LTC — Annual Report 2014

Jul 9, 2015

Contact Information Members of Top Management

1. Letter to Shareholders

2.Corporate Overview

• 2.1 Company Profile
• 2.2 Lite-On Corporate Values
• 2.3 Organization Chart

3.Corporate Governance

• 3.1 Introduction
• 3.1.1 Major Resolutions of the General Meeting
• 3.1.2 Board of Directors
• 3.1.3 Audit Committee
• 3.1.4 The Remuneration Committee
• 3.1.5 The Growth Strategic Committee
• 3.2 Anti-Corruption
• 3.3 Corporate Risk Management
• 3.4 Information Regarding Board Members and
• Management Team
• 3.5 Statement of Internal Control System

4.Capital and Shares

• 4.1 The Top-10 Shareholders and Information of Related
• Parties
• 4.2 The Structure of Shareholders
• 4.3 Change in the Proportion of Shareholding among the
• Directors, Managers, and Major Shareholders

5. Financial Information

5.1 Consolidated Financial Statements of 2014 5.2 Parent Company only Financial Statements of 2014

Table of Contents

Spokesperson:

Brownson Chu General Manager, Finance Department Tel: 886-2-8798-2888 e-mail: brownson.chu@liteon.com

Acting Spokesperson:

Julia Wang Senior Director, Investor Relations/Public Relations Tel: 886-2-8798-2888 e-mail: julia.wang@liteon.com

Global Headquarter:

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

Contact Information

05 06

Members of Top Management

Business Philosophy

Vision Mission Belief Spirit

A World-Class Excellent Company Best Partner in Opto-Electronic, Eco-Friendly and Intelligent Technologies

• Corporate Citizenship: Globalization / Environmental protection / Social responsibility.
• Industry Leader: No.1 global market position.
• Profitability: Being up to the highest industry standard.
• Governance: Transparency/ Independence/ Fairness.

• Size of Organization: Over 10 billion US dollars in revenue.

• Customer Satisfaction

• Excellence in Execution
• Innovation
• Integrity

Long-Term Mission: Become the Absolute #1 in Our Industry

Mid-Term Mission:

• Prioritize investment in energy saving, environmentally friendly and smart technologies; enhance product portfolio and profit
• Expand to emerging markets

• Excellent global time-to-market, time-to-volume capability; optimize global operation (industry #1 operation excellence)

• Passion

• Excellence
• Innovation
• Growth

Dear Shareholders,

This year, Lite-on successfully completed the "One Lite-On" project, merging nine subsidiaries into one. With the resources and competiveness of Lite-On Automotive, Lite-On IT Corp., LarView Technologies 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, Lite-On is entering its 40th year with a brand new face. Thanks to an effective re-organization and the reduction of financial and operational costs, we are already witnessing the results of the consolidation. In 2014, Lite-On's global combined revenue reached NT\$230.63 billion, the equivalent of an 8% annual growth. The six major non-PC-related growth products comprised 50% of the overall revenue, representing a 30% annual increase. Our net operating profit topped NT\$6.46 billion after taxes and our annual earnings per share (EPS) reached NT\$2.8.

Operating Performance

With a steady demand in the end-markets, Lite-On's sales of core products continued to see a steady growth. Our optoelectronic products saw a near 30% annual revenue growth thanks to the increase in market demand for lighting, consumer and portable devices, global demand for energy-saving devices and our successful deliveries to Taiwanese and American customers. There was demand growth from our major car lighting customers, smooth delivery in high-end camera modules expanded, an increase in global market share of smartphones and computers. With the increase in demand for cloud application server power management systems and portable devices, our revenue from server management systems also rose to a record high. In our core business groups, we saw an expansion in market share for high-end server casings and input devices (peripherals like keyboards and mice), an increase in delivery of tablet PC peripheral applications and smooth delivery of the new laser models of multifunction machines. All the above contributed to a nearly 20% annual revenue increase in the information product division. Thanks to the increase in market demand in the storage devices division, revenue in SSDs (solid state drives) and gaming-related products has grown 20%.

Honors and Recognitions

Lite-On has always been dedicated to building transparent corporate governance and upholding corporate social responsibility (CSR). Our efforts did not go unnoticed. Among the various honors received at home and abroad, Lite-On was recognized as runner-up for CommonWealth Magazine's Benchmark Enterprise Award and winner in the Electronics Industry category for the sixth consecutive year. Being a long-time devotee of corporate social responsibility, Lite-On was selected as a leading member of the Dow Jones Sustainability Index (DJSI) for the fourth year in a row. We were also recognized as No. 1 in both the Global and the Emerging Markets Computer Hardware categories. Locally, CommonWealth Magazine placed Lite-On Technology on the Excellence in Corporate Social Responsibility list for the eighth consecutive year. We were also granted the Taiwan Corporate Sustainability Award for the fourth consecutive year. In addition, our highly transparent information disclosure efforts secured us a ranking of A++ on the SFI (Securities & Futures Institute).

To strengthen communication with all our employees, shareholders and stakeholders and to further enforce information transparency, Lite-On Technology has published an annual CSR report starting in 2007. Its content and structure have received GRI G4 Comprehensive Option certification based on the AA 1000 principles by SGS Taiwan Ltd., an impartial third party. Being one of the very first domestic enterprises to receive this certification shows how serious we are about keeping the same standards as the international community. Because of this, we have received the Taiwan Corporate Sustainability Report (CSR) Award conferred by the Taiwan Institute for Sustainable Energy (TISE) for the fourth consecutive year now.

When society faces challenges, Lite-On never shies away from its responsibilities. As the LED streetlight provider with the largest market share in Taiwan, Lite-On made a donation of NT\$5 million immediately after the gas explosion in Kaohsiung and provided LED street lighting devices to help the disaster area get back on its feet. When Lite-On's biomed business group launched the first chemical analyzer developed and manufactured in our country and successfully entered the global biomed market, we followed the lead of the Ministry of Health and Welfare's Enhancing Taiwan's Medical Care policy and gifted 18 skyla®HB1 analyzers, reagents and related services to six remote counties including Lienchiang County, Penghu County, Hualien County, Taitung County, Nantou County and Pintung County. As always, we take concrete actions to care for Taiwan and give back to society.

Development and Future Outlook

Since the One Lite-On project officially began in 2014, the eight business groups--Mobile Mechanics, PID, Power system, Storage, MEC, CDSS, OPS and the New Business unit—have embraced Lite-On's corporate spirit of passion, excellence, innovation and growth to raise our operational results, increase our power for innovation and take hold of the next wave of growth and market opportunities. In 2015, our operational focus will return to making profit and stabilizing our operations to further enhance our asset utilization ratio. At the same time, we will take advantage of automated production processes to optimize our capacity and efficiency and encourage meticulous production to transform the overall production process and increase our shareholders' ROE and deliver more growth in 2015.

Since its establishment in 1975, Lite-On has gone through times when technology in Taiwan and around the globe depended on each other and the industry went from analog to digital and electronic products went from consumer electronics to information and communication products. Today, our applications range from car electronics, LED lighting, cloud computing and biotechnology. For 40 years, Lite-On has kept its focus on creating a competitive edge in mass production. With our diversified product portfolio, we have strived to integrate and manage all resources from the group for maximum operational efficacy and increase revenue growth and profitability. Lite-On started as an electronic components manufacturer. Now our businesses range from end-product manufacturing, innovative R&D, manufacturing and development of products and many more. No matter how the technology industry changes, Lite-On will continue with its efforts and further strengthen its operations.

The multiple uncertainties in the global economy generate many challenges to a company's operations. With new products and technologies being launched everyday, the technology industry is going through a transformational phase where manufacturers are becoming application providers. In such an era of changes and challenges, Lite-On continues to take advantage of being a world-class outstanding enterprise and focuses on becoming an exceptional business partner to our clients. We provide innovative design, hardware, and applications when they are exploring the areas of optoelectronics, electronics, energy savings and smart applications. We continue to explore new opportunities in the areas of LED lighting, cloud computing, car electronics and biomedical technology. We have also already started laying out comprehensive plans to expand our territory and foster a new wave of growth.

As we step into the 40th anniversary of Lite-On, we would like to thank all our members for their hard work and persistence. We would also like to thank each of our customers, suppliers, partners, shareholders and the public for your support and recognition. Lite-On wishes to extend our appreciation to you and we invite you to take part in our future plans for expansion and on our journey towards becoming a centenarian corporation.

Letter to Shareholders

Raymond Soong Chairman of Lite-On Group Warren Chen Vice Chairman and Group CEO of Lite-On Group

2.1 Company Profile

Established:	1975/6/2
Date of Listing:	1983/1/26
Company Code:	2301
Paid-in-Capital:	NT\$ 23.4 B (as of December 2014)

About Lite-On Technology

Founded in 1975, the Lite-On Group embraced being "Best Partner in Opto-Electronic, Eco-Friendly and Intelligent Technologies" as its vision to focus on the development of photonic devices and key electronic components. Through resource integration and management optimization, Lite-On has established itself as a leader in mass production of products used in computers, communications, consumer electronics, automotive electronics, LED lighting, medical and biotech. The Group is a world leader in products such as opto-electronics, information technology, storage devices, and mobile mechanics.

For more than 40 years Lite-On has concentrated on establishing a competitive advantage in mass production. Through resource integration and management, we maximize the returns from a diverse product portfolio to realize excellent revenue growth and profits. Every product line at Lite-On is aimed becoming the largest in Taiwan and among the top-three in the world in terms of market size. As technology advances with time, Lite-On's image business becomes the largest in Taiwan. It is also the second largest supplier of optical drives, the largest supplier of notebook power supplies in the world and one of the top 2 keyboard suppliers in the world. Lite-On is also the world's No. 2 supplier of power supplies, one of the top 3 camera model suppliers, the No. 1 supplier of LED street lights by market share in North America and also the top supplier by volume in Taiwan. In 2014, Lite-On successfully completed the consolidation of its nine main subsidiaries under the "One Lite-On" program. The main business strategy remains focused on advancing resource utilization, using automation to optimize production and efficiency, and promoting lean production to transform the overall production process and productivity. In the long-term, the focus is on profitability, operation excellence and enhancing shareholder returns to lay down the foundation for a sustainable century enterprise.

In recent years, Lite-On has actively moved beyond the information and communications industry into fields such as LED lighting, automobiles, medical and biotech, and cloud computing. These have generated a new wave of revenue growth from new sources. These include energy-saving products such as indoor/outdoor and automotive LEDs; power management systems and solid state hard drive storage devices used in cloud computing centers; and automotive electronics; as well as energy storage products such as electric vehicle charging equipment, wireless charging and quick charging battery modules. The global technology industry is now set to welcome a new wave of changes. Lite-On hopes to leverage our existing advantage as a world-class enterprise in this age of changes and challenges to become the best partner of global customers developing innovations and applications for opto-electronic, eco-friendly and intelligent technologies.

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:

Customer Satisfaction

As the best partners for our customers, we attentively listen to their needs, mastering market trends and using our strong expertise to fulfill their goals.

Excellence in Execution

With outstanding execution, we dedicate ourselves to fulfilling our commitments to customers, while creating innovative competitive advantages.

Innovation

With open minds and innovative technology, we are at the forefront of the mass production of next-gen technology.

Integrity

We emphasize integrity, transparency, and doing the right thing to earn the respect of our employees and trust of our customers and stakeholders to ensure solid and sustainable business operations.

Corporate Overview

2.3 Organization Chart

Corporate Governance

3.1 Introduction

Lite-On emphasizes transparent and effective corporate governance and has drafted a corporate governance framework and implemented practices in accordance with the Company Act, Securities and Exchange Act, and other relevant laws and regulations. The company continues to improve its management performance, while safeguarding the rights and interests of investors and other stakeholders.

Lite-On's corporate governance milestones:

Audit Committee. In 2008 and 2010, a Remuneration Committee and a Growth Strategy Committee were established

• 1. In 2007, the company introduced the role of independent director to replace supervisors, and established its first respectively under the board of directors.
• 1. Lite-On places high emphasis on the complete, timely, fair and transparent disclosure of information. In addition to publishing financial data, statements, annual reports and material information onto the Market Observation Post System (MOPS), Lite-On also makes this information accessible from its website for the convenience of local and foreign investors. (www.liteon.com)
• 1. The company will continue to pursue sound corporate governance and the transparency, timeliness, and fairness of Information Disclosure Evaluation.
• 1. In 2014, Lite-On's NA site at Qingxi and SS site at Qingxi both obtained Product Liability Insurance AAA Certification from ACE Group, the world's most creditworthy certifier. So far, ten of the company's plant sites have obtained Product Liability Insurance AAA Certification, and Lite-On has set a goal for all plant sites to obtain AAA certification.

financial information disclosure. In 2014, Lite-On was rated A++ by the Securities and Futures Institute during its

Lite-On's Board of Directors, Audit Committee, Remuneration Committee and Growth Strategy Committee perform their duties in accordance with the "Board of Directors Meeting Rules," "Audit Committee Organizational Rules," "Compensation Committee Organizational Rules," and "Growth Strategy Committee Organizational Rules.

3.1.1 Major Resolutions of the General Meeting

The Company held a regular session of the General Meeting of 2013 on June 19th 2014 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 2013 Financial Statements
• ii. Adoption of the Proposal for Appropriation of 2013 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 "Procedures for Acquisition and Disposal of Assets"

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

3.1.2 Board of Directors

The company's directors are elected according to its "Director Election Policy," where candidates are nominated based on the system stipulated in Article 192-1 of the Company Act. The company is required by law to announce before the book closure date of its annual general meeting the period of directors' (including independent directors) nomination (no less than 10 days) and the number of directors (including independent directors) to be elected. The list of director candidates (including independent directors) needs to be reviewed by the board to make sure that all candidates are qualified (including independent directors) before the election commences during the annual general meeting.

The board consists of 11 members; all of whom are elected by shareholders. Board members currently include one Chairman; six institutional investor representatives from Lite-On Capital, Dorcas Investment Co. Ltd., Ta-Sung Inv Co. Ltd. and Yuan Pao Development & Inv. Co., Ltd.; one natural-person director; and three independent directors. These members come from a broad variety of backgrounds and experience, and are capable of fulfilling their duties. They have been given the duty to exercise proper governance of the board of directors, to supervise/appoint/instruct the management, and to oversee the company's financial, social, and environmental performance in ways that maximize stakeholders' interests.

Board members' backgrounds, education, concurrent roles at other companies etc and functioning of the board of directors as well as various functional committees have already been disclosed in the company's annual report. The annual report is accessible on the Market Observation Post System and from the company's website (www.liteon.com).

According to Lite-On's "Board of Directors Meeting Rules," board meetings are held at least once every quarter. A total of eleven board meetings were held in 2014.

Major Resolutions of the Board Meetings

Following are the important resolutions from the board during 2014/01/01-2015/04/30.

1. 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.

• 1. 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.
• 1. 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.

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

•LTC announces BOD's resolution of 100% owned subsidiaries LOM Pte and LOM Oyj converting internal loan to LOM

• 1. BOD resolutions on 2014/04/15
• subsidiary.
• 1. BOD resolutions on 2014/05/13
• India into equity investment.
• •Lite-On Technology Corp. announced the results of it's operations for Y2014 Q1.
• 1. BOD resolutions on 2014/06/13 •Interim Meeting of Board Approves a Lot of CAPEX for Operating Equipment and Facilities of USD 41M.
• 1. BOD resolutions on 2014/07/15 •Announcement of the record date for 2013 dividend.
• 1. BOD resolutions on 2014/07/29 •BOD announced the resolution regarding merger with its subsidiary, LarView Technologies Corp.
• 1. BOD resolutions on 2014/08/12 •Lite-On Technology Corp. announced the results of it's operations for Y2014 H1.
• 1. BOD resolutions on 2014/10/15
• •BoD approved the investment in China.
• •BOD approved the investment in China.
• •Board of Directors approved on the subsidiary's purchase of the office building in Shanghai.
• 1. BOD resolutions on 2014/11/11
• Singapore Pte Ltd & Lite-On IT Singapore Pte Ltd.
• •Lite-On Technology Corp. announced the results of it's operations for the first three quarters of Y2014.
• 1. BOD resolutions on 2015/02/13
• •BOD approved the investment in China.
• Ltd.
• 1. BOD resolutions on 2015/03/25
• •Board of Directors Resolution for dividend distribution.
• •Board of directors resolution for issuance of new share for capital increase. •Announcement of Donation to Lite-On Culture Foundation.
• •Lite-On Technology Corp. announced the results of it's operations for Y2014.
• •Board of Directors' resolution on the schedule and agenda of year 2015 shareholders' meeting.

•The Lite-On Tech. Corp.("the Company")'s BoD approved the merger between its wholly-owned subsidiaries Lite-On

•Interim Meeting of Board Approves the Acquisition of Equipment by Subsidiary Zhuhai Lite-On Mobile Technology Co.,

1. The Board and the Functional Committees

	Director	Raymond Soong
	Vice Chairman	Lite-On Capital Inc.	Representative: Warren Chen
	Directors	David Lin
		Dorcas Investment Co., Ltd.	Representative: Joseph Lin
The Board		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

Audit Committee Since: 2007/06/21	Remuneration Committee Since: 2008/08/27	Growth Strategy Committee Since: 2010/09/01
Chair Person: Kuo-Feng Wu Members: Harvey Chang, Edward Yang	Chair Person: Harvey Chang Members: Kuo-Feng Wu, Edward Yang	Chair Person: Edward Yang Members: Raymond Soong, Warren Chen, Keh-Shew Lu, David Lin

2. Board Meetings Attendance

The Board held 14 meetings (A) in the recent period of time (from January 1st , 2014 to April 30th, 2015) with the attendance of the directors specified as below:

Title	Name	Attend (sit in) in person (B)	Attend by proxy	Attendance rate (%) 【A / B】
Chairman	Raymond Soong	13	1	93%
Director	David Lin	11	3	79%
Director	Dorcas Investment Co., Ltd. Representative:Joseph Lin	12	2	86%
Vice Chairman	Lite-On Capital Inc. Representative:Warren Chen	14	0	100%
Director	Ta-Sung Investment Co., Ltd. Representative:Keh-Shew Lu	4	10	29%
Director	Ta-Sung Investment Co., Ltd. Representative: Rick Wu	13	1	93%
Director	Yuan Pao Development & Investment Co., Ltd. Representative: CH Chen	11	3	79%
Director	Yuan Pao Development & Investment Co., Ltd. Representative: David Lee	14	0	100%
Independent Director	Kuo-Feng Wu	14	0	100%
Independent Director	Harvey Chang	11	3	79%
Independent Director	Edward Yang	14	0	100%

Important Notice:

1. 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.

2. 1. The avoidance of the conflict of interest by the directors on relevant motions: five occasions, (1) 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.
3. (2) 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.
4. (3) 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.
5. (4) 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.
6. (5) In the 9th session of the 23th 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.
7. 1. (1) 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.
8. (2) The company will continue to pursue sound corporate governance and the transparency, timeliness, and fairness of financial information disclosure. In 2014, Lite-On was rated A++ by the Securities and Futures Institute during its Information Disclosure Evaluation.

3.1.3 Audit Committee

Chairperson: Independent Director Kuo-Feng Wu Members: Independent Director Harvey Chang, Independent Director Edward Yao-Wu Yang

The Audit Committee consists entirely of independent directors. The duties of its three members are to assist the board of directors in reviewing the company's financial statements, internal control systems, audit practices, accounting policies, major asset transactions, and appointment/dismissal of external auditors, finance officers, accounting officers, and internal auditors so as to ensure compliance with government regulations.

• Effective internal control systems and audit operations are the foundation of sound corporate governance. In order to

maintain an effective internal control system, particularly in the area of risk management, financial and operational control, the Audit Committee regularly reviews reports submitted by internal auditors and assesses the independence of the company's financial statement auditors, thereby ensuring the utmost integrity in financial reporting. Communications between the Audit Committee and internal/external auditors:

• 1. The Chief Internal Auditor reports to the Audit Committee on any changes to internal controls.
• 1. The Chief Internal Auditor reports to the Audit Committee on any self-assessments conducted during the year.
• 1. The Chief Internal Auditor reports to the Audit Committee on audit plans and results during the year.
• 1. The Chief Internal Auditor reports to the Audit Committee on weaknesses discovered during various audits and actions taken to rectify such weaknesses.
• 1. The Chief Internal Auditor provides the Audit Committee with updates on changes to securities-related laws.
• 1. The Chief Internal Auditor reports to the Audit Committee on any special audit tasks assigned.
• 1. The external auditor reports regularly to the Audit Committee on any yearly and half-yearly audits planned and executed.
• 1. The external auditor reports to the Audit Committee whenever there is a change to the Statement of Financial Accounting Standards or securities-related laws.

According to Lite-On's "Audit Committee Organizational Rules," the Audit Committee meets at least once every quarter. A total of ten Audit Committee meetings were held in 2014.

(1) The operation of the Audit Committee

The Audit Committee held 12 meetings (A) in the recent period of time (from January 1st 2014 to April 30th 2015) with the attendance of the independence directors specified below:

Title	Name			Attend (sit in) in person (B) Attend by proxy Attendance rate (%) 【A / B】
Independent Director	Kuo-Feng Wu	12	0	100%
Independent Director	Harvey Chang	9	3	75%
Independent Director	Edward Yang	12	0	100%

Important Notice:

• 1. 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.
• 1. The act of the avoidance of the conflict of interest by the independent director: none.
• 1. The communications between the independent director and the Chief Audit Officer and the certified public accountants:
• (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) Before year start, the certified public accountants reported to the Audit Committee the valuation of independent, annual service contents and compensation.
• (8) The certified public accountants reported to the Audit Committee on the planning, implementation, and result of each period of the year.
• (9) The certified public accountants reported to the Audit Committee on the quarterly and the annual external audits
• (10) 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.
• (11) The certified public accountants reported to the Audit Committee in time when special issue occurs (no special issue occurred in 2014).

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 Remuneration Committee

Chairperson: Independent Director Harvey Chang Members: Independent Director Kuo-Feng Wu, Independent Director Edward Yang

The Remuneration Committee was established in 2009 to strengthen corporate governance and align the company with international practices. The Remuneration Committee has been authorized by the board of directors to supervise, review and decide the company's compensation policies.

Duties of the Remuneration Committee extend beyond employees' incentives and bonuses, to cover performance appraisals and remuneration of directors and executive managers as well. Lite-On's Remuneration Committee consists of three members; all of whom are chosen from independent directors to ensure objectivity, professionalism and fairness of the committee, while avoiding any conflicts of interest those members may have with the company.

The Remuneration Committee reviews the company's remuneration policies and plans on a regular basis to ensure that they sufficient to attract, motivate and retain talent. The committee reviews the performance and remuneration of directors, the CEO and executives, and evaluates employee bonuses on a yearly basis.

3.1.5 Growth Strategy Committee

Chairperson: Independent Director Edward Yao-Wu Yang Members: Director Raymond Soong, Director David Lin, Director Warren Chen, Director Keh-Shew Lu

The Growth Strategy Committee was established in 2010 in an attempt to strengthen and accelerate the growth of the Lite-On Group. The committee is authorized by the board of directors to review growth strategies for the Company and the Group as a whole. It is also responsible for the preliminary assessment of all major investments of the Company and the Group. It reports its resolutions regularly to the board of directors.

The scope of responsibility of Lite-On's Growth Strategy Committee covers Lite-On Technology Corporation as well as its subsidiaries and certain business departments. Committee members comprise five directors, all of whom are appointed by the board of directors.

A total of two Growth Strategy Committee meetings were held in 2014.

3.2 Anti-corruption

Lite-On upholds its reputation by obeying the laws and ethical standards of the countries in which it carries out its business activities. Lite-On tolerates no violation of laws or ethics during pursuit of sales, profits and performance targets. The company also has measures in place to govern activities that are prone to the risk of bribery, and hence prevent incidents from occurring.

"Integrity" is one of the company's four core values. The company has implemented an Employee Code of Conduct to help employees understand and handle the situations and issues encountered in daily work. This Code of Conduct has been included as part of orientation programs to give new hires an understanding of the company's standards with regard to reputation, laws and ethics. The Ethical Code of Conduct for Employees contains the following ethical guidelines:

• 1. Gifts and Hospitality:
• 1.1 Company employees may not give or accept any gifts intended to improperly influence normal business or decision making. Company employees must immediately notify their supervisor or return any substantial gifts that they have received. If, however, a gift constitutes a small gift such as often exchanged in business contact, it shall not be subject to this restriction.
• 1.2 Customers and company employees may engage in reasonable social activities within the course of the business contact in so far as such activities are clearly for business purposes and are respectable in tone. However, any excessively generous treatment shall require the prior consent of the employee's supervisor and a subsequent report to the supervisor. While dining is a necessary accompaniment of meetings between company employees and suppliers or customers, the principle of reciprocity should be emphasized.
• 1.3 Company employees should avoid any improper actions, and absolutely may not give or accept any kickbacks in any form under any circumstances. While engaged in private shopping, company employees and their family members may not accept discounts from suppliers due to their relationship with this company, unless such discounts are given to all employees of this company.
• 1. Principles Governing Business-related Payments:

Any employee who discovers an irregularity affecting company assets or monies that may disrupt payments must immediately notify their supervisor. If the irregularity involves a supplier, the employee must notify the head of purchasing. No bribes of any kind may be given to any person; there are no exceptions to this rule. So-called bribes refer to payments given to certain persons to induce them to violate the rules of their employers or the laws of their country.

• 2.1 Payments to suppliers: payments may only be made for goods or services provided by suppliers confirmed by the appropriate purchasing unit of the company to have complied with standards.
• 2.2 Payments to government officials: the company can not provide government officials of any country with payments that are prohibited in that country. Legitimate payments given to government officials must comply with all procedures specifically required by the company.
• 2.3 Payments to consultants, wholesalers or distributors: payments to consultants, wholesalers and distributors must be equivalent to the value of the services they provide.

2.4 Payments to customers: payments may not be directly or indirectly given to employees of any existing or potential

the procedures prescribed by the company, provided that such payments are not for ordinary commercial purposes as

2.6 Payments outside the payee's place of domicile: paying expenses or salaries to an account in a country where the payee does not reside or do business (this may sometimes be termed "distributed expenses") is acceptable as long as this does

• customer with the intent of inducing them to take improper actions.
• 2.5 Payments to others: payments may be made to persons who are not civil servants or customers in accordance with defined by the laws of the country where the payments take place.
• not violate laws, and provided that the entire transaction does not compromise the company's ethical standards.
• 2.7 Forgery of records: payments cannot be approved, executed, or accepted if part of the payment is intended or known company's account books, all "kickback funds" or similar funds or account transfers are strictly prohibited.

to be used for purposes other than those stated on the records. When there is no disbursement explanation in the

In addition to establishing uniform standards that apply consistently to all employees, Lite-On also emphasizes the need to explain the value of these ethical standards so that employees can understand how they relate to their daily activities and avoid conduct that may violate laws or the company's anti-corruption policy through intensive trainings with tests including employee ethical standards, as well as policies of anti-corruption, insider trading, antitrust and EICC. The company also has consultative services in place to clarify employee queries.

B. EICC (Electronics Industry Code of Conduct) courses: in addition to organizing EICC workshops at locations where the

• A. Employee Ethics, Anti-Corruption, Insider Trading, and Antitrust courses: based on its own Ethical Code of Conduct for Employees, Lite-On has created an online course that informs employees of the various anti-corruption policies and practices the company has in place, while reminding them to avoid conduct that may violate these policies. In addition, these courses have been made compulsory as part of the orientation that new hires joining. Moreover, material Insider Information and Anti-trust courses are compulsory and accessible online so that all employees have a more thorough understanding of how the company handles these two issues.
• company operates, the company has also created an online learning platform that trains employees in EICC values including: business integrity, avoidance of illegitimate gains, open information, respect for intellectual property, responsible advertising, fair trading, confidentiality, responsible minerals procurement, respect for privacy, and prohibition against retaliation.
• C. Consultative services and channels: the company has a Legal Department that supports employees with legal counsel over complies with regulations and that employee interests are protected.
• D. Grievance and reporting channels: internally, the company has hotlines, e-mail and opinion letter boxes available for employees to raise complaints; externally, the company makes public disclosures on its CSR web page regarding any unethical or illegal conduct found over the course of its business. Grievance hotlines, e-mail, and mailboxes have been made available through which outsiders may complain or report their concerns.

the course of their business dealings with customers. In the occurrence a major legal incident, the Legal Department will position itself at the frontline to resolve the matter with the employees involved, while making sure that the company

3.3 Corporate Risk Management

Lite-On has devoted itself to ensuring the economic, environmental and social sustainability for stakeholders including customers, shareholders, employees and the community. While taking steps to realize this goal, Lite-On adopts a robust risk management framework that identifies and controls the various risks of concern, so that said risk can then be transferred, mitigated, minimized or even eliminated entirely. This risk management framework is also one of the main reasons behind Lite-On's sustainable growth and outstanding performance.

The risk management framework

Lite-On's risk management framework and internal control system allow it to take the initiative and respond to the risks associated with its operations in the most cost-effective manner. The Group CEO serves as the highest ranking officer in the company's risk management framework.

Risk management life cycle

Based on experience accumulated throughout its long history, the company has been able to develop a comprehensive risk management framework with job functions and areas of responsibility clearly segregated for risk identification purposes. Risks identified within the organization are classified into "External Risks," "Operational Risks," and "Information Disclosure Risks." Each risk is further assessed and assigned a severity level of high, medium, or low, and mapped onto a risk map for ease of identification. This enables the organization to take further steps to transfer, accept, mitigate, and avoid the identified risks. By executing the PDCA cycle (plan, do, check, and act) the company is able to improve its control over various risk factors and reduce the chances of risks occurring and the impact they might have.

"External Risks" refer to external factors such as slow sales, competition, loss of market demand, change in consumer preferences, changes in technologies, new competing products, international incidents, economic recession, mergers and acquisitions, change in foreign currency control, election outcomes, extortion, noise, pollution, natural disasters, etc.. "Operational Risks" refer to problems that are associated with the company itself, such as inability to deliver goods on

Occurrence		Risk Map
High	Operations (neglect of safety rules/loss of personal property) Health and safety (lighting)	Environment (chemicals) Human resources (orders/child labor/work hour) Finance (Electricity bills) Business strategy (shareholder relations)	Market risk (customers' needs and satisfaction)
Medium	Operations (use of water/mis takes) Human resources (hazardous jobs) Environment (noise) Finance (carbon tax)	Safety and health (furnace temperature) Human resources (work hours/grievance channels) Business (budget spending) Operations (products and services)	Politics (political development) Health and safety (chemical corrosion) Business (business performance) Finance (liquidity) Compliance (legal and reputation risks) Strategies (business model/orga nization)
Low	Compliance (local environmen tal protection laws) Human resources (protection of whistle-blowers)	Business (pension) Human resources (bribery) Safety and health (substance exposure/fatigue/burns)	Safety and health (safety of gas tanks) Environmental safety (poison ous gas and fire) Human resources (limitation of freedom) Finance (derivatives)
Impact	Low	Medium	High

time, defective goods, unresolved technical issues, high procurement costs, excess inventory, bad production design, plant malfunction, employee discipline, safety incidents, fire hazard, use of child labor, forced labor, loss of data, information errors, financial reporting mistakes, etc.. "Information Disclosure Risks." refer to risks associated with the disclosure of public information as part of the company's operations, such as pricing failure, leakage of commercial secrets, unreliable financial forecasts, frequent adjustment of financial forecasts, failure to prepare quarterly/annual financial statements on time, failure to disclose required information, correction of errors etc. By setting key performance indicators (KPI) within the organization, Lite-On is able to assess whether key risks have emerged, and take necessary actions to transfer, accept, mitigate or avoid such risks. In order to minimize the possibility and degree of loss, the company adopts a risk management system that is even more pro-active than insurance. Meanwhile, Lite-On is progressively implementing an "AAA Product Liability Control Project" as enhanced management over manufacturing and sales risk.

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

• Risk management projects

In order to address external and operational risks of higher occurrence or impact, Lite-On has implemented a risk management plan throughout all plant sites that focuses on "Raising Safety Awareness," "Protecting Critical Assets," and "Establishing Safety Systems and Rules." Apart from raising risk awareness within Lite-On, the company has also executed a number of risk management projects that not only help identify dangers within various production centers, but also provides suggestions for future improvements. Through one project at a time, Lite-On is able to accomplish the overall goal of its risk management, and build a foundation for sustainable operations.

• Raising safety awareness

The Risk Management Department arranges regular training and seminars featuring the use of case studies to help employees learn from past mistakes, and hence raise their awareness towards safety and risk management.

• Protecting critical assets

Each year, the company conducts infrared tests on electrical appliances used in plant sites, and performs random checks on their risk management practices to identify areas of weakness and ways of minimizing foreseeable risks. Meanwhile, logistics operations are also inspected regularly to reduce logistics risks. All products that Lite-On offers to its customers undergo stringent internal quality control and are certified by third-party engineers who scrutinize everything the company does from product design, manufacturing to after-sale liabilities.

• Establishing safety systems and rules

Lite-On has been establishing a risk control and checking system since 2009 that aims to grade each property by level of associated risk, and thereby facilitate future assessments and management. Through regular inspections and improvements, Lite-On is able to optimize the risk profiles of its production sites, reducing the possibility of accidents and hence minimizing loss of workers, plant, equipment, raw materials, and operations.

The risk rating and audit system also helps reflect the risk status of various production sites. It reminds workers of the potential dangers present in the workplace, and allows quantifiable targets to be set and improved upon. In the short term, the system helps eliminate risks as soon as they are discovered; in the long run, it enables management to better plan its risk controls and implementation.

Lite-On introduced new business continuity management to make sure that the company can resume operations rapidly and remain competitive when facing any disaster, and built up the Business Continuity Plan (BCP) that achieves the following benefits:

• • Ensure business recoverability and sustainability; reduce overall operational risks and maintain competitiveness.
• • Provide assurances to customers and secure or even expand market share.
• • Protect the company's reputation and shareholders' interests.
• • Reduce costs of supply chain management and create industry service value.

3.4 Information Regarding Board Members and Management Team

3.4.1 . The profiles of the directors and the independent directors

Title	Name	Date of appointment (office)	Tenure (year)	Date of initial appointment	Proportion of shareholding at the time of appointment		Proportion of shareholding at present		Proportion of shareholding by spouse and underage children		Proportion of shareholding under the title of a third party		Important experience (education)	Other positions of the company
					Quantity	%	Quantity	%	Quantity	%	Quantity	%		or other companies
Chairman	Raymond Soong 102.6.19		three	81.05.20	77,738,111	3.37%	78,516,156	3.35%	14,817,654	0.63%	0		0% Honorary DBA, National Chiao Tung University Chief Engineer, Texas Instruments	Note 1
Vice Chairman	Lite-On Capital Inc. Representative: Warren Chen	102.6.19	three	90.04.19 87.05.19	14,817,672 0	0.64% 0%	14,965,974 9,028,220	0.64% 0.39%	0 1,658,600	0% 0.07%	0 0	0% 0%	Bachelor, Dept. Chemical Engineering University of Chinese Culture, Manufacturing Supervisor, Texas Instrument Inc.	Note 2
Director	David Lin	102.6.19	three	87.05.19	8,783,494	0.38%	11,342,609	0.48%	516,748	0.02%	1,500,000 (trust)		0.06% Tulane University MBA President, Texas Instruments Taiwan Ltd. President, Silitek Corp. CEO, Lite-On Group GCEO Lite-On Group and Lite-On technology Corp. Vice Chairman, Lite-On Group and Lite-On technology Corp.	Note 3
Director	Dorcas Investment Co., Ltd. Representative: Joseph Lin	102.6.19	three	90.04.19 96.06.21	5,930,283 0	0.26% 0%	5,989,636 293,699	0.26% 0.01%	0 0	0% 0%	0 0	0% 0%	MBA, University of South California Bachelor, Dept of Mechanical Engineering, UCLA CEO, Dorcas Investment Co., Ltd.	Note 4
Director	Ta-Sung Investment Co., Ltd. Representative: Keh-Shew Lu	102.6.19	three	87.05.19 90.04.19	46,159,459 0	2.00% 0%	46,621,447 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	102.6.19	three	87.05.19 90.04.19	46,159,459 0	2.00% 0%	46,621,447 988,128	1.99% 0.04%	0 50,843	0% 0%	0 0	0% 0%	Bachelor, Dept. of Commerce, Tamkang University; VP, Office 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	102.6.19	three	93.06.15 93.06.15	36,527,518 0	1.58% 0%	36,893,105 0	1.58% 0%	0 0	0% 0%	0 0	0% 0%	Bachelor, Dept of Mechanical Engineering, National Taiwan University Vice CEO, Texas Instruments Taiwan Ltd. Chairman, Co-tech Copper Foil Corporation	Note 7
Director	Yuan Pao Development & Investment Co. Ltd. Representative : David Lee	102.6.19	three	93.06.15 92.06.17	36,527,518 0	1.58% 0%	36,893,105 6,452	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

April 26, 2015

Title	Name	Date of appointment (office)	Tenure (year)	Date of initial appointment	Proportion of shareholding at the time of appointment		Proportion of shareholding at present		Proportion of shareholding by spouse and underage children		Proportion of shareholding under the title of a third party		Important experience (education)	Other positions of the company
					Quantity	%	Quantity	%	Quantity	%	Quantity	%		or other companies
Independent Director	Kuo-Feng Wu	102.6.19	three	96.6.21	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	102.6.19	three	96.6.21	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	102.06.19	three	96.6.21	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

Note 3: Director, Lite-On Technology Corp.

Independent director, Sino-America Silicon Products Inc.

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

Director of Essence Technology Solution Inc

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, representative of Lite-On Semiconductor Corp.

Note 7: Chairman, representative of Lite-On Semiconductor (Philippines) 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, On-Brilliant(Hong Kong) Co., Ltd. and CO-TECH DEVELOPMENT CORP.

Director, representative of Lite-On Technology Corp., Honghua Venture Capital Ltd., DIODES, Inc., ZePoly Pte Ltd. and Kwong Lung Enterprise Co, Ltd.

Note 8: Chairman, representative of On-Bright Electronics Incorporated Co., Ltd., Taiwan On-Bright Electronics., Ltd., SyncMOS Technologies International, Inc.

Chairman, On-Bright Electronics (SH) and On-Bright Electronics (Guangzhou)

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

Director, representative of Lite-On Technology Corp., Dunhong Technology Co. Ltd. and Lite-On Semiconductor (Philippines).

CEO, Lite-On Semiconductor Corp.

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

Independent supervisor, Advantech Corp.

• Director, 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: Chairman, GVT fund

Independent director, Lite-On Technology Corp.

Partner, iD Ventures America, LLC

Director, Sifotonics Technologies, Applied BioCode and Bandwidth 10.

