Compal - AGM Information 2016 | FinancialReports.eu

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Compal Electronics, Inc. 2016 Annual General Shareholders’ Meeting Meeting Handbook

(June 24, 2016)

B1, No. 581, Ruiguang Rd., Neihu District, Taipei City 11492, Taiwan (R.O.C.)

Ⅰ . Meeting Procedures ................................................................................. 1 Ⅱ . Meeting Agenda ...................................................................................... 3 1. Discussion Items ................................................................................... 5 2. Report Items ....................................................................................... 13 3. Ratification Items ............................................................................... 18

Special Motion .................................................................................... 22
Ⅲ . Attachments
Comparison Table Before and After Amendment to the Articles of Incorporation of Compal Electronics, Inc.
Comparison Table Before and After Amendment to the Procedures for Financial Derivatives Transactions
Business Report for the Year 2015
Independent Auditors’ Report
Audit Committee’s Review Report
Financial Statements for the year 2015

Ⅳ . Appendices

Rules and Procedures of Shareholders Meeting
Articles of Incorporation
Procedures for Financial Derivatives Transactions
Shareholding of Directors
The Impact of Non-compensated Distribution of Shares on the Company’s Business Performance, Earnings Per Share, and Shareholder Return Rate
Others

Meeting Procedures

Compal Electronics, Inc. 2016 Annual General Shareholders’ Meeting Procedures

Call Meeting to Order
Chairman’s Address
Discussion Items
Report Items
Ratification Items
Special Motion(s)
Meeting Adjourned

Meeting Agenda

Compal Electronics, Inc.

2016 Annual General Shareholders’ Meeting Agenda

Time ： 9:00 am, June 24, 2016 (Friday)

Place ： B1, No. 581, Ruiguang Rd., Neihu District, Taipei City 11492, Taiwan (R.O.C.)

I . Discussion Items

To approve the amendment to the “Articles of Incorporation”
To approve the proposal of cash distribution from capital surplus
To approve the amendment to the “Procedures for Financial Derivatives Transactions”
To approve the release of non-competition restrictions for Directors
II . Report Items
Report of the distribution of compensation to employees and directors for the year 2015
Report on Business for the year 2015
Audit Committee's Review Report for the year 2015
Report of Mactech Corporation, Compal’s subsidiary, whose rectification plan after the balance of loaning of funds exceeded the limit set by the regulations of Mactech Corporation.
III . Ratification Items
To ratify the Financial Statements and Business Report for the year 2015
To ratify the Distribution of Earnings for the year 2015

Ⅳ . Special Motion(s)

Ⅴ . Meeting Adjourned

Discussion Items

Item 1

Proposed by the Board of Directors

Proposal:

To approve the amendment to the “Articles of Incorporation”

Explanatory Notes:

Amendment to the Articles of Incorporation is proposed to accommodate the business need of the Company and the requirements of applicable laws and regulations.
The Comparison Table Before and After Amendment to the Articles of Incorporation is attached hereto as Attachment 1.

Resolved That:

Item 2

Proposed by the Board of Directors

Proposal:

To approve the proposal of cash distribution from capital surplus

Explanatory Notes:

In accordance with Article 241 of the Company Act, the Company proposes a cash distribution of NT$ 885,334,125 from capital surplus derived from the amount of the subscription price in excess of par value of common shares issued by the Company. The cash is to be distributed to the registered shareholders on the record date, and the cash distribution per share will be NT$0.2. Cash distribution from capital surplus shall be paid to each shareholder, rounded to the nearest NT dollar (truncate the numbers after decimal place). Fractional amounts will be aggregately recognized as other revenue in the accounting book of the Company.
After the resolutions adopted by the 2016 Annual General Meeting of Shareholders, it is proposed that the Board of Directors be authorized by the General Shareholders’ Meeting to determine the record date for the cash distribution from capital surplus.
As of April 25, 2016, the number of shares issued by the Company which is eligible to receive cash distribution is 4,426,670,625 shares. However, if the number of outstanding shares is changed afterward due to the share buy-back or redemption by the Company, transfer of treasury stock to employees, shares cancellation and other factors so that the distribution ratio for the cash distribution from capital surplus must be adjusted accordingly, it is proposed that the Board of Directors be authorized by the General Shareholders’ Meeting to deal with this matter with full authority.

Resolved That:

Item 3

Proposed by the Board of Directors

Proposal:

To approve the amendment to the “Procedures for Financial Derivatives Transactions”

Explanatory Notes:

Amendment to the Procedures for Financial Derivatives Transactions is proposed to accommodate the business need of the Company.
The Comparison Table Before and After Amendment to the Procedures for Financial Derivatives Transactions is attached hereto as Attachment 2.

Resolved That:

Item 4

Proposed by the Board of Directors

Proposal:

To approve the release of non-competition restrictions for Directors

Explanatory Notes:

As certain Directors of the Company may invest in or operate a business which is identical or similar to the business scope of the Company, without prejudice to any interest of Compal, it is proposed to approve the release of non-competition restrictions for these Directors in accordance with Articles 209 of the Company Act.
Information of the Directors who concurrently serve in a position of other companies is shown in the tables below (see page 10~12). The approval of the release of non-competition restrictions for Directors is proposed.

Resolved That ：

■Information of Mr. Jui-Tsung Chen, the Director of Compal, concurrently serves in a position of other company is listed below:

positionofothercompanyislisted below:
Company	Position
General Life Biotechnology Co., Ltd.	Chairman / Representative of Compal

■Information of Mr. Shyh-Yong Shen (Representative of the Corporate Director of Compal, Kinpo Electronics, Inc.), concurrently serves in a position of other companies is listed below:

below:
Company	Position
Cal-CompBiotechCo.,Ltd.	Chairman/Representative of Kinpo (Note 1)
XYZprinting,Inc.	Chairman/Representative of Kinpo
XYZprinting (suzhou) co., Ltd.	Chairman / Representative of a company indirectlyinvested byKinpo
Tung-Wan Kai-Bao Co., Ltd.	Chairman / Representative of a company indirectlyinvested byKinpo
Cal-Comp Optical Electronics (Suzhou) Co.,Ltd.	Chairman/Representative ofCCET (Note 2)
Cal-CompTechnology (Suzhou) Co.,Ltd.	Chairman/Representative ofCCET
Cal-Comp Electronics and Communications (Suzhou) Co.,Ltd.	Chairman / Representative of CCET
Cal-Comp Precision (Wujiang) Co., Ltd.	Chairman / Representative of a company indirectlyinvested by CCET
Cal-Comp Precision (Dongguan) Co., Ltd.	Chairman / Representative of a company indirectlyinvested by CCET
Avaplas Precision Plastics (Shanghai) Co., Ltd	Chairman / Representative of a company indirectlyinvested by CCET
CastleNet Technology Inc.	Chairman / Representative of SAMPO (Note 3)
KinpoElectronics (Philippines),Inc.	Chairman/Invested byKinpo
XYZprinting Japan,Inc.	Chairman/Indirectlyinvested byKinpo
Cal Comp (Malaysia) SDN. BHD.	Chairman / Invested by CCET
Cal-CompElectronics deMexico Co. SAde CV	Chairman/Invested by CCET
Cal-CompPrecision(Singapore)Ltd.	Chairman/Invested by CCET
Cal-CompTechnology (Philippines),Inc.	Chairman/Invested by CCET
Cal-Comp Electronics (Thailand) Public CompanyLimited	Vice Chairman/ Invested by Kinpo
PChome (Thailand) Co.,Ltd.	Vice Chairman/Invested by CCET
KinpoElectronics,Inc.	Director
AcBel Polytech Inc.	Director/Representative of Kinpo
JipoInvestmentInc.	Director/Representative of Kinpo
Kinpo Electronics (China) Co., Ltd.	Director / Representative of a company indirectlyinvested byKinpo
DawningLeadingTechnologyInc.	Director/Representative ofCCET
Kinpo GroupManagement Consultant Company	Director/Representative ofCCET
Cal-Comp Electronics And communications Co., Ltd.	Director / Representative of CCET
AscendantPrivateEquityInvestmentLtd.	Director/Invested byKinpo
Cal-CompElectronics (U.S.A.) Co.,Ltd.	Director/Invested by CCET
Cal-CompIndustriaDe Semicondutores S.A.	Director/Indirectlyinvested by CCET

Company	Position
Cal-CompPrecision(Malaysia) Sdn.Bhd.	Director/Indirectlyinvested by CCET
Cal-CompPrecision(Thailand)Limited	Director/Indirectlyinvested by CCET
Cal-Comp USA(San Diego) Co.,Ltd.	Director/Indirectlyinvested by CCET
KingboltInternational(Singapore)Pte.Ltd.	Director/Invested byKinpo
KinpoInternational Ltd.	Director/Invested byKinpo
Power Station Holdings Ltd.	Director / Indirectly invested by AcBel (Note 4)
XYZprinting,Inc. (Samoa)	Director/Indirectlyinvested byKinpo
XYZprinting,Inc. (U.S.A.)	Director/Indirectlyinvested byKinpo
XYZprinting Netherlands,B.V.	Director/Indirectlyinvested byKinpo
XYZprinting (Thailand) Co.Ltd.	Director/Indirectlyinvested byKinpo
KinpoElectronics,Inc.	Preside
XYZprintingInc.	President/Invested byKinpo
XYZprinting (suzhou) co.,Ltd.	President/Indirectlyinvested byKinpo
Cal-Comp Electronics And communications Co., Ltd.	President / Invested by CCET
Cal-Comp Optical Electronics (Suzhou) Co.,Ltd.	President /Invested by CCET
Cal-CompTechnology (Suzhou) Co.,Ltd.	President /Invested by CCET
Cal-Comp Electronics and Communications (Suzhou) Co.,Ltd.	President / Invested by CCET
AvaplasPrecision Plastics (Shanghai) Co.,Ltd.	President /Indirectlyinvested by CCET
XYZprinting,Inc. (U.S.A.)	President /Invested byKinpo
Cal-CompElectronics (U.S.A.) Co.,Ltd.	President /Invested by CCET
Cal-Comp USA(San Diego) Co.,Ltd.	President /Indirectlyinvested by CCET
Cal-Comp USA(Indiana) Co.,Ltd.	President /Indirectlyinvested by CCET

Note: 1. Note: Kinpo Electronics, Inc. (“Kinpo”)

Cal-Comp Electronics (Thailand) Public Company Limited (“CCET”)
Sampo Corporation (“SAMPO”)
AcBel Polytech Inc. (“AcBel”)

■Information of Mr. Charng-Chyi Ko, the Director of Compal, concurrently serves in a position of other companies is listed below:

positionofothercompaniesislisted below:
Company	Position
Taiwan Biotech Co., Ltd.	President
Baotek Industrial Materials Ltd.	President/ Invested by Taiwan Biotech Co., Ltd.

■Information of Mr. Chung-Pin Wong, the Director of Compal, concurrently serves in a position of other companies is listed below:

positionofothercompaniesislisted below:
Company	Position
General Life Biotechnology Co., Ltd	Director / Representative of Compal
Sirqul	Director / Invested by Compal

■Information of Mr. Chao-Cheng Chen, the Director of Compal, concurrently serves in a position of other companies is listed below:

positionofothercompaniesislisted below:
Company	Position
Compal Broadband Networks, Inc.	Chairman / Representative of Compal
General Life Biotechnology Co., Ltd.	Director / Representative of Compal
Speedlink Tradings Limited	Director / Indirectly invested by Compal

■Information of Mr. Min Chih Hsuan, the Independent Director of Compal, concurrently serves in a position of other company is listed below:

Company	Position
D-LINK Corporation	Chairman / Representative of Yun-Wei Investment Co.Ltd.

■Information of Mr. Duh Kung Tsai, the Independent Director of Compal, concurrently serves in a position of other company is listed below:

ina positionofothercompanyislisted below:

Company	Position
Powertech Technology (Singapore) Pte. Ltd.	Director / Invested by Powertech TechnologyInc.

