders’ meeting.

The 3,669 thousand shares for 2012 was determined by dividing the amount of share bonus resolved in 2013 by the closing price of NT$46.61 (after considering the effect of cash and stock dividends) on the day immediately preceding the shareholders’ meeting.

The appropriation of the earnings for 2012 was approved by the Financial Supervisory Commission, Executive Yuan, ROC. The Company’s board of directors approved August 13, 2013 as the date of distributing stock dividends and cash dividends.

The appropriations of earnings for 2012 were proposed according to the Company’s financial statements for the years ended December 31, 2012, which were prepared in accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers and the Generally Accepted Accounting Standard in the Republic of China (“ROC GAAP”),, and by reference to the balance sheet for the year ended December 31, 2012, which was prepared in accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers (revised) and International Financial Reporting Standards.

There was no difference between the amounts of the bonus to employees and the remuneration to directors and supervisors approved in the shareholders’ meetings in 2013 and 2012 and the amounts recognized in the financial statements for the years ended December 31, 2012 and 2011.

The appropriations of earnings for 2013 had been proposed by the Company’s board of directors on March 27, 2014. The appropriations and dividends per share were as follows:

	Appropriation	Appropriation	Dividends Per	Dividends Per
	of	Earnings	Share	(NT$)
Legal reserve	$	875,485
Reversal of special reserve		640,244
Cash dividends		6,307,866	$	2.71
Share dividends		116,381		0.05

The Board of Directors of the Company also approved in year 2013 the cash dividends to employees, stock dividends to employees and the remuneration to directors in the amounts of NT$997,212 thousand, NT$189,945 thousand and NT$70,039 thousand, respectively. There is no significant difference between the approved amounts and the amounts charged against earnings of 2013.

The appropriations of earnings, the bonus to employees, and the remuneration to directors for 2013 are subject to the resolution of the shareholders’ meeting to be held on June 19, 2014.

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

81 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

d. Others equity items

The exchange differences arising on translation of foreign operation’s net assets from its functional currency to the Company’s presentation currency are recognized directly in other comprehensive income and also accumulated in the foreign currency translation reserve.

Movements in others equity items were as follows:

Balance at January 1

Exchange differences arising on
translating the foreign
operations
Gain arising on changes in the fair
value of available-for-sale
financial assets
Gain arising on changes in the fair
value of hedging instruments
Share of other comprehensive
income of subsidiaries and
associates
Income tax effect

Balance at December 31

2013

Exchange
Differences on
Translating
Foreign
Operations
Unrealized
Gain (Loss)
on Available-
for-sale
Financial
Assets
Cash Flow
Hedge
Total
$ 128,872 $ (446,848) $ (101,563) $ (419,539)
1,962,895
-
-
1,962,895
-
84,664
-
84,664
-
-
54,594
54,594
666,046
445,415
-
1,111,461

(374,773)

-

-

(374,773)
$ 2,383,040
$ 83,231
$ (46,969)
$ 2,419,302

Balance at January 1 Exchange differences arising on translating the foreign operations Loss arising on changes in the fair value of available-for-sale financial assets Gain arising on changes in the fair value of hedging instruments Share of other comprehensive income of subsidiaries and associates Exchange differences on partial disposal of subsidiaries reclassified to equity Income tax effect Balance at December 31	2012	2012
	Exchange Differences on Translating Foreign Operations Unrealized Gain (Loss) on Available- for-sale Financial Assets $ 1,625,560 $ (142,004) (1,068,528) - - (28,704) - - (607,380) (280,660) (2,430) - 181,650 4,520 $ 128,872 $ (446,848)	Cash Flow Hedge $ (165,225) - - 63,662 - - - $ (101,563)	Total $ 1,318,331 (1,068,528) (28,704) 63,662 (888,040) (2,430) 186,170 $ (419,539)

Unrealized gain/loss on available-for-sale financial assets represents the cumulative gains or losses arising from the fair value measurement on available-for-sale financial assets that are recognized in other comprehensive income. When those available-for-sale financial assets have been disposed of or are determined to be impaired subsequently, the related cumulative gains or losses in other comprehensive income are reclassified to profit or loss.

The cash flow hedges reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of the hedging instruments entered into as cash flow hedges. The cumulative gain or loss arising on changes in fair value of the hedging instruments that are recognized and accumulated in cash flow hedges reserve will be reclassified to profit or loss only when the hedge transaction affects profit or loss.

e. Treasury shares

			Unit: In Thousands of Shares	Unit: In Thousands of Shares
	Number of	Increase	Decrease	Number of
Purpose of Buy-Back	Shares at	During the	During the	Shares at
(Please Specify Reasons)	January 1	Period	Period	December 31
For the year ended
December 31, 2013
Shares held by its subsidiaries	27,979	139	-	28,118
For the year ended
December 31, 2012
Shares held by its subsidiaries	27,840	139	-	27,979
Shares transferred to employees	30,565	-	30,565	-
	58,405	139	30,565	29,979

The Company’s shares held by its subsidiaries at the end of the reporting periods were as follows:

Name of Subsidiary Number of Shares Held (In Thousands) December 31, 2013 Lite-On Capital Corporation 14,892 LTC International Ltd. 6,900 Yet Foundate Ltd. 2,237 Lite-On Electronics Co., Ltd. 2,414 Lite-On IT Corp. 1,675	Carrying Amount Market Price $ 718,857 $ 711,812 297,469 305,906 126,881 90,023 105,515 97,132 85,938 80,066 $ 1,334,660 $ 1,284,939

(Continued)

Lite-On Technology Corporation 2013 Annual Report

20. INCOME TAX

Name of Subsidiary
Number of
Shares Held
(In Thousands)
December 31, 2012
Lite-On Capital Corporation
14,818

LTC International Ltd.
6,866
Yet Foundate Ltd.
2,226
Lite-On Electronics Co., Ltd.
2,402
Lite-On IT Corp.
1,667

January 1, 2012
Lite-On Capital Corporation
14,744

LTC International Ltd.
6,832
Yet Foundate Ltd.
2,215
Lite-On Electronics Co., Ltd.
2,390
Lite-On IT Corp.
1,659

Carrying
Amount
Market Price
$ 718,857
$ 571,221
297,469
271,316
126,881
90,511
105,515
97,658
85,938

64,252
$ 1,334,660
$ 1,094,958
$ 718,857
$ 502,769
297,469
258,888
126,881
93,869
105,515
101,281
85,938

56,552
$ 1,334,660
$ 1,013,359
(Concluded)

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

19. REVENUE

REVENUE
Revenue from the sale of goods Royalty income Revenue from management services Rental income from property	For the Year Ended December 31
		2013 $ 78,029,729 968,907 491,859 143,284 $ 79,633,779	2012 $ 74,755,102 1,349,743 484,269 155,223 $ 76,744,337

a. Income tax recognized in profit or loss

The major components of tax expense were as follows:

Current income tax expense (benefit) Current tax expense recognized in the current year Income tax adjustments on prior years Deferred tax The origination and reversal of temporary differences Investment tax credits Income tax expense recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2013 $ 535,033 (7,000) 528,033 (137,272) 153,267 15,995 $ 544,028	2012 $ 140,567 (218,250) (77,683) (59,874) 191,728 131,854 $ 54,171

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

Income before tax Income tax expense at the statutory rate (17%) Tax effect of adjusting items: Nondeductible (deductible) items in determining taxable income Tax-exempt income Additional income tax on unappropriated earnings The origination and reversal of temporary differences Income tax adjustments on prior years Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 9,298,876 $ 1,580,809 (950,139) - 57,630 (137,272) (7,000) $ 544,028	2012 $ 7,456,594 $ 1,267,621 (981,642) (75,187) 121,503 (59,874) (218,250) $ 54,171

b. Income tax expense recognized in other comprehensive income

Deferred income tax expense (benefit) Translation of foreign operations Related to unrealized gain/loss on available-for-sale financial assets Related to actuarial gain/loss from defined benefit plans	For the Year Ended	For the Year Ended	December 31
		2013 $ 374,773 - 3,068 $ 377,841	2012 $ (181,650) (4,520) (19,838) $ (206,008)

Lite-On Technology Corporation 2013 Annual Report

c. Deferred income tax balance

The analysis of deferred income tax assets was as follows:

			December 31,	December 31,		December 31,	December 31,	December 31,
				2013		2012			January 1, 2012
Investment tax credits			$	-		$ 153,267			$	344,995
Temporary differences
Accumulated equity in the net loss of
foreign investees				374,803		131,734				-
Impairment loss on assets				298,231		298,231				219,802
Unrealized loss and expense				107,152			54,461			71,628
Unrealized sales profit				51,236			62,339			39,678
Unrealized loss on inventories				37,064			27,657			49,779
Accrued pension cost				24,590			26,157			28,715
Accrued warranty expense				22,649			29,871			30,829
Available-for-sale financial assets				4,520			4,520			-
Accumulated compensated absences				1,596			1,914			-
Others				-			-			3,623
			$	921,841		$ 790,151			$	789,049
						Recognized in
							Other
	Opening		Recognized in			Comprehensive				Closing
	Balance			Profit (Loss)		Income (Loss)			Balance
2013
Investment tax credits	$	153,267		$ (153,267)		$		-	$	-
Temporary differences
Accumulated equity in the
net loss of foreign
investees		131,734		243,069				-		374,803
Impairment loss on assets		298,231			-			-		298,231
Unrealized loss and expense		54,461		52,691				-		107,152
Unrealized sales profit		62,339		(11,103)				-		51,236
Unrealized loss on
inventories		27,657		9,407				-		37,064
Accrued pension cost		26,157		1,501			(3,068)			24,590
Accrued warranty expense		29,871		(7,222)				-		22,649
Available-for-sale assets		4,520			-			-		4,520
Accumulated compensated
absences		1,914		(319)				-		1,596
	$	790,151		$ 134,757		$	(3,068)		$	921,841
										(Continued)

2012 Investment tax credits Temporary differences Accumulated equity in the net loss of foreign investees Impairment loss on assets Unrealized loss and expense Unrealized sales profit Unrealized loss on inventories Accrued pension cost Accrued warranty expense Available-for-sale assets Accumulated compensated absences Others	Opening Balance Recognized in Profit (Loss) Recognized in Other Comprehensive Income (Loss) $ 344,995 $ (191,728) $ - - 33,391 98,343 219,802 78,429 - 71,628 (17,167) - 39,678 22,661 - 49,779 (22,122) - 28,715 (22,396) 19,838 30,829 (958) - - - 4,520 - 1,914 - 3,623 (3,623) - $ 789,049 $ (121,599) $ 122,701	Closing Balance $ 153,267 131,734 298,231 54,461 62,339 27,657 26,157 29,871 4,520 1,914 - $ 790,151 (Concluded)

The analysis of deferred income tax liabilities was as follows:

			December 31,	December 31,	December 31,	December 31,
			2013			2012	January 1, 2012
Temporary differences
Accumulated equity in the net	gain	of
investees			$ 1,212,198		$	693,593	$	776,900
Land value increment tax				230,216		230,216		230,216
Unrealized exchange gains net				45,420		38,500		28,245
Unrealized amortization of goodwill				35,737		35,737		35,737
			$ 1,523,571		$	998,046	$	1,071,098
					Recognized in
						Other
					Comprehensive
		Opening	Recognized in			Loss		Closing
		Balance	(Profit) Loss			(Income)		Balance
2013
Temporary differences
Accumulated equity in the
net gain of investees	$	693,593	$	143,832	$	374,773	$	1,212,198
Land value increment tax		230,216		-		-		230,216
								(Continued)

Lite-On Technology Corporation 2013 Annual Report

Unrealized exchange gains net Unrealized amortization of goodwill 2012 Temporary differences Accumulated equity in the net gain of investees Land value increment tax Unrealized exchange gains net Unrealized amortization of goodwill	Opening Balance Recognized in (Profit) Loss Recognized in Other Comprehensive Loss (Income) $ 38,500 $ 6,920 $ - 35,737 - - $ 998,046 $ 150,752 $ 374,773 $ 776,900 $ - $ (83,307) 230,216 - - 28,245 10,255 - 35,737 - - $ 1,071,098 $ 10,255 $ (83,307)	Closing Balance $ 45,420 35,737 $ 1,523,571 $ 693,593 230,216 38,500 35,737 $ 998,046 (Concluded)

d. As of December 31, 2013, December 31, 2012 and January 1, 2012, the aggregate deductible temporary differences for which no deferred income tax assets have been recognized amounted to NT$294,292 thousand, NT$301,920 thousand and NT$377,871 thousand, respectively.
e. Integrated income tax

Unappropriated earnings Unappropriated earnings generated before January 1, 1998 Unappropriated earnings generated on and after January 1, 1998 Imputation credits accounts	December 31, 2013 $ 2,215 12,169,867 $ 12,172,082 $ 568,173	December 31, 2012 January 1, 2012 $ 2,215 $ 2,215 13,652,397 12,390,715 $ 13,654,612 $ 12,392,930 $ 485,212 $ 514,845

The estimated and actual creditable ratio for distribution of earnings of 2013 and 2012 were 3.71% and 3.46%, respectively.

Under the Income Tax Law, for distribution of earnings generated after January 1, 1998, the imputation credits allocated to ROC resident shareholders of the Company was calculated based on the creditable ratio as of the date of dividend distribution. The actual imputation credits allocated to shareholders of the Company was based on the balance of the Imputation Credit Accounts (ICA) as of the date of dividend distribution. Therefore, the expected creditable ratio for the 2013 earnings may differ from the actual creditable ratio to be used in allocating imputation credits to the shareholders.

According to legal interpretation No. 10204562810 announced by the Taxation Administration of the Ministry of Finance, when calculating imputation credits in the year of first-time adoption of IFRSs, the cumulative retained earnings include the net increase or net decrease in retained earnings arising from first-time adoption of IFRSs.

f. Income tax assessments

Income tax returns through 2011 have been examined by the tax authorities. The Company disagreed with the tax authorities’ assessment of its 2009 to 2011 tax returns and had applied for a reexamination. Nevertheless, the Company made a provision for the income tax assessed.

21. SHARE-BASED PAYMENT ARRANGEMENTS

The Company elected to take the optional exemption from applying related guidance retrospectively for share-based payment transactions granted and vested before January 1, 2012. The plans are described as follows:

Qualified employees of the Company and its subsidiaries were granted 30,000 options in December 2007. Each option entitles the holder to subscribe for one thousand common shares of the Company. The options granted are valid for 6 years and exercisable at certain percentages after the second, third and fourth anniversary from the grant date. The options were granted at an exercise price equal to the closing price of the Company’s common shares listed on the grant date. For any subsequent changes in the Company’s capital surplus, the exercise price is adjusted accordingly.

Information on employee share options was as follows:

Employee Share Option Plan Balance at January 1 Options exercised Options expired Balance at December 31 Weighted-average fair value of options granted (NT$)	For the Year Ended December 31	For the Year Ended December 31
	2013 Number of Options (In Thousands) Weighted- average Exercise Price (NT$) $ 17,724 $35.5 (16,468) 33.7-35.5 (1,256) 33.7-35.5 $ - $ 16.964	2012
		Number of Options (In Thousands) Weighted- average Exercise Price (NT$) 19,819 $38.0 (766) 35.5-38.0 (1,329) 35.5-38.0 $ 17,724 35.5 $ 16.964

Information about outstanding options at the end of the reporting period was as follows:

December 31, 2013 Range of Exercise Price (NT$) Weighted-aver age Remaining Contractual Life (Years) $33.7 0	December 31, 2012 Range of Exercise Price (NT$) Weighted-aver age Remaining Contractual Life (Years) $35.5 1	January 1, 2012
		Range of Exercise Price (NT$) Weighted-aver age Remaining Contractual Life (Years) $38.0 2

Lite-On Technology Corporation 2013 Annual Report

Options granted in December 2007 were priced using the (Binomial option pricing model) and the inputs to the model were as follows:

the model were as follows:
	December 31,
	2007
Expected volatility	40.07%
Expected life (years)	6 years
Expected dividend yield	7.07%
Risk-free interest rate	2.5101%

If the Company was able to settle the bonuses paid to employees by cash or shares, the Company presumed that the entire amount of the bonus would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, if the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

At the end of 2012, the stock-based compensation exercise price was greater than the average price of the shares, the number of common shares outstanding decreased and earnings per share increased, and these developments had an anti-dilutive effect; thus, these shares were not included in the calculation of diluted EPS.

22. EARNINGS PER SHARE

EARNINGS PER SHARE
Basic earnings per share Diluted earnings per share	Unit: NT$ Per Share For the Year Ended December 31
		2013 $ 3.83 $ 3.79	2012 $ 3.25 $ 3.20

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share from continuing operations were as follows:

2013
Basic EPS
The net income of common shareholders

Effect of dilutive potential common stock
Bonus to employees
Common stock-based compensation

Diluted EPS
The net income of common shareholders plus
the effect of potential dilutive common stock
2012
Basic EPS
The net income of common shareholders

Effect of dilutive potential common stock
Bonus to employees
Common stock-based compensation

Diluted EPS
The net income of common shareholders plus
the effect of potential dilutive common stock

Amounts
(Numerator)
Shares
(Denominator)
(Thousands)
Earnings
Per Share
(NT$)
$ 8,754,848
2,286,684
$ 3.83
-
24,733

-

-
$ 8,754,848
2,311,417
$ 3.79
$ 7,402,423
2,276,009
$ 3.25
-
34,342

-

-
$ 7,402,423
2,310,351
$ 3.20

The average number of shares outstanding for EPS calculation was adjusted retroactively for the issuance of stock dividends. Thus, in 2012, basic and diluted EPS decreased from NT$3.27 to NT$3.25 and from NT$3.22 to NT$3.20, respectively.

23. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

In March 2012, the Company disposed of 2.21% of its interest in Silitech Technology Corp., reducing its continuing interest from 34.90% to 32.69%.

Between March and December 2013, the Company acquired an additional 56.8% of its interest in Lite-On IT Corp., increasing its continuing interest from 42.33% to 99.13%.

The above transactions were accounted for as equity transactions; for the explanation of partial disposal of Silitech Technology Corp. and acquisition of Lite-On IT Corp., please refer to Note 28 in the consolidated financial statements for the year ended December 31, 2013.

24. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance.

The Company’s capital management system aims to ensure that the necessary financial resources and operating plan are enough to meet the next 12 months’ requirements for working capital, capital expenditures, research and development expenses, debt repayment, dividend expenses and other need.

25. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments
1) Fair value of financial instruments not carried at fair value

The fair value of financial instruments not carried at fair value was finance lease payables. The Company’s management considers the carrying amounts of finance lease payables recognized in the financial statements approximate their fair values.

2) Fair value measurements recognized in the balance sheets

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

a) Level 1 fair value measurements are those derived from quoted prices in active markets for identical assets or liabilities;

Lite-On Technology Corporation 2013 Annual Report

b) Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
c) Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

December 31, 2013

Available-for-sale financial assets Securities listed in ROC - equity securities Unlisted securities - other countries - equity securities Derivative financial liabilities for hedging Cash flow hedges - interest swap contracts December 31, 2012 Available-for-sale financial assets Securities listed in ROC - equity securities Securities listed in other countries - equity securities Unlisted securities - other countries - equity securities Emerging market stocks Derivative financial liabilities for hedging Cash flow hedges - interest swap contracts	Level 1 $ 698,162 - $ 698,162 $ - Level 1 $ 583,654 983 - - $ 584,637 $ -	Level 2 $ - - $ - $ 46,969 Level 2 $ - - - 56,434 $ 56,434 $ 101,563	Level 3 $ - 19,009 $ 19,009 $ - Level 3 $ - - 19,009 - $ 19,009 $ -	Total $ 698,162 19,009 $ 717,171 $ 46,969 Total $ 583,654 983 19,009 56,434 $ 660,080 $ 101,563

January 1, 2012 Available-for-sale financial assets Securities listed in ROC - equity securities Securities listed in other countries - equity securities Unlisted securities - ROC - equity securities Unlisted securities - other countries - equity securities Emerging market stocks Derivative financial liabilities for hedging Cash flow hedges - interest swap contracts	Level 1 $ 1,708,728 11,512 - - - $ 1,720,240 $ -	Level 2 $ - - - - 56,434 $ 56,434 $ 165,225	Level 3 $ - - 460,187 19,009 - $ 479,196 $ -	Total $ 1,708,728 11,512 460,187 19,009 56,434 $ 2,255,870 $ 165,225

There were no transfers between Levels 1 and 2 in the current and prior periods.

3) Reconciliation of Level 3 fair value measurements of financial assets

For the year ended December 31, 2013: None.

For the year ended December 31, 2012

For the year ended December 31, 2012
Balance at January 1, 2012 Impairment loss In profit or loss Balance at December 31, 2013	Available-for- sale Financial Assets
	Unlisted Shares $ 479,196 (460,187) $ 19,009

The total gains or losses for the period included a loss of NT$0 thousand and NT$460,187 thousand relating to assets held years ended December 31, 2013 and 2012. Such fair value gains or losses were included in impairment losses.

All gains and losses included in other comprehensive income relate to unlisted shares held at the end of the reporting period and were reported as changes in unrealized gain or loss on available-for-sale financial assets.

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4) Valuation techniques and assumptions applied for the purpose of measuring fair value

The fair values of financial assets and financial liabilities were determined as follows:

a) The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices;
b) The fair values of derivative instruments were calculated using quoted prices.
c) The fair values of other financial assets and financial liabilities (excluding those described above) were determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
b. Categories of financial instruments

Categories of financial instruments
	December 31,	December 31,
	2013	2012	January 1, 2012
Financial assets
Loans and receivables (1)	$ 30,909,188	$ 29,015,546	$ 29,801,058
Available-for-sale financial assets	717,171	660,080	2,255,870
Financial liabilities
Derivative financial liabilities	46,969	101,563	165,225
Measured at amortized cost
Short-term borrowings	5,484,120	2,787,840	1,050,000
Long-term loans (included current portion
of long-term debts)	18,475,000	15,700,000	15,700,000
Payables (2)	27,902,299	21,232,179	25,698,458

1) The balances included cash and cash equivalents, notes receivable, trade receivables, trade receivables - inter, other receivables and other receivables - inter.
2) The balances included notes payable, trade payables, trade payables - inter, other payables and other payables - inter.
c. Financial risk management objectives and policies

The Company’s major financial instruments included equity investments, trade receivable, trade payables and borrowings. The Company’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company sought to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives was governed by the Company’s policies approved by the board of directors, which provided written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits was reviewed by the internal auditors on a continuous basis. The Company did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

1) Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see a) below) and interest rates (see b) below).

a) Foreign currency risk

The Company had foreign currency sales and purchases, which exposed the Company to foreign currency risk. The Company is an international electronics manufacturing entity with stable foreign currency income that covers foreign currency expense; exchange rate exposures were managed through foreign currency loans.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period (see Note 28).

Sensitivity analysis

The Company was mainly exposed to the currency USD.

The following table details the Company’s sensitivity to a 5% increase and decrease in New Taiwan dollars (the functional currency) against the U.S. dollars. The sensitivity analysis included only outstanding foreign currency denominated monetary items. A positive number below indicates an increase in pre-tax profit and other equity associated with New Taiwan dollars strengthen 5% against the U.S. dollars. For a 5% weakening of New Taiwan dollars against the U.S. dollars, there would be an equal and opposite impact on pre-tax profit and other equity and the balances below would be negative.

Profit or loss	Currency USD Impact	Currency USD Impact	Currency USD Impact
	For the Year Ended December 31
		2013 $ (4,982)	2012 $ (34,443)

b) Interest rate risk

The Company was exposed to interest rate risk because entities in the Company borrowed funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix of fixed and floating rate borrowings, and using interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

The carrying amount of the Company’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows.

	December 31,	December 31,	December 31,	December 31,
		2013		2012	January 1, 2012
Fair value interest rate risk
Financial assets (i)	$	3,430,260	$	8,100,735	$	7,008,775
Financial liabilities (ii)		5,484,120		2,788,293		826
Cash flow interest rate risk
Financial assets (iii)		3,493,573		2,222,756		2,740,724
Financial liabilities (iv)		18,475,000		15,700,000		16,750,000

i. The balances included time deposit.

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ii. The balances included financial liabilities exposed to fair value risk from interest rate fluctuation.
iii. The balances included demand deposits.
iv. The balances included financial liabilities exposed to cash flow risk from interest rate fluctuation.

The Company aims to keep borrowings at variable rates. In order to achieve this result, the Company entered into interest rate swaps to hedge its exposures to changes in fair values of the borrowings. The critical terms of these interest rate swaps are similar to those of hedged borrowings. These interest rate swaps were designated as effective hedging instruments and hedge accounting is used.

The Company was also exposed to cash flow interest rate risk in relation to variable-rate bank borrowings and pay-fixed/receive-floating interest rate swaps. It is the Company’s policy to keep its borrowings at floating rate of interests so as to minimize the fair value interest rate risk. The Company’s cash flow interest rate risk was mainly concentrated in the fluctuation of the average rate for 90-day notes in Taiwan’s secondary market arising from the Company’s New Taiwan dollars denominated borrowings.

Sensitivity analysis

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

a) Business related credit risk

To maintain the quality of receivables, the Company has established operating procedures to manage credit risk.

For individual customers, risk factors considered include the customer’s financial position, credit rating agency rating, the Company’s internal credit rating, and transaction history as well as current economic conditions that may affect the customer’s ability to pay. The Company also has the right to use some credit protection enhancement tools, such as requiring advance payments, to reduce the credit risks involving certain customers.

b) Financial credit risk

Bank deposits and other financial instruments are credit risk sources required by the Parent Company’s Department of Finance Department to be measured and monitored. However, since the Company’s counter-parties are all reputable financial institutions and government agencies, there is no significant financial credit risk.

3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Company’s operations.

The objective of liquidity risk management, the Department is required to maintain operating cash and cash equivalents, in order to ensure that the combined company has sufficient financial flexibility.

a) Liquidity and interest risk rate tables

If interest rates had been 25 basis points higher and all other variables were held constant, the Company’s pre-tax profit years ended December 31, 2013 and 2012 would decrease by NT$37,454 thousand and NT$33,693 thousand.

c) Other price risk

The Company was exposed to equity price risk through its investments in listed equity securities. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 7% higher, the pre-tax other comprehensive income years ended December 31, 2013 and 2012 would increase by NT$48,871 thousand and NT$40,925 thousand as a result of the changes in fair value of available-for-sale shares.

2) Credit risk

The table below summarizes the maturity profile of the Company’s non-derivative financial liabilities based on contractual undiscounted payments.

December 31, 2013

December 31, 2013
Weighted Average Effective Interest Rate (%) On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing - $ 27,902,299 Finance lease liabilities - - Fixed interest rate liabilities 0.72-0.76 5,484,120 Variable interest rate liabilities 1.448-1.663 6,350,000 $ 39,736,419	1-3 Years $ 16,165 - - 8,285,000 $ 8,301,165	3 Years to 5 Years $ - - - 3,840,000 $ 3,840,000	5+ Years $ - - - -
			$ -

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company.

The Company is exposed to credit risk from trade receivables, deposits and other financial instruments. Credit risks on business-related exposures are managed separately from that on financial-related exposures.

Lite-On Technology Corporation 2013 Annual Report

b. Purchases of goods

December 31, 2012

Weighted Average Effective Interest Rate (%) On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing - $ 21,232,179 Finance lease liabilities 15.60 453 Fixed interest rate liabilities 0.76-0.79 2,787,840 Variable interest rate liabilities 1.518-1.694 3,125,000 $ 27,145,472 January 1, 2012 Weighted Average Effective Interest Rate (%) On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing - $ 25,698,457 Finance lease liabilities 15.60 504 Fixed interest rate liabilities - - Variable interest rate liabilities 1.480-1.71 1,050,000 $ 26,748,961	1-3 Years $ 16,531 - - 12,075,000 $ 12,091,531 1-3 Years $ 18,101 322 - 2,075,000 $ 2,093,423	3 Years to 5 Years $ - - - 500,000 $ 500,000 3 Years to 5 Years $ - - - 1,125,000 $ 1,125,000	5+ Years $ - - - -
			$ -
			5+ Years $ - - - 12,500,000
			$ 12,500,000

26. TRANSACTIONS WITH RELATED PARTIES

Significant transactions with related parties are summarized below.

a. Sales of goods

For the Year Ended December 31

Related Parties Categories Subsidiaries Associates Other related parties	2013 $ 6,357,298 24 468 $ 6,357,790	2012 $ 8,375,915 24 465 $ 8,376,404

c. d.	Related Parties Categories Subsidiaries Associates Receivables from related parties Related Parties Categories Accounts receivable Subsidiaries Other receivable Subsidiaries Associates Other related parties Payables to related parties Related Parties Categories Accounts payable Subsidiaries Associates Other related parties Other payable Subsidiaries Associates Other related parties	December 31, 2013 $ 5,307,083 $ 368,363 789 3,008 $ 372,160 December 31, 2013 $ 20,649,387 - 18,777 $ 20,668,164 $ 460,941 470 4,552 $ 465,963	For the Year Ended December 31	For the Year Ended December 31
				2013 2012 $ 72,364,906 $ 66,271,267 - 11,457 $ 72,364,906 $ 66,282,724 December 31, 2012 January 1, 2012 $ 3,241,115 $ 5,121,231 $ 243,248 $ 784,690 66,020 68,874 236 - $ 309,504 $ 853,564 December 31, 2012 January 1, 2012 $ 15,591,414 $ 14,477,695 579 82,369 - - $ 15,591,993 $ 14,560,064 $ 445,046 $ 663,986 32 - 4,789 - $ 449,867 $ 663,986

e. Acquisition of property, plant and equipment

Related Parties Categories Subsidiaries	Purchase Price	Purchase Price	Purchase Price
	For the Year Ended December 31
		2013 $ -	2012 $ 1,594

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f. Disposal of property, plant and equipment

Related Parties Categories Subsidiaries		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013		2012
		Proceeds Gains (Losses) $ 197 $ -		Proceeds Gains (Losses) $ 315,253 $ 303,553

The Company will continue to recognize the losses based upon reasonable estimation of the lawsuit quarterly until the settlement of this lawsuit.

28. EXCHANGE RATE OF FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The significant financial assets and liabilities denominated in foreign currencies were as follows:

g. Operating expense

Related Parties Categories Subsidiaries Other related parties	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 220,022 84,652 $ 304,674	2012 $ 398,356 86,007 $ 484,363

The sales prices and payment terms to related parties were not significantly different from those of sales to third parties. For other related party transactions, price and terms were determined in accordance with mutual agreements.

The Company deferred the disposal gain/loss derived from sales of property, plant and equipment to related parties using equity method, and then recognized such gain/loss over the depreciable lives of the disposed assets.

h. Compensation of management personnel

Related Parties Categories Short-term employee benefits Termination benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 400,799 54,429 $ 455,228	2012 $ 391,508 15,889 $ 407,397

The remuneration of directors and key executives was determined by the remuneration committee having regard to the performance of individuals and market trends.

