Macronix — Interim / Quarterly Report 2015

Nov 12, 2015

Macronix International Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Three Months Ended March 31, 2015 and 2014 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and the Stockholders Macronix International Co., Ltd.

We have reviewed the accompanying consolidated balance sheets of Macronix International Co., Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”) as of March 31, 2015 and 2014 and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2015 and 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these consolidated financial statements based on our reviews.

Except as stated in the following paragraph, we conducted our reviews in accordance with Statement of Auditing Standards No. 36 “Review Financial Statements” issued by the Auditing Standards Committee of the Accounting Research and Development Foundation of the Republic of China. A review consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the Republic of China, the objective of which is the expression of an opinion regarding the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion.

As disclosed in Note 12 to the consolidated financial statements, the financial statements of some insignificant subsidiaries included in the consolidated financial statements were not reviewed. As of March 31, 2015 and 2014, the combined total assets of these insignificant subsidiaries were NT$4,323,621 thousand and NT$4,873,121 thousand, representing 10.06% and 9.47%, respectively, of the consolidated total assets, and the combined total liabilities of these subsidiaries were NT$519,776 thousand and NT$556,496 thousand, representing 2.54% and 2.33%, respectively, of the consolidated total liabilities, and for the three months ended March 31, 2015 and 2014, the combined comprehensive loss of these subsidiaries amounted to NT$49,961 thousand and NT$137,501 thousand, representing 33.62% and 13.50%, respectively, of the consolidated total comprehensive loss. As stated in Note 13 to the consolidated financial statements and other related information disclosed, we did not review the financial statements of equity-method investees as of and for the three months ended March 31, 2015. The carrying value of the related investments as of March 31, 2015 was NT$32,371 thousand, and the share of comprehensive loss of associates was NT$6,163 thousand for the three months ended March 31, 2015. These amounts as well as the related financial information of the investees as disclosed in Note 37 to the financial statements were based on the subsidiaries’ and associates’ unreviewed financial statements for the same reporting periods as those of the Company.

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Based on our reviews, except as discussed in the preceding paragraph that the carrying values of the investments in subsidiaries and associates as well as the related disclosures of the investment information were based on unreviewed financial statements of the subsidiaries and associates, and except for the effects of such adjustment, if any, as might have been made had we applied review procedures on the financial statements of the investees referred to in the preceding paragraph, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed by the Financial Supervisory Commission of the Republic of China.

As disclosed in Note 3 to the consolidated financial statements, the Group 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 starting in 2015. As a result of this retrospective application of the accounting policy, the consolidated financial statements as of December 31, 2014 , March 31, 2014 and January 1, 2014 have been restated.

April 27, 2015

Notice to Readers

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

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

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MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6 and 32) Financial assets at fair value through profit or loss - current (Notes 7 and 32) Notes receivable and trade receivables, net (Notes 10 and 32) Receivables from related parties, net (Notes 32 and 33) Other receivables (Notes 10, 32 and 33) Inventories (Note 11) Other current assets (Notes 16 and 18) Total current assets NON-CURRENT ASSETS Available-for-sale financial assets - non-current (Notes 8 and 32) Financial assets measured at cost - non-current (Notes 9 and 32) Investments accounted for using equity method (Note 13) Property, plant and equipment (Notes 14 and 31) Intangible assets (Note 15) Deferred tax assets (Note 27) Other financial assets - non-current (Notes 17 and 32) Other non-current assets (Notes 16 and 18) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 19 and 32) Financial liabilities at fair value through profit or loss - current (Notes 7 and 32) Notes payable and trade payables (Notes 20 and 32) Payables to related parties (Notes 32 and 33) Other payables (Notes 21 and 32) Other payables to related parties (Notes 32 and 33) Payables for purchase of equipment (Note 32) Current tax liabilities (Note 27) Provisions - current (Note 22) Current portion of long-term borrowings (Notes 19 and 32) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 19 and 32) Net defined benefit liabilities (Notes 4 and 23) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT (Note 24) Ordinary shares Capital surplus Retained earnings Accumulated deficit Other equity Treasury shares Equity attributable to shareholders of the parent NON-CONTROLLING INTERESTS (Note 24) Total equity TOTAL		March 31, 2015 (Reviewed) Amount % $ 6,346,342 15 - - 2,727,288 6 276,759 1 116,694 - 9,865,236 23 699,878 2 20,032,197 47 1,480,693 4 113,021 - 32,371 - 19,892,583 46 206,756 1 912,099 2 185,553 - 125,504 - 22,948,580 53 $ 42,980,777 100 $ 1,913,404 5 - - 1,817,216 4 56,618 - 1,111,062 3 5,550 - 235,743 1 184,672 - 154,506 - 12,197,644 28 67,344 - 17,743,759 41 1,607,453 4 1,115,361 3 4,736 - 2,727,550 7 20,471,309 48 35,587,740 83 612,738 1 (14,167,467) (33) 624,206 1 (159,061) - 22,498,156 52 11,312 - 22,509,468 52 $ 42,980,777 100	December 31, 2014 (Audited after Restated) Amount % $ 7,636,201 17 95 - 2,699,155 6 483,179 1 161,304 1 9,301,643 21 578,319 1 20,859,896 47 1,243,142 3 113,399 - 38,599 - 21,128,358 47 238,343 1 912,178 2 182,657 - 126,003 - 23,982,679 53 $ 44,842,575 100 $ 2,134,039 5 7,113 - 1,996,003 5 63,185 - 1,682,698 4 - - 475,285 1 302,416 1 150,617 - 12,143,430 27 74,315 - 19,029,101 43 2,073,506 5 1,116,508 2 17,930 - 3,207,944 7 22,237,045 50 35,587,740 79 241,652 - (13,812,749) (31) 734,847 2 (159,061) - 22,592,429 50 13,101 - 22,605,530 50 $ 44,842,575 100	March 31, 2014 (Reviewed after Restated) Amount % $ 9,626,309 19 - - 2,981,272 6 347,881 1 132,902 - 9,506,181 18 676,271 1 23,270,816 45 1,185,287 2 115,606 - - - 25,321,209 49 349,982 1 910,164 2 185,886 1 115,606 - 28,183,740 55 $ 51,454,556 100 $ 80,382 - 2,924 - 1,737,109 3 68,515 - 1,896,411 4 8,680 - 505,698 1 344,393 1 140,110 - 7,137,657 14 67,178 - 11,989,057 23 10,903,716 21 952,869 2 3,253 - 11,859,838 23 23,848,895 46 35,214,730 69 344,166 1 (8,554,913) (17) 722,741 1 (159,061) - 27,567,663 54 37,998 - 27,605,661 54 $ 51,454,556 100	January 1, 2014 (Audited after Restated)	January 1, 2014 (Audited after Restated)
						Amount % $ 11,978,574 22 1,358 - 2,822,661 5 458,302 1 147,208 - 8,795,383 17 525,959 1 24,729,445 46 951,333 2 114,888 - - - 26,728,291 49 316,358 1 910,037 2 185,715 - 93,934 - 29,300,556 54 $ 54,030,001 100 $ 566,577 1 - - 2,004,696 4 90,570 - 2,226,702 4 14 - 432,797 1 355,427 1 143,399 - 7,648,233 14 71,689 - 13,540,104 25 10,935,406 20 927,210 2 3,087 - 11,865,703 22 25,405,807 47 35,214,730 65 344,166 1 (7,280,502) (14) 457,785 1 (159,061) - 28,577,118 53 47,076 - 28,624,194 53 $ 54,030,001 100

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

(With Deloitte & Touche review report dated April 27, 2015)

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MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Loss Per Share) (Reviewed, Not Audited)

NET OPERATING REVENUE (Notes 25 and 33) OPERATING COSTS (Notes 11, 23, 26 and 33) GROSS PROFIT UNREALIZED GAIN TRANSACTIONS WITH ASSOICATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 23, 26 and 33) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Other income (Note 26) Other gains and losses (Note 26) Finance costs (Note 26) Share of loss of associates (Note 13) Total non-operating income and expenses LOSS BEFORE INCOME TAX INCOME TAX EXPENSE (Note 27) NET LOSS FOR THE PERIOD		**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 (Reviewed) Amount % $ 4,706,274 100 4,085,771 87 620,503 13 (41) - 620,462 13 245,943 5 367,496 8 1,254,468 26 1,867,907 39 (1,247,445) (26) 975,014 21 (10,040) - (65,062) (2) (6,163) - 893,749 19 (353,696) (7) 2,780 - (356,476) (7)	2014 (Reviewed after Restated)
				Amount % $ 4,790,063 100 3,929,251 82 860,812 18 - - 860,812 18 265,343 6 384,576 8 1,480,081 31 2,130,000 45 (1,269,188) (27) 22,154 - 34,660 1 (70,050) (1) - - (13,236) - (1,282,424) (27) 1,112 - (1,283,536) (27) (Continued)

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MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Loss Per Share) (Reviewed, Not Audited)

OTHER COMPREHENSIVE INCOME Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations (Note 24) Unrealized gain on available-for-sale financial assets (Note 24) Share of the other comprehensive loss of associates accounted for using the equity method (Note 24) Other comprehensive income for the period, net of income tax TOTAL COMPREHENSIVE LOSS FOR THE PERIOD NET LOSS ATTRIBUTABLE TO: Shareholders of the parent Non-controlling interests TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO: Shareholders of the parent Non-controlling interests LOSS PER SHARE (Note 28) Basic Diluted		**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 (Reviewed) Amount % $ (30,353) (1) 238,265 5 (19) - 207,893 4 $ (148,583) (3) $ (354,718) (8) (1,758) - $ (356,476) (8) $ (146,762) (3) (1,821) - $ (148,583) (3) $(0.10) $(0.10)	2014 (Reviewed after Restated)
				Amount % $ 35,109 1 229,866 5 - - 264,975 6 $ (1,018,561) (21) $ (1,274,411) (27) (9,125) - $ (1,283,536) (27) $ (1,009,455) (21) (9,106) - $ (1,018,561) (21) $(0.36) $(0.36)

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

(With Deloitte & Touche review report dated April 27, 2015)

(Concluded)

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MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

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

(Reviewed, Note Audited)

BALANCE AT JANUARY 1, 2014 Effect of retrospective application and retrospective restatement Balance at January 1, 2014 as restated Net loss for the three months ended March 31, 2014 Other comprehensive income for the three months ended March 31, 2014, net of income tax Total comprehensive income (loss) for the three months ended March 31, 2014 Issue of ordinary shares under employee share option plans Increase in non-controlling interests BALANCE AT MARCH 31, 2014 BALANCE AT JANUARY 1, 2015 Effect of retrospective application and retrospective restatement Balance at January 1, 2015 as restated Net loss for the three months ended March 31, 2015 Other comprehensive income (loss) for the three months ended March 31, 2015, net of income tax Total comprehensive income (loss) for the three months ended March 31, 2015 Issue of restricted stock to employees Compensation cost of restricted stock for employees Increase in non-controlling interests BALANCE AT MARCH 31, 2015					Equity Attributable to Shareholders of the Parent	Equity Attributable to Shareholders of the Parent	Equity Attributable to Shareholders of the Parent			Non-controlling Total Interests $ 28,678,777 $ 47,021 (101,659) 55 28,577,118 47,076 (1,274,411) (9,125) 264,956 19 (1,009,455) (9,106) - 22 - 6 $ 27,567,663 $ 37,998 $ 22,765,127 $ 13,101 (172,698) - 22,592,429 13,101 (354,718) (1,758) 207,956 (63) (146,762) (1,821) - - 52,460 - 29 32 $ 22,498,156 $ 11,312	Total Equity $ 28,725,798 (101,604) 28,624,194 (1,283,536) 264,975 (1,018,561) 22 6 $ 27,605,661 $ 22,778,228 (172,698) 22,605,530 (356,476) 207,893 (148,583) - 52,460 61 $ 22,509,468
		Capital Stock Share (Thousands) Share Capital 3,521,473 $ 35,214,730 - - 3,521,473 35,214,730 - - - - - - - - - - 3,521,473 $ 35,214,730 3,558,774 $ 35,587,740 - - 3,558,774 35,587,740 - - - - - - - - - - - - 3,558,774 $ 35,587,740	Capital Surplus $ 344,166 - 344,166 - - - - - $ 344,166 $ 241,652 - 241,652 - - - 371,057 - 29 $ 612,738		Retained Earnings Accumulated Deficit $ (7,178,843) (101,659) (7,280,502) (1,274,411) - (1,274,411) - - $ (8,554,913) $ (13,640,051) (172,698) (13,812,749) (354,718) - (354,718) - - - $ (14,167,467)		Other Equity	Employee Unearned Compensation $ - - - - - - - - $ - $ (209,813) - (209,813) - - - (371,057) 52,460 - $ (528,410)	Treasury Shares $ (159,061) - (159,061) - - - - - $ (159,061) $ (159,061) - (159,061) - - - - - - $ (159,061)
							Exchange Unrealized Differences on Gain from Translating Available-for-sale Foreign Financial Operations Assets $ (49,141) $ 506,926 - - (49,141) 506,926 - - 35,090 229,866 35,090 229,866 - - - - $ (14,051) $ 736,792 $ 27,223 $ 917,437 - - 27,223 917,437 - - (30,309) 238,265 (30,309) 238,265 - - - - - - $ (3,086) $ 1,155,702
		Share (Thousands) 3,521,473 - 3,521,473 - - - - - 3,521,473 3,558,774 - 3,558,774 - - - - - - 3,558,774

