foxconn technology co., ltd. · shareholders’ meeting (the “agenda”) of foxconn technology...

FOXCONN TECHNOLOGY CO., LTD.

2015 Annual General Shareholders’ Meeting

Meeting Handbook

June 25, 2015

Stock Code 2354

THIS IS A TRANSLATION OF THE HANDBOOK FOR THE 2015 ANNUAL SHAREHOLDERS’ MEETING (THE “AGENDA”) OF FOXCONN TECHNOLOGY CO., LTD. (THE “COMPANY”). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE HANDBOOK SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

Table of Contents

Meeting Procedure ................................................................................................................... 1 Agenda ...................................................................................................................................... 2 Report Items ............................................................................................................................. 3

Report of the Company’s 2014 Business Operation and Financial Statements. .................... 3 Statutory Auditors’ reports and the audited financial statements for the year ended December 31, 2014. ..................................................................................................... 4 Report of the Company’s new indirect investments in Mainland China during 2014. ....................................................................................................................................... 5

Ratification and Discussion Items .......................................................................................... 6

Proposal 1: Ratification of the 2014 Business Report and Audited Financial Statements. ............................................................................................................................. 6 Proposal 2: Ratification of 2014 earnings distribution. ......................................................... 7 Proposal 3: Proposal to approve the issuance of new shares for capital increase by earnings re-capitalization. ................................................................................................. 9 Proposal 4: Discussion of amendments to the Company’s “Operational Procedures for Derivative Trading.” .................................................................................... 11 Proposal 5: Discussion of amendments to the Company’s “Articles of Incorporation.” ..................................................................................................................... 12 Proposal 6: Discussion of amendments to the Company’s “Regulations Governing the Election of Directors and Supervisors.” ....................................................... 13

Attachments ............................................................................................................................ 15

Attachment 1: 2014 Business Report ................................................................................... 15 Attachment 2: Audit Report by Supervisors ........................................................................ 20 Attachment 3: Financial Statements ..................................................................................... 22 Attachment 4: Operational Procedures for Derivative Trading Amendment Comparison Table ................................................................................................................ 31 Attachment 5: Articles of Incorporation Amendment Comparison Table ........................... 33 Attachment 6: Regulations Governing the Election of Directors and Supervisors Amendment Comparison Table ........................................................................................... 35

Appendices .............................................................................................................................. 37

Appendix 1: Shareholders’ Meeting Rules .......................................................................... 37 Appendix 2: Articles of Incorporation ................................................................................. 40 Appendix 3: Shareholdings of Directors and Supervisors .................................................. 45 Appendix 4: Impact of Stock Dividend Issuance on the Company’s Business Performance, Earnings per Share and Return on Shareholders’ Investment ....................... 46


2015 Annual Shareholders’ Meeting

Meeting Procedure

Time of Meeting: June 25, 2015 (Thursday) at 9:00 am

Location of Meeting: 3F, No.66-1,ChungShan Rd, TuCheng Industrial Park, TuCheng Dist., New Taipei City, Taiwan

I. Report the total number of shares represented at this AGM

II. Meeting Commencement Announced

III. Chairman’s Address

IV. Report Items

V. Ratification and Discussion Items

VI. Extraordinary Motions

VII. Meeting Adjournment

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2015 Annual Shareholders’ Meeting

Agenda

I. Chairman to announce the commencement of meeting.

II. Chairman’s report.

(1) To report business of 2014.

(2) Statutory Auditors’ review of 2014 audited financial statements.

(3) Status Report of the Company’s indirect investment in Mainland China.

III. Ratification and Discussion Items:

(1) Ratification of the 2014 Business Report and Audited Financial Statements.

(2) Ratification of the proposal for distribution of 2014 profits.

(3) Discussion to approve the issuance of new shares for capital increase by earnings re-capitalization.

(4) Discussion of amendments to the Company’s “Operational Procedures for Derivatives Trading.”

(5) Discussion of amendments to the Company’s “Articles of Incorporation.”

(6) Discussion of amendments to the Company’s “Regulations Governing the Election of Directors and Supervisors.”

IV. Extraordinary Motions

V. Adjournment

2

Report Items

Item One:

Report of the Company’s 2014 Business Operation and Financial Statements. Description:

1. Please refer to Attachment 1 for detailed Business Operation Reports (Pages 15-19).

2. Please refer to Attachment 3 for detailed financial statements (Pages 22-30).

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Item Two:

Statutory Auditors’ reports and the audited financial statements for the year ended December 31, 2014. Please review.

Description:

Please refer to Statutory Auditors’ Report and the audited financial statements (Attachment 2 and Attachment 3 (Pages 20-30).

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Item Three:

Report of the Company’s new indirect investment in Mainland China during 2014. Description:

The new 2014 investment in Mainland China made via overseas subsidiaries is as follows:

Approval Certificate # Company Name

Amount Approved (US$) 10300090420 FuZhun Precision Electronics (Hebi) Co., Ltd. 37,000,000

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Ratification and Discussion Items

Proposal 1: Ratification of the 2014 Business Report and Audited Financial Statements. Please ratify.

(Proposed by the Board of Directors)

Description:

1. The 2014 Business Report and Financial Statements of the Company have been approved by the Board, and have also been reviewed and audited by the Supervisors.

2. Please refer to Attachment 1 through Attachment 3 for the documents mentioned above (Pages 15-30).

Resolution:

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Proposal 2: Ratification of 2014 earnings distribution. Please Ratify.


Description:

1. The 2014 profit distribution program of the Company has been submitted by the Board, in accordance with Company Act and the Articles of Incorporation of the Company, as follows.

2. The Company’s net profit after taxes for 2014 was NT$9,402,358,637 by deducting the set aside legal reserve of NT$940,235,864 and adding the accumulated un-appropriated earnings at beginning of period amounted NT$37,793,960,961, but deducting 2014 retained earnings adjustment of NT$41,691,431, the available earnings at end of the period is equal to NT$46,214,392,303, the Company plans to distribute dividends of NT$3,579,487,158 to shareholders. The above-mentioned dividend will be distributed first from 2014 earnings.

3. The cash dividend distribution will be calculated to the nearest NT dollar, the remainder will be transferred into the “Employee Welfare Committee” account.

4. Subject to the approval of the regular shareholders’ meeting, the ex-dividend date for the cash and stock dividend distributions would be decided by the Board.

5. If the number of total shares outstanding, prior to the ex-dividend date for the distribution, has changed due to the repurchasing of shares by the Company, or the transfer of treasury shares to employees, or the conversion of shares from domestic convertible bonds, etc., such that the ratios of the stock dividends and cash dividends are affected and must be adjusted, the Board is authorized to make such adjustments.

Resolution:

7


2014 Earnings Allocation Table Unit: NTD

Items Amount Note

2014 Net profits after taxes for the year 9,402,358,637

Less: Appropriated as legal capital reserve (10%) 940,235,864

2014 Available for appropriation of earnings for the year 8,462,122,773

Add: Accumulated un-appropriated earnings 37,793,960,961

Less: 2014 retained earnings adjustment 41,691,431

2014 Available for appropriation of earnings 46,214,392,303

Allocation Items

Stock Dividends to Shareholders 137,672,590 Stock dividend NT$0.1 per share

Cash Dividends to Shareholders 3,441,814,568 Cash dividend NT$2.5 per share

Un-appropriated earnings 42,634,905,145

Notes:

Employee bonus 676,969,822

Compensation of Directors and Supervisors 0

President: Lin Don-Liang CEO: Lee Han-Ming Accounting Manager: Lu Hsu-Tung

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Proposal 3: Proposal to approve the issuance of new shares for capital increase by earnings re-capitalization. Please review and discuss.


Description:

In order to increase working capital, it is proposed to increase capital from retained earnings and issue new shares for employees’ bonus.