Financial assets Monetary items USD HKD JPY CZK EUR Non-monetary items EUR Investments accounted for by the equity method HKD JPY USD EUR Financial liabilities Monetary items USD JPY HKD CZK EUR Nonmonetary items USD	December 31, 2013 Foreign Currencies Exchange Rate $ 1,018,504 29.8050 14,961 3.8436 9,921 0.2842 6,631 1.5022 1,042 41.0623 - - 2,408,525 3.8436 1,141,347 0.2842 1,079,745 29.8050 147,305 41.0623 1,021,847 29.8050 9,769 0.2842 5,061 3.8436 4,647 1.5022 988 41.0623 - -	December 31, 2012 Foreign Currencies Exchange Rate $ 717,972 29.0400 1,422 3.7464 5,990 0.3364 35,557 1.5349 352 38.478 717 38.478 2,850,596 3.7464 994,115 0.3364 841,835 29.0400 142,470 38.478 741,693 29.0400 1,650 0.3364 4,219 3.7464 39,749 1.5349 497 38.478 3,497 29.0400	January 1, 2012
			Foreign Currencies Exchange Rate $ 764,240 30.2680 43,104 3.8956 43,929 0.3903 54,254 1.5218 370 39.1668 294 39.1668 2,802,429 3.8956 950,745 0.3903 710,981 30.2680 150,487 39.1668 772,733 30.2680 23,380 0.3903 50,715 3.8956 51,313 1.5218 265 39.1668 5,459 30.2680

29. SEPARATELY DISCLOSED ITEMS

a. Information on significant transactions and information on investees:

27. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In May 2010, INPRO II Licensing Sarl (INPRO) filed a lawsuit with the U.S. District Court for the Northern District of California and charged the Company with breach of contract. INPRO alleged that the Company incurred a debt on patent rights obtained from Hitachi Limited. INPRO also claimed it had assumed Hitachi’s rights to payments for patent use. But because of the court’s lack of jurisdiction, INPRO dismissed the case later. On September 3, 2010, the Company filed a lawsuit with the Intellectual Property Court (“IP Court”) in Taiwan against INPRO, alleging that the Company had no patent obligations. On September 8, 2010, INPRO filed a lawsuit with the Superior Court of California (SCC) in the County of San Francisco. In December 2010, the SCC ruled that the U.S. proceedings in the U.S. should be stopped because the same facts had been filed with the IP Court in Taiwan. In July 2012, INPRO file a counterclaim with the IP Court in Taiwan and demanded a royalty payment of US$5.4 million. In June 2013, on the basis of its presentence investigation, the IP Court made a final judgment in favor of INPRO and ruled that the Company should pay royalties of US$5.4 million plus interest. In July 2013, the Company filed an appeal, claiming that the Company had no patent obligations under the former patent licensing contract. The Company accrued a reasonable amount in case of a loss on this lawsuit.

1) Lending funds to others: Note 4 to the financial statements
2) Providing endorsements or guarantees for others: Note 4 to the financial statements
3) Holding of securities at the end of the period: Note 4 to the financial statements
4) Aggregate purchases or sales of the same securities reaching NT$300 million or 20 percent of paid-in capital or more: Note 4 to the financial statements
5) Acquisition of real estate reaching NT$300 million or 20 percent of paid-in capital or more: None
6) Disposal of real estate reaching NT$300 million or 20 percent of paid-in capital or more: Note 4 to the financial statements
7) Purchases or sales of goods from or to related parties reaching NT$100 million or 20 percent of paid-in capital or more: Note 4 to the financial statements

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b. Reconciliation of balance sheet as of January 1, 2012

8) Trade receivables from related parties reaching NT$100 million or 20 percent of paid-in capital or more: Note 4 to the financial statements
9) Trading in derivative instruments: Note 10 to the financial statements
10) Information on investees: Note 4 to the financial statements
b. Information on investments in mainland China:
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. Note 4 to the financial statements
2) Significant direct or indirect transactions with the investee, prices, payment terms and unrealized gain or loss: Note 4 to the financial statements

30. FIRST-TIME ADOPTION OF IFRSS

The Company’s date of transition to the Regulations was January 1, 2012. The impact of the transition to the Regulations on the Company’s balance sheets and statements of comprehensive income is stated as follows:

a. Exemptions

Except for optional exemptions and mandatory exceptions, the Accounting Standards for Use in the Preparation of Parent Company Only Financial Statements have been applied in the Company’s opening balance sheet at the date of transition, January 1, 2012. The major optional exemptions the Company elected are summarized as follows:

Item Deferred tax assets - current Available-for-sale financial assets Financial assets carried at cost Investments accounted for using equity method Net property, plant and equipment Intangible assets, net Deferred expenses, net Deferred income tax assets Prepayment for pension - noncurrent Others Total Other payables Reserve for land value increment tax Deferred tax liabilities Deferred credits - profits of associates Others Total liabilities Capital surplus Unappropriated earnings Net loss not recognized as pension cost Unrealized loss on available-for-sale financial assets Treasury stock Others Totalshareholders’ equity Total	ROC GAAP Effect of Transition to Accounting Standards Used in Preparation of the Financial Statements $ 306,618 $ (306,618) 1,720,240 535,630 535,630 (535,630) 70,169,806 (440,025) 5,382,464 98,807 610,809 76,368 175,175 (175,175) - 789,049 19,834 59,400 34,564,781 - $ 113,485,357 $ 101,806 $ 3,736,148 $ 79,669 230,216 (230,216) 358,451 712,647 233,398 (233,398) 39,999,922 - 44,558,135 328,702 27,759,251 (907,070) 11,729,938 662,992 (17,182) 17,182 (372,591) 230,587 (1,857,643) (230,587) 31,685,449 - 68,927,222 (226,896) $ 113,485,357 $ 101,806	IFRSs Note $ - 1) 2,255,870 2) - 2) 69,729,781 8) 5,481,271 3) 687,177 3) - 3) 789,049 1) and 7) 79,234 5) 34,564,781 $ 113,587,163 $ 3,815,817 10) - 4) 1,071,098 4) and 7) - 8) 39,999,922 44,886,837 26,852,181 8) and 9) 12,392,930 5), 8), 9), 10) and 12) - 12) (142,004) 6) (2,088,230) 6) 31,685,449 68,700,326 $ 113,587,163

Investments in subsidiaries, associates and joint ventures

c. Reconciliation of balance sheet as of December 31, 2012

The Company elected to measure the investments in subsidiaries, associates and joint ventures acquired before the date of transition, at the same carrying amount as recognized under ROC GAAP as of December 31, 2011.

Share-based payment

The Company elected to take the optional exemption from applying related guidance retrospectively for the share-based payment transactions granted and vested before the transition date.

Deemed cost

All other property, plant and equipment, investment properties and intangible assets applied IFRSs retrospectively at the date of the transition.

Employee benefits

The Company elected to recognize all cumulative actuarial gains and losses in retained earnings as of the date of transition. In addition, the Company elected to apply the exemption disclosure requirement provided by IFRS 1, in which the experience adjustments are determined for each accounting period prospectively from the transition date.

Item Deferred tax assets - current Available-for-sale financial assets Financial assets carried at cost Investments accounted for using equity method Net property, plant and equipment Intangible assets Deferred expenses, net Deferred income tax assets Prepayment for pension - noncurrent Other noncurrent assets Others Total	ROC GAAP $ 295,529 584,637 75,443 73,059,529 5,192,407 565,332 149,459 - 29,057 - 31,585,321 $ 111,536,714	Effect of Transition to Accounting Standards Used in Preparation of the Financial Statements $ (295,529) 75,443 (75,443) (520,556) 69,990 75,469 (149,459) 790,151 (29,057) 4,000 - $ (54,991)	IFRSs Note $ - 1) 660,080 2) - 2) 72,538,973 8) 5,262,397 3) 640,801 3) - 3) 790,151 1) and 7) - 5) 4,000 3) 31,585,321 $ 111,481,723 (Continued)

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e. Explanations of significant reconciling items in the transition to IFRSs

Item Other payables Reserve for land value increment tax Deferred tax liabilities Deferred credits - profits of associates Accrued pension cost Others Total liabilities Capital surplus Unappropriated earnings Foreign currency translation reserve Unrealized loss on available-for-sale financial assets Net loss not recognized as pension cost Treasury stock Others Total shareholders’ equity Total	ROC GAAP $ 3,633,722 230,216 273,208 366,048 - 37,253,494 41,756,688 27,504,826 13,253,899 126,009 (677,435) (29,536) (1,104,073) 30,706,336 69,780,026 $ 111,536,714	Effect of Transition to Accounting Standards Used in Preparation of the Financial Statements $ 98,703 (230,216) 724,838 (366,048) 37,458 - 264,735 (752,838) 400,713 2,863 230,587 29,536 (230,587) - (319,726) $ (54,991)	IFRSs Note $ 3,732,425 10) - 4) 998,046 4) and 7) - 8) 37,458 5) 37,253,494 42,021,423 26,751,988 8), 9) and 11) 13,654,612 5), 8), 9), 10), 11) and 12) 128,872 8) (446,848) 6) - 12) (1,334,660) 6) 30,706,336 69,460,300 $ 111,481,723

Material differences between the accounting policies under ROC GAAP and Accounting Standards Used in the Preparation of Parent Company Only Financial Statements were as follows:

1) Classifications of deferred income tax asset/liability and valuation allowance

Under ROC GAAP, valuation allowances are provided to the extent, if any, that it is more likely than not that deferred income tax assets will not be realized. In accordance with the Accounting Standards Used in Preparation of the Company Only Financial Statements, deferred tax assets are only recognized to the extent that it is probable that there will be sufficient taxable profits and the valuation allowance account is no longer used.

In addition, under ROC GAAP, a deferred tax asset and liability is classified as current or noncurrent in accordance with the classification of its related asset or liability. However, if a deferred income tax asset or liability does not relate to an asset or liability in the financial statements, it is classified as either current or noncurrent based on the expected length of time before it is realized or settled. Under Accounting Standards Used in Preparation of the Financial Statements, a deferred tax asset and liability is classified as noncurrent asset or liability.

As of January 1, 2012 and December 31, 2012, the amounts reclassified from deferred income tax assets to noncurrent assets were NT$306,618 thousand and NT$295,529 thousand, respectively.

2) Financial assets carried at cost
d. Reconciliation of statement of comprehensive income for the year ended December 31, 2012

Item Operating revenue Operating cost Operating profits Unrealized gross profit on sales to associates Gross profit Operating expenses Income from operations Non-operating income and expenses Share of profits of subsidiaries and associates Profits on disposal of investments Others Total Income before income tax Income tax expense Profit after income tax expense Other comprehensive Foreign currency translation reserve Unrealized valuation loss on available-for-sale financial assets Cash flow hedges Share of other comprehensive income of subsidiaries and associates Actuarial loss from defined benefit plans Income tax relating to components of other comprehensive income Total comprehensive income for the year	ROC GAAP Effect of Transition to Accounting Standards Used in Preparation of the Financial Statements $ 76,744,337 $ - (69,655,336) 281 7,089,001 281 89,525 - 7,178,526 281 (5,426,063) (18,019) 1,752,463 (17,738) 5,551,497 17,492 442,276 (132,191) (157,205) - 5,836,568 (114,699) 7,589,031 (132,437) (54,171) - $ 7,534,860 $ (132,437)	IFRSs Note $ 76,744,337 (69,655,055) 10) 7,089,282 89,525 7,178,807 (5,444,082) 5) and 10) 1,734,725 5,568,989 8) 310,085 9) and 11) (157,205) 5,721,869 7,456,594 (54,171) 7,402,423 (1,068,528) (28,704) 63,662 (888,040) (127,212) 206,008 $ 5,559,609

Under Regulations Governing the Preparation of Financial Reports by Securities Issuers before its amendment, the non-publicly traded stocks or stocks that are not traded in the Emerging Stock Market and pertaining to an investment in which the investor has no significant influence on the investee should be measured as financial assets carried at cost.

Under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, the financial instruments designated as at fair value through other comprehensive income and financial assets carried at cost should be classified as at fair value through profit or loss.

As of January 1, 2012 and December 31, 2012, the Company’s financial assets carried at cost reclassified to available for sale financial assets amounted to NT$535,630 thousand and NT$75,443 thousand.

3) Classification of deferred expenses

Under ROC GAAP, deferred expenses are recorded under other assets. Under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, the Company reclassified deferred expenses to other current assets, properties, intangible assets, and other noncurrent assets in accordance with their nature.

As of January 1, 2012, the Company had reclassified deferred expenses of NT$98,807 thousand and NT$76,368 thousand to properties and intangible assets, respectively.

As of December 31, 2012, the Company had reclassified deferred expenses of NT$69,990 thousand, NT$75,469 thousand and NT$4,000 thousand to properties, intangible assets and other noncurrent assets, respectively.

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4) Reserve for land value increment tax

Based on the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, land revaluation surplus is classified as reserve for land value increment tax and recorded under other liabilities. Under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, the Company reclassified land value increment tax to deferred income tax liabilities. As of both January 1, 2012 and December 31, 2012, the amount reclassified from land value increment tax to deferred income tax liabilities were NT$230,216 thousand.

5) Employee benefits

The Company had previously applied actuarial valuation to its defined benefit obligations and recognized the related pension cost and retirement benefit obligation in conformity with ROC GAAP. Under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, the Company should carry out actuarial valuation on defined benefit obligations in accordance with IAS No. 19 - “Employee Benefits.” The Company has opted to recognize actuarial gains and losses as other comprehensive income immediately in full in the period in which they occur. The subsequent reclassification to earnings is not permitted.

At the transition date, the Company performed the actuarial valuation under IAS No. 19 - “Employee Benefits” and recognized the valuation difference directly as retained earnings under IFRS 1. As of January 1, 2012, the IFRS-based adjustments resulted in increases in both prepayment for pension - noncurrent and unappropriated earnings by NT$59,400 thousand.

At the transition date, the Company performed the actuarial valuation under IAS No. 19 - “Employee Benefits” and recognized the valuation difference directly as retained earnings under IFRS 1. As of December 31, 2012, the IFRS-based adjustments resulted in (a) increases in accrued pension liabilities by NT$37,458 thousand and (b) decreases in prepayment for pension - noncurrent and unappropriated earnings by NT$29,057 thousand and NT$66,515 thousand, respectively.

For the year ended 2012, IFRS adoption resulted in a decrease of NT$1,297 thousand (recorded as operating expenses) in salary expenses.

6) Treasury stock

Under ROC GAAP on the accounting for treasury stocks, effective January 1, 2002, the Company accounted for its shares held by its subsidiary as treasury stock when it recognized the investment income at the market price. The difference in carrying value and market value of this treasury stock was recorded as unrealized loss on available-for-sale financial assets. Under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, treasury shares are recognized immediately at the time when treasury shares are acquired by subsidiaries.

As of both January 1, 2012 and December 31, 2012, the Company’s unrealized loss of NT$230,587 thousand on available-for-sale financial assets was reclassified to treasury stock.

7) Offsetting between deferred tax assets/liabilities

Under ROC GAAP, deferred current tax assets - current should be offset against deferred tax liability - current under the same taxable entity. The same rule applies to deferred tax asset/liability - noncurrent. Under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, an entity is eligible to offset tax assets against tax liabilities generated from the same taxable entity only (a) if the entity has a legally enforceable right to make this offset and (b) the deferred tax assets and liabilities relate to income taxes levied by the same tax authorities on either the same taxable entity or different taxable entities that intend either to settle current tax liabilities and assets on a net basis or to realize the assets and settle the liabilities simultaneously.

As of January 1, 2012 and December 31, 2012, the offset amounts of the Company’s deferred tax assets and reclassification of deferred tax liabilities were NT$482,431 thousand and NT$494,622 thousand, respectively.

8) Investments accounted for using the equity method

The Company has evaluated significant differences between current accounting policies and Accounting Standards Used in the Preparation of Parent Company Only Financial Statements for the Company’s subsidiaries and associates accounted for using the equity method. The significant difference is mainly due to the adjustment to employee benefits.

As of January 1, 2012, the differences mentioned above resulted in decreases in investments accounted for using the equity method, deferred credits, unappropriated earnings and capital surplus by NT$440,025 thousand, NT$233,398 thousand, NT$37,955 thousand and NT$168,672 thousand, respectively.

As of December 31, 2012, the differences mentioned above resulted in (a) increases in unappropriated earnings and foreign currency translation reserve by NT$90,523 thousand and NT$2,863 thousand and (b) decreases in investments accounted for using the equity method, deferred credits and capital surplus by NT$520,556 thousand, NT$366,048 thousand and NT$247,894 thousand, respectively.

The net profit share of subsidiaries and associates recognized by equity method was adjusted for an increase of NT$17,492 thousand for the year ended December 31, 2012.

9) Accounting treatment of the Company for increases in carrying values of equity-method investments due to not subscribing proportionally to the additional shares issued by the investees and relevant adjustment of capital surplus - long-term equity investment.

Under ROC GAAP, if an investee issues new shares and an investor does not buy new shares proportionately, the investor’s ownership percentage and its interest in net assets of the investment will change. The resulting difference should be used to adjust the capital surplus and long-term equity investment accounts.

Under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, the changes in interest in net assets adjusted the capital surplus and investments for using the equity method. If the Company’s ownership interest is reduced due to the additional subscription of the new shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. In addition, in accordance with the “Q&A on the Adoption of IFRSs” issued by the Taiwan Stock Exchange, capital surplus not covered by the IFRSs, the ROC Company Law and the relevant legal interpretations of the Ministry of Economic Affairs, ROC should be adjusted accordingly at the date of transition to IFRSs.

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As of January 1, 2012, the foregoing adjustments resulted in a decrease of NT$738,398 thousand in the Company’s capital surplus - long term investments and an increase of NT$738,398 thousand in unappropriated earnings.

As of December 31, 2012, the foregoing adjustments resulted in a decrease of NT$651,137 thousand in the Company’s capital surplus - long term investments and an increase of NT$651,137 thousand in unappropriated earnings.

As of December 31, 2012, the gains on disposal of investments was adjusted due to not subscribing proportionally by NT$14,002 thousand.

10) Employee benefits - short-term accumulated compensated absences

Under ROC GAAP, there are no specific requirements for recognizing accumulated compensated absences at the end of reporting periods. Companies usually recognize the related costs when the employees actually go on leave. Under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, the expected cost of short-term accumulated compensated absences should be recognized as the employees render services that increase their entitlement to these compensated absences.

As of January 1, 2012, the IFRS-based evaluation adjustment resulted in both increases of the other payables and decreases of unappropriated earnings by NT$79,669 thousand.

As of December 31, 2012, the IFRS-based evaluation adjustment resulted in both increases of the other payables and decreases of unappropriated earnings by NT$98,703 thousand.

For the year ended December 31, 2012, the salary expenses were adjusted for an increase of NT$19,035 thousand (resulting in a decrease of NT$281 thousand in cost of sales and an increase of NT$19,316 thousand in operating expenses).

As of January 1, 2012, net loss not recognized as pension cost was adjusted for an increase of NT$17,182 thousand and a decrease of NT$17,182 thousand in unappropriated earnings.

As of December 31, 2012, net loss not recognized as pension cost was adjusted for an increase of NT$29,536 thousand and a decrease of NT$29,536 thousand in unappropriated earnings.

f. Explanation of material adjustments to the statement of cash flows.

The Company partially disposed of its interest in subsidiary - Silitech Technology Corp. without loss of control in the year ended December 31, 2012. Under ROC GAAP, the resulting cash flows were classified as investing activities. Under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, the resulting cash flows of NT$288,198 were classified as financing activities.

According to ROC GAAP, interest paid and received and dividends received are classified as operating activities while dividends paid are classified as financing activities. Additional disclosure is required for interest expenses when reporting cash flow using indirect method. However, under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, cash flows from interest and dividends received and paid shall each be disclosed separately. Each shall be classified in a consistent manner from period to period as operating, investing or financing activities. Therefore, interests received, interests paid and dividends received by the Company of NT$81,386 thousand, NT$335,080 thousand and NT$21,459 thousand, respectively, for the year ended December 31, 2012 were presented separately at the date of transition to Accounting Standards Used in the Preparation of Parent Company Only Financial Statements.

Except for the above differences, there are no other significant differences between ROC GAAP and Accounting Standards Used in the Preparation of Parent Company Only Financial Statements in the statement of cash flows.

11) Disposal of partial shares without losing significant influence on the investee

Under ROC GAAP, if the stock ownership percentage changes during the year, the investor company should recognize investment gains or losses in proportion to the actual stock ownership percentage on the disposition date.

Under Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, disposal of the shares of subsidiaries without losing significant control over the subsidiaries is deemed an equity transaction.

As of December 31, 2012, the IFRS-based adjustments resulted in an increase of NT$146,193 thousand in the Company’s capital surplus - difference between consideration and carry amounts adjusted arising from changes in percentage of ownership in subsidiaries, and a decrease of NT$146,193 thousand in the gain on disposal of investments.

12) Employee benefits - minimum pension liability to be recognized

Under ROC GAAP, the minimum pension liability should be should be recognized as such in the balance sheet; if the accrued pension liability is lower than this minimum, any shortfall should be recorded.

Under the Accounting Standards Used in the Preparation of Parent Company Only Financial Statements, there is no requirement for recognizing minimum pension liability.

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Lite-On Technology Corporation and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2013 and 2012 and Independent Auditors’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2013 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Accounting Standard 27 “Consolidated and Separate Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we do not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

LITE-ON TECHNOLOGY CORPORATION

==> picture [216 x 53] intentionally omitted <==

RAYMOND SOONG Chairman

March 27, 2014

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LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Lite-On Technology Corporation

We have audited the accompanying consolidated balance sheets of Lite-On Technology Corporation (the “Parent Company”) and its subsidiaries (collectively referred to as the “Group”) as of December 31, 2013, December 31, 2012 and January 1, 2012, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2013 and 2012. These consolidated financial statements are the responsibility of the Parent 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 the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2013, December 31, 2012 and January 1, 2012, and their consolidated financial performance and their consolidated cash flows for the years ended December 31, 2013 and 2012, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards endorsed by the Financial Supervisory Commission of the Republic of China.

We have also audited the parent company only financial statements of Lite-On Technology Corporation as of and for the years ended December 31, 2013 and 2012 on which we have issued an unqualified report.

March 27, 2014

Notice to Readers

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

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

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss - current (Note 7) Available-for-sale financial assets - current (Notes 5 and 8) Debt investments with no active market - current (Notes 10 and 32) Notes receivable Trade receivables, net (Note 11) Trade receivables from related parties (Note 31) Other receivables (Note 27) Other receivables from related parties (Note 31) Inventories, net (Notes 5 and 12) Construction in progress in excess of progressive billings (Note 13) Other current assets (Note 17) Total current assets NONCURRENT ASSETS Available-for-sale financial assets - noncurrent (Notes 5 and 8) Debt investments with no active market - noncurrent (Notes 10 and 32) Investments accounted for using equity method (Note 14) Property, plant and equipment, net (Notes 5 and 15) Intangible assets, net (Notes 5 and 16) Deferred tax assets (Notes 5 and 24) Refundable deposits Prepayments for investments Other noncurrent assets (Note 17) Total noncurrent assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 18) Financial liabilities at fair value through profit or loss - current (Note 7) Notes payable Trade payables Trade payables to related parties (Note 31) Other payables Other payables to related parties (Note 31) Current tax liabilities (Notes 5 and 24) Provisions - current (Notes 5 and 20) Current portion of long-term borrowings (Note 18) Finance lease payables - current (Notes 4 and 19) Advance receipts Total current liabilities NONCURRENT LIABILITIES Derivative financial liabilities for hedging - noncurrent (Notes 5 and 9) Long-term borrowings, net of current portion (Note 18) Deferred tax liabilities (Notes 5 and 24) Finance lease payables, net of current portion (Note 19) Accrued pension liabilities (Notes 5 and 21) Guarantee deposits Total noncurrent liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital Ordinary shares Advance receipts for common stock Total share capital Capital surplus Additional paid-in capital from share issuance in excess of par value Bond conversion Treasury stock transactions Difference between consideration and carry amounts adjusted arising from changes in percentage of ownership in subsidiaries Arising from share of changes in capital surplus of associates or joint venture Merger Employee stock options Total capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unrealized gain (loss) on available-for-sale financial assets Unrealized loss on cash flow hedging Total other equity Treasury shares Total equity attributable to owners of the Company NONCONTROLLING INTERESTS Total equity TOTAL		December 31, 2013		December 31, 2012		January 1, 2012
		Amount % $ 65,931,169 31 14,867 - 13 - 147,441 - 175,756 - 49,500,169 23 81,554 - 2,319,810 1 18,951 - 27,203,533 13 - - 5,037,428 3 150,430,691 71 2,143,990 1 14,100 - 3,531,425 2 37,001,382 17 15,716,262 7 2,207,204 1 390,443 - - - 925,989 1 61,930,795 29 $ 212,361,486 100 $ 15,576,780 7 27,836 - 191,488 - 60,307,826 29 568,624 - 20,723,468 10 11,699 - 2,102,971 1 1,503,948 1 8,867,669 4 72,735 - 1,401,939 1 111,356,983 53 46,969 - 18,508,496 9 2,721,656 1 172,948 - 235,671 - 81,608 - 21,767,348 10 133,124,331 63 23,246,552 11 29,705 - 23,276,257 11 9,096,489 4 7,540,388 4 430,851 - - - 15,487 - 10,120,217 5 8,587 - 27,212,019 13 8,601,391 4 689,913 - 12,172,082 6 21,463,386 10 2,383,040 1 83,231 - (46,969) - 2,419,302 1 (1,334,660) (1) 73,036,304 34 6,200,851 3 79,237,155 37 $ 212,361,486 100		Amount % $ 51,224,870 26 13,023 - 10 - 9,365,207 5 119,941 - 44,799,940 23 83,421 - 1,559,231 1 2,231 - 20,566,117 10 72,527 - 5,058,662 2 132,865,180 67 2,154,465 1 102,560 - 3,508,782 2 37,697,741 19 16,033,575 8 2,215,617 1 311,277 1 13,155 - 2,153,262 1 64,190,434 33 $ 197,055,614 100 $ 7,010,394 4 35,239 - 240,009 - 51,989,611 26 137,923 - 16,304,341 8 20,173 - 2,042,444 1 1,691,373 1 4,411,168 2 62,381 - 826,445 1 84,771,501 43 101,563 - 19,956,634 10 2,170,053 1 232,716 - 312,768 1 89,068 - 22,862,802 12 107,634,303 55 22,953,154 12 6,840 - 22,959,994 12 8,551,730 4 7,540,388 4 370,703 - 146,193 - 16,645 - 10,120,217 5 6,112 - 26,751,988 13 7,847,905 4 - - 13,654,612 7 21,502,517 11 128,872 - (446,848 ) - (101,563) - (419,539) - (1,334,660) (1) 69,460,300 35 19,961,011 10 89,421,311 45 $ 197,055,614 100		Amount % $ 52,882,246 26 111,584 - 9 - 3,633,137 2 82,039 - 45,841,608 22 1,099 - 1,590,264 1 955 - 27,659,384 13 38,294 - 4,429,820 2 136,270,439 66 4,271,326 2 108,107 - 3,514,672 2 38,886,577 19 16,303,412 8 2,116,283 1 314,903 - 74,843 - 3,755,388 2 69,345,511 34 $ 205,615,950 100 $ 4,737,488 2 42,274 - 498,568 - 60,896,796 30 317,508 - 18,074,382 9 43,058 - 2,165,581 1 1,493,339 1 1,173,473 1 84,360 - 1,154,215 - 90,681,042 44 165,225 - 23,294,964 12 2,137,938 1 320,907 - 142,158 - 85,224 - 26,146,416 13 116,827,458 57 23,099,801 11 - - 23,099,801 11 8,533,185 4 7,641,499 4 416,974 - - - - - 10,255,921 5 4,602 - 26,852,181 13 7,125,313 3 - - 12,392,930 6 19,518,243 9 1,625,560 1 (142,004 ) - (165,225) - 1,318,331 1 (2,088,230) (1) 68,700,326 33 20,088,166 10 88,788,492 43 $ 205,615,950 100

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

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LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

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


OPERATING REVENUE Sales (Notes 5, 23 and 31) Less: Sales allowance Sales returns Other operating revenue Total operating revenue OPERATING COSTS Cost of goods sold (Notes 12, 15, 16, 21 and 31) Other operating cost Total operating costs GROSS PROFIT OPERATING EXPENSES (Notes 15, 16, 21 and 31) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses OPERATING INCOME NONOPERATING INCOME AND EXPENSES Share of profit (loss) of associates and joint ventures (Note 14) Interest income Dividend income Government grants Other income (Note 31) Gain on disposal of investments Net gain on foreign currency exchange Valuation gain (loss) on financial assets (Note 7) Interest expense Other expenses (Note 27) Loss on disposal of property, plant and equipment Impairment loss (Notes 8, 14 and 15) Total nonoperating income and expenses	For the Year Ended December 31
	2013 Amount % $ 216,242,952 101 2,211,370 1 1,094,900 - 277,615 - 213,214,297 100 182,552,021 86 161,682 - 182,713,703 86 30,500,594 14 8,390,499 4 5,837,964 2 6,229,841 3 20,458,304 9 10,042,290 5 (68,569) - 1,244,842 - 38,596 - 916,607 - 1,543,298 1 147,283 - 213,763 - (67,902) - (708,831) - (938,540) (1) (267,939) - (575,119) - 1,477,489 -	2012
		Amount % $ 218,947,484 101 2,428,040 1 845,582 - 373,148 - 216,047,010 100 185,217,693 86 271,319 - 185,489,012 86 30,557,998 14 8,079,917 4 5,873,571 3 5,726,165 2 19,679,653 9 10,878,345 5 17,718 - 1,064,375 - 57,166 - - - 1,911,476 1 438,359 - 8,177 - 73,203 - (554,850) - (1,155,892) (1) (157,087) - (750,433) - 952,212 - (Continued)

LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

OPERATING PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 5 and 24) NET PROFIT FOR THE PERIOD OTHER COMPREHENSIVE INCOME (Notes 14, 21, 22 and 24) Exchange differences on translating foreign operations Unrealized gain (loss) on available-for-sale financial assets Cash flow hedges Actuarial losses on defined benefit plans Share of profit (loss) of other comprehensive income of associates and joint ventures Income tax relating to the components of other comprehensive income Other comprehensive income (loss) for the period, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE PERIOD NET PROFIT ATTRIBUTABLE TO: Owners of the company Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Parent company Non-controlling interests EARNINGS PER SHARE (NEW TAIWAN DOLLARS; Note 25) Basic Diluted		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 Amount % $ 11,519,779 5 2,629,288 1 8,890,491 4 2,869,963 2 512,434 - 54,594 - (284) - 116,528 - (412,212) - 3,141,023 2 $ 12,031,514 6 $ 8,754,848 4 135,643 - $ 8,890,491 4 $ 11,608,664 6 422,850 - $ 12,031,514 6 $3.83 $3.79		2012
				Amount % $ 11,830,557 5 2,454,197 1 9,376,360 4 (2,023,819) (1) (304,324) - 63,662 - (134,530) - (75,659) - 229,169 - (2,245,501) (1) $ 7,130,859 3 $ 7,402,423 3 1,973,937 1 $ 9,376,360 4 $ 5,559,609 2 1,571,250 1 $ 7,130,859 3 $3.25 $3.20

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

(Concluded)

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LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