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

(With Deloitte & Touche review report dated April 27, 2015)

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MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before income tax Adjustments for: Depreciation expense Amortization expense Finance costs Compensation cost of employee share options Compensation cost of employee restricted shares Share of loss of associates Interest income Dividend income (Gain) loss on disposal of property, plant and equipment Unrealized gain on the transactions with associates Gain on foreign currency exchange Changes in operating assets and liabilities Decrease in financial assets held for trading Increase in notes receivable and trade receivables Decrease in receivables from related parties Decrease in other receivables Increase in inventories Increase in other current assets (Decrease) increase in financial liabilities held for trading Decrease in notes payable and trade payables Decrease in payables to related parties Decrease in other payables Increase in other payables to related parties Increase (decrease) in provisions Decrease in other current liabilities (Decrease) increase in net defined benefit liabilities Cash generated from (used in) operations Interest received Dividend received Interest paid Income tax paid Net cash used in operating activities		**Three Months Ended March 31 **
		2015 (Reviewed) 2014 (Reviewed after Restated) $ (353,696) $ (1,282,424) 1,441,062 1,827,086 49,928 59,327 65,062 70,050 - 22 52,460 - 6,163 - (10,267) (18,395) (3,815) - (117) 2,196 41 - (5,449) (21,773) 95 1,358 (40,533) (98,189) 215,683 132,151 42,670 15,050 (563,593) (710,798) (121,406) (149,865) (7,113) 2,924 (173,673) (284,931) (3,873) (21,337) (568,152) (339,439) 5,550 8,666 3,889 (3,289) (6,701) (4,629) (1,147) 25,659 23,068 (790,580) 11,311 17,652 3,815 - (66,987) (71,666) (120,445) (12,273) (149,238) (856,867) (Continued)

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MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Payments for intangible assets Decrease (increase) in other financial assets Increase in other non-current assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from guarantee deposits received Refund of guarantee deposits received (Decrease) increase in other non-current liabilities Increase in non-controlling interests Cash used in financing activities EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		**Three Months Ended March 31 **
		2015 (Reviewed) 2014 (Reviewed after Restated) $ (452,767) $ (339,141) 120 13 (16,006) (25) 15,724 289 (18,635) (92,864) 439 (234) (2,019) (21,454) (473,144) (453,416) 2,164,090 - (2,393,320) (522,312) 1,251,900 122,248 (1,662,005) (664,514) 36 - (13,214) - (17) 166 61 6 (652,469) (1,064,406) (15,008) 22,424 (1,289,859) (2,352,265) 7,636,201 11,978,574 $ 6,346,342 $ 9,626,309

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche review report dated April 27, 2015) (Concluded)

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MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) (Reviewed, Not Audited)

1. GENERAL INFORMATION

Macronix International Co., Ltd. (the “Company”) was incorporated in the Republic of China (“ROC”) on December 9, 1989 and commenced business in December 1989. The Company operates principally as a designer, manufacturer and supplier of integrated circuits and memory chips. The Company also performs design, research and development, consultation and trade of relevant products.

The Company’s shares have been listed on the Taiwan Stock Exchange (TSE) since March 15, 1995. The Company listed a portion of its shares on the NASDAQ Stock Market in the form of American Depositary Shares (ADSs) in May 1996 but delisted on October 29, 2007.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Board of Directors and authorized for issue on April 27, 2015.

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

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

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

Except for the following, whenever applied, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 2013 IFRSs version 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.

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• 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/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than in the current standards.

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

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

• 4) IFRS 13 “Fair Value Measurement”

IFRS 13 establishes a single source of guidance for fair value measurements. It defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The disclosure requirements in IFRS 13 are more extensive than those required by the 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. Refer to Note 32 for related disclosures.

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

6) Revision to IAS 19 “Employee Benefits”

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

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Furthermore, 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.

In addition, revised IAS 19 changes the definition of short-term employee benefits. The revised definition is “employee benefits (other than termination benefits) that are expected to be settled wholly within twelve months after the end of the annual reporting period in which the employees render the related service”. The Group’s unused annual leave, which can be carried forward through 36 months after the end of the annual period in which the employee renders service and which is currently classified as short-term employee benefits, is classified as other long-term employee benefits under revised IAS 19. Related defined benefit obligation of such other long-term benefit is calculated using the Projected Unit Credit Method. However, this change does not affect unused annual leave to be presented as a current liability in the consolidated balance sheet.

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

The impact on the current period is set out below:

Impact on Assets, Liabilities and Equity Decrease in net defined benefit liabilities Decrease in accumulated deficit Impact on Total Comprehensive Income Decrease in operating cost Decrease in operating expense Decrease in net loss for the period The impact on the prior reporting periods is set out below: Impact on Assets, Liabilities and Equity As Originally Stated December 31, 2014 Accrued pension liabilities $ 943,810 Accumulated deficit $ (13,640,051)

March 31, 2015 $ 1,420 $ 1,420 For the Three Months Ended March 31, 2015 $ 806 614 $ 1,420 Adjustments Arising from Initial Application Restated $ 172,698 $ 1,116,508 $ (172,698) $ (13,812,749) (Continued)

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Impact on Assets, Liabilities and Equity March 31, 2014 Accrued pension liabilities Accumulated deficit Non-controlling interests Total effect on equity January 1, 2014 Accrued pension liabilities Accumulated deficit Non-controlling interests Total effect on equity Impact on Total Comprehensive Income For the three months ended March 31, 2014 Operating cost Operating expense Total effect on net loss for the period Total effect on total comprehensive income for the period Impact on net loss attributable to: Shareholders of the parent Non-controlling interests Impact on total comprehensive loss attributable to: Shareholders of the parent Non-controlling interests	As Originally Stated $ 853,114 $ (8,455,103) 37,943 $ (8,417,160) $ 825,606 $ (7,178,843) 47,021 $ (7,131,822) As Originally Stated $ 3,930,307 $ 2,130,793 $ (1,285,385) $ (1,020,410) $ (1,276,260) (9,125) $ (1,285,385) $ (1,011,304) (9,106) $ (1,020,410)	Adjustments Arising from Initial Application $ 99,755 $ (99,810) 55 $ (99,755) $ 101,604 $ (101,659) 55 $ (101,604) Adjustments Arising from Initial Application $ (1,056) $ (793) $ 1,849 $ 1,849 $ 1,849 - $ 1,849 $ 1,849 - $ 1,849	Restated $ 952,869 $ (8,554,913) 37,998 $ (8,516,915) $ 927,210 $ (7,280,502) 47,406 $ (7,233,426) (Concluded) Restated $ 3,929,251 $ 2,130,000 $ (1,283,536) $ (1,018,561) $ (1,274,411) (9,125) $ (1,283,536) $ (1,009,455) (9,106) $ (1,018,561)

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• 7) 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. Refer to Note 32 for related disclosure.

• 8) Amendments to IAS 32 “Offsetting Financial Assets and Financial Liabilities”

The amendments to IAS 32 clarify the requirements relating to the offset of financial assets and financial liabilities. Specifically, the amendments clarify the meaning of “currently has a legally enforceable right of set-off” and “simultaneous realization and settlement”.

• 9) Annual Improvements to IFRSs: 2009-2011 Cycle

Several standards including IFRS 1 “First-time Adoption of International Financial Reporting Standards”, IAS 1 “Presentation of Financial Statements”, IAS 16 “Property, Plant and Equipment”, IAS 32 “Financial Instruments: Presentation” and IAS 34 “Interim Financial Reporting” were amended in this annual improvement.

The amendments to IAS 1 clarify that an entity is required to present a balance sheet as at the beginning of the preceding period when a) it applies an accounting policy retrospectively, or makes a retrospective restatement or reclassifies items in its financial statements, and b) the retrospective application, restatement or reclassification has a material effect on the information in the balance sheet at the beginning of the preceding period. The amendments also clarify that related notes are not required to accompany the balance sheet at the beginning of the preceding period.

The amendments to IAS 16 clarify that spare parts, stand-by equipment and servicing equipment should be recognized in accordance with IAS 16 when they meet the definition of property, plant and equipment and otherwise as inventory.

The amendments to IAS 32 clarify that income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction should be accounted for in accordance with IAS 12 “Income Taxes”.

The amendments to IAS 34 clarify that a measure of total liabilities for a reportable segment would be disclosed in interim financial reporting when such amounts are regularly provided to the chief operating decision maker of the Group and there has been a material change from the amounts disclosed in the last annual financial statements for that reportable segment. Refer to Note 38.

The initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 2013 IFRSs version in 2015 has material effect on the consolidated balance sheet. In preparing the consolidated financial statements for the year ended December 31, 2015, the Group would present the consolidated balance sheet as of January 1, 2014 in accordance of the above amendments to IAS 1 and disclose related information in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”, but not required to make disclosures about the line items of the balance sheet as of January 1, 2014.

• 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.

• 13 -

New IFRSs Annual Improvements to IFRSs 2010-2012 Cycle Annual Improvements to IFRSs 2011-2013 Cycle Annual Improvements to IFRSs 2012-2014 Cycle IFRS 9 “Financial Instruments” Amendments to IFRS 9 and IFRS 7 “Mandatory Effective Date of IFRS 9 and Transition Disclosures” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” Amendments to IFRS 10, IFRS 12 and IAS 28“'Investment Entities: Applying the Consolidation Exception” Amendment to IFRS 11 “Accounting for Acquisitions of Interests in Joint Operations” IFRS 14 “Regulatory Deferral Accounts” IFRS 15 “Revenue from Contracts with Customers” Amendment to IAS 1 “Disclosure Initiative” Amendments to IAS 16 and IAS 38 “Clarification of Acceptable Methods of Depreciation and Amortization” Amendments to IAS 16 and IAS 41 “Agriculture: Bearer Plants” Amendment to IAS 19 “Defined Benefit Plans: Employee Contributions” Amendment to IAS 36 “Impairment of Assets: Recoverable Amount Disclosures for Non-financial Assets” Amendment to IAS 39 “Novation of Derivatives and Continuation of Hedge Accounting” IFRIC 21 “Levies”

Effective Date Announced by IASB (Note 1)

July 1, 2014 (Note 2) July 1, 2014 January 1, 2016 (Note 4) January 1, 2018 January 1, 2018 January 1, 2016 (Note 3) January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2017 January 1, 2016 January 1, 2016 January 1, 2016 July 1, 2014 January 1, 2014 January 1, 2014 January 1, 2014

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

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

• Note 3: 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.

• 14 -

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.

• 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.

• 15 -

3) IFRIC 21 “Levies”

IFRIC 21 provides guidance on when to recognize a liability for a levy imposed by a government. It addresses the accounting for a liability whose timing and amount is certain and the accounting for a provision whose timing or amount is not certain. The Group accrues related liability when the transaction or activity that triggers the payment of the levy occurs. Therefore, if the obligating event occurs over a period of time (such as generation of revenue over a period of time), the liability is recognized progressively. If an obligation to pay a levy is triggered upon reaching a minimum threshold (such as a minimum amount of revenue or sales generated), the liability is recognized when that minimum threshold is reached.

• 4) Annual Improvements to IFRSs: 2010-2012 Cycle

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

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

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

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

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

IAS 24 was amended to clarify that a management entity providing key management personnel services to the 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.

• 5) Annual Improvements to IFRSs: 2011-2013 Cycle

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

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

• 16 -

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

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

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

The entity should use appropriate depreciation and amortization method to reflect the pattern in which the future economic benefits of the property, plant and equipment and intangible asset are expected to be consumed by the entity.

The amended IAS 16 “Property, Plant and Equipment” requires that a depreciation method that is based on revenue that is generated by an activity that includes the use of an asset is not appropriate. The amended standard does not provide any exception from this requirement.

The amended IAS 38 “Intangible Assets” requires that there is a rebuttable presumption that an amortization method that is based on revenue that is generated by an activity that includes the use of an intangible asset is not appropriate. This presumption can be overcome only in the following limited circumstances:

• a) In which the intangible asset is expressed as a measure of revenue (for example, the contract that specifies the entity’s use of the intangible asset will expire upon achievement of a revenue threshold); or

• b) When it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated.

An entity should apply the aforementioned amendments prospectively for annual periods beginning on or after the effective date.

• 7) 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”.

