5.13MB - Foxconn Technology Group

HON HAI PRECISION INDUSTRY CO., LTD.

Annual Report

2012

Annual Report Website

Market Observation Post System: http://mops.twse.com.tw

Company Website: http://www.foxconn.com.tw

Printing Date: April 30, 2013

Stock Code

2317

THIS IS A TRANSLATION OF THE 2012 ANNUAL REPORT (THE “ANNUAL

REPORT”) OF HON HAI PRECISION INDUSTRY CO., LTD. (THE “COMPANY”).

THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE,

THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER

FOR THE TRANSLATION. THE CHINESE TEXT OF THE ANNUAL REPORT SHALL

GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE

SUBJECT MATTER STATED HEREIN.

I. Spokesperson: Deputy Spokesperson:

Name: Simon Hsing Name: Jack Hsiao

Title: Spokesperson Title: Director of Public Relations Office

Tel: (02)2268-3466#3629 Tel: (02)2268-3466#3628

E-mail: [email protected]

II. Contact information of the head office, branch offices and factories

Head office

Add: No. 66, Zhongshan Road, Tucheng Industrial Zone, Tucheng District, New Taipei City

Tel: (02)2268-3466

Hsinchu Science Park Branch Office

Add: 5F-1, No. 5, Hsin-an Road, Hsinchu Science and Industrial Park, East Area, Hsinchu

City

Tel: (03)578-4975

Neihu Branch Office

Add: 1F-11F, No. 32, Jihu Road, Neihu District, Taipei City

Tel: (02)2799-6111

California (US) Branch Office

Add: 288 S. Mayo Ave City of Industry, CA 91789 U.S.A.

Tel: 1-714-680-2066

Huyue Factory

Add: No. 2, Zihyou Street, Tucheng Industrial Zone, Tucheng District, New Taipei City

Tel: (02)2268-3466

Minsheng Factory

Add: No. 4-1, Minsheng Road, Tucheng Industrial Zone, Tucheng District, New Taipei City.

Tel: (02)2267-6511

Dingpu No. 1 Factory

Add: No. 53, Section 4, Zhongyang Road, Tucheng District, New Taipei City

Tel: (02)2268-3466


Add: 2F, No. 53, Section 4, Zhongyang Road, Tucheng District, New Taipei City

Tel: (02)2268-3466


Add: 4F, No. 53, Section 4, Zhongyang Road, Tucheng District, New Taipei City

Tel: (02)2268-3466

mailto:[email protected]

III. Share Transfer Agency

Name: Grand Fortune Securities Co., Ltd.

Address: 3F, No. 51, Section 1, Minsheng East Road, Taipei City

Tel: (02)2562-1658

Website: http://www.gfortune.com.tw

IV. Contact information of the Certified Public Accountants for the Latest Financial

Repot

Name: Hsu, Yong-jian, Xue, Ming-ling

CPA Firm: Pricewaterhouse Coopers (PwC) Taiwan

Address: 27F, No. 333, Section 1, Keelong Road, Taipei City

Tel: (02)2729-6666

Website: http://www.pwc.tw

V. Overseas trade places for listed negotiable securities

London Stock Exchange: http://www.londonstockexchange.com

Singapore Stock Exchange: http://www.sgx.com/wps/portal/marketplace/mp-ch/home

VI. Company Website: http://www.foxconn.com

http://www.gfortune.com.tw/

http://www.pwc.tw/

http://www.londonstockexchange.com/

http://www.sgx.com/wps/portal/marketplace/mp-ch/home

http://www.foxconn.com/

Table of Contents I. Letter to Shareholders .................................................................................................................. 1

II. Company Introduction ................................................................................................................. 3

A. Founding date: February 20, 1974 ............................................................................................... 3

B. Formation History ....................................................................................................................... 3

III. Corporate Governance Report ..................................................................................................... 9

A. Organization ................................................................................................................................ 9

B. Implementation of corporate governance .................................................................................. 31

C. Information on Accountants’ Fees ............................................................................................ 49

D. Alternation of CPA .................................................................................................................... 49

E. The Company’s chairman, general manager, or any managerial officer in charge of

finance or accounting matters has in the most recent year held a position at the

accounting firm of its CPA or at an affiliated enterprise: .......................................................... 49

F. Transfer & pledge of stock equity by directors, supervisors, managerial officers and

holders of 10% or more of company shares: ............................................................................. 50

G. Information on relation among top ten shareholders ................................................................. 52

H. Combined shareholding percentage ........................................................................................... 53

IV. Company Shares and Fund Raising ........................................................................................... 54

A. Company capital and shares ...................................................................................................... 54

B. Section on Corporate Bonds ...................................................................................................... 63

C. Preferred Shares (with warrants): .............................................................................................. 67

D. Global Depository Receipts (GDR) ........................................................................................... 67

E. Subscription of warrants for employees: ................................................................................... 68

F. Name of managers holding warrants for employees and top ten employees in terms of

subscription of warrants, and the acquisition status: ................................................................. 69

G. Subscription of new shares for employee restricted stocks: ...................................................... 69

H. Name of managers holding the new shares for employee restricted stocks and top ten

employees in terms of subscription of the new share, and the acquisition status: ..................... 69

I. Issuance of new shares for merging and transferring the stocks of other companies: ............. 69

J. Implementation of fund usage plan: .......................................................................................... 69

V. Operational Highlights .............................................................................................................. 70

A. Business Activities .................................................................................................................... 70

B. Production and Sales Status ....................................................................................................... 72

C. Information on Environmental Protection Costs ....................................................................... 75

D. Labor Relations ......................................................................................................................... 76

VI. Financial Standing ..................................................................................................................... 81

A. Most Recent 5-Year Concise Financial Information ................................................................. 81

B. Most Recent 5-Year Financial Analysis .................................................................................... 85

C. Audit Report by Supervisors ..................................................................................................... 89

D. 2012 Financial Statements Consolidated With Subsidiaries Audited by CPA .......................... 91

VII. Financial Analysis ................................................................................................................... 237

A. 2012 vs. 2011 Financial Analysis ............................................................................................ 237

B. 2012 vs. 2011 Operating Result Analysis ............................................................................... 237

C. Cash Flow Analysis ................................................................................................................. 238

VIII. Special Notes ........................................................................................................................... 239

A. Consolidated Financial Statements of Affiliates ..................................................................... 239

B. Affiliated Companies Reports: ................................................................................................ 240

1

I. Letter to Shareholders

Although the political and economic environments are so turbulent, the industrial aspects also

have been through tremendous changes, our Company has gained better performance since

last year, the consolidated revenue and profit once both hit record highs! On behalf of the

Board of Directors of the Company, I want to thank all my colleagues for their hard working

and dedicated contributions. Once again, I sincerely thank our strategic partners and

customers for their continued trust and also thank all the shareholders of the Company for

their long-term support.

The international economic environment of 2012 was again precarious. From the very

beginning of 2012, although the United States government extended the low interest rate

policy to stimulate the economy, the debt problems of Greece, Italy and Spain expanded and

once again triggered a debt crisis in Europe, which restrained the global economic recovery.

The presidential elections of many countries were in the second half of 2012, the uncertainty

of which created a more unpredictable situation around the world. Especially, the U.S. fiscal

cliff problem has lowered global consumer confidence significantly, and bogged down

economic development. Fortunately, after the U.S. Federal Reserve Board initiated the third

and fourth quantitative easing monetary policy, the tension of the global economy has been

eased.

Despite operating in such a difficult business environment, under the concerted efforts of all

my colleagues our Company not only achieved excellent performance results but also earned

our remarkable reputation around the world: According to the U.S. Fortune “Global 500”

ranking report, our Company has moved up to the next level, from 60th in 2011 to once again

advance to 43rd last year. In addition, our Company has already obtained 2,013 U.S. patents

in 2012, ranking 8th in the whole world. We have proved Hon Hai’s strong competitive

strength once again.

Looking forward to 2013, the steady growth of the U.S. economy may gradually lead the

global economic recovery, but while the U.S. deficit reduction programs take effect

automatically, whether the debt ceiling can be increased and other issues will affect consumer

confidence. Meanwhile, the most important is that the U.S. policy of quantitative easing may

exit in the second half of this year, it will be a big challenge weather the economy is capable

of sustained recovery at that time. In addition, high unemployment rates and low growth rates

persist in the European market, new developing countries face different issues such as

inflation, unemployment, growth slows etc., coupled with the rapid changes in the ecological

structure of the technology industries, 2013 is still full of uncertainty. In view of this, in

addition to continuous investment in research and development of different areas of science

and technology, our Company is committed to “efficiency, automation, unmanned

productions and globalization” to enable our Company to continue to take the leading

position in the “eight-screens-one-network-one-cloud” business territory. The Group

describes 2013 as a key year, and looks forward to extend the business from core

manufacturing and technology to “technology services” which the development goal is to go

through from the first mile to last mile. We are confident that even though the overall

business recovery cycle is still highly uncertain, we will be able to break through all the

difficulties and challenges to bring you all more value!

2

Once again, on behalf of all shareholders of the Company, I sincerely thank all the employees

and their families. I also encourage the Company’s management team continue to work hard

to maintain the excellent operating results. Thank you so much for all your support.

3

II. Company Introduction

A. Founding date: February 20, 1974

Listing date: June 18, 1991

B. Formation History

In 1994

1. Increased capital to NT$1,303,000,000.

2. Reinvested Vate Technology Co., Ltd.

3. Reinvested LUNG HWA Electronics.

4. Many new products like AN and AT were developed.

In 1995


2. Reinvested Unimicron Technology Corporation.

3. Reinvested United Microelectronics Corporation.

4. Many new products like L/P MCA, SGC and RF were developed.

5. Huyue Factory carried out its third phase for expansion.

In 1996


2. Reinvested Hongyang Venture Capital Investment Co., Ltd.

3. Reinvested Guifeng Co., Ltd.

In 1997


2. Set up the heat transfer product business office and environmental-friendly

electro-plating technique development department.

3. Established the Material Testing Center.

In 1998

4


2. Established the High-Speed Electrical Test Lab, the EMI/RFI Lab and Heat

Transfer Lab.

3. Listed into The Information Technology 100 (IT 100) by the Business Week

of America for the first time.

In 1999


2. Capital was first raised from the international finance market via GDR

issuance with 10% premium for issuing, creating a new high in overseas

capital raising by domestic enterprises.

3. Selected as the Best Management Company in Taiwan by Asian Money.

In 2000


2. Issued US$345 million of overseas unsecured and transferable corporate

bonds.

3. Invested Foxconn Optical Technology Inc. through its subsidiary – FOTI

Holdings Corporation.

In 2001


2. Evaluation of Taiwan Ratings as long-term issuer: grade AA- and its prospect:

stability.

3. Evaluation of Standard & Poor’s (S & P): grade BBB and its prospect:

stability.

4. Became the first largest private manufacturing enterprise in Taiwan.

5. It is the earliest manufacturer of quantity production around the world for Intel

Pentium 4 CPU Stocket478.

6. Issued NT$5 billion of domestic unsecured ordinary corporate bonds.

In 2002


2. According to survey of Taiwan Ratings, it was the first largest manufacturing

enterprise in Taiwan.

5

3. Won the first prize of the Best Corporate Strategy by Asiamoney.com.

4. Became the first largest exporter in Greater China.

In 2003


2. Issued US$450 million of overseas unsecured and transferable corporate

bonds.

3. According to evaluation of IR Magazine, it was awarded the Best Investor

Relation in Taiwan.

4. Acquired Motorola Chihuahua Factory in Mexico.

In 2004


2. Acquired Eimo Oyji of Finland.

3. Merged Taiwan Ambit Microsystems (Stock) Company.

4. Became the first largest 3C OEM globally.

In 2005


2. Invested Antai Power (Stock) Company through its subsidiary – Hongyang

Venture Capital Investment (Stock) Company.

3. Invested Chi Mei Communication Systems Inc. through its subsidiary –

Transworld Holdings Limited.

4. Issued NT$11,500,000,000 of domestic unsecured ordinary corporate bonds.

5. Its overseas subsidiary – Foxconn International Holdings Ltd. was listed in

Hong Kong.

6. Selected as the first largest enterprise in Taiwan firstly by Common Wealth.

7. Ranked among the Top 15 of the World’s Most Admired Companies in

Electronics by Fortune.

8. Became a member of Electronic Industry Code of Conduct (EICC), dedicated

to promoting corporate social and environmental responsibilities (hereinafter

referred to as SER).

6

In 2006


2. Merged Taiwan Premier Image Technology Corp.

3. Issued NT$18,000,000,000 of domestic unsecured and transferable corporate

bonds.

4. Selected as the Happiest Taiwan Enterprise according to the questionnaire

survey of 104 Job Bank.

5. Selected as the Most Desirable Company of office staff of Taiwan according

to the survey of Cheers.

6. Nominated as the Best Investor Relation Company in Taiwan by IR Magazine.

7. Nominated as the Best Corporate Governance of the Year in Taiwan by IR

Magazine.

In 2007


2. Awarded as the Most Admired Enterprise in Taiwan by Common Wealth.

3. Nominated as the Best Investor Relation Company in Taiwan by IR Magazine.

4. Awarded the Progress Prize for the best investor relation company in Taiwan

by IR Magazine.

5. Awarded the title of the World’s Top 10 Chinese Enterprises of the Year by

Asiaweek.

6. Ranked 154th

among Fortune Global 500 Enterprises.

In 2008



3. Awarded as the Most Admired Enterprise in Taiwan by Common Wealth.

4. Ranked 132nd


In 2009



3. Ranked 109th


7

4. Ranked first among Taiwan enterprises for four consecutive years by Taiwan

Ratings.

5. Awarded as the Best Management Enterprise in Taiwan by Finance Asia.

6. Recognized as one of Asia’s Fabulous 50 of Asia by Forbes.

In 2010


2. Issued US$1,000,000,000 of overseas transferable corporate bonds.


4. Ranked 176th

among the Forbes Global 2000.

5. Ranked first among Taiwan Top 1000 Enterprises for five consecutive years

according to the evaluation of Common Wealth.

6. Ranked first among Taiwan enterprises for five consecutive years by Taiwan

Ratings.

7. Ranked 194th

among the Global 500 Enterprises by (Britain) Financial Times.

8. Ranked 112th

among Fortune Global 500.

9. Awarded as the Most Admired Companies in Taiwan by Common Wealth.

In 2011



3. Ranked 189th

among Forbes Global 2000.

4. Ranked first among Top 1000 Taiwan Enterprises for six consecutive years by

Common Wealth.

5. Ranked first among Taiwan enterprises for six consecutive years according to

the evaluation of Taiwan Ratings.

6. Ranked 60th

among Fortune Global 500 by Fortune.

7. Awarded the Most Admired Enterprise in Taiwan by Common Wealth.

In 2012



8

3. Ranked first among the Top 1000 Taiwan Enterprises for seven consecutive

years according to the evaluation of Common Wealth Magazine.

4. Ranked first among Taiwan enterprises according to the evaluation of Taiwan

Ratings for seven consecutive years.

5. Ranked 43rd

among Fortune Global 500.

6. Ranked 156th

among Forbes Global 2000.

9

III. Corporate Governance Report

A. Organization

(1) Organization Chart

Chairman Chairman’s Office

Board of Directors

President

Hu

man

Reso

urces D

ivisio

n

CESB

G B

usin

ess G

rou

p

iDSB

G B

usin

ess Gro

up

iDP

BG

Bu

sine

ss Gro

up

CN

SBG

Bu

sine

ss Gro

up

CM

MSG

Bu

siness G

rou

p

NW

InG

Bu

sine

ss Gro

up

SH

ZB

G B

usin

ess Gro

up

Glo

bal R

&D

Cen

ter

F&

A an

d In

vestm

ent

Man

agem

ent D

ivisio

n

System

info

rmatio

n D

ivision

Glo

bal P

rocu

rem

ent D

ivision

Glo

bal Legal D

ivision

PC

EBG

Bu

sine

ss Gro

up

Executive Secretary

Internal Audit Division

CC

PB

G B

usin

ess Gro

up

Shareholders’ Meeting

Compensation Committee

Supervisors

10

(2) Department functions

Internal Audit Division

Audit internal regulations and rules and put forward proposals for improvement.

President

President is responsible for working out business objectives, taking charge of the

implementation of overall businesses, guiding and supervising the departments to deal

with their respective businesses.

Business Group

Provide customers with such services as the best design development, trial

production, small scale production, mass production, global logistics and after-sale

services, etc.

F&A and Investment Management Division

Responsible for financial and accounting matters, budget preparation and control,

capital planning and scheduling, operations concerning stock.

Global R&D Center

Mainly to make overall planning for R&D resources, work out R&D direction and

integrate R&D with production and manufacturing.

System Information Division

Responsible for establishing, maintaining, managing, controlling and auditing the

global information system of the Company and setting up safe management and

control and firewall and other relevant mechanisms. Also in charge of connecting

global network communication systems of the Company, ERP, KM, virtual office and

other platforms.

Global Procurement Division

Responsible for purchasing raw materials needed by the Company for production and

manufacturing and adjusting the procurement strategies according to industrial

prospects.

Global Legal Division

Responsible for developing, applying and maintaining intellectual property rights for

the Company and dealing with relevant lawsuits.

Human Resources Division

Responsible for comprehensive management of such businesses of the Company as

personnel, checking attendance and recruitment etc.

11

(3) Directors and Supervisors

Date: 04/28/2013

Title Name

Date of

Election

(appoint

ment)

Term

of

Office

First

Elected

Date

Shares held when

elected Current shareholding

Shares currently

held by their

spouses and

minor children

Shares held in

the name of

others Main working (education)

experience

Current positions in the Company and

other companies

Spouse or second-degree

relative holding a

position as key manager,

director or supervisor

Number % Number % Number % Number % Title Name Relatio

n

Chairman Gou, Tai-ming

(Terry Gou)

Jun. 8,

2010 Jul. 1,

2010

3

Feb. 20,

1974

925,961,760 10.79 1,473,989,536 12.45 0 0 0 0

Graduated from China Marine Technical College Director of Taiwan Electrical Equipment Association, Chairman of Mold Industry Association

None

None None None

Director

Hon Chiao

International

Investment Co.,

Ltd

Jun. 8,

2010 Jul. 1,

2010

3

Jun. 10,

1995

13,767,634 0.16 18,657,897 0.16 0 0 0 0 None None

None None None

Representative:

Tai, Jeng-wu

Jun. 8, 2010

Jul. 1,

2010

3 Jul. 1,

2001

8,399,832 0.09 10,869,951 0.09 905,138 0 0 Tatung Institute of Technology, Taiwan

President of Shenzhen Fujun Material Technology Co., Ltd. President of Futaijie Science and Technology Development (Shenzhen) Co., Ltd. Director of Fuhongyuan Environmental Technology (Shenzhen) Co., Ltd. Representative of directors of Xinxi Technology (Stock) Company Representative of Fitipower Integrated Technology Inc.

None None None

Director

Hon Chiao

International

Investment Co.,

Ltd

Jun. 8, 2010

Jul. 1,

2010

3 Jun. 15,

1998

13,767,634 0.16 18,657,897 0.16 0 0 0 0 None None

None None None

Representative:

Lu, Sung-ching

Jun. 8,

2010 Jul. 1,

2010

3

Feb. 21, 2000

20,470,434 0.23 17,120,384 0.14 3,097 0 0 0 Master’s Degree, University of Illinois, U.S.A

None

None None None

Director

Hon Jin

International

Investment Co.,

Ltd

Jun. 8,

2010

Jul. 1,

2010

3

Jun. 8,

2007

961,344 0.01 1,302,812 0.01 0 0 0 0 None None

None None None

12

Title Name

Date of

Election

(appoint

ment)

Term

of

Office

First

Elected

Date

Shares held when


Shares currently

held by their

spouses and

minor children

Shares held in

the name of


experience


other companies


relative holding a




n

Representative:

Lu, Fang-ming

Jun. 8,

2010

Jul. 1, 2010

3

Jun. 8,

2010

3,120,623 0.04 6,344,859 50.05 1,535,802 0.01 0 0

Master’s Degree of Institute of Applied Physics, Chung Yuan Christian University Taiwan General Manager of Asia-Pacific Region, Lingyun Science and Technology Co. Ltd. General Manager of Taiwan Computer System, Hewlett Packard

None

None None None

Director

Hon Jin

International

Investment Co.,

Ltd

Jun. 8,

2010

Jul. 1, 2010

3

Jun. 8,

2007

961,344 0.01 1,302,812 0.01 0 0 0 0 None None

None None None

Representative:

Chien, Yi-bin

Jun. 8,

2010

Jul. 1,

2010

3

Jun. 8,

2007

1,6,83,250 0.02 1,589,324 0.01 0 0 0 0 International trade department of Tamkang University

Supervisor of Bao Xin International Investments Co., Ltd. Director of Expressive Profits Incorporated

None None None

Independent

Director Wu, Yu-Chi

Jun. 8,

2010 Jul. 1,

2010

3

Jun. 8, 2010

0 0 0 0 0 0 0 0

Master’s Degree in Accounting, National Taiwan University Bachelor degree in accounting, Tunghai University

President of Ji-Tou United Accountant Firm

S u p e r v i s o r o f I - S h e n g E l e c t r i c

W i r e & C a b l e C o . , L t d .

Supervisor of Procystal Technology Co.,

Ltd.

None None None

Independent

Director Liu, Cheng-Yu

Jun. 8,

2010

Jul. 1,

2010

3

Jun. 8,

2007

0 0 0 0 0 0 0 0 Master’s Degree in Finance, National Taiwan University

Attorney of I-Si Technology Law Firm None None None

Supervisor

Fu-Rui

International

Investment Co.,

Ltd.

Jun. 8, 2010

Jul. 1,

2010

3 Jun. 15,

1998

41,718,123 0.49 56,536,398 0.48 0 0 0 0 None None None None None

Representative:

Wan, Jui-hsia

Jun. 8,

2010 Jul. 1,

2010

3

Jun. 10, 2004

14,706 0.00 0 0 0 0 0 0

Master’s Degree in Accounting, Soochow University Deputy professor, Department of Account, National Taiwan University

Supervisor of Cheng Uei Precision Industry Co., Ltd. None None None

13

Title Name

Date of

Election

(appoint

ment)

Term

of

Office

First

Elected

Date

Shares held when


Shares currently

held by their

spouses and

minor children

Shares held in

the name of


experience


other companies


relative holding a




n

Supervisor Huang, Qing-

Yuan

Jun. 8,

2010

Jul. 1, 2010

3

Jun. 8,

2007

0 0 0 0 1,161,318 0.01 0 0

Master’s Degree, Graduate School of Business, Nihon University, Japan PhD, Graduate School of Business, Nihon University

Independent Director of Cathay Financial

Holdings

Independent Director of Cathay Life

Insurance

Independent Director of Cathay Securities

Corporation Independent Director of Cathay United Bank

Supervisor of Maishi Venture Capital

Investment Co., Ltd. Director of DFI Inc.

Director of Taiwan Stock Exchange

Corporation (TWSE) Independent Director of TAIWANGLASS

GROUP

Supervisor of Maishi #2 Venture Capital

Investment Co., Ltd.

President of WeiHeng Asset Management

Co., Ltd

None None None

14

(4) Major shareholders of institutional shareholders

Date: 04/28/2013

Name of Institutional Shareholder Name of Major Shareholders Percentage

Hongqiao International Investment Co., Ltd. Outstanding Growth Ltd., British Virgin Islands 90.99%

Shijun International Investment Co., Ltd. 9.01%

Hongjing International Investment Co., Ltd. Hongyuan International Investment Co., Ltd. 50%

Hongqi International Investment Co., Ltd. 50%

Furui International Investment Co., Ltd. Xu Muji 99.83%

Chien, Yi-bin 0.17%

(5) Principal shareholder of corporate shareholders with a juridical person as its

main shareholder

Name Major shareholders Percentage

Outstanding Growth Ltd., British Virgin

Islands INB Holdings Limited 100%

Shijun International Investment Co., Ltd. Great Century International Limited 100%

Hongyuan International Investment Co., Ltd. Hon Hai Precision Industry Co., Ltd. 100%

Hongqi International Investment Co., Ltd. Hon Hai Precision Industry Co., Ltd. 100%

15

(6) Professional knowledge and independence check matrix of directors and supervisors

Qualification

Name

Has over five years work experience and following

professional qualifications Independence Attribute (See Notes Below)

Current

Positions at

Other

Companies

Business, Legal

Affairs, Finance,

Accounting,

Lecturer or above in

Colleges in Related

departments

Judge, Prosecutor,

Attorney, CPA or

National Certified

Professionals

Business,

Legal Affairs,

Finance,

Accounting or

Related Work

Experience

1 2 3 4 5 6 7 8 9 10

Gou, Tai-ming 0

Tai, Jeng-wu 0

Lu, Sung-ching 0

Lu, Fang-ming 0

Chien, Yi-bin 0

Wu, Yu-Chi 0

Liu, Cheng Yu 0

Huang, Qing-Yuan 3

Wan, Jui-hsia 0

Notes: The Directors and Supervisors comply with the following conditions from two years before being elected and during his tenure in office:

(1) Not an employee of this Company or its affiliates.

(2) Not a Director or Supervisor of the Company or its affiliates. (However, this does not apply, in cases where the person is an Independent Director of the company,

its parent company, or any subsidiary in which the company directly or indirectly holds more than 50% of the voting shares.)

(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an

aggregate amount of one percent or more of the total number of outstanding shares of the Company or ranking in the top ten in holdings.

(4) Not a spouse, second-degree relative or fifth degree relative of those listed in the above three items.

(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of outstanding shares of the Company

or that holds shares ranking in the top five in holdings.

(6) Not a director, supervisor, manager or a shareholder holding five percent or more of the shares of a company or institution that has a business or financial

relationship with the Company.

(7) Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides

commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the company, or a spouse thereof.

(8) Not a spouse of or a second degree relative of any other Director of the Company.

(9) No violations of Article 30 of the Company Act.

(10) Not a governmental, judicial person or its representative as defined by Article 27 of the Company Act.

16

(7) Management Team Information

Date: 04/28/2013

Title Name Inaugura

tion date

Shareholding

Currently

holding shares of

spouses and

minor children

Holding

shares in the

name of

others Main experience (education

experience) Current positions at other companies

Spouse or second-

degree relative holding

a position as manager

Number % Number % Number % Title Name Relation

Chairman

and

President

Terry

Gou

Feb. 20,

1989 1,473,989,536 12.45 0 0 0 0

Graduated from China Marine

Technical College

Director of Taiwan Electrical

Appliances Equipment Association

Chairman of Mold Industry

Association

None None None None

Department

General

Manager

Tai,

Jeng-wu

Aug. 1,

1992 10,869,951 0.09 905,138 0.01 0 0

Tatung Institute of Technology,

Taiwan

President of Shenzhen Fujun Material

Technology Co., Ltd.

President of Futaijie Science and Technology

Development (Shenzhen) Co., Ltd.

Director of Fuhongyuan Environmental

Technology (Shenzhen) Co., Ltd.

Representative of directors of Xinxi

Technology (Stock) Company

Representative of Fitipower Integrated

Technology Inc.

None None None

Department

General

Manager

Lu,

Sung-

ching

Aug. 1,

1992 17,120,384 0.14 3,097 0.00 0 0

Master’s Degree, University of

Illinois, U.S.A. None None None None

17

Title Name Inaugura

tion date

Shareholding

Currently

holding shares of

spouses and

minor children

Holding

shares in the

name of



Spouse or second-




Department

General

Manager

You,

Xiang-fu

May 27,

1992 36,643,284 0.31 57,169,569 0.48 0 0

Graduated from Tamsui Institute of

Business Administration, Taiwan

President of Huai’an Fulitong Trade Co., Ltd.

