FIT Hon Teng Limited — Proxy Solicitation & Information Statement 2018

Jun 5, 2018

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 FIT Hon Teng 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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FIT Hon Teng Limited 鴻騰六零八八精密科技股份有限公司

(Incorporated in the Cayman Islands with limited liability under the name Foxconn Interconnect Technology Limited and carrying on business in Hong Kong as FIT Hon Teng Limited)

(Stock Code: 6088)

CONTINUING CONNECTED TRANSACTIONS PROPOSED REVISION OF ANNUAL CAPS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter from the board of directors of FIT Hon Teng Limited is set out on pages 4 to 14 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 15 of this circular. A letter from Alliance Capital Partners Limited containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 16 to 28 of this circular.

A notice convening the extraordinary general meeting of the Company to be held at 66-1, Chungshan Road, Tucheng District, New Taipei City 23680, Taiwan on Friday, June 22, 2018 at 3:30 p.m., is set out on pages 34 to 35 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 (i.e. before 3:30 p.m. on Wednesday, June 20, 2018) 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, June 6, 2018

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . 15
LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED. . . . . . . . . . . . . . . . . . . . . . . . . . 16
APPENDIX — GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
NOTICE OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

— 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 May 14, 2018 regarding the proposed revision of the annual caps for the Product Sales Transaction and the Product Purchase Transaction for the year ending December 31, 2018;

• “associate(s)” having the meaning as defined in the Listing Rules; “Board” the board of Directors;

“Company” FIT Hon Teng Limited (鴻騰六零八八精密科技股份有限公司), a company incorporated in the Cayman Islands with limited liability under the name Foxconn Interconnect Technology Limited and carrying on business in Hong Kong as FIT Hon Teng Limited, the Shares of which are listed on the Main Board of the Stock Exchange;

• “(continuing) connected having the meaning as defined in the Listing Rules; transaction(s)”

• “connected person(s)” having the meaning as defined in the Listing Rules;

• “Director(s)” the director(s) of the Company;

“EGM” the extraordinary general meeting of the Company to be held on Friday, June 22, 2018 at 3:30 p.m. to approve the proposed revision of the annual caps for the Product Sales Transaction and the Product Purchase Transaction for the year ending December 31, 2018, or where the context so admits, any adjournment thereof;

“Existing Annual Caps” the annual caps for each of the Product Purchase Transaction and the Product Sales Transaction for each of the three years ending December 31, 2019, approved by the Independent Shareholders on October 27, 2017;

• “Existing 2018 Annual Caps” the annual caps for each of the Product Purchase Transaction and the Product Sales Transaction for the year ending December 31, 2018, approved by the Independent Shareholders on October 27, 2017;

• “Existing 2019 Annual Caps” the annual caps for each of the Product Purchase Transaction and the Product Sales Transaction for the year ending December 31, 2019, approved by the Independent Shareholders on October 27, 2017;

• “Foxconn Far East Cayman” Foxconn (Far East) Limited, an exempted company incorporated in the Cayman Islands with limited liability which owns 100% issued shares of Foxconn Far East Hong Kong;

• “Foxconn Far East Hong Kong” Foxconn (Far East) Limited, a limited liability company incorporated in Hong Kong;

— 1 —

DEFINITIONS

“Framework Purchase	the framework purchase agreement entered into between the Company
Agreement”	and Hon Hai on November 9, 2016 (as amended by the supplemental
	agreement dated June 26, 2017 and including any amendment thereto
	from time to time);
“Framework Sales Agreement”	the framework sales agreement entered into between the Company and
	Hon Hai on November 9, 2016 (including any amendment thereto from
	time to time);
“Group”, “we” or “us”	the Company and its subsidiaries;
“Hon Hai”	Hon Hai Precision Industry Co., Ltd. (鴻海精密工業股份有限公司), a
	limited liability company established in Taiwan and listed on the Taiwan
	Stock Exchange (Stock Code: 2317.TW), the controlling shareholder of
	the Company;
“Hon Hai Group”	Hon Hai and its subsidiaries and (where relevant) 30%-controlled entities
	and, for the purpose of this circular, excluding the Group;
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic
	of China;
“Independent Board	the independent board committee established by the Board to consider the
Committee”	Product Sales Transaction, the Product Purchase Transaction, and the
	Proposed 2018 Transactions Annual Caps and to advise the Independent
	Shareholders in respect thereof;
“Independent Shareholders”	Shareholders other than Hon Hai and its associates;
“Latest Practicable Date”	June 1, 2018, being the latest practicable date prior to the printing of this
	circular for ascertaining certain information referred to in this circular;
“Listing”	the listing of the Company on the Stock Exchange on July 13, 2017;
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange, as
	amended and/or supplemented from time to time;
“percentage ratios”	the percentage ratios calculated based on the requirements under Rule
	14.07 of the Listing Rules;
“Product Purchase	purchase of various raw materials, ancillary materials and semi-finished
Transaction”	components and assembled products by the Group from Hon Hai Group as
	contemplated under the Framework Purchase Agreement;
“Product Sales Transaction”	sale of various interconnect solutions and other related products
	manufactured or owned by the Group to Hon Hai Group as contemplated
	under the Framework Sales Agreement;
“Proposed 2018 Purchase	the proposed annual caps for the Product Purchase Transaction for the
Annual Cap”	year ending December 31, 2018;

— 2 —

DEFINITIONS

“Proposed 2018 Sales	the proposed annual cap for the Product Sales Transaction for the year
Annual Cap”	ending December 31, 2018;
“Proposed 2018 Transactions	the Proposed 2018 Purchase Annual Cap and the Proposed 2018 Sales
Annual Caps”	Annual Cap;
“Prospectus”	the prospectus dated June 29, 2017 issued by the Company, a copy of
	which is available on the Company’s website at www.fit-foxconn.com
	and the Stock Exchange’s website at http://www.hkexnews.hk;
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong
	Kong), as amended and/or supplemented from time to time;
“Share(s)”	the ordinary share(s) with nominal value of US$0.01953125 each of the
	Company;
“Shareholders”	the holders of the Shares;
“Share Grant”	a share grant awarded to a participant under the Share Grant Scheme;
“Share Grant Scheme”	the share grant scheme approved and adopted by the Company on January
	5, 2015, and the rules and interpretations thereof further adopted by the
	Board on November 4, 2016;
“Sharp”	Sharp Corporation (シャープ株式會社), a limited liability company
	registered in Japan, the shares of which are listed on the First Section of
	the Tokyo Stock Exchange (Stock Code: 6753.T);
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“subsidiary(ies)”	having the meaning ascribed to it under the Companies Ordinance
	(Chapter 622 of the Laws of Hong Kong);
“US$”	United States dollars, the lawful currency of the United States of
	America;
“Vietnam”	the Socialist Republic of Vietnam; and
“%”	percent.

— 3 —

LETTER FROM THE BOARD

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FIT Hon Teng Limited 鴻騰六零八八精密科技股份有限公司

(Incorporated in the Cayman Islands with limited liability under the name Foxconn Interconnect Technology Limited and carrying on business in Hong Kong as FIT Hon Teng Limited)

(Stock Code: 6088)

Executive Directors:

LU Sung-Ching (Chairman) LU Pochin Christopher GILLESPIE William Ralph

Non-executive Director: CHEN Ga-Lane

Registered Office: Cricket Square Hutchins Drive, P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Headquarters in Taiwan:

Independent Non-executive Directors: CURWEN Peter D TANG, Kwai Chang CHAN, Wing Yuen Hubert

66-1, Chungshan Road Tucheng District New Taipei City 23680 Taiwan

Principal Place of Business in Hong Kong: 31/F, Tower Two Times Square 1 Matheson Street Causeway Bay Hong Kong

June 6, 2018

Dear Shareholders,

CONTINUING CONNECTED TRANSACTIONS PROPOSED REVISION OF ANNUAL CAPS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

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 the Product Purchase Transaction, and to seek approval of (where relevant) the Independent Shareholders and the Shareholders in respect of the ordinary resolutions set out in the notice of the EGM on pages 34 to 35 of this circular.

— 4 —

LETTER FROM THE BOARD

In respect of the proposed revision of the annual caps for the Product Sales Transaction and the Product Purchase Transaction, the recommendation of the Independent Board Committee to the Independent Shareholders is set out on page 15 of this circular and the letter from Alliance Capital Partners Limited to the Independent Board Committee and the Independent Shareholders containing its advice is set out on pages 16 to 28 of this circular.