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.

• 17 -

• 8) 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 assets that constitute a business (as defined in IFRS 3) to an associate, the gain or loss resulting from the transaction is recognized in full. Also, when an entity loses control of a subsidiary that contains a business but retains significant influence, the gain or loss resulting from the transaction is recognized in full.

Conversely, when an entity sells or contributes assets that do not constitute a business to an associate, the gain or loss resulting from the transaction is recognized only to the extent of the unrelated investors’ interest in the associate, i.e. the entity’s share of the gain or loss is eliminated. Also, when an entity loses control of a subsidiary that does not contain a business but retains significant influence in an associate, the gain or loss resulting from the transaction is recognized only to the extent of the unrelated investors’ interest in the associate, i.e. the entity’s share of the gain or loss is eliminated.

• 9) Annual Improvements to IFRSs: 2012-2014 Cycle

Several standards including IFRS 5 “Non-current assets held for sale and discontinued operations”, IFRS 7, IAS 19 and IAS 34 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.

IAS 19 was amended to clarify that the depth of the market for high quality corporate bonds used to estimate discount rate for post-employment benefits should be assessed by the market of the corporate bonds denominated in the same currency as the benefits to be paid, i.e. assessed at currency level (instead of country or regional level).

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.

10) 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.

• 18 -

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

The amendments clarified that when the Group (non-investment entity) applies the equity method to an associate or a joint venture that is an investment entity, the Group may retain the fair value measurements that the associate or joint venture used for its subsidiaries.

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 POLICY

• 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, or other regulations and IAS 34 “Interim Financial Reporting” as endorsed by the FSC. Disclosure information included in the consolidated financial statements is less than those required in a complete set of annual financial statements.

• b. Basis of consolidation

See Note 12 and Table 4 for the detailed information of subsidiaries (including the percentage of ownership and main business).

• c. Other important accounting policies

The accounting policies described in the consolidated financial statements were consistent with those applied in the consolidated financial statements for the year ended December 31, 2014, except for the following:

1) Employee benefits

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

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Group’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

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

• 19 -

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The same critical accounting judgments and key sources of estimation uncertainty of consolidated financial statements have been followed in these consolidated financial statements as were applied in the preparation of the consolidated financial statements for the year ended December 31, 2014.

6. CASH AND CASH EQUIVALENTS

		March 31,	March 31,	December 31,	December 31,	March 31,	March 31,
			2015		2014		2014
	Cash on hand	$	342	$	452	$	726
	Checking accounts and demand deposits		2,548,514		1,893,935		1,031,713
	Cash equivalent
	Time deposits		3,797,486		5,741,814		8,593,870
		$	6,346,342	$	7,636,201	$	9,626,309
	The market rate intervals of cash in bank at the end of the reporting period were as follows:
		March 31,		December 31,		March 31,
			2015		2014		2014
	Bank balance	0.001%-3.30%		0.001%-1.36%		0.001%-1.36%
	FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
		March 31,		December 31,		March 31,
			2015		2014		2014
	Financial assets at FVTPL
	Financial assets held for trading
	Derivative financial assets (not under hedge
	accounting)
	Foreign exchange forward contracts	$	-	$	95	$	-
	Financial liabilities at FVTPL
	Financial liabilities held for trading
	Derivative financial liabilities (not under hedge
	accounting)
	Foreign exchange forward contracts	$	-	$	7,113	$	2,924

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

• 20 -

At the end of the reporting period, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

			Contract Amount
Contract	Currency	Maturity Date	(In Thousands)
December 31, 2014
Sell	USD/NTD	2015.01	USD18,000/NTD562,947
March 31, 2014
Sell	USD/NTD	2014.04	USD18,000/NTD545,328

The Group entered into foreign exchange forward contracts during the three months ended March 31, 2015 and 2014 to manage exposures due to exchange rate fluctuations of foreign currency denominated assets and liabilities.

8. AVAILABLE-FOR-SALE FINANCIAL ASSETS

Non-current Domestic investments Listed shares Foreign investments Listed shares FINANCIAL ASSETS MEASURED AT COST Non-current Domestic unlisted common shares Overseas unlisted common shares Classified according to financial asset measurement categories Available-for-sale financial assets	March 31, 2015 December 31, 2014 $ 1,153,909 $ 982,975 326,784 260,167 $ 1,480,693 $ 1,243,142 March 31, 2015 December 31, 2014 $ 79,217 $ 79,217 33,804 34,182 $ 113,021 $ 113,399 $ 113,021 $ 113,399	March 31, 2014 $ 997,274 188,013 $ 1,185,287 March 31, 2014 $ 82,698 32,908 $ 115,606 $ 115,606

9. FINANCIAL ASSETS MEASURED AT COST

Management believed that the fair value of the above unlisted equity investments held by the Group cannot be reliably measured due to the significant range of reasonable fair value estimates, therefore, they were measured at cost less impairment at the end of the reporting period.

• 21 -

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

Notes receivable Operating Trade receivables Trade receivables Less: Allowance for impairment loss Other receivables Tax receivable Others	March 31, 2015 December 31, 2014 $ 243 $ 790 2,727,316 2,698,636 271 271 2,727,045 2,698,365 $ 2,727,288 $ 2,699,155 $ 103,944 $ 148,843 12,750 12,461 $ 116,694 $ 161,304	March 31, 2014 $ 602 2,982,646 1,976 2,980,670 $ 2,981,272 $ 118,221 14,681 $ 132,902

a. Trade Receivables

The average credit period for sales of goods was 60 days. In determining the recoverability of a trade receivable, the Group evaluates each customer’s credibility and financial position and considered any change in the credit quality of the trade receivable since the date credit was initially granted to the end of the reporting period.

Before accepting any new customer, the Group uses an internal credit scoring system to assess the potential customer’s credit quality and defines credit limits by customer.

Of the trade receivables balance (see aging analysis below) that were past due at the end of the reporting period, the Group had not recognized an allowance for impaired notes receivable and trade receivables, because there had not been a significant change in credit quality and the amounts were still considered recoverable.

The aging of receivables was as follows:

Less than 60 days 61-120 days Over 121 days	March 31, 2015 December 31, 2014 $ 2,726,397 $ 2,690,795 - 6,315 919 1,526 $ 2,727,316 $ 2,698,636	March 31, 2014 $ 2,778,366 21,259 183,021 $ 2,982,646

• 22 -

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

Past due but not impaired Less than 60 days 61-120 days Over 121days	March 31, 2015 December 31, 2014 $ 59,524 $ 54,113 - 6,315 648 1,255 $ 60,172 $ 61,683	March 31, 2014 $ 82,105 21,259 181,045 $ 284,409

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

As of March 31, 2015, the Group did not hold collateral for most of the receivables.

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

Balance at January 1, 2014 and March 31, 2014 Balance at January 1, 2015 and March 31, 2015	Individually Assessed for Impairment $ 1,976 $ 271	Assembly Assessed for Impairment $ - $ -	Total $ 1,976 $ 271

b. Notes Receivable and other receivables

No allowance for impairment loss of notes receivable and other receivables was recognized since the notes receivable and other receivables of the Group were not past due and the Group assessed that there was no uncertainty of recoverability.

11. INVENTORIES

Finished goods and merchandise Work in progress Raw materials	March 31, 2015 December 31, 2014 $ 1,205,666 $ 1,156,530 8,376,586 7,857,969 282,984 287,144 $ 9,865,236 $ 9,301,643	March 31, 2014 $ 1,087,058 8,053,970 365,153 $ 9,506,181

The cost of inventories recognized as cost of goods sold for the three months ended March 31, 2015 and 2014 included inventory write-downs of NT$148,154 thousand and NT$261,957 thousand, respectively.

• 23 -

12. SUBSIDIARIES

a. Subsidiary included in consolidated financial statements

As of March 31, 2015, the Company has direct and indirect majority ownership in the following subsidiaries: Run Hong Investment, Ltd. (“Run Hong”), Hui Ying Investment, Ltd. (“Hui Ying”), Mxtran Inc. (“Mxtran”), Infomax Communication Co., Ltd. (“INFOMAX”), Macronix America Inc. (“MXA”), Macronix (BVI) Co., Ltd. (“MXBVI”), Mxtran Holding (Samoa) Co., Ltd. (“Mxtran Samoa”), Mxtran (H.K.) Holding Co., Limited (“Mxtran HK”), Maxtran Technology Co., Ltd. (“Maxtran Beijing”), Infomax Holding Co., Ltd. (“Infomax Samoa”), Infomax Holding Company Limited (“Infomax HK”), Infomax Communication (Suzhou) Co., Ltd. (“Infomax SU”), New Trend Technology Inc. (“NTTI”), Macronix (Asia) Limited (“MX Asia”), Macronix Pte. Ltd. (“MPL”), Macronix Europe NV. (“MXE”), Macronix (Hong Kong) Co., Ltd. (“MXHK”) and Macronix Microelectronics (Suzhou) Co., Ltd. (“MXm”).

Investor Investee Main Business The Company Run Hong Investment company The Company Hui Ying Investment company The Company and Run Hong Magic Pixel Inc. (“MPI”) Fabless multimedia system on chip The Company and Run Hong Mxtran Combi-SIM IC and the related service The Company and Run Hong INFOMAX Baseband chip, analog baseband chip, and power management chip The Company, Run Hong and Hui Ying MoDioTek Co., Ltd. (“MoDioTek”) Wi-Fi video transmission IC and smart security systems The Company MXA Sales and marketing The Company MXBVI Investment company MPI Magic Pixel Inc. (“MPI Samoa) Investment company MPI Samoa Magic Pixel Holding Company Limited (“MPI HK”) Investment company MPI HK Magic Pixel (Shen Zhen) Co., Ltd. (“MPI SZ”) Sales and technical support of fabless multimedia system on chip Mxtran Mxtran Samoa Investment company Mxtran Samoa Mxtran HK Investment company Mxtran HK Maxtran Beijing Technical support of Combi-SIM IC INFOMAX Infomax Samoa Investment company Infomax Samoa Infomax HK Investment company Infomax HK Infomax SU Software, rendering and technical service MoDioTek Mosatek Co., Ltd. (“Mosatek Samoa”) Investment company Mosatek Samoa Mosatek (H.K) Company Limited (“Mosatek HK”) Investment company Mosatek HK Modiotek (Suzhou) Co., Ltd. (“Modiotek SU”) Wi-Fi video transmission IC, sales of smart security systems and technical support MXBVI NTTI IC design MXBVI MX Asia Investment company MXBVI MPL After-sales service MXBVI MXE After-sales service MXBVI MXHK Sales and marketing MXHK MXm Development of integrated circuit system and software

% of Ownership March 31, 2015 December 31, 2014 March 31, 2014 Remark 100.00 100.00 100.00 - 100.00 100.00 100.00 - - - 83.11 Note 2 94.15 94.15 94.15 - 99.02 99.02 99.02 - 23.39 23.39 84.16 Note 1 100.00 100.00 100.00 - 100.00 100.00 100.00 - Note 2 Note 2 100.00 - Note 2 Note 2 100.00 - Note 2 Note 2 100.00 - 100.00 100.00 100.00 - 100.00 100.00 100.00 - 100.00 100.00 100.00 - 100.00 100.00 100.00 - 100.00 100.00 100.00 - 100.00 100.00 100.00 - Note 1 Note 1 100.00 - Note 1 Note 1 100.00 - Note 1 Note 1 100.00 - 100.00 100.00 100.00 - 100.00 100.00 100.00 - 100.00 100.00 100.00 - 100.00 100.00 100.00 - 100.00 100.00 100.00 - 100.00 100.00 100.00 -

• Note 1: The Group did not participate in MoDioTek’s capital increase on April 23, 2014; thus, the Group’s equity interest in MoDioTek decreased to 23.39%. The Group also determined it lost control over MoDioTek and its subsidiaries and therefore did not include this investee in the consolidated financial statements from April 23, 2014.

• Note 2: On August 28, 2014, the Group entered into a sale agreement to dispose of MPI. On September 10, 2014, the disposal was completed. The Group also determined it lost control over MPI and its subsidiaries and therefore did not include this investee in the consolidated financial statements; MPI merged with MoDioTek in November, 2014, and MoDioTek was surviving company.

• 24 -

13. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

• a. Investments in associates

associates MoDioTek Name of Associate Main Business Principal Place of Business MoDioTek Wi-Fi video transmission IC and smart security systems Hsinchu City	March 31, 2015 December 31, 2014 $ 32,371 $ 38,599 % of Ownership
	March 31, 2015 December 31, 2014 23.39% 23.39%

The investments accounted for using equity method and the Group recognized share of income and other comprehensive income (loss) based on unreviewed financial statements.