Report Items

Item 1

Proposed by the Board of Directors

Proposal:

Report of the distribution of compensation to employees and directors for the year 2015

Explanatory Note:

1 、 In accordance with the amended Articles of Incorporation of the Company, if there is any profit in a fiscal year, the Company’s pre-tax profits in such fiscal year, prior to deduction of compensation to employees and directors, shall be distributed to employees as compensation in an amount of not less than two percent (2%) thereof and to directors as compensation in an amount of not more than two percent (2%) of such profits. Notwithstanding the foregoing, in the event that the Company has accumulated losses, the Company shall first reserve an amount to offset accumulated losses.
2 、 The distribution of compensation to employees and directors for the year 2015, as approved by the Remuneration Committee and the Board of Directors, are NT$ 949,980,218 and NT$ 50,233,972, respectively. The compensations shall be distributed in the form of cash.

Item 2

Proposed by the Board of Directors

Proposal:

Report on Business for the year 2015

Explanatory Note:

The Business Report for the year 2015 is attached hereto as Attachment 3.

Item 3

Proposed by the Board of Directors

Proposal:

Audit Committee's Review Report for the year 2015

Explanatory Notes:

The year 2015 financial statements have been audited by the Independent Auditors and the Independent Auditors’ Report was issued. In addition, the Business Report and Distribution of Earnings for the Year 2015 have been reviewed and examined by Audit Committee; the Review Report was issued accordingly.
Independent Auditors’ Report is attached hereto as Attachment 4.
Audit Committee's Review Report is attached hereto as Attachment 5.

Item 4

Proposed by the Board of Directors

Proposal:

Report of Mactech Corporation, Compal’s subsidiary, whose rectification plan after the balance of loaning of funds exceeded the limit set by the regulations of Mactech Corporation.

Explanatory Notes:

Implementation in compliance with Letter No. Jin-Guan-Jen-Shen-Tzu 1040026958 issued by the Financial Supervisory Commission on July 13, 2015.
The rectification plan of Mactech Corporation, Compal’s subsidiary, whose balance of loaning of funds exceeded the limit set by the regulations of Mactech Corporation has been completed to meet the requirements prescribed by law and the authority.

Ratification Items

Item 1

Proposed by the Board of Directors

Proposal:

To ratify the Financial Statements and Business Report for the year 2015

Explanatory Notes:

The Company’s 2015 financial statements have been audited by Kuan-Ying Kuo and Jui-Lan Lo, certified public accountants from KPMG, who have issued an Audit Report. In addition, Business Report has been reviewed and examined by the Audit Committee and the Audit Committee has issued a Review Report accordingly (“Distribution of Earnings for the Year 2015” is listed in the Ratification Item 2).
The “Business Report for the Year 2015” and “Financial Statements for the Year 2015” are attached hereto as Attachments 3 and 6.

Resolved That:

Item 2

Proposed by the Board of Directors

Proposal:

To ratify the Distribution of Earnings for the year 2015

Explanatory Notes:

The 2015 Earnings Distribution Proposal (see page 21) was prepared by the Board of Directors according to the ROC Company Act and Articles of Incorporation of the Company.
The amount of earnings for the year 2015 available for distribution to shareholders as dividend and bonus is NT$ 4,426,670,625 . Such amount is proposed to be distributed in the form of cash dividend. Each shareholder will be entitled to receive a cash dividend of NT$1 per share. Cash dividend shall be distributed and paid to each shareholder, rounded to the nearest NT dollar (truncate the numbers after decimal place). Fractional amounts will be aggregately recognized as other revenue in the accounting book of the Company.
After the resolutions adopted by the 2016 Annual General Meeting of Shareholders, it is proposed that the Board of Directors be authorized by the General Shareholders’ Meeting to determine the record date of cash dividend distribution.
As of April 25, 2016, the number of shares issued by the Company that is eligible to receive dividends is 4,426,670,625 shares. However, if the number of outstanding shares is changed afterward due to the share buy-back or redemption by the Company, transfer of treasury stock to employees, share cancellation and other factors so that the distribution ratio for the cash dividend must be adjusted accordingly, it is proposed that the Board of Directors be authorized by the General Shareholders’ Meeting to deal with this matter with full authority.

Resolved That:

Compal Electronics, Inc.

Earnings Distribution Proposal for the Year 2015

Compal Electronics, Inc. Earnings Distribution Proposal for the Year 2015	Compal Electronics, Inc. Earnings Distribution Proposal for the Year 2015
Unit: NT$
Item	Amount
Unappropriated retained earnings of previous years	23,369,973,964
Add:
The impacts on unappropriated retained earnings as of January 1st, 2015 due to retroactive adjustment and retrospective application of the International Financial Reporting Standards	212,785,000
Unappropriated retained earnings of previous years (retrospectively adjusted)	23,582,758,964
Add:
Net income of 2015	8,684,610,377
Reversal of special reserve for the net debit balance of other equity interest in the previous year	3,139,020,680
Adjustments of retained earnings due to share-based payment transaction	1,370,031
Subtract:
Other comprehensive income of 2015 - remeasurement of defined benefit plans	(71,032,674)
10% Legal reserve	(868,461,038)
Special reserve retained for the net debit balance of other equity interest in this year	(3,199,674,050)
Changes in ownership interests in subsidiaries	(14,572,312)
Changes in equity interests in associates and joint ventures accounted for using equity method	(15,955,723)
Retained earnings available for distribution as of December 31, 2015	31,238,064,255
Distribution item:
Subtract:
Dividends to common shares holders＜Note 1＞	(4,426,670,625)
Unappropriated retained earnings as of December 31, 2015	26,811,393,630

Note: Cash dividends of NT$1 per common share

Special Motion(s)

Attachments

Attachment 1

Articles of Incorporation of Compal Electronics, Inc. Comparison Table Before and After Amendment

Before Amendment	After Amendment	Amendment Reason
Article 2 The business scope of the Company shall be as follows: 1~13(omitted) 14. ZZ99999 All businesses that are not prohibited or restricted by laws, except those that are subject to special approval.	Article 2 The business scope of the Company shall be as follows: 1~13(omitted) 14. To engage in F108031 Wholesale of Drugs, Medical Goods 15. To engage in F208031 Retail sale of Medical Equipments 16. To engage in CF01011 Medical Materials and Equipment Manufacturing 17. ZZ99999 All businesses that are not prohibited or restricted by laws, except those that are subject to special approval.	Revised to meet the business needs
	17.
Article 30 If there isanyprofitafter closing of books, the Company shall first defray tax due, cover losses in the past years and set aside ten percent (10%) of it as legal reserve and set aside or reverse a special reserve in accordance with laws and regulations, then an amount not more than two percent (2%) of the balance shall be paid to directors as remuneration and an amount no less than two percent (2%) shall be allocated as employees’bonus. The balance of earnings available for distribution is composed of the remainder of the said profit and the unappropriated retained earnings of previous years. The earnings appropriation proposal to distribute dividend and bonus shall be proposed	Article 30 If there is any profit in a fiscal year, the Company’s pre-tax profits in such fiscal year, prior to deduction of compensation to employees and directors, shall be distributed to employees as compensation in an amount of not less than two percent (2%) thereof and to directors as compensation in an amount of not more than two percent (2%) of such profits. In the event that the Company has accumulated losses, the Company shall reserve an amount to offset accumulated losses. The compensation to employees as mentioned above may be distributed in the form of stock or cash. Employees entitled to receive the said stock or cash may includethe	Revised to meet the law requirement

	Before Amendment		After Amendment	Amendment Reason
	by the Board of Directors and approved by the General Shareholders Meeting. The rest of the unappropriated retained earnings shall be reserved. The object of the said allocation of share certificates and bonusto employees includes the employees of the Company’s subordinate companies pursuant to the CompanyLaw. The lifecycle of the industry of the Company is in the growing stage. To meet the need of the Company for the future capital and the need of shareholders for cash flow, if there is any profit after close of books, the cash dividend allocated by the Company each year shall not be lower than ten percent (10%) of the total dividend (including cash and share dividend) for such year.		employees of the Company’s subordinate companies pursuant to the CompanyAct.
			Article 30-1 If there is any profit after closing of books in a given year, the Company shall first defray tax due, cover accumulated losses and set aside ten percent (10%) of it as legal reserve and then set aside or reverse a special reserve in accordance with laws and regulations. The balance of earnings available for distribution is composed of the remainder of the said profit and the unappropriated retained earnings of previous years. The earnings appropriation proposal to distribute dividend and bonus shall be proposed by the Board of Directors and approved by the General Shareholders Meeting. The rest of the	Added to meet the law requirement

Before Amendment		After Amendment	Amendment Reason
		unappropriated retained earnings shall be reserved. The lifecycle of the industry of the Company is in the growing stage. To meet the need of the Company for the future capital and the need of shareholders for cash flow, if there is any profit after close of books, the cash dividend allocated by the Company each year shall not be lower than ten percent (10%)of the total dividend (including cash and share dividend) for such year.
Article 35 These Articles of Incorporation were prescribed by the promoters on April 16, 1984. 1st~34th(omitted)		Article 35 These Articles of Incorporation were prescribed by the promoters on April 16, 1984. 1st~34th(omitted) The 35thamendment was made on June 24, 2016.	Added the amendment date

Attachment 2

Compal Electronics, Inc.

Compal Electronics, Inc.	Compal Electronics, Inc.	Compal Electronics, Inc.	Compal Electronics, Inc.	Compal Electronics, Inc.
Comparison Table Before and After Amendment to the Procedures for Financial Derivatives Transactions
Before amendment		After amendment		Reason for amendment
Article 9 Internal Control 1~2 (Omitted) 3. Regular Evaluation (1)~(4) (Omitted)		Article 9 Internal Control 1~2 (Omitted) 3. Regular Evaluation (1)~(4) (Omitted) (5) the essentials of performance evaluation i. Hedging: The profits and losses from both hedged item and hedging tool are the basis of performance evaluation. ii. Non-hedging To evaluate the actual profit and loss.		Revised to meet the business needs
			i.

Article 10 Setting Stop-Loss Point The loss ceilings of the total contracts and that of each individual contractfor non-economic hedging operation are set as follows: 1. The loss ceiling of the total contracts: 5% of the total contracts dollar amount. 2. The loss ceiling of each individual contract: 5% of each		Article 13 Setting Stop-Loss Point The loss ceilings of the total contracts and that of each individual contract are set as follows: Purpose Hedging Non-Hedging The loss ceiling of the total contracts 15% of the total contracts dollar amount 5% of the total contracts dollar amount The loss ceiling of each individual contract 15% of each individual contract dollar amount 5% of each individual contract dollar amount When the loss of hedging transactions reaches 10% of each individual contract or total contracts, should report to the high-level executives authorized by the Board of		Revised to meet the business needs
	individual contract dollar amount.

Before amendment		After amendment	Reason for amendment
		Directors.
ARTICLE 17 Supplementary Provisions These Procedures were approved by the Board of Directors’ Meeting and entered into force on July 25, 1996. The 1st~5thamendments (omitted)		ARTICLE 17 Supplementary Provisions These Procedures were approved by the Board of Directors’ Meeting and entered into force on July 25, 1996. The 1st~5thamendments (omitted) The 6thamendment was adopted by the Board of Directors’Meeting on August 11, 2015 and was implemented after it was approved by the General Shareholders’Meeting on June 24, 2016	Added the amendment date

Attachment 3

Business Report for the Year 2015

Thank you all for your support of Compal Electronics, Inc. (hereafter referred to as “Compal”) over the past year! The year of 2015 was a dramatic year in a way resembling the “chameleon” as a period of time when the global economic change was indeed beyond everyone’s expectation significantly. Despite the impact of economic recession and weak market demands, with the endeavors and efforts of the entire staff of Compal, the annual sales of the company was well maintained and the net profit also showed a growth over the previous fiscal year. Looking ahead of this year, the global economy is likely to be still in recession. However, we believe that corporations should continue to strive for research and developments and vigorously expand new businesses to be ready for the future challenges ahead without using the excuse of the economic recession. Here, with respect to the operational performance of last year and the operation outlook of this year, we summarize the following for you:

2015 Financial Performance

The consolidated sales of Compal in 2015 was NT$847,306 million dollars, slightly up by 0.2% year-on-year, in which the business contribution of non-notebook computer products continued to increase from 23% to 28%. The consolidated operating profit was NT$11,312 million dollars, down 3% year-on-year. Nevertheless, with significant improvement in the non-operating segment and reduction of non-operating loss, the net profit attributed to the parent company was NT$ 8,685 million dollars, up 24% year-on-year. The earning per share (EPS) of the company was NT$ 2.01.

