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WEC AGM Information 2016

Jul 5, 2016

52017_rns_2016-07-05_403b52d5-484e-4503-b5cf-5f0a8c4386c4.pdf

AGM Information

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Stock Code: 2344

(English Translation)

Winbond Electronics Corporation

2016 Annual General Shareholders Meeting Agenda Handbook[1]

Date: June 16, 2016 Time: 9:00 A.M. Place: Room 102, No. 4, Creation Rd. III, Hsinchu Science Park, Taiwan, R.O.C.

1 This translation is for reference only. In the event of any discrepancy between the Chinese version and this translation, the Chinese version shall prevail.

  • 1 -

INDEX

  • I. Table of Meeting Procedure and Agenda

  • II. Attachments

  • Comparison Chart of the Amendment to Articles of Incorporation

  • 2015 Business Report and Financial Statements

  • Independent Auditors’ Report

  • Supervisors’ Review Report

  • Implementation of Share Buyback Program

  • Shareholdings of All Directors and Supervisors of the Tenth Term

III. Appendices

  1. Rules Governing the Conduct of Shareholders Meeting

  2. Articles of Incorporation

  3. 2 -

Procedure and Agenda for the 2016 Annual General Meeting of Shareholders

  • I. Announcement of the Commencement of the Meeting

  • II. Opening Speech of the Chairman

  • III. Meeting Agenda

  • A. Matter to be discussed

    1. To discuss the amendment of the Articles of Incorporation of the Company

Voting by Poll:

  • B. Matters to be reported

    1. Business report of fiscal year 2015

    2. The 2015 supervisors’ review report

    3. Report of remuneration of employees, directors and supervisors for fiscal year 2015

    4. Other matters to be reported

  • C. Matters to be acknowledged and discussed

  • To acknowledge and recognize business report and financial statements of fiscal year 2015

  • To acknowledge and recognize the proposal for distribution of 2015 profit

    1. To discuss the release of directors from the non-competition restriction Voting by Poll:

IV. Other Matters and Motions

  • V. Adjournment

  • 3 -

Matter to be discussed

Motion 1 : (proposed by the Board of Directors)

Proposal: It is proposed to amend the Company's Articles of Incorporation. Please review and approve the same. Explanation:

  1. It is conducted in accordance with the letter issued by the Ministry of Economic Affairs on June 11, 2015 (Jin-Shen-Tze-No. 10402413890) and for practical needs.

  2. Please refer to Attachment 1 for the comparison chart of the articles proposed to be amended.

Voting by Poll:

Matters to be reported

  1. Business report of fiscal year 2015

  2. Both the business report and the financial statements of fiscal year 2015 are hereby presented (please refer to Attachment 2 for details). Please examine. To be reported by General Manager.

  3. The 2015 supervisors’ review report

  4. The 2015 supervisors’ review report is hereby presented (please refer to Attachment 4 for details). Please examine. To be reported by supervisor.

  5. Report of remuneration of employees, directors and supervisors for fiscal year 2015. After deducting the accumulated losses from the profit of the Company audited by the certified public accounts for 2015, it is proposed to, in accordance with Article 22 of the Company's Articles of Incorporation as being resolved to be amended by this 2016 Annual General Meeting of Shareholders, allot 1% of the balance to be the remuneration of directors and supervisors, which is NT$28,475,168 in total, and to allot 1% of the balance to be the remuneration of employees, which is NT$28,475,168 in total. The above amounts will all be paid in cash. The aforesaid ratios and amounts for allocation have been approved by each the Company's Compensation Committee and Board of Directors.

  6. Other matters to be reported

  7. (1) Implementation of share buyback programs previously approved by the respective Tenth and Eleventh Meetings of the Board of Directors of the Tenth Term (please refer to Attachment 5 for details).

  8. (2) Report on shareholdings of all directors and supervisors

    • a. In accordance with Article 26 of the Securities and Exchange Act and the Rules and Review Procedures for Share Ownership Ratios of Directors and Supervisors of Public Companies: (a) The minimum combined shareholding of all directors required by laws and regulations is 85,920,005 shares.

      • (b) The minimum combined shareholding of all supervisors required by laws and regulations is 8,592,001 shares.

    • b. Please refer to Attachment 6 for the shareholding of each director and supervisor and the shareholdings of all directors and supervisors as of the record date for determining the shareholders eligible to attend this annul general shareholders meeting.

    • c. The aggregate shareholdings of all directors and supervisors meet the minimum

  9. 4 -

shareholding required by laws and regulations.

  • (3) During the period for accepting shareholders' proposals (from April 8, 2016 to April 18, 2016), no shareholder submitted any written proposal to the Company for the 2016 annual general shareholders meeting in accordance with Article 172-1 of the Company Act .

Matters to be acknowledged and discussed

Motion 1 : (proposed by the Board of Directors)

Proposal: The business report and financial statements of fiscal year 2015 are hereby presented. Please acknowledge and recognize the same. Explanation:

  1. Please refer to Attachment 2 for the business report and financial statements of fiscal year 2015.

  2. The aforementioned financial statements have been approved by the Thirteenth Meeting of the Board of Directors of the Tenth Term and after audited by the certified public accountants, together with the business report, have been submitted to and reviewed by the supervisors.

Motion 2 : (proposed by the Board of Directors)

Proposal: The proposal for distribution of 2015 profit of the Company is presented. Please acknowledge and recognize the same. Explanation:

  1. The Company has a net profit after tax of NT$3,291,251,169 for the year of 2015. The proposed statement of profit distribution is as follows.

  2. The proposal was approved by the Fourteenth Meeting of the Board of Directors of the Tenth Term.

Winbond Electronics Corporation

Statement of Profit Distribution For the year ended December 31, 2015

(Unit：NT$)
Items Total
Accumulated Deficit, Beginning of Year (1,119,684,661)
Minus：Losses on Remeasurement of Defined Benefit Plans (85,507,056)
Plus：Net Income of 2015 3,291,251,169
Minus：10% Legal Reserve Appropriated (208,605,945)
Minus：Special Reserve Appropriated (1,395,063,216)
482,390,291
Retained Earnings Available for Distribution as of December 31, 2015
Distributable items: (358,000,019)
Cash Dividends to Common Shares (NT$0.1 per share) (Note)
Unappropriated Retained Earnings, End of Year
124,390,272

(Note: Cash dividends will be calculated and distributed in whole New Taiwan Dollar. Any fractional amount less than one New Taiwan Dollar will be accounted in the Company's other income.) Chairman: Arthur Yu-Cheng Chiao

Manager: Tung-Yi Chan

Chief Accountant: Jessica Chiou-Jii Huang

  • 5 -

Motion 3 : (proposed by the Board of Directors)

Proposal: It is proposed to release the directors of the Company from the non-competition restrictions. Please review and approve the same.

Explanation:

  1. It is conducted in accordance with Paragraph 1 of Article 209 of the Company Act which provides that "A director who acts for himself/herself or on behalf of another person in a manner that is within the scope of the company's business shall explain to the shareholders meeting the essential contents of such act and secure its approval."

  2. Mr. Hui-Ming Cheng, the representative of the corporate director of the Company, has been a director of a company that engages in the same business as that of the Company as described below: From March 1, 2015, Mr. Hui-Ming Cheng was the representative of the corporate director of Gogoro Taiwan Limited, a company that engages in the same business as that of the Company. Gogoro Taiwan Limited mainly engages in electronic parts and components manufacturing, product design and international trade, same as the Company.

  3. Mr. Jerry Hsu, an independent director of the Company, has been a director of companies that engage in the same business as that of the Company as described below:

  4. (a) Since June 22, 2015, Mr. Jerry Hsu has been a director of PChome Online Inc., a company that engages in the same business as that of the Company. PChome Online Inc. mainly engages in international trade, software design services, data processing services and product design, same as the Company.

  5. (b) Since June 25, 2015, Mr. Jerry Hsu has been an independent director of Sirtec International Co., Ltd., a company that engages in the same business as that of the Company. Sirtec International Co., Ltd. mainly engages in electronic parts and components manufacturing, computers and computing peripheral equipment manufacturing and international trade, same as the Company.

It is proposed to release each Mr. Hui-Ming Cheng and Mr. Jerry Hsu from the non-competition restrictions starting from the date when he became a director of the above companies and waive the Company's right to request disgorgement of profits against him at the same date.

Voting by Poll :

Other Extemporary Matters and Motions

Meeting Adjourned

  • 6 -

Attachment

  • 7 -

Attachment 1

Winbond Electronics Corporation Comparison Table of the Amendments to the Articles of Incorporation

Article No. Article After Amendment Article Before Amendment Note
Article 8 The transfer, registration, loss or
destruction of share certificates shall
be handled in accordance with the
Company
Act
and
relevant
regulations.		 The transfer, registration, loss or
destruction of share certificates shall
be handled in accordance with the
Company
Act
and
relevant
regulations.
~~Taiwan~~
~~Securities~~
~~Central Depository Co., Ltd. may~~
~~request the Company to combine its~~
~~share certificates in exchange for~~
~~issuance of share certificates of large~~
~~denomination.~~		 Amended based on
actual needs.
~~ssuance o sare cercae~~
~~denomination.~~
Article 13 The Company shall havenineto
elevendirectors, among whom
there should be not less thanthree
independent directors accounting
for not less than one-fifth of the
total number of directors, and two
to three supervisors whose term of
office is three years. Election of
directors and supervisors shall
adopt the candidates nomination
system prescribed in Article 192-1
of the Company Act. All of the
directors and the supervisors are
elected
by
the
shareholders'
meeting from the candidate list of
directors and supervisors, and are
eligible
for
re-election.
Independent and non-independent
directors shall be elected at the
same time, but the quota shall be
calculated separately.
The
method
of
candidate
nomination and election of director
and
supervisor,
professional
qualifications,
requirements
relating
to
shareholdings,
restrictions on concurrent positions
held, and other compliance matters
with
respect
to
independent
directors shall conform to the
Company Act, the Securities and
Exchange Act, and other relevant
rules and regulations.
The aggregate number of shares of
nominal stock held by all the
directors and supervisors shall not
be
less
than
the
percentage