14. PROPERTY, PLANT AND EQUIPMENT

Cost Freehold land Buildings Machinery equipment Research and development equipment Transportation equipment Leasehold improvements Miscellaneous equipment Advance payments and construction in progress Accumulated depreciation Freehold land Buildings Machinery equipment Research and development equipment Transportation equipment Leasehold improvements Miscellaneous equipment Carrying amounts at March 31, 2015			Three Months Ended March 31, 2015	Three Months Ended March 31, 2015	Three Months Ended March 31, 2015
		Balance, Beginning of Period $ 1,294,628 23,088,007 80,734,087 6,322,265 30,323 41,247 1,198,945 1,804,262 114,513,764 393,380 17,930,640 70,414,495 3,520,962 22,073 26,909 1,076,947 93,385,406 $ 21,128,358	Additions $ - - - 373 - - 646 212,206 $ 213,225 $ - 304,578 949,367 166,950 906 1,317 17,944 $ 1,441,062	Disposals $ - - 100,351 5,232 - 2,419 4,148 - $ 112,150 $ - - 100,350 5,232 - 2,419 4,146 $ 112,147	Effect of Foreign Currency Exchange Differences Reclassification Balance, End of Period $ (7,703 ) $ - $ 1,286,925 (3,785 ) 440,570 23,524,792 - 1,287,926 81,921,662 (551 ) (1,226,322 ) 5,090,533 (25 ) - 30,298 (553 ) 1,000 39,275 (2,855 ) 2,370 1,194,958 (37) (505,544) 1,510,887 $ (15,509) $ - 114,599,330 $ 4,350 $ - 389,030 559 - 18,234,659 - (596,967 ) 71,860,479 335 596,967 3,085,378 22 - 22,957 348 - 25,459 1,960 - 1,088,785 $ 7,574 $ - 94,706,747 $ 19,892,583

• 25 -

Cost Freehold land Buildings Machinery equipment Research and development equipment Transportation equipment Leasehold improvements Miscellaneous equipment Advance payments and construction in progress Accumulated depreciation Freehold land Buildings Machinery equipment Research and development equipment Transportation equipment Leasehold improvements Miscellaneous equipment Carrying amounts at March 31, 2014			Three Months Ended March 31, 2014	Three Months Ended March 31, 2014	Three Months Ended March 31, 2014
		Balance, Beginning of Period $ 1,254,023 22,684,751 78,439,414 6,229,051 30,816 45,496 1,201,836 3,289,120 113,174,507 370,449 16,721,347 65,465,651 2,780,190 19,831 26,528 1,062,220 86,446,216 $ 26,728,291	Additions $ - - - 289 - - 3,488 408,265 $ 412,042 $ - 300,402 1,359,778 142,560 1,003 1,356 21,987 $ 1,827,086	Disposals $ - 4,062 8,933 2,160 - 107 12,079 - $ 27,341 $ - 1,853 8,933 2,160 - 107 12,079 $ 25,132	Effect of Foreign Currency Exchange Differences Reclassification Balance, End of Period $ 14,636 $ - $ 1,268,659 3,183 62,359 22,746,231 - 896,253 79,326,734 437 21,577 6,249,194 21 1,200 32,037 830 - 46,219 1,810 16,129 1,211,184 22 (997,518) 2,699,889 $ 20,939 $ - 113,580,147 $ (8,265 ) $ - 378,714 (368 ) - 17,020,264 - 41,908 66,774,588 (215 ) (41,908 ) 2,962,713 (20 ) - 20,854 (542 ) - 28,319 (1,358) - 1,073,486 $ (10,768) $ - 88,258,938 $ 25,321,209

The carrying amount of the freehold land in the U.S.A. which is unutilized by the Group as of March 31, 2015, December 31, 2014 and March 31, 2014 all were US$9,579 thousand, respectively.

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

Buildings Main buildings 21-40 years Electronic equipment 11-20 years Facility equipment 6 years Landscape engineering 20 years Machinery equipment 4-6 years Research and development equipment 5-6 years Transportation equipment 5-6 years Leasehold improvements 3-16 years Miscellaneous equipment 2-16 years

Refer to note 34 for the carrying amount of property, plant and equipment that had been pledged by the Group to secure long-term bank loans granted to the Group.

• 26 -

15. INTANGIBLE ASSETS

Cost Software Licenses Mask Others Accumulated amortization Software Licenses Mask Others Carrying amounts at March 31, 2015 Cost Software Licenses Mask Others Accumulated amortization Software Licenses Mask Others Carrying amounts at March 31, 2014			Three Months Ended March 31, 2015	Three Months Ended March 31, 2015	Three Months Ended March 31, 2015
		Balance, Beginning of Period $ 643,272 58,913 - 18,459 720,644 455,190 16,629 - 10,482 482,301 $ 238,343	Additions Disposals Effect of Foreign Currency Exchange Differences Reclassification Balance, End of Period $ 12,588 $ 218,800 $ (632 ) $ - $ 436,428 2,859 - - - 61,772 2,535 - - - 2,535 653 153 (166) - 18,793 $ 18,365 $ 218,953 $ (798) $ - 519,528 $ 44,395 $ 218,800 $ 504 $ - 280,281 4,503 - - - 21,132 - - - - - 1,030 153 - - 11,359 $ 49,928 $ 218,953 $ 504 $ - 312,772 $ 206,756 Three Months Ended March 31, 2014
		Balance, Beginning of Period $ 579,412 38,151 8,028 11,545 637,136 289,649 26,780 1,857 2,492 320,778 $ 316,358	Additions $ 92,221 - - 643 $ 92,864 $ 53,335 2,802 1,952 1,238 $ 59,327	Disposals $ 2,477 5,866 - 360 $ 8,703 $ 2,477 5,866 - 360 $ 8,703	Effect of Foreign Currency Exchange Differences Reclassification Balance, End of Period $ 1,358 $ 156 $ 670,670 - - 32,285 - - 8,028 (16) - 11,812 $ 1,342 $ 156 722,795 $ (1,255 ) $ (156 ) 341,918 - - 23,716 - - 3,809 - - 3,370 $ (1,255) $ (156) 373,813 $ 349,982

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

Software	1-6	years
Licenses	1-3	years
Mask	1-3	years
Others	1-3	years

• 27 -

16. PREPAYMENTS FOR LEASE

Current asset (included in other current assets) Non-current asset (included in other non-current assets)	March 31, 2015 December 31, 2014 $ 577 $ 585 23,495 23,994 $ 24,072 $ 24,579	March 31, 2014 $ 561 23,395 $ 23,956

Prepaid lease payments included land use right are located in Mainland China. The Group has obtained the land use right certificates.

17. OTHER FINANCIAL ASSETS

Non-current Restricted time deposits (Note 34) Refundable deposits Long-term receivables OTHER ASSETS Current Prepayments Spare parts Offset against business tax payable Prepayments for lease Others Non-current Prepayments for lease Prepayments	March 31, 2015 December 31, 2014 $ 169,658 $ 165,799 13,075 13,088 2,820 3,770 $ 185,553 $ 182,657 March 31, 2015 December 31, 2014 $ 388,042 $ 197,475 281,385 350,070 29,874 29,530 577 585 - 659 $ 699,878 $ 578,319 $ 23,495 $ 23,994 102,009 102,009 $ 125,504 $ 126,003	March 31, 2014 $ 168,094 12,463 5,329 $ 185,886 March 31, 2014 $ 216,763 349,613 25,137 561 84,197 $ 676,271 $ 23,395 92,211 $ 115,606

18. OTHER ASSETS

• 28 -

19. BORROWINGS

a. Short-term borrowings

b.

March 31, 2015 December 31, 2014 March 31, 2014 Unsecured borrowings Letter of credit loan $ 113,404 $ 535,039 $ 80,382 Unsecured borrowings 1,800,000 1,599,000 - $ 1,913,404 $ 2,134,039 $ 80,382 Interest rate 1.17%-1.92% 1.09%-1.92% 0.85% Long-term borrowings March 31, 2015 December 31, 2014 March 31, 2014 Secured borrowings (Note 34) Bank loans $ 11,436,510 $ 9,822,258 $ 12,823,723 Unsecured borrowings Bank loans 2,376,667 4,405,000 5,231,667 13,813,177 14,227,258 18,055,390 Less: Current portion 12,197,644 12,143,430 7,137,657 Less: Syndicate loans arrangement fee 8,080 10,322 14,017 Long-term borrowings: Non-current $ 1,607,453 $ 2,073,506 $ 10,903,716 Interest rate 1.57%-2.52% 1.57%-2.52% 1.54%-2.15% Floating Rate Borrowings Repayment Terms And Maturity Date March 31, 2015 December 31, 2014 March 31, 2014 Secured syndicated loan denominated in NT$ Repayable semi-annually from December 2012 to December 2015. $ 7,855,000 $ 7,855,000 $ 10,997,000 Unsecured syndicated loan denominated in NT$ Pay off in December 2015. 1,500,000 1,500,000 1,500,000 Unsecured bank borrowing denominated in NT$ Pay off in September 2015. 1,000,000 - - Unsecured bank borrowing denominated in NT$ Repayable quarterly from December 2014 to March 2016. 810,000 855,000 - Secured bank borrowing denominated in NT$ Repayable quarterly from January 2015 to October 2018. 750,000 800,000 800,000 Secured bank borrowing denominated in NT$ Repayable monthly from January 2014 to December 2018. 607,982 646,799 762,008 Unsecured bank borrowing denominated in NT$ Repayable semi-annually from March 2013 to September 2014 and Repayable quarterly from December 2014 to September 2015. 400,000 600,000 1,000,000 Secured bank borrowing denominated in NT$ Repayable quarterly from January 2015 to July 2017. 290,000 320,000 - Secured bank borrowing denominated in NT$ Repayable quarterly from April 2016 to January 2020. 251,900 - - (Continued)

• 29 -

Floating Rate Borrowings Repayment Terms And Maturity Date Unsecured bank borrowing denominated in NT$ Repayable semi-annually from March 2015 to September 2017. Secured bank borrowing denominated in JPY Repayable quarterly from June 2015 to March 2019. Secured bank borrowing denominated in NT$ Repayable monthly from May 2003 to April 2016. Unsecured bank borrowing denominated in NT$ Pay off in September 2014. Unsecured bank borrowing denominated in NT$ Pay off in September 2014. Unsecured bank borrowing denominated in NT$ Pay off in September 2014. Unsecured bank borrowing denominated in NT$ Pay off in June 2014. Unsecured bank borrowing denominated in NT$ Pay off in April 2014. Unsecured bank borrowing denominated in NT$ Pay off in March 2015. Unsecured bank borrowing denominated in NT$ Pay off in March 2015. Less:Current portion Syndicated loan arrangement fee Total long-term borrowings

March 31, 2015 December 31, 2014 March 31, 2014 $ 166,667 $ 200,000 $ - 107,545 109,280 122,248 74,083 91,179 142,467 - - 240,000 - - 125,000 - - 66,667 - - 1,200,000 - - 900,000 - 1,200,000 - - 50,000 200,000 12,197,644 12,143,430 7,137,657 8,080 10,322 14,017 $ 1,607,453 $ 2,073,506 $ 10,903,716 (Continued)

The Group had provided notes used as refundable guarantees for borrowings that will be cancelled upon termination of the guarantee.

In addition, the Group’s interest bearing floating rate borrowing was reset every one to three months.

The loan agreement requires the maintenance of current ratio, debt ratio, and times interest earned ratio based on semi-annual and annual consolidated financial statements. For the year ended December 31, 2014, the Group had met the financial ratio requirements.

The details of assets pledged as collaterals for long-term loans are shown in Note 34.

20. NOTES PAYABLE AND TRADE PAYABLES

Notes payable Operating Trade payables Operating	March 31, 2015 December 31, 2014 $ 26 $ 30 1,817,190 1,995,973 $ 1,817,216 $ 1,996,003	March 31, 2014 $ 22 1,737,087 $ 1,737,109

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

• 30 -

21. OTHER PAYABLES

Payable for legal fees Payable for maintenance and repair Bonus Payable for rework fees Payable for royalties Others PROVISIONS Current Employee benefits (a) Customer returns and rebates (b) Balance at January 1, 2015 Additional provisions recognized Reversing un-usage balances/usage Effect of foreign currency exchange differences Balance at March 31, 2015	March 31, 2015 $ 264,139 143,018 135,774 40,601 18,116 509,414 $ 1,111,062 March 31, 2015 $ 69,556 84,950 $ 154,506 Employee Benefits $ 76,761 57,373 (64,464) (114) $ 69,556	December 31, 2014 $ 561,109 183,195 282,949 41,172 18,937 595,336 $ 1,682,698 December 31, 2014 $ 76,761 73,856 $ 150,617 Customer Returns and Rebates $ 73,856 77,911 (66,799) (18) $ 84,950	March 31, 2014 $ 30,555 194,413 146,573 506,837 395,980 622,053 $ 1,896,411 March 31, 2014 $ 65,795 74,315 $ 140,110 Total $ 150,617 135,284 (131,263) (132) $ 154,506

22. PROVISIONS

• a. The provision for employee benefits represents vested long service leave entitlements accrued.

