FIH Mobile Limited — Interim / Quarterly Report 2012

Sep 10, 2012

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability) Stock Code: 2038

INTERIM REPORT 2012

CONTENTS

Corporate Information	2
Report on Review of Condensed Consolidated Financial Statements	3
Condensed Consolidated Statement of Comprehensive Income	4
Condensed Consolidated Statement of Financial Position	6
Condensed Consolidated Statement of Changes in Equity	8
Condensed Consolidated Statement of Cash Flows	10
Notes to the Condensed Consolidated Financial Statements	11
Management Discussion and Analysis	29
Other Information	31

CORPORATE INFORMATION

EXECUTIVE DIRECTORS

CHIN Wai Leung, Samuel (Chairman) CHIH Yu Yang (Chief Executive Officer) LEE Jer Sheng TONG Wen-hsin

AUDITORS

Deloitte Touche Tohmatsu

LEGAL ADVISERS

Baker & McKenzie, Hong Kong Clifford Chance, Hong Kong

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NON-EXECUTIVE DIRECTOR

LEE Jin Ming

INDEPENDENT NON-EXECUTIVE DIRECTORS

LAU Siu Ki Daniel Joseph MEHAN CHEN Fung Ming

COMPANY SECRETARY

LAW Sai Hay

REGISTERED OFFICE

Scotia Centre, 4th Floor P.O. Box 2804, George Town Grand Cayman Cayman Islands

HEAD OFFICE

No.18 Youyi Road Langfang Economic and Technological Development Zone Hebei Province People’s Republic of China

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

8/F., Peninsula Tower 538 Castle Peak Road Cheung Sha Wan Kowloon Hong Kong

PRINCIPAL BANKERS

Agricultural Bank of China Bank of Beijing Bank of China China Construction Bank China Guangfa Bank China Merchants Bank Chinatrust Commercial Bank Citibank Industrial Bank Industrial and Commercial Bank of China Mizuho Corporate Bank Standard Chartered Bank Taipei Fubon Bank The Hongkong and Shanghai Banking Corporation Limited

PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE

Butterfield Fulcrum Group (Cayman) Limited Butterfield House, 68 Fort Street P.O. Box 705, George Town Grand Cayman Cayman Islands

HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE

Computershare Hong Kong Investor Services Limited 46th Floor, Hopewell Centre 183 Queen’s Road East Wan Chai Hong Kong

STOCK CODE

2038

2 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

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REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

TO THE BOARD OF DIRECTORS OF FOXCONN INTERNATIONAL HOLDINGS LIMITED

Introduction

We have reviewed the condensed consolidated financial statements of Foxconn International Holdings Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”) set out on pages 4 to 28, which comprises the condensed consolidated statement of financial position as of 30 June 2012 and the related condensed consolidated statement of comprehensive income, statement of changes in equity and statement of cash flows for the six-month period then ended, and certain explanatory notes. The Main Board Listing Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”). The directors of the Company are responsible for the preparation and presentation of these condensed consolidated financial statements in accordance with IAS 34. Our responsibility is to express a conclusion on these condensed consolidated financial statements based on our review, and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

Scope of Review

We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public Accountants. A review of these condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

Deloitte Touche Tohmatsu

Certified Public Accountants Hong Kong 27 August 2012

INTERIM REPORT 2012 3

FOXCONN INTERNATIONAL HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2012

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NOTES Turnover 3 Cost of sales Gross (loss) profit Other income, gains and losses Selling expenses General and administrative expenses Research and development expenses Impairment loss recognised for property, plant and equipment 8 Interest expense on bank borrowings Share of profits of associates Share of loss of a jointly controlled entity (Loss) profit before taxation Taxation 4 Loss for the period 5 Other comprehensive (expense) income: Exchange differences arising on translation of foreign operations Share of translation reserve of associates Share of translation reserve of a jointly controlled entity Reserves released upon loss of control over a subsidiary 9 Reserves released upon partial disposal of interests in an associate Other comprehensive (expense) income for the period Total comprehensive (expense) income for the period	Six months ended 30.6.2012 30.6.2011 US$’000 US$’000 (unaudited) (unaudited) 2,504,095 2,993,673 (2,541,272) (2,849,309)
	(37,177) 144,364 93,357 98,738 (9,037) (13,066) (110,108) (128,276) (94,429) (96,081) (56,250) – (6,544) (4,443) 323 1,997 (24) –
	(219,889) 3,233 (4,239) (20,344)
	(224,128) (17,111)
	(27,171) 97,817 195 227 (98) – (86) – (341) –
	(27,501) 98,044
	(251,629) 80,933

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INTERIM REPORT 2012

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Continued)

FOR THE SIX MONTHS ENDED 30 JUNE 2012

NOTES Loss for the period attributable to: Owners of the Company Non-controlling interests Total comprehensive (expense) income attributable to: Owners of the Company Non-controlling interests Loss per share 7 Basic Diluted	Six months ended 30.6.2012 30.6.2011 US$’000 US$’000 (unaudited) (unaudited) (226,069) (17,648) 1,941 537
	(224,128) (17,111)
	(253,328) 79,578 1,699 1,355
	(251,629) 80,933
	(US3.10 cents) (US0.25 cents)
	(US3.10 cents) (US0.25 cents)

INTERIM REPORT 2012 5

FOXCONN INTERNATIONAL HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 30 JUNE 2012

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NOTES Non-current assets Property, plant and equipment 8 Prepaid lease payments Available-for-sale investments Interests in associates 10 Interest in a jointly controlled entity 11 Deferred tax assets 12 Deposits for acquisition of prepaid lease payments Deposits for acquisition of property, plant and equipment Current assets Inventories Trade and other receivables 13 Bank deposits Bank balances and cash Assets classified as held for sale 14 Current liabilities Trade and other payables 15 Bank borrowings 16 Provision 17 Tax payable Net current assets Total assets less current liabilities	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) 1,257,216 1,457,039 50,719 51,845 87 90 40,328 45,481 4,083 – 26,540 21,326 30,150 30,264 61 456
	1,409,184 1,606,501
	494,818 608,354 1,133,531 1,411,700 439,491 409,681 1,997,375 1,512,461
	4,065,215 3,942,196 41,679 62,923
	4,106,894 4,005,119
	1,143,405 1,215,434 703,900 483,245 30,382 28,395 69,711 81,222
	1,947,398 1,808,296
	2,159,496 2,196,823
	3,568,680 3,803,324

6 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)

AT 30 JUNE 2012

NOTES Capital and reserves Share capital 18 Reserves Equity attributable to owners of the Company Non-controlling interests Total equity Non-current liabilities Deferred tax liabilities 12 Deferred income 19	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) 292,470 288,987 3,213,962 3,451,022
	3,506,432 3,740,009 20,384 18,685
	3,526,816 3,758,694
	7,704 8,798 34,160 35,832
	41,864 44,630
	3,568,680 3,803,324