						Equity Attribut	able to Owners of the	Company							Other Equity (	Note 22)
Issue of	Share Capital(Note 2	2) Advance Receipts for Common Stock $ - - - - - - - - 6,840 - - - - - 6,840 - - - - - - - - 22,865 - - - - $ 29,705				Capital Surplus	(Note 22)			Total $ 26,852,181 - - - - 146,193 14,227 111,865 19,589 55,853 - - - (447,920) 26,751,988 - - - - - (146,193 ) 1,317 134,320 410,439 60,148 - - - $ 27,212,019		Retained Earning	s(Note 22)
			Additional Paid-in Capital from Share Issuance in Excess of Par Value $ 8,533,185 - - - - - - 111,865 19,589 - - - - (112,909) 8,551,730 - - - - - - - 134,320 410,439 - - - - $ 9,096,489	Bond Conversion $ 7,641,499 - - - - - - - - - - - - (101,111) 7,540,388 - - - - - - - - - - - - - $ 7,540,388	Treasury Stock Transactions $ 416,974 - - - - - (3,928 ) - - 55,853 - - - (98,196) 370,703 - - - - - - - - - 60,148 - - - $ 430,851	Difference Between Consideration and Carry Amounts Adjusted Arising from Change in Percentage of Ownership in Subsidiaries $ - - - - - 146,193 - - - - - - - - 146,193 - - - - - (146,193 ) - - - - - - - $ -	Arising from Share of Changes in Capital Surplus of Associates or Joint Venture $ - - - - - - 16,645 - - - - - - - 16,645 - - - - - - (1,158 ) - - - - - - $ 15,487	Merger $ 10,255,921 - - - - - - - - - - - - (135,704) 10,120,217 - - - - - - - - - - - - - $ 10,120,217	Employee Stock Options $ 4,602 - - - - - 1,510 - - - - - - - 6,112 - - - - - - 2,475 - - - - - - $ 8,587
														Exchange Differences on Translating Foreign Operations $ 1,625,560 - - - - (2,430 ) - - - - - (1,494,258) (1,494,258) - 128,872 - - - - - - - - - - - 2,254,168 2,254,168 $ 2,383,040	Unrealized Gain (Loss) on Available- for-sale Financial Assets $ (142,004 ) - - - - - - - - - - (304,844) (304,844) - (446,848 ) - - - - - - - - - - - 530,079 530,079 $ 83,231	Cash Flow Hedges $ (165,225 ) - - - - - - - - - - 63,662 63,662 - (101,563 ) - - - - - - - - - - - 54,594 54,594 $ (46,969)
Shares (In Thousands) 2,309,980 - - 11,397 - - - 4,421 82 - - - - (30,565) 2,295,315 - - - 11,490 - - - 3,669 14,181 - - - - 2,324,655	Amount $ 23,099,801 - - 113,972 - - - 44,215 816 - - - - (305,650) 22,953,154 - - - 114,899 - - - 36,689 141,810 - - - - $ 23,246,552
											Legal Reserve $ 7,125,313 722,592 - - - - - - - - - - - - 7,847,905 753,486 - - - - - - - - - - - - $ 8,601,391	Special Reserve $ - - - - - - - - - - - - - - - - 689,913 - - - - - - - - - - - $ 689,913	Unappropriated Earnings $ 12,392,930 (722,592 ) (5,174,335 ) (113,972 ) - - (22,468 ) - - - 7,402,423 (107,374) 7,295,049 - 13,654,612 (753,486 ) (689,913 ) (5,400,265 ) (114,899 ) - (3,293,007 ) (783 ) - - - 8,754,848 14,975 8,769,823 $ 12,172,082

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

(With Deloitte & Touche auditors’ report dated XXXXXXXX)

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Lite-On Technology Corporation 2013 Annual Report

LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Provision of impairment loss on trade receivable Net (gain) loss on financial assets or liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of (gain) loss of associates and joint ventures Loss on disposal of property, plant and equipment Loss on derecognition of subsidiaries Gain on disposal of available-for-sale financial assets Gain on disposal of associates Impairment loss recognized on financial assets Impairment loss recognized on non-financial assets Reversal of impairment loss recognized on non-financial assets Unrealized net gain on foreign currency exchange Recognition of provisions Changes in operating assets and liabilities Net (gain) loss on financial instruments at fair value through profit or loss Notes receivable Trade receivables Trade receivables from related parties Other receivables Other receivables from related parties Inventories Construction in progress in excess of progressive billings Other current assets Notes payable Trade payables Trade payables from related parties Other payable Other payable from related parties Provisions Advance receipts Accrued pension liabilities Cash generated from operations Interest received Dividend received	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 11,519,779 6,510,013 482,885 10,198 67,902 708,831 (1,244,842) (38,596) 68,569 267,939 95,082 (111,333) (35,950) 417,975 485,947 - (260,335) 833,303 (77,149) (55,815) (3,737,367) 1,867 690,642 (16,720) (6,427,561) 72,527 43,508 (48,521) 7,762,435 430,701 4,304,767 (8,474) (1,018,852) 558,118 (79,840) 22,171,633 1,246,466 38,596	2012 $ 11,830,557 6,489,143 567,978 50,833 (73,203) 554,850 (1,064,375) (57,166) (17,718) 157,087 - (330,061) (108,298) 661,697 88,736 (474,313) (231,598) 1,188,990 164,729 (37,902) 411,988 (82,322) 24,193 (1,276) 7,278,157 (34,233) (701,198) (258,559) (8,781,520) (179,585) (976,417) (22,885) (977,452) (315,711) 56,826 14,799,972 1,047,096 57,166 (Continued)

LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

	For the Year Ended	For the Year Ended	For the Year Ended	December 31
		2013		2012
Interest paid	$	(742,236)	$	(536,643)
Income tax paid		(2,026,121)		(2,520,841)
Net cash generated from operating activities		20,688,338		12,846,750
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of available-for-sale financial assets		(7,529)		(236,812)
Proceeds on sales of available-for-sale financial assets		167,739		1,534,799
Proceeds from capital reduction of available-for-sale assets		83,696		-
Proceeds (acquisition) of debt investments with no active market		9,306,226		(5,859,175)
Acquisition of associates		(13,099)		(155,134)
Net cash inflow on disposal of associates		111,476		-
Net cash outflow on disposal of subsidiaries		(31,454)		-
Payments for property, plant and equipment		(6,198,402)		(7,964,228)
Proceeds from disposal of property, plant and equipment		1,119,266		1,708,219
(Increase) decrease in refundable deposits		(79,166)		3,626
Payments for intangible assets		(141,387)		(74,585)
(Increase) decrease in other noncurrent assets		(49,688)		1,565,949
Dividend received from associates		37,852		36,353
Net cash generated from (used in) investing activities		4,305,530		(9,440,988)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings		8,357,873		2,357,321
Proceeds of long-term borrowings		3,244,009		176,729
Proceeds (refund) of guarantee deposits received		(7,460)		3,844
Decrease in finance lease payables		(49,414)		(110,170)
Payment cash interests		(5,340,117)		(5,118,482)
Proceeds of the exercise of employee stock options		575,114		27,245
Partial acquisition of subsidiaries		(17,171,678)		-
Partial disposal of interests in subsidiaries without losing control loss		-		288,198
Dividends paid to noncontrolling interests		(450,532)		(1,842,840)
Net cash used in financing activities		(10,842,205)		(4,218,155)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE
OF CASH HELD IN FOREIGN CURRENCIES		554,636		(844,983)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS		14,706,299		(1,657,376)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR		51,224,870		52,882,246
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	$	65,931,169	$	51,224,870
The accompanying notes are an integral part of the consolidated financial	statements.			(Concluded)

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LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2013 AND 2012 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Lite-On Technology Corporation (the “Parent Company”) was established in March 1989. Its shares are traded on the Taiwan Stock Exchange. The Parent Company manufactures and markets (1) computer software, hardware, peripherals and components and (2) multifunction and all-in-one printers, cameras and Internet systems and image-processing equipment.

The Parent Company merged with Lite-On Electronics, Inc., Silitek Corp. and GVC Corp., with the Parent Company as the survivor entity. The merger took effect on November 4, 2002, and the Parent Company thus assumed all rights and obligations of the three merged companies on that date. The Parent Company merged with its subsidiary, Lite-On Enclosure Inc., with the Parent Company as the survivor entity. The merger took effect on April 1, 2004, and the Parent Company thus assumed all rights and obligations of the three merged companies on that date.

The consolidated financial statements are presented in the Parent Company’s functional currency, New Taiwan dollars.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the board of directors and authorized for issue on March 27, 2014.

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

a. New, amended and revised standards and interpretations (the “New IFRSs”) in issue but not yet effective

The Parent Company and entities controlled by the Parent Company (the “Group”) have not applied the following International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) issued by the IASB. On January 28, 2014, the Financial Supervisory Commission (FSC) announced the framework for the adoption of updated IFRSs version in the ROC. Under this framework, starting January 1, 2015, the previous version of IFRSs endorsed by the FSC (the 2010 IFRSs version) currently applied by companies with shares listed on the Taiwan Stock Exchange or traded on the Taiwan GreTai Securities Market or Emerging Stock Market will be replaced by the updated IFRSs without IFRS 9 (the 2013 IFRSs version). However, as of the date that the consolidated financial statements were authorized for issue, the FSC has not endorsed the following new, amended and revised standards and interpretations issued by the IASB (the “New IFRSs”) included in the 2013 IFRSs version. Furthermore, the FSC has not announced the effective date for the following New IFRSs that are not included in the 2013 IFRSs version.

The New IFRSs Included in the 2013 IFRSs Version Not Yet
Endorsed by the FSC
Improvements to IFRSs (2009) - amendment to IAS 39

Amendment to IAS 39“Embedded Derivatives”

Improvements to IFRSs (2010)

Annual Improvements to IFRSs 2009-2011 Cycle

Amendment to IFRS 1“LimitedExemption from Comparative IFRS 7
Disclosures for First-Time Adopters”

Amendment to IFRS 1“SevereHyperinflation and Removal of Fixed
Dates for First-Time Adopters”

Amendment to IFRS 1“Government Loans”

Amendment to IFRS 7“Disclosure - Offsetting Financial Assets and
Financial Liabilities”

Amendment to IFRS 7“Disclosure - Transfer of Financial Assets”

IFRS 10“Consolidated Financial Statements”

IFRS 11“Joint Arrangements”

IFRS 12“Disclosure of Interests in Other Entities”

Amendments to IFRS 10, IFRS 11 and IFRS 12“Consolidated
Financial Statements, Joint Arrangements and Disclosure of
Interests in Other Entities: Transition Guidance”

Amendments to IFRS 10 and IFRS 12 and IAS 27“Investment
Entities”

IFRS 13“Fair Value Measurement”

Amendment to IAS 1“Presentation of Other Comprehensive Income”
Amendment to IAS 12“Deferredtax: Recovery of Underlying
Assets”

IAS 19 (Revised 2011)“Employee Benefits”

IAS 27 (Revised 2011)“SeparateFinancial Statements”

IAS 28 (Revised 2011)“Investments in Associates and Joint
Ventures”

Amendment to IAS 32“Offsetting Financial Assets and Financial
Liabilities”

IFRIC 20“Stripping Costs in Production Phase of a Surface Mine”

The New IFRSs Not Included in the 2013 IFRSs Version
Annual Improvements to IFRSs 2010-2012 Cycle

Annual Improvements to IFRSs 2011-2013 Cycle

IFRS 9“Financial Instruments”

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

IFRS 14“Regulatory Deferral Accounts”

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

Amendment to IAS 36“Impairment ofAssets: Recoverable Amount
Disclosures for Non-Financial Assets”

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

IFRIC 21“Levies”

Effective Date Announced by
IASB (Note 1)

July 1, 2014 (Note 2)
July 1, 2014
Note 3
Note 3
January 1, 2016
July 1, 2014
January 1, 2014
January 1, 2014
January 1, 2014

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2) New and revised standards on consolidation, and associates and disclosure

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after the respective effective dates.
Note 2: The amendment to IFRS 2 applies to share-based payment transactions for which the grant date is on or after 1 July 2014; the amendment to IFRS 3 applies to business combinations for which the acquisition date is on or after 1 July 2014; the amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014.
Note 3: IASB tentatively decided that an entity should apply IFRS 9 for annual periods beginning on or after January 1, 2018.

a) IFRS 10 “Consolidated Financial Statements”

IFRS 10 replaces IAS 27 “Consolidated and Separate Financial Statements” and SIC 12 “Consolidation - Special Purpose Entities”. The Group considers whether it has control over other entities for consolidation. The Group has control over an investee if and only if it has i) power over the investee; ii) exposure, or rights, to variable returns from its involvement with the investee and iii) the ability to use its power over the investee to affect the amount of its returns. Additional guidance has been included in IFRS 10 to explain when an investor has control over an investee.

b) Revision to IAS 28 “Investments in Associates and Joint Ventures”

b. Significant changes in accounting policy that would result from adoption of New IFRSs in issue but not yet effective

Except for the following, the impending initial application of the above New IFRSs, whenever applied, would not have any material impact on the Group’s accounting policies:

1) IFRS 9 “Financial Instruments”

c) IFRS 12 “Disclosure of Interests in Other Entities”

Recognition and measurement of financial assets

With regards to financial assets, all recognized financial assets that are within the scope of IAS 39 “Financial Instruments: Recognition and Measurement” are subsequently measured at amortized cost or fair value. Specifically, financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of subsequent accounting periods. All other financial assets are measured at their fair values at the end of reporting period. However, the Group may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognized in profit or loss.

Hedge accounting

3) IFRS 13 “Fair Value Measurement”

4) Amendment to IAS 1 “Presentation of Items of Other Comprehensive Income”

Effective date

5) Amendment to IAS 36 “Recoverable Amount Disclosures for Non-Financial Assets”

In issuing IFRS 13 “Fair Value Measurement”, the IASB made consequential amendment to the disclosure requirements in IAS 36 “Impairment of Assets”, introducing a requirement to disclose in every reporting period the recoverable amount of an asset or each cash-generating unit. The amendment clarifies that such disclosure of recoverable amounts is required only when an impairment loss has been recognized or reversed during the period. Furthermore, the Group is required to disclose the discount rate used in measurements of the recoverable amount based on fair value less costs of disposal measured using a present value technique.

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6) Revision to IAS 19 “Employee Benefits”

Revised IAS 19 changes the definition of short-term employee benefits. The revised definition is “employee benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service”. The Group’s unused annual leave, which can be carried forward within 18 months after the end of the annual period in which the employee renders service and which is currently classified as short-term employee benefits, will be classified as other long-term employee benefits under revised IAS 19. Related defined benefit obligation of such other long-term benefit is calculated using the Projected Unit Credit Method. However, this change does not affect unused annual leave to be presented as a current liability in the consolidated balance sheet.

7) Annual Improvements to IFRSs: 2010-2012 Cycle

Several standards including IFRS 3 “Business Combinations” and IFRS 13 “Fair Value Measurement” were amended in this annual improvement.

IAS 24 was amended to clarify that a management entity providing key management personnel services to the Group is a related party of the Group. Consequently, the Group is required to disclose as related party transactions the amounts incurred for the service paid or payable to the management entity for the provision of key management personnel services. However, disclosure of the components of such compensation is not required.

8) Annual Improvements to IFRSs: 2011-2013 Cycle

Several standards including IFRS 3 “Business Combination”, IFRS 13 “Fair Value Measurement” and IAS 40 “Investment Property” were amended in this annual improvement.

IFRS 3 was amended to clarify that IFRS 3 does not apply to the accounting for the formation of all types of joint arrangements in the financial statements of the joint arrangement itself.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

On May 14, 2009, the FSC announced the “Framework for the Adoption of IFRSs by the Companies in the ROC.” In this framework, starting 2013, companies with shares listed on the Taiwan Stock Exchange or traded on the Taiwan GreTai Securities Market or Emerging Stock Market should prepare their consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC and SIC (the “IFRSs”) endorsed by the FSC.

The Group’s consolidated financial statements for the year ended December 31, 2013 were its first IFRS consolidated financial statements. The date of transition to IFRSs was January 1, 2012. Refer to Note 37 for the impact of IFRS conversion on the Group’s consolidated financial statements.

a. Statement of compliance

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

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The opening consolidated balance sheets as of the date of transition to IFRSs were prepared in accordance with IFRS 1 “First-time Adoption of International Financial Reporting Standards”. The applicable IFRSs have been applied retrospectively by the Group except for some aspects where IFRS 1 prohibits retrospective application or grants optional exemptions to this general principle. For the exemptions that the Group elected, refer to Note 37.

c. Basis of consolidation

c. The impact of the application of New IFRSs and the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the “Regulations”) in issue but not yet effective on the Group’s consolidated financial statements is as follows:

As of the date the consolidated financial statements were authorized for issue, the Group is continuingly assessing the possible impact that the application of the above New IFRSs will have on the Group’s financial position and operating result, and will disclose the relevant impact when the assessment is complete.

1) Principles for preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company.

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

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

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

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- Attribution of total comprehensive income to non controlling interests

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

e. Foreign currencies

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

Changes in the Group’s ownership interests in existing subsidiaries

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

When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the date when control is lost and (ii) the assets (including any goodwill) and liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Group had directly disposed of the related assets or liabilities.

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

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated. For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income.

2) Subsidiary included in consolidated financial statements

Please refer to Table 1 for the chart of investment relationship and percentage of ownership of Parent Company and its subsidiaries.

3) Subsidiaries excluded from consolidated financial statements: None
d. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within 12 months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Assets and liabilities that are not classified as current are classified as non-current.

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

f. Inventories

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

g. Investment in equity method

The investments of associates and joint ventures accounted for using the equity method.

A joint venture is a contractual arrangement whereby the Company and other parties undertake an economic activity that is subject to joint control (i.e. when the strategic financial and operating policy decisions relating to the activities of the joint venture require the unanimous consent of the parties sharing control). Joint venture arrangements that involve the establishment of a separate entity in which each venturer has an interest are referred to as jointly controlled entities.

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The results and assets and liabilities of associates and joint ventures are incorporated in these consolidated financial statements using the equity method of accounting. Under the equity method, an investment in an associates and joint ventures is initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associates and joint ventures. Besides, the Group also recognizes the share of the change in equity of the associates and joint ventures.

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

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

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

h. Property, plant and equipment

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

i. Goodwill

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

j. Intangible assets

1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Group expects to dispose of the intangible asset before the end of its economic life. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

2) Derecognition of Intangible assets

Intangible asset is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

k. Impairment of tangible and intangible assets other than goodwill

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

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units that are expected to benefit.

18 -

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l. Financial instruments

Financial assets and financial liabilities are recognized in Balance Sheet when a Group becomes a party to the contractual provisions of the instruments.

1) Financial assets

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

a) Measurement category

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

b) Impairment of financial assets

i. Financial assets at fair value through profit or loss

Derivative financial instruments that do not meet the criteria for hedge accounting are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss.

ii. Available-for-sale financial assets

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

c) Derecognition of financial assets

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

iii. Loans and receivables

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

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2) Financial liabilities and equity instruments

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

a) Financial liabilities subsequent measurement

Financial liabilities are measured at amortized cost using the effective interest method.

b) Derecognition of financial liabilities

c) Equity instruments

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

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

3) Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts and interest rate swaps.

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. When the fair value of derivative financial instruments is positive, the derivative is recognized as a financial asset; when the fair value of derivative financial instruments is negative, the derivative is recognized as a financial liability.

m. Hedge accounting

The Parent Company designates derivative hedging instruments to conduct cash flow hedges. The effective portion of changes in the fair value of derivatives is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss. The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as a reclassification adjustment in the line item relating to the hedged item in the same period when the hedged item affects profit or loss.

Hedge accounting is discontinued prospectively when the Parent Company revokes the designated hedging relationship, or when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer meets the criteria for hedge accounting. The cumulative gain or loss on the hedging instrument that has been previously recognized in other comprehensive income from the period when the hedge was effective remains separately in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

n. Provisions

1) Warranties

Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, at the best estimate of the expenditure required to settle the Group’s obligation by the management of the Group.

2) Returns and rebates

The provision of customer returns and rebates was based on historical experience, management’s judgments and other known reasons estimated product returns and rebates may occur in the year. The provision was recognized at the date of sale of the relevant products.

o. Revenue recognition

1) Sale of goods

Revenue from the sale of goods is recognized when the goods are delivered and titles have passed, at which time all the following conditions are satisfied:

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

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

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2) Rental revenue

The operation of leasing business was in accordance with IAS 17 “Leases”, that is, the possible situation related to leasing (i.e. the leasing condition, and the burden of future cost) would treat as operating lease.

3) Power transmission income

Power transmission income is recognized at the end of the process of transmitting power from a substation to the power company. Revenue is measured at the fair value of the payment receivable stated in the agreements between the subsidiaries and the power companies. Since payment receivables are due within one year from the balance sheet date, as the nominal value of the payment to be received approximates its fair value and transactions are frequent, the fair value of the payment is not determined by discounting all future receipts using an imputed rate of interest.

4) Dividend and interest income

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

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

p. Construction contracts

When the outcome of a construction contract can be estimated reliably, revenue and costs are recognized by reference to the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion.

Revenues on and costs of long-term construction contracts are recognized by the percentage-of-completion method, while revenues and costs of short-term construction contracts are recognized by the full-completion method. Under the percentage-of-completion method, the stage of completion of each contract is measured at the ratio of cumulative construction costs to total estimated contract costs.

Construction revenues and costs for the current year is the excess of cumulative construction revenue and costs, determined using the percentage-of-completion method, in excess of the cumulative construction revenue and costs recognized in prior years. Any estimated loss on a construction contract is recognized currently; any subsequent adjustment of this loss is recognized as income or loss in the year of adjustment.

Construction in progress is carried at cost plus estimated construction profit or less estimated losses. Installment payments or collections received from construction projects are credited to progressive billings. Upon completion of each project, these progressive billings are offset against construction in progress.

Construction expenses incurred under the full-completion method are included in construction in progress, while collections received from construction projects are credited to progressive billings. Upon completion of each project, the construction in progress and progressive billings are recognized as construction revenues and costs, respectively.

At year-end, the balances of construction in progress and progressive billings from construction of each project are netted out, and the result is classified as current asset or current liability.

q. Leasing

1) The Group as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

2) The Group as lessee

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

r. Retirement benefit costs

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

Curtailment or settlement gains or losses on the defined benefit plan are recognized when the curtailment or settlement occurs.

s. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

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

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

2) Deferred tax

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3) Current and deferred tax for the year

t. Government grants

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

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable.

b. Estimated impairment of trade receivables

c. Income taxes

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred tax assets can be utilized. Assessment of the realization of the deferred tax assets requires the Company’s subjective judgment and estimation, including the future revenue growth and profitability, tax holidays, the amount of tax credits can be utilized and feasible tax planning strategies. Any changes in the global economic environment, the industry trends and relevant laws and regulations could result in significant adjustments to the deferred tax assets.

d. Derivative instruments and other fair value of financial instruments

As described in Note 30, the Group’s management uses its judgment in selecting an appropriate valuation technique for financial instruments that do not have quoted market price in an active market. Valuation techniques commonly used by market practitioners are applied. For derivative financial instruments, assumptions were based on quoted market rates adjusted for specific features of the instruments. Other financial instruments were valued using a discounted cash flow analysis based on assumptions supported, where possible, by observable market prices or rates. The estimation of fair value of unlisted equity instruments including assumptions based on unobservable market prices or rates. The Group’s management believes that the chosen valuation techniques and assumptions used are appropriate in determining the fair value of financial instruments.

e. Impairment of property, plant and equipment

f. Write-down of inventory

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION

UNCERTAINTY

In the application of the Group’s accounting policies (Note 4), management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

a. Impairment of goodwill

g. Recognition and measurement of defined benefit plans

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6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts Demand deposits Cash equivalent Time deposits with original maturities less than 3 months	December 31, 2013 $ 228,007 1,604,688 32,826,589 31,271,885 $ 65,931,169	December 31, 2012 January 1, 2012 $ 10,300 $ 10,415 1,783,160 2,768,789 21,017,052 22,226,441 28,414,358 27,876,601 $ 51,224,870 $ 52,882,246

	December	December	31,	December	December	31,
		2013			2012		January 1, 2012
Current	$	27,836		$	35,239		$	42,274
Non-current			-			-		-
	$	27,836		$	35,239		$	42,274
								(Concluded)

a. At the end of the reporting period, outstanding interest swap contracts not under hedge accounting were as follows:

December 31, 2013: None

Cash equivalents include time deposits that have a maturity of 3 months or less from the date of acquisition, are readily convertible to a known amount of cash, and are subject to an insignificant risk of change in value; these were held for the purpose of meeting short-term cash commitments.

December 31, 2012

Lite-On Japan Ltd.

As of December 31, 2013, December 31, 2012 and January 1, 2012, the carrying amounts of time deposits with original maturities of over 3 months were NT$125,051 thousand, NT$9,365,207 thousand, and NT$3,633,137 thousand, respectively, which were classified as bond investment for which no active market exists (Note 10).

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

	December 31,	December 31,	December 31,	December 31,
		2013		2012	January 1, 2012
Financial assets held for trading
Derivative financial assets (not under hedge
accounting)
Currency swap contracts	$	9,660	$	663	$	66,289
Foreign exchange forward contracts		5,207		12,360		45,295
	$	14,867	$	13,023	$	111,584
Current	$	14,867	$	13,023	$	111,584
Non-current		-		-		-
	$	14,867	$	13,023	$	111,584
Financial liabilities held for trading
Derivative financial liabilities (not under hedge
accounting)
Currency swap contracts	$	23,552	$	21,333	$	23,922
Foreign exchange forward contracts		4,284		13,857		8,573
Interest swap contracts		-		49		362
Options-put		-		-		9,417
	$	27,836	$	35,239	$	42,274
						(Continued)

Lite-On Japan Ltd.
Notional Amounts		Range of	Range of Interest
(In Thousands)	Maturity Date	Interest Rates Paid	Rates Received
JPY25,000	2008.02.04-2013.01.31	1.48%	Note
January 1, 2012
Lite-On Japan Ltd.
Notional Amounts		Range of	Range of Interest
(In Thousands)	Maturity Date	Interest Rates Paid	Rates Received
JPY125,000	2008.02.04-2013.01.31	1.48%	Note

Note: Based on the Taipei interbank offered rate (Tibor) for 3 month plus a margin of 0.35%.

The economic substance of the pay-fixed receive-floating interest swap contracts listed in the above table is to manage exposures due to the interest rate risk of long-term loans. However, those contracts did not meet the criteria for hedge effectiveness and therefore were not subject to hedge accounting.

b. At the end of the reporting period, outstanding forward exchange contracts, cross-currency swap contracts and options not under hedge accounting were as follows:

			Notional Amount
	Currency	Maturity Date	(In Thousands)
December 31, 2013
Lite-On IT Corp.
Currency swap contracts	USD/NTD	2014.01.07	USD40,000/NTD1,186,000
Forward exchange contracts	EUR/USD	2014.01.17	EUR3,000/USD4,125
Philips & Lite-On Digital Solutions Corp.
Currency swap contracts	USD/NTD	2014.01.20	USD17,000/NTD503,540
Lite-On Automotive Corp.
Forward exchange contracts	EUR/USD	2014.01.14	EUR876/USD1,151
Lite-On Automotive Electronics (Guang Zhou)
Co., Ltd.
Forward exchange contracts	USD/CNY	2014.04.16	USD7,000/CNY42,525
			(Continued)

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			Notional Amount
	Currency	Maturity Date	(In Thousands)
Leotek Electronic Corp.
Forward exchange contracts	USD/NTD	2014.01.07	USD860/NTD25,611
Forward exchange contracts	GBP/NTD	2014.01.14	GBP195/NTD9,394
Forward exchange contracts	EUR/NTD	2014.03.25	EUR380/NTD15,569
Lite-On Mobile Oyj (formerly Perlos Oyj)
Currency swap contracts	USD/EUR	2014.01.17	USD15,500/EUR11,268
Forward exchange contracts	USD/BRL	2014.01.17	USD1,000/BRL2,375
Guangzhou Lite-On Mobile Electronic
Components Co., Ltd.
Forward exchange contracts	USD/CNY	2014.01.23	USD3,000/CNY18,319
Forward exchange contracts	EUR/CNY	2014.01.20	EUR300/CNY2,463
Currency swap contracts	EUR/CNY	2014.02.14	EUR300/CNY2,515
Beijing Lite-On Mobile Electronic and
Telecommunication Components Co., Ltd.
Forward exchange contracts	USD/CNY	2014.01.23	USD2,000/CNY12,204
Forward exchange contracts	EUR/CNY	2014.02.14	EUR200/CNY1,678
Lite-On Mobile Pte. Ltd.
Forward exchange contracts	USD/INR	2014.01.17	USD3,000/INR186,470
Currency swap contracts	EUR/USD	2014.01.17	EUR7,000/USD9,498
Currency swap contracts	CNY/USD	2014.01.17	CNY50,000/USD8,224
Lite-On Mobile India Private Limited
Forward exchange contracts	USD/INR	2014.02.10	USD1,000/INR64,850
Lite-On Singapore Pte. Ltd.
Forward exchange contracts	EUR/USD	2014.01.27	EUR2,400/USD3,284
Silitech Technology Corp.
Currency swap contracts	USD/CNY	2014.01.06-2014.01.21	USD12,500/CNY75,928
Forward exchange contracts	USD/MYR	2014.01.08-2014.03.10	USD1,450/MYR4,694
Forward exchange contracts	EUR/MYR	2014.02.26	EUR50/MYR226
Lite-On Electronics (Thailand) Co., Ltd.
Forward exchange contracts	USD/THB	2014.04.23	USD1,000/THB32,898
Silitek Elec. (Guangzhou) Co., Ltd.
Currency swap contracts	USD/CNY	2014.01.06	USD11,000/CNY66,714
December 31, 2012
Lite-On IT Corp.
Currency swap contracts	USD/NTD	2013.01.07-2013.01.28	USD127,000/NTD3,696,738
Forward exchange contracts	EUR/USD	2013.01.03-2013.01.17	EUR9,000/USD11,800
Lite-On Automotive Corp.
Forward exchange contracts	USD/JPY	2013.02.20	USD755/JPY60,000
Leotek Electronic Corp.
Currency swap contracts	USD/NTD	2013.01.25	USD1,300/NTD37,805
Forward exchange contracts	USD/NTD	2013.01.25	USD2,000/NTD58,600
Lite-On Automotive International (Cayman) Co.,
Ltd.
Forward exchange contracts	USD/CNY	2013.03.05	USD4,000/CNY25,108
Lite-On Mobile Oyj (formerly Perlos Oyj)
Currency swap contracts	USD/EUR	2013.01.07	USD16,500/EUR12,577
Currency swap contracts	JPY/USD	2013.01.17	JPY50,000/USD597
Currency swap contracts	JPY/EUR	2013.01.07	JPY50,000/EUR464
Currency swap contracts	CNY/USD	2013.01.28	CNY10,000/USD1,604
Forward exchange contracts	USD/EUR	2013.01.07	USD1,700/EUR1,283
Forward exchange contracts	USD/INR	2013.01.17	USD6,000/INR327,252
Forward exchange contracts	USD/CNY	2013.02.06	USD9,000/CNY56,489
Guangzhou Lite-On Mobile Electronic
Components Co., Ltd.
Forward exchange contracts	USD/CNY	2013.01.18	USD3,000/CNY18,842
Lite-On Mobile India Private Limited
Forward exchange contracts	USD/INR	2013.01.25	USD1,000/INR57,350
Lite-On Singapore Pte. Ltd.
Forward exchange contracts	EUR/USD	2013.01.04	EUR2,400/USD3,133
			(Continued)

			Notional Amount
	Currency	Maturity Date	(In Thousands)
Silitech Technology Corp.
Currency swap contracts	USD/NTD	2013.01.14	USD24,000/NTD697,200
Forward exchange contracts	USD/MYR	2013.01.07-2013.03.19	USD1,730/MYR5,299
January 1, 2012
Lite-On IT Corp.
Currency swap contracts	USD/NTD	2012.01.05-2012.01.13	USD79,000/NTD2,382,530
Forward exchange contracts	EUR/USD	2012.01.11-2012.02.08	EUR15,200/USD19,844
Leotek Electronic Corp.
Forward exchange contracts	USD/NTD	2012.01.30	USD2,000/NTD60,320
Lite-On Automotive International (Cayman) Co.,
Ltd.
Forward exchange contracts	USD/NTD	2012.01.17	USD900/NTD27,241
Lite-On Automotive Electronics (Guang Zhou)
Co., Ltd.
Forward exchange contracts	USD/CNY	2012.01.09	USD400/CNY2,542
Forward exchange contracts	EUR/CNY	2012.01.09	EUR696/CNY5,932
Lite-On Mobile Oyj (formerly Perlos Oyj)
Currency swap contracts	EUR/USD	2012.01.11	EUR2,000/USD2,678
Currency swap contracts	JPY/EUR	2012.01.11	JPY140,000/EUR1,374
Currency swap contracts	USD/EUR	2012.01.11	USD12,650/EUR9,449
Currency swap contracts	JPY/USD	2012.01.06	JPY495,660/USD6,378
Currency swap contracts	SEK/EUR	2012.01.18	SEK5,000/EUR540
Currency swap contracts	HUF/EUR	2012.01.18	HUF250,000/EUR809
Forward exchange contracts	USD/BRL	2012.01.23	USD1,500/BRL2,710
Forward exchange contracts	USD/INR	2012.01.17	USD17,000/INR898,855
Forward exchange contracts	EUR/CNY	2012.02.21	EUR3,000/CNY25,696
Forward exchange contracts	USD/CNY	2012.02.07	USD20,000/CNY127,104
Forward exchange contracts	USD/EUR	2012.01.09	USD700/EUR511
Guangzhou Lite-On Mobile Electronic
Components Co., Ltd.
Forward exchange contracts	USD/CNY	2012.01.17	USD2,000/CNY12,688
Lite-On Japan Ltd.
Call option	JPY/USD	2012.03.05	JPY33,900/USD300
Put option	JPY/USD	2012.03.05	JPY94,050/USD900
Currency swap contracts	JPY/USD	2012.03.05	JPY33,990/USD300
Lite-On Singapore Pte. Ltd.
Forward exchange contracts	EUR/USD	2012.01.05	EUR2,400/USD3,221
Forward exchange contracts	HUF/USD	2012.01.05	HUF384,000/USD1,691
Forward exchange contracts	JPY/USD	2012.01.05	JPY55,000/USD707
Silitech Technology Corp.
Forward exchange contracts	USD/MYR	2012.01.09-2012.02.24	USD700/MYR2,220
Currency swap contracts	USD/NTD	2012.01.09	USD28,000/NTD844,960
Logah Technology Co., Ltd.
Forward exchange contracts	USD/NTD	2012.02.06-2012.02.24	USD4,200/NTD126,834
			(Concluded)

The subsidiaries entered into derivative contracts in 2013 and 2012 to manage exposures due to fluctuations of foreign exchange rates. The derivative contracts entered into by the subsidiaries did not meet the criteria for hedge accounting. Thus, the derivative contracts classified as financial assets or financial liabilities at fair value through profit or loss. The financial risk management objectives of the subsidiaries were to minimize risks due to changes in fair value or cash flows.

