ACER — AGM Information 2014

Jul 7, 2014

the technology which is developed jointly is, the bigger the power which is created jointly is.

ITEM 6

Proposal :To Approve the Issuance of Restricted Stock Awards (“RSA”) to Key Employees (Proposed by the Board of Directors)

MINUTES OF 2014 ANNUAL SHAREHOLDERS' MEETING OF ACER INCORPORATED (Translation**)

NT$165,509,856, and the net loss after tax for 2013 of NT$20,519,428,168, the deficit to be compensated is NT$21,798,662,191. It is proposed to compensate the deficit by special reserve of NT$3,460,642,125, legal reserve of NT$10,012,168,695, and capital reserve of NT$8,325,851,371. After the appropriation, the ending balance of the un-appropriated retained earnings is NT$0, and the remaining balance of capital surplus is NT$35,381,875,824.

(2)To implement corporate governance, the Company has established the Audit Committee pursuant to Securities and Exchange Act and the Company Act. Further, according to the Company’s Articles of Incorporation, the board of directors resolves that the nine seats of directors (including three seats of independent directors) are to be elected for the new board.

Time and Date of Meeting : 9:00 a.m., June 18, 2014

Place of Meeting : 145, Section 3, Jen Ai Rd., Taipei (Taipei Air Force Activity Center)

Total outstanding shares of ACER (excluding the shares without voting right as stipulated in Article 179 of the Company Law): 2,746,698,434 shares

(3)Nine Directors (including six directors and three independent directors) will be elected at 2014 General Shareholders’ Meeting; the tenure of newly elected directors shall commence on June 18, 2014 and expire on June 17, 2017, for three-year term and eligible for re-election. The Audit Committee will be constituted by all the independent directors.

• (2)It is proposed not to distribute dividend for 2013.

Total shares represented by shareholders present in person or proxy: 1,569,887,524 shares

• (3)The Statement of Deficit Compensated for 2013 are shown as follows:

• (4)Please discuss.

(4)The Candidate List of Directors and Independent Directors were approved by the Board of Director on May 8, 2014 as follows:

Percentage of shares held by shareholders present in person or proxy: 57.16%

Acer Incorporated

2013 Statement of Deficit Compensated

Chairman : Stan Shih

==> picture [173 x 379] intentionally omitted <==

Unit:NT$ Beginning Balance of Un-appropriated Retained Earnings 0 Deduct: Net Adjusted Amount of IFRS Conversion (4,110,875,348) Opening Balance of 2013, after IFRS Conversion (4,110,875,348) Plus : Reversal of Special Reserve in IFRS Opening 2,666,131,469 Actuarial gain for the defined benefit pension plan 165,509,856 Deduct: Net Loss after Tax for 2013 (20,519,428,168) Deficit to be compensated (21,798,662,191) Compensation Items: Special Reserve 3,460,642,125 Legal Reserve 10,012,168,695 Capital Surplus 8,325,851,371 Ending Balance of Un-appropriated Retained Earnings 0

Recorder : Nancy Hu

The attendance list of the directors and supervisors: Directors:Stan Shih, Hung Rouan Investment Corp. Legal Representative: Maverick Shih�Smart Capital Corp. Legal Representative: Philip Peng

Supervisors: Carolyn Yeh�George Huang

The aggregate shareholding of the shareholders present in person or proxy constituted a quorum. The Chairman called the meeting to order.

Chairman’s Address :(Omitted)

A. Report Items :

Voting Results:Shares present at the time of voting: 1,569,887,524 (votes casted electronically: 475,516,179 votes)

• (1)To Report the Business of 2013: (See Attachment)

• (2)To Report the Amendments to Regulations Governing Procedure for Board of Directors Meetings: (Omitted)

casted electronically: 475,516,179 votes)
Voting Results*	% of the total represented share present
Votes in favor:1,385,268,902 votes(298,225,735 votes)	88.24%
Votes against :218,675 votes(204,675 votes)	0.01%
Votes invalid or abstained: 177085769 votes (177085769 votes)	11.28%
,, ,, *including votes casted electronically (number in brackets)

• (3)To Report the Impairment of Non-Financial Assets: (Omitted) (4)Supervisors’ Review Report: (Omitted)

B. Proposed Resolutions (A) ITEM 1

• Proposal :To Approve the Amendments to the Company’s “The Election Regulation of Directors and Supervisors” (Proposed by the Board of Directors)

RESOLVED, that the above proposal be and hereby was approved as proposed.