INTERIM REPORT 2012 7

FOXCONN INTERNATIONAL HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2012

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			Attributable to owners	Attributable to owners	of the Company	of the Company
						Share			Non-
	Share	Share	Special	Legal	Translation	compensation	Retained		controlling	Total
	capital	premium	reserve	reserve	reserve	reserve	profits	Total	interests	equity
	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Balance at 1 January 2011 (audited)	286,563	776,191	15,514	158,037	373,126	84,704	1,852,892	3,547,027	46,000	3,593,027
Exchange differences arising on
translation of foreign operations	–	–	–	–	96,999	–	–	96,999	818	97,817
Share of translation reserve of
associates	–	–	–	–	227	–	–	227	–	227
Other comprehensive income
for the period	–	–	–	–	97,226	–	–	97,226	818	98,044
(Loss) profit for the period	–	–	–	–	–	–	(17,648)	(17,648)	537	(17,111)
Total comprehensive income
(expense) for the period	–	–	–	–	97,226	–	(17,648)	79,578	1,355	80,933
Issue of ordinary shares under
Option Scheme and
Share Scheme	1,414	23,202	–	–	–	(24,616)	–	–	–	–
Recognition of equity-settled share
based payments	–	–	–	–	–	2,744	–	2,744	–	2,744
Payment made for equity-settled
share based payments	–	–	–	–	–	(2,053)	–	(2,053)	–	(2,053)
Transfer to legal reserve	–	–	–	3,589	–	–	(3,589)	–	–	–
Transfer_(note)_	–	–	–	–	–	(1,387)	1,387	–	–	–
Balance at 30 June 2011 (unaudited)	287,977	799,393	15,514	161,626	470,352	59,392	1,833,042	3,627,296	47,355	3,674,651

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)

FOR THE SIX MONTHS ENDED 30 JUNE 2012

			Attributable to owners	Attributable to owners	of the Company	of the Company
						Share			Non-
	Share	Share	Special	Legal	Translation	compensation	Retained		controlling	Total
	capital	premium	reserve	reserve	reserve	reserve	profits	Total	interests	equity
	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000	US$’000
Balance at 1 January 2012 (audited)	288,987	813,391	15,514	161,707	433,679	45,433	1,981,298	3,740,009	18,685	3,758,694
Exchange differences arising on
translation of foreign operations	–	–	–	–	(26,929)	–	–	(26,929)	(242)	(27,171)
Share of translation reserve of
associates	–	–	–	–	195	–	–	195	–	195
Share of translation reserve of
a jointly controlled entity	–	–	–	–	(98)	–	–	(98)	–	(98)
Reserves released upon loss
of control over a subsidiary	–	–	–	–	(86)	–	–	(86)	–	(86)
Reserves released upon partial
disposal of interests in an
associate	–	–	–	–	(341)	–	–	(341)	–	(341)
Other comprehensive expense
for the period	–	–	–	–	(27,259)	–	–	(27,259)	(242)	(27,501)
(Loss) profit for the period	–	–	–	–	–	–	(226,069)	(226,069)	1,941	(224,128)
Total comprehensive (expense)
income for the period	–	–	–	–	(27,259)	–	(226,069)	(253,328)	1,699	(251,629)
Issue of ordinary shares under
Option Scheme and
Share Scheme	3,483	49,734	–	–	–	(39,704)	–	13,513	–	13,513
Recognition of equity-settled share
based payments	–	–	–	–	–	8,929	–	8,929	–	8,929
Payment made for equity-settled
share based payments	–	–	–	–	–	(2,691)	–	(2,691)	–	(2,691)
Transfer to legal reserve	–	–	–	3,531	–	–	(3,531)	–	–	–
Transfer_(note)_	–	–	–	–	–	(1,244)	1,244	–	–	–
Balance at 30 June 2012 (unaudited)	292,470	863,125	15,514	165,238	406,420	10,723	1,752,942	3,506,432	20,384	3,526,816

Note: The amount represents aggregate of (a) the amount recognised in share compensation reserve in respect of those share options forfeited/lapsed after vesting date, and (b) the difference between the fair value of vested share awards at grant date (which was previously recognised in share compensation reserve) and market prices of ordinary shares subsequently purchased by trustee from the stock market to settle the share awards.

INTERIM REPORT 2012 9

FOXCONN INTERNATIONAL HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2012

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		Six months ended	Six months ended
		30.6.2012	30.6.2011
	NOTES	US$’000	US$’000
		(unaudited)	(unaudited)
Net cash from operating activities		250,958	357,187
Investing activities
Purchase of property, plant and equipment		(25,961)	(90,138)
Increase in bank deposits		(34,377)	(17,066)
Proceeds from disposal of property,
plant and equipment		45,310	18,133
Deposits received in respect of assets
held for sale	14	13,419	–
Consideration received for disposals
of interest in Guang Ming	14	16,592	–
Deposits refunded in respect of assets
held for sale	14	(15,810)	–
Deposits paid for acquisition of property,
plant and equipment		(1)	(6,843)
Net cash outflow from loss of control
over a subsidiary	9	(3,860)	–
Net proceeds on partial disposal of
an associate	10	8,015	–
Net cash from (used in) investing activities		3,327	(95,914)
Financing activities
Bank borrowings raised		1,729,278	2,329,429
Bank borrowings repaid		(1,508,171)	(2,375,920)
Proceeds from issue of new shares		13,513	–
Net cash from (used in) financing activities		234,620	(46,491)
Net increase in cash and cash equivalents		488,905	214,782
Cash and cash equivalents at 1 January		1,512,461	1,356,254
Effect of foreign exchange rate changes		(3,991)	32,545
Cash and cash equivalents as at 30 June		1,997,375	1,603,581
Analysis of the balance of cash and cash equivalents
Bank balances and cash		1,997,375	1,434,852
Bank balances and cash included in
a disposal group classified as held for sale		–	168,729
		1,997,375	1,603,581

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INTERIM REPORT 2012

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2012

1. BASIS OF PREPARATION

The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 (“IAS 34”) “Interim Financial Reporting” issued by the International Accounting Standards Board (“IASB”) as well as the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”).

2. PRINCIPAL ACCOUNTING POLICIES

The condensed consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair values.

Except as described below, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2012 are the same as those followed in the preparation of the Group’s annual financial statements for the year ended 31 December 2011. In addition, during the current interim period, the Group has interest in a jointly controlled entity for the first time. The accounting policy of the jointly controlled entity is described below.

Joint ventures

Jointly controlled entities

Joint venture arrangements that involve the establishment of a separate entity in which venturers have joint control over the economic activity of the entity are referred to as jointly controlled entities.

