FIH Mobile Limited — Proxy Solicitation & Information Statement 2017

May 5, 2017

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in FIH Mobile Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the licensed bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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FIH Mobile Limited 富 智 康 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2038)

CONTINUING CONNECTED TRANSACTION ANNUAL CAPS REVISION AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial adviser

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REORIENT Financial Markets Limited

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

First Shanghai Capital Limited

A letter from the board of directors of FIH Mobile Limited is set out on pages 3 to 10 of this circular. A letter from the Independent Board Committee (as defined herein) containing its advice to the Independent Shareholders (as defined herein) is set out on page 11 of this circular. A letter from First Shanghai Capital Limited containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 12 to 19 of this circular.

A notice convening the extraordinary general meeting of the Company to be held at Kowloon Room I, Mezzanine Level, Kowloon Shangri-La Hotel, 64 Mody Road, Tsimshatsui East, Hong Kong on Thursday, 25 May 2017 at 11:00 a.m., or immediately after the conclusion of the 2017 annual general meeting of the Company to be held at the same venue and on the same day, is set out on pages 24 to 25 of this circular. Whether or not you are able to attend the extraordinary general meeting, please complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, as soon as possible and in any event not less than 48 hours before the time of the extraordinary general meeting or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting at the extraordinary general meeting in person should you so wish.

Hong Kong, 8 May 2017

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . .	11
LETTER FROM FIRST SHANGHAI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
APPENDIX — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24

– i –

DEFINITIONS

In this circular, the following terms shall have the meanings set out below unless the context requires otherwise:

• ‘‘Announcement’’

• the announcement of the Company dated 13 April 2017 regarding the proposed revision of the annual caps for the Product Sales Transaction for the three years ending 31 December 2019

• ‘‘associate(s)’’ having the meaning as defined in the Listing Rules

• ‘‘Board’’ the board of Directors

• ‘‘Company’’

• FIH Mobile Limited, a limited liability company incorporated in the Cayman Islands, the shares of which are listed on the Stock Exchange

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘EGM’’

• the extraordinary general meeting of the Company to be held on Thursday, 25 May 2017 at 11:00 a.m., or immediately after the conclusion of the 2017 annual general meeting of the Company to be held at the same venue and on the same day, to approve the proposed revision of the annual caps for the Product Sales Transaction for the three years ending 31 December 2019, or where the context so admits, any adjournment thereof

• ‘‘First Shanghai’’

• First Shanghai Capital Limited, a licensed corporation under the SFO to carry out type 6 (advising on corporate finance) regulated activity which has been appointed by the Company to be the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the proposed revision of the annual caps for the Product Sales Transaction for the three years ending 31 December 2019

• ‘‘Framework Product Sales Agreement’’

• the framework product sales agreement entered into among the Company, Hon Hai and Innolux Corporation (an associate of Hon Hai formerly known as Innolux Display Corporation and then Chimei Innolux Corporation) on 18 January 2005 (as amended by the respective supplemental agreements dated 28 February 2006, 24 October 2007, 19 November 2010, 17 October 2013 and 11 August 2016)

• ‘‘Group’’

• the Company and/or its subsidiaries (as the case may be)

– 1 –

DEFINITIONS

• ‘‘Hon Hai’’

• ‘‘Hon Hai Group’’

• ‘‘Independent Board Committee’’

• ‘‘Independent Shareholders’’

• ‘‘Latest Practicable Date’’

• ‘‘Listing Rules’’

• ‘‘percentage ratios’’

• ‘‘Product Sales Transaction’’

• ‘‘Proposed Annual Caps’’

• ‘‘SFO’’

• ‘‘Shareholders’’

• ‘‘Share(s)’’

• ‘‘Stock Exchange’’

• ‘‘subsidiary(ies)’’

• ‘‘US$’’

• ‘‘3C’’

• 鴻海精密工業股份有限公司 (Hon Hai Precision Industry Co. Ltd. for identification purposes only), the ultimate controlling shareholder of the Company

• Hon Hai, its subsidiaries and/or associates (as the case may be)

• the independent board committee established by the Board to consider the Product Sales Transaction and the Proposed Annual Caps and to advise the Independent Shareholders in respect thereof

• Shareholders other than Hon Hai and its associates

• 2 May 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular

• the Rules Governing the Listing of Securities on the Stock Exchange, as amended and/or supplemented from time to time

• the percentage ratios calculated based on the requirements under Rule 14.07 of the Listing Rules

• sale of parts or other products manufactured or owned by the Group to the Hon Hai Group as contemplated under the Framework Product Sales Agreement

• the proposed annual caps for the Product Sales Transaction for the three years ending 31 December 2019

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• the holders of the Shares

• the ordinary share(s) of US$0.04 each of the Company

• The Stock Exchange of Hong Kong Limited

• having the meaning ascribed to it under the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)

• United States dollars, the lawful currency of the United States of America

• computer, communication and consumer electronics

– 2 –

LETTER FROM THE BOARD

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FIH Mobile Limited 富 智 康 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2038)

Executive Directors: CHIH Yu Yang (Acting Chairman and Chief Executive Officer) WANG Chien Ho HUANG Chin Hsien LUO Zhongsheng

Independent Non-executive Directors: LAU Siu Ki Daniel Joseph MEHAN CHEN Fung Ming TAO Yun Chih

Registered Office: P.O. Box 31119 Grand Pavilion Hibiscus Way 802 West Bay Road Grand Cayman KY1-1205 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: 8th Floor, Peninsula Tower 538 Castle Peak Road Cheung Sha Wan Kowloon Hong Kong 8 May 2017

Dear Shareholders,

CONTINUING CONNECTED TRANSACTION ANNUAL CAPS REVISION AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

The Group is a vertically integrated manufacturing service provider for the handset industry worldwide. It provides a wide range of manufacturing services to its customers in connection with the production of handsets.