Note 1: Chairman, Lite-On Technology Corp., Lite-on Li Shin Technology (Ganzhou) Co., Ltd., Lite-On (Finland) Oy, Lite-On Mobile Oyj, Guangzhou Liteon Mobile Engineering Plastics Co. Ltd., Guangzhou Lite-on Mobile Electronic Components Co. Ltd., Beijing Lite-On Mobile Electronic and Telecommunications Components Co., Ltd., Shenzhen Lite-On Mobile Perlos Precision Molds Co., Ltd., Lite-On Young Fast (Huizhou) Co., Ltd., Yantai Lite-On Mobile Electronic Component Co., Ltd., Zhuhai Lite-On Mobile Technology Co., Ltd., Lite-On Medical Device (Changzhou) Ltd., Lite-On Technology (Shanghai) Ltd., Lite-On Automotive Electronics Mexico, S.A. DE C.V., Lite-On Semiconductor Corp., DIODES,INC., Lite-On Semi (Wuxi) Co., Ltd., Lite-On Semi Electronics (Wuxi) Co., Ltd., and G-Pro Electronics (SH) Co., Ltd.

Chairman, representative of 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., Lite-On Network Communication (Dongguan) Limited, LITE-ON TECHNOLOGY (CHANG ZHOU) CO., LTD,

Wuxi China Bridge Express Trading Co., Ltd., Lite-On IT Guangzhou Ltd., Lite-On IT Trading (Guangzhou) Ltd., Lite-On IT Opto Tech (BH) Co., Ltd., Silitech Technology Corp., Lite-On Technology (Xianing) Co., Ltd., Lite-On Green Technologies Inc., LITE-ON GREEN TECHNOLOGIES(NANJING) CORPORATION, Lite-On Vietnam Co., Ltd., DIODES, INC. and Co-tech Copper Foil Corporation.

Director, Lite-On 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., Huizhou Fu Tai Electronic Ltd., FORDGOOD ELECTRONIC LTD., Actron Technology Corporation, Ta-Rong Investment Co. Ltd., Yuan Pao Development & Investment Co. Ltd., MingShing Investment Co. Ltd.,Duen Yuan Investment Co., Ltd., Ta-Sung Investment Co., Ltd., DYNA International Holding Co.,Ltd., DYNA International Co., Ltd., Lite-On Semiconductor(HK)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., Lite-On 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., Lite-On Communications (GZ) Co., Ltd., Lite-on Electronics and Wireless (Guangzhou) Ltd., Silitek Elec. (DG) Co., Ltd., Lite-On Elec. (GuangZhou) Co., Ltd., LITE-ON TECHNOLOGY (JIANGSU) CO.,LTD, LITE-ON OPTO TECHNOLOGY (CHANGZHOU) CO LTD, Yet Foundate Ltd., Lite-On Computer Tech (DG), Dong Guan G-pro Computer Co., Ltd., China Bridge (China) Co., Ltd., Lite-On Electronics (Chang Zhou) Co LTD, Lite-On Integrated Service Inc., Liteon (Guangzhou) Infotech Inc., Lite-On (Guang Zhou) Precision Tooling Co., Ltd., Lite-On Digital Electronics (DG) Co., Ltd., Lite-on Technology (GZ) Investment Company Limited, Lite-on Power Technology (Dong Guan) Co., Ltd., Dong Guan Lite-on Computer Co., Ltd., Lite-On IT International (HK) Limited, Silitech (BVI) Holding Ltd., Silitech (Bermuda) Holding Ltd., Silitech Technology Corp. Ltd., Silitech Technology Corp. Sdn. Bhd., 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 North America Inc., Lite-on Technology (YingTan) LTD., Leotek Electronics USA LLC, Leotek Electronics Holding Limited, CHANGZHOU LEOTEK NEW ENERGY TRADE LIMITED CORPORATION, Lite-On Green Technology B.V. , Lite-On Green Technologies (HK) Limited, Lite-On Green Energy (HK) Limited, Lite-On Green Energy (Singapore), Lite-On Green Energy B.V., Lite-On Green Energy S.R.L., Romeo Tetti PV1 S.R.L., Lite-On Automotive Service USA, Inc., and Dunhung Technology Corp.

Note 2: Chairman, Lite-On Young Fast Pte. Ltd.

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

Vice Chairman, Lite-On Mobile Oyj, Lite-On Automotive Electronics Mexico, S.A. DE C.V.

Vice Chairman, representative of Lite-On Technology Corp.

Director, Lite-On Singapore Pte. Ltd., Silitech International (India) Private Ltd., EAGLE ROCK INVESTMENT LTD., LI SHIN INTERNATIONAL ENTERPRISE CORP., HUIZHOU LI SHIN ELECTRONIC LIMITED, HUIZHOU FU TAI ELECTRONIC LIMITED, Lite-on Power Technology (Changzhou ) Co., Ltd., LI SHIN TECHNOLOGY (HUIZHOU) LIMITED, Lite-on Li Shin Technology (Ganzhou) Co., Ltd., FORDGOOD ELECTRONIC LTD., Lite-On Japan Ltd., Lite-On (Finland) Oy, Lite-On Mobile Pte. Ltd., Guangzhou Lite-on Mobile Engineering Plastics Co. Ltd., Guangzhou Lite-on Mobile Electronic Components Co. Ltd., Beijing Lite-On Mobile Electronic and Telecommunications Components Co., Ltd., Shenzhen Lite-On Mobile Perlos Precision Molds Co., Ltd., Lite-On Young Fast (Huizhou) Co., Ltd., Yantai Lite-On Mobile Electronic Component Co., Ltd., Zhuhai Lite-On Mobile Technology Co., Ltd., Lite-On Medical Device (Changzhou) Ltd., Lite-On Technology (Shanghai) Ltd.

Director, representative of 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., Ze Poly Pte. Ltd., 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., Lite-On Network Communication (Dongguan) Limited, Lite-On Communications (GZ) Co., Ltd., Lite-on Electronics and Wireless (Guangzhou) Ltd., Silitek Elec. (DG) Co., Ltd., Lite-On Elec. (GuangZhou) Co., Ltd., LITE-ON TECHNOLOGY (JIANGSU) CO.,LTD, Lite-On Technology (ChangZhou) CO LTD., , LITE-ON OPTO TECHNOLOGY (CHANGZHOU) CO LTD, Yet Foundate Ltd., Lite-On Computer Tech (DG), Dong Guan G-pro Computer Co., Ltd., China Bridge (China) Co., Ltd., WUXI CHINA BRIDGE EXPRESS TRADING CO LTD., Lite-On Electronics (Chang Zhou) Co LTD., Lite-On (Guang Zhou) Precision Tooling Ltd., Lite-On Digital Electronics (DG) Co., Ltd., Lite-on Technology (GZ) Investment Company Limited, Lite-on Power Technology (Dong Guan) Co., Ltd., Dong Guan Lite-on Computer Co., Ltd., Lite-On IT International(HK)Limited, High Yield Group Co., Ltd., Lite-On Information Technology B.V, Lite-On Information Technology GmbH, Lite-On IT Guangzhou Ltd., Lite-On IT Trading (Guangzhou) Ltd., Lite-On IT Opto Tech (BH) Co., Ltd., Philip & Lite-On Digital Solutions Corp., Silitech Technology Corp., 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., 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 Technology (YingTan) LTD., Lite-on Technology (Xianning) Co.,Ltd., CHANGZHOU LEOTEK NEW ENERGY TRADE LIMITED CORPORATION, Logah Technology Corp., Lite-On Green Technologies Inc., Lite-On Green Technology B.V., Lite-On Green Technologies (HK) Limited, Lite-On Green Energy (HK) Limited, Lite-On Green Energy (Singapore) Pte.Ltd., Lite-On Green Energy B.V., LITE-ON GREEN TECHNOLOGIES(NANJING) CORPORATION, Lite-On Green Energt S.R.L, Romeo Tetti PV1 S.R.L., Lite-On Automotive Service USA, Inc. and Lite-On Vietnam Co., Ltd.

3.4.2 Independent Status of the Directors

Qualification	following professional designations	With at least 5 years of working experience and the								Eligibility of independent status (Note 2)		Also a director to other
Name	A lecturer of private or public institutions of higher education specialized in business, legal affairs, finance, accounting, or the expertise required by the business of the Company	A judge, district attorney, lawyer, certified public accountant, or professional or technician who has passed relevant national examination and properly licensed.	Work experience in business, legal affairs, finance, accounting, or in an area required by the business of the Company							1 2 3 4 5 6 7 8 9 10		companies (number of firms)
Raymond Soong	No	No	Yes	-	-	-	-	-	-	V V V V		0
David Lin	No	No	Yes		V 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

(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

• 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).
• 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).
• 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.
• 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.

(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

(7) Not a professional, sole proprietor, partner, company or the owner, partner, director (trustee), supervisor(monitor), manager of the group enterprise

(10) Not being elected as the government, institution of their representative as stated in Article 27 of the Company Law.

3.4.3 Profile of the Management Team

Title	Nationality	Name	Date of			Proportion of shareholding Proportion of shareholding		Proportion of shareholding		Major Background Information (note 2)	Other positions of other companies			Manager who is the spouse or kin
(Note 1)			appointment (office)			by spouse and underage children		under the title of a third party						within the 2nd tier of the Civil Code
				shares	%	shares	%	shares	%			Title	Name	Relationship
Vice Chairman/ GCEO	Republic of China	Warren Chen 2002.11.04		9,028,220	0.39%	1,658,600	0.07%	0	0%	Dept of Chemical Engineering/University of Chinese Culture, Manager of Manufacturing Dept, Texas Instruments.	Refer to profile of director for detail	None	None	None
New Business CEO Republic of	China		Danny Liao 2013.06.19	2,490,017 0.11%		0	0%	0	0%	MBA, Lake Superior State University; CEO, Lite-On IT Corporation	Note 3	None	None	None
Business Group President	Republic of China	Alexander Huang	2010.06.01	5,179	0%	200,492 0.01%		0	0%	Dept of Information Engineering (previously Computer Dept), Microsoft Greater China Regional President, President of Microsoft Taiwan.	None
Business Unit General Manager	Republic of China	Shilung Chiang	2002.11.04	908,655 0.04%		0	0%	0	0%	MBA, University of Pittsburgh; President, Computer Business Division, Digital Corporation.	Director, Lite-On Singapore Pte. Ltd.	None	None	None
Business Group CEO	Republic of China	Peter Chiu	2002.11.04	1,220,003 0.05%		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.	Note 4	None	None	None
Operation Controlling General Manager	Republic of China	DI Wang	2002.11.04	1,410,943 0.06%		71,967	0%	0	0%	Ph.D, Northeastern University/Mathematics; VP in Sales Engineering, Potrans Electrical Corp.	Director, representative of Lite-On Integrated Service Inc.	None	None	None
HR General Manager	Republic of China	Albert Chang	2002.11.04	668,249 0.03%		291,067 0.01%		0	0%	Master of Industrial Management, National Cheng Kung University; ABIT U.S. Branch President	Note 5	None	None	None
Business Group President	Republic of China		Rex Chuang 2002.11.04	1,418,938 0.06%		424,199 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)	None	None	None
VP	Republic of China		Sonny Chao 2002.11.04	1,023,303 0.04%		2,561	0%	0	0%	School of Industrial Engineering, Polytechnic Institute of N.Y.; Philips Taiwan Global Marketing & Sales Sr. Program Manager	Note 6	None	None	None
Senior VP	Republic of China	TC Huang	2002.11.04	1,384,631 0.06%		2,905	0%	0	0%	University of Leicester/Business Administration; Manager , Yu long Corporation	None	None	None	None
Business Group CEO	Republic of China	Johnson Sun	2002.11.04	1,603,861 0.07%		374,971 0.02%		0	0%	Dept of Electrical Engineering, Feng Chia University; Safety Engineer, Sony Corporation.	Director, Lite-On Japan Ltd.,Director, representative of Power Innovations International Inc.	None	None	None
Business Unit General Manager	Republic of China		Henry Chen 2003.11.01	82,957	0%	0	0%	0	0%	Graduate Institute of Electrical Engineering, Tatung University; Project Manager, Mustek Systems.	None	None	None	None
VP	US	Wing Eng	2002.11.04	2,334,816 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	Republic of China	Tom Tang	2002.11.04	651,070 0.03%		1,681	0%	0	0%	Department of Electical Engineers, Chung Yung Christian University. Vice President, Pacific Image Electronic Co., Ltd.	None	None	None	None
VP	Republic of China	HY Lee	2002.11.04	590,590 0.03%		25,757	0%	0	0%	Master of Industrial Engineering, National Ching Hua University; Asst VP, Universal Microelectronics	None	None	None	None
VP	Republic of China	CH Lei	2009.02.02	171,364 0.01%		0	0%	0	0%	Dept of Physics, Christian Chung Yuan University; Asst VP, Hon Hai Precision Industrial Corp.	None	None	None	None

April 26, 2015

Title (Note 1)	Nationality	Name	Date of appointment (office)			Proportion of shareholding Proportion of shareholding by spouse and underage children		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
				shares	%	shares	%	shares	%			Title	Name	Relationship
Business Unit General Manager	Republic of China	Charlie Wang	2012.01.02	146,142	0.01%	0	0%	0	0%	MBA, National Cheng Chi University; VP of Lite-On Technology	None	None	None	None
VP	Republic of China	Victor Hsu	2012.11.27	60,050	0%	0	0%	0	0%	University of Illinois at Urbana-Champaign/MBA; Group CFO of Samson Holding Ltd.	Director, representative of Logah Technology Corp.	None	None	None
VP	Republic of China	Joseph SK Chen	2013.01.02	51,456	0%	23,719	0%	0	0%	Department of Electronics, Taipei Tech College. VP of CPBU, Sysgration Corporation Ltd.	None
VP	Republic of China	Johnson Wang	2013.06.03	110,325	0%	0	0%	0	0%	Master of Chemistry, National Ching Hua University; SCM VP, EATON PHOENIXTEC MMPL CO., LTD.	None	None	None	None
VP	Republic of China	Anson Chiu	2013.08.19	104,135	0%	0	0%	0	0%	Department of Industrial Management, Lunghwa University of Science and Technology. Procurement Specialist, Crownpo Technology Inc.	None	None	None	None
Business Unit General Manager	Republic of China	BC Liao	2013.08.19	245,651 0.01%		10,024	0%	0	0%	Industrial Management, Chung Yuan Christian University; Procurement Manager, Philips;	None	None	None	None
Business Unit General Manager	Republic of China	Jerry Hsu	2013.08.19	786,391 0.03%		1,545	0%	0	0%	Department of Electronics, Lunghwa University of Science and Technology. Engineer of power support design, ALITECH CO., LTD	None	None	None	None
VP	Republic of China	CY Chung	2013.10.02	10,000	0%	11,000	0%	0	0%	Industrial Management, National Cheng Kung University; Acting SBG Head, Hon Hai Precision Industrial Corp.	None	None	None	None
VP	Republic of China	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	Republic of China	Joe Wu	2014.03.20	10,385	0%	0	0%	0	0%	Biomedical Engineering , Chung Yuan Christian University. AVP, First International Computer, Inc.	None	None	None	None
Business Unit General Manager	Republic of China	Michael Wang	2014.06.13	592	0%	0	0%	0	0%	Master of Information Engineering, Tamkang University.General Manager,Lite-On Automotive Corp.	None	None	None	None
VP	Republic of China	TsungCheng Wang	2014.06.13	6,744	0%	5145	0%	0	0%	Ph.D, Mechanical Eng,Wayne State University.General Manager,Lite-On Automotive Corp.	None	None	None	None
VP	Republic of China	Jane Lee	2014.06.13	0	0%	0	0%	0	0%	College of Law, National Taiwan University,HR VP,Lite On Automotive Corp.	None	None	None	None
Business Group CEO	Republic of China	Charlie Tseng 2014.08.12		0	0%	0	0%	0	0%	EMBA,National Chiao Tung University.CEO, Lite-On IT Corporation	Note 7	None	None	None
Business Unit General Manager	Republic of China	David Yeh	2014.08.12	0	0%	0	0%	0	0%	Master of Administration,Tulane University.General Manager,Leotek Electronics Corp.	None	None	None	None
VP	Republic of China	James Hwang	2014.08.12	1,020	0%	0	0%	0	0%	Ph.D, Material Engineering,University of Michigan. VP,Leotek Electronics Corp.	None	None	None	None
VP	Republic of China	Chino Chen	2014.09.01	0	0%	0	0%	0	0%	Master of Mechanical Engineering , National Taiwan University.MTD Director, Lite-On IT Corporation	None	None	None	None
VP	Republic of China	Lando Lin	2014.10.01	460,618 0.02%		718	0%	0	0%	Master of Accounting,Feng Chia University.Special Assistant,Lite-On Tech. Co.	Note 8	None	None	None
Business Unit General Manager	Republic of China	Hai Huang	2015.01.01	213,695 0.01%		0	0%	0	0%	Department of Electronic Engineering,National Taiwan Ocean University.Business Unit Director,Lite-On Tech. Co.	None	None	None	None
Chief Finance and Accounting Officer Finance General Manager	Republic of China	Brownson Chu	2004.10.22	863,700 0.04%		584	0%	0	0%	Dept of Accounting, Feng Chia University; CFO, Finance Dept, Lite-On IT Corporation	Note 9	None	None	None
Chief Audit Officer	Republic of China	James Ho	2002.11.04	708,131 0.03%		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., LET (HK) Limited, Lite-On IT International (HK) Ltd., High Yield Group Co., Ltd., Lite-On Sales & Distribution 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., Silitech Technology Corp., 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., Romeo Tetti PV1 S.R.L, Lite-On Automotive Service USA, Inc.; Director, Lite-On Medical Device (Changzhou) Ltd., Lite-On Technology (Shanghai) Ltd., Five Dimension Co., Ltd, Lite-On Automotive Electronics Mexico, S.A. DE C.V.
• Note 4: Director, representative of Silitech Technology Corp.,Lite-On Vietnam Co., Ltd.; Director, Lite-On (Finland) Oy, Lite-On Mobile Oyj (Perlos Oyj), Lite-On Mobile Sweden AB(Perlos AB), Guangzhou Lite-on Mobile Engineering Plastics Co. Ltd.(Perlos (Guangzhou) Engineering Plastics Co., Ltd.), Guangzhou Lite-on Mobile Electronic Components Co. Ltd. (Perlos (Guangzhou) Electronic Components Co., Ltd.), Beijing Lite-On Mobile Electronic and Telecommunications Components Co., Ltd. (Perlos (Beijing) Electronic and Telecommunications Components Co., Ltd.), Shenzhen Lite-On Mobile Perlos Precision Molds Co., Ltd. (Perlos Precision Molds (Shenzen) Co., Ltd.), Lite-On Mobile India Private Limited. (Perlos Telecommunication and electronic Components (India) Private Ltd.), Lite-on Young Fast Pte. Ltd., Lite-On Young Fast (Huizhou) Co., Ltd.,Yantai Lite-On Mobile Electronic Component Co., Ltd., Zhuhai Lite-On Mobile Technology Co., Ltd., YAMADA-LOM FABRICACAO DE ARTEFATOS DE MATERIAL PLASTICO LTDA.
• Note 5: 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., Lite-On Network Communication (Dongguan) Ltd., Ltd., Lite-On Communications (Guangzhou) Co., Ltd, Lite-On Elec and Wire (Guangzhou) Co., Ltd., Silitek Elec. (Dongguan) Co., Ltd., Lite-On Electronics (Guangzhou) Ltd., Lite-On Electronics (Jiangsu)Co. Ltd.,Lite-On Technology (Changzhou) Co., Lite-On Opto Technology (Changzhou)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., Lite-On Technology (Ying Tan) Co., Ltd., Lite-On Li shin Technology (Xianing) Co., Ltd.; Director,LI SHIN INTERNATIONAL ENTERPRISE CORP., Huizhou Li Shin Electronic Co., Ltd., Huizhou Fu Tai Electronic Co., Ltd., Lite On Power Technology (Chang Zhou) Co., Ltd. (Original Name: Li Shin Enterprise (Su Zhou) Co., Ltd.), Li Shin Technology (Huizhou) Ltd., Lite-On Li shin Technology (Ganzhou) Co., Ltd.

& Lite-On Digital Solutions Netherlands B.V., Philips & Lite-On Digital Solutions Germany GmbH, Philips & Lite-On Digital

• Note 6: Director, representative of Lite-On, Inc. (USA),Lite-On Technology USA, Inc.,Lite-On Trading USA, Inc.,Lite-On Service USA, Inc., Power Innovations International Inc.; Director, Leotek Electronics USA LLC.
• Note 7: Director, representative of Lite-On Sales & Distribution Inc.; Director, Philips & Lite-On Digital Solutions USA Inc., Philips Solutions Korea Ltd., Philips & Lite-On Digital Solution (Shanghai) Co., Ltd.
• Note 8: Director, representative of Lite-On, Inc. (USA),Lite-On Technology USA, Inc.,Lite-On Trading USA, Inc.,Lite-On Service USA, LLC; Supervisor, Lite-On Capital Inc.
• Note 9: Director, representative of G&W Technology (BVI) Limited, G&W Technology Ltd., Lite-On Green Technologies (Nanjing) Managers, Lite-on Mobile Pte. Ltd. Taiwan Branch.

Inc., Lite-On Green Technologies Inc., Lite-On Green Energy S.R.L., Romeo Tetti PV1 S.R.L.; Director, Leotek Electronics USA

Corporation; Supervisor, Lite-On Integrated Service Inc., Lite-On Green Technologies Inc., Lite-On Vietnam Co., Ltd.;

39 40

Capital and Shares

4.1 The Top-10 Shareholders

Name	Shareholding by self		Shareholding by spouse and underage children
	Quantity of shares	Proportion of shareholding	Quantity of shares	Proportion of shareholding
NAN SHAN LIFE INSURANCE CO.,LTD	84,156,194	3.59%	0	0%
NAN SHAN LIFE INSURANCE CO.,LTD Representative:Wen-Te Kuo	0	0%	0	0%
Raymond Soong	78,516,156		3.35% 14,817,654	0.63%
Ta-Rong Investment Co., Ltd.	76,777,070	3.28%	0	0%
Ta-Rong Investment Co., Ltd. Representative: Shu-Yan Tsai	43,849	0%	0	0%
FUBON LIFE INSURANCE CO.,LTD	67,471,267	2.88%	0	0%
FUBON LIFE INSURANCE CO.,LTD Representative: Pen Yuan Cheng	0	0%	0	0%
CAPITAL SECURITIES NOMINEE LIMITED	64,540,083	2.76%	0	0%
The Master Trust Bank of Japan, Ltd. as trustee of Eastspring Investments Asia Oceania High Dividend Equity Mother Fund	54,910,997	2.34%	0	0%
Ta-Sung Investment Co., Ltd.	46,621,447	1.99%	0	0%
Ta-Sung Investment Co., Ltd. Representative: Keh-Shew Lu	0	0%	0	0%
Ta-Sung Investment Co., Ltd. Representative: Rick Wu	988,128	0.04%	50,843	0%
Ming-Hsing Investment Co., Ltd.Representative: Keh-Shew Lu	40,019,994	1.71%	0	0%
Ming-Hsing Investment Co., Ltd. Representative: Shu-Yan Tsai	43,849	0%	0	0%
VANGUARD EMERGING MARKETS STOCK INDEX FUND, A SERIES OF VANGUARD INTERNATIONAL EQUITY INDEX FUNDS	39,453,458	1.68%	0	0%
Government of Singapore	39,321,344	1.68%	0	0%

		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 under the Civil Code	2nd tier
	Proportion of shareholding	Quantity of shares	Proportion of shareholding	Title (or name)	Relation
0	0%	0		0% None	None
0	0%	0		0% None	None
		0		0% Ta-Rong/Ta-Sung/ Ming-Hsing Development ( Investment Co., Ltd.)	Director
0	0%	0		0% Raymond Soong	Director
0	0%	0		0% Ta-Sung/Ming-Hsing Development ( Investment Co., Ltd.)	Director/ Representative
0	0%	0		0% None	None
0	0%	0		0% None	None
0	0%	0		0% None	None
0	0%	0		0% None	None
0	0%	0		0% Raymond Soong, Shu-Yan Tsai	Director
0	0%	0		0% None	None
		0		0% None	None
0	0%	0		0% Raymond Soong	Director
0	0%	0		0% Ta-Rong/Ta-Sung Development ( Investment Co., Ltd.)	Representative/ Director
0	0%	0		0% None	None
0	0%	0		0% None	None

4.2 The Structure of Shareholders

							April 26, 2015
	Governmental Organizations	Financial Institutions	Other Institutional Investors	Individuals	Foreign Institutional Shareholders and Individuals	The People's Republic of China Individuals	Total
Numbers of Shareholders	6	21	321	146,568	737	1	147,654
Holding Shares	133	277,000,311	449,785,985		571,144,480 1,041,637,767		2,105,000 2,341,673,676
Holding Stake	0%	11.83%	19.21%	24.39%	44.48%	0.09%	100%

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

Title (note 1)	Name		2014		Current period to April 26
		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	390,907	0	0	0
Vice Chairman	Lite-On Capital Inc.	74,510	0	0	0
	Representative: Warren Chen	(415,747)	0	0	0
Director	David Lin	63,939	0	0	0
Director	Dorcas Investment Co., Ltd	29,820	0	0	0
	Representative:Joseph Lin	1,462	0	0	0
Director	Ta Sung Investment Co., Ltd.	232,113	0	0	0
	Representative: Keh Shew Lu	0	0	0	0
Director	Ta Sung Investment Co., Ltd.	232,113	0	0	0
	Representative: Rick Wu	4,919	0	0	0
Director	Yuan Pao Development & Investment Co., Ltd.:	183,679	0	0	0
	Representative: CH Chen	0	0	0	0
Director	Yuan Pao Development & Investment Co., Ltd.:	183,679	0	0	0
	Representative: David Lee	(10,968)	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
GCEO	Warren Chen	(415,747)	0	0	0
New Business CEO	Danny Liao	480,057	0	0	0
Business Group President	Alexander Huang	75,085	0	(237,000)	0
Business Unit General Manager Shilung Chiang		89,100	0	0	0
Business Group CEO	Peter Chiu	175,158	0	0	0

Title (note 1)	Name	2014			Current period to April 26
		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
Operation Controlling General Manager	DI Wang	66,900	0	(110,000)	0
HR General Manager	Albert Chang	(104,155)	0	0	0
Business Group President	Rex Chuang	49,193	0	0	0
VP	Sonny Chao	(201,995)	0	0	0
Senior VP	TC Huang	210,873	0	0	0
Business Group CEO	Johnson Sun	(534,206)	0	0	0
Business Unit General Manager	Henry Chen	(76,722)	0	(11,000)	0
VP	Wing Eng	91,226	0	0	0
VP	Tom Tang	16,057	0	0	0
VP	HY Lee	52,691	0	0	0
VP	CH Lei	6,703	0	0	0
Business Unit General Manager	Charlie Wang	75,354	0	0	0
VP	Victor Hsu	50,050	0	0	0
VP	Joseph SK Chen	45,032	0	0	0
VP	Johnson Wang	95,325	0	0	0
VP	Anson Chiu	85,095	0	0	0
Business Unit General Manager	BC Liao	70,874	0	0	0
Business Unit General Manager	Jerry Hsu	88,492	0	0	0
VP	CY Chung	10,000	0	0	0
VP	Mike MH Wu	0	0	0	0
VP	Joe Wu	51	0	0	0
Business Unit General Manager	Michael Wang	2	0	0	0
VP	TsungCheng Wang	33	0	0	0
VP	Jane Lee	0	0	0	0
Business Group CEO	Charlie Tseng	0	0	0	0
Business Unit General Manager	David Yeh	0	0	0	0
VP	James Hwang	0	0	0	0
VP	Chino Chen	0	0	0	0
VP	Lando Lin	0	0	0	0
Business Unit General Manager	Hai Huang	0	0	0	0
Chief Finance and Accounting Officer Finance General Manager	Brownson Chu	(1,173)	0	0	0
Chief Audit Officer	James Ho	(121,475)	0	0	0

43 44

Lite-On Technology Corporation and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2014 and 2013 and Independent Auditors' Report

45 46

RAYMOND SOONG Chairman March 25, 2015 - 3 -

LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars)

LIABILITIES AND EQUITY

CURRENT LIABILITIES

	2014		2013
ASSETS	Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents (Note 6) Financial instruments at fair value through profit or loss - current (Note 7)	\$ 66,483,356 13,111	-	31 \$ 66,056,220 14,867	31 -
Available-for-sale financial assets - current (Notes 5 and 8) Debt investments with no active market - current (Note 10)	- 78,170	- -	13 22,390	- -
Notes receivable	311,666	-	175,756	-
Trade receivables, net (Notes 5 and 11) Trade receivables from related parties (Note 34)	51,134,012 73,069	23 -	49,500,169 81,554	23 -
Other receivables	1,420,019	1	2,319,810	1
Other receivables from related parties (Note 34) Inventories, net (Note 12)	3,053 29,513,791	- 14	18,951 27,203,533	- 13
Non-current assets classified as held for sale (Note 13)	129,505	-	-	-
Other current assets (Note 18)	4,561,144	2	5,037,428	3
Total current assets	153,720,896	71	150,430,691	71
NONCURRENT ASSETS
Available-for-sale financial assets - noncurrent (Notes 5 and 8)	1,326,255	1	2,143,990	1
Debt investments with no active market - noncurrent (Note 10) Investments accounted for using equity method (Notes 5 and 14)	518 4,055,902	- 2	14,100 3,531,425	- 2
Property, plant and equipment, net (Notes 5 and 15)	36,107,216	17	37,001,382	17
Investment properties, net (Note 16) Intangible assets, net (Notes 5 and 17)	537,030 16,298,963	- 8	- 15,716,262	- 7
Deferred tax assets	3,107,672	1	2,207,204	1
Refundable deposits Other noncurrent assets (Note 18)	492,255 889,328	- -	390,443 925,989	- 1
Total noncurrent assets	62,815,139	29	61,930,795	29
TOTAL	\$ 216,536,035		100 \$ 212,361,486	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 19) Financial liabilities at fair value through profit or loss - current (Note 7)	\$ 22,911,114 38,408	-	11 \$ 15,576,780 27,836	7 -
Derivative financial instruments for hedging- current (Note 9)	11,989	-	-	-
Notes payable Trade payables	122,947 61,920,859	- 29	191,488 60,307,826	- 29
Trade payables to related parties (Note 34)	953,666	-	568,624	-
Other payables Other payables to related parties (Note 34)	19,693,248 6,741	9 -	21,352,914 11,699	10 -
Current tax liabilities	2,272,036	1	2,102,971	1
Provisions - current (Note 21) Advance receipts	1,080,628 2,832,769	- 1	874,502 1,401,939	1 1
Current portion of long-term borrowings (Note 19)	8,358,989	4	8,867,669	4
Finance lease payables - current (Note 20)	85,232	-	72,735	-
Total current liabilities	120,288,626	55	111,356,983	53
NONCURRENT LIABILITIES
Derivative financial instruments for hedging - noncurrent (Note 9) Long-term borrowings, net of current portion (Note 19)	- 13,564,160	- 6	46,969 18,508,496	- 9
Deferred tax liabilities	3,229,792	2	2,721,656	1
Finance lease payables, net of current portion (Note 20) Accrued pension liabilities (Notes 5 and 22)	101,721 108,874	- -	172,948 235,671	- -
Guarantee deposits	80,871	-	81,608	-
Total noncurrent liabilities	17,085,418	8	21,767,348	10
Total liabilities	137,374,044	63	133,124,331	63
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital
Ordinary shares	23,416,737	11	23,246,552	11
Advance receipts for common stock Total share capital	- 23,416,737	- 11	29,705 23,276,257	- 11
Capital surplus
Additional paid-in capital from share issuance in excess of par value Bond conversion	9,238,931 7,534,962	4 4	9,096,489 7,540,388	4 4
Treasury stock transactions Difference between consideration and carrying amounts adjusted arising from changes in percentage of ownership in subsidiaries	445,694 30,960	- -	430,851 -	- -
Arising from share of changes in capital surplus of associates	231,446	-	15,487	-
Merger Employee stock options	10,112,934 -	5 -	10,120,217 8,587	5 -
Total capital surplus	27,594,927	13	27,212,019	13
Retain earnings Legal reserve	9,476,876	5	8,601,391	4
Special reserve Unappropriated earnings	49,669 11,429,060	- 5	689,913 12,172,082	- 6
Total retained earnings	20,955,605	10	21,463,386	10
Other equity Exchange differences on translating foreign operations	4,125,097	2	2,383,040	1
Unrealized gain on available-for-sale financial assets	139,072	-	83,231	-
Unrealized loss on cash flow hedging Total other equity	(11,989 ) 4,252,180	- 2	(46,969 ) 2,419,302	- 1
Treasury shares	(1,248,722 )	(1 )	(1,334,660 )	(1 )
Total equity attributable to owners of the Company	74,970,727	35	73,036,304	34
NONCONTROLLING INTERESTS	4,191,264	2	6,200,851	3
Total equity	79,161,991	37	79,237,155	37
TOTAL	\$ 216,536,035		100 \$ 212,361,486	100

NONCURRENT LIABILITIES

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche audit report dated March 25, 2015)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2014		2013
	Amount	%	Amount	%
OPERATING REVENUE
Sales (Notes 24 and 34)	\$ 236,908,189	103	\$ 216,242,952	101
Less: Sales allowance	3,733,656	2	2,211,370	1
Sales returns	2,947,400	1	1,094,900	-
Other operating revenue	404,841	-	277,615	-
Total operating revenue	230,631,974	100	213,214,297	100
OPERATING COSTS
Cost of goods sold (Notes 12, 28 and 34)	202,260,385	88	182,552,021	86
Other operating cost	122,617	-	161,682	-
Total operating costs	202,383,002	88	182,713,703	86
GROSS PROFIT	28,248,972	12	30,500,594	14
OPERATING EXPENSES (Notes 28 and 34)
Selling and marketing expenses	8,794,035	4	8,390,499	4
General and administrative expenses	5,953,353	2	5,837,964	2
Research and development expenses	6,372,383	3	6,229,841	3
Total operating expenses	21,119,771	9	20,458,304	9
OPERATING INCOME	7,129,201	3	10,042,290	5
NONOPERATING INCOME AND EXPENSES
Share of profit (loss) of associates (Note 14)	41,056	-	(68,569)	-
Interest income	1,357,118	1	1,244,842	-
Dividend income	39,824	-	38,596	-
Government grants	-	-	916,607	-
Other income (Note 34)	1,305,569	-	1,543,298	1
Gain on disposal of investments	468,873	-	147,283	-
Net gain on foreign currency exchange	58,022	-	213,763	-
Valuation gain (loss) on financial instruments
(Note 7)	249,729	-	(67,902)	-
Finance costs	(673,634)	-	(708,831)	-
Other expenses	(703,177)	-	(938,540)	(1)
Net loss on disposal of property, plant and equipment	(77,334)	-	(267,939)	-
Impairment loss (Notes 8, 14 and 15)	(1,444,257)	(1)	(575,119)	-
Total nonoperating income and expenses	621,789	-	1,477,489	-
				(Continued)

LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2014		2013
	Amount	%	Amount	%
PROFIT BEFORE INCOME TAX	\$ 7,750,990	3	\$ 11,519,779	5
INCOME TAX EXPENSE (Note 25)	2,071,417	1	2,629,288	1
NET PROFIT FOR THE YEAR	5,679,573	2	8,890,491	4
OTHER COMPREHENSIVE INCOME (Notes 22, 23 and 25) Exchange differences on translating foreign
operations	2,115,652	1	2,869,963	2
Unrealized gain on available-for-sale financial assets Cash flow hedges	53,856 34,980	- -	512,434 54,594	- -
Actuarial gain (loss) arising from defined benefit plans	27,065	-	(284)	-
Share of other comprehensive income of associates	154,687	-	116,528	-
Income tax relating to the components of other comprehensive income	(433,322)	-	(412,212)	-
Other comprehensive income for the year, net of income tax	1,952,918	1	3,141,023	2
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	\$ 7,632,491	3	\$ 12,031,514	6
NET PROFIT ATTRIBUTABLE TO:
Owners of the Company	\$ 6,461,659	3	\$ 8,754,848	4
Non-controlling interests	(782,086)	(1)	135,643	-
	\$ 5,679,573	2	\$ 8,890,491	4
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the Company	\$ 8,307,615	3	\$ 11,608,664	6
Non-controlling interests	(675,124)	-	422,850	-
	\$ 7,632,491	3	\$ 12,031,514	6
EARNINGS PER SHARE (NEW TAIWAN DOLLARS; Note 26) Basic	\$2.80		\$3.81
Diluted	\$2.76		\$3.77

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

(With Deloitte & Touche audit report dated March 25, 2015) (Concluded)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars)