President of Qunkang Electronics (Kunshan)

Co., Ltd.

President of Fuyu Energy Technology

(Kunshan) Co., Ltd.

President of Fuyu ElectronicTechnology

(Huai’an) Co., Ltd.

None None None

Department

General

Manager

Lu,

Fang-

ming

Apr. 1,

2003 6,344,859 0.05 1,535,802 0.01 0 0

Master’s Degree of Institute of

Applied Physics, Chung-Yuan

Christian University

Taiwan General Manager of Asia-

Pacific Region, Lingyun Science

and Technology Co., Ltd.

General Manager of Taiwan

Computer System, Hewlett Packard

None None None None

18

Title Name Inaugura

tion date

Shareholding

Currently

holding shares of

spouses and

minor children

Holding

shares in the

name of



Spouse or second-




Department

General

Manager

Jiang,

Hao-

liang

May 1,

2005 2,958,872 0.02 0 0 0 0

Univ. of Birmingham. UK

Bachelor of EE None None None None

Department

General

Manager

Chien,

Yi-bin

Jun. 1,

2005 1,589,324 0.01 0 0 0 0

International Trade Department of

Tamkang University, Taiwan

Director of Expressive Profits Incorporated

Representative of supervisors of Baoxin

International

Investment (Stock) Company

None None None

Department

General

Manager

Xu,

Mu-ji

Jun. 1,

2005 9,365,774 0.08 0 0 0 0

Graduated from National Chin-Yi

University of Technology, Taiwan

President of Hongzhun Precision Tooling

(Kunshan)

Co., Ltd.

President of Hongzhun Precision Tooling

(Shenzhen)

Co., Ltd.

None None None

19

Title Name Inaugura

tion date

Shareholding

Currently

holding shares of

spouses and

minor children

Holding

shares in the

name of



Spouse or second-




Department

General

Manager

Zhong,

Yi-wen

Jan. 1,

2007 186,045 0.00 0 0 0 0

Bachelor degree in economics,

Iowa State University, U.S.A.

Manager of Hon Hai Precision

Industry (Stock) Company

President of Hongfujin Precision Industry

(Shenzhen) Co., Ltd. None None None

Department

General

Manager

Ling,

Zhi-ping

Jan. 21,

2009 1,808,065 0.02 0 0 0

0

Enterprise Research Institute of

University of Washington, U.S.A.

School of Business, Taiwan

University

President of Amworld Microsystems

(Shanghai) Ltd.

President of Ambit Microsystems (Shanghai)

Ltd.

President of Ambit Microsystems

(Zhongshan) Ltd.

None None None

Deputy

Department

General

Manager

Xiong,

Bing-

zheng

Aug. 31,

2008 894,861 0.001 120,110 0.00 0 0

Industrial Management Department

of Taiwan Institute of Industrial

Skills

Industrial Engineering Department

of Taiwan Institute of Technology

Director of Foxconn Precision Electronics

(Yantai) Co., Ltd.

Director of Jing Fu Tai Precision Electronics

(Yantai) Company Limited

Director of Fu Hongyuan (Shenzhen)

Company Limited Director Environmental

Technology

Director of Hongfujin Precision Electronics

(Yantai) Co., Ltd.

Director of Yantai Fuhuada Precision

Electronics Co., Ltd.

Director of Competition Optical Technology

Ltd.

Director of Competition Team Ireland Ltd.

Director of Competition Team Technology

Pte. Ltd.

Director of Dominant Elite Holding Ltd.

Director of Foxconn Baja California S.A. de

C.V.

Director of Famous Rise International Ltd.

Director of Universal Field International Ltd.

Representative of directors of Pan-

None None None

20

Title Name Inaugura

tion date

Shareholding

Currently

holding shares of

spouses and

minor children

Holding

shares in the

name of



Spouse or second-




Head

Office

General

Manager

Li,

Jin-ming

Oct. 17,

1997 237,373 0.00 0 0 0 0

Graduated from National Chengchi

University, Taiwan

Deputy general manager of Huafei

Color Display System (Stock)

Company

Manager of Taiwan Philip (Stock)

Company

President of Fertile Plan International

Logistics (Vietnam) Co., Ltd

Director of Foxconn (Far East) Ltd.(Cayman)

Director of Foxconn (Far East) Ltd.(HK)

Director of Foxconn International Holdings

Ltd.

Board director of Foxconn Japan Co., Ltd.

Director of Foxteq Holdings Inc.

Director of Foxteq Integration, Inc.(Cayman)

Director of Foxteq Investments Ltd.

Director of FUCHUAN CO., Ltd.

Director of FUHONG Precision Component

(Bac Giang) LTD.

Director of FUNING Precision Component

Co., LTD.

Director of KCT Engineering Co., Ltd.

Directors of Liyi International Investment

(Stock) Company

Directors of Hongyuan International


Director of Hongjing International Investment

(Stock) Company

Directors of Hongqi International Investment

(Stock) Company

Supervisors of Hongyang Venture Capital


Director of Hongfujin Precision Industry

(Shenzhen) Co., Ltd.

President of Shenzhen Futaitong International

Logistics Co., Ltd.

None None None

Financial

Director

Huang,

De-cai

Apr.

15,1998 2,655,813 0.02 0 0 0 0

Graduated from National Chiao

Tung University, Taiwan

Financial director of Vanguard

International Semiconductor

Corporation

Manager of Taiwan Philip (Stock)

Company

Director and president of Hongyang Venture

Capital Investment (Stock) Company

Representative of directors of Hongqi

International Investment (Stock) Company

Representative of directors of Baoxin


Representative of supervisors of Hongjing


Representative of supervisors of Liyi


Representative of supervisors of Hongyuan

International investment (Stock) Company

Supervisor of Pan-International Industrial

Corporation

Representative of Supervisors of CyberTAN

Technology, Inc.

Director of Shenzhen Fuxuntong Trading Co.,

Ltd.

None None None

Accounting

Director

Chou,

Zong-kai

Jul. 20,

2010 61,750 0.00 0 0 0 0

Master’s Degree in accounting,

Long Island University

Manager of Deloitte & Touche,

Taiwan

Lecturer of Hsing Wu University ,

Taiwan

Director of FAST VICTOR LIMITED

Director of Focus PC Enterprises Limited.

Supervisor of FUCHUAN CO., LTD.

Director of Full Bonus International Limited

Director of FUYONG CO., LTD

Director of Glory Star Investments Limited.

Director of Great Name Investments Limited

Director of Great World Technology Pte. Ltd.

Director of HIGH PRECISION HOLDINGS

LIMITED

Supervisor of KCT Engineering Co., Ltd.

Director of Keep Profit Investment Limited

Director of Mega Star Investments Limited

Director METRO VICTORY LIMITED

Director of Operate Technology Limited

Director of Precision Technology Investments

Pte. Ltd. Director of Tongrand Limited

None None None

21

(8) Remunerations paid to directors, supervisors and management team in the latest year

(a) Director Remuneration

Unit: NT$Thousand

Title Director Juristic

Director

Juristic

Director

Representati

ve

Juristic

Director

Representati

ve

Juristic

Director

Juristic

Director

Representati

ve

Juristic

Director

Representati

ve

Independent

Director

Independent

Director

Name

Gou, Tai-

ming

(Terry Gou)

Hon Chiao

International

Investment

Co., Ltd.

Tai, Jeng-

wu

Lu, Sung-

ching

Hon Jin

International

Investment

Co., Ltd.

Lu, Fang-

ming

Chien, Yi-

bin Wu, Yu-Chi

Liu, Cheng-

Yu

Rem

un

erat

ion

of

Dir

ecto

rs

Remunerations

(A)

The Company 3,600

All companies within the

consolidated financial

statements

3,600

Retirement

allowance

(B)

The Company 0



statements

0

Remuneration

from distribution

of earnings

(C)

The Company 0



statements

0

Business

execution

expenses (D)

The Company 480



statements

480

Proportion of A, B, C

and D to net profit after

tax

The Company 0.00%



statements

0.00%

22

R

elev

ant

rem

un

erat

ion

of

par

t-ti

me

per

son

nel

Remuneration,

money award and

special expenses

etc. (E)

The Company 25,674



statements

25,674

Retirement

allowance (F)

The Company 0



statements

0

Employee profit

sharing from

earnings

distribution (G)

The

Company

Cash

Dividends 0

Stock

Dividends 213,283

All

companies

within the

consolidate

d financial

statements

Cash

Dividends 0

Stock

Dividends 213,283

Number of stock

certificates of

employee (H)

The Company None



statements

None

Number of shares

of Employees

Restricted Stock

(I)

The Company None



statements

None

Proportion of A, B, C,

D, E, F and G to net

profit after tax

The Company 0.26%



statements

0.27%

Is there any remuneration from other invested

businesses apart from subsidiaries No

23

Range of Remunerations

Range of Remunerations paid to directors

Names of directors

Summation of the first 4 items (A+B+C+D) Summation of the first 7 items (A+B+C+D+E+F+G)

The Company All companies involved in

financial statement (I) The Company

All companies in the financial

statement (J)

Under NT$2,000,000

Terry Gou, Hon Chiao

International Investment Co.,

Ltd., Tai Jeng-wu, Lu Sung-

ching, Hon Jin International

Investment Co., Ltd., Lu Fang-

ming, Chien Yi-bin



Ltd., Tai Jeng-wu, Lu Sung-

ching, Hon Jin International

Investment Co., Ltd., Lu Fang-

ming, Chien Yi-bin



Ltd., Hon Jin International




Ltd., Hon Jin International


NT$2,000,000 (included) ~ NT$5,000,000 (excluded) Wu Yu-Chi, Liu Cheng-Yu Wu Yu-Chi, Liu Cheng-Yu Wu Yu-Chi, Liu Cheng-Yu Wu Yu-Chi, Liu Cheng-Yu

NT$5,000,000 (included) ~ NT$10,000,000 (excluded) - - - -

NT$10,000,000 (included) ~ NT$15,000,000 (excluded) - - - -

NT$15,000,000 (included) ~ NT$30,000,000 (excluded) - - Chien Yi-bin Chien Yi-bin

NT$30,000,000 (included) ~ NT$50,000,000 (excluded) - - Lu Sung-ching Lu Sung-ching

NT$50,000,000 (included) ~ NT$100,000,000 (excluded) - - Tai Jeng-wu Tai Jeng-wu

Over NT$100,000,000 - - Lu Fang-ming Lu Fang-ming

Total 9 9 9 9

24

(b) Remunerations of Supervisors

Unit: NT$Thousand

Title Name

Remuneration of supervisors

Proportion of A, B and C

to net profit after tax Is there any

remuneration

from other

invested

businesses

apart from

subsidiaries

Remunerations (A) Remuneration from

earnings distribution (B)

Business execution

expenses (C)

The

Company

All

companies in

the financial

statement

The

Company

All

companies

in the

financial

statements

The

Company

All

companies

in the

financial

statements

The

Company

All

companies

in the

financial

statements

Supervisor Huang, Qing-Yuan

3,600 3,600 0 0 480 480 0.0043% 0.0044% No

Supervisor

Fu-Rui International


Representative:

Wan Jui-hsia

25


Range of Remuneration Paid to Supervisors

Name of Supervisor

Summation of the first three items (A+B+C)

The Company All companies in the financial statement (D)

Under NT$2,000,000 Fu-Rui International Investment Co., Ltd.

Representative: Wan Jui-Hsia

Fu-Rui International Investment Co., Ltd.

Representative: Wan Jui-Hsia

NT$2,000,000 (included) ~ NT$ 5,000,000 (excluded) Qing-Yuan Huang Qing-Yuan Huang

NT$5,000,000 (included) ~ NT$10,000,000 (excluded) - -





Over NT$100,000,000 - -

Total 2 2

26

(c) Remunerations paid to the management team

Unit: NT$Thousand

Title Name

Remunerations

(A)

Retirement

allowance (B)

Money award and

special payment

etc. (C)

Earning distribution as dividends

for personnel (D)

(Note)

Rate of total

amount of A, B,

C and D to pure

profits after tax

(%)

Number of

stock

certificates of

employee

Number of shares

of Employees

Restricted Stock

Rem

un

erat

ion

fro

m o

ther

inv

este

d

bu

sin

esse

s ap

art

fro

m s

ub

sid

iari

es.

Th

e C

om

pan

y

All

co

mp

anie

s i

n t

he

fin

anci

al s

tate

men

t

Th

e C

om

pan

y

All

co

mp

anie

s i

n t

he

fin

anci

al s

tate

men

t

Th

e C

om

pan

y

All

co

mp

anie

s in

th

e

fin

anci

al s

tate

men

t The Company

All companies

involved in

financial

statement

Th

e C

om

pan

y

All

co

mp

anie

s i

n t

he

fin

anci

al s

tate

men

t

Th

e C

om

pan

y

All

co

mp

anie

s i

n t

he

fin

anci

al s

tate

men

t

Th

e C

om

pan

y

All

co

mp

anie

s i

n t

he

fin

anci

al s

tate

men

t

Cas

h

Div

iden

ds

Sto

ck

Div

iden

ds

Cas

h

Div

iden

ds

Sto

ck

Div

iden

ds

General

Manager Terry Gou

23,340 23,340 0 0 44,165 44,165 0 356,087 0 356,087 0.447% 0.462% None None None None None

Department

General

Manager

Lu,

Sung-ching

Department

General

Manager

You, Xiang-

fu

Department

General

Manager

Tai,

Jeng-wu

Department

General

Manager

Lu, Fang-

ming

Department

General

Manager

Jiang,

Hao-liang

Department

General

Manager

Chien,

Yi-bin

Department

General

Manager

Xu,

Mu-ji

27

Department

General

Manager

Zhong,

Yi-wen

Department

General

Manager

Ling,

Zhi-ping

Deputy

Department

General

Manager

Xiong,

Bing-zheng

Head Office

General

Manager

Li,

Jin-ming

Financial

Director

Huang,

De-cai

Accounting

Director

Chou,

Zong-kai

Note: NT$6,822,891Thousand of earnings were distributed to employees as dividends in 2012 according to the resolution of board of directors. In this

year, the actual distribution rate will be considered for distributing dividends.

28


Range of remuneration paid to the management team

Names of General Managers and Deputy General Managers

The Company All companies in the financial statement (E)

Under NT$2,000,000 Terry Gou, You Xiangfu, Xu Muji Terry Gou, You Xiangfu, Xu Muji

NT$2,000,000 (included) ~ NT$5,000,000 (excluded) Zhong Yiwen Zhong Yiwen

NT$5,000,000 (included) ~ NT$10,000,000 (excluded) Xiong Bingzheng, Chou Zongkai Xiong Bingzheng, Chou Zongkai


NT$15,000,000 (included) ~ NT$30,000,000 (excluded) Chien Yi-bin Chien Yi-bin

NT$30,000,000 (included) ~ NT$50,000,000 (excluded) Lu, Sung-ching, Jiang Haoliang, Huang Decai, Li Jinming Lu, Sung-ching, Jiang Haoliang, Huang Decai, Li Jinming

NT$50,000,000 (included) ~ NT$100,000,000 (excluded) Tai, Jeng-wu, Ling Zhiping Tai, Jeng-wu, Ling Zhiping

Over NT$100,000,000 Lu, Fang-ming Lu, Fang-ming

Total 14 14

29

(d) Employee profit sharing granted to the management team

Unit: NT$Thousand

Note: As of the printing date of this Annual Report, the distribution list of employee profit sharing has not been fixed, and shall be proposed as

stipulated according to the actual distribution of the last year.

Title Name

Stock Dividends

(Note)

Cash Dividends

(Note) Total

Proportion of tota l a mount to net

prof its after tax (%)

Ma

na

gem

ent T

eam

General manager Terry Gou

356,087 0 356,087 0.376%

Department General Manager Lu, Sung-ching

Department General Manager You, Xiang-fu

Department General Manager Tai, Jeng-wu

Department General Manager Lu, Fang-ming

Department General Manager Jiang, Hao-liang

Department General Manager Chien, Yi-bin

Department General Manager Xu, Mu-ji

Department General Manager Zhong, Yi-wen

Department General Manager Ling, Zhi-ping

Department Vice President Xiong, Bing-zheng

Head Office General Manager Li, Jin-ming

Financial Director Huang, De-cai

Accounting Director Chou, Zong-kai

30

(e) Analysis of the proportion of the total remuneration of directors,

supervisors, general managers and deputy general managers of the

Company paid by the Company and all companies in the consolidated

financial statement to net profit after tax in individual financial

statements of the recent two years.

Item

Title

Proportion of the total compensation to net profit after tax

2012 2011

The Company

All companies in

the consolidated

financial statement

The Company

All companies in

the consolidated

financial

statement

Directors 0.256% 0.265% 0.261% 0.260%

Supervisors 0.004% 0.004% 0.005% 0.005%

General Manager and Deputy

General Managers 0.447% 0.461% 0.561% 0.559%

(f) Procedures for payment and relevance with operation performance and

future risks

(i) According to the distribution of earnings as stipulated in the Company

Articles of Incorporation, except employee profit sharing, there is no

distribution to directors or supervisors.

(ii) The remunerations paid to general managers and deputy general

managers during the recent two years include salary, money award and

employee profit sharing from earnings distribution. As for salary and

money award, the payment is handled according to the relevant

procedures of the Company’s personnel regulations. As for employee

profit sharing from earnings distribution, the distribution is proposed

by board of directors according to the distribution of annual earnings

and the earnings distribution as stipulated in the Company Articles of

Incorporation and upon the approval of the shareholder meeting.

(iii) According to the Company’s policy for payment of compensation,

reasonable compensation shall be paid based on job evaluation of the

personnel in the Company.

31

B. Implementation of corporate governance

(1) Information on implementation of Board of Directors

Five meetings were held by the Board of Directors in the recent year (2012) with

their attendance shown as follows:

Title Name Attendance in

person By proxy

Attendance rate

in person (%) Remarks

Chairman Terry Gou 2 2 40 -

Director

Representative of Hon

Chiao International

Investment Co., Ltd.: Tai,

Jeng-wu

3 2 60 -

Director

Representative of Hon

Chiao International

Investment Co., Ltd.: Lu,

Sung-ching

2 0 40 -

Director

Representative of Hon Jin

International Investment

Co., Ltd.: Lu, Fang-ming

5 0 100 -

Director

Representative of Hon Jin


Co., Ltd.: Chien, Yi-bin

0 1 0 -

Independent

Director Wu, Yu-Chi 5 0 100 -

Independent

Director Liu, Cheng-Yu 5 0 100 -

Other noteworthy matters:

1. Matters specified in Article 14.3 of Taiwan’s Securities and Exchange Act or Board resolutions where other

Independent Directors have expressed opposition or qualified opinions that have been noted in the record or

declared in writing: None

2. Avoidance of Conflict of Interest by directors. None

3. Assessment of objectives (such setting of an audit committee and improvement of information transparency

etc.) and implementation status in the area of strengthening the powers of the board of directors for current and

immediately past years: None.

(2) Operation status of Audit Committee:

The Company does not have an audit committee.

32

(3) Participation of supervisors in the operation of the Board of Directors:

Five meetings were held by the Board of Directors in the recent year (2012) with

the attendance of supervisors shown as follows:


person By proxy (%) Remarks

Supervisor

Representative of Fu-Rui


Co., Ltd.: Wan, Jui-hsia

5 100 -

Supervisor Huang, Qing-Yuan 4 80 -


1. Organization and responsibilities of supervisors

(a) Communication of between supervisors with and the Company’s employees and shareholders:

Supervisors regard direct connection and dialogue with the Company’s employees and shareholders

from the perspective of supervisors

(b) Communication between supervisors with and internal audit director and accountants.

(1) Supervisors have no objection to the Audit director shall submit audit report submitted by

the audit director of audit items to supervisors in the next following month after the audit is

completed.

(2) Audit director shall attend the regular meeting of the Board of Directors and make prepare

the audit service report to which supervisors do not have any no objection.

(3) Supervisors carry out face-to-face regular quarterly communication and communication in

written form with accountants on finance regularly in each quarter in person and in writing.

2. If supervisors participating in board meetings have expressed opinions, meeting minutes shall record

date and session of the board meeting, content of the resolution, resolution of the meeting and the

response of the Company regarding the supervisor’s opinion: None.

33

(4) Corporate governance implementation and the difference from the Corporate Governance Best Practice Principles for

TWSE/GTSM-Listed Companies and reasons

Item Operation

Difference from

corporate governance

pract ice pr inc iples for

TWSE/GTSM-Lis ted

companies and reasons

1. Equity structure and shareholder rights

(1) How the Company handles shareholder suggestions of shareholders

and disputes.

(2) Company’s control of the list of its major shareholders and final

decision-makers

(3) How the Company establishes its risk management mechanism and

firewalls involving related enterprises.

1. An investor relation office was set up to deal with shareholder

suggestions and disputes.

2. The Company can control the list of its major shareholders and final

decision-makers, and disclose them legally.

3. The Company, according to such relevant internal methods as operating

methods for operating, service and financial operations with specific

companies and group enterprises, supervision methods for subsidiaries,

endorsement guarantee method, capital loan and other methods and assets

to get or deal with assets, has established proper risk management and

control mechanism and firewalls. Those who have business contact with

any materially related enterprise shall be deemed as independent third

person so as to avoid non-conventional transactions.

In conformity with the

corporate governance practice

principles

2. Organization and responsibilities of the Board of Directors

(1) Establishment of Independent Directors

(2) Regular assessment on independence of CPA

1. Two Independent Directors were selected at the General Shareholder

Meeting in 2010.

2. Carry out regular assessment on independence of CPA.



principles

III. Establishment of communication channels with materially related

parties

Direct communication and dialogue with stakeholders shall be done when

supervisors regard it necessary.



principles

4. Disclosure of information

(1) Establishment of a Website where information on financial

operations and corporate governance is disclosed.

(2) Use of other methods for information disclosure (such as setting an

English website, appointing personnel in charge of collecting and

disclosing information, implementing spokesman system and

publication of shareholder meeting records on the Company’s website).

1. The Company has established a website where relevant information on

financial operations and business is disclosed, or the Company’s relevant

information on financial operations, business and corporate governance can

be inquired through an open information observation station.

2. The Company has appointed special person in charge of information

disclosure of the open information observation station of exchange through

observation station and information release on website of company.

3. The Company has set up positions for spokesperson and deputy

spokesperson.



principles

5.Operation of Functional Commissions such as the Nomination, or

Compensation Committees established by the Company

The Company has set up the Compensation Committee according to the

regulations.

At present, the Company

doesn’t set up such functional

commissions as Nomination

Committee and Audit

Committee.

34

Item Operation

Difference from

corporate governance

pract ice pr inc iples for

TWSE/GTSM-Lis ted

companies and reasons

6. If the Company works out its corporate governance system according to the rule of “Corporate Governance Best Practice Principles for TWSE/GTSM-Listed Companies, please

state the differences from other companies.

The Company is still planning its corporate governance system, but the rights of directors and supervisors and the internal control systems are made according to the spirit and

standards in Corporate Governance Best Practice Principles for TWSE/GTSM-Listed Companies.

7. Other important information for better understanding the Company’s corporate governance operation

(1)Interests and rights of employees: The Company treats employees in an honest way all the time to ensure their legal interests and rights according to the Labor Standards Act.

(2)Care for employees: by adopting welfare system and good education and training, mutual trust relationship established with employees, such as assistance to employees in group

activities and supply of entertainment facilities, subsidy for health diagnosis and medical consulting, supply of employee dormitory, care for lodging life of employees and parking lot

etc.

(3)Relation with investors: The investor relation office was set up to deal with shareholder suggestions.

(4)Relation with suppliers: good relations with suppliers are maintained all the time.

(5)Relation with materially related parties: materially related parties shall communicate with the Company and put forward proposals to protect their due legal rights and interests.

(6)Further study of directors and supervisors: the Company’s directors are qualified with industrial professional knowledge and practice experience in operation management.

(7)Execution of risk management policy and risk measuring standards: various internal regulations are established legally for various risk management and evaluation.

(8)Execution of customer policies: stable and good relations with customers are maintained with the view of creating profits.

(9)Liability insurance for the Company’s directors and supervisors: liability insurance has been covered for directors and supervisors.

8.If there exist corporate governance evaluation reports done by the Company itself or outsourced to professional agencies, please state the evaluation result, major shortcomings (or

recommendations) and improvement: NA.

35

(5) Organization, responsibilities and operation status of the Compensation Committee:

(a) Information on members of the Compensation Committee

ID

(Note 1)

Conditions

Name

Has over 5 years of work experience and

following professional qualifications. Independence Attribute (Note 2)

Current

positions at

other

companies

Remarks

(Note 3)

Business,

Legal

Affairs,

Finance,

Accounting,

Lecturer or

above in

Colleges in

Related

departments

Judge,

Prosecutor ,

Attorney,

CPA or

Nat ional

Cer t i f ied

Professionals

Business,

Legal

Affairs,

Finance,

Accountin

g or

Related

Work

Experienc

e

1 2 3 4 5 6 7 8

Independent

Director Wu, Yu-Chi

0

Independent

Director Liu, Cheng-Yu

0

Director Lu, Fang-ming

0 Yes

Note 1: For ID column, please fill in director, Independent Director or others.

Note 2: If the member complies with the following conditions from 2 years before being elected and during his tenure in office, please mark ““ in the corresponding

space.

(1) They are neither employees of the Company nor its affiliates

(2) They are neither directors nor supervisors of the Company or its affiliates, unless they are Independent Directors of the Company or its parent company or

subsidiaries in which the Company holds, directly or indirectly, more than 50% of the voting shares.

(3) They are not individual shareholders who hold shares, together with those held by their spouses, minor children or held under others’ name, in an aggregate

amount of more than 1% of the total outstanding shares of the Company or ranks among the top ten shareholders who are natural persons in terms of the share

volume held.

(4) They are not spouses or relative within the second degree of kinship or lineal relative within the third degree of kinship, or any of the persons in the preceding

three subparagraphs.

(5) They are not directors, supervisors or employees of a corporate shareholders that directly holds 5% or more of the total outstanding shares of the Company or

ranks among the top 5 corporate shareholders in the terms of share volume held.

(6) They are not directors, supervisors, managers or shareholders holding 5% or more shares of a specific company or institution and who also have financial or

business dealings with the Company.

(7) They are not professionals or owners, partners, directors, supervisors, or executive officer and the spouse thereof of a sole proprietorship, partnership, company, or

institution that provides commercial, legal, financial, accounting or consulting services to the Company or to its affiliates.

(8) Not any of the circumstances in Article 30 of the Company Act.

Note 3: If the member is a director, please explain whether it complies with Article 6.5 of the Regulations Governing the Appointment and Exercise of Powers by the

Compensation Committee of a Company Whose Stock is listed on the Stock Exchange or Traded over the Counter.

36

(b) Operation status of the Compensation Committee

(1) There are 3 members in the Company’s Compensation Committee.

(2) Current Term: From September 30, 2011 to June 30, 2013. The Compensation

Committee held two meetings (A) in the recent year (in 2012), the qualifications and

attendance of the Committee are shown as follows:


person (B) By proxy

Attendance rate in

person (%) (B/A)

(Note)

Remarks

Convener Wu, Yu-Chi 2 0 100 -

Member Liu, Cheng-Yu 2 0 100 -

Member Lu, Fang-ming 2 0 100 -


1. If the proposals of the Compensation Committee are not accepted or revised by the Board of Directors,

meeting minutes shall record date and session of the board meeting, content of the resolution, resolution of

the meeting and the response of the Company regarding the Compensation Committee’s opinion (if the

compensation approved by the Board of Directors is superior to the proposal of the Compensation

committee, the difference and causes shall be stated clearly).