– 3 –

LETTER FROM THE BOARD

The Hon Hai Group is the leading global manufacturing service provider in the 3C industries. Hon Hai is the ultimate controlling shareholder of the Company holding approximately 63.63% of the total number of issued shares of the Company as at the Latest Practicable Date, and hence a connected person of the Company under the Listing Rules.

The Group from time to time has been carrying out the Product Sales Transaction with the Hon Hai Group, which is more particularly described below. Reference is made to the announcements of the Company dated 11 August 2016 and 21 September 2016 as well as the circular of the Company dated 1 September 2016 in relation to, among other things, the Product Sales Transaction and the existing annual caps for the Product Sales Transaction for the three years ending 31 December 2019.

As stated in the Announcement, the Company envisages that the annual caps for the Product Sales Transaction for the three years ending 31 December 2019 may not be sufficient and proposes to revise such annual caps.

Based on the maximum amount of the Proposed Annual Caps, the Product Sales Transaction and the Proposed Annual Caps are subject to the approval of the Independent Shareholders. The Company has established the Independent Board Committee to advise the Independent Shareholders in respect thereof, and has appointed First Shanghai as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

The purpose of this circular is to provide the Shareholders with information regarding the proposed revision of the annual caps for the Product Sales Transaction, and to seek approval of the Independent Shareholders in respect of the ordinary resolution set out in the notice of the EGM on pages 24 to 25 of this circular. The recommendation of the Independent Board Committee to the Independent Shareholders in respect of the aforesaid is set out on page 11 of this circular. The letter from First Shanghai to the Independent Board Committee and the Independent Shareholders containing its advice in respect of the aforesaid is set out on pages 12 to 19 of this circular.

PRODUCT SALES TRANSACTION

Pursuant to the Framework Product Sales Agreement, the Group has agreed to sell or procure its subsidiaries to sell to the Hon Hai Group parts or other products manufactured or owned by the Group for a term up to 31 December 2019 upon and subject to the terms and conditions set out therein at a price determined as follows:

• (1) where the Group has been approved or otherwise designated by the relevant customers of the Hon Hai Group, at the price agreed between the Group and such customers; if not, at a price to be determined by reference to the average market price; or

• (2) where (1) above is not appropriate or applicable, at a price to be agreed between the Group and the Hon Hai Group upon the basis of the principle of ‘‘cost plus’’; or

– 4 –

LETTER FROM THE BOARD

• (3) where none of the above pricing bases is appropriate or applicable, at a price to be agreed between the Group and the Hon Hai Group based on reasonable commercial principles.

Under the Product Sales Transaction, the Group sells to the Hon Hai Group parts and other products manufactured or owned by the Group including handset products, handset parts, moulds used in handset manufacturing, and other consumer electronic products. Due to changes in the specifications of the handset products and technological changes, the specifications of the products under the Product Sales Transaction will change from time to time as they need to be tailored for the specific product being manufactured and having regard to the changing market conditions (which may affect the prices of parts and other products), the Group is not able to fix the prices of the products under the Product Sales Transaction but has instead agreed to the pricing terms set out above.

Payment for the Product Sales Transaction is usually received by the Group within 90 days after the date of the relevant invoice.

PRICING DETAILS

With regard to the pricing term numbered (1) above where the Group is approved or otherwise designated by the customers of the Hon Hai Group (which are independent of the Hon Hai Group and the Group) to supply parts or other products to the Hon Hai Group, the products are sold at prices agreed between the Group and the Hon Hai Group’s customers (without the Hon Hai Group’s direct involvement).

In cases under the pricing term numbered (1) above where the Group is not approved or otherwise designated by the customers of the Hon Hai Group or where the customers of the Hon Hai Group are not independent of the Hon Hai Group and the Group, a price is to be determined by reference to the average market price. These products comprise handset products and parts and other products sourced from independent vendors in the market; in general, the Group will select at least one purchase transaction of the Group of the same product from an independent vendor within three months of the proposed transaction with the Hon Hai Group in order to determine the average market price or the market price (if there is only one independent transaction available).

As to the pricing term numbered (2) above, cost plus is determined based on the cost of the products sold to the Hon Hai Group plus a margin as agreed between the Group and the Hon Hai Group. These products comprise handset products and parts, moulds used in handset manufacturing and other products which are all to be tailor made by the Group according to the Hon Hai Group’s unique specifications. Under the cost-plus pricing, the cost is based on the Group’s accounting records. In determining the margin, the Group takes into account the margin for products of similar nature in the market by way of referring to margins for the Group’s sales of products of similar nature to independent customers. In general, the Company will select one independent transaction (most related to the subject product in nature) within three months of the proposed transaction with the Hon Hai Group to determine the market margin.

– 5 –

LETTER FROM THE BOARD

As to the pricing term numbered (3) above, in consideration of its inventory optimisation management, the Group may agree to prices lower than the costs or prices/margins under the Group’s recent independent transactions. In such cases, the Company would only accept such lower prices if the products could not be sold at higher prices to other independent customers and the Company does not consider it to be in its interests to keep such inventory having regard to factors such as inventory obsolescence. The Company will attempt to solicit purchases from independent parties and will ensure that the price of the products sold to the Hon Hai Group will not be lower than any prices offered by interested independent buyers. The operation departments of the Group carry out the inventory optimisation management and would solicit purchases from buyers including the Hon Hai Group. The accounting departments of the Group will review any proposed sales of products by the operation departments under this pricing policy. This pricing term has not been applied since 2015 but remains to be relevant to cater to such circumstances in the future.

REASONS FOR THE PRODUCT SALES TRANSACTION

The Company considers it in its best interests to generate more income as well as enhance utilisation of its assets by carrying out the Product Sales Transaction in response to the Hon Hai Group’s needs from time to time, provided that the Hon Hai Group purchases from the Group at prices comparable to market prices and/or which are considered to be fair and reasonable to the Company.