On financial instruments with fair value through profit or loss (FVTPL), the Group had net losses of NT$67,902 thousand in 2013 and net gains of NT$73,203 thousand in 2012.

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8. AVAILABLE-FOR-SALE FINANCIAL ASSETS

	December 31,	December 31,	December 31,	December 31,
		2013		2012	January 1, 2012
Domestic investments
Quoted shares	$	1,182,391	$	903,046	$	1,898,101
Unquoted shares		289,160		481,785		851,972
Emerging market shares		178,716		310,657		437,953
Foreign investments
Unquoted shares		324,374		316,720		188,967
Mutual funds		127,705		106,310		749,051
Quoted shares		41,657		35,957		145,291
	$	2,144,003	$	2,154,475	$	4,271,335
Current	$	13	$	10	$	9
Non-current		2,143,990		2,154,465		4,271,326
	$	2,144,003	$	2,154,475	$	4,271,335

Refer to Note 30 for information relating to the fair values of on available-for-sale financial assets determined.

There was objective evidence that the fair values of some financial assets were below their carrying costs and will permanently decline. As a result, the Group recognized impairment losses of NT$407,293 thousand and NT$661,697 thousand in 2013 and 2012.

9. DERIVATIVE FINANCIAL INSTRUMENTS FOR HEDGING

	December 31,	December 31,	December 31,	December 31,
		2013		2012	January 1, 2012
Derivative financial liabilities under
hedge accounting
Cash flow hedges - interest rate swaps	$	46,969	$	101,563	$	165,225
Current	$	-	$	-	$	-
Non-current		46,969		101,563		165,225
	$	46,969	$	101,563	$	165,225

The Parent Company’s liabilities with floating interest rate might be affected by changes in the market rate. Thus, future cash flows on those liabilities might fluctuate, exposing the Parent Company to cash flow risk. To hedge against this risk, the Parent Company entered into an interest rate swap contract with a bank to change the floating rate of its liabilities to fixed rate. The cash flow hedge transactions are deemed sufficient.

The outstanding interest rate swap contracts of the Parent Company at the end of the reporting period were as follows:

as follows:
December 31, 2013
Notional Amounts		Range of	Range of Interest
(In Thousands)	Maturity Date	Interest Rates Paid	Rates Received
NT$4,800,000	2015.09.23	1.895%	0.863%
December 31, 2012
Notional Amounts		Range of	Range of Interest
(In Thousands)	Maturity Date	Interest Rates Paid	Rates Received
NT$6,000,000	2015.09.23	1.895%	0.900%
January 1, 2012
Notional Amounts		Range of	Range of Interest
(In Thousands)	Maturity Date	Interest Rates Paid	Rates Received
NT$6,000,000	2015.09.23	1.895%	0.861%

10. DEBT INVESTMENTS WITH NO ACTIVE MARKET

	December 31,	December 31,	December 31,
		2013	2012	January 1, 2012
Time deposits with original maturity of more than
3 months	$	125,051	$ 9,365,207	$ 3,633,137
Pledged deposits		36,490	102,560	108,107
	$	161,541	$ 9,467,767	$ 3,741,244
Current	$	147,441	$ 9,365,207	$ 3,633,137
Noncurrent		14,100	102,560	108,107
	$	161,541	$ 9,467,767	$ 3,741,244

Refer to Note 32 for information on bond investments with no active market pledged as security.

11. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

	December 31,	December 31,
	2013	2012	January 1, 2012
Trade receivables	$ 49,716,019	$ 45,123,260	$ 46,111,657
Allowance for impairment loss	(215,850)	(323,320)	(270,049)
	$ 49,500,169	$ 44,799,940	$ 45,841,608

As of December 31, 2013, December 31, 2012 and January 1, 2012, the Group did not have the age of the trade receivables that were past due but not impaired.

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Movements in the allowance for impairment loss recognized on notes receivable and trade receivables were as follow:

Balance at January 1 Allowance for impairment loss Amounts written off during the period as uncollectible Foreign exchange translation Reclassification Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2013 $ 323,320 10,198 (131,294) 13,631 (5) $ 215,850	2012 $ 270,049 50,833 (10,940) (4,737) 18,115 $ 323,320

The unexpired factored accounts receivable of the subsidiaries as of December 31, 2013 and 2012 were as follows:

- Philips & Lite On Digital Solutions Corp.

Interest Rates on Advances Advances Receivables Amounts Received at Received Counter-parties Sold Collected Year-end (%) Credit Line December 31, 2013 Taishin International Bank US$ 4,041 US$ 4,417 US$ - 0.17-0.19 US$ 8,500 December 31, 2012 Taishin International Bank US$ 7,244 US$ 7,311 US$ - 0.17-0.19 US$ 8,500

Silitech Technology Corp. December 31, 2013: None

					Interest
					Rates on
			Advances		Advances
	Receivables	Amounts	Received	at	Received
Counter-parties	Sold	Collected	Year-end		(%)	Credit Line
December 31, 2012
Citibank	EUR 976	EUR 4,774	EUR	-	1.47-1.81	US$ 30,000
	US$ 13,166	US$ 17,368	US$	-	1.78-1.85

The above credit lines may be used on a revolving basis.

12. INVENTORIES, NET

Finished goods Raw materials Work in progress Inventory in transit Merchandise Power generation facility held for sale	December 31, 2013 $ 13,108,163 6,682,596 4,882,929 2,257,198 272,647 - $ 27,203,533	December 31, 2012 January 1, 2012 $ 11,436,105 $ 14,714,682 4,458,816 6,295,461 2,616,363 3,174,499 1,835,678 1,651,845 219,155 161,887 - 1,661,010 $ 20,566,117 $ 27,659,384

The cost of inventories recognized as allowance for inventory write-down for the years ended December 31, 2013 and 2012 was NT$1,816,168 thousand and NT$1,487,365 thousand, respectively. The cost of inventories recognized as cost of goods sold for the years ended December 31, 2013 and 2012 was NT$182,552,021 thousand and NT$185,217,693 thousand, respectively.

The cost of inventories recognized as cost of goods sold for the year ended December 31, 2013 included inventory write-downs of NT$328,803 thousand. The cost of inventories recognized as cost of goods sold for the year ended December 31, 2012 included reversal of inventory write-downs of NT$474,313 thousand. Inventory write-down made through allowance account was reversed after the inventory had been disposed of by direct write off.

13. CONSTRUCTION IN PROGRESS IN EXCESS OF PROGRESSIVE BILLINGS

Item C December 31, 2013 Solar power project December 31, 2012 Solar power project January 1, 2012 Solar power project	ontract Cost C $ 508,192 $ 593,697 $ 609,049	ost Incurred to Date $ 538,719 $ 514,691 $ 479,217	Estimated Costs to Complete Construction C $ - $ 42,033 $ 80,835	onstruction in Progress $ 508,192 $ 547,916 $ 525,796	Progressive Billings Percentage of Completion (%) Estimated Completion Year $ 508,192 100 - $ 475,389 80-100 2013 $ 487,502 80-100 2013	Profit (Loss) to Be Recognized $ (30,527) $ 33,225 $ 46,579

14. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

	December 31,	December 31,
	2013	2012	January 1, 2012
Investments in associates	$ 3,530,347	$ 3,494,479	$ 3,500,398
Investments in jointly controlled entities	1,078	14,303	14,274
	$ 3,531,425	$ 3,508,782	$ 3,514,672

The subsidiaries (Philips & Lite-On Digital Solutions Corp. and Silitech Technology Corp.) signed accounts receivable factoring contracts with banks. Pursuant to the factoring agreements, losses from commercial disputes were borne by the subsidiaries, while losses from credit risk were borne by the banks.

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a. Investments in associates

Investments in associates
	December 31,	December 31,
Name of Associate	2013	2012	January 1, 2012
Listed companies
Lite-On Semiconductor Corp.	$ 1,605,278	$ 1,460,323	$ 1,496,027
Jhen Vei Electronics Co., Ltd.	-	88,055	117,285
Unlisted companies
Dragonjet Corporation	1,031,514	999,445	965,445
LiteStar JV Holding (BVI) Co., Ltd.	718,970	697,387	765,534
Epricrystal (Changzhou) Co., Ltd.	144,146	137,021	125,756
Lite-Space Technology Company Limited	18,848	108,355	26,208
Yamada-Lom Fabricacao De Artefatos De
Material Plastico Ltda	7,795	-	-
Canfield Ltd.	3,796	3,893	4,143
	$ 3,530,347	$ 3,494,479	$ 3,500,398

As the end of the reporting period, the proportion of ownership and voting rights in associates held by the Group were as follows:

the Group were as follows:
	December 31,	December 31,
Name of Associate	2013	2012	January 1, 2012
Lite-On Semiconductor Corp.	20.45%	20.45%	20.45%
Jhen Vei Electronics Co., Ltd.	-	17.12%	17.12%
Dragonjet Corporation	29.66%	29.74%	29.74%
LiteStar JV Holding (BVI) Co., Ltd.	20.19%	26.72%	30.00%
Epricrystal (Changzhou) Co., Ltd.	3.71%	4.71%	5.00%
Lite-Space Technology Company Limited	39.23%	39.23%	27.00%
Yamada-Lom Fabricacao De Artefatos De
Material Plastico Ltda	25.00%	-	-
Canfield Ltd.	33.33%	33.33%	33.33%

Fair values of investments in associates for which there are published price quotation are summarized as follows, based on the closing price of those investments at the balance sheet date:

	December	December	31,	December 31,
Name of Associate		2013		2012	January 1, 2012
Lite-On Semiconductor Corp.	$	1,635,893		$ 1,399,598	$	1,095,140
Jhen Vei Electronics Co., Ltd.	$		-	$ 106,178	$	96,523

Although Li Shin International Enterprise Corp. (“Li Shin”), as of December 31, 2012, and January 1, 2012, held less than 20% of the total voting shares of Jhen Vei Electronics Co., Ltd. (“Jhen Vei”), Li Shin’s holding was still significantly higher than that of any other shareholder and was thus deemed to have significant influence over Jhen Vei’s. As a result, Li Shin used the equity method to account for its investment in Jhen Vei.

Lite-On Electronic (Tianjin) Co., Ltd., a subsidiary of the Parent Company, held less than 20% of the equity interest in Epricrystal (Changzhou) Co., Ltd. (“Epricrystal”), but a joint arrangements, LiteStar JV Holding (BVI) Co., Ltd. owned more than 20% interest of Epricrystal, enabling the Group to exercise significant influence. Thus, the Group accounted for this investment by the equity method.

In February 2013, Lite-On Mobile Pte. Ltd. (“Lite-On Mobile”), a subsidiary of the Parent Company, subscribed for shares of Yamada-Lom Fabricacao De Artefatos De Material Plastico Ltda (“Yamada-Lom”) for US$540 thousand in cash. After the subscription, Lite-On Mobile acquired a 25% equity interest in Yamada-Lom and could thus exercise significant influence on this investee.

In January 2013, Li Shin International Enterprise Corp. (“Li Shin”), a subsidiary of the Parent Company, disposed of interests in Jhen Vei Electronics Co., Ltd. (“Jhen Vei”) and received proceeds of NT$111,476 thousand; thus Li Shin ceased to have significant influence on Jhen Vei. This transaction resulted in the recognition of a gain in profit or loss, calculated as follows:

Proceeds of disposal Carrying amount of investment on the date of loss of significant influence Gain recognized	$ 111,476 (75,526) $ 35,950

The summarized financial information in respect of the Group’s associates is set out below:

Total assets Total liabilities Revenue Profit (loss) for the year Other comprehensive income Group’s share of profitsof associates for the year	December 31, 2013 $ 29,121,757 $ 11,000,741	December 31, 2012 January 1, 2012 $ 27,373,390 $ 26,958,248 $ 11,564,387 $ 11,138,174 For the Year Ended December 31	December 31, 2012 January 1, 2012 $ 27,373,390 $ 26,958,248 $ 11,564,387 $ 11,138,174 For the Year Ended December 31	December 31, 2012 January 1, 2012 $ 27,373,390 $ 26,958,248 $ 11,564,387 $ 11,138,174 For the Year Ended December 31
			2013 $ 12,332,985 $ 118,687 $ 629,954 $ 148,851	2012 $ 13,576,167 $ (163,602) $ (368,657) $ 134,303

The investments accounted for by the equity method including the share of profit or loss and other comprehensive income of those investments were based on the associates’ financial statements audited by the auditors for the same years, except for the financial statements as of and for the years ended December 31, 2013 and 2012 of Canfield Ltd., an equity-method investee of Li Shin International Corp. which were not audited. The management believed that if the financial statements of Canfield Ltd. were audited, the audit would not result in significant adjustment to the consolidated financial statements.

b. Investments in jointly controlled entities

	December 31,	December 31,	December 31,
Name of Associate		2013	2012	January 1, 2012
Unlisted companies
Kompaktsolar GmbH	$	1,078	$ 14,303	$ 14,274

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At the end of the reporting period, the proportion of ownership and voting rights in jointly controlled entities held by the Group were as follows:

	December 31,	December 31,
Name of Associate	2013	2012	January 1, 2012
Kompaktsolar GmbH	51.00%	51.00%	51.00%

The summarized financial information in respect of the Group’s interests in the jointly controlled entities which are accounted for using the equity method is set out below:

December 31, 2013 Total assets $ 84,730 Total liabilities $ 44,082 Recognized in profit or loss Equity loss of joint ventures accounted by using equity method	December 31, 2012 January 1, 2012 $ 30,936 $ 66,064 $ 23,163 $ 58,218 For the Year Ended December 31	December 31, 2012 January 1, 2012 $ 30,936 $ 66,064 $ 23,163 $ 58,218 For the Year Ended December 31	December 31, 2012 January 1, 2012 $ 30,936 $ 66,064 $ 23,163 $ 58,218 For the Year Ended December 31
		2013 $ 3,415	2012 $ 429

There was objective evidence that the fair value of investment in jointly controlled entity was below tit carrying cost and will permanently decline. As a result, the Group recognized an impairment loss of NT$10,682 thousand in the consolidated statement of comprehensive income for the year ended December 31, 2013.

Kompak’s financial statements, which had been used to determine the carrying amounts of the Group’s investments, shares of profits and other comprehensive income of investments in jointly controlled entities, had been audited.

15. PROPERTY, PLANT AND EQUIPMENT, NET

Carrying amounts of each class of Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment	December 31, 2013 $ 2,398,990 13,167,598 16,790,486 479,393 23,802 737,435 379,971 3,023,707 $ 37,001,382	December 31, 2012 January 1, 2012 $ 2,693,720 $ 2,747,664 15,108,055 14,408,900 16,970,344 18,965,895 256,095 325,390 24,931 30,868 667,290 771,694 126,682 129,918 1,850,624 1,506,248 $ 37,697,741 $ 38,886,577

Cost Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment Accumulated depreciation Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment Accumulated impairment Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment Cost Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment Accumulated depreciation Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment			For the Year Ended December 31, 2013	For the Year Ended December 31, 2013		December 31, 2013 $ 2,398,990 20,283,203 40,610,971 4,114,144 89,042 2,757,887 1,420,378 6,784,900 78,459,515 6,947,394 22,822,096 3,611,874 64,939 2,016,021 1,126,069 3,725,652 40,214,045 - 168,211 998,389 22,877 301 4,431 14,338 35,541 1,244,088 $ 37,001,382
		January 1, 2013 $ 2,693,720 21,407,250 39,618,614 2,031,914 97,205 2,594,743 526,456 5,898,277 74,868,179 6,285,903 21,603,815 1,775,819 72,274 1,927,453 399,774 4,047,653 36,112,691 - 13,292 1,044,455 - - - - - 1,057,747 $ 37,697,741	Additions Disposals Reclassification $ 173 $ 280,305 $ 49,260 83,067 1,775,793 54,690 4,849,528 3,299,701 (1,445,875 ) 378,198 651,053 2,218,185 10,768 26,790 4,019 183,608 202,004 122,825 92,943 151,518 926,414 685,221 324,057 (46,851) $ 6,283,506 $ 6,711,221 $ 1,882,667 $ 860,224 $ 268,496 $ (48,976 ) 3,668,056 1,776,008 (1,168,097 ) 875,248 581,743 1,416,194 10,823 21,921 1,429 218,497 177,051 (2,228 ) 39,777 149,007 716,786 837,388 399,913 (1,174,242) $ 6,510,013 $ 3,314,139 $ (259,134) $ - $ - $ - - - 145,394 310,847 162,731 (227,447 ) - - 22,877 - - 298 1,850 - 2,570 7,178 - 7,069 - - 35,536 $ 319,875 $ 162,731 $ (13,703) For the Year Ended December 31, 2012		Effect of Foreign Currency Exchange Differences $ (63,858 ) 513,989 888,405 136,900 3,840 58,715 26,083 572,310 $ 2,136,384 $ 118,739 494,330 126,356 2,334 49,350 18,739 354,766 $ 1,164,614 $ - 9,525 33,265 - 3 11 91 5 $ 42,900
		January 1, 2012 $ 2,747,664 20,049,688 40,009,100 1,852,778 105,490 2,738,339 526,270 5,622,995 73,652,324 5,632,706 20,128,012 1,527,388 74,622 1,966,645	Additions $ - 2,375,613 4,441,726 245,999 5,232 148,208 24,129 292,274 $ 7,533,181 $ 965,526 4,410,612 348,069 8,058 225,817	Disposals Reclassification $ 29,244 $ - 1,270,080 352,097 3,633,851 (277,409 ) 85,939 76,684 10,535 (97 ) 217,206 53,349 47,580 62,356 45,108 122,758 $ 5,339,543 $ 389,738 $ 474,252 $ (7,401 ) 2,621,445 (6,311 ) 78,866 57 8,592 - 200,163 (2,275 )	Effect of Foreign Currency Exchange Differences December 31, 2012 $ (24,700 ) $ 2,693,720 (100,068 ) 21,407,250 (920,952 ) 39,618,614 (57,608 ) 2,031,914 (2,885 ) 97,205 (127,947 ) 2,594,743 (38,719 ) 526,456 (94,642) 5,898,277 $ (1,367,521) 74,868,179 $ 169,324 6,285,903 (307,053 ) 21,603,815 (20,829 ) 1,775,819 (1,814 ) 72,274 (62,571 ) 1,927,453 (Continued)

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16. OTHER INTANGIBLE ASSETS, NET

For the Year Ended December 31, 2012

Equipment held under finance lease Other equipment Accumulated impairment Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment	January 1, 2012 $ 396,352 4,116,747 33,842,472 - 8,082 915,193 - - - - - 923,275 $ 38,886,577	Additions $ 49,390 481,671 $ 6,489,143 $ - - 96,830 - - - - - $ 96,830	Disposals Reclassification $ 38,329 $ 4,272 52,590 (6,159) $ 3,474,237 $ (17,817) $ - $ - 2,452 - 5,642 - - - - - - - - - - - $ 8,094 $ -	Effect of Foreign Currency Exchange Differences December 31, 2012 $ (11,911 ) $ 399,774 (492,016) 4,047,653 $ (726,870) 36,112,691 $ - - 7,662 13,292 38,074 1,044,455 - - - - - - - - - - $ 45,736 1,057,747 $ 37,697,741 (Concluded)

An analysis of deprecation by function:

Operating costs Operating expenses	2013 $ 5,616,781 893,232 $ 6,510,013	2012 $ 5,626,595 862,548 $ 6,489,143

For the years ended December 31, 2013 and 2012 as the result of the declining sale of one of the products in the market, the estimated future cash flows expected to arise from the related equipment was decreased and recognized impairment loss NT$157,144 thousand and NT$88,736 thousand, respectively. The Group determined the recoverable amount of the relevant assets on the basis of their value in use. The impairment loss (reversal of impairment loss) was recognized in the consolidated statements of comprehensive income.

The above items of property, plant and equipment were depreciated on a straight-line basis at the following rates per annum:

Buildings 5-60 years Machinery equipment 2-10 years Tooling equipment 2-10 years Transportation equipment 3-10 years Office equipment 2-10 years Equipment held under finance lease 3-40 years Other equipment 2-10 years

Carrying amounts of each class Goodwill Patents Use rights Client relationships Software Other intangible assets	December 31, 2013 $ 14,261,666 11,401 1,010,954 - 61,541 370,700 $ 15,716,262	December 31, 2012 $ 14,267,414 10,175 1,235,611 10,239 63,064 447,074 $ 16,033,575	January 1, 2012 $ 14,261,731 14,698 1,460,267 51,193 68,105 447,418 $ 16,303,412

For the Year Ended December 31, 2013

			For the Year Ended December 31, 2013	For the Year Ended December 31, 2013
Cost Goodwill Patents Use right Client relationships Software Other intangible assets Accumulated amortization Goodwill Patents Use right Client relationships Software Other intangible assets Accumulated impairment Goodwill Patents Use right Client relationships Software Other intangible assets Cost Goodwill Patents Use right Client relationships Software Other intangible assets		January 1, 2013 $ 14,798,181 27,134 2,695,878 163,819 251,569 2,833,194 20,769,775 77,234 16,959 1,460,267 153,580 188,505 2,386,122 4,282,667 453,533 - - - - - 453,533 $ 16,033,575	Additions Disposals Reclassification $ - $ - $ - 10,079 - - - - - - - - 5,346 - 14,696 125,962 (7,220) 718,630 $ 141,387 $ (7,220) $ 733,326 $ - $ - $ - 8,898 - - 224,657 - - 10,239 - - 5,672 - 14,690 233,420 (6,657) 575,008 $ 482,885 $ (6,657) $ 589,698 $ - $ - $ - - - - - - - - - - - - - - - - $ - $ - $ - For the Year Ended December 31, 2012		Effect of Foreign Currency Exchange Differences $ (5,748 ) 115 - - (6,238 ) (243,070) $ (254,941) $ - 70 - - (5,035 ) (131,096) $ (136,061) $ - - - - - - $ -	December 31, 2013 $ 14,792,433 37,328 2,695,878 163,819 265,373 3,427,496 21,382,327 77,234 25,927 1,684,924 163,819 203,832 3,056,796 5,212,532 453,533 - - - - - 453,533 $ 15,716,262
		January 1, 2012 $ 14,792,498 27,134 2,695,878 163,819 242,189 2,601,730 20,523,248	Additions $ - 2,248 - - 17,049 55,288 $ 74,585	Disposals Reclassification $ - $ - - (2,217 ) - - - - (4,259 ) (4,508 ) - 187,291 $ (4,259) $ 180,566	Effect of Foreign Currency Exchange Differences December 31, 2012 $ 5,683 $ 14,798,181 (31 ) 27,134 - 2,695,878 - 163,819 1,098 251,569 (11,115) 2,833,194 $ (4,365) 20,769,775 (Continued)

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Accumulated amortization Goodwill Patents Use right Client relationships Software Other intangible assets Accumulated impairment Goodwill Patents Use right Client relationships Software Other intangible assets			For the Year Ended December 31, 2012	For the Year Ended December 31, 2012
		January 1, 2012 $ 77,234 12,436 1,235,611 112,626 174,084 2,154,312 3,766,303 453,533 - - - - - 453,533 $ 16,303,412	Additions $ - 6,799 224,656 40,954 20,842 274,727 $ 567,978 $ - - - - - - $ -	Disposals Reclassification $ - $ - - (2,421 ) - - - - - (6,418 ) (4,085) (30,392) $ (4,085) $ (39,231) $ - $ - - - - - - - - - - - $ - $ -	Effect of Foreign Currency Exchange Differences December 31, 2012 $ - $ 77,234 145 16,959 - 1,460,267 - 153,580 (3 ) 188,505 (8,440) 2,386,122 $ (8,298) 4,282,667 $ - 453,533 - - - - - - - - - - $ - 453,533 $ 16,033,575 (Concluded)

An analysis of amortization by function:

Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
		2013 $ 59,698 423,187 $ 482,885	2012 $ 66,597 501,381 $ 567,978

The above items of other intangible assets were depreciated on a straight-line basis at the following rates per annum:

Patents 6 years Use rights 12 years Client relationships 4 years Software 2-14 years Other intangible assets 1-10 years

The goodwill arising from the Parent Company’s acquisition of Lite-On Enclosure Inc. in 2004 was NT$210,220 thousand was amortization approximately over a period of five years. However, under the Guidelines Governing the Preparation of Financial Reports, effective January 1, 2006, goodwill need no longer be amortized. As of December 31, 2013, December 31, 2012 and January 1, 2012, the carrying value of goodwill were all NT$132,986 thousand.

The Parent Company completed the purchase of some assets of the IrDA Department of Avago Technologies Limited. Statement of Financial Accounting Standards (SFAS) No. 3 - “Business Combinations” and SFAS No. 38 - “Intangible Assets” define recognized goodwill as the sum of the acquisition cost plus other direct transaction costs minus the fair value of the identifiable net assets acquired. Thus, the calculation of goodwill generated as of December 31, 2009 was as follows:

Acquisition costs Fair value of identifiable assets acquired Inventories Properties, plant and equipment Patents Client relationships Goodwill	$ 59,278 46,700 27,134 163,819	$ 708,863 296,931
		$ 411,932

On April 10, 2006, Lite-On IT Corporation (LOITC) and Qisda Corp. (“Qisda”) signed a contract, under which LOITC will obtain Qisda’s subcontract and manufacturing business on optical storage devices, including related authorization on product manufacturing, technology, technology acquisition, patent rights, etc. for NT$1,226,855 thousand plus 13% equity in LOITC. This acquisition was in line with LOITC’s long-term strategic relationship with Qisda to expand production scale and promote market share.

In their special meeting on November 15, 2007, however, LOITC’s shareholders approved the board of directors’ proposal of August 27, 2007 to cancel the plan to use LOITC’s shares to make the payment and to negotiate instead with Qisda for a new payment mode (i.e., wholly pay in cash) and schedule. LOITC thus paid cash for its acquisition at these amounts: NT$2,695,878 thousand, recorded under intangible assets - patent rights; and NT$2,806,508 thousand, recorded under goodwill.

Except for the goodwill generated through the acquisition of Lite-On Enclosure Inc. by the Parent Company for NT$132,986 thousand, the Parent Company’s purchase of some assets of IrDA Department of Avago Technologies Limited for NT$411,932 thousand, and the goodwill carrying value of NT$2,806,508 thousand recognized by Lite-On IT Corp., resulted in differences between the acquisition costs of the Parent Company’s investments in the subsidiaries and the acquisition costs of the subsidiaries’ investments in other companies; the Parent Company’s proportionate shares in the investees’ equity are listed as follows:

Lite-On Mobile Oyj (formerly Perlos Oyj) Li Shin International Enterprise Corp. Lite-On Automotive Corp. Leotek Electronics Corp. Others	December 31, 2013 $ 8,640,111 1,708,258 303,073 220,170 38,628 $ 10,910,240	December 31, 2012 $ 8,645,859 1,708,258 303,073 220,170 38,628 $ 10,915,988	January 1, 2012 $ 8,640,922 1,708,258 303,073 219,424 38,628 $ 10,910,305

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The amounts of cash-generating unit used in amortization of Goodwill of the Group are listed as follows:

Lite-On Mobile Oyj (formerly Perlos Oyj) Lite-On IT Corp. Li Shin International Enterprise Corp. The Parent Company Lite-On Automotive Corp. Leotek Electronics Corp. Others	December 31, 2013 $ 8,640,111 2,806,508 1,708,258 544,918 303,073 220,170 38,628	December 31, 2012 $ 8,645,859 2,806,508 1,708,258 544,918 303,073 220,170 38,628	January 1, 2012 $ 8,640,922 2,806,508 1,708,258 544,918 303,073 219,424 38,628

$ 14,261,666 $ 14,267,414 $ 14,261,731

Goodwill is allocated to the Group’s recoverable amount of cash-generating units. The recoverable amount of all cash-generating units has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by the management covering the future five-year period. For the years ended December 31, 2013 and 2012, the recoverable amount of all cash-generating units calculated using the value-in-use exceeded their carrying amount, so goodwill was not impaired. The key assumptions used for value-in-use calculations are gross margin, growth rate and discount rate.

Management determined gross margin based on past performance and future profits. The growth rate used is consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant cash-generating units.

17. OTHER ASSETS

OTHER ASSETS
	December 31,	December 31,
	2013	2012	January 1, 2012
Offset against business tax payable	$ 2,739,245	$ 1,269,470	$	841,008
Prepayments	1,937,381	2,684,730		3,246,715
Prepayments for lease	782,061	572,519		620,211
Prepayment for equipment	85,771	1,236,480		2,631,249
Other financial assets	-	1,102,784		340,388
Others	418,959	345,941		505,637
	$ 5,963,417	$ 7,211,924	$	8,185,208
Current	$ 5,037,428	$ 5,058,662	$	4,429,820
Non-current	925,989	2,153,262		3,755,388
	$ 5,963,417	$ 7,211,924	$	8,185,208

Land use rights with carrying amounts of NT$543,254 thousand, NT$572,519 thousand and NT$620,211 thousand as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively, referred to land located in Mainland China.