2. If members have opposition or qualified opinions to the resolution of the Compensation Committee that

have been noted in the record or declared in writing, meeting minutes shall record date and session of the

meeting, content of resolution, proposals of all members and the response.

37

(6) Performance of Social Responsibilities

Items Implementation Status

Difference from the

Corporate Social

Responsibility Best

Practice Principles for

TWSE/GTSM-Listed

Companies and

reasons

1. Exercise and enhance corporate

governance

(1) The Company works out its corporate

social responsibility policy and checks the

results of the implementation.

(2) The Company sets up exclusively (or

concurrently) dedicated units to be in

charge of proposing and enforcing the

corporate social responsibility policies.

(3) The Company organizes regular

education and training on business ethnics

and advocating principles for directors,

supervisors and employees, and should

incorporate the foregoing into its

employee performance assessment system

to establish a clear and effective reward

and punishment system.

1. At present, the Company has worked out its

corporate social responsibility policy, covering ethnics,

laborers, safety, health, environment and management,

and established Foxconn Global SER Committee

(FGSC) to drive and supervise the execution of

relevant CSR operations.

2. In 2007, The Company set up FGSC organization,

which is composed of 7 full-time personnel in charge

of driving and supervising relevant work, including the

implementation of internal audit, performance

assessment, CSR education and training, and the

publication of CSR annual report. In addition, there are

over 60 part-time personnel in each business group and

surrounding units in charge of executing CSR related

work.

3. The Company carries out regular trainings and

propaganda on corporate business ethnics for its

employees every year. For its new employees,

trainings on personnel rules, management system,

business ethnics and morals are carried out on their

first working day to clarify their due responsibilities

and obligations.

Conformity

2. Environment for sustainable

development

(1) The Company endeavors to utilize all

resources more efficiently and uses

renewable materials which have a low

impact on the environment.

(2) Based on its industrial features, the

Company establishes proper environment

management systems.

(3) The Company establishes dedicated

units or assigns dedicated personnel for

environment management to maintain the

environment.

(4) The Company monitors the impact of

climate change on its operations, and

should establish company strategies to

save energy and reduce the emission of

carbon and greenhouse gas.

1. The Company actively advocates water recycling,

and adopts some renewable/biodegradable raw

materials to effectively reduce the impact of

production and manufacturing on the environment.

2. In response to the international trend and customer

requirements, the Company gradually established

environment management systems for its business

units, and passed the certification of ISO 14001.

3. In 2008, environmental protection office was

established to be in charge of planning, design,

management and operation maintenance of

environmental protection facilities, which were

installed in all working areas. Moreover, the Company

obtained the discharge license issued by the

government, and assigned dedicated personnel to be in

charge of equipment operation in accordance with laws

and regulations.

4. From 2008, the Company started the examination of

the emission of carbon dioxide, and some working

areas obtained certificates after passing the

certification. At the same time, the examination report

was submitted to relevant UN agencies with a view to

actively participating in important international topics.

The Company also started to promote energy

management by means of working out the objectives

of energy conservation and emission reduction and

endeavoring to the achieve them.

Conformity

38


Difference from the

Corporate Social

Responsibility Best


TWSE/GTSM-Listed

Companies and

reasons

3. Protect social public interests

(1) According to the relevant labor laws

and internationally acknowledged human

rights of laborers, the Company

establishes proper management methods,

procedures and non-discrimination

employment policy to ensure the legal

rights and interests of employees.

(2) The Company provides safe and

healthy working environment for its

employees and organizes training on

safety and health on a regular basis.

(3) The Company establishes regular

communication mechanism for

employees, and informs employees of the

operation changes that may have

significant impact on employees in a

reasonable way.

(4) The Company works out and discloses

its policies on consumer rights and

interests and establishes transparent and

effective procedures for accepting

consumer complaints in its products and

service.

(5) The Company cooperates with its

suppliers to jointly foster a stronger sense

of corporate social responsibilities.

(6) Through commercial activities, non-

cash property endowments, voluntary

service or other free professional services,

the company participates in community

development and charities events.

1. The Company abides by the labor law of the region

(or the country) where its working plants are located

by transferring relevant contents into its labor

management policy. The Company has established

corresponding procedures and special lines for labor

management to ensure the legal interests and rights of

its employees.

2. The Company provides safe and healthy working

environment for its employees and focus on employee

health care, a health management center to provide

employee health and health-related advice and

assistance, and regular health and safety at work

seminars.

3. The Company regularly holds various

communication meetings with employees to convey

the Company’s policies and information.

4. The Company follows the regulations on limited

use/prohibited use of hazardous substance and conflict

minerals in an all-round way and provides relevant

information to customers.

5. The Company has thousands of suppliers in different

regions, but we learn from each other for common

progress in the aspects of society and environment like

hazardous substance control, environmental protection,

labor safety and health, human rights, conflict metal

and carbon footprint. At the same time, our suppliers

are required to practice their corporate social

responsibilities.

6. As the Company actively participates in social

activities for public interests and charitable activities,

donations are provided for affected people in the Flood

of August 8th (in Taiwan), Sichuan Earthquake, Japan

Earthquake as well as Floral Expo Charitable Garden

Party.

Conformity

4. Enhance information disclosure

(1) The ways for the company to disclose

1. A special column for “corporate responsibilities” is

established on the Company’s website.

Conformity

39


Difference from the

Corporate Social

Responsibility Best


TWSE/GTSM-Listed

Companies and

reasons

relevant critical and reliable information

on corporate social responsibilities.

(2) The Company compiles with the

report on corporate social responsibilities

to disclose the performance of corporate

social responsibilities.

2. As a EICC member, the Company is dedicated to

promoting social and environmental responsibilities

(hereinafter referred to as SER), and worked out

“Foxconn Global Codes of Conducts: Social and

Environmental Responsibilities”.

5. If the Company makes its own corporate social responsibilities according to the rule of Corporate Social Responsibility

Best Practice Principles for TWSE/GTSM-Listed Companies, please state the differences.

The Company carries out regular trainings and propaganda on corporate business ethnics for its employees every year. For

its new employees, trainings on personnel rules, management system, business ethnics and morals are carried out on their

first working day to clarify their due rights and obligations. However, the Company hasn’t prepared its own Corporate

Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies, which will be worked out in the future

according to the specific regulations.

6. Other important information for better understanding of corporate social responsibilities (such as systems and measures

that the company has adopted with respect to environmental protection, community participation, social contributions,

social services, social and public interest, legal rights and interests of consumers, human rights, safety, health and other

corporate social responsibilities, and the status of implementation.):

(1) New processing systems are introduced to enhance the capacity to recover wastes and sewage, and installed and put

into operation in some workshop areas.

(2) Donated NT $ 825,000 to Law Foundation, NTU.

(3) Donated NT$980,000 to Qingling Foundation, NTU for NTU 3D IC packaging and versatile & Flexible organic

display device.

(4) Contributed NT$300,000 to Hakka Cultural and Economic Exchanges Association ‘Summit Forum’.

(5) Donated NT $ 200,000 to China Poly Industries Promote Common Standard Foundation.

(6) Donated NT $ 5,465,301 to National Tsing Hua University scholarships.

(7) Donated NT$9,432,500 to Graduate School Scholarship, National Kaohsiung Applied Sciences University.

(8) Contributed NT$500,000 to National Science Museum for Edison Learning Activity Funds.

(9) The Company has hosted lots of charity party to support disadvantaged people and social charitable organizations.

(10) Based on respect employees, the Company emphasizes employment of no children and no compulsory overtime work,

and cadres are required to pay no discrimination or harass employees. Above measures are announced formally.

(11) The Company established a safety and health department to regularly examine plant facilities and provide education

and training on industrial safety and health and relevant performance assessment.

(12) The Company set up a supplier management office for auditing the corporate social responsibilities and training of its

suppliers every year.

7. Clear statement shall be made if the products or corporate social responsibility report of the Company pass the

inspection of relevant certification agencies:

The Company hasn’t submitted its annual report on corporate social responsibilities to any certification organization for

inspection, but plans to submit it to a third-party certification institution for inspection in the near future.

40

(7) Status of Implementation of Integrity Management

Implementation of Integrity Operation

Items Implementation

Difference from the Integrity

Operation Practice Principles for

TWSE/GTSM-Listed Companies

and reasons

1. Adopt integrity operation policy and

scheme

(1) The company clarifies the integrity

operation policy in its regulations and

external documents and the commitment of

board of directors and managers to active

implementation.

(2) The company works out scheme,

operation procedures and guidelines of

conducts for employee education and

training to prevent dishonest behaviors

(3) When working out a scheme to prevent

dishonest behaviors, the company adopts

measures to prevent bribery and illegal

political contributions in business activities

with high risks of dishonest behaviors.

The Company sticks to the corporate

culture with integrity operation as the

core and works out codes of conduct

(CoC) for stakeholders to perform

relevant social and environmental

responsibilities, including Letter of

Commitment of Manufacturers signed

with suppliers, clearly stating that

suppliers should ensure transparent and

fair commercial trading activities. In

addition, the Company has made

commitment to customers and

shareholders in its CoC.

The Company carries out education and

training for all employees on CoC every

year regularly. For its new employees,

trainings on personnel regulations,

management system, business ethnics

and morals are provided to clearly state

their due rights and obligations.

The Company, strictly sticking to

business ethnics from its top level to

down level, establishes integrity

corporate culture and creates an

operation environment for sustainable

development based on transparent,

incorruptible and responsible operation

concepts.

Conformity

2. Put integrity operation into practice

(1) The company should keep its

commercial activities away from people

with records of dishonest behaviors, and

articles on honest behaviors shall be

explicitly stated in commercial contracts.

(2) The company sets up company sets up

exclusively (or concurrently) dedicated

units to be in charge of corporate integrity

operation and supervision of the board of

directors.

(3) The company works out policies to

prevent interest conflicts and provide

proper statement channels.

(4) The company shall establish effective

accounting system, internal control system

and auditing of internal auditors to put

integrity operation into practice.

The Company adheres to integrity

culture and operation, commits to

abiding by requirements of international

and domestic laws and regulations on

anti-corruption and anti-bribery, takes

zero-tolerance policy for any behavior or

activity against the regulations, and

strictly prohibits any corruption, bribery,

embezzlement and other illegal earning

activities. All employees shall receive

anti-corruption trainings for at least 2

hours every year. In addition, the

Company asks its downstream suppliers,

manufacturers and customers to strictly

implement high-standard anti-corruption

policies as the premise for cooperation.

After approved by the chairman of the

Global SER Committee and the general

managers of the business group, the

codes of conducts on corporate social

and environmental responsibilities have

become the basic principles and

standards of the Company to deal with

Conformity

41





and reasons

relationship with all stakeholders

(employees, customers, shareholders,

suppliers, public community, investors

and non-governmental organizations).

The whole management team of the

Company must strictly abide by the

principles of conducts and the stated

spirit and guiding principle. Under the

supervision of board of directors,

directors of each business group must

ensure their commercial operations in

conformity with the regulations of CoC.

The Company demands all new

employees to sign the Agreement on

Integrity, Incorruption and

Confidentiality of Intellectual Property

Rights and asks other employees to

abide by it. At the same time, the

Company also requires that its suppliers

or other cooperators should sign the

Letter of Commitment of Manufacturers

to ensure transparent and fair

commercial trading activities. The

Company holds annual supplier

meetings and carries out irregular SER

audit, conveying its requirements for

suppliers.

The Company establishes accounting

and internal control systems to put

integrity operation into practice. After

its internal auditors work out and review

the annual audit program according to

the risk evaluation results, the Company

will compile them into audit report and

submit it to the board of directors.

3. The company establishes reporting

channels and punishments for violation

against the regulations of integrity

operation as well as the appeal system.

The Company establishes various

reporting channels so that employees

and relevant people can report the

improper business behaviors through the

system. Anyone who violates the

regulations on integrity operation will be

punished according to the Company’s

regulations on reward and punishment.

In case of any illegal affairs, legal

actions will be taken as well.

Conformity

4. Enhance information disclosure

(1) The company establishes a website to

disclose relevant information on integrity

operation.

(2) Other information disclosure methods

of the company (such as setting up an

English website, appointing a dedicated

person in charge of collecting and

disclosing company information through

the website etc.).

On the Company’s official website both

in Chinese and English

(http://www.foxconn.com), there are

relevant information on integrity

operation such as annual report on

corporate social and environmental

responsibilities and CoC.

Conformity

http://www.foxconn.com/

42





and reasons

5. If the company makes its own integrity operation according to the Integrity Operation Best Practice Principles for

TWSE/GTSM-Listed Companies, please state the differences.

The Company has its own regulations on integrity and incorruption, which shall be respected by all employees, managers

and board of directors.

6. Other important information for better understanding of the integrity operation (such as the company’s determination on

advocating the integrity operation and policy among manufacturers who have business dealings with the company, inviting

them to participate in relevant trainings and review and revise the regulations on integrity operation).

Please refer to the Company’s official website: http://www.foxconn.com/CSR_REPORT.html (Annual Report on

Corporate Social and Environmental Responsibilities).

(8) Other Company-established corporate governance rules and regulations:

N/A

(9) Other Important Corporate Governance Information:

None

http://www.foxconn.com/CSR_REPORT.html

43

(10) Status of Implementation of Internal Control System

(a) Statement of internal control system

Hon Hai Precision Industry Co., Ltd.

Statement of Internal Controls

Date: 03/25/2013

According to the examination on internal control system done by the Company itself in 2012, we

hereby states as follows:

(1) The Company’s board of directors and management team understand their responsibilities of

developing, implementing and maintaining the Company’s internal control system, and such a

system has been established. The purpose of establishing the internal control system is to

reasonably assure the following objectives: (a) The effectiveness and efficiency of business

operation (including earnings ,operation performance and the safeguard of company assets); (b)

The reliability of the financial and related reports; and (c) The compliance of the relevant

laws/regulations and company policies;

(2) Due to the innate limitation in designing a faultless internal control system, this system can

only assure the reasonableness of the above three objectives have been fairly achieved. In

addition, the effectiveness of internal control system could alter over time due to the change of

business environment or situation. Since the Company’s internal control system has included

self-examination capability, the Company will make immediate corrections when errors are

detected.

(3) The evaluation of effectiveness of the internal control system design and implementation is

made in accordance with the “Guidelines for the Establishment of Internal Control Systems by

Public Companies” (the Guidelines). The Guidelines are made to examine the following five

factors during the management and control process: (1) control environment, (2) risk assessment

and response, (3) control activities, (4) information and communication, and (5) supervision.

Each factor also includes several items. Details of each factor can be found in the Guidelines.

(4) The Company has examined the effectiveness of each respected area in the internal control

system based on the Guidelines.

(5) The examination result indicated that the Company’s internal control system (including

subsidiary governance) dated December 31, 2012has effectively assured that the following

objectives have been reasonably achieved during the assessing period: (a) The degree that

effectiveness and efficiency of business operation; (b) The reliability of the financial and related

reports; (c) The compliance of the relevant laws/regulations and company policies

(6) This Statement is a significant part of the Company’s annual report and prospectus available

to the general public. If it contains false information or omits any material content, the Company

is in violation of Article 20, Article 32, Article 171 and Article 174 set forth in the Taiwan’s

Security and Exchange Act.

44

(7) The Company hereby declares that this statement had been approved by the Board of

Directors on 03/25/2013. Among the 6 attending Directors, no one raised any objection to the

contents of this statement.


Chairman: Gou, Tai-ming [signature and seal]

President: Gou, Tai-ming [signature and seal]

45

(b) The Company is required by the Security and Futures Commission to hire an

accountant to audit the Company’s internal control system and disclose the audit

report made by accountants:

None

(11) Lawful punishment inflicted on the Company, and/or disciplinary action taken by

the Company against its employees for violating internal regulations in the latest year

and up to the printing date of this Annual Report); important errors committed; and

correction and improvement procedures:

None

(12) Important resolutions made by the Shareholders’ Meeting and Board of Directors

by the end of 2012 and the printing date of the annual report

(a) The resolutions approved by the entire attending shareholders at the General

Meeting of Shareholders on June 18, 2012 and its implementation

(1) Resolutions:

The Company convened the General Meeting of Shareholders on June 18, 2012, and

passed (a) 2011 business operation report and 2011 audited financial statements; (b)

distribution of 2011 profits; (c) issuance of new common shares for capital increase by

retained earnings; (d) Amendment to “Procedures for Acquisition or Disposal of Assets”;

(e) Amendment to “Regulations Governing the Election of Directors and Supervisors”; (f)

Amendment to “Shareholders' Meeting Rules”; (g) amended the Articles of Incorporation.

(2) Implementation:

A. Profit distribution and issuance of new shares for capital increase by retained

earnings: the new shares for capital increase by retained earnings was listed and

traded on October 2, 2012; and the cash dividend was distributed on September 12,

2012.

B. For the issuance of new common shares for cash by capital increase and proposed

issuance of Global Depositary Receipts (“GDRs”): There is no such condition.

(b) Important resolutions of the Board of Directors from 2012 to April 30, 2013

(1) March 27, 2012

The Company obtained 6.584% shareholding rights of Japanese Sharp Corporation

(hereinafter referred to as Sharp); recognized the financial statement and consolidated

financial statement in 2011; promised to handle the cash capital increase for Chi Mei

Optoelectronics Corp. and issue the common shares for cash by capital increase and

proposed issuance of Global Depositary Receipts (“GDRs”); modified the Procedures of

the Acquisition or Disposal of Assets, election method of Directors and Supervisors and

Articles of Incorporation; convened the general meeting of shareholders in 2012 and

formulated the shareholder proposals; In order to raise medium- and long-term funds, the

Company issued the domestic unsecured common corporate bonds, indirectly invested the

46

GDS Software (Shenzhen)Co., Ltd., increased funds to Hongyang Precision Industry

(Shenzhen) Co., Ltd. and Fujin Precision Industry (Jincheng) Co., Ltd.; indirectly

invested Hongfujin Precision Electronics (Yantai) Co., Ltd.. The Company’s investment

in mainland China, Fuyang Electronic Technology (Changshu) Co., Ltd. merged with

Fulin Electronic Technology (Changshu) Co., Ltd. The Company indirectly invested

Yecheng Photo-electricity (Shenzhen) Co., Ltd., Yecheng Science & Technology

(Chengdu) Co., Ltd. and Xincheng Science & Technology (Chengdu) Co., Ltd. In

addition, it amended the internal control system, passed the proposal for machines and

facilities, and changed the spokesman.

(2) April 28, 2012

The Company drafted the distribution of 2011 profit; proposed the issuance of new shares

for capital increase by retained earnings; amended the articles of incorporation and

meeting norm of the shareholders’ meeting; approved the internal control statement of

2011; issued new shares for employee restricted stocks and employee stock options below

market price; applied the short-term credit line (within 1 year) to financial institution;

signed the contract; provided endorsement guarantee to its overseas subsidiary Foxconn

(Far East) Ltd. for applying the short-term credit line; provided guarantee to its subsidiary

in mainland China, Hongfujin Precision Electronics (Chengdu) Co., Ltd. for borrowing

joint loan; guarantee to its subsidiary, Foxconn (Far East) Ltd. for issuing Japanese Yen

bonds; guarantee to its overseas subsidiary, Best Leap Enterprises Ltd. for borrowing

joint loan; guarantee to subsidiary Competition Team Technologies Ltd. for issuing dollar

bonds. In addition, it indirectly invested Futaihua Precision Electronics (Jiyuan) Co., Ltd.

and Futaijing Precision Electronics (Yantai) Co., Ltd., increased funds for Hongqisheng

Precision Electronics (Qinhuangdao) Co., Ltd. and Fuding Electronic Science &

Technology (Jiashan) Co., Ltd.

(3) July 13, 2012

Set capital increase by retained earnings and proposed IPO allotment, ex-dividend

reference date for 2011 Fiscal Year. Set cash dividend payment date and ex-dividend date

for 2012 Fiscal Year; provided endorsement guarantee to its overseas subsidiary,

Competition Team Technology Limited (hereinafter referred to as CTT) for applying loan

from bank; guarantee to its overseas subsidiary, Competition Team Ireland Limited

(hereinafter referred to as CTIL) for applying the short-term turnover amount from bank;

guarantee to its overseas subsidiary, Hongfujin Precision Electronics (Chengdu) Co., Ltd.

for applying medium and long term loan from bank; figured out the overall financial plan

for the group; established the issuing platform of Medium Term Note (hereinafter referred

to as MTN); issued the bonds priced in foreign currencies with Foxconn (Far East)

Limited (Cayman) and/or Competition Team Technologies Limited (Bahamas) as issuer

and the Company itself guarantor; provided guarantee to its subsidiary, Foxconn (Far

East) Limited (Cayman) (hereinafter referred to as issuer) for issuing dollar (or equivalent

foreign currencies) bonds under MTN program. In addition, it applied the credit line to

financial institutions for the needs of operation turnover, risk management of interest and

exchange rate; signed the contract to indirectly increase funds to Fuxiang Precision

Industry (Kunshan) Co., Ltd., Fuyu Electronic Science & Technology (Huai’an) Co.,

Ltd., Foxconn Electronic Industry Development (Kunshan) Co., Ltd. invested and

established Funeng New Energy Science & Technology Service (Nanyang) Co., Ltd.,

Zhongzhun Precision Industry (Luoyang) Co., Ltd. It also obtained the equity of Innocom

47

Technology (Chongqing) Co., Ltd.; ratify the machines and facilities disposal case; ratify

the granted case of the year-end bonus and performance bonus to managers in 2011;

worked out methods to evaluate performance and calculate rewards for directors,

supervisors and managers.

(4) August 31, 2012

The Company recognized the financial statement and consolidated financial statement of

the first half year of 2012; Ratify the equipment obtain cases of the Company.

(5) October 30, 2012

The Company issued domestic unsecured common corporate bonds to raise medium- and

long-term funds; issued short-term non-guarantee commercial paper to meet the needs of

operation turnover; applied the credit line to financial institutions for the needs of

operation turnover, risk management of interest and exchange rate. The Company signed

the credit contract in which the highest capital limit doesn’t exceed ten billion Japanese

Yen. The Company also increased funds for Sanchuang Digital Co., Ltd., indirectly

invested and established Hongfujin Precision Electronics (Hengyang) Co., Ltd.,

Hongfuyuan (Shenzhen) Environmental Technology Co., Ltd., Oudiyuan (Shenzhen)

Environmental Technology Co., Ltd, Futaihua Precision Electronics (Chengdu) Co., Ltd.,

Jiaxing Ruixia Commerce Co., Ltd., Futaihua Precision Electronics (Jiyuan) Co., Ltd.,

Xincheng Technology (Chengdu) Co., Ltd., Xincheng Photo-electricity (Shenzhen) Co.,

Ltd.; Ratify the machinery equipment obtain cases of the Company; The Company has

formulated the annual audit plan for 2013.

(6) March 25, 2013

Ratify 2012 financial statements of the Company and consolidated financial

statements, propose to conduct a cash capital increase by means of the issuance of

common shares to participate in Global Depositary Receipts (“GDRs”) offerings, propose

to issue new shares for employee Restricted Stock Awards, Loan Procedures, Procedures

for Endorsements & Guarantees, and Articles of Incorporation amendment cases, election

of Directors and Supervisors, to approve the lifting of director of non-competition

restrictions, to set date and subjects for 2013 general shareholders’ meeting of the

Company, to approve Director and Supervisor candidate list , Regulations Governing the

Election of Directors and Supervisors amendment, in response to Act amended, to change

the terms of the Company’s participation in the issue of GDR Depositary Agreement in

1999 which concerning how to vote in the Company’s shareholders’ meeting for the GDR

holders, to endorse overseas subsidiaries, Competition Team Ireland Limited, for

applying short-term bank liquidity, obtain FuNuin New Energy Technology Services

(Nanyang) Co., Ltd. equity case, propose to dispose of the Company’s subsidiaries

reinvested MediaMarket (China) International Retail Holding Limited Case, to approve

2012 Annual Statement of Internal Control of the Company, ratify obtained equipment

case, the annual bonus appropriation case to employees and managers.

(13) Directors or supervisors have expressed opposition or qualified opinions that have

been noted in the record or declared in writing in connection with the important

48

resolutions passed by the Board of Directors in the latest year and up to the printing

date of this Annual Report:

None

(14) During the latest year and up to the printing date this Annual Report), the

Company’s chairman, general manager, accounting director, financial director, internal

auditors, R&D supervisor had been:

None

49

C. Information on Accountants’ Fees

(1) Range of accountants’ fee

CPA Firm Name of accountant Inspection

period Remarks

PricewaterhouseCoopers

Taiwan Hsu, Yong-jian Xue, Ming-ling 2012 -

Unit: NT$Thousand

Fee items

Range of amount

Audit fee Non-audit fee Total

1 Under 2 million

2 2 million(included) ~ 4 million


4 6 million(included) ~8 million


6 Over 10 million (included)

(2) The non-audit fee paid to certified CPA, certified Office of CPA and affiliated

companies accounts for over 1/4 to audit fee:

N/A

(3) Alter the CPA Firm and the audit fee in altering year is less than that in the previous

year:

None

(4) The audit fee is reduced by over 50% compared with the previous year:

None

D. Alternation of CPA

(1) About the Former CPA: None

(2) About the Successor CPA: None

(3) Reply of the Previous Accountant: N/A

E. The Company’s chairman, general manager, or any managerial officer in charge of

finance or accounting matters has in the most recent year held a position at the

accounting firm of its CPA or at an affiliated enterprise:

None

50

F. Transfer & pledge of stock equity by directors, supervisors, managerial officers and holders of 10% or more of

company shares:

None

(1) Changes in Equity

Unit: share

Title Name

2012 Current year to 04/30

Shareholding

Increase/Decrease

Pledged Shares

Increase/Decrease

Shareholding

Increase/Decrease

Pledged Shares

Increase/Decrease

Chairman Terry Gou 133,999,048 370,000,000 0 10,000,000

Director Representative of Hongqiao International Investment Co., Ltd.: Tai,

Jeng-wu 1,696,172 0 0 0

Director Representative of Hongqiao International Investment Co., Ltd.: Lu,

Sung-ching 1,696,172 0 0 0

Director Representative of Hongjing International Investment Co., Ltd.: Lu,

Fang-ming 118,437 0 0 0

Director Representative of Hongjing International Investment Co., Ltd.:

Chien, Yi-bin 118,437 0 0 0

Independent Director Wu, Yu-Chi 0 0 0 0

Independent Director Liu, Cheng-Yu 0 0 0 0

Supervisor Representative of Furui International Investment Co., Ltd.: Wan, Jui-

hsia 5,139,672 600,000 0 0

Supervisor Huang, Qing-Yuan 0 0 0 0

Department General Manager Lu, Sung-ching (785,738) 0 (1,060,000) 0

Department General Manager Tai, Jeng-wu 3,079,359 0 (3,020,000) 0

Department General Manager You, Xiang-fu 831,207 0 0 0

Department General Manager Lu, Fang-ming 867,941 0 0 0

Department General Manager Jiang, Hao-liang 195,606 0 0 0

Department General Manager Chien, Yi-bin (111,244) 0 79,000 0

51

Title Name

2012 Current year to 04/30

Shareholding

Increase/Decrease

Pledged Shares

Increase/Decrease

Shareholding

Increase/Decrease

Pledged Shares

Increase/Decrease

Department General Manager Xu, Mu-ji (632,748) 0 (450,000) 0

Department General Manager Zhong, Yi-wen (273,383) 0 95,750 0

Department General Manager Ling, Zhi-ping (58,540) 0 (9,000) 0

Department General Manager Xiong, Bing-zheng 307,260 0 0 0

Head Office General Manager Li, Jin-ming (196,330) 0 (150,000) 0

Financial Director Huang, De-cai 331,346 0 0 0

Accounting Director Chou, Zong-kai 61,750 0 0 0

(2) Information on equity transfer: The counterparties of equity transfer are not related parties.