• Explanatory Notes :

ITEM 4

• (1)To strengthen corporate governance, comply with the Company Act and Securities and Exchange Act, and coordinate with the Audit Committee system and candidate nomination system for election of the directors (including independent directors) newly adopted by the Company’s Articles of Incorporation and relevant rules, it is proposed to amend the Company’s “The Election Regulation of Directors and Supervisors” as follows.

• (2)Please discuss.

Proposal :To Approve Amendments to the Company's Articles of Incorporation (Proposed by the Board of Directors) Explanatory Notes :

(1)Acer’s current authorized capital as specified in the Articles of Incorporation is NT$35 billion, an amount of NT$ 2.5 billion from the aforesaid total capital stock is reserved for exercising stock options. As of the date of this Meeting, the paid-in capital after stock cancellation of the First Buyback in Year 2011 from the date of May 26, 2014 is NT$28,061,078,280. To facilitate future operational requirements, it is proposed to appropriately increase the authorized capital to NT$40 billion.

• (2)To facilitate Acer Audit Committee setting and practical requirements, it’s proposed to modify the number of directors (including independent directors) from Nine (9) ~ eleven (11) to seven (7) ~eleven (11).

• (3)Therefore, it’s proposed amending Article 6, 12 and 22 of Acer’s Article of Incorporation; for details on the proposed revisions, please refer to Attachment “Comparison Table of Acer’s Articles of Incorporation Before and After Revision” as follows.

• (4)Please discuss.

Voting Results: Directors:

Elected Elected Shares Stan Shih 1,318,544,969 George Huang 1,329,618,452 Hsin-I Lin 1,285,681,673 Jason C.S. Chen 1,292,620,884 Legal Representative:Carolyn Yeh Hung Rouan Investment Corp. 1,286,681,955 Voting Results:Shares present at the time of voting: 1,569,585,047 (votes Legal Representative:Philip Peng Smart Capital Corp. 1,285,245,364 casted electronically: 475,516,179 votes) Independent Directors: Elected Elected Shares Voting Results % of the total representedshare present Ji-Ren Lee F.C. Tseng 1,295,803,7881,296,332,023 Votes in favor:1,385,896,197 votes(298,378,992 votes) 88.30% Chin-Cheng Wu 1,296,560,881 Votes against :105,178 votes(105,178 votes) 0.01% D. Proposed Resolutions (B) Votes invalid or abstained:177,032,009 votes(177,032,009 votes) 11.28% ITEM 2 including votes casted electronically (number in brackets) Proposal :To Accept 2013 Financial Statements and Business Report RESOLVED, that the above proposal be and hereby was approved as (Proposed by the Board of Directors) proposed. Explanatory Notes :

Voting Results:Shares present at the time of voting: 1,569,887,524 (votes casted electronically: 475,516,179 votes)

==> picture [186 x 33] intentionally omitted <==

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

% of the total represented
Voting Results share present
Votes in favor:1,385,329,969 votes(298,272,802 votes) 88.24%
Votes against : 136,434 votes(136,434 votes) 0.01%
Votes invalid or abstained: 177,106,943 votes (177,106,943 votes) 11.28%
----- End of picture text -----*

• *including votes casted electronically (number in brackets)

RESOLVED, that the above proposal be and hereby was approved as proposed.