(I) PROPOSED REVISION OF ANNUAL CAPS

The Group from time to time has been carrying out the Product Sales Transaction and Product Purchase Transaction with Hon Hai Group pursuant to the Framework Sales Agreement and Framework Purchase Agreement for a term up to December 31, 2019, respectively. The Product Sales Transaction and the Product Purchase Transaction constitute non-exempt continuing connected transactions for the Company under the Listing Rules, and the Company has set the annual caps for the Product Sales Transaction and the Product Purchase Transaction for each of the three years ending December 31, 2019, respectively.

On August 18, 2017, the Company announced that the original annual caps of the Product Sales Transaction and the Product Purchase Transaction were expected to be exceeded and proposed the revised annual caps for each of the three years ending December 31, 2019, which were approved by the Independent Shareholders on October 27, 2017 and thus constitute the Existing Annual Caps.

It is anticipated that the Existing 2018 Annual Caps may not be sufficient. The Company has therefore proposed the Proposed 2018 Transactions Annual Caps in place of the Existing 2018 Annual Caps.

Based on the maximum amount of the Proposed 2018 Transactions Annual Caps, the Product Sales Transaction, the Product Purchase Transaction and the Proposed Transaction 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 Alliance Capital Partners Limited as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

Background

References are made to the announcement of the Company dated August 18, 2017 and the circular of the Company dated October 12, 2017 in relation to, among other things, the Product Sales Transaction, the Product Purchase Transaction and the revision of annual caps for the Product Sales Transaction and the Product Purchase Transaction, respectively, for the three years ending December 31, 2019.

Product Sales Transaction

The Company’s products are sold to, among others, contract manufacturers and brand company customers. Contract manufacturers incorporate the Company’s interconnect solutions with a vast number of other components and modules and assemble them into finished products at the specification of their customers, generally brand companies. Brand companies generally market and sell their finished products to end users. Hon Hai Group is a leading contract manufacturer which is involved in, among others, assembling the finished products for brand companies and many brand companies often require Hon Hai Group to purchase the relevant parts and components, including the Company’s interconnect solutions, from specific approved suppliers like the Company, as part of the assembly process for better quality control and overall supply chain management.

— 5 —

LETTER FROM THE BOARD

Please refer to the section headed “Business — Our Customers” of the Prospectus for further details of the transaction model described above. To the best knowledge and information of the Company and as of the Latest Practicable Date, brand company customers of the Company are independent third parties of the Company and Hon Hai Group.

Pursuant to the Framework Sales Agreement, the Group has agreed to sell to Hon Hai Group various interconnect solutions and other related products for a term up to December 31, 2019 upon and subject to the terms and conditions set out therein at a price determined as follows:

• (1) for the sales to Hon Hai Group that are designated by the Group’s brand company customers, at the price negotiated and determined between the Group’s brand company customers and the Group; or

• (2) for other sales to Hon Hai Group where selling prices were not designated by the Group’s customers (“ Connected Sales ”), at a price that is determined by referencing the blended profit margin, which is the difference between revenue generated from such sales and historical cost allocated thereto for the preceding month, divided by the corresponding revenue, to that of sales to independent third parties (“ Third Party Sales ”), on a rolling basis, such that the differences in the blended profit margins between Connected Sales and Third Party Sales in each fiscal year shall not be more than 6.5% having considered the long-term business relationship, large sales volume to Hon Hai Group, and the strategic partnership with Hon Hai Group.

As more particularly set out in the section headed “Connected Transaction — Non-exempt Continuing Connected Transactions — (c) Framework Sales Agreement” of the Prospectus, in respect of the 6.5% blended profit margin, the Company believes it is industry practice to (1) grant large customers volume discounts; (2) give long-term customers with repeated sales and sustainable businesses price discounts as this would incur lower negotiation, coordination and logistics costs and subject the Company to lower exposure to credit risks, as compared to dealing with new customers; and (3) offer better pricing terms to customers with long-term strategic value to the Company. Having considered that (a) Hon Hai Group accounted for 37.0%, 23.0% and 24.8% of the Group’s revenue in 2015, 2016 and 2017 respectively and the relative magnitude of such amounts vis-a-vis revenue contribution from the other customers, (b) the Company’s long-term business cooperation with Hon Hai Group since the Company’s inception which the Company believes subject it to minimal credit risk as compared to other third party customers, and (c) being part of the ecosystem of Hon Hai Group brings the Company significant strategic value, the Directors are of the view that the 6.5% capped difference in the blended profit margin is under normal commercial terms, fair and reasonable, and in the interests of the Shareholders as a whole.

The pricing policy above has been disclosed in the Prospectus. The “blended profit margin” is calculated by dividing blended gross profit by revenue from customers during a specific period. Blended gross profit is calculated by aggregating the revenue generated from specific customers less the historical unit cost allocated to such sales for the preceding month multiplied by number of units sold. The Company will calculate the blended gross margin for Connected Sales and for Third Party Sales, respectively, and compare the two to determine whether the difference exceeds 6.5%.

As an internal control measure for compliance with the 6.5% threshold, the management of the Company reviews and monitors whether the difference exceeds the 6.5% threshold, at least on a quarterly basis, and takes appropriate measures to ensure compliance from time to time based on the review results. If the management determines that there is a risk for exceeding the 6.5% threshold on an annual basis, it will increase the frequency of review as appropriate and take further measures to ensure compliance.

— 6 —

LETTER FROM THE BOARD

Product Purchase Transaction

The Product Purchase Transactions can generally be classified into three models.

Model One:

Gold salts, one of the major raw materials, is a hazardous material allowed to be sold only by licensed suppliers in the PRC. Hon Hai Group is one of the licensed suppliers and has been a supplier of the Group. In addition, due to Hon Hai Group’s economies of scale, the processing fees are generally competitive when compared with other suppliers.

Model Two:

The Group purchases certain ancillary materials from Hon Hai Group, either as an approved supplier designated by the Group’s customers or due to its competitive prices compared to other suppliers.

Model Three:

In order to enhance the Group’s production efficiency and manage its production cost, the Group from time to time engages Hon Hai Group, for certain labor-intensive production processing of its interconnect solutions and certain other products. Hon Hai Group has been a long-term supplier of manufacturing vendor services of the Group with the expertise to manage a large workforce.

Pursuant to the Framework Purchase Agreement, the Group has agreed to purchase from Hon Hai Group various raw materials, ancillary materials and semi-finished components and assembled products for a term up to December 31, 2019 upon and subject to the terms and conditions set out therein at a price determined as follows:

• (1) Model One . For the procurement of gold salts, at the price equivalent to the sum of the commodity spot prices and the processing fees. The Group will obtain and compare fee proposals provided by Hon Hai Group and independent third party suppliers on a quarterly basis to the extent practicable. As a risk control measure, the Group will procure gold salts from more than one supplier, but will allocate at least 70% annual purchase from the supplier with the lowest fee quote; or

• (2) Model Two . For the procurement of ancillary raw materials from Hon Hai Group that is designated by the Group’s customers, at the price agreed between Hon Hai Group and the Group’s customers; and for other procurement of ancillary raw materials from Hon Hai Group, at the price determined with reference to comparable third-party prices to the extent independentthird-party suppliers are available; or

• (3) Model Three . For the procurement of semi-finished goods and assembled products, at the price determined based on (a) Hon Hai Group’s purchase prices of raw materials supplied by us, (b) their purchase prices of other raw materials, (c) their labor costs and overheads and (d) handling fees up to 5% of relevant labor cost and overheads.

The pricing policy above has been disclosed in the Prospectus. As to the 70% threshold set out in (1) above, the procurement department of the Company ensures the compliance of the 70% threshold by placing orders for the first three weeks of each month with its gold salts supplier with the lowest quote. It also prepares a monthly report of actual purchase amounts for management’s review as to the compliance of the 70% threshold.

— 7 —

LETTER FROM THE BOARD

Historical Values and Annual Caps

With reference to the announcement of the Company dated August 18, 2017 and the circular of the Company dated October 12, 2017, the Company has set the Existing Annual Caps for the Product Sales Transaction and the Product Purchase Transaction for each of the three years ending December 31, 2019.