The results and assets and liabilities of jointly controlled entities are incorporated in the condensed consolidated financial statements using the equity method of accounting. Under the equity method, investments in jointly controlled entities are initially recognised in the condensed consolidated statement of financial position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive income of the jointly controlled entities. When the Group’s share of losses of a jointly controlled entity equals or exceeds its interest in that jointly controlled entity (which includes any long-term interests that, in substance, form part of the Group’s net investment in the jointly controlled entity), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of that jointly controlled entity.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of a jointly controlled entity recognised at the date of acquisition is recognised as goodwill, which is included within the carrying amount of the investment.

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

2. PRINCIPAL ACCOUNTING POLICIES (Continued)

Joint ventures (Continued)

Jointly controlled entities (Continued)

Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.

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In addition, in the current interim period, the Group has applied, for the first time, the following amendments to International Financial Reporting Standards (“IFRSs”) issued by the IASB.

Amendments to IFRS 7 Financial instruments: Disclosures – Transfers of financial assets Amendments to IAS 12 Deferred tax: Recovery of underlying assets

The application of the above amendments to IFRSs in the current interim period has had no material effect on the amounts reported in these condensed consolidated financial statements and/or disclosures set out in these condensed consolidated financial statements.

3. SEGMENT INFORMATION

The Group determines its operating segments based on internal reports reviewed by the chief operating decision maker, the Chief Executive Officer, for the purposes of resources allocation and performance assessment.

The Group’s operations are organised into three operating segments based on the location of customers – Asia, Europe and America.

The Group’s revenue is mainly arising from the manufacturing services to its customers in connection with the production of handsets.

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INTERIM REPORT 2012

3. SEGMENT INFORMATION (Continued)

The following is an analysis of the Group’s revenue and results by operating and reportable segments.

Segment revenue (external sales) Asia Europe America Total Segment (loss) profit Asia Europe America Other income, gains and losses General and administrative expenses Research and development expenses Impairment loss recognised for property, plant and equipment Interest expense on bank borrowings Share of profits of associates Share of loss of a jointly controlled entity (Loss) profit before taxation	Six months ended 30.6.2012 30.6.2011 US$’000 US$’000 (unaudited) (unaudited) 1,436,406 1,609,423 487,774 593,758 579,915 790,492
	2,504,095 2,993,673
	(10,622) 101,283 (1,781) 23,417 (3,521) 36,648
	(15,924) 161,348 61,242 68,688 (110,108) (128,276) (94,429) (96,081) (54,425) – (6,544) (4,443) 323 1,997 (24) –
	(219,889) 3,233

Segment profits represent the gross profits earned by each segment and the service income (included in other income) after deducting certain selling expenses and impairment recognised for certain property, plant and equipment. This is the measure reported to the Chief Executive Officer for the purposes of resources allocation and performance assessment.

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

4. TAXATION

Current tax (Over)underprovision in prior periods Deferred tax_(note 12)_ – Current period – Change in tax rate	Six months ended 30.6.2012 30.6.2011 US$’000 US$’000 (unaudited) (unaudited) 12,590 11,446 (1,909) 3,503
	10,681 14,949 (6,442) 5,210 – 185
	4,239 20,344

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No provision for Hong Kong Profits Tax has been made as the Group’s income neither arises in nor is derived from Hong Kong.

Tax charge mainly consists of income tax in the People’s Republic of China (“PRC”) attributable to the assessable profits of the Company’s subsidiaries established in the PRC. Under the Law of the PRC on Enterprise Income Tax (the “EIT Law”) and Implementation Regulation of the EIT Law, the tax rate of certain PRC subsidiaries increases from 18% to 25% progressively over 5 years from 1 January 2008 onwards. The applicable tax rate for current year was 25% (2011: 24%). Pursuant to the relevant laws and regulations in the PRC, two of the Company’s PRC subsidiaries are exempted from PRC enterprise income tax (“EIT”) for two years starting from year 2008 and 2009, respectively, which was their first profit-making year, followed by a 50% reduction for next three years. One of the Company’s subsidiaries was awarded the Advanced – Technology Enterprise Certificate and entitled for a tax reduction from 25% to 15% for three years commencing from 1 January 2009 and can be renewed in every 3 years. During the current period, the relevant subsidiary has successfully renewed the certificate and continues to entitle a reduced tax rate of 15% from 2012 to 2014.

Except as described above, other PRC subsidiaries are subject to EIT at 25% (2011: 25%).

Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

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INTERIM REPORT 2012

5. LOSS FOR THE PERIOD

	Six months	ended
	30.6.2012	30.6.2011
	US$’000	US$’000
	(unaudited)	(unaudited)
Loss for the period has been arrived at after charging (crediting):
Write down (reversals of write down) of inventories	24,736	(4,734)
Amortisation of prepaid lease payments (included in
general and administrative expenses)	561	1,158
Cost of inventories recognised as expense	2,511,045	2,844,754
Provision for warranty	5,491	9,289
Depreciation of property, plant and equipment	108,059	127,643
Depreciation of investment properties	–	798
(Reversals of) impairment loss recognised in respect of
trade receivables	(4,733)	3,462
Interest income from bank deposits	(27,295)	(12,973)
Gain on partial disposal of an associate_(note 10)_	(2,685)	–
Gain on loss of control over a subsidiary_(note 9)_	(19)	–

6. DIVIDEND

No dividend was paid, declared or proposed for the six months ended 30 June 2012 (for the six months ended 30 June 2011: Nil). The directors do not recommend the payment of an interim dividend.

7. LOSS PER SHARE

The calculation of the basic and diluted loss per share attributable to the owners of the Company is based on the following data:

Loss Loss for the purposes of calculating basic and diluted loss per share Number of shares Weighted average number of ordinary shares for the purposes of basic and diluted loss per share	Six months ended 30.6.2012 30.6.2011 US$’000 US$’000 (unaudited) (unaudited) (226,069) (17,648)
	7,298,516,893 7,198,833,690

The computation of diluted loss per share for the six months ended 30 June 2012 and 2011 does not assume the exercise of the Company’s share options and share awards as the exercise of the outstanding options and awards would result in a decrease in the loss per share for both periods.

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

8. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT

During the current period, the Group acquired property, plant and equipment of approximately US$26,368,000 (2011: US$99,416,000).

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In addition, the Group disposed of certain property, plant and equipment with a carrying amount of US$49,673,000 (2011: US$19,406,000) for proceeds of US$45,310,000 (2011: US$18,133,000), resulting in a loss on disposal of US$4,363,000 (2011: US$1,273,000).

The Group reviews property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As at 30 June 2012, the management assessed the recoverable amounts of the property, plant and equipment as a result of the deteriorating market demand and changing economic environment. Impairment of property, plant and equipment is measured by comparing its carrying amount to its recoverable amount which was determined based on its value in use and estimated by reference to the projected discounted cash flows that were expected to generate from the property, plant and equipment. As a result of the assessment, an impairment loss of US$56,250,000 (2011: Nil) had been recognised during the period ended 30 June 2012.

