FTC — AGM Information 2018

Jul 9, 2018

Stock Code 2354

FOXCONN TECHNOLOGY CO., LTD.

2018 Annual General Shareholders’ Meeting

Meeting Handbook

June 22, 2018

THIS IS A TRANSLATION OF THE HANDBOOK FOR THE 2018 ANNUAL SHAREHOLDERS’ MEETING (THE “AGENDA”) OF FOXCONN TECHNOLOGY CO., LTD. (THE “COMPANY”). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE HANDBOOK SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

Table of Contents

MEETING PROCEDURE ....................................................................................... 2 AGENDA .................................................................................................................. 3 REPORT ITEMS .................................................................................................................... 4 RATIFICATION ITEMS .......................................................................................................... 7 EXTRAORDINARY MOTIONS ................................................................................................ 9 MEETING ADJOURNMENT ................................................................................................. 10 ATTACHMENTS ................................................................................................... 11 ATTACHMENT 1: 2017 BUSINESS REPORT .......................................................................... 11 ATTACHMENT 2: AUDIT COMMITTEE’S REVIEW REPORT ................................................... 16 ATTACHMENT 3: FINANCIAL STATEMENTS ........................................................................ 17 APPENDICES ........................................................................................................ 28 APPENDIX 1: RULES AND PROCEDURES OF SHAREHOLDERS’ MEETING ............................... 28 APPENDIX 2: ARTICLES OF INCORPORATION ...................................................................... 31 APPENDIX 3: SHAREHOLDINGS OF DIRECTORS ................................................................... 36

FOXCONN TECHNOLOGY CO., LTD. 2018 Annual Shareholders’ Meeting

Meeting Procedure

Time of Meeting:

June 22, 2018 (Friday) at 9:00 am

Location of Meeting: No.66-1, Chungshan Rd, Tucheng Industrial Park, Tucheng Dist., New Taipei City, Taiwan

• I. Report the total number of shares represented at this AGM

• II. Meeting Commencement Announced

• III. Chairman’s Address

• IV. Report Items

• V. Ratification Items

• VI. Extraordinary Motions

• VII. Meeting Adjournment

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FOXCONN TECHNOLOGY CO., LTD.

2018 Annual Shareholders’ Meeting

Agenda

• I. Chairman’s Address.

• II. Report Items.

• (1) To report business of 2017.

• (2) Audit Committee’s review report of 2017 audited financial statements.

• (3) Report of the proportion of employee remuneration for the year ended December 31, 2017.

III. Ratification Items:

• (1) Ratification of the 2017 business report and audited financial statements.

• (2) Ratification of the proposal for distribution of 2017 profits.

• IV. Extraordinary Motions.

• V. Meeting Adjournment.

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Report Items

Item One:

Report of the Company’s 2017 Business Operation and Financial Statements

Please Review.

Description:

1. Please refer to Attachment 1 for detailed Business Report (Pages 11-15).

2. Please refer to Attachment 3 for detailed financial statements (Pages 17-27).

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Item Two:

Audit Committee’s review report of 2017 audited financial statements

Please review.

Description:

Please refer to Attachment 2 (Page16)for the Audit Committee’s review report and Attachment 3 (Pages 17-27)for the audited financial statements.

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Item Three:

Report of the proportion of employee remuneration for the year ended December 31, 2017

Please review.

Description:

1. According to the Articles of Incorporation, 4%-6% of the company profit (if any) is to be set aside for employee remuneration.

2. The employee remuneration totaled NT$457,835,087 in 2017, distributed in cash, taking up 4% of the profit of the year. There is no difference between the above resolution and the ratified cost for 2017.

3. The Chairman is authorized to handle any pending issues related to this item, or any changes needed due to fact changes or required by the competent authorities.

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Ratification Items

Proposal 1: Ratification of the 2017 Business Report and Audited Financial Statements

Please ratify.

(Proposed by the Board of Directors)

Description:

1. The 2017 Business Report and Financial Statements of the Company have been approved by the Board of Directors and have also been reviewed and audited by the Audit Committee.

2. Please refer to Attachment 1 through Attachment 3 for the documents mentioned above (Pages 11-27).

Resolution:

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Proposal 2: Ratification of 2017 earnings distribution. Please Ratify.

(Proposed by the Board of Directors)

Description:

1. The 2017 profit distribution program of the Company has been submitted by the Board of Directors, in accordance with Company Act and the Articles of Incorporation of the Company, as shown in the following table.

2. The Company’s net profit after taxes for 2017 was NT$9,965,386,354 by deducting the set-aside legal reserve of NT$996,538,635 and adding the accumulated un-appropriated earnings at the beginning of the period amounted NT$53,560,532,137 and deducting 2017 retained earnings adjustment of NT$9,848,527, the available earnings at the end of the period is equal to NT$62,519,531,329.

3. The Company plans to distribute dividends of NT$5,092,146,692. Each common share holder will be entitled to receive cash dividends of NT$3.6 per share. The aforementioned dividends will be distributed from 2017 available earnings.

4. The cash dividends will be calculated to the nearest NTD, the remainder will be transferred into the “Employee Welfare Committee” account.

5. Subject to the approval of the General Shareholders’ Meeting, the ex-dividend date and the payment date for the cash dividend distributions and other related items would be decided by the Chairman.

6. Prior to the ex-dividend date for the distribution, if the number of total shares outstanding has changed due to the repurchasing of shares by the Company, the transfer of treasury shares to employees, or the conversion of shares from domestic convertible bonds, etc., so that the ratio of the cash dividend is changed and must be adjusted, the Chairman is authorized to make such adjustments.