On February 7, 2018, the Group entered into an agreement with Sharp to form a joint venture company to explore opportunities in the development, design, manufacturing, distribution and marketing for automotive cameras and electronic mirrors. In 2018, the Group plans to further invest in and/or acquire certain companies or business units which engage in the design, production and development of applications which utilize their interconnect solutions in the automotive, industrial and medical end market (including smart home, wearable devices and electric vehicles), the completion of which may render certain of these companies or business units becoming part of the Group. It is expected that these companies or business units will conduct purchase and sales of various raw materials, ancillary materials and semi-finished components and assembled products with Hon Hai Group, which will increase the transaction amounts under each of the Product Purchase Transaction and Product Sales Transaction.

Furthermore, in order to control production costs, the Company has been outsourcing certain noncore, labor-intensive assembly processes to certain production facilities of Hon Hai Group located in Vietnam. In 2018, the management of the Company has decided to allocate more of these assembly processes to Hon Hai Group’s production facilities in Vietnam. As a result, the Group will purchase more semi-finished components and assembled products from Hon Hai Group, thus increasing the amount of Product Purchase Transaction.

Lastly, to improve the utilization rate of plating devices, the Company has decided to expand the surface processing business. Accordingly, a larger amount of gold salts needs to purchased from Hon Hai Group, thus increasing the amount of Product Purchase Transaction.

As a result of the above, it is anticipated that there will be additional needs to sell the Group’s interconnect solutions and other related products to and purchase certain assembled products from Hon Hai Group under the Product Sales Transaction and the Product Purchase Transaction, respectively. Accordingly, the Company envisages that the Existing 2018 Annual Caps may not be sufficient and has therefore proposed the Proposed Sales Annual Caps and the Proposed Purchase Annual Cap in place of the Existing Annual Cap.

The table below sets out (a) the historical actual amounts of the Product Sales Transaction and Product Purchase Transaction for the three years ended December 31, 2017; (b) the Existing 2018 Annual Caps; and (c) the Proposed 2018 Transactions Annual Caps.

	Actual		Proposed 2018
	transaction	Existing 2018	Transactions
	amounts	Annual Caps	Annual Caps
	Year ended	Year ending	Year ending
	December 31,	December 31,	December 31,
(in US$ millions)	2017	2018	2018
Product Sales Transaction	753.4	1,116.6	1,222.0
Product Purchase Transaction	437.9	585.4	634.8

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LETTER FROM THE BOARD

Major factors considered as to the additional amounts for the Proposed 2018 Transactions Annual Caps:

First of all, based on the latest available actual amounts of the transactions under the Product Sales Transaction and the Product Purchase Transaction during the period from January 1, 2018 to March 31, 2018 (both dates inclusive), transactions under such two categories have reached approximately 16.5% and 17.3% of the respective Existing 2018 Annual Caps. This is because, based on the Company’s experience in the industry, brand companies, particularly those in the computer and consumer electronics and mobile and wireless end markets, (i) typically choose to release new product offerings in the second half of each year and (ii) tend to increase their purchases in preparation of peak sales holiday seasons. Accordingly, the Company expects the demand for various interconnect solutions and other related products, including gold salts, ancillary raw materials and semi-finished goods and assembled products to rebound in the second half of this year which will further drive up the amount under the Product Sales Transaction and the Product Purchase Transaction, respectively.

Moreover, as explained above, investments in and/or acquisitions of certain companies in the automotive, industrial and medical end market shall render certain sales and purchases between such companies with Hon Hai Group connected transactions. Accordingly, the revised projections have taken into account the historic transaction amounts between these companies and Hon Hai Group, which are reflected in an approximate 8.4% increase in the projection of Product Purchase Transaction for 2018, and an approximate 9.4% increase in the projection of Product Sales Transaction for 2018.

Additionally, with the view to improve the utilization rate of plating devices, the Company has decided to expand the surface processing business, and purchase a larger amount of gold salts from Hon Hai Group. The Company expects to purchase approximately 11.85% more gold salts from Hon Hai Group in 2018 compared to 2017.

Lastly, in line with the Company’s production strategy to save costs, they have been outsourcing certain non-core, labor-intensive assembly processes to certain production facilities of Hon Hai Group located in Vietnam. The benefits to the Group include (i) the reduction of production costs by leveraging on the economies of scale of Hon Hai Group’s large production capacity, and (ii) the ability to avoid ramping up the Group’s production capacity drastically in response to seasonal and fluctuating customer demands. In light of the above benefits, the management of the Company has decided to allocate more of these assembly processes to Hon Hai Group’s production facilities in Vietnam in 2018. As a result, the Group will purchase more semi-finished components and assembled products from Hon Hai Group, thus increasing the amount of Product Purchase Transaction.

Having considered the above reasons (which materialized largely in 2018) and that the connector industry and its competitive landscape are highly dynamic, the Company has calculated and proposed the Proposed 2018 Transactions Annual Caps based on the best estimates of the Company and on a prudent basis.

— 9 —

LETTER FROM THE BOARD

Existing 2019 Annual Caps

The Company expects that the reasons for revising the Existing 2018 Annual Caps would similarly have an impact on the Product Purchase Transaction and Product Sales Transaction for the year ending December 31, 2019.

In deciding not to revise the Existing 2019 Annual Caps for Independent Shareholders’ approval at the EGM, the Company has taken into careful consideration the following factors:

First of all, as mentioned above, it is the Group’s strategy to continue its investments and acquisitions in certain companies and business units which engage in the design, production and development of applications which utilize their interconnect solutions in the automotive, industrial and medical end market. It is expected that these investments and acquisitions will continue into 2019. However, in light of the uncertainties in relation to, inter alia , the actual operating size of these potential target companies or business units, the actual amount of purchase and sales conducted by these target companies or business units with Hon Hai Group, as well as the execution timetable, the Company considers it more prudent to propose the revised annual caps for Product Purchase Transaction and Product Sales Transaction for the year ending December 31, 2019 at a more appropriate stage when there is more visibility on the above parameters.

Furthermore, based on the Company’s experience in the industry, the volume of orders placed by major brand company customers, particularly those in the computer and consumer electronics and mobile and wireless end markets, tend to have a larger degree of fluctuation, which adds to the uncertainty in projecting for the transaction amounts in 2019. Normally, the Company would have a clearer forecast of the following year’s order volume in the last quarter of the current year and the first quarter of the following year.

Having considered the above reasons, and to avoid multiple revisions of annual caps in the future, the Company considers it more prudent to propose the revisions for the Existing 2019 Annual Caps (if necessary) at a later stage when a more accurate forecast is available.

Further announcement(s) and circular(s) will be made by the Company in accordance with the Listing Rules as and when necessary.

— 10 —

LETTER FROM THE BOARD

Reasons for and Benefits in relation to the Transactions

The Company considers it in its best interests to generate more income and save cost by carrying out the Product Sales Transaction and the Product Purchase Transaction in response to the stronger-thanexpected demand for lightning cable, earphones and other products from certain brand company customers, provided that the Group sells to and purchases from Hon Hai Group at prices pursuant to the pricing policies set forth in the Framework Sales Agreement and the Framework Purchase Agreement.

In view of the above, the Directors (including the independent non-executive Directors whose view is set out in the Letter from the Independent Board Committee) consider that the Proposed 2018 Transactions Annual Caps together with the terms of the Framework Sales Agreement and the Framework Purchase Agreement are fair and reasonable, on normal commercial terms, in the ordinary and usual course of business of the Group and in the interests of the Company and its Shareholders as a whole.

Internal Control

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

• Before entering into a transaction under the continuing connected transactions of the Company, the purchase, operation and/or other functional 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 and, in respect of the procurement of ancillary raw materials from Hon Hai Group that is not designated by the Group’s customers, will compare the pricing to comparable third-party prices to the extent independent-third-party suppliers are available. 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 operation management department of the Group will review the aforesaid works carried out by the purchase, operation and/or other functional departments (as the case may be) on a quarterly basis.

• The operation management department of the Company is primarily responsible for reviewing and monitoring 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 operation management department of the Company will consult with the Group’s internal audit function, external lawyers and the compliance adviser in respect of continuing connected transaction compliance issues and annually report to the head of the operation management department 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.

— 11 —

LETTER FROM THE BOARD

• 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.

General Information

The Group

The Group is a leading global interconnect solutions provider and one of the few global interconnect solutions providers whose offerings span wire-based, fiber-based and wireless interconnect solutions.

Hon Hai Group

Hon Hai Group is primarily engaged in the manufacture, sales and service of connectors, case, thermal module, wired/wireless communication products, optical products, power supply modules, and assemblies for use in the information technology, communications, automotive equipment, precision molding, automobile, and consumer electronics industries.

