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FTC AGM Information 2019

Jul 9, 2019

52024_rns_2019-07-09_ef307c9e-9da5-4486-be93-3f5491f3c92c.pdf

AGM Information

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Stock Code 2354

FOXCONN TECHNOLOGY CO., LTD.

2019 Annual General Shareholders’ Meeting Meeting Handbook

June 21, 2019

THIS IS A TRANSLATION OF THE HANDBOOK FOR THE 2019 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

Table of Contents Table of Contents
1. Meeting Procedure．．．．．．．．．．．．．．．．．．．．．．．1
2. Meeting Agenda．．．．．．．．．．．．．．．．．．．．．．．2
a. Report Items．．．．．．．．．．．．．．．．．．．．．．．．3
b. Ratification, Discussion and Election Matters．．．．．．．．．．6
c. Extraordinary Motions．．．．．．．．．．．．．．．．．．．．．．．．．．16
3. Attachments
1. Business Report．．．．．．．．．．．．．．．．．．．．．．．17
2. Audit Committee’s Review Report．．．．．．．．．．．．．．．．．．25
3. Independent Auditors’ Report and 2018 Financial
Statements．．．．．．．．．．．．．．．．．．．．．．．．．26
4. Articles of Incorporation Amendment Comparison
Table．．．．．．．．．．．．．．．．．．．．．．．．．49
5. Amendments to the Company’s “Procedures for Asset Acquisition
& Disposal” Comparison Table．．．．．．．．．．．．．．．．．54
6. Amendments to the Company’s “Operational Procedures for
Lending Funds to Others” Comparison Table．．．．．．．．．．．72
7. Amendments to the Company’s “Procedures for Endorsement &
Guarantees” Comparison Table．．．．．．．．．．．．．．．．．75
8. Amendments to the Company’s “Policies and Procedures for
Financial Derivatives Transactions” Comparison Table．．．．．．．．78
9. Directors and Independent Directors Candidates
List．．．．．．．．．．．．．．．．．．．．．．．．．80
4. Appendices
1. Rules and Procedures of Shareholders’ Meeting．．．．．．．．82
2. Articles of Incorporation．．．．．．．．．．．．．．．．．．86
3. Regulations Governing the Election of Directors and
Independent Directors．．．．．．．．．．．．．．．．．．．．．．．91
4. Shareholdings of Directors and Independent
Directors．．．．．．．．．．．．．．．．．．．．．．．93

FOXCONN TECHNOLOGY CO., LTD. 2019 Annual Shareholders’ Meeting

Meeting Procedure

Time of Meeting: June 21, 2019 (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 Discussion and Election Items

  • VI. Extraordinary Motions

  • VII. Meeting Adjournment

  • 1 -

FOXCONN TECHNOLOGY CO., LTD. 2019 Annual Shareholders’ Meeting Agenda

  • I. Chairman’s Address.

  • II. Report Items.

  • (1) To report business of 2018.

  • (2) Audit Committee’s review report of 2018 audited financial statements.

  • (3) Report of the proportion of employee remuneration for the year ended December 31, 2018.

  • III. Ratification, Discussion and Election Items

  • (1) Ratification of the 2018 business report and audited financial statements.

  • (2) Ratification of the proposal for distribution of 2018 profits.

  • (3) Proposal on amendments of Articles of Incorporation.

  • (4) Proposal on amendments of Procedures for Acquisition and Disposal of Assets.

  • (5) Proposal on amendments of the Procedures for Loaning Funds to Others.

  • (6) Proposal on amendments of the Procedures for Endorsements/Guarantees.

  • (7) Proposal on amendments of Procedures Governing Derivatives Trading.

  • (8) Re-election of directors.

  • (9) Release restrictions on the prohibition of directors’ participation in competing businesses.

  • IV. Extraordinary Motions.

  • V. Meeting Adjournment.

  • 2 -

Report Items

Item One:

Report of the Company’s 2018 Business Operation and Financial Statements

Please Review.

Description:

  1. Please refer to Attachment 1 for detailed Business Report (Pages 17 ~ 24).

  2. Please refer to Attachment 3 for detailed financial statements (Pages 26 ~ 48).

  3. 3 -

Item Two:

Audit Committee’s review report of 2018 audited financial statements

Please review.

Description:

Please refer to Attachment 2 (Page 25) for the Audit Committee’s

review report and Attachment 3 (Pages 26 ~ 48) for the audited financial statements.

Item Three:

  • 4 -

Report of the proportion of employee remuneration for the year ended December 31, 2018

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$ 666,180,470 in 2018, distributed in cash, taking up 5.98% of the profit of the year. There is no difference between the above resolution and the ratified cost for 2018.

  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.

  4. 5 -

Ratification, Discussion and Election Matters

Proposal 1: Ratification of the 2018 Business Report and Audited Financial Statements

Please ratify.

(Proposed by the Board of Directors)

Description:

  1. The 2018 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 17 ~ 48).

Resolution:

  • 6 -

Proposal 2: Ratification of 2018 earnings distribution. Please Ratify.

(Proposed by the Board of Directors)

Description:

  1. The 2018 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 tax is NT$9,146,658,556, of which NT$914,665,856 is allocated as legal reserve and NT$46,491,528 as special reserve. Unappropriated earnings of NT$57,427,384,637 at the beginning of the period is added to the remaining profits, deducting IFRS transition adjustments of NT$16,842,668, plus the 2018 gains from revaluation of defined benefit plans of NT$775,190 and deducting the 2018 financial assets at fair value through other comprehensive income of NT$15,714,787, which resulted in NT$65,581,103,544 of accumulated distributable earnings as of December 31, 2018.

  3. The Company plans to distribute dividends of NT$4,526,352,615. Each common share holder will be entitled to receive cash dividends of NT$3.2_ per share. The aforementioned dividends will be distributed from 2018 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:

  • 7 -

FOXCONN TECHNOLOGY LTD. 2018 Earnings Allocation Table

Unit: NTD

Unit: NTD
Items Amount Note
2018 net profit after-tax 9,146,658,556
Less: Legal reserve (10%) 914,665,856
Less : Special reserve 46,491,528
Distributable earnings in 2018 8,185,501,172
Add : Beginning balance of unappropriated earnings 57,427,384,637
Less : IFRS transition adjustments 16,842,668
Add : 2018 Gains from revaluation of defined benefit
plans		 775,190
Less : 2018 Financial assets at fair value through
other comprehensive income		 15,714,787
Accumulated distributable earnings as of December
31,2018		 65,581,103,544
Distributable items
Cash dividends to shareholders 4,526,352,615 NT$3.2 per
share
Ending balance of unappropriated earnings 61,054,750,929

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

  • 8 -

(Proposed by the Board of Directors)

Proposal 3: Amendments of Articles of Incorporation, please review it. Explanation: Amendments of Articles of Incorporation in accordance

with relevant laws and regulations. Please refer to attachment 4 (pages 49 ~53).

Resolutions:

  • 9 -

(Proposed by the Board of Directors)

Proposal 4: Amendments of Procedures for Acquisition and Disposal of Assets, please review it.

Explanation: Amendments of Procedures for Acquisition and Disposal of Assets in accordance with relevant laws and regulations. Please refer to attachment 5 (pages 54 ~ 71).

Resolutions:

  • 10 -

(Proposed by the Board of Directors)

Proposal 5: Amendments of Procedures for Loaning Funds to Others, please review it.

Explanation: Amendments of Procedures for Loaning Funds to Others in accordance with relevant laws and regulations. Please refer to attachment 6 (pages 72 ~ 74).

Resolutions:

  • 11 -

(Proposed by the Board of Directors)

Proposal 6: Amendments of Procedures for Endorsements/Guarantees, please review it.

Explanation: Amendments of Procedures for Endorsements/Guarantees in accordance with the relevant laws and regulations. Please refer to attachment 7 (pages 75 ~ 77).

Resolutions:

  • 12 -

(Proposed by the Board of Directors)

Proposal 7: Amendments of Procedures Governing Derivatives Trading, please review it.

Explanation: Amendments of Procedures Governing Derivatives Trading in accordance with relevant laws and regulations. Please refer to attachment 8 (pages 78 ~ 79).

Resolutions:

  • 13 -

( Proposed by the Board of Directors)

Proposal 8: Re-election of directors, please proceed with the elections.

  • Explanation: I. The term of office of this session of the Board will end on June 25, 2019, and all the directors shall be re-elected in accordance with the Articles of Incorporation during the shareholders’ meeting of the current fiscal year.

  • II. 7 new directors (including 3 independent directors) shall be elected and their term of office will begin on June 26, 2019 and end on June 25, 2022, for a total of three years.

  • III. The Company’s election of directors is adopted under a candidate nomination system, the roster of director candidates has been reviewed and approved in the second session of the Board of Directors’ meeting in 2019 and the shareholders shall elect the directors from among the nominees included in the roster of director candidates . For the educational background, past work experience and other relevant information of the director candidates, please refer to Attachment 9 (pages 80~81).

IV. Please proceed with the elections. Election results:

  • 14 -

( Proposed by the Board of Directors)

Proposal 9: Proposal for releasing restrictions on the prohibition of directors’ participation in competing businesses, please review it.

Explanation: In order for the Company to successfully expand its business, a resolution plan to release the restrictions on the prohibition of directors' participation in competing businesses in accordance with Article 209 of the Company Act is proposed, please approve it.

Type Name of Elected Directors Name of company and title
Director of CyberTAN Tech.
Director of InnoLux Corp.
Director of Altus Technology, Inc.
Director of An Tec Electric System Ltd.
Director of King Giants Precision Ind. Ltd.
Director of JUSDA International Ltd.
Director of EFEIHU (Taiwan) Ltd.
Director of Socle Technology Corp.
Hyield Venture Capital Ltd.
Director of Healthconn Corp.
Director of HON LIN Technology Ltd.
Director of Fitipower Integrated Technology Inc.
Director of Taiwan Intelligent Fiber Optic Network Ltd.
Director of Zhong Yang Technology Ltd.
Director of Foxsemicon Integrated Technology Inc.
Director Director of Ezimage Technology Ltd.
Director of Vossic TechnologyLtd.
Director of Nanjing Hongfusharp Precision Electronics Ltd.
Director of Fujin Precision Industrial (Jincheng) Ltd.
Hyield Venture Capital Ltd. Director of Futaihua Precision Electronics (Chengdu) Ltd.
Director of FUSING International Inc. Pte. Ltd.
Representative: Hung Chih-Chien
Director of Flnet IOT Smart Home Limited, Shenzhen
Director of FOXCONN – Shenzhen.
Director of Hongfujin Precision Industries(Shenzhen)Ltd.
General Manager of the Super Precision Mechanical Business
Group, Hon Hai Precision Industry Ltd.
Hyield Venture Capital Ltd.
Director of Jin Ji Zhe Trading Holdings Ltd.
Representative: Cheng Fang-Yi Director of Jizhun Precision Industry Huizhou Ltd.
Director of Futaihua Precision Electronics (Jiyuan) Ltd.
Director of Jizhun Precision Electronics(Jiyuan)Ltd.
Independent
Lin Song-Shu Independent Director of Genie Networks Limited
Director
Director of General Interface Solution (GIS) Holding Limited.
Independent
Yo Hsiang-Tun
Independent Director of Advanced Optoelectronic Technology
Director
Inc.

Resolutions:

  • 15 -

Extraordinary Motions

Meeting Adjournment

  • 16 -

Attachment 1:

FOXCONN TECHNOLOGY CO., LTD. Business Report

Dear Shareholders:

2018 is associated with a high level of uncertainty. In terms of finance, the performance of the original steady US economy is even stronger as it is driven by recent tax cuts, which ramped up the global stock market to hit new highs in the first half of 2018. However, as the austerity policies of global central banks gradually comes to an end, the overall global economic figures are mixed with different results and hence there is increased volatility in the global financial market on the second half of the year, while the stock market would exhibit a downward trend under the gloom of economic slowdown. In terms of government risks, the geopolitical risks from North Korea have been reduced due to the Trump-Kim summit. However, the economic cold war caused by the US-China trade dispute, confrontations between the US and Russia in the Middle East, and the US-China conflict in the South China Sea gives the impression of growing disputes and international tensions. The oil price increased to over NT$80/barrel due to relatively low supply compared to the rising oil demand, as well as the effect of US sanctions against Iran, which has significantly boosted up inflation expectations. Meanwhile, the global economy has expanded and global central banks have implemented monetary easing policies over many years. In view of recent economic indicators, inflation risk has gradually emerged and the US Federal Reserve has driven global central banks to begin reducing their balance sheet and raise interest rates, resulting in financial stringency, which would definitely cause high volatility and instability in the global financial market.

In terms of the economic environment, Taiwan has shown outstanding results in 2018, which is truly a bliss under rising global trade conflicts. However, the one inadequacy is that the main growth momentum is still from exporting goods, whereas the private consumption is declining due to annuity reform, and the growth of travel industry continues to slow down. Although there is better performance in the stock market, it is only driven by a few weighted stocks, hence people did not enjoy the wealth effect driven by - 17 -

economic expansion. Looking forward, there are several hidden concerns: (1) The continued competition in the red supply chain. (2) The negative impact of trade war on Taiwan's export-oriented economy. (3) The period of economic expansion is coming to an end, approaching a downtrend line. Taiwan will face the next major challenge on to finding suitable ways to overcome hidden concerns and maintain continuous growth in the economy.

In 2018, FTC’s sales declined slightly mainly due to the uncertainty in the global economy caused by the US-China trade conflict. The increase in tariffs also dragged down overall demand in the fourth quarter of 2018 and with the sharp drop in order visibility and pull-in orders from the Company’s client, the traditional shopping season has already come to an end. As for gross profit margin and profitability, the performance is slightly weak. The 3 main reasons are, (1) High proportion of low-margin products. (2) The sudden decline of global economy in the fourth quarter, and is not prosperous in the peak season. (3) Labor costs continue to rise. However, these negative factors are projected to ease in the coming year, and FTC’s gross profit margin and profits would also improve.

Finally, our management team would like to express our gratitude to all shareholders for your long-term support. In face of fluctuations in the upcoming year, our management team has the confidence to stabilize the Company’s business operations and would be able to seize opportunities in face of economic headwinds, and guide all employees to work together on achieving sales and profit growth. We thank you all.

I. 2018 Business Results:

  • (1) Net profit before tax came in at NT$11.332billion in 2018, which decreased by NT$114 million compared with NT$11.446 billion in 2017, down by 0.99% YoY. While the net profit attributable to the parent company was NT$9.1471billion in 2018, which decreased by NT$818million compared with NT$9,965million in 2017, down by 8.20% YoY, with earnings per share of NT$6.47. Please refer to the table below for relevant financial information and annual differences.