HISTORICAL VALUES AND ANNUAL CAPS

With reference to the Company’s announcements dated 11 August 2016 and 21 September 2016 and circular dated 1 September 2016, the Company has set the existing annual caps for the Product Sales Transaction for the three years ending 31 December 2019.

Anticipating additional projects to manufacture and sell products to the Hon Hai Group under the Product Sales Transaction, the Company envisages that the existing annual caps for the Product Sales Transaction may not be sufficient and has therefore proposed the Proposed Annual Caps in place of such existing annual caps.

The table below sets out (a) the historical actual amounts of the Product Sales Transaction for the two years ended 31 December 2016; (b) the existing annual caps for the Product Sales Transaction for the three years ending 31 December 2019; and (c) the Proposed Annual Caps.

	Actual transaction
	amounts for the year	Existing annual caps for the			year	Proposed annual caps for the
	ended 31 December		ending 31 December			year	ending 31 December
	2015 2016	2017	2018		2019	2017	2018	2019
(in US$’000)	(audited) (audited)
Product Sales Transaction	480,702 868,939	951,000	1,018,000	1,089,000		2,147,000	2,357,000	2,588,000

Note: Based on the maximum amount of the Proposed Annual Caps, the relevant percentage ratios are more than 5% and the Product Sales Transaction constitutes a non-exempt continuing connected transaction for the Company under the Listing Rules. Accordingly, the Product Sales Transaction and the Proposed Annual Caps are subject to the approval of the Independent Shareholders.

– 6 –

LETTER FROM THE BOARD

The Proposed Annual Caps are determined with reference to projections of the Company which in turn are prepared by the Company mainly with reference to the following major factors:

• . the latest available actual amounts of the transactions under the Product Sales Transaction during the period from 1 January 2017 to 31 March 2017 (both dates inclusive), where according to the Group’s management accounts, two product lines under the Product Sales Transaction relating to a new product brand acquired by the Hon Hai Group in 2016 recorded transactions up to approximately US$71.1 million per month and US$13.2 million per month respectively during the aforesaid period;

• . the historical growth and budgets of the Product Sales Transaction, where based on another product line of the Product Sales Transaction amounting to approximately US$420.3 million for the year ended 31 December 2016 with annual growth of 95% compared to the year earlier, such product line for the purposes of estimation of the Proposed Annual Caps is estimated to be approximately US$819 million for the year ending 31 December 2017, and the remaining transactions under the Product Sales Transaction amounted to approximately US$265.8 million for the year ended 31 December 2016 which was close to the amount for the year earlier;

• . the Group’s historical turnover during 2013–2016; and

• . an additional buffer of 5%, to cater for any increase in the transaction which is unexpected but not substantial.

The Directors (including the independent non-executive Directors whose view is stated under the paragraph headed ‘‘Recommendation’’ below) consider that the Proposed Annual Caps are fair and reasonable, and the terms of the Product Sales Transaction are fair and reasonable, on normal commercial terms and in the interests of the Company and its Shareholders as a whole. In view of his relationship with Hon Hai, Mr. WANG Chien Ho (being an executive Director) has abstained from voting on the Board resolutions in relation to the Product Sales Transaction and the Proposed Annual Caps.

INTERNAL CONTROL

The Group has adopted the following internal control procedures over the continuing connected transactions of the Company including the Product Sales Transaction:

• . Before entering into a transaction under the continuing connected transactions of the Company, the purchase departments and/or the operation departments (as the case may be) of the Group will review and check whether the pricing is fair and reasonable adhering to the pricing terms and details. In addition to reviewing the pricing before entering into a transaction under the continuing connected transactions of the Company where the pricing terms under the relevant agreements are applied for the first time or the pricing terms are different from those used previously, the accounting departments of the relevant member companies of the Group will review the aforesaid works carried out by the purchase departments and/or the operation departments (as the case may be) on a quarterly basis.

– 7 –

LETTER FROM THE BOARD

• . The accounting department of the Company is primarily responsible to review and monitor the continuing connected transactions ensuring that the annual caps of the relevant continuing connected transactions are not exceeded and the continuing connected transactions have been conducted in accordance with the pricing policies or mechanisms under the framework agreements relating to such continuing connected transactions. The accounting department of the Company will consult with the Group’s internal audit function in respect of continuing connected transaction compliance issues and annually report to the chief financial officer of the Company, who (in his own capacity and on behalf of the Group’s management designated for the purposes of the Group’s enterprise risk management and internal controls) will report to the audit committee of the Company and also provide a confirmation to the audit committee that the continuing connected transactions of the Company which are subject to the annual review and disclosure requirements under the Listing Rules have been entered into (a) in the ordinary and usual course of business of the Group; (b) on normal commercial terms or better; and (c) in accordance with the relevant agreements governing them on terms that are fair and reasonable and in the interests of the Shareholders as a whole; and that the Group’s internal control procedures applicable to continuing connected transactions are adequate and effective to ensure that such transactions were so conducted. The audit committee will consider this accordingly.

• . The Company’s external auditors will review the continuing connected transactions (which are subject to the annual review and disclosure requirements under the Listing Rules) annually to check and confirm (among others) whether the pricing terms have been adhered to and whether the relevant caps have been exceeded.

• . The independent non-executive Directors will review the continuing connected transactions of the Company (which are subject to the annual review and disclosure requirements under the Listing Rules) annually to check and confirm whether such continuing connected transactions are conducted in the ordinary and usual course of business of the Group, on normal commercial terms or better, in accordance with the relevant agreements governing them on terms that are fair and reasonable and in the interests of the Shareholders as a whole, and whether the internal control procedures put in place by the Company are adequate and effective to ensure that such continuing connected transactions were conducted in accordance with the pricing policies set out in such relevant agreements.