Listing Rules Implications

As of the Latest Practicable Date, the Company is indirectly owned as to 76.92% by Hon Hai, the controlling shareholder of the Company. Accordingly, Hon Hai is a connected person of the Company pursuant to Chapter 14A of the Listing Rules.

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 are exceeded.

Based on the maximum amount of the Proposed 2018 Transactions Annual Caps, one or more of the relevant percentage ratios are more than 5% and the Product Sales Transaction and the Product Purchase Transaction constitute non-exempt continuing connected transactions for the Company under the Listing Rules and therefore the Proposed 2018 Transactions Annual Caps are subject to the approval of the Independent Shareholders. Hon Hai and its associates will abstain from voting on the resolution to be proposed at the extraordinary general meeting for approving the above matters. The Product Sales Transaction and the Product Purchase Transaction are also subject to the annual review requirements under Rules 14A.55 to 14A.59 of the Listing Rules.

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LETTER FROM THE BOARD

The Board has established the Independent Board Committee to review, consider and recommend the Proposed 2018 Transactions Annual Caps and to advise the Independent Shareholders in respect thereof, and has appointed Alliance Capital Partners Limited as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

As none of the Directors has any material personal interest in the Product Sales Transaction and the Product Purchase Transaction, none of the Directors has abstained from voting on the board resolution to approve the Product Sales Transaction, the Product Purchase Transaction and the Proposed 2018 Transactions Annual Caps.

Recommendation

After taking into account the view of the Independent Board Committee as set out in this circular and the reasons for and benefits of the Product Sales Transaction and the Product Purchase Transaction, the Directors are of the view that the terms of the Framework Sales Agreement and the Framework Purchase Agreement and the Proposed 2018 Transactions Annual Caps are fair and reasonable, on normal commercial terms, in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Independent Shareholders to vote in favor of the ordinary resolutions to approve the Proposed 2018 Transactions Annual Caps at the EGM.

EGM

A notice convening the EGM to be held at 66-1, Chungshan Road, Tucheng District, New Taipei City 23680, Taiwan on Friday, June 22, 2018 at 3:30 p.m., is set out on pages 34 to 35 of this circular. At the EGM, ordinary resolutions will be proposed for the Independent Shareholders to consider and, if thought fit, to approve the Proposed 2018 Transactions Annual Caps.

The ordinary resolutions proposed at the EGM will be determined by way of poll by the Independent Shareholders relating to the Proposed 2018 Transactions Annual Caps.

Pursuant to Rule 14A.36 of the Listing Rules, any connected person and any Shareholder and their respective associates with a material interest (other than by virtue of being a Shareholder) in the Product Sales Transaction and the Product Purchase Transaction are required to abstain from voting at the EGM. Hon Hai and its associates who in aggregate were interested in 5,179,557,888 Shares (representing approximately 76.92% of the total number of Shares in issue) as of the Latest Practicable Date are required to and will abstain from voting at the EGM in respect of the ordinary resolution approving the Proposed 2018 Transactions Annual Caps.

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 (i.e. before 3:30 p.m. on Wednesday, June 20, 2018) 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.

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LETTER FROM THE BOARD

CLOSURE OF REGISTER OF MEMBERS

For the purpose of ascertaining the Shareholders’ entitlement to attend and vote at the EGM, the register of members of the Company will be closed from Tuesday, June 19, 2018 to Friday, June 22, 2018, both days inclusive, during which period no transfer of Shares will be registered. In order to qualify for attending and voting at the EGM, all transfers accompanied by the relevant share certificates must be lodged with the branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration no later than 4:30 p.m. on Friday, June 15, 2018.

GENERAL

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

Yours faithfully, For and on behalf of the Board FIT Hon Teng Limited* LU Sung-Ching Chairman of the Board

• Incorporated in the Cayman Islands with limited liability under the name Foxconn Interconnect Technology Limited and carrying on business in Hong Kong as FIT Hon Teng Limited

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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FIT Hon Teng Limited 鴻騰六零八八精密科技股份有限公司

(Incorporated in the Cayman Islands with limited liability under the name Foxconn Interconnect Technology Limited and carrying on business in Hong Kong as FIT Hon Teng Limited)

(Stock Code: 6088)

June 6, 2018

Dear Independent Shareholders,

CONTINUING CONNECTED TRANSACTIONS PROPOSED REVISION OF ANNUAL CAPS

We refer to the circular dated June 6, 2018 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 Proposed 2018 Transactions Annual Caps. Alliance Capital Partners Limited has been appointed as the independent financial adviser to advise us and the Independent Shareholders in this regard.

Having considered the Proposed 2018 Transactions Annual Caps, and having taken into account the principal factors and reasons considered by, and the opinion of, Alliance Capital Partners Limited as stated in its letter dated June 6, 2018, we consider that the Proposed 2018 Transactions Annual Caps are fair and reasonable, on normal commercial terms, in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favor of the ordinary resolution proposed at the EGM approving the Proposed 2018 Transactions Annual Caps.

We draw the attention of the Independent Shareholders to (i) the letter from the Board; (ii) the letter from Alliance Capital Partners Limited; and (iii) the appendix to the Circular.

CURWEN Peter D

Yours faithfully, Independent Board Committee TANG, Kwai Chang CHAN, Wing Yuen Hubert Independent Non-executive Directors

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

The following is the text of Letter from Alliance Capital Partners Limited to the Independent Board Committee and the Independent Shareholders, prepared for the purpose of inclusion in this circular.

Room 1502–03A, 15/F, Wing On House 71 Des Voeux Road Central, Hong Kong

June 6, 2018

To: The Independent Board Committee and the Independent Shareholders of FIT Hon Teng Limited

CONTINUING CONNECTED TRANSACTIONS PROPOSED REVISION OF ANNUAL CAPS

INTRODUCTION

We refer to our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to proposed revision of the annual caps for the Product Sales Agreement and Product Purchase Agreement, details of which are set out in the letter from the board (the “ Letter from the Board ”) contained in the circular dated June 6, 2018 issued by the Company to the Shareholders (the “ Circular ”), of which this letter forms part. Unless otherwise defined, capitalised terms used in this letter shall have the same meanings as those defined in the Circular.

Reference is made to the announcement of the Company dated August 18, 2017 and the circular of the Company dated October 12, 2017, the Company announced that the original annual caps of the Product Sales Transaction and the Product Purchase Transaction were expected to be exceeded and proposed the revised annual caps for each of the three years ending December 31, 2019, which were approved by the Independent Shareholders on October 27, 2017 and thus constitute the Existing Annual Caps.

As set out in the Letter from the Board, it is anticipated that the Existing 2018 Annual Caps for the Product Sales Transaction and Product Purchase Transaction for the year ending December 31, 2018 may not be sufficient. The Company has therefore proposed the Proposed 2018 Transactions Annual Caps in place of the Existing 2018 Annual Caps.

As at the Latest Practicable Date, the Company is indirectly owned as to 76.92% by Hon Hai, the controlling shareholder of the Company. Accordingly, Hon Hai is a connected person of the Company pursuant to Chapter 14A of the Listing Rules.

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 are exceeded.

Based on the maximum amount of the Proposed 2018 Transactions Annual Caps, one or more of the relevant percentage ratios are more than 5% and the Product Sales Transaction and the Product Purchase Transaction constitute non-exempt continuing connected transactions for the Company under the Listing Rules, and therefore the Proposed 2018 Transactions Annual Caps are subject to the approval of the Independent Shareholders. Hon Hai and its associates will abstain from voting on the resolution to

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

be proposed at the EGM for approving the above matters. The Product Sales Transaction and the Product Purchase Transaction are also subject to the annual review requirements under Rules 14A.55 to 14A.59 of the Listing Rules.

THE INDEPENDENT BOARD COMMITTEE

As at the Latest Practicable Date, the Independent Board Committee, comprising all of the independent non-executive Directors of the Company (namely Mr. CURWEN Peter D, Mr. TANG, Kwai Chang and Mr. CHAN, Wing Yuen Hubert) has been established to advise the Independent Shareholders on whether the Proposed 2018 Transactions Annual Caps are fair and reasonable. In this regard, we, Alliance Capital Partners Limited, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on this matter.

Apart from the normal advisory fee payable to us in connection with our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders, there is no relationship or interests with the Company or any other parties that could reasonably be regarded as relevant to our independence. We consider that we are independent under Rule 13.84 of the Listing Rules.