9. LOSS OF CONTROL OVER A SUBSIDIARY

During the current period, the Company entered into an agreement with Ways Technical Corp., Ltd. (“Ways”), an associate of the Group, that Ways’ wholly-owned subsidiary namely 精泉科技股份有限 公司 (“Ways Subsidiary”) shall subscribe for 12,100,000 shares in an indirectly wholly-owned subsidiary of the Company, namely 位吉股份有限公司 (also known as Ways Transworld Inc.) (“Ways Transworld”), for a consideration of NTD121,000,000 (equivalent to approximately US$4,138,000). Ways Transworld is principally engaged in the business of designing and manufacturing plastic molds for handheld devices, such as mobile phones and personal navigation devices. Upon completion of the transaction in May 2012, the Group lost its control on Ways Transworld but has joint control over Ways Transworld as all of the major strategic financial and operating decisions require unanimous consent of the Group and Ways Subsidiary. Accordingly, Ways Transworld was regarded as a jointly controlled entity of the Group after the transaction and is accounted for using the equity method (see note 11 for details).

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INTERIM REPORT 2012

9. LOSS OF CONTROL OVER A SUBSIDIARY (Continued)

The net assets of Ways Transworld derecognised at the date when control over Ways Transworld was lost were as follows:

Property, plant and equipment Trade and other receivables Amounts due from related parties Inventories Bank balances and cash Trade and other payables Amounts due to related parties Net assets disposed of Fair value of the interest in a jointly controlled entity Cumulative exchange differences in respect of the net assets of the subsidiary reclassified from equity to profit or loss on loss of control of a subsidiary Gain on loss of control over a subsidiary Net cash outflow arising on deemed disposal: Bank balances and cash disposed of	US$’000 2,032 4,357 25 943 3,860 (1,168) (5,777)
	4,272 (4,205) (86)
	(19)
	(3,860)

The fair value of the Group’s retained interests in Ways Transworld was determined by the directors of the Company, taking into account the cash consideration of US$4,138,000 injected by Ways Subsidiary.

10. INTERESTS IN ASSOCIATES

Cost of investments in associates, less impairment Listed in Taiwan Unlisted Share of post-acquisition profits and other comprehensive income, net of dividend received	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) 25,698 30,108 6,935 6,935 7,695 8,438
	40,328 45,481

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INTERIM REPORT 2012

10. INTERESTS IN ASSOCIATES (Continued)

During the current period, the Group disposed of certain interests in an associate, namely Ways, a limited company established in Taiwan and its shares being traded on the Taiwan OTC Exchange, through open market trading at the Taiwan OTC Exchange for a total cash proceed of US$8,015,000. Accordingly, the Group’s interest in Ways decreased from 20.06% to 17.12% and gain on partial disposal of an associate of US$2,685,000 was recognised in profit or loss and included in other income during the six months ended 30 June 2012. In the opinion of the directors, the Group is able to exercise significant influence over Ways because it has the right to appoint two out of six directors of Ways.

==> picture [9 x 108] intentionally omitted <==

11. INTEREST IN A JOINTLY CONTROLLED ENTITY

Cost of unlisted investment in a jointly controlled entity Share of post-acquisition loss and other comprehensive income	30.6.2012 US$’000 4,205 (122)
	4,083

At 30 June 2012, the Group had interests in the following significant jointly controlled entity:

					Proportion
					of nominal
					value of
		Place/			issued
		country of	Principal		capital	Proportion
Name of jointly		incorporation/	place of	Class of	held by	of voting
controlled entity	Form of entity	registration	operation	shares held	the Group	power held	Principal activity
					2012	2012
位吉股份有限公司	Limited company	Taiwan	Taiwan	Ordinary	50%	50%	Designing and manufacturing
(also known as							plastic molds for handheld
Ways Transworld Inc.)							devices

18 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

12. DEFERRED TAXATION

The following are the major deferred tax (assets) liabilities recognised and movements thereon for the period:

At 1 January 2011 Charge (credit) to profit o loss for the period Effect of change in tax rate Exchange adjustments At 30 June 2011 At 1 January 2012 (Credit) charge to profit o loss for the period Exchange adjustments At 30 June 2012	Allowances for inventories, trade and other receivables Warranty provision Accelerated tax depreciation Tax losses Deferred income Others Total US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 (5,126) (2,261) 3,916 (4,376) (8,634) (8,828) (25,309) r 100 601 (277) 2,690 (93) 2,189 5,210 17 16 87 (65) – 130 185 (93) (69) 6 (36) (250) (83) (525)
	(5,102) (1,713) 3,732 (1,787) (8,977) (6,592) (20,439)
	(1,704) (1,580) 3,105 (6) (8,638) (3,705) (12,528) r (4,027) 86 (314) (3,538) (182) 1,533 (6,442) 166 6 (203) 10 32 123 134
	(5,565) (1,488) 2,588 (3,534) (8,788) (2,049) (18,836)

For the purposes of presentation in the condensed consolidated statement of financial position, certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances for financial reporting purposes:

Deferred tax assets Deferred tax liabilities	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) (26,540) (21,326) 7,704 8,798
	(18,836) (12,528)

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

12. DEFERRED TAXATION (Continued)

At 30 June 2012, the Group has unused tax losses of US$956,228,000 (31.12.2011: US$781,610,000) available for offset against future profits. A deferred tax asset has been recognised in respect of approximately US$217,000 (31.12.2011: US$57,000) of such losses. No deferred tax asset has been recognised in respect of the unused tax losses of US$956,011,000 (31.12.2011: US$781,553,000) either due to the unpredictability of future profit streams or because it is not probable that the unused tax losses will be available for utilisation before their expiry. The unrecognised tax losses will expire before 2017.

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Under the Law of the PRC on Enterprise Income Tax, withholding tax is imposed on dividends declared in respect of profits earned by PRC subsidiaries from 1 January 2008 onwards. No liability has been recognised in respect of temporary differences associated with undistributed earnings of subsidiaries from 1 January 2008 onwards of approximately US$790,844,000 (31.12.2011: US$922,366,000) as at the end of the reporting period because the Group is in a position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future.

13. TRADE AND OTHER RECEIVABLES

Trade receivables Other receivables, deposits and prepayments	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) 936,845 1,193,461 196,686 218,239
	1,133,531 1,411,700

The Group normally allows an average credit period of 30 to 90 days to its trade customers.