18. BORROWINGS

a. Short-term borrowings

December 31,
2013
Unsecured borrowings
Line of credit borrowings
$ 15,576,780

Market interest rates for short-term borrowings were as follows:
December 31,
2013
Short-term borrowings
0.72%-1.96%
Long-term borrowings
December 31,
2013
Unsecured borrowings
The Parent Company
$ 18,475,000

Lite-On Mobile Pte. Ltd.
5,960,993
Silitech Technology Corp.
1,440,000
Guangzhou Lite-On Mobile Electronic
Components Co., Ltd.
1,192,206
Lite-On Japan Ltd.
307,966
Silitech Technology (SuZhou) Co., Ltd.

-

27,376,165

Less: Current portion

8,867,669

Long-term borrowings: Non-current
$ 18,508,496

December 31,
2012
January 1, 2012
$ 7,010,394
$ 4,737,488
December 31,
2012
January 1, 2012
0.76-1.86%
0.86%-8.24%
December 31,
2012
January 1, 2012
$ 15,700,000
$ 15,700,000
5,808,000
6,053,601
1,005,000
1,809,000
1,161,605
-
489,890
602,923

203,307

302,913

24,367,802

24,468,437

4,411,168

1,173,473
$ 19,956,634
$ 23,294,964

b. Long-term borrowings

1) As of December 31, 2013, December 31, 2012 and January 1, 2012, the Parent Company had 6, 4 and 4 long-term bank loans with contract terms maturing between September 23, 2008 and September 23, 2018 and interest rates ranging from 1.448% to 1.663% and 1.518% to 1.694% for the years ended 2013 and 2012, payable monthly or quarterly. These loans should be repaid in 3, 5, or 8 installments or at lump sum on loan maturity.

a) NT$12 billion, which is a refinancing of existing credit lines to improve financial structure, which should be used as a medium-term loan and may not be used on a revolving basis; and
b) NT$3 billion, which is for supporting operations and may be used on a revolving basis.

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Under the syndicated loan agreement, the Company should maintain certain financial ratios based on the most recent semiannual or annual consolidated financial statements.

At December 31, 2013, the Company used a) NT$1.23 billion and b) NT$2.77 billion of the credit line of the above syndicated loan.

Under the syndicated loan agreement, the Company should maintain certain financial ratios based on the most recent semiannual or annual consolidated financial statements.

2) Lite-On Mobile Pte. Ltd., a subsidiary of the Parent Company, had a syndicated loan with Citibank. As of December 31, 2013, December 31, 2012 and January 1, 2012, the floating interest rates were 1.05% to 1.35%, 0.908% to 1.0968% and 1.625% to 2.2%. The principal is repayable from April 29, 2014 in five semiannual installments.

This contract is a five-year syndicated loan of US$200 million and was signed with Citibank and 13 other financial institutions (the endorsements and guarantees were provided by the Parent Company). As of December 31, 2013, December 31, 2012 and January 1, 2012, Lite-On Mobile Pte. Ltd. had used all of the credit line of the syndicated loan.

3) Silitech Technology Co., Ltd. (“Silitech”), a subsidiary of the Parent Company, entered into a NT$2.4 billion syndicated loan contract, with the Land Bank of Taiwan as lead bank and a contract term from February 18, 2013 to February 18, 2018. This loan was obtained for the purposes of supporting working capital and capital expenditure. As of December 31, 2013, Silitech had used NT$1.44 billion of the syndicated loan, with an interest rate of 1.6734%.

The first repayment of NT$480 million should be made on August 18, 2017. The remaining principal of NT$960 million is repayable by February 18, 2018.

Silitech entered into a contract for a NT$3 billion syndicated long-term bank loan, with the Land Bank of Taiwan as lead bank and a contract term from March 16, 2009 to March 16, 2014. Silitech had used NT$2.01 billion of the credit line of the syndicated loan. The floating interest rates were 1.7061% and 1.6712% as of December 31, 2012, January 1, 2012, and January 1, 2012, respectively; the principal is repayable from December 16, 2011 in 10 trimestral installments. In February 2013, Silitech Technology Co., Ltd. settled this loan in advance.

4) Guangzhou Lite-On Mobile Electronic Components Co., Ltd., a subsidiary of the Parent Company, had a syndicated loan with Citibank. As of December 31, 2013, December 31, 2012, the floating interest rates were 1.05% to 1.725% and 0.91% to 0.93425%. The principal is repayable from December 28, 2014 in five semiannual installments.

This contract is a five-year syndicated loan of US$50 million and was signed with Citibank and 10 other financial institutions (the endorsements and guarantees were provided by the Parent Company). As of both December 31, 2013 and December 31, 2012, Guangzhou Lite-On Mobile Electronic Components Co., Ltd. had used US$40 million of the credit line of the syndicated loan.

5) As of December 31, 2013, Lite-On Japan Ltd., a subsidiary of the Parent Company, had 19 long-term bank loans, with contract terms from April 2008 to October 2018, with interest rate of 1.00% to 1.75% and principal repayable in trimestral installments.

As of December 31, 2012, Lite-On Japan Ltd., a subsidiary of the Parent Company, had 23 long-term bank loans, with contract terms from January 2007 to February 2016, with interest rate of 1.06% to 1.75% and principal repayable in trimestral installments.

As of January 1, 2012, Lite-On Japan Ltd., a subsidiary of the Parent Company, had 18 long-term bank loans, with contract terms from January 2007 to February 2016, with interest rate of 1.16% to 1.75% and principal repayable in trimestral installments.

6) Silitech Technology (SuZhou) Co., Ltd., a subsidiary of the Parent Company, entered into a US$10 million long-term bank loan with Taipei Fubon Bank, with contract term from August 27, 2010 to August 27, 2013. The floating interest rates were 1.0615% and 1.26806% as of December 31, 2012 and January 1, 2012, respectively. The principal is amortized semiannually and repayable from August 27, 2012, at US$3 million for each of the first two installments and at US$4 million on the third repayment.

19. FINANCE LEASE PAYABLES

FINANCE LEASE PAYABLES
	December 31,		December 31,
		2013		2012	January 1, 2012
Minimum lease payments
Not later than one year	$	84,944	$	62,483	$	85,046
Later than one year and not later than five years		183,109		234,213		322,215
Later than five years		-		-		-
		268,053		296,696		407,261
Less: Future finance charges		22,370		1,599		1,994
Present value of minimum lease payments	$	245,683	$	295,097	$	405,267
Present value of minimum lease payments
Not later than one year	$	72,735	$	62,381	$	84,360
Later than one year and not later than five years		172,948		232,716		320,907
Later than five years		-		-		-
	$	245,683	$	295,097	$	405,267
Current	$	72,735	$	62,381	$	84,360
Non-current		172,948		232,716		320,907
	$	245,683	$	295,097	$	405,267

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20. PROVISIONS

	December 31,	December 31,
	2013	2012	January 1, 2012
Guangzhou Lite-On Mobile Electronic
Components Co., Ltd.	$ 244,053	$ 291,839	$ 355,986
Lite-On Mobile Sweden AB	987	918	1,612
Lite-On Mobile Oyj (formerly Perlos Oyj)	630	1,470	2,048
Lite-On Japan Ltd.	13	417	4,441
The Parent Company	-	453	826
Beijing Lite-On Mobile Electronic and
Telecommunication Components Co., Ltd.	-	-	40,064
Lite-On Mobile India Private Limited	-	-	290
	245,683	295,097	405,267
Less: Current portion of long-term capital lease
liabilities	72,735	62,381	84,360
	$ 172,948	$ 232,716	$ 320,907

a. Guangzhou Lite-On Mobile Electronic Components Co., Ltd. leased buildings, machinery and equipment under capital leases valid from January 1, 2007 to December 31, 2016. The terms of these leases were 10 years, with 7.11% interest rate. The building, machinery and equipment can be bought at a bargain purchase price at the end of the lease term.
b. Lite-On Mobile Sweden AB leased machinery and equipment under capital leases valid from January 1, 2009 to January 31, 2016. The terms of these leases were three years, with 2.36% to 3.63% interest rate
c. Lite-On Mobile Oyj (formerly Perlos Oyj) leased machinery and equipment under capital leases valid from July 1, 2009 to September 30, 2015. The terms of these leases were between three and four years, with 5.00% interest rate.
d. Lite-On Japan Ltd. leased machinery and equipment under capital leases valid from May 2009 to July 2014. The terms of these leases were between three and five years, with 1.3% to 2.7% interest rate.
e. The Parent Company leased machinery and equipment under capital leases valid from September 1, 2009 to June 1, 2013. The terms of these leases were between 3 and 5 years, with 15.6% interest rate. The payments of these leases were between NT$42 thousand and NT$120 thousand. The ownership of the leased assets will be transferred to the Parent Company at the end of the lease term.
f. Beijing Lite-On Mobile Electronic and Telecommunication Components Co., Ltd. leased buildings under capital leases valid from January 1, 2003 to December 31, 2012. These leases were for 10 years, with 4.24% interest rate. In the third quarter of 2012, Beijing Lite-On Mobile Electronic and Telecommunication Components Co., Ltd. fully rapid this loan in advance.
g. Lite-On Mobile India Private Limited leased machinery and equipment under capital leases valid from September 15, 2009 to April 18, 2013. The terms of these leases were between three and five years, with 10.24% interest rate. In the second quarter of 2012, Lite-On Mobile India Private Limited fully rapid this loan in advance.

PROVISIONS
	December 31,		December 31,
		2013		2012	January 1, 2012
Warranties	$	874,502	$	917,217	$ 1,121,504
Customer returns and rebates		629,446		774,156	371,835
	$	1,503,948	$	1,691,373	$ 1,493,339
Current	$	1,503,948	$	1,691,373	$ 1,493,339
Non-current		-		-	-
	$	1,503,948	$	1,691,373	$ 1,493,339
			Customer
			Returns and
	Warranties			Rebates	Total
Balance at January 1, 2013	$	917,217	$	774,156	$ 1,691,373
Additional provisions recognized		382,144		583,285	965,429
Usage		(293,843)		(725,009)	(1,018,852)
Reversing un-usage balances		(125,153)		(6,973)	(132,126)
Effect of foreign currency exchange differences		(5,863)		3,987	(1,876)
Balance at December 31, 2013	$	874,502	$	629,446	$ 1,503,948
Balance at January 1, 2012	$	1,121,504	$	371,835	$ 1,493,339
Additional provisions recognized		390,016		1,078,656	1,468,672
Usage		(305,071)		(672,381)	(977,452)
Reversing un-usage balances		(279,682)		-	(279,682)
Effect of foreign currency exchange differences		(9,550)		(3,954)	(13,504)
Balance at December 31, 2012	$	917,217	$	774,156	$ 1,691,373

a. The provision for warranty claims represents the present value of management’s best estimate of the future outflow of economic benefits that will be required under the Group’s obligations for warranties under local sale of goods legislation. The estimate had been made on the basis of historical warranty trends and may vary as a result of new materials, altered manufacturing processes or other events affecting product quality.
b. The provision of customer returns and rebates was based on historical experience, management’s judgments and other known reasons estimated product returns and rebates may occur in the year. The provision was recognized as a reduction of operating income in the periods of the related goods sold.

21. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

Based on the Labor Pension Act (the “Act”), the rate of monthly contributions by the Parent Company and subsidiaries - Lite-On IT Corp., Silitech Technology Corp., Lite-On Automotive Corp., Li Shin International Enterprise Corp., Logah Technology Co., Ltd., Leotek Electronics Corp., Lite-On Integrated Services Inc. and Philips & Lite-On Digital Solutions Corp. - to employees’ individual pension accounts is at 6% of monthly wages and salaries, The pension expenses recognized were NT$211,570 thousand in 2013 and NT$180,706 thousand in 2012.

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Some consolidated entities, which are mainly in investments, have either very few or even no staff. These companies have no pension plans and thus do not contribute to pension funds and do not recognize pension costs.

Except for these companies, the remaining companies all contribute to pension funds and recognize pension costs based on local government regulations. The pension expenses recognized were NT$345,821 thousand in 2013 and NT$444,244 thousand in 2012.

By function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
		2013 $ 237,348 320,043 $ 557,391	2012 $ 283,606 341,344 $ 624,950

An analysis by function Operating cost Operating expenses	For the Year Ended	For the Year Ended	December 31
		2013 $ 3,030 36,592 $ 39,622	2012 $ 10,295 124,326 $ 134,621 (Concluded)

Pre-tax actuarial losses recognized in other comprehensive income for the years ended December 31, 2013 and 2012 were NT$284 thousand and NT$134,530 thousand, respectively. The cumulative amount of pre-tax actuarial losses recognized in other comprehensive income as of December 31, 2013 and 2012 was NT$134,814 thousand and NT$134,530 thousand, respectively.

The amount included in the consolidated balance sheet arising from the Group’s obligation in respect of its defined benefit plans was as follows:

b. Defined benefit plans

The Parent Company, Lite-On IT Corp., Silitech Technology Corp., Lite-On Automotive Corp., Li Shin International Enterprise Corp., Logah Technology Co., Ltd., Leotek Electronics Corp. and Philips & Lite-On Digital Solutions Corp. have pension plans for all regular employees, which provide benefits based on length of service and average basic pay for the 6 months before retirement.

The Parent Company, Lite-On IT Corp., Silitech Technology Corp., Lite-On Automotive Corp., Li Shin International Enterprise Corp., Logah Technology Co., Ltd., Leotek Electronics Corp. and Philips & Lite-On Digital Solutions Corp. contribute monthly an amount equal to 2% respectively, of salaries and wages to a pension fund, which is administered by the employees’ pension fund committees and deposited in the Bank of Taiwan in the committee’s name.

	December 31,	December 31,	December 31,	December 31,
		2013		2012	January 1, 2012
Present value of funded defined benefit
obligation	$	1,205,365	$	1,334,236	$	1,216,778
Fair value of plan assets		(1,048,675)		(1,092,150)		(1,087,026)
		156,690		242,086		129,752
Present value of unfunded defined benefit
obligation		75,899		81,430		32,621
Deficit		232,589		323,516		162,373
Past service cost not yet recognized		(1,773)		(14,861)		(24,335)
Fair value of plan assets adjustments		4,855		4,113		4,120
Accrued pension liabilities	$	235,671	$	312,768	$	142,158

Movements in the present value of the defined benefit obligations were as follows:

valuations were as follows:
	December 31,	December 31,
	2013	2012	January 1, 2012
Discount rate(s)	1.50%-2.00%	1.30%-3.75%	1.60%-4.00%
Expected return on plan assets	2.00%-5.00%	1.30%-2.50%	1.60%-2.25%
Expected rate(s) of salary increase	1.25%-3.50%	2.00%-5.00%	2.00%-5.00%

Amounts recognized in profit or loss in respect of these defined benefit plans are as follows:

Current service cost Interest cost Expected return on plan assets Amortization on past service cost Losses/(gains) arising from curtailment or settlement	For the Year Ended December 31
	2013 2012 $ 22,050 $ 17,963 19,432 19,387 (14,204) (18,981) 13,088 9,474 (744) 106,778 $ 39,622 $ 134,621

Balance at January 1 Service cost Interest cost Actuarial losses/(gains) Losses/(gains) on curtailments Exchange differences on foreign plans Benefits paid Balance at December 31	For the Year Ended December 31
	2013 2012 $ 1,415,666 $ 1,249,399 22,050 17,963 19,432 19,387 (57,250) 42,536 (744) 106,778 (612) (23) (117,278) (20,374) $ 1,281,264 $ 1,415,666

(Continued)

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Movements in the fair value of the plan assets were as follows:

Balance at January 1 Expected return on plan assets Exchange differences on foreign plans Contributions from plan participants Benefits paid Actuarial losses Balance at December 31	For the Year Ended December 31
	2013 2012 $ 1,088,037 $ 1,082,906 14,204 18,981 (26) (79) 116,417 98,597 (117,278) (20,374) (57,534) (91,994) $ 1,043,820 $ 1,088,037

The major categories of plan assets at the end of the reporting period for each category were as follows:

	December 31,	December 31,
	2013	2012	January 1, 2012
Equity instruments	18	16	18
Debt instruments	11	9	9
Property	3	7	7
Others	68	68	66
	100	100	100

The overall expected rate of return was based on historical return trends and analysts’ predictions of the market for the asset over the life of the related obligation, with reference to the use of the Labor Pension Fund by Labor Pension Fund Supervision Committee, taking into consideration the effect of possible differences between the guaranteed minimum income and the return on local banks’ two-year time deposits.

22. EQUITY

a. Share capital

1) Ordinary shares

Numbers of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued	December 31, 2013 3,500,000 $ 35,000,000 2,324,655 $ 23,246,552	December 31, 2012 January 1, 2012 3,500,000 3,500,000 $ 35,000,000 $ 35,000,000 2,295,315 2,309,980 $ 22,953,154 $ 23,099,801

Fully paid ordinary shares, which have a par value of NT$10, carry one vote per share and carry a right to dividends.

Of the Parent Company’s authorized shares, 120,000 thousand shares and 100,000 thousand shares had been reserved for the issuance of convertible bonds and employee share options, respectively.

In their meeting on August 27, 2008, the Parent Company’s Board of Directors approved a plan to repurchase up to 30,000 thousand shares listed on the Taiwan Stock Exchange (TSE) between September 28, 2008 and October 27, 2008, with the buyback price ranging from NT$20.48 to NT$43.60. On October 28, 2008, the Parent Company’s Board of Directors approved the repurchase of up to 40,000 thousand shares listed on the TSE between October 29, 2008 and December 28, 2008, with the buyback price ranging from NT$13.00 to NT$37.10. The Parent Company bought back a total of 30,565 thousand shares during the repurchase periods and retired all these shares in January 2012.

2) Issued global depositary receipts

The Group chose to disclose the history of experience adjustments as the amounts determined for each accounting period prospectively from the date of transition to IFRSs

			December 31,	December 31,	December 31,	December 31,
				2013		2012	January 1, 2012
Experience	adjustments	on plan liabilities	$	23,956	$	10,575	$	-
Experience	adjustments	on plan assets	$	459	$	2,360	$	-

The Group expects to make contributions of NT$195,997 thousand to the defined benefit plans in the next year starting from December 31, 2013.

On September 25, 1996, the Parent Company issued 4,900 thousand units of global depositary receipts (GDRs) on the London Stock Exchange. These GDRs represented 49,000 thousand common shares of the Parent Company.

On April 3, 1995, GVC Corp. issued 5,000 units of GDRs on the London Stock Exchange. These GDRs represented 25,000 thousand common shares of GVC Corp., which were assumed by the Corporation as a result of a merger, with the Parent Company as the survivor entity. As of November 4, 2002, the outstanding GDRs were 7,627 thousand units, or 38,136 thousand common shares of GVC Corp. For merger purposes, these GDRs were exchanged for the Parent Company’s 1,478 thousand marketable equity securities, which represented the Parent Company’s 14,781 thousand common shares.

As of December 31, 2013, December 31, 2012 and January 1, 2012, the outstanding marketable equity securities were 5,206 thousand units, 5,201 thousand units and 5,196 thousand units, representing 52,064 thousand common share, 52,006 thousand common share and 51,957 thousand common shares of the Parent Company, respectively. The rights and obligation of security holders are the same as those of common shareholders, except for voting rights. As of December 31, 2013, December 31, 2012 and January 1, 2012, the unredeemed GDRs amounted to 1,194 thousand units, 984 thousand units, and 1,141 thousand units.

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b. Capital surplus

The premium from shares issued in excess of par (including share premium from issuance of common shares, conversion of bonds, treasury share transactions, and excess of the consideration received over the carrying amount of the subsidiaries’ net assets during disposal or acquisition) and donations may be used to offset a deficit; in addition, when the Parent Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to capital (limited to a certain percentage of the Parent Company’s capital surplus and once a year).

The capital surplus from long-term investments, employee share options and share warrants may not be used for any purpose.

c. Retained earnings and dividend policy

To ensure the availability of cash for the Parent Company’s present and future expansion plans and to meet shareholders’ cash flow requirements, the Parent Company prefers to distribute more stock dividends. In principle, cash dividends are limited to 10% of total dividends distributed.

The Parent Company’s Articles of Incorporation provide that the annual net income, less any deficit, and 10% legal reserve as well as special reserve equal to the debit balances of the shareholders’ equity accounts, together with the distributable unappropriated earnings of prior years, can be retained partially on the basis of operating requirements. The remainder should be distributed as follows:

1) Bonus to employees: At least 1%.
2) Bonus to directors: 1.5% or less.
3) Others, as dividends.

For the year ended December 31, 2013, the bonus to employees were estimated on the basis of net income after considering the effect of partial profit on share of subsidiaries and associates at 15%; the remuneration to directors were estimated on the basis of net income at 0.85%. For the year ended December 31, 2012, the bonus to employees and remuneration to directors represented 14.18% and 0.82%, respectively of net income. Material differences between these estimates and the amounts proposed by the Board of Directors in the following year are adjusted in the year of the proposal. If the actual amounts subsequently resolved by shareholders differ from the proposed amounts, the differences are recorded in the year of the shareholders’ resolution as a change in accounting estimate. If stock bonuses are resolved to be distributed to employees, the number of shares is determined by dividing the amount of bonuses by the closing price (after considering the effect of cash and stock dividends) of the shares on the day preceding the shareholders’ meeting.

the date of transitions to IFRSs, if the increase in retained earnings that resulted from all IFRSs adjustments is not sufficient for this appropriation, only the increase in retained earnings that resulted from all IFRSs adjustments will be appropriated to special reserve. The special reserve appropriated as above may be reversed in proportion to the usage, disposal or reclassification of the related assets and thereafter distributed. The special reserve appropriated on the first-time adoption of IFRSs may be used to offset deficits in subsequent years. No appropriation of earnings shall be made until any shortage of the aforementioned special reserve is appropriated in subsequent years if the Parent Company has earnings and the original need to appropriate a special reserve is not eliminated.

Appropriation of earnings to legal reserve shall be made until the legal reserve equals the Parent Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Parent Company has no deficit and the legal reserve has exceeded 25% of the Parent Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

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

The appropriations of earnings for 2012 and 2011 had been approved in the shareholders’ meetings on June 19, 2013 and 2012, respectively. The appropriations and dividends per share were as follows:

Legal reserve Special reserve Share dividends Cash dividends	Appropriation of Earnings 2012 2011 $ 753,486 $ 722,592 689,913 - 114,899 113,972 5,400,265 5,174,335	Dividends Per Share (NT$)
		2012 2011 $ - $ - - - 0.05 0.05 2.35 2.27

The bonus to employees and the remuneration to directors for 2012 and 2011 approved in the shareholders’ meetings on June 19, 2013 and 2012, respectively, were as follows:

Bonus to employees Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2012 Cash Dividends Stock Dividends $ 897,799 $ 171,009 61,420 -	2011
		Cash Dividends Stock Dividends $ 819,420 $ 156,080 61,420 -

The appropriation of the earnings for 2012 was approved by the Financial Supervisory Commission, Executive Yuan, ROC. The Parent Company’s board of directors approved August 13, 2013 as the date of distributing stock dividends and cash dividends.

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The appropriations of earnings for 2012 were proposed according to the Parent Company’s financial statements for the year ended December 31, 2012, which were prepared in accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, and by reference to the balance sheet for the year ended December 31, 2012, which was prepared in accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers (revised) and International Financial Reporting Standards.

There was no difference between the amounts of the bonus to employees and the remuneration to directors approved in the shareholders’ meetings in 2013 and 2012 and the amounts recognized in the financial statements for the years ended December 31, 2012 and 2011.

The appropriations of earnings for 2013 had been proposed by the Group’s board of directors on March 27, 2014. The appropriations and dividends per share were as follows:

	Appropriation	Appropriation	Dividends Per
	of	Earnings	Share (NT$)
Legal reserve	$	875,485
Reversal of special reserve		640,244
Cash dividends		6,307,866	$2.71
Share dividends		116,381	0.05

The Board of Directors of the Parent Company also approved the cash dividends to employees, stock dividends to employees and the remuneration to directors in the amounts of NT$997,212 thousand, NT$189,945 and NT$70,039 thousand in cash for payment in 2013, respectively. There is no significant difference between the aforementioned approved amounts and the amounts charged against earnings of 2013.

The appropriations of earnings, the bonus to employees, and the remuneration to directors and supervisors for 2013 are subject to the resolution of the shareholders’ meeting to be held on June 19, 2014.

d. Other equity items

Movements in other equity items were as follows:

Balance at January 1 Exchange differences arising on translating the foreign operations Gain arising on changes in the fair value of available-for-sale financial assets Gain arising on changes in the fair value of hedging instruments Share of other comprehensive income of associates Income tax effect Balance at December 31		2013
		Foreign Currency Translation Reserve Unrealized Gain (Loss) from Available-for-sale Financial Assets Cash Flow Hedges Reserve $ 128,872 $ (446,848) $ (101,563) 2,541,491 - - - 500,644 - - - 54,594 87,450 29,435 - (374,773) - - $ 2,383,040 $ 83,231 $ (46,969)	Total $ (419,539) 2,541,491 500,644 54,594 116,885 (374,773) $ 2,419,302

Balance at January 1 Exchange differences arising on translating the foreign operations Loss arising on changes in the fair value of available-for-sale financial assets Gain arising on changes in the fair value of hedging instruments Share of other comprehensive income of subsidiaries and associates Exchange differences on partial disposal of subsidiaries reclassified to equity Income tax effect Balance at December 31		2012
		Foreign Currency Translation Reserve Unrealized Gain (Loss) from Available-for-sale Financial Assets Cash Flow Hedges Reserve $ 1,625,560 $ (142,004) $ (165,225) (1,607,425) - - - (302,174) - - - 63,662 (68,483) (7,190) - (2,430) - - 181,650 4,520 - $ 128,872 $ (446,848) $ (101,563)	Total $ 1,318,331 (1,607,425) (302,174) 63,662 (75,673) (2,430) 186,170 $ (419,539)

The exchange differences arising on translation of foreign operation’s net assets from its functional currency to the Parent Company’s presentation currency are recognized directly in other comprehensive income and also accumulated in the foreign currency translation reserve.

Unrealized gain/loss on available-for-sale financial assets represents the cumulative gains or losses arising from the fair value measurement on available-for-sale financial assets that are recognized in other comprehensive income, excluding the amounts recognized in profit or loss for the effective portion from changes in fair value of the hedging instruments. When those available-for-sale financial assets have been disposed of or are determined to be impaired subsequently, the related cumulative gains or losses in other comprehensive income are reclassified to profit or loss.

e. Non-controlling interests


Balance at January 1 Attributable to non-controlling interests: Share of profit for the year Exchange difference arising on translation of foreign entities Gain/(loss) arising on changes in the fair value of available-for-sale financial assets Share of other comprehensive income of associates and jointly controlled entities accounted for using the equity method Actuarial loss on defined benefit plans Gain/(loss) on income tax of other comprehensive income Equity transactions with non-controlling interests (Note 28) Payment to non-controlling cash dividends Balance at December 31	For the Year Ended December 31
		2013 $ 19,961,011 135,643 328,472 11,790 (357) (18,327) (34,371) (13,732,478) (450,532) $ 6,200,851	2012 $ 20,088,166 1,973,937 (416,394) (2,150) 14 (7,318) 23,161 144,435 (1,842,840) $ 19,961,011

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f. Treasury shares

Unit: In Thousands of Shares

	Number of	Increase	Decrease	Decrease	Number of
Purpose of Buy-Back	Shares at	During the	During the		Shares at
(Please Specify Reasons)	January 1	Period	Period		December 31
For the year ended
December 31, 2013
Shares held by its subsidiaries	27,979	139		-	28,118
For the year ended
December 31, 2012
Shares held by its subsidiaries	27,840	139		-	27,979
Shares transferred to employees	30,565	-	30,565		-
	58,405	139	30,565		27,979

The Parent Company’s shares held by its subsidiaries at the end of the reporting periods were as follows:

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

23. REVENUE

REVENUE
Revenue from the sale of goods Power Rental income from property Refer to Note 36 for segment revenue information.	For the Year Ended December 31
		2013 $ 212,915,644 197,313 101,340 $ 213,214,297	2012 $ 215,438,361 483,128 125,521 $ 216,047,010

24. INCOME TAX

a. Income tax recognized in profit or loss

Name of Subsidiary
Number of
Shares Held
(In Thousands)
December 31, 2013
Lite-On Capital Corporation
14,892

LTC International Ltd.
6,900
Yet Foundate Ltd.
2,237
Lite-On Electronics Co., Ltd.
2,414
Lite-On IT Corp.
1,675

December 31, 2012
Lite-On Capital Corporation
14,818

LTC International Ltd.
6,866
Yet Foundate Ltd.
2,226
Lite-On Electronics Co., Ltd.
2,402
Lite-On IT Corp.
1,667

January 1, 2012
Lite-On Capital Corporation
14,744

LTC International Ltd.
6,832
Yet Foundate Ltd.
2,215
Lite-On Electronics Co., Ltd.
2,390
Lite-On IT Corp.
1,659

Carrying
Amount
Market Price
$ 718,857
$ 711,812
297,469
305,906
126,881
90,023
105,515
97,132
85,938

80,066
$ 1,334,660
$ 1,284,939
$ 718,857
$ 571,221
297,469
271,316
126,881
90,511
105,515
97,658
85,938

64,252
$ 1,334,660
$ 1,094,958
$ 718,857
$ 502,769
297,469
258,888
126,881
93,869
105,515
101,281
85,938

56,552
$ 1,334,660
$ 1,013,359

The major components of tax expense were as follows:

Current income tax expense (benefit) Current tax expense recognized in the current year Income tax adjustments on prior years Deferred tax The origination and reversal of temporary differences Investment tax credits Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 2,529,610 (37,022) 2,492,588 120,060 16,640 136,700 $ 2,629,288	2012 $ 2,613,168 (315,175) 2,297,993 (101,299) 257,503 156,204 $ 2,454,197

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

Income before tax Income tax expense at the statutory rate (17%) Tax effect of adjusting items: Tax-exempt income Additional income tax on unappropriated earnings The origination and reversal of temporary differences Income tax adjustments on prior years Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 11,519,779 $ 2,611,542 (156,105) 90,813 120,060 (37,022) $ 2,629,288	2012 $ 11,830,557 $ 2,823,194 (175,681) 223,158 (101,299) (315,175) $ 2,454,197

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

b. Income tax expense recognized in other comprehensive income

Income tax expense recognized in other comprehensive income
Deferred income tax benefit (expense) Translation of foreign operations Related to unrealized gain/loss on available-for-sale financial assets Related to actuarial gain/loss from defined benefit plans Share of other comprehensive income of associates and jointly controlled entities	For the Year Ended		December 31
		2013 $ (409,816) - (2,459) 63 $ (412,212)	2012 $ 203,903 4,520 20,746 - $ 229,169

c. Deferred income tax

The analysis of deferred income tax in the Group only assets was as follows:

December 31,
2013
December 31,
2012
Investment tax credits
$ 48,324
$ 155,133
Temporary differences
Accumulated equity in the net loss of
foreign investees
522,830
459,370
Unrealized loss and expense
475,000
190,792
Impairment loss on assets
298,231
572,053
Unrealized loss on inventories
151,972
161,854
Operating loss carryforward
149,223
58,372
Accrued warranty expense
139,097
127,404
Unrealized for sales returns and allowance
122,972
165,334
Unrealized sales profit
51,236
106,797
Accrued pension cost
42,290
42,224
Accumulated compensated absences
8,204
10,329
Available-for-sale financial assets
4,771
1,483
Others

193,054

164,472

$ 2,207,204
$ 2,215,617

January 1,
2012
$ 468,383
543,620
178,573
174,795
210,972
8,085
159,255
76,462
58,556
44,721
12,069
82,294

98,498
$ 2,116,283

2013 Investment tax credits Temporary differences Accumulated equity in the net loss of foreign investees Unrealized loss and expense Impairment loss on assets Unrealized loss on inventories Operating loss carryforward Accrued warranty expense Unrealized for sales returns and allowance Unrealized sales profit Accrued pension cost Accumulated compensated absences Available-for-sale financial assets Others 2012 Investment tax credits Temporary differences Accumulated equity in the net loss of foreign investees Unrealized loss and expense Impairment loss on assets Unrealized loss on inventories Operating loss carryforward Accrued warranty expense Unrealized for sales returns and allowance Unrealized sales profit Accrued pension cost Accumulated compensated absences Available-for-sale financial assets Others	Opening Balance Recognized in Profit (Loss) Recognized in Other Comprehensive Income (Loss) $ 155,133 $ (108,945 ) $ - 459,370 160,767 (96,292 ) 190,792 291,313 - 572,053 (278,203 ) - 161,854 (10,376 ) - 58,372 92,305 - 127,404 11,880 - 165,334 (43,040 ) - 106,797 (56,450 ) - 42,224 2,525 (2,459 ) 10,329 (2,125 ) - 1,483 3,361 - 164,472 29,725 - $ 2,215,617 $ 92,737 $ (98,751) $ 468,383 $ (306,985 ) $ - 543,620 (107,395 ) 23,819 178,573 11,914 - 174,795 392,292 - 210,972 (46,908 ) - 8,085 49,482 - 159,255 (31,341 ) - 76,462 90,116 - 58,556 47,759 - 44,721 (23,243 ) 20,746 12,069 (1,740 ) - 82,294 (84,038 ) 4,520 98,498 63,999 - $ 2,116,283 $ 53,912 $ 49,085	Exchange Differences $ 2,136 (1,015 ) (7,105 ) 4,381 494 (1,454 ) (187 ) 678 889 - - (73 ) (1,143) $ (2,399) $ (6,265 ) (674 ) 305 4,966 (2,210 ) 805 (510 ) (1,244 ) 482 - - (1,293 ) 1,975 $ (3,663)	Closing Balance $ 48,324 522,830 475,000 298,231 151,972 149,223 139,097 122,972 51,236 42,290 8,204 4,771 193,054
			$ 2,207,204
			$ 155,133 459,370 190,792 572,053 161,854 58,372 127,404 165,334 106,797 42,224 10,329 1,483 164,472
			$ 2,215,617

The analysis of deferred income tax in the Group only liabilities was as follows:

December 31, 2013 December 31, 2012 Temporary differences Accumulated equity in the net gain of investees $ 2,080,163 $ 1,587,279 Land value increment tax 239,693 239,693 Unrealized amortization of goodwill 334,048 301,814 Available-for-sale financial assets - 3,361 Others 67,752 37,906 $ 2,721,656 $ 2,170,053	January 1, 2012 $ 1,623,594 239,693 254,411 - 20,240 $ 2,137,938

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2013 Temporary differences Accumulated equity in the net gain of investees Land value increment tax Unrealized amortization of goodwill Available-for-sale financial Others 2012 Temporary differences Accumulated equity in the net gain of investees Land value increment tax Unrealized amortization of goodwill Available-for-sale financial Others	Opening Balance Recognized in (Profit) Loss Recognized in Other Comprehensive Loss (Income) $ 1,587,279 $ 173,508 $ 313,461 239,693 - - 301,814 29,655 - 3,361 (3,294 ) - 37,906 29,568 - $ 2,170,053 $ 229,437 $ 313,461 $ 1,623,594 $ 144,786 $ (180,084 ) 239,693 - - 254,411 44,796 - - 3,287 - 20,240 17,247 - $ 2,137,938 $ 210,116 $ (180,084)	Exchange Differences $ 5,915 - 2,579 (67 ) 278 $ 8,705 $ (1,017 ) - 2,607 74 419 $ 2,083	Closing Balance $ 2,080,163 239,693 334,048 - 67,752 $ 2,721,656 $ 1,587,279 239,693 301,814 3,361 37,906 $ 2,170,053

d. As of December 31, 2013 and 2012 and January 1, 2012, the aggregate deductible temporary differences for which no deferred income tax assets have been recognized amounted to NT$616,546 thousand, NT$567,729 thousand and NT$628,788 thousand, respectively.
e. Integrated income tax

Unappropriated earnings Unappropriated earnings generated before January 1, 1998 Unappropriated earnings generated on and after January 1, 1998 Imputation credits accounts	December 31, 2013 $ 2,215 12,169,867 $ 12,172,082 $ 568,173	December 31, 2012 January 1, 2012 $ 2,215 $ 2,215 13,652,397 12,390,715 $ 13,654,612 $ 12,392,930 $ 485,212 $ 514,845

The estimated and actual creditable ratio for distribution of earnings of 2013 and 2012 were 3.71% and 3.46%, respectively.