BASIS OF OUR ADVICE

In arriving at our recommendations, we have relied on the statements, information and representations contained in the Circular and the information and representations provided to us by the Group and/or its senior management staff (the “ Management ”). We have assumed that all information and representations contained or referred to in the Circular and all information and representations which have been provided by the Directors and the Management are true and accurate at the time they were made and will continue to be true and accurate as at the date of the despatch of the Circular.

The Directors collectively and individually accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, information contained in the 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 contained in the Circular misleading. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors and the Management. We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any facts or circumstances which would render the information provided and representations made to us untrue, inaccurate or misleading. We consider that we have performed all the necessary steps to enable us to reach an informed view and to justify our reliance on the information provided to us so as to provide a reasonable basis for our opinion. We have not, however, carried out any independent verification of the information provided by the Directors and the Management, nor have we conducted an independent investigation into the business and affairs or the prospects of the Company, the Group, the seller, or any of their respective associates.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources which are the latest information publicly available to the best of our knowledge, the sole responsibility of Alliance Capital Partners Limited is to ensure that such information has been correctly extracted from the relevant sources.

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion and recommendations in respect of the terms of the Proposed 2018 Transactions Annual Caps, we have taken into consideration the following principal factors and reasons:

1. Background of the Group

The Group is a leading global interconnect solutions provider and one of the few global interconnect solutions providers whose offerings span wire-based, fiber-based and wireless interconnect solutions.

Below sets out certain key consolidated financial information of the Group, as extracted from the annual report for the year ended December 31, 2017 (“ 2017 Annual Report ”):

Revenue Gross profit Profit for the year	For the year ended December 31, 2017 2016 US$’000 US$’000 (audited) (audited) 3,398,803 2,880,260 569,444 490,410 180,486 168,562	For the year ended December 31, 2017 2016 US$’000 US$’000 (audited) (audited) 3,398,803 2,880,260 569,444 490,410 180,486 168,562
		490,410
		168,562

Pursuant to 2017 Annual Report, the Company’s revenue amounted to approximately US$3,399 million, representing approximately 18.0% increase from approximately US$2,880 million in 2016. Such increase was resulted from (i) an increase of approximately 28.4% from the mobile and wireless devices end market; (ii) an increase of approximately 18.8% from the communication infrastructure end market; (iii) an increase of approximately 45.2% from the automotive, industry and medical end market.

2. Background of Hon Hai and Hon Hai Group

Hon Hai, a limited liability company established in Taiwan, the shares of which are listed on the Taiwan Stock Exchange (Stock code: 2317.TW). Hon Hai is a controlling shareholder of the Company and Hon Hai Group is primarily engaged in the manufacture, sales and service of connectors, case, thermal module, wired/wireless communication products, optical products, power supply modules, and assemblies for use in the information technology, communications, automotive equipment, precision molding, automobile, and consumer electronics industries.

3. Reasons for and benefits in relation to the Product Sales Transaction and Product Purchase Transaction

Pursuant to the Letter to the Board, the Company considers that it is in its best interests to generate more income and save cost by carrying out the Product Sales Transaction and the Product Purchase Transaction in response to the stronger-than-expected demand for lightning cable, earphones and other products from certain brand company customers, provided that the Group sells to and

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

purchases from Hon Hai Group at prices pursuant to the pricing policies set forth in the Framework Sales Agreement and the Framework Purchase Agreement. To the best knowledge and information of the Company and as of the Latest Practicable Date, brand company customers of the Company are independent third parties of the Company and Hon Hai Group. For more details of Production Sales Transaction and Product Purchase Transaction, please refer to “Letter from the Board — (I) Proposed revision of annual caps — Background — Product Sales Transaction” and “Letter from the Board — (I) Proposed revision of annual caps — Background — Product Purchase Transaction”, respectively.

As mentioned in the Letter to the Board, the Group anticipated that the Existing 2018 Annual Caps for the Product Sales Transaction and Product Purchase Transaction for the year ending December 31, 2018 may not be sufficient to meet the demand for the forthcoming transactions with Hon Hai Group. Therefore, the Company proposed to place the Proposed 2018 Transactions Annual Caps and seek approval from the Independent Shareholders to ensure compliance with the applicable requirements under Chapter 14A of the Listing Rules.

Our view

As set out in the Prospectus, the contract manufacturers such as Hon Hai Group are generally involved in assembling the finished products of brand company customers, many brand company customers often designate the contract manufacturers to purchase the interconnect solutions and other products from the Group. As such, brand company customers, act as the primary decision makers for such purchases, have significant influence on the interconnect solutions and other products the Group provides, including specifications, purchase volume and selling price.

As stated in the Prospectus, it is an industry practice that brand company customers (in particular, the Group’s largest customer which is a leader in the global mobile and wireless devices end market) often require contract manufacturer customers to purchase the relevant parts and components, including the Group’s interconnect solutions, from specific approved suppliers like the Group, for better quality control and overall supply chain management. In this regard, we have reviewed certain samples of sales orders and relevant correspondences between Hon Hai Group and a brand company customer and noted that the brand company customer required the Company to supply certain parts and components to Hon Hai Group. The Management also advised that such cooperation arrangement with Hon Hai Group can benefit from (i) better understanding of the end market; (ii) tailoring its products and solutions to meet market needs; and (iii) expanding the Group’s customer base through marketing its products and solutions to different range of applications.

The Group procured gold salts, ancillary materials and semi-finished components from Hon Hai Group to take advantage of Hon Hai Group’s economics of scale. In particular, in respect of the Product Purchase Transaction under Model One, gold salts are a hazardous material and generally allowed to be sold only by licensed suppliers. We have enquired with the Management and noted that Hon Hai and one of its subsidiaries are licensed suppliers which hold the relevant business license issued by the relevant authorities in Taiwan and the PRC, respectively, and a subsidiary of Hon Hai has a safety production permit issued by Shenzhen Administration of Work Safety in the PRC.

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

In addition, in respect of the Product Purchase Transaction under Model Two, brand company customers require the Group to purchase certain ancillary materials from its designated suppliers, for example, Hon Hai Group. In this regard, we have reviewed relevant correspondences between the Company and a brand company customer. We noted that the brand company customer requires the Company to purchase certain ancillary materials from their designated suppliers, such as Hon Hai Group. Furthermore, as mentioned in the Prospectus, for procurement of ancillary materials that is not designated by brand company customers, the Group will also purchase ancillary raw materials from Hon Hai Group due to the competitive prices.

In respect of the Product Purchase Transaction under Model Three, as mentioned in the Letter from the Board, in order to enhance the Group’s production efficiency and manage its production cost, the Group from time to time engages Hon Hai Group for certain labourintensive production processing of its interconnect solutions and certain other products. Hon Hai Group has been a long-term supplier of manufacturing vendor services of the Group with the expertise to manage a large workforce. Furthermore, as advised by the Management, given the unique nature of the semi-finished goods and assembled products, there were no third-party transactions with comparable products. As such, conducting the Product Purchase Transaction with Hon Hai Group is essential and mutually complementary.

Considering that (i) the Group continued to implement its business strategy to solidify its market position as a global leader in the development and production of interconnect solutions and related products as disclosed in the 2017 Annual Report; (ii) connectors in the mobile and wireless devices sector was a key driver to the Group’s revenue for the three years ended 31 December 2017, representing approximately 39.7%, 43.0% and 46.8% of the Group’s revenue according to the Prospectus and 2017 Annual Report, respectively; (iii) the anticipated rise in upcoming demand for the sales of relevant parts and components to Hon Hai Group and procurement of gold salts, ancillary raw materials and semi-finished goods and assembled products from Hon Hai Group; and (iv) it is the industry practice to sell and/ or purchase production materials and components to/from designated contract manufacturers or designated suppliers; and (v) the Group can benefit from Product Sales Transaction and the Product Purchase Transaction as mentioned above, we concur with the Directors’ view that the Framework Sales Agreement and the Framework Purchase Agreement and the transactions contemplated thereunder are essential for the Group to meet the rising trend of market demand in various interconnect solutions and other related products for mobile and wireless devices, communications infrastructure and automotive, industrial and medical end market, and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

4. Terms of the Framework Sales Agreement and Framework Purchase Agreement

(a) Framework Sales Agreement

According to the Framework Sales Agreement, the Group has agreed to sell to Hon Hai Group various interconnect solutions and other related products for a term up to December 31, 2019 upon and subject to the terms and conditions set out therein at a price determined as follows:

• i. for the sales to Hon Hai Group that are designated by brand company customers (the “ Designated Product Sales ”), at the price negotiated and determined between brand company customers and the Group; or

• ii. for other sales to Hon Hai Group where selling prices were not designated by the Group’s customers (“ Connected Sales ”), at a price that is determined by referencing

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

the blended profit margin, which is the difference between revenue generated from such sales and historical cost allocated thereto for the preceding month, divided by the corresponding revenue, to that of sales to independent third parties (“ Third Party Sales ”), on a rolling basis, such that the differences in the blended profit margins between Connected Sales and Third Party Sales in each fiscal year shall not be more than 6.5%, having considered the long-term business relationship, large sales volume to Hon Hai Group, and the strategic partnership with Hon Hai Group.