Resolution:

FOXCONN TECHNOLOGY CO., LTD. 2017 Earnings Allocation Table

		Unit: NTD Note NT$3.6per share
Items	Amount	Note
2017 Netprofits after taxes for theyear	9,965,386,354
Less: Appropriated as legal capital reserve(10%)	996,538,635
2017 Available for appropriation of earnings for theyear	8,968,847,719
Add: Accumulated un-appropriated earnings at the beginningof theperiod	53,560,532,137
deduct: 2017 retained earnings adjustment	9,848,527
Earnings available for appropriation at the end of 2017	62,519,531,329
Allocation Items
Cash Dividends to Shareholders	5,092,146,692	NT$3.6per share
Un-appropriated earnings	57,427,384,637

President: Hung Chih-Chien CEO: Lee Han-Ming Accounting Manager: Lan Yuan-Wen

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Extraordinary Motions

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Meeting Adjournment

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Attachments

Attachment 1: 2017 Business Report

FOXCONN TECHNOLOGY CO., LTD. Business Report

Dear Shareholders,

2017 was a good year. Financially speaking, global stock markets continued to hit record highs while global economy expanded. Major economy research institutes also continuously raised their forecasts for current and future economic growth and for trade estimates. Politically speaking, Brexit deal shows United Kingdom can leave European Union in smooth and orderly way. Chancellor Angela Merkel won fourth term in the German election. There were no major conflicts between China and U.S.A. The geopolitical risk in North Korea is still under control. Oil price continues to stay above $50 Per Barrel as OPEC reaches the agreement to cut oil production. Although higher oil price raises the expectation of inflation rate, major economies still see no major inflation risk. On the other hand, US Fed continued to raise its benchmark interest rate and to taper its quantitative easing policy as expected. EU, Japan and other countries are also about to scale back their quantitative easing policies. However, stock markets continue to surprise on the upside and volatility is still low. Bond market volatility is a bit bigger but still stable by any measure.

This year Taiwan was doing quite good in terms of economic growth. But the strong performance was supported by solid growth in exports as a result of better-than-expected overseas strong demand for smart phones and semiconductor products. That was the major reason why export growth rate could post double digit growth. Domestic consumption also posted a good growth due to the fact that the job market improved and trading volume in the stock market increased. There were some concerns, however. Real private investment growth was poor and dropped. Competitions from the so-called red supply chain were closing in also. Tourism figures showed a sharp fall and this negative topic caused widespread discussions among us. There are some negative factors but, in all, Taiwan’s GDP, helped by global economy growth, is expected to expand further in 2018.

In 2017 the Company delivered an excellent growth in sales revenue, more than 80%. The main reason was that our customers’ products sell like hot cakes. However, earnings and gross margins were not that good because: (1) higher proportion of low gross margin products, (2)the postponement of high season. Looking into 2018, higher proportion of high gross margin products may be expected. There are also chances that both earnings and gross margins can improve together.

Lastly, the management team of the Company would like to express gratitude to shareholders for the longterm support. The management team of the Company is quite optimistic towards 2018. The management team of the Company has strong confidence in grasping all the chances ahead and will work diligently to deliver earnings growth and margin expansion. The management team of the Company will also work hard to continue to increase owner’s equity and improve social welfare.

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1 、 Financial results

(1) The profit before income tax of 2017 was NT$11.446 billion, compared with NT$13.714 billion in 2016, a decrease of NT$2.268 billion, a negative 17% year-over-year growth. The profit attributable to owners of the parent of 2017 was NT$9.965 billion, compared with NT$10.721 billion in 2016, a decrease of NT$0.756 billion, a negative 7% year-over-year growth. The earnings per share was NT$7.05. Enclosed below for your reference is the financial data of the Company.

(1)The profit before income tax of 2017 was NT$11.446 billion, compared with NT$13.714 billion in 2016, a decrease of NT$2.268 billion, a negative 17% year-over-year growth. The profit attributable to owners of the parent of 2017 was NT$9.965 billion, compared with NT$10.721 billion in 2016, a decrease of NT$0.756 billion, a negative 7% year-over-year growth. The earnings per share was NT$7.05. Enclosed below for your reference is the financial data of the Company.	(1)The profit before income tax of 2017 was NT$11.446 billion, compared with NT$13.714 billion in 2016, a decrease of NT$2.268 billion, a negative 17% year-over-year growth. The profit attributable to owners of the parent of 2017 was NT$9.965 billion, compared with NT$10.721 billion in 2016, a decrease of NT$0.756 billion, a negative 7% year-over-year growth. The earnings per share was NT$7.05. Enclosed below for your reference is the financial data of the Company.	(1)The profit before income tax of 2017 was NT$11.446 billion, compared with NT$13.714 billion in 2016, a decrease of NT$2.268 billion, a negative 17% year-over-year growth. The profit attributable to owners of the parent of 2017 was NT$9.965 billion, compared with NT$10.721 billion in 2016, a decrease of NT$0.756 billion, a negative 7% year-over-year growth. The earnings per share was NT$7.05. Enclosed below for your reference is the financial data of the Company.	(1)The profit before income tax of 2017 was NT$11.446 billion, compared with NT$13.714 billion in 2016, a decrease of NT$2.268 billion, a negative 17% year-over-year growth. The profit attributable to owners of the parent of 2017 was NT$9.965 billion, compared with NT$10.721 billion in 2016, a decrease of NT$0.756 billion, a negative 7% year-over-year growth. The earnings per share was NT$7.05. Enclosed below for your reference is the financial data of the Company.
Consolidated Income Statement Unit: NTD/thousand
Items	2017	2016	Growth%
Operatingrevenue	147,815,617	80,110,459	85%
Operatingcosts	(133,556,310)	(65,507,435)	104%
Gross profit	14,259,307	14,603,024	-2%
Total operatingexpenses	(3,733,165)	(3,278,820)	14%
Operating profit	10,526,142	11,324,204	-7%
Total non-operatingincome and expenses	920,086	2,390,050	-62%
Profit before income tax	11,446,228	13,714,254	-17%
Income tax expense	(1,477,893)	(2,994,281)	-51%
Profit for theyear	9,968,335	10,719,973	-7%
Profit attributable to non-controllinginterest	2,949	(1,135)	360%
Profit attributable to owners of theparent	9,965,386	10,721,108	-7%

(2) Budget execution: N/A. Foxconn Technology Co., LTD. was not required to disclose its 2017 financial forecast.

• (3) Cash flow analysis

(3)Cash flow analysis	(3)Cash flow analysis	(3)Cash flow analysis	(3)Cash flow analysis
Consolidated Statements of Cash Flows Unit: NTD/thousand
Items	2017	2016	Change
Cash flows from operatingactivities	8,354,545	14,510,392	(6,155,847)
Cash flows from investingactivities	(5,621,154)	(20,802,203)	15,181,049
Cash flows from financingactivities	9,943,009	3,888,404	6,054,605

(4) Profitability analysis

Consolidated financial analysis

Items	Year	Year	2017	2016
Profitability	Return On Assets(%)		5.6%	7.93%
	Return On Equity (%)		8.26%	10.84%
	To Capital Stock(%)	OperatingIncome	74.42%	80.06%
		Profit Before Tax	80.92%	96.96%
	Net Profit Margin(%)		6.74%	13.38%
	Earnings Per Share(NTD）		7.05	7.59

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(5) Research and development

A company is required to devote itself to continuously investing in research and development in order to achieve results and get benefits. The only way to maintain its leadership in frontier technologies is through incessant investment in R&D. As far as the company concerned, current directions will mainly focus on ：

1). discovering new technologies.