									Capital Surplus (Note 23)			Equity Attributable to Owners of the Company
					Additional Paid-in			Arising from the Consideration Received in Excess of the Carrying Amount of the Subsidiaries'	Difference Between Consideration and Carry Amounts Adjusted Arising from	Arising from								Exchange	Unrealized	Other Equity (Note 23)
			Issue of Share Capital (Note 23) Advance		Capital from Share Issuance			Net Assets	Changes in During Actual Percentage of	Share of Changes in						Retained Earnings (Notes 23 and 31)		Differences on Translating	Gain on Available-for-				Non-controlling Interests
	Share (In Thousands)	Amount	Receipts for Common Stock	Total	in Excess of Par Value	Bond Conversion	Treasury Stock Transactions	Disposal or Acquisition	Ownership in Subsidiaries	Capital Surplus of Associates	Merger	Employee Stock Options	Total		Legal Reserve Special Reserve	Unappropriated Earnings	Total	Foreign Operations	sale Financial Assets	Cash Flow Hedges	Total	Treasury Shares (Note 23)	(Notes 23, 29, 30 and 31)	Total Equity
BALANCE AT JANUARY 1, 2013	2,295,315	\$22,953,154	\$ 6,840	\$22,959,994	\$ 8,551,730	\$ 7,540,388	\$ 370,703	\$ 146,193	\$ -	\$ 16,645	\$10,120,217	\$ 6,112	\$26,751,988	\$ 7,847,905	\$ -	\$13,654,612	\$21,502,517	\$ 128,872	\$ (446,848 )	\$ (101,563 )	\$ (419,539 )	\$ (1,334,660 )	\$19,961,011	\$89,421,311
Appropriation of the 2012 earnings Legal reserve Special reserve Cash dividends - 23.5% Stock dividends - 0.5%	- - - 11,490	- - - 114,899	- - - -	- - - 114,899	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -	753,486 - - -	- 689,913 - -	(753,486 ) (689,913 ) (5,400,265 )	- - (5,400,265 ) (114,899 ) (114,899 )	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -	- - (5,400,265 ) -
Changes in noncontrolling interests	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(450,532 )	(450,532 )
Other changes in capital surplus Additional acquisition of partially owned subsidiaries Change in capital surplus from investments in associates and joint ventures accounted for by	-	-	-	-	-	-	-	(146,193 )	-	-	-	-	(146,193 )	-	-		(3,293,007 ) (3,293,007 )	-	-	-	-	-		(13,732,478 ) (17,171,678 )
the equity method Stock dividends of employee transferred to	-	-	-	-	-	-	-	-	-	(1,158 )	-	2,475	1,317	-	-	(783 )	(783 )	-	-	-	-	-	-	534
capital Issue of common shares under employee share	3,669	36,689	-	36,689	134,320	-	-	-	-	-	-	-	134,320	-	-	-	-	-	-	-	-	-	-	171,009
options Change in capital from cash dividends of the Parent Company paid to subsidiaries	14,181 -	141,810 -	22,865 -	164,675 -	410,439 -	- -	- 60,148	- -	- -	- -	- -	- -	410,439 60,148	- -	- -	- -	- -	- -	- -	- -	- -	- -	- -	575,114 60,148
Net profit for the year ended December 31, 2013	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	8,754,848	8,754,848	-	-	-	-	-	135,643	8,890,491
Other comprehensive income for the year ended December 31, 2013, net of income tax	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	14,975	14,975	2,254,168	530,079	54,594	2,838,841	-	287,207	3,141,023
Total comprehensive income for the year ended December 31, 2013	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	8,769,823	8,769,823	2,254,168	530,079	54,594	2,838,841	-	422,850	12,031,514
BALANCE AT DECEMBER 31, 2013	2,324,655	23,246,552	29,705	23,276,257	9,096,489	7,540,388	430,851	-	-	15,487	10,120,217	8,587	27,212,019	8,601,391	689,913	12,172,082	21,463,386	2,383,040	83,231	(46,969 )	2,419,302	(1,334,660 )	6,200,851	79,237,155
Appropriation of the 2013 earnings Legal reserve Special reserve Cash dividends - 27.1% Stock dividends - 0.5%	- - - 11,638	- - - 116,381	- - - -	- - - 116,381	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -	875,485 - - -	- (640,244 ) - -	(875,485 ) 640,244 (6,307,866 ) (116,381 )	- - (6,307,866 ) (116,381 )	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -	- - (6,307,866 ) -
Changes in noncontrolling interests	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(127,371 )	(127,371 )
Other changes in capital surplus Additional acquisition of partially owned subsidiaries	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-		(543,482 ) (543,482 )	-	-	-	-	-		(469,686 ) (1,013,168 )
Arising from changes in percentage of ownership interest in subsidiaries	-	-	-	-	-	-	(206 )	-	30,960	-	-	(694 )	30,060	-	-	-	-	-	-	-	-	-	-	30,060
Change in capital surplus from investments in associates and joint ventures accounted for by the equity method	-	-	-	-	-	-	(556 )	-	-	215,959	-	(7,893 )	207,510	-	-	-	-	-	-	-	-	-	-	207,510
Stock dividends of employee transferred to capital	4,085	40,849	-	40,849	149,096	-	-	-	-	-	-	-	149,096	-	-	-	-	-	-	-	-	-	-	189,945
Issue of common shares under employee share options	2,971	29,705	(29,705 )	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Change in capital from cash dividends of the Parent Company paid to subsidiaries	-	-	-	-	-	-	65,430	-	-	-	-	-	65,430	-	-	-	-	-	-	-	-	-	-	65,430
Disposal of investments accounted for using equity method	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(1,240 )	-	-	(1,240 )	-	-	(1,240 )
Effect of acquisition and deconsolidation of subsidiaries	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(13,549 )	-	-	(13,549 )	-		(737,406 ) (750,955 )
Net profit for the year ended December 31, 2014	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	6,461,659	6,461,659	-	-	-	-	-		(782,086 ) 5,679,573
Other comprehensive income for the year ended December 31, 2014, net of income tax	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(1,711 )		(1,711 ) 1,756,846	55,841	34,980	1,847,667	-	106,962	1,952,918
Total comprehensive income for the year ended December 31, 2014	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	6,459,948	6,459,948	1,756,846	55,841	34,980	1,847,667	-		(675,124 ) 7,632,491
Cancellation of treasury shares	(1,675 )	(16,750 )	-	(16,750 )	(6,654 )	(5,426 )	(49,825 )	-	-	-	(7,283 )	-	(69,188 )	-	-	-	-	-	-	-	-	85,938	-	-
BALANCE AT DECEMBER 31, 2014	2,341,674	\$23,416,737	\$ -	\$23,416,737	\$ 9,238,931	\$ 7,534,962	\$ 445,694	\$ -	\$ 30,960	\$ 231,446	\$10,112,934	\$ -	\$27,594,927	\$ 9,476,876	\$ 49,669	\$11,429,060	\$20,955,605	\$ 4,125,097	\$ 139,072	\$ (11,989 )	\$ 4,252,180	\$ (1,248,722 )	\$ 4,191,264	\$79,161,991

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

(With Deloitte & Touche audit report dated March 25, 2015)

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars)

	2014	2013
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	\$ 7,750,990	\$ 11,519,779
Adjustments for:
Depreciation expenses	7,108,539	6,510,013
Amortization expenses	568,508	482,885
Impairment loss recognized on trade receivables	108,831	10,198
Net loss (gain) on fair value change of financial assets designated as
at fair value through profit or loss	(249,729)	67,902
Finance costs	673,634	708,831
Interest income	(1,357,118)	(1,244,842)
Dividend income	(39,824)	(38,596)
Share of loss (gain) of associates accounted for using equity method	(41,056)	68,569
Loss on disposal of property, plant and equipment	77,334	267,939
Gain (loss) on deconsolidation of subsidiaries (Note 30)	(8,348)	95,082
Net gain on disposal of available-for-sale financial assets	(422,324)	(111,333)
Gain on disposal of associates	(46,549)	(35,950)
Impairment loss recognized on financial assets	212,956	417,975
Impairment loss recognized on non-financial assets	2,077,506	485,947
Unrealized net gain on foreign currency exchange	(196,979)	(260,335)
Recognition of provisions	341,704	382,144
Changes in operating assets and liabilities
Financial instruments held for trading	262,057	(77,149)
Notes receivable	(135,910)	(55,815)
Trade receivables	(888,927)	(3,737,367)
Trade receivables from related parties	8,485	1,867
Other receivables	940,017	690,642
Other receivables from related parties	15,898	(16,720)
Inventories	(2,530,316)	(6,427,561)
Construction in progress in excess of progressive billings	-	72,527
Other current assets Notes payable	493,806 (68,541)	43,508 (48,521)
Trade payables	1,054,233	7,762,435
Trade payables from related parties	385,042	430,701
Other payable	(1,497,329)	4,934,213
Other payable from related parties	(4,958)	(8,474)
Provisions	(140,685)	(1,197,139)
Advance receipts	1,376,959	558,118
Accrued pension liabilities	(121,216)	(79,840)
Cash generated from operations	15,706,690	22,171,633
Interest received	1,347,747	1,246,466
Dividend received	39,824	38,596
Interest paid	(668,047)	(742,236)
Income tax paid	(2,294,797)	(2,026,121)
Net cash generated from operating activities	14,131,417	20,688,338
		(Continued)

LITE-ON TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars)

	2014	2013
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of available-for-sale financial assets	\$ (10,205)	\$ (7,529)
Proceeds on sales of available-for-sale financial assets	738,493	167,739
Proceeds from capital reduction of available-for-sale financial assets	-	83,696
Proceeds of disposal (acquisition) of debt investments with no active
market	(42,198)	9,431,277
Acquisition of investments accounted for using equity method	-	(13,099)
Net cash inflow on disposal of associates	127,894	111,476
Net cash outflow on acquisition of subsidiaries (Note 29)	(811,374)	-
Net cash outflow on disposal of subsidiaries (Note 30)	(902,385)	(31,454)
Proceeds from capital reduction of investments accounted for using
equity method	271,931	-
Payments for property, plant and equipment	(8,645,137)	(6,198,402)
Proceeds of the disposal of property, plant and equipment	634,898	1,119,266
Increase in refundable deposits	(98,283)	(79,166)
Payments for intangible assets	(377,598)	(141,387)
Decrease (increase) in other noncurrent assets	53,384	(49,688)
Dividend received from associates	40,417	37,852
Net cash generated from (used in) investing activities	(9,020,163)	4,430,581
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	7,079,518	8,357,873
Proceeds from (repayment of) long-term borrowings	(5,760,241)	3,244,009
Refund of guarantee deposits received	(737)	(7,460)
Decrease in finance lease payables	(58,872)	(49,414)
Dividends paid to owners of the Company	(6,242,436)	(5,340,117)
Proceeds of the exercise of employee stock options	-	575,114
Partial acquisition of interests in subsidiaries (Note 31)	(1,013,168)	(17,171,678)
Dividends paid to noncontrolling interests	(127,371)	(450,532)
Net cash used in financing activities	(6,123,307)	(10,842,205)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE
OF CASH HELD IN FOREIGN CURRENCIES	1,439,189	554,636
NET INCREASE IN CASH AND CASH EQUIVALENTS	427,136	14,831,350
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	66,056,220	51,224,870
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	\$ 66,483,356	\$ 66,056,220
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche audit report dated March 25, 2015)		(Concluded)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Lite-On Technology Corporation (the "Parent Company") was established in March 1989. The Parent Company's shares have been listed on the Taiwan Stock Exchange. The Parent Company manufactures and markets (1) computer software, hardware, peripherals and components, (2) monitors, multifunction and all-in-one printers, cameras and Internet systems and image-processing equipment; (3) information storage and process equipment, electronic components and office equipment; (4) electronic coils, transformers, power suppliers and electronic hardware parts; (5) light-emitting diode (LED) products; (6) electronic car products; and (7) optical lens modules and optoelectronic components.

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 its former subsidiary on that date.

The Parent Company separately merged with Li Shin International Enterprise Corp., Lite-On Clean Energy Technology Corp., Lite-On Automotive Corp., Leotek Electronics Corp., Lite-On IT Corporation and LarView Technologies Corp., with the Parent Company as the survivor entity. The merger separately took effect on March 22, 2014, April 15, 2014, June 1, 2014, June 29, 2014, June 30, 2014 and September 1, 2014, and the Parent Company thus assumed all rights and obligations of the six merged companies on those date.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the board of directors on March 25, 2015.

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

a. The amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 2013 version of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) endorsed by the FSC not yet effective.

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

New, Amended and Revised Standards and Interpretations (the "New IFRSs")	Effective Date Announced by IASB (Note)
Improvements to IFRSs (2009) - amendment to IAS 39	January 1, 2009 and January 1, 2010, as appropriate
Amendment to IAS 39 "Embedded Derivatives"	Effective for annual periods ended on or after June 30, 2009
Improvements to IFRSs (2010)	July 1, 2010 and January 1, 2011, as appropriate
Annual Improvements to IFRSs 2009-2011 Cycle	January 1, 2013
Amendment to IFRS 7 "Disclosure - Offsetting Financial Assets and Financial Liabilities"	January 1, 2013
Amendment to IFRS 7 "Disclosure - Transfer of Financial Assets"	July 1, 2011
IFRS 10 "Consolidated Financial Statements"	January 1, 2013
IFRS 11 "Joint Arrangements"	January 1, 2013
IFRS 12 "Disclosure of Interests in Other Entities"	January 1, 2013
Amendments to IFRS 10, IFRS 11 and IFRS 12 "Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance"	January 1, 2013
Amendments to IFRS 10 and IFRS 12 and IAS 27 "Investment Entities"	January 1, 2014
IFRS 13 "Fair Value Measurement"	January 1, 2013
Amendment to IAS 1 "Presentation of Other Comprehensive Income"	July 1, 2012
Amendment to IAS 12 "Deferred Tax: Recovery of Underlying Assets"	January 1, 2012
IAS 19 (Revised 2011) "Employee Benefits"	January 1, 2013
IAS 28 (Revised 2011) "Investments in Associates and Joint Ventures"	January 1, 2013
Amendment to IAS 32 "Offsetting Financial Assets and Financial Liabilities"	January 1, 2014
IFRIC 20 "Stripping Costs in Production Phase of a Surface Mine"	January 1, 2013

Annual Improvements to IFRSs 2009-2011 Cycle January 1, 2013 Amendment to IFRS 7 "Disclosure - Offsetting Financial Assets and Financial Liabilities" January 1, 2013 Amendment to IFRS 7 "Disclosure - Transfer of Financial Assets" July 1, 2011 IFRS 10 "Consolidated Financial Statements" January 1, 2013 IFRS 11 "Joint Arrangements" January 1, 2013 IFRS 12 "Disclosure of Interests in Other Entities" January 1, 2013 Amendments to IFRS 10, IFRS 11 and IFRS 12 "Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance" January 1, 2013 Amendments to IFRS 10 and IFRS 12 and IAS 27 "Investment Entities" January 1, 2014 IFRS 13 "Fair Value Measurement" January 1, 2013 Amendment to IAS 1 "Presentation of Other Comprehensive Income" July 1, 2012 Amendment to IAS 12 "Deferred Tax: Recovery of Underlying Assets" January 1, 2012 IAS 19 (Revised 2011) "Employee Benefits" January 1, 2013 IAS 28 (Revised 2011) "Investments in Associates and Joint Ventures" January 1, 2013 Amendment to IAS 32 "Offsetting Financial Assets and Financial Liabilities" January 1, 2014 IFRIC 20 "Stripping Costs in Production Phase of a Surface Mine" January 1, 2013 Note: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after the respective effective dates. Except for the following, whenever applied, the initial application of the above 2013 IFRSs version and the related amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers would not have any material impact on the Group's accounting policies:

1) 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.

2) 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 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.

The fair value measurements under IFRS 13 will be applied prospectively from January 1, 2015.

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

The Group will retrospectively apply the above amendments starting from 2015. Items not expected to be reclassified to profit or loss are remeasurements of the defined benefit plans. Items expected to be reclassified to profit or loss are the exchange differences on translating foreign operations, unrealized gains (loss) on available-for-sale financial assets, cash flow hedges, and share of the other comprehensive income (except the share of the remeasurements of the defined benefit plans) of subsidiaries and associates accounted for using the equity method. However, the application of the above amendments will not result in any impact on the net profit for the year, other comprehensive income for the year (net of income tax), and total comprehensive income for the year.

5) Revision to IAS 19 "Employee Benefits"

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

On initial application of the revised IAS 19 in 2015, the changes in cumulative employee benefit costs as of December 31, 2013 resulting from the retrospective application are adjusted to deferred tax liabilities and retained earnings. In addition, in preparing the consolidated financial statements for the year ended December 31, 2015, the Group would elect not to present 2014 comparative information about the sensitivity of the defined benefit obligation.

The anticipated impact on retrospective application is set out below:

	Carrying Amount	IAS 19 Adjustments	Adjusted Carrying Amount
Impact on assets, liabilities and equity
December 31, 2014
Deferred tax assets Accrued pension liabilities	\$ 3,107,672 \$ 108,874	\$ (2,206) \$ \$ (12,853) \$	3,105,466 96,021 (Continued)

January 1, 2014

	Carrying Amount	IAS 19 Adjustments	Adjusted Carrying Amount
Retained earnings	\$ 20,955,605	\$ 10,638	\$ 20,966,243
Other equity	4,252,180	9	4,252,189
Total effect on equity	\$ 25,207,785	\$ 10,647	\$ 25,218,432
January 1, 2014
Deferred tax assets	\$ 2,207,204	\$ (2,734) \$	2,204,470
Accrued pension liabilities	\$ 235,671	\$ (15,962) \$	219,709
Retained earnings	\$ 21,463,386	\$ 13,228	\$ 21,476,614
Impact on total comprehensive income for the year ended December 31, 2014
Operating cost	\$ 202,383,002	\$ 858	\$ 202,383,860
Operating expense	21,119,771	2,260	21,122,031
Income tax expense	2,071,417	(528)	2,070,889
Total effect on net profit for the period	5,679,573	(2,590)	5,676,983
Exchange differences on translating
foreign operations	2,115,652	9	2,115,661
Total effect on total comprehensive income for the period	7,632,491	(2,581)	7,629,910
			(Concluded)

• Exchange differences on translating Total effect on total comprehensive

6) Amendments to IFRS 7 "Disclosure - Offsetting Financial Assets and Financial Liabilities"

The amendments to IFRS 7 require disclosure of information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under enforceable master netting arrangements and similar arrangements.

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

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

New IFRSs

New IFRSs	Effective Date Announced by IASB (Note 1)
Annual Improvements to IFRSs 2010-2012 Cycle	July 1, 2014 (Note 2)
Annual Improvements to IFRSs 2011-2013 Cycle	July 1, 2014
Annual Improvements to IFRSs 2012-2014 Cycle	January 1, 2016 (Note 4)
IFRS 9 "Financial Instruments"	January 1, 2018
Amendments to IFRS 9 and IFRS 7 "Mandatory Effective Date of	January 1, 2018
IFRS 9 and Transition Disclosures"
Amendments to IFRS 10 and IAS 28 "Sales or Contribution of Assets	January 1, 2016 (Note 3)
between an Investor and its Associate or Joint Venture"
Amendment to IFRS 11 "Accounting for Acquisitions of Interests in	January 1, 2016
Joint Operations"

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

(Continued)

Announced by IASB (Note 1)
January 1, 2016
IFRS 15 "Revenue from Contracts with Customers" January 1, 2017 January 1, 2016 Amendments to IAS 16 and IAS 38 "Clarification of Acceptable January 1, 2016 Methods of Depreciation and Amortization" Amendments to IAS 16 and IAS 41 "Agriculture: Bearer Plants" January 1, 2016 Amendment to IAS 19 "Defined Benefit Plans: Employee July 1, 2014 Amendment to IAS 36 "Impairment of Assets: Recoverable Amount January 1, 2014 Amendment to IAS 39 "Novation of Derivatives and Continuation of January 1, 2014 January 1, 2014 (Concluded)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.

• Note 2: The amendment to IFRS 2 applies to share-based payment transactions with grant date on or after July 1, 2014; the amendment to IFRS 3 applies to business combinations with acquisition date on or after July 1, 2014; the amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014.
• Note 3: Prospectively applicable to transactions occurring in annual periods beginning on or after January 1, 2016.
• Note 4: The amendment to IFRS 5 is applied prospectively to changes in a method of disposal that occur in annual periods beginning on or after January 1, 2016; the remaining amendments are effective for annual periods beginning on or after January 1, 2016.

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

1) IFRS 9 "Financial Instruments"

Recognition and measurement of financial assets

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

For the Group's debt instruments that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding, their classification and measurement are as follows:

a) For debt instruments, if they are held within a business model whose objective is to collect the contractual cash flows, the financial assets are measured at amortized cost and are assessed for impairment continuously with impairment loss recognized in profit or loss, if any. Interest revenue is recognized in profit or loss by using the effective interest method;

b) For debt instruments, if they are held within a business model whose objective is achieved by both the collecting of contractual cash flows and the selling of financial assets, the financial assets are measured at fair value through other comprehensive income (FVTOCI) and are assessed for impairment. Interest revenue is recognized in profit or loss by using the effective interest method, and other gain or loss shall be recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses. When the debt instruments are derecognized or reclassified, the cumulative gain or loss previously recognized

in other comprehensive income is reclassified from equity to profit or loss.

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

The impairment of financial assets

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

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

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.

2) 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.

3) Annual Improvements to IFRSs: 2010-2012 Cycle

Several standards including IFRS 3 "Business Combinations" and IFRS 8 "Operating Segments" were amended in this annual improvement.

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 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.

4) Annual Improvements to IFRSs: 2011-2013 Cycle

Several standards including IFRS 3 "Business Combinations" and IFRS 13 "Fair Value Measurement" 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.

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.

5) IFRS 15 "Revenue from Contracts with Customers"

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

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

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

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

6) Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and its

Associate or Joint Venture"

The amendments stipulate that, when an entity sells or contributes to an associate assets that constitute a business as defined in IFRS 3 "Business Combination", or when an entity loses control of a subsidiary that contains a business but retains significant influence or joint control, the gain or loss resulting from the transaction is recognized in full.

Also, when an entity loses control of a subsidiary that does not contain a business as defined in IFRS 3 but retains significant influence or joint control in an associate or a joint venture, the gain or loss resulting from the asset sale or contribution is recognized only to the extent of the unrelated investors' interest in the associate or joint venture, and the entity's share of the gain or loss is eliminated.

7) Annual Improvements to IFRSs: 2012-2014 Cycle

Several standards including IFRS 5 "Non-current assets held for sale and discontinued operations", IFRS 7 "Disclosure - Offsetting Financial Assets and Financial Liabilities" and IAS 34 "Interim financial reporting" were amended in this annual improvement.

IFRS 5 was amended to clarify that reclassification between non-current assets (or disposal group) "held for sale" and non-current assets "held for distribution to owners" does not constitute a change to a plan of sale or distribution. Therefore, previous accounting treatment is not reversed. The amendment also explains that assets that no longer meet the criteria for "held for distribution to owners" and do not meet the criteria for "held for sale" should be treated in the same way as assets that cease to be classified as held for sale.

The amendments to IFRS 7 provide additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset. In addition, the amendments clarify that the offsetting disclosures are not explicitly required for all interim periods; however, the disclosures may need to be included in condensed interim financial statements to comply with IAS 34 under specific conditions.

IAS 34 was amended to clarify that other disclosure information required by IAS 34 should be included in interim financial statements. If the Group includes the information in other statements (such as management commentary or risk report) issued at the same time, it is not required to repeat the disclosure in the interim financial statements. However, it is required to include a cross-reference from the interim financial statements to that issued statements that is available to users on the same terms and at the same time as the interim financial statements.

8) Amendment to IAS 1 "Disclosure Initiative"

The amendment clarifies that the consolidated financial statements should be prepared for the purpose of disclosing material information. To improve the understandability of its consolidated financial statements, the Group should disaggregate the disclosure of material items into their different natures or functions, and disaggregate material information from immaterial information.

The amendment further clarifies that the Group should consider the understandability and comparability of its consolidated financial statements to determine a systematic order in presenting its footnotes.

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 value. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

• c. Basis of consolidation
• 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.

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.

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.

The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition.

2) Subsidiaries included in consolidated financial statements

			% of Ownership
Investor	Investee	Main Business	December 31 2014	2013	Remark
The Parent Company	Lite-On IT Corporation	Manufacture and sale of optical disc drives	-	99.13	a)
	Silitech Technology Corp. Lite-On Integrated Service Inc.	Manufacture and sale of modules and plastic products Information outsourcing and system integrate	32.08 100.00	32.14 100.00	- -
	Li Shin International Enterprise Corp. Logah Technology Corp.	Manufacture and sale of electronic components Development, manufacture and sale of LCD	- 28.10	100.00 18.97	b) c)
	Lite-On Automotive Corp.	TV inverters Manufacture and sale of automotive	-	82.26	d)
	Lite-On Capital Corp.	electronic components Investment activities	100.00	100.00	-
	Lite-On Electronics H.K. Ltd.	Sale of LED optical products	100.00	100.00	-
	Lite-On Electronics (Thailand) Co., Ltd. Lite-On Japan Ltd.	Manufacture and sale of LED optical products Sale of LED optical products and power	100.00 49.49	100.00 49.49	- -
	Lite-On International Holding Co., Ltd. Investment activities	supplies	100.00	100.00	-
	LTC Group Ltd. (BVI)	Investment activities	100.00	100.00	-
	Lite-On Technology USA, Inc. Lite-On Electronics (Europe) Ltd.	Investment activities Manufacture and sale of power supplies	100.00 100.00	100.00 100.00	- -
	Lite-On Technology (Europe) B.V. Lite-On Overseas Trading Co., Ltd.	Market research and after-sales service Merchandising business	54.00 100.00	54.00 100.00	- -
	Lite-On Singapore Pte. Ltd.	Manufacture and supply computer peripheral products	100.00	100.00	-
	Lite-On Vietnam Co., Ltd. Li Shin International Enterprise Corp.	Electronic contract manufacturing Manufacture and sale of computer and	100.00 100.00	- 100.00	e) f)
	(BVI) Eagle Rock Investment Ltd.	appliance components Import and export business and investment activities	100.00	100.00	f)
	LarView Technologies Corporation	Investment activities	100.00	-	g)
	(Samoa) Lite-On Mobile Pte. Ltd.	Manufacture and sale of mobile phone modules and design for assembly line	100.00	100.00	h)
	High Yield Group Co., Ltd. Lite-On IT Singapore Pte. Ltd.	Holding company Sale of optical disc drives	100.00 100.00	100.00 100.00	i) i)
	Lite-On Information Technology B.V.	Market research and customer service	100.00	100.00	i)
	Philip & Lite-On Digital Solutions Corp.	Sale of optical disc drives	49.00	49.00	i)
	Lite-On Sales & Distribution Inc. LET (HK) Ltd.	Sale of optical disc drives Sale of optical disc drives	100.00 100.00	100.00 100.00	i) i)
	Leotek Electronics Holding Limited Lite-On Clean Energy Technology	Holding company Manufacture and wholesale of electric car	100.00 -	100.00 100.00	j) k)
	Corp. Lite-On Automotive Electronics	batteries Sale of automotive parts and other electronic	100.00	100.00	l)
	(Europe) BV Lite-On Automotive North America	products Sale of automotive parts and other electronic	100.00	100.00	l)
	Inc. Lite-On Automotive Service USA Inc.	products Sale of automotive parts and other electronic	100.00	100.00	l)
	Lite-On Automotive International	products Investment activities	100.00	100.00	l)
Lite-On Capital Corp.	(Cayman) Co., Ltd. Silitech Technology Corp.	Manufacture and sale of modules and plastic	0.61	0.61	-
	Leotek Electronics Corp.	products Sale of optical products	-	100.00	m)
	Logah Technology Corp.	Development, manufacture and sale of LCD TV inverters	4.43	-	c)
	Lite-On Green Technologies Inc.	Manufacture and wholesale of electronic components and energy technology services	100.00	100.00	-
	Lite-On Green Energy (HK) Limited Lite-On Technology (Europe) B.V.	Investment activities Market research and after-sales services	100.00 46.00	100.00 46.00	- -
	Lite-On Green Energy (Singapore) Pte. Ltd.	Investment activities	100.00	100.00	-
	Five Dimension Co., Ltd.	Development, manufacture and sale of cell phone and camera lens modules	69.94	-	n)
Five Dimension Co., Ltd. Lite-On Green Technologies Inc.	FiiDi Optical Co., Ltd. Lite-On Green Technologies B.V.	Wholesale of precision modules Solar energy engineering	40.00 100.00	100.00	n) -
	Lite-On Green Technologies (HK) Limited	Solar energy engineering	100.00	100.00	-
Lar View Technologies Corporation (Samoa)	LarView Technologies Corp. (Shenzhen)	Manufacture of optical instruments, general Instruments, optical instruments, computers and peripherals	100.00	-	g)
Lite-On Green Energy (Singapore) Pte. Ltd.	Lite-On Green Energy B.V. Lite-On Green Energy Kaiserslautern	Investment activities Solar energy engineering	100.00 100.00	100.00 100.00	- -
Lite-On Green Technologies (HK) Limited	GmbH Lite-on Green Technologies (Nanjing) Corporation	Solar energy engineering	100.00	100.00	-
Lite-On Green Energy B.V.	Romeo Tetti PV1 S.R.L Lite-On Green Energy S.R.L	Solar energy engineering Solar energy engineering	100.00 100.00	100.00 100.00	- -
Lite-On Electronics H.K. Ltd.	Lite-On Electronics (Tianjinn) Co., Ltd. ODM services		100.00	100.00	-
	Lite-On Network Communication (Dongguan) Limited (formerly:	Manufacture and sale of IT products	100.00	100.00	-
	Dong Guan G-Com Computer Ltd.) Lite-On Power Technology (Chang Zhou) Co., Ltd. (formerly: Li Shin Enterprise (Su Zhou) Co., Ltd.)	Manufacture and sale of new-type electronic components and peripheral materials	100.00	100.00	-
	China Bridge (China) Co., Ltd. Lite-On Electronics (Dongguan) Co.,	Investment, sales agent Manufacture of electronic components	100.00 100.00	100.00 100.00	- -
	Ltd. Silitek Elec. (Dongguan) Co., Ltd.	Manufacture and sale of keyboards	100.00	100.00	-
					(Continued)

			% of Ownership						% of Ownership
Investor	Investee	Main Business	December 31 2014	2013	Remark	Investor	Investee	Main Business	December 31 2014	2013	Remark
	Lite-On Computer Tech (Dongguan) Co., Ltd. Dong Guan G-Tech Computers Co.,	Manufacture and sale of display device Manufacture and sale of computer case	100.00 100.00	100.00 100.00	- -	LET (HK) Ltd.	Lite-On Opto Technology (Guangzhou) Co., Ltd. Lite-On Auto Electric Technology	Manufacture and sale of optical disc drives Manufacture and sale of optical disc drives	100.00 100.00	100.00 100.00	- -
	Ltd.						(Guangzhou) Ltd.
	DongGuan G-Pro Computer Co., Ltd. Lite-On Digital Electronics (Dongguan)	Manufacture and sale of system products Manufacture and sale of computer peripheral	79.29 100.00	79.29 100.00	- -	Lite-On Information Technology B.V. Lite-On Information Technology	Lite-On IT Opto Tech (BH) Co., Ltd.	Manufacture and sale of optical disc drives Sale of optical disc drives	100.00 100.00	100.00 100.00	- -
Lite-On Network Communication (Dongguan) Limited (formerly:	Co., Ltd. DongGuan G-Pro Computer Co., Ltd.	products Manufacture and sale of system products	20.71	20.71	-	Philip & Lite-On Digital Solutions Corp.	GmbH Philips & Lite-On Digital Solutions Germany GmbH	Development and sale of modules of automotive recorders	100.00	100.00	-
Dong Guan G-Com Computer Ltd.) China Bridge (China) Co., Ltd.	Lite-On Opto Technology (Changzhou)	Development, manufacture of new-type	12.59	12.59	-		Philips & Lite-On Digital Solutions USA Inc.	Sale of optical disc drives	100.00	100.00	-
	Co., Ltd.	electronic components and provide technology consulting services,					Philips & Lite-On Digital Solutions Korea Ltd.	Sale of optical disc drives	100.00	100.00	-
		maintenance equipment and after-sales services					Philips & Lite-On Digital Solutions Netherlands B.V.	Sale and design of optical disc drives	100.00	100.00	-
		China Bridge Express (Wuxi) Co., Ltd. Express and sale of power supplies, printers, display devices and scanners	100.00	100.00	-		Philip & Lite-On Digital Solutions (Shanghai) Co., Ltd.	Sale of optical disc drives	100.00	100.00	-
Lite-On Electronics Co., Ltd.	Lite-On Communications (Guanzhou) Co., Ltd.	Manufacture and sale of mobile terminal equipment	100.00	100.00	-	Silitech Technology Corp.	Silitech (BVI) Holding Ltd. Lite-On Japan Ltd.	Investment activities Sale of optical and power supply products	100.00 7.87	100.00 7.87	- -
	Lite-On Electronics (Guangzhou) Co., Ltd. (formerly: Silitek Elec. (Guanzhou) Co., Ltd.)	Manufacture and sale of printers and scanners	100.00	100.00	-	Silitech (BVI) Holding Ltd. Silitech (Bermuda) Holding Ltd.	Silitech (Bermuda) Holding Ltd. Silitech Technology Corp. Ltd.	Investment activities Manufacture of plastic and computer peripheral products	100.00 100.00	100.00 100.00	- -
	Lite-On (Guanzhou) Precision Tooling Co., Ltd.	Manufacture and sale of modules	67.03	67.03	-		Silitech Technology Corp. Sdn. Bhd. Silitech Technology (Europe) Ltd.	Manufacture of computer peripheral products Sale of modules and keyboards	100.00 -	100.00 100.00	- s)
	Lite-On Tech (Guanzhou) Co., Ltd.	Manufacture and sale of computer cases	100.00	100.00	-		Silitech (Hong Kong) Holding Ltd.	Investment activities	100.00	100.00	-
	Lite-On (Guanzhou) Infortech Co., Ltd. Information outsourcing Lite-On Elec and Wire (Guanzhou)	Manufacture and sale of mobile terminal	100.00 100.00	100.00 100.00	- -		Silitech International (India) Private Limited	Development, manufacture and sale of automotive parts	100.00	100.00	-
	Co., Ltd. Lite-On Electronics (Jiangsu) Co., Ltd. Development, manufacture, sale and	equipment	100.00	100.00	-	Silitech (Hong Kong) Holding Ltd. Silitech Technology Corp. Ltd.		Silitech Technology (SuZhou) Co., Ltd. Manufacture and sale of automotive parts Xurong Electronic (Shenzhen) Co., Ltd. Manufacture of automotive parts, touch	100.00 100.00	100.00 100.00	- -
		installation of power supplies and transformers and provision of technology consulting services, maintenance					SuZhou Xulong Mold Producing Co., Ltd.	panels and plastic & rubber assembly Development, manufacture and sale of precision modules and new-type electronic	60.00	60.00	-
	Lite-On Technology (Guanzhou)	equipment and precision instruments Investment activities	100.00	100.00	-			components (chip components, testing elements, hybrid integrated circuits)
	Investment Co., Ltd.					Logah Technology Corp.	Logah Technology Co., Ltd.	Holding company	100.00	100.00	c)
	Lite-On Power Technology (Dongguan) Co., Ltd.	Development, manufacture and sale of electronic components, power supplies and	100.00	100.00	-	Logah Technology Co., Ltd Logah Technology (HK) Co., Ltd.	Logah Technology (HK) Co., Ltd. Logah Electronics (Su Zhou) Co., Ltd.	Holding company Manufacture and sale of new-type electronic	100.00 100.00	100.00 100.00	c) c)
Lite-On Technology (Guanzhou) Investment Co., Ltd.	Lite-On (Guanzhou) Precision Tooling Co., Ltd.	provision technology consulting services Manufacture and sale of modules	32.97	32.97	-		Lippo Electronics (Su Zhou) Co., Ltd.	components Manufacture and sale of new-type electronic components	100.00	100.00	c)
Lite-On Electronics (Jiangsu) Co., Ltd.	Lite-On Technology (Changzhou) Co., Ltd.	Development, manufacture, sale and installation of power supplies and	100.00	100.00	-	Leotek Electronics Holding Limited	Changzhou Leotek New Energy Trade Limited	Wholesale, import and export and installation of street lights, signal lights, scenery lights	100.00	100.00	-
		transformers and provision technology consulting services, maintenance				Lite-On Automotive International	Lite-On Automotive Holdings	and new-type electronic components Investment activities	100.00	100.00	-
	Lite-On Opto Technology (Changzhou)	equipment and after-sales services Development, manufacture and sale of	87.41	87.41	-	(Cayman) Co., Ltd. Lite-On Automotive Holdings (Hong	(Hong Kong) Co., Ltd. Lite-On Automotive (Wuxi) Co., Ltd.	Manufacture, sale and processing of	100.00	100.00	-
	Co., Ltd.	new-type electronic components and LED and provision technology consulting				Kong) Co., Ltd.	Lite-On Automotive Electronics	electronic products Manufacture, sale and processing of	100.00	100.00	-
	Lite-On Medical Device (Changzhou)	services, maintenance equipment and after-sales services Manufacture and sale of medical equipment	100.00	-	o)	Lite-On Japan Ltd.	(Guanzhou) Co., Ltd. Lite-On Japan (S) Pte. Ltd.	electronic products Import and export business of electronic components	100.00	100.00	-
	Ltd.						L&K Industries Philippines, Inc.	Import and export business of electronic	100.00	100.00	-
Yet Foundate Ltd.		Dongguan Lite-On Computer Co., Ltd. Manufacture and sale of computer hosts and components	100.00	100.00	-		Lite-On Japan (H.K.) Limited	components Import and export business of electronic	100.00	100.00	-
Fordgood Electronic Ltd.	Lite-On Li Shin Technology (Ganzhou) Co., Ltd.	Manufacture and sale of electronic components	100.00	100.00	-		Lite-On Japan (Korea) Co., Ltd.	components Import and export business of electronic	100.00	100.00	-
Lite-On Technology USA, Inc.	Lite-On, Inc.	Sales data processing business of optoelectronic products and power supplies	100.00	100.00	-	Lite-On Japan (S) Pte. Ltd.	Lite-on Japan (Thailand) Co., Ltd.	components Import and export business of electronic	100.00	100.00	-
	Lite-On Trading USA, Inc.	Sale of optical products	100.00	100.00	-			components
	Lite-On Service USA, Inc.	Sale of optical products	100.00	100.00	-	Lite-On Japan (H.K.) Limited	NL (Shanghai) Co., Ltd.	Import and export business of electronic	100.00	100.00	-
	Leotek Electronics USA LLC. Power Innovations International, Inc.	Sale of LED products Development, design and manufacture of	100.00 95.25	100.00 -	p) q)	Lite-On Mobile Oyj (formerly:	Lite-On Mobile Sweden AB	components Manufacture and sale of mobile phone	100.00	100.00	-
Lite-On International Holding Co.,	Ze Poly Pte. Ltd.	power control and energy management Manufacture and sale of thin-film solar cell	48.13	48.13	-	Perlos Oyj)	Lite-On Mobile Indústria e Comércio	modules and design for assembly line Manufacture and sale of mobile phone	3.53	4.00	-
Ltd. Ze Poly Pte. Ltd.	Lite-On China Holding Co., Ltd. Ze Poly Tomsk Ltd.	Manufacture and sale of computer cases Solar energy industry	100.00 -	100.00 100.00	- r)	Lite-On Mobile Pte. Ltd.	de Plásticos Ltda. Guangzhou Lite-On Mobile Electronic	modules and design for assembly line Manufacture and sale of mobile phone	100.00	100.00	-
Lite-On Singapore Pte. Ltd.	Lite-On Technology (Ying Tan) Co., Ltd.	Manufacture and sale of electronic components	100.00	100.00	-		Components Co., Ltd. Guangzhou Lite-On Mobile	modules and design for assembly line Manufacture and sale of mobile phone	100.00	100.00	-
	Lite-On Technology (Xianging) Co., Ltd.	Manufacture and sale of electronic components	100.00	100.00	-		Engineering Plastics Co., Ltd. Beijing Lite-On Mobile Electronic and	modules and design for assembly line Manufacture and sale of mobile phone	100.00	100.00	-
	Lite-On Technology (Shanghai) Ltd.	Manufacture and sale of energy saving equipment	100.00	-	o)		Telecommunication Components Co., Ltd.	modules and design for assembly line
LTC Group Ltd. (BVI)	Titanic Capital Services Ltd. LTC International Ltd.	Investment activities Manufacture and sale of system products	100.00 100.00	100.00 100.00	- -		Shenzhen Lite-On Mobile Precision Molds Co., Ltd.	Manufacture and sale of mobile phone modules and design for assembly line	100.00	100.00	-
Lite-On Technology (Europe) B.V.	Lite-On (Finland) Oy	Manufacture and sale of mobile phone modules and design for assembly line	100.00	100.00	-		Lite-On Mobile Indústria e Comércio de Plásticos Ltda.	Manufacture and sale of mobile phone modules and design for assembly line	96.47	96.00	-
Lite-On (Finland) Oy	Lite-On Mobile Oyj (formerly: Perlos	Manufacture and sale of mobile phone	100.00	100.00	-		Perlos Precision Plastics Moulding	Manufacture and sale of mobile phone	100.00	100.00	-
Lite-On China Holding Co., Ltd.	Oyj) Lite-On Electronics Co., Ltd.	modules and design for assembly line Investment activities	100.00	100.00	-		Limited Liability Company Lite-On Mobile India Private Limited.	modules and design for assembly line Manufacture and sale of mobile phone	100.00	100.00	-
	Yet Foundate Ltd.	Manufacture of plastic and computer peripheral products	100.00	100.00	-		Zhuhai Lite-On Mobile Technology	modules and design for assembly line Manufacture and sale of mobile phone	83.48	89.00	-
	I-Solutions Limited Fordgood Electronic Ltd.	Original equipment manufacturer of electronic products Import and export and real estate business	100.00 100.00	100.00 100.00	- -	Guangzhou Lite-On Mobile Electronic	Company Ltd. Lite-On Young Fast Pte. Ltd. Yantai Lite-On Mobile Electronic	modules and design for assembly line Investment activities Manufacture and sale of mobile phone	100.00 100.00	65.00 100.00	- -
	G&W Technology (BVI) Ltd.	Real estate management	50.00	50.00	-	Components Co., Ltd.	Components Co., Ltd.	modules and design for assembly line
G&W Technology (BVI) Ltd. Eagle Rock Investment Ltd.	G&W Technology Limited Huizhou Li Shin Electronic Co., Ltd.	Leasing business Manufacture of computer peripheral products	100.00 100.00	100.00 100.00	- -	Electronic Components Co., Ltd. Zhuhai Lite-On Mobile Technology	Company Ltd.	Manufacture and sale of mobile phone modules and design for assembly line	16.52	11.00	-
	Huizhou Fu Tai Electronic Co., Ltd.	Manufacture of computer peripheral products	100.00	100.00	-	Lite-On Young Fast Pte. Ltd.	Lite-On Young Fast (Huizhou) Co.,	Modules of touch panels	100.00	100.00	-
	Li Shin Technology (Huizhou) Ltd.	Manufacture and sale of new-type electronic components and peripheral materials	100.00	100.00	-		Ltd.				(Concluded)
High Yield Group Co., Ltd.	LET (HK) Ltd.	Sale of optical disc drives	100.00	100.00	- (Continued)

(Concluded)

Remark:

• a) Lite-On IT Corporation was dissolved after merging with the Parent Company on June 30, 2014.
• b) Li Shin International Enterprise Corp. was dissolved after merging with the Parent Company on March 22, 2014.
• c) The Group lost its power to control the financial and operating policies of Logah Technology Corp. in March 2014. As a result, Logah Technology Corp. ceased to be consolidated but still continues to be accounted for using the equity method. Please refer to Note 30.
• d) Lite-On Automotive Corp. was dissolved after merging with the Parent Company on June 1, 2014.
• e) Lite-On Vietnam Co., Ltd. was established in January 2014.
• f) Li Shin International Enterprise Corp. was dissolved after merging with the Parent Company in March 2014. Thus, Li Shin's subsidiaries became directly held by the Parent Company.
• g) In April 2014, the Group acquired power to cast the majority of the equity of LarView Technologies Corp.; thus, this investee was included in the consolidated financial statement effective that month. Please refer to Note 29. LarView was dissolved after merging with the Parent Company in September 2014. Thus, LarView's subsidiaries became directly held by the Parent Company.
• h) The Group reorganized its structure in June 2014, and the Parent Company acquired the entire equity of Lite-On Mobile Pte. Ltd. from its subsidiary, Lite-On Mobile Oyj (formerly: Perlos Oyj).
• i) Lite-On IT Corporation was dissolved after merging with the Parent Company in June 2014. Thus, Lite-On IT's subsidiaries became directly held by the Parent Company.
• j) Leotek Electronics Corp. was dissolved after merging with the Parent Company in June 2014. Thus, Leotek's subsidiaries became directly held by the Parent Company.
• k) Lite-On Clean Energy Technology Corp. was dissolved after merging with the Parent Company on April 15, 2014.
• l) Lite-On Automotive Corp. was dissolved after merging with the Parent Company in June 2014. Thus, Lite-On Auto's subsidiaries became directly held by the Parent Company.
• m) Leotek Electronics Corp. was dissolved after merging with the Parent Company on June 29, 2014.
• n) In November 2014, the Group acquired power to cast the majority of the equity; thus, this investee was included in the consolidated financial statement effective that month. Please refer to Note 29.
• o) Established in October 2014.
• p) The Group reorganized its structure in March 2014, and Leotek Electronics USA LLC. became directly held by Lite-On Technology USA, Inc.

q) The Group acquired power to cast the majority of the equity of Power Innovations International Inc. in April 2014; thus, this company was included in the consolidated financial statement

• effective that month. Please refer to Note 29.
• r) Accomplished the liquidation in December 2014.
• s) Accomplished the liquidation in November 2014.
• 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
• liability for at least 12 months after the reporting period.