Under the Income Tax Law, for distribution of earnings generated after January 1, 1998, the imputation credits allocated to ROC resident shareholders of the Parent Company was calculated based on the creditable ratio as of the date of dividend distribution. The actual imputation credits allocated to shareholders of the Parent Company was based on the balance of the Imputation Credit Accounts (ICA) as of the date of dividend distribution. Therefore, the expected creditable ratio for the 2013 earnings may differ from the actual creditable ratio to be used in allocating imputation credits to the shareholders.

f. Income tax assessments

The tax authorities have examined the income tax returns of the Parent Company through 2011. The Corporation disagreed with the tax authorities’ assessment of its 2009 to 2011 tax returns and applied for a reexamination. The Parent Company has made a provision for the income tax assessed.

25. EARNINGS PER SHARE

EARNINGS PER SHARE
Basic earnings per share Diluted earnings per share	Unit: NT$ Per Share For the Year Ended December 31
		2013 $ 3.83 $ 3.79	2012 $ 3.25 $ 3.20

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share from continuing operations were as follows:

Amounts
(Numerator)
Shares
(Denominator)
(Thousands)
Earnings
Per Share
(NT$)
$ 8,754,848
2,286,684
$ 3.83
-
24,733

-

-
$ 8,754,848

2,311,417
$ 3.79
$ 7,402,423
2,276,009
$ 3.25
-
34,342

-

-
$ 7,402,423

2,310,351
$ 3.20

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If the Parent Company was able to settle the bonuses paid to employees by cash or shares, the Parent Company presumed that the entire amount of the bonus would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, if the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

Options granted in December 2007 were priced using the (Binomial option pricing model) and the inputs to the model were as follows:

the model were as follows:
	December 31,
	2007
Expected volatility	40.07%
Expected life (years)	6 years
Expected dividend yield	7.07%
Risk-free interest rate	2.5101%

27. DISPOSAL OF SUBSIDIARY

26. SHARE-BASED PAYMENT ARRANGEMENTS

Employee Share Option Plan

Qualified employees of the Parent Company and its subsidiaries were granted 30,000 options in December 2007. Each option entitles the holder to subscribe for one thousand common shares of the Parent Company. The options granted are valid for 6 years and exercisable at certain percentages after the second, third and fourth anniversary from the grant date. The options were granted at an exercise price equal to the closing price of the Parent Company’s common shares listed on the grant date. For any subsequent changes in the Parent Company’s capital surplus, the exercise price is adjusted accordingly.

Information on employee share options was as follows:

Employee Share Option Plan Balance at January 1 Options exercised Options expired Balance at December 31 Weighted-average fair value of options granted (NT$)	For the Year Ended December 31	For the Year Ended December 31
	2013 Number of Options (In Thousands) Weighted- average Exercise Price (NT$) $ 17,724 $35.5 (16,468) 33.7-35.5 (1,256) 33.7-35.5 $ - - $ 16.964	2012
		Number of Options (In Thousands) Weighted- average Exercise Price (NT$) 19,819 $38.0 (766) 35.5-38.0 (1,329) 35.5-38.0 $ 17,724 35.5 $ 16.964

Information about outstanding options at the end of the reporting period was as follows:

December 31, 2013 Range of Exercise Price (NT$) Weighted- average Remaining Contractual Life (Years) $33.7 0	December 31, 2012 Range of Exercise Price (NT$) Weighted- average Remaining Contractual Life (Years) $35.5 1	January 1, 2012
		Range of Exercise Price (NT$) Weighted- average Remaining Contractual Life (Years) $38.0 2

On December 11, 2013, subsidiary Lite-On Green Technologies B.V. disposed of its 100% ownership in Lite-On Green Technologies S.R.L. Lite-On Green Technologies B.V. lost its control over Lite-On Green Tecnologies S.R.L.; thus, the relevant assets and liabilities had been derecognized.

a. Consideration received from the disposal

Consideration received from the disposal
	December 11,
		2013
Sales proceeds receivable	$	437,888
Analysis of asset and liabilities on the date control was lost
	December 11,
		2013
Current assets
Cash and cash equivalents	$	31,454
Prepayments		63,236
Others		18,746
Non-current assets
Property, plant and equipment		1,047,048
Current liabilities
Payables		(583,167)
Others		(44,347)
Net assets disposed of	$	532,970
Loss on disposal of subsidiary
	For the Year
		Ended
	December 31,
		2013
Net assets disposed of	$	532,970
Less: Consideration received		437,888
Loss on disposal (recorded as nonoperating income and expense: Other expenses)$		95,082

b. Analysis of asset and liabilities on the date control was lost

c. Loss on disposal of subsidiary

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d. Net cash outflow on disposal of subsidiary

Net cash outflow on disposal of subsidiary
	For the Year
		Ended
	December 31,
		2013
Consideration received in cash and cash equivalents	$	437,888
Less: Cash and cash equivalent balances disposed of		31,454
Sales proceeds receivable		437,888
	$	31,454

29. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance.

The Group’s capital management system aims to ensure that the necessary financial resources and operating plan are enough to meet the next 12 months’ requirements for working capital, capital expenditures, research and development expenses, debt repayment, dividend expenses and other need.

30. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments

28. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

1) Fair value of financial instruments not carried at fair value

In March 2012, the Parent Company disposed of 2.21% of its interest in Silitech Technology Crop. Limited, and reduced its continuing interest from 34.90 % to 32.69%.

In March to December 2013, the Parent Company acquired an additional 56.8% equity interest in Lite-On IT Corporation. Limited, and increased its continuing interest from 42.33 % to 99.13%.

The fair value of financial instruments not carried at fair value was finance lease payables. The Group’s management considers the carrying amounts of finance lease payables recognized in the financial statements approximate their fair values.

2) Fair value measurements recognized in the consolidated balance sheets

The above transactions were accounted for as equity transactions, since the Group did not cease to have control over these subsidiaries.

Cash consideration received (paid) The proportionate share of the carrying amount of the net assets of the subsidiary transferred to (from) non-controlling interests Reattribution of other equity to (from) non-controlling interests Exchange differences arising on the translation of the financial statements of foreign operations Differences arising from equity transaction Silitech Technology Crop. Line items adjusted for equity transaction Capital surplus - difference between consideration and carrying amounts adjusted arising from changes in percentage of ownership in subsidiaries $ 146,193 Retained earnings - $ 146,193	Silitech Technology Crop $ 288,198 (144,435) 2,430 $ 146,193 Lite-On IT Corporation $ (146,193) (3,293,007) $ (3,439,200)	Lite-On IT Corporation $ (17,171,678) 13,732,478 - $ (3,439,200) Total $ - (3,293,007) $ (3,293,007)

a) Level 1 fair value measurements are those derived from quoted prices in active markets for identical assets or liabilities;
b) Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
c) Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

December 31, 2013

Financial assets at FVTPL Derivative financial assets Financial liabilities at FVTPL Derivative financial liabilities Available-for-sale financial assets Securities listed in ROC - equity securities Securities listed in other countries - equity securities Unlisted securities - ROC - equity securities Unlisted securities - other countries - equity securities Mutual funds Emerging market stocks	Level 1 $ - $ - $ 1,182,391 41,657 - - - - $ 1,224,048	Level 2 $ 14,867 $ 27,836 $ - - - - 127,705 178,716 $ 306,421	Level 3 $ - $ - $ - - 289,160 324,374 - - $ 613,534	Total $ 14,867
				$ 27,836
				$ 1,182,391 41,657 289,160 324,374 127,705 178,716
				$ 2,144,003

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December 31, 2012

For the year ended December 31, 2012

Financial assets at FVTPL Derivative financial assets Financial liabilities at FVTPL Derivative financial liabilities Available-for-sale financial assets Securities listed in ROC - equity securities Securities listed in other countries - equity securities Unlisted securities - ROC - equity securities Unlisted securities - other countries - equity securities Mutual funds Emerging market stocks January 1, 2012 Financial assets at FVTPL Derivative financial assets Financial liabilities at FVTPL Derivative financial liabilities Available-for-sale financial assets Securities listed in ROC - equity securities Securities listed in other countries - equity securities Unlisted securities - ROC - equity securities Unlisted securities - other countries - equity securities Mutual funds Emerging market stocks	Level 1 $ - $ - $ 903,046 35,957 - - - - $ 939,003 Level 1 $ - $ - $ 1,898,101 145,291 - - - - $ 2,043,392	Level 2 $ 13,023 $ 35,239 $ - - - - 106,310 310,657 $ 416,967 Level 2 $ 111,584 $ 42,274 $ - - - - 749,051 437,953 $ 1,187,004	Level 3 $ - $ - $ - - 481,785 316,720 - - $ 798,505 Level 3 $ - $ - $ - - 851,972 188,967 - - $ 1,040,939	Total $ 13,023 $ 35,239 $ 903,046 35,957 481,785 316,720 106,310 310,657 $ 2,154,475 Total $ 111,584 $ 42,274 $ 1,898,101 145,291 851,972 188,967 749,051 437,953 $ 4,271,335

There were no transfers between Level 1 and 2 in the current and prior periods.

3) Reconciliation of Level 3 fair value measurements of financial assets

For the year ended December 31, 2013

Balance at January 1, 2013 Impairment loss In profit or loss In other comprehensive income Disposals Balance at December 31, 2013	Investments on Equity Instruments
	Unlisted Quotes $ 798,505 (108,929) 8,539 (84,581) $ 613,534

For the year ended December 31, 2012
Balance at January 1, 2012 Impairment loss In profit or loss In other comprehensive income Purchases Balance at December 31, 2012	Investments on Equity Instruments
	Unlisted Quotes $ 1,040,939 (470,187) (9,059) 236,812 $ 798,505

The total gains or losses for the period included a loss of NT$108,929 thousand and NT$470,187 thousand relating to assets held years ended December 31, 2013 and 2012. Such fair value gains or losses were included in impairment losses.

4) Valuation techniques and assumptions applied for the purpose of measuring fair value

The fair values of financial assets and financial liabilities were determined as follows:

a) The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices;
b) The fair values of derivative instruments were calculated using quoted prices. Where such prices were not available, a discounted cash flow analysis was performed using the applicable yield curve for the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives.
c) The fair values of other financial assets and financial liabilities (excluding those described above) were determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
b. Categories of financial instruments

Categories of financial instruments
	December 31,		December 31,
		2013		2012	January 1, 2012
Financial assets
Fair value through profit or loss (FVTPL)
derivative instruments	$	14,867	$	13,023	$	111,584
Loans and receivables (i)		118,188,950		107,257,401		104,139,455
Available-for-sale financial assets		2,144,003		2,154,475		4,271,335
Financial liabilities
Fair value through profit or loss (FVTPL)
derivative instruments		27,836		35,239		42,274
Derivative instruments in designated hedge
accounting relationships		46,969		101,563		165,225
Amortized cost
Short-term borrowings		15,576,780		7,010,394		4,737,488
Long-term loans (included current portion
of long-term debts)		27,376,165		24,367,802		24,468,437
Payables (ii)		81,803,105		68,692,057		79,830,312

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i: The balances included cash and cash equivalents, debt investments with no active market, notes receivable, trade receivables, trade receivables - inter, other receivables and other receivables - inter.
ii: The balances included notes payable, trade payables, trade payables - inter, other payables and other payables - inter.
c. Financial risk management objectives and policies

The Group’s major financial instruments include equity investments, trade receivable, trade payables, borrowings. The Group’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Group sought to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives was governed by the Group’s policies approved by the board of directors, which provided written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits was reviewed by the internal auditors on a continuous basis. The Group did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). The Group entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including:

a) Forward foreign exchange contracts to hedge the exchange rate risk arising on the export;
b) Interest rate swaps to mitigate the risk of rising interest rates; and

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

a) Foreign currency risk

Several subsidiaries of the Parent Company had foreign currency sales and purchases, which exposed the Group to foreign currency risk. Exchange rate exposures were managed within approved policy parameters utilizing forward foreign exchange contracts.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period (Note 34).

The carrying amounts of the Group’s derivatives exposed to foreign currency risk at the end of the reporting period were as follows.

		December 31,	December	31,
		2013	2012		January 1, 2012
Assets
USD		$ 10,753	$ 13,023		$ 88,771
EUR		3,619		-	13,383
CNY		495		-	-
JPY		-		-	9,430
Liabilities
USD		17,516	29,140		32,495
EUR		10,090	6,050		-
GBP		230		-	-
JPY		-	49		9,779
Sensitivity	analysis

The Group was mainly exposed to the Currency USD.

The following table details the Group’s sensitivity to a 5% increase and decrease in New Taiwan dollars (the functional currency) against the relevant foreign currencies. The sensitivity analysis included only outstanding foreign currency denominated monetary items A positive number below indicates an increase in pre-tax profit and other equity associated with New Taiwan dollars strengthen 5% against the relevant currency.

For a 5% weakening of New Taiwan dollars against the relevant currency, there would be an equal and opposite impact on pre-tax profit and other equity and the balances below would be negative.

Profit or loss		Currency USD Impact	Currency USD Impact
		2013 $ (657,995)	2012 $ (553,417)

b) Interest rate risk

The Group was exposed to interest rate risk because entities in the Group borrowed funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings, and using interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

The Group required all its group entities to use foreign exchange forward contracts to eliminate currency exposure. It is the Group’s policy to negotiate the terms of the hedge derivatives to match the terms of the hedged item to maximize hedge effectiveness.

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The carrying amount of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows.

	December 31,	December 31,	December 31,	December 31,
		2013		2012	January 1, 2012
Fair value interest rate risk
Financial assets (i)	$	31,433,426	$	37,882,125	$ 31,617,845
Financial liabilities (ii)		16,570,115		11,226,695	8,460,842
Cash flow interest rate risk
Financial assets (iii)		32,826,589		21,017,052	22,226,441
Financial liabilities (iv)		26,628,513		20,446,598	21,150,350

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 7% higher, the pre-tax other comprehensive income for the years ended December 31, 2013 and 2012 would increase by NT$85,683 thousand and NT$65,730 thousand as a result of the changes in fair value of available-for-sale shares.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group.

i: The balances included time deposit and debt investments with no active market
ii: The balances included financial liabilities exposed to fair value risk from interest rate fluctuation.
iii: The balances included demand deposits.
iv: The balances included financial liabilities exposed to cash flow risk from interest rate fluctuation.

The Parent Company aims to keep borrowings at variable rates. In order to achieve this result, the Parent Company entered into interest rate swaps to hedge its exposures to changes in fair values of the borrowings. The critical terms of these interest rate swaps are similar to those of hedged borrowings. These interest rate swaps were designated as effective hedging instruments and hedge accounting is used.

The Parent Company was also exposed to cash flow interest rate risk in relation to variable-rate bank borrowings and pay-fixed/receive-floating interest rate swaps. It is the Parent Company’s policy to keep its borrowings at floating rate of interests so as to minimize the fair value interest rate risk. The Parent Company’s cash flow interest rate risk was mainly concentrated in the fluctuation of the average rate for 90-day notes in Taiwan’s secondary market arising from the Group’s New Taiwan dollars denominated borrowings.

Sensitivity analysis

The sensitivity analyses below were determined based on the Group’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.

If interest rates had been 25 basis points higher and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2013 and 2012 would increase by NT$15,495 thousand and NT$1,426 thousand.

c) Other price risk

The Group is exposed to credit risk from trade receivables, deposits, and other financial instruments. Credit risk on business-related exposures is managed separately from that on financial-related exposures.

a) Business related credit risk

To maintain the quality of receivables, the Group has established operating procedures to manage credit risk.

For individual customers, risk factors considered include the customer’s financial position, credit rating agency rating, the Group’s internal credit rating, and transaction history as well as current economic conditions that may affect the customer’s ability to pay. The Group also has the right to use some credit protection enhancement tools, such as requiring advance payments, to reduce the credit risks involving certain customers.

b) Financial credit risk

Bank deposits and other financial instruments are credit risk sources required by the Parent Company’s Department of Finance Department to be measured and monitored. However, since the Group’s counter-parties are all reputable financial institutions and government agencies, there is no significant financial credit risk.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations.

The objective of liquidity risk management, the department is required to maintain operating cash and cash equivalents, in order to ensure that the combined company has sufficient financial flexibility.

a) Liquidity and interest risk rate tables

The table below summarizes the maturity profile of the Company’s non-derivative financial liabilities based on contractual undiscounted payments.

The Group was exposed to equity price risk through its investments in listed equity securities. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments.

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Lite-On Technology Corporation 2013 Annual Report

December 31, 2013

Weighted Average Effective Interest Rate (%) Non-derivative financial liabilities Non-interest bearing - Finance lease liabilities 1.30%-7.11% Fixed interest rate liabilities 0.745%-2.7% Variable interest rate liabilities 0.86%-1.55% December 31, 2012	On Demand or Less than 1 Year $ 81,803,105 72,735 11,286,074 13,158,375 $ 106,320,289	1-3 Years $ 80,745 172,948 9,102,439 3,078,083 $ 12,434,215	3 Years to 5 Years $ - - 6,240,000 87,974 $ 6,327,974	5+ Years $ 863 - - -
				$ 863

Weighted Average Effective Interest Rate (%) Non-derivative financial liabilities Non-interest bearing - Finance lease liabilities 1.3%-15.6% Fixed interest rate liabilities 0.01%-1.610% Variable interest rate liabilities 1.10%-1.75% January 1, 2012	On Demand or Less than 1 Year $ 68,692,057 62,381 6,700,998 4,720,564 $ 80,176,000	1-3 Years $ 88,247 232,716 6,276,000 6,207,670 $ 12,804,633	3 Years to 5 Years $ - - 7,469,600 3,364 $ 7,472,964	5+ Years $ 821 - - -
				$ 821

Weighted Average Effective Interest Rate (%) Non-derivative financial liabilities Non-interest bearing - Finance lease liabilities 1.3%-15.6% Fixed interest rate liabilities 0.01%-1.74% Variable interest rate liabilities 1.10%-8.235%	On Demand or Less than 1 Year $ 79,830,312 84,360 4,169,955 1,741,006 $ 85,825,633	1-3 Years $ 84,289 320,907 2,726,794 295,054 $ 3,427,044	3 Years to 5 Years $ - - 14,253,601 6,019,515 $ 20,273,116	5+ Years $ 935 - - -
				$ 935

The table below summarizes the maturity profile of the Group’s financial instruments on undiscounted contract payments.

December 31, 2013

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On Demand
or Less than 3 Years to
1 Year 1-3 Years 5 Years 5+ Years
Forward exchange contracts
Inflows $ 649,675 $ - $ - $ -
Outflows (655,200) - - -
(5,525) - - -
(Continued)
----- End of picture text -----

Currency swap contracts Inflows Outflows December 31, 2012 Forward exchange contracts Inflows Outflows Currency swap contracts Inflows Outflows January 1, 2012 Forward exchange contracts Inflows Outflows Currency swap contracts Inflows Outflows	On Demand or Less than 1 Year $ 1,451,250 (1,455,348) (4,098) $ (9,623) On Demand or Less than 1 Year $ 768,527 (764,314) 4,213 1,840,192 (1,850,325) (10,133) $ (5,920) On Demand or Less than 1 Year $ 784,113 (628,849) 155,264 2,563,951 (2,494,563) 69,388 $ 224,652	1-3 Years $ - - $ - 1-3 Years $ - - - - - $ - 1-3 Years $ - - - - - $ -	3 Years to 5 Years 5+ Years $ $ - - - - $ - $ - (Concluded) 3 Years to 5 Years 5+ Years $ - $ - - - - - - - - - $ - $ - 3 Years to 5 Years 5+ Years $ - $ - - - - - - - - - $ - $ -

31. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Parent Company and its subsidiaries, which were related parties of the Parent Company, had been eliminated on consolidation and are not disclosed in this note.

a. Sales of goods

Related parties categories Associates Other related parties	For the Year Ended	For the Year Ended	December 31
		2013 $ 234,637 476 $ 235,113	2012 $ 262,545 492 $ 263,037

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The price of the Group’s sales to Lite-On Semiconductor Corp. For the years ended December 31, 2013 and 2012, price was calculated at cost plus specific profit. Except for these sales, the sales terms between the Group and its related parties were normal.

Operating lease contracts with related parties were based on market prices and made under normal terms.

b. Purchases of goods

Related parties categories Other related parties Associates	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 $ 1,949,975 1,069,126 $ 3,019,101	2012 $ 2,811,111 282,510 $ 3,093,621

The cost of the Group’s purchases from Lite-On Semiconductor Corp. for the year ended December 31 in 2013 and 2012 was based on cost plus specific profit. Except for these purchases, the purchase terms between the Group and its related parties were normal.

c. Receivables from related parties

Receivables from related parties
	December 31,	December 31,
	2013		2012	January 1, 2012
Related parties categories
Accounts receivable
Associates	$ 81,025	$	82,892	$	353
Other related parties	529		529		746
	$ 81,554	$	83,421	$	1,099
Other receivable
Other related parties	$ 18,162	$	236	$	-
Associates	789		1,995		955
	$ 18,951	$	2,231	$	955
Payables to related parties
	December 31,	December 31,
	2013		2012	January 1, 2012
Related parties categories
Accounts payable
Associates	$ 315,595	$	103,231	$	273,160
Other related parties	253,029		34,692		44,348
	$ 568,624	$	137,923	$	317,508

d. Payables to related parties

December 31, 2013 Other payable Other related parties $ 11,038 Associates 661 $ 11,699 Operating expense Related parties categories Other related parties Other revenues Related parties categories Other related parties Associates	December 31, 2012 January 1, 2012 $ 20,135 $ 43,058 38 - $ 20,173 $ 43,058 (Concluded) For the Year Ended December 31	December 31, 2012 January 1, 2012 $ 20,135 $ 43,058 38 - $ 20,173 $ 43,058 (Concluded) For the Year Ended December 31	December 31, 2012 January 1, 2012 $ 20,135 $ 43,058 38 - $ 20,173 $ 43,058 (Concluded) For the Year Ended December 31
	2013 $ 95,669 For the Year Ended		2012 $ 123,437 December 31
		2013 $ 4,664 3,570 $ 8,234	2012 $ 1,506 3,598 $ 5,104

e. Operating expense

f. Other revenues

g. Compensation of key management personnel

Short-term employee benefits Termination benefits Share-based payments Post-employment benefits	For the Year Ended	For the Year Ended	December 31
		2013 $ 622,153 54,692 869 9,506 $ 687,220	2012 $ 649,699 16,078 3,202 9,079 $ 678,058

The remuneration of directors and key executives was determined by the remuneration committee having regard to the performance of individuals and market trends.

32. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

		December 31,	December 31,	December 31,
			2013	2012	January 1, 2012
Pledge-time	deposits	$	36,490	$ 102,560	$ 108,107

(Continued)

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Mortgaged or pledged assets - noncurrent included the guarantee deposits of Lite-On IT Corporation, Philips & Lite-On Digital Solutions Corporation, Logah Electronics (Su Zhou) Co., Ltd. and Lippo Electronics (Su Zhou) Co., Ltd. provided to a supplier and the export customs agency for shipment clearance in advance of customs duty payments.

33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

a. In May 2010, INPRO II Licensing Sarl (INPRO) filed a lawsuit with the U.S. District Court for the Northern District of California and charged the Parent Company with breach of contract. INPRO alleged that the Parent Company incurred a debt on patent rights obtained from Hitachi Limited. INPRO also claimed it had assumed Hitachi’s rights to payments for patent use. But because of the court’s lack of jurisdiction, INPRO dismissed the case later. On September 3, 2010, the Parent Company filed a lawsuit with the Intellectual Property Court (“IP Court”) in Taiwan against INPRO, alleging that the Parent Company had no patent obligations. On September 8, 2010, INPRO filed a lawsuit with the Superior Court of California (SCC) in the County of San Francisco. In December 2010, the SCC ruled that the U.S. proceedings in the U.S. should be stopped because the same facts had been filed with the IP Court in Taiwan. In July 2012, INPRO file a counterclaim with the IP Court in Taiwan and demanded a royalty payment of US$5.4 million. In June 2013, on the basis of its presentence investigation, the IP Court made a final judgment in favor of INPRO and ruled that the Parent Company should pay royalties of US$5.4 million plus interest. In July 2013, the Parent Company filed an appeal, claiming that the Parent Company had no patent obligations under the former patent licensing contract. Parent Company accrued a reasonable amount in case of a loss on this lawsuit. Parent Company will continue to recognize the losses based upon reasonable estimation of the lawsuit quarterly until the settlement of this lawsuit.
b. In October 2009, the U.S. Department of Justice (DOJ) announced that it would make antitrust -
investigations of CD-ROM factories. Lite-On IT Corp. (“Lite On IT”) received an investigation notice from the DOJ. Lite-ON IT stated it would cooperate with the DOJ in the investigation. This case was still in the preliminary stage, but Lite-On IT believes that the case will not have a significant impact on the financial operations.
c. The European Commission issued a Statement of Objection to some CD-ROM factories to make -
antitrust investigations in the third quarter of 2012. When Lite-On IT Corp. (“Lite On IT”) received in July 2012 the investigation notice from the European Commission, it stated that it would cooperate with the European Commission in the investigation. Lite-On IT has assigned lawyers to deal with the lawsuits. These cases were still in proceeding, but Lite-On IT believes that the case will not have a significant impact on the financial operations.
d. CMP Consulting Service, Inc., KI, Inc., Aaron Wagner, The Stereo Shop, David Carney, Jr. Tina Corse, Cynthia R. Rall, Richard R. Rall, Aaron Deshaw and Don Cheung filed an antitrust group lawsuit against Lite-On IT and its subsidiaries - Philips & Lite-On Digital Solutions Corporation, Philips & Lite-On Digital Solutions USA, Inc. and other companies with related businesses - with a court in California, from October 2009 to September 2010. Although the outcome of the proceedings had not been determined, Lite-On IT accrued a reasonable amount in case of a loss on this lawsuit. Lite-On IT will continue to recognize the losses based upon reasonable estimation of the lawsuit quarterly until the settlement of this lawsuit.
e. On May 13, 2013, Dell Inc. and Dell Products L.P. filed a complaint with the United States District Court for Western District of Texas; on October 24, 2013, Hewlett Packard Company filed a complaint with the United States District Court for Southern District of Texas; on October 25, 2013, Acer Inc, Acer America Corporation, Gateway Inc and Gateway U.S. Retail, Inc. filed a complaint with the United States District Court for the Northern District of California; on October 31, 2013, Ingram Micro Inc., and Synnex Corporation filed a complaint with the United States District Court for the Central District of California. All these complaints constituted an antitrust group lawsuit against Lite-On IT and other companies with related businesses. Lite-On IT assigned lawyers as its representative in

these lawsuits. Although the outcome of the proceedings had not been determined, Lite-On IT accrued a reasonable amount in case of a loss on this lawsuit. Lite-On IT will continue to recognize the losses based upon reasonable estimation of the lawsuit quarterly until the settlement of this lawsuit.

f. In April 2010, petitioner Carlos Fogelman filed a motion for authorization to institute class action antitrust proceedings with the Superior Court of Quebec in the district of Montreal. In June 2010, the Fanshawe College of Applied Arts and Technology filed a statement of claim in Ontario court. In September 2010, Neil Godfrey filed a statement of claim with the Superior Court of British Columbia. In September 2011, Donald Woligroski filed a statement of claim in Manitoba court. All plaintiffs filed the antitrust group lawsuit against Lite-On IT Corporation and its subsidiaries - Philips & Lite-On Digital Solutions USA, Inc. and other companies with related businesses. Although the outcome of the proceedings had not been determined, Lite-On IT accrued a reasonable amount in case of a loss on this lawsuit. Lite-On IT will continue to recognize the losses based upon reasonable estimation of the lawsuit quarterly until the settlement of this lawsuit.
g. In April 2011, Orinda Intellectual Properties USA Holding Group, Inc. instituted class action proceedings against Lite-On IT Corp., Lite-On Americans, Inc. and other companies with related businesses, with the United States District Court for the Northern District of California, alleging infringement of a single patent on Blue-ray discs. Lite-On IT has assigned lawyers to deal with the lawsuits. In December 2011, the United States Patent and Trademark office determined that the case has no validity. The plaintiff has filed an appeal, and the legal research for the validity remains to be completed. The legal procedure will be postponed accordingly. The outcome cannot be determined, but Lite-On IT believes that the case will not have a significant impact on the financial operations.
h. On July 23, 2013, Lake Cherokee Hard Drive Technologies, instituted class action proceedings against Lite-On Sales & Distribution Inc. and other companies with related businesses, with the United States District Court for Eastern District of Texas, alleging infringement of patent. These cases were still in the preliminary stage, and Lite-On IT could not estimate the outcome of the case or amount of possible loss.