ITEM 5

Proposal :To Approve Amendments to the Company’s Following Internal Rules:

Proposal :To Accept 2013 Financial Statements and Business Report (Proposed by the Board of Directors) Explanatory Notes :

• i Procedures of Acquiring or Disposing of Assets

• ii Foreign Exchange Risk Management Policy and Guidelines iii Procedure Governing Lending of Capital to Others iv Procedures Governing Endorsement and Guarantee

(1)The 2013 Financial Statements of Acer Incorporated (including the Balance Sheets, Statements of Comprehensive Income, Statements of Changes in Equity and Statements of Cash Flow) have been approved by the Board of Directors and reviewed by the supervisors, and hereby are submitted for acceptance. (Please refer the attachments )

• Shareholder (account no. 0786653) inquired about the market development and CEO’s opinions.

• (Proposed by the Board of Directors)

Explanatory Notes :

• CEO stated: a.Devices such as Google's Chromebook and so-called 2-in-1 notebook PCs are stimulating otherwise moribund PC demand. We need to build on the foundations to increase market share of PC, tablet and smartphone. We have already improved in the cloud business.

• b.Acer is seeking to transform itself from a hardware company into a “hardware plus software plus services” and implement the thinking of the Wangdao ideology. We need to control the cost and expenses and raise market share. We expect Acer to return to glory.

• (1)To comply with the FSC amendments to “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” and “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” and consider the Company’s establishment of Audit Committee based on the Company Act, Securities and Exchange Act, and the Company’s Articles of Incorporation, it is proposed to amend the following internal rules:

• (2)Please discuss.

Income, Statements of Changes in Equity and Statements of Cash Flow) have been approved by the Board of Directors and reviewed by the supervisors, and hereby are submitted for acceptance. (Please refer the attachments ) (2)Please discuss.	Income, Statements of Changes in Equity and Statements of Cash Flow) have been approved by the Board of Directors and reviewed by the supervisors, and hereby are submitted for acceptance. (Please refer the attachments ) (2)Please discuss.
Voting Results:Shares present at the time of voting: 1,569,887,524 (votes casted electronically: 475,516,179 votes)
Voting Results*	% of the total represented share present
Votes in favor:1,374,793,896 votes(287,753,332 votes)	87.57%
Votes against :1,452,896 votes(1,452,896 votes)	0.09%
Votes invalid or abstained: 186,309,951 votes(186,309,951 votes)	11.87%

i Procedures of Acquiring or Disposing of Assets; ii Foreign Exchange Risk Management Policy and Guidelines; iii Procedures Governing Lending of Capital to Others; and iv Procedures Governing Endorsement and Guarantee; for details please see the comparison table of the aforesaid internal rules before and after revisions. (Please refer the attachments)

Shareholder (account no. 0776988) inquired the marketing strategy of smartphone, any ongoing litigation, the impairment of goodwill and break-even sales?

• *including votes casted electronically (number in brackets)

RESOLVED, that the above proposal be and hereby was approved as proposed.

• Chairman and legal department stated:

• We will develop more competitive smartphone and strengthen marketing strategy. Hope all of shareholders can continue supporting Acer. The major litigations and the related risks are shown on page 102 to 106. Currently all business units are break-even, we don’t need to recognize impairment loss for goodwill.

iii Procedures Governing Lending of Capital to Others; and iv Procedures Governing Endorsement and Guarantee; for details please see the comparison table of the aforesaid internal rules before and after revisions. (Please refer the attachments)	iii Procedures Governing Lending of Capital to Others; and iv Procedures Governing Endorsement and Guarantee; for details please see the comparison table of the aforesaid internal rules before and after revisions. (Please refer the attachments)
(2)Please discuss. Voting Results:Shares present at the time of voting: 1,569,887,524 (votes casted electronically: 475,516,179 votes)
Voting Results*	% of the total represented share present
Votes in favor:1,385,345,937 votes (298,300,770 votes)	88.24%
Votes against : 224,232 votes(224,232 votes)	0.01%
Votes invalid or abstained: 176,991,177 votes (176,991,177 votes)	11.27%

ITEM 3

• Proposal : To Approve the Statement of Deficit Compensated for 2013 (Proposed by the Board of Directors)

• Explanatory Notes :

(1)The beginning balance of the un-appropriated retained earnings of the Company in 2013 is NT$0. After deduct the net adjusted amount of IFRS conversion, the opening balance of 2013 after IFRS conversion becomes NT$(4,110,875,348). After plus the reversal of Special Reserve booked in IFRS opening of NT$2,666,131,469, the actuarial gain of defined benefit pension plan of

C. Directors Election

• Proposal : To Elect All Directors (including Independent Directors) of the Company (Proposed by the Board of Directors)

• Explanatory Notes :

• (1)The tenure of the Company’s directors (including independent directors) is being expired on June 2014 and the directors election is scheduled at 2014 General Shareholders' Meeting.