  • 18 -

Consolidated Income Statement

Unit: NTD thousands
Growth%
-3.90%
-3.74%
-5.38%
30.89%
-18.24%
196.28%
-0.99%
47.62%
-8.20%
-8.22%
42.01%
Items 2018 2017 Growth%
Operating revenue 142,057,432 147,815,617 -3.90%
Operating costs (128,564,689) (133,556,310) -3.74%
Gross profit 13,492,743 14,259,307 -5.38%
Total operating expenses (4,886,359) (3,733,165) 30.89%
Operating profit 8,606,384 10,526,142 -18.24%
Total non-operating income
expenses		 and
2,726,067		 920,086 196.28%
Profit before income tax 11,332,451 11,446,228 -0.99%
Income tax expense (2,181,604) (1,477,893) 47.62%
Profit for the year 9,150,847 9,968,335 -8.20%
Net income attributable to
stockholders ofthe parent		 9,146,659 9,965,386 -8.22%
Income attributable to minority
interest		 4,188 2,949 42.01%

(2) Budget execution ：

Foxconn Technology LTD. was not required to disclose its 2018 financial forecast.

(3) Cash flow analysis ：

Consolidated Statements of Cash Flows

Unit: NTD/thousand
Items 2018 2017 Change
Cash flows from operatingactivities 11,749,938 8,354,545 3,395,393
Cash flows from investingactivities (4,396,850) (5,621,154) 1,224,304
Cash flows from financingactivities (15,176,525) 9,943,009 (25,119,534)
  • 19 -

(4) Profitability analysis ：

Consolidated financial analysis


Consolidated financial analysis
Consolidated financial analysis
ITEM YEAR
 2018 2017
Return On Assets(%) 5.16% 5.60%
Return On Equity (%) 7.82% 8.26%
To Capital Stock OperatingIncome 60.84% 74.42%
Profitability
(%)		 Profit Before Tax 80.12% 80.92%
Net Profit Margin(%) 6.44% 6.74%
Earnings Per Share(NTD） 6.47 7.05

(5) Research and development ：

In recent years, the technology industry showed continuous slowdown in growth rates. This is partially due to saturation of the market and no recent breakthrough in hardware technologies. The only way to solve this problem is to continuously work on R&D businesses, as innovative technologies can not only drive up demands, but also can maintain the company's competitive advantage. Currently, the company's R & D focuses on:

  1. New applications: Penetrating into the automotive applications market.

  2. New technologies: Technologies on surface treatment for various materials.

  3. New process: Increase yield and reduce costs.

The company has a high concern of independently working on R&D, hence the company cooperates with others in order to improve its success rate. The Company’s potential partners are as follows:

  1. International customers: To understand the development direction of international technology and to recognize the product roadmap.

  2. Colleges and Universities: Take in talents and explore latest technological developments.

  3. Potential suppliers: To understand the diversification of industrial technology and relevant suppliers.

  4. Equipment Suppliers: Obtain equipment and perform dynamic competitor analysis.

  5. 20 -

For casing products, the Company still focus on high-end products, with the design of “metal frame” and “glass back cover,” which should continue for a certain period. On the other hand, the surface treatment technology is developing towards “multi-color,” “anode” and “sputter.” For thermal products, it is technically developing towards new thermal materials and its application develops toward handheld devices, data storage, automotive and communication network equipment.

II 、 General outlines of business plan for 2019 ：

  • (1) Business guideline ：

The long-term prospects of the technology industry are still on an uptrend, but we need to consider the recent development trends, including:

  1. The impact of US-China trade war on the supply chain.

  2. Demands would be reduced by the rise of trade protectionism.

  3. Killer apps are difficult to find.

  4. Increased difficulty in raising product price.

  5. The rise in inflation will increase production costs.

Although development trends cannot be controlled by the Company, corresponding measures can still be conducted to mitigate impact to the Company. The following measures are conducted by Foxconn to reduce relative impacts:

  1. Strict control on the Company’s inventory, in order to reduce loss on inventories caused by demand uncertainty.

  2. Continue to invest in technology R & D.

  3. Technologies are adding value if the Company develops unique technologies.

  4. Strict control on the Company’s costs, increase product yield and enhance automation to reduce overall costs.

The company continues to adopt the following practices to achieve the sales growth targets:

  1. Expand the Company’s market share and develop new clients.

  2. Develop new applications and penetrate into new industries.

  3. 21 -

3. Develop new products and enter new markets.

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

The company is cautiously optimistic on the outlook for 2019. The Company is cautious as it is hard to predict the global economy, and due to high uncertainty from constant trade conflicts. On the other hand, the Company is optimistic as it has been constantly adjusting its business operations, and has better ability than its competitors to withstand downside risks of the economy. In addition, the company will focus on R&D investments, and the company's leading position in casing and thermal industry will be further consolidated on the recovery of the economy.

1. Sales strategy:

(1) In terms of business operations: For becoming a leading global company, the Company will continuously increase its market share, and will also focus on the diversification of customers. For emerging markets, the Company focuses on consolidating existing customers and expanding market share. For future growth, the Company will develop new customers in fields of non-3C products to add new sources for sales growth.

(2) In terms of product price: For high-end technologies, the company focuses on increasing the unit price and gross profit margin. For technologies other than high-end technologies, the company focuses on maintaining unit price and economies of scale. (3) In terms of sales and marketing: The Company will continue to develop customers in Europe, Japan and India.

  1. Production strategy:

  2. (1) Proper expansion of the plant and capacity in low-cost regions.

  3. (2) Continue to increase the proportion of automation and product yield in order to reduce production costs.

  4. (3) Improve existing processes in order to enhance production efficiency.

3. R & D strategy:

  • (1) Jointly develop products with international customers to make sure that they are developing towards the right direction.

  • 22 -

(2) Cooperate with colleges and universities to take in talents and to be aware of the latest scientific development.

(3) Develop products in cooperation with potential suppliers in order to be aware of the current status of industrial technology development.

(4) Collaborate with equipment suppliers to understand the status of relevant companies and to be aware of the possibilities of various process developments.

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

Regarding the development trend in the past year, there are several factors in the competition trend of thermal module industry: 1) Continuous consolidation of the industry. 2) Weak demands on thermal solutions of PCs. 3) The emergence of graphene materials has brought about opportunity on industrial restructuring. 4) The 5G era has brought about opportunity to drive new demands on thermal solutions. FTC has always been a leader in the thermal industry. In addition to its leading position in R&D, the adjustment on competitive strategy is also the fastest. Therefore, in the future, FTC will maintain its leading position in the industry.

Regarding development trends in the past year, there are several factors in the competition trend of metal casing industry: 1) The importance of surface treatment technology has increased, and more colors have been developed for metal casings. 2) New competitors are weaker than expected, and would be worth noting after a considerable amount of time. 3) The red supply chain is still dominated by low-end technology products, and hence is not a major threat for high-end technology Taiwanese manufacturers. 4) The importance of stainless steel metal casings continues to increase. 5) The design of the metal frame and glass back cover has become the mainstream for high-end products, thus the market is still optimistic on the future development of metal casing industry. FTC is not only a leader in the metal casing industry, but also has cutting-edge technologies which are still 1 to 2

  • 23 -

years ahead of its competitors and thus maintains a large market share in the industry. On the outlook of the future competitive environment, the Company has absolute confidence on maintaining its leading competitive advantage through economies of scale, which is brought about by FTC’s technology leadership and market share.

It is well known that trade protectionism has become more and more intense over the past year, and has brought about impact to the global economy. The global demand has also caused downward revision of the economy, and is expected to continue for some time in the future, which would be quite unfavorable for the export-oriented Taiwanese manufacturers. However, despite the evolution of the global political economy, the company's management team has absolute confidence on facing upcoming challenges. FTC will persist in its efforts to actively increase market share and expand into new markets to improve profitability, while ensuring continuous growth on interests of shareholders.

Finally, our team would like to thank all shareholders for your continued support. Your enthusiastic support boosts confidence of the management team to face all adversities and challenges. Our management team also look forward to the support of shareholders in the coming year, and will continue to break through headwinds to achieve outstanding performances. We are thankful for all our shareholders, thank you for your support!

==> picture [261 x 33] intentionally omitted <==

Chairman: Hung Chih-Chien Manager: Li Han-Ming Account Manager: Lan Yuan-Wen

  • 24 -

Attachment 2

Audit Committee’s Review Report

The Board of Directors reports the financial statements, business report, and earnings distribution proposal of 2018. Of which the financial statements have been audited by PricewaterhouseCoopers Taiwan. The aforementioned financial statements, business report and earnings distribution proposal of 2018 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 LTD.

Chairman of the Audit Committee: Lin Song-Shu

On the Date of May 09, 2019

  • 25 -

Attachment 3 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 parent company only balance sheets of Foxconn Technology Co., Ltd. (the “Company”) as at December 31, 2018 and 2017, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2018 and 2017, and its parent company only financial performance and its parent company only 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 parent company only Financial Statements section of our report. We are independent of the Company 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 parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Company’s parent company only financial statements of the year ended December 31, 2018 are stated as follows:

Revenue cutoff

Description

  • 26 -

Refer to Note 4(26) for accounting policy on revenue recognition and Note 6(18) for details of revenues.

The Company has three revenue types, including (1) direct shipment from the factory, (2) FOB destination, and (3) hub. For FOB destination and hub, revenue is recognized when goods are shipped to destination or picked up by customers (when control of the products is transferred). The supporting documents for revenue recognition include receipts from customers (FOB destination), reports or other information provided by hub custodians and inventory movement record of hub. As the hubs are located around the world with numerous custodians, the frequency and contents of statements provided by custodians vary, and the process of revenue recognition involves numerous manual procedures, these factors may potentially result in inaccurate timing of sales revenue recognition and discrepancy between the physical inventory quantities in the hubs and the quantities as reflected in accounting records.

Since there are numerous daily revenue from hubs and from FOB destination and the transaction amounts prior to and after the balance sheet date are significant to the financial statements, revenue cutoff has been identified as a key audit matter.

How our audit addressed the matter

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

  1. Evaluated and tested the Company’s internal controls over revenue recognition.

  2. Tested sales transactions that took place shortly before and after the balance sheet date by verifying the customers’ receipt notes, supporting documents provided by hub custodian, and inventory movement records, and ascertained whether cost of goods sold was recognized in the correct reporting period.

  3. Confirmed physical inventory quantities held by distribution warehouses and agreed to accounting records. 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

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(6) for details of inventories..

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

  • 27 -

The Company and its subsidiaries recognise inventories at the lower of cost and net realisable value which is determined based on historical data of inventory closeout and range of discount. Inventory valuation losses are provided against inventory aged over a certain time period and individually identified as obsolete or damaged.

As the amounts of the Company and its subsidiaries’ 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 judgement, we consider provision for inventory valuation losses 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. Ensured consistent application of accounting policies on provision for inventory valuation losses and ascertain 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. Assessed the reasonableness of inventory valuation losses through discussion with management as to the determination of net realisable value of obsolete or damaged inventories and validating realated supporting documents.

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

Management is responsible for the preparation and fair presentation of the parent company only 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 parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’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 Company or to cease operations, or has no realistic alternative but to do so.

  • 28 -

Those charged with governance, including the Audit Committee, are responsible for overseeing the Company’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 parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 parent company only 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 parent company only 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 control.

  • 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 Company’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 Company’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 Company to cease to continue as a going concern.

  • E. Evaluate the overall presentation, structure and content of the parent company only financial

  • 29 -

statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  • F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only 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 parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s 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, Sheng-Chung Wu, Han-Chi For and on behalf of PricewaterhouseCoopers, Taiwan

March 27, 2019

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only 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 parent company only 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.

  • 30 -

FOXCONN TECHNOLOGY CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Assets Notes
6(1)
6(2)
6(4)
6(5)
6(6)
6(7)
6(3)
6(8)
6(9)
6(10)
6(23)		 December31,2018
AMOUNT
%
$ 11,123,840
8
567,640
1
500,000
-
12,734,403
9
974,348
1
380,117
-
269,161
-
15,407
-
26,564,916
19
1,415,846
1
-
-
109,456,141
80
77,567
-
127,279
-
60,268
-
9,146
-
111,146,247
81
$ 137,711,163
100		 December31,2017 December31,2017
AMOUNT
$ 11,123,840
567,640
500,000
12,734,403
974,348
380,117
269,161
15,407
26,564,916
1,415,846
-
109,456,141
77,567
127,279
60,268
9,146
111,146,247
$ 137,711,163		 AMOUNT
$ 18,114,095
1,446
-
14,080,612
1,336,791
1,011,989
1,220,920
6,652,418
42,418,271
-
1,791,255
141,841,293
95,304
127,387
30,294
11,057
143,896,590
$ 186,314,861		 %
Current assets
1100
Cash and cash equivalents
1110
Current financial assets at fair
value through profit or loss
1136
Financial assets at amortised
cost-current
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
1517
Financial assets at fair value
through other comprehensive
income-non-current
1523
Non-current available-for-sale
financial assets
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		 10
-
-
7
1
-
1
4
23
-
1
76
-
-
-
-
77
100

(Continued)

  • 31 -

FOXCONN TECHNOLOGY CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity December 31, 2018
Notes
AMOUNT
%
6(11)
$ 13,689,160
10
6(2)
39,992
-
1,325,536
1
19,347,339
14
6(12)
2,100,239
1
6(23)
989,355
1
84,419
-
37,576,040
27
6(23)
610,671
1
6(13)
12,791
-
623,462
1
38,199,502
28
6(14)
14,144,852
10
6(15)
7,767,553
6
6(16)
11,103,487
8
66,542,261
48
6(17)
(
46,492)
-
99,511,661
72
$ 137,711,163
100		 December 31, 2017 December 31, 2017
AMOUNT
$ 22,449,280
47,417
778,929
24,906,383
2,187,453
840,369
10,198
51,220,029
561,389
14,304
575,693
51,795,722
14,144,852
7,768,067
10,106,948
63,516,070
38,983,202
134,519,139
$ 186,314,861		 %
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
Share capital
3110
Ordinary share
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3XXX
Total equity
Commitments and Contingent
Liabilities
3X2X
Total liabilities and equity		 12
-
1
13
1
1
-
28
-
-
-
28
8
4
5
34
21
72
100

The accompanying notes are an integral part of these parent company only financial statements.