34. EXCHANGE RATE OF FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The significant financial assets and liabilities denominated in foreign currencies were as follows:

Financial assets Monetary items USD INR THB HKD EUR Non-monetary items USD JPY HKD EUR	December 31, 2013 Foreign Currencies Exchange Rate $ 2,834,676 29.8050 1,939,704 0.4821 720,707 0.9081 175,896 3.8436 106,441 41.0623 8,860 29.8050 6,348 0.2842 5,838 3.8436 - 41.0623	December 31, 2012 Foreign Currencies Exchange Rate $ 1,726,192 29.0400 2,170,846 0.5299 370,358 0.9506 190,306 3.7464 51,370 38.4780 40,332 29.0400 4,554 0.3364 5,900 3.7464 960 38.4780	January 1, 2012
			Foreign Currencies Exchange Rate $ 2,406,629 30.2680 2,586,306 0.5678 509,548 0.9609 214,211 3.8956 129,898 39.1668 141,784 30.2680 55,944 0.3903 54,050 3.8956 17,490 39.1668 (Continued)

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36. OPERATING SEGMENT INFORMATION

Financial liabilities Monetary items USD INR JPY THB EUR	December 31, 2013 Foreign Currencies Exchange Rate $ 3,276,209 29.8050 972,394 0.4821 319,678 0.2842 239,047 0.9081 122,758 41.0623	December 31, 2012 Foreign Currencies Exchange Rate $ 2,107,333 29.0400 2,491,401 0.5299 1,075,705 0.3364 193,477 0.9506 70,961 38.4780	January 1, 2012
			Foreign Currencies Exchange Rate $ 8,689,211 30.2680 1,309,431 0.5678 1,948,319 0.3903 143,239 0.9609 174,281 39.1668 (Concluded)

35. SEPARATELY DISCLOSED ITEMS

a. Information on significant transactions and information on investees:
1) Lending funds to others: Note 4 to the financial statements
2) Providing endorsements or guarantees for others: Note 4 to the financial statements
3) Holding of securities at the end of the period: Note 4 to the financial statements
4) Aggregate purchases or sales of the same securities reaching NT$300 million or 20 percent of paid-in capital or more: Note 4 to the financial statements
5) Acquisition of real estate reaching NT$300 million or 20 percent of paid-in capital or more: None
6) Disposal of real estate reaching NT$300 million or 20 percent of paid-in capital or more: Note 4 to the financial statements
7) Purchases or sales of goods from or to related parties reaching NT$100 million or 20 percent of paid-in capital or more: Note 4 to the financial statements
8) Trade receivables from related parties reaching NT$100 million or 20 percent of paid-in capital or more: Note 4 to the financial statements
9) Information on investees: Note 4 to the financial statements
10) Trading in derivative instruments: Notes 7, 9 and 30 to the financial statements
b. Information on investments in mainland China:
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. Note 4 to the financial statements
2) Significant direct or indirect transactions with the investee, prices, payment terms and unrealized gain or loss: Note 4 to the financial statements

The Group’s reportable segments were Optoelectronics and Communications, IT Products and Optical Storage segments. These segments mainly performance were as follows:

a. Optoelectronics and communications: Produce LEDs, designs and mass-manufactures of phone camera modules;
b. IT Products: Provides a full range products for Computing, Server and Networking; manufactures and sells multifunction and all-in-one printers.
c. Optical Storage: Manufactures and sells CD-ROM, CD-RW, and DVD-ROM as well as more advanced products.

The Group also had other operating segments that did not exceed the quantitative threshold. These segments mainly engage in the LED Transit Modules, Automotive Electronics, and renewable energy and efficiency related technologies and products.

The Group uses net profit as the measurement for segment profit and the basis of performance assessment. There was no material inconsistency between the accounting policies of the operating segment and the accounting policies described in Note 4.

The Group’s operating segment information is as follows:

a. Industry financial information

Foundry IT Products Photoelectric 2013 Sales from external customers $ 66,334,325 $ 90,553,985 $ 44,382,462 $ Sales among segments 1,473,214 2,183,250 9,889 Operating profit (loss) 3,223,083 6,560,810 1,932,298 Segment assets 56,313,299 53,851,411 39,658,343 2012 Sales from external customers 41,144,029 84,671,825 50,462,897 Sales among segments 1,395,417 2,251,655 8,276 Operating profit (loss) 3,417,166 6,210,560 2,672,385 Segment assets 41,189,058 48,517,842 41,403,932 Geographic information Sales to Other Than Consolidated Entities 2013 2012 Asia $ 150,692,417 $ 156,544,176 United States 37,792,454 23,806,841 Europe 24,186,976 20,539,434 Others 542,450 15,156,559 $ 213,214,297 $ 216,047,010	Foundry IT Products Photoelectric 2013 Sales from external customers $ 66,334,325 $ 90,553,985 $ 44,382,462 $ Sales among segments 1,473,214 2,183,250 9,889 Operating profit (loss) 3,223,083 6,560,810 1,932,298 Segment assets 56,313,299 53,851,411 39,658,343 2012 Sales from external customers 41,144,029 84,671,825 50,462,897 Sales among segments 1,395,417 2,251,655 8,276 Operating profit (loss) 3,417,166 6,210,560 2,672,385 Segment assets 41,189,058 48,517,842 41,403,932 Geographic information Sales to Other Than Consolidated Entities 2013 2012 Asia $ 150,692,417 $ 156,544,176 United States 37,792,454 23,806,841 Europe 24,186,976 20,539,434 Others 542,450 15,156,559 $ 213,214,297 $ 216,047,010	Others Elimination Total 11,943,525 $ - $ 213,214,297 264,920 (3,931,273 ) - (2,825,700 ) - 8,890,491 65,028,154 (2,489,721 ) 212,361,486 39,768,259 - 216,047,010 275,674 (3,931,022 ) - (2,923,751 ) - 9,376,360 67,822,835 (1,878,053 ) 197,055,614 Non-current Assets	Others Elimination Total 11,943,525 $ - $ 213,214,297 264,920 (3,931,273 ) - (2,825,700 ) - 8,890,491 65,028,154 (2,489,721 ) 212,361,486 39,768,259 - 216,047,010 275,674 (3,931,022 ) - (2,923,751 ) - 9,376,360 67,822,835 (1,878,053 ) 197,055,614 Non-current Assets
		2013 $ 47,597,784 169,092 8,474,404 - $ 56,241,280	2012 $ 55,598,984 467,530 2,252,862 105,251 $ 58,424,627

b. Geographic information

The geographic information is presented by billing regions. Noncurrent assets include properties, intangible assets and other assets.

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c. Production information

The Group mainly engages in manufacturing optoelectronics and network, system integration, optical storage, LED transit modules, automotive electronics, renewable energy and efficiency-related technologies and products, etc.

Employee benefits

The Group elected to recognize all cumulative actuarial gains and losses in retained earnings as of the date of transition. In addition, the Group elected to apply the exemption disclosure requirement provided by IFRS 1, in which the experience adjustments are determined for each accounting period prospectively from the transition date.

d. Major customers representing at least 10% of gross sales

c. Impact on the transition to IFRSs

Customer A		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 Amount % $ - -		2012
				Amount % $ 26,355,806 12

There is no customer representing at least 10% of gross sales for the year ended December 31, 2013.

37. FIRST-TIME ADOPTION OF IFRSS

a. Basis of the preparation for financial information under IFRSs

The Group’s consolidated financial statements for the year ended December 31, 2013 not only follows the significant accounting policies stated in Note 4 but also applies the requirements under IFRS 1 “First-time Adoption of IFRS” as the basis for the preparation.

b. Exemptions from IFRS 1

IFRS 1 establishes the procedures for the Group’s first consolidated financial statements prepared in accordance with IFRSs. According to IFRS 1, the Group is required to determine the accounting policies under IFRSs and retrospectively apply those accounting policies in its opening balance sheet at the date of transition to IFRSs, January 1, 2012; except for optional exemptions and mandatory exceptions to such retrospective application provided under IFRS 1. The major optional exemptions the Group adopted are summarized as follows:

Business combinations

The Group elected not to apply IFRS 3, “Business Combinations,” retrospectively to business combinations that occurred before the date of transition. Therefore, in the opening balance sheet, the amount of goodwill generated from past business combinations remains the same compared with the one under ROC GAAP as of December 31, 2011.

The exemption of not elected to apply IFRS 3 “Business Combinations” also applied to investments in associates acquired in the past.

Share-based payment transactions

The Group elected to take the optional exemption from applying IFRS 2 “Share-based Payment” retrospectively for the shared-based payment transactions granted and vested before the date of transition.

Deemed cost

All other property, plant and equipment, investment properties and intangible assets applied IFRSs retrospectively at the date of the transition.

The impact on the Group’s consolidated balance sheets and consolidated statements of comprehensive income after transition to IFRSs is as follows:

1) Reconciliation of the consolidated balance sheet as of January 1, 2012

Item Cash and cash equivalents Bond Investments with no active market Accounts receivable Other current assets Deferred income tax assets - current Available-for-sale financial assets - noncurrent Financial assets carried at cost - noncurrent Investments accounted for by the equity method Properties Intangible assets Assets leased to others, net Idle assets, net Deferred expense, net Deferred income tax assets Other noncurrent assets Other Total Other payables Provision Obligations under capital leases - noncurrent Reserve for land value increment tax Accrued pension liabilities Deferred income tax liabilities Other Total liabilities Capital surplus Unappropriated earnings Net loss not recognized as pension cost Unrealized loss on financial instruments Treasury stock Other Noncontrolling interests Total shareholders’ equity Total	ROC GAAP Amount $ 56,515,383 - 45,469,494 4,364,455 951,668 2,783,354 1,487,972 3,590,108 39,985,995 16,408,099 113,843 135,538 2,273,596 - - 29,981,481 $ 204,060,986 $ 17,848,327 1,028,614 316,466 239,693 143,168 747,622 94,658,734 114,982,624 27,759,251 11,729,938 (17,182 ) (372,591 ) (1,857,643 ) 31,685,449 20,151,140 89,078,362 $ 204,060,986	Effect of Transition to IFRSs $ (3,633,137 ) 3,633,137 372,114 65,365 (951,668 ) 1,487,972 (1,487,972 ) (75,436 ) (1,099,418 ) (104,687 ) (113,843 ) (135,538 ) (2,273,596 ) 2,116,283 3,755,388 - $ 1,554,964 $ 226,055 464,725 4,441 (239,693 ) (1,010 ) 1,390,316 - 1,844,834 (907,070 ) 662,992 17,182 230,587 (230,587 ) - (62,974) (289,870) $ 1,554,964	IFRSs Amount Note $ 52,882,246 a) 3,633,137 a) 45,841,608 b) 4,429,820 h), i), j) and m) - c) 4,271,326 f) - f) 3,514,672 o) 38,886,577 e), h), j) and l) 16,303,412 h), i) and l) - e) - e) - h) 2,116,283 c), d), m), n) and o) 3,755,388 h), i), j), l) and m) 29,981,481 $ 205,615,950 $ 18,074,382 n) 1,493,339 b) 320,907 l) - g) 142,158 m) 2,137,938 d) and g) 94,658,734 116,827,458 26,852,181 o) and p) 12,392,930 l), m), n), o), p) and q) - q) (142,004 ) k) (2,088,230 ) k) 31,685,449 20,088,166 m) and n) 88,788,492 $ 205,615,950

2) Reconciliation of the consolidated balance sheet as of December 31, 2012

			Effect of
	ROC GAAP	Transition to
Item	Amount		IFRSs	IFRSs Amount	Note
Cash and cash equivalents	$ 60,590,077	$	(9,365,207 )	$ 51,224,870	a)
Bond Investments with no active market	-		9,365,207	9,365,207	a)
Accounts receivable	44,025,784		774,156	44,799,940	b)
Other current assets	4,965,958		92,704	5,058,662	h), i) and j)
					(Continued)

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Item Deferred income tax assets - current Available-for-sale financial assets - noncurrent Financial assets carried at cost - noncurrent Investments accounted for by the equity method Properties Intangible assets Assets leased to others, net Idle assets, net Deferred expense, net Deferred income tax assets Other noncurrent assets Other Total Other payables Provision Obligations under capital leases - noncurrent Reserve for land value increment tax Accrued pension liabilities Deferred income tax liabilities Other Total liabilities Capital surplus Unappropriated earnings Net loss not recognized as pension cost Unrealized loss on financial instruments Foreign currency translation reserve Treasury stock Other Noncontrolling interests Total shareholders’ equity Total	ROC GAAP Amount $ 1,110,308 1,032,235 1,122,230 3,554,690 37,475,790 16,095,958 111,394 203,233 2,067,016 - - 22,843,493 $ 195,198,166 $ 16,144,977 820,311 232,299 239,693 175,583 843,248 86,923,052 105,379,163 27,504,826 13,253,899 (29,536 ) (677,435 ) 126,009 (1,104,073 ) 30,706,336 20,038,977 89,819,003 $ 195,198,166	Effect of Transition to IFRSs $ (1,110,308 ) 1,122,230 (1,122,230 ) (45,908 ) 221,951 (62,383 ) (111,394 ) (203,233 ) (2,067,016 ) 2,215,617 2,153,262 - $ 1,857,448 $ 159,364 871,062 417 (239,693 ) 137,185 1,326,805 - 2,255,140 (752,838 ) 400,713 29,536 230,587 2,863 (230,587 ) - (77,966) (397,692) $ 1,857,448	IFRSs Amount Note $ - c) 2,154,465 f) - f) 3,508,782 o) 37,697,741 e), h), j) and l) 16,033,575 h), i), l) and m) - e) - e) - h) 2,215,617 c), d), m), n) and o) 2,153,262 h), i), j), and m) 22,843,493 $ 197,055,614 $ 16,304,341 b), m) and n) 1,691,373 b) 232,716 l) - g) 312,768 m) 2,170,053 d) and g) 86,923,052 107,634,303 26,751,988 o), p) and r) 13,654,612 l), m), n), o), p), q) and r) - q) (446,848 ) k) 128,872 l), m), n) and o) (1,334,660 ) k) 30,706,336 19,961,011 l), m), n) and o) 89,421,311 $ 197,055,614 (Concluded)

3) Reconciliation of the consolidated statement of comprehensive income for the year ended December 31, 2012.

Item Net sales Cost of sales Gross profit Operating expenses Operating income Nonoperating gains and loss Net profit on disposal of investments Investment income recognized under the equity method, net Other Total nonoperating expenses and losses Income before income tax Income tax Consolidated net income Exchange differences on translating foreign operations Unrealized loss on available-for-sale financial assets Cash flow hedges Actuarial loss of defined benefits Share of other comprehensive loss of associates and joint ventures accounted for using equity method Income tax relating to components of other comprehensive income Total comprehensive income for the period	ROC GAAP Amount $ 216,047,010 (185,419,313) 30,627,697 (19,735,700) 10,891,997 585,557 15,217 478,617 1,079,391 11,971,388 (2,451,510) $ 9,519,878	Effect of Transition to IFRSs $ - (69,699) (69,699 ) 56,047 (13,652) (147,198 ) 2,501 17,518 (127,179) (140,831 ) (2,687) $ (143,518)	IFRSs Amount Note $ 216,047,010 - (185,489,012) m), n) and s) 30,557,998 (19,679,653) l), m), n) and s) 10,878,345 438,359 r) 17,718 o) 496,135 - 952,212 11,830,557 (2,454,197) m), n) and o) 9,376,360 (2,023,819 ) (304,324 ) 63,662 (134,530 ) m) (75,659 ) 229,169 $ 7,130,859

4) Explanations of significant reconciling items in the transition to IFRSs

Material differences between the accounting policies under ROC GAAP and the accounting policies adopted under IFRSs were as follows:

a) Bank deposits with original maturity more than 3 months

Under ROC GAAP, the term “cash and cash equivalents” used in the financial statements includes cash on hand, demand deposits, check deposits, time deposits that are cancelable but without any loss of principal and negotiable certificates of deposit that are readily salable without any loss of principal. However, under IFRSs, cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. An investment normally qualifies as a cash equivalent only when it has a short maturity of 3 months or less from the date of acquisition. Thus, some certificates of deposit the Group held that had maturities of more than 3 months from the date of investment have been reclassified to bond investments with no active market.

As of December 31, 2012 and January 1, 2012, the amounts reclassified to bond investments with no active market were NT$9,365,207 thousand and NT$3,633,137 thousand, respectively.

b) Allowance for sales returns and discounts

Under ROC GAAP, provisions for estimated sales returns and discounts are recognized as a reduction of revenue in the period the related revenue is recognized on the basis of historical experience. Allowance for sales returns and discounts is recorded as a deduction from accounts receivable. Under IFRSs, the allowance for sales returns and discounts is a present obligation arising from past events and with uncertain timing of settlement and is thus reclassified to provisions.

As of December 31, 2012 and January 1, 2012, the amounts reclassified from allowance for sales returns and discounts to provisions were NT$774,156 thousand and NT$372,114 thousand, respectively.

c) Classifications of deferred income tax asset/liability and valuation allowance

Under ROC GAAP, valuation allowances are provided to the extent, if any, that it is more likely than not that deferred income tax assets will not be realized. Under IFRSs, deferred tax assets are only recognized to the extent that it is probable that there will be sufficient taxable profits against which the deductible temporary differences can be used; thus, a valuation allowance account is not needed.

In addition, under ROC GAAP, a deferred tax asset and liability is classified as current or noncurrent in accordance with the related asset or liability for financial reporting. However, if a deferred income tax asset or liability does not relate to an asset or liability in the financial statements, it is classified as current or noncurrent on the basis of the expected length of time before it is realized or settled. Under IFRSs, a deferred tax asset and liability is classified as noncurrent asset or liability.

As of December 31, 2012 and January 1, 2012, the amounts reclassified from deferred income tax assets - current to deferred income tax assets - noncurrent were NT$1,110,308 thousand and NT$951,668 thousand, respectively.

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d) Offsetting between deferred tax assets/liabilities

Under ROC GAAP, deferred current tax assets - current should be offset against deferred tax liability - current under the same taxable entity. The same rule applies to deferred tax asset/liability - noncurrent. Under IFRSs, an entity is eligible to offset tax assets against tax liabilities generated from the same taxable entity only (a) if the entity has a legally enforceable right to make this offset and (b) the deferred tax assets and liabilities relate to income taxes levied by the same tax authorities on either the same taxable entity or different taxable entities that intend either to settle current tax liabilities and assets on a net basis or to realize the assets and settle the liabilities simultaneously.

As of December 31, 2012 and January 1, 2012, the offset amounts of the Group’s deferred tax assets and deferred tax liabilities were NT$1,087,112 thousand and NT$1,150,623 thousand, respectively.

e) Classification of leased assets and idle asset

Under ROC GAAP, leased assets and idle assets are classified under other assets and idle assets. Under IFRSs, the aforementioned items are classified as properties in accordance with their nature. Leased assets are mainly dormitories leased to employees and factories leased to suppliers. Based on IAS 40 - “Investment Property,” the dormitories leased to employees and factories leased to suppliers are not considered investment properties since they cannot be sold separately and comprise only an insignificant portion of the plant.

As of December 31, 2012 and January 1, 2012, the amount reclassified from leased assets and idle assets to properties were NT$314,627 thousand and NT$249,381 thousand, respectively.

As of December 31, 2012, the Group had reclassified deferred expenses of NT$17,618 thousand, NT$1,189,471 thousand, NT$516,087 thousand and NT$343,840 thousand to other current assets, properties, intangible assets and other noncurrent assets, respectively.

As of January 1, 2012, the Group had reclassified deferred expenses of NT$12,858 thousand, NT$1,296,031 thousand, NT$598,025 thousand and NT$366,682 thousand to other current assets, properties, intangible assets and other noncurrent assets, respectively.

i) Land use rights

Under ROC GAAP, land use rights are classified as intangible asset. Under IFRSs, based on their nature, a land use right is classified as prepayment in accordance with International Accounting Standard (IAS) No. 17 - “Leases.”

As of December 31, 2012, the Group’s land use rights reclassified to other current assets and other noncurrent assets amounted to NT$1,678 thousand and NT$570,841 thousand, respectively.

As of January 1, 2012, the Group’s land use rights reclassified to other current assets and other noncurrent assets amounted to NT$1,709 thousand and NT$618,502 thousand, respectively.

j) Classification of the prepayments for equipment

Under ROC GAAP, the prepayments for equipment are usually recorded under fixed assets. Under IFRSs, prepayments for equipment are usually recorded under other current assets or other noncurrent assets.

f) Financial assets carried at cost

Under IFRSs, the financial instruments designated as at fair value through other comprehensive income and financial assets carried at cost should be classified as at fair value through profit or loss.

As of December 31, 2012 and January 1, 2012, the Group’s financial assets carried at cost reclassified to available for sale financial assets amounted to NT$1,122,230 thousand and NT$1,487,972 thousand, respectively.

g) Reserve for land value increment tax

Based on the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, land revaluation surplus is classified as reserve for land value increment tax and recorded under other liabilities. Under IFRSs, the Group reclassified land value increment tax to deferred income tax liabilities. As of both December 31, 2012 and January 1, 2012, the amount reclassified from land value increment tax to deferred income tax liabilities were NT$239,693 thousand.

h) Classification of deferred expenses

Under ROC GAAP, deferred expenses are recorded under other assets. Under IFRSs, the Group reclassified deferred expenses to other current assets, properties, intangible assets, and other noncurrent assets in accordance with their nature.

As of December 31, 2012, on the basis of the nature of the prepayments for equipment, the Group reclassified prepayments for equipment to other current assets and other noncurrent assets of NT$73,410 thousand and NT$1,236,480 thousand, respectively.

As of January 1, 2012, on the basis of the nature of the prepayments for equipment, the Group reclassified prepayments for equipment to other current assets and other noncurrent assets of NT$48,426 thousand and NT$2,631,249 thousand, respectively.

k) Treasury stock

Under ROC GAAP on the accounting for treasury stocks, effective January 1, 2002, the Group accounted for its shares held by its subsidiary as treasury stock when it recognized the investment income at the market price. The difference in carrying value and market value of this treasury stock was recorded as unrealized loss on available-for-sale financial assets. Under IFRSs, treasury shares are recognized immediately at the time when treasury shares are acquired by subsidiaries.

As of both December 31, 2012 and January 1, 2012, the Group’s unrealized loss of NT$230,587 thousand on available-for-sale financial assets was reclassified to treasury stock.

l) Capitalization of lease payments

Under ROC GAAP, lease payments are recorded as rental expense in the period the lessee actually uses the item leased. Under IFRSs, they should be capitalized as part of asset acquisition cost.

As of December 31, 2012, the IFRS-based adjustment resulted in increases in properties by NT$227,744 thousand and unappropriated earnings by NT$15,138 thousand, respectively.

86 -
85 -

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As of January 1, 2012, the IFRS-based adjustment resulted in increases in properties by NT$34,845 thousand and unappropriated earnings by NT$33,084 thousand, respectively.

The depreciation expense for the year ended 2012 was adjusted for an increase of NT$16,150 thousand (recorded as operating expenses).

m) Employee benefits

The Group had previously applied actuarial valuation to its defined benefit obligations and recognized the related pension cost and retirement benefit obligation in conformity with ROC GAAP. Under IFRSs, the Group should carry out actuarial valuation on defined benefit obligations in accordance with IAS No. 19 - “Employee Benefits.” The Group has opted to recognize actuarial gains and losses as other comprehensive income immediately in full in the period in which they occur. The subsequent reclassification to earnings is not permitted.

At the transition date, the Group performed the actuarial valuation under IAS No. 19 - “Employee Benefits” and recognized the valuation difference directly as retained earnings under IFRS 1. As of December 31, 2012, the IFRS-based adjustments resulted in (a) increases in deferred income tax assets by NT$13,245 thousand; accrued pension liabilities by NT$131,476 thousand; and (b) decreases in other noncurrent assets by NT$15,413 thousand; unappropriated earnings by NT$79,141 thousand; noncontrolling interests by NT$42,876 thousand.

At the transition date, the Group performed the actuarial valuation under IAS No. 19 - “Employee Benefits” and recognized the valuation difference directly as retained earnings under IFRS 1. As of January 1, 2012, the IFRS-based adjustments resulted in (a) increases in deferred income tax assets by NT$7,624 thousand; other noncurrent assets by NT$46,252 thousand; accrued pension liabilities by NT$81,378 thousand; and (b) decreases in unappropriated earnings by NT$3,104 thousand.

For the year ended 2012, IFRS adoption resulted in a decrease of NT$11,571 thousand (NT$9,730 thousand recorded as cost of sales and NT$1,841 thousand recorded as operating expenses) in salary expenses and an increase of NT$1,434 thousand in income tax.

n) Employee benefits - short-term accumulated compensated absences

Under ROC GAAP, there are no specific requirements for recognizing accumulated compensated absences at the end of reporting periods. The Group usually recognize the related costs when the employees actually go on leave. Under IFRSs, the expected cost of short-term accumulated compensated absences should be recognized as the employees render services that increase their entitlement to these compensated absences.

As of December 31, 2012, the IFRS-based evaluation adjustment resulted in increases in other payables by NT$248,303 thousand. This adjustment also resulted in decreases in unappropriated earnings by NT$187,443 thousand and noncontrolling interests by NT$50,875 thousand.

As of January 1, 2012, the IFRS-based evaluation adjustment resulted in increases in deferred income tax assets by NT$6,471 and other payables by NT$256,609 thousand. This adjustment also resulted in decreases in unappropriated earnings by NT$179,786 thousand and noncontrolling interests by NT$70,352 thousand.

For the year ended December 31, 2012, IFRS adoption resulted in an increase of NT$9,073 thousand (resulting in a decrease of NT$14,820 thousand in cost of sales and an increase of NT$23,893 thousand in operating expenses) in salary expenses and NT$1,277 thousand in income tax.

o) Investments accounted for using the equity method

The Parent Company has evaluated significant differences between current accounting policies and IFRSs for the Group’s associates and joint ventures accounted for by the equity method. The significant difference is mainly due to the adjustment to employee benefits and leases.

As of December 31, 2012, the differences mentioned above resulted in an increase in unappropriated earnings by NT$175,012 thousand. In addition, the adjustment resulted in decreases in investments accounted for by the equity method by NT$49,346 thousand and capital surplus by NT$255,568 thousand.

As of January 1, 2012, the differences mentioned above resulted in an increase in unappropriated earnings by NT$91,583 thousand. In addition, the adjustment resulted in decreases in investments accounted for by the equity method by NT$75,436 thousand and capital surplus by NT$168,671 thousand.

For the year ended 2012, the IFRS-based adjustments resulted in increases in investment income recognized under the equity method by NT$2,501 thousand, and a decrease of NT$24 thousand in income tax.

p) Accounting treatment of the Parent Company for increases in carrying values of equity-method investments due to not subscribing proportionally to the additional shares issued by the investees and relevant adjustment of capital surplus - long-term equity investment.

Under IFRSs, any equity changes in the invested associates without the loss of significant influence on the associates will be recognized as a deemed acquisition or a deemed disposal of the shares in the invested associates. Any equity changes in the invested subsidiaries without losing significant control over the subsidiaries will be deemed equity transactions. In addition, in accordance with the “Q&A on the Adoption of IFRSs” issued by the Taiwan Stock Exchange, capital surplus not covered by the IFRSs, the ROC Company Law and the relevant legal interpretations of the Ministry of Economic Affairs, ROC should be adjusted accordingly at the date of transition to IFRSs.

As of December 31, 2012, the foregoing adjustments resulted in a decrease of NT$651,137 thousand in capital surplus - long term investments and an increase of NT$651,137 thousand in unappropriated earnings.

As of January 1, 2012, the foregoing adjustments resulted in a decrease of NT$738,398 thousand in capital surplus - long term investments and an increase of NT$738,398 thousand in unappropriated earnings.

q) Employee benefits - minimum pension liability to be recognized

Under the IFRSs, there is no requirement for recognizing minimum pension liability.

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As of December 31, 2012, net loss not recognized as pension cost was adjusted for an increase of NT$29,536 thousand and a decrease of NT$29,536 thousand in unappropriated earnings.

As of January 1, 2012, net loss not recognized as pension cost was adjusted for an increase of NT$17,182 thousand and a decrease of NT$17,182 thousand in unappropriated earnings.

r) Disposal of partial shares without losing significant influence on the investee

Under IFRSs, disposal of the shares of subsidiaries without losing significant control over the subsidiaries is deemed an equity transaction.

As of December 31, 2012, the IFRS-based adjustments resulted in an increase of NT$146,193 thousand in capital surplus - difference between consideration and carry amounts adjusted arising from changes in percentage of ownership in subsidiaries, and a decrease of NT$146,193 thousand in the gain on disposal of investments.

s) The reclassification of line items in the consolidated statement of comprehensive income

Under IFRSs, based on the nature of operating transactions, the Group reclassified a repair and warranty expense of NT$94,250 thousand for year ended 2012 to cost of sales.

5) Explanation of material adjustments to the statement of cash flows.

The Parent Company partially disposed of its interest in Subsidiary-Silitech Technology Corp. without loss of control for the year ended December 31, 2012. Under R.O.C. GAAP, the resulting cash flows were classified as investing activities. Under IAS 7 “Statement of Cash Flows”, the resulting cash flows of NT$288,198 thousand were classified as financing activities.

Time deposits that can be readily cancelled without eroding the principal and negotiable certificates of deposit that can be readily sold without eroding the principal meet the definition of cash in accordance with ROC GAAP. However, under IAS 7” Statement of Cash Flow”, cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. For an investment to qualify as a cash equivalent it must be readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value. An investment normally qualifies as a cash equivalent only when it has a short maturity of, say, 3 months or less from the date of acquisition. Therefore, time deposits with a carrying amount of NT$9,365,207 thousand and NT$3,633,137 thousand as of December 31, 2012 and January 1, 2012, respectively, held by the Group was for investment purposes and thus no longer classified as cash under IFRSs.