• 2). developing new applications.

• 3). innovating current manufacturing processes.

• 4). studying new materials.

To make sure that the Company is doing right in its R&D projects and that the Company is able to capture the latest frontier technologies, the Company puts the following guidelines into practices:

1). engaging with famous universities in order to absorb new knowledge and understand the status of the development of cutting-edge technology.

2). cooperating with the customers in order to make sure that technology development of the Company is heading towards the right direction.

• 3). collaborating with international conglomerates to acquire new technologies.

For casing products, current design is heading towards ：「 metal frames 」 + 「 glass back cover 」 . Metal casing is still essential to such designs. In pursuit of fashion, industrial design and surface treatment are getting more important. Thus, casing products of the Company are developing towards these directions mentioned above. For thermal modules, the Company is heading towards designing highly-efficient cooling system, developing new applications, and studying new materials.

2 、 General outlines of business plan for 2018

(1) Business guideline

The Company thinks that the outlook for technology industry is still promising. But there are some shortterm trends worth paying attention to:

• 1). technology innovations are slowing down.

• 2). the market is getting saturated.

• 3). homogeneity of products.

Fierce competitions are inevitable in the face of these short-term trends. To maintain its competitiveness, the Company will take the following measures to lower the overall operation costs:

• 1). standardization of manufacturing processes.

• 2). strict control of expenses.

• 3). effective inventory management

• 4). more automation

• 5). better yield rate

In terms of business expansion the Company will take the following measures to grow its sales revenue and earnings:

• 1). aggressive market share gain.

• 2). finding new customers.

• 3). diverse product portfolio

• (2) Business goal and important manufacturing/marketing policy

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Generally speaking, the Company is optimistic about the upcoming year’s business. The major goals of the company are to grow sales revenue growth, to ensure its earnings, to lower overall costs, to accelerate the development of new products, and to solidify the company’s leadership in thermal industry and casing industry through technology competition.

• Sales strategy:

• 1).Business: the Company will focus on doing business with major international companies and try to increase its market share among these companies. The Company will also continue to work on potential customers in the emerging countries (including China). Meanwhile, the Company will devote itself to developing new client bases in non-3C product territories in order to increase its sources of sales revenue.

• 2).Price: the Company will try to maintain its overall product ASP through upgrading its technologies and increasing its added value.

• 3).Marketing: the Company will devote itself to developing European customers.

• Manufacturing strategy:

• 1). the Company will work on lowering its overall labor costs through higher percentage of automation.

• 2). the Company will continue to work on developing and expanding the capacity of its plant at Hebi where the overall labor costs are lower.

• 3). Improve yield rate.

• R&D strategy:

• 1).the Company will continue to carry out comprehensive cooperation with major international companies on developing new products.

• 2).the Company will amplify its R&D capacity through recruiting more new talents and approaching the team away from other companies.

• 3). the Company will keep engaged with famous universities in order to absorb new knowledge and understand the latest development of current state-of-the-art technology.

(3)Impacts of external competitions and operating environments in aggregate

The Company has the following observations about the future competitive environment of the thermal module industry. The Company thinks that there are two trends worth paying attention to. First, the overall thermal design power on PC products is getting lower but the thermal demand from smart-phone industry is on the rise. Second, the appearance of new thermal interface material may cause the structure of the thermal industry to reshuffle. For a long period of time FTC has been the leading company in PC thermal module industry and in developing new thermal interface materials. Current industry trend should help FTC to maintain its industry leadership.

The Company has the following observations about the future competitive environment of the metal casing industry. The Company thinks that there are some trends worth paying attention to. First, less competitors make it easier to maintain its high gross margin the industry. Second, long learning curve continues to prevent new entrants from entering metal casing industry. Third, the so-called red supply chain still competes in the low-end front, not a 「 threat to companies like FTC. Fourth, metal casing is still essential to current design trend: metal frames 」 + 「 glass back cover 」 . This design should still benefit metal casing industry in the future. FTC has been the leader in casing industry for years and still maintains its technology leadership. Although metal casing industry is getting maturer, FTC is still able to maintain its superior earnings quality and gross margin trend through economies of scale and technology leadership.

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As stated last year, trade protectionism and anti-globalization are on the rise. These trends should continue and may get even worse this year. These trends are adverse to global economic development and to Taiwan’s economic growth as well. In a word, the Company may encounter some challenges on the road ahead. The management team of the Company is still confident in the prospect of the Company. Of course, the management team of the Company will definitely work hard in blazing a trail for the Company, do its best to deal with these challenges, and make sure that the owner’s equity of the Company is intact.

Lastly, the management team of the company would like to thank shareholders for all the support shown to us. The management team of the Company will work diligently in return for your supports and expectations. Thank you all!

President: Hung Chih-Chien CEO: Lee Han-Ming Accounting Manager: Wang Chung-Chun

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Attachment 2: Audit Committee’s Review Report

Audit Committee’s Review Report

The Board of Directors reports the financial statements, business report, and earnings distribution proposal of 2017. Of which the financial statements have been audited by PricewaterhouseCoopers Taiwan. The aforementioned financial statements, business report and earnings distribution proposal of 2017 have been reviewed by us as the Audit Committee of the Company. We deem no inappropriateness on these documents. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby present this report. Please review.

Submitted to:

Regular Shareholders’ Meeting of the Company

Foxconn Technology Co., LTD.

Chairman of the Audit Committee: Lin Song-Shu

On the Date of May 10, 2018

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Attachment 3: Financial Statements

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Stockholders of Foxconn Technology Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Foxconn Technology Co., Ltd. and its subsidiaries (the “Group”) as at December 31, 2017 and 2016, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2017 and 2016, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (“ROC GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

The key audit matters in relation to the consolidated financial statements for the year ended December 31, 2017, are outlined as follows:

Cutoff of sales revenue from distribution warehouse

Description

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Please refer to Note 4(26) for accounting policies on revenue recognition.