• b. The provision of customer returns and rebates was based on historical experience, management’s judgments and other known reasons estimated product returns and rebates may occur in the year. The provision was recognized as a reduction of operating income in the years of the related goods sold.

23. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company, Mxtran and Infomax of the Group adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan. Based on the LPA, the Group makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

• 31 -

The employees of the Group’s subsidiary in China are members of a state-managed retirement benefit plan operated by the government of China. The subsidiary is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

b. Defined benefit plans

The defined benefit plan adopted by the Company in accordance with the Labor Standards Law is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company contribute 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 and are managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Group has no right to influence the investment policy and strategy.

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

	December 31,	December 31,
		2014
Present value of defined benefit obligation	$	1,576,706
Fair value of plan assets		(839,728)
Net defined benefit liability	$	736,978

Movements in net defined benefit liability were as follows:

Present Value Of Defined Benefit Obligation Fair Value of the Plan Assets Balance at January 1, 2014 $ 1,466,736 $ 797,238 Service cost Current service cost 6,450 - Net interest expense 32,944 - Recognized in profit or loss 39,394 - Remeasurement Return on plan assets - 10,137 Actuarial loss - experience adjustments 76,340 6,287 Recognized in other comprehensive income 76,340 16,424 Contributions from the employer - 31,830 Benefits paid (5,764) (5,764) Balance at December 31, 2014 $ 1,576,706 $ 839,728

Net Defined Benefit Liability $ 669,498 6,450 32,944 39,394 (10,137) 70,053 59,916 (31,830) - $ 736,978

• 32 -

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

Operating cost Selling and marketing expenses General administration expenses Research and development expenses	**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 $ 3,335 333 6,345 1,215 $ 11,228	2014 $ 4,074 375 29,507 1,875 $ 35,831

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

• 1) Investment risk: The plan assets are invested in domestic/ foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government/corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

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

	December 31,
	2014
Discount rate	2.25%
Expected rate of salary increase	3.00%
Expected return on plan assets increase	1.25%
The average duration of the defined benefit obligation	7 years

The Company maintains a separate executive pension plan and the net periodic pension costs were NT$5,349 thousand and NT$28,366 thousand for the three months ended March 31, 2015 and 2014, respectively.

• 33 -

24. EQUITY

a. Share capital

1) Ordinary shares

Numbers of shares authorized (in thousand) Share authorized Numbers of shares issued and fully paid (in thousand) Shares issued	March 31, 2015 6,550,000 $ 65,500,000 3,558,774 $ 35,587,740	December 31, 2014 6,550,000 $ 65,500,000 3,558,774 $ 35,587,740	March 31, 2014 6,550,000 $ 65,500,000 3,521,473 $ 35,214,730

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

A total of 864,704 thousand shares and 650,000 thousand shares of the Company’s authorized shares were reserved for the issuance of convertible bonds and employee share options.

2) Global depositary receipts

On August 28, 2014, the Company’s board of directors resolved to issue GDRs. The Company will issue from 480,000 thousand to 600,000 thousand ordinary shares. On September 30, 2014, the above transaction was approved under Rule No.1030037906 issued by the FSC. On March 16, 2015, the board of directors resolved to cancel the issuance of GDRs. On March 23, 2015, the above resolution was approved under Rule No.1040008949 issued by the FSC.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Arising from employee share options Arising from donations May be used to offset a deficit only (2) Arising from changes in percentage of ownership interest in subsidiaries May not be used for any purpose Arising from treasury share transactions Arising from employee restricted shares	March 31, 2015 December 31, 2014 $ 317,204 $ 317,204 37 37 $ 317,241 $ 317,241 $ 690 $ 661 $ 26,502 $ 26,502 268,305 (102,752) $ 294,807 $ (76,250)	March 31, 2014 $ 317,204 37 $ 317,241 $ 423 $ 26,502 - $ 26,502

• 34 -

• 1) Such capital surplus 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 share capital (limited to a certain percentage of the Company’s paid-in capital and once a year).

• 2) Such capital surplus arises from changes in capital surplus of subsidiaries accounted for by using equity method.

• c. Retained earnings and dividend policy

The Company’s Articles of Incorporation provide that any profit after annual closing should be used first to cover income tax and accumulated deficit and then make appropriation for legal reserve 10% of the remaining amount (until the amount of the legal reserve equals the amount of the Company’s paid-in capital) and special reserve in accordance with law. Appropriation for remuneration to directors and supervisors should be made at 2% of the remaining amount. Any remaining amount will be added to the undistributed earnings from previous years and distributed in the following manner: (a) shareholders’ dividends - 85%; (b) employees’ bonus - 15%. Employees’ bonus will be distributed in the same form as the distribution of dividends to shareholders on a proportionate basis.

The above bonuses including shareholders and employees’ bonus can retain as undistributed earnings, and distribute in future, as determined by the shareholders at Annual General Meeting.

Distributions, except for the remuneration to directors and supervisors, may be made in the form of cash dividend or stock dividend, as determined by the shareholders at an Annual General Meeting. Both the shareholders’ bonus and employees’ bonus take the form of cash dividend as the first choice. Nevertheless, it still depends on the Company’s financial, sales or operating condition. The Company’s Articles of Incorporation provide that no more than 50% of the current year’s total amount of distributable earnings can be distributed in the form of stock dividend.

Due to the net loss for the three months ended March 31, 2015 and 2014, there were no accrual for bonus to employees and remuneration to directors and supervisors.

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.

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

• 1) Exchange differences on translating foreign operations

Balance at January 1 Exchange differences arising on translation of foreign entities Balance at March 31	Three Months Ended March 31	Three Months Ended March 31	Three Months Ended March 31
		2015 $ 27,223 (30,309) $ (3,086)	2014 $ (49,141) 35,090 $ (14,051)

• 35 -

• 2) Unrealized gain on available-for-sale financial assets

Balance at January 1 Unrealized gain on available-for-sale financial assets Balance at March 31	Three Months Ended March 31	Three Months Ended March 31	Three Months Ended March 31
		2015 $ 917,437 238,265 $ 1,155,702	2014 $ 506,926 229,866 $ 736,792

• 3) Unearned employee benefit

In the meeting of shareholders on June 18, 2014, the shareholders approved a restricted share plan for employees. Refer to Note 29 for the information of restricted shares issued.

Balance at January 1 Issuance of shares Share-based payment expenses recognized Balance at March 31	Three Months Ended March 31	Three Months Ended March 31	Three Months Ended March 31
		2015 $ (209,813) (371,057) 52,460 $ (528,410)	2014 $ - - - $ -

• e. Non-controlling interests

Balance at January 1 Effect of retrospective application and retrospective restatement Attributable to non-controlling interests: Share of loss for the period Issue of employee share options by subsidiaries Exchange difference arising on translation of foreign entities Non-controlling interest relating to outstanding vested share options held by the employees of subsidiaries Balance at March 31	Three Months Ended March 31	Three Months Ended March 31	Three Months Ended March 31
		2015 $ 13,101 - (1,758) - (63) 32 $ 11,312	2014 $ 47,021 55 (9,125) 22 19 6 $ 37,998

• f. Treasury shares

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

		Number of
		Shares Held	Carrying
	Name of Subsidiary	(In Thousands)	Amount	Market Price
March 31,	2015
Hui Ying		3,899	$ 159,061	$	29,713
December	31, 2014
Hui Ying		3,899	159,061		27,023
					(Continued)

• 36 -

		Number of
		Shares Held	Carrying
	Name of Subsidiary	(In Thousands)	Amount	Market Price
March 31,	2014
Hui Ying		3,899	$ 159,061	$	24,605
					(Concluded)

The Company’s shares held by subsidiaries are regarded as treasury shares; shareholders’ rights are retained, except the rights to participate in any share issuance for cash and to vote.

25. REVENUE

Revenue from the sale of goods Royalty revenue and others	**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 $ 4,700,914 5,360 $ 4,706,274	2014 $ 4,784,820 5,243 $ 4,790,063

The analysis of the Group’s revenue and main products was disclosed in Note 38.

26. NET LOSS

Net loss was attributable to:

a. Other income

Intellectual property rights income Interest income Dividends Others	**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 $ 951,300 10,267 3,815 9,632 $ 975,014	2014 $ - 18,395 - 3,759 $ 22,154

b. Other gains and losses

Net foreign exchange (losses) gains Net losses arising on financial assets designated as at FVTPL Other losses	Three Months Ended March 31	Three Months Ended March 31	Three Months Ended March 31
		2015 $ (9,021) (571) (448) $ (10,040)	2014 $ 48,961 (9,160) (5,141) $ 34,660

• 37 -

c. Finance costs

Interest on loans Less: Amounts included in the cost of qualifying assets Information about capitalized interest was as follows: Capitalized interest Capitalization rate d. Depreciation and amortization Property, plant and equipment Intangible assets An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating costs Selling and marking expense General administration expense Research and development expense e. Employee benefits expense Post-employment benefits (Note 23) Defined contribution plans Defined benefit plans Share-based payments Equity-settled share-based payments Other employee benefits Total employee benefits expense	Three Months Ended March 31	Three Months Ended March 31	Three Months Ended March 31
	2015 2014 $ 68,148 $ 77,942 3,086 7,892 $ 65,062 $ 70,050 Three Months Ended March 31
	2015 2014 $ 3,086 $ 7,892 1.99% 1.72% **Three Months Ended March 31 **
	2015 2014 $ 1,441,062 $ 1,827,086 49,928 59,327 $ 1,490,990 $ 1,886,413 $ 1,242,565 $ 1,530,982 198,497 296,104 $ 1,441,062 $ 1,827,086 $ 32,909 $ 35,696 151 145 8,725 15,206 8,143 8,280 $ 49,928 $ 59,327 **Three Months Ended March 31 **
		2015 $ 62,604 11,228 73,832 52,460 1,373,228 $ 1,499,520	2014 $ 64,809 35,831 100,640 22 1,439,504 $ 1,540,166 (Continued)

• 38 -

An analysis of employee benefits expense by function Operating costs Operating expenses	**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 $ 729,138 770,382 $ 1,499,520	2014 $ 743,184 796,982 $ 1,540,166 (Concluded)

27. INCOME TAXES RELATING TO CONTINUING OPERATIONS

• a. Income tax recognized in profit or loss

The major components of tax expense were as follows:

Current tax In respect of the current year In respect of prior years Deferred tax In respect of the current year Income tax expense recognized in profit or loss Integrated income tax Accumulated deficit Unappropriated earnings generated before January 1, 1998 Unappropriated earnings generated on and after January 1, 1998 Balance of the imputation credit accounts	March 31, 2015 $ - (14,167,467) $ (14,167,467) $ 404,277		**Three Months Ended March 31 **	**Three Months Ended March 31 **
			2015 $ 2,700 1 79 $ 2,780 December 31, 2014 $ - (13,812,749) $ (13,812,749) $ 289,482	2014 $ 1,150 89 (127) $ 1,112 March 31, 2014 $ - (8,554,913) $ (8,554,913) $ 231,042

b. Integrated income tax

No tax creditable ratios were calculated for accumulated deficit as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively.

c. Income tax assessments

The Company’s tax returns through 2012 have been assessed by the tax authorities except 2010. The Company disagreed with the tax authorities’ assessment on its 2012 tax returns and had applied for re-examination. The Company was also not satisfied with the results of the review of the 2009 tax returns and had applied for appeal. Nevertheless, the Company has accured extra income tax base on the assessment by the tax authorities.

• 39 -

28. LOSS PER SHARE

LOSS PER SHARE
Basic and diluted loss per share	Unit: NT$ Per Share Three Months Ended March 31
		2015 $ (0.10)	2014 $ (0.36)

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

Net Loss for the Period

Loss for the period attributable to owners of the parent	**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 $ (354,718)	2014 $ (1,274,411)

Weighted average number of ordinary shares outstanding (in thousand shares):

Weighted average number of ordinary shares in computation of basic and diluted loss per share	**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 3,517,574	2014 3,517,574

As disclosed in Note 29 to the financial statements, in determining whether the share-based payments are potential ordinary shares. The aforementioned stock options were not included in the calculation of diluted loss per share because they were antidilutive for the three months ended March 31, 2015 and 2014.

29. SHARE-BASED PAYMENT ARRANGEMENTS

• a. Employee share option plan

Mxtran

Approved by the board of directors of Mxtran on April 2, 2007, May 4, 2007, November 16, 2007, December 21, 2007 and August 12, 2011, Mxtran was authorized to issue employee stock options for 1,409 thousand units, 74 thousand units, 17 thousand units, 1,564 thousand units and 2,344 thousand units, respectively. Each stock option may subscribe for one new share of common stock of Mxtran. The options are valid for six years and exercisable at certain percentages after the second anniversary from the grant date. For any subsequent changes in Mxtran’s capital surplus, the exercise price is adjusted accordingly.