  • 32 -

FOXCONN TECHNOLOGY CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items Notes
6(18)
6(6)(21)

6(21)




6(19)
6(20)

6(8)
6(23)

6(13)

6(17)

6(17)

6(23)

6(16)

6(24)		 Year ended D ecember 31
2018 2017
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
7070
Share of profits 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
Actuarial losses on defined benefit plans
8316
Unrealised loss on valuation of financial
assets at fair value through other
comprehensive income
8330
Share of other comprehensive income of
associates and joint ventures accounted
for using equity method, components of
other comprehensive income that will not
be reclassified to profit or loss
8349
Income tax related to components of other
comprehensive income that will not be
reclassified to profit or loss
8310
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
Exchange differences on translation
8362
Unrealised gains (losses) on valuation of
available-for-sale financial assets
8380
Share of other comprehensive income of
associates and joint ventures accounted
for using equity method, components of
other comprehensive income that will be
reclassified to profit or loss
8360
Other comprehensive income that
will be reclassified to profit or loss
8500
Total comprehensive income
Basic earnings per share
9750
Basic earnings per share
9850
Diluted earnings per share
$

The accompanying notes are an integral part of these parent company only financial statements.

-33-

FOXCONN TECHNOLOGY CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

2017
Balance at January 1, 2017
Profit
Other comprehensive income (loss)
Total comprehensive income (loss)
Appropriations of 2016 earnings
Legal reserve
Cash dividends
Changes in equity of associates and joint
ventures accounted for using equity method
Balance at December 31, 2017
2018
Balance at January 1, 2018
Effects of retrospective application and
retrospective restatement
Balance at January 1 after adjustments
Profit
Other comprehensive income (loss)
Total comprehensive income (loss)
Appropriations of 2017 earnings
Legal reserve
Cash dividends
Changes in equity of associates and joint
ventures accounted for using equity method
Balance at December 31, 2018		 Notes Ordinary share Capitalsurplus Retained Earnings Earnings Other EquityInterest Total
Legal reserve Unappropriated
retained earnings		 Exchange
differences on
translation of
foreign financial
statements		 Unrealised gains
(losses) from
financial assets
measured at fair
value through other
comprehensive
income		 Unrealised gains
(losses) on
available-for-sale
financialassets
6(16)
6(16)
6(16)


$ 14,144,852
-
-
-
-
-
-
$ 14,144,852
$ 14,144,852
-
14,144,852
-
-
-
-
-
-
$ 14,144,852		 $ 7,793,643
-
-
-
-
-
(
25,576 )
$ 7,768,067
$ 7,768,067
-
7,768,067
-
-
-
-
-
(
514 )
$ 7,767,553		 $ 9,034,837
-
-
-
1,072,111
-
-
$ 10,106,948
$ 10,106,948
-
10,106,948
-
-
-
996,539
-
-
$ 11,103,487		 $ 60,007,688
9,965,386
(
9,849 )
9,955,537
(
1,072,111 )
(
5,375,044 )
-
$ 63,516,070
$ 63,516,070
(
16,843 )
63,499,227
9,146,659
776
9,147,435
(
996,539 )
(
5,092,147 )
(
15,715 )
$ 66,542,261		 $ 1,580,117
-
(
4,166,406 )
(
4,166,406 )
-
-
-
($ 2,586,289 )
($ 2,586,289 )
-
(
2,586,289 )
-
8,278
8,278
-
-
-
($ 2,578,011 )		 $ -
-
-
-
-
-
-
$ -
$ -
41,569,491
41,569,491
-
(
39,037,972 )
(
39,037,972 )
-
-
-
$ 2,531,519		 $ 14,111,229
-
27,458,262
27,458,262
-
-
-
$ 41,569,491
$ 41,569,491
(
41,569,491 )
-
-
-
-
-
-
-
$ -		 $ 106,672,366
9,965,386
23,282,007
33,247,393
-
(
5,375,044 )
(
25,576 )
$ 134,519,139
$ 134,519,139
(
16,843 )
134,502,296
9,146,659
(
39,028,918 )
(
29,882,259 )
-
(
5,092,147 )
(
16,229 )
$ 99,511,661

-34-

FOXCONN TECHNOLOGY CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31

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

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax $ 10,481,596 $ 10,988,042
Adjustments
Adjustments to reconcile profit (loss)
Depreciation (including investment property) 6(21) 16,718 15,200
Amortisation 6(21) 1,250 1,250
Expected credit gain ( 887 ) -
Interest expense 521,116 235,787
Share of profits of associates and joint ventures 6(8)
accounted for using equity method ( 6,310,617 ) ( 7,326,434)
Net loss on financial assets or liabilities at fair 6(2)
value through profit or loss ( 573,619 ) 293,209
Dividend income 6(19) ( 106,424 ) ( 21,543)
Interest income 6(19) ( 293,720 ) ( 181,804)
Changes in operating assets and liabilities
Changes in operating assets
Accounts receivable, net 1,352,682 ( 7,474,102)
Accounts receivable due from related parties 351,877 278,437
Other receivables 52,448 122,922
Inventories 951,759 544,308
Other current assets ( 10,689 ) ( 305)
Changes in operating liabilities
Accounts payable 546,607 349,993
Accounts payable to related parties ( 5,559,044 ) 14,004,692
Other payables 452,863 ( 5,442)
Other current liabilities 74,221 4,586
Other non-current liabilities ( 1,606) ( 4,208)
Cash inflow generated from operations 1,946,531 11,824,588
Income taxes paid ( 1,165,774) ( 1,166,685)
Net cash flows from operating activities 780,757 10,657,903
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in financial assets at amortised
cost-current 6,147,700 -
Acquisition of property, plant and equipment ( 2,482 ) ( 30,113)
Increase in other financial assets - ( 6,647,700)
Decrease (increase) other non-current assets 661 ( 660)
Interest received 329,768 142,768
Dividends received 119,816 53,985
Net cash flows from (used in) investing
activities 6,595,463( 6,481,720)
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in short-term borrowings ( 8,760,120 ) 16,579,780
Cash dividends paid 6(15) ( 5,092,147 ) ( 5,375,044)
Interest paid ( 514,208) ( 222,818)
Net cash flows (used in) from financing
activities ( 14,366,475) 10,981,918
Net (decrease) increase in cash and cash equivalents ( 6,990,255 ) 15,158,101
Cash and cash equivalents at beginning of year 18,114,095 2,955,994
Cash and cash equivalents at end of year $ 11,123,840 $ 18,114,095

-35-

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 of December 31, 2018 and 2017, 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 of December 31, 2018 and 2017, 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.

Key audit matters on the consolidated financial statements for the year ended December 31, 2018 are stated as follows:

Revenue cutoff

Description

36

Refer to Note 4(29) for accounting policy on revenue recognition and Note 6(22) for details of revenues. The Group has three revenue types, including (1) direct shipment from the factory, (2) FOB destination, and (3) hub. For FOB destination and hub, revenue is recognized when goods are shipped to destination or picked up by customers (when control of the products is transferred). The supporting documents for revenue recognition include receipts from customers (FOB destination), reports or other information provided by hub custodians and inventory movement record of hub. As the hubs are located around the world with numerous custodians, the frequency and contents of statements provided by custodians vary, and the process of revenue recognition involves numerous manual procedures, these factors may potentially result in inaccurate timing of sales revenue recognition and discrepancy between the physical inventory quantities in the hubs and the quantities as reflected in accounting records.

Since there are numerous daily revenue from hubs and from FOB destination and the transaction amounts prior to and after the balance sheet date are significant to the financial statements, revenue cutoff has been identified as a key audit matter.

How our audit addressed the matter

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

  1. Evaluated and tested the Group’s internal controls over revenue recognition.

  2. Tested sales transactions that took place shortly before and after the balance sheet date by verifying the customers’ receipt notes, supporting documents provided by hub custodian, and inventory movement records, and ascertained whether cost of goods sold was recognized in the correct reporting period.

  3. Confirmed physical inventory quantities held by distribution warehouses and agreed to accounting records. Assessed the reasonableness of reconciling items identified through confirmation or physical inventory, if any, and inspected related supporting documents and rationale.

Provision for inventory valuation losses

Description

Refer to Note 4(14) 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, 2018, the Group’s inventories and provision for inventory valuation losses amounted NT$3,043,636 thousand and NT$138,194 thousand, respectively.

The Group is primarily engaged in manufacturing and sales of 3C electronic products. Due to rapid

37

technological innovations, short electronic product life cycles and fluctuation of market prices, there is a higher risk of inventory losses arising from market value decline or obsolescence. The Group recognises inventories at the lower of cost and net realisable value, which is determined based on historical data of inventory closeout and range of discount. Inventory valuation losses are provided against inventory aged over a certain time period and individually identified as obsolete or damaged.

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 judgement, we consider provision for inventory valuation losses 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:

  • D. Ensured consistent application of accounting on provision for inventory valuation losses and ascertain compliance with respective accounting guidance.

  • E. 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.

  • F. Assessed the reasonableness of inventory valuation losses through discussion with management as to the determination of net realisable value of obsolete or damaged inventories and validating related supporting documents.

Other matter – Parent company only financial reports

We have audited and expressed an unmodified opinion on the parent company only financial statements of Foxconn Technology Co., Ltd. as of and for the years ended December 31, 2018 and 2017.

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

38

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 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:

  • G. 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.

  • H. 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.

  • I. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

39

estimates and related disclosures made by management.

  • J. 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.

  • K. 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.

  • L. 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.

40

Hsu, Sheng-Chung Wu, Han-Chi

For and on behalf of PricewaterhouseCoopers, Taiwan

March 27, 2019

------------------------------------------------------------------------------------------------------------------------------------------------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.

41

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Assets Notes
6(1)
6(2)
6(4)
6(5)
7
6(6) and 7
6(7)
6(8)
6(3)
12(4)
6(4)
12(4)
6(9)
6(10) and 7
6(11)
6(12)
6(27)
6(13)		 December 31, 2018
AMOUNT
%
$ 52,191,701
33
567,640
-
17,663,897
11
16,504,913
11
15,634,864
10
1,070,706
1
2,905,442
2
484,697
-
107,023,860
68
23,085,238
15
-
-
5,367,399
3
-
-
8,713,290
6
7,404,149
5
970,020
1
1,944,619
1
563,501
-
1,258,489
1
49,306,705
32
$ 156,330,565
100		 December 31, 2017 December 31, 2017
AMOUNT
$ 52,191,701
567,640
17,663,897
16,504,913
15,634,864
1,070,706
2,905,442
484,697
107,023,860
23,085,238
-
5,367,399
-
8,713,290
7,404,149
970,020
1,944,619
563,501
1,258,489
49,306,705
$ 156,330,565		 AMOUNT
$ 59,389,534
1,446
-
16,860,595
35,990,057
1,388,872
4,013,323
20,746,102
138,389,929
-
61,861,247
-
4,571,100
563,534
7,444,897
793,958
-
569,660
1,270,102
77,074,498
$ 215,464,427		 %
Current assets
1100
Cash and cash equivalents
1110
Current financial assets at fair
value through profit or loss
1136
Financial assets at amortised
cost-current
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
1517
Financial assets at fair value
through other comprehensive
income-non-current
1523
Non-current available-for-sale
financial assets
1535
Financial assets at amortised
cost-non-current
1546
Investments in debt
instruments without active
market-non-current
1550
Investments accounted for
under equity method
1600
Property, plant and equipment
1760
Investment property - net
1780
Intangible assets
1840
Deferred tax assets
1900
Other non-current assets
15XX
Total non-current assets
1XXX
Total assets		 27
-
-
8
17
1
2
9
64
-
29
-
2
-
4
-
-
-
1
36
100

(Continued)

42

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity December 31, 2018
Notes
AMOUNT
%
6(14)
$ 13,877,029
9
6(2)
39,992
-
8,169,183
5
7
18,381,701
12
6(15) and 7
13,768,085
9
6(27)
1,462,978
1
12(5)
321,542
-
56,020,510
36
6(27)
610,672
-
109,449
-
720,121
-
56,740,631
36
6(17)
14,144,852
9
6(18)
7,767,553
5
6(19)
11,103,487
7
66,542,261
43
6(20)
(
46,492)
-
99,511,661
64
6(21)
78,273
-
99,589,934
64
9
$ 156,330,565
100		 December 31, 2017 December 31, 2017
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		 %
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
Ordinary share
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3350
Unappropriated retained
earnings
Other equity interest
3400
Other equity interest
31XXTotal equity attributable to
owners of parent
36XXNon-controlling interests
3XXXTotal equity
Commitments and Contingent
Liabilities
3X2X
Total liabilities and equity		 11
-
3
16
6
1
-
37
1
-
1
38
6
4
5
29
18
62
-
62
100

43

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items 2018
2017
Notes
AMOUNT
%
AMOUNT
%
6(22) and 7
$ 142,057,432
100
$ 147,815,617
100
6(7)(25) and 7
(
128,564,689) (
91) (
133,556,310 ) (
90)
13,492,743
9
14,259,307
10
6(25) and 7
(
672,972)
- (
579,901 ) (
1)
(
2,455,196) (
2) (
1,679,864 ) (
1)
(
1,758,191) (
1) (
1,473,400 ) (
1)
(
4,886,359) (
3) (
3,733,165 ) (
3)
8,606,384
6
10,526,142
7
6(23)
3,196,930
2
2,143,914
1
6(24)
194,392
- (
782,191 ) (
1)
(
545,878)
- (
268,237 )
-
6(9)
(
119,377)
- (
173,400)
-
2,726,067
2
920,086
-
11,332,451
8
11,446,228
7
6(27)
(
2,181,604)(
2)(
1,477,893)(
1)
$ 9,150,847
6
$ 9,968,335
6
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

(Continued)

44

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items 2018
2017
Notes
AMOUNT
%
AMOUNT
%
($ 93)
- ( $ 11,866 )
-
6(3)
(
39,037,972) (
27)
-
-
869
-
2,017
-
(
39,037,196)(
27)(
9,849 )
-
6(20)(21)
6,569
- (
4,167,472 ) (
3)
-
-
27,458,262
19
6,569
-
23,290,790
16
($ 29,879,780)(
21) $ 33,249,276
22
$ 9,146,659
6
$ 9,965,386
6
4,188
-
2,949
-
$ 9,150,847
6
$ 9,968,335
6
($ 29,882,259) (
21) $ 33,247,393
22
2,479
-
1,883
-
($ 29,879,780)(
21) $ 33,249,276
22
6(28)
$ 6.47
$ 7.05
$ 6.41
$ 7.01
Components of other
comprehensive income that
will not be reclassified to
profit or loss
8311
Actuarial losses on defined
benefit plans
8316
Unrealised loss on valuation
of financial assets at fair
value through other
comprehensive income
8349
Income tax related to
components of other
comprehensive income that
will not be reclassified to
profit or loss
8310
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
Exchange differences on
translation
8362
Unrealised gains (losses) on
valuation of
available-for-sale financial
assets
8360
Other comprehensive
income that will be
reclassified to profit or
loss
8500
Total comprehensive (loss)
income
Profit 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