LISTING RULES REQUIREMENTS

Pursuant to Rule 14A.54 of the Listing Rules, the Company should re-comply with the applicable requirements under Chapter 14A of the Listing Rules before the existing annual caps for the Product Sales Transaction for the three years ending 31 December 2019 are exceeded.

Based on the maximum amount of the Proposed Annual Caps, the relevant percentage ratios are more than 5% and the Product Sales Transaction constitutes a non-exempt continuing connected transaction for the Company under the Listing Rules and therefore the Product Sales

– 8 –

LETTER FROM THE BOARD

Transaction and the Proposed Annual Caps are subject to the approval of the Independent Shareholders. The Company has established the Independent Board Committee to advise the Independent Shareholders in respect thereof, and has appointed First Shanghai as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

The Product Sales Transaction is also subject to the annual review requirements under Rules 14A.55 to 14A.59 of the Listing Rules.

EGM

A notice convening the EGM to be held at Kowloon Room I, Mezzanine Level, Kowloon Shangri-La Hotel, 64 Mody Road, Tsimshatsui East, Hong Kong on Thursday, 25 May 2017 at 11:00 a.m., or immediately after the conclusion of the 2017 annual general meeting of the Company to be held at the same venue and on the same day, is set out on pages 24 to 25 of this circular. At the EGM, an ordinary resolution will be proposed for the Independent Shareholders to consider and, if thought fit, to approve the proposed revision of the annual caps for the Product Sales Transaction for the three years ending 31 December 2019.

The ordinary resolution proposed at the EGM will be determined by way of poll by the Independent Shareholders. Pursuant to Rule 14A.36 of the Listing Rules, any connected person (as defined in the Listing Rules) and any Shareholder and their respective associates with a material interest (other than by virtue of being a Shareholder) in the Product Sales Transaction are required to abstain from voting at the EGM. Hon Hai and its associates who in aggregate were interested in 5,081,034,525 Shares (representing approximately 63.63% of the total number of Shares in issue) as at the Latest Practicable Date are required to and will abstain from voting at the EGM in respect of such ordinary resolution.

A form of proxy for use in connection with the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible and in any event not less than 48 hours before the time of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM should you so wish.

RECOMMENDATION

The Independent Board Committee, having taken into account the advice of First Shanghai, is of the view that (i) the terms of the Product Sales Transaction are fair and reasonable, on normal commercial terms and, together with the bases of determining the Proposed Annual Caps, are fair and reasonable; and (ii) the entering into of the Product Sales Transaction is in the Group’s ordinary and usual course of business and, together with the Proposed Annual Caps, is in the interests of the Company and the Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolution to approve the Product Sales Transaction and the Proposed Annual Caps at the EGM.

– 9 –

LETTER FROM THE BOARD

GENERAL

Your attention is drawn to the letter from the Independent Board Committee, the letter from First Shanghai, the additional information set out in the appendix to this circular and the notice of the EGM.

Yours faithfully, By Order of the Board CHIH Yu Yang Acting Chairman

– 10 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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FIH Mobile Limited 富 智 康 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2038)

8 May 2017

Dear Independent Shareholders,

CONTINUING CONNECTED TRANSACTION ANNUAL CAPS REVISION

We refer to the circular dated 8 May 2017 of the Company (the ‘‘Circular’’) of which this letter forms part. Terms defined in the Circular bear the same meanings herein unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to advise you regarding the fairness and reasonableness of the Product Sales Transaction and the Proposed Annual Caps. First Shanghai has been appointed as the independent financial adviser to advise us and the Independent Shareholders in this regard.

Having considered the terms of the Product Sales Transaction as well as the Proposed Annual Caps, and having taken into account the principal factors and reasons considered by, and the opinion of, First Shanghai as stated in its letter dated 8 May 2017, we consider that (i) the terms of the Product Sales Transaction are fair and reasonable, on normal commercial terms and, together with the bases of determining the Proposed Annual Caps, are fair and reasonable; and (ii) the entering into of the Product Sales Transaction is in the Group’s ordinary and usual course of business and, together with the Proposed Annual Caps, is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution proposed at the EGM approving the Product Sales Transaction and the Proposed Annual Caps.

We draw the attention of the Independent Shareholders to (i) the letter from the Board; (ii) the letter from First Shanghai; and (iii) the appendix to the Circular.

Yours faithfully,

Independent Board Committee

LAU Siu Ki Daniel Joseph MEHAN CHEN Fung Ming TAO Yun Chih Independent Non-executive Directors

– 11 –

LETTER FROM FIRST SHANGHAI

The following is the text of a letter received from First Shanghai setting out its advice to the Independent Board Committee and the Independent Shareholders in respect of the proposed revision of the annual caps for the Product Sales Transaction for the three years ending 31 December 2019 for inclusion in this circular.

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FIRST SHANGHAI CAPITAL LIMITED

19th Floor, Wing On House 71 Des Voeux Road Central Hong Kong

8 May 2017

To the Independent Board Committee and

the Independent Shareholders of FIH Mobile Limited

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTION ANNUAL CAPS REVISION

INTRODUCTION

We refer to our engagement to advise the Independent Board Committee and the Independent Shareholders in respect of the proposed revision of the annual caps for the Product Sales Transaction for the three years ending 31 December 2019, the details of which are set out in the circular of the Company to the Shareholders dated 8 May 2017 (the ‘‘Circular’’), of which this letter forms part. Unless the context otherwise requires, terms used in this letter shall have the same meanings as those defined in the Circular.

The Product Sales Transaction involves the sale of parts or other products manufactured or owned by the Group to the Hon Hai Group. The Group has been conducting the Product Sales Transaction with the Hon Hai Group from time to time. The Company envisages that the existing annual caps for the Product Sales Transaction for the three years ending 31 December 2019 may not be sufficient and proposes to revise the existing annual caps to the Proposed Annual Caps.