The Group recognises sales revenue when goods are drop-shipped from factories directly and upon acceptance of customers (the transfer of significant risks and rewards of ownership of the goods) if goods are shipped from the distribution warehouse. For shipments from distribution warehouse, the Group recognises sales revenue based on movements of inventories indicated in the statements or other information provided by the warehouse custodians. The Group has warehouses in various locations with numerous custodians, the frequency and contents of statements provided by custodians vary, and the process of revenue recognition contains numerous manual procedures, which may potentially result in inaccurate timing of sales revenue recognition and discrepancy between physical inventory quantities in the distribution warehouse and quantities as reflected in accounting records. As there are numerous daily sales transactions from distribution warehouse and the transaction amounts prior to and after the balance sheet date are significant to the financial statements, cutoff of sales revenue from distribution warehouse was identified as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A.Assessed and tested internal controls over periodic reconciliations to ascertain the consistency between shipment and timing of revenue recognition with customers.

• B.Performed cut-off testing for shipments that occurred within a specific time frame prior to and after the balance sheet date, including validating supporting documents from warehouse custodians and ensuring the appropriateness of timing for recording inventory movements.

• C.Confirmed or conducted physical count of inventory quantities held by distribution warehouses and agreed to accounting record, assessed the reasonableness of reconciling items identified through confirmation or physical inventory, if any, and inspected respective supporting documents and rationale.

Provision for inventory valuation losses

Description

Please refer to Note 4(13) for accounting policies on inventory valuation, Note 5(2) for uncertainty of accounting estimates and assumptions in relation to inventory valuation losses, and Note 6(7) for details of inventories. As at December 31, 2017, the Group’s inventories and provision for inventory valuation losses amounted to NT$4,153,077 thousand and NT$139,754 thousand, respectively.

The Group is primarily engaged in manufacturing and sales of 3C electronic products. Due to rapid technological innovations, short life cycles of electronic products and the fluctuation of market prices, there is a higher risk of inventory losses due from market value decline or obsolescence. The Group

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recognises inventories at the lower of cost and net realisable value and inventory valuation losses are provided against inventory aged over a certain period of time and individually identified as obsolete or damaged, whose net realisable value is determined based on historical data of inventory clearance and range of discount.

As the amounts of inventory are material, types of inventories vary, the identification of obsolete or damaged inventories and determination of net realisable value are subject to management and audit judgment, we consider the provision for inventory valuation losses a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A.Ensured consistent application of policies relating to provision for inventory valuation losses and in compliance with respective accounting guidance.

• B.Validated the appropriateness of system logic of inventory aging report utilised by management in assessing inventory valuation losses and sampled and tested transactions for proper categorisation in inventory aging report.

• C.Discussed with management and obtained corroboration for the net realisable value of obsolete and damaged inventories to assess the reasonableness of allowance for inventory valuation losses.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Foxconn Technology Co., Ltd. as at and for the years ended December 31, 2017 and 2016.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the Audit Committee, are responsible for overseeing the

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Group’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• A.Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

• B.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal controls.

• C.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• D.Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• E. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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• F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Hsu, Yung-Chien Hsu, Sheng-Chung

For and on behalf of PricewaterhouseCoopers, Taiwan March 29, 2018

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Assets	December 31,2017 Notes AMOUNT % 6(1) $ 59,389,534 27 6(2) 1,446 - 6(5) 16,860,595 8 7 35,990,057 17 6(6) and 7 1,388,872 1 6(7) 4,013,323 2 6(8) 20,746,102 9 138,389,929 64 6(3) 61,861,247 29 6(4) 4,571,100 2 6(9) 563,534 - 6(10) and 7 7,444,897 4 6(11) 793,958 - 6(26) 569,660 - 6(12) 1,270,102 1 77,074,498 36 $ 215,464,427 100 (Continued)	December 31,2016	December 31,2016
		AMOUNT $ 49,024,765 1,984,968 9,139,763 13,492,173 3,362,762 3,429,097 19,174,154 99,607,682 35,879,251 - 797,032 9,150,769 754,225 778,407 1,284,911 48,644,595 $ 148,252,277	%
Current assets 1100 Cash and cash equivalents 1110 Current financial assets at fair value through profit or loss 1170 Accounts receivable, net 1180 Accounts receivable due from related parties, net 1200 Other receivables 130X Inventories 1470 Other current assets 11XX Total current assets Non-current assets 1523 Non-current available-for-sale financial assets 1546 Bond investments without active markets - noncurrent 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1760 Investment property - net 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			33 2 6 9 2 2 13
			67
			24 - 1 6 - 1 1
			33
			100

~22~

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity	Notes 6(13) 6(2) 7 6(14) and 7 6(26) 6(26) 6(16) 6(17) 6(18) 6(19) 6(20) 9	December 31, 2017 AMOUNT % $ 23,298,389 11 47,417 - 6,219,942 3 35,226,222 16 13,807,252 6 1,403,438 1 150,722 - 80,153,382 37 561,390 1 154,722 - 716,112 1 80,869,494 38 14,144,852 6 7,768,067 4 10,106,948 5 63,516,070 29 38,983,202 18 134,519,139 62 75,794 - 134,594,933 62 $ 215,464,427 100	December 31, 2016	December 31, 2016
		AMOUNT $ 23,298,389 47,417 6,219,942 35,226,222 13,807,252 1,403,438 150,722 80,153,382 561,390 154,722 716,112 80,869,494 14,144,852 7,768,067 10,106,948 63,516,070 38,983,202 134,519,139 75,794 134,594,933 $ 215,464,427	AMOUNT $ 7,818,924 1,503,327 6,840,531 11,899,218 10,776,793 1,831,524 130,654 40,800,971 573,888 131,141 705,029 41,506,000 14,144,852 7,793,643 9,034,837 60,007,688 15,691,346 106,672,366 73,911 106,746,277 $ 148,252,277	%
Current liabilities 2100 Short-term borrowings 2120 Current financial liabilities at fair value through profit or loss 2170 Accounts payable 2180 Accounts payable to related parties 2200 Other payables 2230 Current tax liabilities 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2570 Deferred tax liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total Liabilities Equity attributable to owners of parent Share capital 3110 Share capital - common stock Capital reserve 3200 Capital surplus Retained earnings 3310 Legal reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Total equity attributable to owners of parent 36XX Non-controlling interests 3XXX Total equity Commitments and Contingent Liabilities 3X2X Total liabilities and equity				6 1 5 8 7 1 -
				28
				- -
				-
				28
				10 5 6 40 11
				72 -
				72
				100

The accompanying notes are an integral part of these consolidated financial statements.