45

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars)

2017
Balance at January 1, 2017

Profit
Other comprehensive income (loss)
6(20)
Total comprehensive income (loss)
Appropriations of 2016 earnings
6(19)
Legal reserve
Cash dividends
Changes in equity of associates and joint ventures
accounted for using equity method
Balance at December 31, 2017

2018
Balance at January 1, 2018

Effects of retrospective application and retrospective
restatement
12(4)
Balance at January 1 after adjustments
Profit
Other comprehensive income (loss)
6(20)
Total comprehensive income (loss)
Appropriations of 2017 earnings
6(19)
Legal reserve
Cash dividends
Changes in equity of associates and joint ventures
accounted for using equity method
Disposal of equity instruments at fair value through other
comprehensive income
Balance at December 31, 2018
 $ 14,144,852
-
-
-
-
-
-

$ 14,144,852
$ 14,144,852
-
14,144,852
-
-
-
-
-
-

-
$ 14,144,852		 $ 7,793,643
-
-
-
-
-
(
25,576 )
$ 7,768,067
$ 7,768,067
-
7,768,067
-
-
-
-
-
(
514 )
-
$ 7,767,553		 $ 9,034,837
-
-

-
1,072,111

-

-
$ 10,106,948
$ 10,106,948
-

10,106,948
-
-
-
996,539

-

-
-

$ 11,103,487		 $ 60,007,688
9,965,386
(
9,849 )

9,955,537

(
1,072,111 )
(
5,375,044 )
-
$ 63,516,070

$ 63,516,070

(
16,843 )
63,499,227

9,146,659
776
9,147,435
(
996,539 )
(
5,092,147 )
-
(
15,715 )
$ 66,542,261
 $ 1,580,117

-
(
4,166,406 )
(
4,166,406 )
-
-
-
($ 2,586,289 )
($ 2,586,289 )
-
(
2,586,289 )
-
8,278

8,278

-
-
-
-
($ 2,578,011 )		 $ -

-
-
-
-
-
-
$ -

$ -

41,569,491

41,569,491
-
(
39,037,972 )
(
39,037,972 )
-
-
-
-
$ 2,531,519
 $ 14,111,229

-
27,458,262
27,458,262
-
-

-

$ 41,569,491

$ 41,569,491

(
41,569,491 )
-
-
-

-

-
-

-

-

$ -
 $ 106,672,366

9,965,386
23,282,007

33,247,393
-
(
5,375,044 )
(
25,576 )
$ 134,519,139

$ 134,519,139

(
16,843 )
134,502,296
9,146,659
(
39,028,918 )
(
29,882,259 )
-
(
5,092,147 )
(
514 )
(
15,715 )
$ 99,511,661
 $ 73,911
$ 106,746,277
2,949
9,968,335
(
1,066 )
23,280,941
1,883
33,249,276
-
-
-
(
5,375,044 )
-
(
25,576 )
$ 75,794
$ 134,594,933
$ 75,794
$ 134,594,933
-
(
16,843 )
75,794
134,578,090
4,188
9,150,847
(
1,709 ) (
39,030,627 )
2,479
(
29,879,780 )
-
-
-
(
5,092,147 )
-
(
514 )
-
(
15,715 )
$ 78,273
$ 99,589,934

46

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax $ 11,332,451 $ 11,446,228
Adjustments
Income and expenses having no effect on cash
flows
Depreciation (including investment property) 6(25) 1,894,552 2,300,949
Amortisation 6(25) 21,513 22,194
Expected credit gain 12(2) ( 5,685 ) -
Net loss on financial assets or liabilities at fair 6(2)
value through profit or loss ( 573,619 ) 527,612
Gain (loss) on disposal of property, plant and 6(24)
equipment ( 284,224 ) 29,588
Interest expense 545,876 268,237
Interest income 6(23) ( 2,052,109 ) ( 1,535,779 )
Dividend income 6(23) ( 394,419 ) ( 36,331 )
Share of loss of associates and joint ventures 6(9)
accounted for using equity method 119,377 173,400
Changes in assets/liabilities relating to operating
activities
Changes in operating assets
Accounts receivable, net 1,288,810 ( 7,891,302 )
Accounts receivable due from related parties 23,132,231 ( 22,746,231 )
Other receivables 246,152 ( 156,617 )
Inventories 1,598,329 ( 615,493 )
Other current assets ( 115,173 ) ( 45,655 )
Other non-current assets 11,229 ( 21,735 )
Net changes in liabilities relating to operating
activities
Accounts payable 906,236 ( 404,381 )
Accounts payable to related parties ( 17,857,559 ) 23,611,535
Other payables ( 5,854,454 ) 5,203,866
Other current liabilities 147,781 21,892
Other non-current liabilities ( 44,497 ) 32,684
Cash inflow generated from operations 14,062,798 10,184,661
Income taxes paid ( 2,312,860 ) ( 1,830,116 )
Net cash flows from operating activities 11,749,938 8,354,545

(Continued)

47

FOXCONN TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in financial assets at amortised
cost-current $ 2,510,941 $ -
Net increase in financial assets at amortised
cost-non-current ( 911,741 ) -
Acquisition of investments accounted for using 6(9)
equity method ( 8,034,291 ) -
Proceeds from disposal of financial assets at fair 6(3)
value through other comprehensive income 290,985 -
Acquisition of investments in debt instruments 6(4)
without active market - ( 4,571,100 )
Increase in other financial assets - ( 1,956,856 )
Acquisition of property, plant and equipment 6(30) ( 1,916,428 ) ( 1,442,068 )
Proceeds from disposal of property, plant and 6(30)
equipment 541,661 297,837
Increase (decrease) in net receivable/ payable on
raw materials ( 337,968 ) 502,095
Interest received 2,033,139 1,512,607
Dividends received 394,419 36,331
Net cash flow from acquisition of subsidiaries 6(29) 1,032,433 -
Net cash flows used in investing activities ( 4,396,850 ) ( 5,621,154 )
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid ( 596,552 ) ( 255,604 )
(Decrease) increase in short-term loans ( 9,487,826 ) 15,573,657
Cash dividends paid ( 5,092,147 ) ( 5,375,044 )
Net cash flows (used in) from financing
activities ( 15,176,525 ) 9,943,009
Effect of changes in foreign currency exchange rates
on cash 625,604 ( 2,311,631 )
Net (decrease) increase in cash and cash equivalents ( 7,197,833 ) 10,364,769
Cash and cash equivalents at beginning of year 59,389,534 49,024,765
Cash and cash equivalents at end of year $ 52,191,701$ 59,389,534

48

Attachment 4

FOXCONN TECHNOLOGY CO., LTD.

Articles of Incorporation Amendment Comparison Table

Before amendment After amendment Explanation
Article 1:
The Company is established in
accordance with the provisions of the
Company Act, named Foxconn
Technology Ltd. .		 Article 1:
The Company is established in
accordance with the provisions of
the Company Act, named
as FOXCONN TECHNOLOGY
CO., LTD
.		 Revisions in
accordance
with
the
Company
Act.
Article 5:
The Company’s total capital is set at
NT$15 billion, which is divided into
1.5 billion shares with the price of
NT$10 per share, and is authorized
to be distributed separately by the
board of directors when necessary.
Among them, 50 million shares are
retained for share subscription
warrants or corporate bonds with
warrants.		 Article 5:
The Company’s total capital is set at
NT$15 billion, which is divided into
1.5 billion shares with the price of
NT$10 per share, and is authorized
to be distributed separately by the
board of directors when necessary.
Among them, 50 million shares are
retained for share subscription
warrants or corporate bonds with
warrants.authorized to be
distributed separately by the
board of directors .
The Company’s qualification
requirements of employees entitled
to receive shares or to receive
restricted stock, may include the
employees of parents or
subsidiaries of the company
meeting certain specific
requirements. The condition,
distribution and subscription of
shares shall be submitted to the
board of directors for resolution.		 Revisions in
accordance
with
the
Company
Act.
Article 6:
The Company issues registered
shares, of which the share certificates
shall be affixed with the signatures
or personal seals of3 directors or
more
and shall be duly certified or
authenticated under the laws before
the issuance. The Companymay
print the total number shares in
each issuance or may
be exempted
fromprinting any share certificate		 Article 6:
The Company issues registered
shares, of which the share
certificates shall be affixed with the
signatures or personal seals ofthe
director representing the
Company
and shall be duly
certified or authenticatedby the
bank which is competent to certify
shares
under the laws before
issuance.The Company may
be		 Revisions in
accordance
with
the
Company
Act.

49

Before amendment After amendment Explanation
for the shares issued
.		 exempted from printing any share
certificates,but shall register the
issued shares with a centralized
securities depositary enterprise
.
Article 18:
If The Company is profitable in the
current fiscal year, it shall distribute
4%-6% of profit (refers to the pre-tax
profit deducted by earnings before
the distribution of compensation to
employees and directors) of the
current year distributable as
employees’ compensation. However,
the Company shall reserve the
accumulated losses to be covered.
Employees’ compensation in the
preceding paragraph may be
distributed in the form of shares or in
cash, and the qualification
requirements of employees may
include the employees of the
Company meeting specific
requirementsset by the board of
directors
.
The company may have the profit
distributable as employees’
compensation in the preceding two
paragraphs by resolution of the board
of directors, and a report of such
distribution shall be submitted to the
shareholders’ meeting.		 Article 18:
If The Company is profitable in the
current fiscal year, it shall distribute
4%-6% of profit (refers to the
pre-tax profit deducted by earnings
before the distribution of
compensation to employees and
directors) of the current year
distributable as employees’
compensation. However, the
Company shall reserve the
accumulated losses to be covered.
Employees’ compensation in the
preceding paragraph may be
distributed in the form of shares or in
cash, and the qualification
requirements of employees may
include the employees of the
Company meetingcertain
specific
requirements.The condition and
distribution of shares shall be
submitted to the board of directors
for resolution.
The company may have the profit
distributable as employees’
compensation in the preceding two
paragraphs by resolution of the
board of directors, and a report of
such distribution shall be submitted
to the shareholders’ meeting.		 Revisions in
accordance
with
the
Company
Act.

50

Before amendment After amendment Explanation
Article 18-1:
If the Company has net profits, it
shall be allocated in the following
procedures:
(I) Make up for loss
(II) Set aside ten percent of such
profits as a legal reserve.
(III) Special reserve is set aside or
reversed in accordance with
related regulations
The remaining earnings along with
the accumulated unappropriated
earnings in prior years are
accumulated distributable earnings
that shall be appropriated as
proposed by the Board of Directors
in accordance with the dividend
policies in Article18-3
and resolved
by the shareholders’ meeting.
The Company is currently in growth
stage. Its dividend policy depends on
situations such as the current and
future investment environment,
capital requirements, domestic and
global competitions and the
Company’s capital budget, as well as
considering the interests of
shareholders and the Company's
long-term financial planning.
Accumulated distributable earnings
are allocated as shareholders’
dividends, which shall not be lower
than 15% of the current year’s
distributable surplus, and the cash
dividends shall account for at least
10% of the total dividends.		 Article 18-1:
If the Company has net profits, it
shall be allocated in the following
procedures:
(I) Make up for loss.
(II) Set aside ten percent of such
profits as a legal
reserve.However when the
legal reserve amounts to the
authorized capital, this shall
not apply.
(III) Special reserve is set aside or
reversed in accordance with
related regulations.
The remaining earnings along with
the accumulated unappropriated
earnings in prior years are
accumulated distributable earnings
that shall be appropriated as
proposed by the Board of Directors
in accordance with the dividend
policies in Article18-4
and resolved
by the shareholders’ meeting.
The distributable dividends and
bonuses, capital reserve or legal
reserve in whole or in part may be
paid in cash after a resolution has
been adopted by a majority vote at
a meeting of the board of directors
attended by two-thirds of the total
number of directors, and shall be
exempt from the application of the
provisions set out in the
resolutions of Shareholders'
meeting.
The Company is currently in growth
stage. Its dividend policy depends on
situations such as the current and
future investment environment,
capital requirements, domestic and
global competitions and the
Company’s capital budget, as well as
considering the interests of
shareholders and the Company's
long-term financial planning.
Accumulated distributable earnings
are allocated as shareholders’
dividends, whichshall not belower		 In
accordance
with
the
Company
Act and the
Company’s
business
requirements.

51

Before amendment After amendment Explanation
than 15% of the current year’s
distributable surplus, and the cash
dividends shall account for at least
10% of the total dividends.
Article 19:
Additional contents		 Article 19:
The Company shall, with the
consent of at least two-thirds of
the voting rights present at the
most recent shareholders meeting
attended by shareholders
representing a majority of total
issued shares, transfer shares to
employees at less than the average
actual share repurchase price, or
issue employee share subscription
warrants at less than the
Company’s closing securities price
on the issue date.
For shares repurchased according
to the preceding paragraph, the
qualification requirements of
employees may include the
employees of the Company
meeting certain specific		 Additional
contents in
accordance
with the
provisions of
the Company
Act.

52

Before amendment After amendment Explanation
requirements. The condition and
distribution of shares shall be
submitted to the board of directors
for resolution.
Article 19
:
The Company’s total investment may
exceed 40% of its paid-in capital,
and shall authorize the board of
directorsfor implementation.		 Article20
:
The Company’s total investment
may exceed 40% of its paid-in
capital, and shall authorize the board
ofdirectorsfor implementation.		 Adjustment
of the
sequence of
articles.
Article20
:
The Company may make guarantees
for others.		 Article21
:
The Company may make guarantees
for others.		 Adjustment
of the
sequence of
articles.
Article 21
:
Items not covered in the Articles of
Incorporation shall be subject to
provisions of theCompanyAct.		 Article22
:
Items not covered in the Articles of
Incorporation shall be subject to
provisions of theCompanyAct.		 Adjustment
of the
sequence of
articles.
Article 22
:
The Articles of Incorporation was
established in April 21, 1990, …,
28threvision - June 22, 2016.		 Article23
:
The Articles of Incorporation was
established in April 21, 1990, …,
28threvision - June 22, 2016,29
th
revision– June 21, 2019.		 Adjustment
of the
sequence of
articles and
adding the
date of
revision.