For more details of Product Sales Transaction, please refer to “Letter from the Board — (I) Proposed revision of annual caps — Background — Product Sales Transaction”.

Our View

To assess the reasonableness of the Designated Product Sales, we have obtained and reviewed 17 sales samples from the Management covering the period from October 2017 to March 2018 and noted that the unit price of the Designated Product Sales was negotiated and determined between the Group’s brand company customers and the Group.

To assess the reasonableness of the Connected Sales where the selling price was not negotiated and determined between the Group’s brand company customers and the Group, we have obtained from the Management and reviewed a summary of 24 pairs of sample sales transaction records for various products (sales orders with connected parties and with independent third parties) covering the period from October 2017 to March 2018. Based on the information as set out in the summary, we noted that the selling prices of the sample sales transactions between the Group and Hon Hai Group are generally lower than the selling prices between the Group and independent third parties.

As mentioned in the section headed “Connected transaction — Non-exempt continuing connected transactions — (c) Framework Sales Agreement” of the Prospectus, as advised by independent industry consultant, it is a typical industry practice for connector manufacturers to offer discount to customer with significant revenue contributions, representing gross profit margin concession in the range of 5% to 10%.

Having considered that such lower prices to Hon Hai Group were determined after considering the large sales volume to, as well as the long term business relationship and strategic partnership with Hon Hai Group, we are of the view that it is reasonable to offer price discount to Hon Hai Group.

Regarding the 6.5% blended profit margin threshold set out in 4(a)(ii) above, as disclosed in the Letter from the Board, it is calculated by dividing blended gross profit by revenue from customers during a specific period. Blended gross profit is calculated by aggregating the revenue generated from specific customers less the historical unit cost allocated to such sales for the preceding month multiplied by number of units sold. The Company will calculate the blended gross margin for Connected Sales and for Third Party Sales, respectively, and compare the two to determine whether the difference exceeds 6.5%. In this connection, we have obtained from the Management and reviewed three quarterly gross profit margin analysis tables for 2017 third quarter, 2017 fourth quarter and 2018 first quarter, a table showing the gross profit margins of Product Sales Transaction and sales transactions with non-connected parties. We noted that the gross profit margins of Product Sales Transaction and sales transactions with non-connected parties are similar, and the differences in the blended gross margin for Connected Sales and for Third Party Sales are within 6.5%.

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

Based on the above, we concur with the Directors’ view that the terms of Product Sales Transaction and 6.5% capped difference in the blended profit margin is under normal commercial terms, fair and reasonable, and in the interests of the Shareholders as a whole.

(b) Framework Purchase Agreement

According to the Framework Purchase Agreement, the Group has agreed to purchase from Hon Hai Group various raw materials, ancillary materials and semi-finished components and assembled products for a term up to December 31, 2019 upon and subject to the terms and conditions set out therein at a price determined as follows:

• i. Model One : For the procurement of gold salts, at the price equivalent to the sum of the commodity spot prices and the processing fees. The Group will obtain and compare fee proposals provided by Hon Hai Group and independent third party suppliers on a quarterly basis to the extent practicable. As a risk control measure, the Group will procure gold salts from more than one supplier, but will allocate at least 70% annual purchase from the supplier with the lowest fee quote; or

• ii. Model Two : For the procurement of ancillary raw materials from Hon Hai Group that is designated by the Group’s customers, at the price agreed between Hon Hai Group and the Group’s customers (the “ Designated Supplier Transactions ”); and for other procurement of ancillary raw materials from Hon Hai Group, at the price determined with reference to comparable third-party prices to the extent independent-third-party suppliers are available (the “ Non-designated Supplier Transaction” ); or

• iii. Model Three : For the procurement of semi-finished goods and assembled products, at the price determined based on (a) Hon Hai Group’s purchase prices of raw materials supplied by the Group, (b) their purchase prices of other raw materials, (c) their labour costs and overheads, and (d) handling fees up to 5% of relevant labour cost and overheads.

For more details of the Product Purchase Transaction, please refer to “Letter from the Board — (I) Proposed revision of annual caps — Background — Product Purchase Transaction”.

Our View

To assess the reasonableness of the terms of Product Purchase Transaction relating to the procurement of gold salts, we have obtained and reviewed two quarterly summaries for the fourth quarter in 2017 and the first quarter in 2018 from the Management setting out the fee quotations, which were determined by the sum of the commodity spot prices and the processing fees, provided by Hon Hai Group and independent third parties. We noted that the Company has complied with the 70% threshold and selected gold salts suppliers with the lowest quote basis. Based on the information reviewed above, we are of view that the procurement transactions of gold salts are in line with the terms of Product Purchase Transaction under the Framework Purchase Agreement.

To assess the reasonableness of the terms of Product Purchase Transaction relating to the procurement of ancillary raw materials, we have reviewed samples of both Designated Supplier Transactions and Non-designated Supplier Transactions obtained from the

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

Management. For the Non-designated Supplier Transactions, we noted from the purchase order samples and other corresponding documents that the Group has compared the price quotations from Hon Hai Group with independent-third-party suppliers to ensure that the prices determined were in line with the pricing policy of the Framework Purchase Agreement. Based on our due diligence works, we consider that the pricing policies of Designated Supplier Transactions and Non-designated Supplier Transactions are reasonable.

To assess the reasonableness of the terms of Product Purchase Transaction relating to the procurement of semi-finished goods and assembled products, we have reviewed the purchase transaction samples and information obtained from the Management, which set out the breakdown of raw material costs, relevant production costs and margins on production, and note that the purchase prices of the purchase transaction samples were in line with the pricing policy stated in 4(b)(iii) above. In respect of the handling fees of up to 5% stated in 4(b)(iii) above, we have enquired the Management and understand that no third parties’ transactions have been made by the Group due to the fact that the specifications of semi-finished goods and assembled products are unique and designated by the key brand companies. In this regard, to assess the reasonableness of the handling fees of up to 5% stated in 4(b)(iii) above, we have reviewed the annual report of Hon Hai for financial year 2016 and financial year 2017, and noted that the gross profit margins of Hon Hai for the corresponding financial year of approximately 7.4% and 6.4% were higher than the handling fees. Therefore, we are of view that the handling fees of up to 5% is justifiable.

5. Basis for determining the Proposed 2018 Transactions Annual Caps

Under the Product Sales Transaction and Product Purchase Transaction, (i) the historical actual amounts of the Product Sales Transaction and Product Purchase Transaction for the year ended December 31, 2017, (ii) the existing annual caps for Product Sales Transaction and Production Purchase Transaction for the year ended December 31, 2017 and for the year ending December 31, 2018 and (iii) the Proposed 2018 Transactions Annual Caps for the year ending December 31, 2018 are set out as follows:

					Proposed
					2018
					Transactions
	Actual transaction amounts		Existing	annual caps	Annual Caps	Approximate
		For the				percentage
		period from				increase when
		January 1,				compared
	Year ended	2018 to	Year ended	Year ending	Year ending	to the
	December 31,	March 31,	December 31,	December 31,	December 31,	Existing 2018
	2017	2018	2017	2018	2018	Annual Caps
	(US$’ million)	(US$’ million)	(US$’ million)	(US$’ million)	(US$’ million)	(%)
Product Sales Transaction	753.4	184.2	1,008.8	1,116.6	1,222.0	9.4
Approximate % of utilisation of the
respective existing annual caps	74.7%	16.5%
Product Purchase Transaction	437.9	101.2	508.5	585.4	634.8	8.4
Approximate % of utilisation of the
respective existing annual caps	86.1%	17.3%

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

Pursuant to the Letter from the Board, the Proposed 2018 Transactions Annual Caps are considered based on the following factors:

• (a) The latest available actual amounts of the transactions under the Product Sales Transaction and the Product Purchase Transaction during the period from January 1, 2018 to March 31, 2018 (both dates inclusive). The Company also anticipated the demand for various interconnect solutions and other related products, including gold salts, ancillary raw materials and semi-finished goods and assembled products to rebound in the second half of this year.