1. Capital increase from retained earnings:

In consideration of the needs of the Company’s future business development, it is proposed to increase capital from 2014 retained earnings as well as to issue new shares for employees’ bonus. Appropriated from shareholders’ bonus of NT$137,672,590 to issue 13,767,259 new shares; while employees’ bonus of NT$480,000,000.

2. The conditions of the new share issuance:

(1) According to the proposed capital increase plan, 10 common shares will be distributed for every 1,000 common shares for free, except for the part of employees’ stock bonus, recorded in the shareholders’ books and calculated as their shares held on the ex-dividend date. Allotment of fractional shares (less than one share) shall be paid in cash, and the Chairman or his designated representative may subscribe at par value. Actual placement and number of shares will depend on the number of registered shareholders on the ex-rights date.

(2) The total number of shares issued to employees will be calculated based on the closing price of the day prior to the day of the shareholders’ meeting as well as the impact of ex-dividend. The distribution of less than one full share will be paid in cash.

(3) The new shares issued by the capital increase will carry the same rights and obligations as the current outstanding shares.

(4) The distribution of employees’ bonus will be in accordance with the employees’ bonus policy of the Company.

(5) The ex-dividend date will be decided by the Board of Directors meeting after approval by the competent authority.

(6) If the number of total shares outstanding, prior to the ex-dividend date for the distribution, has changed due to the repurchasing of shares by the Company, or the transfer of treasury shares to employees, or the conversion of shares from domestic convertible bonds, etc., such that the ratios of the stock dividends and cash dividends are affected and must be adjusted, the Board is authorized to make such adjustments.

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(7) The Board is authorized to make any necessary amendments to the capital increase plan due to the needs of actual practices or by the instructions of the competent authority.

Resolution:

10

Proposal 4: Discussion of amendments to the Company’s “Operational Procedures for Derivative Trading.” (Proposed by the Board of Directors)

Description:

In accordance with the laws and regulations, the proposed amendments to the Company’s “Operational Procedures for Derivative Trading” are shown in a comparison table on Attachment 4 (Pages 31-32).

Resolution:

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Proposal 5: Discussion of amendments to the Company’s “Articles of Incorporation.” (Proposed by the Board of Directors)

Description:

In accordance with the requirements of relevant regulations to set up the Company’s Audit Committee beginning in 2016, the proposed amendments to the Company’s “Articles of Incorporation” are shown in a comparison table on Attachment 5 (Pages 33-34).

Resolution:

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Proposal 6: Discussion of amendments to the Company’s “Regulations Governing the

Election of Directors and Supervisors.” (Proposed by the Board of Directors)

Description:

In accordance with the requirements of relevant regulations to set up the Company’s Audit Committee beginning in 2016, the proposed amendments to the Company’s “Regulations Governing the Election of Directors and Supervisors” are shown in a comparison table on Attachment 6 (Pages 35-36).

Resolution:

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Other Business or Special Motions

Meeting Adjournment

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Attachments

Attachment 1: 2014 Business Report Dear Shareholders,

On 2014 there were many unique events in terms of global financial markets, economic environment, and geopolitics.1)The bitcoin bubble burst, causing big losses for investors.2)Oil price dropped sharply. Oil shale mining companies and Russia were big losers.3) Annexation of Crimea by Russia, the worst geopolitical crisis since the so-called Cold War, caused EU and USA to impose sanctions on Russia and Ruble depreciated sharply.4)USA 2014/Q3 GDP reached 5%.The U.S. economy grew at its quickest pace in 11 years.5)Fed ended its QE program while E.U. and Japan were pursuing easy money policy. This made more noticeable the differences in monetary policy across countries.6) Deflations came into play while experts worried about inflation.7)The annual expansion of 7.4% in 2014 was the lowest for China in 24 years. Globally speaking, there were many crises and these crises were complex. However, easy-money parties continued to push the global financial markets higher.

Overall global environments were not excellent at all. But Taiwan economy registered a steady growth thanks to strong domestic demand and growth in domestic consumption. Weak NTD helped a bit because Taiwan’s economy is basically export-driven. The GDP stood at 3.5%, better than last year’s 2.1% and global growth of 2.7%. Looking into 2015, we think global economy should continue to proper moderately. Global commodity price may decline further and oil price should stay relatively low. Strong USD might drive NTD weaker, which should benefit Taiwan’s export-driven economy. All these good factors make us believe that Taiwan’s GDP growth should continue to be rosy. Still, there are, putting aside these rosy numbers, some structural concerns like low wages, sky-high housing prices, aging population, exodus of talent pool, marginalization of Taiwan economy , and wider gap between rich and poor. If we don’t deal with these concerns properly, Taiwan’s long-term economic growth will be in trouble. Against the background of such environments, foreign and domestic, the Company still performed well on 2014. Both gross margin and earnings grew nicely. Better product mix and proper cost control were reasons behind these good numbers. Although overall consolidated sales revenue of the company didn’t grow at all, better product mix change due to improved sales on higher margin products helped to lift up gross margin and earnings. Besides, the company set up a new plant in Hebi, Henan and hence, there were some start-up costs and other expenses. However, efficient actions and smooth operations helped to keep overall costs under control. Meanwhile, a higher percentage of automation in the manufacturing processes alleviated the negative impact of higher labor costs. Furthermore, it’s worth mentioning that the company, while pursuing growth in sales revenue and net profits and implementing long-term strategy for expanding client bases and new product lines, has been paying lots of efforts to improve employee welfare, job site sanitation, safety and health at work. For this, the company set up a CSR committee on December 1st, 2014. The committee, led by the chairman and CEO, will function as a self-regulatory organization/mechanism whereby the company will monitor and ensure its active compliance with economic responsibility, cultural responsibility, educational responsibility, environmental responsibility and so on. As a result, the ultimate goal of the company is to pursue “sustainable development and operation.” Facing 2015, we think the tone for global economy has been set: USA will continue to grow moderately, both EU and Japan are facing uncertain futures, China’s economic story is layered and complex. The tone for financial markets has been set too: volatile. The overall picture is mixed for 2015. However, the management team feels confident to face the challenge ahead, to grasp unique

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opportunities for the company, and overcome all difficulties the company may face in the future. With sincere heart and with hardworking spirit, the management team will, while taking care of the corporate social responsibility, do its utmost to increase owner’s equity and social welfare. 1、Financial results

(1)The profit before income tax of 2014 was NT$10.968 billion, compared with NT$8.177 billion in 2013, an increase of NT$2.791 billion, a 34% year-over-year growth. The profit attributable to owners of the parent of 2014 was NT$9.402 billion, compared with NT$7.027 billion in 2013, an increase of NT$2.375 billion, a 34% year-over-year growth. The earnings per share was NT$6.84.

Consolidated Income Statement Unit: NTD/thousand

Items 2014 2013 Growth% Operating revenue 83,895,142 94,598,086 -11% Operating costs (68,630,993) (82,550,232) -17% Net operating margin 15,264,149 12,047,854 27% Total operating expenses (5,554,892) (5,073,435) 9% Operating profit 9,709,257 6,974,419 39% Total non-operating income and expenses 1,258,656 1,202,447 5% Profit before income tax 10,967,913 8,176,866 34% Income tax expense (1,585,626) (1,165,661) 36% Profit for the year 9,382,287 7,011,205 34% Profit attributable to non-controlling interest

(20,072) (16,548) 21%

Profit attributable to owners of the parent 9,402,359 7,027,753 34%

(2)Budget execution: N/A. Foxconn Technology Co., LTD. is not required to disclose its 2014 financial forecast.