2015 Business Development

The total shipment of computer products of the Computer Business Group (PCBG) in 2015 was down by 10% less than the previous year, and it was mainly affected by the weaker demands of the overall market and the global recession. Nevertheless, with the change of the usage habit of the consumers, various types of demands emerged, such as the demands for ultra-slim notebooks, high-end gaming notebooks and two-in-one notebooks, of which the products required more precise market segmentation and positioning. In the fields of slim type material technology, power-saving technology and heat dissipation technology etc., the Company will continue to develop state-of-the art innovative and quality products in cooperation with our clients in order to satisfy the market demands.

The total shipment of the products of the Smart Device Business Group (SDBG) in 2015 was up by 30% over the previous year. Such rapid growth benefited from the development of the tablet business and the continuous investment in the development of the new technology of LTE smartphone as well as the cooperation with our new prospective clients. For tablets, Compal constantly develops new usage models and integrates with the application of the Internet-of-Things (IoT). For smartphones, the company also vigorously develops image technology and new designs of software services in order to create unique products. Accordingly, Compal continues to maintain its leading position in the industry.

Corporate Governance & Social Responsibility

During the development of the business, Compal is also committed to invest in the corporate sustainability for business operations in a long term. With regard to the corporate governance, Compal has established the Auditing Committee in 2015 and received the award for top 5% ranking in the “First-Term Corporate Governance Evaluation” by the Taiwan Stock Exchange Corporation (TWSE). With regard to the green environment, in addition to the promotion on the green and halogen-free products, the company has also been included in the Climate Disclosure Leadership Index (CDLI) for the first time with recognition by international institutes. In terms of social welfare, Compal continues to fulfill the corporate social responsibility and engages in the promotion of the rural children digital learning program. In 2015, the Commonweath Magazine ranked the company No. 16 in the “CSR Corporate Citizen Awards” for large corporations, and the commitment of Compal in the corporate sustainability was recognized by society once again.

2016 New business Development

With years of experience in the technology platform and research and development in the information technology and communication industry, Compal has been able to rapidly and effectively enter various new business fields, including the fields of Server, Auto Electronics, Smart Home, IoT Vertical Solution, Smart Medical and Healthcare and Smart Wearable Devices etc. For the development of new businesses, Compal develops customized and competitive products according to the demands in each field such that the company is not merely acting as a hardware supplier but further engages in the development of integrated system service, and the goal is to establish a new service-oriented business model with sources of revenue.

Moreover, with the emerging trend of aging society and health management and the rise of sports fashion, we are of the opinion that smart medical and healthcare will soon be an important area and topic for future industrial development. Considering our solid experience in the information technology and communication along with the advantages in integration and product developments, not to mention our active cross-industry alliance, Compal is able

to rapidly develop comprehensive and diverse products and services in light of providing greater sources and developments for the industry of medical and healthcare industry in Taiwan in the future.

Business Outlook

According to market research firms (IDC), the global market demands for notebook and tablet in 2016 will be down year-over-year, and the annual growth of the smartphone demand will be reduced. Nevertheless, the new application fields, such as server, auto electronics, IoT and smart wearable devices are expected to have opportunities for significant growths and will become competitive areas for all companies. Despite the global economy still being in its down time, with consideration to the global market condition and the business development of the company, Compal expects the total shipment of 5C (Computing, Communication, Consumer, Cloud, Connecting) related electronic products to continue to grow over the previous year. The revenue contribution of the non-notebook business in 2016 is expected to head toward the goal of exceeding 30% contribution in total.

In the long term, Compal will continue to advance in innovation, to enhance value-added products and services, to increase the competitiveness of the company and to constantly sustain revenue and profit growth at the same time as our most vital commitments to all of our shareholders. Once again, we sincerely appreciate your support and advice for Compal and wish you a peaceful and prosperous year!

Sincerely yours,

Chairman of the Board: Sheng-Hsiung Hsu President and Chief Executive Officer: Jui-Tsung Chen Accounting Officer: Ching-Hsiung Lu

Attachment 4

Independent Auditors’ Report

To Compal Electronics, Inc.:

We have audited the accompanying balance sheets of Compal Electronics, Inc. as of December 31, 2015 and 2014 (retrospectively adjusted), and the statements of comprehensive income, and changes in equity and cash flows for the years ended December 31, 2015 and 2014 (retrospectively adjusted). These annual parent company only financial reports are the responsibility of the Company’s management. Our responsibility is to express an opinion on these annual parent company only financial report 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 the generally accepted auditing standards in the Republic of China. Those standards and regulations require that we plan and perform the audit to obtain reasonable assurance about whether the annual parent company only financial reports are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the annual parent company only financial reports. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the annual parent company only financial reports. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the annual parent company only financial reports referred to above present fairly, in all material respects, the financial position of Compal Electronics, Inc. as of December 31, 2015 and 2014 (retrospectively adjusted), and the results of its operations and its cash flows for the years ended December 31, 2015 and 2014 (retrospectively adjusted), in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers.

As stated in note 6(c) of the annual parent company only financial reports, Compal Electronics, Inc. recognized both the impairment loss of $1,689,000,000 on the equity investment in Chunghwa Picture Tube, Ltd. and the related share of loss of associates and joint ventures accounted for using equity method of 3,041,000,000 for the three months ended March 31, 2014.

As stated in note 3(a) of the annual parent company only financial reports, starting January 1, 2015, the annual parent company only financial reports of Compal Electronics, Inc. are prepared in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting standards (2013), International Accounting Standards (2013), IFRIC Interpretations (2013) and SIC Interpretations (not including International Accounting Standards No. 9) endorsed by the Financial Supervisory Commission R.O.C., and retrospectively adjusted of the annual parent company only financial reports for the year ended December 31, 2014. The adjustment did not have any significant impact to the annual parent company only financial reports.

KPMG

Taipei, Taiwan (the Republic of China) March 30, 2016

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

The auditors’ report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language versions of the auditors’ report and financial statements, the Chinese version shall prevail.

Independent Auditors’ Report

To Compal Electronics, Inc.:

We have audited the accompanying consolidated balance sheets of Compal Electronics, Inc. and subsidiaries as of December 31, 2015, and 2014 (retrospectively adjusted), the consolidated statements of comprehensive income for the years ended December 31, 2015 and 2014 (retrospectively adjusted), and changes in stockholders’ equity and cash flows for the years ended December 31, 2015 and 2014 (retrospectively adjusted). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial reports 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 the generally accepted auditing standards in the Republic of China. Those standards and regulations require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial reports are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial reports. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial reports. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial reports referred to above present fairly, in all material respects, the consolidated financial position of Compal Electronics, Inc. as of December 31, 2015 and 2014 (retrospectively adjusted), 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, and International Financial Reporting standards, International Accounting Standards, IFRSC Interpretations and SIC Interpretations endorsed by the Financial Supervisory Commission in the Republic of China.

As stated in note (6)(d) of the consolidated financial statements, Compal Electronics, Inc. and its subsidiaries recognized an impairment loss of NT$4,730,000 thousand on the equity investment in Chunghwa Picture Tubes, Ltd. for the three months ended March 31, 2014.

As stated in note (3)(a) of the consolidated financial reports, effective January 1, 2015, the consolidated financial reports of Compal Electronics, Inc. and its subsidiaries are prepared in conformity with International Financial Reporting standards (2013), International Accounting Standards (2013), IFRIC Interpretations (2013) and SIC Interpretations (not including International Financial Reporting standards 9) endorsed by the Financial Supervisory Commissions R.O.C., are retrospectively adjusted accordingly the consolidated financial statements for the year ended December 31, 2014. The adjustment did not have any significant impact to the consolidated financial reports.

Compal Electronics Inc. has prepared the annual parent company only financial reports as of and for the years ended December 31, 2015 and 2014, on which we have issued a modified unqualified opinion.

KPMG

Taipei, Taiwan (the Republic of China) March 30, 2016

Attachment 5

Audit Committee’s Review Report

The Company’s 2015 financial statements have been approved by the Audit Committee and by the Board of Directors. Kuan-Ying Kuo and Jui-Lan Lo, certified public accountants from KPMG, have completed the audit of the financial statements and issued an audit report relating thereto. In addition, the Board of Directors has prepared and submitted to us the Company’s 2015 business report and proposal for distribution of earnings. We, the Audit Committee members, have duly examined and determined such business report and proposal for distribution of earnings to be in line with the requirements under the Company Law and relevant laws and regulations. According to Article 14-4 of the Securities and Exchange Act and Article 219 of Company Law, we hereby submit this report.

Compal Electronics, Inc. Chairman of the Audit Committee:

May 11, 2016

Attachment 6

(English Translation of Financial Report Originally Issued in Chinese) COMPAL ELECTRONICS, INC.

Balance Sheets

December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars)

Assets Current assets: Cash and cash equivalents $ Current financial assets at fair value through profit or loss Current available-for-sale financial assets Current bond investment without active market Notes and accounts receivable, net Notes and accounts receivable due from related parties, net Other receivables Inventories Other current assets Non-current assets: Investments accounted for using equity method Non-current available-for-sale financial assets Non-current financial assets at cost Non-current bond investment without active market Property, plant and equipment Intangible assets Deferred tax assets Other non-current assets Total assets $		December 31, 2015	December 31, 2015	December 31, 2014 (retrospectively adjusted) Amount % 43,095,497 12.5 114,111 - 44,538 - 350,000 0.1 166,442,177 48.5 3,085,099 0.9 427,096 0.1 41,528,853 12.1 522,183 0.2 255,609,554 74.4 73,585,998 21.4 8,735,528 2.6 6,588 - 1,400,000 0.4 2,230,023 0.7 412,185 0.1 1,336,919 0.4 114,320 - 87,821,561 25.6 343,431,115 100.0 Liabilities and equity Current liabilities: Short-term borrowings $ Notes and accounts payable Notes and accounts payable to related parties Other payables Current tax liabilities Current provisions Other current liabilities Unearned revenue Long-term borrowings, current portion Non-current liabilities: Long-term borrowings Deferred tax liabilities Net defined benefit liabilities Other non-current liabilities Total liabilities Equity attributable to owners of parent: Ordinary shares Capital surplus Retained earnings Other equity interest Treasury shares Total equity Total liabilities and equity $	December 31, 2014 (retrospectively adjusted) Amount % 43,095,497 12.5 114,111 - 44,538 - 350,000 0.1 166,442,177 48.5 3,085,099 0.9 427,096 0.1 41,528,853 12.1 522,183 0.2 255,609,554 74.4 73,585,998 21.4 8,735,528 2.6 6,588 - 1,400,000 0.4 2,230,023 0.7 412,185 0.1 1,336,919 0.4 114,320 - 87,821,561 25.6 343,431,115 100.0 Liabilities and equity Current liabilities: Short-term borrowings $ Notes and accounts payable Notes and accounts payable to related parties Other payables Current tax liabilities Current provisions Other current liabilities Unearned revenue Long-term borrowings, current portion Non-current liabilities: Long-term borrowings Deferred tax liabilities Net defined benefit liabilities Other non-current liabilities Total liabilities Equity attributable to owners of parent: Ordinary shares Capital surplus Retained earnings Other equity interest Treasury shares Total equity Total liabilities and equity $		December 31, 2015 December 31, 2014 (retrospectively adjusted)	December 31, 2015 December 31, 2014 (retrospectively adjusted)	December 31, 2015 December 31, 2014 (retrospectively adjusted)	December 31, 2015 December 31, 2014 (retrospectively adjusted)
		Amount 30,797,312 - 29,738 350,000 148,844,537 973,946 553,185 25,344,975 603,115 207,496,808 78,006,762 5,970,903 6,588 1,050,000 2,181,737 378,454 1,042,365 105,422 88,742,231 296,239,039	% 10.4 - - 0.1 50.2 0.3 0.3 8.6 0.2 70.1 26.3 2.0 - 0.4 0.7 0.1 0.4 - 29.9 100.0		Amount 43,095,497 114,111 44,538 350,000 166,442,177 3,085,099 427,096 41,528,853 522,183 255,609,554 73,585,998 8,735,528 6,588 1,400,000 2,230,023 412,185 1,336,919 114,320 87,821,561 343,431,115		Amount 22,087,200 63,996,915 62,361,931 8,957,625 2,200,353 2,034,677 428,602 1,747,574 13,850,000 177,664,877 13,740,000 448,762 469,846 139,759 14,798,367 192,463,244 44,711,266 12,838,638 51,877,511 (3,926,881) (1,724,739) 103,775,795 296,239,039	% 7.5 21.6 21.1 3.0 0.7 0.7 0.1 0.6 4.7 60.0 4.6 0.2 0.2 - 5.0 65.0 15.1 4.3 17.5 (1.3) (0.6) 35.0 100.0	Amount 28,667,700 101,637,875 74,153,547 8,133,574 583,444 1,676,185 645,522 2,293,685 3,000,000 220,791,532 19,660,000 1,117,063 399,130 76,467 21,252,660 242,044,192 44,232,366 14,296,445 47,721,872 (3,139,021) (1,724,739) 101,386,923 343,431,115	% 8.3 29.6 21.6 2.4 0.2 0.5 0.2 0.6 0.9 64.3 5.7 0.3 0.1 - 6.1 70.4 12.9 4.2 13.9 (0.9) (0.5) 29.6 100.0