(3) Information on equity pledge: The counterparties of share pledges are not related parties.

52

G. Information on relation among top ten shareholders

Date: 04/28/2013

Name

Shareholding

Spouse & Minor

Minor

Shareholding

Shares Held

through Other Parties

Shares held

Related Party (Note)

Remark

Number % Number % Number % Name Relation

Terry Gou 1,473,989,536 12.45 - - - - None None -

Citibank Hosting Hon Hai Precision Industry Co.,

Ltd. Depositary Receipts Account 303,140,549 2.56 - - - - None None -

Chase Bank Hosting Central Bank of Saudi Arabia

Investment Account 230,646,627 1.95 - - - - None None -

Standard Chartered Bank hosting Sanskrit Vanguard

Emerging Markets Equity Index Fund account 210,784,314 1.78 - - - - None None -

Citibank Hosting Government of Singapore

Investment Account 172,755,725 1.46 - - - - None None -

JP Morgan Chase Bank hosting Abu Dhabi

Investment Authority Investment Account 140,926,047 1.19 - - - - None None -

Standard Chartered Bank Hosting the Fidelity Puritan

Trust: Fidelity low-priced stocks Fund 127,600,000 1.08 - - - - None None -

Standard Chartered Bank hosting iShares MSCI

Emerging Markets Index Fund Investment Account 119,635,231 1.01 - - - - None None -

Cathay Life Insurance Co., Ltd. 112,369,247 0.95 - - - - None None -

JP Morgan Hosting ABP pension fund account 111,109,232 0.94 - - - - None None -

Note: Names and relationship of any of the top ten shareholders being a related party as defined in the Statement of Financial Accounting Standards No. 6

or relatives within 2nd

degree of kinship.

53

H. Combined shareholding percentage

04/28/2013; unit: 1,000 shares

Shift in investment Investment by the Company

Investment by directors,

supervisors, managers, direct or

indirect control groups

Combined investment

Shares % Shares % Shares %

Foxconn (Far East) Ltd. 3,578,845 100.00% - - 3,578,845 100.00%

Hongyang Venture Capital (Shenzhen) Co., Ltd. 405,503 97.50% 10,397 2.50% 415,900 100.00%

Foxconn Holding Ltd. 99,100 100.00% - - 99,100 100.00%

Baoxin International Investment Co., Ltd. 621,000 100.00% - - 621,000 100.00%

Hongqi International Investment Co., Ltd. 250,000 100.00% - - 250,000 100.00%

Hongyuan International Investment Co., Ltd. 267,000 100.00% - - 267,000 100.00%

Ambit International Ltd. 53,100 100.00% - - 53,100 100.00%

Liyi International Investment Co., Ltd. 96,900 100.00% - - 96,900 100.00%

Pan-International Industrial Corp. 106,178 20.84% 29,181 5.73% 135,359 26.57%

Foxconn Technology Co., Ltd. 124,238 10.04% 246,470 19.92% 370,708 29.97%

Yangxin Technologies Co., Ltd. 7,873 64.58% 4,317 35.42% 12,190 100.00%

PREMIER IMAGE TECHNOLOGY (HK) LTD. 1,409 1.63% 84,749 98.33% 86,158 99.96%

Sanchuang Digital Co., Ltd. 115,570 80.00% - - 115,570 80.00%

Foxconn Holdings B.V.-Netherland 107,723 100.00% - - 107,723 100.00%

Foxconn Singapore Pte. 53,038 100.00% - - 53,038 100.00%

Margini Holdings Ltd. 275,890 100.00% - - 275,890 100.00%

Foxconn SA B. V. 72,163 97.76% - - 72,163 97.76%

Note: Long-term equity investment of the Company calculated according to the equity method.

54

IV. Company Shares and Fund Raising

A. Company capital and shares

(1) Capital and Shares

04/28/2013; Unit: 1,000 shares

Type

Authorized Capital

Issued shares Non-issued

Shares

Options, bonds,

warrants, other

convertible

shares

Total Outstanding

Shares Total

Registered

Common Shares

(Listed Stock)

11,835,867 11,835,867 2,664,133 500,000 15,000,000

(2) Sources of Capital

Unit: NT$1,000; 1,000 shares

Year/

month

Issue

price

(NT$)

Authorized capital

stock Paid-in capital Remarks

Shares Amount Shares Amount Source of capital

(NT$1,000)

Property

other

than

cash

offset by

the

number

of shares

Approval date

and document

No.

1991/06 10

42 100,000 1,000,000 80,300 803,000

Capital increase

NT$93,000 by earnings

Capital increase

NT$90,000 by cash

None -

1992/07 10 100,000 1,000,000 97,600 976,000

Capital increase


Capital increase

NT$40,150 by capital

reserve

None -

1993/08 10 150,000 1,500,000 112,800 1,128,000

Capital increase


Capital increase


reserve

None -

1994/08 10 150,000 1,500,000 130,300 1,303,000

Capital increase


Capital increase


reserve

None -

1995/06 10 250,000 2,500,000 187,900 1,879,000

Capital increase


Capital increase


reserve

None

June 19, 1995

(84), TCZ(I) No.

36224

55

Year/

month

Issue

price

(NT$)

Authorized capital



(NT$1,000)

Property

other

than

cash

offset by

the

number

of shares

Approval date

and document

No.

1995/10 48 250,000 2,500,000 227,900 2,279,000 Capital increase

NT$400,000 by cash None

October 09, 1995

(84), TCZ(I) No.

52879

1996/10 10 450,000 4,500,000 358,000 3,580,000

Capital increase

NT$1,301,000 by

earnings

None July 9, 1996 (85),

TCZ(I) No. 41678

1997/09 10 600,000 6,000,000 511,800 5,118,000

Capital increase

NT$1,108,400 by

earnings

Capital increase


reserve

None

June 30, 1997

(86), TCZ(I) No.

51749

1998/08 10 1,000,00

0 10,000,000 734,600 7,346,000

Capital increase

NT$1,818,560 by

earnings

Capital increase


reserve

None

July 10, 1998

(87), TCZ (I) No.

58651

1999/08 10 1,300,00

0 13,000,000 1,050,000 10,500,000

Capital increase

NT$3,154,000 by

earnings

None

June 30, 1999

(88),TCZ(I) No.

58593

1999/11 220.7

5

1,300,00

0 13,000,000 1,100,000 11,000,000

Capital increase

NT$500,000 by cash None

August 9, 1999

(88),TCZ(I) No.

63098

2000/08 10 2,400,00

0 24,000,000 1,452,900 14,529,000

Capital increase

NT$3,529,000 by

earnings

None

June 22, 2000

(89),TCZ(I) No.

54010

2001/08 10 2,400,00

0 24,000,000 1,768,780 17,687,800

Capital increase

NT$3,158,800 by

earnings

None

June 13, 2001

(90), TCZ(I) No.

137713

2002/08 10 3,000,00

0 30,000,000 2,064,897 20,648,970

Capital increase

NT$2,961,170 by

earnings

None

June 27, 2002

(91), TCZ(I) No.

135225

2003/08 10 3,000,00

0 30,000,000 2,519,174 25,191,744

Capital increase

NT$4,542,774 by

earnings

None

June 12, 2003

(92), TCZ(I) No.

920128415

2004/07 10 3,600,00

0 36,000,000 2,757,198 27,571,989

Capital increase

NT$2,380,244 by

merging

None

January 27, 2004

(93), TCZ(I) No.

920162759

2004/10 10 4,600,00

0 46,000,000 3,231,023 32,310,231

Capital increase

NT$4,738,011 by

earnings; Converse

NT$231 Euro-convertible

bond

None

July 21, 2004,

JGZYZ

No.0930132689

2005/05 10 4,600,00

0 46,000,000 3,238,718 32,387,189

Converse NT$76,957

Euro-convertible bond None -

2005/08 10 5,300,00

0 53,000,000 3,284,525 32,845,251

Converse NT$458,061


56

Year/

month

Issue

price

(NT$)

Authorized capital



(NT$1,000)

Property

other

than

cash

offset by

the

number

of shares

Approval date

and document

No.

2005/09 10 5,300,00

0 53,000,000 4,003,171 40,031,717

Capital increase

NT$7,186,466 by

earnings

None

January 29, 2005,

JGZYZ

No.0940131076

2005/11 10 5,300,00

0 53,000,000 4,038,323 40,383,231

Converse NT$351,514


2006/04 10 5,300,00

0 53,000,000 4,099,953 40,999,534

Converse NT$616,303


2006/09 10 5,700,00

0 57,000,000 4,989,944 49,899,441

Capital increase

NT$8,899,907 by

earnings

None

July 11, 2006,

JGZYZ

No.0950129699

2007/03 10 5,700,00

0 57,000,000 5,168,139 51,681,388

Capital increase

NT$1,781,947 by

merging

None

October 19, 2006,

JGZYZ

No.0950147071

2007/09 10 7,000,00

0 70,000,000 6,290,767 62,907,665

Capital increase

NT$11,226,277 by

earnings

None

July 09, 2007,

JGZYZ

No.0960035148

2008/10 10 8,120,00

0 81,200,000 7,414,623 74,146,235

Capital increase

NT$11,238,569 by

earnings

None

June 30, 2008,

JGZYZ

No.0970032402

2009/06 10 9,300,00

0 93,000,000 8,578,932 85,789,319

Capital increase

NT$11,643,084 by

earnings

None

April 28, 2009,

JGZYZ

No.0980017596

2010/09 10 10,820,0

00 108,200,000 9,661,248 96,612,482

Capital increase

NT$10,823,163 by

earnings

None

July 01, 2010,

JGZFZ

No.0990034120

2011/08 10 12,230,0

00 122,300,000

10,689,09

7

106,890,96

7

Capital increase

NT$10,278,485 by

earnings

None

June 20, 2011,

JGZFZ

No.1000028108

2012/09 10 12,230,0

00 122,230,000

11,835,86

7

118,358,66

5

Capital increase

NT$11,467,698 by

earnings

None

July 5, 2012

JGZFZ No.

1010029788

(3) Information on shelf registration system:

None

57

(4) Shareholder Structure

04/28/2013

Shareholder

Structure

Quantity

Governments Financial

institutions

Juridical

Person

Private

Investors

Foreign

institutions &

foreigners

Total

Members 9 277 888 573,796 2,530 577,500

Total shares held 245,020,005 714,043,094 398,340,403 5,153,092,366 5,325,370,659 11,835,866,527

Shareholdings

(%) 2.07% 6.03% 3.37% 43.54% 44.99% 100.00%

(5) Distribution of Shares

(a) Distribution of common shares

04/28/2013

Shares Members Total Shares held Shareholdings (%)

1-999 94,208 26,943,004 0.23%

1,000 to 5,000 344,033 762,519,579 6.44%

5,001 to 10,000 73,616 532,730,500 4.50%

10,001 to 15,000 25,682 314,885,709 2.66%

15,001 to 20,000 12,309 217,947,960 1.84%

20,001 to 30,000 10,981 269,615,468 2.28%

30,001 to 40,000 4,910 171,281,386 1.45%

40,001 to 50,000 2,857 129,444,314 1.09%

50,001 to 100,000 4,742 328,760,162 2.78%

100,001 to 200,000 1,887 261,561,587 2.21%

200,001 to 400,000 904 255,017,772 2.16%

400,001 to 600,000 319 158,021,660 1.34%

600,001 to 800,000 170 118,570,740 1.00%

800,001 to 1,000,000 120 107,694,057 0.91%

Above 1,000,001 762 8,180,872,629 69.11%

Total 577,500 11,835,866,527 100.00%

(b) Diversification of preferred stocks:

The Company doesn’t issue preferred stocks.

58

(6) List of major shareholders

04/28/2013 Shares

Major Shareholder’s name Shares held

Shareholdings

(%)

Terry Gou 1,473,989,536 12.45%

Citibank Hosting Hon Hai Precision Industry Co., Ltd.

Depositary Receipts Account 303,140,549 2.56%

Chase Bank Hosting Central Bank of Saudi Arabia

Investment Account 230,646,627 1.95%

Standard Chartered Bank hosting Sanskrit Vanguard

Emerging Markets Equity Index Fund account 210,784,314 1.78%

Citibank Hosting Government of Singapore Investment

Account 172,755,725 1.46%

JP Morgan Chase Bank hosting Abu Dhabi Investment

Authority Investment Account 140,926,047 1.19%

Standard Chartered Bank Hosting the Fidelity Puritan Trust:

Fidelity low-priced stocks Fund 127,600,000 1.08%

Standard Chartered Bank hosting iShares MSCI Emerging

Markets Index Fund Investment Account 119,635,231 1.01%

Cathay Life Insurance Co., Ltd. 112,369,247 0.95%

JP Morgan Hosting ABP pension fund account 111,109,232 0.94%

59

(7) Information on Market Price, Equity, Earnings, Dividends Per Share &

Relatives

Year

Item 2011 2012

Current year to

March 31, 2013

Market Price Per

Share

(Note 1)

Highest

Before

adjustment 126.50 117.00

89.90

After adjustment 115.00 105.00

Lowest

Before

adjustment 61.50 79.00

79.70

After adjustment 61.50 70.45

Average 92.89 92.08 83.62

Equity Per Share Before distribution 54.06 54.62 57.33

After distribution - -

Earnings per

share

(Note 2)

Weighted average shares (1,000

shares) 10,661,194 11,798,513 11,834,564

Earnings per

share (NT$)

Before

adjustment 7.65 8.03 1.38

After adjustment 6.94 - -

Dividends per

share

(Note 3)

Cash dividend 1.5 1.5 -

Stock Dividends

Stock Dividends

Appropriated

from Retained

Earnings

1.0 1.0 -

Stock Dividends

Appropriated

from Capital

Reserve

None None -

Accumulated Unappropriated

Dividends None None -

Investment

return analyses

P/E ratio 12.14 11.47 -

Price-dividend ratio 61.93 61.39 -

Cash dividend yield 1.61% 1.63% -

Note 1: The market price per share shall be adjusted by stock dividends.

Note 2: The earnings per share shall be adjusted by stock dividends.

Note 3: 2012 dividends have not yet been approved by the AGM.

(8) Dividend Policy and Execution Status

(a) Dividend policy

The Company is in a growth stage, therefore, it will expand with the development

of its business in the future. The distribution of earnings shall be planned by the

Board of Directors according to the Company’s budget on capital expenditure and

fund demand. And the earnings shall be distributed after the Shareholders’

Meeting works out a resolution. For the distribution of shareholder dividend, no

more than 90% of the stock dividends allocated in the year shall be distributed in

the form of cash.

60

(b) Distribution of stock dividends at this Shareholders’ Meeting:

(i) Shareholder stock dividend: Since 2012, the Company allotted NT $

11,835,866,530 to issue new shares through capitalization, with 100

shares to every 1,000 shares. After gaining the approval of the General

Meeting of Shareholders and reporting to the authorities for approval, the

Board of Directors shall formulate the base day for distribution.

(ii) Shareholder cash dividend: Since 2012, the Company allotted

NT$17,753,799,791 as cash dividend, with NT$1.5 for each share. After

gaining the approval of the General Meeting of Shareholder, the Board of

Directors shall formulate the base day for distribution.

(9) Influence of non-compensated distribution of shares and the present occasion

on the Company’s business performance, earnings per share, and

shareholder rights

Year

Item 2013

(estimate)

Amount of paid-in capital in opening period (NT$) 118,358,665,270

Dividend

Distribution

(Note 1)

Cash dividend per share (NT$) 1.5

Stock dividends per share for capital increase by retained earnings

(Shares) 0.1

Stock dividends per share for capital increase by capital reserve

(Shares) -

Business

Performance

Variation

Operating profit

N/A (Note 2)

Change in operating profit compared with the previous year

After-tax net profit

Change in after-tax net profit compared with the previous year

Earnings per share

Change in earnings per share compared with the previous year

Average return on investment (Average annual EP ratio)

Pro forma earnings

per share and

price/earnings ratio

If retained earnings for capital increase all

converted to cash dividends

Pro forma EPS N/A (Note 2)

Pro forma average ROI

If no capital increase by capital reserve Pro forma EPS

N/A (Note 2) Pro forma average ROI

If no capital increased by capital reserve but

capital increase by earnings shifted to cash

dividends

Pro forma EPS N/A (Note 2)

Pro forma average ROI

Note 1: Pending resolution by 2012 Annual General Shareholders’ Meeting.

Note 2: Hon Hai is not required to disclose its 2013 financial forecast pursuant to “Regulations Governing the

Publication of Financial Forecasts of Public Companies.”

61

(10) Employee dividends and remuneration of directors and supervisors:

(a) Information on employee dividends and director/supervisor

remuneration, as set forth in the Company’s articles of incorporation:

The Company’s annual net profit shall be settled and distributed according to

the following sequence:

(1) Cover the deficit

(2) Make provision ten percent as legal reserve

(3) Make provision of other special reserves according to laws and regulations.

(4) 8% is employee dividend. The objects the employee stock dividend

distributed to shall include employees of subsidiaries complying with the

conditions. The relevant methods shall be formulated by the Board of

Directors.

(5) For the rest, the Board of Directors shall formulate the profit distribution

plan according to the Company’s dividend policy.

(b) The basis of estimating the amount of employees’ bonus and

remuneration of directors/supervisors for the current period, and the

accounting treatment of the discrepancy, if any, between the actual

distributed amount of employees’ stock bonus and estimated figure

thereof:

(1) The employee dividend shall take the percentage as estimating basis after

considering the legal reserve from after-tax net profit; the remuneration of

directors and supervisors shall take the profit distribution approved by the

Board of Directors as the estimating basis.

(2) The total number of employee divided stocks to be issued shall be

determined by the closing price of the day before the meeting date, and taking

into account the influence of the ex-right and ex-dividend factors. Employee

divided of less than one share shall be distributed in cash.

(3) Where the discrepancy between actually distributed and estimated amount

has been confirmed by the resolution of the shareholder meeting, it shall be

recognized as the loss and profit of the following year.

(c) Information on the amount of employee dividend, remuneration of

directors and supervisors and the calculation of earnings per share as

approved by the Board of Directors:

(1) The cash dividend distributed to employee shall be NT$0 and

remuneration to directors and supervisors shall be NT$0.

62

(2) The employee stock dividend shall be NT$6,822,891,111, accounting for

6.7164% of the total after-tax net profit and employee dividend in the

individual or respective financial report of this period.

(3) The earnings per share of any proposed distribution of employee dividends

and director/supervisor compensation shall be NT$7.97.

(4) In the case of any differences between the actual distributed and

recognized number, please state the difference, reasons and response:

The Company’s actually distributed number is of no difference with the

recognized one.

(d) Actual distribution of employee dividends, remuneration of

directors/supervisors in the previous year:

(1) Actual distribution

Unit: NT$ Employee dividends

Remuneration to

Directors and

Supervisors Employee Stock Dividends:

Amount

Employee Stock Dividends:

Number of Shares

Employee Cash

Dividends

5,874,551,962 77,860,198 22 0

Note: NT$75.45 per share is determined as the calculating basis by the closing price of the Company on

June 15, 2012 and taking account of the influence of the ex-right and ex-dividend factors.

(2) In the case of any differences between the actual distributed and

recognized number, please state the difference, reasons and response:

The Company’s actually distributed number does not differ from the

recognized one.

(11) Share repurchases:

None

63

B. Section on Corporate Bonds

(1) Corporate Bonds

Unit: NT$

Corporate Bond Type

2005 Unsecured

Corporate Bonds,

Phase I

Bonds A-E

2009 Unsecured

Corporate Bonds,

Phase I

2010 Unsecured

Corporate Bonds,

Phase I

2011 Unsecured

Corporate Bonds,

Phase I

Issuing (handling) date September 22, 2005 -

September 28, 2005 October 6, 2009 December 27, 2010 March 8, 2011

Denomination 1,000,000 1,000,000 1,000,000 1,000,000

Issuing and transaction

location Market (listed) Market (listed) Market (listed) Market (listed)

Issue price Issue by denomination Issue by denomination Issue by denomination Issue by denomination

Total amount 2,500,000,000 6,820,000,000 6,000,000,000 6,000,000,000

Interest rate 2.37% 1.72% 1.43% 1.47%

Deadline

10-year period

Due date: September

22, 2015 - September

28, 2015

5-year period

Due date: October 6,

2014

5-year period

Due date: December

27, 2015

5-year period

Due date: March 8,

2016

Guarantee Agency None None None None

Consignee Bank SinoPac

Company Limited

Bank SinoPac

Company Limited

Bank SinoPac

Company Limited

Bank SinoPac

Company Limited

Underwriting institution None None None None

Certified lawyer None None None None

CPA None None None None

Repayment method Repayment in lump

sum upon maturity

Respectively repay

50% in the fourth and

fifth years from the

expiration of issue date

Respectively repay



expiration of issue date

Respectively repay



expiration of issue

date

Outstanding principal 5,500,000,000 6,820,000,000 6,000,000,000 6,000,000,000

Terms of redemption or

advance repayment None None None None

Restrictive clause None None None None

Name of credit rating

agency

Rating date

Rating of corporate bonds

Rating agency:

China Credit Rating

Co., Ltd.

Rating date: August

23, 2005

Rating result: twAA

Rating agency:

China Credit Rating

Co., Ltd. Rating

date: December 26,

2008

Rating result: twAA+

Rating agency:

China Credit Rating

Co., Ltd. Rating

date: December 3,

2010


Rating agency:

China Credit Rating

Co., Ltd. Rating

date: December 21,

2010


64

Unit: NT$

Other

rights

attached

As of the printing

date of this Annual

Report, amount of

(exchanged or

subscribed)

ordinary shares,

GDRs or other

securities

converted:

N/A N/A N/A N/A

Issuance and

conversion

(exchange or

subscription)

method

None None None None

Issuance and conversion,

exchange or subscription

method, issuing condition

dilution, and impact on

existing shareholders’

equity

None None None None

Transfer Agent None None None None

Corporate Bond Type 2011 Unsecured Corporate Bonds, Phase II

2011 Unsecured

Corporate Bonds,

Phase III

2012 Unsecured

Corporate Bonds,

Phase I Bond A Bond B Bond C

Issuing (handling) date June 14, 2011 June 14, 2011 June 14, 2011 July 18, 2011 March 1, 2012

Denomination 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000


location Market (listed) Market (listed) Market (listed)

Issue price Issue by denomination Issue by

denomination

Issue by

denomination

Total amount 3,000,000,000 2,650,000,000 1,400,000,000 4,950,000,000 9,000,000,000

Interest rate 1.43% 1.66% 1.82% 1.51% 1.34%

Deadline

5-year period

Due date:

June 14, 2016

7-year period

Due date:

June 14, 2018

10-year period

Due date:

June 14, 2021

5-year period

Due date: July 18,

2016

5-year period

Due date: March 1,

2017

Guarantee Agency None None None

Consignee Bank SinoPac Company Limited Bank SinoPac

Company Limited

Bank SinoPac

Company Limited

Underwriting institution None None None

Certified lawyer None None None

CPA None None None

Repayment method Repayment in lump sum upon maturity Repayment in lump

sum upon maturity

Repayment in lump

sum upon maturity

Outstanding principal 3,300,000,000 2,650,000,000 1,400,000,000 4,950,000,000 9,000,000,000

Terms about redemption

or advance repayment None None None

65

Unit: NT$

Restrictive clause None None None


agency:

Rating date:

Rating of corporate

bonds:

Rating agency:

China Credit Rating Co., Ltd.

Rating date: May 19, 2011


Rating agency:

China Credit Rating

Co., Ltd.

Rating date: June 23,

2011


Rating agency:

China Credit Rating

Co., Ltd.

Rating date:

December 16, 2011


Other

rights

attached

As of the

printing date of

this Annual

Report, amount

of (exchanged or

subscribed)

ordinary

shares, GDRs

or other

securities

converted:

NA NA NA

Issuance and

conversion

(exchange or

subscription)

method

None None None






equity

None None None

Transfer Agent None None None

Corporate Bond Type

2012 Unsecured

Corporate Bonds,

Phase II

2012 Unsecured

Corporate Bonds,

Phase III

2012 Unsecured

Corporate Bonds,

Phase IV

2013 Unsecured Corporate

Bonds, Phase I

Note A Note B

Issuing (handling) date May 23, 2012 August 6, 2012 October 11, 2012 102.1.30 102.1.30

Denomination 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000


location Market (listed) Market (listed) Market (listed) Market (listed)

Issue price Issue by denomination Issue by denomination Issue by denomination Issue by denomination

Total amount 6,000,000,000 8,000,000,000 3,300,000,000 7,450,000,000 3,600,000,000

Interest rate 1.43% 1.18% 1.35% 1.33% 1.45%

Deadline 5-year period

Due date: 05/23/2017

3-year period

Due date:08/06/2015

5-year period

Due date: 10/11/2017

5-year

period

Due date:

01/30/2018

7-year period

Due date:

01/30/2020

Guarantee Agency None None None None

Consignee Bank SinoPac

Company Limited

Bank SinoPac

Company Limited

Bank SinoPac

Company Limited

Bank SinoPac Company

Limited

66

Underwriting institution None None None None

Certified lawyer None None None None

CPA None None None None

Repayment method Repayment in lump

sum upon maturity

Repayment in lump

sum upon maturity

Repayment in lump

sum upon maturity

Repayment in lump sum

upon maturity

Outstanding principal 6,000,000,000 8,000,000,000 3,300,000,000 7,450,000,000 3,600,000,000

Terms about redemption

or advance repayment None None None None

Restrictive clause None None None None


agency:

Rating date:

Rating of corporate bonds:

Rating agency:

China Credit Rating

Co., Ltd.

Rating date: April 24,

2012


Rating agency:

China Credit Rating

Co., Ltd.

Rating date: July 11,

2012


Rating agency:

China Credit Rating

Co., Ltd.

Rating date:

September 12, 2012


Rating agency:

China Credit Rating Co.,

Ltd.

Rating date: September

12, 2012


Other

rights

attached

As of the

printing date of

this Annual

Report, amount

of (exchanged or

subscribed)

ordinary

shares, GDRs

or other

securities

converted:

N/A N/A N/A N/A

Issuance and

conversion

(exchange or

subscription)

method

None None None None






equity

None None None

None

Transfer Agent None None None

None

67

(2) Convertible Bonds

Corporate Bond Type First-time unsecured Euro-convertible bonds

Year

Item 2012

From the current year to

04/30/2013

Market

price of

converti

ble

bonds

Highest 106.279 103.693

Lowest 96.104 99.857

Average 101.127 101.072

Conversion price 111.592

Issuing (handling) date

and conversion price in

issuing

Issued on October 12, 2010

NT$152.75

Method of performing

conversion obligations Issuance of new shares

(3) Information about exchangeable bonds:

None

(4) Information about shelf registration to issue corporate bonds:

None

(5) Information about bonds with attached warrants:

None

C. Preferred Shares (with warrants):

None

D. Global Depository Receipts (GDR)

Up to April 30, 2013, the total amount of global depository receipts issued had been

282,503,027. (The stock dividends issued was increased by 9,000,000 units in 2000;

increased by 7,712,055 units in 2001; 6,576,842 units in 2002; 9,849,149 units in

2003; 10,331,442 units for capital increase by merging and 8,233,870 units of stock

dividends in 2004; 16,859,728 units in 2005; 22,166,888 units in 2006; 24,277,009

units in 2007; 17,397,658 units in 2008; 17,977,893 units in 2009; 16,058.934 units in

2010; 14,779,513 units in 2011; 15,619,935 units in 2012. In addition, by the end of

April 30, 2013, the ECB issued 26,296,111 units of GDRs in total.)