(3)Cash flow analysis

Consolidated Statements of Cash Flows Unit: NTD/thousand

Items 2014 2013 Change Cash flows from operating activities 13,933,523 14,527,617 (594,094) Cash flows from investing activities (23,738,820) (7,350,967) (16,387,853) Cash flows from financing activities 3,465,846 (872,385) 4,338,231

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(4)Profitability analysis

Consolidated financial analysis

Year Items 2014 2013

Profitability

Return On Assets (%) 8.37% 7.08% Return On Equity (%) 12.40% 10.76 % To Capital Stock (%)

Operating Income 70.52% 53.38 % Profit Before Tax 79.67% 62.59 %

Net Profit Margin (%) 11.18% 7.41% Earnings Per Share(NTD） 6.84 5.14

(5)Research and development

The company couldn’t emphasize more on the research and development of new applications and new technology. Not only does the company invest continuously in developing new manufacturing process for casing products and thermal modules, but the company also devotes itself to finding new materials to be used in current product lines. To strengthen its R&D capacity, the company will continue to recruit new talents and keep engaged with famous universities in the form of a Project, methods that can help the company to develop new technology and discover new materials. The company intends to keep itself informed of the front-end technology and knowledge through collaboration with major global companies so that the competitiveness of the company can be sustained. Current 3C products still emphasize on being “light” and “thin” from the viewpoint of design and on the sense of touch and beauty from the viewpoint of appearances. Following these trends, the company has been focusing on developing new materials, precision molding technology, surface treatment technology, and integrated materials. To enrich our client bases and expand into non-3C industries, the company has been putting resources such as fund, human capital, and related resources into developing new non-3C markets for the technology owned by the company in the hope that these efforts could generate new growth drivers for the company in the future.

2、General outlines of business plan for 2015

(1)Business guideline

Due to the fact that technology innovation slows down and brand companies learn from one another, it’s getting tougher for brand companies to create meaningful and significant product differentiations. Besides, 3C markets have been getting more mature and saturated. It’s obvious that growth rate will decline in the future. Price competition is also inevitable because it’s hard to compete through product differentiation. Such fierce price competition would shorten product cycle and lower consumers’ loyalty considerably. Under such circumstances, the company will out-compete others through superior volume-manufacturing technologies, inventory control and cost management. For the coming year, the company will keep on purchasing new equipments and machines to strengthen its volume-manufacturing

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processes and technologies. The company will also re-engineer its management flows to have a better control over its costs and inventory. To maintain the company’s competitiveness and speed up new market development, the company will devote itself to achieving these goals through more inputs of funds, human capital, equipments and machines, and related resources.

(2) Business goal and important manufacturing/marketing policy

The company holds a cautious and optimistic view towards global economy for 2015. That said, the company is cautiously optimistic towards its overall business for 2015,too. Its main goals are to stabilize its sales revenue pattern, to grow its net profits, to improve its gross margin, and to maintain its leadership as the best solution provider in metal casing industry and thermal industry.

①Sales strategy: the company will still focus on doing business with major international companies and trying to enlarge its share of orders among these companies. The company will also continue to work on potential customers in the under-developed countries (including China and India). Meanwhile, the company will concentrate on developing new client bases in the non-3C industries, trying to lower the impact of seasonality that makes sales revenue volatile and to mitigate the negative impact of the economic cycle on the overall operation of the company.

②Manufacturing strategy: the company will work on improving its manufacturing efficiency through higher percentage of automation and alleviating the negative impact of rising labor costs in the coastal regions through expanding the capacity of its plant at Hebi where the overall labor costs are lower.

③R&D strategy: The company will continue carrying out comprehensive cooperation with major international companies on developing new products and establishing strategic partnership with famous colleges and universities in the hope of developing new technologies and growing our R&D capacity in non-3C areas. The company will keep actively engaged with major international companies in exchange of technologies and product information, to make sure that the company is well informed of the up-to-date, state-of-the-art technologies and that the company stays on the right trend of technology development.

(3)Impacts of external competitions and operating environments in aggregate

It’s not easy for the thermal module industry to have a meaningful growth, due to the fact that fierce price competition among competitors is driving down the average sales price and shrinking the total available market, that PC market is getting saturated, and that thermal design power is getting lower and decreasing the demand for thermal modules. In recent years, thermal module makers have been trying to expand into smartphone market. It seems that smartphones are generating more and more heat while they are getting thinner and equipped with more features. The company will follow suit, too. The company is a leader in the thermal module industry. The big gets bigger so the company is definitely able to maintain its competitive edges. The company has been exploring into new fields, especially in the non-3C areas. It’s true that it takes some time to bear fruit. But the company has a healthy financial structure and the R&D capacity is ample. Thus, it’s our estimate that the company should be able to play a major role in thermal module industry in the future.

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In casing industry, high entry barriers make it difficult for new entrants to compete with existent players. Entry barriers are high because the learning curve is long and because this is a capital-and technology-intensive industry. These barriers make it possible for the casing industry to maintain a satisfactory level of gross margin. Still, there are concerns. For example, aggressive expansion of capacity among competitors raises a concern on oversupply. Rosy gross margin and superior industry growth rates naturally invite fierce, potential competitions. In the future it will take more time and greater efforts to make a difference and to maintain gross margin and growth rates sensibly. Metal casings are mainly used in 3C products. So it’s foreseeable that the growth rate should decline in the future. Fortunately, the company has been working on entering other industries for years. This should help to mitigate the impact of slower growth in 3C industry. The company has taken necessary steps to deal with these issues and some initial results have been seen. Thus, the company is quite optimistic towards its future development.

For the year to come, there will be many new challenges and opportunities. The company will definitely deal with these challenges properly, seize these opportunities timely, execute its goals and strategies accurately, and expand its client bases in non-3C fields soundly. All these things are done to make sure that the long-term prospect of the company is intact. Lastly, we always feel grateful to shareholders for all the support shown to us. The management team will work diligently in return for your supports and expectations. Thank you all!

President: Lin Don-Liang CEO: Lee Han-Ming Accounting Manager: Lu Hsu-Tung

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Attachment 2: Audit Report by Supervisors

The Board reports the financial statement, business report, and earnings distribution proposal of 2014, and financial statement have been audited by PricewaterhouseCoopers Taiwan. The financial statements, business report and earnings distribution proposal have been audited by us as Supervisors of the Company. We deem no inappropriateness on these documents. Pursuant to Article 219 of the Company Act, we hereby present the audited report. Please review.

Submitted to:

2015 Regular Shareholders’ Meeting of the Company

Foxconn Technology Co., LTD.

Supervisor: Xinsheng Investment Co., LTD.

Representative: Lee Kuo-Yu

On the Date of May 15, 2015

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Audit Report by Supervisors

The Board reports the financial statement, business report, and earnings distribution proposal of 2014, and financial statement have been audited by PricewaterhouseCoopers Taiwan. The financial statements, business report and earnings distribution proposal have been audited by us as Supervisors of the Company. We deem no inappropriateness on these documents. Pursuant to Article 219 of the Company Act, we hereby present the audited report. Please review.

Submitted to:

2015 Regular Shareholders’ Meeting of the Company

Foxconn Technology Co., LTD.