3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a

Current liabilities include:

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

• 1) Liabilities held primarily for the purpose of trading;
• and before the consolidated financial statements are authorized for issue; and
• classification.

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

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

e. Business combinations

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

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

f. Foreign currencies

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

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

On the disposal of a foreign operation and losing of control, joint control or significant influence over an associate that includes a foreign operation, all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company 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 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.

g. Inventories

Inventories consist of raw materials, supplies, finished goods and work-in-process and merchandise 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.

h. Investment accounted for using equity method

Investments in associates and joint ventures are accounted for using equity method.

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

A joint venture is a contractual agreement by which two or more parties undertake an economic activity that is subject to joint control. Joint control exists only when the strategic financial and operating decisions relating to the activity have the unanimous consent of the ventures. Joint venture arrangements that involve the establishment of a separate entity in which venturers have joint control over the equity of the entity are referred to as jointly controlled entities.

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 associate 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 associate and joint ventures. The Group also recognizes the changes in the Group's share of equity of associates and joint ventures attributable to the Group.

When the Group subscribes for additional new shares of the associate and joint ventures 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 ventures. 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 ventures, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for by the equity method is insufficient, the shortage is debited to retained earnings.

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.

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 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 the joint venture that are not related to the Group.

i. Property, plant and equipment

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

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.

j. Investment properties

Investment properties are properties held to earn rentals or for capital appreciation. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

Any gain or loss arising on derecognition of the property is calculated as the difference between the net disposal proceeds and the carrying amount of the asset and is included in profit or loss in the period in which the property is derecognized.

k. Goodwill

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

For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the 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.

For an investment accounted for using equity method, the cash-generating unit of the whole entity is tested for impairment. If impairment is identified but the recoverable amount of the asset later increases, 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.

• l. 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) Intangible assets acquired in a business combination

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

3) Derecognition of intangible 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.

m. 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 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.

n. Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset is available for immediate sale in its present condition. To meet the criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale.

Non-current assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Recognition of depreciation of those assets would cease.

o. Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to 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.

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.

i. Financial assets at fair value through profit or loss

Financial assets are classified as at fair value through profit or loss when the financial asset doesn't meet the criteria of hedge accounting. Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss.

ii. Available-for-sale financial assets

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

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

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

iii. Loans and receivables

Loans and receivables including cash and cash equivalent, note receivable, 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 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.

b) Impairment of financial assets

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

For financial assets carried at amortized cost, such as trade receivables, 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.

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.

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

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

2) Financial liabilities and equity instruments

Debt and equity instruments issued by a entity of 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

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

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

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

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.

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, interest rate swaps and option contracts.

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.

p. Hedge accounting

The Group 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 Group 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.

q. Provisions

Provisions are measured at the best estimate of the discounted cash flows 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.

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.

r. 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. Allowance for sales returns and liability for returns are recognized at the time of sale based on the seller's reliable estimate of future returns and based on past experience and other relevant factors.

1) Sale of goods

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

a) The Group has transferred to the buyer the significant risks and rewards of ownership of the

b) The Group retains neither continuing managerial involvement to the degree usually associated

• goods;
• with ownership nor effective control over the goods sold;
• c) The amount of revenue can be measured reliably;
• and

d) It is probable that the economic benefits associated with the transaction will flow to the Group;

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.

Revenue from selling of properties in the course of ordinary activities is recognized when the construction is completed and the properties are transferred to buyers. Until such revenue is recognized, deposits received from sales of properties and installment payments are carried in the consolidated balance sheets under current liabilities.

2) 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.

3) Electricity generation revenue

Revenue is recognized when the power is transmitted to the substation of a power company. Electricity generation revenue is based on the fair value of subsidiary's settled value with power company. However, when receivables are expected to be realized within one year, the difference between fair value and maturity value of receivables is insignificant and the trading of power is very frequent, the fair value of settled value will not have to be discounted to the present value.

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.

s. Leasing

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 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.

t. 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.

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 consolidated 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.

u. 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 consolidated 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 Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are 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 Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

3) Current and deferred tax for the year

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. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

v. 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.

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.

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 Group takes into consideration the estimation of future cash flows. The amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows 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 Group'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 33, 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

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.

g. Impairment of investment in associates

The Group immediately recognizes impairment loss on its net investment in the associate when there is any indication that the investment may be impaired and the carrying amount may not be recoverable. The Group also takes into consideration the market conditions and industry development to evaluate the appropriateness of assumptions.

h. Recognition of defined benefit plans

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

	December 31
	2014	2013
Cash on hand	\$ 124,912	\$ 228,007
Checking accounts	1,923,505	1,604,688
Demand deposits	35,292,046	32,826,589
Time deposits	29,142,893	31,396,936
	\$ 66,483,356	\$ 66,056,220

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets held for trading

	December 31
	2014	2013
Financial assets held for trading
Derivative financial assets (not under hedge accounting) Foreign exchange forward contracts Currency swap contracts	\$ 12,222 889	\$ 5,207 9,660
	\$ 13,111	\$ 14,867
Current Non-current	\$ 13,111 - \$ 13,111	\$ 14,867 - \$ 14,867
Financial liabilities held for trading
Derivative financial liabilities (not under hedge accounting) Foreign exchange forward contracts Currency swap contracts	\$ 38,206 202	\$ 4,284 23,552
	\$ 38,408	\$ 27,836 (Continued)

Financial liabilities held for trading

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
			(Continued)

			December 31				Maturity	Notional Amount
			2014	2013		Currency	Date	(In Thousands)
Current			\$ 38,408	\$ 27,836	Lite-On Automotive Corp.
Non-current			-	-	Forward exchange contracts	EUR/USD	2014.01.14	EUR876/USD1,151
					Lite-On Automotive Electronics (Guang
			\$ 38,408	\$ 27,836	Zhou) Co., Ltd.
				(Concluded)	Forward exchange contracts	USD/CNY	2014.04.16	USD7,000/CNY42,525
					Leotek Electronic Corp.
a. At the end of the reporting period, outstanding forward exchange contracts and cross-currency swap					Forward exchange contracts	USD/NTD	2014.01.07	USD860/NTD25,611
contracts not under hedge accounting were as follows:					Forward exchange contracts	GBP/NTD	2014.01.14	GBP195/NTD9,394
					Forward exchange contracts	EUR/NTD	2014.03.25	EUR380/NTD15,569
		Maturity		Notional Amount	Lite-On Mobile Oyj (formerly Perlos Oyj)
	Currency	Date		(In Thousands)	Currency swap contracts	USD/EUR	2014.01.17	USD15,500/EUR11,268
					Forward exchange contracts	USD/BRL	2014.01.17	USD1,000/BRL2,375
December 31, 2014					Guangzhou Lite-On Mobile Electronic
					Components Co., Ltd.
Lite-On Overseas Trading Co., Ltd.					Forward exchange contracts	USD/CNY	2014.01.23	USD3,000/CNY18,319
Forward exchange contracts	USD/CNY	2015.01.12		USD45,000/CNY277,020	Forward exchange contracts Currency swap contracts	EUR/CNY EUR/CNY	2014.01.20 2014.02.14	EUR300/CNY2,463 EUR300/CNY2,515
Currency swap contracts Lite-On Singapore Pte. Ltd.	USD/CNY	2015.01.22		USD15,000/CNY93,435	Beijing Lite-On Mobile Electronic and
Forward exchange contracts	USD/CNY	2015.01.12		USD65,000/CNY402,870	Telecommunication Components Co.,
Forward exchange contracts	EUR/USD	2015.01.30		EUR6,600/USD8,047	Ltd.
Lite-On Electronics (Thailand) Co., Ltd.					Forward exchange contracts	USD/CNY	2014.01.23	USD2,000/CNY12,204
Forward exchange contracts	USD/THB	2015.04.07		USD2,000/THB66,086	Forward exchange contracts	EUR/CNY	2014.02.14	EUR200/CNY1,678
DongGuan G-Pro Computer Co., Ltd.					Lite-On Mobile Pte. Ltd.
Forward exchange contracts	USD/CNY	2015.01.05		USD6,104/CNY38,058	Forward exchange contracts	USD/INR	2014.01.17	USD3,000/INR186,470
LET (HK) Ltd.					Currency swap contracts	EUR/USD	2014.01.17	EUR7,000/USD9,498
Forward exchange contracts	USD/EUR	2015.01.29		USD10,972/EUR9,000	Currency swap contracts	CNY/USD	2014.01.17	CNY50,000/USD8,224
Guangzhou Lite-On Mobile Electronic					Lite-On Mobile India Private Limited
Components Co., Ltd.					Forward exchange contracts	USD/INR	2014.02.10	USD1,000/INR64,850
Forward exchange contracts	USD/CNY	2015.01.05		USD7,000/CNY43,173	Lite-On Singapore Pte. Ltd.
Forward exchange contracts	EUR/CNY	2015.01.05	EUR300/CNY2,307		Forward exchange contracts	EUR/USD	2014.01.27	EUR2,400/USD3,284
Zhuhai Lite-On Mobile					Silitech Technology Corp.
Telecommunication Co., Ltd.					Currency swap contracts	USD/CNY	2014.01.06-	USD12,500/CNY75,928
Forward exchange contracts	USD/CNY	2015.01.05		USD3,000/CNY18,503	Forward exchange contracts	USD/MYR	2014.01.21 2014.01.08-	USD1,450/MYR4,694
Lite-On Mobile Pte. Ltd. Forward exchange contracts	USD/CNY	2015.01.12		USD33,000/CNY204,072			2014.03.10
Forward exchange contracts	EUR/USD	2015.01.12		EUR1,000/USD1,230	Forward exchange contracts	EUR/MYR	2014.02.26	EUR50/MYR226
Forward exchange contracts	USD/JPY	2015.01.26		USD1,200/JPY144,114	Lite-On Electronics (Thailand) Co., Ltd.
Forward exchange contracts	USD/BRL	2015.01.15	USD2,500/BRL6,626		Forward exchange contracts	USD/THB	2014.04.23	USD1,000/THB32,898
Forward exchange contracts	USD/INR	2015.01.15		USD1,500/INR93,759	Lite-On Electronics (Guangzhou) Co., Ltd.
Silitech Technology Corp.					Currency swap contracts	USD/CNY	2014.01.06	USD11,000/CNY66,714
Forward exchange contracts	USD/MYR	2015.01.06-		USD1,670/MYR5,737				(Concluded)
		2015.03.06
December 31, 2013					The subsidiaries entered into derivative contracts in 2014 and 2013 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
Lite-On IT Corp.					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.

8. 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 \$212,956 thousand and \$407,293 thousand in the consolidated statements of comprehensive income for the years ended December 31, 2014 and 2013, respectively.

9. DERIVATIVE FINANCIAL INSTRUMENTS FOR HEDGING

	December 31
	2014	2013
Derivative financial liabilities under hedge accounting
Cash flow hedges - interest rate swaps	\$ 11,989	\$ 46,969
Current Non-current	\$ 11,989 -	\$ - 46,969
	\$ 11,989	\$ 46,969

		December 31			Range of	Range of
	2014	2013	Notional Amount (In Thousands)	Maturity Date	Interest Rates Paid	Interest Rates Received
Domestic investments			December 31, 2014
Quoted shares Emerging market shares	\$ 626,191 178,716	\$ 1,182,391 178,716	NT\$2,400,000	2015.09.23	1.895%	0.888%
Unquoted shares	144,617	289,160	December 31, 2013
Foreign investments			NT\$4,800,000	2015.09.23	1.895%	0.863%
Unquoted shares Mutual funds Quoted shares	221,811 143,434 11,486	324,374 127,705 41,657	10. DEBT INVESTMENTS WITH NO ACTIVE MARKET
						December 31
	\$ 1,326,255	\$ 2,144,003			2014	2013
Current Non-current	\$ - 1,326,255	\$ 13 2,143,990	Pledged deposits		\$ 78,688	\$ 36,490
	\$ 1,326,255	\$ 2,144,003	Current Noncurrent		\$ 78,170 518	\$ 22,390 14,100
Refer to Note 33 for information relating to the fair values of on available-for-sale financial assets					\$ 78,688	\$ 36,490

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:

Trade receivables
Allowance for impairment loss
Unrealized interest revenues

Refer to Note 35 for information on bond investments with no active market pledged as security.

11. TRADE RECEIVABLES

	December 31
	2014	2013
Trade receivables Allowance for impairment loss Unrealized interest revenues	\$ 51,479,864 (298,871) (46,981)	\$ 49,716,019 (215,850) -
	\$ 51,134,012	\$ 49,500,169

As of December 31, 2014 and 2013, the Group did not have the age of the trade receivables that were past due but not impaired.

At the end of the reporting period, trade receivables from sales on installments by the Group were as follows:

For the year ended December 31, 2013: None.

	December 31, 2014
Trade receivables Unrealized interests revenue	\$ 789,720 (46,981)
	\$ 742,739

The amounts of the above trade receivables expected to be recovered were NT\$131,620 thousand per year during 2015 to 2020.

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

	For the Year Ended December 31
	2014	2013
Balance at January 1	\$ 215,850	\$ 323,320
Allowance for impairment loss	108,831	10,198
Foreign exchange translation	(2,988)	13,626
Effect of business combination	(22,060)	-
Uncollectible amounts written off during the period as uncollectible	(762)	(131,294)
Balance at December 31	\$ 298,871	\$ 215,850

The unexpired factored accounts receivable of the subsidiaries as of December 31, 2014 and 2013 were as follows:

Philips & Lite-On Digital Solutions Corp.

For the year ended December 31, 2014: None.

Counter-parties	Receivables Sold	Amounts Collected	Advances Received at Year-end	Interest Rates on Advances Received (%)	Credit Line
December 31, 2013
Taishin International Bank	US\$ 3,691	US\$ 3,900	US\$ -	0.17-0.18	US\$ 8,000

The above credit lines may be used on a revolving basis.

The subsidiaries (Philips & Lite-On Digital Solutions 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 bome by the banks.

	December 31
	2014	2013
Finished goods	\$ 15,623,878	\$ 13,108,163
Raw materials	7,413,962	6,682,596
Work in progress	3,834,591	4,882,929
Inventory in transit	2,336,889	2,257,198
Merchandise	304,471	272,647
	\$ 29,513,791	\$ 27,203,533

The costs of inventories recognized as cost of goods sold for the years ended December 31, 2014 and 2013 were \$202,260,385 thousand and \$182,552,021 thousand, respectively.

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2014 and 2013 included inventory write-downs of \$846,205 thousand and \$328,803 thousand, respectively. Which resulted from write-downs of inventory to net realizable value.

13. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

December 31, 2014

Equipment held for sale \$ 129,505

Silitech Technology (SuZhou) Co., Ltd., the subsidiary of the Parent Company, expect to entered into a sale agreement to dispose of idle equipment, and will complete as of January 2015. The buyer has been chosen. The sale proceeds substantially exceeded the carrying amount of the related net assets and, accordingly, no impairment losses were recognized on the reclassification of these operations as held for sale.

14. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

a. Investments in associates

	December 31
	2014	2013
Investments in associates Investments in jointly controlled entities	\$ 4,055,902 -	\$ 3,530,347 1,078
	\$ 4,055,902	\$ 3,531,425
a. Investments in associates
		December 31
Name of Associate	2014	2013
Listed companies
Lite-On Semiconductor Corp.	\$ 1,698,507	\$ 1,605,278
Logah Technology Corp.	352,473	- (Continued)

Listed companies

		December 31
Name of Associate	2014	2013
Unlisted companies
Dragonjet Corporation	\$ 1,060,414	\$ 1,031,514
LiteStar JV Holding (BVI) Co., Ltd.	781,257	718,970
Epricrystal (Changzhou) Co., Ltd.	153,263	144,146
Lite-Space Technology Company Limited	5,494	18,848
Canfield Ltd.	4,494	3,796
Yamada-Lom Fabricacao De Artefatos De Material Plastico Ltda	-	7,795
	\$ 4,055,902	\$ 3,530,347
		(Concluded)

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

December 31
2014	2013
	-
	39.23%
	33.33%
	29.66%
	25.00%
	20.45%
	20.19%
3.71%	3.71%
	32.53% 39.23% 33.33% 29.62% 25.00% 20.23% 20.19%

Starting from March 28, 2014, the Group has no power to govern the financial and operating policies of Logah Technology Corp. The Group used the fair value measurement for its investments after it lost control of Logah Technology Corp. (please refer to Note 30). The Group still has significant influence on Logah Technology Corp.; thus, the Group accounted for this investment by the equity method.

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 an equity-method investee of the Parent Company, 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.

Accounted for using equity method 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 31
Name of Associate	2014	2013
Lite-On Semiconductor Corp. Logah Technology Corp.	\$ 1,429,838 \$ 599,741	\$ 1,635,893 \$ -

In January 2013, Li Shin International Enterprise Corp. ("Li Shin") (the Parent Company had a merger with Li Shin on March 22, 2014), a subsidiary of the Parent Company, disposed of interests in Jhen Vei Electronics Co., Ltd. ("Jhen Vei") and received proceeds of \$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	\$ 111,476
Carrying amount of investment on the date of loss of significant influence	(75,526)
Gain recognized (recorded as nonoperating income and expense: Gain on disposal
of investments)	\$ 35,950

The financial information on the Group's interests in the associates is summarized as follows:

		December 31
	2014	2013
Total assets	\$ 30,688,975	\$ 29,121,757
Total liabilities	\$ 11,239,149	\$ 11,000,741
		For the Year Ended December 31
	2014	2013
Operating revenue	\$ 13,413,687	\$ 12,332,985
Net profit	\$ 500,961	\$ 118,687
Other comprehensive income	\$ 567,104	\$ 629,954
Share of profit of subsidiaries and associates	\$ 546,769	\$ 148,851

The financial statements used as basis for calculating the equity-method investments, the Group's share of profit or loss, and the other comprehensive income attributable the Group had all been audited, except those of Canfield Ltd. and Lite-Space Technology Company Limited. Management believed there would have been no significant impact on the accompanying consolidated financial statements had these two investees' financial statements been audited.

b. Investments in jointly controlled entities

	December 31
Name of Associate	2014	2013
Unlisted companies

Unlisted companies Kompaktsolar GmbH \$ - \$ 1,078

At the end of the reporting period, the proportion of ownership and voting rights in jointly controlled entities held by the Group are as follows:

	December 31
Name of Associate	2014	2013
Kompaktsolar GmbH	51.00%	51.00%

In June 2013, Subsidiary of Lite-On Green Technologies B.V. (LOGTBV) expect the carrying amounts are below the future cash flow of the investee company. Therefore, recognizing for impairment loss of \$10,682 thousand in the consolidated statement of comprehensive income.

The Group's investments and its share of profits and other comprehensive income are based on the jointly controlled entities financial statements audited by auditors for the same years.

15. PROPERTY, PLANT AND EQUIPMENT, NET

		December 31
	2014	2013
Freehold land	\$ 2,335,867	\$ 2,398,990
Buildings	12,424,092	13,167,598
Machinery equipment	16,012,090	16,790,486
Tooling equipment	140,111	479,393
Transportation equipment	21,681	23,802
Office equipment	465,815	737,435
Equipment held under finance lease	267,468	379,971
Other equipment	4,440,092	3,023,707
	\$ 36,107,216	\$ 37,001,382

				For the Year Ended December 31, 2014
Cost	January 1, 2014	Additions	Disposals	Effect of Business Combination	Reclassification	Effect of Foreign Currency Exchange Differences	December 31, 2014
Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment Accumulated depreciation	\$ 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	\$ - 101,821 5,026,374 122,835 6,182 182,053 73,977 2,926,602 \$ 8,439,844	\$ - 65,610 3,129,618 304,519 11,220 153,056 13,380 193,794 \$ 3,871,197	\$ (56,368 ) \$ (135,706 ) (141,208 ) - (1,600 ) 803 (68,222 ) (31,642 )	- (31,002 ) (701,125 ) 9,974 (72 ) (85,220 ) (21,608 ) (498,728 ) \$ (433,943 ) \$ (1,327,781 ) \$ 1,581,854	\$ 438,649 1,067,749 (57,462 ) 824 27,985 20,300 90,564	(6,755 ) \$ 2,335,867 20,591,355 42,733,143 3,884,972 83,156 2,730,452 1,411,445 9,077,902 82,848,292
Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment Accumulated impairment	6,947,394 22,822,096 3,611,874 64,939 2,016,021 1,026,069 3,725,652 40,214,045	\$ 811,998 4,857,725 406,792 8,299 281,832 53,531 688,362 \$ 7,108,539	\$ 30,105 1,949,067 409,189 10,202 90,590 12,442 185,661 \$ 2,687,256	\$ (185,703 ) - (1,301 ) (20,156 ) (24,858 ) (22,620 )	(11,582 ) \$ (159,084 ) \$ 262,808 (545,589 ) 2,572 (2,269 ) 26,560 (9,004 ) 307,456 \$ (266,220 ) \$ (379,358 ) \$ 1,094,771	607,859 92,292 1,085 41,088 68,189 21,450	7,821,429 25,607,321 3,704,341 60,551 2,254,755 1,101,485 4,534,639 45,084,521
Freehold land Buildings Machinery equipment Tooling equipment Transportation equipment Office equipment Equipment held under finance lease Other equipment	- 168,211 998,389 22,877 301 4,431 14,338 35,541 1,244,088	\$ - 193,933 886,485 19,520 890 7,713 40,943 81,817 \$ 1,231,301	\$ - 5,851 463,493 1,908 - 439 - 18 \$ 471,709	\$ - - (79,978 ) - (299 ) (2,133 ) (14,241 ) (3,902 )	\$ - - (178,024 ) - - - - - \$ (100,553 ) \$ (178,024 ) \$	\$ - (10,459 ) (49,647 ) 31 32 310 1,452 (10,267 ) (68,548 )	- 345,834 1,113,732 40,520 924 9,882 42,492 103,171 1,656,555

\$ 37,001,382 \$ 36,107,216

For the Year Ended December 31, 2013 January 1, 2013 Additions Disposals Effect of Business Combination Reclassification Effect of Foreign Currency Exchange Differences December 31, 2013 Cost Freehold land \$ 2,693,720 \$ 173 \$ 280,305 \$ - \$ 49,260 \$ (63,858 ) \$ 2,398,990 Buildings 21,407,250 83,067 1,775,793 - 54,690 513,989 20,283,203 Machinery equipment 39,618,614 4,849,528 3,299,701 - (1,445,875 ) 888,405 40,610,971 (Continued) For the Year Ended December 31, 2013

				Effect of		Effect of Foreign Currency
	January 1, 2013	Additions	Disposals	Business Combination	Reclassification	Exchange Differences	December 31, 2013
Tooling equipment	\$ 2,031,914	\$ 378,198	\$ 651,053	\$ -	\$ 2,218,185	\$ 136,900	\$ 4,114,144
Transportation equipment	97,205	10,768	26,790	-	4,019	3,840	89,042
Office equipment Equipment held under	2,594,743	183,608	202,004	-	122,825	58,715	2,757,887
finance lease	526,456	92,943	151,518	-	926,414	26,083	1,420,378
Other equipment	5,898,277	685,221	324,057	-	(46,851 )	572,310	6,784,900
	74,868,179	\$ 6,283,506	\$ 6,711,221	\$ -	\$ 1,882,667	\$ 2,136,384	78,459,515
Accumulated depreciation
Buildings	6,285,903	\$ 860,224	\$ 268,496	\$ -	\$	(48,976 ) \$ 118,739	6,947,394
Machinery equipment	21,603,815	3,668,056	1,776,008	-	(1,168,097 )	494,330	22,822,096
Tooling equipment	1,775,819	875,248	581,743	-	1,416,194	126,356	3,611,874
Transportation equipment	72,274	10,823	21,921	-	1,429	2,334	64,939
Office equipment	1,927,453	218,497	177,051	-	(2,228 )	49,350	2,016,021
Equipment held under
finance lease	399,774	39,777	149,007	-	716,786	18,739	1,026,069
Other equipment	4,047,653	837,388	339,913	-	(1,174,242 )	354,766	3,725,652
	36,112,691	\$ 6,510,013	\$ 3,314,139	\$ -	\$ (259,134 ) \$ 1,164,614		40,214,045
Accumulated impairment
Freehold land	-	\$ -	\$ -	\$ -	\$ -	\$ -	-
Buildings	13,292	-	-	-	145,394	9,525	168,211
Machinery equipment	1,044,455	148,116	-	-	(227,447 )	33,265	998,389
Tooling equipment	-	-	-	-	22,877	-	22,877
Transportation equipment	-	-	-	-	298	3	301
Office equipment Equipment held under	-	1,850	-	-	2,570	11	4,431
finance lease	-	7,178	-	-	7,069	91	14,338
Other equipment	-	-	-	-	35,536	5	35,541
	1,057,747	\$ 157,144	\$ -	\$ -	\$ (13,703 ) \$	42,900	1,244,088
	\$ 37,697,741						\$ 37,001,382
							(Concluded)

For the years ended December 31, 2014 and 2013, as the result of the declining sale of some of the products in the market, the estimated future cash flows expected to arise from the related equipment was decreased and recognized impairment loss \$1,231,301 thousand and \$157,144 thousand, respectively. The Group carried out a review of the recoverable amount of that related equipment and determined that the carrying amount exceeded the recoverable amount. The impairment loss had been 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

16. INVESTMENT PROPERTIES, NET

For the investment properties valued by independent valuer, the Group's management determined their fair value by reference to the market evidence of the transaction price of real estate. The important assumption and the fair value valued by revenue-method are as follow:

	December 31, 2014
Fair value	\$ 613,771
Capital rate	6.5%

17. OTHER INTANGIBLE ASSETS, NET

	December 31
	2014	2013
Goodwill	\$ 14,953,187	\$ 14,261,666
Patents	12,188	11,401
Patents use rights	786,297	1,010,954
Software	286,304	61,541
Other intangible assets	260,987	370,700
	\$ 16,298,963	\$ 15,716,262

For the Year Ended December 31, 2014

Cost	Buildings		January 1, 2014	Additions	Disposals	Effect of Business Combination	Reclassification	Effect of Foreign Currency Exchange Differences	December 31, 2014
		Cost
Balance at January 1, 2014	\$ -
Transferred from property, plant and equipment	706,741	Goodwill Patents	\$ 14,792,433 37,328	\$ 697,770 1,092	\$ - 6,143	\$ (5,043 ) \$ 130	- 7,187	\$ (113 )	(1,206 ) \$ 15,483,954 39,481
Net exchange differences	26,737	Patents use rights	2,695,878	-	-	-	-	-	2,695,878
		Client relationships	163,819	-	-	-	-	-	163,819
		Software	265,373	279,302	12,047	51,550	(19,224 )	(1,378 )	563,576
Balance at December 31, 2014	\$ 733,478	Other intangible assets	3,427,496 21,382,327	56,165 \$ 1,034,329	38,730 \$ 56,920	1,836 \$ 48,473	413,730 \$ 401,693	(922 ) \$	3,859,575 (3,619 ) 22,806,283
		Accumulated amortization
Accumulated depreciation
		Goodwill Patents	77,234 25,927	\$ - 8,772	\$ - 4,093	\$ - -	\$ - (3,251 )	\$ - (62 )	77,234 27,293
		Patents use rights	1,684,924	224,657		-			1,909,581
Balance at January 1, 2014	\$ -	Client relationships	163,819	-	-	-	-	-	163,819
Transferred from property, plant and equipment	189,287	Software	203,832	108,482	10,543	3,799	(26,655 )	(1,643 )	277,272
Net exchange differences	7,161	Other intangible assets	3,056,796 5,212,532	226,597 \$ 568,508	35,746 \$ 50,382	879 \$ 4,678	342,389 \$ 312,483	7,673 \$ 5,968	3,598,588 6,053,787
		Accumulated impairment
Balance at December 31, 2014	\$ 196,448	Goodwill	453,533	\$ -	\$ -	\$ -	\$ -	\$ -	453,533
		Patents	-	-	-	-	-	-	-
		Patents use rights	-	-	-	-	-	-	-
Carrying amounts at December 31, 2014	\$ 537,030	Software	-	-	-	-	-	-	-
		Other intangible assets	- 453,533	- \$ -	- \$ -	- \$ -	- \$ -	- \$ -	- 453,533
The investment properties held by the Group were depreciated using the straight-line method over their
estimated useful lives of 20 years.			\$ 15,716,262						\$ 16,298,963

For the Year Ended December 31, 2013

	January 1, 2013	Additions	Disposals	Effect of Business Combination		Reclassification	Effect of Foreign Currency Exchange Differences	December 31, 2013
Cost
Goodwill	\$ 14,798,181	\$ -	\$ -	\$	-	\$ -	\$	(5,748 ) \$ 14,792,433
Patents	27,134	10,079	-		-	-	115	37,328
Patents use rights	2,695,878	-	-		-	-	-	2,695,878
Client relationships	163,819	-	-		-	-	-	163,819
Software	251,569	5,346	-		-	14,696	(6,238 )	265,373
Other intangible assets	2,833,194	125,962	7,220		-	718,630	(243,070 )	3,427,496
Accumulated amortization	20,769,775	\$ 141,387	\$ 7,220	\$	-	\$ 733,326		\$ (254,941 ) 21,382,327
Goodwill	77,234	\$ -	\$ -	\$	-	\$ -	\$ -	77,234
Patents	16,959	8,898	-		-	-	70	25,927
Patents use rights	1,460,267	224,657	-		-	-	-	1,684,924
Client relationships	153,580	10,239	-		-	-	-	163,819
Software	188,505	5,672	-		-	14,690	(5,035 )	203,832
Other intangible assets	2,386,122	233,419	6,657		-	575,008	(131,096 )	3,056,796
Accumulated impairment	4,282,667	\$ 482,885	\$ 6,657	\$	-	\$ 589,698	\$ (136,061 )	5,212,532
Goodwill	453,533	\$ -	\$ -	\$	-	\$ -	\$ -	453,533
Patents	-	-	-		-	-	-	-
Patents use rights	-	-	-		-	-	-	-
Software	-	-	-		-	-	-	-
Other intangible assets	- 453,533	\$ - -	\$ - -	\$	- -	\$ - -	\$ - -	- 453,533
	\$ 16,033,575							\$ 15,716,262

The above items of other intangible assets were depreciated on a straight-line basis at the following rates per annum:

Patents 6 years Patents use rights 12 years Client relationships 4 years Software 2-14 years Other intangible assets 1-10 years a. To integrate its overall resources and enhance the efficiency of operations, the Parent Company had short-form mergers - in accordance with Article 19 of the Business Mergers and Acquisitions Act - with Li Shin International Enterprise Corp., Lite-On Automotive Corp., Leotek Electronics Corp., Lite-On IT Corp. and LarView Technologies Corp. on March 22, 2014, June 1, 2014, June 29, 2014, June 30, 2014 and September 1, 2014, respectively, under the board of directors' approval. The Parent Company was the survivor entity in all of these mergers. The investment premium from Li Shin International Enterprise Corp., Lite-On Automotive Corp., Leotek Electronics Corp., Lite-On IT Corp., and LarView Technologies Corp. were \$1,708,258 thousand, \$277,840 thousand, \$220,170 thousand, \$2,806,508 thousand, and \$368,462 thousand, respectively. The total amount of \$5,381,238 thousand was transferred to the Parent Company and recorded as intangible assets - goodwill.

The goodwill arising from the Parent Company's acquisition of Lite-On Enclosure Inc. in 2004 was \$210,220 thousand was amortized for about 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, 2014 and 2013, the carrying value of goodwill were all \$132,986 thousand.

The Parent Company completed the purchase of some assets of the IrDA Department of Avago Technologies Limited. Statement of IFRS 3 - "Business Combinations" and IAS 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 was \$411,932 thousand as of December 31, 2009.

b. The amounts of cash-generating unit used in amortizing the Group's goodwill are listed as follows:

	December 31
		2014		2013
Lite-On Mobile Pte. Ltd.	\$	8,638,905	\$	-
The Parent Company		5,926,156		544,918
Power Innovations International Inc.		278,137		-
Five Domension Co., Ltd.		51,171		-
Lite-On Mobile Oyj (formerly Perlos Oyj)		-		8,640,111
Lite-On IT Corp.		-		2,806,508
Lite-On Automotive Corp.		-		277,840
Leotek Electronics Corp.		-		220,170
Li Shin International Enterprise Corp.		-		1,708,258
Others		58,818		63,861
		\$ 14,953,187		\$ 14,261,666

The Group reorganized its structure on June 2014, and the Parent Company acquired the entire equity of Lite-On Mobile Pte. Ltd. from its subsidiary, Lite-On Mobile Oyj (formerly Perlos Oyj). This acquisition resulted in changes to the smallest identifiable group of cash-generating units. Thus, the original goodwill allocated to the cash-generating units of Lite-On Mobile Oyj (formerly Perlos Oyj) were reallocated to the subsidiary Lite-On Mobile Pte. Ltd.

As of the goodwill of \$697,770 thousand resulting from the acquisition of LarView Technologies, Power Innovations International Inc. and Five Domension Co., Ltd. in 2014, refer to Note 29.

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. As of December 31, 2014 and 2013, 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.

18. OTHER ASSETS

	December 31
	2014	2013
Prepayments	\$ 2,689,934	\$ 1,937,381
Offset against business tax payable	1,530,386	2,739,245
Prepayments for lease	775,063	782,061
Prepayment for equipment	93,450	85,771
Others	361,639	418,959
	\$ 5,450,472	\$ 5,963,417
Current Non-current	\$ 4,561,144 889,328	\$ 5,037,428 925,989
	\$ 5,450,472	\$ 5,963,417

Prepayments for lease with carrying amounts of \$554,592 thousand and \$543,254 thousand as of December

31, 2014 and 2013, respectively, referred to land use rights located in Mainland China.

19. BORROWINGS

a. Short-term borrowings

	December 31,
	2014	2013
Line of credit borrowings	\$ 22,911,114	\$ 15,576,780

Market interest rates for short-term borrowings were as follows:

		December 31,
	2014	2013
Short-term borrowings	0.82%-4.1%	0.72%-1.96%

b. Long-term borrowings

	December 31,
	2014	2013
Unsecured borrowings
The Parent Company	\$ 12,925,000	\$ 18,475,000
Lite-On Mobile Pte. Ltd.	6,319,993	5,960,993
Silitech Technology Corp.	1,440,000	1,440,000
Guangzhou Lite-On Mobile Electronic Components Co., Ltd.	1,011,199	1,192,206
Lite-On Japan Ltd.	193,630	307,966
Five Dimension Co., Ltd	28,977	-
	21,918,799	27,376,165
Current portion	(8,358,016)	(8,867,669)
	13,560,783	18,508,496
Secured borrowings
Power Innovations International Inc.	4,350	-
Current portion	(973)	-
Secured borrowings: Non-current	3,377	-
	\$ 13,564,160	\$ 18,508,496

1) As of December 31, 2014 and 2013, the Parent Company had 4 and 6 long-term bank loans respectively with contract terms between September 23, 2008 and September 23, 2018. The floating interest rates are (1.520% to 1.703% and 1.448% to 1.663% and as of December 31, 2014 and 2013, 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 Parent Company signed a 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 (a) \$12 billion and (b) \$3 billion of the credit line of the above syndicated loan.