• *including votes casted electronically (number in brackets)

RESOLVED, that the above proposal be and hereby was approved as proposed.

Shareholder (account no. 0802740) inquired how do you profit from BYOC? There is not easy to buy Acer’s smartphone. Please strengthen marketing channels.

Explanatory Notes :

• (1)In order to award outstanding employees and retain their talents, it is proposed to issue Restricted Stock Awards to eligible employees pursuant to Article 267 of the Company Act and the

Chairman and CEO stated:

• a.The market of BYOC includes B2B and B2C. B2B, including eDC data center, trading platforms (such as e-books, e-auctions and e-ticketing) and Acer Open Platform (AOP), which has made profits. B2C is to provide free service for users to manage music, photos and documents via the devices of Acer smartphones, PCs and mobile devices. B2C is on the stage of investing. Our starting point is the widely-covered scope of our hardware device, with a hope to differentiate Acer’s brand with others’ by BYOC and then develop high quality products.

• “Regulations Governing the Offering and Issuance of Securities by Securities Issuers” promulgated by the FSC.

• (2)The issuance of RSA may be reported in one tranche or in installments to the competent authority for registration within one year after the resolution of the General Shareholders’ Meeting. In accordance with the actual needs, the Chairman of the Board shall set up the actual issue date(s) in one tranche or in installments within one year following the date of receipt of effective registration from the competent authority.

• b.We’ll s strengthen marketing channels.

• (3)The following matters are included for the issuance of RSA:

Shareholder (account no. 0785027) suggested to note “Regulations Governing Procedure for Board of Directors Meetings” is valid after amending “The Election Regulation of Directors and Supervisors” and establishing “Audit Committee”.

• i. Issuance amount: not exceed 50,000 thousand shares.(Note)

• ii. Issuance terms and conditions:

• (i).Issuance price: granted to employees for free or by subscription at NT$10 per share tentatively. Upon the approval at the General Shareholders’ Meeting, it is proposed that the Board of Directors is to be authorized to resolve the actual issue price on the issue date.

• Chairman and Legal stated:

• We will follow shareholder’s suggestion.

• Shareholder (account no. 0666739) inquired the following questions: a.Supervisor has rights to audit, prevent or bring to justice if the company has any illegal matter. The supervisor and Chairman are couple. Shall you avoid conflict of interest?

• (ii).Vesting condition: qualified with both of the time-based and performance-based requirements set by the issuance rules of the RSA.

• (iii).Type of shares: common share of the Company.

• b.Does the supervisor inspect the major subsidiary and interview local employees and vendors? How many times? Does the supervisor apprehend local business and find any corrupt practices?

• (iv).Handling of the shares that employees obtain by inheritance or fail to meet the vesting condition: the Company shall redeem or buy back at issuance price and then cancel all of those RSA that fail to meet the vesting condition.

• c.Acer had huge loss, including NT$3.18B for inventory written off in

Q4’13.

• (1)Does accounting department not evaluate stock level, make a reservation for the damage arising from price deduction of inventory, and make a report to management team for their attention? Did CPAs omit to audit and find?

• iii.Qualification for employees and stocks awarded

• (i).Qualification for employees: For those employees who are full-time and outstanding as of the issue date. The actual number of qualified employees shall be determined by seniority, position, performance, overall contribution and any other factors, with consideration given to the Company’s operational needs and business development strategy, pursuant to the issuance rules of the RSA set by the Company within the extent permitted by laws and regulations.

• (2)There is no material discrepancy between the execution and compliance audited by internal auditors and internal control systems as shown page 37. Is there no any abnormal for the types of transaction cycle? Do auditors audit the major subsidiaries and have any inappropriate pressure? If yes, do supervisors know it?