Hon Hai is the ultimate controlling shareholder of the Company and is, therefore, a connected person of the Company. Hence, the Product Sales Transaction constitutes a continuing connected transaction for the Company under the Listing Rules. As stated in the letter from the Board in the Circular, the Product Sales Transaction and the Proposed Annual Caps are subject to approval by the Independent Shareholders at the EGM.

– 12 –

LETTER FROM FIRST SHANGHAI

The Independent Board Committee, comprising all the independent non-executive Directors, namely Messrs. LAU Siu Ki, CHEN Fung Ming and TAO Yun Chih and Dr. Daniel Joseph MEHAN, has been established to advise the Independent Shareholders in respect of the Product Sales Transaction and the Proposed Annual Caps. We, First Shanghai Capital Limited, have been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

Within the past two years from the Latest Practicable Date, apart from our current engagement as the independent financial adviser in respect of the Product Sales Transaction and the Proposed Annual Caps, we were engaged as independent financial adviser by the Company in relation to certain continuing connected transactions as detailed in the circular of the Company dated 1 September 2016 (the ‘‘2016 CCT Circular’’). Given (i) our independent role in this previous engagement; and (ii) our fee for this previous engagement represented an insignificant percentage of the revenue of our parent group, we consider this previous engagement would not affect our independence to form our opinion in respect of the Product Sales Transaction and the Proposed Annual Caps.

In putting forth our opinion and recommendation, we have relied on the accuracy of the information and representations included in the Circular and provided to us by the management of the Group, and have assumed that all such information and representations made or referred to in the Circular and provided to us by the management of the Group in all material respects were true at the time they were made and continued to be true up to the Latest Practicable Date. We have also assumed that all statements of belief, opinion and intention made in the Circular were reasonably made after due enquiry. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the management of the Group and have been advised that no material facts have been withheld or omitted from the information provided and referred to in the Circular. We consider that we have reviewed sufficient information to reach an informed view and to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our advice. We have not, however, conducted any independent verification of the information included in the Circular and provided to us by the management of the Group nor have we conducted any form of investigation into the business, affairs or future prospects of the Group and the Hon Hai Group. Notwithstanding the foregoing, we have formulated our opinion and recommendation with due skill and care and have made due inquiry before making such formulation.

– 13 –

LETTER FROM FIRST SHANGHAI

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion on the Product Sales Transaction and the Proposed Annual Caps, we have taken into account the following principal factors and reasons:

1. Background to and reasons for the Product Sales Transaction

The Group is a vertically integrated manufacturing service provider for the handset industry worldwide. Hon Hai, whose shares are listed on the Taiwan Stock Exchange Corporation, is the ultimate controlling shareholder of the Company. The Hon Hai Group is a leading global manufacturing service provider in the 3C industries.

The Product Sales Transaction involves the sale of parts or other products (including handset products, handset parts, moulds used in handset manufacturing and other consumer electronic products) manufactured or owned by the Group to the Hon Hai Group. The Group has been conducting the Product Sales Transaction with the Hon Hai Group from time to time. The major reasons for the Product Sales Transaction include:

• . the Group can generate revenue through the sale of parts or products; and

• . the Group can increase its asset utilisation rate and achieve economies of scale (particularly at times when the Group has surplus production capacity) given the sale of parts or products of the Group may give rise to higher manufacturing needs for the production of such parts or products.

Taking into account, in particular, (i) the principal businesses of the Group and the nature of the Product Sales Transaction; (ii) the Group can generate more revenue, increase asset utilisation rate and achieve economies of scale; and (iii) the terms of the Product Sales Transaction are fair and reasonable and on normal commercial terms as discussed below, we are of the view that the entering into of the Product Sales Transaction (including the Proposed Annual Caps as discussed below) is in the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM FIRST SHANGHAI

2. Principal terms of the Product Sales Transaction

The principal terms of the Product Sales Transaction are the same as those disclosed in the 2016 CCT Circular. The following flow chart and notes summarise the pricing bases of the Product Sales Transaction based on the letter from the Board in the Circular and the advice by the management of the Group:

“ Approved Vendor Principle ”[(1)]

If the above pricing basis is not appropriate or applicable

“ Market Price Principle ”[(2)]

If the above pricing basis is not appropriate or applicable

“ Cost Plus Principle ”[(3)] If the above pricing basis is not appropriate or applicable “ Reasonable Commercial Principle ”[(4)]

Notes:

1. Under the circumstances where (i) an independent customer of the Hon Hai Group (the ‘‘Independent Customer’’) specifies and requests certain products from the Hon Hai Group; (ii) the Group is an approved/designated vendor of the Independent Customer and acts as a supplier to the Hon Hai Group; and (iii) the Hon Hai Group plans to procure parts or other products from the Group, such pricing basis shall be adopted, pursuant to which the Group shall directly negotiate and then agree the pricing terms of the parts or other products with the Independent Customer, where the Hon Hai Group would then confirm the pricing terms with the Independent Customer based on such negotiation and agreement. The Hon Hai Group is not directly involved in the negotiation and agreement of the pricing terms.

2. The price shall be based on at least one purchase transaction of the Group of the same product from independent vendor to determine the market price.

3. The price shall make reference to the percentage margin of comparable transactions with independent third parties.

4. The price shall take into account factors applicable to the special circumstances on a case by case basis, such as in regard to inventory optimisation management.