See accompanying notes to the parent company only financial reports.

(English Translation of Financial Report Originally Issued in Chinese) COMPAL ELECTRONICS, INC.

Statements of Comprehensive Income

For the years ended December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars, except net income per share amounts)

Net sales revenue $ Cost of sales Gross profit Less: Unrealized profit from sales Gross profit Operating expenses: Selling expenses Administrative expenses Research and development expenses Net operating income Non-operating income and expenses: Other gains and losses Finance costs Other income Share of profit of subsidiaries, associates and joint ventures accounted for using equity method Impairment loss Total non-operating income and expenses Profit before tax Less: tax expense Profit Other comprehensive income: Items that will not be reclassified subsequently to profit or loss Other comprehensive income, before tax, remeasurement of defined benefit obligation Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method that may not be reclassified subsequently to profit or loss Less: income tax relating to items that will not be reclassified Subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Other comprehensive income, before tax, exchange differences on translation Other comprehensive income, before tax, available-for-sale financial assets Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method that may be reclassified subsequently to profit or loss Less: income tax relating to items that may be reclassified Subsequently to profit or loss Other comprehensive income, net Comprehensive income $ Earnings per share: Basic net income per share $ Diluted net income per share $		2015		2014 (retrospectively adjusted)	2014 (retrospectively adjusted)	2014 (retrospectively adjusted)
		Amount 802,994,930 780,260,207 22,734,723 (2,867) 22,737,590 3,798,280 2,581,758 9,052,274 15,432,312 7,305,278 293,589 (604,735) 786,958 2,413,800 (32,000) 2,857,612 10,162,890 1,478,280 8,684,610 (79,571) (4,988) (13,527) (71,032) 2,011,139 (1,695,723) (357,582) 18,486 (60,652) (131,684) 8,552,926	% 100.0 97.2 2.8 - 2.8 0.5 0.3 1.1 1.9 0.9 - - 0.1 0.3 - 0.4 1.3 0.2 1.1 - - - - 0.2 (0.2) - - - - 1.1 2.01 1.97		Amount 803,504,061 782,209,491 21,294,570 5,657 21,288,913 2,260,919 2,563,289 9,172,949 13,997,157 7,291,756 951,688 (515,563) 751,602 790,247 (1,691,121) 286,853 7,578,609 554,148 7,024,461 (43,607) (289) (6,268) (37,628) 2,903,749 1,391,202 269,533 2,837 4,561,647 4,524,019 11,548,480	% 100.0 97.4 2.6 - 2.6 0.3 0.3 1.1 1.7 0.9 0.1 (0.1) 0.1 0.1 (0.2) - 0.9 - 0.9 - - - - 0.3 0.2 - - 0.5 0.5 1.4 1.63 1.61

See accompanying notes to the parent company only financial reports.

(English Translation of Financial Report Originally Issued in Chinese) COMPAL ELECTRONICS, INC.

Statements of Changes in Equity For the years ended December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars)

	Ordinary shares		Retained	earnings	earnings	Total retained earnings		Other equity interest	Other equity interest
		Legal reserve	Special reserve	r	Unappropriated etained earnings		Exchange differences on translation of foreign financial statements	Unrealized gains (losses)on available-for-sale financial assets	Unearned employee benefit and others	Total other equity interest
$ $	44,134,467 -	15,621,182 -	8,818,725 -		19,820,927 229,144 20,050,071 7,024,461 (37,628)	44,260,834 229,144	(1,846,674) - (1,846,674)) - 3,018,218 3,018,218 - - - - 6,763 - - - - - 1,178,307 - 1,624,754 1,624,754 - - - - - - - - - 2,803,061	(5,860,844) - (5,860,844) - 1,543,429 1,543,429 - - - - 87 - - - - - (4,317,328) - (1,693,104) (1,693,104) - - - - - - - - - (6,010,432)	- -
	44,134,467	15,621,182	8,818,725			44,489,978			-
	- -	- -	- -						- -
	-	-	-		6,986,833 (246,721) 1,111,207 (2,177,668) - (1,575,776) (1,495) - - - - 24,146,451 8,684,610 (71,032) 8,613,578 (703,408) 4,568,497 (4,428,781) - - (14,572) (15,956) 1,370 - 32,167,179				-
	- - - - - - - 97,899 - -	246,721 - - - - - - - - -	- (1,111,207) - - - - - - - -						- - - - - - - - - -
	44,232,366 - -	15,867,903 - -	7,707,518 - -						- - 7,698
	-	-	-						7,698
	- - - - - - - 478,900 -	703,408 - - - - - - - -	- (4,568,497) - - - - - - -						- - - - - - - (727,208) -
	44,711,266	16,571,311	3,139,021						(719,510)

Note 1: Directors’ and supervisors’ remuneration amounting to $21,761 and employee bonuses amounting to $314,199 were recognized in the 2013 statement of comprehensive income. Note 2: Directors’ and supervisors’ remuneration amounting to $49,379 and employee bonuses amounting to $895,790 were recognized in the 2014 statement of comprehensive income.

See accompanying notes to the parent company only financial reports.

(English Translation of Financial Report Originally Issued in Chinese) COMPAL ELECTRONICS, INC.

Statements of Cash Flows

For the years ended December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Depreciation and amortization Increase in allowances for uncollectible accounts Finance costs Interest income Dividends income Compensation cost of employee share options Share of profit of subsidiaries, associates and joint ventures accounted for using equity method Loss (gain) on disposal of investments Impairment loss on financial assets Adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Changes in financial assets at fair value through profit or loss Decrease (increase) in notes and accounts receivable Decrease (increase) in inventories Decrease (increase) in other current assets Decrease (increase) in other receivable Total changes in operating assets Changes in operating liabilities: Increase (decrease) in notes and accounts payable Increase (decrease) in other payable Increase (decrease) in provisions Increase (decrease) in unearned revenue Increase (decrease) in other current liabilities Other Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash flows from (used in) operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of investments accounted for using equity method, available-for-sale financial assets and bond investment without active market Proceeds from disposal of investments accounted for using equity method and available-for sale financing assets Redemption from bond investment without active market Net cash outflows resulted from business combination Proceeds from capital reduction and liquidation of investments Acquisition of property, plant and equipment Decrease (increase) in other receivable due from related parties Acquisition of intangible assets Other Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Cash dividends paid Exercise of employee share options Treasury shares convert to employee Other Net cash flows from (used in) financing activities Net increase(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period		2015 2014 (retrospectively adjusted)	2015 2014 (retrospectively adjusted)
	$ $	10,162,890 698,496 27,627 604,735 (153,268) (170,537) 400,262 (2,413,800) (405,885) 32,000 (1,380,370) 114,111 19,681,148 16,183,878 (80,932) (150,363) 35,747,842 (49,432,576) 807,475 358,492 (546,111) (216,920) (26,483) (49,056,123) (13,308,281) (14,688,651) (4,525,761) 160,900 900,359 (588,159) (240,077) (4,292,738) (1,023,451) 1,489,852 350,000 - 51,520 (153,958) 27,733 (470,768) 17,144 288,072 (6,580,500) 12,770,000 (7,840,000) (6,643,171) - - 152 (8,293,519) (12,298,185) 43,095,497 30,797,312	7,578,609 855,418 7,381 515,563 (158,627) (147,794) 110,250 (790,247) 46,381 1,691,121 2,129,446 (40,193) 10,794,135 (11,096,332) (124,932) 506,306 38,984 23,378,885 (926,097) 271,965 410,956 231,895 48,003 23,415,607 23,454,591 25,584,037 33,162,646 168,543 750,407 (489,520) (184,371) 33,407,705 (1,421,025) 195,597 - (534,954) 65,776 (110,730) 373,037 (307,808) 16,407 (1,723,700) (4,736,756) 10,100,000 (240,000) (4,355,336) 195,717 282,125 3 1,245,753 32,929,758 10,165,739 43,095,497

See accompanying notes to the parent company financial reports.

(English Translation of Financial Report Originally Issued in Chinese) COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars)

Assets Current assets: Cash and cash equivalents $ Current financial assets at fair value through profit or loss Current available-for-sale financial assets Current derivative financial assets used for hedging Current bond investment without active market Notes and accounts receivable, net Notes and accounts receivable due from related parties, net Other receivables Inventories, net Other current assets Non-current assets: Investments accounted for using equity method Non-current available-for-sale financial assets Non-current financial assets at cost Non-current bond investment without active market Property, plant and equipment Intangible assets Deferred tax assets Long-term prepaid rents Other non-current assets Total assets $		December 31, 2015		December 31, 2014 (retrospectively adjusted) Amount % 74,708,130 19.7 184,093 - 44,538 - - - 350,000 0.1 178,552,207 47.2 343,030 0.1 788,334 0.2 67,270,875 17.8 2,604,042 0.7 324,845,249 85.8 11,694,855 3.1 12,402,009 3.3 83,202 - 1,400,000 0.4 24,472,732 6.4 1,035,162 0.3 1,653,141 0.4 735,246 0.2 429,122 0.1 53,905,469 14.2 378,750,718 100.0 Liabilities and equity Current liabilities: Short-term borrowings $ Current financial liabilities at fair value through profit or loss Notes and accounts payable Notes and accounts payable to related parties Other payables Current tax liabilities Current provisions Other current liabilities Unearned revenue Long-term borrowings, current portion Non-current liabilities: Long-term borrowings Deferred tax liabilities Net defined benefit liabilities Non-current liabilities Total liabilities Equity attributable to owners of parent: Ordinary shares Capital surplus Retained earnings Other equity interest Treasury shares Non-controlling interests Total equity Total liabilities and equity $		December 31, 2015	December 31, 2014 (retrospectively adjusted)
		Amount % 62,751,542 19.1 25,412 - 29,738 - 21,360 - 350,000 0.1 164,799,743 50.3 62,245 - 824,160 0.3 46,520,021 14.2 2,399,255 0.7 277,783,476 84.7 11,788,042 3.6 9,063,101 2.8 103,867 - 1,050,000 0.3 24,308,631 7.4 1,194,193 0.4 1,377,465 0.4 747,066 0.2 509,734 0.2 50,142,099 15.3 327,925,575 100.0				Amount % 29,481,176 9.0 29,215 - 127,152,784 38.8 1,473,760 0.4 18,141,188 5.5 4,196,978 1.3 2,388,710 0.7 3,929,073 1.2 1,747,574 0.5 14,216,617 4.3 202,757,075 61.7 14,356,563 4.4 481,497 0.2 545,460 0.2 186,864 0.1 15,570,384 4.9 218,327,459 66.6 44,711,266 13.6 12,838,638 3.9 51,877,511 15.8 (3,926,881) (1.2) (1,724,739) (0.5) 103,775,795 31.6 5,822,321 1.8 109,598,116 33.4 327,925,575 100.0	Amount % 46,692,373 12.3 39,310 - 170,739,133 45.1 1,167,152 0.3 18,216,304 4.8 2,180,985 0.6 2,066,581 0.5 3,233,431 0.9 2,294,765 0.6 3,634,233 1.0 250,264,267 66.1 20,504,301 5.4 1,136,411 0.3 462,009 0.1 163,793 - 22,266,514 5.8 272,530,781 71.9 44,232,366 11.7 14,296,445 3.8 47,721,872 12.6 (3,139,021) (0.8) (1,724,739) (0.5) 101,386,923 26.8 4,833,014 1.3 106,219,937 28.1 378,750,718 100.0

See accompanying notes to the consolidated financial statements.