~23~

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2017 AND 2015

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Items

Year ended December 31 2017 2016 Notes AMOUNT % AMOUNT % 6(21) and 7 $ 147,815,617 100 $ 80,110,459 100 6(7)(24) and 7 ( 133,556,310) ( 90) ( 65,507,435) ( 82) 14,259,307 10 14,603,024 18 6(24) and 7 ( 579,901) ( 1) ( 546,625) ( 1) ( 1,679,864) ( 1) ( 1,756,585) ( 2) ( 1,473,400) ( 1) ( 975,610) ( 1) ( 3,733,165) ( 3) ( 3,278,820) ( 4) 10,526,142 7 11,324,204 14 6(22) 2,143,914 1 1,605,094 2 6(23) ( 782,191) ( 1) 1,212,047 1 ( 268,237) - ( 58,832) - 6(9) ( 173,400) - ( 368,259) - 920,086 - 2,390,050 3 11,446,228 7 13,714,254 17 6(26) ( 1,477,893) ( 1) ( 2,994,281) ( 4) $ 9,968,335 6 $ 10,719,973 13 ($ 11,866) - ($ 2,694) - 2,017 - 457 - ( 9,849) - ( 2,237) - 6(19)(20) ( 4,167,472) ( 3) ( 4,931,134) ( 6) 27,458,262 19 13,792,869 17 23,290,790 16 8,861,735 11 $ 33,249,276 22 $ 19,579,471 24 $ 9,965,386 6 $ 10,721,108 13 2,949 - ( 1,135) - $ 9,968,335 6 $ 10,719,973 13 $ 33,247,393 22 $ 19,587,263 24 1,883 - ( 7,792) - $ 33,249,276 22 $ 19,579,471 24 6(27) $ 7.05 $ 7.59 $ 7.01 $ 7.54

4000 Operating revenue 5000 Operating costs 5900 Gross profit from operations Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Net operating income Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of loss of associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Tax expense 8200 Profit Components of other comprehensive income that will not be reclassified to profit or loss 8311 Other comprehensive income, before tax, actuarial losses on defined benefit plans 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive loss that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8362 Unrealised gain on valuation of available-for-sale financial assets 8360 Components of other comprehensive income that will be reclassified to profit or loss 8500 Total comprehensive income Profit (loss), attributable to: 8610 Owners of parent 8620 Non-controlling interests Comprehensive income (loss) attributable to: 8710 Owners of parent 8720 Non-controlling interests Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

~24~

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

2016 Balance at January 1, 2016 Appropriationsn of 2015 earnings: Legal reserve appropriated Cash dividends Stock dividends Employees' stock bonus Consolidated net income Other comprehensive income, net of income tax Changes in equity of associates and joint ventures accounted for under equity method Balance at December 31, 2016 2017 Balance at January 1, 2017 Appropriationsn of 2016 earnings: Legal reserve appropriated Cash dividends Consolidated net income Other comprehensive income, net of income tax Changes in equity of associates and joint ventures accounted for under equity method Balance at December 31, 2017	Notes		Equity attributabl	e t	o owners of the parent	o owners of the parent	o owners of the parent						Non- controlling interests	Total equity
			Share capital - common stock		Capital reserve		Retained	Earnings	Other equityinterest			Total
							Legal reserve	Unappropriated retained earnings	Financial statements translation differences of foreign operations		Unrealized gain or loss on available-for- sale financial assets
	6(18) 6(19) 6(18) 6(19)		$ 13,950,240 - - 139,502 55,110 - - - $ 14,144,852 $ 14,144,852 - - - - - $ 14,144,852	$ 7,470,233 - - - 329,558 - - ( 6,148 ) $ 7,793,643 $ 7,793,643 - - - - ( 25,576 ) $ 7,768,067			$ 7,815,013 1,219,824 - - - - - - $ 9,034,837 $ 9,034,837 1,072,111 - - - - $ 10,106,948	$ 54,833,215 ( 1,219,824 ) ( 4,185,072 ) ( 139,502 ) - 10,721,108 ( 2,237 ) - $ 60,007,688 $ 60,007,688 ( 1,072,111 ) ( 5,375,044 ) 9,965,386 ( 9,849 ) - $ 63,516,070	$ 6,504,594 - - - - - ( 4,924,477 ) - $ 1,580,117 $ 1,580,117 - - - ( 4,166,406 ) - ($ 2,586,289 )		$ 318,360 - - - - - 13,792,869 - $ 14,111,229 $ 14,111,229 - - - 27,458,262 - $ 41,569,491	$ 90,891,655 - ( 4,185,072 ) - 384,668 10,721,108 8,866,155 ( 6,148 ) $ 106,672,366 $ 106,672,366 - ( 5,375,044 ) 9,965,386 23,282,007 ( 25,576 ) $ 134,519,139	$ 81,703 - - - - ( 1,135 ) ( 6,657 ) - $ 73,911 $ 73,911 - - 2,949 ( 1,066 ) - $ 75,794	$ 90,973,358 - ( 4,185,072 ) - 384,668 10,719,973 8,859,498 ( 6,148 ) $ 106,746,277 $ 106,746,277 - ( 5,375,044 ) 9,968,335 23,280,941 ( 25,576 ) $ 134,594,933

The accompanying notes are an integral part of these consolidated financial statements.

~25~

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax			$	11,446,228 $	13,714,254
Adjustments
Income and expenses having no effect on cash flows
Depreciation expense (including investment property)	6(24)			2,300,949	2,738,198
Amortization expense	6(24)			22,194	61,555
Net loss on financial assets or liabilities at fair value	6(2)
through profit or loss				527,612	27,718
Loss on disposal of investments	6(3)(9)			-	103,772
Loss on disposal of property, plan and equipment	6(23)			29,588	34,730
Interest expense				268,237	58,832
Interest income	6(22)	(		1,535,779 ) (	984,638 )
Dividend income	6(22)	(		36,331 ) (	98,624 )
Share of loss of associates and joint ventures accounted	6(9)
for using equity method				173,400	368,259
Changes in assets/liabilities relating to operating activities
Changes in operating assets
Accounts receivable net		(		7,891,302 ) (	3,342,685 )
Accounts receivable due from related parties		(		22,746,231 )	4,732,631
Other receivable		(		156,617 ) (	375,776 )
Inventories		(		615,493 )	443,750
Other current assets		(		45,655 )	83,440
Other non-current assets		(		21,735 )	-
Net changes in liabilities relating to operating activities
Accounts payable		(		404,381 )	2,821,178
Accounts payable to related parties				23,611,535	752,384
Other payable				5,203,866 (	5,004,209 )
Other current liabilities				21,892	53,374
Other non-current liabilities				32,684	11,309
Cash inflow generated from operations				10,184,661	16,199,452
Income taxes paid		(		1,830,116 ) (	1,689,060 )
Net cash flows from operating activities				8,354,545	14,510,392