The Company shall havesevento
ninedirectors, among whom there
should be not less thantwo
independent directors accounting
for not less than one-fifth of the
total number of directors, and two
to three supervisors whose term of
office is three years. Election of
directors and supervisors shall
adopt the candidates nomination
system prescribed in Article 192-1
of the Company Act. All of the
directors and the supervisors are
elected
by
the
shareholders'
meeting from the candidate list of
directors and supervisors, and are
eligible
for
re-election.
Independent and non-independent
directors shall be elected at the
same time, but the quota shall be
calculated separately.
The
method
of
candidate
nomination and election of director
and
supervisor,
professional
qualifications,
requirements
relating
to
shareholdings,
restrictions on concurrent positions
held, and other compliance matters
with
respect
to
independent
directors shall conform to the
Company Act, the Securities and
Exchange Act, and other relevant
rules and regulations.
The aggregate number of shares of
nominal stock held by all the
directors and supervisors shall not
be
less
than
the
percentage		 1. The first
Paragraph is
amended to
establish an audit
committee as
required by laws
and regulations and
to change the
number of seats of
directors and
independent
directors based on
actual needs.
2. The fourth and
fifth Paragraphs are
newly added in
order to comply
with laws and
regulations. As
the Company still
has supervisors, the
provisions relating
to supervisors in
the Articles of
Incorporation will
be deleted at the
2017 annual
general
shareholders
meeting.
  • 8 -
Article No. Article After Amendment Article Before Amendment Article Before Amendment Note
stipulated
by
the
competent
authority in accordance with law.
After the term of office of the
directors and supervisors elected in
2014 expires, the Company shall,
pursuant to Article 14-1 of the
Securities
and
Exchange
Act,
establish an audit committee to
replace supervisors and the audit
committee or its members shall be
responsible
for
performing
the
functions and duties of supervisors
provided under the Company Act,
Securities and Exchange Act, other
laws and regulations and these
Articles of Incorporation. After
establishment
of
the
audit
committee, the provisions relating to
supervisors in the Articles of
Incorporation shall no longer apply.
The
Board
of
Directors
may
establish an audit committee and a
compensation
committee
in
accordance with law and may
establish other committees with
different
functions.
The
organization
rules
of
those
committees shall be stipulated by the
Board of Directors.		 stipulated
by
the
competent
authority in accordance with law.
Article 14-1 Meetings of the Board of Directors
are convened by the Chairman of
the Board of Directors. When
convening a meeting of the Board
of Directors, a meeting notice
specifying
the
reasons
for
convening such meeting shall be
sent to each director and supervisor
seven days prior to the meeting;
provided that a meeting may be
convened at any time in case of
emergency.
The meeting notice set forth in the










Meetings of the Board of Directors
are convened by the Chairman of
the Board of Directors. When
convening a meeting of the Board
of Directors, a meeting notice
specifying
the
reasons
for
convening such meeting shall be
sent to each director and supervisor
seven days prior to the meeting;
provided that a meeting may be
convened at any time~~by notice sent~~
~~b f il itd f itt~~











The first Paragraph
of the article before
amendment was
amended to become
the first and second
Paragraphs in order
to comply with
laws and
regulations and for
actual needs.


~~y ax or e-ma nsea o a wren~~
~~notice i~~n case of emergency.
(Omitted)

preceding paragraph may be in
writing or by fax or e-mail.
(Omitted)
Article 22 From the pre-tax net profits of the
current year, before deducting
remuneration of employees and
remuneration of directors and
supervisors, no more than 1% shall
be allocated as remuneration of		 If the Company hassurplus earnings
at the end of a fiscal year, after
covering all losses incurred in prior		 surplus earnings



1. The first
Paragraph of the
previous Article 22
was moved to the
first Paragraph of
Article 22-1 and

years and paying all
  • 9 -
Article No. Article After Amendment Article Before Amendment Note
directors and supervisors and no
less than 1% as remuneration of
employees. The remuneration of
employees may be distributed in
stock or cash upon resolution of
the Board of Directors, and may
be distributed to the employees of
subsidiaries
of
the
Company
meeting certain criteria.
However, if the Company has
accumulated losses, the Company
shall first set aside an amount for
making up losses, and then allocate
remuneration of employees and
remuneration
of
directors
and
supervisors
according
to
the
percentage set forth in the preceding
paragraph.
The Board of Directors is authorized
to determine the "employees of
subsidiaries of the Company meeting
certain criteria"set forth in the first
Paragraphor the Board of Directors
may authorize the Chairman of the
Board of Directors to ratify the
"employees of subsidiaries of the
Company meeting certain criteria"
set forth in the first Paragraph.		 legal reserve need not be made when
the accumulated legal reserve equals
the paid-in capital of the Company.
After setting aside or reversing
special reserve pursuant to applicable
laws and regulations and orders of
competent authoritie~~sfrom (1) the~~
~~ii t l ditibtd~~



































was amended in
accordance with
laws and
regulations and
based on actual
needs. The first
and second
Paragraphs of the
current article were
newly added to
comply with laws
and regulations.
2. The second
Paragraph of the
previous Article 22
became the third
Paragraph and the
wording was
amended
accordingly.
~~remanng amoun pus unsrue~~
~~tid~~
~~i~~

~~(2)~~
~~th~~
~~reane~~
~~earnngs;~~
~~or~~

~~e~~
~~diff bt th ditibtd~~
~~erences eween e unsrue~~
~~tid i d th l~~
~~reane earnngs an e osses~~
~~ffd b th C t th d~~
~~suere y e ompany a e en~~
~~f fil if th l b~~
~~o a sca year e osses can e~~
~~fll d b th ditibtd~~
~~uy covere y e unsrue~~
~~retained earnings,~~the Company shall
distribute the remaining balance.~~(if~~
~~t thi t id il~~
~~no oerwse se ase as speca~~
~~d d bd~~
~~reserve an reserve ase on~~
~~bi d) i th flli~~
~~usness nees n e oowng~~
~~order:~~
~~(1) 1% t 2% ti f~~
~~o as remuneraon o~~
~~directors and supervisors;~~
~~(2) 10% t 15% b t~~
~~o as onus o~~
~~employees;~~
~~(3) th ii t b~~
~~e remanng amoun as onus~~
~~t hhld Nt l th 10%~~
~~o sareoers. o ess an~~
~~f th ttl hhld b hll~~
~~o e oa sareoers onus sa~~
~~be distributed in form of cash.~~
~~"El" fd t i It 2 f~~
~~mpoyees reerre o n em o~~
~~th di Ph h~~
~~e proceeng aragrap, wen~~
~~ditibti th tk b ild~~
~~srung e soc onus, ncue~~
~~th l f bidii f th~~
~~e empoyees o susares o e~~
~~C ti ti iti~~









~~ompany meeng ceran crera.~~
The Board of Directors is authorized
to determinethe above"employees of
subsidiaries of the Company meeting
certain criteria" or the Board of
Directors
may
authorize
the
Chairman of the Board of Directors to
ratifythe above"employees of
subsidiaries of the Company meeting
certain criteria".
Article 22-1 If the Company has pre-tax profits at
the end of the current fiscal year,
afterpaying all taxes and covering all
accumulated losses, the Company
shall set aside10%of said earnings
as legal reserve. However, legal
reserve need not be made when the
accumulated legal reserve equals the






1. The first
Paragraph of this
article was moved
from the first
Paragraph of
Article 22 and was
amended in
accordance with
  • 10 -
Article No. Article After Amendment Article Before Amendment Note
paid-in capital of the Company.
After setting aside or reversing
special reserve pursuant to applicable
laws and regulations and orders of
competent authoritiesor based on the
business needs of the Company,if
there is any balance, the Board of








The
Company's
dividend
distribution policy is made in
accordance with the Company Act
and the Articles of Incorporation in
consideration of factors including
capital and financial structure,
operating status, retained earnings,
industry
characteristics
and
economic cycle. The dividends
shall be distributed in a steady
manner in consideration of the
appropriate
retained
earnings
which
may
be
~~retained~~
~~or~~
distributed in stock dividend or
cash dividend~~, or both,~~so as to
maintain continuous growth.~~The~~
~~Company is now fast growing and~~
~~expanding and is in an industry~~
~~that requires intensive capital,~~
~~technologies,~~
~~and~~
~~labors.~~
~~Factoring~~
~~in~~
~~these~~
~~industry~~
~~characteristics, the dividend policy~~
~~is highly dependent upon future~~
~~needs for capital expenditures and~~
~~working capital. As a result, the~~
~~appropriation of retained earnings~~
~~is preferably by way of cash~~
~~dividends,~~
~~nevertheless,~~
~~stock~~
~~dividends would also be applicable~~
~~if the conditions so warrant.~~
~~Based on the current policy, the~~
~~distribution of stock dividends is~~
~~subject to a condition that stock~~
~~dividends shall not be more than~~
~~50%~~
~~of~~
~~total~~
~~dividends.~~
~~Nonetheless,~~
~~the~~
~~conditions,~~
~~timing, amount or type of surplus~~
~~earnings reserved or dividends~~
~~distributed may be adjusted at~~		 laws and
regulations and
based on actual
needs.
2. The second
Paragraph was
amended based on
the actual needs.