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LETTER FROM FIRST SHANGHAI

In respect of the pricing bases set out in the above chart, we are advised by the management of the Group that the pricing basis adopted under the Product Sales Transaction could vary from case to case given the difference in the nature of the subject transaction. For example, (i) the Approved Vendor Principle may not be applicable because the Group may not be an approved/designated vendor for the subject transaction; (ii) the Market Price Principle may not be applicable for a tailor-made product which is unique and has no readily available market price; (iii) the Cost Plus Principle may not be applicable when the margin of a comparable product with independent third party is not available for reference. We are advised by the management of the Group that, in respect of the Product Sales Transaction, the Approved Vendor Principle and the Reasonable Commercial Principle had not been applied in the recent years.

In respect of payment terms, according to the letter from the Board in the Circular, the payments of the Product Sales Transaction are usually settled within 90 days after the date of the relevant invoice. As such, we have reviewed the annual report of the Company for the year ended 31 December 2016, where we note that (i) the Group normally allows an average credit period ranging from 30 to 90 days to its trade customers, except certain customers with a good track record which may be granted a longer credit period; and (ii) the credit period of the Product Sales Transaction of 90 days is in line with the aforesaid.

In respect of the key internal control measures of the Group for the Product Sales Transaction, we are advised by the management of the Group that the relevant departments of the Group are responsible for, (i) in respect of the Approved Vendor Principle, the review of documents to ensure the pricing terms are determined based on the negotiation and agreement between the Group and the Independent Customer; (ii) in respect of the Market Price Principle, the review of market price based on at least one purchase transaction of the Group of the same product from independent vendor within three months from the proposed transaction with the Hon Hai Group to ensure that the pricing terms with the Hon Hai Group are no less than such average market price or market price (if there is only one independent transaction available); (iii) in respect of the Cost Plus Principle, the assessment of whether the margins of prices for the transactions conducted with the Hon Hai Group are no less than those with independent third parties; and (iv) in respect of the Reasonable Commercial Principle, the soliciting of purchases from independent third parties to ensure that the price of the products sold to the Hon Hai Group are no less than any prices offered by interested independent buyers. In addition, the terms of the Product Sales Transaction have been and will continue to be reviewed by the auditors and the independent non-executive Directors in accordance with the Listing Rules on an annual basis.

In respect of our work done, apart from the Approved Vendor Principle and the Reasonable Commercial Principle which had not been applied in the recent years as stated above, we have reviewed three sets and five sets of sample documents (covering documents such as invoices and purchase orders) provided by the Group from its internal control records for the Market Price Principle and the Cost Plus Principle, respectively, under the Product Sales Transaction carried out within two years before the Latest Practicable Date (the ‘‘Review Period’’). We consider the Review Period to be a suitable timeframe for our sampling and evaluating the current application of pricing policies and

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LETTER FROM FIRST SHANGHAI

current internal control measures of the Group in practice. In addition, we are advised by the management of the Group and we understand that the number of actual transactions carried out under the Product Sales Transaction is enormous, i.e. over 20,000 actual transactions under the Product Sales Transaction actually took place during the year ended 31 December 2016, where the Cost Plus Principle was more frequently applied than the Market Price Principle. Taking into account, in particular, (i) a main purpose of our review is to obtain an understanding about how the pricing mechanism and policies of the Product Sales Transaction work in practice; (ii) the sample size basis covers each type of pricing policies which had been practically applied under the Product Sales Transaction during the Review Period; (iii) the terms of the Product Sales Transaction have been and will continue to be reviewed by the auditors and the independent non-executive Directors in accordance with the Listing Rules on an annual basis; and (iv) the enormous number of actual transactions carried out under the Product Sales Transaction during the Review Period, we consider our sample size basis as aforesaid to be acceptable and in line with our usual practice. Based on our work done aforementioned (being the review of sample documents of the Group with the Hon Hai Group and with independent third parties) and advice by the management of the Group, (i) in respect of the Market Price Principle, we note that the pricing terms with the Hon Hai Group are no less than the prices with independent third parties; and (ii) in respect of the Cost Plus Principle, the margins of prices for the transactions conducted with the Hon Hai Group are no less than those with independent third parties. We also consider that the Market Price Principle and the Cost Plus Principle to be fair and reasonable. During our review process as detailed above, we have not identified any factor which caused us to doubt the application of the pricing mechanism by the Group in respect of the Product Sales Transaction.

We have also reviewed the two most recent published annual reports of the Company and we note that (i) the auditors had issued their unqualified letters containing their findings and conclusions in respect of the Product Sales Transaction in accordance with rule 14A.56 of the Listing Rules; and (ii) the independent non-executive Directors had reviewed and confirmed that the Product Sales Transaction had been entered into, among other things, on normal commercial terms or better and in accordance with the relevant agreements governing them on terms that are fair and reasonable for the respective years.

Taking into account the above factors, in particular, (i) no alteration is made to the pricing terms of the Product Sales Transaction as compared with those in the 2016 CCT Circular; (ii) the pricing terms are based on either the Approved Vendor Principle, the Market Price Principle, the Cost Plus Principle or the Reasonable Commercial Principle as described in this section; (iii) the key internal control measures of the Group described in this section to ensure that the pricing terms are based on either negotiation and agreement with the Independent Customers or no less favourable than the terms with independent third parties or on arm’s length basis, where applicable; and (iv) the track record of the results of review by the auditors and the independent non-executive Directors and they will continue to review in accordance with the Listing Rules, we are of the view that sufficient internal control measures are in place and the terms of the Product Sales Transaction are fair and reasonable and on normal commercial terms so far as the Independent Shareholders are concerned.

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LETTER FROM FIRST SHANGHAI

3. Proposed Annual Caps

The following table sets out (i) the actual transaction amounts for each of the three years ended 31 December 2016; and (ii) the Proposed Annual Caps for each of the three years ending 31 December 2019 in respect of the Product Sales Transaction.