53

Attachment 5

FOXCONN TECHNOLOGY CO., LTD.

Amendments to the Company’s “Procedures for Asset Acquisition & Disposal” Comparison

Table

Before Amendments After Amendments Description
Article 2: Statutory Basis
It is based on the content of Article 36
of Securities and Exchange Act
(hereafter referred to as “the
Act”), FSC Document No.
1060001296 issued on February 9,
2017 and FSC Document No.
1060004523 issued on February 13,
2017
Standards for Public Company
Acquisition or Disposal of Assets.		 Article 2: Statutory Basis
It is based on the content of Article 36
of Securities and Exchange Act
(hereafter referred to as “the Act”),
Standards for Public Company
Acquisition or Disposal of Assets.		 Adjusted
content in
accordance
with
amendments
in related
laws.
Article 3: Scope of Assets
1. Stocks, bonds, corporate bonds,
financial bonds, beneficiary
certificates, depository receipt, call/put
warrant, beneficial securities,
asset-backed securitization, etc.
2. Real estate (including land,
buildings, investment property,land
usage rights
)and equipment.
3. Membership card.
4. Patent, copyright, trademark right,
franchise and other intangible assets.
5
.Derivatives.
6
.Assets acquired or disposed of
through merger, division, acquisitions
or share transfer in accordance with the
law.
7
.Other important assets.		 Article 3: Scope of Assets
1. Stocks, bonds, corporate bonds,
financial bonds, beneficiary
certificates, depository receipt, call/put
warrant, beneficial securities,
asset-backed securitization, etc.
2. Real estate (including land,
buildings, investment property) and
equipment.
3. Membership card.
4. Patent, copyright, trademark right,
franchise and other intangible assets.
5.Right-of-use assets
6
.Derivatives.
7
.Assets acquired or disposed of
through merger, division, acquisitions
or share transfer in accordance with the
law.
8
.Other important assets.		 Adjusted
content in
accordance
with
amendments
in related
laws.
Article 4 Definition of Terms
1. Derivatives: Refers to forward
contracts, option contracts, futures
contracts, leverage contracts, exchange
contracts derived from assets, interest		 Article 4 Definition of Terms
1. Derivatives: Refers to forward
contracts, option contracts, futures
contracts, leverage contracts, exchange
contracts derived from specified		 Adjusted
content
in
accordance
with
amendments
  • 54 -
Before Amendments After Amendments Description
rates,
exchange rates, index and other
similar commodities, and complicate
contracts from combination of them.
Forward contracts are excluded from
insurance contracts, performance
contracts, post-sale service contracts,
long-term lease contracts and long-term
purchasing (selling) goods contracts.
2.Assets acquired or disposed of
through merger, division, acquisitions
or share transfer in accordance with the
law: Those acquired or disposed of
through
merger,
division
and
acquisition in accordance with the
Mergers
and
Acquisitions
Act,
Financial
Holding
Company
Act,
Financial Institution Merger Act or
other laws, or by acquisitions or share
transfer of new stocks of other
companies (hereafter referred to as
“share exchange”) underClause 8
of
Article 156 of the Company Act.
(omitted below)		 interest rate, financial instrument
price, commodity price,
exchange
rates, index of prices or rates, credit
rating or credit index, or other
variable, and complicated contracts
consisting of a combination of the
above.
Forward contracts are excluded
from insurance contracts, performance
contracts, post-sale service contracts,
long-term lease contracts and long-term
purchasing (selling) goods contracts.
2. Assets acquired or disposed of
through merger, division, acquisitions
or share transfer in accordance with the
law: Those acquired or disposed of
through merger, division and
acquisition in accordance with the
Mergers and Acquisitions Act,
Financial Holding Company Act,
Financial Institution Merger Act or
other laws, or by acquisitions or share
transfer of new stocks of other
companies (hereafter referred to as
“share exchange”) under Article 156-3
of the Company Act.
(omitted below)		 in
related
laws.
Article 5 The limit of non-business
real estate and securities that are
invested by the Company and its
subsidiaries shall be in accordance
with following provisions:
1. Investment limits of the
Company:
(a) The investment
fornon-business real estate
shall
be no more than 20% net value of
the Company.
(b) The total investment of
securities shall be no more than
60% net value of the Company,
and the amount that is invested in
an individual security shall be no
more than 30% net value of the
Company.
2. Investment limits of
subsidiaries:
(a) The investment		 Article 5 The limit of non-business
real estate and securities that are
invested by the Company and its
subsidiaries shall be in accordance
with following provisions:
1. Investment limits of the
Company:
(a) The investment
fornon-business real estate and
right-of-use assets
shall be no
more than 20% net value of the
Company.
(b) The total investment of
securities shall be no more than
60% net value of the Company,
and the amount that is invested in
an individual security shall be no
more than 30% net value of the
Company.
2. Investment limits of
subsidiaries:		 Adjusted
content in
accordance
with
amendments
in related
laws.
  • 55 -
Before Amendments After Amendments Description
fornon-business real estate
shall
be no more than 20% of net value
of the parent company.
(b) The total investment of
securities shall be no more than
60% net value of the parent
company, and the amount that is
invested in an individual security
shall be no more than 30% net
value of the parent company.
The total amount of the investment
in securities is calculated based on
the original cost of the investment.		 (a) The investment
fornon-business real estate and
right-of-use assets
shall be no
more than 20% of net value of the
parent company.
(b) The total investment of
securities shall be no more than
60% net value of the parent
company, and the amount that is
invested in an individual security
shall be no more than 30% net
value of the parent company.
The total amount of the investment
in securities is calculated based on
the original cost of the investment.
Article 6 Appraisal Report or
Opinions
1. Where the Company receives an
appraisal report or opinion from
accountants, lawyers or securities
underwriters, neither any of these
professional agents nor their
appraisers, accountants, lawyers
or securities underwriters shall be
related parties to any transaction.
(omitted below)		 Article 6 Appraisal Report or
Opinions
1. Where the Company receives an
appraisal report or opinion from
accountants, lawyers or securities
underwriters,all of these
professional agents nor their
appraisers, accountants, lawyers
or securities underwriters shall
meet the following requirements:
(a) May not have previously
received a final and
unappealable sentence to
imprisonment for 1 year or
longer for a violation of the Act,
the Company Act, the Banking
Act of The Republic of China,
the Insurance Act, the Financial
Holding Company Act, or the
Business Entity Accounting Act,
or for fraud, breach of trust,
embezzlement, forgery of
documents, or occupational
crime. However, this provision
does not apply if 3 years have
already passed since completion
of service of the sentence, since
expiration of the period of a
suspended sentence, or since a
pardon was received.
(b) May not be a related party
or de facto related party of any		 Adjusted
content in
accordance
with
amendments
in related
laws.
meet
  • 56 -
Before Amendments After Amendments Description
party to the transaction.
(c) If the company is required
to obtain appraisal reports from
two or more professional
appraisers, the different
professional appraisers or
appraisal officers may not be
related parties or de facto
related parties of each other.
When issuing an appraisal report
or opinion, the personnel referred
to in the preceding paragraph
shall comply with the following:
(a) Prior to accepting a case,
they shall prudently assess their
own professional capabilities,
practical experience, and
independence.
(b) When examining a case,
they shall appropriately plan
and execute adequate working
procedures, in order to produce
a conclusion and use the
conclusion as the basis for
issuing the report or opinion.
The related working procedures,
data collected, and conclusion
shall be fully and accurately
specified in the case working
papers.
(c) They shall undertake an
item-by-item evaluation of the
comprehensiveness, accuracy,
and reasonableness of the
sources of data used, the
parameters, and the
information, as the basis for
issuance of the appraisal report
or the opinion.
(d) They shall issue a statement
attesting to the professional
competence and independence of
the personnel who prepared the
report or opinion, and that they
have evaluated and found that
the information used is
reasonable and accurate, and
that they have complied with

shall
  • 57 -
Before Amendments Before Amendments After Amendments Description
applicable laws and regulations.
(omitted below)
Article 7: Procedures for
Acquisition or Disposal of Real
Estate or Equipment
1. Evaluating Procedure:
The Company's assessment of the
acquisition or disposal of real
estate of equipment
shall be
conducted by the asset-carrying
department for the feasibility
assessment report and shall be
approved by the management
department and the Company's
approval authority.
2. Operating Procedure:
(a) In acquiring or disposing of
real estateor equipment
, where
the transaction amounts to 20
percent of the Company's paid-in
capital or NT$300 million or
more, the Company shall obtain
an appraisal report prior to the
date of occurrence of the event
unless the A&D is made with a
government agency, or engages
others to build on its own land, or
engages others to build on a rental
land or the A&D asset is business
equipment. The A&D transaction
shall further comply with the
following provisions:
(1) The transaction shall be
addressed to and pass the board
resolution if it takes limit price,
specific price or special price as
the reference basis of the
transaction price,and it shall be
done in accordance with the
above procedures in case of
change of terms of exchange in
future.
(omitted below)		 Article 7: Procedures for
Acquisition or Disposal ofReal
Estate, Equipment or Right-of-use
Assets
1. Evaluating Procedure:
The Company's assessment of the
acquisition or disposal of real estate,
equipment or right-of-use assets
shall be conducted by the
asset-carrying department for the
feasibility assessment report and
shall be approved by the
management department and the
Company's approval authority.
2. Operating Procedure:
(a) In acquiring or disposing of
real estate, equipment or
right-of-use assets
,where the
transaction amounts to 20 percent
of the Company's paid-in capital
or NT$300 million or more, the
Company shall obtain an appraisal
report prior to the date of
occurrence of the event unless the
A&D is made with adomestic
government agency, or engages
others to build on its own land, or
engages others to build on a rental
land or the A&D asset is business
equipmentor right-of-use asset
.
The A&D transaction shall further
comply with the following
provisions:
(1) The transaction shall be
addressed to and pass the board
resolution if it takes limit price,
specific price or special price as
the reference basis of the
transaction price;the same
procedure shall also be
followed whenever there is any
subsequent change to the
terms and conditions of the
transaction.		 Adjusted
content in
accordance
with
amendments
in related
laws.
  • 58 -
Before Amendments After Amendments Description
(omitted below)
Article 9 Procedure for Acquisition
or Disposal of Intangible Assets
1. Appraisal Procedure
The appraisal of intangible assets
that are acquired or disposed of by
the Company shall be done in the
form of a feasibility report
conducted by the requesting
department, and submitted to
Intellectual Property Unit.
2. Operational Procedure
Professional appraisal institutes
shall be invited to issue appraisal
reports before any acquisition or
disposal of intangible assets; except
for transactions with governmental
agencies, opinions from accountants
on the rationality of the transaction
price shall be obtained before
closing a transaction when the
transaction amount is more than
20% of the paid-up capital or NTD
300 million.
(omitted below)		 Article 9 Procedure for Acquisition
or Disposal of Intangible Assetsor
right-of-use assets thereof or
memberships
1. Appraisal Procedure
The appraisal of intangible assetsor
right-of-use assets thereof or
memberships
that are acquired or
disposed of by the Company shall
be done in the form of a feasibility
report conducted by the requesting
department, and submitted to
Intellectual Property Unit.
2. Operational Procedure
Professional appraisal institutes
shall be invited to issue appraisal
reports before any acquisition or
disposal of intangible assetsor
right-of-use assets thereof or
memberships
;except for
transactions withdomestic
governmental agencies, opinions
from accountants on the rationality
of the transaction price shall be
obtained before closing a
transaction when the transaction
amount is more than 20% of the
paid-up capital or NTD 300 million.
(omitted below)		 Adjusted
content in
accordance
with
amendments
in related
laws.
Article 9-1
Calculation of
Transaction Amount
The calculation of transaction
amount in Articles 7, 8, and 9 shall
be performed according to the
provisions of Section2(e)
of Article
13
.
The referred “within one year” shall
start from the transaction date and
trace back one year. The part
calculated in the appraisal report
from professional appraisers or
opinion from accountant which is
done accordance withprovisions of		 Article 10
Calculation of
Transaction Amount
The calculation of transaction
amount in Articles 7, 8, and 9 shall
be performed according to the
provisions of Section2(g)
ofArticle 14
.
The referred “within one year” shall
start from the transaction date and
trace back one year. The part
calculated in the appraisal report
from professional appraisers or
opinion from accountant which is
done accordance withprovisions of		 Amendment
to article
order.
  • 59 -

Before Amendments After Amendments Description these procedures is excluded. these procedures is excluded. Article 10 Procedure for Related Article 11 Procedure for Related Adjusted Party Transactions Party Transactions content in 1. Appraisal Procedure and 1. Appraisal Procedure and accordance Operation Procedures Operation Procedures with (a) Appraisal procedures and (a) Appraisal procedures and operation procedures by which the operation procedures by which the amendment Company acquires or disposes of Company acquires or disposes of s in related assets from a related party shall be assets from a related party shall be in accordance with Articles 7, 8 or in accordance with Articles 7, 8 or laws. 9 respectively, based on the nature 9 respectively, based on the nature of the assets. Furthermore, if the of the assets. Furthermore, if the transaction amount is more than transaction amount is more than 10% of the paid-up capital of the 10% of the paid-up capital of the Company, appraisal reports shall Company, appraisal reports shall be obtained from professional be obtained from professional appraisers or opinions from appraisers or opinions from accountants in accordance with accountants in accordance with Articles 7, 8, or 9 respectively. Articles 7, 8, or 9 respectively. (b) If the assets disposed of or (b) If the assets disposed of or acquired by the Company from a acquired by the Company from a related party are real estate or not related party are real estate or real real estate but with the transaction property right-of-use assets or amount up to 20% of the paid-up not real estate or real property capital, or 10% of the total assets right-of-use assets but with the or above NTD 300 million, trading transaction amount up to 20% of of bonds or bonds with repurchase the paid-up capital, or 10% of the and resell conditions, purchasing total assets or above NTD 300 or redemption domestic money million, trading of domestic bonds market funds are not subject to this or bonds with repurchase and limit, it is necessary to make resell conditions, purchasing or appraisals for them and prepare all redemption domestic money data according to Section 2(a) of market funds are not subject to this this Article and submit them to the limit, it is necessary to make board for approval and the appraisals for them and prepare all supervisors for recognition data according to Section 2(a) of (c) The calculation of transaction this Article and submit them to the amounts in the two former items board for approval and the shall be performed according to supervisors for recognition the provisions of Section 2(e) of (c) The calculation of transaction Article 13 . The referred to “within amounts in the two former items one year” shall start from the shall be performed according to transaction date and trace back one the provisions of Section 2(g) of year. The part calculated in the Article 14 . The referred to “within appraisal report from professional one year” shall start from the appraisers or the opinion of the transaction date and trace back one accountant performed in year. The part calculated in the