Directors may submit a proposal for

allocation of the remaining balance

and the accumulated undistributed
earnings to the shareholders meeting

for resolution of distributing bonus

and dividends to shareholders.
The
Company's
dividend
distribution policy is made in
accordance with the Company Act
and the Articles of Incorporation
in
consideration
of
factors
including capital and financial
structure,
operating
status,
retained
earnings,
industry
characteristics
and
economic
cycle. The dividends shall be
distributed in a steady manner.
With respect to distribution of
dividends, in consideration of
future operation scale and cash
flow needs, no less than 50% of
the distributable retained earnings
of the current year shall be
distributed to shareholders as
dividends,
which
may
be
distributed in stock dividend or
cash dividend,and the distribution
of cash dividend shall not be less
than 50% of total dividends,so as
to maintain continuous growth.
  • 11 -
Article No. Article After Amendment Article Before Amendment Note
~~appropriate time in accordance~~
~~with~~
~~economic~~
~~and~~
~~industrial~~
~~fluctuations, in particular, the~~
~~Company's~~
~~need~~
~~for~~
~~future~~
~~development and profitability.~~
Article 25 These Articles of Incorporation
were enacted on September 1,
1987; (omitted) the twenty-third
amendment was made on June 18,
2010;
the
twenty-fourth
amendment was made on June 22,
2011; the twenty-fifth amendment
was made on June 19, 2013; and
the twenty-sixth amendment was
made on June 16, 2016and shall
become effective after approval by
a resolution of the shareholders
meeting.
Any
subsequent
amendments to these Articles of
Incorporation shall follow the
same procedure.		 These Articles of Incorporation
were enacted on September 1,
1987; (omitted) the twenty-third
amendment was made on June 18,
2010.
The
twenty-fourth
amendment was made on June 22,
2011;
and
the
twenty-fifth
amendment was made on June 19,
2013 and shall become effective
after approval by a resolution of
the shareholders meeting. Any
subsequent amendments to these
Articles of Incorporation shall
follow the same procedure.		 Adding the date of
amendment.
  • 12 -

Attachment 2

(English Translation)

Business Report 2015

In 2015, slow economic growth in China and languid economic recovery in Europe and the U.S. subdued the demands of the electronics consumer market. Winbond nevertheless exhibited an outstanding performance amid a sternly challenging environment with our balanced market expansion, in-house developed process technologies and the advantage of a flexible production system. Winbond's stand-alone revenue was NT$30,844 million in 2015, flat with that of 2014; our consolidated revenue, including those of Nuvoton Technology Corp and other subsidiaries, amounted to NT$38,350 million, edging up 0.9% compared to the year before. We recorded stand-alone net earnings of NT$3,291 million and consolidated net earnings of NT$3,473 million, representing an 8% growth of earnings per share to reach NT$0.9 per share. These outcomes mark a pattern of steady profit growth.

Market Expansion

Winbond is one of the few companies in the world with design and manufacturing capabilities for both DRAM and Flash memory. By offering a comprehensive line-up of high-quality products, Winbond serves the needs of a world-class clientele with excellent services and reliable supply. We are also a world leading brand of Code Storage Flash memory. The weight of our product lines by revenue in the three major application markets of computer, consumer electronics and communications have reached a healthy balance, making up respectively 28%, 28% and 33% of revenue. We also endeavor to expand the automotive and industrial electronics application markets. As a result of our longstanding efforts, our revenue from products for applications in those markets grew from 7% in 2014 to 11% in 2015 as we progress toward the long-term goal of stable profitability. In terms of product lines, our DRAM products accounted for 64% of our memory revenue and our flash products accounted for 36% of our memory revenue. With regard to consolidated revenue, DRAM, Flash memory and logic products contribute respectively 52%, 29%, and 19% of total revenue.

Product and Technology Development

With a firm belief in the importance of building core technologies with R&D and innovation, Winbond strives to reinforce our R&D capabilities in process technology and product design. The focus of tech products has gradually shifted from computers and smart phones to automotive electronics, IoT and wearable devices. These new applications require reliable, safe and low energy consuming semiconductor products to facilitate integration and processing, thereby calling for different technological development goals from those of the past. After years of efforts, the number of patents obtained by Winbond and Nuvoton Technology has grown to three times as much as that in 2011. We look for these innovative technologies will meet the future demands of the world.

Production and Manufacturing

As the quantity and density of memory chips embedded in smart electronic products gradually increase, the functions of system-controlled IC become more powerful. Diverse demands for memory chips will engender significant opportunities for industry growth. Winbond's monthly output capacity for 12-inch wafers has exceeded 40,000 pieces in 2015. In the future, Winbond will maintain our flexible production advantage through prudent capital spending and adequate capacity allocation.

  • 13 -

Future Outlook

We have seen how electronic and information technology continually alters human lifestyles and improves quality of life throughout forty years of development. We are however also witnessing the immense pressure population growth and energy consumption is imposing upon the sustainability of the environment and the Earth. Looking into the future, Winbond will continue to make advances in product and technology. On the other hand, we will also be utilizing new technologies to create new business models so as to achieve sustainable operations and show appreciation to our shareholders for their longstanding support.

Chairman: Arthur Yu-Cheng Chiao President: Tung-Yi Chan CAO: Jessica Chiou-Jii Huang

  • 14 -

WINBOND ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 6)

Available-for-sale financial assets, current (Note 8)
Held-to-maturity financial assets, current (Note 9)
Notes and accounts receivable, net (Note 10)
Accounts receivable due from related parties, net (Note 28)
Other receivables (Notes 6 and 11)
Inventories (Note 12)
Other current assets

Total current assets

NON-CURRENT ASSETS
Held-to-maturity financial assets, non-current (Note 9)
Financial assets measured at cost, non-current (Note 13)
Investments accounted for using equity method (Note 14)
Property, plant and equipment (Note 15)

Investment properties (Note 16)
Intangible assets (Note 17)
Deferred income tax assets (Note 22)
Other non-current assets (Notes 6 and 11)

Total non-current assets

TOTAL

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Short-term borrowings (Note 18)

Financial liabilities at fair value through profit or loss, current (Note 7)

Notes and accounts payable

Accounts payable to related parties (Note 28)

Payable on equipment

Other payables

Current portion of long-term borrowings (Note 18)

Other current liabilities


Total current liabilities


NON-CURRENT LIABILITIES

Long-term borrowings (Note 18)

Net defined benefit liabilities, non-current (Note 19)

Other non-current liabilities


Total non-current liabilities


Total liabilities


EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT

Common stock (Note 20)

Capital surplus

Unappropriated earnings (accumulated deficits)

Exchange differences on translation of foreign financial statements

Unrealized (losses) gains on available-for-sale financial assets

Treasury stock


Total equity attributable to owners of the parent


NON-CONTROLLING INTERESTS


Total equity


TOTAL
 2015
Amount
%
$ 6,396,615 10
2,500,550
4
99,900
-
5,184,287
8
80,915
-
794,939
1
8,535,835 14
1,119,716

2

24,712,757
39

-
-
727,786
1
1,724,898
3
31,915,030 51
71,866
-
270,926
-
2,853,873
5
320,631

1

37,885,010
61

$ 62,597,767
100

$ -
-

22,427
-

3,846,484
6

707,064
1

811,277
2

2,455,022
4

4,352,267
7
138,654

-


12,333,195
20



8,755,160 14

1,025,969
2
384,904

-


10,166,033
16


22,499,228
36


35,800,002 57

2,470,292
4

2,086,060
3

88,771
-
(1,436,767) (2)
(106,387)

-


38,901,971 62

1,196,568

2


40,098,539
64


$ 62,597,767
100
 2014





















































































Amount
%
$ 6,975,514 11

2,902,576
4

-
-

5,433,212
8

85,234
-

310,447
1

6,316,936 10
952,819

1
22,976,738
35

101,840
-

719,378
1

2,416,386
4
33,986,751 53

78,506
-

311,616
1

3,490,222
5
759,580

1
41,864,279
65
$ 64,841,017
100
$ 390,213
1

16,894
-

3,823,082
6

642,564
1

1,287,996
2

2,290,033
3

5,879,760
9
120,836

-
14,451,378
22

9,763,339 15

974,840
1
351,369

1
11,089,548
17
25,540,926
39
36,949,822 57

2,143,393
3
(1,119,684) (2)

23,265
-

292,835
1
(106,387)

-
38,183,244 59
1,116,847

2
39,300,091
61
$ 64,841,017
100

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

  • 15 -

WINBOND ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE

OPERATING COST (Note 12)

GROSS PROFIT

OPERATING EXPENSES
Selling expenses
General and administrative expenses
Research and development expenses

Total operating expenses

PROFIT FROM OPERATIONS

NON-OPERATING INCOME AND LOSSES
Interest income
Dividend income
Gains on doubtful debt recoveries
Other income
Gains on disposal of investments
Foreign exchange gains
Share of profit of associates accounted for using
equity method (Note 14)
Interest expense
Other expense
Losses on disposal of property, plant and
equipment
Losses on financial instruments at fair value
through profit or loss

Total non-operating income and losses

PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Note 22)

NET PROFIT
 2015
Amount
%
$ 38,350,315 100
26,528,662
69

11,821,653
31

1,193,005
3
1,257,611
3
5,262,111
14

7,712,727
20

4,108,926
11

173,461
1
124,449
-
-
-
53,143
-
32,047
-
162,565
-
21,884
-
(263,751) (1)
(35,172)
-
(8,341)
-
(121,027)

-

139,258

-

4,248,184 11
775,311

2

3,472,873

9
 2014































Amount
%
$ 37,989,660 100
27,199,199
72
10,790,461
28

1,127,300
3

1,112,579
3
4,892,159
13
7,132,038
19
3,658,423

9

166,289
-

114,709
-

902
-

43,045
-

40,657
-

250,790
1

14,663
-

(177,339)
-

(34,162)
-

(7,643)
-
(129,296)

-
282,615

1

3,941,038 10
730,494

2
3,210,544

8
(Continued)
  • 16 -

WINBOND ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME
Components of other comprehensive income that
will not be reclassified to profit or loss:
Losses on remeasurement of defined benefit plans
Components of other comprehensive income that
will be reclassified to profit or loss:
Exchange differences on translation of foreign
financial statements
Unrealized (losses) gains on available-for-sale
financial assets

Other comprehensive income

TOTAL COMPREHENSIVE INCOME

NET PROFIT ATTRIBUTABLE TO:
Owner of the parent

Non-controlling interests


TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owner of the parent

Non-controlling interests


EARNINGS PER SHARE (Note 23)
Basic
Diluted		 2015
Amount
%
$ (97,066)
-
72,285
-

(1,729,602)
(5)


(1,754,383)
(5)

$ 1,718,490

4

$ 3,291,251
9

181,622

-

$ 3,472,873

9

$ 1,541,648
4

176,842

-

$ 1,718,490

4

$ 0.90
$ 0.90		 2014



















Amount
%
$ (10,274)
-

90,597
-

213,780

1

294,103

1
$ 3,504,647

9
$ 3,075,969
8

134,575

-
$ 3,210,544

8
$ 3,364,700
9

139,947

-
$ 3,504,647

9
$ 0.83
$ 0.83
$ $
$ $
$ $
$ $
$ $


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

(Concluded)