The following is an aged analysis of trade receivables, from invoice date, at the end of the reporting period:

0 – 90 days 91 – 180 days 181 – 360 days Over 360 days	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) 917,408 1,177,063 12,280 8,247 4,150 3,772 3,007 4,379
	936,845 1,193,461

20 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

14. ASSETS CLASSIFIED AS HELD FOR SALE

On 8 July 2011, Shenzhen Futaihong Precision Industrial Co., Ltd. (“FTH Precision”), a wholly-owned subsidiary of the Company, and Hong Fu Jin Precision Industry (Shen Zhen) Co., Ltd. (“HFJ Precision”), a wholly-owned subsidiary of Hon Hai Precision Industry Co. Ltd. (“Hon Hai”), the ultimate holding company of the Company, entered into an equity transfer agreement (the “Transfer”) with an independent third party (the “Purchaser”), pursuant to which, among other things, FTH Precision and HFJ Precision have agreed to sell in a series and the Purchaser has agreed to purchase in a series the entire equity interest of 深圳市富泰宏光明房地產有限公司 (also known as Shenzhen Futaihong Guang Ming Property Co., Ltd.) (present name being 深圳市金城光明房地產有 限公司) (“Guang Ming”) for a total cash consideration of RMB878,750,000 (equivalent to approximately US$136,382,000). Upon and subject to the terms and conditions set out in the said equity transfer agreement (details of which are stipulated in the Company’s announcement dated 8 July 2011), FTH Precision and HFJ Precision held approximately 70.12% and 29.88% in the equity interests of Guang Ming, respectively, before the Transfer. Pursuant to the said equity transfer agreement, FTH Precision will be entitled to receive RMB616,180,000 (equivalent to approximately US$95,631,000) in aggregate upon disposal of all the Group’s interest in Guang Ming to the Purchaser by 31 December 2012.

Up to 31 December 2011, the Group disposed of 25% equity interest in Guang Ming to the Purchaser and received cash consideration of RMB219,687,000 (equivalent to approximately US$34,095,000) and deposit of RMB130,313,000 (equivalent to approximately US$20,224,000) for the subsequent disposal. The Group lost control upon disposal of 25% equity interest in Guang Ming from 70.12% to 45.12% but is still able to exercise significant influence over Guang Ming as at 31 December 2011.

During the six months ended 30 June 2012, the Group further disposed of 15.12% equity interest in Guang Ming to the Purchaser with consideration of RMB132,867,000 (equivalent to approximately US$21,006,000). It was settled by cash received during the current period of RMB102,554,000 (equivalent to approximately US$16,592,000) and a deposit received in prior year of RMB30,313,000 (equivalent to approximately US$4,414,000). In addition, during the current period, the Group received a deposit of RMB84,876,000 (equivalent to approximately US$13,419,000) for the subsequent disposal, while the remaining balance of the deposit of RMB100,000,000 (equivalent to approximately US$15,810,000) received in prior year was refunded to the Purchaser.

At 30 June 2012, the remaining interest held in Guang Ming by the Group was 30% (31.12.2011: 45.12%), which is regarded as an interest in an associate and is expected to be disposed of by 31 December 2012. Accordingly, the remaining interest in Guang Ming was reclassified as held for sale and is separately presented in the condensed consolidated statement of financial position.

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

15. TRADE AND OTHER PAYABLES

Trade payables Accruals and other payables Deposit received	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) 794,088 880,956 335,898 314,254 13,419 20,224
	1,143,405 1,215,434

==> picture [9 x 108] intentionally omitted <==

The following is an aged analysis of trade payables, from invoice date, at the end of the reporting period:

0 – 90 days 91 – 180 days 181 – 360 days Over 360 days BANK BORROWINGS Bank loans Analysis of bank borrowings by currency: US$ Euro Japanese Yen	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) 782,317 863,521 6,624 6,434 1,833 6,901 3,314 4,100
	794,088 880,956
	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) 703,900 483,245
	691,033 477,163 4,863 6,082 8,004 –
	703,900 483,245

16. BANK BORROWINGS

The bank borrowings as at the end of the reporting period are unsecured, repayable within one year and carry interest at fixed interest rates ranging from 0.96% to 3.55% (31.12.2011: 1.25% to 4.37%) per annum.

22 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

1. PROVISION

At 1 January 2011 Exchange adjustments Provision for the year Utilisation of provision Eliminated on disposal of a subsidiary At 31 December 2011 Exchange adjustments Provision for the period Utilisation of provision At 30 June 2012	Warranty provision US$’000 28,340 721 6,819 (7,467) (18)
	28,395 32 5,491 (3,536)
	30,382

The warranty provision represents management’s best estimate of the Group’s liability under twelve to twenty-four months’ warranty granted on handset products, based on prior experience and industry averages for defective products.

18. SHARE CAPITAL

Ordinary shares of US$0.04 each, authorised: Balance at 1 January 2011, 31 December 2011 and 30 June 2012 Ordinary shares of US$0.04 each, issued and fully paid: Balance at 1 January 2011 Issue pursuant to a share scheme_(note 21(b)) Balance at 31 December 2011 Exercise of share options(note 21(a)) Issue pursuant to a share scheme(note 21(b))_ Balance at 30 June 2012	Number of shares Amount US$’000 20,000,000,000 800,000
	7,164,065,229 286,563 60,609,485 2,424
	7,224,674,714 288,987 28,962,295 1,159 58,104,335 2,324
	7,311,741,344 292,470

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

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19. DEFERRED INCOME

Government subsidies Sale and leaseback transaction	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) 34,160 35,182 – 650
	34,160 35,832

==> picture [9 x 108] intentionally omitted <==

Government subsidies granted to the Company’s subsidiaries in the PRC are released to income over the useful lives of the related depreciable assets.

20. COMMITMENTS

COMMITMENTS
	30.6.2012	31.12.2011
	US$’000	US$’000
	(unaudited)	(audited)
Commitments for the acquisition of property,
plant and equipment contracted but not provided for	32,706	67,126

21. SHARE-BASED PAYMENT TRANSACTIONS

(a) Equity-settled share option scheme

The Company has a share option scheme for eligible employees of the Group. Details of the share options outstanding during the current period are as follows:

Option type 2007A 2011	Outstanding at 1.1.2012 Granted during the period Exercised during the period Lapsed during the period Cancelled during the period Outstanding at 30.6.2012 2,400,000 – – (2,400,000) – – 250,661,762 – (28,962,295) (7,221,041) – 214,478,426
	253,061,762 – (28,962,295) (9,621,041) – 214,478,426

53,005,616 share options are exercisable as at 30 June 2012 (31.12.2011: 1,600,000).

The weighted average closing price of the Company’s shares immediately before the dates on which the options were exercised during the current period was US$0.71 (equivalent to HK$5.50).

The Group recognised total expense of US$3,998,000 (for the six months ended 30 June 2011: US$789,000) for the six months ended 30 June 2012 in relation to the share options granted by the Company.

24 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

21. SHARE-BASED PAYMENT TRANSACTIONS (Continued)

(b) Other share-based payment plan

Pursuant to the approval of the board of directors of the Company (the “Board”) on 29 December 2010, the Company offered 35,573,029 ordinary shares to certain employees pursuant to the share scheme. The shares were granted without lock-up period. No consideration was payable on the grant of the shares and 35,354,446 ordinary shares were subsequently issued on 4 January 2011 and 218,583 ordinary shares were purchased by the trustee of the share scheme from the stock market in January 2011.