  • 60 -
Before Amendments After Amendments Description
accordance with the provisions of
these procedures or submitted the
board for approval and the
supervisor for recognition is
excluded.
(d) To judge if the transaction
counterpart is within the range of
related party or not, substantial
relationship shall be considered in
addition to the legal form.
2. Determination Procedure for
Authorization Limit
(a) If the real estate or non-real
estate transaction amount up to
20% of the paid-up capital or 10%
of the total assets or above NTD
300 million is acquired from or
disposed of with a related party, it
shall submit following data to the
board for approval and the
supervisor for recognition before
signing any trade contract or
making any payment. However,
for equipment acquired or
disposed between the Company
and its subsidiaries of less than
10% of the paid-up capital, it is
permissible to be approved first by
the chairman and then ratified at
the next board of directors meeting
by submitting the proposal:
(1) Purposes, necessity and
expected benefit for/from the
acquisition or disposal of
assets.
(2) Reasons for choosing the
related party as the transaction
counterpart.
(3) If any real estate is to be
acquired from the related party,
evaluation materials to assess
the reasonableness of the
conditions of scheduled
transactions shall be provided
in accordance with Sections
3(a), 3(b), 3(c), 3(d) and 3(f) of
this Article.
(4) Date andprice of original		 appraisal report from professional
appraisers or the opinion of the
accountant performed in
accordance with the provisions of
these procedures or submitted the
board for approval and the
supervisor for recognition is
excluded.
(d) To judge if the transaction
counterpart is within the range of
related party or not, substantial
relationship shall be considered in
addition to the legal form.
2. Determination Procedure for
Authorization Limit
(a) If the real estateor real
property right-of-use assets
or
non-real estateor real property
right-of-use assets
transaction
amount up to 20% of the paid-up
capital or 10% of the total assets
or above NTD 300 million is
acquired from or disposed of with
a related party, it shall submit
following data to the board for
approval and the supervisor for
recognition before signing any
trade contract or making any
payment. However, for equipment
acquired or disposed, right-of-use
assets or real property
right-of-use assets held for
business use
, between the
Company and its subsidiaries of
less than 10% of the paid-up
capitalor between subsidiaries in
which it directly or indirectly
holds 100 percent of the issued
shares or authorized capital
,it is
permissible to be approved first by
the chairman and then ratified at
the next board of directors meeting
by submitting the proposal:
(1) Purposes, necessity and
expected benefit for/from the
acquisition or disposal of
assets.
(2) Reasons for choosingthe
  • 61 -
Before Amendments After Amendments Description
acquisition by the related party,
the original transaction
counterpart of the related party,
and the relationship between
the original counterpart and the
Company as well as the related
party.
(5) Estimates of the balance
sheet for every month of the
coming year starting from
contract establishment month,
and evaluations of the necessity
of the transaction and the
reasonableness of the use of
funds.
(6) The appraisal report from
professional appraisers or the
opinion from the accountant
shall be performed accordance
with Section 1 of this Article.
(7) Restrictions and other
important covenants for the
transaction
(b) The calculation of transaction
amount provided herein above
shall be done according to
provisions of Section 2(e) of
Article 13
.The referred to “within
one year” shall start from the
transaction date and trace back to
one year. The part which has been
submitted the board for approval
and the supervisor for recognition
is excluded.
(c) Acquiring assets beyond the
mentioned in Section 2(a)(1) from
the related party or disposing of
them shall be done in accordance
with the first three Articles.
3. Reasonable Assessment of
Transaction Cost
(a) When the Company acquires
real estate from related parties it
shall appraise the reasonableness
of the transaction cost in
accordance with the following
procedures:
(1) It is based on the trading		 related party as the transaction
counterpart.
(3) If any real estateor
right-of-use asset
is to be
acquired from the related party,
evaluation materials to assess
the reasonableness of the
conditions of scheduled
transactions shall be provided
in accordance with Sections
3(a), 3(b), 3(c), 3(d) and 3(f) of
this Article.
(4) Date and price of original
acquisition by the related party,
the original transaction
counterpart of the related party,
and the relationship between
the original counterpart and the
Company as well as the related
party.
(5) Estimates of the balance
sheet for every month of the
coming year starting from
contract establishment month,
and evaluations of the necessity
of the transaction and the
reasonableness of the use of
funds.
(6) The appraisal report from
professional appraisers or the
opinion from the accountant
shall be performed accordance
with Section 1 of this Article.
(7) Restrictions and other
important covenants for the
transaction
(b) The calculation of transaction
amount provided herein above
shall be done according to
provisions of Section 2(g) of
Article 14
.The referred to “within
one year” shall start from the
transaction date and trace back to
one year. The part which has been
submitted the board for approval
and the supervisor for recognition
is excluded.
(c) Acquiring assets beyond the
mentioned in Section 2(a)(1)from
  • 62 -
Before Amendments After Amendments Description
price of the related party plus
necessary interests of the
capital and necessary costs on
the buyer. The so-called
necessary interests of capital
are calculated based on
weighted average interests of
annual loans for purchasing the
Company’s assets, but it cannot
be higher than the highest
lending rate of non-financial
industry issued by Ministry of
Finance.
(2) If the related party once
made any loan through
pledging this object to a
financial institution, and the
financial institution has
appraised the total value of this
object for loan granting, the
value can be recognized as long
as the actual loan has exceeded
70% of the total loan value of
this object and the loan period
has exceeded 1 year. However,
this is not applicable if the
financial institution is related to
one of the transaction parties.
(b) When jointly purchasing land
and houses placed thereon, one of
the methods mentioned above
shall be adopted to appraise the
transaction cost respectively for
the land and the houses.
(c) In the case that the real estate
is acquired from a related party,
the cost shall be appraised in
accordance with Sections 3(a) and
3(b) of this Article and
accountants shall be invited to
review and issue specific opinions.
(d) When the appraised values of
real estate acquired by the
Company from the related party
according Sections 3(a) and 3(b)
of this Article are all relatively
lower, it shall be handled
according to Section 3(f) of this
Article. Subject to the following
the related party or disposing of
them shall be done in accordance
with the first three Articles.
3. Reasonable Assessment of
Transaction Cost
(a) When the Company acquires
real estateor real property
right-of-use assets
from related
parties it shall appraise the
reasonableness of the transaction
cost in accordance with the
following procedures:
(1) It is based on the trading
price of the related party plus
necessary interests of the
capital and necessary costs on
the buyer. The so-called
necessary interests of capital
are calculated based on
weighted average interests of
annual loans for purchasing the
Company’s assets, but it cannot
be higher than the highest
lending rate of non-financial
industry issued by Ministry of
Finance.
(2) If the related party once
made any loan through
pledging this object to a
financial institution, and the
financial institution has
appraised the total value of this
object for loan granting, the
value can be recognized as long
as the actual loan has exceeded
70% of the total loan value of
this object and the loan period
has exceeded 1 year. However,
this is not applicable if the
financial institution is related to
one of the transaction parties.
(b) When jointly purchasingor
leasing
land and houses placed
thereon, one of the methods
mentioned above shall be adopted
to appraise the transaction cost
respectively for the land and the
houses.
  • 63 -
Before Amendments After Amendments Description
situations and combined with
objective evidence and reasonable
opinions obtained from
professional appraisers of real
estate and accountants, the limit
herein will be excluded:
(1) In the case that the related
party obtains undeveloped land
or leases the land for
construction, the evidences put
forward by the related party
shall be in accordance with one
of the following requirements:
(i) The undeveloped land
was appraised according to
the provisions of the
preceding Article, but the
buildings have been
appraised based on the
related party’s construction
costs plus reasonable
construction profit and in
combination with the land,
the total exceeds the actual
transaction price. The
referred to reasonable
construction profit shall be
calculated based on the
average operating margin of
the construction sector of the
related party in last three
years or the latest average
operating margin issued by
the Ministry of Finance,
whichever is lower.
(ii) There are cases of
completed transactions by
unrelated parties within the
preceding year involving
other floors of the same
property or property in an
adjacent area in which the
properties are similar in area
and the terms of the
transactions in those cases
are found to be similar after
assessment of reasonable
discrepancies in the prices of
different floors or districts in		 (c) In the case that the real
estateor right-of-use asset
is
acquired from a related party, the
cost shall be appraised in
accordance with Sections 3(a) and
3(b) of this Article and
accountants shall be invited to
review and issue specific opinions.
(d) When the appraised values of
real estateor real property
right-of-use asset
acquired by the
Company from the related party
according Sections 3(a) and 3(b)
of this Article are all relatively
lower, it shall be handled
according to Section 3(f) of this
Article. Subject to the following
situations and combined with
objective evidence and reasonable
opinions obtained from
professional appraisers of real
estate and accountants, the limit
herein will be excluded:
(1) In the case that the related
party obtains undeveloped land
or leases the land for
construction, the evidences put
forward by the related party
shall be in accordance with one
of the following requirements:
(i) The undeveloped land
was appraised according to
the provisions of the
preceding Article, but the
buildings have been
appraised based on the
related party’s construction
costs plus reasonable
construction profit and in
combination with the land,
the total exceeds the actual
transaction price. The
referred to reasonable
construction profit shall be
calculated based on the
average operating margin of
the construction sector of the
related party in last three
years or the latest average
  • 64 -
Before Amendments After Amendments Description
accordance with standard
propertymarket practices.
(iii) There are cases of
leasing transactions
completed by unrelated
parties for other floors of
the same property within
the preceding year in
which the transaction
terms are estimated to be
similar based on
reasonable price
discrepancies among floors
in accordance with
standard property leasing
market practices.
(2) If the Company can prove
that the transaction conditions
are similar to those of
othertransaction cases
of
similar areas in the vicinity
between other parties when the
Company purchased real estate
from the related party. The
above-mentionednearby
transactions
refer to those
which are on the same street or
nearby streets within the
distance of 500 meters of the
target transaction or with
similar current value as
reported; the similar area
acreage refers to that its acreage
shall not be less than 50% of
thetarget transaction
in area;
the above mentioned “within
one year” shall start from the
transaction date to trace back to
one year.
(e) When the appraised values of
real estate acquired by the
Company from related parties
according to Sections 3(a) and 3(b)
of this Article is lower than the
transaction price, the situation
shall be handled in following
manner. Moreover, if the
Company uses the equity method
to account for its investment in		 operating margin issued by
the Ministry of Finance,
whichever is lower.
(ii) There are cases of
completed transactions by
unrelated parties within the
preceding year involving
other floors of the same
property or property in an
adjacent area in which the
properties are similar in area
and the terms of the
transactions in those cases
are found to be similar after
assessment of reasonable
discrepancies in the prices of
different floors or districts in
accordance with standard
propertymarket sale or
leasing practices.
(2) If the Company can prove
that the transaction conditions
are similar to those of
othertransaction cases
of
similar areas in the vicinity
between other parties when the
Company purchased real estate
from the related party. The
above-mentionednearby
transactions
refer to those
which are on the same street or
nearby streets within the
distance of 500 meters of the
target transaction or with
similar current value as
reported; the similar area
acreage refers to that its acreage
shall not be less than 50% of
thetarget transaction
in area;
the above mentioned “within
one year” shall start from the
transaction date to trace back to
one year.
(e) When the appraised values of
real estateor real property
right-of-use assets
acquired by
the Company from related parties
according to Sections 3(a) and
3(b)of this Article is lower than
  • 65 -
Before Amendments After Amendments Description
another company and sets aside a
special reserve according to the
above provision, it may not utilize
the special reserve until it has
recognized a loss on decline in
market value of the assets it
purchased at a premium, or they
have been disposed of, or adequate
compensation has been made, or
the status quo ante has been
restored, or there is other evidence
to confirm there was nothing
unreasonable in the transaction,
and the Financial Supervisory
Commission of the Executive
Yuan has given its consent.
(1) In accordance with the
provisions of Clause 1 of
Article 41 of the Securities and
Exchange Act, a special reserve
shall be set aside based on the
difference between the
transaction price and the
appraised cost, which may not
be distributed or used for
capital increase or issuance of
bonus shares. Where the
Company uses the equity
method to account for its
investment in another company,
then the special reserve called
for under Article 41, paragraph
of the Securities and Exchange
Act shall be set aside pro rata in
a proportion consistent with the
share of the Company's equity
stake in the other company.
(2) Supervisors shall comply
with Article 218 of the
Company Act.
(3) Actions taken pursuant to
Sections 3(e)(1) and 3(e)(2) of
this Article shall be reported to
the shareholders’ meeting, and
the details of the transaction
shall be disclosed in the annual
report and prospectuses.
(f) Acquisition by the Company
of real estate from a relatedparty		 the transaction price, the situation
shall be handled in following
manner. Moreover, if the
Company uses the equity method
to account for its investment in
another company and sets aside a
special reserve according to the
above provision, it may not utilize
the special reserve until it has
recognized a loss on decline in
market value of the assets it
purchasedor leased
at a premium,
or they have been disposed ofor
lease terminated
, or adequate
compensation has been made, or
the status quo ante has been
restored, or there is other evidence
to confirm there was nothing
unreasonable in the transaction,
and the Financial Supervisory
Commission of the Executive
Yuan has given its consent.
(1) In accordance with the
provisions of Clause 1 of
Article 41 of the Securities and
Exchange Act, a special reserve
shall be set aside based on the
difference between the
transaction price and the
appraised costof the real
estate or real property
right-of-use assets
,which may
not be distributed or used for
capital increase or issuance of
bonus shares. Where the
Company uses the equity
method to account for its
investment in another company,
then the special reserve called
for under Article 41, paragraph
of the Securities and Exchange
Act shall be set aside pro rata in
a proportion consistent with the
share of the Company's equity
stake in the other company.
(2) Supervisors shall comply
with Article 218 of the
Company Act.
(3) Actions takenpursuant to
  • 66 -
Before Amendments After Amendments Description
shall be performed in accordance
with the provisions relating to
appraisal procedures and
operational procedures set forth in
Section 2 of this Article; the
provisions relating to appraisal
procedures and operational
procedures in Sections 3(a), 3(b)
and 3(c) of this Article are not
applicable.
(1) Real estate that the related
party obtained through
inheritance or as a gift.
(2) More than five years will
have elapsed from the time the
related party signed the contract
to obtain the real estate to the
signing date for the current
transaction.
(3) The real estate is acquired
by the signing of a joint
development contract with the
related party or ask related
party to construct real estate as
prefectural construction or
rental prefectural construction
on behalf of the Company.
(g) When the Company acquires
real estate from a related party and
any evidence indicates that the
acquisition was not performed in
accordance with operational
conventions, then it shall comply
with Section 3(e) of this Article.		 Sections 3(e)(1) and 3(e)(2) of
this Article shall be reported to
the shareholders’ meeting, and
the details of the transaction
shall be disclosed in the annual
report and prospectuses.
(f) Acquisition by the Company
of real estateor real property
right-of-use assets
from a related
party shall be performed in
accordance with the provisions
relating to appraisal procedures
and operational procedures set
forth in Section 2 of this Article;
the provisions relating to appraisal
procedures and operational
procedures in Sections 3(a), 3(b)
and 3(c) of this Article are not
applicable.
(1) Real estateor real
property right-of-use assets
that the related party obtained
through inheritance or as a gift.
(2) More than five years will
have elapsed from the time the
related party signed the contract
to obtain the real estateor real
property right-of-use assets
to
the signing date for the current
transaction.
(3) The real estate is acquired
by the signing of a joint
development contract with the
related party or ask related
party to construct real estate as
prefectural construction or
rental prefectural construction
on behalf of the Company.
(4) Acquisition of real
property right-of-use assets
held for business use between
the Company and
subsidiaries or subsidiaries in
which it directly or indirectly
holds 100 percent of the
issued shares or authorized
capital.
(g) When the Company acquires
real estateor real property
  • 67 -
Before Amendments After Amendments Description
right-of-use assets
from a related
party and any evidence indicates
that the acquisition was not
performed in accordance with
operational conventions, then it
shall comply with Section 3(e) of
this Article.
Article 11
Procedure for
Acquisition or Disposal of
Derivatives
(omitted below)		 Article 12
Procedure for
Acquisition or Disposal of
Derivatives
(omitted below)		 Amendment
to article
order.
Article 12
Procedures for Merger,
Division, Acquisitions or Transfer
of Shares
(omitted below)		 Article 13
Procedures for Merger,
Division, Acquisitions or Transfer
of Shares
(omitted below)		 Amendment
to
article
order.
Article 13:
Procedures for Public
Disclosure of Information
1. Disclosure Timeline
(omitted)
2. Disclosure Items and Standards
(1) Acquisition or disposal of
real estate with a related party
regardless of its transaction price,
or of assets other than real estate
with a related party for the
transaction price over 20 percent
of the Company’s paid-in capital,
10 percent of the Company’s total
assets or above NT$300 million.
Trading of government bonds,
bonds with call or put options and
subscription or redemption of
money market funds issued by
domestic securities investment
trust companies are excluded
herein.
(2) Merger, Division,
Acquisitions or Shares Transfer
(3) The loss in derivatives
reaches to upper loss limit,
including in total or of an
individual contract as regulated in		 Article 14:
Procedures for Public
Disclosure of Information
1. Disclosure Timeline
(omitted)
2. Disclosure Items and Standards
(1) Acquisition or disposal of
real estateor real property
right-of-use assets
with a related
party regardless of its transaction
price, or of assets other than real
estateor real property
right-of-use assets
with a related
party for the transaction price
over 20 percent of the Company’s
paid-in capital, 10 percent of the
Company’s total assets or above
NT$300 million. Trading of
government bonds, bonds with
call or put options and
subscription or redemption of
money market funds issued by
domestic securities investment
trust companies are excluded
herein.
(2) Merger, Division,
Acquisitions or Shares Transfer
(3) The loss in derivatives		 Adjusted
content in
accordance
with
amendment
s in related
laws.
  • 68 -