Actual	transaction amount	transaction amount		Proposed Annual	Proposed Annual	Caps
For the year ended 31 December				For the year ending 31		December
2014	2015		2016	2017	2018		2019
US$ million	US$ million	US$	million	US$ million	US$ million	US$	million
(audited)	(audited)	(audited)
325	481		869	2,147	2,357		2,588

Notes:

1. The existing annual caps for each of the years ending 31 December 2017, 2018 and 2019 are US$951 million, US$1,018 million and US$1,089 million, respectively.

2. The Proposed Annual Caps and the assumptions involved for their derivations should not be construed as an assurance or forecast by the Group of its future profitability or income.

We have reviewed the historical actual transaction amounts and the calculation breakdown of the Proposed Annual Caps. In respect of the determination of the Proposed Annual Caps, our key understanding based on the advice by the management of the Group is summarised as follows:

• . the actual transaction amount for the year ended 31 December 2016 was approximately US$869 million, representing an annual growth of approximately 81% (the ‘‘2016 Growth’’). The existing annual caps for the years ending 31 December 2017, 2018 and 2019 are around US$1,000 million and are considered insufficient;

• . the 2016 Growth was mainly attributable to the substantial annual increase in the transaction amount related to the products of a product brand (the ‘‘Ongoing Products’’). A portion of the 2016 Growth was contributed by the transaction amount related to certain new products of another product brand (the ‘‘New Products’’) following the acquisition of equity interests in an internationally renowned electronics company by the Hon Hai Group in 2016;

• . the key assumptions underlying the calculation of the Proposed Annual Cap for the year ending 31 December 2017 include (i) in respect of the Ongoing Products, the transaction amount for 2017 was derived based on the annual growth rate recorded in 2016; and (ii) in respect of the New Products, the estimated monthly transaction amounts in 2017 were derived based on the monthly level actually achieved in 2017 according to the latest available monthly data; and

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LETTER FROM FIRST SHANGHAI

• . the Proposed Annual Caps for the years ending 31 December 2018 and 2019 are derived based on an annual growth rate of 10% as compared with that for the year ending 31 December 2017 (the ‘‘General Growth Rate’’), where the General Growth Rate is in line with the average of the annual growth of the revenue of the Group for each of the three years ended 31 December 2016 of approximately 10%.

Based on the foregoing, in particular, (i) our review of the calculation breakdown of the Proposed Annual Caps; (ii) the Proposed Annual Cap for 2017 reflects the growth of the Ongoing Products in 2016 and also the New Products following the acquisition of an internationally renowned electronics company by the Hon Hai Group in 2016, where the estimated transaction amounts are based on actual achieved figures; (iii) the Proposed Annual Caps for 2018 and 2019 are based on the General Growth Rate, which is in line with the average revenue growth of the Group; and (iv) the achieved annual growth rate of the actual transaction amount in 2016, we are of the view that the Proposed Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned.

RECOMMENDATION

Having considered the above, we are of the opinion that (i) the terms of the Product Sales Transaction are fair and reasonable, on normal commercial terms and, together with the bases of determining the Proposed Annual Caps, are fair and reasonable; and (ii) the entering into of the Product Sales Transaction is in the Group’s ordinary and usual course of business and, together with the Proposed Annual Caps, is in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend, and we ourselves recommend, the Independent Shareholders to vote in favour of the ordinary resolution to approve the Product Sales Transaction and the Proposed Annual Caps at the EGM.

		Yours faithfully,
		For and on behalf of
	First	Shanghai Capital Limited
Fanny	Lee	Allen Wang
Managing	Director	Director

Note: Ms. Fanny Lee and Mr. Allen Wang have been responsible officers of Type 6 (advising on corporate finance) regulated activity under the SFO since 2006 and 2014, respectively. Both of them have participated in the provision of independent financial advisory services for various connected transactions involving companies listed in Hong Kong.

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests

As at the Latest Practicable Date, the interests and/or short positions, if any, of each Director and chief executive of the Company in the shares, underlying shares and/or debentures of the Company and/or any of its associated corporations (within the meaning of Part XV of the SFO) which were required 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 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/
		Nature of	of ordinary	associated
Name of director	Name of corporation	interest	shares	corporation
CHIH Yu Yang	Company	Personal Interest	14,227,857	0.1782%
	Hon Hai	Personal Interest	1,454,594	0.0084%
	Chiun Mai Communication	Personal Interest	1,000	0.0007%
	Systems, Inc. (‘‘CMCS’’)
	(Note)
HUANG Chin Hsien	Hon Hai	Personal Interest	914	0.00001%

Note: The Company indirectly, through its wholly-owned subsidiaries, holds approximately 86.82% of the entire number of issued shares of CMCS, a company incorporated in Taiwan.

Save as disclosed above, none of the Directors or chief executive of the Company had, as at the Latest Practicable Date, 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

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GENERAL INFORMATION

APPENDIX

Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they 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.

No transactions, arrangements or contracts of significance in relation to the Group’s business to which the Company, any of its subsidiaries, its holding company or any subsidiary of the Company’s holding company was a party and in which a director of the Company or an entity connected with a director of the Company (as defined in Section 486 of the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)) had a material interest, whether directly or indirectly, subsisted as at the Latest Practicable Date.

(b) Substantial shareholders’ interests

So far as is known to any Director or chief executive of the Company, as at the Latest Practicable Date, Shareholders (other than the Directors or chief executive of the Company) who had interests and/or short positions in the shares and/or 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:

follows:
			Approximate
		Total number	percentage of
	Capacity/	of ordinary	interest in
Name of substantial shareholder	Nature of interest	shares	the Company
Foxconn (Far East) Limited	Beneficial owner	5,081,034,525	63.63%
Hon Hai (Notes)	Interest of a controlled	5,081,034,525	63.63%
	corporation

Notes:

1. Foxconn (Far East) Limited is a direct wholly-owned subsidiary of Hon Hai, and therefore, Hon Hai is taken or deemed 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.