(Continued)

~26~

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2017 AND 2016

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of available-for-sale financial assets	6(3)		$	- ($	17,495,657 )
Proceeds from disposal of available-for-sale financial assets				-	296,789
Proceeds from disposal of investments accounted for using
equity method				-	126,521
Proceeds from capital reduction of investments accounted	6(8)
for under equity method				-	189,293
Acquisition of investments accounted for using equity	6(8)
method				- (	100,000 )
Acquisition of investments in debt instrument without	6(4)
active market		(		4,571,100 )	-
Increase in other financial assets		(		1,956,856 ) (	3,245,378 )
Acquisition of property, plant and equipment	6(28)	(		1,442,068 ) (	1,418,830 )
Proceeds from disposal of property, plant and equipment	6(28)			297,837	38,859
Decrease in other non-current assets				-	2,353
Increase in deferred expense				- (	4,619 )
Decrease(Increase) in net receivable/ payable on raw
materials				502,095 (	310,264 )
Interest received				1,512,607	1,020,106
Dividend received				36,331	98,624
Net cash flows used in investing activities		(		5,621,154 ) (	20,802,203 )
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid		(		255,604 ) (	71,007 )
Increase in short-term loans				15,573,657	8,144,483
Cash dividends paid	6(18)	(		5,375,044 ) (	4,185,072 )
Net cash flows from financing activities				9,943,009	3,888,404
Effect of changes in foreign currency exchange rates		(		2,311,631 ) (	2,509,279 )
Net increase (decrease) in cash and cash equivalents				10,364,769 (	4,912,686 )
Cash and cash equivalents at beginning of year				49,024,765	53,937,451
Cash and cash equivalents at end of year			$	59,389,534 $	49,024,765

~27~

Appendices

Appendix 1: Rules and Procedures of Shareholders’ Meeting

• Article 1 Unless otherwise provided by law, Shareholders’ Meeting of the Company (the “Meeting”) shall be conducted in accordance with these Rules and Procedures.

• Article 2 The shareholders or their representatives present shall wear identification and may hand in attendance cards in lieu of signing the attendance book prepared by the Company. The number of shares shall be counted based on the certificate of attendance as furnished plus the quantity of shares for which the voting power is exercised via electronic transmission.

• Article 3 The participation and voting by shareholders shall be duly calculated based on the number of shares they hold. If shareholders propose to count the attendance, the chairperson may not proceed. In the resolution, if the attendance has reached the statutory quota, the proposal is considered approved.

• Article 4 The location of shareholders’ meeting shall be the Company’s current location or such other place that is convenient for shareholders to attend. The meeting shall not commence earlier than 9AM or later than 3PM.

• Article 5 If a shareholders’ meeting is convened by the board, the chairman of the board shall be the chairman presiding at the meeting. If the chairman of the board is on leave or cannot perform his duties for some reason, the vice chairman shall preside at the meeting on the chairman’s behalf; if the Company does not have a vice chairman or the vice chairman is on leave or cannot perform his duties for some reason, the chairman shall designate one managing director to act on his behalf. If the Company does not have a managing director, the chairman shall designate one director to act on his behalf. If the chairman has not appointed an agent or the designated director cannot perform his duties for some reason, the meeting chairman shall be elected from among the directors present. If the meeting is convened by any other person besides the board of directors who is entitled to convene the meeting, such person shall be the chairman to preside at the meeting. If there are more than two persons convening the meeting, then shall be the one elected by the other.

• Article 6 The Company may appoint designated attorneys, certified public accounts or other relevant persons to attend shareholders’ meetings. The staff members who take charge of the shareholders’ meeting affairs shall wear identification certificates or armbands.

• Article 7 The Company shall record the shareholders’ meetings by audio or video and keep the recording for at least one year.

• Article 8 The chairman shall call the meeting to order at the time scheduled for the meeting, provided, however, that if during such a shareholders’ meeting a majority of the total number of outstanding shares ceases to be present or if there are other good causes, the chairman may postpone the shareholders’

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meeting to a later time, provided, however, that the maximum number of times a shareholder meeting may be postponed shall be two and total time of postponement shall not exceed one hour. If after two postponements no quorum can yet be constituted but the shareholders present at the meeting represent more than one third of the total outstanding shares, tentative resolutions may be made in accordance with Section 1 of Article 175 of the Company Act.

If before the end of the meeting enough shares become present to constitute a quorum, the chairman may then re-submit the tentative resolutions to the meeting for approval, in accordance with Article 174 of the Company Act.

Article 9 The agenda for the shareholders’ meetings shall be set by the Board of Directors if the meeting is convened by the Board of Directors. The meeting shall be conducted in accordance with the agenda, which may not be altered without a resolution adopted at the shareholders’ meeting. The preceding provisions of this Article apply mutatis mutandis to cases where shareholders’ meetings are convened by any person(s), other than the Board of Directors, entitled to convene the meeting. Unless otherwise resolved at the shareholders’ meeting, the chairman may not announce adjournment of the meeting unless the scheduled agenda items (including Extemporary Motions) set forth in the preceding provisions of this Article are concluded. If the chairman announces adjournment of the meeting and violates these rules of procedure, the meeting may be continued after electing one of the attendees to be the meeting chairman in accordance to the approval of the majority of the votes represented by the attending shareholders. After the meeting is adjourned, shareholders may not separately elect a chairman and resume the meeting at the original or another venue.

Article 10 When a shareholder (or his/her representative) attending the meeting wishes to speak, he or she shall first fill out a speaker’s card, specifying therein the major points of his or her speech, account number (or number appeared on attendance pass) and account name. The chairman shall determine sequence of shareholders’ speeches.

A shareholder (or his/her representative) in attendance who submits a speaker’s slip but does not speak shall be deemed to have not spoken. In the case where the contents of a shareholder’s speech differ from those specified on the speaker’s card, the contents of the actual speech shall prevail.

Unless otherwise permitted by the chairman and speaking shareholder, no shareholder shall interrupt the speech of the speaking shareholder; the chairman shall stop any such interruptions and take necessary actions to maintain the order of the shareholders’ meeting.