  • 17 -

WINBOND ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

BALANCE, JANUARY 1, 2014

Change in equity of associates accounted for using equity method
Net income for 2014
Other comprehensive income for 2014

Total comprehensive income for 2014

Issue of ordinary shares under employee stock options
Decrease in non-controlling interests

BALANCE, DECEMBER 31, 2014

Net income for 2015
Other comprehensive income for 2015

Total comprehensive income for 2015

Acquisition of treasury stock

Retirement of treasury stock

Decrease in non-controlling interests

BALANCE, DECEMBER 31, 2015
 Equity Attributable to Owners of the Parent Equity Attributable to Owners of the Parent Non-controllin
g
Total
Interests

$ 34,813,920 $ 1,074,182

(252)
(161)

3,075,969
134,575
288,731

5,372

3,364,700

139,947


4,876
-
-

(97,121)

38,183,244
1,116,847

3,291,251
181,622
(1,749,603)

(4,780)

1,541,648

176,842

(822,921)

-

-

-

-

(97,121)

$ 38,901,971
$ 1,196,568
 Total Equity
$ 35,888,102

(413)

3,210,544
294,103
3,504,647

4,876
(97,121)
39,300,091

3,472,873
(1,754,383)
1,718,490
(822,921)
-
(97,121)
$ 40,098,539










Common
Stock
$ 36,940,232
-
-
-

-

9,590
-

36,949,822
-
-

-

-

(1,149,820)

-

$ 35,800,002
Unappropriate
d

Earnings
(Accumulated
Capital
Surplus
Deficits)
$ 2,148,359 $ (4,187,772)

(252)
-

-
3,075,969
-

(7,881)

-

3,068,088


(4,714)
-
-

-


2,143,393 (1,119,684)

-
3,291,251
-

(85,507)

-

3,205,744

-

-

326,899

-

-

-

$ 2,470,292
$ 2,086,060
 Other Equity
Exchange
Differences on
Unrealized
Translation of Gains (Losses)
Foreign
on Available-

Financial
for-sale
Statements
Financial
Assets
$ (59,567) $ 79,055

-
-

-
-

82,832

213,780


82,832

213,780


-
-

-

-


23,265
292,835

-
-

65,506
(1,729,602)


65,506
(1,729,602)


-

-


-

-


-

-

$ 88,771
$ (1,436,767)
 Treasury
Stock
$ (106,387)

-

-
-

-


-
-


(106,387)

-
-

-

(822,921)

822,921

-

$ (106,387)

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

  • 18 -

WINBOND ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax

Adjustments for:
Depreciation expenses
Amortization expenses
Provision for allowance for doubtful accounts
Provision for decline in market value and obsolescence and
abandonment of inventories
Net loss on financial assets and liabilities at fair value through profit
or loss
Interest expense
Interest income
Dividend income
Share of profit of associates accounted for using equity method
Loss on disposal of property, plant and equipment
Gain on disposal of investments
Realized profit on the transactions with associates
Changes in operating assets and liabilities
Decrease (increase) in notes and accounts receivable
Decrease in accounts receivable due from related parties
(Increase) decrease in other receivables
(Increase) decrease in inventories
Increase in other current assets
Increase in other non-current assets
Increase in notes and accounts payable
Increase in accounts payable to related parties
Increase in other payables
Increase in other current liabilities
(Decrease) increase in other non-current liabilities

Cash generated from operations
Interest received
Dividend received
Interest paid
Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of available-for-sale financial assets
Proceeds from disposal of available-for-sale financial assets
Proceeds from capital reduction of available-for-sale financial assets
Acquisition of financial assets measured at cost
Proceeds from capital reduction of financial assets measured at cost
Proceeds from disposal of investments accounted for using equity
method		 2015
$ 4,248,184
5,754,587
101,995
1,698
141,831
5,532
263,751
(173,461)
(124,449)
(21,884)
8,341
(32,047)
-
245,974
4,319
(202,610)
(2,360,730)
(166,897)
(13,524)
23,402
64,500
204,975
17,818

(2,833)

7,988,472
46,855
124,449
(330,970)

(170,700)


7,658,106

(686,329)
80,433
23,187
(40,000)
31,592
-		 2014
$ 3,941,038

4,759,388

115,818

5,285

230,527

349

177,339

(166,289)

(114,709)

(14,663)

7,643

(40,657)

(118)

(533,864)

4,520

26,629

426,424

(274,980)

(83,558)

560,105

120,946

123,711

41,687

58,681

9,371,252

48,770

122,653

(272,935)

(134,535)

9,135,205

(828,260)

148,292

-

-

5,368

33,872
(Continued)
  • 19 -

WINBOND ELECTRONICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

Acquisitions of property, plant and equipment

Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Decrease in financial lease receivables

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings
Increase in long-term borrowings
Repayments of long-term borrowings
Dividend paid to non-controlling interests
Payments to acquire treasury stock
Proceeds from exercise of employee stock options
Increase in non-controlling interests

Net cash (used in) generated from financing activities

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF
CASH HELD IN FOREIGN CURRENCIES

NET DECREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS, END OF YEAR
 2015
$ (4,093,096)
3,835
(49,576)

299,817


(4,430,137)

(390,213)
3,460,710
(6,017,973)
(97,121)
(822,921)
-

6,779


(3,860,739)


53,871

(578,899)

6,975,514

$ 6,396,615
 2014
$ (13,192,897)

1,351

(192,673)

152,728
(13,872,219)

(1,682,495)

9,617,600

(3,863,100)

(97,121)

-

4,876

7,764

3,987,524

54,625

(694,865)

7,670,379
$ 6,975,514

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

(Concluded)

  • 20 -

WINBOND ELECTRONICS CORPORATION

BALANCE SHEETS DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 6)

Available-for-sale financial assets, current (Note 8)
Held-to-maturity financial assets, current (Note 9)
Notes and accounts receivable, net (Note 10)
Accounts receivable due from related parties, net (Note 27)
Other receivables (Note 11)
Inventories (Note 12)
Other current assets

Total current assets

NON-CURRENT ASSETS
Held-to-maturity financial assets, non-current (Note 9)
Financial assets measured at cost, non-current (Note 13)
Investments accounted for using equity method (Note 14)
Property, plant and equipment (Note 15)
Intangible assets (Note 16)
Deferred income tax assets (Note 21)
Other non-current assets (Notes 6 and 11)

Total non-current assets

TOTAL

LIABILITIES AND EQUITY

CURRENT LIABILITIES
Short-term borrowings (Note 17)

Financial liabilities at fair value through profit or loss, current (Note 7)
Notes payable
Accounts payable
Accounts payable to related parties (Note 27)
Payable on equipment
Other payables
Current portion of long-term borrowings (Note 17)
Other current liabilities

Total current liabilities

NON-CURRENT LIABILITIES
Long-term borrowings (Note 17)
Net defined benefit liabilities, non-current (Note 18)
Other non-current liabilities

Total non-current liabilities

Total liabilities

EQUITY
Common stock (Note 19)
Capital surplus
Unappropriated earnings (accumulated deficits)
Exchange differences on translation of foreign financial statements
Unrealized (losses) gains on available-for-sale financial assets
Treasury stock

Total equity

TOTAL
 2015
Amount
%
$ 3,634,615
6
2,441,832
4
99,900
-
2,802,110
5
1,320,712
2
514,417
1
7,514,792 13

1,016,814

2


19,345,192
33

-
-
80,161
-
6,049,338 10
31,195,173 53
76,371
-
2,527,000
4

223,037

-


40,151,080
67

$ 59,496,272
100

$ -
-
21,048
-
519,500
1
2,677,142
5
707,064
1
767,457
1
1,753,839
3
4,352,267
7

80,157

-


10,878,474
18

8,755,160 15
524,047
1

436,620

1


9,715,827
17


20,594,301
35

35,800,002 60
2,470,292
4
2,086,060
3
88,771
-
(1,436,767) (2)

(106,387)

-


38,901,971
65

$ 59,496,272
100
 2014























































Amount
%
$ 4,146,238
7

2,826,103
4

-
-

3,535,090
6

983,807
2

250,428
-

5,534,586
9

852,710

1

18,128,962
29

101,840
-

40,161
-

6,576,196 11

33,304,147 54

52,000
-

3,146,000
5

661,584

1

43,881,928
71
$ 62,010,890
100
$ 390,213
1

11,253
-

534,789
1

2,747,750
4

642,308
1

1,249,178
2

1,667,581
3

5,879,760
9

71,663

-

13,194,495
21

9,763,339 16

481,684
1

388,128

-

10,633,151
17

23,827,646
38

36,949,822 60

2,143,393
3

(1,119,684) (2)

23,265
-

292,835
1

(106,387)

-

38,183,244
62
$ 62,010,890
100

The accompanying notes are an integral part of the financial statements.

  • 21 -

WINBOND ELECTRONICS CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE

OPERATING COSTS (Note 12)

GROSS PROFIT

OPERATING EXPENSES
Selling expenses
General and administrative expenses
Research and development expenses

Total operating expenses

PROFIT FROM OPERATIONS

NON-OPERATING INCOME AND LOSSES
Interest income
Dividend income
Gains on doubtful debt recoveries
Other income
Gains on disposal of investments
Foreign exchange gains
Share of profit of subsidiaries and associates
accounted for using equity method (Note 14)
Interest expense
Other expense
Losses on disposal of property, plant and equipment
Losses on financial instruments at fair value through
profit or loss

Total non-operating income and losses

PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Note 21)

NET PROFIT
 2015
Amount
%
$ 30,843,606 100

22,381,244
72


8,462,362
28

773,989
3
755,116
2

3,426,559
11


4,955,664
16


3,506,698
12

153,217
1
29,121
-
-
-
38,420
-
1,625
-
137,198
-
448,169
1
(262,406) (1)
(23,702)
-

(8,238)
-

(109,851)

-


403,553

1

3,910,251 13

619,000

2


3,291,251
11
 2014
































Amount
%
$ 30,929,689 100

23,315,561
75

7,614,128
25

725,368
2

634,278
2

3,029,747
10

4,389,393
14

3,224,735
11

144,173
-

29,776
-

902
-

27,390
-

9,824
-

204,547
1

345,085
1

(177,101) (1)

(23,195)
-

(6,769)
-

(107,398)

-

447,234

1

3,671,969 12

596,000

2

3,075,969
10
(Continued)
  • 22 -

WINBOND ELECTRONICS CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME
Components of other comprehensive income that
will not be reclassified to profit or loss:
Loss on remeasurement of defined benefit plans

Components of other comprehensive income that
will be reclassified to profit or loss:
Exchange differences on translation of foreign
financial statements
Unrealized (losses) gains on available-for-sale
financial assets

Other comprehensive income

TOTAL COMPREHENSIVE INCOME

EARNINGS PER SHARE (Note 22)
Basic
Diluted		 2015
Amount
%
$ (85,507)
-
65,506
-

(1,729,602)
(6)


(1,749,603)
(6)

$ 1,541,648

5

$ 0.90
$ 0.90		 2014







Amount
%
$ (7,881)
-

82,832
-

213,780

1

288,731

1
$ 3,364,700
11
$ 0.83
$ 0.83
$ $


The accompanying notes are an integral part of the financial statements.