68

04/28/2013

Issue date:

Item October 7, 1999 March 17, 2005

Issuing and transaction location:

Issuing location: Europe, Asia, USA

Transaction location: London Stock

Exchange

Issuing location: Europe, Asia, USA

Transaction location: London Stock

Exchange

Total amount: USD 416,700,000 USD 257,178,618.20

Unit issue price: USD 13.89 USD 8.7577

Total of issued unit

(1) 25,000,000 units

(2) 5,000,000 units

30,000,000 units in total

29,366,000 units

Source of negotiable securities

(1) Issuance of new shares for cash

increase

(2) The Company’s common shares

held by the original shareholders

The Company’s common shares held

by the original shareholders

Amount of negotiable securities 60,000,000 common shares 58,732,000 common shares

GDR holders’

rights and obligations

1. Right to vote

2. Right to distribute dividend,

subscribe new shares and other rights

1. Right to vote

2. Right to distribute dividend,

subscribe new shares and other rights

Consignee None None

Depository Bank Citibank N. A Citibank N. A

Custodian Bank Citibank N. A, Taipei Branch Citibank N. A, Taipei Branch

Outstanding balance 150,335,079 Unit (negotiable securities 300,670,163 shares)

Method to share the expenses

incurred during the issuance and

duration

Issue cost: amortized by the issuing companies and shareholder participants

according to the actual shares issued

Expenses incurred in the duration: amortized by the issuing company

Important conventions about

depositary and escrow

agreement

The depositary institute performs the obligations for GDR holders, while the

guarantee agency keeps GDR common shares.

Mark

et price p

er un

it

(un

it: US

D)

2012

Highest 7.82

Lowest 5.2

Average 6.51

Current

year

to

04/30/2013

Highest 6.145

Lowest 4.998

Average 5.572

E. Subscription of warrants for employees:

None

69

F. Name of managers holding warrants for employees and top ten employees

in terms of subscription of warrants, and the acquisition status:

None

G. Subscription of new shares for employee restricted stocks:

None

H. Name of managers holding the new shares for employee restricted stocks

and top ten employees in terms of subscription of the new share, and the

acquisition status:

None

I. Issuance of new shares for merging and transferring the stocks of other

companies:

None

(1) During the latest year and up to the printing date of this Annual Report,

if the Company has merged or transferred the stocks of other companies

for issuing new shares:

(a) The assessment prepared by the managing underwriter concerning the

issuance of new shares by merging or transferring the stocks of other

companies within the past quarter:

None

(b) The implementation status of the past quarter. If the progress or

benefit of such implementation is not as good as expected, its impact on

shareholders’ equity and an improvement plan shall be state specifically:

N/A

(2) The merger or issuance of new shares approved by the Board of Directors

during the latest year and up to the printing date of this Annual Report:

None

J. Implementation of fund usage plan:

The Company doesn’t issue any uncompleted plan or completed one with unrealized

benefit within the latest three years.

70

V. Operational Highlights

A. Business Activities

(1) Business scope

(a) Major content of business activities

IT, communications, automation devices, photo-electricity, precise machinery,

auto, production, sales and service related with connectors, casings, radiators,

assembled parts of consuming electronics as well as assembly of network cables.

The products manufactured by the Company include:

(1) I/O product line: IN-PUT, OUT-PUT connectors.

(2) IC line packaging and product line of expansion memory: connector for IC

line and memory IC expansion bracket.

(3) Product line of system connector: electrical coupler of host and branch system.

(4) Product lines of network connection and output & input device: terminal,

scanner, keyboard, monitor, mouse, network integrated connecting cables.

(5) Photo-electricity connecting product line: optical connectors and connecting

wire network used in digital network.

(6) Compound connectors with electronic processing functions: filtering

connectors, static-free connectors and high frequency connectors.

(7) EISA graphics card connectors under new industrial standard: expansion slot

connectors with open framework.

(8) Casings, radiators, spare parts processed by precision metal, engineering

plastic module, precise machinery components used in IT products, Bare System

and consuming electronic products.

(9) Assembly and processing of memory card

(10) Broadband communications, wireless mobile communications and end-to-end

communication products

(11) Ethernet switch and wireless network products

(b) Operational proportion

100% of the products are 3C electronics (Computer, Communication, Consumer

Electronics). The output and sales volume of recent two years can be found in the

Production and Sales Table.

(2) Technology and R&D

71

(a) Current product items

The Company’s products cover the spares parts, modules and system assemblies

for 3C electronics. The spare parts may include 3C connectors, line assembled

products and other spare parts; the modules may include the machinery modules

(e.g. the casing of 3C products) and electronic modules (e.g. surface adhesive

product for 3C products); the system assembly is mainly for finished 3C products.

(b) New commodities to be developed

As for the R&D of new products, the Company will focus on connectors such as

compound, modular, high frequency, photo-electricity and surface-mounted

connectors. Besides, it will follow the trend and make its computers and

accessories lighter, thinner, shorter, smaller, more surface-mounted and

modularized as well as integrated with communications.

(c) R&D expenses for recent years

Unit: NT$Thousand

Year 2012 Jan-Mar., 2013

R&D Expenses 11,478,794 2,300,147

R&D Expenses to Revenue % 0.36% 0.35%

72

B. Production and Sales Status

(1) Key Accounts in the Past Two Years

(a) Key Suppliers

Unit: NT$million

2011 2012 As of end of Q1, 2013

Item From Amount

Percentage of

total Net

Purchases

(%)

Relationship

with the

issuer

From Amount

Percentage

of total Net

Purchases

(%)

Relationship

with the

issuer

From Amount Percentage of total

Net Purchases (%)

Relationship

with the

issuer

1 Vendor ac 904,830 35.08% Note 1 Vendor ac 760,977 26% Note 1 Vendor ac 134,111 18% Note 1

2 Vendor af 445,389 15% Note 1 Vendor af 128,751 17% Note 1

Vendor ag 400,306 14% Note 1

Others 1,674,814 64.92% Other 1,331,113 45% Others 214,277 65% -

Total Net

Purchases 2,579,644 100.00%

Total Net

Purchases 2,937,785 100%

Total Net

Purchases

477,139 100% -

Note 1: Indirect investment subsidiary of the Company.

Note 2: Changes were due to market trend dynamics and customer demand variation.

73

(b) Key Buyers

Unit: NT$million

2011 2012 As of end of Q1, 2013

Item From Amount

Percentage of

total Net

Sales (%)

Relationship

with the

issuer

From Amount

Percentage

of total Net

Sales (%)

Relationship

with the

issuer

From Amount Percentage of total

Net Sales (%)

Relationship

with the

issuer

1 Customer

E 1,350,164 48.68% Nil Customer E 1,840,779 57.19% Nil Customer E 387,543 60.55% Nil

2 Customer

A 343,170 12.37% Nil Customer A 329,113 10.22% Nil Customer A 65,037 10.16% Nil

Others 1,079,977 38.95% - Others 1,049,036 32.59% - Others 205,735 29.29% -

Total Net

Sales 2,773,311 100.00% - Total Net

Sales 3,218,928 100.00% - Total Net

Sales 658,315 100.00% -

Note: Starting from 2013, the Company prepares financial statements in accordance with T-IFRS (Taiwan International Financial Reporting Standards).

(2) Production Value in the Most Recent Years

Unit: 1,000 pcs, NT$Thousand

Quantity

& Value

Major Product

2011 2012

Capacity Quantity Value Capacity Quantity Value

3C Electronics 18,531,684 16,350,881 2,677,526,630 24,871,337 21,943,981 3,090,181,680

74

(3) Sales Value in the Most Recent Years

Unit: 1,000 pcs, NT$Thousand

Quantity &

Value

Major Product

2011 2012

Domestic Export Domestic Export

Quantity Value Quantity Value Quantity Value Quantity Value

3C Electronics 78,851 13,452,920 16,176,352 2,755,589,938 156,408 25,369,524 19,688,931 3,187,695,80

9

Service and

Management Fee

Incomes

－－－ 4,268,520 －－－ 5,863,062

(4) Taiwan Employee Data during the Past Two Years and Up to Apr. 30, 2013

Year 2011 2012 Up to Apr. 30, 2013

Employee

Number

Staff 6,651 6,568 6,487

Operator 18 35 34

Total 6,669 6,603 6,521

Average Age 38.20 38.53 38.53

Average Seniority 5.90 6.34 6.57

Education

Distribution %

PhD Degree 2.07% 2.01% 2.07%

Master Degree 44.08% 45.49% 45.67%

College 50.74% 49.37% 49.15%

High School 2.76% 2.73% 2.70%

Below High School 0.34% 0.39% 0.41%

75

C. Information on Environmental Protection Costs

(1) The loss caused by environmental pollution during the latest year and up to

the printing date of this Annual Report:

None

(2)

(a) The main workshops and production facilities of the Company are located in

Tucheng Industrial Park or Hsinchu Science Park. The Company takes

environmental protection as its priority, and carries out immediate correction

once discovering any problem. Besides, it also makes inspection on the

existing preventive facilities. Apart from creating a good working and living

environment for its employees and the neighborhood, it strictly complies with

the discharge standard. For the pollution and wastes generated in the

production process, the Company takes the following steps to protect the

environment:

(1) Prevention of water pollution: set up wastewater treatment plants and

water quality analysis laboratory in Tucheng factory. Chemical method is

applied in wastewater treatment, in which pollutants are rid from wastewater

and discharged through discharge outlets The lab has various instruments to

measure temperature, PH value, chemical oxygen demand and suspended solid

and analyze heavy metal, so that daily inspection on discharging water can be

made and water discharge can be well controlled. The Company’s factories in

Huyue, Minsheng and Hsinchu all received a letter on permit to connect

wastewater (or sewage) to the sewer system, under the reference of TFZ No.

1015060021, 0955060439 and YLZ No.0960021733 respectively.

(2) Prevention of stationary pollution source: waste gas is collected by

extraction pipes, and released to the air after the pollutants are removed

through the wet scrubber. Every year, the Company authorizes other

companies to detect the viscosity of pollutants in exhaust gas and report the

result to the component department of environmental protection. The

Company obtained the Operating Permit of Stationary Pollution Source in

1998 and extended it in June 2008. The permit No. is: BXCZD No. F0447-02.

(3) Cleaning of wastes: Works are done in accordance with the Waste

Cleaning Plan, and the disposal of waste is reported online in a legal way, and

wastes are legally cleaned and recycled.

(4) Management on toxic chemicals: Toxic chemicals are stored separately

and strictly controlled. Moreover, documents on use and inspection are

obtained legally, and periodically reported to the component department of

environmental protection.

76

(b) The Company has been adhering to the environmental policy of “pollution

control and prevention, continuous waste reduction, providing environment-

friendly products, protecting the earth, creating a green enterprise”, and

strictly abiding by laws and regulations on environmental protection and

clients’ requirements by means of effectively controlling raw materials,

manufacturing process and delivery. Besides, it is dedicated to continuous

improvement in order to better product quality, make sure the products free

from restricted materials and promote the transformation of upstream suppliers

to green supplying chain so as to comply with ROHS requirements.

(c) Current pollution status, the influence of improvement on the Company’s

earnings, competitive position and capital expenditure, estimated major

expenditure on environmental protection in the following two years:

(1) Estimated expenditure on environmental protection in the next two years

Unit: NT$1,000 2014 2015

Expense or equipment to be purchased for

pollution control None None

Predicted improvement None None

Amount paid None None

(2) Influence after improvement

Influence on net profit None None

Influence on competitive position None None

D. Labor Relations

Current important labor agreement and implementation:

The Company has been treating its employees with sincerity and established mutual

trust with them through its welfare system and good training system that guarantee a

fulfilling and stable life for them. Though there is no union in the Company, but the

Company has established “Workers and Employers Meeting” and meets regularly

pursuant to the law, over the years, its employees can give full play to their team

spirit, coordinate the Company’s decision, cooperate with each other to create a

harmonious environment for working. The Company pursuant to the relevant labor

laws and regulations, to protect the legitimate interests of employees, provides

employees with safe and healthy working environment, and set up an employee

feedback and complaints mechanism. The Company adopts the followings measures

to build a harmonious labor relation:

(1) Welfare measures for employees: establishment of the Welfare Committee for

employees

77

Founded in April 1985, the Welfare Committee is composed of 13 members,

including 4 appointed by the employer and 9 by employees. The committee

members are re-elected every three years, and there are dedicated members

appointed to deal with the routine administrative works of the Committee. At

present, the welfares proposed by the Welfare Committee are as follows:

(a) Food allowance;

(b) Birthday gift (cash or other present);

(c) Lucky draw during get-togethers;

(d) Assistance to employees in club activities and entertainment (build fitness

rooms and hand out books);

(e) Consultancy on health and medical care;

(f) Compassionate visit for funerals;

(g) Care for the life of employees living inside and outside the Company;

(h) Cash gift for wedding and childbirth;

(i) Training allowance;

(j) Group insurance.

(2) Career Development and Training for Employees

Training is one of the basic welfares enjoyed by the Company’s employees. The

Company encourages its employees to “study in the work and apply what they

have learned in the work”, and takes training as a means to improve employee

quality and their work skills, promote the group performance, facilitate the

realization of its operation target of “long term, stability, development, science

and technology, internationality”. The Company formulated the Method on

Employee Trainings. Based on this, the Company provided 573,818 hours of

trainings in 2012 with the training fees reaching up to NT$33,358,842. The main

content of training includes:

(a) Orientation training for new employees

New employees are guided to familiarize the corporate culture, organization

development, reformation history and working environment.

(b) Technology and Development Committee

With the horizontal integration of the Technology and Development

Committee, employees can join different committees according to their job

characteristics and professional fields. The Technology and Development

Committee has introduced the latest knowledge and technology in various

fields to promote technical exchange among employees and set out a complete

training structure for professional technicians.

78

(c) Development of management talents

The Company has worked out its own training program to develop

management talents at different management level according to their

management needs. The training modes are diversified and colorful.

(d) School of advanced manufacturing and productivity

With the launch of the IE School and the industrial transformation of the

company group, the Company takes advantage of the training management

system and on-line study platform to make the training programs process-

oriented, simplified, standardized, systematized, information-based and

networked.

(e) Lectures on general knowledge

Mainly include the courses covering IE popularity, safety and health, quality

awareness.

(f) Lectures given by celebrities

The Company invites the famous and successful people in various fields to

give lectures in the Company.

(g) Library

The Company has a professional library where there are abundant journals and

books as well as well-equipped reading rooms and audiovisual apparatus.

(3) Code of conduct or ethics

In order to help employees have a better understanding of ethics, rights,

obligations and the code of conduct, the Company hereby works out the relevant

measures and regulations to provide basis for all employees. The relevant

measures are briefed as follows:

(a) Rules on decision-making right and right decentralization: to improve work

efficiency, strengthen the management on right decentralization and

effectively standardize the rights of employees at different levels.

(b) Organizational structure and duties of each departments: definitely regulate

the organizational functions of each unit and the duties of each post.

(c) The Employee Handbook is prepared to help employees understand the

relevant measures and regulations.

(1) Tutoring programs for new employees: to eliminate the new employees’

insecurity towards the new environment and soon familiarize the

working environment and colleagues after reporting for duty, and help

them to get their mind and body ready for work and reduce the turnover

rate within a short period.

79

(2) Code of business ethics: to improve all employees’ behavioral quality,

business ethics and expertise and try to maximize the Company’s benefit

within the legal scope. Every employee has the responsibility to prevent

the Company’s interests from being lost or impaired and is obliged to

maintain the Company’s reputation so as to guarantee its permanent

growth and development.

(3) Employee attendance: strengthen the attendance system to establish a

good working discipline for employees.

(4) Reward and punishment system: Rewards or punishment are given to

employees whose behavior or conduct has brought benefit or loss for the

Company in operation.

(5) Leave-related measures for employees: to provide basis for employees to

take and ask for a leave.

(6) Performance assessment method for employees: employees’ working

achievements and performance are assessed annually as the basis for

salary adjustment, promotion, issuance of bonus and arrangement for

training courses.

(d) Dormitory regulations: to standardize the conducts, rights and obligations of

the employees living in the dormitory.

(4) Working environment and protective measures for employees’ personal safety

(a) The Company continued to maintain the occupational safety and health

management system, passed the certification of SGS Company and obtained

the OHSAS18001 and CNS15506 certificates in 2012.

(b) The Company has formulated the safety and health policy and promised to

achieve the goal of zero injury, zero occupational disease and zero accident so

as to create a best working environment for all employees.

(c) The Company was awarded “Annual Labor Safety and Health institutions ─

Excellent Work Award” of the Labor Department and “Outstanding

institutions Award” & “Professionalism and safety & health personnel

Outstanding Award” of the New Taipei City in July 2012.

(d) Employees’ personal safety

The Company has, according to the Implementation Rules for Public

Institutions on Records of Labor-hour without Occupational Injury , taken part

in the competition of non-occupational injury record during labor-hour and hit

the record of four million and eight hundred thousand labor-hours without

occupational injury.

(e) Environmental health

80

Based on the annual safety and health management plan, the Company

checked the physical and chemical hazardous factors of each department,

worked out the working environment inspection plan inclusive of sampling

strategies. The plan was approved as qualified by Taipei District Public

Prosecutors Office (Taiwan), and the inspection result also complied with the

standard, and was announced in the Safety and Hygiene Committee and

publicized on the Company’s website and relevant bulletin boards.

(f) Education trainings:

The Company provided safety and health trainings to 936 new employees,

1605 regular staff and 93 employees at director level according to its annual

training plan.

(5) Retirement System:

The Company has formulated the retirement and pension plans for employees

according to the Labor Standards Act and the Labor Pension Act. Since January

1987, the Company legally established the Supervisory Committee of Workers’

Retirement Fund, which is re-elected every three years and in charge of checking

the amount, deposit and withdrawal as well as payment of retirement fund so as to

ensure employees’ rights.

(6) Other important agreements: None.

(7) Loss suffered from labor disputes in the latest year and up to the printing date of

this Annual Report:

The Company has no major dispute on labor relation or labor agreement in the

latest year and up to the printing date of this Annual Report.

81

VI. Financial Standing

A. Most Recent 5-Year Concise Financial Information

(1) Concise Balance Sheet and Statement of Comprehensive Income

Concise Balance Sheet

Unit: NT$Thousand

Period

Item As of March 31, 2013

Current assets 1,506,392,829

Net property, plant and equipment 408,053,543

Intangible assets 3,955,963

Other assets 106,931,445

Total assets 2,025,333,780

Current liabilities Before Distribution 1,189,622,293

After Distribution Note 2

Non-current liabilities 119,674,734

Total liability Before Distribution 1,309,297,027


Equity attributable to owners of parent 678,517,673

Share capital 118,358,665

Capital surplus 58,889,659

Retained earnings Before Distribution 476,124,374


Other equity interest 25,163,876

Treasury shares (18,901)

Non-controlling interests 37,519,080

Total equity Before Distribution 716,036,75


Note 1: If asset revaluated in that period, the value date and new value amount should be presented. Note 2: As of April 30, 2013, the amount of after distribution has not presented due to the proposal of earnings distribution of year 2012 had not yet been submitted to the shareholders' meeting.

82

Concise Statement of Comprehensive Income

Unit: NT$Thousand

Period

Item As of March 31, 2013

Operating revenue 809,011,951

Gross profit (loss) from operations 45,913,087

Net operating income (loss) 13,906,991

Non-operating income and expenses 8,690,182

Profit (loss) from continuing operations before

tax 22,597,173

Profit (loss) from continuing operations 16,350,324

Loss from discontinuing operations -

Net Profit (loss) 16,350,324

Other comprehensive income, net 17,466,671

Total comprehensive income 33,816,995

Profit (loss), attributable to owners of parent 16,352,513

Profit (loss), attributable to non-controlling

interests (2,189)

Comprehensive income, attributable to owners

of parent 33,710,832

Comprehensive income, attributable to non-

controlling interests 106,163

Basic earnings per share 1.38

83

(2) Concise Balance Sheet and Income Statement – R.O.C. GAAP

Concise Balance Sheet – R.O.C. GAAP

Unit: NT$Thousand

Period

Item

Most Recent 5-Year Financial Information

2008 2009 2010 2011 2012

Current assets 318,224,251 439,496,040 722,996,649 958,370,691 1,083,776,739

Fund and Long-

term equity

investments

290,037,817 361,366,109 428,619,217 534,685,388 603,762,719

Fixed assets (Note

1) 38,966,815 31,592,786 28,828,180 33,886,138 26,828,097

Intangible assets - - - - -

Other assets 1,435,105 1,017,035 1,424,288 1,184,021 1,277,471

Total assets 648,663,988 833,471,970 1,181,868,334 1,528,126,238 1,715,645,026

Current

liabilitie

s

Before

Dist. 261,521,745 357,287,001 650,838,634 861,779,296 988,892,523

After

Dist. 269,677,831 374,444,865 641,177,386 845,745,651 Note 2

Long-term

liabilities 16,680,000 29,539,400 45,635,371 84,299,377 75,366,400

Other liabilities 9,295,396 6,790,115 4,801,573 4,215,877 4,853,916

Total

liabilitie

s

Before

Dist. 287,497,141 393,616,516 701,275,578 950,294,550 1,069,112,839

After

Dist. 295,653,227 410,774,380 710,936,826 934,260,905 Note 2

Common stock 74,146,236 85,789,319 96,612,482 106,890,967 118,358,665

Capital surplus 52,944,370 57,308,705 65,011,063 70,693,639 77,266,078

Retaine

d

earnings

Before

Dist. 208,944,248 265,351,332 315,053,301 377,321,804 445,361,440

After

Dist. 189,666,227 237,898,750 295,730,805 361,288,159 Note 2

Unrealized gain

(loss) of financial

instruments

4,727,053 16,902,917 13,265,130 1,802,723 4,169,293

Translation

adjustments and

other

equity adjustment

20,423,841 14,522,082 (9,330,319) 21,141,456 1,395,612

Unrecognized

pension cost - - - - -

Stockho

lders’

Equity

Before

Dist. 361,166,847 439,855,454 480,592,756 577,831,688 646,532,187

After

Dist. 353,010,761 422,697,590 470,931,508 561,798,043 Note 2

Note 1: All above years didn’t process asset revaluation. Note 2: As of April 30, 2013, the amount of after distribution has not presented due to the proposal of earnings distribution of year 2012 had not yet been submitted to the shareholders' meeting.

84

Concise Income Statement – R.O.C. GAAP

Unit: NT$Thousand

Period

Item

Most Recent 5-Year Financial Information

2008 2009 2010 2011 2012

Operating revenue 1,473,026,282 1,420,573,052 2,313,129,125 2,773,311,378 3,218,928,395

Gross profit t 59,407,893 63,675,490 100,920,995 107,826,879 152,199,836

Operating income 26,687,988 24,788,398 35,444,869 31,500,286 45,925,843

Non-operating

income 41,917,316 58,471,359 53,937,373 64,478,317 64,038,228

Non-operating

expense 4,566,805 1,148,277 4,941,502 4,187,129 2,497,303

Income from

continuing

operations before

income taxes

64,038,499 82,111,480 84,440,740 91,791,474 107,466,768

Net income for

continuing

operations

55,133,175 75,685,105 77,154,551 81,590,999 94,762,377

Income from

discontinued

operations

0 0 0 0 0

Extraordinary gain

(loss) 0 0 0 0 0

Translation

adjustments and

other equity

adjustment

0 0 0 0 0

Net income 55,133,175 75,685,105 77,154,551 81,590,999 94,762,377

Basic earnings per

share (NT$)

(Note 1)

4.67 6.41 6.54 6.94 8.03

Note 1: EPSs are retroactively adjusted based on the number of shares of stock dividends as of Dec. 31, 2012. Note 2: The gross profit, operating income and non-operating expenses and losses have been reclassified due to the implementation of Financial Accounting Standards No. 10.