Pursuant to the approval of the Board on 29 April 2011, the Company offered 3,302,725 ordinary shares to an employee pursuant to the share scheme. The shares were granted without lock-up period. No consideration was payable on the grant of the shares and the shares were purchased by the trustee of the share scheme from the stock market in May 2011.

Pursuant to the approval of the Board on 8 July 2011, the Company offered 5,138,266 ordinary shares to certain employees pursuant to the share scheme. The shares were granted without lock-up period. No consideration was payable on the grant of the shares. 3,889,391 ordinary shares were subsequently issued on 18 July 2011 and 1,248,875 ordinary shares were purchased by the trustee of the share scheme from the stock market in July 2011.

Pursuant to the approval of the Board on 18 October 2011, the Company offered 21,948,624 ordinary shares to certain employees pursuant to the share scheme. The shares were granted without lock-up period. No consideration was payable on the grant of the shares. 21,365,648 ordinary shares were subsequently issued on 27 October 2011 and 582,976 ordinary shares were purchased by the trustee of the share scheme from the stock market in October 2011.

Pursuant to the approval of the Board on 29 December 2011, the Company offered 62,423,773 ordinary shares to certain employees pursuant to the share scheme, of which 48,484,394 ordinary shares were granted without lock-up period, while the remaining shares were granted with lock-up periods ranging from one to two years from the grant date. No consideration was payable on the grant of the shares. 58,104,335 ordinary shares were subsequently issued on 5 January 2012 and 4,319,438 ordinary shares were purchased by the trustee of the share scheme from the stock market in January 2012.

The Group has recognised total expense of US$4,931,000 (for the six months ended 30 June 2011: US$1,955,000) for the current period in relation to the shares granted under the share scheme.

25

FOXCONN INTERNATIONAL HOLDINGS LIMITED

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22. RELATED PARTY DISCLOSURES

(a) During the current period, the Group entered into the following transactions with related parties, including Hon Hai, the ultimate holding company of the Company, subsidiaries and associates of Hon Hai other than members of the Group:

==> picture [9 x 108] intentionally omitted <==

Hon Hai: Sales of goods Purchase of goods Sales of property, plant and equipment Purchase of property, plant and equipment Subcontracting income Consolidated services and subcontracting expense General services income General services expense Subsidiaries of Hon Hai: Sales of goods Purchase of goods Sales of property, plant and equipment Purchase of property, plant and equipment Lease income Lease expense Subcontracting income Consolidated services and sub-contracting expense General services income General services expense Associates of Hon Hai: Sales of goods Purchase of goods Sales of property, plant and equipment Purchase of property, plant and equipment Lease income Lease expense Subcontracting income Consolidated services and subcontracting expense General services income General services expense	Six months ended 30.6.2012 30.6.2011 US$’000 US$’000 (unaudited) (unaudited) 36 625 4,550 10,599 571 429 65 821 2,788 2,185 9,299 141 – 32 160 326
	30,507 42,537 103,047 100,679 26,829 7,728 6,872 5,744 500 80 883 1,803 9,592 25,802 7,101 8,378 154 1 21,575 13,379
	1,994 29,097 53,915 78,504 10,327 3,909 2,495 1,491 – 1,085 42 293 807 1,920 1,416 458 85 3,913 818 3,007

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

22. RELATED PARTY DISCLOSURES (Continued)

(b) At the end of the reporting period, the Group had the following balances due from/to related parties included in:

Trade receivables: Hon Hai Subsidiaries of Hon Hai Associates of Hon Hai Other receivables: Hon Hai Subsidiaries of Hon Hai Associates of Hon Hai Trade payables: Hon Hai Subsidiaries of Hon Hai Associates of Hon Hai Other payables: Hon Hai Subsidiaries of Hon Hai Associates of Hon Hai	30.6.2012 31.12.2011 US$’000 US$’000 (unaudited) (audited) 1,038 830 44,495 37,490 10,324 4,051
	55,857 42,371
	168 183 6,417 154 2 6
	6,587 343
	62,444 42,714
	6,764 3,091 74,507 152,957 40,838 30,372
	122,109 186,420
	135 1,533 788 1,934 289 125
	1,212 3,592
	123,321 190,012

Balances due from/to related parties are unsecured, interest free and are repayable within one year.

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

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22. RELATED PARTY DISCLOSURES (Continued)

(c) Compensation of key management personnel

The remuneration of directors and other members of key management for the period was as follows:

==> picture [9 x 108] intentionally omitted <==

Short-term benefits Share-based payments	Six months ended 30.6.2012 30.6.2011 US$’000 US$’000 (unaudited) (unaudited) 481 492 107 2,000
	588 2,492

23. APPROVAL

The condensed consolidated financial statements on pages 4 to 28 were approved and authorised for issue by the Board on 27 August 2012.

28 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

MANAGEMENT DISCUSSION AND ANALYSIS

Review of Results and Operations

For the six-month period ended 30 June 2012, the Group recorded a 16.37% year-on-year decrease in consolidated turnover of US$2,504 million (2011: US$2,994 million). Loss for the period attributable to owners of the Company was US$226 million compared to a loss of US$18 million for the same period last year. Basic loss-per-share for the period was US3.1 cents.

During the first six months of 2012, we saw major changes in the handset ecosystem triggered by the end market volatility due to the European and global economic slow-down, the emergence of new service/applications centric business models and resulting in our customers’ continuous struggle in their market share protection battle. Market dynamics shifted drastically and created tough challenges for some industry players as well as the Group. Though we spent major efforts in soliciting new customers’ businesses and streamlining our operations, it was clear that our total capacity was still over our demand level.

In line with the consolidation of our major PRC manufacturing capabilities in our northern sites by the end of 2011, further consolidation continued in our Shenzhen site with re-locations of teams and business into our northern PRC sites to counter continuous business and market dynamics and challenges. Through such consolidation, re-organization of our business operations into smaller and responsive teams had continued. We had also continued to explore and develop smart phone ODM business with our existing and new customers. While we believe that we still remained as the major supply chain partner to our existing customers, our aggressive business development efforts remain a top priority in providing more services in the value chain to our customers and getting new businesses.

Liquidity and Financial Resources

As at 30 June 2012, the Group had a cash balance of US$1,997 million. The cash balance is expected to be able to finance our operations. Our gearing ratio, expressed as a percentage of interest bearing external borrowings of US$704 million (2011: US$483 million) over total assets of US$5,516 million (2011: US$5,612 million), was 12.76% (2011: 8.61%). External borrowings increased in the first half of 2012 mainly to meet the operating cash demand; most of the borrowings were denominated in US Dollars and some of them were denominated in Japanese Yen and Euro. The Group borrowed according to real demand and there were no bank committed borrowing facilities and no seasonality of borrowing requirements. The outstanding interest bearing external borrowings were all at fixed rate ranging from 0.96% to 3.55% per annum with original maturity of one to three months.

Net cash from operating activities for the six months ended 30 June 2012 was US$251 million.