• (b) The historic transaction amounts of the Product Sales Transaction and Product Purchase Transaction between certain companies or business units which engage in the design, product and development of applications which utilize their interconnect solutions in the automotive, industrial and medical end market and Hon Hai Group as the Group plans to further invest in and/or acquire these certain companies or business units. The completion of which will render certain of these companies or business units becoming part of the Group.

• (c) An increase in purchase amount of gold salts from Hon Hai Group so as to expand the surface processing business of the Group.

• (d) In line with the Company’s production strategy to save costs, they have been outsourcing certain non-core, labour intensive assembly processes to certain production facilities of Hon Hai Group located in Vietnam. As such, the Group is expected to purchase more semifinished components and assembled products from Hon Hai Group, thus increasing the amount of Product Purchase Transaction.

Our view

As disclosed in the Letter from the Board, the actual amounts of Product Sales Transaction and Product Purchase Transaction with Hon Hai Group have recorded approximately US$184.2 million and US$101.2 million, representing approximately 16.5% and 17.3% of the respective Existing 2018 Annual Caps for the year ending December 31, 2018. We noted that the transaction amounts for the aforementioned period amounted to approximately 15.1% and 15.9% of the Proposed 2018 Sales Annual Caps and Proposed 2018 Purchase Annual Caps, respectively. As discussed with the Management, we are given to understand that such lower transaction amounts during the period from January 1, 2018 to March 31, 2018 was mainly resulted from (i) the business strategies of the Group’s major customers which are computer and consumer electronics and mobile and wireless brand companies that usually release their new products in the second half of each year; and (ii) seasonality effect that most of the Group’s production activities are reduced during the Chinese New Year holiday period. Having considered aforementioned reasons, the Management expects that the transaction amounts will generally be higher in the second to fourth quarter of the current year. In this connection, we have obtained and reviewed a forecast sales order schedule and a forecast purchase order schedule prepared by the Management and noted that new sales orders and new purchase orders placed and/or expected to be placed with the Group for the eight-months ending December 31, 2018 are over US$700 million and US$300 million, respectively. In respect of the seasonality factor, we have also obtained and reviewed a quarterly summary setting out the amounts of transaction under the Product Sales Transaction and Product Purchase Transaction for the year ended December 31, 2017 and noted that the sales and purchase amounts for the first quarter in

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

2017 was the lowest amongst other quarters. In addition, we further noted from the quarterly summary that the actual amounts of Product Sales Transaction increased from approximately US$156.1 million in first quarter in 2017 to approximately US$228.8 million in the fourth quarter in 2017, representing an increase of approximately 46.6%, and the actual amounts of Product Purchase Transaction rose from approximately US$97.0 million in the first quarter in 2017 to approximately US$137.7 million in the fourth quarter in 2017, representing an increase of approximately 42.0%.

As disclosed in the Letter from the Board, on February 7, 2018, the Group entered into an agreement with Sharp to form a joint venture to explore opportunities in the development, design, manufacturing, distribution and marketing for automotive cameras and electronic mirrors. Furthermore, pursuant to the Letter from the Board, we noted that the Group plans to further invest in and/or acquire companies or business units which engage in the design, production and development of applications which utilize their interconnect solutions in the automotive, industrial and medical end market (including smart home, wearable devices and electric vehicles), the completion of which may render certain of these companies or business units becoming part of the Group. These companies or business units have been conducting purchase and sales of various raw materials, ancillary materials and semi-finished components and assembled products with Hon Hai Group in previous years and are expected to continue to do so in 2018. As a result, purchase and sales between these companies or business units and Hon Hai Group will be deemed as continuing connected transactions after the completion of such acquisitions. In this connection, the Group expects that the Product Sales Transaction amount and Product Purchase Transaction amount will increase.

We are given to understand that gold salt is an essential raw material for the surface processing and such process is mainly for metal surface decoration on the Group’s four main end markets’ products. As disclosed in the Letter from the Board and the Management’s advices to us, the Company expects the demand for earphones and its associated products as well as certain types of communications infrastructure end market’s products to rise, and the purchase of gold salts from Hon Hai Group in 2018 is expected to increase as compared to that in 2017. As such, it is reasonable for the Company to revise the annual caps for Product Purchase Transaction in 2018 so as to meet the expected rising demand of key brand customers’ products.

In respect of shifting the Company’s certain non-core, labour-intensive assembly processes to certain production facilities of Hon Hai Group located in Vietnam in order to minimise the production cost of the Group, for our due diligence purpose, we have researched the latest monthly minimum wage for non-state enterprises in Vietnam and noted that it ranges from around US$121.3 to US$174.9, which is lower than the monthly average minimum wage in Jiangsu Province, the PRC of around US$268.8. Therefore, we concur with the Directors’ view that moving certain assembly processes to production facilities of Hon Hai Group in Vietnam may help to reduce the Group’s production cost.

Based on the above, we are of view that the Proposed 2018 Transactions Annual Caps contemplated under the Framework Sales Agreement and Framework Purchase Agreement are determined by the Company after due and careful consideration and are fair and reasonable so far as the Company and the Shareholders are concerned.

Shareholders should note that the Proposed 2018 Transactions Annual Caps are estimated by the Group pursuant to the information currently available and that such amounts should not be construed as the actual transaction amounts between the Group and the Hon Hai Group for the

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

year ending December 31, 2018. Shareholders should also be aware that the actual utilisation and sufficiency of the Proposed 2018 Transactions Annual Caps would depend on various factors, including but not limited to, whether the Group conducts the Product Sales Transaction and the Product Purchase Transaction, the progress of entering into the subject contracts and the size and scope of the subject contracts. In this connection, we understand from the Management that the Company will continuously monitor the progress and utilisation of the Proposed 2018 Transactions Annual Caps to ensure compliance with the Listing Rules from time to time.

6. Internal control procedures and pricing policies

With reference to the Letter from the Board and the Prospectus, the Group has adopted the following internal control procedures over the continuing connected transactions of the Company including the Product Sales Transaction and the Product Purchase Transaction:

• Before entering into a transaction under the continuing connected transactions of the Company, the purchase, operation and/or other functional 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 and, in respect of the procurement of ancillary raw materials from Hon Hai Group that is not designated by our customers, will compare the pricing to comparable third-party prices to the extent independent-third-party suppliers are available. 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 operation management department of the Group will review the aforesaid works carried out by the purchase, operation and/or other functional departments (as the case may be) on a quarterly basis. In respect of the Product Sales Transaction, the management of the Company reviews and monitors whether the difference exceeds the 6.5% threshold, at least on a quarterly basis, and takes appropriate measures to ensure compliance from time to time based on the review results. If the management determines that there is a risk for exceeding the 6.5% threshold on an annual basis, it will increase the frequency of review as appropriate and take further measures to ensure compliance. In respect of the Product Purchase Transaction, the 70% threshold set out in 4(b)(i) above, the procurement department of the Company ensures the compliance of the 70% threshold by placing orders for the first three weeks of each month with its gold salts supplier with the lowest quote. It also prepares a monthly report of actual purchase amounts for management’s review as to the compliance of the 70% threshold.

• The operation management department of the Company is primarily responsible for reviewing and monitoring 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 operation management department of the Company will consult with the Group’s internal audit function, external lawyers and the compliance adviser in respect of continuing connected transaction compliance issues and annually report to the head of the operation management department 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

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

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 are conducted in accordance with the pricing policies set out in such relevant agreements.

Our view

In respect of implementation of the aforementioned internal control procedures, we have enquired the Management and reviewed the Group’s internal control procedures and a 2017 annual continuing connected transaction report in relation to the Framework Sales Agreement and Framework Purchase Agreement prepared by the operation management department for audit committee review. We noted that the 2017 annual continuing connected transaction report includes the actual Product Sales Transaction and Product Purchase Transaction amounts in 2017 and the relevant internal control procedures to report to the audit committee to ensure that such continuing connected transactions are conducted within the Existing Annual Caps. We consider that the annual continuing connected transaction report which records the actual transaction as compared to the annual caps would help to ensure proper monitoring of the utilisation of the annual caps.

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LETTER FROM ALLIANCE CAPITAL PARTNERS LIMITED

RECOMMENDATIONS

Having considered the principal factors and reasons above, we are of the opinion that the Proposed 2018 Transactions Annual Caps are fair and reasonable, on normal commercial terms, in the ordinary and usual course of business of the Group and 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 Proposed 2018 Transactions Annual Caps.