Supervisor: Yu Che-Hung

On the Date of May 15, 2015

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Attachment 3: Financial Statements

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REPORT OF INDEPENDENT ACCOUNTANTS

DECEMBER 31, 2014 AND 2013

------------------------------------------------------------------------------------------------------------------------------------ For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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To the Board of Directors and Stockholders of Foxconn Technology Co., Ltd. We have audited the accompanying consolidated balance sheets of Foxconn Technology Co., Ltd. and its subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Foxconn Technology Co., Ltd. and its subsidiaries as of December 31, 2014 and 2013, and their financial performance and cash flows for the years then ended, in conformity with the “Rules Governing the Preparations of Financial Statements by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

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We have also audited the parent company only financial statements of Foxconn Technology Co., Ltd. as of and for the years ended December 31, 2014 and 2013, on which we have expressed an unqualified opinion on such financial statements. PricewaterhouseCoopers, Taiwan March 27, 2015 ------------------------------------------------------------------------------------------------------------------------------------------------- The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2014 AND 2013 (Expressed in thousands of New Taiwan dollars)

2014 2013

Assets Notes AMOUNT % AMOUNT %

Current assets

1100 Cash and cash equivalents 6(1) $ 35,253,120 27 $ 39,929,559 42

1110 Financial assets at fair value through

profit or loss - current

6(2)

416,480 - 45,843 -

1170 Accounts receivable, net 6(4) 13,519,735 10 10,976,258 12

1180 Accounts receivable - related parties 7 20,688,176 16 9,820,365 10

1200 Other receivables 6(5) and 7 3,071,110 3 969,997 1

130X Inventory 6(6) 3,917,182 3 2,134,537 2

1470 Other current assets 6(7) 31,552,830 24 7,491,924 8

11XX Total current assets 108,418,633 83 71,368,483 75

Non-current assets

1523 Available-for-sale financial assets - non-

current

6(3)

4,820,399 4 3,470,105 4

1543 Financial assets carried at cost - non-

current

6(8)

- - 347,455 -

1550 Investments accounted for under equity

method

6(9)

620,899 - 387,676 -

1600 Property, plant and equipment 6(10) and 7 14,303,803 11 16,806,461 18

1760 Investment property - net 6(11) 136,557 - 140,897 -

1840 Deferred income tax assets 6(29) 1,749,937 1 1,526,661 2

1900 Other non-current assets 6(12) 945,350 1 1,192,455 1

15XX Total non-current assets 22,576,945 17 23,871,710 25

1XXX Total assets $ 130,995,578 100 $ 95,240,193 100

(Continued)

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2014 AND 2013 (Expressed in thousands of New Taiwan dollars)

2014 2013

Liabilities and Equity Notes AMOUNT % AMOUNT %

Current liabilities

2100 Short-term loans 6(13) $ 12,376,815 10 $ 6,797,031 7

2120 Financial liabilities at fair value through

profit or loss - current 6(2)

107,654 - 12,429 -

2170 Accounts payable 5,124,354 4 4,613,396 5

2180 Accounts payable - related parties 7 12,365,478 9 5,209,813 5

2200 Other payables 6(14) and 7 16,799,097 13 7,264,368 8

2230 Current income tax liabilities 6(29) 1,446,060 1 886,654 1

2300 Other current liabilities 6(15) 216,555 - 381,427 -

21XX Total current liabilities 48,436,013 37 25,165,118 26

Non-current liabilities

2570 Deferred income tax liabilities 6(29) 455,466 - 429,354 1

2600 Other non-current liabilities 6(17) 48,218 - 377,778 -

25XX Total non-current liabilities 503,684 - 807,132 1

2XXX Total liabilities 48,939,697 37 25,972,250 27

Equity attributable to owners of parent

Share capital 6(18)

3110 Share capital - common stock 13,767,258 11 13,064,902 14

Capital surplus 6(19)

3200 Capital surplus 7,035,542 5 6,758,655 7

Retained earnings 6(20)

3310 Legal reserve 6,874,777 5 6,172,002 7

3350 Undistributed earnings 47,154,631 36 40,456,473 42

Other equity interest 6(21)

3400 Other equity interest 7,125,234 6 2,700,800 3

31XX Equity attributable to owners of the

parent

81,957,442 63 69,152,832 73

36XX Non-controlling interest 6(22) 98,439 - 115,111 -

3XXX Total equity 82,055,881 63 69,267,943 73

Commitments and contingent liabilities 9

Total liabilities and equity $ 130,995,578 100 $ 95,240,193 100

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

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

2014 2013

Items Notes AMOUNT % AMOUNT % 4000 Sales revenue 6(23) and 7 $ 83,895,142 100 $ 94,598,086 100

5000 Operating costs 6(6)(26) and 7 ( 68,630,993 ) ( 82 ) ( 82,550,232 ) ( 88 )

5900 Net operating margin 15,264,149 18 12,047,854 12

Operating expenses 6(26) and 7

6100 Selling expenses ( 758,114 ) ( 1 ) ( 831,924 ) ( 1 )

6200 General and administrative expenses ( 3,130,172 ) ( 3 ) ( 2,984,458 ) ( 3 )

6300 Research and development expenses ( 1,666,606 ) ( 2 ) ( 1,257,053 ) ( 1 )

6000 Total operating expenses ( 5,554,892 ) ( 6 ) ( 5,073,435 ) ( 5 )

6900 Operating profit 9,709,257 12 6,974,419 7

Non-operating income and expenses

7010 Other income 6(24) 1,370,492 1 681,478 -

7020 Other gains and losses 6(25) 178,557 - 685,600 1

7050 Finance costs 6(28) ( 89,682 ) - ( 161,985 ) -

7060 Share of loss of associates and joint ventures accounted for under equity method

6(9)

( 200,711 ) - ( 2,646 ) -

7000 Total non-operating income and expenses

1,258,656 1 1,202,447 1

7900 Profit before income tax 10,967,913 13 8,176,866 8

7950 Income tax expense 6(29) ( 1,585,626 ) ( 2 ) ( 1,165,661 ) ( 1 )

8200 Profit for the year $ 9,382,287 11 $ 7,011,205 7

Other comprehensive income

8310 Financial statements translation differences of foreign operations

$ 3,610,542 4 $ 2,306,755 2

8325 Unrealized gain (loss) on valuation of available-for-sale financial assets

817,292 1 ( 455,847 ) -

8360 Actuarial gain (loss) on defined benefit plan

6(16) 376 - ( 1,392 ) -

8399 Income tax relating to the components of other comprehensive income

( 64 ) - 237 -

8300 Total other comprehensive income for the year

$ 4,428,146 5 $ 1,849,753 2

8500 Total comprehensive income for the year

$ 13,810,433 16 $ 8,860,958 9

Profit (loss) attributable to:

8610 Owners of the parent $ 9,402,359 11 $ 7,027,753 7

8620 Non-controlling interest ( 20,072 ) - ( 16,548 ) -

$ 9,382,287 11 $ 7,011,205 7

Comprehensive income (loss) attributable to:

8710 Owners of the parent $ 13,827,105 16 $ 8,872,938 9

8720 Non-controlling interest ( 16,672 ) - ( 11,980 ) -

$ 13,810,433 16 $ 8,860,958 9

Earnings per share 6(30)

9750 Basic earnings per share $ 6.84 $ 5.14

9850 Diluted earnings per share $ 6.79 $ 5.09


27

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(Expressed in thousands of New Taiwan dollars)

Equity attributable to owners of the parent Retained earnings Other equity interest