(Concluded)

  • 23 -

WINBOND ELECTRONICS CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

Unappropriated
Earnings
(Accumulated
Common Stock
Capital Surplus
Deficits)
BALANCE, JANUARY 1, 2014
$ 36,940,232
$ 2,148,359
$ (4,187,772)
Change in equity of subsidiaries and associates accounted for using
equity method
-
(252)
-
Net income for 2014
-
-
3,075,969
Other comprehensive income for 2014

-

-

(7,881)
Total comprehensive income for 2014

-

-

3,068,088
Issue of ordinary shares under employee stock options

9,590

(4,714)

-
BALANCE, DECEMBER 31, 2014
36,949,822
2,143,393
(1,119,684)
Net income for 2015
-
-
3,291,251
Other comprehensive income for 2015

-

-

(85,507)
Total comprehensive income for 2015

-

-

3,205,744
Acquisition of treasury stock

-

-

-
Retirement of treasury stock

(1,149,820)

326,899

-
BALANCE, DECEMBER 31, 2015
$ 35,800,002
$ 2,470,292
$ 2,086,060		 Other Equity
Exchange

Differences on
Unrealized
Translation of
Foreign Financial
Gains (Losses) on
Available-for-sale
Statements
Financial Assets
Treasury Stock
$ (59,567)
$ 79,055
$ (106,387)

-
-
-
-
-
-

82,832

213,780

-


82,832

213,780

-


-

-

-

23,265
292,835
(106,387)
-
-
-

65,506

(1,729,602)

-


65,506

(1,729,602)

-


-

-

(822,921)


-

-

822,921

$ 88,771
$ (1,436,767)
$ (106,387)
 Total
$ 34,813,920
(252)
3,075,969

288,731

3,364,700

4,876
38,183,244
3,291,251

(1,749,603)

1,541,648

(822,921)

-
$ 38,901,971

The accompanying notes are an integral part of the financial statements.

  • 24 -

WINBOND ELECTRONICS CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax

Adjustments for:
Depreciation expenses
Amortization expenses
(Reversal of) provision for allowance for doubtful accounts
Provision for decline in market value and obsolescence and
abandonment of inventories
Net loss (gain) on financial assets and liabilities at fair value through
profit or loss
Interest expense
Interest income
Dividend income
Share of profit of subsidiaries and associates accounted for using
equity method
Loss on disposal of property, plant and equipment
Gain on disposal of investments
Loss (gain) on foreign currency exchange of held-to-maturity
financial assets
Unrealized profit on the transactions with subsidiaries
Changes in operating assets and liabilities
Decrease (increase) in notes and accounts receivable
Increase in accounts receivable due from related parties
Decrease in other receivables
(Increase) decrease in inventories

Increase in other current assets
Increase in other non-current assets
(Decrease) increase in notes payable
(Decrease) increase in accounts payable
Increase in accounts payable to related parties
Increase in other payables
Increase in other current liabilities
Increase in other non-current liabilities

Cash generated from operations
Interest received
Dividend received
Interest paid
Income tax (paid) refund

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of available-for-sale financial assets
Proceeds from disposal of available-for-sale financial assets
Proceeds from capital reduction of available-for-sale financial assets		 2015
$ 3,910,251

5,589,185
21,591
(13,398)
121,523
9,795
262,406
(153,217)
(29,121)
(448,169)
8,238
(1,625)
1,940
8,873
746,378
(325,014)
16,232
(2,101,729)
(164,104)
(13,511)
(15,289)
(70,608)
64,756
88,315
8,494
19,166

7,541,358
26,121
181,066
(329,626)
(884)

7,418,035

(653,619)
32,027
23,187		 2014
$ 3,671,969
4,600,207
20,731

5,740
250,629
(4,588)
177,101

(144,173)

(29,776)

(345,085)
6,769

(9,824)
(4,070)
13,215
(388,782)

(106,978)
37,297

325,919

(246,867)

(35,409)

17,239

561,128
120,476
3,348
37,183

20,256
8,553,655
27,167
181,720

(272,557)

1,251

8,491,236

(801,410)
122,879
-
(Continued)
  • 25 -

WINBOND ELECTRONICS CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (In Thousands of New Taiwan Dollars)

Acquisition of financial assets measured at cost

Acquisition of investments accounted for using equity method
Proceeds from capital reduction of investments accounted for using
equity method
Acquisitions of property, plant and equipment

Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Decrease in finance lease receivables

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings
Increase in long-term borrowings
Repayments of long-term borrowings

Payments to acquire treasury stock
Proceeds from exercise of employee stock options

Net cash (used in) generated from financing activities

NET DECREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS, END OF YEAR
 2015
$ (40,000)
(5,947)
114,651
(3,907,863)
2,856
(24,371)
299,818

(4,159,261)

(390,213)
3,460,710
(6,017,973)
(822,921)
-

(3,770,397)

(511,623)
4,146,238

$ 3,634,615
 2014
$ -

(1,206)
-
(13,032,502)
880

-

152,728
(13,558,631)
(1,503,665)
9,617,600
(3,863,100)

-

4,876

4,255,711

(811,684)

4,957,922
$ 4,146,238

The accompanying notes are an integral part of the financial statements.

(Concluded)

  • 26 -

Attachment 3

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Winbond Electronics Corporation

We have audited the accompanying consolidated balance sheets of Winbond Electronics Corporation (the “Company”) and its subsidiaries (collectively referred as the “Group”) as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for the years ended December 31, 2015 and 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2015 and 2014 and their consolidated financial performance and their consolidated cash flows for the years ended December 31, 2015 and 2014, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed by the Financial Supervisory Commission of the Republic of China.

We have also audited the parent company only financial statements of Winbond Electronics Corporation as of and for the years ended December 31, 2015 and 2014 on which we have issued an unqualified report.

==> picture [208 x 38] intentionally omitted <==

January 29, 2016

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevai

  • 27 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Winbond Electronics Corporation

We have audited the accompanying balance sheets of Winbond Electronics Corporation (the “Company”) as of December 31, 2015 and 2014, and the related statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2015 and 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2015 and 2014, and its financial performance and its cash flows for the years ended December 31, 2015 and 2014, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

==> picture [208 x 38] intentionally omitted <==

January 29, 2016

Notice to Readers

The accompanying financial statements are intended only to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China.

For the convenience of readers, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

  • 28 -

Attachment 4 (English Translation)

Supervisors’ review report[2]

To: The 2016 Annual General Meeting of Shareholders

The Board of Directors of the Company has prepared the 2015 parent company only financial statements and the consolidated financial report, which have been audited by HONG, KUO-TYAN and WU, KER-CHANG at Deloitte who have been retained by the Board of Directors of the Company to issue an audit report. The audit report provides that the 2015 parent company only financial statements and the consolidated financial report of the Company can fairly present the Company's financial position. The undersigned supervisors have reviewed the audit report and the aforesaid documents, together with the business report, the consolidated business reports of affiliates and the motion for Distribution of Earnings prepared by the Board of Directors, and did not find any incompliance. According to Article 219 of the Company Law, it is hereby submitted for your review and perusal.

Supervisor: James Wen (Representative of Chin Xin Investment Co., Ltd.)

Supervisor: Yeu-Yuh Chu

Supervisor: Hong-Chi Yu

Date: March 28, 2016

2 This translation is for reference only. In the event of any discrepancy between the Chinese version and this translation, the Chinese version shall prevail.

  • 29 -

Attachment 5

Winbond Electronics Corporation

Implementation of Share Buyback Program Previously Approved by the Board of Directors

No. of Share Buyback Program No. of Share Buyback Program The 20thround The 21stround
Date of Board of Directors' resolution 2015/07/31 2015/10/1
Type of shares to be repurchased Common shares Common shares
Purpose of buyback Maintaining company's
credit and
shareholders' equity		 Maintaining company's credit
and
shareholders' equity
Number of shares to be repurchased 80,000,000 shares 35,000,000 shares
Estimated repurchase price range NT$6.5 ~ NT$8.0 NT$7.0~ NT$8.5
Implementation Status Actual share buyback period 2015/08/03~2015/09/18 2015/10/02~2015/10/23
Number of shares bought back 80,000,000 shares 34,982,000 shares
Number of shares bought back as a
percentage of total outstanding shares

2.17％		 0.95％
The Average buyback price per share NT$6.94 NT$7.66
Implementation of share buyback
program		 Completion The company did not
complete the proposed share
repurchase because of price
consideration
Record date for capital reduction 2015/10/31 2015/10/31
Number of shares repurchased and
cancelled
80,000,000 shares		 34,982,000 shares
  • 30 -

Attachment 6

(English Translation)

Winbond Electronics Corporation Shareholdings of All Directors and Supervisors of the Tenth Term[3]

Book closure date:April 18,2016 Book closure date:April 18,2016
Position Name Current
shareholding
(Shares)		 Shareholding
ratio (%)
Chairman Arthur Yu-Cheng Chiao 58,264,955 1.63
Director Matthew Feng-Chiang Miau 100,000 0.00
Director Yung Chin 10,720,537 0.30
Director Hui-Ming Cheng(Representative
of Walsin Lihwa Corporation)		 811,327,531 22.66
Director Tung-Yi Chan 500,000 0.01
Independent Director Francis Tsai 0 0.00
Independent Director Allen Hsu 0 0.00
Independent Director Jerry Hsu 0 0.00
Supervisor James Wen (Representative of
Chin Xin Investment Co.,Ltd.)		 182,047,000 5.09
Supervisor Yeu-Yuh Chu 0 0.00
Supervisor Hong-Chi Yu 0 0.00
Shareholdings of All Directors 880,913,023 24.61
Shareholdings of All Supervisors 182,047,000 5.09
Shareholdings of All Directors and Supervisors 1,062,960,023 29.70

Note: This Company had a total of 3,580,000,193 issued shares as of April 18, 2016

3 This translation is for reference only. In the event of any discrepancy between the Chinese version and this translation, the Chinese version shall prevail.