Before Amendments

the procedure. (4) Acquisition or disposal of equipment/machinery used for operation, the trading counterparty is not a related party, and the transaction amount is above and inclusive of NT$1 billion.

(5) Acquisition or disposal by a public company in the construction business of real property for construction use, where the trading counterparty is not a related party, and the transaction amount reaches NT$500 million.

(6) Real estates acquired under an arrangement for commissioned construction on self-owned or rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the company expects to invest in the transaction is above and inclusive of NT$500 million.

(7) Any transaction, other than those referred in the preceding six subparagraphs including disposal of receivables by a financial institution or investment in mainland China that reaches 20 percent of the Company’s paid-in capital or exceeds NT$300 million. However, the following circumstances shall not apply:

a. Trading of government bonds.

b. Securities trading by investment professionals on foreign or domestic securities exchanges, over-the-counter markets, and trading of securities and bonds in the domestic primary market.

c. Trading of bonds with call or put options, or subscription or

After Amendments Description
reaches to upper loss limit,
including in total or of an
individual contract as regulated in
the procedure.
(4) Acquisition or disposal of
equipment/machineryor
respective right-of-use
used for
operation, the trading
counterparty is not a related party,
and the transaction amount is
above and inclusive of NT$1
billion.
(5) Real estates acquired under
an arrangement for commissioned
construction on self-owned or
rented land, joint construction and
allocation of housing units, joint
construction and allocation of
ownership percentages, or joint
construction and separate sale,
and respective transaction is not
with a related party,
and the
amount the company expects to
invest in the transaction is above
and inclusive of NT$500 million.
(6) Any transaction, other than
those referred in the preceding six
subparagraphs including disposal
of receivables by a financial
institution or investment in
mainland China that reaches 20
percent of the Company’s paid-in
capital or exceeds NT$300
million. However, the following
circumstances shall not apply:
a. Trading of domestic
government bonds.
b. Trading of bonds with call or
put options, or subscription or
redemption of money market
funds issued by domestic
securities investment trust
companies.
(7) "Within the preceding year"
as used in the preceding four
paragraph refers to the year
preceding the date of occurrence
of the current transaction. Items
dulyannounced in accordance
  • 69 -
Before Amendments After Amendments Description
redemption of money market
funds issued by domestic
securities investment trust
companies.
(8) "Within the preceding year"
as used in the preceding four
paragraph refers to the year
preceding the date of occurrence
of the current transaction. Items
duly announced in accordance
with these Regulations need not
be counted toward the transaction
amount.
a. The amount of any individual
transaction.
b. The cumulative transaction
amount of acquisitions and
disposals of the same type of
underlying asset with the same
trading counterparty within the
preceding year.
c. The cumulative transaction
amount of real property
acquisitions and disposals
(cumulative acquisitions and
disposals, respectively) within
the same development project
within the preceding year.
d. The cumulative transaction
amount of acquisitions and
disposals (cumulative
acquisitions and disposals,
respectively) of the same
security within the preceding
year.
(omitted below)		 with these Regulations need not
be counted toward the transaction
amount.
a. The amount of any individual
transaction.
b. The cumulative transaction
amount of acquisitions and
disposals of the same type of
underlying asset with the same
trading counterparty within the
preceding year.
c. The cumulative transaction
amount of real propertyor real
property right-of-use asset
acquisitions and disposals
(cumulative acquisitions and
disposals, respectively) within
the same development project
within the preceding year.
d. The cumulative transaction
amount of acquisitions and
disposals (cumulative
acquisitions and disposals,
respectively) of the same
security within the preceding
year.
(omitted below)
Article 14
Subsidiaries of the
Company shall behave according to
following regulations:
1. Subsidiaries shall be in
accordance with Standards for
Public Company Acquisition or
Disposal of Assets in establishing
and implementing “Procedures for
Acquiringor Disposal of Assets.” If		 Article 15
Subsidiaries of the
Company shall behave according to
following regulations:
1. Subsidiaries shall be in
accordance with Standards for
Public Company Acquisition or
Disposal of Assets in establishing
and implementing “Procedures for
Acquiringor Disposal of Assets.” If		 Adjusted
content in
accordance
with
amendments
in related
laws.
  • 70 -
Before Amendments After Amendments Description
the subsidiary is not a public
company, the formation of a
procedure and its amendment shall
be passed by the board of directors
of the subsidiary; if the subsidiary is
a public company, the formation of
these procedures shall be in
accordance with Standards for
Public Company Acquisition or
Disposal of Assets.
2. If the subsidiary is not a public
company but reaches to the
standards of announcement and
report regulated in Article 12
of
“Standards for Public Company
Acquisition or Disposal of Assets,”
the Company shall make an
announcement for the subsidiary.
3. In the subsidiary’s standards of
announcement and report, the
referred to“20% of the
Company’s paid-up capital,” or
“10% of the Company’s total
assets” is based on the Company’s
paid-up capital or total assets.		 the subsidiary is not a public
company, the formation of a
procedure and its amendment shall
be passed by the board of
directorsand shareholder
approval
of the subsidiary; if the
subsidiary is a public company, the
formation of these procedures shall
be in accordance with Standards for
Public Company Acquisition or
Disposal of Assets.
2. If the subsidiary is not a public
company but reaches to the
standards of announcement and
report regulated in Article 31
of
“Standards for Public Company
Acquisition or Disposal of Assets,”
the Company shall make an
announcement for the subsidiary.
3. In the subsidiary’s standards of
announcement and report,
“Company’s paid-up capital,”
“Company’s total assets” should be
evaluated.
Article 15
Penalty
(omitted below)		 Article 16
Penalty
(omitted below)		 Amendment
to
article
order.
Article 16
Implementation and
Revision
(omitted below)		 Article 17
Implementation and
Revision
(omitted below)		 Amendment
to
article
order.
Article 17
Supplementary Articles
(omitted below)		 Article 18
Supplementary Articles
(omitted below)		 Amendment
to
article
order.
  • 71 -

Attachment 6

FOXCONN TECHNOLOGY CO., LTD.

Amendments to the Company’s “Operational Procedures for Lending Funds to Others” Comparison Table

Before Amendments After Amendments Description
Article 3 Definitions
1~3Omit
4.
The term “date of
occurrence” in this
procedure, which means
thetransaction signing
date
,payment date, the
date of resolution of the
Board of Directors or
other information that is
sufficient to determine the
date of thetransaction
object
and the date of the
transaction amount,
whichever is earlier.		 Article 3 Definitions
1~3Omit
4.
The term “date of
occurrence” in this
procedure, which means
thesigning date
,payment
date, the date of resolution
of the Board of Directors
or other information that
is sufficient to determine
the date of
thecounterparts of the
loan
and the date of the
transaction amount,
whichever is earlier.		 In accordance with
amendments made to the
“Regulations Governing
Loaning of Funds and
Making of
Endorsements/Guarantees
by Public Companies” by
the FSC.
Article 4 Lending
Counterparts
1~3 Omit
4.
Foreign
companies,
of
which
the
Company
directly
or
indirectly
controls 100% of the
voting shares, if engaged
in thelending business
,
will be exempt from the
restrictions referred to in
the
preceding
Section
1(b).		 Article 4 Lending
Counterparts
1~3 Omit
4.
Foreign
companies,
of
which
the
Company
directly
or
indirectly
controls 100% of the
voting shares, if engaged
in the lending business,or
when lending to the
Company,
will be exempt
from
the
restrictions
referred
to
in
the
preceding Section 1(b).		 In accordance with
amendments made to the
“Regulations Governing
Loaning of Funds and
Making of
Endorsements/Guarantees
by Public Companies” by
the FSC.
  • 72 -
Before Amendments After Amendments Description
Article
5
Total
Lending
Amount
and
Financing Limit for
Individual Entities
1~3 Omit
4.
The net value mentioned
above is subject to the
data
in
the
financial
statements most recently
reviewed by the CPA.		 Article
5
Total
Lending
Amount
and
Financing Limit for
Individual Entities
1~3Omit
4.
Foreign companies, of
which
the
Company
directly
or
indirectly
controls 100% of the
voting shares, if engaged
in the lending to the
Company,
such
financing amount shall
not exceed 40% of the
Company’s net worth, or
individually not exceed
20% of the Company’s
net worth.
5.
The net value mentioned
above is subject to the
data
in
the
financial
statements most recently
reviewed by the CPA.		 In accordance with
amendments made to the
“Regulations Governing
Loaning of Funds and
Making of
Endorsements/Guarantees
by Public Companies” by
the FSC.
Article 11 Penalty
In accordance with the
Company’s personnel
management regulations and
employee handbook, managers
and persons-in-charge who
violate these procedures shall be
punished based on the severity
of violation.
Article 11 Penalty
1. In accordance with the
Company’s personnel
management regulations and
employee handbook, managers
and persons-in-charge who
violate these procedures shall be
punished based on the severity
of violation.
2. The responsible person of
a company who has violated
Article 4 shall be liable,
jointly and severally with the
borrower, for the repayment
of the loan at issue and for the
In accordance with
amendments made to the
“Regulations Governing
Loaning of Funds and
Making of
Endorsements/Guarantees
by Public Companies” by
the FSC.
damages, if any, to company
resulted there-from.
Article 12 Other Matters
1. These procedures and their		 Article 12 Other Matters
1. These procedures and their		 In accordance with
amendments made to the
“Regulations Governing
  • 73 -
Before Amendments After Amendments Description
amendments shall be approved
by the board of directors and
then sent to all supervisors and
proposed at the shareholders’
meeting for approval. If any
director expresses objection on
the record or in a written
statement, the Company shall
submit the objection to the
supervisors and the
shareholders’ meeting for
discussion.
2. If the Company has
established independent
directors, it shall consider the
dissenting opinions from all
independent directors fully
and list the consenting and
objecting opinions and their
reasons in the meeting
minutes of the board of
directors.
3. A subsidiary subject to
Article 2 of these procedures
shall have its operational
procedures for lending practices
and any amendments thereto
approved by aresolution of the
board of directors
of the
subsidiary.		 amendments shall be
approvedby one-half or more
of the audit committee
members and approved by the		 Loaning of Funds and
Making of
Endorsements/Guarantees
by Public Companies” by
the FSC.

board of directors and then
proposed at the shareholders’
meeting for approval. If any
director expresses objection on
the record or in a written
statement, the Company shall
submit the objection to
theaudit committee
and the
shareholders’ meeting for
discussion.
2. If a matter set out
previously has not been
consented to by one-half or
more of the entire
membership of the audit
committee, it may be adopted
with the consent of two-thirds
or more of all directors, and
the audit committee’s
resolution recorded in the
board meeting minutes.
3. The terms "audit committee
members" in paragraph 1 and
"all directors" in the preceding
paragraph shall be counted as
the actual number of persons
currently holding those
positions.
4. A subsidiary subject to
Article 2 of these procedures
shall have its operational
procedures for lending practices
and any amendments thereto
approved by aresolution of the
board of directors of the
subsidiary, and proposed for
shareholder approval.
  • 74 -

Attachment 7

FOXCONN TECHNOLOGY CO., LTD.