Yours faithfully, For and on behalf of Alliance Capital Partners Limited Alyssa Ng Executive Director

Ms. Alyssa Ng is licensed person under the SFO to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities and has more than 10 years’ experience in participation and advising in various initial public offerings and transactions involving companies listed in Hong Kong, including but not limited to the provision of independent financial advisory services regarding connected transactions.

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APPENDIX — GENERAL INFORMATION

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) Interests of Directors and chief executive of the Company

As of the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company or any associated corporation (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 they were taken or deemed to have under the provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or which had otherwise been notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”), were as follows:

Long positions in the Shares as of the Latest Practicable Date

		Number of	Approximate
	Capacity and	ordinary	percentage of
Name of Directors	nature of interest	shares held	shareholding
LU Sung-Ching 1	Beneficial owner	95,720,000	1.42%
LU Pochin Christopher	Beneficial owner	12,512,000	0.19%
CHEN Ga-Lane	Beneficial owner	2,400,000	0.04%

Note:

1. Mr. Lu Sung-Ching is also interested in 349,440,000 Shares under the Share Grant Scheme.

Save as disclosed above, as of the Latest Practicable Date, none of the Directors or chief executives of the Company had any interest or short position in the shares, underlying shares or debentures of the Company or any associated corporation (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 they were taken or deemed to have under such provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or which had otherwise been notified to the Company and the Stock Exchange pursuant to the Model Code.

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APPENDIX — GENERAL INFORMATION

(b) Interests of substantial Shareholders

As of the Latest Practicable Date, according to the register kept by the Company pursuant to Section 336 of the SFO and, so far as was known to the Directors or chief executive of the Company, the persons or entities, other than a Director or chief executive of the Company, who had an interest or a short position in the shares or the 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 directly or indirectly, interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the Company or any other company which is a subsidiary of the Company, or in any options in respect of such share capital were as follows:

Long positions in the Shares as of the Latest Practicable Date

			Number of	Approximate
	Capacity and		ordinary	percentage of
Name of Shareholders	nature of interest		shares held	shareholding
Hon Hai	Interest in		5,179,557,888	76.92%
	controlled
	corporation	1
Foxconn Far East Cayman	Interest in		5,179,557,888	76.92%
	controlled
	corporation	2
Foxconn Far East Hong Kong	Beneficial owner		5,179,557,888	76.92%

Notes:

1. Hon Hai holds the entire issued share capital of Foxconn Far East Cayman, which in turn holds the entire issued share capital of Foxconn Far East Hong Kong.

2. Foxconn Far East Cayman holds the entire issued share capital of Foxconn Far East Hong Kong, which in turn holds 5,179,557,888 Shares.

Save as disclosed above, as of 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.

As of the Latest Practicable Date, Dr. CHEN Ga-Lane, a non-executive Director, is the Chief Investment Officer and the Chief Technology Officer of the Hon Hai Group.

Save as disclosed above, as of the Latest Practicable Date, none of the Directors is a director or employee in Hon Hai, Foxconn Far East Cayman or Foxconn Far East Hong Kong which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

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APPENDIX — GENERAL INFORMATION

(c) Directors’ or chief executive’s rights to acquire interests or short positions in Shares and debentures

The Share Grant Scheme was approved and adopted by the Board on January 5, 2015, and the Board further adopted the rules and interpretations thereof on November 4, 2016.

Details of the interests of the Directors in the Share Grant are set out below.

Name of Director	Date of grant	Number of Share Grant
LU Sung-Ching	January 5, 2015	349,440,000
GILLESPIE William Ralph	January 18, 2016	1,632,000

Save as disclosed above, as of the Latest Practicable Date, none of the Directors or chief executive of the Company or their respective spouse or minor children were granted any rights to acquire benefits by means of acquisition of the Shares in or debentures of the Company or any other body corporate; nor was the Company, its subsidiaries or holding company or any of its subsidiaries a party to any arrangement to enable the Directors or chief executive of the Company to acquire such rights in the Company or any other body corporate.

3. DISCLOSURE OF OTHER INTERESTS

(a) Interests in contract or arrangement

As of the Latest Practicable Date, none of the Directors is materially interested in any contract or arrangement which is significant to the business of the Group.

(b) Interests in assets

As of the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been acquired or disposed of by, or leased to, or which were proposed to be acquired or disposed of by, or leased to, any member of the Group since December 31, 2017, being the date to which the latest published audited accounts of the Group were made up.

(c) Interests in competing business

As of 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.

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APPENDIX — GENERAL INFORMATION

4. QUALIFICATION OF EXPERT

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

Name Qualification Alliance Capital Partners a licensed corporation under the SFO to carry out Type 1 (dealing Limited in securities) and Type 6 (advising on corporate finance) regulated activities

5. CONSENT

Alliance Capital Partners Limited 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 of the Latest Practicable Date, save as disclosed in the annual results announcement of the Company for the year ended December 31, 2017 published on March 23, 2018, the Directors are not aware of any material adverse change in the financial or trading position of the Group since December 31, 2017, 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 of the Latest Practicable Date, Alliance Capital Partners Limited 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 of the Latest Practicable Date, none of the Directors or Alliance Capital Partners Limited had any interest, either directly or indirectly, in any assets which have been, since December 31, 2017 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.

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

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

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APPENDIX — GENERAL INFORMATION

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the Framework Sales Agreement and the Framework Purchase Agreement are available for inspection during normal business hours at 31/F, Tower Two, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong from the date of this circular to the date of the EGM (both dates inclusive) and also at the EGM.

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NOTICE OF EGM

==> picture [105 x 61] intentionally omitted <==

FIT Hon Teng Limited 鴻騰六零八八精密科技股份有限公司

(Incorporated in the Cayman Islands with limited liability under the name Foxconn Interconnect Technology Limited and carrying on business in Hong Kong as FIT Hon Teng Limited)

(Stock Code: 6088)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders of FIT Hon Teng Limited (the “ Company ”) will be held at 66-1, Chungshan Road, Tucheng District, New Taipei City 23680, Taiwan on Friday, June 22, 2018 at 3:30 p.m., for the following purposes:

To consider and, if thought fit, passing (with or without modifications) the following ordinary resolutions:

“THAT

• (a) the proposed sales annual cap for the year ending December 31, 2018 as set out in the circular of the Company dated June 6, 2018 in respect of the transactions contemplated under the framework sales agreement entered into between the Company and Hon Hai Precision Industry Co. Ltd. (“ Hon Hai ”) on November 9, 2016 (the “ Product Sales Transaction ”) be and are hereby approved, confirmed and ratified in all respects;

• (b) the proposed purchase annual cap for the year ending December 31, 2018 as set out in the circular of the Company dated June 6, 2018 in respect of the transactions contemplated under the framework purchase agreement entered into between the Company and Hon Hai on November 9, 2016 (as amended by the supplemental agreement dated June 26, 2017) (the “ Product Purchase Transaction ”) be and are hereby approved, confirmed and ratified 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 authorized 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 and the Product Purchase Transaction for a term up to December 31, 2019 and/ or the said annual caps.”

By Order of the Board FIT Hon Teng Limited* LU Sung-Ching Chairman of the Board

Hong Kong, June 6, 2018

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NOTICE OF EGM

Registered Office: Headquarters in Taiwan: Cricket Square 66-1, Chungshan Road Hutchins Drive Tucheng District P.O. Box 2681 New Taipei City 23680 Grand Cayman KY1-1111 Taiwan Cayman Islands Principal Place of Business in Hong Kong: 31/F, Tower Two Times Square 1 Matheson Street Causeway Bay Hong Kong

Notes:

• (a) As set out in the circular of the Company dated June 6, 2018, the register of members of the Company will be closed from Tuesday, June 19, 2018 to Friday, June 22, 2018, both dates inclusive, during which period no transfer of 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 Shops 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 Friday, June 15, 2018.

• (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 (i.e. before 3:30 p.m. on Wednesday, June 20, 2018) 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 Precision Industry Co., Ltd., the controlling shareholder of the Company, and its associates (as defined in the Listing Rules) are required to abstain from voting on the ordinary resolution numbered.

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

• Incorporated in the Cayman Islands with limited liability under the name Foxconn Interconnect Technology Limited and carrying on business in Hong Kong as FIT Hon Teng Limited

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