Article 11 A shareholder may not speak more than twice on the same resolution without the chairman’s consent, with five minutes maximum for each speech.

The chairman may stop any shareholder who violates the above-mentioned rules or exceeds the scope of the agenda item. During the meeting the chairman shall take necessary actions to maintain the order of the shareholders’ meeting.

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• Article 12 Any legal entity designated as proxy by shareholder(s) to be present at the meeting may appoint only one representative to attend the meeting.

• If a corporate shareholder designates two or more representatives to attend the meeting, only one of the representatives so designated may speak on any one motion.

• Article 13 The chairman may respond or designate other persons to respond after an attending shareholder’s speech.

• Article 14 When the chairman considers that the discussion for a motion has reached the extent for making a resolution, he may announce discontinuance of the discussion and submit the motion for resolution.

• Article 15 Unless listed in the handbook, the contents of new proposals shall ask the chairman or master of ceremonies to be read to attending shareholders. If there is an amendment or replacement proposal to the original proposal, the chairman shall decide the sequence of voting for such proposals, provided that if any one of the proposals has been approved, the others shall be deemed vetoed and no further voting is required.

• Article 16 Unless otherwise specified in the Company Act and the Articles of Incorporation, resolutions shall be adopted by a majority of the votes represented by the attending shareholders. The resolution shall be deemed adopted and shall have the same effect as if it was voted by casting ballots if no objection is voiced after inquiry by the chairman.

• Article 17 The persons for supervising the casting of votes and the counting thereof for resolutions shall be designated by the chairman, provided, however, that the person supervising the casting of votes shall be a shareholder. The voting result should be announced on the spot and kept in record.

• Article 18 During the process of the meeting, the chairman may announce a recess at an appropriate time.

• Article 19 The chairman may direct disciplinary officers (or security personnel) to maintain the order of the Meeting. For identification purposes, they shall wear a badge bearing the words of “disciplinary officer.”

• Article 20 In cases of force majeure, the meeting shall be discontinued. The meeting shall be resumed an hour after the incident is over.

• Article 21 If the matters are not provided herein, the Company Act and other laws and regulations of the Republic of China shall govern.

• Article 22 These rules and procedures shall be effective after ratification at the shareholders’ meetings. The same applies to modifications.

~30~

Appendix 2: Articles of Incorporation

Chapter I General Provisions

Article 1 The Company, organized under the Company Act as a Company limited by shares, and shall be named FOXCONN TECHNOLOGY CO., LTD. (hereinafter, “the Company”).

• Article 2 The Company’s scope of business is as follows:

• The development, design, manufacture and sale of TV set, fax machine, A/V recorder, acoustic system and related components.

• The development, design, manufacture and sale of computer terminal, computer, monitor, calculator and peripherals, power supplies and related components.

• The development, design, manufacture and sale of uninterrupted power supply system and equipment.

• The development, design, manufacture and sale of telephone and communication equipment.

• Import and export trade business of the products listed above.

• Agents of foreign and domestic goods’ selling, quoting and bidding.

• Shipping centers and bonded warehouse business.(G801010)

• CC01080 Electronic parts and components manufacturing.

• C805050 Industrial plastic products manufacturing.

• CC01010 Power generation, transmission, and distribution equipment manufacturing.

• C801010 Basic Industrial Chemical Manufacturing.

• CA02990 Other Fabricated Metal Products Manufacturing Not Elsewhere Classified (Metal Casings for computers).

• I301010 Software Design Services.

• I301020 Data Processing Services.

• I301030 Digital Information Supply Services.

• C805030 Plastic Made Grocery Manufacturing.

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1. ZZ99999 In addition to licensed businesses, the Company may operate any other businesses that are not prohibited or restricted by law.

2. Article 3 The Company is headquartered in New Taipei City, Taiwan and when necessary may establish branches or subsidiaries at home and abroad according to resolutions by the board of directors.

3. Article 4 Public announcements of the Company shall be made in accordance with the provisions of Article 28 of the Company Act.

Chapter II Shares

• Article 5 The authorized capital of the Company is NT$15 billion, consisting of 1.5 billion shares, all of common stock, with a par value of NT$10 per share. The board of directors is authorized to issue the shares in separate installments as required, of which 50 million shares are reserved for stock options with warrants or corporate bonds for the exercise of stock options. The board of directors is also authorized to issue shares in separate installments as required.

• Article 6 The share certificates of the Company shall without exception be in registered form, signed by, or affixed with the seals of, at least three directors, and authenticated by the competent governmental authority upon issuance. Shares issued by the Company need not be in certificate form.

• Article 7 Registration for transfer of shares shall be suspended sixty (60) days immediately before the date of regular meeting of shareholders, and thirty (30) days immediately before the date of any extraordinary meeting of shareholders, or within five (5) days before the day on which dividend, bonus, or any other benefit is scheduled to be paid by the Company. All stock processing and related activities shall follow the “Guidelines for Stock Operations for Public Companies” issued by the Financial Supervisory Commission unless specified otherwise by law and securities regulations.

Chapter III Shareholders’ Meeting

• Article 8 Shareholders’ meetings of the Company are of two kinds: regular shareholders’ meetings and extraordinary shareholders’ meetings. The regular shareholders’ meeting is called once per year within six months of the close of the fiscal year. Extraordinary shareholders’ meetings may be called in accordance with applicable laws and regulations whenever necessary. Electronic voting is one of the voting methods adopted by the Shareholders’ Meeting. The voting procedures shall follow the related provisions issued by the competent authorities.

• Article 9 For any shareholders’ meeting, a shareholder may appoint a proxy to attend the meeting by using the proxy form issued by the Company and specifying the scope of proxy.

• Article 10 Each shareholder of the Company is entitled to one vote per share, unless otherwise provided by applicable law or regulation.

~32~

• Article 11 Unless otherwise provided by applicable law or regulation, a resolution of the shareholders’ meeting shall be adopted by the consent of a majority of the votes represented by those in attendance at the meeting, in person or by proxy, by shareholders who represent a majority of the total issued shares.

Chapter IV Board of Directors and Audit Committee

• Article 12 The Company shall have five to nine directors, with three-year office term. Directors are elected and appointed by the shareholders’ meeting from candidates in accordance with the candidate nomination system of Article 192-1 of the Company Act. Candidate(s) may continue in office if re-elected. The aforesaid Board of Directors must have at least two independent directors. More than one fifth of the directorship must be independent directors.