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

Liquidity and Financial Resources (Continued)

Net cash from investing activities for the six months ended 30 June 2012 was US$3 million, of which, mainly, US$26 million represented the expenditures on property, plant and equipment related to the facilities in our major sites in the PRC, US$34 million represented placement in bank deposit, US$17 million represented consideration received for disposals of interest in Guang Ming, US$13 million represented deposits received in respect of assets held for sale, US$4 million represented the net cash outflow from loss of control over a subsidiary, US$16 million represented deposits refunded in respect of assets held for sale, US$45 million represented proceeds on disposal of property, plant and equipment, and US$8 million represented net proceeds on partial disposal of an associate.

==> picture [9 x 108] intentionally omitted <==

Net cash from financing activities for the six months ended 30 June 2012 was US$235 million, primarily due to net increase in bank loans of US$221 million and proceeds of US$14 million from the issue of shares to employees for such period.

Exposures to Currency Risk and Related Hedges

In order to mitigate foreign currency risks, the Group actively utilized natural hedge technique to manage its foreign currency exposures by non-financial methods, such as managing the transaction currency, leading and lagging payments, receivable management, etc.

Besides, the Group sometimes entered into short-term foreign currency forward contracts (usually with tenor less than 6 months) to hedge the currency risk resulting from its short-term bank loans (usually with tenors less than 6 months) denominated in foreign currencies. Also, the Group, from time to time, utilized a variety of foreign currency forward contracts to hedge its exposure to foreign currencies.

Capital Commitment

As at 30 June 2012, the capital commitment of the Group was US$32.7 million (2011: US$67.1 million). Usually, the capital commitment will be funded by cash generated from operations.

Pledge of Assets

A subsidiary of the Company has pledged its corporate assets of approximately US$1.6 million (2011: US$1.7 million) to secure general banking facilities granted to the Group.

30 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

MANAGEMENT DISCUSSION AND ANALYSIS (Continued)

Outlook

Looking forward, challenging economic conditions around the world may continue to cast uncertainties in our business environment. The management team remains cautious over the future handset market conditions in 2012. We will continue to take actions on resources optimization and operation cost control in the remaining of the year, as well as enhancing the Group’s value-added offerings for the new customers. Notwithstanding our continuous endeavours, at present, we still see tremendous challenges to restore our financial position to profitability by the end of 2012.

Our strategy is to focus on new customers in smart phone sector. We believe our R&D investment in past years will be instrumental in our future endeavours.

Employees

As at 30 June 2012, the Group had a total of 75,487 (2011: 98,868) employees. Total staff costs incurred during the six months ended 30 June 2012 amounted to US$251 million (2011: US$272 million). The Group offers a comprehensive remuneration policy which is reviewed by the management on a regular basis.

The Company has adopted a share scheme and a share option scheme respectively. The share option scheme complies with the requirements of Chapter 17 of the Listing Rules.

OTHER INFORMATION DIRECTORS

Mr. CHIN Wai Leung, Samuel relinquished his position as the chief executive officer of the Company with effect from 1 January 2012 and remains as the chairman of the Company. He resigned as a director of certain subsidiaries of the Company, namely Success World Holdings Limited and FIH Co., Ltd. with effect from 19 June 2012 and 20 June 2012 respectively. Pursuant to the approval of the Board on 26 July 2012, Mr. Chin’s appointment was renewed for a term of three years ending on 22 September 2015 subject to retirement and re-election under the articles of association of the Company. He is entitled to annual emoluments consisting of basic salary of US$300,000 and a discretionary bonus to be determined by the Board from time to time with reference to the Company’s performance, his duties and responsibilities with the Company, his contribution to the Company and the prevailing market practice.

Mr. CHENG Tien Chong retired as an executive director and the chief executive officer of the Company with effect from 26 July 2012. It follows that he ceased to be the chairman of the Company’s corporate governance committee with effect from 26 July 2012. He also resigned as a director of certain subsidiaries of the Company, namely Evenwell Holdings Limited, Success World Holdings Limited and Wide-Ranging Investments Limited with effect from 31 July 2012 and FIH Co., Ltd. with effect from 7 August 2012.

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FOXCONN INTERNATIONAL HOLDINGS LIMITED

OTHER INFORMATION (Continued) DIRECTORS (Continued)

Mr. CHIH Yu Yang, an executive director of the Company, was appointed as the chief executive officer of the Company with effect from 26 July 2012. He was also appointed as the chairman of the Company’s corporate governance committee with effect from 26 July 2012. Pursuant to the approval of the Board on 26 July 2012, Mr. Chih’s appointment was renewed for a term of three years ending on 27 August 2015 subject to retirement and re-election under the articles of association of the Company. He is entitled to annual emoluments consisting of basic salary of NTD3,600,000 (equivalent to approximately US$121,320) and a discretionary bonus to be determined by the Board from time to time with reference to the Company’s performance, his duties and responsibilities with the Company, his contribution to the Company and the prevailing market practice.

==> picture [9 x 108] intentionally omitted <==

Mr. LEE Jer Sheng, an executive director of the Company, was appointed as a director of FIH Co., Ltd., being a subsidiary of the Company, with effect from 20 June 2012.

Mr. CHANG Ban Ja, Jimmy retired as a non-executive director of the Company with effect from 31 May 2012.

Mr. TONG Wen-hsin was appointed as an executive director of the Company with effect from 26 July 2012. He was also appointed as a director of certain subsidiaries of the Company, namely Evenwell Holdings Limited, Success World Holdings Limited and Wide-Ranging Investments Limited, with effect from 31 July 2012.

32 FOXCONN INTERNATIONAL HOLDINGS LIMITED

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OTHER INFORMATION (Continued) DISCLOSURE OF INTERESTS

Directors’ Interests and Short Positions in Shares, Underlying Shares and Debentures

As at 30 June 2012, the interests and short positions, if any, of each director and chief executive of the Company in the shares, underlying shares and debentures of the Company and any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the “SFO”)) which were required to be notified to the Company and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the directors and chief executive were taken or deemed to have under such provisions of the SFO), or which were required to be and were recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or which were otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) adopted by the Company were as follows:

				Approximate
				percentage of
				interest in the
		Capacity/	Total number	Company/
	Name of	Nature of	of ordinary	associated
Name of director	corporation	interest	shares	corporation
CHIN Wai Leung, Samuel	Company	Personal Interest	19,264,200	0.2635%
	Hon Hai	Personal Interest	791,551	0.0074%
CHENG Tien Chong_(Note 1)_	Hon Hai	Personal Interest	616,000	0.0058%
CHIH Yu Yang	Company	Personal Interest	3,786,396	0.0518%
	Hon Hai	Personal Interest	237,453	0.0022%
	Chi Mei	Personal Interest	1,000	0.0007%
	Communication
	Systems, Inc.
	(Note 2)
LEE Jer Sheng_(Note 3)_	Company	Personal Interest	1,899,562	0.0260%
		Jointly held Interest	100,000	0.0014%
LEE Jin Ming_(Note 4)_	Hon Hai	Personal Interest	393,703	0.0037%
		Through a Trust	1,000,000	0.0094%

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OTHER INFORMATION (Continued) DISCLOSURE OF INTERESTS (Continued)

Directors’ Interests and Short Positions in Shares, Underlying Shares and Debentures (Continued)

==> picture [9 x 108] intentionally omitted <==

Notes:

1. Mr. CHENG Tien Chong retired as an executive director and the chief executive officer of the Company with effect from 26 July 2012.