85

(3) CPAs and Their Opinions for Most Recent 5-Years

Year Name of CPA Auditor’s Opinion Reason for Changing CPA

2008 Yong-jian Hsu,

Yan-song Li

Modified unqualified

opinion －

2009 Yong-jian Hsu,

Yan-song Li


opinion －

2010 Yong-jian Hsu,

Yan-song Li


opinion －

2011 Yong-jian Hsu,

Ming-ling Xue


opinion

Internal administrative

organizational changes

2012 Yong-jian Hsu,

Ming-ling Xue


opinion －

B. Most Recent 5-Year Financial Analysis

(1) Financial Analysis

Period

Item

As of March 31, 2013

Financial

Ratio %

Total liabilities to total assets 64.65

Long-term debts to fixed assets 200.88

Ability to

payoff debt

(%)

Current ratio 126.63

Quick ratio 95.31

Interest protection 13.26

Ability to

operate

A/R turnover (times) 6.32

A/R turnover days 58

Inventory turnover (times) 8.08

Account payable turnover (times) 5.69

Days sales outstanding 45

Fixed assets turnover (times) 7.96

Total assets turnover (times) 1.59

Profitability

Return on assets (%) 0.87

Return on equity (%) 2.34

To pay-in capital

%

Operating income 11.75

PBT 19.09

Net margin (%) 2.02

EPS (NT$) 1.38

Cash flow %

Cash flow ratio (%) 1.98

Cash flow adequacy ratio (%) 72.05

Cash reinvestment ratio (%) 2.25

Leverage Operating leverage 7.96

Financial leverage 1.15

86

Formula:

1. Financial Ratio

(1) Total liabilities to Total assets = Total liabilities / Total assets

(2) Long-term debts to fixed assets = (Net equity + Long-term debts) / Net fixed assets

2. Ability to Pay off Debt

(1) Current ratio = Current Assets / Current liability

(2) Quick ratio = (Current assets - Inventory - Prepaid expenses) / Current liability

(3) Interest protection = Net income before income tax and interest expense / Interest expense

3. Ability to Operate

(1) Account receivable (including account receivable and notes receivable from operation) turnover

= Net sales / the Average of account receivable (including account receivable and notes receivable

from operation) balance

(2) A/R turnover day = 365 / account receivable turnover

(3) Inventory turnover = Cost of Goods Sold / the average of inventory

(4) Account payable (including account payable and notes payable from operation)turnover = Cost

of goods sold / the average of account payable (including account payable and notes payable from

operation) balance

(5) Inventory turnover day = 365 / Inventory turnover

(6) Fixed assets turnover = Net sales / Net Fixed Assets

(7) Total assets turnover = Net sales / Total assets

4. Earning Ability

(1) Return on assets = [PAT + Interest expense × (1 - interest rate)] / the average of total assets

(2) Return on equity = PAT / the average of net equity

(3) Net income ratio = PAT / Net sates

(4) EPS = (PAT - Dividend from prefer stock) / weighted average outstanding shares

5. Cash Flow

(1) Cash flow ratio = Cash flow from operating activities / Current liability

(2) Cash flow adequacy ratio = Most recent 5-year Cash flow from operating activities / Most recent

5-year (Capital expenditure + the increase of inventory + cash dividend)

(3) Cash investment ratio = (Cash flow from operating activities - cash dividend) / (Gross fixed

assets + long-term investment + other assets + working capital)

6. Leverage

87

(1) Operating leverage = (Nest revenue - variable cost of goods sold and operating expense) /

operating income

(2) Financial leverage = Operating income / (Operating income - interest expenses)

(2) Financial Analysis – R.O.C. GAAP

Period

Item

Most recent 5-Year Financial Information

2008 2009 2010 2011 2012

Financial

Ratio %

Total liabilities to total assets 44.32 47.31 59.34 62.19 62.32

Long-term debts to fixed assets 969.66 1,485.77 1,825.39 1,953.99 2,690.83

Ability to

payoff debt

(%)

Current ratio 121.68 123.01 111.09 111.21 109.59

Quick ratio 85.52 97.33 93.26 95.82 99.75

Interest protection 35.65 108.17 95.23 51.24 50.14

Ability to

operate

A/R turnover (times) 7.87 6.97 9.03 7.46 6.54

A/R turnover days 46 52 40 49 56

Inventory turnover (times) 14.70 14.83 21.53 21.62 26.28

Account payable turnover (times) 10.76 7.56 7.42 6.29 5.94

Days sales outstanding 25 25 17 17 14

Fixed assets turnover (times) 38.42 40.27 76.57 88.44 106.04

Total assets turnover (times) 2.32 1.92 2.3 2.05 1.98

Earning

ability

Return on assets (%) 8.92 10.28 7.73 6.13 5.95

Return on equity (%) 15.49 18.9 16.76 15.42 15.48

To pay-in

capital %

Operating income 38.29 28.89 36.69 29.47 38.80

PBT 86.37 95.71 87.4 85.87 90.80

Net margin (%) 3.74 5.33 3.34 2.94 2.94

EPS (NT$) 5.19 7.12 7.26 7.65 8.03

Cash flow %

Cash flow ratio (%) 23.04 15.59 17.64 (註 2) 11.13

Cash flow adequacy ratio (%) 33.26 66.86 96.93 83.09 113.81

Cash reinvestment ratio (%) 9.82 9.18 16.94 (註 2) 12.36

Leverage Operating leverage 1.80 2.02 1.75 1.93 1.63

Financial leverage 1.08 1.03 1.03 1.06 1.05

Formula:

1. Financial Ratio

(1) Total liabilities to Total assets = Total liabilities / Total assets

(2) Long-term debts to fixed assets = (Net equity + Long-term debts) / Net fixed assets

2. Ability to Pay off Debt

(1) Current ratio = Current Assets / Current liability

(2) Quick ratio = (Current assets - Inventory - Prepaid expenses) / Current liability

88

(3) Interest protection = Net income before income tax and interest expense / Interest expense

3. Ability to Operate

(1) Account receivable (including account receivable and notes receivable from operation) turnover

= Net sales / the Average of account receivable (including account receivable and notes receivable

from operation) balance

(2) A/R turnover day = 365 / account receivable turnover

(3) Inventory turnover = Cost of Goods Sold / the average of inventory

(4) Account payable (including account payable and notes payable from operation)turnover = Cost

of goods sold / the average of account payable (including account payable and notes payable from

operation) balance

(5) Inventory turnover day = 365 / Inventory turnover

(6) Fixed assets turnover = Net sales / Net Fixed Assets

(7) Total assets turnover = Net sales / Total assets

4. Earning Ability

(1) Return on assets = [PAT + Interest expense × (1 - interest rate)] / the average of total assets

(2) Return on equity = PAT / the average of net equity

(3) Net income ratio = PAT / Net sates

(4) EPS = (PAT - Dividend from prefer stock) / weighted average outstanding shares

5. Cash Flow

(1) Cash flow ratio = Cash flow from operating activities / Current liability

(2) Cash flow adequacy ratio = Most recent 5-year Cash flow from operating activities / Most recent

5-year (Capital expenditure + the increase of inventory + cash dividend)

(3) Cash investment ratio = (Cash flow from operating activities - cash dividend) / (Gross fixed

assets + long-term investment + other assets + working capital)

6. Leverage

(1) Operating leverage = (Nest revenue - variable cost of goods sold and operating expense) /

operating income

(2) Financial leverage = Operating income / (Operating income - interest expenses)

89

C. Audit Report by Supervisors

The Board reports the financial statement, business report, and earnings distribution proposal

of 2012, and financial statement have been audited by PricewaterhouseCoopers Taiwan. The

financial statements, business report and earnings distribution proposal have been audited by

us as Supervisors of the Company. We deem no inappropriateness on these documents.

Pursuant to Article 219 of the Company Act, we hereby present the audited report. Please

review.

Submitted to:

2013 Regular Shareholders’ Meeting of the Company


Supervisor: Huang, Qing-yuan

On the Date of May 16, 2013

90

Audit Report by Supervisors

The Board reports the financial statement, business report, and earnings distribution proposal

of 2012, and financial statement have been audited by PricewaterhouseCoopers Taiwan. The

financial statements, business report and earnings distribution proposal have been audited by

us as Supervisors of the Company. We deem no inappropriateness on these documents.

Pursuant to Article 219 of the Company Act, we hereby present the audited report. Please

review.

Submitted to:

2013 Regular Shareholders’ Meeting of the Company


Supervisor: Fu-Rui International Investment Co., Ltd.

Representative: Wan, Jui-hsia

On the Date of May 16, 2013

91

D. 2012 Financial Statements Consolidated With Subsidiaries Audited by

CPA

HON HAI PRECISION INDUSTRY CO., LTD.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REPORT OF INDEPENDENT ACCOUNTANTS

DECEMBER 31, 2011 AND 2012

For the convenience of readers and for information purpose only, 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. In the event of any discrepancy between the English version and the original Chinese

version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and

financial statements shall prevail.

92

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Stockholders:


We have audited the accompanying consolidated balance sheets of Hon Hai Precision

Industry Co., Ltd. and its subsidiaries as of December 31, 2011 and 2012, and the

related consolidated statements of income, of changes in stockholders’ equity and of

cash flows for the years then ended, expressed in thousands of New Taiwan dollars.

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 did not audit the financial statements of certain consolidated subsidiaries which

statements reflect total assets of $245,803,235,000 and $147,874,948,000, constituting

14.21% and 7.23% of the consolidated total assets as of December 31, 2011 and 2012,

respectively, and total revenues of $405,044,774,000 and $154,940,895,000, constituting

11.73% and 3.97% of the consolidated total operating revenues for the years then ended,

respectively. Those statements were audited by other auditors, whose reports thereon

have been furnished to us, and our opinion expressed herein, insofar as it relates to the

amounts included for these subsidiaries, is based solely on the reports of the other

auditors.

We conducted our audits in accordance with the “Rules Governing the Examination of

Financial Statements by Certified Public Accountants” and generally accepted auditing

standards in the Republic of China. Those 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 and the reports of other auditors provide a reasonable basis for

our opinion.

In our opinion, based on our audits and the reports of other auditors, the consolidated

financial statements referred to above present fairly, in all material respects, the

financial position of Hon Hai Precision Industry Co., Ltd. and its subsidiaries as of

December 31, 2011 and 2012, and the results of their operations and their cash flows

for the years then ended in conformity with the “Rules Governing the Preparation of

Financial Statements by Securities Issuers” and generally accepted accounting

principles in the Republic of China.

93

Hon Hai Precision Industry Co., Ltd. adopts International Financial Reporting

Standards, International Accounting Standards, and relevant interpretations and

interpretative bulletins (IFRSs) that are ratified by the Former Financial Supervisory

Commission, Executive Yuan, R.O.C. (FSC) in the preparation of its financial

statements effective January 1, 2013. Information relating to the adoption of IFRSs is

disclosed in Note 13 under the requirements of Jin-Guan-Zheng-Shen-Zi Order No.

0990004943 of FSC, dated February 2, 2010. The IFRSs may be subject to changes

during the time of transition; therefore, the actual impact of IFRSs adoption on Hon Hai

Precision Industry Co., Ltd. may also change

PricewaterhouseCoopers, Taiwan

March 28, 2013

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

The accompanying consolidated financial statements are not intended to present the financial

position and results of operations and cash flows in accordance with accounting principles

generally accepted in countries and jurisdictions other than the Republic of China. The

standards, procedures and practices in the Republic of China governing the audit of such

financial statements may differ from those generally accepted in countries and jurisdictions

other than the Republic of China. Accordingly, the accompanying consolidated financial

statements and report of independent accountants are not intended for use by those who are not

informed about the accounting principles or auditing standards generally accepted in the

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

94

HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31,

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

2011 2012

NT$ NT$

ASSETS

Current Assets

Cash and cash equivalents (Note 4(1)) $ 329,793,633 $ 505,526,956

Financial assets at fair value through profit or loss - current

(Note 4(2)) 70,329 140,220

Available-for-sale financial assets - current (Note 4(3)) 674,287 777,410

Notes and accounts receivable, net (Note 4(4)) 450,757,984 597,578,990

Accounts receivable, net - related parties (Note 5) 25,291,811 35,469,651

Other receivables (Notes 4(5) and 5) 34,679,896 38,235,975

Other financial assets - current (Note 6) 46,741,750 947,222

Inventories, net (Note 4(6)) 380,521,794 349,882,643

Prepayments (Note 5) 7,119,919 7,647,041

Deferred income tax assets - current (Note 4(15)) 8,016,419 6,751,334

1,283,667,822 1,542,957,442

Funds and Investments

Financial assets at fair value through profit or loss

non-current (Note 4(2)) - 179,300

Available-for-sale financial assets - non-current

(Note 4(3)) 4,790,319 8,302,853

Financial assets carried at cost - non-current (Note 4(7)) 4,046,796 8,620,722

Equity investments under the equity method (Note 4(8)) 40,259,657 44,492,047

Prepayments for long-term investments (Note 4(8)) 1,545 982,430

Other financial assets - non-current (Note 6) 24,179 854,748

49,122,496 63,432,100

Property, Plant and Equipment (Notes 4(9) and 5)

Cost

Land 4,225,808 3,900,934

Buildings and improvements 151,455,281 166,307,528

Machinery 246,249,077 285,431,007

Molding equipment 3,633,968 2,741,721

Testing equipment 24,948,040 24,704,409

Office equipment 15,863,541 15,292,609

Tooling equipment 3,270,354 3,539,459

Other equipment 43,977,326 48,275,054

Cost and revaluation 493,623,395 550,192,721

Less: Accumulated depreciation ( 165,396,856) ( 191,244,750)

Accumulated impairment ( 4,432,302) ( 4,658,696)

Construction in progress and prepayments for equipment 31,579,244 36,008,944

355,373,481 390,298,219

Intangible Assets (Note 4(10))

Patent right - 3,448,500

Goodwill 695,266 505,969

695,266 3,954,469

Other Assets

Deferred charges 15,101,778 20,165,075

Other assets - other (Note 4(11)) 26,350,582 23,596,212

41,452,360 43,761,287

TOTAL ASSETS $ 1,730,311,425 $ 2,044,403,517

(continued)

95


CONSOLIDATED BALANCE SHEETS (CONTINUED)

DECEMBER 31,


2011 2012 NT$ NT$ LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Short-term loans (Note 4(12)) $ 260,522,749 $ 297,572,165

Short-term notes and bills payable (Note 4(13)) 7,989,312 7,991,597 Financial liabilities at fair value through profit or loss - current

(Note 4(2)) 251,834 66,767 Accounts payable 519,725,102 602,755,794 Accounts payable - related parties (Note 5) 28,769,177 35,614,847 Income tax payable (Note 4(15)) 19,939,503 19,177,206 Accrued expenses (Notes 4(14)(20)) 87,322,885 137,224,165 Payables for equipment (Note 5) 28,177,904 49,996,281 Other payables 5,835,155 6,718,815 Receipts in advance 5,584,781 27,681,170 Long-term liabilities - current portion (Notes 4(16)(17)) 3,000,000 50,226,736 Accrued warranty liabilities 21,417,453 11,415,509 Other current liabilities 3,180,188 3,583,255

991,716,043 1,250,024,307 Long-term Liabilities Bonds payable (Note 4(16)) 62,378,777 74,980,461 Long-term loans (Note 4(17)) 53,600,100 30,707,957 115,978,877 105,688,418 Other Liabilities Reserve for retirement plan (Note 4(18)) 1,064,300 1,103,395 Deferred income tax liabilities - non-current (Note 4(15)) 1,793,747 468,606 Other liabilities - other 4,738,974 5,387,638

7,597,021 6,959,639 Total Liabilities 1,115,291,941 1,362,672,364 Stockholders’ Equity Stockholders’ Equity of Parent Company Capital stock (Note 4(19))

Common stock 106,890,967 118,358,665 Capital reserve (Note 4(21)) Paid-in capital in excess of par value of common stock 34,724,228 39,820,178 Capital reserve from conversion of convertible bonds 18,482,483 18,482,483 Capital reserve from long-term investments 15,452,488 16,928,977 Capital reserve from conversion right (Note 4(16)) 2,034,440 2,034,440 Retained earnings (Note 4(22)) Legal reserve 51,821,402 59,980,502 Undistributed earnings 325,500,402 385,380,938 Other adjustments to stockholders’ equity

Cumulative translation adjustments 21,141,456 1,395,612 Unrealized gain or loss on financial instruments (Note 4(3)) 1,802,723 4,169,293

Treasury stock ( 18,901) ( 18,901) Stockholders' equity of parent company 577,831,688 646,532,187

Minority interest 37,187,796 35,198,966 Total stockholders' equity 615,019,484 681,731,153 Commitments and Contingent Liabilities (Note 7) Subsequent Events (Note 9)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,730,311,425 $ 2,044,403,517

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

See report of independent accountants dated March 28, 2013.

96


CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31,

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,

EXCEPT EARNINGS PER SHARE DATA) 2011 2012 NT$ NT$ Operating Revenue Sales (Note 5) $ 3,452,681,273 $ 3,905,395,322 Operating Costs Cost of goods sold (Notes 4(6)(24) and 5) ( 3,186,298,789) ( 3,575,766,285) Gross profit 266,382,484 329,629,037 Operating expenses (Notes 4(20)(24)) Sales and marketing expenses ( 72,749,672) ( 104,581,183) General and administrative expenses ( 69,941,002) ( 70,970,421) Research and development expenses ( 40,846,782) ( 45,626,952) Total operating expenses ( 183,537,456) ( 221,178,556) Operating income 82,845,028 108,450,481 Non-operating income and gains Interest income 8,424,751 13,348,559 Investment income accounted for under the equity method (Note 4(8)) 3,151,898 2,792,985

Dividend income 167,904 144,580 Gain on disposal of property, plant and equipment (Note 5) 155,628 153,958 Gain on disposal of investments (Note 4(3)) 584,107 1,644,484

Foreign exchange gain - net 8,981,365 1,435,180 Gain on valuation of financial assets (Note 4(2)) - 21,776 Gain on valuation of financial liabilities (Note 4(2)) - 9,314

Other non-operating income (Note 3) 5,976,471 4,381,750 Total non-operating income and gains 27,442,124 23,932,586 Non-operating expenses and losses Interest expense ( 5,704,004) ( 9,596,761) Financing charges (Note 4(4)) ( 482,813) ( 189,662) Impairment loss (Notes 4(3)(9)) ( 564,979) ( 3,427,380) Loss on valuation of financial assets (Note 4(2)) ( 28,311) - Loss on valuation of financial liabilities (Note 4(2)) ( 433,239) - Other non-operating losses ( 537,606) ( 790,173) Total non-operating expenses and losses ( 7,750,952) ( 14,003,976) Income before income tax 102,536,200 118,379,091 Income tax expense (Note 4(15)) ( 20,601,567) ( 26,591,950) Consolidated net income $ 81,934,633 $ 91,787,141

Attributable to: Equity holders of the Company $ 81,590,999 $ 94,762,377 Minority interest 343,634 ( 2,975,236) $ 81,934,633 $ 91,787,141

Before

income tax

After income

tax

Before income

tax

After income

tax Earnings per common share (Note 4(23)) Basic earnings per common share

Consolidated net income $ 8.72 $ 6.97 $ 10.03 $ 7.78 Minority interest ( 0.07) ( 0.03) 0.27 0.25 Net income attributable to equity holders of the Company $ 8.65 $ 6.94 $ 10.30 $ 8.03

Diluted earnings per common share Consolidated net income $ 8.52 $ 6.81 $ 9.78 $ 7.60 Minority interest ( 0.07) ( 0.03) 0.26 0.24 Net income attributable to equity holders of the Company $ 8.45 $ 6.78 $ 10.04 $ 7.84



97


CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31,


Capital Stock Retained Earnings Other Adjustments to Stockholders’ Equity

Common stock Capital Reserves Legal reserve

Undistributed

earnings

Cumulative

translation

adjustments

Unrealized gain

( loss) on

financial

instruments Treasury stock

Minority

interest Total

2011

Balance at January 1, 2011 $ 96,612,482 $ 65,011,063 $ 44,105,947 $ 270,947,354 ($ 9,330,319) $ 13,265,130 ($ 18,901) $ 32,853,249 $ 513,446,005

Appropriations of 2010 earnings (Note 1):

Legal reserve - - 7,715,455 ( 7,715,455) - - - - -

Cash dividends - - - ( 9,661,248) - - - - ( 9,661,248)

Stock dividends 9,661,248 - - ( 9,661,248) - - - - -

Employees’ stock bonus 617,237 4,937,891 - - - - - - 5,555,128

Consolidated net income for 2011 - - - 81,590,999 - - - 343,634 81,934,633

Unrealized loss on financial assets - - - - - ( 8,892,143) - - ( 8,892,143)

Transfer due to expiry of convertible bonds

Paid-in capital in excess of par - 1,195,200 - - - - - - 1,195,200

Capital reserve from conversion right - ( 1,195,200) - - - - - - ( 1,195,200)

Adjustments due to changes in equities of

long-term investments - 744,685 - - - ( 2,570,264) - - ( 1,825,579)

Cumulative translation adjustment - - - - 30,471,775 - - - 30,471,775

Minority interest - - - - - - - 3,990,913 3,990,913

Balance at December 31, 2011 $ 106,890,967 $ 70,693,639 $ 51,821,402 $ 325,500,402 $ 21,141,456 $ 1,802,723 ($ 18,901) $ 37,187,796 $ 615,019,484

2012

Balance at January 1, 2012 $ 106,890,967 $ 70,693,639 $ 51,821,402 $ 325,500,402 $ 21,141,456 $ 1,802,723 ($ 18,901) $ 37,187,796 $ 615,019,484

Appropriations of 2011 earnings (Note 2):

Legal reserve - - 8,159,100 ( 8,159,100) - - - - -

Cash dividends - - - ( 16,033,645) - - - - ( 16,033,645)

Stock dividends 10,689,096 - - ( 10,689,096) - - - - -

Employees’ stock bonus 778,602 5,095,950 - - - - - - 5,874,552

Consolidated net income for 2012 - - - 94,762,377 - - - ( 2,975,236) 91,787,141

Unrealized loss on financial assets - - - - - 2,026,951 - - 2,026,951

Adjustments due to changes in equities of

long-term investments - 1,476,489 - - - 339,619 - -

1,816,108

Cumulative translation adjustment - - - - ( 19,745,844) - - - ( 19,745,844)

Minority interest - - - - - - - 986,406 986,406

Balance at December 31, 2012 $ 118,358,665 $ 77,266,078 $ 59,980,502 $ 385,380,938 $ 1,395,612 $ 4,169,293 ($ 18,901) $ 35,198,966 $ 681,731,153

Note 1: Directors' and supervisors' remuneration amounting to $0 and employees' bonus amounting to $5,555,128 had been deducted from the Consolidated Statement of Income in 2010.

Note 2: Directors' and supervisors' remuneration amounting to $0 and employees' bonus amounting to $5,874,552 had been deducted from the Consolidated Statement of Income in 2011.



98

HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

2011 2012

NT$ NT$

CASH FLOWS FROM OPERATING ACTIVITIES

Consolidated net income $ 81,934,633 $ 91,787,141

Adjustments to reconcile consolidated net income to net cash

provided by operating activities:

(Reversal of allowance) provision for doubtful accounts and sales

discount ( 1,235,775) 980,352

Depreciation 45,661,397 58,161,542

Amortization of intangible and other assets 5,794,344 9,721,785

Gain on disposal of property, plant and equipment, net ( 155,628) ( 153,958)

Loss on impairment 564,979 3,427,380

Loss on valuation of financial assets and liabilities, net 205,917 9,812

Provision for inventory obsolescence and market price decline 4,827,280 2,777,797

Investment income accounted for under the equity method ( 3,151,898) ( 2,792,985)

Cash dividends from long-term investments accounted for under

the equity method 596,865 978,316

Gain on disposal of investments ( 584,107) ( 1,644,484)

Amortization of discount on convertible bonds payable 645,094 666,334

Changes in assets and liabilities:

Financial assets at fair value through profit or loss ( 9,412) ( 58,853)

Notes receivable 6,379,705 4,100

Accounts receivable ( 64,911,164) ( 147,805,458)

Accounts receivable - related parties ( 6,463,311) ( 10,177,840)

Inventories ( 125,965,359) 18,919,000

Other receivables ( 3,786,611) ( 2,717,896)

Prepayments ( 1,743,980) ( 527,121)

Accounts payable 116,108,004 83,030,692

Accounts payable - related parties 5,232,965 6,845,670

Accrued expenses 33,779,206 55,775,832

Other payables ( 968,432) 883,660

Accrued warranty liabilities 7,863,653 ( 10,001,944)

Income tax payable 5,313,499 ( 762,297)

Receipts in advance ( 1,223,747) 22,096,389

Other current liabilities 1,569,014 403,067

Deferred income tax ( 5,042,428) ( 60,056)

Accrued pension liabilities ( 26,712) 39,095

Net cash provided by operating activities 101,207,991 179,805,072

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of property, plant and equipment ( 91,666,421) ( 70,144,320)

Decrease in other financial assets - non-current 15,744,557 43,731,078

Increase in other assets ( 13,185,355) ( 14,444,913)

Acquisition of land use right ( 2,545,301) ( 502,553)

Increase in long-term equity investments ( 854,579) ( 2,806,699)

Acquisition of financial assets carried at cost ( 963,826) ( 6,093,326)

Proceeds from disposal of property, plant and equipment 4,495,537 6,093,536

Financial assets / liability at fair value through profit or loss ( 112,185) ( 384,917)

Proceeds from disposal of funds and investments 2,339,899 12,548,867

Acquisition of available-for-sale financial assets - ( 7,740,334)

Acquisition of subsidiary and assets, net of cash acquired ( 1,278,561) -

Acquisition of buy patent right - ( 3,448,500)

Proceeds from disposal of land use right 1,855,833 102,608

Net cash used in investing activities ( 86,170,402) ( 43,089,473)

(continued)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

2011 2012

NT$ NT$

CASH FLOWS FROM FINANCING ACTIVITIES

Increase in short-term loans $ 47,184,885 $ 37,049,416

(Decrease) increase in notes and bills payable ( 1,601,976) 2,285

Increase in long-term loans 22,029,600 6,214,600

Increase in bonds payable 18,000,000 45,176,000

Payment of bonds payable ( 17,219,400) ( 3,000,000)

Payment of long-term loans ( 16,128,700) ( 6,653,250)

Increase in other liabilities-other 665,904 648,664

Payment of cash dividends ( 9,661,248) ( 16,033,645)

Increase in minority interest 3,990,913 986,406

Net cash provided by financing activities 47,259,978 64,390,476

Net effect of changes in foreign currency exchange rates 13,254,743 ( 25,372,752)

Net increase in cash and cash equivalents 75,552,310 175,733,323

Cash and cash equivalents at beginning of year 254,241,323 329,793,633

Cash and cash equivalents at end of year $ 329,793,633 $ 505,526,956

Supplemental disclosures of cash flow information:

Cash paid during the year for interest $ 4,673,272 $ 8,928,971

Cash paid during the year for income tax $ 17,021,446 $ 24,697,266

Cash paid for the acquisition of property, plant and equipment

Increase in property, plant and equipment $ 108,335,664 $ 93,450,555

Add: Payable – beginning balance 11,197,683 28,177,904

Less: Payable – ending balance ( 28,177,904) ( 49,996,281)

Effect of changes in foreign currency exchange rates 310,978 ( 1,487,858)

Cash paid $ 91,666,421 $ 70,144,320

Investing activities with no cash flow effect:

Unrealized gain (loss) on financial instruments

Adjustment for change in value of available-for-sale financial

assets ($ 8,892,143) $ 2,026,951

Valuation of long-term investments accounted for under the equity

method ( 2,570,264) 339,619

($ 11,462,407) $ 2,366,570



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011 AND 2012

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

1. HISTORY AND ORGANIZATION

Hon Hai Precision Industry Co., Ltd. (the Company) was established on February 20, 1974. The Company

began to be listed on the Taiwan Stock Exchange in June 1991. The Company merged with Premier Image

Technology Corporation (Premier Corp.) on December 1, 2006. The main activities of the Company are

the manufacture, processing and sales of connectors, cable, enclosures, wired/wireless communication

products, optical products, power supply modules, and assemblies for use in the IT, communications,

automotive equipment, precision molding, automobile, and consumer electronics industries. As of

December 31, 2012, the Company’s issued and outstanding capital was $118,358,665; the Company and

its subsidiaries had approximately 1,290,000 employees.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated financial statements of the Company and its subsidiaries (collectively

referred herein as the Group) are prepared in accordance with the “Rules Governing the Preparation of

Financial Statements by Securities Issuers” and accounting principles generally accepted in the Republic

of China. The Group’s significant accounting policies are summarized below:

1) Basis for preparation of consolidated financial statements

A. All majority-owned subsidiaries and controlled entities are included in the consolidated financial

statements. Effective January 1, 2008, the Company prepares consolidated financial statements on a

quarterly basis. The income (loss) of the subsidiaries is included in (excluded from) the consolidated

statement of income effective on the date the Company gains (losses) control over the subsidiaries.

Significant intercompany transactions and assets and liabilities arising from intercompany

transactions are eliminated.

B. Subsidiaries included in the consolidated financial statements and their changes in 2012:

Ownership

percentage (%)

Investor Subsidiaries Main operating activities 2011.12.31 2012.12.31 Note

Hon Hai Foxconn (Far Investment holdings in companies 100% 100% (3)

Precision East) Limited in Mainland China, Hong Kong,

Industry and subsidiaries Europe and America primarily

Co., Ltd. in engaged in manufacturing,

sale, research and development

of computer cases, connectors

and computer components.

101

Ownership

percentage (%)


Hon Hai Foxconn Holding Investment holdings in Asia- 100% 100%

Precision Ltd. and Pacific and America

Industry subsidiaries hi-tech companies

Co., Ltd.

〃 Hyield Venture Venture capital investments in 97.50% 97.50%

Capital Co., Ltd. companies primarily engaged in

and subsidiaries manufacturing of automobile

wires/electronic devices and

electronic components, and

services of planning, advisory

and business management.

〃 Bao Shin Domestic investments in 100% 100%

International companies primarily engaged in

Investment development and sale of

Co., Ltd. and computer systems, manufacturing

subsidiaries and sale of machinery and

equipment.

〃 Hon Yuan Domestic investments in 100% 100%


Investment manufacturing and sale of

Co., Ltd. and machinery and equipment.

subsidiaries

〃 Hon Chi Domestic investments in 100% 100%


Investment software and electronic

Co., Ltd. and Information application services,

subsidiaries and manufacturing and sale of

machinery and equipment.

〃 Lin Yih Investment holdings in R.O.C. 100% 100%

International companies

Investment

Co., Ltd.

102

Ownership

percentage (%)


Hon Hai Hon Hai/ Logistics services in America 100% 100%

Precision Foxconn

Industry Logistics

Co., Ltd. California LLC.