• (3)Each business identified in the internal self-assessment project should be charged by a respective department manager. The department manager should take the responsibility by signing the statement only if no problem is found after self-assessment. Even if any risk identified in the self-assessment, it is very less likely that the company should suffer such a huge loss in a short period time. However, since self-assessment in the page 39 indicates such selfassessment is effective, does it mean that few department managers make any fales statements when signing the self-assessment statements? Should the supervisors clarify?

• (ii).Stocks awarded: number of restricted stocks plus number of employee stock options issued under Paragraph 1 of Article 56-1 of “Regulations Governing the Offering and Issuance of Securities by Securities Issuers” awarded to each employee shall not exceed 0.3% of the total number of the Company’s issued shares on the ended date of a year. Moreover, number of restricted stocks plus number of employee stock options issued under Paragraph 1 of Article 56 of “Regulations Governing the Offering and Issuance of Securities by Securities Issuers” awarded to each employee shall not exceed 1% of the total number of the Company’s issued shares on the ended date of a year.

• Chairman assigned legal department to state:

  • a.Acer has very strict rule which are fully in compliance with “Corporate Governance” purpose. If there is any conflict of interest, any parties involved should exercise recusal, no matter if they are relatives or not.

• iv. The reasons necessitating the issuance of RSA: to attract and retain talents, enhance employees’ cohesion and sense of belonging to the Company, increase competitiveness, and foster the best interests of the Company and its shareholders.

• b.In addition to the supervisors, we also assign internal auditors to audit and plan the key audit items before audit. We even assign the internal auditors to explain the rule of corporate governance for the new manager.

• v. The estimated expense amount, dilution of the Company’s earning per shares (EPS) and other impacts on shareholders’ equity: the total number of the RSA issued shall not exceed 50,000 thousand shares. Based on the closing price of NT$18 on March 5, 2014 for the common shares of the Company, with assumption of the shares subscripted fully at NT$10 per share, in consideration of employees’ vesting period, stock price volatility and risk-free interest rate, etc., and then plugging into option pricing model, the yearly amortization of the expense amount for 2014, 2015, 2016, 2017 and 2018 is estimated to be NT$97.26M, NT$97.26M, NT$97.26M, NT$97.26M and NT$97.26M respectively, the dilution of the Company’s EPS is approximately NT$0.035, NT$0.035, NT$0.035, NT$0.035 and NT$0.035 respectively. If the RSA are granted for free, the yearly amortization of the expense amount for 2014, 2015, 2016, 2017 and 2018 is estimated to be NT$180M, NT$180M, NT$180M, NT$ 180M and NT$180M respectively, the dilution of the Company’s EPS is approximately NT$0.065, NT$0.065 , NT$0.065, NT$0.065 and NT$0.065 respectively. There is a limited dilution of the Company’s future EPS, and there is no material impact on existing shareholders’ equity.

• c. (1)We attach high importance to the management of the stocks and will recognize the loss arising from the price decrease of inventories based on net realizable value. The loss in the 4th quarter of 2013 comes from simplifying products and brands, not related to stocks.

• (2)We evaluate the subsidiaries and branches overseas every year and increase the frequency of audit if the subsidiary or branch is explosed to high risk. Besides, the internal auditors have no abnormal pressure from anyone.

• (3)We attach great importance to internal controls. Even the operation results are not satisfactory, the mainly reason is because of the volatile market conditions, instead of the imperfect internal controls.

E : Special Motion : None.

F : Meeting Adjourned: 10: 37 a.m.

• **In case of any discrepancy between the English and Chinese version of those minutes of 2014 Annual General Shareholders’ Meeting of Acer, the Chinese version shall prevail.

• vi. If some revision or adjustment has to be made due to the competent authority’s instruction, amendment to the laws and regulations, financial market conditions or other objective circumstances, it is proposed that the General Shareholders’ Meeting authorizes the Board of Directors with full power and authority to handle all the issues regarding the issuance of RSA.