Notes

Share capital - common stock

Capital surplus

Legal reserve

Undistributed earnings

Financial statements translation

differences of foreign

operations

Unrealized gain

or loss on available-for- sale financial

assets

Total

Non-controlling interest

Total equity

2013 Balance at January 1, 2013 $ 12,370,160 $ 6,331,741 $ 5,334,296 $ 36,123,105 ( $ 640,287 ) $ 1,494,747 $ 61,013,762 $ 65,109 $ 61,078,871 Appropriations of 2012 earnings 6(20) Legal reserve - - 837,706 ( 837,706 ) - - - - - Cash dividends - - - ( 1,237,016 ) - - ( 1,237,016 ) - ( 1,237,016 ) Stock dividends 618,508 - - ( 618,508 ) - - - - - Employees' stock bonus 76,234 426,914 - - - - 503,148 - 503,148 Consolidated net income for 2013 - - - 7,027,753 - - 7,027,753 ( 16,548 ) 7,011,205 Other comprehensive income (loss), net of income tax - - - ( 1,155 ) 2,302,187 ( 455,847 ) 1,845,185 4,568 1,849,753 Increase in non-controlling interests 6(22) - - - - - - - 61,982 61,982 Balance at December 31, 2013 $ 13,064,902 $ 6,758,655 $ 6,172,002 $ 40,456,473 $ 1,661,900 $ 1,038,900 $ 69,152,832 $ 115,111 $ 69,267,943 2014 Balance at January 1, 2014 $ 13,064,902 $ 6,758,655 $ 6,172,002 $ 40,456,473 $ 1,661,900 $ 1,038,900 $ 69,152,832 $ 115,111 $ 69,267,943 Appropriations of 2013 earnings 6(20) Legal reserve - - 702,775 ( 702,775 ) - - - - - Cash dividends - - - ( 1,306,490 ) - - ( 1,306,490 ) - ( 1,306,490 ) Stock dividends 653,245 - - ( 653,245 ) - - - - - Employees' stock bonus 49,111 276,887 - - - - 325,998 - 325,998 Consolidated net income for 2014 - - - 9,402,359 - - 9,402,359 ( 20,072 ) 9,382,287 Other comprehensive income, net of income tax - - - 312 3,607,142 817,292 4,424,746 3,400 4,428,146 Adjustments arising from changes in percentage of ownership in subsidiaries 6(8) - - - ( 42,003 ) - - ( 42,003 ) - ( 42,003 ) Balance at December 31, 2014 $ 13,767,258 $ 7,035,542 $ 6,874,777 $ 47,154,631 $ 5,269,042 $ 1,856,192 $ 81,957,442 $ 98,439 $ 82,055,881


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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Expressed in thousands of New Taiwan dollars)

Notes 2014 2013

CASH FLOWS FROM OPERATING ACTIVITIES Consolidated profit before tax for the year $ 10,967,913 $ 8,176,866 Adjustments to reconcile net income to net cash provided

by operating activities

Income and expenses having no effect on cash flows Depreciation 6(26) 4,009,874 4,203,698 Amortization 6(26) 37,247 36,698 Unrealized gain on financial assets and liabilities at fair

value through profit or loss 6(2)

( 275,437 ) ( 33,414 ) Loss on disposal of investments 6(25) 233,712 ( 9,994 ) Gain on disposal of property, plant and equipment, and

other assets 6(25)

( 90,985 ) ( 249,285 ) Gain on reversal of impairment loss 6(25) - ( 16,379 ) Interest expense 6(28) 89,682 161,985 Dividend income 6(24) ( 102,965 ) ( 101,808 ) Interest income 6(24) ( 876,365 ) ( 376,154 ) Share of loss of associates and joint ventures accounted

for under equity method 6(9)

200,711 2,646 Changes in assets/liabilities relating to operating activities Net changes in assets relating to operating activities Accounts receivable ( 2,336,211 ) 11,429,808 Accounts receivable - related parties ( 9,705,140 ) 7,075,453 Other receivables 972,799 801,480 Inventories ( 1,649,142 ) 3,759,605 Other current assets 449,846 316,446 Other non-current assets - ( 5,656 ) Net changes in liabilities relating to operating activities Accounts payable 311,685 ( 1,926,796 ) Accounts payable - related parties 6,713,389 ( 15,377,738 ) Other payables 6,605,505 ( 2,197,671 ) Other current liabilities ( 179,444 ) 14,843 Other non-current liabilities ( 26,272 ) 15,485 Cash generated from operations 15,350,402 15,700,118 Income tax paid ( 1,416,879 ) ( 1,172,501 ) Net cash provided by operating activities 13,933,523 14,527,617

(Continued)

29

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (Expressed in thousands of New Taiwan dollars)

Notes 2014 2013

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets carried at cost $ - $ 10,999 Acquisition of available-for-sale financial assets ( 217,170 ) - Proceeds from disposal of available-for-sale financial assets 9,404 - Acquisition of investments accounted for under equity

method

( 326,539 ) ( 229,711 ) Increase in other financial assets ( 23,566,688 ) ( 6,197,756 ) Acquisition of property, plant and equipment 6(31) ( 1,127,165 ) ( 1,710,938 ) Proceeds from disposal of property, plant and equipment 6(31) 449,189 629,890 Increase in other non-current assets ( 11,431 ) - Increase in deferred expenses ( 30,394 ) ( 21,689 ) Decrease in receivable from materials paid on behalf of

others

192,938 - Increase in other current assets - ( 298,100 ) Interest received 786,071 364,530 Dividends received 102,965 101,808

Net cash used in investing activities ( 23,738,820 ) ( 7,350,967 )

CASH FLOWS FROM FINANCING ACTIVITIES Interest paid ( 91,092 ) ( 153,415 ) Increase in short-term loans 4,863,428 527,247 Decrease in refundable deposits - ( 9,201 ) Cash dividends paid 6(20) ( 1,306,490 ) ( 1,237,016 )

Net cash provided by (used in) financing activities 3,465,846 ( 872,385 )

Effect of changes in foreign currency exchange rates on cash 1,663,012 151,820

(Decrease) increase in cash and cash equivalents ( 4,676,439 ) 6,456,085 Cash and cash equivalents at beginning of year 39,929,559 33,473,474

Cash and cash equivalents at end of year $ 35,253,120 $ 39,929,559

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Attachment 4: Operational Procedures for Derivative Trading Amendment Comparison Table

Original Proposed Revision Description

Article 2: Statutory Basis I. Guidelines for Handling Acquisition and Disposal of Assets by Public Companies, Order No. 0910006105 of Taiwan Ministry of Finance (I) issued by Securities and Futures Management Committee of Ministry of Finance (hereinafter referred to as “SFMCMF”) on 10th December, 91st year of the Republic of China. II. FASB Statements No. 14- Accounting Standards for Foreign Currency Translation issued by the consortium as a juridical person -Financial Accounting Standards Board of Accounting Research and Development Foundation of Legal Body of Financial Group of the Republic of China on 10th December, 77th year of the Republic of China. III. Attentions for Matters That Should be Disclosed in the Financial Statement for Public Companies Dealing the Derivatives, Document No. 00263 of Taiwan Minister of Finance (VI) issued by Securities and Futures Management Committee of Ministry of Finance on 29th January, 85th year of the Republic of China. IV. FASB Statements No. 27- Accounting Management System on disclosing financial instruments issued by Financial Accounting Standards Board of Accounting Research and Development Foundation of Legal Body of Financial Group of the Republic of China on 20th June, 86th year of the Republic of China.

Article 2: Statutory Basis 1. “Regulations Governing the

Acquisition and Disposal of Assets by Public Companies” issued by “Financial Supervisory Commission” order #1020053073 on December 30, 2013

2. “International Accounting Standard No. 39 “Financial Instruments: Recognition and Measurement” approved by “Financial Supervisory Commission” order #1030010325 on April 3, 2014

3. “International Accounting Standard No. 32 “Financial Instruments: Expression” approved by “Financial Supervisory Commission” order #1030010325 on April 3, 2014

4. “International Accounting Standard No. 7 “Financial Instruments: Expose” approved by “Financial Supervisory Commission” order #1030010325 on April 3, 2014.

Text amended pursuant to the name changes of the competent authorities, laws and dates.

Article 4: Principle III. Division of Rights and Liabilities (VII) Accounting Department: 3. The disclosure of derivatives in financial statement(half year, yearly)

Article 4: Principle III. Division of Rights and Liabilities (VII) Accounting Department: 3. The disclosure of derivatives in financial statement(quarter, half year,

1. Synchronized with financial statements release.

2. Pursuant to Article 18,

31


shall be in accordance with the regulations in Clause 3 and 4 of Article 2 hereof. VI. Loss-limit: the loss-limit of derivatives trading is as follows: (I) Individual contract: 20% of contract amount. If there are special situations, it shall be specially approved by the high competent personnel authorized by the board of directors.

yearly) shall be in accordance with the regulations in Clause 3 and 4 of Article 2 hereof. VI. Loss-limit: the loss-limit of derivatives trading is as follows: (I) Individual contract: 20% of contract amount.

Section 1, Item 1 of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies.”