According to ROC GAAP, interest paid and received and dividends received are classified as operating activities while dividends paid are classified as financing activities. Additional disclosure is required for interest expenses when reporting cash flow using indirect method. However, under IAS 7” Statement of Cash Flow”, cash flows from interest and dividends received and paid shall each be disclosed separately. Each shall be classified in a consistent manner from period to period as operating, investing or financing activities. Therefore, interests received, interests paid and dividends received by the Group of NT$1,047,096 thousand, NT$536,643 thousand and NT$57,166 thousand, respectively, for the year ended December 31, 2012 were presented separately at the date of transition to IFRSs.

Except for the above differences, there are no other significant differences between ROC GAAP and IFRSs in the statement of cash flows.

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TABLE 1

LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND PERCENTAGES OF OWNERSHIP AS OF DECEMBER 31, 2013, DECEMBER 31, 2012 AND JANUARY 1, 2012

December 31, 2013

	100%	100%	100%	100%
`Lite-On Technology Corporation`	`Lite-On Capital Corp.`	`Leotek Electronics Corp.`	Leotek Electronics USA Corportaion
	100%		100%
			Leotek Electronics Holding Limited	`Changzhou Leotek New Energy` `Trade Limited`

			100%	100%
	`Lite-On Clean Energy Technology` `Corp.`		Lite-on Green Energy Kaiserslautern GmbH
	100%	100%	100%
		Lite-on Green Energy (Singapore) Pte. Ltd.	Lite-on Green Energy B.V.	Romeo Tetti PV1 S.R.L.
		100% `Lite-On Green Technologies Inc.` 100% Lite-on Green Energy (HK) Limited 100% LTC International Ltd. 100% Titanic Capital Services Ltd. 100% `LET (HK) Ltd.` 100% High Yield Group Co., Ltd. 100% Lite-on IT Singapore Pte. Ltd. 100% Lite-On Sales & Distribution Inc. 100%	100%	100%
				Lite-on Green Energy S.R.L.
				100%
			Lite-On Green Technologies B.V
			100%
			Lite-on Green Technologies (HK) Limited	`Lite-On Green Technologies` `(Nanjing) Corporation`

			100%	100%
	LTC Group Ltd.	LTC International Ltd.
	100% `Lite-On Integrated Service Inc.` 99.13% `Lite-On IT Corporation` 100% Lite-On Electronics (Thailand) Co., Ltd.
			`Lite-On IT International (HK)` `Ltd.`	`Lite-On Opto Technology` `(Guangzhou) Co., Ltd.`
			100%	100%
				`Lite-On IT Trading (Guangzhou)` `Co., Ltd.`
				100%
				`Lite-On IT Opto Tech (BH) Co.,` `Ltd.`

		`Lite-On Information Technology` `B.V.`	`Lite-On Information Technology` `GmbH`
		49%	100%
		`Philip & Lite-On Digital` `Solutions Corp.`	Philips & Lite-On Digital Solutions USA Inc.
			100%
			Philips & Lite-On Digital Solutions Netherlands B.V.
			100%
			Philips & Lite-On Digital Solutions Germany GmbH
			100%
			Philips & Lite-On Digital Solutions Korea Ltd.
			100%
			`Philips & Lite-On Digital` `Solution (Shanghai) Co.,Ltd.`

203

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100% `Lite-On Technology Corporation` Lite-On International Holding Co., Ltd 100% Lite-On Electronics H.K. Ltd. 100% Lite-On Singapore Pte. Ltd.	100% 50% Lite-On China Holding Co., Ltd. G&W Technology (BVI) Limited 100% Lite-On Electronics Co., Ltd. 100% I-Solutions Limited 100% `Yet Foundate Ltd.` 100% Fordgood Electronic Ltd. 48.13% 100% Ze Poly Pte. Ltd. Ze Poly Tomsk Ltd. 100% `Silitek Elec. (Dongguan) Co.,` `Ltd.` 100% `Lite-On Digital Electronics` `(Donguan) Co., Ltd.` 100% `Lite-On Computer Tech` `(Dongguan) Co., Ltd.` 100% `Dong Guan G-Com Computers Co.,` `Ltd.` 100% `Dong Guan G-Tech Computers Co.,` `Ltd.` 100% `Lite-On Electronics (Dongguan)` `Co., Ltd.` 100% `Lite-On Electronics (Tianjin)` `Co., Ltd.` 79.29% `DongGuan G-pro Computer Co.,` `Ltd.` 100% 100% `China Bridge (China) Co., Ltd.` `China Brige Express (Wuxi) Co.,` `Ltd.` 100% `Lite-On Power Technology (Chang Zhou)` `Co., Ltd. (original name: Li Shin` `Enterprise (Su Zhou) Co., Ltd.)` 100% `Lite-On Technology (Ying Tan)` `Co., Ltd.` 100% `Lite-On Technology (Xianing)` `Co., Ltd.` 20.71%	100% G&W Technology Limited 100% `Lite-On Communications` `(Guangzhou) Co., Ltd.` 100% `Lte-On Elec and Wire` `(Guangzhou) Co., Ltd.` 100% `Lite-On (Guang Zhou) Infortech` `Co., Ltd.` 100% `Silitek Elec. (Guangzhou) Co.` `Ltd.` 67.03% `Lite-On (Guang Zhou) Precision` `Tooling Co., Ltd.` 100% `Lite-On Tech. (Guangzhou) Co.,` `Ltd.` 32.97% 100% 100% `Lite-On Electronics (Jiangsu)` `Co. Ltd.` `Lite-On Technology (Changzhou) Co.,` `Ltd.` 100% 87.41% `Lite-On Technology (Guangzhou)` `Co., Ltd.` `Lite-On Opto Technology (Changzhou)` `Co., Ltd.` 100% 12.59% `Lite-On Power Technology` `(Dongguan) Co., Ltd.` 100% `Dongguan Lite-On Computer Co.,` `Ltd.` 100% `Lite-On Li Shin Technology` `(Ganzhou) Co., Ltd.`

205

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==> picture [866 x 577] intentionally omitted <==

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

100% 100%
Lite-On Technology Corporation Lite-On Technology USA Inc. Lite-On Trading USA, Inc.
100%
Lite-On Service USA, Inc.
100%
Lite-On, Inc.
100%
Lite-On Electronics (Europe) Ltd.
100%
Lite-On Overseas Trading Co., Ltd.
100%
Lite-On Automotive Electronics
(Europe) BV
100%
Lite-On Automotive North
America Inc.
82.26% 100% 100% 100%
Lite-On Automotive International Lite-On Automotive Holdings Litie-On Automotive Electronics
Lite-On Automotive Corp.
(Cayman) Co., Ltd (Hong Kong) Ltd. (Gungzhou) Co., Ltd.
100% 100%
Lite-On Automotive Service Lite-On Automotive (Wuxi) Co.,
USA,Inc Ltd.
100% 100%
Silitech Technology (SuZhou) Co.,
Silitech (Hong Kong) Holding Ltd.
Ltd.
32.14% 100% 100% 100%
Silitech Technology Corporation
Silitech Technology Corp. Silitech (BVI) Holding Ltd. Silitech (Bermuda) Holding Ltd.
Sdn. Bhd.
100%
Silitech Technology (Europe)
0.61%
Limited
100% 100% 100% 100% 100%
Silitech Technology Corporation Xurong Electronic (Shenzhen) Co.,
Lite-On Capital Corp. Lite-On Japan(s) Pte. Ltd. Lite-On Japan (Thailand) Co., Ltd.
Limited Ltd.
100% 100%
Silitech International (India)
7.87% L&K Industries Philippines, Inc.
Private Ltd.
100% 100% 60%
SuZhou Xulong Mold Producing Co.,
Lite-On Japan (H.K.) Ltd. NL (Shanghai) Co., Ltd.
Ltd.
49.49% 100%
Lite-On Japan Ltd. LOJ Korea Co., Ltd.
----- End of picture text -----

208

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Lite-On Technology Corporation 2013 Annual Report

==> picture [867 x 456] intentionally omitted <==

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

100% 20.66% 100% 100% 100%
Li Shin International Logah Electronics (Su Zhou) Co.,
Lite-On Technology Corporation Logah Technology Corp. Logah Technology Co., Ltd. Logah Technology (HK) Co., Ltd.
Enterprise Corp. Ltd.
18.97% 100%
Lippo Electronics (Su Zhou) Co.,
Ltd.
100% 100%
Li Shin International Enterprise Huizhou Li Shin Electronic Co.,
Corp. Ltd.
100% 100%
Huizhou Fu Tai Electronic Co.,
Eagle Rock Investment Ltd.
Ltd.
100%
Li Shin Technology (Huizhou)
Ltd.
54% 100% 100% 100%
Lite-On Mobile Oyj 4%
Lite-On Technology (Europe) B.V. Lite-On (Finland) Oy Lite-On Mobile Sweden AB
(Formerly: Perlos Oyi)
100% 100% 96%
Lite-On Mobile Indústria e Comércio
Lite-On Capital Corp. Lite-On Mobile Pte. Ltd.
de Plásticos Ltda.
46%
100%
Guangzhou Lite-On Mobile
Engineering Plastics Co., Ltd.
100% 100%
Guangzhou Lite-on Mobile Electronic Yantai Lite-On Mobile Electronic
Components Co. Ltd. Components Co., Ltd.
100% 11% 89%
Beijing Lite-On Mobile Electronic and Zhuhai Lite-On Mobile Technology
Telecommunications Components Co., Ltd. Co., Ltd.
100%
Shenzhen Lite-On Mobile Precision
Molds Co., Ltd.
100%
Perlos Precision Plastics Moulding
Limited Liability Company
100%
Lite-On Mobile India Private Limited.
65% 100%
Lite-On Young Fast (Huizhou) Co.,
Lite-on Young Fast Pte. Ltd.
Ltd.
----- End of picture text -----

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December 31, 2012

	100%	100% `Leotek Electronics Corp.` 100%	100% Leotek Electronics USA Corportaion 100% Leotek Electronics Holding Limited 100% ~~Lite-On Green Energy~~ Kaiserslautern GmbH 100%	100% `Changzhou Leotek New Energy` `Trade Limited` 100% Romeo Tetti PV1 S.R.L 100% Lite-on Green Energy S.R.L. 100% Lite-on Green Technologies S.R.L 100% `Lite-On Green Technologies` `(Nanjing) Corporation` 100% `Lite-On Opto Technology` `(Guangzhou) Co., Ltd.` 100% `Lite-On IT Trading (Guangzhou)` `Co., Ltd.` 100% `Lite-On IT Opto Tech (BH) Co.,` `Ltd.`
`Lite-On Technology Corporation`	`Lite-On Capital Corp.`	`Leotek Electronics Corp.`
	100%
		`Lite-On Clean Energy Technology` `Corp.`	~~Lite-On Green Energy~~ Kaiserslautern GmbH
		100%
		~~Lite-on Green Energy (Singapore)~~ Pte. Ltd.	Lite-on Green Energy B.V.	Romeo Tetti PV1 S.R.L

		100%
		`Lite-On Green Technologies Inc.`	Lite-On Green Technologies B.V	Lite-on Green Technologies S.R.L
		100%	100% ~~Lite-On Green Technologies~~ Australia Pty Ltd. 100%
		`Lite-on Green Energy (HK)` `Limited`	~~Lite-On Green Technologies~~ Australia Pty Ltd.
		100%
	LTC Group Ltd.	LTC International Ltd.	Lite-on Green Technoligies (HK) Limited	`Lite-On Green Technologies` `(Nanjing) Corporation`
	100% `Lite-On Integrated Service Inc.` 42.32% 0.32% `Lite-On IT Corporation` 100% Lite-On Electronics (Thailand) Co., Ltd.	100% Titanic Capital Services Ltd. 100% `LET (HK) Limited` 100% High Yield Group Co., Ltd. 100% Lite-on IT Singapore Pte. Ltd. 100% Lite-On Sales & Distribution Inc. 100%	100% `LET (HK) Limited` 100% `Lite-On Information Technology` `GmbH` 100% Philips & Lite-On Digital Solutions USA Inc. 100% Philips & Lite-On Digital Solutions Netherlands B.V. 100% Philips & Lite-On Digital Solutions Germany GmbH 100% Philips & Lite-On Digital Solutions Korea Ltd. 100% `Philips & Lite-On Digital` `Solutions (Shanghai) Co., Ltd.`
		`Lite-On Information Technology` `B.V.`	`Lite-On Information Technology` `GmbH`
		100% Lite-On Americas Inc. 49%
		`Philip & Lite-On Digital` `Solutions Corp.`	Philips & Lite-On Digital Solutions USA Inc.

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	100%	100%	50%	100%
`Lite-On Technology Corporation`	Lite-On International Holding Co., Ltd	Lite-On China Holding Co., Ltd.	G&W Technology (BVI) Limited	G&W Technology Limited

	100% Lite-On Electronics H.K. Ltd. 100% Lite-On Singapore Pte. Ltd.		100% Lite-On Electronics Co., Ltd. 100% I-Solutions Limited 100% `Yet Foundate Ltd.` 100% Fordgood Electronic Ltd. 100% Ze Poly Tomsk Ltd. 100% `China Brige Express (Wuxi) Co.,` `Ltd.` 100% `Wuxi Lite-On Tech. Co., Ltd.` 1%	100%
				`Lite-On Communications` `(Guangzhou) Co., Ltd.`
				100%
				`Lte-On Elec and Wire` `(Guangzhou) Co., Ltd.`
				100%
				`Lite-On (Guang Zhou) Infortech` `Co., Ltd.`
				100%
				`Silitek Elec. (Guangzhou) Co.` `Ltd.`
				67.03%
				`Lite-On (Guang Zhou) Precision` `Tooling Co., Ltd.`
				100%
				`Lite-On Tech. (Guangzhou) Co.,` `Ltd.`
				100%
				`Lite-On Electronics (Jiangsu)` `Co. Ltd.`
				100%
				`Lite-On Technology (Guangzhou)` `Co., Ltd.`
				100%
				`Dongguan Lite-On Computer Co.,` `Ltd.`
				100%
				`Lite-On Li Shin Technology` `(Ganzhou) Co., Ltd.`

		`Lite-On Power Technology (Chang Zhou)` `Co., Ltd. (original name: Li Shin` `Enterprise (Su Zhou) Co., Ltd.)`	`Wuxi Lite-On Tech. Co., Ltd.`
		100% `Lite-On Technology (Ying Tan)` `Co., Ltd.` 100% `Lite-On Technology (Xianing)` `Co., Ltd.`
		`Lite-On Technology (Xianing)` `Co., Ltd.`

213

214

Lite-On Technology Corporation 2013 Annual Report

	100%	100% Lite-On Trading USA, Inc. 100% Lite-On Service USA, Inc. 100% Lite-On, Inc. 100% Maxi Switch S.A. de C.V 100% Lite-On Automotive Electronics (Europe) BV 100% Lite-On Automotive North America Inc. 100% 100% Lite-On Automotive International (Cayman) Co., Ltd Lite-On Automotive Holdings (Hong Kong) Ltd. 100% 100% Silitech (BVI) Holding Ltd. Silitech (Bermuda) Holding Ltd. 100% 100% Lite-On Japan(s) Pte. Ltd. Lite-On Japan (Thailand) Co., Ltd. 100% L&K Industries Philippines, Inc. 100% 100% Lite-On Japan (H.K.) Pte. Ltd. NL (Shanghai) Co., Ltd. 100% LOJ Korea Co., Ltd.	100%
`Lite-On Technology Corporation`	Lite-On Technology USA Inc.	Lite-On Trading USA, Inc.
	100% Lite-On Electronics (Europe) Ltd. 100% Lite-On Overseas Trading Co., Ltd. 84.89% `Lite-On Automotive Corp.` 32.37% `Silitech Technology Corp.` 100% `Lite-On Capital Corp.` 49.49% Lite-On Japan Ltd. 7.87% 0.61%
			`Silitech Technology (SuZhou)` `Co., Ltd.`
			100%
			`Xurong Electronic (Shenzhen)` `Co., Ltd.`
			60%
			`SuZhou Xulong Mold Producing` `Co., Ltd.`
			100%
	Lite-On Japan Ltd.	LOJ Korea Co., Ltd.	Major Suit (HK) Co. Ltd.

215 Lite-On Technology Corporation 2013 Annual Report

216

Lite-On Technology Corporation 2013 Annual Report

==> picture [1056 x 627] intentionally omitted <==

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

100% 20.66% 100% 100% 100%
Li Shin International Logah Electronics (Su Zhou)
Lite-On Technology Corporation Logah Technology Corp. Logah Technology Co., Ltd. Logah Technology (HK) Co., Ltd.
Enterprise Corp. Co., Ltd.
18.97% 100%
Lippo Electronics (Su Zhou)
Co., Ltd.
100% 100%
Li Shin International Enterprise Huizhou Li Shin Electronic Co.,
Corp. Ltd.
100% 100%
Huizhou Fu Tai Electronic Co.,
Eagle Rock Investment Ltd.
Ltd.
100%
Li Shin Technology (Huizhou)
Ltd.
54% 100% 100% 100%
Lite-On Mobile Oyj
Lite-On Technology (Europe) B.V. Lite-On (Finland) Oy Lite-On Mobile Sweden AB
(Formerly: Perlos Oyi)
100% 100% 100%
Lite-On Mobile Indústria e Comé
Lite-On Capital Corp. Lite-On Mobile Pte. Ltd.
rcio de Plásticos Ltda.
46% 100%
Guangzhou Lite-On Mobile
Engineering Plastics Co., Ltd.
100% 100%
Guangzhou Lite-on Mobile Yantai Lite-On Mobile Electronic
Electronic Components Co. Ltd. Components Co., Ltd.
100% 11% 89%
Beijing Lite-On Mobile Electronic and
Zhuhai Lite-On Mobile Technology
Telecommunications Components Co.,
Co., Ltd.
Ltd
100%
Shenzhen Lite-On Mobile Precision
Molds Co., Ltd.
100%
Perlos Precision Plastics Moulding
Limited Liability Company
100%
Lite-On Mobile India Private Limited.
100% 100%
Lite-On Young Fast (Huizhou) Co.,
Lite-on Young Fast Pte. Ltd.
Ltd.
----- End of picture text -----

218

217 Lite-On Technology Corporation 2013 Annual Report

Lite-On Technology Corporation 2013 Annual Report

January 1, 2012

	100%	74.06% `Leotek Electronics Corp.` 100%	100% Leotek Electronics USA Corportaion 100% ~~Lite-On Green Energy~~ Kaiserslautern GmbH 100%	100%
`Lite-On Technology Corporation`	`Lite-On Capital Corp.`	`Leotek Electronics Corp.`
	100%
		`Lite-On Clean Energy Technology` `Corp.`	~~Lite-On Green Energy~~ Kaiserslautern GmbH

		100%
		~~Lite-on Green Energy (Singapore)~~ Pte. Ltd.	Lite-on Green Energy B.V.	Romeo Tetti PV1 S.R.L

		100%	100%	100%
		`Lite-On Green Technologies Inc.`	Lite-On Green Technologies B.V	Lite-on Green Technologies S.R.L

		100%	100% ~~Lite-On Green Technologies~~ Australia Pty Ltd. 100%	100%
		`Lite-on Green Energy (HK)` `Limited`	~~Lite-On Green Technologies~~ Australia Pty Ltd.
		100%
	LTC Group Ltd.	LTC International Ltd.	Lite-on Green Technoligies (HK) Limited	`Lite-On Green Technologies` `(Nanjing) Corporation`
	100% `Lite-On Integrated Service Inc.` 42.71% 0.33% `Lite-On IT Corporation` 100% Lite-On Electronics (Thailand) Co., Ltd.	100% Titanic Capital Services Ltd. 100% `LET (HK) Limited` 100%	100%	100%
		High Yield Group Co., Ltd.	`LET (HK) Limited`	`Lite-On Opto Technology` `(Guangzhou) Co., Ltd.`

		100% Lite-on IT Singapore Pte. Ltd. 100% Lite-On Sales & Distribution Inc. 100%	100% `Lite-On Information Technology` `GmbH` 100% Automotive Playback Modules Hungary Electronical Mechanical Manufacturing and Trading Limited Liability Company 100% Philips & Lite-On Digital Solutions USA Inc. 100% Philips & Lite-On Digital Solutions Netherlands B.V. 100% Philips & Lite-On Digital Solutions Germany GmbH 100% Philips & Lite-On Digital Solutions Korea Ltd. 100% `Philips & Lite-On Digital` `Solutions (Shanghai) Co., Ltd.`	100%
				`Lite-On IT Trading (Guangzhou)` `Co., Ltd.`
				100%
				`Lite-On IT Opto Tech (BH) Co.,` `Ltd.`

		`Lite-On Information Technology` `B.V.`	`Lite-On Information Technology` `GmbH`

		100% Lite-On Americas Inc. 49%
		`Philip & Lite-On Digital` `Solutions Corp.`	Philips & Lite-On Digital Solutions USA Inc.


			`Philips & Lite-On Digital` `Solutions (Shanghai) Co., Ltd.`

219 Lite-On Technology Corporation 2013 Annual Report

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==> picture [972 x 581] intentionally omitted <==

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

100% 100% 50% 100%
Lite-On International Holding Co.,
Lite-On Technology Corporation Ltd Lite-On China Holding Co., Ltd. G&W Technology (BVI) Limited G&W Technology Limited
100% 100%
Lite-On Communications
Lite-On Electronics Co., Ltd.
(Guangzhou) Co., Ltd.
100% 100%
Lte-On Elec and Wire
Yet Foundate Ltd.
(Guangzhou) Co., Ltd.
100% 100%
I-Solutions Limited Lite-On (Guang Zhou) Infortech
Co., Ltd.
100% 100%
Silitek Elec. (Guangzhou) Co.
Ltd. Visonpak (Guangzhou) Co. Ltd.
100%
Lite-On (Guang Zhou) Precision
Tooling Co., Ltd.
100%
Lite-On Tech. (Guangzhou) Co.,
Ltd.
100% 100%
Lite-On Electronics (Jiangsu) Lite-On Technology (Changzhou)
Co. Ltd. Co., Ltd.
100% 100%
Lite-On Technology (Guangzhou) Lite-On Opto Technology
Co., Ltd. (Changzhou) Co., Ltd.
100%
Dongguan Lite-On Computer Co.,
Ltd.
100% 100%
Lite-On Li Shin Technology
Fordgood Electronic Ltd.
(Ganzhou) Co., Ltd.
48.13% 100%
Ze Poly Pte. Ltd. Ze Poly Tomsk Ltd.
100% 100%
Lite-On Electronics H.K. Ltd. Silitek Elec. (Dongguan) Co.,
Ltd.
100%
Lite-On Digital Electronics
(Donguan) Co., Ltd.
100%
Lite-On Computer Tech
(Dongguan) Co., Ltd.
100%
Dong Guan G-Com Computers Co.,
Ltd.
100%
Dong Guan G-Tech Computers Co.,
Ltd.
100%
Lite-On Electronics (Dongguan) 20.71%
Co., Ltd.
100%
Lite-On Electronics (Tianjin)
Co., Ltd.
79.29%
DongGuan G-pro Computer Co.,
Ltd.
100% 100%
China Brige Express (Wuxi) Co.,
China Bridge (China) Co., Ltd. Ltd.
100% 100%
Lite-On Power Technology (Chang Zhou)
Co., Ltd. (original name: Li Shin Wuxi Lite-On Tech. Co., Ltd.
Enterprise (Su Zhou) Co., Ltd.)
100% 100%
Lite-On Technology (Ying Tan)
----- End of picture text -----

==> picture [469 x 318] intentionally omitted <==

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

48.13% 100%
Ze Poly Pte. Ltd. Ze Poly Tomsk Ltd.
100% 100%
Lite-On Electronics H.K. Ltd. Silitek Elec. (Dongguan) Co.,
Ltd.
100%
Lite-On Digital Electronics
(Donguan) Co., Ltd.
100%
Lite-On Computer Tech
(Dongguan) Co., Ltd.
100%
Dong Guan G-Com Computers Co.,
Ltd.
100%
Dong Guan G-Tech Computers Co.,
Ltd.
100%
Lite-On Electronics (Dongguan) 20.71%
Co., Ltd.
100%
Lite-On Electronics (Tianjin)
Co., Ltd.
79.29%
DongGuan G-pro Computer Co.,
Ltd.
100% 100%
China Brige Express (Wuxi) Co.,
China Bridge (China) Co., Ltd. Ltd.
100% 100%
Lite-On Power Technology (Chang Zhou)
Co., Ltd. (original name: Li Shin Wuxi Lite-On Tech. Co., Ltd.
Enterprise (Su Zhou) Co., Ltd.)
100% 100%
Lite-On Technology (Ying Tan)
Lite-On Singapore Pte. Ltd.
Co., Ltd.
100%
Lite-On Technology (Xianing)
Co., Ltd.
----- End of picture text -----

221

222

Lite-On Technology Corporation 2013 Annual Report

==> picture [1014 x 647] intentionally omitted <==

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

100% 100%
Lite-On Technology Corporation Lite-On Technology USA Inc. Lite-On Trading USA, Inc.
100%
Lite-On Service USA, Inc.
100%
Lite-On, Inc.
100%
Maxi Switch S.A. de C.V
100%
Lite-On Electronics (Europe) Ltd.
100%
Lite-On Overseas Trading Co., Ltd.
100%
Lite-On Automotive Electronics
(Europe) BV
100%
Lite-On Automotive North
America Inc.
84.89% 100% 100% 100%
Lite-On Automotive International Lite-On Automotive Holdings Litie-On Automotive Electronics
Lite-On Automotive Corp.
(Cayman) Co., Ltd (Hong Kong) Ltd. (Gungzhou) Co., Ltd.
100%
Lite-On Automotive (Wuxi) Co.,
Ltd.
100% 100%
Silitech Technology (SuZhou)
Silitech (Hong Kong) Holding Ltd.
Co., Ltd.
34.90% 100% 100% 100%
Silitech Technology Corporation
Silitech Technology Corp. Silitech (BVI) Holding Ltd. Silitech (Bermuda) Holding Ltd.
Sdn. Bhd.
100%
0.62% Silitech Technology (Europe)
Limited
100% 100% 100% 100% 100%
Silitech Technology Corporation Xurong Electronic (Shenzhen)
Lite-On Capital Corp. Lite-On Japan(s) Pte. Ltd. Lite-On Japan (Thailand) Co., Ltd.
Limited Co., Ltd.
100% 100% 55.00% 100%
Silitech International (India)
7.87% L&K Industries Philippines, Inc. Silitek Plating Limited Silitech Plating (ShenZhen) Co., Ltd.
Private Ltd.
100% 100% 60%
SuZhou Xulong Mold Producing
Lite-On Japan (H.K.) Pte. Ltd. NL (Shanghai) Co., Ltd.
Co., Ltd.
49.49% 100% 100% 100%
Silitech Surface Treatment
Lite-On Japan Ltd. LOJ Korea Co., Ltd. Major Suit (HK) Co. Ltd.
(Shenzhen) Co., Ltd.
----- End of picture text -----

223 Lite-On Technology Corporation 2013 Annual Report

224

Lite-On Technology Corporation 2013 Annual Report

==> picture [1015 x 648] intentionally omitted <==

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

100% 20.66% 100% 100% 100%
Li Shin International Logah Electronics (Su Zhou)
Lite-On Technology Corporation Logah Technology Corp. Logah Technology Co., Ltd. Logah Technology (HK) Co., Ltd.
Enterprise Corp. Co., Ltd.
18.97% 100%
Lippo Electronics (Su Zhou)
100%
Co., Ltd.
Suzhou Fordgood Electronic Co., Ltd.
100% 100%
Li Shin International Enterprise Huizhou Li Shin Electronic Co.,
Corp. Ltd.
100% 100%
Huizhou Fu Tai Electronic Co.,
Eagle Rock Investment Ltd.
Ltd.
100%
Li Shin Technology (Huizhou)
Ltd.
54% 100% 100% 100%
Lite-On Mobile Oyj
Lite-On Technology (Europe) B.V. Lite-On (Finland) Oy Perlos Mexico Holding Corp.
(Formerly: Perlos Oyi)
100% 100%
Lite-On Capital Corp. Lite-On Mobile Sweden AB
46% 100% 99%
Lite-On Mobile Pte. Ltd. Perlos Mexico, S. A. de C.V
100%
Lite-On Mobile Indústria e Comé
rcio de Plásticos Ltda.
100%
Guangzhou Lite-On Mobile
Engineering Plastics Co., Ltd.
100% 100%
Guangzhou Lite-on Mobile Yantai Lite-On Mobile Electronic
Electronic Components Co. Ltd. Components Co., Ltd.
100% 100%
Beijing Lite-On Mobile Electronic and
Zhuhai Lite-On Mobile Technology
Telecommunications Components Co.,
Co., Ltd.
Ltd
100%
Shenzhen Lite-On Mobile Precision
Molds Co., Ltd.
100%
Perlos Precision Plastics Moulding
Limited Liability Company
100%
Lite-On Mobile India Private Ltd.
100% 100%
Lite-On Young Fast (Huizhou) Co.,
Lite-on Young Fast Pte. Ltd.
Ltd.
----- End of picture text -----

AI assistant

LTC — Annual Report 2013

51997_rns_2014-07-21_7bcffa30-1b8e-418f-9604-2cfaed0fa4d8.pdf

Table of Contents

Letter to Shareholders

Corporate Overview

Corporate Governance

Capital and Shares

Financial Information

Contact Information

Acting Spokesperson :

Global Headquarters:

Major Factory:

Stock Affairs Department:

CPAs:

GDR and Related Information:

Members of Top Management

Vision

Mission

To become a Company of World Class Excellence

Short-term:

Lite-on Value

Strategy

Business Philosophy

Letter to Shareholders

Dear Shareholders,

Development and Outlook

Operating Performance

Honors and Recognitions

Corporate Overview

2.1 Company Profile

About Lite-On Technology

2.2 Lite-On Corporate Values

1. Customer Satisfaction

2. Excellence in Execution

3. Innovation

4. Integrity

Corporate Governance

2.3 Organization

3.1.1 Major Resolutions of the General Meeting

3.1.2 Board of Directors

6. BOD resolutions on 2013/05/13

7. BOD resolutions on 2013/06/19

8. BOD resolutions on 2013/07/15

9. BOD resolutions on 2013/08/12

10. BOD resolutions on 2013/11/12

Major Resolutions of the Board Meetings

1. BOD resolutions on 2013/01/30

2. BOD resolutions on 2013/02/04

3. BOD resolutions on 2013/03/20

4. BOD resolutions on 2013/03/29

5. BOD resolutions on 2013/05/08

11. BOD resolutions on 2013/12/16

12. BOD resolutions on 2014/01/13

13. BOD resolutions on 2014/03/17

14. BOD resolutions on 2014/03/27

15. BOD resolutions on 2014/04/15

1. The Board and the Functional Committees

2. Board Meetings Attendance

3.1.3 Audit Committee

Chairperson: Kuo-Feng Wu, independent director

Members: Harvey Chang, independent director; Edward Yao-Wu Yang, independent director

3. Audit Committee Attendance

4. The status of operation of the Audit Committee or the supervisors and the Board of Directors

(1) The operation of the Audit Committee

Important Notice:

(2) The participation of the supervisors in the Board

3.1.4 The Compensation Committee

Chairperson: Harvey Chang, independent director

Members: Kuo-Feng Wu, independent director; Edward Yao-Wu Yang, independent director.

3.1.5 The Growth Strategic Committee

Chairperson: Edward Yao-Wu Yang, Independent Director

3.2 Anti-corruption

I Gifts and treats:

II Principles governing on-the-job payments:

3.3 Corporate Risk Management

Risk Management Organizational Structure

Risk Management Cycle

3.4 Information Regarding Board Members and Management Team

3.4.1 . The profiles of the directors and the independent directors

LTC Annual Report 2013