Mxtran made capital deducition and increased its share capital by 12,000 thousand shares and 20,000 thousand shares on March 5, 2009 and March 9, 2009, respectively. Each stock option has subscribed for 0.4 common stock share and the exercise price was subject to adjustments for any change of capital structure.

• 40 -

Information on employee share options was as follows:

Balance at January 1 Options cancelled Balance at March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
	2015 Number of Options (In Thousands) Weighted- average Exercise Price (NT$) 1,309 $ 10.00 (30) - 1,279 10.00	2014
		Number of Options (In Thousands) Weighted- average Exercise Price (NT$) 1,732 $ 10.00 (105) - 1,627 10.00

As of March 31, 2015, information about Mxtran’s outstanding and exercisable options was as follows:

Options Issued on or After

	Options Issued on or After
Range of Exercise Price (NT$) $ 10.00	January 1, 2004 and Outstanding	Options Exercisable Number of Exercisable Options (Thousand) Exercise Price (NT$/Per Share) 1,279 $ 10.00
	Number of Outstanding Options (Thousand) Remaining Contractual Life (In Years) Exercise Price (NT$/Per Share) 1,279 2.36 $ 10.00

Options granted were priced using the Black-Scholes pricing model and the inputs to the model were as follows:

Grant-date share price	$	3.23
Exercise price		10.00
Expected volatility		44.82%
Expected life (years)	4.25 years
Expected dividend yield		-
Risk-free interest rate		1.11%

For the three months ended March 31, 2015 and 2014, the compensation cost recognized was NT$0 and NT$22 thousand, respectively. As of March 31, 2015 and 2014, the estimated percentages of forfeiture due to termination of employment over the remaining vesting period was 2.3% and 6%, respectively.

INFOMAX

Approved by the board of directors of INFOMAX on April 2, 2007, November 16, 2007, December 21, 2007, April 2, 2010 and January 26, 2011, INFOMAX was authorized to issue employee stock options for 2,577 thousand units, 423 thousand units, 1,910 thousand units, 8,654 thousand units and 1,346 thousand units, respectively. Each stock option may subscribe for one new share of common stock of INFOMAX. The options which were authorized on April 2, 2007, November 16, 2007 and December 21, 2007 are valid for six years, six years and eight years, respectively. The options authorized on April 2, 2010 and January 26, 2011 are valid for the earlier of six years to the grant dates or two months to the date of application for share listing on the TSE or GreTai Securities Market. The options granted are exercisable at certain percentages after the second anniversary from the grant date. For any subsequent changes in INFOMAX’s capital surplus, the exercise price is adjusted accordingly.

INFOMAX made capital deducition and increased its share capital by 109,797 thousand shares and 100,000 thousand shares on December 1, 2012 and April 3, 2013, respectively. Each stock option has subscribed for 0.3 common stock share and the exercise price was subject to adjustments for any change of capital structure.

• 41 -

Information on employee share option was as follows:

Balance at January 1 Options cancelled Balance at March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
	2015 Number of Options (In Thousands) Weighted- average Exercise Price (NT$) 7,116 $ 31.87 (35) - 7,081 31.87	2014
		Number of Options (In Thousands) Weighted- average Exercise Price (NT$) 7,341 $ 31.87 - - 7,341 31.87

As of March 31, 2015, information about INFOMAX’s outstanding and exercisable options was as follows:

follows:
Range of Exercise Price (NT$) $ 31.87 31.87 31.87	Options Issued on or After January 1, 2004 and Outstanding	Options Exercisable Number of Exercisable Options (Thousand) Exercise Price (NT$/Per Share) 1,111 $ 31.87 5,421 31.87 549 31.87 7,081
	Number of Outstanding Options (Thousand) Remaining Contractual Life (In Years) Exercise Price (NT$/Per Share) 1,111 0.72 $ 31.87 5,421 1.00 31.87 549 1.82 31.87 7,081

Options granted were priced using the Black-Scholes pricing model and the inputs to the model were as follows:

Grant-date share price	$	5.17
Exercise price		10.00
Expected volatility		37.82%
Expected life (years)		4.25 years
Expected dividend yield		-
Risk-free interest rate		0.91%

For the three months ended March 31, 2015 and 2014, the compensation cost recognized both were NT$0, respectively. As of March 31, 2015 and 2014, the estimated percentages of forfeiture due to termination of employment over the remaining vesting period were both 3%.

b. Restricted Stock Plan for employees

In the shareholders’ meeting on June 18, 2014, the shareholders approved a restricted stock plan for employees of 2014, consisting of 123,251 thousand shares and issuance price of NT$ 0 per share, which has also been approved by the board of directors on July 24, 2014. On August 19, 2014, the FSC issued approval No. 1030031466 which approved this plan. The board of directors approved a restricted stock plan were as below:

Grant Date	Grant Shares	Fair	Value	Issued Date	Issued Shares
2014/08/28	38,365	$	7.76	2014/12/25	37,301
2015/03/16	62,213		6.82	Note	Note

Note: As of March 31, 2015, the date of issue was not yet set.

• 42 -

To meet the vesting conditions, an employee has to meet performance and other conditions over the vesting period, as follows:

• 1) Remain employed by the Company within one year after the grant date; and has a current year’s performance rating of “successful” (or higher) - 40% of restricted shares will be vested;

• 2) Remain employed by the Company within two years after the grant date; and has a current year’s performance rating of “successful” (or higher) - 30% of restricted shares will be vested;

• 3) Remain employed by the Company within three years after grant date; and has a current year’s performance rating of “successful” (or higher) - 30% of restricted shares will be vested.

In addition to the vesting conditions, the limitations are as follows:

• 1) Employees, except for inheritance, should not sell, transfer, pledge, donate or in any other way dispose of the shares.

• 2) The shares should be held in stock trust.

• 3) Except for the above two paragraphs, other rights of restricted stock plan for employees, including but not limited to, dividends, bonuses, the distribution rights of legal reserve and capital surplus, share options of cash capital and voting rights of shareholders, etc. are the same as the Group’s issued ordinary shares.

• 4) The dividends of restricted stock plan for employees are not restricted by existing conditions.

When employees do not reach the vesting conditions of restricted stock plan for employees during the year, the Company will recover and cancel the shares.

Information on restricted stock plan for employees was as follows:

Balance at January 1 Granted (Note) Balance at March 31	Number of Shares (In Thousands)	Number of Shares (In Thousands)	Number of Shares (In Thousands)
	Three Months Ended March 31
		2015 $ 37,301 62,213 $ 99,514	2014 $ - - $ -

Note: The given shares in this year have not issued yet.

For the three months ended of March 31, 2015, the compensation cost recognized was NT$52,460 thousand.

30. OPERATING LEASE ARRANGEMENTS

• a. The Group as lessee

Operating leases relate to leases of land, offices, employee dormitories and office equipment with lease terms between 1 and 50 years. The Group does not have a bargain purchase option to acquire the leased land, offices, employee dormitories and office equipment at the expiry of the lease periods.

• 43 -

The future minimum lease payments for non-cancellable operating lease commitments were as follows:

March 31, 2015 Not later than 1 year $ 53,777 Later than 1 year and not later than 5 years 135,068 Later than 5 years 211,557 $ 400,402 The lease payments recognized as expenses were as follows: Minimum lease payment	December 31, 2014 March 31, 2014 $ 62,176 $ 89,235 119,670 135,155 217,055 238,972 $ 398,901 $ 463,362 **Three Months Ended March 31 **	December 31, 2014 March 31, 2014 $ 62,176 $ 89,235 119,670 135,155 217,055 238,972 $ 398,901 $ 463,362 **Three Months Ended March 31 **	December 31, 2014 March 31, 2014 $ 62,176 $ 89,235 119,670 135,155 217,055 238,972 $ 398,901 $ 463,362 **Three Months Ended March 31 **
		2015 $ 27,318	2014 $ 25,254

• b. The Group as lessor

Operating leases relate to the building owned by the Group with lease terms between 1 to 5 years. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. The lessee does not have a bargain purchase option to acquire the property at the expiry of the lease period.

The future minimum lease revenue from non-cancellable operating leases was as follows:

	March 31,	March 31,	December 31,	December 31,	March 31,	March 31,
		2015		2014		2014
Not later than 1 year	$	4,403	$	4,433	$	4,104
Later than 1 year and not later than 5 years		3,729		4,509		7,462
	$	8,132	$	8,942	$	11,566

31. CAPITAL MANAGEMENT

The Group manages its capital to ensure that the Group will be able to operate under the premises of going concern and growth while maximizing the return to shareholders through the optimization of the debt and equity balance.

The Group’s strategy for managing the capital structure is to lay out the plan of product development and expand the market share considering the growth and the magnitude of industry and further developing an integral plan founded on the required capacity, capital outlay, and magnitude of assets in long-term development. Ultimately, considering the risk factors such as the fluctuation of the industry cycle and the life cycle of products, the Group determines the optimal capital structure by estimating the profitability of products, operating profit ratio, and cash flow based on the competitiveness of products. The management of the Group periodically examines the capital structure and contemplates on the potential costs and risks involved while exerting different financial tools. In general, the Group implements prudent strategy of risk management.

• 44 -

32. FINANCIAL INSTRUMENTS

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

The management considers that the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values or their fair values cannot be reliably measured.

• b. Fair value of financial instruments that are measured at fair value

• 1) Fair value hierarchy

March 31, 2015 Available-for-sale financial assets - non-current Securities listed in ROC Securities listed in other countries December 31, 2014 Financial assets at FVTPL Derivative financial instruments Available-for-sale financial assets - non-current Securities listed in ROC Securities listed in other countries Financial liabilities at FVTPL Derivative financial instruments March 31, 2014 Available-for-sale financial assets - non-current Securities listed in ROC Securities listed in other countries Financial liabilities at FVTPL Derivative financial instruments	Level 1 $ 1,153,909 326,784 $ 1,480,693 Level 1 $ - $ 982,975 260,167 $ 1,243,142 $ - Level 1 $ 997,274 188,013 $ 1,185,287 $ -	$	Level 2 $ - - $ - Level 2 95 - - - 7,113 Level 2 - - - 2,924	Level 3 $ - - $ - Level 3 $ - $ - - $ - $ - Level 3 $ - - $ - $ -	Total $ 1,153,909 326,784 $ 1,480,693 Total $ 95 $ 982,975 260,167 $ 1,243,142 $ 7,113 Total $ 997,274 188,013 $ 1,185,287 $ 2,924
		$
		$
		$
		$
		$
		$

• 45 -

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

• 2) Valuation techniques and inputs applied for the purpose of measuring Level 2 fair value measurement

Financial Instruments Valuation Techniques and Inputs Derivatives - foreign currency Future cash flows are estimated based on observable forward forward contracts exchange rates at the end of the reporting period and contract forward rates.

• c. Categories of financial instruments

		March 31,	December	31,	March 31,
		2015	2014		2014
Financial assets
Fair value through profit or loss (FVTPL)
Held for trading	$	-	$	95 $	-
Loans and receivables (i)		9,652,636	11,162,496		13,274,250
Available-for-sale financial assets (ii)		1,593,714	1,356,541		1,300,893
Financial liabilities
Fair value through profit or loss (FVTPL)
Held for trading		-	7,113		2,924
Amortized cost (iii)		18,944,690	20,568,146		22,338,168

• i) The balances included loans and receivables measured at amortized cost, which comprise cash and cash equivalents, notes receivable and trade receivables (including receivables from related parties), other receivables, and other financial assets (including current and non-current assets).

• ii) The balances included the carrying amount of available-for-sale financial assets measured at cost.

• iii) The balances included financial liabilities measured at amortized cost, which comprise short-term loans, notes payable and trade payables (including payables to related parties), other payables (including other payables to related parties), payable for purchase of equipment, and long-term loans (including current portion).

• d. Financial risk management objectives and policies

The Group manages its exposure to risks relating to the operations through market risk, credit risk, and liquidity risk with the objective to reduce the potentially adverse effects the market uncertainties may have on its financial performance.

The plans for material treasury activities are reviewed by management in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, the Group must comply with certain treasury procedures that provide guiding principles for overall financial risk management.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below), interest rates (see (b) below), and other price risk (see (c) below).

• 46 -

• i Foreign currency risk

The Group had foreign currency sales and purchases, which exposed to foreign currency risk. Exchange rate exposures were managed within approved policy parameters utilizing forward foreign exchange contracts.

Sensitivity analysis

The Group was mainly exposed to the USD and JPY.

Sensitivity analysis of rate is for the transactions in currencies other than the entity’s functional currency (foreign currencies) which are recognized at the rates of exchange prevailing at the dates of the transactions.

The following table details the Group’s sensitivity to a 3% and 10% increase in New Taiwan dollars (the functional currency) against the relevant foreign currencies, respectively. The sensitivity rates used are 3% and 10% when reporting foreign currency risk internally to key management personnel.