Article 5: Operational Procedures I. Delegation Guidelines for

Transactions Delegated Amount (equivalent to)

(I) Chairman: Above US$ 100M(inclusive)

(II) CEO:US$80M(inclusive)~100M (III) Top Officer

Authorized by the Board of Directors: US$50M(inclusive)~80M

(IV) Finance Manager: Up to US$50M(exclusive)

Article 5: Operational Procedures I. Delegation Guidelines for

Transactions Delegated Amount

(equivalent to) (I) Chairman: Above US$100M (II) CEO: US$80M~100M(inclusive) (III) Top Officer Authorized by the

Board of Directors: US$50M~80M(inclusive)

(IV) Finance Manager: Up to US$50M(inclusive)

Taking recent year’s operational scale into consideration, current delegated dollar amounts meet the hedging needs of the company. Thus, only minor adjustments are needed on the part of the delegated amount

32

Attachment 5: Articles of Incorporation Amendment Comparison Table


Article 8 Shareholders’ meetings of the Company are of two kinds: regular shareholders meetings and extraordinary shareholders meetings. The regular shareholders’ meeting is called once per year within six months of the close of the fiscal year. Extraordinary shareholders meetings may be called in accordance with applicable laws and regulations whenever necessary.

Article 8 Shareholders’ meetings of the Company are of two kinds: regular shareholders meetings and extraordinary shareholders meetings. The regular shareholders’ meeting is called once per year within six months of the close of the fiscal year. Extraordinary shareholders meetings may be called in accordance with applicable laws and regulations whenever necessary. Shareholders’ meeting will adopt electronic voting as one of the methods to exercise the right to vote, and its related operation rules shall follow the competent authority regulations.

Increase the number of voting methods.

Chapter IV Board of Directors and Supervisors

Chapter IV Board of Directors, Supervisors and Audit Committee

Set up the Audit Committee.

Article 12 The Company shall have five to nine directors, to be elected by the shareholders’ meeting from among candidates with legal capacity in accordance with Article 192-1 of the Company Act. The term of office shall be three years, and they may continue in office if re-elected. The aforesaid Board of Directors must have at least two independent directors. More than one fifth of the directorship must be independent directors.

Article 16 The Company shall have five to nine directors, to be elected by the shareholders’ meeting from the director candidate list in accordance with Article 192-1 of the Company Act. The term of office shall be three years, and they may continue in office if re-elected. The aforesaid Board of Directors must have at least two independent directors. More than one fifth of the directorship must be independent directors. The Board of Directors shall set up functional committees, committee member qualifications, duties and related matters shall be defined by BOD in accordance with the laws and regulations. The company will set up the Audit Committee to replace the role of Supervisors after the 2016

Amend the text to be more specific.In accordance with setting up the Audit Committee, references to supervisors have been deleted.

33

shareholders' meeting pursuant to Article 14 paragraph 4 of the Securities Exchange Act. The Audit Committee shall be comprised of all independent directors, whose number shall be no less than three, one of whom will be the convener. Their duties and other related matters will be defined by BOD in accordance with the laws and regulations. The relevant provisions of the constitution with regard to Supervisors will become invalid from the date of the establishment of the Audit Committee.

Article 22 These Articles of Incorporation were enacted on April 21, 1990. … The 26th amendment was made on June 25, 2014.

Article 22 These Articles of Incorporation were enacted on April 21, 1990. … The 26th amendment was made on June 25, 2014. The 27th amendment was made on June 25, 2015.

Updating of the date of amendment.

34

Attachment 6: Regulations Governing the Election of Directors and Supervisors Amendment Comparison Table

Original Proposed Revision Proposed Revision Description

Regulations Governing the Election of Directors and Supervisors

Regulations Governing the Election of Directors

In accordance with setting up the Audit Committee, references to supervisors have been deleted.

Article 1 Election of Directors and Supervisors shall be acted upon in accordance with these Regulations.

Article 1 Election of Directors shall be acted upon in accordance with these Regulations.

Same as above

Article 2 Unless otherwise provided by the Company Act or the Articles of Incorporation of the Company, the election of Directors and Supervisors, each common share with a voting right is entitled to the number of ballots which are equivalent to the numbers of directors to be elected, they can be voted to only one candidate or a few candidates, same as the election of supervisors. Voters’ registration can be substituted by the attendee card number which is printed on the ballots.

Article 2 Unless otherwise provided by the Company Act or the Articles of Incorporation of the Company, the election of Directors, each common share with a voting right is entitled to the number of ballots which are equivalent to the numbers of directors to be elected, they can be voted to only one candidate or a few candidates. Voters’ registration can be substituted by the attendee card number which is printed on the ballots.

Same as above

Article 4 A. The numbers of the Directors and supervisors of the Company shall be provided by the Articles of Incorporation of the Company. In the election for the directors and supervisors of the Company, the candidates receiving ballots representing the highest number of voting rights sequentially shall be elected. A candidate simultaneously elected as a director and supervisor shall, at the candidate's own discretion, decide to serve as either director or supervisor. The position left vacant by such decision shall be filled by the candidate with the next most votes in the original election. When two or more persons receive the same number of votes and the

Article 4 A. The numbers of the Directors of the Company shall be provided by the Articles of Incorporation of the Company. In the election for the directors of the Company, the candidates receiving ballots representing the highest number of voting rights sequentially shall be elected. When two or more persons receive the same number of votes and the specified number of positions is exceeded, the two persons receiving the same number of votes shall draw lots to decide who shall serve; the chair shall draw lots on behalf of a non-attendee.

Same as above

35

specified number of positions is exceeded, the two persons receiving the same number of votes shall draw lots to decide who shall serve; the chair shall draw lots on behalf of a non-attendee. B. The election of Directors and Supervisors shall adopt the candidate nomination system pursuant to Article 192-1 of the Company Act. The election of independent directors and non-independent directors shall be held together; but elected places shall be calculated separately. The elected candidates shall base on the total voting rights received.

B. The election of Directors shall adopt the candidate nomination system pursuant to Article 192-1 of the Company Act. The election of independent directors and non-independent directors shall be held together; but elected places shall be calculated separately. The elected candidates shall base on the total voting rights received.

Article 9 The Board of Directors will issue a Notice of Election to all the elected Directors and Supervisors.

Article 9 The Board of Directors will issue a Notice of Election to all the elected Directors.

Same as above

36

Appendices

Appendix 1: Shareholders’ Meeting Rules

Article 1 Meetings of shareholders shall be acted upon in accordance with these rules.

Article 2 The shareholders or their representatives present shall wear identification and may hand in attendance cards in lieu of signing the attendance book. The total attendance shall be calculated in accordance with the attendance cards turned in at the meeting.

Article 3 The participation and voting by shareholders shall be duly calculated based on the number of shares they hold.

Article 4 The location of shareholders meeting shall be the Company’s current location or such other place that is convenient for shareholders to attend. The meeting shall not commence earlier than 9AM or later than 3PM.

Article 5 If a shareholders’ meeting is convened by the board, the chairman of the board shall be the chairman presiding at the meeting. If the chairman of the board is on leave or cannot perform his duties for some reason, the vice chairman shall preside at the meeting on the chairman’s behalf; if the Company does not have a vice chairman or the vice chairman is on leave or cannot perform his duties for some reason, the chairman shall designate one managing director to act on his behalf. If the Company does not have a managing director, the chairman shall designate one director to act on his behalf. If the chairman has not appointed an agent or the designated director cannot perform his duties for some reason, the meeting chair shall be elected from among the directors present. If the meeting is convened by any other person besides the board of directors who is entitled to convene the meeting, such person shall be the chairman to preside at the meeting. If there are more than two persons convening the meeting, then shall be the one elected by the other.

Article 6 The Company may appoint designated attorneys, certified public accounts or other relevant persons to attend shareholders’ meetings.