〃 Hon Hai/ Logistics services in America 100% 100%

Foxconn

Logistics

Texas LLC.

〃 Ambit Investment holdings in companies 100% 100%

International in Mainland China primarily

Ltd. and engaged in manufacturing and

subsidiaries sale of power supply modules,

application modules and network

cables assemblies.

〃 Foxconn Asia-pacific sales company 100% 100%

Singapore

(Pte) Ltd. and

subsidiaries

〃 Foxconn Patent applications in America. 100% 100%

International Inc.

〃 Altus Technology Manufacture and design of 100% 100%

Inc. cellular phone and camera

lens and packaging of sensors

〃 Premier Image Manufacture and sale of camera 99.96% 99.96%

Technology

-Hong Kong

Limited and

subsidiaries

〃 Foxconn SA B.V. Investment holdings of Russian 97.76% 97.76%

and subsidiaries domestic sales companies

〃 Margini Holdings Investment holdings in Vietnam 100% 100%

Limited and export processing and

subsidiaries construction services companies

and Brazil domestic sales

companies.

103

Ownership

percentage (%)


Hon Hai Foxconn Holdings Investment holdings in companies 100% 100%

Precision B.V.- Netherland in Europe.

Industry and subsidiaries

Co., Ltd.

〃 Syntrend Retail of office machinery and 80% 80%

Creative Park equipment and electronic

Co., Ltd. appliances, and information/

software services.

(1) The financial statements of consolidated subsidiaries as of and for the years ended December 31,

2011 and 2012 were audited by independent accountants.

(2) For the relevant information on indirectly owned subsidiaries of the Company, please refer to Note

11.

(3) Changes in the consolidated subsidiaries

a. In October, 2011, a subsidiary of the Company acquired 100% of Scientific-Atlanta Holdings

B.V. and Scientific-Atlanta de Mexico, S. de R.L. de C.V., which were consolidated effective the

acquisition date.

b. From July, 2011 to March, 2012, a subsidiary of the Company disposed 70% of Shenzhen

Futaihong Bright Real Estate Co., which was excluded from consolidation effective in March,

2012, the date on which the Company lost control over the subsidiary.

c. In the first half of 2012, a subsidiary of the Company acquired 95.18% and 68% ownership in

Interface Optoelectronics (Shenzhen) Co., Ltd. and Interface Technology (Chengdu) Co., Ltd.,

respectively, which were consolidated effective the acquisition date. However, the subsidiary

made adjustments to its investments in the two investees subsequently in the fourth quarter of

2012 for business consideration, which resulted to a loss of control over them. Thus, the two

investees were excluded from consolidation effective the date on which the subsidiary lost

control over them.

d. In the first half of 2012, a subsidiary of the Company acquired 50.48% ownership in Synergy

Technology (Chengdu) Co., Ltd., which was consolidated effective the acquisition date.

e. In December, 2012, a subsidiary of the Company acquired 100% ownership in Excel Victory Ltd.

and its subsidiaries, which were consolidated effective the acquisition date.

C. Majority-owned subsidiaries that were not included in the consolidated financial statements: None.

D. Adjustments for subsidiaries with different balance sheet dates: None.

E. Special operating risks of the foreign subsidiaries: No significant special operating risks that would

affect the financial statements.

F. Significant restriction on remittance of funds from the foreign subsidiaries to the Company: None.

G. The Company’s common stock owned by its subsidiary:

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As of December 31, 2011 and 2012, Hon Jin International Investment Co., Ltd. owned 1,184,375

and 1,302,812 shares, respectively, of the Company’s common stock at a cost of $18,901.

H. Information on new issuance of convertible bonds and common stock by subsidiaries: The issuance

of convertible bonds and new common stock by subsidiaries had no significant effect on

stockholders’ equity of the parent company.

2) Translation of financial statements of foreign subsidiaries into New Taiwan Dollars

Assets and liabilities of foreign subsidiaries are translated into New Taiwan dollars using the exchange

rates at the balance sheet date. Equity accounts are translated at historical rates except for beginning

retained earnings, which is carried forward from prior year’s balance. Dividends are translated at the

rates prevailing at the date of declaration. Profit and loss accounts are translated at weighted-average

rates of the year. The resulting translation differences are included in “cumulative translation

adjustments” under stockholders’ equity.

3) Criteria for classifying assets and liabilities as current or non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are

classified as non-current assets:

1) Assets arising from operating activities that are expected to be realized or consumed, or are

intended to be sold within the normal operating cycle;

2) Assets held mainly for trading purposes;

3) Assets that are expected to be realized within twelve months from the balance sheet date; and

4) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to

be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they

are classified as non-current liabilities:

1) Liabilities arising from operating activities that are expected to be paid off within the normal

operating cycle;

2) Liabilities arising mainly from trading activities;

3) Liabilities that are to be paid off within twelve months from the balance sheet date; and

4) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve

months after the balance sheet date.

4) Use of estimates

The preparation of financial statements in conformity with R.O.C. generally accepted accounting

principles requires management to make estimates and assumptions that affect the reported amounts of

assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial

statements and the amounts of revenues and expenses reported during the period. Actual results could

differ from those assumptions and estimates.

5) Foreign currency transactions

A. Transactions denominated in foreign currencies are translated into functional currency at the spot

exchange rates prevailing at the transaction dates. Exchange gains or losses due to the difference

between the exchange rate on the transaction date and the exchange rate on the date of actual receipt

and payment are recognized in current year’s profit or loss.

105

B. Monetary assets and liabilities denominated in foreign currencies are translated at the spot exchange

rates prevailing at the balance sheet date. Exchange gains or losses are recognized in profit or loss.

However, exchange gains or losses on overseas inter-company accounts that are, in nature, deemed

long term is accounted for as a reduction in stockholders’ equity.

C. Non-monetary items that are measured at fair value are translated using the exchange rates prevailing

at the balance sheet date. When a gain or loss on a non-monetary item is recognized directly in

equity, any exchange component of that gain or loss shall be recognized directly in equity.

Conversely, when a gain or loss on a non-monetary item is recognized in profit or loss, any exchange

component of that gain or loss shall be recognized in profit or loss. However, non-monetary items

that are measured on a historical cost basis are translated using the exchange rate at the date of the

transaction.

6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that meet both the following criteria:

a) Readily convertible to known amount of cash; and

b) Subject to an insignificant risk of changes in value resulting from fluctuations in interest rate.

The statement of cash flows is compiled under the cash and cash equivalents basis.

7) Financial assets and financial liabilities at fair value through profit or loss

A. Equity investments are recognized using trade date accounting. Debt instruments are recognized and

derecognized using settlement date accounting. All are recognized initially at fair value. A fixed

price commitment between trade date and settlement date meets the definition of a derivative except

for a contract whose terms require delivery of the asset within the time frame established generally

by regulation or convention in the marketplace concerned is recognized using trade date accounting

or settlement date accounting.

B. Financial assets or liabilities at fair value through profit or loss are subsequently re-measured and

stated at fair value, and the gain or loss is recognized in profit or loss. The fair value of listed stocks,

OTC stocks, closed-end mutual funds and deposit receipts is based on latest quoted fair prices of the

accounting period. The fair value of open-end and balanced mutual funds is based on the net asset

value at the balance sheet date.

C. For derivatives that do not qualify for hedge accounting, if the derivative is an option, then the

transaction is recognized at fair value on the trade date, and if the derivative is not an option, then

the transaction is recognized at zero fair value on the trade date.

D. The derivative features (such as call options and put options) embedded in bonds payable issued by

the Company are described in Note 2 (20).

8) Available-for-sale financial assets

A. Equity investments are recognized using trade date accounting. Bond investments are recognized and

derecognized using settlement date accounting and are recognized initially at fair value plus

transaction costs that are directly attributable to the acquisition of the financial asset.

B. Available-for-sale financial assets are measured and stated at fair value, and the gain or loss is

recognized in equity. The cumulative fair value changes are reclassified to profit and loss upon

106

derecognition of the financial assets. The fair value of listed stocks, OTC stocks, closed-end mutual

funds and deposit receipts is based on latest quoted fair prices of the accounting period. The fair

value of open-end and balanced mutual funds is based on the net asset value at the balance sheet

date.

C. If there is any objective evidence that the financial asset is impaired; the cumulative loss that had

been recognized directly in equity shall be transferred from equity to profit or loss. Impairment

losses recognized previously in profit or loss for an investment in an equity instrument shall not be

reversed through profit or loss, and if, subsequently, the fair value of a debt instrument increases and

the increase can be objectively related to an event occurring after the impairment loss was

recognized in profit or loss, the impairment loss shall be reversed, with the amount of the reversal

recognized in profit or loss.

9) Financial assets carried at cost

A. Investment in unquoted equity instruments is recognized using trade date accounting and is

recognized initially at its fair value plus transaction costs that are directly attributable to the

acquisition of the financial asset.

B. If there is any objective evidence that the financial asset is impaired; the impairment loss is

recognized in profit or loss. Such impairment loss cannot be reversed.

10) Settlement date accounting

If an entity recognizes financial assets using settlement date accounting, any change in the fair value

of the asset to be received during the period between the trade date and the settlement date / balance

sheet date is not recognized for assets carried at cost or amortized cost. For financial asset or financial

liability classified as at fair value through profit or loss, the change in fair value is recognized in profit

or loss. For available-for-sale financial assets, the change in fair value is recognized directly in equity.

11) Notes and accounts receivable, other receivables

A. Notes and accounts receivable are claims generated from the sale of goods or services. Other

receivables are those receivables arising from transactions other than the sale of goods or services.

Notes receivable, accounts receivable and other receivables are recognized initially at fair value and

are subsequently measured at amortized cost using the effective interest method.

B. The Group assesses whether objective evidence of impairment exists individually or collectively for

financial assets that are not individually significant. If there is objective evidence that an

impairment loss has been incurred, the amount of the loss is recognized and measured as the

difference between the asset’s carrying amount and the present value of estimated future cash flows

discounted at the financial asset’s original effective interest rate. If the amount of the impairment

loss decreases and the decrease can be related objectively to an event occurring after the impairment

was recognized, the previously recognized impairment loss shall be reversed. The reversal shall not

result in a carrying amount of the financial asset that exceeds what the amortized cost would have

been had the impairment not been recognized at the date the impairment is reversed. The amount of

the reversal shall be recognized in profit or loss.

12) Inventories

The perpetual inventory system is adopted for inventory recognition. Inventories are stated at cost. The

107

cost is determined using the weighted-average method. At the end of period, inventories are evaluated

at the lower of cost or net realizable value, and the individual item approach is used in the comparison

of cost and net realizable value. The calculation of net realizable value is based on the estimated

selling price in the normal course of business, net of estimated costs of completion and estimated

selling expenses. As the value of raw materials declines and the cost of finished goods is over the net

realizable value, the net realizable value of raw materials is determined based on current replacement

cost.

13) Long-term equity investments accounted for under the equity method

A. Long-term equity investments in which the Group holds more than 20% of the investee company’s

voting shares or has the ability to exercise significant influence on the investee’s operational

decisions are accounted for under the equity method. The excess of the initial investment cost over

the acquired net asset value of the investee attributable to goodwill is no longer amortized from

2006. Retrospective adjustment of the amount of goodwill amortized in previous years is not

required. Goodwill is subject to tests of impairment on an annual basis. The excess of acquired net

asset value of investee over the initial investment cost is allocated proportionately and applied as a

reduction to the book values of identifiable non-current assets, and any remaining amount of such

excess after this allocation is credited to extraordinary gains.

B. Long-term investment in which the Group holds more than 50% of the investee company’s voting

shares or has the ability to control the investee’s operational decisions are accounted for under the

equity method and included in the consolidated financial statements on a quarterly basis.

C. Exchange differences arising from translation of the financial statements of overseas investee

companies accounted for under the equity method are recorded as “cumulative translation

adjustments” in proportion to the Company’s ownership under stockholders' equity.

14) Property, plant and equipment

A. Property, plant and equipment are stated at cost. Costs incurred to bring the assets to the condition

and location necessary for their intended uses are capitalized. Significant servicing or betterments

capable of generating future economic benefits are capitalized and depreciated accordingly.

Maintenance and repairs are expensed as incurred.

B. Depreciation is provided under the straight-line method based on the assets’ estimated economic

service lives. The useful lives of property, plant and equipment are 3 to 9 years, except for

buildings, the useful life of which is 6 to 51 years.

15) Goodwill and other intangible assets

A. The excess of the initial acquisition cost over the fair value of the acquired identifiable tangible and

intangible assets is attributable to goodwill.

B. Royalties paid on the acquisition of technical patent authorization are stated at cost and amortized

on a straight-line basis over its estimated economic life.

16) Deferred charges and other assets

A. The costs of telephone network installation charges, computer software, molding and tools

equipment are recorded as deferred charges and amortized over their estimated economic lives on a

108

straight-line basis.

B. Land use rights are stated at cost and amortized over the lease period using the straight-line

method.

17) Impairment of non-financial assets

The Group recognizes impairment loss when there is indication that the recoverable amount of an

asset is less than its carrying amount. The recoverable amount is the higher of the fair value less costs

to sell and value in use. The fair value less costs to sell is the amount obtainable from the sale of the

asset in an arm’s length transaction after deducting any direct incremental disposal costs. The value in

use is the present value of estimated future cash flows to be derived from continuing use of the asset

and from its disposal at the end of its useful life. When the impairment no longer exists, the

impairment loss recognized in prior years shall be reversed. The recoverable amount of goodwill shall

be evaluated periodically. Impairment loss will be recognized whenever the recoverable amount of the

goodwill is less than its carrying amount. Impairment loss of goodwill recognized in prior years is not

reversed in the following years.

18) Warranty obligation

Warranty obligation is recognized based on the estimated warranty cost per unit and the number of

units sold during the period.

19) Pension plan

Under the defined benefit pension plan, net periodic pension costs are recognized in accordance with

the actuarial calculations. Net periodic pension costs include service cost, interest cost, and expected

return on plan assets, and amortization of unrecognized net transition obligation and actuarial gains or

losses. Unrecognized net transition obligation is amortized on a straight-line basis over 15 years.

Under the defined contribution pension plan, net periodic pension costs are recognized as incurred.

20) Bonds payable

For bonds issued with embedded conversion, put, or call option feature after January 1, 2006, the

issuer shall classify the issuance price based on the substance of the contractual arrangement on initial

recognition, and recognize the elements separately as a financial asset, financial liability, or an equity

instrument.

These bonds are accounted for as follows:

A. The difference between the issue price and face value of convertible corporate bonds is accounted

for as premium or discount which is required to be amortized over the period from the date of

issuance to maturity date using the interest method and is recorded as “interest expense”.

B. The value of any derivative features (such as a call option and put option) embedded in the

compound financial instrument is recognized as “financial assets or financial liabilities at fair value

through profit or loss”. These derivative features are subsequently re-measured and stated at fair

value on each balance sheet date, and the gain or loss is recognized in “gain or loss on valuation of

financial assets or financial liabilities”. At the maturity of the redemption period, if the fair value

of common stock exceeds the redemption price, the fair value of the put option is recognized as

“capital reserve”; however, if the fair value of common stock is lower than the redemption price,

the fair value of the put option is recognized as “gain or loss”.

109

C. A conversion right embedded in the bonds issued by the Company, which is convertible to an

equity instrument, is recognized in “capital reserve from conversion right”. When a bondholder

exercises his/her conversion rights, the liability component of the bonds (including corporate bonds

and embedded derivatives) shall be revalued at fair value on the conversion date, and the resulting

difference shall be recognized as “gain or loss” in the current period. The book value of the

common stock issued due to the conversion shall be based on the adjusted book value of the above-

mentioned liability component plus the book value of the stock conversion option.

D. Costs incurred on issuance of convertible bonds are proportionately charged to the liabilities and

equities of the underlying instruments based on initial recognition amount.

E. In the event that the bondholders may exercise put options within the following year, the

underlying bonds payable shall be reclassified to current liabilities. The bonds payable whose put

options are unexercised during the exercisable period shall be reclassified to non-current liabilities.

21) Income tax

A. Income tax expense is provided based on accounting income after adjusting for permanent

differences. The provision for income tax includes deferred income tax for the expected future tax

consequences of events that have been included in different periods for financial or tax reporting

purposes. Deferred income tax assets and liabilities are determined using enacted tax rates in effect

for the year(s) in which the differences are expected to reverse. Valuation allowance on deferred

income tax assets is recognized to the extent that it is more likely than not that the income tax

benefits will not be realized. Over or under provision of income tax from the previous years is

recorded as adjustment to the current year’s income tax expense. In accordance with the ROC

Income Tax Law, the company’s undistributed income is subject to an additional 10% corporate

income tax. The tax is charged to income tax expense after the appropriation of earnings is

approved by the stockholders in the following year.

B. Income tax credits are provided for in accordance with R.O.C. SFAS No. 12, "Accounting for

Income Tax Credits". Income tax credits arising from acquisitions of equipment or technology,

expenditures for research and development, training and development of employees and

investments in qualified stocks are charged to deferred income tax assets and credited to income

tax expense in the period the related expenditures are incurred.

C. Effective January 1, 2006, the Company adopted the Income Basic Tax Act (the “Act”). Under the

Act, the income tax payable shall be the higher of the basic tax and the regular income tax in

accordance with the Income Tax Law and other relevant laws.

D. As a result of the amendment of the Income Tax Law, the Company recalculated its deferred tax

assets and liabilities and recorded the resulting difference in the current year’s income tax benefit

or expense.

22) Government grants

In accordance with R.O.C. SFAS No. 29, “Government Grants”, government grants related to assets

are recognized as deferred income; for depreciable assets, it is recognized as income over the useful

life period of the asset in proportion to which depreciation expense on those assets is recognized. For

non-depreciable assets that require the fulfillment of certain obligations, it would then be recognized

110

as income over the periods that bear the cost of meeting the obligations. If the government grant

relates to receiving financial consideration, it is recognized as income when earned, or as deferred

income (shown as “other liabilities”) and recognized in periods over which the grant will be earned.

23) Treasury stock

A. When shares are bought back by the Company, the treasury stock is accounted for as a deduction of the

equity.

B. Any excess of the proceeds over the cost of the treasury stock reissued is recognized as an increase

in additional paid-in capital from the treasury stock transaction and if the proceeds are less than the

cost, the deficit is charged to the additional paid-in capital account. Should the paid-in capital in

excess of par value of common stock balance be insufficient to absorb the deficit, the balance is

charged to retained earnings.

C. Treasury stock cost is determined using the weighted-average cost method.

D. The Company's common stock owned by its subsidiaries is treated as treasury stock.

24) Share-based payment - employee compensation plan

Based on the employee stock options and the share-based payment agreements, the Company shall

measure the services received during the vesting period by reference to the fair value of the equity

instruments granted and account for those amounts as payroll expenses during that period.

25) Employees’ bonuses and directors’ and supervisors’ remuneration

Effective January 1, 2008, pursuant to EITF 96-052 of the Accounting Research and Development

Foundation, R.O.C., dated March 16, 2007, “Accounting for Employees’ Bonuses and Directors’ and

Supervisors’ Remuneration”, the costs of employees’ bonuses and directors’ and supervisors’

remuneration are accounted for as expenses and liabilities, provided that such recognition is required

under legal or constructive obligation and the amounts can be estimated reasonably. However, if the

accrued amounts for employees’ bonuses and directors’ and supervisors’ remuneration are significantly

different from the actual distributed amounts resolved by the stockholders at their annual stockholders’

meeting subsequently, the differences shall be recognized as gain or loss in the following year. In

addition, according to EITF 97-127 of the Accounting Research and Development Foundation, R.O.C.,

dated March 31, 2008, “Criteria for Listed Companies in Calculating the Number of Shares of

Employees’ Stock Bonus”, the Company calculates the number of shares of employees’ stock bonus

based on the closing price of the Company's common stock at the previous day of the stockholders’

meeting held in the year following the financial reporting year, after taking into account the effects of

ex-rights and ex-dividends.

26) Earnings per share

Basic earnings per share is calculated by dividing net income by the weighted-average number of

shares outstanding during the period. Diluted earnings per share is calculated by taking into account

the potentially dilutive securities which are assumed to have been converted to common stock at the

beginning of the period. Anti-dilutive potential common shares are ignored in calculating dilutive

earnings per share.

27) Revenues and expenses

Revenues are recognized when the earning process is substantially completed and are realized or

111

realizable. Related costs are recognized to match the timing of revenue recognition. Expenses,

including research and development costs, are recognized as incurred.

28) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the

chief operating decision-maker. The chief operating decision-maker is responsible for allocating

resources and assessing performance of the operating segments.

In accordance with R.O.C. SFAS No. 41, “Operating Segments”, segment information is disclosed in

the consolidated financial statements rather than in the separate financial statements of the Company.

3. CHANGES IN ACCOUNTING PRINCIPLES

1) Notes and accounts receivable, other receivables

Effective January 1, 2011, the Group adopted the amendments of R.O.C. SFAS No. 34, “Financial

Instruments: Recognition and Measurement”. The Group recognizes impairment loss on notes

receivable, accounts receivable and other receivables when there is an objective evidence of

impairment. As a result of the adoption of the amended SFAS No. 34, the Group’s consolidated net

income increased by $982,020 and consolidated earnings per share increased by $0.09 (in dollars) for

the year ended December 31, 2011.

2) Operating segments

Effective January 1, 2011, the Group adopted the newly issued R.O.C. SFAS No. 41, “Operating

Segments” to replace the original R.O.C. SFAS No. 20, “Segment Reporting”. This change in

accounting principle had no significant effect on net income and earnings per share for the year ended

December 31, 2011.

4. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

December 31,

2011 2012

Cash on hand $ 4,201,508 $ 6,157,872

Checking accounts 4,011,744 4,618,703

Savings deposits 105,922,445 132,081,859

Time deposits 206,682,107 353,871,385

320,817,804 496,729,819

Cash equivalents 8,975,829 8,797,137

$ 329,793,633 $ 505,526,956

Cash equivalents include the Sweep Fund.

112

(2) Financial assets and liabilities at fair value through profit or loss

December 31, 2011

Book value

Contract amount

(Nominal principal)

(in thousands)

Current assets

Open-end funds $ 24,412 -

Forward exchange contracts 45,917 HUF(BUY) 1,107,070

JPY(BUY) 245,283

MXN(BUY) 28,090

RMB(BUY) 815,616

USD(BUY) 12,249

EUR(SELL) 16,500

INR(SELL) 290,008

USD(SELL) 123,096

$ 70,329

Non-current assets

Forward exchange contracts ($ 251,834) BRL(BUY) 15,078

CHF(BUY) 2,220

EUR(BUY) 4,137

HUF(BUY) 2,631,660

MXN(BUY) 688,646

USD(BUY) 634,437

EUR(SELL) 8,500

INR(SELL) 39,050

RMB(SELL) 4,035,869

USD(SELL) 65,700

($ 251,834)

113

December 31, 2012

Book value

Contract amount

(Nominal principal)

(in thousands)

Current asset

Open-end funds $ 83,265

Forward exchange contracts 56,955 KRW(BUY) 1,949,780

RMB(BUY) 1,582,660

MXN(BUY) 143,772

USD(BUY) 75,061

EUR(BUY) 68

RMB(SELL) 437,972

INR(SELL) 276,824

USD(SELL) 262,800

$ 140,220

Non-current asset

Designated as at fair value through profit loss

Corporate bonds $ 179,300

Current liabilities

Forward exchange contracts ($ 66,767)

MXN(BUY) 714,991

USD(BUY) 153,903

JPY(BUY) 7,388

RMB(SELL) 879,519

USD(SELL) 55,950

BRL(SELL) 10,872

EUR(SELL) 6,600

INR(SELL) 1,295

($ 66,767)

1) For the year ended December 31, 2011, the Group recognized a net loss of $461,550, including

unrealized loss of $205,917.

2) For the year ended December 31, 2012, the Group recognized a net gain of $31,090, including

unrealized loss of $9,812.

3) On March 27, 2012, the Company’s board of directors resolved to sign an equity subscription

contract for the Company and its subsidiary, Foxconn (Far East) Limited, to acquire 50,000 and

31,143 thousand shares of a listed company in Japan, Sharp Corporation, in the amount of JPY

27,500,000 thousand and JPY 17,128,650 thousand, respectively, for a total equity interest by the

Group of 6.584%. This equity subscription contract meets the recognition criteria of a forward

contract specified in ROC SFAS No. 34, “Financial Instruments: Recognition and Measurement”.

The Company and its subsidiary should evaluate gain or loss based on fair value for this

arrangement and also recognize related financial assets/liabilities. However, the Company could not

get the approval for equity settlement because it was unable to provide related documents before

July 31, 2012 as required by the competent authorities. As such, this equity subscription contract no

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longer met the recognition criteria of a forward contract specified in ROC SFAS No. 34. Therefore,

the Company and its subsidiary reversed the loss on valuation of financial liabilities and financial

liabilities of $4,513,255 and reversed deferred income tax assets and income tax benefit of

$501,753, on July 31, 2012 as these amounts had been recognized during the six-month period

ended June 30, 2012. The net effect of such reversals was $4,011,502.

(3)Available-for-sale financial assets

December 31,

2011 2012

Current items:

Listed stocks $ 59,990 $ 57,610

Adjustment of available-for-sale financial assets 614,297 719,800

$ 674,287 $ 777,410

Non-current items:

Listed stocks $ 4,343,859 $ 5,427,810

Adjustment of available-for-sale financial assets 446,460 2,875,043

$ 4,790,319 $ 8,302,853

1. The fair value of available-for-sale financial assets decreased by $11,462,407 and increased by

$2,366,570 for the years ended December 31, 2011 and 2012, respectively, and is shown as an

adjustment to stockholders’ equity as unrealized gain or loss on financial instruments. The transfers

from this equity account to loss amounted to $0 and $872,963 (shown as “gain on disposal of

investment”) for the years ended December 31, 2011 and 2012, respectively.

2. The Company’s subsidiaries have evaluated the above financial assets and recognized impairment

loss of $363,601 and $0 for the years ended December 31, 2011 and 2012, respectively.

(4) Notes and accounts receivable

December 31,

2011 2012

Notes receivable $ 781,288 $ 777,187

Accounts receivable 453,197,281 601,002,740

Less: Allowance for doubtful accounts ( 1,835,555) ( 2,224,178)

Allowance for sales allowances ( 1,385,030) ( 1,976,759)

$ 450,757,984 $ 597,578,990

1. The Company factored its accounts receivable to certain financial institutions without recourse.

Under the agreement, the Company is not required to bear uncollectible risk of the underlying

accounts receivable, but is liable for the losses incurred on any business dispute, and did not provide

any collateral. Accordingly, these accounts receivable meet the derecognition criteria for financial

assets. The Company has derecognized the accounts receivable sold to financial institutions, net of

the amount estimated for business disputes.

As of December 31, 2011 and 2012, the relevant information of accounts receivable factored but

unsettled were as follows:

115

December 31, 2011

Institutions

Interest

rate

(%)

Accounts

receivable

sold/

derecognized Amount

advanced Amount retained Limit Mega International

Commercial Bank

1.70 $ 3,466,775 $ 3,466,775 $ - $22,710,000

Taipei Fubon Bank 1.28~1.30 24,224,000 24,224,000 - 43,906,000

Mizuho Corporate

Bank

1.07 5,753,200 5,753,200 - 18,168,000

Sumitomo Mitsui

Banking

Corporation

0.95 10,598,000 10,598,000 - 10,598,000

Standard Chartered

Commercial Bank

1.50

340,374 340,374 - 3,633,600

$ 44,382,349 $44,382,349 $ - $99,015,600

December 31, 2012

Institutions

Interest

rate

(%)

Accounts

receivable

sold/

derecognized Amount

advanced Amount retained Limit Mega International

Commercial Bank

0.90 $ 8,712,000 $ 8,712,000 $ - $21,780,000

Taipei Fubon Bank 0.99 23,232,000 23,232,000 - 36,300,000

Mizuho Corporate

Bank

0.94 5,227,200 5,227,200 - 8,712,000

ING Bank, N.V. 1.1205 7,550,400 7,550,400 - 14,520,000

$ 44,721,600 $44,721,600 $ - $81,312,000

2. As of December 31, 2011 and 2012, the Group has signed promissory notes amounting to $3,542,760

(US$117 million) and $4,065,600 (US$140 million) as guarantee for those accounts receivable in

commercial dispute, respectively.