(English Translation of Financial Report Originally Issued in Chinese)

COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2015 and 2014 (expressed in thousands of New Taiwan Dollars, except net income per share)

2015	2014 (Retrospectively adjusted)	2014 (Retrospectively adjusted)
Amount % $ 847,305,698 100.0 813,927,341 96.1 33,378,357 3.9 5,011,950 0.6 4,804,295 0.6 12,249,660 1.4 22,065,905 2.6 11,312,452 1.3 (323,839) - (899,702) (0.1) 1,495,156 0.2 (37,562) - (121,574) - 367,162 - 479,641 0.1 11,792,093 1.4 2,784,946 0.3 9,007,147 1.1 (93,596) - (794) - (15,911) - (78,479) - 1,766,330 0.2 (1,629,927) (0.2) 21,360 - (146,939) - 34,315 - (23,491) - (101,970) - $ 8,905,177 1.1 $ 8,684,610 1.1 322,537 - $ 9,007,147 1.1 $ 8,552,926 1.0 352,251 - $ 8,905,177 1.0 $ 2.01 $ 1.97	Amount % 845,700,752 100.0 813,336,090 96.2 32,364,662 3.8 3,746,315 0.4 4,842,391 0.6 12,111,034 1.4 20,699,740 2.4 11,664,922 1.4 1,119,338 0.1 (1,019,504) (0.1) 1,800,129 0.2 (37,566) - (4,777,920) (0.5) 977,953 0.1 (1,937,570) (0.2) 9,727,352 1.2 2,181,971 0.3 7,545,381 0.9 (42,088) - (743) - (6,010) - (36,821) - 2,882,064 0.3 1,667,628 0.2 - - 81,735 - 39,107 - 4,592,320 0.5 4,555,499 0.5 12,100,880 1.4 7,024,461 0.8 520,920 0.1 7,545,381 0.9 11,548,480 1.4 552,400 - 12,100,880 1.4 1.63 1.61	% 100.0 96.2 3.8 0.4 0.6 1.4 2.4 1.4 0.1 (0.1) 0.2 - (0.5) 0.1 (0.2) 1.2 0.3 0.9 - - -
		-
		0.3 0.2 - - -
		0.5 0.5 1.4 0.8 0.1 0.9 1.4 -

See accompanying notes to the consolidated financial statements.

(English Translation of Financial Report Originally Issued in Chinese) COMPAL ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated statements of changes in equity For the Years Ended December 31, 2015 and 2014

(expressed in thousands of New Taiwan dollars)

							Equity attribut	able to owners of p	able to owners of p	rent						Non controlling interests	Total equity
	Ordinary shares	Capital surplus		Retained	earnings					Other equity int	erest		Treasury shares	o	Total equity attributable to wners of parent
			Legal reserve	Special reserve	Unappropriated retained earnings		Total retained earnings 44,260,834 229,144	Exchange differences on translation of foreign financial statements		Unrealized gains (losses)on available-for-sale financial assets	Unearned employee benefit Total other and others equity interest
$ $	44,134,467 -	16,193,087 - 16,193,087 - - - - - - (2,177,668) 3,492 (3,720) 24,056 97,818 109,389 49,991 - 14,296,445 - - - - - - (2,214,390) 258 28,275 5,824 647,200 75,026 - 12,838,638	15,621,182 - 15,621,182 - - - 246,721 - - - - - - - - - - 15,867,903 - - - 703,408 - - - - - - - - - 16,571,311	8,818,725 -		19,820,927 229,144 20,050,071 7,024,461 (37,628) 6,986,833 (246,721) 1,111,207 (2,177,668) - (1,575,776) (1,495) - - - - - 24,146,451 8,684,610 (71,032) 8,613,578 (703,408) 4,568,497 (4,428,781) - - (14,572) (15,956) 1,370 - - 32,167,179			(1,846,674) - (1,846,674) - 3,018,218 3,018,218 - - - - 6,763 - - - - - - 1,178,307 - 1,624,754 1,624,754 - - - - - - - - - - 2,803,061	(5,860,844) - (5,860,844) - 1,543,429 1,543,429 - - - - 87 - - - - - - (4,317,328) - (1,693,104) (1,693,104) - - - - - - - - - - (6,010,432)	- - - - - - - - - - - - - - - - - - - 7,698 7,698 - - - - - - - (727,208) - - (719,510)	(7,707,518) - (7,707,518) - 4,561,647 4,561,647 - - - - 6,850 - - - - - - (3,139,021) - (60,652) (60,652) - - - - - - - (727,208) - - (3,926,881)	(2,007,725) -		94,873,145 229,144 95,102,289 7,024,461 4,524,019 11,548,480 - - (2,177,668) (2,177,668) (1,565,434) (5,215) 24,056 195,717 392,375 49,991 - 101,386,923 8,684,610 (131,684) 8,552,926 - - (4,428,781) (2,214,390) 258 13,703 (10,132) 400,262 75,026 - 103,775,795	5,089,127 -	99,962,272 229,144 100,191,416 7,545,381 4,555,499 12,100,880 - - (2,177,668) (2,177,668) (2,195,866) (5,215) 24,056 195,717 392,375 49,991 (178,081) 106,219,937 9,007,147 (101,970) 8,905,177 - - (4,428,781) (2,214,390) 258 13,703 (10,132) 400,262 75,026 637,056 109,598,116
	44,134,467			8,818,725			44,489,978						(2,007,725)			5,089,127
	- -			- -									- -			520,920 31,480
	-			-									-			552,400
	- - - - - - - 97,899 - - -			- (1,111,207) - - - - - - - - -									- - - - - - - - 282,986 - -
	44,232,366 - -			7,707,518 - -									(1,724,739) - -
	-			-									-
	- - - - - - - 478,900 - -			- (4,568,497) - - - - - - - -									- - - - - - - - - -
	44,711,266			3,139,021									(1,724,739)

See accompanying notes to the consolidated financial statements.

(English Translation of Financial Report Originally Issued in Chinese) COMPAL ELECTRONICS, INC. AND SUBSIDIARIES Consolidated statements of cash flows

For the years ended December 31, 2015 and 2014

(expressed in thousands of New Taiwan dollars)

Cash flows from (used in) operating activities: Profit before tax $ Adjustments: Depreciation and amortization Increase (decrease) in allowances for uncollectible accounts and allowance for sales return s and discounts Finance costs Interest income Dividends income Compensation cost of employee share options Share of profit of associates and joint ventures accounted for using equity method Gain on disposal of property, plant and equipment Loss (gain) on disposal of investments Impairment loss Long-term prepaid rents Adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Changes in financial assets at fair value through profit or loss Decrease (increase) in notes and accounts receivable Decrease (increase) in other receivable Decrease (increase) in inventories Decrease (increase) in other current assets Decrease(increase)in other non-current assets Total changes in operating assets Changes in operating liabilities: Changes in financial liabilities at fair value through profit or loss Increase (decrease) in notes and accounts payable Increase (decrease) in other payable Increase (decrease) in provisions Increase (decrease) in unearned revenue Increase (decrease) in other current liabilities Others Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash flows from (used in) operations Interest received Dividend received Interest paid Income taxes paid Net Cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of investments accounted for using equity method, available-for-sale financial assets and financial assets at cost Proceeds from disposal of investments accounted for using equity method and available-for-sale financial assets Redemption from bond investment without active market Net cash flow from acquisition of subsidiaries Proceeds from capital reduction and liquidation of investments Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in prepayments for business facilities Others Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Cash dividends paid Exercise of employee share options Treasury shares convert to employee Acquisition of non-controlling interests Disposal of ownership interests in subsidiaries (without losing control) Changes in non-controlling interests Others Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $		2015 2014 (Retrospectively adjusted) 11,792,093 9,727,352 5,924,610 6,036,864 64,767 (10,582) 899,702 1,019,504 (599,764) (1,023,736) (237,232) (208,983) 431,627 168,012 (367,162) (977,953) (3,560) (46,226) 20,718 (18,348) 121,574 4,777,920 15,790 16,690 6,271,070 9,733,162 158,681 (100,321) 14,112,026 9,337,791 29,017 108,584 20,977,572 (16,026,011) 235,139 (798,821) (46,752) (98,042) 35,465,683 (7,576,820) (10,223) 27,928 (43,388,753) 20,156,529 251,855 1,172,834 313,461 390,816 (729,446) 405,746 653,199 453,269 46,899 (30,487) (42,863,008) 22,576,635 (7,397,325) 14,999,815 (1,126,255) 24,732,977 10,665,838 34,460,329 597,659 975,307 418,826 284,335 (938,675) (946,545) (1,209,392) (975,202) 9,534,256 33,798,224 (187,700) (1,285,377) 1,718,652 183,002 350,000 - 250,273 2,159,000 68,125 68,599 (5,492,667) (6,565,882) 128,388 145,932 (616,124) (396,954) 29,518 (15,332) (70,200) 17,809 (3,821,735) (5,689,203) (17,330,697) (5,315,160) 12,930,000 10,271,167 (8,555,354) (663,154) (6,568,145) (4,305,345) - 195,717 - 282,125 (13,518) (2,304,824) - 98,938 282,154 (230,546) 22,998 58,941 (19,232,562) (1,912,141) 1,563,453 1,545,398 (11,956,588) 27,742,278 74,708,130 46,965,852 62,751,542 74,708,130	2015 2014 (Retrospectively adjusted) 11,792,093 9,727,352 5,924,610 6,036,864 64,767 (10,582) 899,702 1,019,504 (599,764) (1,023,736) (237,232) (208,983) 431,627 168,012 (367,162) (977,953) (3,560) (46,226) 20,718 (18,348) 121,574 4,777,920 15,790 16,690 6,271,070 9,733,162 158,681 (100,321) 14,112,026 9,337,791 29,017 108,584 20,977,572 (16,026,011) 235,139 (798,821) (46,752) (98,042) 35,465,683 (7,576,820) (10,223) 27,928 (43,388,753) 20,156,529 251,855 1,172,834 313,461 390,816 (729,446) 405,746 653,199 453,269 46,899 (30,487) (42,863,008) 22,576,635 (7,397,325) 14,999,815 (1,126,255) 24,732,977 10,665,838 34,460,329 597,659 975,307 418,826 284,335 (938,675) (946,545) (1,209,392) (975,202) 9,534,256 33,798,224 (187,700) (1,285,377) 1,718,652 183,002 350,000 - 250,273 2,159,000 68,125 68,599 (5,492,667) (6,565,882) 128,388 145,932 (616,124) (396,954) 29,518 (15,332) (70,200) 17,809 (3,821,735) (5,689,203) (17,330,697) (5,315,160) 12,930,000 10,271,167 (8,555,354) (663,154) (6,568,145) (4,305,345) - 195,717 - 282,125 (13,518) (2,304,824) - 98,938 282,154 (230,546) 22,998 58,941 (19,232,562) (1,912,141) 1,563,453 1,545,398 (11,956,588) 27,742,278 74,708,130 46,965,852 62,751,542 74,708,130
			9,727,352 6,036,864 (10,582) 1,019,504 (1,023,736) (208,983) 168,012 (977,953) (46,226) (18,348) 4,777,920 16,690 9,733,162 (100,321) 9,337,791 108,584 (16,026,011) (798,821) (98,042) (7,576,820) 27,928 20,156,529 1,172,834 390,816 405,746 453,269 (30,487) 22,576,635 14,999,815 24,732,977 34,460,329 975,307 284,335 (946,545) (975,202) 33,798,224 (1,285,377) 183,002 - 2,159,000 68,599 (6,565,882) 145,932 (396,954) (15,332) 17,809 (5,689,203) (5,315,160) 10,271,167 (663,154) (4,305,345) 195,717 282,125 (2,304,824) 98,938 (230,546) 58,941 (1,912,141) 1,545,398 27,742,278 46,965,852 74,708,130

See accompanying notes to financial statements.