The staff members who take charge of the shareholders’ meeting affairs shall wear identification certificates or armbands.

Article 7 The Company shall record the shareholders’ meetings by audio or video and keep the recording for at least one year.

Article 8 The chairman shall call the meeting to order at the time scheduled for the meeting, provided, however, that if during such a shareholders’ meeting a majority of the total number of outstanding shares ceases to be present, the chairman may postpone the shareholders’ meeting to a later time, provided, however, that the maximum number of times a shareholder meeting may be postponed shall be two and total time of postponement shall not exceed one

37

hour. If after two postponements no quorum can yet be constituted but the shareholders present at the meeting represent more than one third of the total outstanding shares, tentative resolutions may be made in accordance with Section 1 of Article 175 of the Company Act.

If before the end of the meeting and at enough shares become present to constitute a quorum, the chairman may then re-submit the tentative resolutions to the meeting for approval, in accordance with Article 174 of the Company Act.

Article 9 The agenda for the shareholders’ meetings shall be set by the Board of Directors if the meeting is convened by the Board of Directors. The meeting shall be conducted in accordance with the agenda, which may not be altered without a resolution adopted at the shareholders’ meeting. The preceding provisions of this Article apply mutatis mutandis to cases where shareholders’ meetings are convened by any person(s), other than the Board of Directors, entitled to convene the meeting. Unless otherwise resolved at the shareholders’ meeting, the chairman may not announce adjournment of the meeting unless the scheduled agenda items (including Extemporary Motions) set forth in the preceding provisions of this Article are concluded.

If the chairman announces adjournment of the meeting and violates these rules of procedure, the meeting may be continued after electing one of the attendees to be the meeting chainman in accordance to the approval of the majority of the votes represented by the attending shareholders. After the meeting is adjourned, shareholders may not separately elect a chairman and resume the meeting at the original or another venue.

Article 10 When a shareholder attending the meeting wishes to speak, he or she shall first fill out a speaker’s card, specifying therein the major points of his or her speech, account number (or number appeared on attendance pass) and account name. The chairman shall determine sequence of shareholders’ speeches.

A shareholder in attendance who submits a speaker’s slip but does not speak shall be deemed to have not spoken. In the case where the contents of a shareholder’s speech differ from those specified on the speaker’s card, the contents of the actual speech shall prevail.

Unless otherwise permitted by the chairman and speaking shareholder, no shareholder shall interrupt the speech of the speaking shareholder; the chairman shall stop any such interruptions.

Article 11 A shareholder may not speak more than twice on the same resolution without the chairman’s consent, with five minutes maximum for each speech.

The chairman may stop any shareholder who violates the above rules or exceeds the scope of the agenda item.

Article 12 Any legal entity designated as proxy by shareholder(s) to be present at the meeting may appoint only one representative to attend the meeting.

38

If a corporate shareholder designates two or more representatives to attend the meeting, only one of the representatives so designated may speak on any one motion.

Article 13 The chairman may respond or designate other persons to respond after an attending shareholder’s speech.

Article 14 When the chairman considers that the discussion for a motion has reached the extent for making a resolution, he may announce discontinuance of the discussion and submit the motion for resolution.

Article 15 Unless listed in the handbook, the contents of new proposals shall ask the chairman or master of ceremonies to be read to attending shareholders. If there is an amendment or replacement proposal to the original proposal, the chairman shall decide the sequence of voting for such proposals, provided that if any one of the proposals has been approved, the others shall be deemed vetoed and no further voting is required.

Article 16 Unless otherwise specified in the Company Act and the Articles of Incorporation, resolutions shall be adopted by a majority of the votes represented by the attending shareholders. The resolution shall be deemed adopted and shall have the same effect as if it was voted by casting ballots if no objection is voiced after inquiry by the chairman.

Article 17 The persons for supervising the casting of votes and the counting thereof for resolutions shall be designated by the chairman, provided, however, that the person supervising the casting of votes shall be a shareholder.

Article 18 During the process of the meeting, the chairman may announce a recess at an appropriate time

Article 19 The chairman may direct disciplinary officers (or security personnel) to maintain the order of the Meeting. For identification purposes, they shall wear a badge bearing the words of “disciplinary officer.”

Article 20 In cases of force majeure, the meeting shall be discontinued. The meeting shall be resumed an hour after the incident is over.

Article 21 If the matters are not provided herein, the Company Act and other laws and regulations of the Republic of China shall govern.

Article 22 These rules and procedures shall be effective after ratification at the shareholders’ meetings. The same applies to modifications.

39

Appendix 2: Articles of Incorporation

Chapter I General Provisions

Article 1 The Company, organized under the Company Act as a Company limited by shares, and shall be named FOXCONN TECHNOLOGY CO., LTD. (hereinafter, “the Company”).

Article 2 The Company’s scope of business is as follows:

1. The development, design, manufacture and sale of TV set, fax machine, A/V recorder, acoustic system and related components.

2. The development, design, manufacture and sale of computer terminal, computer, monitor, calculator and peripherals, power supplies and related components.

3. The development, design, manufacture and sale of uninterrupted power supply system and equipment.

4. The development, design, manufacture and sale of telephone and communication equipment.

5. Import and export trade business of the products listed above.

6. Agents of foreign and domestic goods’ selling, quoting and bidding.

7. Shipping centers and bonded warehouse business.(G801010)

8. CC01080 Electronic parts and components manufacturing.

9. C805050 Industrial plastic products manufacturing.

10. CC01010 Power generation, transmission, and distribution equipment manufacturing.

11. C801010 Basic Industrial Chemical Manufacturing.

12. CA02990 Other Fabricated Metal Products Manufacturing Not Elsewhere Classified (Metal Casings for computers).

13. I301010 Software Design Services.

14. I301020 Data Processing Services.

15. I301030 Digital Information Supply Services.

16. C805030 Plastic Made Grocery Manufacturing.

40

17. ZZ99999 In addition to licensed businesses, the Company may operate any other businesses that are not prohibited or restricted by law.

Article 3 The Company is headquartered in New Taipei City, Taiwan and when necessary may establish branches or subsidiaries at home and abroad according to resolutions by the board of directors.

Article 4 Public announcements of the Company shall be made in accordance with the provisions of Article 28 of the Companies Act.

Chapter II Shares

Article 5 The authorized capital of the Company is NT$15 billion, consisting of 1.5 billion shares, all of common stock, with a par value of NT$10 per share. The board of directors is authorized to issue the shares in separate installments as required, of which 50 million shares are reserved for stock options with warrants or corporate bonds for the exercise of stock options. The board of directors is also authorized to issue shares in separate installments as required.

Article 6 The share certificates of the Company shall without exception be in registered form, signed by, or affixed with the seals of, at least three directors, and authenticated by the competent governmental authority upon issuance. Shares issued by the Company need not be in certificate form.

Article 7 Registration for transfer of shares shall be suspended sixty (60) days immediately before the date of regular meeting of shareholders, and thirty (30) days immediately before the date of any extraordinary meeting of shareholders, or within five (5) days before the day on which dividend, bonus, or any other benefit is scheduled to be paid by the Company. All stock processing and related activities shall follow the Financial Supervisory Commission’s “Guidelines for Stock Operations for Public Companies” unless specified otherwise by law and securities regulations.

Chapter III Shareholders’ Meeting

Article 8 Shareholders’ meetings of the Company are of two kinds: regular shareholders meetings and extraordinary shareholders meetings. The regular shareholders’ meeting is called once per year within six months of the close of the fiscal year. Extraordinary shareholders meetings may be called in accordance with applicable laws and regulations whenever necessary.

Article 9 For any shareholders’ meeting, a shareholder may appoint a proxy to attend the meeting by using the proxy form issued by the Company and specifying the scope of proxy.

Article 10 Each shareholder of the Company is entitled to one vote per share, unless otherwise provided by applicable law or regulation.