• The Board of Directors shall set up functional committees. Committee member qualifications, duties and related matters shall be defined by the Board of Directors in accordance with the laws and regulations.

• The company will set up the Audit Committee to replace the role of Supervisors. The Audit Committee shall be comprised of all independent directors, whose number shall be no less than three, one of whom will be the convener. Their duties and other related matters will be defined by the Board of Directors in accordance with the laws and regulations.

• Article 13 The board of directors shall consist of the directors of the Company; the chairman of the board of directors shall be elected from among the directors by a majority of directors in attendance at a meeting attended by at least two-thirds of the directors. The chairman of the board of directors shall represent the Company in external matters.

• Article 14 Except for the first meeting of the board of directors of every new term, which shall be convened pursuant to Article 203 of the Company Act, all other meetings of the board of directors shall be convened by the chairman of the board of directors. Unless otherwise provided for by applicable law or regulation, a resolution of the board of directors shall be adopted by the consent of a majority of the votes represented by those the majority in attendance at the board of directors meeting. Directors shall attend meetings of the board of directors. If a director is unavailable to attend a meeting in person, the director may issue a power of attorney for the given meeting specifying the scope of the authorized powers to authorize another director to attend the meeting on the director’s behalf, provided that a director may represent only one other director at a meeting pursuant to Article 205 of the Company Act.

• Article 14-1 Seven days prior to the convening of a meeting of the board of directors, notice shall be sent to all directors in writing, by fax or by e-mail notification thereof, specifying the reasons for calling the meeting, though in emergency situations, a meeting may be called whenever necessary.

• Article 15 When the Company’s directors perform their duties, the Company may compensate them at a rate consistent with general practices in the industry. The board of directors is authorized to purchase liability insurance for directors, in accordance with a

~33~

resolution of the board of directors adopted by the consent of a majority of the votes represented by those the majority in attendance at the board of directors meeting.

Chapter V Managers

• Article 16 The Company may appoint one Chief Executive Officer, whose commissioning, decommissioning and pay rate shall be as pursuant to Article 29 of the Company Act.

Chapter VI Accounting

• Article 17 After the close of each fiscal year, the following reports shall be prepared by the board of directors and submitted to the regular shareholders’ meeting for ratification.

  1. Business Report.

  2. Financial Statements.

  3. Proposal Concerning Appropriation of Net Profits or Recovering of Losses.

• Article 18 If the Company reports a surplus (Surplus refers to profit before tax deducted appropriated employee compensation and director compensation), 4-6% of which shall be set aside as employee compensation. If the Company has accumulated losses, the Company shall reserve an amount to offset it. Employee compensation mentioned in preceding paragraph shall be distributed in stocks or in cash. The payment shall apply to employees in the subsidiaries as well whoever meets criteria developed by the Board of Directors. The proceeding two paragraphs shall be based on resolutions by the Board of Directors and reported to the shareholders’ meeting.

• Article 18-1 The annual net income of the Company shall be appropriated in accordance with the priorities listed as follows:

• Recovering of Losses.

• Appropriation of 10% for legal capital reserve.

• Appropriate or return to Special capital reserve pursuant to applicable laws or regulations.

As to the earnings available for appropriation to shareholders including accumulated un-appropriated earnings and earnings available for appropriation of this year, the board of directors is authorized to draft an appropriation plan in accordance with the dividend policy in Section 3 of this Article. The Company is currently at a developing stage. The Company's dividend distribution policy is subject to the Company's current and future investment environment, fund requirements, competition from local and abroad, and capital budgets, as well as taking into consideration of the interests of shareholders and the long-term financial planning. Shareholder dividends are set aside on accumulated un-appropriated

~34~

earnings, which shall not be less than 15% of earnings available for appropriation for the year and cash dividends shall not be less 10% of total dividends.

Chapter VII Supplementary Provisions

• Article 19 The total investment amount of the Company is allowed to exceed the limit of 40% of the paid-in capital. The Board of Directors is authorized to make the final decision.

• Article 20 The Company may provide endorsements and guarantees and act as a guarantor.

• Article 21 Any matters not sufficiently provided for in these Articles of Incorporation shall be handled in accordance with the Company Act and other applicable laws or regulations.

Article 22 These Articles of Incorporation were enacted on April 21, 1990. The 1st amendment was made on January 23, 1991. The 2nd amendment was made on August 15, 1992. The 3rd amendment was made on April 2, 1994. The 4th amendment was made on April 30, 1994. The 5th amendment was made on April 9, 1995. The 6th amendment was made on March 16, 1996. The 7th amendment was made on July 31, 1996. The 8th amendment was made on May 24, 1997. The 9th amendment was made on April 13, 1998. The 10th amendment was made on June 11, 1998. The 11th amendment was made on May 25, 1999. The 12th amendment was made on June 2, 2000. The 13th amendment was made on June 10, 2002. The 14th amendment was made on June 27, 2003. The 15th amendment was made on November 27, 2003. The 16th amendment was made on June 10, 2004. The 17th amendment was made on June 14, 2005. The 18th amendment was made on June 14, 2006. The 19th amendment was made on June 8, 2007. The 20th amendment was made on June 2, 2008. The 21st amendment was made on June 10, 2009. The 22nd amendment was made on June 8, 2010. The 23rd amendment was made on June 8, 2011. The 24th amendment was made on June 18, 2012. The 25th amendment was made on June 26, 2013. The 26th amendment was made on June 25, 2014. The 27th amendment was made on June 25, 2015. The 28th amendment was made on June 22, 2016..

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Appendix 3: Shareholdings of Directors

1. As of 04/24/2018, all directors’ minimum shareholding number and actually registered holding shares.

olding shares.
Title	Minimum number of shares to be held	Shares actually held in share register (Excluding independent directors)
Directors	33,947,644	85,048,996

1. As of 04/24/2018, shares held by all directors.

Category	Name	Shares held in share register
Chairman	Hyield Venture Capital Co. ,Ltd. Representative: Hung Chih-Chien	85,003,766
Director	Hyield Venture Capital Co. ,Ltd. Representative: Cheng Fang-Yi	85,003,766
Director	Caixin International Investment Co., Ltd. Representative: Dai Feng-Yuan	45,230
Director	Caixin International Investment Co., Ltd. Representative: Lee Xue-Kun	45,230
Independent Director	Lin Song-Shu	0
Independent Director	Chen Yao-Ching	0
Independent Director	Yu Hsiang-Tun	7,177

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