2. Mr. WANG Chien Ho, an executive Director, is an employee of the Hon Hai Group.

Save as disclosed above, as at the Latest Practicable Date, 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.

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GENERAL INFORMATION

APPENDIX

3. COMPETING BUSINESS INTEREST OF DIRECTORS

As at the Latest Practicable Date, none of the Directors or their respective associates was interested in any business which competes or is likely to compete, either directly or indirectly, with the businesses of the Group as required to be disclosed pursuant to the Listing Rules.

4. QUALIFICATION

The following is the qualification of the expert who has given an opinion or advice on the information contained in this circular:

Name

Qualification

First Shanghai a licensed corporation under the SFO to carry out type 6 (advising on corporate finance) regulated activity

5. CONSENT

First Shanghai has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which they respectively appear herein.

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, save as disclosed in the profit warning announcement of the Company dated 3 April 2017, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2016, being the date to which the latest published audited financial statements of the Group were made up.

7. MISCELLANEOUS

• (a) None of the Directors has entered into a service contract with the Company which does not expire or which is not determinable by the Company within one year without payment of compensation, other than statutory compensation.

• (b) As at the Latest Practicable Date, First Shanghai was not beneficially interested in the share capital of any member of the Group and did not have any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group. As at the Latest Practicable Date, none of the Directors or First Shanghai had any interest, either directly or indirectly, in any assets which have been, since 31 December 2016 being the date to which the latest published audited financial statements of the Company were made up, acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

• (c) The branch share registrar of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited.

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GENERAL INFORMATION

APPENDIX

• (d) The principal share registrar of the Company is Royal Bank of Canada Trust Company (Cayman) Limited.

• (e) The English text of this circular shall prevail over the Chinese text, in case of any inconsistency.

8. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the Framework Product Sales Agreement is available for inspection during normal business hours at Suites 3201–3204, One Exchange Square, 8 Connaught Place, Hong Kong from the date of this circular to the date of the EGM (both dates inclusive) and also at the EGM.

– 23 –

NOTICE OF EGM

==> picture [224 x 39] intentionally omitted <==

FIH Mobile Limited 富 智 康 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2038)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders of FIH Mobile Limited (the ‘‘Company’’) will be held at Kowloon Room I, Mezzanine Level, Kowloon Shangri-La Hotel, 64 Mody Road, Tsimshatsui East, Hong Kong on Thursday, 25 May 2017 at 11:00 a.m., or immediately after the conclusion of the 2017 annual general meeting of the Company to be held at the same venue and on the same day, for the purpose of considering and, if thought fit, passing (with or without modifications) the following ordinary resolution:

ORDINARY RESOLUTION

‘‘THAT

• (a) the transactions contemplated under the framework product sales agreement entered into among the Company, 鴻海精密工業股份有限公司 (Hon Hai Precision Industry Co. Ltd. for identification purposes only) (‘‘Hon Hai’’) and Innolux Corporation (an associate of Hon Hai formerly known as Innolux Display Corporation and then Chimei Innolux Corporation) on 18 January 2005 (as amended by the respective supplemental agreements dated 28 February 2006, 24 October 2007, 19 November 2010, 17 October 2013 and 11 August 2016) (the ‘‘Product Sales Transaction’’) for a term up to 31 December 2019 and the Company’s entering into and implementation thereof from time to time thereunder and the latest terms governing the same be and are hereby approved in all respects;

• (b) the proposed annual caps as set out in the circular of the Company dated 8 May 2017 in respect of the Product Sales Transaction for the three years ending 31 December 2019 be and is hereby approved in all respects; and

• (c) any one director of the Company, or any two directors of the Company if affixation of the Company’s common seal is necessary, be and is/are hereby authorised for and on behalf of the Company to execute and deliver (and affix the Company’s common seal to, if necessary) all such documents, instruments or agreements and to do all such other acts or things which he/they may in his/their absolute discretion consider necessary or desirable in connection with or incidental to any of the matters contemplated under the Product Sales Transaction for a term up to 31 December 2019 and/or the said annual caps.’’

By Order of the Board CHIH Yu Yang Acting Chairman

Hong Kong, 8 May 2017

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NOTICE OF EGM

Registered Office: Head Office: P.O. Box 31119 No. 18 Youyi Road Grand Pavilion Langfang Economic and Hibiscus Way Technological Development Zone 802 West Bay Road Hebei Province Grand Cayman People’s Republic of China KY1-1205 Cayman Islands Principal Place of Business in Hong Kong: 8th Floor, Peninsula Tower 538 Castle Peak Road Cheung Sha Wan Kowloon Hong Kong

Notes:

• (a) As set out in the notice of annual general meeting of the Company dated 13 April 2017, the register of members of the Company will be closed from Friday, 19 May 2017 to Thursday, 25 May 2017, both dates inclusive, during which period no transfer of shares of the Company (‘‘Shares’’) will be registered. In order to be entitled to attend and vote at the extraordinary general meeting, all transfers of Shares accompanied by the relevant share certificates and properly completed and signed transfer forms must be lodged with the branch share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited, at Rooms 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong for registration no later than 4:30 p.m. on Thursday, 18 May 2017.

• (b) Any member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend and vote in his stead. A proxy need not be a member of the Company. If more than one proxy is appointed, the appointment shall specify the number of Shares in respect of which each such proxy is appointed.

• (c) Form of proxy together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power or authority, must be lodged with the branch share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, not less than 48 hours before the time appointed for holding of the extraordinary general meeting or any adjourned meeting.

• (d) In accordance with Chapter 14A of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’), Hon Hai, the ultimate controlling shareholder of the Company, and its associates (as defined in the Listing Rules) are required to abstain from voting on the above ordinary resolution.

• (e) The ordinary resolution set out above will be determined by way of poll.

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