Article 11 Unless otherwise provided by applicable law or regulation, a resolution of the shareholders’ meeting shall be adopted by the consent of a majority of the votes

41

represented by those in attendance at the meeting, in person or by proxy, by shareholders who represent a majority of the total issued shares.

Chapter IV Board of Directors and Supervisors

Article 12 The Company shall have five to nine directors and two supervisors, to be elected by the shareholders’ meeting from among candidates with legal capacity in accordance with Article 192-1 of the Company Act. The term of office shall be three years, and they may continue in office if re-elected. The aforesaid Board of Directors must have at least two independent directors. More than one fifth of the directorship must be independent directors.

Article 13 The board of directors shall consist of the directors of the Company; the chairman of the board of directors shall be elected from among the directors by a majority of directors in attendance at a meeting attended by at least two-thirds of the directors. The chairman of the board of directors shall represent the Company in external matters.

Article 14 Except for the first meeting of the board of directors of every new term, which shall be convened pursuant to Article 203 of the Company Act, all other meetings of the board of directors shall be convened by the chairman of the board of directors. Unless otherwise provided for by applicable law or regulation, a resolution of the board of directors shall be adopted by the consent of a majority of the votes represented by those the majority in attendance at the board of directors meeting. Directors shall attend meetings of the board of directors. If a director is unavailable to attend a meeting in person, the director may issue a power of attorney for the given meeting specifying the scope of the authorized powers to authorize another director to attend the meeting on the director’s behalf, provided that a director may represent only one other director at a meeting pursuant to Article 205 of the Company Act.

Article 14-1 Seven days prior to the convening of a meeting of the board of directors, notice shall be sent to all directors and supervisors, specifying the reasons for calling the meeting, though in emergency situations, a meeting may be called whenever necessary.

Notice of the convening of a meeting described in the preceding paragraph may be in writing, by fax or by e-mail notification thereof.

Article 15 When the Company’s directors and supervisors perform Company duties, the Company may compensate them at a rate consistent with general practices in the industry. The board of directors is authorized to purchase liability insurance for directors and supervisors, in accordance with a resolution of the board of directors adopted by consent of a majority of the votes represented by those the majority in attendance at the board of directors meeting.

Chapter V Managers

42

Article 16 The Company may appoint one Chief Executive Officer, whose commissioning, decommissioning and pay rate shall be as pursuant to Article 29 of the Company Act.

Chapter VI Finance

Article 17 After the close of each fiscal year, the following reports shall be prepared by the board of directors and submitted to the regular shareholders’ meeting by the supervisors for reviewing and for ratification.

1. Business Report.

2. Financial Statements.

3. Proposal Concerning Appropriation of Net Profits or Recovering of Losses.

Article 18 The annual net income of the Company shall be appropriated in accordance with the priorities listed as follows:

1. Recovering of Losses.

2. Appropriation of 10% for legal capital reserve.

3. Appropriate or return to Special capital reserve pursuant to applicable law or regulation.

4. Appropriate 8% from the annual distributable earnings for employee bonus; the Company may issue stock bonuses to employees of an affiliated Company meeting the conditions set by the board of directors, or other related guidelines the board of directors is authorized to develop.

As to the earnings available for appropriation to shareholders including accumulated un-appropriated earnings and earnings available for appropriation of this year, the board of directors is authorized to draft a appropriation plan in accordance with the dividend policy in this Article Section 3.

The Company is currently in a growth stage; with the Company's dividend distribution policy subject to the Company's current and future investment environment, fund requirements, domestic competition and capital budgets, taking into account the interests of shareholders and the long-term financial planning, shareholder dividends set aside on shareholders accumulated un-appropriated earnings shall not be less than 15% of earnings available for appropriation and cash dividends shall not be less than 10% of total shareholder dividends.

Chapter VII

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Supplementary Provisions

Article 19 The total investment amount of the Company is allowed to exceed the limit of 40% of the paid-in capital. The Board of Directors is authorized to make the final decision.

Article 20 The Company may provide endorsements and guarantees and act as a guarantor.

Article 21 Any matters not sufficiently provided for in these Articles of Incorporation shall be handled in accordance with the Company Act and other applicable laws or regulations.

Article 22 These Articles of Incorporation were enacted on April 21, 1990. The 1st amendment was made on January 23, 1991. The 2nd amendment was made on August 15, 1992. The 3rd amendment was made on April 2, 1994. The 4th amendment was made on April 30, 1994. The 5th amendment was made on April 9, 1995. The 6th amendment was made on March 16, 1996. The 7th amendment was made on July 31, 1996. The 8th amendment was made on May 24, 1997. The 9th amendment was made on April 13, 1998. The 10th amendment was made on June 11, 1998. The 11th amendment was made on May 25, 1999. The 12th amendment was made on June 2, 2000. The 13th amendment was made on June 10, 2002. The 14th amendment was made on June 27, 2003. The 15th amendment was made on November 27, 2003. The 16th amendment was made on June 10, 2004. The 17th amendment was made on June 14, 2005. The 18th amendment was made on June 14, 2006. The 19th amendment was made on June 8, 2007. The 20th amendment was made on June 2, 2008. The 21st amendment was made on June 10, 2009. The 22nd amendment was made on June 8, 2010. The 23rd amendment was made on June 8, 2011. The 24th amendment was made on June 18, 2012. The 25th amendment was made on June 26, 2013. The 26th amendment was made on June 25, 2014.

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Appendix 3: Shareholdings of Directors and Supervisors 1. As of 04/27/2015, all directors’ and supervisors’ minimum shareholding number and

actually registered holding shares.

Title Minimum number of shares to be held

Shares actually held in share register

Directors 33,041,419 83,373,197

Supervisors 3,304,141 77,503,099

2. As of 04/27/2015, table of shares held by all directors and supervisors.

Title Name Shares held in share register

Chairman Hyield Venture Capital Co. ,Ltd. Representative: Lin Don-Liang 83,328,857

Director Caixin International Investment Co., Ltd. Representative: Hung Chih-Chien 44,340

Director Caixin International Investment Co., Ltd. Representative: Lee Xue-Kun 44,340

Independent Director Cai Pei-Xun 0

Independent Director Chen Yao-Qing 0

Supervisor

Xinsheng Investment Co., Ltd.

Representative : Lee Kuo-Yu 77,503,099

Supervisor Yu Che-Hung 0

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Appendix 4: Impact of Stock Dividend Issuance on the Company’s Business Performance, Earnings per Share and Return on Shareholders’ Investment

Year Item

2015

Beginning Paid-in Capital (NTD) 13,767,258,270

Dividend Distribution(1)

Cash dividend per share (NTD) (1) 2.5 Stock dividend per share for capital increase from retained earnings (Share) (1) 0.01

Stock dividend per share for capital increase from capital reserve (Share) (1) -

Business Performance Variation

Operating profit

N/A (2)

Year-on-year increase / decrease (%) of operating profit Net profit after tax Year-on-year increase / decrease (%) of net profit after tax Earnings per share Year-on-year increase / decrease of earnings per share Average return over investment (annualized)

Pro forma earnings per share and its P/E ratio

If cash dividend is distributed instead of capital increase from retained earnings

Pro forma earnings per share (NTD)

N/A (2)

Pro forma average return over investment (annualized)

If no capital increase from capital reserve

Pro forma earnings per share (NTD) Pro forma average return over investment (annualized)

If no capital reserve and cash dividend is distributed instead of capital increase from retained earnings

Pro forma earnings per share (NTD)

Pro forma average return over investment (annualized)

Note 1: Pending resolution by 2015 Annual General Shareholders’ Meeting.

Note 2: Foxconn Technology Co., LTD. is not required to disclose its 2015 financial forecast pursuant to “Regulations Governing the Publication of Financial Forecasts of Public Companies.”

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foxconn technology co., ltd. · shareholders’ meeting (the “agenda”) of foxconn technology...

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