On September 12, 2013, the Parent Company signed another contract for a five-year syndicated loan with Citibank and 16 other financial institutions. The credit line was NT\$15 billion, which was for Company to repay the former syndicated loan with Citibank signed on September 23, 2008. This syndicated loan was for the Parent Company to repay the former syndicated loan with Citibank under a contract signed on September 23, 2008. It should be used as a medium-term loan but may not be used on a revolving basis. Subsequently, (b) \$3 billion of the credit line of the above syndicated loan signed on September 23 was cancelled.

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 Parent Company should maintain certain financial ratios based on the most recent semiannual or annual consolidated financial statements.

As of December 31, 2014 and 2013, the Parent Company used both NT\$12 billion of the credit line of the above syndicated loan.

On March 19, 2013, the Parent 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.

The minimum payment of principal should be repaid at NT\$4 billion by March 19, 2014. The remaining principal of this syndicated loan should be repaid in five semiannual installments from March 19, 2016. The Parent Company had early repaid the syndicated loan on March 2014.

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

2) Lite-On Mobile Pte. Ltd., a subsidiary of the Parent Company, had a long-term, syndicated-bank loan. As of December 31, 2014 and 2013, the floating interest rates were 0.925% and 1.395% to 1.05% and 1.35%, respectively. The principal is repayable from April 29, 2014 in five semiannual

installments.

On April 29, 2011, Lite-On Mobile Pte. Ltd. signed a loan contract with Citibank and 13 other financial institutions (the endorsements and guarantees were provided by the Parent Company). This contract is on a five-year syndicated loan of US\$200 million. As of December 31, 2014 and 2013, Lite-On Mobile Pte. Ltd. had used US\$120 million and US\$200 million, respectively, of the syndicated loan.

On March 31, 2014, Lite-On Mobile Pte. Ltd. signed with Citibank and 12 other financial institutions (the endorsements and guarantees were provided by the Parent Company). This contract is on a five-year syndicated loan of US\$200 million. This syndicated loan was for Lite-On Mobile Pte. Ltd. to prepay the syndicated loan with Citibank under a contract signed on April 29, 2011. As of December 31, 2014, Lite-On Mobile Pte. Ltd. had used US\$80 million of the syndicated loan.

3) Silitech Technology Co., Ltd., a subsidiary of the Parent Company, entered into a \$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, 2014 and 2013, Silitech had both used \$1.44 billion of the syndicated loan, with an interest rate of 1.6786% and 1.6734%.,

respectively.

The first repayment of \$480 million should be made on August 18, 2017. The remaining principal of \$960 million is repayable by February 18, 2018.

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, 2014 and 2013, the floating interest rates were 0.880% and 1.05% to 1.725%. 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 December 31, 2014 and 2013, Guangzhou Lite-On Mobile Electronic Components Co., Ltd. had used US\$32 million and US\$40 million of the credit line of the syndicated loan.

5) As of December 31, 2014, Lite-On Japan Ltd., a subsidiary of the Parent Company, had 11 long-term bank loans, with contract terms from March 2011 to October 2018, with interest rate of

0.935% to 1.35% and principal repayable in trimestral installments.

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.

• 6) As of December 31, 2014, Five Dimension Co., Ltd, a subsidiary of the Parent Company, had 3 long-term bank loans, with contract terms from March 28, 2012 to March 20, 2027, with fixed interest rate of 0.4% to 2.375%. and principal repayable monthly installments or at lump sum on loan maturity.
• 7) As of December 31, 2014, Power Innovations International Inc., a subsidiary of the Parent Company, had a long-term secured borrowing of machinery, with contract terms from March 28, 2013 to February 28, 2019, with interest rate of 4.4%.

20. FINANCE LEASE PAYABLES

		December 31
	2014	2013
Minimum lease payments
Not later than one year Later than one year and not later than five years Later than five years	\$ 93,485 104,988 - 198,473	\$ 84,944 183,109 - 268,053
Future finance charges	(11,520)	(22,370)
Present value of minimum lease payments	\$ 186,953	\$ 245,683
Present value of minimum lease payments
Not later than one year Later than one year and not later than five years Later than five years	\$ 85,232 101,721 -	\$ 72,735 172,948 -
	\$ 186,953	\$ 245,683
Current Non-current	\$ 85,232 101,721	\$ 72,735 172,948
	\$ 186,953	\$ 245,683
		December 31
	2014	2013
Guangzhou Lite-On Mobile Electronic Components Co., Ltd. Power Innovations International Inc. Lite-On Mobile Sweden AB Lite-On Mobile Oyj (formerly Perlos Oyj) Lite-On Japan Ltd.	\$ 177,962 8,244 700 47 - 186,953	\$ 244,053 - 987 630 13 245,683
Current portion of long-term capital lease liabilities	(85,232) \$ 101,721	(72,735) \$ 172,948

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

b. Power Innovations International Inc. leased machinery and equipment under capital leases valid from March 28, 2013 to March 31, 2020. The terms of these leases were between five and seven years, with 3.49% to 4.75% interest rate. The machinery and equipment can be bought at bargain purchase prices

c. Lite-On Mobile Sweden AB leased machinery and equipment under capital leases valid from January 9, 2013 to January 31, 2016. The terms of these leases were three years, with 2.36% interest rate.

• leases were 10 years, with 7.11% interest rate.
• at the end of the lease terms.
• interest rate.
• August 2014. The terms of these leases were five years, with 2.7% interest rate.

d. Lite-On Mobile Oyj (formerly Perlos Oyj) leased machinery and equipment under capital leases valid from October 1, 2010 to September 30, 2015. The terms of these leases were four years, with 5.00%

e. Lite-On Japan Ltd. leased machinery and equipment under capital leases valid from August 2009 to

21. PROVISIONS

	December 31
	2014	2013
Warranties	\$ 1,080,628	\$ 874,502
Movements in the provisions were as follow:
	December 31
	2014	2013
Balance at January 1	\$ 874,502	\$ 917,217
Recognition of provisions	341,704	382,144
Usage	(149,273)	(418,996)
Effect of foreign currency exchange differences	13,695	(5,863)
Balance at December 31	\$ 1,080,628	\$ 874,502

Balance at January 1	\$ 874,502	\$	917,217
Recognition of provisions	341,704		382,144
Usage	(149,273)		(418,996)

Based on the local legislation for the sale of goods, provision for warranty claims is 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. The estimate had been made on the basis of historical warranty trends and may vary as a result of the entry of new materials, altered manufacturing processes or other events affecting product quality.

22. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Parent Company and subsidiaries - Philips & Lite-On Digital Solutions Corp., Silitech Technology Corp., Lite-On Integrated Services Inc. and Lite-On Green Technologies Inc. of the Group 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. The pension expenses recognized were NT\$214,258 thousand in 2014 and NT\$211,570 thousand in 2013.

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\$405,138 thousand in 2014 and NT\$345,821 thousand in 2013.

	For the Year Ended December 31
	2014	2013
By function
Operating costs	\$ 232,160	\$ 237,348
Operating expenses	387,236	320,043
	\$ 619,396	\$ 557,391

b. Defined benefit plans

The Parent Company and subsidiaries - Philips & Lite-On Digital Solutions Corp. and Silitech Technology Corp. of the Group 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 six months before retirement. The Parent Company and subsidiaries - Philips & Lite-On Digital Solutions Corp. and Silitech Technology Corp. of the Group contribute amounts equal to 2% to 2.5% 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 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:

	For the Year Ended December 31
	2014	2013
Discount rate(s)	1.70%-4.125%	1.50%-2.00%
Expected return on plan assets	1.70%-2.25%	1.25%-3.50%
Expected rate(s) of salary increase	3.00%-4.75%	2.00%-5.00%

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

	For the Year Ended December 31
	2014	2013
Current service cost	\$ 17,031	\$ 22,050
Interest cost	19,925	19,432
Expected return on plan assets	(20,125)	(14,204)
Past service cost	(26,330)	13,088
Gains arising from curtailment or settlement	(8,531)	(744)
	\$ (18,030)	\$ 39,622
An analysis by function
Operating cost	\$ (15,901)	\$ 3,030
Operating expenses	(2,129)	36,592
	\$ (18,030)	\$ 39,622

Pre-tax actuarial gains and losses recognized in other comprehensive income for the years ended December 31, 2014 and 2013 were NT\$27,065 thousand of gain and NT\$284 thousand of loss, respectively. The cumulative amount of pre-tax actuarial losses recognized in other comprehensive income as of December 31, 2014 and 2013 was NT\$107,749 thousand and NT\$134,814 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:

	For the Year Ended December 31
	2014	2013
Present value of funded defined benefit obligation	\$ 1,178,095	\$ 1,281,264
Fair value of plan assets	(1,082,074)	(1,043,820)
Deficit	96,021	237,444
Past service cost not yet recognized	12,853	(1,773)
Accrued pension liabilities	\$ 108,874	\$ 235,671

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

	For the Year Ended December 31
	2014	2013
Balance at January 1	\$ 1,281,264	\$ 1,415,666
Service cost	17,031	22,050
Finance cost	19,925	19,432
Actuarial gains	(17,812)	(57,250)
Gains on curtailments	(6,960)	(744)
Liabilities extinguished on settlements	(5,591)	-
Exchange differences on foreign plans	(152)	(612)
Benefits paid	(16,763)	(117,278)
Liability eliminated from deconsolidation of subsidiaries	(92,847)	-
Balance at December 31	\$ 1,178,095	\$ 1,281,264

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

	For the Year Ended December 31
	2014	2013
Balance at January 1	\$ 1,043,820	\$ 1,088,037
Expected return on plan assets	20,125	14,204
Exchange differences on foreign plans	-	(26)
Contributions from plan participants	27,243	116,417
Benefits paid	(16,793)	(117,278)
Actuarial gain (loss)	9,253	(57,534)
Assets eliminated on the deconsolidation of subsidiaries	(1,604)	-
Balance at December 31	\$ 1,082,074	\$ 1,043,820

The major categories of plan assets at the end of the reporting period for each category were as follows:

	For the Year Ended December 31
Equity instruments Debt instruments Property Others	2014	2013
	27	18
	23	11
	-	3
	50	68
	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.

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, 2014	December 31, 2013	December 31, 2012	January 1, 2012
Experience adjustments gains/ (losses) on plan liabilities	\$ 27,715	\$ (23,956)	\$ (10,575)	\$ -
Experience adjustments gains/(losses) on plan assets	\$ 9,253	\$ (459)	\$ (2,360)	\$ -

The Group expects to make contributions of NT\$23,576 thousand to the defined benefit plans in the next year starting from December 31, 2014.

23. EQUITY

a. Share capital

1) Common shares

		December 31
	2014	2013
Number of shares authorized (in thousands) Amount of shares authorized Number of shares issued and fully paid (in thousands) Amount of shares issued	3,500,000 \$ 35,000,000 2,341,674 \$ 23,416,737	3,500,000 \$ 35,000,000 2,324,655 \$ 23,246,552

Fully paid common shares, which have a par value of \$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.

2) Issued global depositary receipts

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 thousand units of GDRs on the London Stock Exchange. These GDRs represented 25,000 thousand common shares of GVC Corp., which later issued more shares. 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, 2014 and 2013, the outstanding marketable equity securities were 5,213 thousand units and 5,206 thousand units, representing 52,127 thousand common share and 52,064 thousand common share 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, 2014 and 2013, the unredeemed GDRs amounted to 994 thousand units and 1,194 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) 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 share of changes in equities of subsidiaries, share of changes in equities of associates and joint venture and employee share options 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.

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.

The bonus to employees and remuneration to directors were estimated at a certain percentage of net income. Material differences between these estimates amounts and the amounts proposed by the board of directors on or before the financial statements are authorized for issue are adjusted in the year the bonus and remuneration are recognized. If there is a change in the proposed amounts after the consolidated financial statements are authorized for issue, the differences are recorded as a change in accounting estimate and will be adjusted in the following year. If a share bonus will be distributed to employees, the number of shares is determined by dividing the amount of the share bonus by the fair value of the shares. The fair value of the shares refers to the closing price (after considering the effect of cash and stock dividends) of the shares on the day immediately preceding the shareholders' meeting.

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

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 2013 and 2012 had been approved in the shareholders' meetings on June 19, 2014 and 2013, respectively. The appropriations and dividends per share were as follows:

2013		2012				2012
						\$ 0.05
		5,400,265		2.71		2.35
\$	875,485 - 640,244 116,381 6,307,866	\$	Appropriation of Earnings 753,486 689,913 - 114,899		2013 \$ 0.05	Dividends Per Share (NT\$)

		For the Year Ended December 31
		2013		2012
Cash Dividends		Stock Dividends	Cash Dividends	Stock Dividends
Bonus to employees	\$ 997,212	\$ 189,945	\$ 897,799	\$ 171,009
Remuneration of directors	70,039	-	61,420	-

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 4,085 thousand shares for 2013 was determined by dividing the amount of share bonus resolved in 2014 by the closing price of NT\$46.50 (after considering the effect of cash and stock dividends) on the day immediately preceding the shareholders' meeting.

The appropriation of the earnings for 2013 was approved by the Financial Supervisory Commission, Executive Yuan, ROC. The Parent Company's board of directors approved August 6, 2014 as the date of distributing stock dividends and cash dividends.

There was no difference between (a) the amounts approved in the shareholders' meeting on June 19, 2014 and 2013 and (b) the amounts recognized in the consolidated financial statements for the years ended December 31, 2013 and 2012.

The appropriations of earnings for 2014 had been proposed by the Parent Company's board of directors on March 25, 2015. The appropriations and dividends per share were as follows:

Appropriation of Earnings	Dividends Per Share (NT\$)
4,613,097 117,084	\$1.97 0.05
	\$ 646,166 182,544

The Board of Directors of the Parent Company also approved in year 2014 the cash dividends to employees, stock dividends to employees and the remuneration to directors in the amounts of NT\$768,033 thousand, NT\$146,292 thousand and NT\$54,924 thousand, respectively. There is no significant difference between the approved amounts and the amounts charged against earnings of 2014.

The appropriations of earnings, the bonus to employees, and the remuneration to directors for 2014 are subject to the resolution of the shareholders' meeting to be held on June 24, 2015.

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.

d. Other equity items

Movements in other equity items were as follows:

		For the Year Ended December 31, 2014
	Foreign Currency Translation Reserve	Unrealized Gain (Loss) from Available-for sale Financial Assets	Cash Flow Hedges Reserve	Total
Balance at January 1	\$ 2,383,040	\$ 83,231	\$	(46,969) \$ 2,419,302
Exchange differences arising on translating the financial statements of foreign operations	1,995,848	-	-	1,995,848
Gain arising on changes in the fair value of available-for
sale financial assets Reclassification to income from disposal of available-for-sale	-	475,947	-	475,947
financial assets Gain arising on changes in the	-	(422,324)	-	(422,324)
fair value of hedging instruments Share of other comprehensive	-	-	34,980	34,980
income of subsidiaries and associates (Note 1)	165,305	2,218	-	167,523 (Continued)

	For the Year Ended December 31, 2014
		Foreign Currency Translation Reserve		Unrealized Gain (Loss) from Available-for sale Financial Assets		Cash Flow Hedges Reserve		Total
The proportionate share of other comprehensive income reclassified to profit or loss upon partial disposal of associates	\$	(1,240) \$		-	\$	-	\$	(1,240)
Effect of deconsolidation of subsidiary Income tax effect		(13,549) (404,307)		- -		- -		(13,549) (404,307)
Balance at December 31		\$ 4,125,097	\$	139,072	\$	(11,989) \$ 4,252,180		(Concluded)

		For the Year Ended December 31, 2013
	Exchange Differences on Translating Foreign Operations	Unrealized Gain (Loss) on Available for-sale Financial Assets	Cash Flow Hedge	Total
Balance at January 1	\$ 128,872	\$ (446,848)	\$ (101,563) \$ (419,539)
Exchange differences arising on translating the financial statements of foreign operations	2,541,491	-	-	2,541,491
Gain arising on changes in the
fair value of available-for sale financial assets	-	611,977	-	611,977
Reclassification to income from disposal of available-for-sale
financial assets	-	(111,333)	-	(111,333)
Gain arising on changes in the fair value of hedging instruments	-	-	54,594	54,594
Share of other comprehensive income of subsidiaries and
associates (Note 2)	87,450	29,435	-	116,885
Income tax effect	(374,773)	-	-	(374,773)
Balance at December 31	\$ 2,383,040	\$ 83,231	\$ (46,969) \$ 2,419,302

Note 1: The use of share of the actuarial loss NT\$12,836 thousand arising of associates are not included.

Note 2: The use of share of the actuarial loss NT\$357 thousand arising of associates are not included.

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. 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. Non-controlling interests

	For the Year Ended December 31
		2014	2013
Balance at January 1		\$ 6,200,851	\$ 19,961,011
Attributable to non-controlling interests:
Share of profit (loss) for the year		(782,086)	135,643
Exchange difference arising on translation of foreign entities		119,804	328,472
Unrealized gains and losses on available-for-sale financial
assets		233	11,790
Actuarial profit (loss) on defined benefit plans		8,785	(18,684)
Gain/(loss) on income tax of other comprehensive income		(21,860)	(34,371)
Effect of acquisition of subsidiary (Note 29)		10,131	-
Effect of deconsolidation of subsidiary (Note 30)		(747,537)	-
Acquisition of non-controlling interests in subsidiaries (Note 31)		(469,686)	(13,732,478)
Cash dividend of non-controlling interests		(127,371)	(450,532)
Balance at December 31		\$ 4,191,264	\$ 6,200,851

f. Treasury shares

Unit: In Thousands of Shares

Purpose of Buyback	Number of Shares at January 1	Increase During the Period	Decrease During the Period	Number of Shares at December 31
For the year ended December 31, 2014
Shares held by subsidiaries	28,118	132	1,675	26,575
For the year ended December 31, 2013
Shares held by subsidiaries	27,979	139	-	28,118

The Parent 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)	Carrying Amount	Market Price
December 31, 2014
Lite-On Capital Inc. LTC International Ltd. Yet Foundate Ltd. Lite-On Electronics Co., Ltd.	14,966 6,935 2,248 2,426	\$ 718,857 297,469 126,881 105,515 \$ 1,248,722	\$ 544,761 272,328 95,922 103,497 \$ 1,016,508
December 31, 2013
Lite-On Capital Inc. LTC International Ltd. Yet Foundate Ltd. Lite-On Electronics Co., Ltd. Lite-On IT Corp.	14,892 6,900 2,237 2,414 1,675	\$ 718,857 297,469 126,881 105,515 85,938	\$ 711,812 305,906 90,023 97,132 80,066
		\$ 1,334,660	\$ 1,284,939

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.

24. REVENUE

	For the Year Ended December 31
	2014	2013
Revenue from the sale of goods	\$ 230,418,781	\$ 212,915,644
Rental income from property	117,047	101,340
Electricity generation revenue	96,146	197,313
	\$ 230,631,974	\$ 213,214,297

For segment revenue information, refer to Note 39.

25. INCOME TAX

a. Income tax recognized in profit or loss

	For the Year Ended December 31
	2014	2013
Current income tax expense (benefit)
Current tax expense recognized in the current year	\$ 2,934,326	\$ 2,529,610
Adjustment for prior years' tax	(72,204)	(37,022)
	2,862,122	2,492,588
Deferred tax
The origination and reversal of temporary differences	(877,671)	120,060
Investment tax credits and loss carryforward	86,966	16,640
	(790,705)	136,700
Income tax expense recognized in profit or loss	\$ 2,071,417	\$ 2,629,288

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

as follows:

	For the Year Ended December 31
	2014	2013
Income before tax	\$ 7,750,990	\$ 11,519,779
Income tax expense at the statutory rate	\$ 2,088,117	\$ 2,611,542
Tax effect of adjusting items:
Nondeductible items in determining taxable income	856,785	91,614
Tax-exempt income	(220,112)	(247,719)
Additional income tax on unappropriated earnings	209,536	90,813
The origination and reversal of temporary differences	(790,705)	120,060
Adjustment for prior years' tax	(72,204)	(37,022)
Income tax expense recognized in profit or loss	\$ 2,071,417	\$ 2,629,288

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

laws in those jurisdictions.

As the status of 2014 appropriations of earnings is uncertain, the potential income tax consequences of 2014 unappropriated earnings are not reliably determinable.

b. Income tax recognized in other comprehensive income

Deferred tax

Income tax recognized in other comprehensive income (loss)

	For the Year Ended December 31
	2014	2013
Deferred tax
Income tax recognized in other comprehensive income (loss)
Translation of foreign operations	\$ (424,538)	\$ (409,816)
Related to actuarial gain/loss from defined benefit plans	(8,647)	(2,459)
Share of other comprehensive income of associates and jointly controlled entities	(137)	63
	\$ (433,322)	\$ (412,212)

c. Deferred income tax

The analysis of deferred income tax in the Group only assets was as follows:

	December 31
	2014	2013
Investment tax credits	\$ -	\$ 48,324
Temporary differences
Investment accounted for using equity method	1,305,046	522,830
Unrealized loss and expense	565,528	475,000
Impairment loss on assets	325,877	298,231
Accrued warranty expense	236,222	262,069
Unrealized loss on inventories	225,978	151,972
Operating loss carryforward	112,478	149,223
Accrued pension cost	61,515	42,290
Unrealized sales profit	40,835	51,236
Accumulated compensated absences	29,681	8,204
Available-for-sale financial assets	-	4,771
Others	204,512	193,054
	\$ 3,107,672	\$ 2,207,204

	Opening Balance	Recognized in Profit (Loss)	Recognized in Other Comprehensive Income (Loss)	Exchange Differences	Closing Balance
2014
Investment tax credits	\$ 48,324	\$ (48,324 ) \$	-	\$ -	\$ -
Temporary differences
Investment accounted for using equity
method	522,830	716,142	59,819	6,255	1,305,046
Unrealized loss and expense	475,000	89,804	-	724	565,528
Impairment loss on assets Accrued warranty expense	298,231 262,069	27,425 (25,639 )	- -	221 (208 )	325,877 236,222
Unrealized loss on inventories	151,972	73,414	-	592	225,978
Operating loss carryforward	149,223	(38,642 )	-	1,897	112,478
Accrued pension cost	42,290	10,566	8,647	12	61,515
Unrealized sales profit	51,236	(10,318 )	-	(83 )	40,835
Accumulated compensated absences	8,204	21,477	-	-	29,681
Available-for-sale financial assets	4,771	(4,771 )	-	-	-
Others	193,054	11,366	-	92	204,512
	\$ 2,207,204	\$ 822,500	\$ 68,466	\$ 9,502	\$ 3,107,672
2013
Investment tax credits	\$ 155,133	\$ (108,945 ) \$	-	\$ 2,136	\$ 48,324
Temporary differences
Investment accounted for using equity
method	459,370	160,767	(96,292 )	(1,015 )	522,830
Unrealized loss and expense	190,792	291,313	-	(7,105 )	475,000
Impairment loss on assets	572,053	(278,203 )	-	4,381	298,231
Unrealized loss on inventories Operating loss carryforward	161,854 58,372	(10,376 ) 92,305	- -	494 (1,454 )	151,972 149,223
Accrued warranty expense	292,738	(31,160 )	-	491	262,069
Unrealized sales profit	106,797	(56,450 )	-	889	51,236
Accrued pension cost	42,224	2,525	(2,459 )	-	42,290
Accumulated compensated absences	10,329	(2,125 )	-	-	8,204
Available-for-sale financial assets	1,483	3,361	-	(73 )	4,771
Others	164,472	29,725	-	(1,143 )	193,054
	\$ 2,215,617	\$ 92,737	\$ (98,751 ) \$		(2,399 ) \$ 2,207,204

The analysis of deferred income tax in the Group only liabilities was as follows:

			December 31
				2014			2013
Temporary differences
Accumulated equity in the net gain of investees				\$ 2,614,664			\$ 2,080,163
Unrealized amortization of goodwill Land value increment tax					353,808 239,693		334,048 239,693
Others					21,627		67,752
				\$ 3,229,792			\$ 2,721,656
				Recognized in Other
	Opening Balance	Recognized in Profit (Loss)		Comprehensive Income (Loss)	Exchange Differences		Closing Balance
2014
Temporary differences Investment accounted for using equity method	\$ 2,080,163	\$ 56,452		\$ 501,788	\$		(23,739 ) \$ 2,614,664
Unrealized amortization of goodwill Land value increment tax Others	334,048 239,693 67,752	19,760 - (44,417 )		- - -		- - (1,708 )	353,808 239,693 21,627
	\$ 2,721,656	\$ 31,795		\$ 501,788	\$		(25,447 ) \$ 3,229,792
2013
Temporary differences Investment accounted for using equity method	\$ 1,587,279	\$ 173,508		\$ 313,461	\$	5,915	\$ 2,080,163
Land value increment tax	239,693	-		-		-	239,693
Unrealized amortization of goodwill Available-for-sale financial	301,814 3,361	29,655 (3,294 )		- -		2,579 (67 )	334,048 -
Others	37,906	29,568		-		278	67,752
	\$ 2,170,053	\$ 229,437		\$ 313,461	\$	8,705	\$ 2,721,656
d. As of December 31, 2014 and 2013, the aggregate deductible temporary differences for which no deferred income tax assets have been recognized amounted to NT\$530,132 thousand and NT\$616,546 thousand, respectively.
e. Integrated income tax
					December 31
				2014			2013
Unappropriated earnings Unappropriated earnings generated before January 1, 1998				\$	2,215	\$	2,215
Unappropriated earnings generated on and after January 1, 1998					11,426,845		12,169,867
				\$ 11,429,060			\$ 12,172,082
Imputation credits accounts				\$	1,583,451	\$	469,347

The estimated and actual creditable ratio for distribution of earnings of 2014 and 2013 were 12.70% and 11.40%, respectively.

According to the amendation to the Income Tax Law in Article 66-6 effective on January 1, 2015, which halved the creditable ratio for ROC resident shareholders. In addition, 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.

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 2014 earnings may differ from the actual creditable ratio to be used in allocating imputation credits to the shareholders.

f. Income tax assessments

The tax returns through 2011 have been assessed by the tax authorities. The Company and subsidiaries disagreed with the tax authorities' assessment of its 2011 tax return and applied for a re-examination. Nevertheless, to be conservative, the Company and its subsidiaries provided for the income tax assessed by the tax authorities.

26. EARNINGS PER SHARE

Unit: NT\$ Per Share

	For the Year Ended December 31
	2014	2013
Basic earnings per share	\$ 2.80	\$ 3.81
Diluted earnings per share	\$ 2.76	\$ 3.77

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

	Amounts (Numerator)	Shares (Denominator) (Thousands)	Earnings Per Share (NT\$)
2014
Basic EPS The net income of common shareholders	\$ 6,461,659	2,311,803	\$ 2.80
Effect of dilutive potential common stock Bonus to employees	-	27,277
Diluted EPS The net income of common shareholders plus the effect of potential dilutive common stock \$ 6,461,659		2,339,080	\$ 2.76 (Continued)

2013

Basic EPS

	Amounts (Numerator)	Shares (Denominator) (Thousands)	Earnings Per Share (NT\$)
The net income of common shareholders Effect of dilutive potential common stock	\$ 8,754,848	2,298,322	\$ 3.81
Bonus to employees	-	24,857
The net income of common shareholders plus the effect of potential dilutive common stock \$ 8,754,848		2,323,179	\$ 3.77 (Concluded)

Diluted EPS

The weighted average number of shares outstanding used for the earnings per share computation was adjusted retroactively for the issuance of bonus shares on August 6, 2014. This adjustment caused the basic and diluted after-tax earnings per share for the year ended December 31, 2013 to decrease from NT\$3.83 to NT\$3.81 and from NT\$3.79 to NT\$3.77, respectively.

If the Parent Company offered to settle bonuses paid to employees in cash or shares, the Parent Company assumed 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.

27. SHARE-BASED PAYMENT ARRANGEMENTS

The Parent Company decided not to apply retrospectively the related regulation to share-based payments granted and vested before January 1, 2012. The share-based payment arrangement was as follows:

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:

For the year ended December 31, 2014: None.

111 112

Lite-On Technology Corporation 2014 Annual Report Lite-On Technology Corporation 2014 Annual Report

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

	December 2007
Expected volatility	40.07%
Expected life (years)	6 years
Expected dividend yield	7.07%
Risk-free interest rate	2.5101%

28. ADDITIONAL INFORMATION FOR EXPENSES

	For the Year Ended December 31, 2013
Employee Share Option Plan	Number of Options (In Thousands)	Weighted average Exercise Price (NT\$)	Employee benefit expenses summarized by function
Balance at January 1	17,724	\$35.5
Options exercised	(16,468)	\$33.7-\$35.5
Options expired	(1,256)	\$33.7-\$35.5
Balance at December 31	-	-	29. ACQUISITION OF SUBSIDIARIES
Weighted-average fair value of options granted (NT\$)	\$ 16.964		a. Subsidiaries acquired

	For the Year Ended December 31
	2014	2013
a. Depreciation of property, plant and equipment
Recognized in cost of revenue	\$ 6,078,049	\$ 5,616,781
Recognized in operating expenses	1,030,490	893,232
	\$ 7,108,539	\$ 6,510,013
b. Amortization of intangible assets
Recognized in cost of revenue	\$ 69,585	\$ 59,698
Recognized in operating expenses	498,923	423,187
	\$ 568,508	\$ 482,885
c. Employee benefit expenses
Post-employment benefits (Note 22)
Recognized in cost of revenue	\$ 216,259	\$ 240,378
Recognized in operating expenses	385,107	356,635
	601,366	597,013
Termination benefits	30,357	23,583
Other employee benefits	25,216,163	24,060,442
	\$ 25,847,886	\$ 24,681,038
		(Continued)

	For the Year Ended December 31
	2014	2013
Employee benefit expenses summarized by function
Recognized in cost of revenue	\$ 15,912,346	\$ 16,330,030
Recognized in operating expenses	9,935,540	8,351,008
	\$ 25,847,886	\$ 24,681,038 (Concluded)

Principal Activity

Date of Acquisition	Proportion of Voting Equity Interests Acquired (%)	Consideration Transferred (Note1)
April 2014	83.33	\$ 600,000
June 2014	95.25	424,174
November 2014	69.94	61,798

Manufacture of optical
instruments, general
Instruments, computers
and peripherals.
Development, design and
manufacture of power
control equipment and
energy management.
Development, manufacture
and sale of cell phone and
camera lens modules

\$ 1,085,972

Note 1: Including fair value of the originally held equity of LarView Technologies Corp. at the acquisition date and fair value of non-controlling interests.

The Parent Company acquired 83.33% equity of LarView Technologies Corp. not only to upgrade its capability in the automated processing of camera modules but also to expand the market for this product. Since the Parent Company's subsidiary, Lite-On Capital Corp., already had a 16.67% equity in LarView, the Group's equity in LarView became 100% after the acquisition. To integrate its overall resources and enhance the efficiency of operations, the Parent Company had a short-form merger - in accordance with Article 19 of the Business Mergers and Acquisitions Act - with LarView Technologies Corp. on September 1, 2014. The Parent Company was the survivor entity in all of these mergers.

Lite-On Technology USA, Inc., a subsidiary of the Parent Company, acquired 95.25% equity in Power Innovations International Inc. to enhance power system projects and development of uninterruptible power system.

Lite-On Capital Corp., a subsidiary of the Parent Company, acquired 69.94% equity in Five Dimension Co., Ltd to enhance research and development capabilities in professional camera and maintain its market competiveness.

b. Considerations transferred

	LarView Technologies Corp.	Power Innovations International Inc.	Five Dimension Co., Ltd	Total
Cash Fair value of the originally held equity of LarView Technologies Corp. at the acquisition date (recorded as	\$ 500,000	\$ 417,237	\$ 58,604	\$ 975,841
available-for-sale financial assets - noncurrent) Fair value of non-controlling	100,000	-	-	100,000
interests	-	6,937	3,194	10,131
	\$ 600,000	\$ 424,174	\$ 61,798	\$ 1,085,972

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

d. Goodwill arising on acquisition

	LarView Technologies Corp.	Power Innovations International Inc.	Five Dimension Co., Ltd	Total	Consideration paid in cash Cash and cash equivalents acquired	\$ 975,841 (164,467) \$ 811,374
Current assets					f. Impact of acquisitions on the results of the Group
Cash and cash equivalents	\$ 41,259	\$ 87,390	\$ 35,818	\$ 164,467
Trade and other receivables	145,720	38,680	142	184,542	The acquirees' operating results on the acquisition date, which were included in the consolidated
Inventories, net	152,159	49,644	-	201,803	statements of comprehensive income, were as follows:
Other	5,138	2,542	1,846	9,526
Non-current assets						For the Year
Property, plant and						Ended
equipment	265,250	30,280	330	295,860		December 31,
Investments accounted for						2014
using equity method	4,439	-	158	4,597
Other intangible assets	47,205	1,093	540	48,838	Revenue
Refundable deposits	1,000	1,020	1,509	3,529	LarView Technologies Corp.	\$ 556,013
Other	13,798	-	564	14,362	Power Innovations International Inc.	211,591
Current liabilities					Five Dimension Co., Ltd	23
Short-term borrowings	(125,708)	(955)	-	(126,663)
Trade and other payables	(246,654)	(35,836)	(1,250)	(283,740)		\$ 767,627
Advances received	(14,068)	(13,990)	-	(28,058)
Current portion of long-term					Profit (loss)
borrowings	-	(2,147)	(2,878)	(5,025)	LarView Technologies Corp.	\$ (265,299)
Finance lease payables	-	(142)	-	(142)	Power Innovations International Inc.	37,433
Non-current liabilities					Five Dimension Co., Ltd	(2,951)
Long-term borrowings	(58,000)	(11,542)	(26,152)	(95,694)
	\$ 231,538	\$ 146,037	\$ 10,627	\$ 388,202		\$ (230,817)

	LarView Technologies Corp.	Power Innovations International Inc.	Five Dimension Co., Ltd	Total
Consideration transferred Less: Fair value of identifiable net assets	\$ 600,000	\$ 424,174	\$ 61,798	\$ 1,085,972
acquired	(231,538)	(146,037)	(10,627)	(388,202)
Goodwill arising on acquisition	\$ 368,462	\$ 278,137	\$ 51,171	\$ 697,770

e. Net cash outflow on acquisition of subsidiaries

For the Year Ended December 31, 2014
\$ 811,374

For the Year Ended December 31, 2014
\$ 767,627
\$ (230,817)

Had these business combinations been in effect at the beginning of the reporting period, the Group's operating revenue would have been \$230,514,143 thousand, and its profit would have been \$7,718,208 thousand for the year ended December 31, 2014.

30. DECONSOLIDATION OF SUBSIDIARY

On December 11, 2013, a subsidiary of the Parent Company, Lite-On Green Technologies B.V., lost its power to govern the financial and operating policies of another subsidiary, Lite-On Green Technologies S.R.L., due to Lite-On Green Technologies B.V.'s disposal of all its equity in Lite-On Green Technologies S.R.L. Thus, the relevant assets and liabilities had been derecognized.

On March 28, 2014, the Group lost its power to govern the financial and operating policies of Logah Technology Corp. because of the loss of power to cast the majority of votes at meetings of the Board of Directors; thus, the relevant assets, liabilities and non-controlling interests had been derecognized.

a. Consideration received from the derecognition

The Company did not receive any consideration in the deconsolidation of subsidiaries in 2014.

	December 11, 2013
Proceeds of disposal of subsidiary	\$ 437,888

b. Analysis of asset and liabilities on the date control was lost

	March 28, 2014	December 11, 2013
Current assets
Cash and cash equivalents	\$ 902,385	\$ 31,454
Trade receivables, net	27,350	-
Inventories, net	1,575	-
Prepayments	-	63,236
Other	56,537	18,746
Non-current assets
Property, plant and equipment, net	363,030	1,047,048
Other	17,546	-
Current liabilities
Borrowings	(91,260)	-
Payables	(19,764)	(583,167)
Others	(6,281)	(44,347)
Non-current liabilities
Deferred tax liabilities	(12,793)	-
Others	(6)	-
Net assets deconsolidated	\$ 1,238,319	\$ 532,970

c. Gain/(loss) on deconsolidation of subsidiary

	For the Year Ended December 31
	2014		2013
Fair value of interest retained Consideration received	\$	490,624 -	\$	- 437,888
Add: Accumulated exchange differences reclassified to profit or loss after deconsolidation of subsidiary		13,549		-
				(Continued)

	For the Year Ended December 31
	2014	2013
Less: Carrying amount of interest retained
Net assets deconsolidated	\$ 1,238,319	\$ 532,970
Non-controlling interests	(747,537)	-
	490,782	532,970
Less: Goodwill of deconsolidated subsidiary	5,043	-
Gain/(loss) on deconsolidation (recorded as nonoperating income
and expense - other income)	\$ 8,348	\$ (95,082)
		(Concluded)

• Less: Carrying amount of interest retained
• Gain/(loss) on deconsolidation (recorded as nonoperating income
• d. Net cash outflow on deconsolidation of subsidiary

	For the Year Ended December 31
	2014	2013
Consideration received	\$	- \$ 437,888
Less: The balance of cash and cash equivalents deconsolidated Receivable on disposal of investments funds (recorded	902,385	31,454
as other receivable)		- 437,888
	\$ 902,385	\$ 31,454

31. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

In March to December 2013, the Parent Company acquired an additional 56.8% equity interest in Lite-On IT Corporation, and increased its continuing interest from 42.33% to 99.13%.

In January to June 2014, the Parent Company acquired an additional 0.87% equity interest in Lite-On IT Corporation, and increased its continuing interest from 99.13% to 100%.

In April 2014, the Parent Company acquired an additional 17.74% equity interest in Lite-On Automotive Corp., and increased its continuing interest from 82.26% to 100%.

The above transactions were accounted as equity transactions, since the Group did not cease to have control over these subsidiaries.

		For the Year Ended December 31, 2014		For the Year Ended December 31, 2013
	Lite-On Automotive Corporation		Lite-On IT Corporation		Lite-On IT Corporation
Cash consideration paid The proportionate share of the carrying amount of the net assets of the subsidiary transferred from	\$	808,800	\$	204,368	\$ 17,171,678
non-controlling interests		(297,970)		(171,716)	(13,732,478)
Differences arising from equity transaction	\$	510,830	\$	32,652	\$ 3,439,200

32. 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.

33. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments
• 1) Fair value of financial instruments measured at amortized cost

Management believes the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values.