Appendices

Appendix 1 Rules and Procedures of Shareholders Meeting of Compal Electronics, Inc.

Passed by the General Shareholders Meeting on April 8, 1998

The shareholders meeting of Compal Electronics, Inc. (the "Company") shall be conducted in accordance with these Rules and Procedures unless the law provides otherwise.
The Company shall prepare an attendance book for shareholders to sign in, or the shareholder present may hand in an attendance card in lieu of signing on the attendance book.
The number of shares representing shareholders present in the meeting shall be calculated in accordance with those indicated on the attendance book or the attendance cards.
The presence of shareholders in a shareholders meeting and their voting thereof shall be calculated in accordance with the number of shares. Resolutions shall be adopted at the shareholders meeting in accordance with the Company Act and Articles of Incorporation of the Company.
The place for convening a shareholders meeting for the Company shall be held inside the premises of the Company, or any other place convenient for presence of shareholders, and suitable for holding of the said meeting. The time for commencing the said meeting shall not be earlier than 9am or later than 3pm.
If a shareholders meeting is called by the Board of Directors, the Chairman of the Board shall preside at the said shareholders meeting. In case the Chairman is on leave of absence, or cannot exercise his/her powers and authority, the Vice Chairman shall act in lieu of him/her. If there is no Vice Chairman, or the Vice Chairman is also on leave of absence, or cannot exercise his/her powers and authority, the Chairman shall designate a Managing Director to act in lieu of him/her; if there is no Managing Director, the Chairman shall designate a Director to act in lieu of him/her. If the Chairman does not designate a Director, the Managing Directors or Directors shall elect one from among themselves to act in lieu of the Chairman.
If a shareholders meeting is called by a person other than the Board of Directors, who has the right to call the meeting, said person shall preside at that meeting.
The Company may designate its lawyer, certified public accountant or other relevant persons to attend the shareholders meeting.
Persons handling affairs of meeting shall wear identification cards or arm badges.

The proceeding of the meeting shall be audio recorded or videotaped in its entirety and these tapes shall be kept for at least one year.
The chairman of the meeting shall call the meeting to order at the time scheduled for the meeting, provided, however, that if the shareholders present do not represent a majority of the total amount of issued shares, the chairman of the meeting may postpone the meeting, provided, however, that the postponement of the said meeting shall be limited to two times, and the total time postponed shall not exceed one hour. If the meeting has been postponed for two times, but the shareholders present still do not represent a majority of the total amount of issued shares, a tentative resolution may be adopted in accordance with Paragraph 1 of Article 175 of the Company Act by shareholders representing one-third of the total amount of issued shares. Before the close of the said meeting, if the shareholders present represent a majority of the total amount of issued shares, the chairman of the meeting may present the tentative resolution so adopted to the meeting for resolution in accordance with the provisions of Article 174 of the Company Act.
If a shareholders meeting is called by the Board of Directors, the meeting agenda shall be set by the Board of Directors, and the meeting shall be conducted in accordance with the said agenda. The agenda shall not be changed without a resolution made by the shareholders meeting. If a shareholders meeting shall be called by a person, other than the Board of Directors, entitled to convene such meeting, the preceding provisions shall apply mutatis mutandis to the said meeting.
The chairman of the meeting shall not adjourn a meeting without resolution adopted by shareholders if the items (including extraordinary motions) listed in the agenda so arranged in the above two Paragraphs are not completed. After close of the said meeting, shareholders shall not elect another person to serve as chairman and continue the meeting at the same place or at any other place.
When a shareholder present at the meeting wishes to speak, he/she shall first fill out a slip, specifying therein the major points of his/her speech, his/her serial number as a shareholder (or number of attendance) and his/her name, and the chairman of the meeting shall determine his/her order of giving a speech.
A shareholder who submits his/her slip for a speech but does not actually speak shall be considered as not having given a speech. If the contents of his/her speech shall be different from those specified on the slip, the contents of his/her speech shall prevail.

When a shareholder is giving a speech, the other shareholders shall not interrupt unless they have obtained the prior consent from the chairman of the meeting as well as the said shareholder, and the chairman of the meeting may stop such interruption.

Unless otherwise permitted by the chairman of the meeting, any shareholder shall not, for each discussion item, speak more than two times and each time shall not exceed 3 minutes. However, after obtaining consent of the chairman, the length of such speech may be extended for an additional 3 minutes.
If the speech of any shareholder violates the above provisions or his/her speech exceeds the scope of the discussion item, the chairman of the meeting may stop the speech of such shareholder.
Any legal entity designated as proxy by a shareholder(s) to be present at the shareholders meeting may appoint only one representative to attend such meeting.
If a corporate shareholder who designates two or more representatives to represent it at the shareholders meeting, only one of the representatives so designated may speak on any one discussion item.
After the speech of a shareholder, the chairman of the meeting may respond himself/herself or appoint an appropriate person to respond.
The chairman of the meeting may announce to end the discussion of any discussion item and go into voting if the chairman considers that the discussion for a motion has reached the extent for making a resolution.
The persons for supervising the casting of votes and the counting thereof for resolutions shall be designated by the chairman of the meeting, provided, however, that the person supervising the casting of votes shall be a shareholder. The results of resolution(s) shall be announced in the meeting, and recorded in the meeting minutes.
During the meeting, the chairman of the meeting may, at his/her discretion, set time for intermission.
Unless otherwise specifically provided for in the Company Act or the Articles of Incorporation of the Company, resolutions shall be adopted by a majority of votes represented by the shareholders present at a meeting. The resolution shall be deemed adopted and shall have the same effect as if it was voted by casting ballots if no objection is raised after solicitation by the chairman of the meeting.
If there is amendment to or substitute for one discussion item, the chairman of the meeting may combine such amendment or substitute into the original discussion item, and determine their orders for resolution. If any one of the above has been adopted, the others shall be considered as rejected, upon which no further resolution shall be required.
The chairman of the meeting may direct disciplinary personnel (or security personnel) to keep the order of the meeting. Such disciplinary personnel (or security personnel) shall wear badges bearing the words of "disciplinary personnel".

In order to keep the order of the meeting, shareholders shall obey directions

made by the chairman of the meeting, disciplinary personnel (or security personnel). In case any person interrupts the meeting and, after being stopped by the chairman of the meeting three times, refuses to desist his/her interruption, the chairman of the meeting may ask the disciplinary personnel (or security personnel) to escort such shareholder to leave the meeting place.

These Rules and Procedures shall be effective from the date they are approved by the shareholders meeting. The same applies in case of amendments.

Appendix 2 Articles of Incorporation of Compal Electronics, Inc.

CHAPTER I GENERAL PROVISIONS

Article 1

The Company is organized under the Company Law and shall be named Compal Electronics, Inc.

Article 2

The business scope of the Company shall be as follows:

To engage in CC01110 manufacturing business of computers and their peripheral equipments;
To engage in CC01080 manufacturing business of electronic parts and components;
To engage in CC01060 manufacturing business of wired communication machinery implements;
To engage in CC01070 manufacturing business of radio communication machinery implements;
To engage in CC01101 manufacturing business of telecom controlled radio frequency instruments;
To engage in F401021 import business of telecom controlled radio frequency instruments;
To engage in CB01010 manufacturing business of machinery equipments;
To engage in CB01020 manufacturing business of office machinery;
To engage in CE01990 manufacturing business of other optical & precision apparatus;
To engage in G801010 terminal business;
To engage in I501010 products design business;
To engage in I301010 information software services business;
To engage in F401010 international trade business;
ZZ99999 All businesses that are not prohibited or restricted by laws, except those that are subject to special approval.

Article 3

The Company may provide guarantee to other companies to meet its business needs.

Article 4

The head office of the Company shall be in Taipei. When deemed necessary, the Company may set up branch offices or factories within or outside the Republic

of China by resolutions of the Board of Directors.

Article 5(Deleted)

Article 6

The re-investment amount of the Company may exceed 40% of its paid-in capital.

CHAPTER 2 SHARES

Article 7

The total capital of the Company shall be NT$60,000,000,000 consisting of 6,000,000,000 shares with a par value of NT$10 each (including 100,000,000 shares for employees’ subscription to shares according to certificates of subscription or company bonds attaching the right of subscription to shares) which may be issued in several issues, and the shares that are not issued may be issued by the board of directors according to business requirement.

Article 8

The share certificates of the Company shall be in registered form and issued after they are serially numbered, signed or sealed by at least three directors, and certified by the competent authority or by the agency approved to handle the registration of the share issue.

The Company may be exempted from printing any share certificate for the shares issued and shall appoint a centralized securities custody enterprise/ institution to make recordation of the issue of such shares.

Article 9

The shareholders shall fill out seal impression cards when opening accounts. The style of signature or seal impression card shall be kept by the Company or the Company’s stock agency for recordation, and the same shall apply to alteration.

Article 10

Unless otherwise provided in laws and regulations and securities rules, the shareholders shall deal with stock affairs or exercise other relevant rights in accordance with the “Guidelines Governing the Processing of Stock Affairs by Public Company”.

Article 11

No entry for transfer of shares shall be permitted within sixty (60) days prior to

a regular shareholders' meeting; thirty (30) days prior to a special shareholders' meeting; and five (5) days prior to a record date set for distributing dividends and bonuses or other benefits.

CHAPTER 3 SHAREHOLDERS' MEETING

Article 12

Shareholders' meeting shall be of two types, regular shareholders' meeting and special shareholders' meeting. The regular shareholders' meeting shall be called by the board of directors once a year within six (6) months of the close of each fiscal year. The special shareholders' meeting may be called pursuant to law when deemed necessary.

Article 13

A shareholder who is unable to attend a shareholders' meeting may authorize a proxy to attend the meeting by a power of attorney printed by the Company duly signed or sealed and setting forth the vested power in accordance with the [Regulations Governing the Use of Proxy for Attending Shareholders' Meetings of Public Companies] prescribed by the competent authority.

Article 14

The chairman of the board of directors shall preside at the shareholders' meetings. If the chairman is unable to attend the meeting or to exercise his power and authority, the vice chairman of the board of directors shall act on his behalf. In case there is no vice chairman or the vice chairman is also absent or unable to exercise his power and authority, the chairman shall designate a managing director to act on his behalf, or where there is no managing director, one of the directors to act on his behalf. In the absence of such a designation, the managing directors or the directors shall elect one from among themselves an acting chairman of the board of directors.

Article 15

Each shareholder of the Company shall have one (1) vote for each share held, unless otherwise provided in Article 179 of Company Law.