  • 31 -

Appendix

  • 32 -

Appendix 1 (English Translation)

Winbond Electronics Corporation (hereinafter the "Company")[4] "Rules Governing the Conduct of Shareholders Meeting"

The seventh amendment was adopted by the Shareholders' Meeting of June 15, 2012

Article 1

Unless otherwise provided by laws and regulations, all shareholders meetings of the Company shall be conducted in accordance with these Rules.

Article 2

The shareholders meetings of the Company shall be convened by the Board of Directors unless otherwise provided by laws and regulations.

All shareholders shall be served with the convention notice of a annual shareholders meeting at least 30 days prior to the meeting, except for those shareholders each holding less than 1,000 registered shares who may be notified by means of an announcement on the Market Observation Post System at least 30 days prior to the meeting. All shareholders shall be served with the convention notice of a special shareholders meeting at least 15 days prior to the meeting, except for those shareholders each holding less than 1,000 registered shares who may be notified by means of an announcement on the Market Observation Post System at least 15 days prior to the meeting. Convention notices and announcements shall state the reasons for the meeting. The convention notice may, as an alterative, be given by means of electronic transmission, after obtaining a prior consent from the shareholders.

The election or discharge of directors and supervisors, amendment of the Company's Articles of Incorporation, dissolution, merger, or spin-off of the Company, or the matters specified in Paragraph 1 of Article 185 of the Company Act, or Article 26-1 or Article 43-6 of the Securities and Exchange Act shall be listed among the reasons for the meeting, and may not be proposed as extemporary motions.

The Company shall prepare the agenda handbook for shareholders meeting in accordance with Article 6 of the "Regulations Governing Content and Compliance Requirements for Shareholders Meeting Agenda Handbooks of Public Companies".

Article 3

The shareholders holding one percent or more of the total number of issued shares of the Company may propose in writing to the Company a proposal for discussion at a annual shareholders meeting; provided that only one matter shall be allowed in each single proposal. In case a proposal submitted by shareholder(s) contains more than one matter, such proposal shall not be included in the agenda of the shareholders meeting. The number of words of a proposal submitted by a shareholder shall be limited to not more than 300 words, and any proposal containing more than 300 words shall not be included in the agenda of the shareholders meeting. The "300 words" includes the reasons and punctuation marks. If any of the circumstances listed in Paragraph 4 of Article 172-1 of the Company Act occurs to the proposal submitted by any shareholder, the Board of Directors of the Company may ignore that proposal.

The Company shall announce the acceptance of shareholders' proposal, the place and the period for shareholders to submit proposals to be discussed at the shareholders meeting prior to the commencement of the close period for share transfer. The period for accepting such proposals shall not be less than 10 days.

Shareholders submit proposals to be discussed at the shareholders meeting shall attend the shareholders meeting in person or by proxy, and participate in discussion of those proposals.

4 This translation is for reference only. In the event of any discrepancy between the Chinese version and this translation, the Chinese version shall prevail.

  • 33 -

The Company shall, prior to the delivery of the convention notice, notify all the shareholders who had submitted the proposals of the proposal screening results, and shall incorporate in the convention notice the proposals conforming to the requirements set out in this article. With regard to the proposals submitted by shareholders but not included in the agenda of the shareholders meeting, the Board of Directors shall explain reasons why such proposals are not included in the agenda of the shareholders meeting.

Article 4

Prior to any shareholders meeting, a shareholder may appoint a proxy to attend the meeting by issuing a power of attorney in the form provided by the Company stating the scope of authorization. Each shareholder may issue one power of attorney only, and may appoint one person only to serve as a proxy. The written proxy must be delivered to the Company at least five days prior to each shareholders meeting. If two or more written proxies forms are received from a shareholder, the first one received by the Company shall prevail; unless an explicit statement to revoke the previous written proxy is made in the proxy which comes later.

After the Company receives the written proxy, in case the shareholder issuing the said proxy intends to attend the shareholders meeting in person or to exercise his/her/its voting power in writing or by way of electronic transmission, a proxy rescission notice in writing shall be delivered to the Company two days prior to the date of the shareholders meeting; otherwise, the voting right exercised by the authorized proxy at the meeting shall prevail.

Article 5

Except that the "shareholder" referred to in Articles 2, 3 and 4 of these Rules means the shareholders in person, the "shareholder" referred to in these Rules means the shareholder himself/herself/itself and the proxy appointed by the shareholder in accordance with the laws and regulations.

Article 6

This Company shall prepare an attendance book for attending shareholders to sign in, or shareholder present may hand in an attendance card in lieu of signing on the attendance book. The number of shares representing shareholders present at the meeting shall be calculated in accordance with those indicated in the attendance book or the attendance cards, plus the number of shares whose voting right exercised in writing or by way of electronic transmission. Each shareholder attending the shareholders meeting in person (or proxy) shall wear an attendance pass and submit the attendance card in lieu of sign-in.

Article 7

Attendance and voting at the shareholders meeting shall be determined based on the number of shares.

Article 8

Unless otherwise restricted by, or subject to evasion in accordance with, the laws and regulations, and shares having no voting right in accordance with Paragraph 2 of Article 179 of the Company Law, a shareholder shall have one voting right in respect of each share.

The method for exercising the voting right shall be described in the convention notice of the shareholders meeting if the voting right will be exercised in writing or by way of electronic transmission. A shareholder who exercises his/her/its voting right at a shareholders meeting in writing or by way of electronic transmission shall be deemed to have attended the said shareholders meeting in person, but shall be deemed to have waived his/her/its voting right with respect to any extemporary motions and any amendments or replacements to the original proposals at the said shareholders meeting.

  • 34 -

In case a shareholder elects to exercise his/her/its voting right in writing or by way of electronic transmission, his/her/its declaration of intention shall be delivered to the Company no later than two days prior to the scheduled shareholders meeting. If two or more declarations of intention are delivered to the Company, the first declaration of intention received shall prevail; unless an explicit statement to revoke the previous declaration is made in the declaration which comes later.

In case a shareholder who has exercised his/her/its voting right in writing or by way of electronic transmission intends to attend the shareholders meeting in person, the shareholder shall, two days prior to the shareholders meeting and in the same manner previously used in exercising his/her/its voting right, deliver a separate declaration of intention to revoke his/her/its previous declaration of intention made in exercising the voting right under the preceding paragraph. In the absence of a timely revocation of the previous declaration of intention, the voting right exercised in writing or by way of electronic transmission shall prevail. In case a shareholder has exercised his/her/its voting right in writing or by way of electronic transmission and has also authorized a proxy to attend the shareholders meeting on his/her/its behalf, then the voting right exercised by the authorized proxy for the said shareholder shall prevail.

If the Company allows its shareholders to exercise their voting rights in writing or by way of electronic transmission, the Company shall finish the counting and verification of the votes cast in writing or by way of electronic transmission before the shareholders meeting.

If the Company allows its shareholders to exercise their voting rights in writing or by way of electronic transmission, the Company shall compile the number of votes cast in writing or by way of electronic transmission and prepare a statement of information and disclose such statement of information in explicit way at the place of the shareholders meeting.

Article 9

Shareholders meetings shall be held at the Company's premises or at another place that is convenient for shareholders to attend and suitable for such meetings. Shareholders meetings shall not start earlier than 9:00 AM or later than 3:00 PM.

Article 10

If a shareholders meeting is convened by the Board of Directors, the Chairman of the Board of Directors shall be the chairman presiding at the meeting. If the Chairman of the Board of Directors 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 of the Board of Directors shall appoint a managing director to serve on his behalf. If there are no managing directors, the Chairman of the Board of Directors shall appoint a director to serve on his behalf. If the Chairman of the Board of Directors has not appointed any representative, the managing directors or directors shall nominate a person among themselves to preside at the shareholders meeting.

If a shareholders meeting is convened by any person entitled to convene the meeting other than the Board of Directors, such person shall be the meeting's chairman; provided that if this meeting is convened by two or more persons, the chairman of the meeting shall be elected from among themselves.

Article 11

The Company may appoint lawyer(s) or certified public accountant(s) engaged by the Company, or relevant persons, to attend a shareholders meeting.

Persons handling affairs of the shareholders meeting shall wear identification cards or arm badges.

Article 12

The chairman of the shareholders meeting may order disciplinary officers (or security guards) to

  • 35 -

assist in keeping order at the meeting place. Such disciplinary officers (or security guards) shall wear arm badges marked "Disciplinary Personnel" when assisting in keeping order at the meeting place.

Article 13

Persons attending the shareholders meeting shall not bring anything that is harmful to the safety of others’ life, body, freedom or property.

Article 14

During the shareholders meeting, the chairman may request the police present at the meeting place to keep order.

Article 15

The process of the shareholders meeting shall be audio recorded or video recorded in its entirety and these records shall be preserved for at least one year. If the Company allows shareholders to exercise their voting right in writing or by way of electronic transmission, the related written and media data shall also be preserved for at least one year. However, if a lawsuit has been instituted by any shareholder pursuant to Article 189 of the Company Act, the records and data involved shall be kept by the Company until the legal proceedings of the foregoing lawsuit have been concluded.