Amendments to the Company’s “Procedures for Endorsement & Guarantees” Comparison

Table

Before Amendments After Amendments Description
Article 3 Definitions 1.
1~3 Omit
4. The term “date of
occurrence” in these
procedures means the
transaction signing date,
payment date, the date of
resolution of the Board
of Directors or other
information that is
sufficient to determine
the date of
thetransaction object
and the date of the
transaction amount,
whichever is the earlier.		 Article 3 Definitions 1.
1~3 Omit
4. The term “date of
occurrence” in these
procedures means the
transaction signing date,
payment date, the date of
resolution of the Board of
Directors or other
information that is sufficient
to determine the date of
theendorsement &
guarantees counterpart
and
the date of the transaction
amount, whichever is the
earlier.		 In accordance with
amendments made to the
“Regulations Governing
Loaning of Funds and
Making of
Endorsements/Guarantees
by Public Companies” by
the FSC.
Article 6 Limits on
Endorsements and
Guarantees
1~4 Omit
5.
The net value mentioned
above is subject to the
latest financial
statements most
recently reviewed by
the CPA.		 Article 6 Limits on
Endorsements and
Guarantees
1~4 Omit
5. In the event that an
endorsement/guarantee is
made due to needs arising out
of business transaction, the
amount of any single
endorsement/guarantee shall
not exceed the amount of the
business transaction between
the parties. The phrase
“amount of the business
transaction” shall mean the
amount of purchases or sales
between the parties in the most		 Addition of Clause 5 for
clarity and in accordance
of applicable laws.

recent year, whichever is
higher, and shall not exceed
20% of the net worth as stated
in the latest financial
statements of the Company.
  • 75 -
Before Amendments After Amendments Description
6.
The net value mentioned
above is subject to the
latest financial statements
most recently reviewed by
the CPA.
Article 9 Information
Disclosure
1. Omit
2. If the balance of
endorsements and/or
guarantees meets one of
the following levels, the
Company shall announce
and report such event
within two days of the
occurrence, the date of
occurrence to be counted
as the first day:
(a)(b) Omit
(c) The balance of
endorsements and/or
guarantees by the Company
and its subsidiaries for an
individual enterprise is more
than NT$10 million or the
aggregate amount of all
endorsements and/or
guarantees for long-term
nature of investments in
,
and balance of loans to, such
enterprise reaches 30% of the
Company’s net value as
stated in its latest financial
statement.
(omitted below)
Article 9 Information Disclosure
1. Omit
2.
If
the
balance
of
endorsements
and/or
guarantees meets one of
the following levels, the
Company shall announce
and
report
such
event
within two days of the
occurrence, the date of
occurrence to be counted
as the first day:
(a)(b) Omit
(c) The balance of endorsements
and/or
guarantees
by
the
Company and its subsidiaries for
an individual enterprise is more
than NT$10 million or the
aggregate
amount
of
all
endorsements and/or guarantees
for amounts accounted for
using the equity method
,and
balance
of
loans
to,
such
enterprise reaches 30% of the
Company’s net value as stated in
its latest financial statement.
(omitted below)
In accordance with
amendments made to the
“Regulations Governing
Loaning of Funds and
Making of
Endorsements/Guarantees
by Public Companies” by
the FSC.
Article 12 Other Matters
1. These procedures shall be
approved by the board of
directors, all supervisors
and
the shareholders’
meeting. Any amendment
hereto is subject to the same
procedures.
If any director expresses
objection on the record or in
a written statement,the		 Article 12 Other Matters
1. These procedures shall be
approved byhalf or more of all
Audit Committee members, the
In accordance with
amendments made to the
“Regulations Governing
Loaning of Funds and
Making of
Endorsements/Guarantees
by Public Companies” by
the FSC.

Board of Directors for and
the
shareholders’ meeting. Any
amendment hereto is subject to
the same procedures.
If any director expresses
objection on the record or in a
written statement,the Company
  • 76 -
Before Amendments After Amendments Description
Company shall submit the
objection to the supervisors
and the shareholders’
meeting for discussion.
2. If the Company has
established independent
directors, it shall consider
the dissenting opinions
from all independent
directors fully and list the
consenting and objecting
opinions and their reasons
in the meeting minutes of
the board of directors.
3.
A subsidiary subject to
Article 2 of these procedures
shall have its procedures for
endorsements and guarantees
and any amendments thereto
approved by a resolution of
the board of directors of the
subsidiary.		 shall submit the objection to
theAudit Committee
and the
shareholders’ meeting for
discussion.
2. When, in accordance with
relevant rules and regulations,
endorsement/guarantee
transaction is required to
submit to the Board of
Directors for resolution, such
case shall be approved by half
or more of all Audit Committee
members before submitting to
the Board of Directors for a
resolution. If approval of half
or more of all Audit Committee
members is not obtained, the
procedures may be
implemented if approved by
two-thirds or more of all
directors, and the resolution of
the Audit Committee shall be
recorded in the minutes of the
Board of Directors meeting.
3. The terms"all audit
committee members" and"all
directors" in clause 1 shall be
counted as the actual number
of persons currently holding
those positions.
4.
A subsidiary subject to Article
2 of these procedures shall have
its procedures for endorsements
and guarantees and any
amendments thereto approved by
a resolution of the board of
directors of the subsidiary, then
approved by the shareholders’
meeting before
implementation.
  • 77 -

Attachment 8

FOXCONN TECHNOLOGY CO., LTD.

Amendments to the Company’s “Policies and Procedures for Financial Derivates Transactions” Comparison Table

Before Amendments After Amendments Description
Article 2 Statutory Basis
1. “Regulations Governing the
Acquisition and Disposal of Assets
by Public Companies” issued by
“Financial Supervisory
Commission” order #1020053073 on		 Article 2 Statutory Basis
Pursuant to standards set forth by
Article 36-1 of the Securities and
Exchange Act, and Regulations
Governing the Acquisition and
Disposal of Assets by Public
Companies.		 Amended
in
accordance
of relevant
regulations.
December 30, 2013
2. “International Accounting
Standard No. 39“Financial
Instruments: Recognition and
Measurement” approved by
“Financial Supervisory
Commission” order #1030010325 on
April 3, 2014
3. “International Accounting
Standard No. 32“Financial
Instruments: Expression” approved

by“Financial Supervisory
Commission” order #1030010325 on
April 3, 2014
4. “International Accounting
Standard No. 7“Financial
Instruments: Expose” approved by
“Financial Supervisory
Commission” order #1030010325 on
April 3, 2014.
Article 4 Principles and Guidelines
1. Category of trade: categories of the
derivatives transactions the
Company can engage in can be
divided as follows:
(omitted below)
3. Division of Responsibilities		 Article 4 Principles and Guidelines
1. Category of trade: categories of the
derivatives transactions the
Company can engage in can be
divided as follows:
(omitted below)
3. Division of Responsibilities		 Clear
definitions
of
supervisory
and control
roles.
  • 78 -
Before Amendments After Amendments Description
a. Board of Directors:
i.
Make decisions concerning
formulation and amendment of
these procedures.
ii.
Assign senior executives to
supervise and control the risks of
derivatives trading described
herein at any time, and to sign
the relevant contracts and
handle account matters on
behalf of the Company.
a. Board of Directors:
i.
Make decisions concerning
formulation and amendment of
these procedures.
ii.
Assign senior executives to
supervise and control the risks of
derivatives trading described
herein at any time.
  • 79 -

Attachment 9

Foxconn Technology CO., LTD.

The list of the Company's director candidates (including independent directors)


directors)
Type Candidat
e Name		 Educational
Background		 Past Experience Title Shareholdi
ng (shares)
Dire
ctor		 Hyield
Venture
Capital
Ltd.
Hung
Chih-Ch
ien		 Master’s
degree
in
Mechanical
Engineering
,
National
Central
University

Senior associate manager of
Foxconn Technology Co.,
Ltd.		 Chairman and Deputy
general manager of
Foxconn Technology
Co., Ltd.		 85,003,766
Direc
tor		 Hyield
Venture
Capital
Ltd.
Cheng
Fang-Yi		 Bachelor’s
degree
in
Business
Administrat
ion, Fu Jen
Catholic
University.

Production manager/IE
manager of Chunghwa
Picture Tubes, Ltd.
General manager of CPTF
Visual Display (Fuzhou)
Ltd., and Chief Operating
Officer and quality assurance
manager of Chunghwa
Picture Tubes (Malaysia)
Sdn. Bhd.		 General Manager of
the Super Precision
Mechanical Business
Group, Hon Hai
Precision Industry
Ltd.		 85,003,766
Direc
tor		 Tsai
Hsin
Internati
onal
Investm
ent Co.,
Ltd.
Lee
Han-Mi
ng
Bachelor’s
degree
in
Industrial
Design,
National
Cheng
Kung
University
Director of Foxconn
Technology Co., Ltd.		 General Manager of
Foxconn Technology
Co., Ltd.		 45,230
Direc
tor		 Tsai
Hsin
Internati
onal
Investm
ent Co.,
Ltd.
Li
Hsuei-K
un		 Associate
degree
in
Mechanical
Engineering
,
National
Taipei
University
of
Technology.


Associate manager of
Foxconn Technology Co.,
Ltd.		 Chairman and Deputy
general manager of
Foxconn Technology
Co., Ltd.		 45,230
Indep
ende
nt		 Lin
Son-Shu		 Master’s
degree
in
Accounting,
Deputy manager of KPMG.
Partnership accountant and		 Independent director,
member of the audit		 0
  • 80 -
Type Candidat
e Name		 Educational
Background		 Past Experience Title Shareholdi
ng (shares)
Direc
tor		 National
Taiwan
University.		 director of Dinkum &
CPAs
Member of the tax
committee ,CPA
Associations R.O.C.(Taiwan)
Adjunct lecturer of National
Taiwan University School of
Professional Education and
Continuing Studies
Lecturer of small Business
Integrated Assistance Center		 committee and member
of the remuneration
committee of Foxconn
Technology Co., Ltd.
Independent Directo of
Genie Networks
Limited
Director, tax manager
and partnership
accountant of Crowe
Horwath International
Indep
ende
nt
Direc
tor		 Chen
Yao-Chi
ng		 Bachelor’s
degree
in
Cooperative
Economics
and
Social
Entrepreneu
rship, Feng
Chia
University


Chief controller and deputy
general manager of the
procurement department in
Ford Lio Ho Motor Ltd.		 Independent director
and member of the
remuneration
committee of Foxconn
Technology Co., Ltd.
Deputy Chairman of
Guangzhou Changjun
Auto Technology
Ltd.		 0
Indep
ende
nt
Direc
tor		 Yo
Hsiang-
Tun		 Bachelor’s
degree
in
Business
Studies,
Keio
University
Deputy manager of
International Office in Daiwa
Securities Ltd.
Legal department manager
of Prudential Securities
(Japan) Ltd.
Trust department manager of
Merrill Lynch Japan
Securities Ltd.
General manager of
Yamaichi Merchant Bank
Singapore Ltd.
International trade manager
of Yamaichi Securities Ltd.		 Independent director,
member of the audit
committee and member
of the remuneration
committee of Foxconn
Technology Co., Ltd.
Director of General
Interface Solution
(GIS) Holding
Limited.
Independent director,
member of the audit
committee and member
of the remuneration
committee of
Advanced
Optoelectronic
TechnologyInc.		 7,177
  • 81 -

Appendix 1

FOXCONN TECHNOLOGY CO., LTD.

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

  • 82 -

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’
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.
  • 83 -
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.
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

  • 84 -

  • 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.

  • 85 -

Appendix 2

FOXCONN TECHNOLOGY CO., LTD. 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.

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

Article 3 The Company is headquartered in New Taipei City, Taiwan and when necessary may establish branches or subsidiaries at home and abroad

  • 86 -

according to resolutions by the board of directors.

  • 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.

  • Article 11 Unless otherwise provided by applicable law or regulation, a resolution - 87 -

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,

  • 88 -

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 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

  • 89 -

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 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 1 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 2 The Company may provide endorsements and guarantees and act as a guarantor. Article 3 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 4 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..

  • 90 -

Appendix 3

Foxconn Technology CO., LTD. Procedures of election of directors

Article 1: Elections of directors shall be conducted in accordance with these Procedures.

  • Article 2: For the elections of directors, except as otherwise provided by law, each share will have voting rights in numbers equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.

  • Article 3: Before the election begins, the Chair shall appoint a number of persons with shareholder status to perform the respective duties of vote monitoring and counting personnel.

  • Article 4: (I) The number of directors will be as specified in this Corporation's Articles of Incorporation, with voting rights separately calculated for independent and non-independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective number of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.

  • (II) Elections of directors shall be conducted in accordance with the candidate nomination system under Article 192 of the Companies Act.

    • Independent directors and non-independent directors should be elected together, and voting rights should be separately calculated for independent and non-independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective number of votes.

  • Article 5: The Board of Directors shall prepare separate ballots for directors in numbers corresponding to the directors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting.

  • Article 6: A voter can select a candidate in the Company’s “List of

  • 91 -

Candidates” at the “candidate” column of the ballot. Except for voting rights that are exercised by shareholders electronically.

Article 7: A ballot is invalid under any of the following circumstances:

(I) The ballot was not prepared in accordance with article 5 of the regulation.

(II) The ballot is not placed in the ballot box.

(III) A blank ballot is placed in the ballot box.

(IV) Two or more candidates are entered in the ballot.

(V) The writing is unclear and indecipherable.

(VI) Other words are entered in addition to the candidate's information in the candidate list adopted by the Company.

(VII) The number of persons enrolled is greater than the number of persons to be elected.

(VIII) The sum of the electoral powers cast by the elector exceeds the sum of the electoral powers held by him.

Article 8: The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation shall be announced by the Chair on the site.

Article 9: The Board of Directors of this Corporation shall issue notifications to the persons elected as directors.

Article 10: These Rules shall be implemented after adoption by shareholders’ meetings.

  • 92 -

Appendix 4

FOXCONN TECHNOLOGY CO., LTD.

Shareholdings of Directors

  1. As of 04/23/2019, all directors’ minimum shareholding number and actually registered holding 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

2. As of 04/23/2019, 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
Ltd.
Representative: Dai Feng-Yuan		 45,230
Director Caixin International Investment
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
  • 93 -

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