Note: This document is extracted from the meeting, the details are subject to the audio and video recording.

Business Report to Shareholders

vii. The RSA issued may be held in a security trust account. viii.With respect to the issuance of RSA, the relevant restrictions, important agreements and any other matters not set forth here shall be dealt with in accordance with the applicable laws and regulations and the issuance rules set by the Company.

The global ICT industry endured profound change in the past year, and obstacles within the company have resulted in our business underperformance. In fiscal year 2013, we reported consolidated revenues of NT$360.13 B, down 16.2% on year, loss after tax of NT$20.52B, and loss per share of NT$7.54. After adjustment due to compliance with the International Financial Reporting Standard (IFRS), our accumulated loss is NT$21.79B. We reported the above to all shareholders in accordance with laws (Article 211 of the Company Act) and regulations.

Note: This 50,000 thousand shares account for 1.78 % of the total number of the Company’s issued shares of 2,806,107,828 shares after stock cancellation of the First Buyback in Year 2011 from the date of May 26, 2014.

A main part of the loss was due to compliance with the IFRS to recognize NT$9.94B for the impairment of intangible assets in trademark rights etc. Other key factors of our loss were NT$3.18B for inventory write off and NT$1.02B for manpower reduction. Consequently, our former chairman and president resigned to take responsibility. On November 5, I returned to Acer as chairman of the Transformation Committee. Then on November 21, I assumed the company chairmanship in order to transform and lead our company through during this important time. I focused on re-engineering the organization culture and engraining the benevolent thinking of the Wangdao ideol-ogy, and hoped to combine the qualities of professionalism and entrepreneurship. I pushed for change in the com-pany business strategy while restructuring the organization, and through extensive communication we reached the consensus to define the new corporate vision. The consensus among all our employees was that a company without change cannot sustain! Following intensive in-ternal communication, on December 18 we publicly announced Acer’s vision and basic direction for transformation, Build Your Own Cloud (BYOC˛), a self-built cloud that will enable our customers to seamlessly integrate their PC and mobile devices to access their data – anytime, anywhere.

• (4)Please discuss.

• Voting Results:Shares present at the time of voting: 1,569,887,524 (votes casted electronically: 475,516,179 votes)

==> picture [186 x 33] intentionally omitted <==

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

% of the total represented
Voting Results share present
Votes in favor:1,166,661,573 votes(79,695,469 votes) 74.31%
Votes against : 218,923,954 votes(218,832,891 votes) 13.95%
Votes invalid or abstained: 176,987,819 votes(176,987,819 votes) 11.27%
----- End of picture text -----*

• *including votes casted electronically (number in brackets)

RESOLVED, that the above proposal be and hereby was approved as proposed.

ITEM 7

• Proposal : To Release the Restrictions on Competitive Activities of NewlyElected Directors and their Representatives (Proposed by the Board of Directors)

Explanatory Notes :(1)Pursuant to Article 209 of the Company Act, a director engaging, The vision is also about transforming from a hardware company into a “hardware + software + services" player as we prepare to embrace new either for himself or on behalf of another person, in activities that are within the scope of the company's business, shall explain to the Shareholders' Meeting the essential contents of such opportunities in the era of cloud technology. Acer’s role in the future is to become the “en-abler of BYOC,” and build in the BYOC angel into all Acer hardware and software. At the Computex Taipei international tradeshow in June we will showcase a wide range of BYOC services for all visitors to experience! activities and obtain its approval for conducting such activities. Finally, on January 1 this year, as Acer carried out a series of changes, I hired (2)It is hereby proposed to request the 2014 General Shareholders’ Jason Chen, former senior vice president of Worldwide Sales and Marketing at Meeting to release the restriction on competitive activities for Taiwan Semiconductor Manufacturing Company (TSMC), as the new CEO and newly-elected directors or their corporate representatives, who corporate president. participate in the operations of another company that engages in During this time, I held frequent in depth discussion with George Huang of the the same or similar business scope as the Company. Transformation Committee and Jason on business management and strategy. An (3)Please discuss. important conclusion we reached is the “5Cs” - Communication, Com- Voting Results:Shares present at the time of voting: 1,569,887,524 (votes munication, Communication, Consensus, and Commitment - as Acer’s topcasted electronically: 475,516,179 votes) down management culture. Voting Results % of the total representedshare present Through our efforts over the past few months our company has taken many new initiatives, and I feel assured that Acer is moving towards the right direction, as employee morale and confidence are gradually restored. The challenge that we Votes in favor:1,373,395,060 votes(286,359,893 votes) 87.48% face today was accumulated from long ago, therefore it cannot be expected for our Votes against : 10,878,157 votes(10,856,157 votes) 0.69% operations to improve immediately. Time is needed for our efforts to reflect in the Votes invalid or abstained: 178,300,129 votes(178,300,129 votes) including votes casted electronically (number in brackets) 11.36% financial figures and I hope that you will have the patience. I wish thank our shareholders over your long-term support for Acer. We truly appreciate your encouragement, and I hope you can uphold the original intention RESOLVED, that the above proposal be and hereby was approved as to continue supporting Acer.