Article 16

The chairman shall announce the commencement of the shareholders meeting at the time scheduled for the meeting. But if the number of shares represented by the shareholders present at the meeting is less than one-half of all issued shares of the Company at the time scheduled for the meeting, the chairman may announce the postponement of the meeting. The shareholders meeting can only be postponed for twice and the time of the postponement shall not be more than one hour in the aggregate. If after two postponements the number of shares represented by the shareholders present at the meeting is still less than one-half of all issued shares of the Company but the shareholders present at the meeting represent more than one-third of all issued shares, provisional resolutions may be made in accordance with Paragraph 1 of Article 175 of the Company Act.

If the number of the shares represented by the shareholders present at the shareholders meeting reaches one-half of all issued shares of the Company prior to the end of the meeting, the chairman may submit the foregoing provisional resolutions to the shareholders meeting for approval in accordance with Article 174 of the Company Act.

Article 17

The agenda of the meeting shall be set by the Board of Directors if the meeting is convened by the Board of Directors. The shareholders meeting shall be conducted according to the agenda, and unless otherwise provided by these Rules or laws and regulations, the agenda shall not be changed without the resolution of the shareholders meeting.

The above provision also applies to the shareholders meeting convened by any person entitled to convene such meeting other than the Board of Directors.

Unless otherwise resolved at the meeting, the chairman cannot announce adjournment of the meeting before all the items (including extemporary motions) listed in the agenda made according to the preceding two paragraph are completed.

After the meeting is adjourned, shareholders cannot designate another person as chairman and continue the meeting at the same or other place.

Article 18

When a shareholder present at the meeting wishes to speak, he/she shall fill in a speech note specifying the summary of his/her speech, the shareholder's account number (or the number of

  • 36 -

attendance pass) and the account name of the shareholder. The chairman shall determine the sequence of shareholders' speeches.

If any shareholder present at the meeting submits a speech note but does not speak, no speech should be deemed to have been made by the shareholder. In case the contents of the speech of a shareholder are inconsistent with the contents of the speech note submitted by such shareholder, the contents of the actual speech shall prevail. The proxy’s speech shall be complied with the written proxy, documents of public solicitation and advertisement. Unless otherwise provided by laws and regulations, the shareholders appointing a proxy to attend the shareholders meeting shall agree with any speeches and voting made by the proxy in the shareholders meeting.

When a shareholder speaks at the meeting, unless otherwise permitted by the chairman and the speaking shareholder, no other shareholders shall interrupt the speech of the speaking shareholder; otherwise the chairman shall stop such interruption.

Article 19

The same shareholder may not speak more than twice for the same motion without the chairman's permission, and each speech time may not exceed 5 minutes.

The chairman may stop the speech of any shareholder who violates the above provision or when such speech is out of the scope of the motion.

Article 20

A legal entity serving as proxy to attend a shareholders meeting may designate only one representative to attend such meeting.

When a legal-entity shareholder has appointed two or more representatives to attend the shareholders meeting, only one representative can speak for each motion.

Article 21

After the speech of the shareholder(s) present at the shareholders meeting, the chairman may respond in person or designate relevant person(s) to respond to the speech.

Article 22

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

Article 23

Unless otherwise provided by the Company Act or the Company's Articles of Incorporation, a resolution shall be adopted by a majority of the votes represented by the shareholders present at the meeting. The voting right of shareholders shall be calculated according to the voting right that shareholders may exercise in accordance with the Company Act or the Company’s Articles of Incorporation.

A motion may be resolve by way of vote, or shall be deemed passed if no objection to the motion is expressed by all of the shareholders present at the meeting after the solicitation of the chairman, which shall have the same effect as if it was voted by casting ballots. If there shall be an amendment or alternative to one motion, the chairman shall combine the amendment or alternative with the original motion to determine their orders for resolution. In addition, if the proposal submitted by shareholders according to Article 3 of these Rules is conflicting or amending or substituting against the proposal of the Board of Directors, the chairman shall combine the proposal of shareholders with that of the Board of Directors to decide the order for resolution. If any one of the above shall be passed, the others shall be deemed as rejected, upon which no further resolution shall be required.

Article 24

  • 37 -

The chairman shall appoint persons responsible for checking and counting ballots during votes on motions. The results of resolution shall be announced at the place and recorded in the minutes of the meeting. The persons responsible for checking ballots must be shareholders and shall monitor the voting procedure, prevent from inappropriate voting behaviors, examine ballots and monitor the records of the persons responsible for counting ballots. A ballot shall be invalid and shall not be calculated under any of the following conditions:

  1. a ballot is not in the form provided by the Company;

  2. a ballot is not thrown in the ballot box;

  3. a blank ballot without writing words or expressing opinion regarding the motions;

  4. a ballot with other words thereon other than those required to be filled in;

  5. the handwriting on a ballot is too blurred or indistinct to be readable or is altered;

  6. a ballot is used by the proxy who violates the "Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies"; or

  7. any violation of laws or regulations or voting guidelines made by the Company. The standard for recognition of invalid ballots in case the exercise of voting right in writing by shareholders is carried out in conformity mutatis mutandis with the Subparagraphs 1, 3, 4, 5 and 7 of the proceeding paragraph. If there is any doubt or disputes, the shareholders agree to authorize the Company's verification section to decide.

In addition, the standard for recognition of invalid ballots in case the exercise of voting right by electronic transmission by shareholders is carried out in conformity mutatis mutandis with Subparagraph 7 of the proceeding paragraph, as well as in compliance with the relevant regulations of the authority.

Article 25

During the meeting, the chairman may, at his discretion, set time for intermission.

Article 26

In case of an air-raid alarm, an earthquake or other force majeure event, the chairman shall immediately announce to suspend the meeting and evacuate respectively. Once the reason of suspending the meeting is eliminated, the chairman shall decide if the meeting will resume.

Article 27

Resolutions adopted at a shareholders meeting shall be recorded in the minutes of the meeting, which shall be affixed with the signature or seal of the chairman of the meeting and shall be distributed to all shareholders of the company within twenty (20) days after the close of the meeting. The minutes of the meeting may be made and distributed by electronic way.

With regard to the distribution of the minutes in the foregoing paragraph, the minutes may be distributed by way of an announcement on the Market Observation Post System, instead of actual distribution of the minutes.

The minutes must faithfully record the meeting's date (year, month, day), place, chairman's name, resolution method, summary of proceedings, and results of resolutions. The minutes of shareholders' meeting shall be preserved for as long as the Company exists.

Article 28

Any matter concerned that is not provided in these Rules shall be handled in accordance with the Company Law and the related laws and regulations, and the relevant provisions of the Articles of Incorporation of the Company.

Article 29

  • 38 -

These Rules shall be effective from the date they are approved by the shareholders' meeting. The same applies in the case of amendments.

  • 39 -

Appendix 2 (English Translation)

ARTICLES OF INCORPORATION WINBOND ELECTRONICS CORPORATION[5]

The twenty-fifth amendment was adopted by the Shareholders' Meeting of June 19, 2013

Section 1 : General Principles

  • Article 1: The Company is incorporated as a company limited by shares in accordance with the Company Act (the "Company Act")and shall have the name of Winbond Electronics Corporation ( hereinafter the "Company").

  • Article 2: The business scope of the Company is as follows: Research and development, ODM, production and manufacture, repair, and sale of the following products:

  • (i) Integrated circuits.

  • (ii) Semiconductor memory parts and components and their systems products.

  • (iii) Semiconductor components and system products for use in computer systems.

  • (iv) Semiconductor components and system products for use in digital communications.

  • (v) Semiconductor components and system products for use in peripherals.

  • (vi) Other semiconductor components.

  • (vii) Design of computer software programs and data processing.

  • (viii) Import and export trade related to the business of the Company.

  • Business categories and codes of the aforementioned products are as follows:

  • (i) CC01080 Electronic Parts and Components Manufacture

  • (ii) CC01110 Computers and Computing Peripherals Manufacture

  • (iii) CC01120 Data Storage Media Manufacture and Duplication

  • (iv) F401010 International Trade

  • (v) I301010 Software Design Services

  • (vi) I301020 Data Processing Services

  • (vii)I501010 Product Designing

  • Article 2-1: The Company may act as a guarantor as required by its business operation.

  • Article 2-2: Total investment by the Company shall not be subject to the ceiling of an amount equivalent to 40 percent of its paid-in capital.

  • Article 3: The Company has its head-office in Central Taiwan Science-Based Industrial Park. Subject to the approval of the Board of Directors and government authority, the Company may, if necessary, set up branches or business offices within and outside of the Republic of China.

  • Article 4: Public notices by the Company shall be made in accordance with Article 28 of the Company Act.

5 This translation is for reference only. In the event of any discrepancy between the Chinese version and this translation, the Chinese version shall prevail.

  • 40 -

Section 2 : Shares

  • Article 5: The total capital of the Company is sixty-seven billion New Taiwan Dollars ( NT$67,000,000,000) divided into six billion seven hundred million (6,700,000,000) shares, at ten New Taiwan Dollars per share and may be issued in a series of issuance. The un-issued shares may be issued by a resolution of the Board of Directors if the Board deems necessary.

A maximum of five billion New Taiwan Dollars may be used to be divided into five hundred million shares at ten New Taiwan Dollars per share may be used for issuance, in installments, of stock/subscription warrants, preferred shares with subscription rights, or corporate bonds with subscription rights. The quota each for the issuance of stock/subscription warrants, preferred shares with subscription rights or corporate bonds with subscription rights may be adjusted by the Board of Directors in consideration of factors concerning capital market and operation needs.

Article 6: (Deleted)

  • Article 7: Shares certificates of the Company shall be in registered form and shall be signed or sealed by at least three directors and then be printed in the form as requested by the government authority and be legally authenticated before being issued in accordance with laws and regulations. In the case where issuance of shares does not require issuing of share certificates, the Company shall register the shares with the central securities depositary institution.

  • Article 8: The transfer, registration, loss or destruction of share certificates shall be handled in accordance with the Company Act and relevant regulations. Taiwan Securities Central Depository Co., Ltd. may request the Company to combine its share certificates in exchange for issuance of share certificates of large denomination.

Section 3: Shareholders Meetings

  • Article 9: Shareholders meetings shall be of two types, general meetings and special meetings. General meetings shall be convened by the Board of Directors once a year, within six months from the end of each fiscal year in accordance with law. Special meetings shall be convened in accordance with the law, whenever necessary.