Pre-tax loss	Currency USD Impact Three Months Ended March 31 2015 2014 $ 45,306 $ 25,285	Currency JPY Impact
		Three Months Ended March 31
		2015 2014 $ 27,344 $ 2,741

• ii 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.

The carrying amounts of the Group's financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

		March 31,	December 31,	December 31,	March 31,
		2015		2014	2014
Fair value interest rate risk
Financial assets	$	3,579,384	$	4,868,205 $	8,713,078
Financial liabilities		1,800,000		1,599,000	80,382
Cash flow interest rate risk
Financial assets		2,936,274		2,933,344	1,080,599
Financial liabilities		13,918,501		14,751,975	18,041,373

Sensitive analysis

Sensitivity analysis of interest is calculated based on the financial liabilities exposed to cash flow interest rate risk at the end of each reporting period.

If interest rates had been 50 basis points higher/lower, the Group’s pre-tax loss for the three months ended March 31, 2015 and 2014 would increase/decrease by NT$17,398 thousand and NT$22,552 thousand, respectively.

• 47 -

iii 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.

Sensitive analysis

Sensitivity analysis of equity price is calculated based on the fair values of available-for-sale investments at the end of each reporting period.

If equity prices had been 10% higher/lower, equity for the three months ended March 31, 2015 and 2014 would have increased/decreased by NT$148,069 thousand and NT$118,529 thousand, respectively, as a result of the changes in fair value of available-for-sale investments.

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’s exposure to credit risk mainly arises from trade receivables - operating, bank deposits, and other financial instruments. Credit risk is managed separately for business related and financial related exposures.

Business related credit risk

In order to maintain the credit quality of trade receivables, the Group has established procedures to monitor and limit exposure to credit risk on trade receivables.

Credit evaluation is performed in the consideration of the relevant factors which may affects the customer’s paying ability such as financial condition, external and internal credit scoring, historical experience, and economic conditions. The Group holds some of the credit enhancements such as prepayments and collateral to mitigate its credit risks.

Trade receivables consisted of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of trade receivables and, where appropriate, credit guarantee insurance cover is purchased.

As of March 31, 2015, December 31, 2014 and March 31, 2014, the Group’s ten largest customers accounted for 41%, 52% and 48% of total trade receivables (including receivables from related parties), respectively. The Group believed the concentration of credit risk was relatively insignificant for the remaining trade receivables.

Financial credit risk

The Group’s exposure to financial credit risk which pertained to bank deposits and other financial instruments were evaluated and monitored by Corporate Treasury function. The Group only deals with creditworthy counterparties and banks so that no significant credit risk was identified.

• 3) Liquidity risk

The objective of liquidity risk management is to ensure the Group has sufficient liquidity to fund its business requirements of cash and cash equivalents and the unused of financing facilities associated with existing operations.

The Group relies on bank borrowings as a significant source of liquidity. As of March 31, 2015, December 31, 2014 and March 31, 2014, the Group had available unutilized overdraft and

• 48 -

short-term bank loan facilities of approximately NT$2,647,002 thousand, NT$3,922,524 thousand and NT$6,143,319 thousand, respectively.

Liquidity and interest rate risk tables for non-derivative financial liabilities

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The tables included both interest and principal cash flows.

Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To the extent that interest flows are floating rate, the undiscounted amount was derived from the expected borrowing interest rate at the end of the reporting period.

March 31, 2015

On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing $ 3,226,189 Variable interest rate liabilities 12,474,887 Fixed interest rate liabilities 1,805,129 $ 17,506,205 December 31, 2014 On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing $ 4,217,171 Variable interest rate liabilities 12,929,684 Fixed interest rate liabilities 1,603,482 $ 18,750,337 March 31, 2014 On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing $ 4,216,413 Variable interest rate liabilities 7,353,456 Fixed interest rate liabilities 80,722 $ 11,650,591	1-3 Years $ - 1,220,570 - $ 1,220,570 1-3 Years $ - 1,704,910 - $ 1,704,910 1-3 Years $ - 10,392,176 - $ 10,392,176	3-5 Years $ - 444,500 - $ 444,500 3-5 Years $ - 443,796 - $ 443,796 3-5 Years $ - 717,288 - $ 717,288	5+ Years $ - - - $ - 5+ Years $ - - - $ - 5+ Years $ - - - $ -	Total $ 3,226,189 14,139,957 1,805,129
				$ 19,171,275
				Total $ 4,217,171 15,078,390 1,603,482
				$ 20,899,043
				Total $ 4,216,413 18,462,920 80,722
				$ 22,760,055

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities was subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

• 49 -

Liquidity and interest risk rate tables for derivative financial liabilities

The following table detailed the Group’s liquidity analysis for its derivative financial instruments. The table was based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates as illustrated by the yield curves at the end of the reporting period.

December 31, 2014

	On Demand	On Demand
	or Less than				3	Months to
		1 Month	1-3	Months		1 Year	1-5	Years		5+ Years
Gross settled
Foreign exchange forward
contracts
Inflows	$	562,947	$	-	$	-	$	-	$		-
Outflows		569,965		-		-		-			-
March 31, 2014
	On Demand
	or Less than				3	Months to
		1 Month	1-3	Months		1 Year	1-5	Years		5+ Years
Gross settled
Foreign exchange forward
contracts
Inflows	$	545,328	$	-	$	-	$	-	$		-
Outflows		548,252		-		-		-			-

33. TRANSACTIONS WITH RELATED PARTIES

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

• a. Operating revenues

Listed Account Related Parties Categories Sales Key management personnel Others Associates	**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 $ 567,413 911 589 $ 568,913	2014 $ 834,392 399 - $ 834,791

Sales prices to related parties were not comparable to those with external customers as the Group was the sole provider for them. The sales terms to the related parties were between 30 to 60 days after monthly closing, similar to those with external customers.

• 50 -

• b. Trade receivables from related parties:

Listed Account Related Parties Categories Receivables from Key management personnel Related parties, Others net Associates The Group is its major management authority Other receivables Associates The Group is its major management authority	March 31, 2015 December 31, 2014 $ 276,120 $ 482,213 360 182 279 784 - - $ 276,759 $ 483,179 $ 833 $ 217 - 32 $ 833 $ 249	March 31, 2014 $ 347,651 175 - 55 $ 347,881 $ - - $ -

The outstanding trade receivables from related parties are unsecured. No expense was recognized for the three months ended March 31, 2015 and 2014 for allowance for impaired trade receivables with respect to the amounts owed by related parties.

• c. Trade payables to related parties:

Listed Account Related Parties Categories Payables to related parties The Group is its major management authority Associates Other Payables to related parties Others	March 31, 2015 December 31, 2014 $ 56,173 $ 62,957 445 228 $ 56,618 $ 63,185 $ 5,550 $ -	March 31, 2014 $ 68,515 - $ 68,515 $ 8,680

The outstanding trade payables from related parties are unsecured and will be settled in cash.

• d. Other transactions

Listed Account Related Parties Categories Manufacturing expense The Group is its major management authority Operating expense Others Key management personnel Associates The Group is its major management authority	Three Months Ended March 31	Three Months Ended March 31	Three Months Ended March 31
		2015 $ 52,265 $ 5,550 2,712 412 136 $ 8,810	2014 $ 74,067 $ 6,000 - - 52 $ 6,052 (Continued)

• 51 -

Listed Account Related Parties Categories Software and pattern Associates revenue The Group is its major management authority Rental revenue Associates	**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 $ 1,103 5 $ 1,108 $ 1,607	2014 $ - 52 $ 52 $ - (Concluded)

The subcontract processing charges and operating expense of related parties were comparable to those with other vendors. The payment term was 75 days after monthly closing.

The Group leases offices to associates (rentals are classified under other gains and losses). The amount of lease payment was based on the office space leased by each related party and was collected on a monthly basis.

Under certain contracts, the Group authorized the above related parties to use the Group’s pattern and software. The specifically negotiated terms were not comparable to those with external customers.

e. Compensation of key management personnel

The remuneration of key management personnel for the three months ended March 31, 2015 and 2014 was as follows:

Short-term benefits Post-employment benefits Share-based payments	**Three Months Ended March 31 **	**Three Months Ended March 31 **	**Three Months Ended March 31 **
		2015 $ 27,067 3,970 5,577 $ 36,614	2014 $ 31,986 28,500 2 $ 60,488

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

34. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings, the tariff of imported raw materials guarantees, natural gas agreement, land lease agreement or the deposit for hiring foreign workers:

Property, plant and equipment, net Pledge deposits (classified as other financial assets - non-current)	March 31, 2015 December 31, 2014 $ 13,512,845 $ 14,573,603 169,658 165,799 $ 13,682,503 $ 14,739,402	March 31, 2014 $ 16,700,986 168,094 $ 16,869,080

• 52 -

35. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of March 31, 2015 were as follows:

• a. As of March 31, 2015, December 31, 2014 and March 31, 2014, unused letters of credit amounted to approximately NT$169,020 thousand, NT$6,647 thousand and NT$8,836 thousand, respectively.

• b. Unrecognized commitments are as follows:

Acquisition of property, plant and equipment	March 31, 2015 December 31, 2014 $ 648,564 $ 639,834	March 31, 2014 $ 1,031,120

• c. The Company entered into the Phase-change memory technology agreement with IBM Company in January 2010, and the term of the agreement is from January 2010 to January 2013. Under the agreement, both parties have to share in the related expenditures of the technology development, and the Company had completed the payment in January, 2013. The Company entered into another Phase-change memory technology agreement with IBM Company in January 2013. The term of the agreement is from January 2013 to January 2016. As of March 31, 2015, the Company has paid US$6,300 thousand and unrecognized commitment is US$2,100 thousand.

• d. The Company entered into the Patents Cross-License Agreement with J Company in December 2009, and the term of the agreement is from December 2009 to December 2015. Under the agreement, the Company has completed the payment in April 2011.

36. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the group entities and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

March 31, 2015

Foreign Exchange Currencies Rate Financial assets Monetary items JPY $ 1,908,360 0.26 USD 95,560 31.30 Financial liabilities Monetary items JPY 856,656 0.26 USD 47,311 31.30	Carrying Amount $ 496,174 2,991,028 $ 3,487,202 $ 222,731 1,480,834 $ 1,703,565

• 53 -

December 31, 2014

Foreign Exchange Currencies Rate Financial assets Monetary items JPY $ 3,208,671 0.26 USD 85,878 31.65 Financial liabilities Monetary items JPY 1,894,756 0.26 USD 56,627 31.65 March 31, 2014 Foreign Exchange Currencies Rate Financial assets Monetary items JPY $ 1,687,699 0.30 USD 129,448 30.47 Financial liabilities Monetary items JPY 1,596,348 0.30 USD 83,787 30.47	Carrying Amount $ 834,254 2,718,039 $ 3,552,293 $ 492,637 1,792,245 $ 2,284,882 Carrying Amount $ 506,310 3,944,281 $ 4,450,591 $ 478,904 2,552,990 $ 3,031,894

The significant realized and unrealized foreign exchange gains (losses) were as follows:

For the Three Months Ended March 31

Foreign Currencies USD JPY Others	2015 Exchange Rate Net Foreign Exchange Gain (Loss) 31.57 $ (13,061) 0.26 6,230 (2,190) $ (9,021)	2014
		Exchange Rate Net Foreign Exchange Gain (Loss) 30.20 $ 25,090 0.29 23,687 184 $ 48,961

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37. SEPARATELY DISCLOSED ITEMS

Information on significant transactions and information on investees:

• a. Financing provided to others: None

• b. Endorsements/guarantees provided: None

• c. Marketable securities held (excluding investment in subsidiaries and associates): Table 1 (attached)

• d. Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital: None.

• e. Acquisition of individual real estate at costs of at least NT $300 million or 20% of the paid-in capital: None

• f. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None

• g. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 2 (attached)

• h. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 3 (attached)

• i. Trading in derivative instruments: Please see Note 7

• j. Intercompany relationships and significant intercompany transactions: Table 5 (attached)

• k. Information on investees: Table 4 (attached)

• l. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, shareholding ratio, investment gain or loss, carrying amount of the investment at the end of the period, repatriated investment gains, and limit on the amount of investment in the mainland China area: Table 6 (attached)

• 2) Any of the significant transactions with investee companies in mainland China, either directly or indirectly through a third area, and their prices, payment terms, and unrealized gains or losses: None

38. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Specifically, the Group's reportable segments were as follows:

Memory products and wafer fabrication IC design

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The Group’s reportable segments were separated according to the nature of its business activities. The accounting policies adopted by the reportable segments had no material difference from those disclosed in Note 4.