Article 16

Except as otherwise provided in the Company Law, a resolution shall be adopted at a shareholders' meeting attended by shareholders holding and representing a majority of the total issued and outstanding shares and at which meeting a majority of the votes held by the shareholders present shall be cast in favor of such resolution.

Article 17

Minutes of proceedings shall be prepared for all resolutions adopted at a shareholders' meeting, stating the date and place of the meeting, the abstract and results of proceedings, name of the chairman and the means by which a resolution is adopted, number of shareholders present and number of shares represented. A copy of the minutes of proceedings duly signed and sealed by the chairman shall be forwarded to each shareholder within twenty (20) days after the meeting.

The distribution process of meeting minutes is made in accordance with applicable laws and regulations.

CHAPTER 4 DIRECTORS AND COMMITTEES

Article 18

The Company shall have ten (10) to nineteen (19) directors. Directors shall be elected by adopting candidate nomination system and being elected. There shall be at least three (3) independent directors among the Company's directors, and the independent directors shall represent at least onefifth of the total number of directors.

The directors’ liability insurance may be bought by the Company for the liability of compensation they may bear according to law in their business scope during their term of office.

The professional qualifications, restrictions on shareholdings and concurrent positions held, assessment of independence, method of nomination, and other matters for compliance with respect to independent directors shall be in compliance with applicable laws and regulations.

Article 19

The directors shall hold office for a term of three years and shall be eligible for re-election.

Re-election of independent directors shall be governed by applicable laws and regulations.

Article 20

When one-third (1/3) of the directors have vacated their offices or all of the independent directors are discharged, the special shareholders' meeting shall be called by the board of directors within sixty (60) days for election of directors and independent directors to fill the vacancies until the original term expires.

Article 21

The directors shall form a board of directors. The chairman and vice chairman of the board of directors shall be elected by and from among the directors with the

concurrence of a majority of the directors present at a board of directors' meeting attended by more than two-thirds (2/3) of the directors. The board chairman shall conduct all the business of the Company pursuant to the laws and regulations, Article of incorporation, and resolutions adopted at shareholders' meetings and board of directors' meetings.

Article 22

The business policies and other important matters of the Company shall be performed in accordance with the resolutions of the board of directors' meetings. Except for the initial meeting of each term of the board of directors, which shall be called by the director who receives the highest votes, all the other meetings shall be called and presided by the board chairman. In the event the board chairman is absent or unable to perform his right or authority, he may designate vice chairman to act on his behalf. In case there is no vice chairman or the vice chairman is absent or unable to perform his power or authority, the chairman may designate one managing director to act on his behalf, or where there is no managing director, one of the directors to act on his behalf. In the absence of the designation, the managing directors or directors shall elect one from among themselves.

Article 23

Except as otherwise provided in the Company Law, a board of directors' meeting at which a resolution is adopted shall be attended by a majority of the directors and at which meeting a majority of those present shall vote in favor of such a resolution. If any director is unable to attend a board of directors' meeting, he/she may appoint another director to attend the meeting by proxy by executing a power of attorney in favor of the proxy specifying any limits on authority or powers in respect to the business to be transacted at the meeting; provided that the proxy shall accept the appointment of one director only. Minutes of proceedings shall be prepared for the resolutions adopted at a board of directors’ meeting and the provisions of Article 17 herein shall apply mutatis mutandis.

Article 24

Enhancing supervision functions and strengthening management mechanisms, the board of directors of the Company may set up committees. The organizational rules for each committee shall be promulgated respectively in accordance with relevant laws and regulations as well as the regulations and rules of the Company.

An Audit Committee is established according to Article 14-4 of the Securities and Exchange Act which consists of all independent directors. The Audit Committee shall have such powers and duties as the supervisors under the Company Law, the Securities and Exchange Act and other laws and regulations.

Article 25

In conducting the business of the Company, the directors shall be paid remuneration, regardless of whether the Company makes a profit or sustains a loss. The remuneration of directors shall be submitted by the remuneration committee to the board of directors and decided by the board of directors in accordance with personal partake-in and contribution to the Company’s operation and benchmarks in the same industry.

Article 26

Functions of the board of directors shall be as follows:

Appoint and remove managerial personnel;
Decide and amend business policies;
Examine budget and final account;
Propose for distribution of profits and covering of losses;
Approve for re-investment, extending loan to other companies, and pledge of assets;
Approve for endorsement, guarantee, acceptance to affiliates in excess of the total specified amounts (to be decided by the board of directors);
Approve for borrowing and financing in excess of total specified amounts (to be decided by the board of directors);
Establish and/or withdraw any main divisions of the Company and/or its domestic or overseas branches, and to prescribe and amend Articles of Incorporation and important rules by laws;`
Approve for important contracts;
Approve for other important business; and
Appoint, discharge, and make payment to CPA.

Article 27

A board of directors’ meeting shall be called with a seven days prior written notice setting forth the cause(s) of such meeting to all directors, except there is an urgent need. In case of emergency, a board of directors’ meeting may be called at any time.

The meeting notice as referred to in the foregoing Paragraph shall set forth the cause(s) and be given via mail, e-mail or facsimile.

CHAPTER 5 OFFICERS

Article 28

The Company shall employ managers, their appointment and discharge shall be handled in accordance with Article 29 of the Company Law.

CHAPTER 6 FINANCIAL ACCOUNTS AND DISTRIBUTION OF PROFITS

Article 29

At the close of each fiscal year of the Company, the board of directors shall prepare the following statements/documents and present to the shareholders’ meeting for ratification in accordance with the legal procedure:

business report;
financial statement;
proposal for distribution of profits or covering of losses.

Article 30

If there is any profit after closing of books, the Company shall first defray tax due, cover losses in the past years and set aside ten percent (10%) of it as legal reserve and set aside or reverse a special reserve in accordance with laws and regulations, then an amount not more than two percent (2%) of the balance shall be paid to directors as remuneration and an amount no less than two percent (2%) shall be allocated as employees’ bonus. The balance of earnings available for distribution is composed of the remainder of the said profit and the unappropriated retained earnings of previous years. The earnings appropriation proposal to distribute dividend and bonus shall be proposed by the Board of Directors and approved by the General Shareholders Meeting. The rest of the unappropriated retained earnings shall be reserved.

The object of the said allocation of share certificates and bonus to employees includes the employees of the Company’s subordinate companies pursuant to the Company Law.

The lifecycle of the industry of the Company is in the growing stage. To meet the need of the Company for the future capital and the need of shareholders for cash flow, if there is any profit after close of books, the cash dividend allocated by the Company each year shall not be lower than ten percent (10%) of the total dividend (including cash and share dividend) for such year.

Article 31

Once the total legal reserve equals the total capital, the Company may stop setting aside the legal reserve by shareholders’ resolution.

CHAPTER 7 SUPPLEMENTAL PROVISIONS

Article 32

Matters not provided herein shall be governed by the Company Act.

Article 33

The organizational rules and handling procedures of the Company shall be separately prescribed by resolution of the board of directors.

Article 34 (Deleted)

Article 35

These Articles of Incorporation were prescribed by the promoters on April 16, 1984.

The 1[st] amendment was made on May 16, 1984; The 2[nd] amendment was made on December 27, 1984; The 3[rd] amendment was made on April 6, 1986; The 4[th] amendment was made on July 18, 1986; The 5[th] amendment was made on May 10, 1987; The 6[th] amendment was made on June 13, 1987; The 7[th] amendment was made on June 18, 1988; The 8[th] amendment was made on May 27, 1989; The 9[th] amendment was made on May 4, 1990; The 10[th] amendment was made on June 23, 1990; The 11[th] amendment was made on March 20, 1991; The 12[th] amendment was made on April 30, 1992; The 13[th] amendment was made on April 13, 1993; The 14[th] amendment was made on April 23, 1994; The 15[th] amendment was made on March 31, 1995; The 16[th] amendment was made on March 27, 1996; The 17[th] amendment was made on May 29, 1997; The 18[th] amendment was made on April 8, 1998; The 19[th] amendment was made on April 8, 1999; The 20[th] amendment was made on March 30, 2000; The 21[st] amendment was made on April 3, 2001; The 22[nd] amendment was made on May 24, 2002; The 23[rd] amendment was made on June 10, 2003; The 24[th] amendment was made on June 10, 2005; The 25[th] amendment was made on June 9, 2006; The 26[th] amendment was made on June 15, 2007; The 27[th] amendment was made on June 13, 2008; The 28[th] amendment was made on June 19, 2009; The 29[th] amendment was made on June 18, 2010; The 30[th] amendment was made on June 24, 2011; The 31[st] amendment was made on June 22, 2012. The 32[nd] amendment was made on June 21, 2013. The 33rd amendment was made on June 20, 2014. The 34[th] amendment was made on June 26, 2015.

Appendix 3 Procedures for Financial Derivatives Transactions of Compal Electronics, Inc.

Article 1 Objective

These Procedures for Financial Derivatives Transactions (hereinafter referred to as the “Procedures”) are enacted in accordance with applicable laws and regulations to protect shareholders’ rights and interest, fulfill the requirement of public disclosure of information and establish a risk management policy governing the operation of financial derivatives transactions by the Company.

Article 2 Definition

“Financial derivative” referred herein is defined as financial instrument having all of the following characters:

Its value changes in response to the changes in a specific variable (sometimes called the “underlying”), such as interest rate, foreign exchange rate, financial instrument price, commodity price, credit rating, price index, rate index or other variables.
It requires no initial net investment or an initial net investment that is smaller than would be required for other type of contracts that would be expected to have a similar response to changes in market factors;
It is settled at a future date.

Article 3 Principles and Strategies

When operating financial derivatives, the Company shall follow the principles and the operating strategies as follows:

Principles:
The Company’s financial derivative operation is mainly to eliminate currency risk, interest rate risk, etc. arising out of operating activities and shall take steady and hedging approach.
Strategies:
(1) Asset or liability positions currently held by the Company and those required in the future will be used as hedging operations in consideration of the future market changes.
(2) As a result of changes in the environment, engaging in financial derivative trading operations to avoid business financial risk and minimize the Company’s losses.

Article 4 Type of Instruments

The major financial derivatives operated by the Company in the financial market are listed below:Type of Instruments trading on the spotmarket	Forward Contract	Option	Swap
Exchange Rate	Forward Exchange Contract	FX Option	1. Currency Swap 2. Cross Currency Swap
Interest Rate	Forward Rate Agreement	Interest Rate Option	1. Interest Rate Swap 2. Cross CurrencySwap

The Company’s engagement in any other financial instruments not set forth above shall be subject to special approval of the Chairman.

Article 5 Boundary / Scope

Operations of financial derivatives by the Company shall fall within the scope of the following items:

Sales revenue.
Expenses for purchasing material, product and equipment.
Long-term and short-term loans.
Other operating and non-operating transactions.

Article 6 Responsibility

To facilitate the trading operations, the respective department concerned shall complete cash budget material on time or be responsible for implementation of relevant works.

Article 7 Level of Authority

Total Authorized Contract Dollar Amount
(1) Transactions to hedge exchange rate risk: The dollar amount of total contracts outstanding shall not exceed the higher of the total import amount and the total export amount in the previous year..
(2) Transactions to hedge interest rate risk: The authorized dollar amount of total contracts outstanding shall not exceed the total amount of liabilities.
(3) Transactions to hedge project risk: The authorized dollar amount of total contracts outstanding shall not exceed total project budget.
Levels of authorization and delegation, contract amount limits and deputy appointment are handled in accordance with the “Authorization and Delegation Form” and applicable regulations.

Article 8 Operating Procedures

The “Operating Instructions to Engage in Financial Derivatives Transactions” shall expressly set forth the operating procedures.