  • Article 10: Shareholders may designate a proxy to attend a shareholders meeting with a power of attorney stating the scope of authority in accordance with the Company Act and the "Regulations for the Use of Proxies for the Attendance at Stockholders Meetings of Public Companies," promulgated by the competent governmental authority.

  • Article 11: Unless otherwise provided by the laws and regulations, each share has one voting right.

  • Article 12: Except otherwise provided by the laws and regulations, a resolution of the shareholders meeting shall be adopted by the majority of the votes represented by the attending shareholders who hold the majority of the Company’s issued shares.

Section 4 : Directors and Supervisors

Article 13: The Company shall have 7 to 9 directors, among whom there should be not less than two

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independent directors accounting for not less than one-fifth of the total number of directors, and 2 to 3 supervisors whose term of office is three years. Election of directors and supervisors shall adopt the candidates nomination system prescribed in Article 192-1 of the Company Act. All of the directors and the supervisors are elected by the shareholders' meeting from the candidate list of directors and supervisors, and are eligible for re-election. Independent and non-independent directors shall be elected at the same time, but the quota shall be calculated separately.

The method of candidate nomination and election of director and supervisor, professional qualifications, requirements relating to shareholdings, restrictions on concurrent positions held, and other compliance matters with respect to independent directors shall conform to the Company Act, the Securities and Exchange Act, and other relevant rules and regulations.

The aggregate number of shares of nominal stocks held by all the directors and supervisors shall not be less than the percentage stipulated by the competent authority in accordance with law.

  • Article 13-1: The Company may, after the approval of the board of directors, in view of the international and local industry standards, purchase liability insurance for directors and supervisors with respect to the indemnification liabilities that the directors and supervisors shall be liable resulting from exercising their duties during their terms of office according to law.

  • Article 14: The Board of Directors shall be formed by directors. The directors shall elect a Chairman of the Board of Directors from among themselves by a majority vote at a meeting attended by two-thirds or more of the directors. The Chairman of the Board of Directors represents the Company. A Vice Chairman may also be elected to assist the Chairman.

  • Article 14-1: Meetings of the Board of Directors are convened by the Chairman of the Board of Directors. When convening a meeting of the Board of Directors, a convention notice specifying the reasons for convening such meeting shall be sent to each director and supervisor seven days prior to the meeting; provided that a meeting may be convened at any time by notice sent by fax or e-mail instead of a written notice in case of emergency.

Unless otherwise provided by law, resolutions adopted at a meeting of the Board of Directors must be approved by a majority vote of the directors being present, who shall represent no less than half of the total number of directors.

Directors may designate other directors as their proxies to attend the meetings of the Boards of Directors; provided that each director may act as proxy for one other director only. The Board of Directors shall meet at least once every three months.

  • Article 15: In the case where the Chairman of the Board is on leave or otherwise unable to perform his/her duties, matters conducted on behalf of the Chairman shall be handled in accordance with Article 208 of the Company Act.

  • Article 16: Remuneration for directors and supervisors shall be decided by the Board of Directors based on their contribution and involvement in the operations of the Company and by reference to those in similar industries both domestically and internationally.

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Article 17: The functions and responsibilities of the Board of Directors shall be as follows:

  1. Review operating policies and short- and long- term development plans;

  2. Review annual business plans and supervise its implementation;

  3. Approve budget and review the results at year-end;

  4. Propose capital increase or decrease;

  5. Propose profit distribution or loss make-up plans;

  6. Review, approve, amend and terminate material contracts and contracts relating to procurement, transfer, licensing of important technology and patents and of important technical cooperation;

  7. Propose and review plans in connection with using transfer as security, sale, lease, pledge, mortgage, or other disposal of all or a substantial portion of assets of the Company;

  8. Propose and review amendments to the Articles of Incorporation;

  9. Approve organizational by-laws and important operation rules;

  10. Decide the establishment, reorganization, or removal of branches or business offices;

  11. Approve major capital expenditures of NT$500 Million or more (capital expenditures not exceeding the above amount shall be approved by the Chairman of the Board of Directors);

  12. Appoint or remove corporate officials at the level of vice presidents and higher;

  13. Convene shareholders meetings and make business reports;

  14. Examine and approve investment in other enterprises and purchase/sale of stocks of NT$ 500 Million or more (The Chairman is authorized to approve the investment or purchase/sale if the transaction amount is less than NT$500 Million);

  15. Appoint or dismiss auditing certified public accountant of the Company;

  16. Examine and approve the application to financial institutions or third parties for financing, guarantees, providing acceptance of commercial paper, any other extension of credit, and credit lines for derivatives products in an amount of NT$500 Million or more. The Chairman of the Board of Directors is authorized to approve any of the above applications that is in an amount no more than NT$500 Million.

  17. Examine and approve the amount of endorsements, guarantees, and acceptance of commercial paper to be made in the name of the Company;

  18. Examine and approve major business transactions between related parties (including affiliated enterprises);

  19. Perform such other duties and responsibilities prescribed by law or authorized by shareholders meetings.

Where it is necessary and legally permissible, actions listed above may first be approved or conducted by the Chairman of the Board of Directors and later reported to the Board of Directors for recognition. Actions covered by items 11, 14 and 16 above intending for the same purpose shall not be separately contracted, applied for or spent without prior approval.

  • Article 18: The supervisors shall perform the following functions and responsibilities:

  • (1) Audit the final accounting.

  • (2) Examine business and financial conditions of the Company.

  • (3) Examine the books, records and documents of the Company.

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  • (4) Perform such other supervisory matters provided by law.

Section 5: Management

  • Article 19: The Company may have chief executive officer, vice executive officer, president and several vice presidents according to the resolution of the Board of Directors. Appointment, removal, and remuneration of the chief executive officer, vice executive officer, president and vice presidents shall be handled in accordance with Article 29 of the Company Act. The Board of Directors is authorized to determine the duties and function of the said managers or the Board of Directors may authorize the Chairman of the Board of Directors to determine the duties and functions of the said managers.

Section 6 : Accounting

  • Article 20: The Company's fiscal year shall be from January 1 to December 31 of each calendar year. Final accounting shall be prepared after the end of each fiscal year.

  • Article 20-1: After the end of each fiscal year, the Board of Directors shall have the following documents prepared: (1) business report (2) financial statement (3) proposal for allocation of surplus profits or making up loss, and submit the same for supervisors' examination and for recognition at the shareholders meeting.

  • Article 21: (Deleted)

  • Article 22: If the Company has surplus earnings at the end of a fiscal year, after covering all losses incurred in prior years and paying all taxes, the Company shall set aside 10% of said earnings as legal reserve. However, legal reserve need not be made when the accumulated legal reserve equals the paid-in capital of the Company. After setting aside or reversing special reserve pursuant to applicable laws and regulations and orders of competent authorities from (1) the remaining amount plus undistributed retained earnings; or (2) the differences between the undistributed retained earnings and the losses suffered by the Company at the end of a fiscal year if the losses can be fully covered by the undistributed retained earnings, the Company shall distribute the remaining amount (if not otherwise set aside as special reserve and reserved based on business needs) in the following order:

  • (1) 1% to 2% as remuneration to directors and supervisors;

  • (2) 10% to 15% as bonus to employees;

  • (3) the remaining amount as bonus to shareholders. Not less than 10% of the total shareholders bonus shall be distributed in form of cash.

  • "Employees" referred to in Item 2 of the proceeding Paragraph, when distributing the stock bonus, include the employees of subsidiaries of the Company meeting certain criteria. The Board of Directors is authorized to determine the above "certain criteria" or the Board of Directors may authorize the Chairman of the Board of Directors to ratify the above "certain criteria".

  • Article 22-1: The Company's dividend distribution policy is made in accordance with the Company Act and the Articles of Incorporation in consideration of factors including capital and financial structure, operating status, retained earnings, industry characteristics and economic cycle. The dividends shall be distributed in a steady

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manner under consideration of the appropriate retained earnings which may be retained or distributed in stock dividend or cash dividend, or both, so as to maintain continuous growth. The Company is now fast growing and expanding and is in an industry that requires intensive capital, technologies, and labors. Factoring in these industry characteristics, the dividend policy is highly dependent upon future needs for capital expenditures and working capital. As a result, the appropriation of retained earnings is preferably by way of cash dividends, nevertheless, stock dividends would also be applicable if the conditions so warrant. Based on the current policy, the distribution of stock dividends is subject to a condition that stock dividends shall not be more than 50% of total dividends. Nonetheless, the conditions, timing, amount or type of surplus earnings reserved or dividends distributed may be adjusted at appropriate time in accordance with economic and industrial fluctuations, in particular, the Company's need for future development and profitability.

Section 7 : Supplementary Regulations

  • Article 23: For matters not covered herein, provisions in the Company Act shall govern.

  • Article 24: Organizational rules of the Company shall be separately stipulated.

  • Article 25: These Articles of Incorporation were enacted on September 1, 1987, and were first amended on November 20, 1987. The second amendment was made on May 23, 1988; the third amendment was made on August 23, 1988; the fourth amendment was made on May 5, 1989; the fifth amendment was made on October 21, 1989; the sixth amendment was made on March 30, 1990; the seventh amendment was made on April 30, 1991; the eighth amendment was made on March 26, 1992; the ninth amendment was made on March 25, 1993; the tenth amendment was made on March 30, 1994; the eleventh amendment was made on March 17, 1995; the twelfth amendment was made on April 9; the thirteenth amendment was made on April 22, 1997; the fourteenth amendment was made on 17 April, 1998; the fifteenth amendment was made on April 23, 1999; the sixteenth amendment was made on April 27, 2000; the seventeenth amendment was made on April 16, 2001; the eighteenth amendment was made on May 17, 2002; the nineteenth amendment was made on May 6, 2003; the twentieth amendment was made on June 10, 2005; the twenty-first amendment on June 9, 2006; the twenty-second amendment was made on April 30, 2008; the twenty-third amendment was made on June 18, 2010. The twenty-fourth amendment was made on June 22, 2011; and the twenty-fifth amendment was made on June 19, 2013 and shall become effective after approval by a resolution of the shareholders meeting. Any subsequent amendments to these Articles of Incorporation shall follow the same procedure.

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