• a. Segment revenues and results

The following was an analysis of the Group’s net operating revenue and results by reportable segment.

b.	Segment Net Operating Revenue For The Three Months Ended March 31 2015 2014 Memory products and wafer fabrication $ 4,697,594 $ 4,766,144 IC design 8,680 23,919 Loss from operations $ 4,706,274 $ 4,790,063 Other income Other gains and losses Share of loss of associates Finance costs Loss before income tax Segment total assets and liabilities March 31, 2015 Segment assets Memory products and wafer fabrication $ 42,324,237 IC design 656,540 Consolidated total assets $ 42,980,777 Segment liabilities Memory products and wafer fabrication $ 20,418,919 IC design 52,390 Consolidated total liabilities $ 20,471,309	Segment Net Operating Revenue	Segment Net Operating Revenue	Segment Net Operating Revenue	Segment Loss From Operations And Net Loss For The Three Months Ended March 31 2015 2014 $ (1,156,980) $ (1,132,747) (90,465) (136,441) (1,247,445) (1,269,188) 975,014 22,154 (10,040) 34,660 (6,163) - (65,062) (70,050) $ (353,696) $ (1,282,424) December 31, 2014 March 31, 2014 $ 44,087,905 $ 50,259,534 754,670 1,195,022 $ 44,842,575 $ 51,454,556 $ 22,176,137 $ 23,772,663 60,908 76,232 $ 22,237,045 $ 23,848,895	Segment Loss From Operations And Net Loss	Segment Loss From Operations And Net Loss
			For The Three Months **Ended March 31 **			For The Three Months **Ended March 31 **
				2014 $ 4,766,144 23,919 $ 4,790,063 March 31, 2015 $ 42,324,237 656,540 $ 42,980,777 $ 20,418,919 52,390 $ 20,471,309			2014 $ (1,132,747) (136,441) (1,269,188) 22,154 34,660 - (70,050) $ (1,282,424) March 31, 2014 $ 50,259,534 1,195,022 $ 51,454,556 $ 23,772,663 76,232 $ 23,848,895

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TABLE 1

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

MARKETABLE SECURITIES HELD MARCH 31, 2015

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

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		March 31, 2015	March 31, 2015		Note
				Shares/Units (In Thousands)	Carrying Amount	Percentage of Ownership	Fair Value (Note 3)
The Company Macronix (BVI) Co., Ltd. Hui Ying Investment, Ltd.	Stock Ardentec Corporation United Industrial Gases Co., Ltd. Aetas Technology Inc. Zowie Technology Co., Ltd. Honbond Venture Capital Co., Ltd. Stock Chipbond Technology Corporation Key ASIC Bhd Tower Semiconductor Ltd. Global Strategic Investment Fund(Cayman) Global Strategic Investment Fund(Samoa) Stock Macronix International Co., Ltd. Raio Technology Co., Ltd.	The Company serves as member of its board of directors None None None The Company serves as member of its board of directors None None None None None The Company None	Available-for-sale financial assets - non-current Financial assets measured at cost - non-current Financial assets measured at cost - non-current Financial assets measured at cost - non-current Financial assets measured at cost - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Financial assets measured at cost - non-current Financial assets measured at cost - non-current Available-for-sale financial assets - non-current Financial assets measured at cost - non-current	35,243,366 6,671,877 145,850 20,426 4,624,425 1,088,319 26,924,500 584,893 490,000 1,739,783 3,899,382 876,968	$ 1,081,971 58,500 - - 20,717 71,938 15,929 310,855 - 33,804 29,713 -	7.40 3.06 0.29 0.18 15.00 0.17 3.34 0.77 2.52 4.90 0.11 10.57	$ 1,081,971 152,730 - 71 28,238 71,938 15,929 310,855 12,656 54,731 29,713 21,456	Note 1 Note 2 - Note 2 Note 2 Note 1 Note 1 Note 1 Note 2 Note 2 Note 1 Note 2

Note 1: The market value was based on the closing price as of March 31, 2015.

Note 2: The calculation is based upon the most recent financial statements available to the Company.

Note 3: Active market is market value; and no market is net value, which calculated by closing rate.

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TABLE 2

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE THREE MONTHS ENDED MARCH 31, 2015

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

Buyer	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Term	Ending Balance	% to Total
The Company Macronix (Hong Kong) Co., Ltd. Macronix America Inc.	MegaChips Corporation Macronix (Hong Kong) Co., Ltd. Macronix America Inc. The Company The Company	Its subsidiary, Shun Ying Investment, is represented in MXIC’s board of directors Indirect subsidiary Subsidiary Indirect subsidiary Subsidiary	Sales Sales Sales Purchase Purchase	$ 567,413 669,512 149,388 US$ 21,245 US$ 4,737	12% 14% 3% 100% 100%	30 days after monthly closing 45 days after monthly closing Net 60 days 45 days after monthly closing Net 60 days	Note 33 Note 33 Note 33 No material difference No material difference	Note 33 Note 33 Note 33 No material difference No material difference	$ 276,120 304,418 61,057 US$ 9,727 US$ 1,951	9% 10% 2% 95% 100%	- - - - -

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TABLE 3

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL MARCH 31, 2015

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

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	**Action Taken **
The Company	MegaChips Corporation Macronix (Hong Kong) Co., Ltd.	Its subsidiary, Shun Ying Investment, is represented in MXIC’s board of directors Indirect subsidiary	$ 276,120 304,418	5.99 times 8.12 times	$ - -	- -	JPY 913,666 thousand US$ 5,986 thousand	$ - -

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TABLE 4

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

INFORMATION ON INVESTEES FOR THE THREE MONTHS ENDED MARCH 31, 2015 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance as of March 31, 2015	Balance as of March 31, 2015	Balance as of March 31, 2015	Net Income (Loss) of the Investee (Note 3)	Share of Profit (Loss)	Note
				March 31, 2015 (Note 1)	December 31, 2014 (Note 1)	Shares	Percentage of Ownership	Carrying Amount (Note 2)
The Company Macronix (BVI) Co., Ltd. Run Hong Investment, Ltd. Hui Ying Investment, Ltd. Infomax Communication Co., Ltd. Infomax Holding Co., Ltd. Mxtran Inc. Mxtran Holding (Samoa) Co., Ltd.	Macronix America Inc. Macronix (BVI) Co., Ltd. Hui Ying Investment, Ltd. Run Hong Investment, Ltd. Infomax Communication Co., Ltd. Mxtran Inc. MoDioTek Co., Ltd. New Trend Technology Inc. Macronix Europe NV. Macronix Pte Ltd. Macronix (Hong Kong) Co., Ltd. Macronix (Asia) Limited Infomax Communication Co., Ltd. Mxtran Inc. MoDioTek Co., Ltd. MoDioTek Co., Ltd. Infomax Holding Co., Ltd. Infomax Holding Company Limited Mxtran Holding (Samoa) Co., Ltd. Mxtran (H.K.) Holding Co., Limited	San Jose, California, U.S.A. Tortola, British Virgin Islands Taipei, Taiwan Taipei, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan San Jose, California, U.S.A. Belgium Singapore Hong Kong Cayman Island Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Samoa Hong Kong Samoa Hong Kong	Marketing Investment holding company Investment Investment Baseband chip, analog baseband chip, and power management chip Combi-SIM IC and the related service Wi-Fi video transmission IC and smart security systems IC design After-sale service After-sale service Marketing Investment holding company Baseband chip, analog baseband chip, and power management chip Combi-SIM IC and the related service Wi-Fi video transmission IC and smart security systems Wi-Fi video transmission IC and smart security systems Investment holding company Investment holding company Investment holding company Investment holding company	$ 2,640 7,348,057 500,000 984,432 1,502,711 607,379 59,944 850,637 2,106 3,291 378,427 26,325 27,423 34,271 4,241 4,241 273,869 97,521 27,809 23,880	$ 2,640 7,348,057 500,000 984,432 1,502,711 607,379 59,944 850,637 2,106 3,291 378,427 26,325 27,423 34,271 4,241 4,241 264,448 97,521 27,809 23,880	100,000 223,300,000 - - 150,271,240 60,627,800 5,994,371 25,850,000 999 174,000 89,700,000 800,000 2,742,506 3,393,200 403,245 403,245 8,870,000 23,352,500 920,000 6,152,000	100.00 100.00 100.00 100.00 97.25 89.16 20.61 100.00 100.00 100.00 100.00 100.00 1.77 4.99 1.39 1.39 100.00 100.00 100.00 100.00	$ 197,432 1,623,277 23,915 26,427 559,948 21,447 28,518 302,909 84,750 16,331 489,273 50,525 10,191 1,203 1,927 1,927 14,745 10,175 (631 ) (940 )	$ (18,669 ) (1,266 ) (321 ) (2,537 ) (71,324 ) (18,105 ) (26,203 ) (1 ) 1,654 226 (8,513 ) 955 (71,324 ) (18,105 ) (26,203 ) (26,203 ) (7,442 ) 2,573 (1,844 ) (1,844 )	$ (18,635 ) (1,266 ) (321 ) (2,537 ) (69,362 ) (16,143 ) (5,430 ) Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4

Note 1: The foreign currency amount was converted into New Taiwan dollars at the historical exchange rate.

Note 2: The foreign currency amount was based on unreviewed financial statements for the same reporting period; the amount was converted into New Taiwan dollars at the exchange rate on March 31, 2015.

Note 3: The foreign currency amount was based on unreviewed financial statements for the same reporting period; the amount was converted into New Taiwan dollars at the average exchange rate for the three months ended March 31, 2015.

Note 4: Under relevant regulations, no disclosure of investment gain (loss) is needed.

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TABLE 5

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE THREE MONTHS ENDED MARCH 31, 2015 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Counterparty	Relationship (Note 1)			Transaction Summary
			Account	Amount	Payment Terms (Note 4)	% to Total Revenues or Assets
MXIC	MXHK	2	Sales	$ 669,512	Note 2	14%
			Notes receivable and trade receivables	304,418		1%
	MXE	2	Operatingexpenses	25,895		1%
			Tradepayables	16,265		-
	MXA	1	Sales	149,388	Note 2	3%
			Operatingexpenses	30,885		1%
			Notes receivable and trade receivables	61,057		-
			Tradepayables	88,429		-
	Mxtran	1	Rental revenue	1,403	Note3	-
	MX Asia	2	Operatingexpenses	23,637		1%
			Tradepayables	12,738		-
	INFOMAX	1	Rental revenue	1,894	Note3	-

• Note 1: 1. Transaction was between the parent company and subsidiaries.

• Transaction was between the parent company and indirect subsidiaries.

Note 2: The sale price referred to the product price to end customer.

Note 3: The Company leased office to related parties and collected rental revenue according to the floor space per month.

Note 4: The transaction terms with related parties were 30 to 60 days after monthly closing and were similar to those with third parties.

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TABLE 6

MACRONIX INTERNATIONAL CO., LTD. AND SUBSIDIARY

INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE THREE MONTHS ENDED MARCH 31, 2015 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital (Note 3)	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2015 (Note 3)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2015 (Note 3)	Investment Flows	Investment Flows	Accumulated Outward Remittance for Investment from Taiwan as of March 31, 2015 (Note 3)	Net Income (Loss) of the Investee	% Ownership for Direct or Indirect Investment (Note 4)	Investment Gain (Loss) (Notes 5)	Carrying Amount as of March 31, 2015 (Notes 6)	Accumulated Inward Remittance of Investment Income as of March 31, 2015
							Outward	Inward
Macronix Microelectronics (Suzhou) Co., Ltd. Infomax Communication (Suzhou) Co., Ltd. Maxtran Technology Co., Ltd.	Development of integrated circuit system and software Software, rendering and technical service Technical support of Combi-SIM IC		$ 296,160 82,415 23,435	(Note 1) (Note 2) (Note 2)		$ 296,160 82,415 23,435	$ - - -	$ - - -	$ 296,160 82,415 23,435	$ 1,158 2,754 (1,844 )	100.00% 99.02% 94.15%	$ 1,158 2,727 (1,736 )	$ 350,552 8,738 (1,315 )	$ - - -
Accumulated Investment in Mainland China as of March 31, 2015		Investment Amount Authorized by the Investment Commission, MOEA				Upper Limit on Investment
$ 402,010 (Note 3)		$ 402,010 (Note 3)				$ 13,498,893

Note 1: The Company invested in a company located in Mainland China indirectly through the existing company in the third country.

Note 2: The Company invested in a company located in Mainland China indirectly through the investing company in the third country.

Note 3: The foreign currency amount was converted into New Taiwan dollars at the historical exchange rate.

Note 4: The percentage of ownership is based on the total holding percentage owned by the Company and its subsidiaries.

Note 5: The foreign currency amount was based on unreviewed financial statements for the same reporting period; the amount was converted into New Taiwan dollars at the average exchange rate for the three months ended March 31, 2015.

Note 6: The foreign currency amount was based on unreviewed financial statements for the same reporting period; the amount was converted into New Taiwan dollars at the exchange rate on March 31, 2015.

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