2) Fair value measurements recognized in the consolidated balance sheets

	For the Year Ended December 31		December 31, 2014
	2014	2013
	Lite-On IT	Lite-On IT
Line items adjusted for equity transaction	Corporation	Corporation	Financial assets at FVTPL
Capital surplus - difference between consideration and carrying amounts adjusted arising from changes in percentage of ownership			Financial liabilities at FVTPL
in subsidiaries - actual acquisition or disposal	\$ -	\$ (146,193)	Available-for-sale financial assets
Retained earnings	(543,482)	(3,293,007)	Securities listed in ROC - equity
	\$ (543,482)	\$ (3,439,200)	Securities listed in other countries - Unlisted securities - ROC - equity

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;
• 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

	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL
Derivative financial assets	\$ -	\$ 13,111	\$ -	\$ 13,111
Financial liabilities at FVTPL
Derivative financial liabilities	\$ -	\$ 38,408	\$ -	\$ 38,408
Available-for-sale financial assets
Securities listed in ROC - equity securities	\$ 626,191	\$ -	\$ -	\$ 626,191
Securities listed in other countries - equity securities	11,486	-	-	11,486
Unlisted securities - ROC - equity
securities Unlisted securities - other countries -	-	-	144,617	144,617
equity securities	-	-	221,811	221,811
Mutual funds	-	143,434	-	143,434
Emerging market stocks	-	178,716	-	178,716
	\$ 637,677	\$ 322,150	\$ 366,428	\$ 1,326,255
December 31, 2013
	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL Derivative financial assets	\$ -	\$ 14,867	\$ -	\$ 14,867
Financial liabilities at FVTPL
Derivative financial liabilities	\$ -	\$ 27,836	\$ -	\$ 27,836
Available-for-sale financial assets
Securities listed in ROC - equity securities
Securities listed in other countries -	\$ 1,182,391	\$ -	\$ -	\$ 1,182,391
equity securities Unlisted securities - ROC - equity	41,657	-	-	41,657
securities	-	-	289,160	289,160
Unlisted securities - other countries - equity securities	-	-	324,374	324,374
Mutual funds	-	127,705	-	127,705
Emerging market stocks	-	178,716	-	178,716
	\$ 1,224,048	\$ 306,421	\$ 613,534	\$ 2,144,003

Financial assets at FVTPL

Financial liabilities at FVTPL

Available-for-sale financial assets Securities listed in ROC - equity

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

	Investments on Equity Instruments
	Unlisted Quotes
December 31, 2014
Balance at January 1, 2014	\$ 613,534
Total gains or losses
In profit or loss	(176,965)
In other comprehensive income	4,209
Additions	26,150
Disposals	(500)
Transfers out of Level 3	(100,000)
Balance at December 31, 2014	\$ 366,428
December 31, 2013
Balance at January 1, 2013	\$ 798,505
Total gains or losses
In profit or loss	(108,929)
In other comprehensive income	8,539
Disposals	(84,581)
Balance at December 31, 2013	\$ 613,534

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 value of financial instruments other than the above-mentioned, are adopt the pricing models recognized by the financial management. According to the discounted cash flow analysis and observable financial market average prices or with the same kind of tool to be estimated, the use of the discount rate and the parameters can refer to Reuters news agency or Bloomberg agency or other financial institutions with essentially the same conditions and characteristics of the interest rate swap offer financial products whose features including the remaining contract terms of fixed interest rates, the payment of principal, payment of currency, and etc. All the informations can be obtained by the Company.

b. Categories of financial instruments

	December 31
	2014	2013
Financial assets
Fair value through profit or loss (FVTPL)
Derivative instruments	\$ 13,111	\$ 14,867
Loans and receivables (1)	119,503,863	118,188,950
Available-for-sale financial assets	1,326,255	2,144,003
Financial liabilities
Fair value through profit or loss (FVTPL)
Derivative instruments	38,408	27,836
Derivative instruments in designated hedge accounting
relationships	11,989	46,969
Amortized cost
Short-term borrowings	22,911,114	15,576,780
Long-term loans (including current portion of long-term debts)	21,923,149	27,376,165
Payables (2)	82,697,461	82,432,551

Financial assets
Fair value through profit or loss (FVTPL)
Financial liabilities
Fair value through profit or loss (FVTPL)
Derivative instruments in designated hedge accounting
Amortized cost
receivables - inter, other receivables and other receivables - inter.

1) The balances included loans and receivables measured at amortized cost, which comprise cash and cash equivalents, debt investments with no active market, notes receivable, trade receivables, trade

2) The balances included financial liabilities measured at amortized cost, which comprise 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.

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 (Refer to Note 37).

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.

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
	2014	2013
Assets
USD EUR CNY	\$ 12,398 713 -	\$ 10,753 3,619 495
Liabilities
USD EUR CNY	38,408 - -	17,516 10,090 230

Sensitivity analysis

The Group was mainly exposed to the U.S. dollar.

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.

	Currency USD Impact For the Year Ended December 31
2014	2013
\$ (491,367)	\$ (657,995)

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 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:

Fair value interest rate risk Cash flow interest rate risk

	December 31
	2014	2013
Fair value interest rate risk
Financial assets (i)	\$ 29,221,581	\$ 31,433,426
Financial liabilities (ii)	24,067,560	16,570,115
Cash flow interest rate risk
Financial assets (iii)	35,292,046	32,826,589
Financial liabilities (iv)	20,953,656	26,628,513

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.
• fluctuation.

iv. The balances included financial liabilities exposed to cash flow risk from interest rate

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. 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, 2014 and 2013 would increase by \$35,846 thousand and decrease \$15,495 thousand.

c) Other price risk

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.

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, 2014 and 2013 would increase by \$44,637 thousand and \$85,683 thousand as a result of the changes in fair value of available-for-sale financial assets.

2) Credit risk

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

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 related credit risk

Bank deposits and other financial instruments are credit risk sources required by the Group'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 objective of liquidity risk management, the department is required to maintain operating cash and cash equivalents, in order to ensure that the Group has sufficient financial flexibility.

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

December 31, 2014

Weighted Average Effective Interest Rate (%)

Non-derivative financial liabilities

	Effective Interest Rate (%)	On Demand or Less than 1 Year	1-3 Years	Over 3 Years to 5 Years	5+ Years
Non-derivative financial liabilities
Non-interest bearing	-	\$ 82,697,461	\$ 79,976	\$ -	\$ 895
Finance lease liabilities	2.36%-7.11%	85,232	101,721	-	-
Variable interest rate liabilities	0.4%-6.1786%	10,415,998	7,691,404	5,760,000	13,205
Fixed interest rate liabilities	0.82%-4.4%	20,854,105	79,907	19,644	-
		\$ 114,052,796	\$ 7,953,008	\$ 5,779,644	\$ 14,100

December 31, 2013

Weighted Average Effective Interest Rate (%)

Non-derivative financial liabilities

1-interest bearing
ance lease liabilities	$1.30\% - 7$
iable interest rate liabilities	$0.745\%$
ed interest rate liabilities	$0.86\% - 1$

Effective Interest Rate (%)	On Demand or Less than 1 Year	1-3 Years	Over 3 Years to 5 Years	5+ Years
				\$ 863
				-
				-
0.86%-1.55%	13,158,375	3,078,083	87,974	-
	\$ 106,949,735	\$ 12,434,215	\$ 6,327,974	\$ 863
	- 1.30%-7.11% 0.745%-2.7%	\$ 82,432,551 72,735 11,286,074	\$ 80,745 172,948 9,102,439	\$ - - 6,240,000

The table below summarizes the maturity profile of the Group's derivative financial instruments based on contractual undiscounted payments.

December 31, 2014

	On Demand or Less than 1 Year	1-3 Years		Over 3 Years to 5 Years		5+ Years
Forward exchange contracts
Inflows	\$ 8,508,990	\$	-	\$	-	\$	-
Outflows	(8,500,136)		-		-		-
	(8,854)		-		-		-
Currency swap contracts
Inflows	671,640		-		-		-
Outflows	(666,900)		-		-		-
	4,740		-		-		-
	\$ 13,594	\$	-	\$	-	\$	-

December 31, 2013

	On Demand or Less than 1 Year	1-3 Years		Over 3 Years to 5 Years		5+ Years
Forward exchange contracts
Inflows	\$ 649,675	\$	-	\$	-	\$	-
Outflows	(655,200)		-		-		-
	(5,525)		-		-		-
Currency swap contracts
Inflows	1,451,250		-		-		-
Outflows	(1,455,348)		-		-		-
	(4,098)		-		-		-
	\$ (9,623)	\$	-	\$	-	\$	-

34. 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

The Group's selling prices for Lite-On Semiconductor Corp. for the Group were at cost plus a negotiated profit. Except for this sales arrangement with Lite-On Semiconductor Corp., 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

	For the Year Ended December 31
	2014	2013
Related parties categories			Related parties categories
Associates Other related parties	\$ 217,833 3,405	\$ 234,637 476	Trade payable
	\$ 221,238	\$ 235,113

The cost of the Group's purchases from Lite-On Semiconductor Corp. for the years ended December 31, 2014 and 2013 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

Related parties categories

Trade receivable

	For the Year Ended December 31				For the Year Ended December 31
	2014	2013		2014	2013
Related parties categories			Related parties categories
Associates Other related parties	\$ 4,696,060 632,680	\$ 1,069,126 1,949,975	Other related parties	\$ 48,073	\$ 95,669
	\$ 5,328,740	\$ 3,019,101

		December 31
	2014	2013
Related parties categories
Trade receivable
Associates	\$ 72,417	\$ 81,025
Other related parties	652	529
	\$ 73,069	\$ 81,554
Other receivable
Associates	\$ 2,850	\$ 789
Other related parties	203	18,162
	\$ 3,053	\$ 18,951
		December 31
	2014	2013

Other receivable

d. Payables to related parties

Associates Other related parties	\$ 677,197 276,469	\$ 315,595 253,029
	\$ 953,666	\$ 568,624
Other payable Associates Other related parties	\$ 738 6,003	\$ 661 11,308
	\$ 6,741	\$ 11,699

Other payable

e. Operating expense

For the Year Ended December 31
	2014	2013

f. Other revenues

	For the Year Ended December 31
	2014	2013
Related parties categories
Associates Other related parties	\$ 4,053 1,542	\$ 3,570 4,664
	\$ 5,595	\$ 8,234

g. Compensation of key management personnel

	For the Year Ended December 31
	2014	2013
Short-term employee benefits	\$ 894,599	\$ 622,153
Post-employment benefits	19,054	9,506
Termination benefits	112,732	54,692
Share-based payments	-	869
	\$ 1,026,385	\$ 687,220

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

35. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

	December 31
	2014	2013
Pledge-time deposits	\$ 78,688	\$ 36,490

Above assets included the guarantee deposits provided to a supplier and the export customs agency for shipment clearance in advance of customs duty payments.

36. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

a. The European Commission issued a Statement of Objection to some CD-ROM factories in line with antitrust investigations in the third quarter of 2012. The Parent Company has assigned lawyers to deal with the lawsuit. As of December 31, 2014, the investigation was still in progress. The Parent Company believed that this case would not have a significant impact on its business and financial operations.

b. 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 the Parent Company 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. The Parent Company assigned lawyers as its representative in these lawsuits. In October 2014, the U.S. District Court for the Northern District of California rejected the antitrust group lawsuit, but prosecutors appeal to the United States Court of Appeals against the rejection of the group litigation. In January 2015, the appeals court dismissed the lawsuit. But in the same month, the judge of the U.S. District Court for the Northern District of California allowed the plaintiff to appeal against the antitrust group lawsuit again within a reduced litigation scope. The Parent Company will await for the further judgment by the appeal court. The Parent Company accrued a reasonable amount in case of a loss on this lawsuit and will continue to recognize the losses quarterly on the basis of a reasonable estimation of the lawsuit

c. In the second quarter of 2013, the Attorney General of the State of Florida filed antitrust lawsuits against the Parent Company and its subsidiaries - Philips & Lite-On Digital Solutions Corporation and Philips & Lite-On Digital Solutions USA, Inc. - as well as other companies with related businesses with the U.S. District Court for the Northern District of California (USDC-NDC). The Parent Company assigned lawyers as its representative in these lawsuits. In the second quarter of 2014, the USDC-NDC allowed the plaintiff to proceed with the lawsuits but dismissed certain parts of these lawsuits. Although the outcome of the proceedings had not been determined, the Parent Company accrued a reasonable amount in case of a loss on this lawsuit and will continue to recognize the losses

d. In the second quarter of 2013, Dell Inc. and Dell Products L.P. filed a complaint with the United States District Court for Western District of Texas; In the fourth quarter of 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; In the fourth quarter of 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 the Parent Company and other companies with related businesses. The Parent Company assigned lawyers as its representative in these lawsuits. Although the outcome of the proceedings had not been determined, the Parent Company accrued a reasonable amount in case of a loss on this lawsuit and will continue to recognize losses quarterly on the basis of a reasonable estimation of the lawsuits until the settlement of

• until the settlement of this lawsuit.
• quarterly at this reasonably estimated amount until the settlement of this lawsuit.
• these lawsuits.
• estimation of the lawsuit until the settlement of this lawsuit.

e. From the second quarter of 2010 to the second quarter of 2014, 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. The Fanshawe College of Applied Arts and Technology filed a statement of claim in Ontario court. Neil Godfrey filed a statement of claim with the Superior Court of British Columbia. Donald Woligroski filed a statement of claim in Manitoba court. Cindy Retallick filed a statement of claim in Saskatchewan court. All plaintiffs filed the antitrust group lawsuit against the Company and its subsidiaries - Philips & Lite-On Digital Solutions Corporation, Philips & Lite-On Digital Solutions USA, Inc. and other companies with related businesses. The Parent Company assigned lawyers as its representative in these lawsuits. Although the outcome of the proceedings had not been determined, the Parent Company accrued a reasonable amount in case of a loss on this lawsuit and will continue to recognize the losses quarterly on the basis of a reasonable

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

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

		December 31
		2014		2013
	Foreign		Foreign
	Currencies	Exchange Rate	Currencies	Exchange Rate
Financial assets
Monetary items
USD	\$ 1,534,223	31.6000	\$ 1,672,224	29.8050
INR	1,335,473	0.4997	1,939,704	0.4821
THB	742,958	0.9593	720,707	0.9081
HKD	157,663	4.0748	178,998	3.8436
EUR	22,028	38.4003	42,430	41.0623
Non-monetary items
USD	51,861	31.6000	8,739	29.8050
HKD	34,052	4.0748	5,838	3.8436
JPY	29,752	0.2641	6,348	0.2842
Financial liabilities
Monetary items
USD	1,845,215	31.6000	2,112,782	29.8050
INR	112,181	0.4997	972,394	0.4821
THB	245,358	0.9593	239,047	0.9081
EUR	15,338	38.4003	122,176	41.0623
HKD	6,995	4.0748	22,268	3.8436

38. 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 \$300 million or 20 percent of paid-in capital or more: Note 4 to the financial statements
• 5) Acquisition of real estate reaching \$300 million or 20 percent of paid-in capital or more: Note 4 to the financial statements
• 6) Disposal of real estate reaching \$300 million or 20 percent of paid-in capital or more: None
• 7) Purchases or sales of goods from or to related parties reaching \$100 million or 20 percent of paid-in capital or more: Note 4 to the financial statements
• 8) Trade receivables from related parties reaching \$100 million or 20 percent of paid-in capital or more: Note 4 to the financial statements

9) Trading in derivative instruments: Notes 7, 9 and 33 to the financial statements

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

• 10) Information on investees: Note 4 to the financial statements
• b. Information on investments in mainland China:
• investment in the mainland China area: Note 4 to the financial statements
• gain or loss: Note 4 to the financial statements
• statements

2) Significant direct or indirect transactions with the investee, prices, payment terms and unrealized

c. Information on transactions between Parent Company and Subsidiaries: Note 4 to the financial

39. SEGMENT INFORMATION

a. General information

The Group identified the reportable segments based on the managerial reporting information, and the segments by the types of products which included Optoelectronics, Information Technologies, Storage, and Mobile Mechanics and Others. The types of products are described as follows:

1) Optoelectronics: LED Components and Lighting Products, Camera Modules and Automotive

2) Information technologies: Products used in Server, Networking Devices, NB, Tablets, DT and

• Electronics.
• Multifunction Peripheral.
• 3) Storage: Optical Disk Drives and Solid State Drives.
• Products for Mobile Devices and others.

4) The Group also had Mobile Mechanics and Others operating segments that did not exceed the quantitative threshold. These segments mainly engage in manufacturing and selling of Mechanical

The composition of reportable segments has been changed due to changes in the classification of some products, and the information for the year ended December 31, 2013 has been adjusted for comparison.

b. Measurement of segment information

The Group uses the income before income tax from operations as the measurement for segment profit and the basis of performance assessment. There was no material differences between the accounting policies of the operating segment and the accounting policies described in Note 4.

c. Segment information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

	Optoelectronics	Information Technologies	Storage	Mobile Mechanics and Others	Elimination	Total
2014
Sales from external customers Sales among segments Operating profit (loss)	\$ 60,958,757 1,460,397 1,612,663	\$ 103,532,918 2,198,233 7,173,364	\$ 38,760,007 - 2,631,152	\$ 27,380,292 807,138 (3,137,528 )	\$ - (4,465,768 ) -	\$ 230,631,974 - 8,279,651
2013
Sales from external customers Sales among segments Operating profit (loss)	47,347,635 1,454,201 3,678,051	90,673,481 2,183,250 5,823,390	39,303,024 9,889 2,293,121	35,890,157 468,327 (1,072,555 )	- (4,115,667 ) -	213,214,297 - 10,722,007

Note: The information for the year ended December 31, 2013 has been adjusted for comparison.

d. Geographic information

		Sales to Other Than Consolidated Entities	Non-current Assets For the Year Ended December 31
	2014	2013	2014	2013
Asia	\$ 167,023,169	\$ 150,692,417	\$ 56,488,206	\$ 47,597,784
America	39,738,424	37,792,454	530,407	169,092
Europe	23,035,368	24,186,976	413,851	8,474,404
Others	835,013	542,450	-	-
	\$ 230,631,974	\$ 213,214,297	\$ 57,432,464	\$ 56,241,280

The geographic information is presented by billing regions. Noncurrent assets include intangible assets, properties, plant and equipment.

e. Major customers representing at least 10% of gross sales

	For the Year Ended December 31
	2014		2013
	Amount	%	Amount	%
Customer A	\$ 24,108,155	10.45	\$ -	-

There is no customer representing at least 10% of gross sales for the year ended December 31, 2013.

• f. Reconciliation information for segment profit (loss)
• 1) The revenue from external parties reported to the chief operating decision-maker is used the same accounting policies in consistent with in the statement of comprehensive income.

2) A reconciliation of reportable segments profit (loss) and income before income tax is provided as

follows:

	For the Year Ended December 31
	2014	2013
Reportable segments' profit	\$ 8,279,651	\$ 10,722,007
Unclassified loss	(1,150,450)	(679,717)
Non-operating income and expenses	621,789	1,477,489
Profit before income tax	\$ 7,750,990	\$ 11,519,779

3) Segment profit represented the profit before tax earned by each segment without unclassified of headquarter administration costs, share of profits of associates, gain recognized on the disposal of interest in former associates, interest income, gain or loss on disposal of property, plant and equipment, gain or loss on disposal of investments, exchange gain or loss, valuation gain or loss on financial instruments, finance costs and income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment

performance.

Lite-On Technology Corporation

Financial Statements for the Years Ended December 31, 2014 and 2013 and Independent Auditors' Report

135 136

LITE-ON TECHNOLOGY CORPORATION

BALANCE SHEETS DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars)

LIABILITIES AND EQUITY

	2014		2013
ASSETS	Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents (Note 6)	\$ 6,541,854		5 \$ 6,924,714	6
Debt investments with no active market - current (Note 11) Notes receivable, net (Note 7)	1,054 40,613	- -	- 7,518	- -
Trade receivables, net (Notes 5 and 7)	23,111,141	16	18,074,101	14
Trade receivables from related parties (Note 29)	10,832,845	8	5,307,083	4
Other receivables Other receivables from related parties (Note 29)	658,483 559,388	- -	223,612 372,160	- -
Inventories, net (Notes 5 and 8)	8,422,865	6	2,575,272	2
Prepayments	919,633	1	453,873	-
Total current assets	51,087,876	36	33,938,333	26
NONCURRENT ASSETS Available-for-sale financial assets (Notes 5 and 9)	646,291	-	717,171	1
Debt investments with no active market - noncurrent (Note 11)	735	-	-	-
Investments accounted for using equity method (Notes 5 and 12)	75,426,008	52	87,132,748	68
Property, plant and equipment, net (Notes 5 and 13) Intangible assets, net (Notes 5 and 14)	7,378,066 7,074,562	5 5	4,758,177 646,137	4 -
Deferred tax assets (Notes 5 and 20)	2,124,934	2	921,841	1
Refundable deposits Prepayments for pension fund (Notes 5 and 17)	174,804 17	- -	87,784 -	- -
Other noncurrent assets	7,278	-	5,512	-
Total noncurrent assets	92,832,695	64	94,269,370	74
TOTAL	\$ 143,920,571		100 \$ 128,207,703	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES Short-term borrowings (Note 15)	\$ 13,467,121		9 \$ 5,484,120	4
Derivative financial liabilities for hedging - current (Notes 5 and 10)	11,989	-	-	-
Notes payable Trade payables	6,715 6,005,349	- 4	7,134 2,408,170	- 2
Trade payables to related parties (Note 29)	20,910,791	15	20,668,164	16
Other payables Other payables to related parties (Note 29)	7,833,883 600,100	5 -	4,352,868 465,963	3 -
Current tax liabilities (Notes 5 and 20)	846,665	1	720,462	1
Provisions - current (Notes 5 and 16)	828,287	1	133,230	-
Advance receipts Current portion of long-term borrowings (Note 15)	1,958,793 5,225,000	1 4	713,778 6,350,000	1 5
Total current liabilities	57,694,693	40	41,303,889	32
NONCURRENT LIABILITIES
Derivative financial liabilities for hedging - noncurrent (Notes 5 and 10)	-	-	46,969	-
Long-term borrowings, net of current portion (Note 15) Deferred tax liabilities (Notes 5 and 20)	7,700,000 2,951,521	5 2	12,125,000 1,523,571	10 1
Accrued pension liabilities (Notes 5 and 17)	-	-	11,173	-
Guarantee deposits Credit balance of investments accounted for using equity method (Note 12)	19,796 583,834	- 1	16,165 144,632	- -
Total noncurrent liabilities	11,255,151	8	13,867,510	11
Total liabilities	68,949,844	48	55,171,399	43
EQUITY
Share capital
Ordinary shares Advance receipts for common stock	23,416,737 -	16 -	23,246,552 29,705	18 -
Total share capital	23,416,737	16	23,276,257	18
Capital surplus Additional paid-in capital from share issuance in excess of par value	9,238,931	7	9,096,489	7
Bond conversion	7,534,962	5	7,540,388	6
Treasury stock transactions Difference between consideration and carry amounts adjusted arising from changes in percentage of ownership in	445,694	-	430,851	-
subsidiaries	30,960	-	-	-
Arising from share of changes in capital surplus of associates Merger	231,446 10,112,934	- 7	15,487 10,120,217	- 8
Employee stock options Total capital surplus	- 27,594,927	- 19	8,587 27,212,019	- 21
Retained earnings
Legal reserve Special reserve	9,476,876 49,669	7 -	8,601,391 689,913	7 1
Unappropriated earnings	11,429,060	8	12,172,082	9
Total retained earnings Other equity	20,955,605	15	21,463,386	17
Exchange differences on translating foreign operations	4,125,097	3	2,383,040	2
Unrealized gain on available-for-sale financial assets	139,072	-	83,231	-
Unrealized loss on cash flow hedging Total other equity	(11,989) 4,252,180	- 3	(46,969) 2,419,302	- 2
Treasury shares	(1,248,722 )	(1 )	(1,334,660 )	(1 )
Total equity	74,970,727	52	73,036,304	57
TOTAL	\$ 143,920,571	100	\$ 128,207,703	100

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2014		2013
	Amount	%	Amount	%
PROFIT BEFORE INCOME TAX	\$ 6,427,575	5	\$ 9,298,876	12
INCOME TAX EXPENSE (Notes 5 and 20)	34,084	-	(544,028)	(1)
NET PROFIT FOR THE YEAR	6,461,659	5	8,754,848	11
OTHER COMPREHENSIVE INCOME (Notes 17, 18 and 20) Exchange differences on translating foreign
operations	2,394,153	2	1,962,895	3
Unrealized gain on available-for-sale financial assets	39,301	-	84,664	-
Cash flow hedges	34,980	-	54,594	-
Actuarial gains on defined benefit plans Share of other comprehensive income (loss) of	9,908	-	18,043	-
subsidiaries and associates Income tax relating to the components of other	(226,395)	-	1,110,678	1
comprehensive income	(405,991)	-	(377,058)	-
Other comprehensive income for the year, net of income tax	1,845,956	2	2,853,816	4
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	\$ 8,307,615	7	\$ 11,608,664	15
EARNINGS PER SHARE (NEW TAIWAN DOLLARS; Note 22) Basic Diluted	\$2.80 \$2.76		\$3.81 \$3.77

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

LITE-ON TECHNOLOGY CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2014		2013
	Amount	%	Amount	%
OPERATING REVENUE
Sales (Notes 19 and 29)	\$ 118,870,033	103	\$ 81,058,390	102
Less: Sales returns	773,798	1	323,820	1
Sales allowance	2,303,987	2	1,100,791	1
Total operating revenue	115,792,248	100	79,633,779	100
OPERATING COSTS
Cost of goods sold (Notes 8, 17 and 29)	104,930,667	91	71,585,095	90
GROSS PROFIT	10,861,581	9	8,048,684	10
UNREALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES	-	-	4,938	-
REALIZED GAIN ON TRANSACTIONS WITH
SUBSIDIARIES AND ASSOCIATES	53,749	-	-	-
GROSS PROFIT, NET	10,915,330	9	8,043,746	10
OPERATING EXPENSES (Notes 17 and 29) Selling and marketing expenses	2,260,134	2	1,380,316	2
General and administrative expenses	3,329,509	3	2,703,984	3
Research and development expenses	2,609,568	2	1,758,838	2
Total operating expenses	8,199,211	7	5,843,138	7
OPERATING INCOME	2,716,119	2	2,200,608	3
NONOPERATING INCOME AND EXPENSES
Share of profit of subsidiaries and associates
(Note 12)	2,744,873	2	7,002,137	9
Other income	1,107,287	1	815,170	1
Gain on disposal of investments	266,284	-	-	-
Interest income	41,958	-	61,927	-
Gain on disposal of property, plant and equipment	25,682	-	342,674	-
Dividend income	20,298	-	14,435	-
Net gain (loss) on foreign currency exchange	8,435	-	(12,039)	-
Other expenses	(38,949)	-	(369,106)	-
Finance costs	(370,659)	-	(488,234)	(1)
Loss on disposal of property, plant and equipment	(3,405)	-	(235,277)	-
Loss on disposal of investments	-	-	(33,419)	-
Impairment loss (Note 9)	(90,348)	-	-	-
Total nonoperating income and expenses	3,711,456	3	7,098,268	9
				(Continued)

STATEMENTS OF CHANGES IN EQUITY FOR TH E YEARS ENDED DECEMBER 31, 2014 AND 2013

(In Thousands of New Taiwan Dollars)

									Capital Surplus (Note 18)
					Additional			Arising from the Consideration Received in Excess Amount of the	Difference Between Consideration and of the Carrying Carry Amounts Adjusted										Other Equity (Note 18) Unrealized
			Issue of Share Capital (Note 18)		Paid-in Capital			Subsidiaries' Net	Arising from Changes in	Arising from Share of								Exchange Differences on	Gain on Available
	Shares (In Thousands)	Amount	Advance Receipts for Common Stock	Total	from Share Excess of Par Value	Bond Conversion	Transactions	Treasury Stock Actual Disposal Ownership in Capital Surplus or Aquisition	Assets During Percentage of Subsidiaries	Changes in of Associates	Merger	Employee Stock Options	Total		Legal Reserve Special Reserve	Retained Earnings (Notes 18 and 25) Unappropriated Earnings	Total	Translating Foreign Operations	for-sale Financial Assets	Cash Flow Hedges	Total	Treasury Shares (Note 18)	Total Equity
BALANCE AT JANUARY 1, 2013	2,295,315	\$22,953,154	\$ 6,840	\$22,959,994	\$ 8,551,730	\$ 7,540,388	\$ 370,703	\$ 146,193	\$ -	\$ 16,645	\$10,120,217	\$ 6,112	\$26,751,988	\$ 7,847,905	\$ -	\$13,654,612	\$21,502,517	\$ 128,872	\$ (446,848 )	\$ (101,563 )	\$ (419,539 )	\$ (1,334,660 )	\$69,460,300
Appropriation of the 2012 earnings
Legal reserve Special reserve	- -	- -	- -	- -	- -	- -	- -	- -	- -	- -	- -	- -	- -	753,486 -	- 689,913	(753,486 ) (689,913 )	- -	- -	- -	- -	- -	- -	- -
Cash dividends - 23.5%	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(5,400,265 )	(5,400,265 )	-	-	-	-	-	(5,400,265 )
Stock dividends - 0.5%	11,490	114,899	-	114,899	-	-	-	-	-	-	-	-	-	-	-	(114,899 )	(114,899 )	-	-	-	-	-	-
Other changes in capital surplus
Additional acquisition of partially owned subsidiaries Change in capital surplus from investments in subsidiaries and associates	-	-	-	-	-	-	-	(146,193 )	-	-	-	-	(146,193 )	-	-		(3,293,007 ) (3,293,007 )	-	-	-	-	-	(3,439,200 )
accounted for using equity method	-	-	-	-	-	-	-	-	-	(1,158 )	-	2,475	1,317	-	-	(783 )	(783 )	-	-	-	-	-	534
Stock dividends of employee transfer to capital	3,669	36,689	-	36,689	134,320	-	-	-	-	-	-	-	134,320	-	-	-	-	-	-	-	-	-	171,009
Issue of common shares under employee share options Change in capital from cash dividends of the Company paid to subsidiaries	14,181 -	141,810 -	22,865 -	164,675	410,439 -	- -	- 60,148	- -	-	- -	- -	- -	410,439 60,148	- -	- -	- -	- -	- -	- -	- -	- -	- -	575,114 60,148
Net profit for the year ended December 31, 2013	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	8,754,848	8,754,848	-	-	-	-	-	8,754,848
Other comprehensive income for the year ended December 31, 2013, net of
income tax	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	14,975	14,975	2,254,168	530,079	54,594	2,838,841	-	2,853,816
Total comprehensive income for the year ended December 31, 2013	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	8,769,823	8,769,823	2,254,168	530,079	54,594	2,838,841	-	11,608,664
BALANCE AT DECEMBER 31, 2013	2,324,655	23,246,552	29,705	23,276,257	9,096,489	7,540,388	430,851	-	-	15,487	10,120,217	8,587	27,212,019	8,601,391	689,913	12,172,082	21,463,386	2,383,040	83,231	(46,969 )	2,419,302	(1,334,660 )	73,036,304
Appropriation of the 2013 earnings
Legal reserve	-	-	-	-	-	-	-	-	-	-	-	-	-	875,485	-	(875,485 )	-	-	-	-	-	-	-
Special reserve	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(640,244 )	640,244	-	-	-	-	-	-	-
Cash dividends - 27.1% Stock dividends - 0.5%	- 11,638	- 116,381	- -	- 116,381	- -	- -	- -	- -	- -	- -	- -	- -	- -	- -	- -	(6,307,866 )	(6,307,866 ) (116,381 ) (116,381 )	- -	- -	- -	- -	- -	(6,307,866 ) -
Other changes in capital surplus
Additional acquisition of partially owned subsidiaries Partial disposal of interests in subsidiaries	- -	- -	- -	- -	- -	- -	- (206 )	- -	- 30,960	- -	- -	- (694 )	- 30,060	- -	- -	(543,482 ) -	(543,482 ) -	- -	- -	- -	- -	- -	(543,482 ) 30,060
Change in capital surplus from investments in subsidiaries and associates accounted for using equity method	-	-	-	-	-	-	(556 )	-	-	215,959	-	(7,893 )	207,510	-	-	-	-	-	-	-	-	-	207,510
Stock dividends of employee transfer to capital	4,085	40,849	-	40,849	149,096	-	-	-	-	-	-	-	149,096	-	-	-	-	-	-	-	-	-	189,945
Issue of common shares under employee share options	2,971	29,705	(29,705 )	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Change in capital from cash dividends of the Company paid to subsidiaries	-	-	-	-	-	-	65,430	-	-	-	-	-	65,430	-	-	-	-	-	-	-	-	-	65,430
Disposal of investments accounted for using equity method	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(1,240 )	-	-	(1,240 )	-	(1,240 )
Effect of acquisition and deconsolidation of subsidiaries	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(13,549 )	-	-	(13,549 )	-	(13,549 )
Net profit for the year ended December 31, 2014	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	6,461,659	6,461,659	-	-	-	-	-	6,461,659
Other comprehensive income for the year ended December 31, 2014, net of income tax	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	(1,711 )		(1,711 ) 1,756,846	55,841	34,980	1,847,667	-	1,845,956
Total comprehensive income for the year ended December 31, 2014	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	6,459,948	6,459,948	1,756,846	55,841	34,980	1,847,667	-	8,307,615
Cancellation of treasury shares	(1,675 )	(16,750 )	-	(16,750 )	(6,654 )	(5,426 )	(49,825 )	-	-	-	(7,283 )	-	(69,188 )	-	-	-	-	-	-	-	-	85,938	-
BALANCE AT DECEMBER 31, 2014	2,341,674	\$23,416,737	\$ -	\$23,416,737	\$ 9,238,931	\$ 7,534,962	\$ 445,694	\$ -	\$ 30,960	\$ 231,446	\$10,112,934	\$ -	\$27,594,927	\$ 9,476,876	\$ 49,669	\$11,429,060	\$20,955,605	\$ 4,125,097	\$ 139,072	\$ (11,989 )	\$ 4,252,180	\$ (1,248,722 )	\$74,970,727

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

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars)

	2014	2013
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	\$ 6,427,575	\$ 9,298,876
Adjustments for:
Depreciation expenses	479,839	259,545
Amortization expenses	295,400	71,591
Recognition (reversal) of impairment loss of trade receivables	19,385	(9,781)
Finance costs	370,659	488,234
Interest income	(41,958)	(61,927)
Dividend income	(20,298)	(14,435)
Share of profit of subsidiaries and associates	(2,744,873)	(7,002,137)
Gain on disposal of property, plant and equipment	(22,277)	(107,397)
(Gain) loss on disposal of available-for-sale financial assets	(259,010)	27,394
(Gain) loss on disposal of investments accounted for using equity
method	(7,274)	6,025
Impairment loss recognized on financial assets	90,348	-
Impairment loss recognized on non-financial assets	486,882	55,334
Unrealized loss on transactions with subsidiaries and associates	-	4,938
Realized gain on transactions with subsidiaries and associates	(53,749)	-
Unrealized net gain on foreign currency exchange	(189,968)	(267,175)
Recognition (reversal) of provisions	231,972	(14,550)
Changes in operating assets and liabilities
Notes receivable	(32,280)	(7,518)
Trade receivables	(801,654)	(3,083,914)
Trade receivables from related parties	(1,128,393)	(2,065,968)
Other receivables	(18,244)	(66,440)
Other receivables from related parties	(57,980)	(62,656)
Inventories	614,975	(415,890)
Prepayments	(139,318)	(182,943)
Notes payable	(419)	6,634
Trade payables	(1,735,704)	1,217,951
Trade payables from related parties	(1,911,615)	5,076,171
Other payable	134,266	869,714
Other payable from related parties	72,716	16,096
Provisions	144,229	(27,932)
Advance receipts	881,801	151,591
Accrued pension liabilities	7,165	(8,242)
Cash generated from operations	1,092,198	4,151,189
Interest received	46,147	64,898
Dividend received	20,298	14,435
Interest paid	(373,041)	(525,382)
Income tax paid	(449,136)	(131,276)
Net cash generated from operating activities	336,466	3,573,864
		(Continued)

LITE-ON TECHNOLOGY CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars)

	2014	2013
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of available-for-sale financial assets	\$ (4,620)	\$ -
Proceeds on sales of available-for-sale financial assets	445,082	179
Purchase of debt investments with no active market	(1,789)	-
Acquisition of investments accounted for using equity method	(2,637,954)	(1,000)
Net cash inflow from consolidated subsidiaries (Note 26)	4,734,033	-
Proceeds from capital reduction of investments accounted for using
equity method	2,409,223	4,554,526
Payments for property, plant and equipment	(950,967)	(265,087)
Proceeds from disposal of property, plant and equipment	3,411	593,439
Increase in refundable deposits	(73,863)	(3,655)
Payments for intangible assets	(174,255)	(66,344)
Increase in other noncurrent assets	(1,766)	(1,512)
Dividend received from subsidiaries and associates	940,459	4,742,294
Net cash generated from investing activities	4,686,994	9,552,840
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	7,461,128	2,696,280
Proceeds from (repayment of) long-term borrowings	(5,550,000)	2,775,000
Proceeds from (refund of) guarantee deposits received	3,586	(366)
Decrease in finance lease payables	-	(453)
Payment cash interests	(6,307,866)	(5,400,265)
Proceeds of the exercise of employee stock options	-	575,114
Partial acquisition of subsidiaries (Note 25)	(1,013,168)	(17,171,678)
Net cash used in financing activities	(5,406,320)	(16,526,368)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(382,860)	(3,399,664)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	6,924,714	10,324,378
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	\$ 6,541,854	\$ 6,924,714
The accompanying notes are an integral part of the financial statements.		(Concluded)

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Lite-On Technology Corporation (the "Company") was established in March 1989. The Company's shares have been listed on the Taiwan Stock Exchange. The Company manufactures and markets (1) computer software, hardware, peripherals and components, (2) monitors, multifunction and all-in-one printers, cameras and Internet systems and image-processing equipment; (3) information storage and process equipment, electronic components and office equipment; (4) electronic coils, transformers, power suppliers and electronic hardware parts; (5) light-emitting diode (LED) products; (6) electronic car products; and (7) optical lens modules and optoelectronic components.

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 its former subsidiary on that date.

The Company separately merged with Li Shin International Enterprise Corp., Lite-On Clean Energy Technology Corp., Lite-On Automotive Corp., Leotek Electronics Corp., Lite-On IT Corporation and LarView Technologies Corp., with the Parent Company as the survivor entity. The merger separately took effect on March 22, 2014, April 15, 2014, June 1, 2014, June 29, 2014, June 30, 2014 and September 1, 2014, and the Company thus assumed all rights and obligations of the six merged companies on those date.

The financial statements are presented in the Company's functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the board of directors and authorized for issue on March 25, 2015.