Article 9 Internal Control

Risk Management
(1) Credit Risk Control
- The corresponding banks that the Company deals with should be the financial institutions with outstanding credit rating, sizable business and capable to provide professional information.
(2) Market/Price Risk Management Considering the fact that the fluctuation in the market price of derivative products may result in loss, after conclusion of the position, it is required to strictly conform to the established stop-loss points for hedging and non-hedging transactions.
(3) Liquidity Risk Control
- i. Liquidity of Financial Products: It is necessary to consider whether the traded products are common and universal in the market.
- ii. Liquidity of Cash Flow: It is necessary to pay attention to the Company’s cash flow from time to time to ensure the successful settlement upon maturity of the various transactions.
(4) Operating Risk Control
- It is necessary to strictly comply with the authorized limit, operating procedure for transactions, and entry and control related to the transaction record.
(5) Legal Risk Control
- Any contract in respect of transactions shall first be reviewed by the Legal Department before being signed to avoid any risk arising therefrom.
(6) Product Risk Control
- Personnel in charge of operating financial derivatives must possess complete and accurate professional knowledge to avoid loss arising from the misuse of financial derivatives.
Internal Control
The purposes of internal control are to prevent and detect any unauthorized transactions, transactions beyond the scope of authorization, unrecorded transactions and unrecognized loss. Requirements are including the following: (1) The Company shall, in the name of the Company, officially inform the corresponding banks in writing of the trader being assigned. The same shall apply where the trader is changed.
(2) After completion of each transaction, the form about transaction shall be filled in after completion of each transaction and forwarded to the Accounting Department for entry, and bank confirmation letter shall be subsequently provided to the Accounting Department for reference.
(3) The functions of trading, confirmation and settlement shall be performed by different personnel. Each responsible personnel must not hold a concurrent post or acting as each other’s deputy.

(4) Personnel responsible for confirmation shall check the transaction records truly and control the transaction positions.
(5) Accounting personnel shall check the account with the corresponding banks or ask for the statement of account periodically. .
(6) Audit and accounting personnel shall check whether the total transaction amount exceeds the total authorized contract amount under these Procedures from time to time.
(7) Audit personnel shall conduct an independent post-audit for the entire operation process of each trading.
Regular Evaluation
(1) The department implementing the transactions shall require the respective corresponding bank to provide a list of pricing and price evaluation information about the undue transactions of each type of instruments.
(2) The department implementing the transactions will prepare an assessment report on each type of instruments based on such information accordingly.
(3) The assessment report shall be submitted to the high-level management authorized by the Board of Directors and the Accounting Department for review.
(4) The Board of Directors and the authorized high-level management authorized by the Board of Directors will handle this matter in accordance with Article 14 herein.

Article 10 Setting Stop-Loss Point

The loss ceilings of the total contracts and that of each individual contract for non-economic hedging operation are set as follows:

The loss ceiling of the total contracts: 5% of the total contracts dollar amount.
The loss ceiling of each individual contract: 5% of each individual contract dollar amount.

Article 11 Disciplinary Sanction

In case where an employee of the Company is in violation of these Procedures and other applicable laws and regulations, a proper disciplinary punishment may be imposed on such employee based on the seriousness of the case and in accordance with the Reward and Punishment Rules under the Regulations of Personnel Administration adopted by the Company.

Article 12 Public Announcement and Reporting

The reporting standard, content and deadlines for public announcement and reporting of financial derivative transactions shall be handled in accordance with regulations enacted by the competent authorities.

Article 13 Internal Audit

Internal audit personnel is required to evaluate the suitability of the internal

control system in connection with financial derivative transactions on a regular basis, to conduct monthly auditing on how well the related departments follow these Procedures, and to produce report accordingly. Should there be any serious violation found, a written report must be submitted to the audit committee.

Internal audit personnel is required to submit the foresaid report and the implementation status of the annual audit plan to the competent authorities no later than the end of February in the following year and the unusual item improvement status to competent authorities for records no later than the end of May in the following year.

Article 14 Supervision and Management

The supervision and management conducted by the Board of Directors shall meet the following principles:
(1) Appointing high-level management to monitor and control the financial derivatives transaction risk from time to time.
(2) Evaluating regularly whether the financial derivatives performance meet the established business and operating strategies of the Company and whether the associated risks thereof have exceed the Company’s risk tolerance.
The high-level management authorized by the Board of Directors shall manage the financial derivative transactions according to the following principles:
(1) Evaluating, on a regular basis, whether the risk management measures currently adopted by the Company is appropriate and whether the risk management measures are taken in accordance with these Procedures herein.
(2) Monitoring transactions and the status of profit and loss, taking necessary countermeasures and reporting to the Board of Directors immediately if abnormal events are detected.
Personnel authorized to engage in the financial derivatives transactions in accordance with these Procedures shall report the transaction status to the most recent Board of Directors afterward.

Article 15 Implementation and Amendment

The Procedures shall be agreed by no less than half of all audit committee members and approved by the Board of Directors, and enter into force after the approval of resolution by the Shareholders Meeting. The same procedure applies to the amendment of the Procedures.

When the Procedures are submitted to the Board of Directors’ Meeting for discussion in accordance with the provisions prescribed herein, the opinions of each Independent Director shall be fully taken into consideration; Independent Directors' opinions specifically expressing assent or dissent and the reasons for dissent shall be recorded in the minutes of the Board of Directors' Meeting.

If pursuant to the applicable laws and regulations, the financial derivatives

transactions should be approved by the audit committee, such transaction should be agreed by no less than half of the audit committee members, and approved by the

Board of Directors.

The independent director’s opinions shall be fully taken into consideration when, pursuant to the applicable laws and regulations, any the financial derivatives transaction is submitted to the Board of Directors for discussion. If the independent director has any dissenting opinions or makes any reservation, they shall be stated in the minutes of the meeting of the Board of Directors.

If the approval by no less than half of the audit committee members is not obtained in accordance with the foregoing provisions, the approval of two-thirds of all the Directors should be obtained instead. In this case, the resolution made by the audit committee members shall be stated in the minutes of the meeting of the Board of Directors.

The calculation of the number of the above mentioned audit committee members and Directors is based on those who at the time take office.

Article 16 Enactment of Operating Instructions

Detailed operating instructions are drafted by Financial Department and then decided by the Chairman duly authorized by the Board of Directors.

Article 17 Supplementary Provisions

These Procedures were approved by the Board of Directors’ Meeting and entered into force on July 25, 1996.

The 1[st] amendment was adopted by the Board of Directors’ Meeting on March 17, 2003 and was implemented after it was approved by the General Shareholders’ Meeting on June 10, 2003.

The 2[nd] amendment was adopted by the Board of Directors’ Meeting on February 16, 2006 and was implemented after it was approved by the General Shareholders Meeting on June 9, 2006.

The 3[rd] amendment was adopted by the Board of Directors’ Meeting on April 30,

2012 and was implemented after it was approved by the General Shareholders’ Meeting on June 22, 2012.

The 4[th] amendment was adopted by the Board of Directors’ Meeting on May 8, 2014

and was implemented after it was approved by the General Shareholders’ Meeting on June 20, 2014.

The 5[th] amendment was adopted by the Board of Directors’ Meeting on May 11, 2015 and was implemented after it was approved by the General Shareholders’ Meeting on June 26, 2015.

Appendix 4 Compal Electronics, Inc. Shareholding of Directors

Book closure date: April 26,2016	Book closure date: April 26,2016	Book closure date: April 26,2016
Position	Name	Shares
Chairman	Sheng-Hsiun Hsu	17,775,401
Director	Jui-Tsung Chen	50,782,587
Director	Wen Being Hsu	4,000,000
Director	Kinpo Electronics, inc.	151,628,692
Director	Charng-Chyi Ko	7,896,867
Director	Sheng-Chieh Hsu	9,119,297
Director	Yen-Chia Chou	8,022,874
Director	Wen-Chung Shen	11,935,968
Director	Yung-Ching Chang	3,727,587
Director	Chung-Pin Wong	4,833,618
Director	Chiung-Chi Hsu	2,000,731
Director	Chao-Cheng Chen	3,000,000
Independent Director	Min Chih Hsuan	0
Independent Director	Duei Tsai	0
Independent Director	Duh Kung Tsai	0
Shareholdingof all Directors		274,723,622

Note ：

The above mentioned shares includes the shares under trust with discretion reserved.
In accordance with the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies”, where the paid-in capital of the company is more than NT$10 billion but NT$50 billion or less, the aggregate number of registered shares owned by all Directors shall not be less than three percent of the total issued shares; the aggregate number of registered shares owned by all Supervisors shall not be less than 0.3 percent of the total issued shares. The aggregate numbers of registered shares held by all Directors and Supervisors of Compal are listed below:
․ The aggregate number of the registered shares held by all Directors shall not less than 107,295,279 shares;
․ The Company has established an Audit Committee ; therefore, the supervisors’ shareholdings requirement is not applicable.

Appendix 5 The Impact of Non-compensated Distribution of Shares on the Company’s Business Performance, Earnings Per Share, and Shareholder Return Rate:

This is not applicable as the Company did not publicly announce its financial forecast for 2016 in accordance with the regulations and Non-compensated Distribution of Shares is not proposed.

Appendix 6 Other

Acceptance of proposals submitted by shareholders and receiving nomination of candidate of the Director at this Annual General Shareholders Meeting

In accordance with Article 172-1 of the Company Act, shareholder(s) holding one percent (1%) or more of the total number of outstanding shares of a company may propose to the company a proposal for discussion at a general shareholders' meeting, provided that only one matter shall be allowed in each single proposal. The number of words of a proposal to be submitted by a shareholder shall be limited to not more than three hundred (300) words (including proposal, explanatory notes and punctuation marks), and any proposal containing more than 300 words shall not be included in the agenda of the shareholders' meeting. The shareholder who has submitted a proposal shall attend, in person or by a proxy, the general shareholders' meeting where at his proposal is to be discussed and shall take part in the discussion of such proposal.
The proposal and nomination accepting period of 2016 Annual General Shareholders Meeting is from April 8, 2016 to April 18, 2016.
No proposals are raised by shareholders during the said accepting period.

AI assistant

Compal — AGM Information 2016

52007_rns_2016-07-11_3f4baae7-2c14-436b-b119-2cdb3cbdb3fc.pdf

Table of Contents

Ⅳ . Appendices

Meeting Procedures

Compal Electronics, Inc. 2016 Annual General Shareholders’ Meeting Procedures

Meeting Agenda

Compal Electronics, Inc.

2016 Annual General Shareholders’ Meeting Agenda

I . Discussion Items

Ⅴ . Meeting Adjourned

Discussion Items

Item 1

Proposal:

Explanatory Notes:

Resolved That:

Item 2

Proposal:

Explanatory Notes:

Resolved That:

Item 3

Proposal:

Explanatory Notes:

Resolved That:

Item 4

Proposal:

Explanatory Notes:

Resolved That ：

Report Items

Item 1

Proposal:

Explanatory Note:

Item 2

Proposal:

Explanatory Note:

Item 3

Proposal:

Explanatory Notes:

Item 4

Proposal:

Explanatory Notes:

Ratification Items

Item 1

Proposal:

Explanatory Notes:

Resolved That:

Item 2

Proposal:

Explanatory Notes:

Resolved That:

Compal Electronics, Inc.

Special Motion(s)

Special Motion(s)

Attachments

Attachment 1

Articles of Incorporation of Compal Electronics, Inc. Comparison Table Before and After Amendment

Attachment 2

Compal Electronics, Inc.

Attachment 3

Business Report for the Year 2015

2015 Financial Performance

2015 Business Development

Corporate Governance & Social Responsibility

2016 New business Development

Business Outlook

Attachment 4

Independent Auditors’ Report

To Compal Electronics, Inc.:

KPMG

Independent Auditors’ Report

To Compal Electronics, Inc.:

KPMG

Audit Committee’s Review Report

Attachment 6

(English Translation of Financial Report Originally Issued in Chinese) COMPAL ELECTRONICS, INC.

Balance Sheets

December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars)

(English Translation of Financial Report Originally Issued in Chinese) COMPAL ELECTRONICS, INC.

Statements of Comprehensive Income

Compal AGM Information 2016