Voting Results:Shares present at the time of voting: 1,569,887,524 (votes casted electronically: 475,516,179 votes)

RESOLVED, that the above proposal be and hereby was approved as proposed.

Sincerely,

Shareholder (account no. 0177449) inquired if a small software company can have any chance to join BYOC business? Chairman stated:

We welcome the small company to enter the BYOC business. The better

==> picture [162 x 181] intentionally omitted <==

==> picture [161 x 267] intentionally omitted <==

==> picture [162 x 343] intentionally omitted <==

Stan Shih Chairman

==> picture [140 x 795] intentionally omitted <==

==> picture [140 x 400] intentionally omitted <==

Independent Auditors’ Report

The Board of Directors Acer Incorporated:

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

In our opinion, the consolidated financial statements referred to in the first paragraph present fairly, in all material respects, the consolidated financial position of Acer Incorporated and subsidiaries as of December 31, 2013 and 2012 and January 1, 2012, and the results of their consolidated operations and their consolidated cash flows for the years then ended in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed by the Financial Supervisory Commission of the Republic of China.

We have also audited the non-consolidated statements of Acer Incorporated as of December 31, 2013, and 2012, and January 1, 2012, and the related statements of comprehensive income, change in equity, and cash flows for the years ended December 31, 2013 and 2012, on which we have issued an unqualified opinion. Taipei, Taiwan (the Republic of China) March 27, 2014

Notes to Readers

The accompanying consolidated financial statements are intended only to present the financial position, results of operations, and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China. For the convenience of readers, the auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language auditors’ report and separate financial statements shall prevail.

Independent Auditors’ Report

The Board of Directors

Acer Incorporated:

We have audited the accompanying non-consolidated balance sheets of Acer Incorporated (the “Company”) as of December 31, 2013 and 2012 and January 1, 2012, the related non-consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2013 and 2012. These nonconsolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these non-consolidated financial statements based on our audits. We conducted our audits in accordance with the “Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants” and auditing standards generally accepted in the Republic of China. Those regulations and standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the non-consolidated financial statements referred to above present fairly, in all material respects, the non-consolidated financial position of Acer Incorporated as of December 31, 2013 and 2012 and January 1, 2012, and the results of its operations and its cash flows for the years then ended, in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers. Taipei, Taiwan (the Republic of China) March 27, 2014

Notes to Readers

The accompanying consolidated financial statements are intended only to present the financial position, results of operations, and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China. For the convenience of readers, the auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language auditors’ report and separate financial statements shall prevail.

==> picture [198 x 345] intentionally omitted <==

==> picture [178 x 326] intentionally omitted <==

==> picture [404 x 227] intentionally omitted <==

==> picture [176 x 317] intentionally omitted <==

==> picture [393 x 229] intentionally omitted <==

==> picture [208 x 236] intentionally omitted <==

==> picture [393 x 154] intentionally omitted <==

==> picture [201 x 217] intentionally omitted <==

==> picture [393 x 172] intentionally omitted <==