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

a. The amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 2013 version of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) endorsed by the FSC not yet effective

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

The New IFRSs Included in the 2013 IFRSs Version Not Yet Endorsed by the FSC	Effective Date Announced by IASB (Note)
Improvements to IFRSs (2009) - amendment to IAS 39	January 1, 2009 and January 1, 2010, as appropriate
Amendment to IAS 39 "Embedded Derivatives"	Effective for annual periods ended on or after June 30, 2009
Improvements to IFRSs (2010)	July 1, 2010 and January 1, 2011, as appropriate
Annual Improvements to IFRSs 2009-2011 Cycle	January 1, 2013
Amendment to IFRS 7 "Disclosure - Offsetting Financial Assets and Financial Liabilities"	January 1, 2013
Amendment to IFRS 7 "Disclosure - Transfer of Financial Assets"	July 1, 2011
IFRS 11 "Joint Arrangements"	January 1, 2013
IFRS 12 "Disclosure of Interests in Other Entities"	January 1, 2013
Amendments to IFRS 10, IFRS 11 and IFRS 12 "Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance"	January 1, 2013
Amendments to IFRS 10 and IFRS 12 and IAS 27 "Investment Entities"	January 1, 2014
IFRS 13 "Fair Value Measurement"	January 1, 2013
Amendment to IAS 1 "Presentation of Other Comprehensive Income"	July 1, 2012
Amendment to IAS 12 "Deferred Tax: Recovery of Underlying Assets"	January 1, 2012
IAS 19 (Revised 2011) "Employee Benefits"	January 1, 2013
IAS 27 (Revised 2011) "Separate Financial Statements"	January 1, 2013
IAS 28 (Revised 2011) "Investments in Associates and Joint Ventures"	January 1, 2013
Amendment to IAS 32 "Offsetting Financial Assets and Financial Liabilities"	January 1, 2014
IFRIC 20 "Stripping Costs in Production Phase of a Surface Mine"	January 1, 2013

Annual Improvements to IFRSs 2009-2011 Cycle January 1, 2013 Amendment to IFRS 7 "Disclosure - Offsetting Financial Assets and Financial Liabilities" January 1, 2013 Amendment to IFRS 7 "Disclosure - Transfer of Financial Assets" July 1, 2011 IFRS 11 "Joint Arrangements" January 1, 2013 IFRS 12 "Disclosure of Interests in Other Entities" January 1, 2013 Amendments to IFRS 10, IFRS 11 and IFRS 12 "Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance" January 1, 2013 Amendments to IFRS 10 and IFRS 12 and IAS 27 "Investment Entities" January 1, 2014 IFRS 13 "Fair Value Measurement" January 1, 2013 Amendment to IAS 1 "Presentation of Other Comprehensive Income" July 1, 2012 Amendment to IAS 12 "Deferred Tax: Recovery of Underlying Assets" January 1, 2012 IAS 19 (Revised 2011) "Employee Benefits" January 1, 2013 IAS 27 (Revised 2011) "Separate Financial Statements" January 1, 2013 IAS 28 (Revised 2011) "Investments in Associates and Joint Ventures" January 1, 2013 Amendment to IAS 32 "Offsetting Financial Assets and Financial Liabilities" January 1, 2014 IFRIC 20 "Stripping Costs in Production Phase of a Surface Mine" January 1, 2013 Note: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after the respective effective dates. Except for the following, whenever applied, the initial application of the above 2013 IFRSs version and the related amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers would not have any material impact on the Company's accounting policies: 1) 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 and associates. In general, the disclosure requirements in IFRS 12 are more extensive than in the

current standards.

2) 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.

The fair value measurements under IFRS 13 will be applied prospectively from January 1, 2015.

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

The Company will retrospectively apply the above amendments starting from 2015. Items not expected to be reclassified to profit or loss are remeasurements of the defined benefit plans. Items expected to be reclassified to profit or loss are the exchange differences on translating foreign operations, unrealized gains (loss) on available-for-sale financial assets, cash flow hedges, and share of the other comprehensive income (except the share of the remeasurements of the defined benefit plans) of subsidiaries and associates accounted for using the equity method. However, the application of the above amendments will not result in any impact on the net profit for the year, other comprehensive income for the year (net of income tax), and total comprehensive income for the year.

4) Amendment to IFRS 7 "Disclosure - Offsetting Financial Assets and Financial Liabilities"

The amendments to IFRS 7 require disclosure of information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under enforceable master netting arrangements and similar arrangements.

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

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

The New IFRSs Not Included in the 2013 IFRSs Version	Effective Date Announced by IASB (Note 1)
Annual Improvements to IFRSs 2010-2012 Cycle	July 1, 2014 (Note 2)
Annual Improvements to IFRSs 2011-2013 Cycle	July 1, 2014
Annual Improvements to IFRSs 2012-2014 Cycle	January 1, 2016 (Note 4)
IFRS 9 "Financial Instruments"	January 1, 2018
Amendments to IFRS 9 and IFRS 7 "Mandatory Effective Date of	January 1, 2018
IFRS 9 and Transition Disclosures"
Amendments to IFRS 10 and IAS 28 "Sales or Contribution of Assets	January 1, 2016 (Note 3)
between an Investor and its Associate or Joint Venture"
Amendment to IFRS 11 "Accounting for Acquisitions of Interests in	January 1, 2016
Joint Operations"
IFRS 14 "Regulatory Deferral Accounts"	January 1, 2016
IFRS 15 "Revenue from Contracts with Customers"	January 1, 2017
Amendment to IAS 1 "Disclosure Initiative"	January 1, 2016
Amendments to IAS 16 and IAS 38 "Clarification of Acceptable	January 1, 2016
Methods of Depreciation and Amortization"
Amendments to IAS 16 and IAS 41 "Agriculture: Bearer Plants"	January 1, 2016
Amendment to IAS 19 "Defined Benefit Plans: Employee	July 1, 2014
Contributions"
Amendment to IAS 27 "Equity Method in Separate Financial	January 1, 2016
Statements"
	(Continued)

The New IFRSs Not Included in the 2013 IFRSs Version

Effective Date Announced by IASB (Note 1)
January 1, 2014
January 1, 2014
(Concluded)

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" January 1, 2014

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on

Note 2: The amendment to IFRS 2 applies to share-based payment transactions with grant date on or after July 1, 2014; the amendment to IFRS 3 applies to business combinations with acquisition date on or after July 1, 2014; the amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014.

• or after their respective effective dates.
• January 1, 2016.
• effective for annual periods beginning on or after January 1, 2016.

Note 3: Prospectively applicable to transactions occurring in annual periods beginning on or after

Note 4: The amendment to IFRS 5 is applied prospectively to changes in a method of disposal that occur in annual periods beginning on or after January 1, 2016; the remaining amendments are

The initial application of the above New IFRSs has not had any material impact on the Company's accounting policies, except for the following:

1) IFRS 9 "Financial Instruments"

Recognition and measurement of financial assets

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

For the Company's debt instruments that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding, their classification and measurement are as follows:

a) For debt instruments, if they are held within a business model whose objective is to collect the contractual cash flows, the financial assets are measured at amortized cost and are assessed for impairment continuously with impairment loss recognized in profit or loss, if any. Interest

• revenue is recognized in profit or loss by using the effective interest method;
• comprehensive income is reclassified from equity to profit or loss.

b) For debt instruments, if they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, the financial assets are measured at fair value through other comprehensive income (FVTOCI) and are assessed for impairment. Interest revenue is recognized in profit or loss by using the effective interest method, and other gain or loss shall be recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses. When the debt instruments is derecognized or reclassified the cumulative gain or loss previously recognized in other

Except for above, all other financial assets are measured at fair value through profit or loss. 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. No subsequent impairment assessment is required, and the cumulative gain or loss previously recognized in other comprehensive income cannot be reclassified from equity to profit or loss.

The impairment of financial assets

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

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

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.

2) 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 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.

3) Annual Improvements to IFRSs: 2010-2012 Cycle

Several standards including IFRS 3 "Business Combinations" and IFRS 8 "Operating Segments" were amended in this annual improvement.

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.

4) Annual Improvements to IFRSs: 2011-2013 Cycle

Several standards including IFRS 3 "Business Combinations" and IFRS 13 "Fair Value Measurement" 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.

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.

5) IFRS 15 "Revenue from Contracts with Customers"

IFRS 15 establishes principles for recognizing revenue that apply to all contracts with customers, and will supersedes IAS 18 "Revenue", IAS 11 "Construction Contracts" and a number of revenue-related interpretations from January 1, 2017. When applying IFRS 15, an entity shall recognize revenue by applying the following steps:

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

Allocate the transaction price to the performance obligations in the contracts; and

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

6) Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and its

Associate or Joint Venture"

The amendments stipulated that, when an entity sells or contributes to an associate assets that constitute a business as defined in IFRS 3 "Business Combinations" or when an entity loses control of a subsidiary that contains a business but retains significant influence or joint control, the gain or loss resulting from the transaction is recognized in full.

Also, when an entity loses control of a subsidiary that does not contain a business as defined in IFRS 3 but retains significant influence or joint control in an associate or a joint venture, the gain or loss resulting from the asset sale or contribution is recognized only to the extent of the unrelated investors' interest in the associate or joint venture and the entity's share of the gain or loss is eliminated.

7) Annual Improvements to IFRSs: 2012-2014 Cycle

Several standards including IFRS 7 "Disclosure - Offsetting Financial Assets and Financial Liabilities" and IAS 34 "Interim financial reporting" were amended in this annual improvement.

The amendments to IFRS 7 provide additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset. In addition, the amendments clarify that the offsetting disclosures are not explicitly required for all interim periods.

8) Amendment to IAS 1 "Disclosure Initiative"

The amendment clarifies that the financial statements should be prepared for the purpose of disclosing material information. To improve the understandability of its consolidated financial statements, the Company should disaggregate the disclosure of material items into their different natures or functions, and disaggregate material information from immaterial information.

The amendment further clarifies that the Company should consider the understandability and comparability of its consolidated financial statements to determine a systematic order in presenting its footnotes.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Company is continuingly assessing the possible impact that the application of other standards and interpretations will have on the Company's financial position and financial performance, 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, and IFRS as endorsed by the FSC.

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;
• 2) Assets expected to be realized within 12 months after the reporting period; and
• liability for at least 12 months after the reporting period.

3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a

Current liabilities include:

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

• 1) Liabilities held primarily for the purpose of trading;
• and before the financial statements are authorized for issue; and
• classification.

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

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

d. Business combinations

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

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

e. 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.

f. 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.

g. 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.

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.

h. Property, plant and equipment

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

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.

i. 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.

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

• 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 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) Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date. Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment loss.

3) 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.

k. Impairment of tangible and intangible assets other than goodwill

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.

l. Financial instruments

Financial assets and financial liabilities are recognized in Balance Sheets 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.

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 short-term maturities, highly liquid, readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value.

b) Impairment of financial assets

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.

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.

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.

a) Financial liabilities subsequent measurement

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

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.

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.

m. 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.

n. Provisions

Provisions are measured at the best estimate of the discounted cash flows 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.

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

o. 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.

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 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.

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.

Revenue from selling of properties in the course of ordinary activities is recognized when the construction is completed and the properties are transferred to buyers. Until such revenue is recognized, deposits received from sales of properties and installment payments are carried in the consolidated 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

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.

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.

p. Leasing

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

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.

q. 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.

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. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortized on a straight-line basis over the average period until the benefits become vested.

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.

r. 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.

3) Current and deferred tax for the year

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. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

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 28, 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.

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.

g. Impairment of investment in the associate

The Company immediately recognizes impairment loss on its net investment in the associate when there is any indication that the investment may be impaired and the carrying amount may not be recoverable. The Company also takes into consideration the market conditions and industry development to evaluate the appropriateness of assumptions.

h. Recognition and measurement of defined benefit plans

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

	December 31
	2014	2013
Cash on hand Demand deposits Cash equivalent	\$ 1,340 6,540,514	\$ 881 3,493,573
Time deposits	-	3,430,260
	\$ 6,541,854	\$ 6,924,714

7. TRADE RECEIVABLES, NET

As of December 31, 2014 and 2013, the Company did not have the age of the trade receivables that were

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

	For the Year Ended December 31
	2014	2013
Balance at January 1	\$ 21,109	\$ 30,890
Allowance (reversal) for impairment loss	19,385	(9,781)
Acquired from business combination	13,929	-
Balance at December 31	\$ 54,423	\$ 21,109

At the end of the reporting period, trade receivables from sales on installments by the Company were as follows:

	December 31	Finished good	884,640	-
	2014 2013	Work in progress	445,210	-
Notes receivable		Inventory in transit	416,290	-
Notes receivable - operating	\$ 40,613 \$ 7,518		\$ 8,422,865	\$ 2,575,272
Allowance for impairment loss	- -	Movements in the allowance for inventory write-down were as follows:
	\$ 40,613 \$ 7,518		For the Year Ended December 31
Trade receivables			2014	2013
Trade receivables Allowance for impairment loss Unrealized interests revenue	\$ 23,212,545 \$ 18,095,210 (54,423) (21,109) (46,981) -	Balance at January 1 Allowance for inventory write-down Acquired from business combination	\$ 218,025 486,882 454,336	\$ 162,691 55,334 -
	\$ 23,111,141 \$ 18,074,101	Balance at December 31	\$ 1,159,243	\$ 218,025

For the year ended December 31, 2013: None

December 31, 2014

Gross amounts trade receivables \$ 789,720 Unrealized interests revenue (46,981)

\$ 742,739

The amounts of the above trade receivables expected to be recovered were NT\$131,620 thousand per year during 2015 to 2020.

8. INVENTORIES, NET

	December 31
	2014	2013
Merchandise	\$ 4,770,066	\$ 2,575,272
Raw materials	1,906,659	-
Finished good	884,640	-
Work in progress	445,210	-
Inventory in transit	416,290	-
	\$ 8,422,865	\$ 2,575,272

For the Year Ended December 31
2014		2013

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2014 and 2013 was NT\$104,930,667 thousand and NT\$71,585,095 thousand, respectively.

9. AVAILABLE-FOR-SALE FINANCIAL ASSETS

	December 31
	2014	2013
Non-current
Domestic investments
Quoted shares	\$ 591,405	\$ 698,162
Unquoted shares	4,620	-
	596,025	698,162
Foreign investments
Unquoted shares	\$ 41,337	\$ 19,009
Quoted shares	8,929	-
	50,266	19,009
	\$ 646,291	\$ 717,171

Refer to Note 28 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\$90,348 thousand in the statements of comprehensive income for the year ended December 31, 2014.

10. DERIVATIVE FINANCIAL INSTRUMENTS FOR HEDGING

		December 31
	2014	2013
Derivative financial assets under hedge accounting - non-current
Cash flow hedges - interest rate swaps	\$ 11,989	\$ 46,969
Current Non-current	\$ 11,989 -	\$ - 46,969
	\$ 11,989	\$ 46,969

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, 2014

Notional Amounts (In Thousands)	Maturity Date	Range of Interest Rates Paid
NT\$2,400,000	2008.9.23-2015.9.23	1.895%	0.888%
December 31, 2013
Notional Amounts (In Thousands)	Maturity Date	Range of Interest Rates Paid
NT\$4,800,000	2008.9.23-2015.9.23	1.895%	0.863%

Range of	Range of Interest
Interest Rates Paid	Rates Received
Range of	Range of Interest
Interest Rates Paid	Rates Received

11. DEBT INVESTMENTS WITH NO ACTIVE MARKET

For the year ended December 31, 2013: None

December 31,
2014

Pledged deposits	\$ 1,789
Current Non-current	\$ 1,054 735
	\$ 1,789

Refer to Note 30 for information on bond investments with no active market pledged as security.

12. INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD

		December 31
	2014	2013
Investments in subsidiaries	\$ 72,551,249	\$ 84,685,063
Investments in associates	2,874,759	2,447,685
	\$ 75,426,008	\$ 87,132,748
a. Investments in subsidiaries
		December 31
	2014	2013
Listed companies
Silitech Technology Corp.	\$ 1,520,216	1,989,559
Lite-On Japan Ltd.	337,901	324,371
Logah Technology Corp.	-	246,170
		(Continued)

Listed companies

December 31

	2014	2013
Unlisted companies
Lite-On International Holding Co., Ltd.	\$ 23,434,167	\$ 20,412,910
Lite-On Singapore Pte. Ltd.	11,059,029	9,440,364
Lite-On Electronics H.K. Ltd.	10,381,190	9,257,407
Lite-On Mobile Pte. Ltd.	10,248,622	-
High Yield Group Co., Ltd.	5,436,169	-
Lite-On Technology USA, Inc.	1,930,753	1,727,197
Eagle Rock Investment Ltd.	1,768,331	-
Lite-On Automotive International (Cayman) Co., Ltd	1,637,335	-
Lite-On Capital Corp.	1,499,219	8,743,042
Lite-On Electronics (Thailand) Co., Ltd.	1,252,123	1,065,618
Philip & Lite-On Digital Solutions Corp.	467,959	-
Lite-On IT Singapore Pte. Ltd.	397,240	-
LTC Group Ltd. (BVI)	349,883	350,789
Lite-On Overseas Trading Co., Ltd.	281,227	250,541
Lite-On Technology (Europe) B.V.	216,138	6,048,666
Lite-On Vietnam Co., Ltd.	71,623	-
Lite-On Sales & Distribution Inc.	69,816	-
Lite-On Electronics (Europe) Ltd.	47,877	42,184
Lite-On Automotive Electronics (Europe) B.V	45,626	-
Lite-On Integrated Service Inc.	45,290	45,219
Leotek Electronics Holding Limited	15,526	-
Lite-On Automotive Service USA Inc.	12,955	-
Lite-On Information Technology B.V.	11,355	-
Lite-On Automotive North America Inc.	10,291	-
LarView Technologies Corporation (Samoa)	3,388	-
Lite-On IT Corporation	-	19,032,107
Li Shin International Enterprise Corp.	-	4,268,292
Lite-On Automotive Corp.	-	1,440,627
LET (HK) Ltd.	(518,191)	-
Li Shin International Enterprise Corp. (BVI)	(65,643)	-
Lite-On Clean Energy Technology Corp.	-	(144,632
	71,967,415	84,540,431
Add: Credit balance on the carrying value of investments accounted for using equity method	583,834	144,632
	\$ 72,551,249	\$ 84,685,063
		(Concluded)

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

	December 31
	2014	2013
Lite-On International Holding Co., Ltd.	100.00%	100.00%
Lite-On Electronics H.K. Ltd.	100.00%	100.00%
Lite-On Capital Corp.	100.00%	100.00%
Lite-On Singapore Pte. Ltd.	100.00%	100.00%
		(Continued)

		December 31
	2014	2013
Lite-On Technology USA, Inc.	100.00%	100.00%
Lite-On Electronics (Thailand) Co., Ltd.	100.00%	100.00%
LTC Group Ltd. (BVI)	100.00%	100.00%
Lite-On Overseas Trading Co., Ltd.	100.00%	100.00%
Lite-On Electronics (Europe) Ltd.	100.00%	100.00%
Lite-On Integrated Service Inc.	100.00%	100.00%
Lite-On Mobile Pte. Ltd.	100.00%	-
Lite-On Vietnam Co., Ltd.	100.00%	-
Li Shin International Enterprise Corp. (BVI)	100.00%	-
Eagle Rock Investment Ltd.	100.00%	-
LET (HK) Ltd.	100.00%	-
High Yield Group Co., Ltd.	100.00%	-
Lite-On Sales & Distribution Inc.	100.00%	-
Lite-On Information Technology B.V.	100.00%	-
Lite-On IT Singapore Pte. Ltd.	100.00%	-
Leotek Electronics Holding Limited	100.00%	-
LarView Technologies Corporation (Samoa)	100.00%	-
Lite-On Automotive Electronics (Europe) B.V	100.00%	-
Lite-On Automotive North America Inc.	100.00%	-
Lite-On Automotive Service USA Inc.	100.00%	-
Lite-On Automotive International (Cayman) Co., Ltd	100.00%	-
Lite-On Technology (Europe) B.V.	54.00%	54.00%
Lite-On Japan Ltd.	49.49%	49.49%
Philip & Lite-On Digital Solutions Corp.	49.00%	-
Silitech Technology Corp.	32.08%	32.14%
Li Shin International Enterprise Corp. (Note 26)	-	100.00%
Lite-On Clean Energy Technology Corp. (Note 26)	-	100.00%
Lite-On IT Corporation (Note 26)	-	99.13%
Lite-On Automotive Corp. (Note 26)	-	82.26%
Logah Technology Corp.	-	18.97%
		(Concluded)

Due to the reorganization within the group, the Company acquired all equity of Lite-On Mobile Pte. Ltd. from its subsidiaries - Lite-On Capital Corp. and Lite-On Technology (Europe) B.V. on June 2014.

The Company set up a subsidiary - Lite-On Vietnam Co., Ltd. and acquired all equity interest on

January 2014.

Li Shin International Enterprise Corp. (BVI), Eagle Rock Investment Ltd., Lite-On Automotive Electronics (Europe) B.V., Lite-On Automotive North America Inc., Lite-On Automotive Service USA Inc., Lite-On Automotive International (Cayman) Co., Ltd, Leotek Electronics Holding Limited, LET (HK) Ltd., High Yield Group Co., Ltd., Lite-On Sales & Distribution Inc., Lite-On Information Technology B.V., Lite-On IT Singapore Pte. Ltd., Philip & Lite-On Digital Solutions Corp., and LarView Technologies Corporation (Samoa) are investee companies aquired by the combinations of Li Shin International Enterprise Corp., Lite-On Automotive Corp., Leotek Electronics Corporation, Lite-On IT Corporation, and LarView Technologies Corp. on March 22, 2014, June 1, 2014, June 29, 2014, June 30, 2014 and September 1, 2014 under the approval of the board of directors.

Starting from March 28, 2014, the Company has no power to govern the financial and operating policies of Logah Technology Corp. Still, the Company has significant influence on Logah Technology Corp.; hence, it becomes the associate of the Company (refer to Note 24).

The Company holds less than 50% equity interest in Lite-On Japan Ltd. and Silitech Technology Corp. However, the Company and its subsidiaries can control the composition of their board of directors; hence, they are deemed as subsidiaries of the Company.

The investments accounted for by the equity method including the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2014 and 2013 were based on the subsidiaries' financial statements audited by auditors for the same years.

b. Investments in associates

	December 31
Name of Associate	2014	2013
Listed companies
Lite-On Semiconductor Corp. Logah Technology Corp.	\$ 1,499,910 304,447	\$ 1,416,172 -
Unlisted companies
Dragonjet Corporation Lite-Space Technology Company Limited Canfield Ltd.	1,060,414 5,494 4,494	1,031,513 - -
	\$ 2,874,759	\$ 2,447,685

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

	December 31
Name of Associate	2014	2013
Lite-On Semiconductor Corp.	18.17%	18.37%
Dragonjet Corporation	29.62%	29.66%
Logah Technology Corp.	28.10%	-
Lite-Space Technology Company Limited	39.23%	-
Canfield Ltd.	33.33%	-

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, 2014 and 2013. Thus, the investee was accounted for by the equity method.

Canfield Ltd. and Lite-Space Technology Company Limited are investee companies acquired by the combinations of Li Shin International Enterprise Corp. and Lite-On IT Corporation on March 22, 2014 and June 30, 2014, respectively.

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
Name of Company	2014	2013
Silitech Technology Corp. Lite-On Semiconductor Corp.	\$ 1,412,607 \$ 1,284,225	\$ 2,141,891 \$ 1,579,493
Logah Technology Corp. Lite-On Japan Ltd.	\$ 518,024 \$ 353,125	\$ 252,364 \$ 332,719

The financial information on the Company's interests in the associates is summarized as follows:

	December 31
	2014	2013
Total assets	\$ 20,804,912	\$ 17,911,944
Total liabilities	\$ 9,350,928	\$ 8,421,692
	For the Year Ended December 31
	2014	2013
Operating revenue	\$ 11,032,457	\$ 7,274,832
Net profit	\$ 279,240	\$ 247,208
Other comprehensive income	\$ 355,747	\$ 427,680
Share of profit of subsidiaries and associates	\$ 449,600	\$ 678,732

The financial statements used as basis for calculating the equity-method investments, the Company's share of profit or loss, and the other comprehensive income attributable the Company had all been audited except those of Canfield Ltd. and Lite-Space Technology Company Limited. Management believed there would have been no significant impact on the accompanying financial statements had these two investees' financial statements been audited.

13. PROPERTY, PLANT AND EQUIPMENT, NET

Carrying amounts of each class

				December 31
				2014		2013
Carrying amounts of each class
Freehold land				\$ 2,226,499		\$ 2,033,482
Buildings					2,935,988	2,224,075
Machinery equipment					1,413,967	209,698
Tooling equipment					80,239	5,607
Transportation equipment					519	57
Office equipment					168,000	115,175
Equipment held under finance lease					47,405	265
Other equipment					505,449	169,818
				\$ 7,378,066		\$ 4,758,177
				For the Year Ended December 31, 2014
				Acquired from
	January 1, 2014	Additions	Disposals	Business Combination	Reclassification	December 31, 2014
Cost
Freehold land	\$ 2,033,482	\$ -	\$ -	\$ 193,017	\$ -	\$ 2,226,499
Buildings	3,240,213	-	-	1,251,305	-	4,491,518
Machinery equipment	2,270,617	652,863	86,196	1,202,399	(136,678 )	3,903,005
Tooling equipment	266,286	27,895	32,795	316,321	(2,351 )	575,356
Transportation equipment	827	93	993	4,678	-	4,605
Office equipment Equipment held under finance	518,017	70,072	11,030	224,501	(1,150 )	800,410
lease	5,515	-	-	81,566	-	87,081
Other equipment	460,298	232,233	22,142	402,850	-	1,073,239
	8,795,255	\$ 983,156	\$ 153,156	\$ 3,676,637	\$ (140,179 ) 13,161,713
						(Continued)

	January 1, 2014	Additions	Disposals
Cost
Equipment held under finance

				For the Year Ended December 31, 2014
	January 1, 2014	Additions	Disposals	Acquired from Business Combination	Reclassification	December 31, 2014
Accumulated depreciation
Buildings	\$ 1,016,138	\$ 105,367	\$ -	\$ 428,815	\$ -	\$ 1,550,320
Machinery equipment	2,053,972	197,205	82,770	370,500	(49,869 )	2,489,038
Tooling equipment	260,679	36,404	32,754	233,139	(2,351 )	495,117
Transportation equipment	770	149	993	4,160	-	4,086
Office equipment	402,842	67,835	10,844	174,520	(1,943 )	632,410
Equipment held under finance
lease	5,250	5,462	-	28,964	-	39,676
Other equipment	290,480	67,417	19,328	229,221	-	567,790
Accumulated impairment	4,030,131	\$ 479,839	\$ 146,689	\$ 1,469,319	\$ (54,163 )	5,778,437
Freehold land	-	\$ -	\$ -	\$ -	\$ -	-
Buildings	-	-	-	5,210	-	5,210
Machinery equipment	6,947	-	-	-	(6,947 )	-
Tooling equipment	-	-	-	-	-	-
Transportation equipment	-	-	-	-	-	-
Office equipment	-	-	-	-	-	-
Equipment held under finance lease	-	-	-	-	-	-
Other equipment	-	-	-	-	-	-
	6,947	\$ -	\$ -	\$ 5,210	\$ (6,947 )	5,210
	\$ 4,758,177					\$ 7,378,066 (Concluded)

				For the Year Ended December 31, 2013
				Acquired from
	January 1, 2013	Additions	Disposals	Business Combination	Reclassification	December 31, 2013
Cost
Freehold land	\$ 2,280,117	\$ -	\$ 246,635	\$ -	\$ -	\$ 2,033,482
Buildings	3,674,272	-	434,059	-	-	3,240,213
Machinery equipment	2,454,974	139,670	267,337	-	(56,690 )	2,270,617
Tooling equipment	386,930	4,627	99,311	-	(25,960 )	266,286
Transportation equipment	1,137	-	310	-	-	827
Office equipment Equipment held under finance	497,190	47,216	19,232	-	(7,157 )	518,017
lease	5,515	-	-	-	-	5,515
Other equipment	348,749	128,177	6,045	-	(10,583 )	460,298
Accumulated depreciation	9,648,884	\$ 319,690	\$ 1,072,929	\$ -	\$ (100,390 )	8,795,255
Buildings	1,058,046	\$ 80,305	\$ 122,213	\$ -	\$ -	1,016,138
Machinery equipment	2,287,732	87,627	264,705	-	(56,682 )	2,053,972
Tooling equipment	372,372	13,578	99,311	-	(25,960 )	260,679
Transportation equipment	942	138	310	-	-	770
Office equipment	382,391	46,749	19,141	-	(7,157 )	402,842
Equipment held under finance
lease	4,851	399	-	-	-	5,250
Other equipment	265,124	30,749	5,393	-	-	290,480
	4,371,458	\$ 259,545	\$ 511,073	\$ -	\$ (89,799 )	4,030,131
Accumulated impairment
Freehold land	-	\$ -	\$ -	\$ -	\$ -	-
Buildings	8,082	-	8,082	-	-	-
Machinery equipment	6,947	-	-	-	-	6,947
Tooling equipment	-	-	-	-	-	-
Transportation equipment	-	-	-	-	-	-
Office equipment	-	-	-	-	-	-
Equipment held under finance
lease Other equipment	- -	- -	- -	- -	- -	- -
	15,029	\$ -	\$ 8,082	\$ -	\$ -	6,947

\$ 5,262,397 \$ 4,758,177

No impairment assessment was performed for the year ended 2014 and 2013 as there was no indication of impairment.

Depreciation of property, plant and equipment analysis by function as follows:

An analysis by function

	For the Year Ended December 31
	2014	2013
An analysis by function
Operating cost	\$ 107,948	\$ 27,929
Operating expenses	371,891	231,616
	\$ 479,839	\$ 259,545

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

Buildings 2-60 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 3-5 years Other equipment 2-10 years

14. INTANGIBLE ASSETS, NET

	January 1, 2014	Additions	Disposals
Cost
Accumulated amortization

					December 31
				2014		2013
Carrying amounts of each class
Goodwill				\$ 5,926,156	\$	544,918
Patents					860,597	5,653
Software					287,809	95,566
Client relationships					-	-
				\$ 7,074,562	\$	646,137
			For the Year Ended December 31, 2014	Acquired from
	January 1, 2014	Additions	Disposals	Business Combination	Reclassification	December 31, 2014
Cost
Goodwill	\$ 622,152	\$ -	\$ -	\$ 5,381,238	\$ -	\$ 6,003,390
Patents	27,134	543	-	4,304,544	-	4,332,221
Software	638,731	252,781	15,324	177,155	(7,933 )	1,045,410
Client relationships	163,819	-	-	-	-	163,819
Accumulated amortization	1,451,836	\$ 253,324	\$ 15,324	\$ 9,862,937	\$	(7,933 ) 11,544,840
Goodwill	77,234	\$ -	\$ -	\$ -	\$ -	77,234
Patents	21,481	165,897	-	3,284,246	-	3,471,624
Software	543,165	129,503	15,324	108,190	(7,933 )	757,601
Client relationships	163,819	-	-	-	-	163,819
	805,699	\$ 295,400	\$ 15,324	\$ 3,392,436	\$ (7,933 )	4,470,278
						(Continued)

	For the Year Ended December 31, 2014
	January 1, 2014		Additions		Disposals	Acquired from Business Combination		Reclassification		December 31, 2014
Accumulated impairment
Goodwill Patents Software Client relationships	\$ - - - - -	\$ \$	- - - - -	\$ \$	- - - - -	\$ \$	- - - - -	\$ \$	- - - - -	\$	- - - - -
	\$ 646,137									\$ 7,074,562 (Concluded)

	For the Year Ended December 31, 2013
	January 1, 2013	Additions	Disposals	Acquired from Business Combination	Reclassification	December 31, 2013
Cost
Goodwill Patents Software Client relationships Accumulated amortization Goodwill	\$ 622,152 27,134 563,090 163,819 1,376,195 77,234	\$ 66,344 \$ 66,344 \$	- \$ - - - 1,286 - - \$ 1,286 - \$ -	\$ - - - - \$ - \$ -	\$ - - 10,583 - \$ 10,583 \$ -	\$ 622,152 27,134 638,731 163,819 1,451,836 77,234
Patents Software Client relationships Accumulated impairment	16,959 487,621 153,580 735,394	4,522 56,830 10,239 \$ 71,591	- 1,286 - \$ 1,286	- - - \$ -	- - - \$ -	21,481 543,165 163,819 805,699
Goodwill Patents Software Client relationships	- - - - - \$ 640,801	\$ \$	- \$ - - - - - - - - \$ -	\$ - - - - \$ -	\$ - - - - \$ -	- - - - - \$ 646,137

Amortization of intangible assets analysis by function as follows:

	For the Year Ended December 31
	2014	2013
An analysis by function
Operating cost	\$ 11,772	\$ 3,583
Operating expenses	283,628	68,008
	\$ 295,400	\$ 71,591

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
Software	1-14 years
Client relationships	4 years

a. To integrate its overall resources and enhance the efficiency of operations, the Company had short-form mergers - in accordance with Article 19 of the Business Mergers and Acquisitions Act - with Li Shin International Enterprise Corp., Lite-On Automotive Corp., Leotek Electronics Corp., Lite-On IT Corp. and LarView Technologies Corp. on March 22, 2014, June 1, 2014, June 29, 2014, June 30, 2014 and September 1, 2014, respectively, under the board of directors' approval. The Company was the survivor entity in all of these mergers. The investment premium from Li Shin International Enterprise Corp., Lite-On Automotive Corp., Leotek Electronics Corp., Lite-On IT Corp., and LarView Technologies Corp. were \$1,708,258 thousand, \$277,840 thousand, \$220,170 thousand, \$2,806,508 thousand, and \$368,462 thousand, respectively. The total amount of \$5,381,238 thousand was

transferred to the Company and recorded as intangible assets - goodwill.

The goodwill arising from the Company's acquisition of Lite-On Enclosure Inc. in 2004 was \$210,220 thousand was amortized for about 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, 2014 and December 31, 2013, the carrying value of goodwill was \$132,986 thousand. The Company completed the purchase of some assets of the IrDA Department of Avago Technologies Limited. Statement of IFRS 3 - "Business Combinations" and IAS 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 goodwill generated was calculated at \$411,932 thousand as of December 31, 2009.

b. Goodwill is allocated to the Company'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. As of December 31, 2014 and 2013, 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.

15. BORROWINGS

a. Short-term borrowings

Unsecured borrowings

	December 31
	2014	2013
Unsecured borrowings
Line of credit borrowings	\$ 13,467,121	\$ 5,484,120

The range of weighted average effective interest rate on bank loans was 0.82%-1.16% and 0.72%-0.76% per annum as of December 31, 2014 and 2013, respectively.

b. Long-term borrowings

As of December 31, 2014 and 2013, the Company had 4 and 6 long-term bank loans respectively with contract terms between September 23, 2008 and September 23, 2018. The floating interest rates are (1.520% to 1.703% and 1.448% to 1.663% and as of December 31, 2014 and 2013, 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 a 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 (a) \$12 billion and (b) \$3 billion of the credit line of the above syndicated loan.

On September 12, 2013, the Company signed another contract for a five-year syndicated loan with Citibank and 16 other financial institutions. The credit line was NT\$15 billion, which was for Company to repay the former syndicated loan with Citibank signed on September 23, 2008. It should be used as a medium-term loan but may not be used on a revolving basis. Subsequently, (b) \$3 billion of the credit line of the above syndicated loan signed on September 23, 2008 was cancelled.

			16. PROVISIONS
		December 31
	2014	2013			December 31
Unsecured borrowings				2014	2013
Syndicated loan with Citi Bank	\$ 12,000,000	\$ 16,000,000	Current
Chang Hwa Bank	500,000	500,000
Taiwan Cooperative Bank	425,000	1,275,000	Warranties	\$ 828,287	\$ 133,230
Taipei Fubon Commercial Bank	-	700,000
	12,925,000	18,475,000	Movements in the provisions were as follow:
Current portion	(5,225,000)	(6,350,000)
				For the Year Ended December 31
Long-term borrowings: Non-current	\$ 7,700,000	\$ 12,125,000		2014	2013

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, 2014 and 2013, the Company used both NT\$12 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.

The minimum payment of principal should be repaid at NT\$4 billion by March 19, 2014. The remaining principal of this syndicated loan should be repaid in five semiannual installments from March 19, 2016. The Company had early repaid the syndicated loan on March 2014.

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.

As of December 31, 2014 and 2013, the Company did not violate the financial ratios stated above.

	December 31
	2014	2013
Current
Warranties	\$ 828,287	\$ 133,230
Movements in the provisions were as follow:
	For the Year Ended December 31
	2014	2013
Balance at January 1	\$ 133,230	\$ 175,712
Additional provisions recognized	343,780	59,396
Usage	(109,217)	(27,932)
Reversing un-usage balances	(111,808)	(73,946)
Acquired from business combination	572,302	-
Balance at December 31	\$ 828,287	\$ 133,230

Based on the local legislation for the sale of goods, provision for warranty claims is 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. The estimate had been made on the basis of historical warranty trends and may vary as a result of the entry of new materials, altered manufacturing processes or other events affecting product quality.

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, 2014 and 2013, the Company recognized expenses in statements of comprehensive income were NT\$171,589 thousand and NT\$105,144 thousand, respectively.

An analysis by function

	For the Year Ended December 31
	2014	2013
An analysis by function
Operating cost	\$ 19,900	\$ 7,714
Operating expenses	151,689	97,430
	\$ 171,589	\$ 105,144

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:

	December 31
	2014	2013
Discount rates	1.70%	1.75%
Expected return on plan assets	1.70%	1.75%
Expected rates of salary increase	3.00%	3.00%

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

	For the Year Ended December 31
	2014	2013
Current service cost	\$ 7,661	\$ 6,720
Interest cost	17,292	11,559
Expected return on plan assets	(17,439)	(11,170)
	\$ 7,514	\$ 7,109
An analysis by function
Operating cost	\$ 2,602	\$ 1,957
Operating expenses	4,912	5,152
	\$ 7,514	\$ 7,109

Pre-tax actuarial gains recognized in other comprehensive income for the years ended December 31, 2014 and 2013 were NT\$9,908 thousand and NT\$18,043 thousand, respectively. The cumulative amount of pre-tax actuarial losses recognized in other comprehensive income as of December 31, 2014 and 2013 was NT\$99,261 thousand and NT\$109,169 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:

	December 31
	2014	2013
Present value of funded defined benefit obligation Fair value of plan assets	\$ 1,072,976 (1,072,993)	\$ 870,102 (858,929)
Accrued pension liabilities (prepayments for pension fund)	\$ (17)	\$ 11,173

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

Balance at January 1	\$ 870,102	\$ 889,166
Acquired from business combination	199,654	-
Interest cost	17,292	11,559
Current service cost	7,661	6,720
Actuarial gains	(5,114)	(18,324)
Benefits paid	(16,619)	(19,019)

	For the Year Ended December 31
		2014		2013
Balance at January 1	\$	870,102	\$	889,166
Acquired from business combination		199,654		-
Interest cost		17,292		11,559
Current service cost		7,661		6,720
Actuarial gains		(5,114)		(18,324)
Benefits paid		(16,619)		(19,019)
Balance at December 31		\$ 1,072,976	\$	870,102

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

Balance at January 1	\$ 858,929	\$ 851,708
Acquired from business combination	191,207	-
Expected return on plan assets	17,439	11,170
Contributions from the employer	17,243	15,351
Actuarial gains/(losses)	4,794	(281)
Benefits paid	(16,619)	(19,019)

	For the Year Ended December 31
	2014	2013
Balance at January 1	\$ 858,929	\$ 851,708
Acquired from business combination	191,207	-
Expected return on plan assets	17,439	11,170
Contributions from the employer	17,243	15,351
Actuarial gains/(losses)	4,794	(281)
Benefits paid	(16,619)	(19,019)
Balance at December 31	\$ 1,072,993	\$ 858,929

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
	2014	2013
Equity instruments	-	-
Debt instruments	-	-
Others	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,
2014

	December 31, 2014	December 31, 2013	December 31, 2012	January 1, 2012
Experience adjustments gains/(losses) on plan
liabilities Experience adjustments	\$ 9,686	\$ (10,775)	\$ (61,224)	\$ -
gains/(losses) on plan assets	\$ 4,794	\$ (281)	\$ (5,267)	\$ -

The Company expects to make contributions of NT\$20,400 thousand to the defined benefit plans in the next year starting from December 31, 2014.

c. Employee benefit expenses

	For the Year Ended December 31
	2014	2013
Short-term employee benefits	\$ 4,860,870	\$ 3,502,049
Post-employment benefits
Defined contribution plans	171,589	105,144
Defined benefit plans	7,514	7,109
	179,103	112,253
Termination benefits	17,770	12,844
Other employee benefits	82,510	55,229
	\$ 5,140,253	\$ 3,682,375
An analysis by function
Operating cost	\$ 462,255	\$ 186,047
Operating expenses	4,677,998	3,496,328
	\$ 5,140,253	\$ 3,682,375

18. EQUITY

a. Share capital

1) Ordinary shares

	December 31
	2014	2013
Numbers of shares authorized (in thousands)	3,500,000	3,500,000
Shares authorized	\$ 35,000,000	\$ 35,000,000
Number of shares issued and fully paid (in thousands)	2,341,674	2,324,655
Shares issued	\$ 23,416,737	\$ 23,246,552

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 later issued more shares. 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, 2014 and 2013, the outstanding marketable equity securities were 5,213 thousand units, and 5,206 thousand units, representing 52,127 thousand common share, and 52,064 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, 2014 and 2013, the unredeemed GDRs amounted to 994 thousand units, and 1,194 thousand

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 changes in percentage of ownership interest in subsidiaries, investments in subsidiaries, investments in associates and joint ventures accounted for using equity method, and employee share options 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.