2. The Company indirectly, through its wholly-owned subsidiaries, holds approximately 76.3% of the entire issued share capital of Chi Mei Communication Systems, Inc., a company incorporated in Taiwan.

3. 1,899,562 shares include 1,898,882 shares which are issuable upon exercise of share options granted under the share option scheme of the Company and upon vesting of the share grants granted under the share scheme of the Company. 100,000 shares are beneficially and jointly owned by Mr. LEE Jer Sheng and Ms. TING Kuei Feng, the spouse of Mr. LEE Jer Sheng. Accordingly, Mr. LEE Jer Sheng is deemed to be interested in 100,000 shares which are jointly held by him and his spouse for the purposes of the SFO.

4. 1,000,000 shares are held by a trust in which Mr. LEE Jin Ming is the beneficiary. Accordingly, Mr. LEE Jin Ming is deemed to be interested in 1,000,000 shares which are held by the trust for the purposes of the SFO.

Save as disclosed above, none of the directors or chief executive of the Company had, as at 30 June 2012, any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the directors and chief executive of the Company were taken or deemed to have under such provisions of the SFO), or which were required to be and were recorded in the register required to be kept by the Company under Section 352 of the SFO, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code.

34 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

OTHER INFORMATION (Continued) DISCLOSURE OF INTERESTS (Continued)

Substantial Shareholders’ Interests and Short Positions in Shares and Underlying Shares

So far as is known to any director of the Company, as at 30 June 2012, shareholders (other than the directors or chief executive of the Company) who had interests and short positions in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or which were required to be and were recorded in the register required to be kept by the Company under Section 336 of the SFO were as follows:

			Approximate
			percentage of
Name of	Capacity/	Total number of	interest in
substantial shareholder	Nature of interest	ordinary shares	the Company
Foxconn (Far East) Limited	Beneficial owner	5,081,034,525	69.49%
Hon Hai_(Note)_	Interest of a controlled corporation	5,081,034,525	69.49%

Note: Foxconn (Far East) Limited is a direct wholly-owned subsidiary of Hon Hai, and therefore, Hon Hai is deemed or taken to be interested in the 5,081,034,525 shares which are beneficially owned by Foxconn (Far East) Limited for the purposes of the SFO.

Save as disclosed above, as at 30 June 2012, the Company had not been notified by any persons (other than the directors or chief executive of the Company) who had interests or short positions in the shares or underlying shares of the Company which would be required to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were required to be and were recorded in the register required to be kept by the Company under Section 336 of the SFO.

INTERIM REPORT 2012 35

FOXCONN INTERNATIONAL HOLDINGS LIMITED

OTHER INFORMATION (Continued) SHARE OPTION SCHEME

Movements of the share options granted under the Company’s share option scheme during the six months ended 30 June 2012 were as follows:

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Category of grantee Employees Director LEE Jer Sheng Employees

Outstanding at the beginning of the period Date of grant during the period Granted during the period Vesting period Exercise price Exercised during the period Lapsed/ Expired during the period Cancelled during the period Outstanding at the end of the period 2,400,000 – – each year on 16 July from 2008 to 2013 HK$20.63 – 2,400,000 – – 1,701,553 – – each year on 1 January from 2012 to 2014 HK$3.62 – – – 1,701,553 248,960,209 – – each year on 1 January from 2012 to 2014 HK$3.62 28,962,295 7,221,041 – 212,776,873

253,061,762 – 28,962,295 9,621,041 – 214,478,426

Apart from the share option scheme above and the Company’s share scheme, at no time during the six months ended 30 June 2012 was the Company or any of its subsidiaries a party to any arrangement to enable the directors of the Company to acquire benefits by means of acquisitions of shares in, or debenture of, the Company or any other body corporate.

36 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012

OTHER INFORMATION (Continued) DIVIDEND

The directors did not recommend the payment of an interim dividend for the six months ended 30 June 2012.

PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY

Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company’s listed securities during the six months ended 30 June 2012.

RESERVES

Movements in reserves of the Group during the six months ended 30 June 2012 are set out on page 9.

AUDIT COMMITTEE

The Company has established an audit committee in accordance with the requirements of the Listing Rules, particularly the Code on Corporate Governance Practices (the “CCGP”) during the period from 1 January 2012 to 31 March 2012 and the Corporate Governance Code (the “CG Code”) during the period from 1 April 2012 to 30 June 2012 as set out in Appendix 14 to the Listing Rules. Its primary duties are to review the Group’s financial reporting process and internal control system, nominate and monitor external auditors and provide advice and comments to the Board. The audit committee is comprised of three non-executive directors, two of whom are independent non-executive directors (among whom one of the independent non-executive directors has the appropriate professional qualifications or accounting or related financial management expertise as required under the Listing Rules).

The audit committee has reviewed the unaudited condensed consolidated financial statements of the Group for the six months ended 30 June 2012 and the Company’s interim report for such six-month period.

M O D E L C O D E F O R S E C U R I T I E S T R A N S A C T I O N S B Y DIRECTORS

The Company has adopted the Model Code as set out in Appendix 10 to the Listing Rules. Following specific enquiry made by the Company, all the directors of the Company have confirmed that they have complied with the required standards set out in the Model Code in respect of the Company’s securities throughout the six months ended 30 June 2012.

INTERIM REPORT 2012 37

FOXCONN INTERNATIONAL HOLDINGS LIMITED

OTHER INFORMATION (Continued) CORPORATE GOVERNANCE

The Company has complied with all the code provisions set out in the CCGP during the period from 1 January 2012 to 31 March 2012 and the CG Code during the period from 1 April 2012 to 30 June 2012.

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As an enhancement of the Company’s corporate governance practices and in full compliance with the code provisions set out in the CCGP during the period from 1 January 2012 to 31 March 2012 and the CG Code during the period from 1 April 2012 to 30 June 2012, the roles of chairman and chief executive officer of the Company were separated with effect from 1 January 2012.

Moreover, the Company has established two additional committees of its board of directors namely the nomination committee and the corporate governance committee with their respective terms of reference, and has formulated a number of internal policies and procedures, including the procedures for shareholders to propose candidates for election as a director of the Company, the shareholders communication policy and the memorandum on shareholder rights.

On behalf of the Board CHIN Wai Leung, Samuel Chairman

Hong Kong, 27 August 2012

38 FOXCONN INTERNATIONAL HOLDINGS LIMITED

INTERIM REPORT 2012