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.

The bonus to employees and remuneration to directors were estimated at a certain percentage of net income. Material differences between these estimates amounts and the amounts proposed by the board of directors on or before the financial statements are authorized for issue are adjusted in the year the bonus and remuneration are recognized. If there is a change in the proposed amounts after the consolidated financial statements are authorized for issue, the differences are recorded as a change in accounting estimate and will be adjusted in the following year. If a share bonus will be distributed to employees, the number of shares is determined by dividing the amount of the share bonus by the fair value of the shares. The fair value of the shares refers to the closing price (after considering the effect of cash and stock dividends) of the shares on the day immediately preceding the shareholders' meeting.

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

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 2013 and 2012 had been approved in the shareholders' meetings on June 19, 2014 and 2013, respectively. The appropriations and dividends per share were as follows:

		Appropriation of Earnings	Dividends Per Share	(NT\$)
	2013	2012	2013		2012
Legal reserve	\$ 875,485	\$ 753,486
Special reserve		- 689,913
Reversal of special reserve	640,244	-
Share dividends	116,381	114,899	\$ 0.05		\$ 0.05
Cash dividends	6,307,866	5,400,265	2.71		2.35

	For the Year Ended December 31
		2013	2012
	Cash	Stock	Cash	Stock
	Dividends	Dividends	Dividends	Dividends
Bonus to employees	\$ 997,212	\$ 189,945	\$ 897,799	\$ 171,009
Remuneration of directors	70,039	-	61,420	-

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 4,085 thousand shares for 2013 was determined by dividing the amount of share bonus resolved in 2014 by the closing price of NT\$46.50 (after considering the effect of cash and stock dividends) on the day immediately preceding the shareholders' meeting.

The appropriation of the earnings for 2013 was approved by the Financial Supervisory Commission, Executive Yuan, ROC. The Parent Company's board of directors approved August 6, 2014 as the date of distributing stock dividends and cash dividends.

There was no difference between (a) the amounts approved in the shareholders' meeting on June 19, 2014 and 2013 and (b) the amounts recognized in the consolidated financial statements for the years ended December 31, 2013 and 2012.

The appropriations of earnings for 2014 had been proposed by the Company's board of directors on March 25, 2015. The appropriations and dividends per share were as follows:

	Appropriation of Earnings	Dividends Per Share (NT\$)
Legal reserve	\$ 646,166
Special reserve	182,544
Cash dividends	4,613,097	\$ 1.97
Share dividends	117,084	0.05

The board of directors of the Company also approved in year 2014 the cash dividends to employees, stock dividends to employees and the remuneration to directors in the amounts of NT\$768,033 thousand, NT\$146,292 thousand and NT\$54,924 thousand, respectively. There is no significant difference between the approved amounts and the amounts charged against earnings of 2014. The appropriations of earnings, the bonus to employees, and the remuneration to directors for 2014 are subject to the resolution of the shareholders' meeting to be held on June 24, 2015.

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.

d. Others equity items

Movements in others equity items were as follows:

	2014
	Foreign Currency Translation Reserve	Unrealized Gain (Loss) from Available-for sale Financial Assets	Cash Flow Hedges Reserve	Total
Balance at January 1 Exchange differences arising on translating the financial statements of foreign	\$ 2,383,040	\$ 83,231	\$	(46,969) \$ 2,419,302
operations Gain arising on changes in the fair value of available-for	2,394,153	-	-	2,394,153
sale financial assets Reclassification to income from disposal of available-for-sale	-	298,311	-	298,311
financial assets Gain arising on changes in the fair value of hedging	-	(259,010)	-	(259,010)
instruments Share of other comprehensive income of subsidiaries and	-	-	34,980	34,980
associates (Note 1) The proportionate share of other comprehensive income reclassified to profit or loss upon partial disposal of	(233,000)	16,540	-	(216,460)
associates	(1,240)	-	-	(1,240)
Effect of deconsolidation of subsidiary Income tax effect	(13,549) (404,307)	- -	- -	(13,549) (404,307)
Balance at December 31	\$ 4,125,097	\$ 139,072	\$	(11,989) \$ 4,252,180

	2013
		Exchange Differences on Translating Foreign Operations	Unrealized Gain (Loss) on Available for-sale Financial Cash Flow Assets Hedge		Total
Balance at January 1 Exchange differences arising on translating the financial statements of foreign operations	\$	128,872 1,962,895		\$ (446,848) -		\$ (101,563) \$ (419,539) -	1,962,895
Gain arising on changes in the fair value of available-for-sale financial
assets Reclassification to income from disposal of available-for-sale		-		57,270		-	57,270
financial assets Gain arising on changes in the fair value of hedging		-		27,394		-	27,394
instruments Share of other comprehensive income of subsidiaries and		-		-		54,594	54,594
associates (Note 2)		666,829		444,632		-	1,111,461
Income tax effect		(375,556)		783		-	(374,773)
Balance at December 31		\$ 2,383,040	\$	83,231	\$	(46,969) \$ 2,419,302

Note 1: The use of share of the actuarial loss NT\$9,935 thousand arising of subsidiaries and associates are not included.

Note 2: The use of share of the actuarial loss NT\$783 thousand arising of subsidiaries and associates are not included.

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.

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

Increase During the Period	Decrease During the Period	Number of Shares at December 31

Purpose of Buyback	Number of Shares at January 1	Increase During the Period	Decrease During the Period	Number of Shares at December 31
For the year ended December 31, 2014
Shares held by its subsidiaries	28,118	132	1,675	26,575
For the year ended December 31, 2013
Shares held by its subsidiaries	27,979	139	-	28,118
The Company's shares held by its subsidiaries at the end of the reporting periods were as follows:

Name of Subsidiary

December 31, 2014

Name of Subsidiary	Number of Shares Held (In Thousands)	Carrying Amount	Market Price
December 31, 2014
Lite-On Capital Corporation	14,966	\$ 718,857	\$ 544,761
LTC International Ltd.	6,935	297,469	272,328
Yet Foundate Ltd.	2,248	126,881	95,922
Lite-On Electronics Co., Ltd.	2,426	105,515	103,497
		\$ 1,248,722	\$ 1,016,508
December 31, 2013
Lite-On Capital Corporation	14,892	\$ 718,857	\$ 711,812
LTC International Ltd.	6,900	297,469	305,906
Yet Foundate Ltd.	2,237	126,881	90,023
Lite-On Electronics Co., Ltd.	2,414	105,515	97,132
Lite-On IT Corp.	1,675	85,938	80,066
		\$ 1,334,660	\$ 1,284,939

December 31, 2013

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

		For the Year Ended December 31
	2014	2013
Revenue from the sale of goods	\$ 113,855,987	\$ 78,029,729
Royalty income	1,054,983	968,907
Revenue from management services	766,148	491,859
Rental income from property	115,130	143,284
	\$ 115,792,248	\$ 79,633,779

20. INCOME TAX

a. Income tax recognized in profit or loss

The major components of tax expense were as follows:

	For the Year Ended December 31
	2014	2013
Current income tax expense (benefit)
Current tax expense recognized in the current year	\$ 833,181	\$ 535,033
Adjustment for prior years' tax	(76,196)	(7,000)
	756,985	528,033
Deferred tax
The origination and reversal of temporary differences	(791,069)	(137,272)
Investment tax credits	-	153,267
	(791,069)	15,995
Income tax expense recognized in profit or loss	\$ (34,084)	\$ 544,028

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

	For the Year Ended December 31
	2014	2013
Income before tax	\$ 6,427,575	\$ 9,298,876
Income tax expense at the statutory rate Tax effect of adjusting items:	\$ 1,092,688	\$ 1,580,809
Deductible items in determining taxable income	(469,043)	(950,139)
Additional income tax on unappropriated earnings	209,536	57,630
The origination and reversal of temporary differences	(791,069)	(137,272)
Adjustment for prior years' tax	(76,196)	(7,000)
Income tax expense recognized in profit or loss	\$ (34,084)	\$ 544,028

The applicable tax rate used above is the corporate tax rate of 17% payable by the Company.

As the status of 2014 appropriations of earnings is uncertain, the potential income tax consequences of 2014 unappropriated earnings are not reliably determinable.

b. Income tax expense recognized in other comprehensive income

2014	2013
	\$ 375,556
	2,285
-	(783)
\$ 405,991	\$ 377,058
	For the Year Ended December 31 \$ 404,307 1,684

c. Deferred income tax balance

The analysis of deferred income tax assets was as follows:

				December 31
				2014	2013
Temporary differences				\$ 1,266,944	\$ 374,803
Accumulated equity in the net loss of foreign investees Impairment loss on assets				325,877	298,231
Unrealized loss on inventories				197,071	37,064
Unrealized loss and expense				117,257	107,152
Accrued warranty expense				113,095	22,649
Unrealized sales profit				40,835	51,236
Accrued pension cost				36,465	24,590
Accumulated compensated absences				27,390	1,596
Available-for-sale financial assets				-	4,520
				\$ 2,124,934	\$ 921,841
	Opening Balance	Recognized in Profit (Loss)	Recognized in Other Comprehensive Income (Loss)	Acquired from Business Combination	Closing Balance
2014
Temporary differences Accumulated equity in the net loss of foreign
investees	\$ 374,803	\$ 477,908	\$ -	\$ 414,233	\$ 1,266,944
Impairment loss on assets	298,231	15,359	-	12,287	325,877
Unrealized loss on
inventories Unrealized loss and	37,064	88,805	-	71,202	197,071
expense	107,152	5,164	-	4,941	117,257
Accrued warranty expense	22,649	(32,423)	-	122,869	113,095
Unrealized sales profit	51,236	(42,152)	-	31,751	40,835
Accrued pension cost	24,590	1,654	(1,684)	11,905	36,465
Accumulated
compensated absences Available-for-sale	1,596	25,794	-	-	27,390
financial assets	4,520	(4,771)	-	251	-
	\$ 921,841	\$ 535,338	\$ (1,684)	\$ 669,439	\$ 2,124,934 (Continued)

			December 31
					2014			2013
Temporary differences
Accumulated equity in the net loss of foreign investees					\$ 1,266,944		\$	374,803
Impairment loss on assets					325,877			298,231
Unrealized loss on inventories					197,071			37,064
Unrealized loss and expense					117,257			107,152
Accrued warranty expense					113,095			22,649
Unrealized sales profit					40,835			51,236
Accrued pension cost					36,465			24,590
Accumulated compensated absences					27,390			1,596
Available-for-sale financial assets						-		4,520
					\$ 2,124,934		\$	921,841
	Opening Balance	Recognized in Profit (Loss)		Recognized in Other Comprehensive Income (Loss)		Acquired from Business Combination		Closing Balance
2014
Temporary differences
Accumulated equity in the
net loss of foreign
investees Impairment loss on assets	\$ 374,803 298,231	\$ 477,908 15,359	\$	- -		\$ 414,233 12,287		\$ 1,266,944 325,877
Unrealized loss on
inventories	37,064	88,805		-		71,202		197,071
Unrealized loss and
expense Accrued warranty expense	107,152 22,649	5,164 (32,423)		- -		4,941 122,869		117,257 113,095
Unrealized sales profit	51,236	(42,152)		-		31,751		40,835
Accrued pension cost	24,590	1,654		(1,684)		11,905		36,465
Accumulated
compensated absences	1,596	25,794		-		-		27,390
Available-for-sale
financial assets	4,520	(4,771)		-		251		-
	\$ 921,841	\$ 535,338	\$	(1,684)		\$ 669,439		\$ 2,124,934 (Continued)

	Opening Balance	Recognized in Profit (Loss)		Acquired from Business Combination	Closing Balance
2013
Investment tax credits Temporary differences Accumulated equity in the net loss of foreign	\$ 153,267	\$ (153,267)	\$ -	\$ -	\$ -
investees	131,734	243,069	-	-	374,803
Impairment loss on assets Unrealized loss and	298,231	-	-	-	298,231
expense	54,461	52,691	-	-	107,152
Unrealized sales profit Unrealized loss on	62,339	(11,103)	-	-	51,236
inventories	27,657	9,407	-	-	37,064
Accrued pension cost	26,157	1,501	(3,068)	-	24,590
Accrued warranty expense Available-for-sale	29,871	(7,222)	-	-	22,649
financial assets Accumulated	4,520	(783)	783	-	4,520
compensated absences	1,914	(319)	-	-	1,596
	\$ 790,151	\$ 134,757	\$ (2,285)	\$ -	\$ 921,841 (Concluded)

The analysis of deferred income tax liabilities was as follows:

	December 31
	2014	2013
Temporary differences
Accumulated equity in the net gain of investees	\$ 2,355,715	\$ 1,212,198
Unrealized amortization of goodwill	353,808	35,737
Land value increment tax	230,216	230,216
Unrealized exchange gains net	11,782	45,420
	\$ 2,951,521	\$ 1,523,571

	Opening Balance	Recognized in Profit (Loss)	Recognized in Other Comprehensive Income (Loss)	Acquired from Business Combination	Closing Balance
2014
Temporary differences Accumulated equity in the
net gain of investees Unrealized amortization	\$ 1,212,198	\$ (238,275)	\$ 404,307	\$ 977,485	\$ 2,355,715
of goodwill	35,737	-	-	318,071	353,808
Land value increment tax Unrealized exchange	230,216	-	-	-	230,216
gains net	45,420	(17,456)	-	(16,182)	11,782
	\$ 1,523,571	\$ (255,731)	\$ 404,307	\$ 1,279,374	\$ 2,951,521 (Continued)

	Opening Balance	Recognized in Profit (Loss)	Recognized in Other Comprehensive Income (Loss)	Acquired from Business Combination	Closing Balance
2013
Temporary differences Accumulated equity in the net gain of investees Land value increment tax	\$ 693,593 230,216	\$ 143,832 -	\$ 374,773 -	\$ - -	\$ 1,212,198 230,216
Unrealized exchange gains net Unrealized amortization	38,500	6,920	-	-	45,420
of goodwill	35,737	-	-	-	35,737
	\$ 998,046	\$ 150,752	\$ 374,773	\$ -	\$ 1,523,571 (Concluded)

d. As of December 31, 2014 and 2013, the aggregate deductible temporary differences for which no deferred income tax assets have been recognized amounted to NT\$223,496 thousand and NT\$294,292

thousand, respectively.

e. Integrated income tax

Unappropriated earnings

	December 31
		2014		2013
Unappropriated earnings
Unappropriated earnings generated before January 1, 1998	\$	2,215	\$	2,215
Unappropriated earnings generated on and after January 1, 1998		11,426,845		12,169,867
		\$ 11,429,060		\$ 12,172,082
Imputation credits accounts	\$	1,583,451	\$	469,347

The estimated and actual creditable ratio for distribution of earnings of 2014 and 2013 were 12.70% and 11.40%, respectively.

According to the amendments to the Income Tax Law in Article 66-6 effective on January 1, 2015, which halved the creditable ratio for ROC resident shareholders. In addition, 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.

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 2014 earnings may differ from the actual creditable ratio to be used in allocating imputation credits to the shareholders.

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 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: (As of December 31, 2014: None)

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

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

	December 2007
Expected volatility	40.07%
Option life (years)	6 years
Expected dividend yield	7.07%
Risk-free interest rate	2.5101%

22. EARNINGS PER SHARE

Unit: NT\$ Per Share

For the Year Ended December 31 2014 2013 Basic earnings per share \$ 2.80 \$ 3.81

Diluted earnings per share \$ 2.76 \$ 3.77

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

2014

Basic EPS

Diluted EPS

	Amounts (Numerator)	Shares (Denominator) (Thousands)	Earnings Per Share (NT\$)
The net income of common shareholders	\$ 6,461,659	2,311,803	\$ 2.80
Effect of dilutive potential common stock Bonus to employees	-	27,277
Diluted EPS The net income of common shareholders plus the effect of potential dilutive common stock \$ 6,461,659		2,339,080	\$ 2.76
The net income of common shareholders Effect of dilutive potential common stock Bonus to employees	\$ 8,754,848 -	2,298,322 24,857	\$ 3.81
Diluted EPS
The net income of common shareholders plus the effect of potential dilutive common stock \$ 8,754,848		2,323,179	\$ 3.77

2013

Basic EPS

Diluted EPS

The weighted average number of shares outstanding used for the earnings per share computation was adjusted retroactively for the issuance of bonus shares on August 6, 2014. This adjustment caused the basic and diluted after-tax earnings per share for the year ended December 31, 2013 to decrease from NT\$3.83 to NT\$3.81 and from NT\$3.79 to NT\$3.77, respectively.

If the Company offered to settle bonuses paid to employees in cash or shares, the Parent Company assumed 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.

23. ACQUISITION OF SUBSIDIARIES - WITH OBTAINED CONTROL

	Principal Activity	Date of Acquisition	Proportion of Voting Equity Interests Acquired (%)	Consideration Transferred
LarView Technologies Corp.	Manufacture of optical instruments, general Instruments, computers and peripherals.	April, 2014	83.33	\$ 500,000

LarView Technologies Corp. was acquired not only to upgrade its capability in the automated processing of camera modules but also to expand the market for this product. For more information on this acquisition, please refer to Note 29.

24. DISPOSAL OF SUBSIDIARIES - WITH LOSS OF CONTROL

On March 28, 2014, the Company lost its power to govern the financial and operating policies of Logah Technology Corp. because of the loss of power to cast the majority of votes at meetings of the Board of Directors. For the related information on disposal of Logah Technology Corp., please refer to Note 30.

25. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

In March to December 2013, the Company acquired an additional 56.8% equity interest in Lite-On IT Corporation, and increased the equity interest from 42.33 % to 99.13%.

In January to June 2014, the Company acquired an additional 0.87% equity interest in Lite-On IT Corporation, and increased the equity interest from 99.13 % to 100%.

In April 2014, the Company acquired an additional 17.74% equity interest in Lite-On Automotive Corp., and increased the equity interest from 82.26 % to 100%.

The above transactions were accounted for as equity transactions, since the Company did not cease to have control over these subsidiaries.

	For the Year Ended December 31
		2014			2013
		Lite-On Automotive Corporation		Lite-On IT Corporation		Lite-On IT Corporation
Cash consideration paid The proportionate share of the carrying amount of the net assets of the subsidiary transferred from	\$	808,800	\$	204,368		\$ 17,171,678
non-controlling interests		(297,970)		(171,716)		(13,732,478)
Differences arising from equity transaction	\$	510,830	\$	32,652		\$ 3,439,200

Line items adjusted for equity transaction

	For the Year Ended December 31
	2014	2013
Line items adjusted for equity transaction
Capital surplus - difference between consideration received or paid and the carrying amount of the subsidiaries' net assets during actual disposal or acquisition	\$ -	\$ (146,193)
Retained earnings	(543,482)	(3,293,007)
	\$ (543,482)	\$ (3,439,200)

26. ACQUISITION OF SUBSIDIARIES

a. Subsidiaries acquired

	Principal Activity	Date of Acquisition	Ownership with Direct/Indirect Voting Rights	Consideration Transfer
Li Shin International Enterprise Corp.	Manufacture of business machinery equipment and electronic components	March 22, 2014	100%	\$ -
Lite-On Clean Energy Technology Corp.	Manufacture of business machinery equipment, power supplies, batteries and modules	April 15, 2014	100%	-
Lite-On Automotive Corp.	Manufacture and sale of automotive electronic components	June 1, 2014	100%	-
Leotek Electronics Corp.	Development, manufacture and sale of LED products, including display panel, light bulb, streetlight, emergency flasher, traffic light, warning light and etc.	June 29, 2014	100%	1,264,985
Lite-On IT Corporation	Manufacture and sale of data storage and processing equipment, electronic components and business machinery equipment	June 30, 2014	100%	-
LarView Technologies Corp.	Manufacture of optical instruments, general instruments, electronic components, computers and peripherals.	September 1, 2014	100%	85,075

\$ 1,350,060

To integrate its overall resources and enhance the efficiency of operations, the Company had short-form mergers - in accordance with Article 19 of the Business Mergers and Acquisitions Act - with Li Shin International Enterprise Corp., Lite-On Clean Energy Technology Corp., Lite-On Automotive Corp., Leotek Electronics Corp., Lite-On IT Corp. and LarView Technologies Corp. on March 22, 2014, April 15, 2014, June 1, 2014, June 29, 2014, June 30, 2014 and September 1, 2014, respectively, under the board of directors' approval. The Company was the survivor entity in all of these mergers.

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

	Li Shin International Enterprise Corp.	Lite-On Clean Energy Technology Corp.	Lite-On Automotive Corp.	Leotek Electronics Corp.	Lite-On IT Corporation	LarView Technologies Corp.	Total
Current assets
Cash and cash equivalents	\$ 726,692	\$ 5,939	\$ 174,865	\$ 709,079	\$ 4,404,246	\$ 63,272	\$ 6,084,093
Trade and other receivables	945,002	26,886	553,011	584,255	6,505,987	507,553	9,122,694
Inventories, net	69,153	33,776	254,702	136,576	5,830,823	309,495	6,634,525
Other	15,079	2,846	37,361	41,605	258,325	52,524	407,740
Non-current assets
Available-for-sale financial asset -
noncurrent	13	-	202,324	36,644	256,026	-	495,007
Investments accounted for by the equity
method	1,711,495	-	1,517,774	40,040	5,771,412	3,204	9,043,925
Property, plant and equipment, net	130,978	24,550	72,344	227,384	1,457,601	289,251	2,202,108
Intangible assets, net	2,758	2,515	112,416	-	3,890,498	-	4,008,187
Deferred tax assets	9,775	110	25,607	39,349	594,598	-	669,439
Prepayments for pension fund	8,360	-	-	87	-	-	8,447
Current liabilities
Short-term borrowings	-	(207,948 )	(15,000 )	-	-	(298,925 )	(521,873 )
Trade and other payables	(922,972 )	(57,522 )	(811,729 )		(505,974 ) (7,087,200 )		(780,416 ) (10,165,813 )
Current tax liabilities	(25,877 )	-	(44,725 )	(35,717 )	(95,245 )	-	(201,564 )
Provisions	-	(3,893 )	(121,119 )	(52,194 )	(395,096 )	-	(572,302 )
Other	(219 )	(1,766 )	(58,986 )	(38,952 )	(429,170 )	(3,540 )	(532,633 )
Non-current liabilities
Deferred tax liabilities	(20,497 )	(110 )	(159,779 )		(5,300 ) (1,093,688 )	-	(1,279,374 )
Other	-	-	-	(45 )	-	-	(45 )
Net identifiable assets	\$ 2,649,740	\$ (174,617 ) \$ 1,739,066		\$ 1,176,837	\$ 19,869,117	\$ 142,418	\$ 25,402,561

c. Net cash inflow from consolidated subsidiaries

	For the Year Ended December 31, 2014
Obtaining cash and cash equivalents	\$ 6,084,093
Transfer consideration of cash payments	(1,350,060)
	\$ 4,734,033

27. 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.

28. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments
• 1) Fair value of financial instruments measured at amortized cost

Management believes the carrying amounts of financial assets and financial liabilities recognized in the consolidated 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

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

• identical assets or liabilities;
• 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, 2014

	Level 1	Level 2	Level 3	Total
Available-for-sale financial assets
Securities listed in ROC - equity securities	\$ 591,405	\$ -	\$ -	\$ 591,405
Securities listed in other countries - equity securities	8,929	-	-	8,929
Unlisted securities - ROC - equity securities	-	-	4,620	4,620
Unlisted securities - other countries - equity securities	-	-	41,337	41,337
	\$ 600,334	\$	\$ 45,957	\$ 646,291
Derivative financial liabilities for hedging
Cash flow hedges - interest swap contracts	\$ -	\$ 11,989	\$ -	\$ 11,989
December 31, 2013
	Level 1	Level 2	Level 3	Total
Available-for-sale financial assets
Securities listed in ROC - equity securities	\$ 698,162	\$ -	\$ -	\$ 698,162
Unlisted securities - other countries - equity securities	-	-	19,009	19,009
	\$ 698,162	\$ -	\$ 19,009	\$ 717,171 (Continued)

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, 2014

	Investments on Equity
	Instruments
	Unlisted Quotes
Balance at January 1, 2014	\$ 19,009
Total losses
In profit or loss	(90,348)
Additions	4,620
Acquired from business combination	112,676
Balance at December 31, 2014	\$ 45,957

For the year ended December 31, 2013: None.

The total gains or losses for the period included a loss of NT\$90,348 thousand and NT\$0 thousand relating to assets held years ended December 31, 2014 and 2013.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.

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

	Level 1	Level 2	Level 3	Total	b. Categories of financial instruments
Derivative financial liabilities for hedging
Cash flow hedges - interest swap contracts	\$ -	\$ 46,969	\$ -	\$ 46,969 (Concluded)	Financial assets

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 financial instruments other than the above-mentioned, are calculated using pricing models recognized by the financial management. Based on the discounted cash flow analysis and observable financial market average prices or similar data to make the assumption. The discount rate and related parameters can be refer to the quoted price of interest rate swap between Reuters news agency. Bloomberg agency or other financial institutions and the financial products with same conditions and characteristics, which included the remaining contract terms of fixed interest rates, the payment of principal, payment of currency, etc. Those information can be obtained by the Company.

December 31

Financial liabilities

	2014	2013
Financial assets
Loans and receivables (1) Available-for-sale financial assets	\$ 41,746,113 646,291	\$ 30,909,188 717,171
Financial liabilities
Derivative financial liabilities Measured at amortized cost	11,989	46,969
Short-term borrowings Long-term loans (included current portion of long-term debts) Payables (2)	13,467,121 12,925,000 35,356,838	5,484,120 18,475,000 27,902,299

• Measured at amortized cost
• inter.
• payables inter.
• c. Financial risk management objectives and policies

1) 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 -

2) The balances included notes payable, trade payables, trade payables - inter, other payables and other

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 (Refer to Note 32).

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.

	Currency USD Impact
	For the Year Ended December 31
	2014	2013
Profit or loss	\$ 123,205	\$ (4,982)

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
	2014	2013
Fair value interest rate risk
Financial assets (i)	\$ 1,789	\$ 3,430,260
Financial liabilities (ii)	10,481,921	5,484,120
Cash flow interest rate risk
Financial assets (iii)	6,540,514	3,493,573
Financial liabilities (iv)	15,910,200	18,475,000

i. The balances included 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 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.

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, 2014 and 2013 would decrease by NT\$23,424 thousand and NT\$37,454 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 Company does not actively trade these investments.

If equity prices had been 7% higher, the pre-tax other comprehensive income years ended December 31, 2014 and 2013 would increase by NT\$42,023 thousand and NT\$48,871 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 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.

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 related 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

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

December 31, 2014

	Weighted Average Effective Interest Rate (%)	On Demand or Less than 1 Year	1-3 Years	3 Years to 5 Years	5+ Years
Non-derivative financial liabilities
Non-interest bearing Finance lease liabilities Fixed interest rate	- -	\$ 35,356,838 -	\$ 19,796 -	\$ - -	\$ - -
liabilities Variable interest rate	0.83-1.16	10,481,921	-	-	-
liabilities	0.82-1.703	8,210,200	7,700,000	-	-
		\$ 54,048,959	\$ 7,719,796	\$ -	\$ -
December 31, 2013
	Weighted Average Effective Interest Rate (%)	On Demand or Less than 1 Year	1-3 Years	3 Years to 5 Years	5+ Years
Non-derivative financial liabilities
Non-interest bearing Finance lease liabilities	- -	\$ 27,902,299 -	\$ 16,165 -	\$ - -	\$ - -
Fixed interest rate liabilities	0.72-0.76	5,484,120	-	-	-
Variable interest rate liabilities	1.448-1.663	6,350,000	8,285,000	3,840,000	-
		\$ 39,736,419	\$ 8,301,165	\$ 3,840,000	\$ -

29. 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	2014	2013
Subsidiaries Associates Other related parties	\$ 24,564,781 180,563 479	\$ 6,357,298 24 468
	\$ 24,745,823	\$ 6,357,790

b. Purchases of goods

	For the Year Ended December 31
Related Parties Categories	2014	2013
Subsidiaries Associates	\$ 102,989,099 1,502	\$ 72,364,906 -
	\$ 102,990,601	\$ 72,364,906

c. Receivables from related parties

Trade receivables

		December 31
Related Parties Categories	2014	2013
Trade receivables
Subsidiaries Associates	\$ 10,681,809 151,036	\$ 5,307,083 -
	\$ 10,832,845	\$ 5,307,083
Other receivables
Subsidiaries Associates Other related parties	\$ 521,520 37,665 203	\$ 368,363 789 3,008
	\$ 559,388	\$ 372,160

Other receivables

d. Payables to related parties

e. Acquisition of property, plant and equipment

		Purchase Price
		For the Year Ended December 31
Related Parties Categories	2014	2013
Subsidiaries	\$ 807	\$ -

f. Disposal of property, plant and equipment

		For the Year Ended December 31
		2014		2013
Related Parties Categories	Proceeds	Gains (Losses)	Proceeds	Gains (Losses)
Subsidiaries	\$ 269	\$ -	\$ 197	\$ -

g. Operating expense

	For the Year Ended December 31
Related Parties Categories	2014	2013
Subsidiaries Other related parties Associates	\$ 266,229 57,008 71	\$ 220,022 84,652 -
	\$ 323,308	\$ 304,674

		December 31
Related Parties Categories	2014	2013
Accounts payable
Subsidiaries	\$ 20,882,049	\$ 20,649,387
Associates	1,522	-
Other related parties	27,220	18,777
	\$ 20,910,791	\$ 20,668,164
Other payable
Subsidiaries	\$ 595,372	\$ 460,941
Associates	4,317	470	December 31, 2013: None
Other related parties	411	4,552
	\$ 600,100	\$ 465,963

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.

For the Year Ended December 31
\$ 541,359	\$ 455,228

		For the Year Ended December 31
Related Parties Categories	2014	2013
Short-term employee benefits Termination benefits	\$ 522,938 18,421	\$ 400,799 54,429
	\$ 541,359	\$ 455,228
The remuneration of directors and key executives was determined by the remuneration committee having regard to the performance of individuals and market trends.
30. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY
December 31, 2013: None
		December 31, 2014
Pledge-time deposits		\$ 1,789
Pledged assets - noncurrent included the refundable deposits that had been provided for a government projects.
31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

a. The European Commission issued a Statement of Objection to some CD-ROM factories in line with antitrust investigations in the third quarter of 2012. The Company has assigned lawyers to deal with the lawsuit. As of December 31, 2014, the investigation was still in progress. The Company

• believed that this case would not have a significant impact on its business and financial operations.
• reasonable estimation of the lawsuit until the settlement of this lawsuit.

b. 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 the Company 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. The Company assigned lawyers as its representative in these lawsuits. In October 2014, the U.S. District Court for the Northern District of California rejected the antitrust group lawsuit, but prosecutors appeal to the United States Court of Appeals for the Ninth Circuit against the rejection of the group litigation. In January 2015, the appeals court dismissed the lawsuit. But in the same month, the U.S. District Court for the Northern District of California allowed the plaintiff to appeal against the antitrust group lawsuit again within a reduced litigation scope. The Company will await for the further judgment by the appeal court. Although the outcome of the proceedings had not been determined, the Company accrued a reasonable amount in case of a loss on this lawsuit and will continue to recognize the losses quarterly on the basis of a

c. In the second quarter of 2013, the Attorney General of the State of Florida filed antitrust lawsuits against the Company and its subsidiaries - Philips & Lite-On Digital Solutions Corporation and Philips & Lite-On Digital Solutions USA, Inc. - as well as other companies with related businesses with the U.S. District Court for the Northern District of California (USDC-NDC). The Company assigned lawyers as its representative in these lawsuits. In the second quarter of 2014, the USDC-NDC allowed the plaintiff to proceed with the lawsuits but dismissed certain parts of these lawsuits. Although the outcome of the proceedings had not been determined, the Company accrued a reasonable amount in The significant financial assets and liabilities denominated in foreign currencies were as follows:

		December 31
	2014		2013
	Foreign Currencies	Exchange Rate	Foreign Currencies	Exchange Rate
Financial liabilities
Monetary items
USD	\$ 1,162,743	31.60	\$ 1,021,847	29.8050
JPY	33,666	0.2641	9,769	0.2842
CZK	10,562	1.3862	4,647	1.5022
HKD	4,407	4.0748	5,061	3.8436
EUR	2,675	38.4003	988	41.0623
				(Concluded)

33. SEPARATELY DISCLOSED ITEMS

2) Providing endorsements or guarantees for others: Note 4 to the financial statements.

4) Aggregate purchases or sales of the same securities reaching NT\$300 million or 20 percent of

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: None.

7) Purchases or sales of goods from or to related parties reaching NT\$100 million or 20 percent of

8) Trade receivables from related parties reaching NT\$100 million or 20 percent of paid-in capital or

• a. Information on significant transactions and information on investees:

• 1) Lending funds to others: None.

• 3) Holding of securities at the end of the period: Note 4 to the financial statements.

• paid-in capital or more: Note 4 to the financial statements.

• paid-in capital or more: Note 4 to the financial statements.

• more: Note 4 to the financial statements.
• 9) Trading in derivative instruments: Note 10 and Note 28 to the financial statements.
• 10) Information on investees: Note 4 to the financial statements.
• b. Information on investments in mainland China:
• investment in the mainland China area. Note 4 to the financial statements.
• gain or loss: Note 29 to the financial statements.

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

2) Significant direct or indirect transactions with the investee, prices, payment terms and unrealized

	case of a loss on this lawsuit and will continue to recognize the losses quarterly at this reasonably estimated amount until the settlement of this lawsuit.
d. In the second quarter of 2013, Dell Inc. and Dell Products L.P. filed a complaint with the United States	District Court for Western District of Texas; In the fourth quarter of 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; In the fourth quarter of 2013, Ingram Micro Inc., and Synnex Corporation filed a complaint with the United States District Court for the Central District				Financial liabilities
	of California. All these complaints constituted an antitrust group lawsuit against the Company and				Monetary items
	other companies with related businesses. The Company assigned lawyers as its representative in these
	lawsuits. Although the outcome of the proceedings had not been determined, the Company accrued a reasonable amount in case of a loss on this lawsuit and will continue to recognize losses quarterly on
	the basis of a reasonable estimation of the lawsuits until the settlement of these lawsuits.
e. From the second quarter of 2010 to the second quarter of 2014, 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. The Fanshawe College of Applied Arts and Technology filed a				33. SEPARATELY DISCLOSED ITEMS
	statement of claim in Ontario court. Neil Godfrey filed a statement of claim with the Superior Court of British Columbia. Donald Woligroski filed a statement of claim in Manitoba court. Cindy
Retallick filed a statement of claim in Saskatchewan court. All plaintiffs filed the antitrust group	lawsuit against the Company and its subsidiaries - Philips & Lite-On Digital Solutions Corporation,				1) Lending funds to others: None.
	Philips & Lite-On Digital Solutions USA, Inc. and other companies with related businesses. The Company assigned lawyers as its representative in these lawsuits. Although the outcome of the
	proceedings had not been determined, the Company accrued a reasonable amount in case of a loss on this lawsuit and will continue to recognize the losses quarterly on the basis of a reasonable estimation of
the lawsuit until the settlement of this lawsuit. 32. EXCHANGE RATE OF FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES
The significant financial assets and liabilities denominated in foreign currencies were as follows:
			December 31
	2014 Foreign	Exchange	2013 Foreign	Exchange
Financial assets	Currencies	Rate	Currencies	Rate	more: Note 4 to the financial statements.
Monetary items USD	\$ 1,240,721	31.60	\$ 1,018,504	29.8050
JPY	30,231	0.2641	9,921	0.2842
CZK	14,214	1.3862	6,631	1.5022	b. Information on investments in mainland China:
EUR	6,034	38.4003	1,042	41.0623
HKD Investments accounted for by the equity method	3,207	4.0748	14,961	3.8436
HKD	2,425,296	4.0748	2,408,525	3.8436
USD	1,792,886	31.60	1,079,745	29.8050
JPY EUR	1,279,443 7,113	0.2641 38.4003	1,141,347 147,305	0.2842 41.0623

• d. In the second quarter of 2013, Dell Inc. and Dell Products L.P. filed a complaint with the United States District Court for Western District of Texas; In the fourth quarter of 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; In the fourth quarter of 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 the Company and other companies with related businesses. The Company assigned lawyers as its representative in these lawsuits. Although the outcome of the proceedings had not been determined, the Company accrued a reasonable amount in case of a loss on this lawsuit and will continue to recognize losses quarterly on the basis of a reasonable estimation of the lawsuits until the settlement of these lawsuits.
• e. From the second quarter of 2010 to the second quarter of 2014, 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. The Fanshawe College of Applied Arts and Technology filed a statement of claim in Ontario court. Neil Godfrey filed a statement of claim with the Superior Court of British Columbia. Donald Woligroski filed a statement of claim in Manitoba court. Cindy Retallick filed a statement of claim in Saskatchewan court. All plaintiffs filed the antitrust group lawsuit against the Company and its subsidiaries - Philips & Lite-On Digital Solutions Corporation, Philips & Lite-On Digital Solutions USA, Inc. and other companies with related businesses. The Company assigned lawyers as its representative in these lawsuits. Although the outcome of the proceedings had not been determined, the Company accrued a reasonable amount in case of a loss on this lawsuit and will continue to recognize the losses quarterly on the basis of a reasonable estimation of the lawsuit until the settlement of this lawsuit.

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