3. For the years ended December 31, 2011 and 2012, the financing charges (expenses) incurred from

accounts receivable factoring were $482,813 and $189,662 (shown as “financing charges”),

respectively.

116

(5) Other receivables

December 31,

2011 2012

Tax refund receivable $ 25,442,053 $ 30,598,424

Receivable from purchase made on behalf of related 1,564,834 1,891,534

parties

Others 7,673,009 5,746,017

$ 34,679,896 $ 38,235,975

(6) Inventories

December 31,

2011 2012

Raw materials and supplies $ 95,943,901 $ 87,707,668

Work in process 73,841,392 103,684,540

Finished goods 196,627,104 156,262,122

Inventory in transit 29,648,996 20,496,593

396,061,393 368,150,923

Less: Allowance for inventory obsolescence and

market price decline ( 15,539,599) ( 18,268,280)

$ 380,521,794 $ 349,882,643

Expenses and losses incurred on inventories for the years ended December 31, 2011 and 2012 were as

follows:

For the years ended December 31,

2011 2012

Cost of inventories sold $ 3,181,209,951 $ 3,573,047,465

Loss on inventory obsolescence and market price

decline 4,827,280 2,777,797

Others 261,558 ( 58,977)

$ 3,186,298,789 $ 3,575,766,285

(7) Financial assets carried at cost

December 31,

2011 2012

Emerging stocks and unlisted stocks $ 4,046,796 $ 8,620,722

These investments have no active quoted market price and their fair values cannot be measured reliably.

Therefore, they were measured at cost.

117

(8) Long-term equity investments accounted for under the equity method

December 31, 2011 December 31, 2012

Investee Company

Ownership

Percentage

(%) Book value

Ownership

Percentage

(%) Book value

Foxconn Technology Co., Ltd. 30 $16,680,857 30 $18,671,104

Zhen Ding Technology Holding Limited 43 7,644,526 41 8,444,318

Pan International Industrial Corporation 27 2,797,361 27 2,959,223

G-Tech Optoelectronics Corporation 31 2,440,357 28 2,943,407

Simplo Technology Co., Ltd. 9 2,074,231 9 2,231,052

ESON Precision Ind. Co. Ltd. 29 1,345,316 29 1,491,078

Ampower Holding Limited - Cayman 45 941,679 45 818,234

Others 6,335,330 6,933,631

40,259,657 44,492,047

Add: Prepaid long-term investment 1,545 982,430

$40,261,202 $45,474,477

1) For the years ended December 31, 2011 and 2012, the investment income recognized under the

equity method amounted to $3,151,898 and $2,792,985, respectively.

2) For the years ended December 31, 2011 and 2012, cash dividends declared by the investee

companies accounted for under the equity method amounted to $596,865 and $978,316, respectively,

and were shown as a reduction to the book value of long-term investments accounted for under the

equity method.

(9) Property, plant and equipment

December 31, 2011

Original cost

Accumulated

depreciation

Net

book value

Land $ 4,225,808 $ - $ 4,225,808

Buildings and improvements 151,455,281 ( 31,385,787) 120,069,494

Machinery 246,249,077 ( 85,373,074) 160,876,003

Molding equipment 3,633,968 ( 2,241,472) 1,392,496

Testing equipment 24,948,040 ( 14,378,776) 10,569,264

Furniture and fixtures 15,863,541 ( 10,252,415) 5,611,126

Tooling equipment 3,270,354 ( 1,340,102) 1,930,252

Miscellaneous equipment 43,977,326 ( 20,425,230) 23,552,096

Prepayments for equipment and

construction in progress 31,579,244 - 31,579,244

$ 525,202,639 ($ 165,396,856) 359,805,783

Less: Accumulated impairment ( 4,432,302)

$ 355,373,481

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December 31, 2012

Original cost

Accumulated

depreciation

Net

book value

Land $ 3,900,934 $ - $ 3,900,934

Buildings and improvements 166,307,528 ( 39,502,668) 126,804,860

Machinery 285,431,007 ( 101,166,810) 184,264,197

Molding equipment 2,741,721 ( 2,105,513) 636,208

Testing equipment 24,704,409 ( 14,936,486) 9,767,923

Furniture and fixtures 15,292,609 ( 10,981,400) 4,311,209

Tooling equipment 3,539,459 ( 1,115,235) 2,424,224

Miscellaneous equipment 48,275,054 ( 21,436,638) 26,838,416

Prepayments for equipment and

construction in progress 36,008,944 - 36,008,944

$ 586,201,665 ($ 191,244,750) 394,956,915

Less: Accumulated impairment ( 4,658,696)

$ 390,298,219

The Group recognized impairment loss of $201,378 and $3,427,380 (shown as “impairment loss”) in

2011 and 2012, respectively.

For the years ended December 31, 2011 and 2012, the accumulated impairment is as follows:

2011 2012

Net book value, January 1 $ 5,220,239 $ 4,432,302

Increase in current year 201,378 3,427,380

Disposal in current year ( 683,758) ( 2,901,955)

Cumulative translation adjustments ( 305,557) ( 299,031)

Net book value, December 31 $ 4,432,302 $ 4,658,696

(10) Intangible assets

1) Business acquisition

In October, 2011, the Company’s subsidiary, PCE Paragon Solutions kft., acquired from Cisco

System, Inc. 100% ownership of its subsidiaries, Scientific-Atlanta Holdings BV and Scientific-

Atlanta de Mexico S. de R.L. de C.V., for a cost of US$ 43,697 thousand.

2) Goodwill


2011 2012

Net book value, January 1 $ 215,474 $ 695,266

Increase in current year 483,316 -

Cumulative translation adjustments ( 3,524) ( 189,297)

Net book value, December 31 $ 695,266 $ 505,969

119

The above amount mainly represents goodwill arising from the company’s subsidiary’s acquisition of

Scientific-Atlanta de Mexico S. de R.L. de C.V. in 2011.

3) Patent right

December 31, 2012

Original Cost

Accumulated

Amortization

Book Value

Net book value, January 1 $ - $ - $ -

Increase in current year 3,448,500 - 3,448,500

Net book value, December 31 $ 3,448,500 $ - $ 3,448,500

(11) Other assets

December 31,

2011 2012

Land use rights $ 21,300,084 $ 18,493,237

Others 5,050,498 5,102,975

$ 26,350,582 $ 23,596,212

For the years ended December 31, 2011 and 2012, the land use rights were as follows:


2011 2012

Net book value, January 1 $ 20,268,938 $ 21,300,084

Increase in current year 2,545,301 502,553

Disposal in current year ( 1,855,833) ( 2,263,769)

Amortization in current year ( 382,443) ( 392,646)

Cumulative translation adjustments 724,121 ( 652,985)

Net book value, December 31 $ 21,300,084 $ 18,493,237

Disposal of land use rights in current year includes disposal of subsidiaries.

(12) Short-term loans

December 31,

2011 2012

Credit loans $ 189,861,503 $ 297,551,360

Secured loans 70,661,246 20,805

$ 260,522,749 $ 297,572,165

Interest rates per annum 0.55%~3.6% 0.3554%~5.85%

120

(13) Short-term notes and bills payable

December 31,

2011 2012

Commercial paper $ 8,000,000 $ 8,000,000

Less: unamortized discount ( 10,688) ( 8,403)

$ 7,989,312 $ 7,991,597

Interest rates per annum 0.998%~1.158% 0.948%~1.028%

(14) Accrued expenses

December 31,

2011 2012

Awards and salaries payable $ 25,818,394 $ 44,352,676

Royalty fees payable 19,727,839 18,565,601

Consumption goods expense payable(including indirect

materials) 4,442,314 15,697,913

Employees’ bonuses payable 5,874,552 7,247,437

Tax payable (excluding VAT) 2,507,583 4,098,884

Shipping fees payable 2,363,450 3,011,635

Business tax (VAT) payable 3,220,579 2,671,108

Accrued molding expense 230,783 2,654,620

Others 23,137,391 38,924,291

$ 87,322,885 $ 137,224,165

(15) Income tax

1) Income tax expense and income tax payable are reconciled as follows:

December 31,

2011 2012

Income tax expense $ 20,601,567 $ 26,591,950

Changes in deferred income tax 5,042,428 60,056

Less: Prepaid income tax and income tax withheld ( 6,673,379) ( 9,372,641)

Effect of tax rate different from the U.S. branch ( 49,793) ( 69,122)

Over provision of prior years' income tax ( 556,981) ( 315,890)

Add: Income tax payable for prior years 1,575,661 2,282,853

Income tax payable $ 19,939,503 $ 19,177,206

121

2) As of December 31, 2010 and 2011, the deferred income tax assets and liabilities were as follows:

December 31,

2011 2012

Deferred income tax assets $ 10,150,273 $ 10,431,693

Deferred income tax liabilities ($ 3,927,601) ($ 4,148,965)

3) The temporary differences and related amounts of deferred tax assets (liabilities) are listed as follows:

December 31,

2011 2012

Amount Tax effect Amount Tax effect

Current items:

Allowance for sales allowances $ 1,385,030 $ 235,455 $ 1,976,759 $ 336,049

Reserve for inventory

obsolescence and market price

decline 8,100,008 1,425,601 6,891,828 1,241,694

Unrealized exchange loss (gain) 1,109,138 83,458 ( 3,763,506) ( 639,558)

Product warranty 19,312,929 3,298,507 9,291,820 1,579,609

Unrealized expenses 14,755,755 2,829,602 23,629,308 3,857,661

Others 610,818 143,796 1,832,433 375,879

$45,273,678 $ 8,016,419 $39,858,642 $ 6,751,334

Non-current items:

Reserve for pension cost $ 875,352 $ 148,867 $ 904,575 $ 153,945

Foreign investment income

accounted for under the

equity method ( 24,413,045) ( 3,927,601) ( 20,643,569) ( 3,509,407)

Difference from finance and tax

due to depreciation expense 3,813,275 957,037 9,566,113 1,557,402

Others 5,784,156 1,027,950 5,294,984 1,329,454

($13,940,262) ($ 1,793,747) ($ 4,877,897) ($ 468,606)

4) As of December 31, 2012, the Company’s income tax returns through 2009 have been approved by

the R.O.C. Tax Authority.

122

(16) Bonds payable

December 31,

2011 2012

Convertible bonds payable

2010 1st unsecured euro convertible bonds payable $ 31,251,000 $ 31,251,000

Less: Discount on bonds payable ( 1,260,384) ( 557,938)

Exchange loss ( 931,839) ( 2,171,526)

29,058,777 28,521,536

Corporate bonds payable

First unsecured corporate bonds issue in 2005 $ 5,500,000 $ 2,500,000

First debenture issue of 2009 6,820,000 6,820,000



Second debenture issue of 2011 7,050,000 7,050,000

Third debenture issue of 2011 4,950,000 4,950,000

First debenture issue of 2012 - 9,000,000

Second debenture issue of 2012 - 6,000,000

Third debenture issue of 2012 - 8,000,000

Fourth debenture issue of 2012 - 3,300,000

36,320,000 59,620,000

Foreign bonds

Foreign unsecured corporate bonds USD-denominated - 18,876,000

Less: Discount on bonds payable - ( 105,539)

- 18,770,461

Total 65,378,377 106,911,997

Less: Current portion ( 3,000,000) ( 31,931,536)

Bonds payable – long-term $ 62,378,777 $ 74,980,461

1) 2010 1st unsecured euro convertible bonds

A. On August 18, 2010, following the approval from the SFB, the Company issued the 1st

unsecured euro zero coupon convertible bonds in the amount of US$1 billion. These convertible

bonds cover a period of three years from October 12, 2010 to October 12, 2013.

B. The conversion price shall be adjusted based on the terms of the convertible bonds. As of

December 31, 2012, the convertible bonds have not been converted. The adjusted conversion

price was $111.592 (in dollars) per share with a fixed exchange rate applicable on bonds of

NTD$31.251=USD$1.

C. Under the terms of the convertible bonds, all the repurchased, previously redeemed or converted

123

bonds will be retired and not to be re-issued.

D. Under the terms of the convertible bonds, the rights and obligations of the new shares converted

from convertible bonds are the same as those of the issued and outstanding common stock.

E. The effective interest rate of the bonds was 2.02%.

F. The fair value of conversion right in the amount of $2,034,440 was separated from bonds

payable at issuance date, and was recognized in “Capital reserve from conversion right” in

accordance with SFAS No. 36.

G. First unsecured corporate bonds issue in 2010 had been reclassified to “Current liabilities” in the

fourth quarter of 2012.

2) First unsecured corporate bonds issue in 2005

A. On September 14, 2005, following the approval from the SFB, the Company issued domestic

unsecured bonds in the amount of $11,500,000. As of December 31, 2012, Bond Aa to Af, Bond

Ba to Bf and Bond Ca to Cf had been redeemed in the amount of $9,000,000. The amount of the

unredeemed bonds is $2,500,000. The terms of these domestic unsecured bonds are summarized

as follows:

Type of

bonds Issuance date Period Amount

Normal

interest rate Payment term

Bond Da to

De

September 2005 10 years $ 500,000 2.37% Principal is due at maturity.

Interest is paid annually at

simple interest rate.

3) First debenture issue of 2009

A. On January 12, 2009, following the approval from the SFB, the Company issued domestic

unsecured bonds in the amount of $6,820,000. The terms of these domestic unsecured bonds are

summarized as follows:

Issuance date Period Amount

Nominal


October 2009 5 years $ 6,820,000 1.72% Pay half of principal each in the

fourth and fifth year.

Interest is paid annually at simple

interest rate.

B. 2009 1st unsecured corporate bonds payable of $3,410,000 had been reclassified to “Current

liabilities” in the fourth quarter of 2012.

124


On December 17, 2010, following the approval from the SFB, the Company issued domestic




Nominal


December 2010 5 years $ 6,000,000 1.43% Pay half of principal each in the



interest rate.


On January 7, 2011, following the approval from the SFB, the Company issued domestic unsecured

bonds in the amount of $6,000,000. The terms of these domestic unsecured bonds are summarized as

follows:


Nominal


March 2011 5 years $ 6,000,000 1.47% Pay half of principal each in the



interest rate.

6) Second debenture issue of 2011

On June 1, 2011, following the approval from the SFB, the Company issued domestic unsecured


follows:

Type of bonds Issuance date Period Amount

Normal


Bond A June 2011 5 years $ 3,000,000 1.43% Principal is due at maturity.



Bond B June 2011 7 years $ 2,650,000 1.66% Principal is due at maturity.



Bond C June 2011 10 years $ 1,400,000 1.82% Principal is due at maturity.



7) Third debenture issue of 2011

On July 6, 2011, following the approval from the SFB, the Company issued domestic unsecured


follows:


Nominal


125


Nominal


July 2011 5 years $ 4,950,000 1.51% Principal is due at maturity.


interest rate.


On December 28, 2011, following the approval from the SFB, the Company issued domestic




Nominal


March 2012 5 years $ 9,000,000 1.34% Principal is due at maturity.


interest rate.

9) Second debenture issue of 2012

On May 11, 2012, following the approval from the SFB, the Company issued domestic unsecured


follows:


Nominal


May 2012 5 years $ 6,000,000 1.43% Principal is due at maturity.


interest rate.

10) Third debenture issue of 2012

On July 27, 2012, following the approval from the SFB, the Company issued domestic unsecured

bonds in the amount of $8,000,000. The terms of these domestic unsecured bonds are summarized

as follows:


Nominal


August 2012 3 years $ 8,000,000 1.18% Principal is due at maturity.


interest rate.

126

11) Fourth debenture issue of 2012

On September 28, 2012, following the approval from the SFB, the Company issued domestic




Nominal


October 2012 5 years $ 3,300,000 1.35% Principal is due at maturity.


interest rate.

12) Foreign unsecured corporate bonds USD-denominated

On December 13, 2012, Competition Team Technologies Ltd., a subsidiary of the Company, issued

foreign unsecured corporate bonds in the amount of US$ 650 million. The terms of these foreign

unsecured bonds are summarized as follows:

Issuance date Period Amount Nominal interest rate

December 2012 5 years USD 650 million 2.125%

(17) Long-term loans

Institution Loan period December 31, 2011 Limit

Mizuho Corporate Bank

Ltd., etc. syndicated

loan

2008/8/21~2013/8/21 $ 12,263,400 (USD405 million)

〞 2008/9/11~2013/9/11 13,626,000 (USD450 million)

ING Bank, N.V. etc.

syndicated loan

2010/10/22~2015/10/22 5,681,100 (EUR145 million)



loan

2011/3/31~2014/3/31 19,920,600 (JPY51 billion)

China Development

Industrial Bank

2011/8/12~2014/8/12 2,000,000 (NTD2.5 billion)

First Commercial Bank 2011/11/30~2026/11/30 109,000 (NTD2.5 billion)

$ 53,600,100

Interest rate 0.7729%~1.8040%

127

Institution Loan period December 31, 2012 Limit



loan

2008/8/21~2013/8/21 $ 11,761,200 (USD405 million)

〞 2008/9/11~2013/9/11 6,534,000 (USD225 million)

ING Bank, N.V. etc.

syndicated loan

2010/10/22~2015/10/22 5,581,050 (EUR145 million)



loan

2011/3/31~2014/3/31 17,156,400 (JPY51 billion)

China Development

Industrial Bank

2011/8/12~2014/8/12 2,000,000 (NTD2.5 billion)

First Commercial Bank 2011/11/30~2026/11/30 763,000 (NTD2.5 billion)


Ltd.

2012/6/28~2015/6/28 3,742,703 (JPY11 billion)

Citibank 2012/9/21~2015/9/20 1,464,804 (USD50 million)

$ 49,003,157

Less: Current portion ( 18,295,200)

$ 30,707,957

Interest rate 0.638%~1.6803%

1) In 2008, Foxconn (Far East) Limited, a subsidiary of the Company, entered into a syndicated credit

facility agreement with Mizuho Corporate Bank Ltd. as the lead bank and obtained a credit line in

the amount of US$ 1,035 million, of which US$ 405 million had been repaid in advance. As of

December 31, 2012, the credit line is US$ 630 million, and the Company is the guarantor of the loan.

2) Part of the syndicated loan with Mizuho Corporate Bank Ltd. as the lead bank, amounting to US$630

million, had been reclassified to ‘current liabilities’ in the third quarter of 2012.

3) Foxconn Slovakia, SPOL. S R.O., a subsidiary of the Company, entered into a syndicated credit

facility agreement with ING Bank N.V. etc. as the lead bank and obtained a credit line in the amount

of EUR 410 million, of which EUR 265 million had been repaid in advance in the fourth quarter of

2011. Starting from the fourth quarter in 2011, the credit line amounted to EUR 145 million, and the

Company is the guarantor of the loan.

4) Throughout the term of Mizuho Corporate Bank Ltd., China Development Industrial Bank, First

Commercial Bank, etc. syndicated term loan agreement, the Group shall maintain the agreed

financial ratios, to be tested semi-annually and annually on an audited consolidated basis.

(18) Retirement plan

1) The Company participates in a defined benefit pension plan in accordance with the Labor Standards

Law, covering all regular employees for services provided prior to July 1, 2005, and employees who

choose to remain in the defined benefit pension plan subsequent to the enforcement of the Labor

Pension Act on July 1, 2005. The Company contributes on a monthly basis an amount equal to 2.1%

128

of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of

Taiwan, the trustee, under the name of the independent retirement fund committee.

A. In 2011 and 2012, the related actuarial assumptions used to calculate the pension liability were

as follows:

2011 2012

Discount rate 1.90% 1.75%

Rate of increase in compensation 3.00% 3.00%

Expected return rate on plan assets 1.90% 1.75%

B. Funded status of the pension plan

December 31,

2011 2012

Benefit obligation:

Vested benefit obligation ($ 274,377) ($ 359,171)

Non-vested benefit obligation ( 1,081,451) ( 1,154,451)

Accumulated benefit obligation ( 1,355,828) ( 1,513,622)

Additional benefits based on future

salary increases ( 552,906) ( 592,195)

Projected benefit obligation ( 1,908,734) ( 2,105,817)

Fair value of plan assets 621,909 645,316

Funded status ( 1,286,825) ( 1,460,501)

Unrecognized net transition obligation 2,735 222

Unrecognized actuarial loss 412,748 559,591

Accrued pension liability ($ 871,342) ($ 900,688)

Vested benefit $ 302,126 $ 392,289

C. In 2011 and 2012, the details of net pension cost were as follows:

2011 2012

Service cost $ 36,377 $ 33,119

Interest cost 29,126 36,266

Expected return on plan assets ( 10,530) ( 11,816)

Amortization of unrecognized net transition

obligation 2,513 2,513

Amortization of unrecognized actuarial loss 2,314 15,848

Net periodic pension cost $ 59,800 $ 75,930

2) Effective July 1, 2005, in accordance with the Labor Pension Act, the Company has a defined

contribution employee retirement plan covering all domestic employees. The Company contributes

monthly an amount based on 6% of employees’ monthly salaries and wages to the employees’

personal pension accounts with the Bureau of Labor Insurance. Employees may choose to receive

pension on a monthly basis or as lump sum payment upon retirement wherein the amount of

129

benefits is the account balance plus accumulated investment gains. The pension expenses under

this plan amounted to $301,182 and $305,101 for the years ended December 31, 2011 and 2012,

respectively.

3) The subsidiaries in mainland China have defined contribution pension plans and contribute an

amount monthly based on 8%~9% of employees’ monthly salaries and wages to an independent

fund administered by a government agency. The plan is administered by the government of

mainland China and the subsidiaries do not have further pension liabilities.

4) As of December 31, 2011 and 2012, the subsidiaries which participated in defined contribution

pension plans recognized reserve according to the respective local laws for retirement plan in the

amount of $192,958 and $202,707, respectively. Pension expenses in the amount of $7,959,174 and

$15,269,556 were recognized for the years ended December 31, 2011 and 2012, respectively.

(19) Capital stock

1) As of December 31, 2012, the Company’s authorized shares were 12,230,000 thousand shares

(including 200 million shares reserved for employee stock options or convertible bonds) and the

issued and outstanding common stock were 11,835,867 thousand shares with a par value of $10 (in

dollars) per share.

2) On June 18, 2012, the Company’s shareholders adopted a resolution to increase the authorized

shares to 15 billion shares and approved employees’ stock bonus amounting to $5,874,552 for 2011.

The employee stock bonus of 77,860 thousand shares was determined based on the closing price of

$75.45 (in dollars) on June 15, 2012, the previous day of the 2012 shareholders’ meeting after

taking into account the effects of ex-rights and ex-dividends. In addition, the Company’s

shareholders adopted a resolution to issue stock dividends at par value amounting to $10,689,097.

3) Pursuant to the resolution adopted at the stockholders' meeting held on June 1, 1999, and after

obtaining approval from the SFC, the Company issued 25 million units of global depository receipts

(GDRs) in Europe, Asia and the USA, comprising 50 million shares of common stock (Deposited

Shares). The issuance amounted to USD347,250 thousand, and the main terms and conditions of the

GDRs are as follows:

A. Voting

Holders of GDRs have no right to directly exercise voting rights or attend the Company’s

stockholders' meeting, except when a motion is on the election of directors or supervisors.

A holder or holders together holding at least 51% of the GDRs outstanding at the relevant record

date of the stockholders' meeting can instruct the Depositary to vote in the same direction in

respect of one or more resolutions to be proposed at the meeting.

B. Sale and withdrawal of GDRs

Under the current R.O.C. law, shares represented by the GDRs may be withdrawn by holders of

GDRs commencing three months after the initial issue of GDRs. A holder of a GDR may,

provided that the Company has delivered to the custodian physical share certificates in respect

of the Deposited Shares, request the Depositary to sell or cause to be sold on behalf of such

holder the shares represented by such GDRs.

130

C. Dividends

GDR holders are entitled to receive dividends to the same extent as the holders of common

stock subject to the terms of the Deposit Agreement and applicable laws of the R.O.C.

D. As of December 31, 2012, 157,010,000 units of GDRs were outstanding, which represents

314,019 thousand shares of common stock.

(20) Share-based payment - employee compensation plan

As of December 31, 2011 and 2012, the share-based payment transactions of Foxconn International

Holdings Limited, a subsidiary of the Company (listed on the Stock Exchange of Hong Kong), are set

forth below:

Type of arrangement Grant date

Quantity

granted

Contract

period

Vesting conditions/

Restricted terms

Employee stock options September 12, 2007 2,400,000 1 ~ 6 years Note (1)

〞 July 8, 2011 256,159,719 1 ~ 3 years 〞

Share appreciation rights January 1, 2006 7,343,564 1 ~ 3 years -

Other share-based

payment plans

December 29, 2006 5,748,145 - Note (2)

〞 July 24, 2007 502,090 - Note (3)

〞 December 28, 2007 20,459,322 - Note (4)

〞 October 29, 2009 26,161,489 - -

〞 April 27, 2010 9,435,264 - -

〞 November 19, 2010 25,616,428 - -

〞 December 29, 2010 35,573,029 - -

〞 April 29, 2011 3,302,725 - -

〞 July 8, 2011 5,138,266 - -

〞 October 18, 2011 21,948,624 - -

〞 December 29, 2011 62,423,773 - Note (5)

〞 December 28, 2012 135,564,990 - Note (6)

Note 1: Vested upon completion of certain years’ service.

Note 2: Of the shares granted, 2,737,718 shares cannot be sold within 1 to 3 years from the grant

date.

Note 3: Of the shares granted, 407,000 shares cannot be sold within 1 to 2 years from the grant date.


date.


date.


date.

131

1) Employee stock options

For the stock options granted with the compensation cost accounted for using the fair value method,

their fair value on the grant date is estimated using the Black-Scholes option-pricing model. The

weighted-average parameters used in the estimation of the fair value are as follows:

Grant date

Stock

price

(HK$)

Exercise

price

(HK$)

Expected

price

volatility

Expected

dividend

yield rate

Risk-free

interest

rate

Fair value per

share (US$)

September 12, 2007(A) 19.46 20.63 36% - 3.92% 0.86

July 8, 2011 3.62 3.62 37% - 0.297%~

0.667%

0.11

For the years ended December 31, 2011 and 2012, the weighted-average exercise price of employee

stock options outstanding were US$0 and US$0.7 (in dollars) per share, respectively, and expenses

incurred on employee stock options transactions were $404,788 (US$13,773 thousand) and

$245,461 (US$8,301 thousand), respectively. Details of the employee stock options are set forth

below:


Employee Stock Options (In shares) 2011 2012

Options outstanding at beginning of year 227,459,105 253,061,762

Options granted 256,159,719 -

Options exercised - ( 29,548,295)

Options revoked ( 230,105,486) ( 17,138,833)

Options canceled ( 451,576) -

Options outstanding at end of year 253,061,762 206,374,634

Options exercisable at end of year 1,600,000 51,323,616

2) Share appreciation rights

There is no stock appreciation rights outstanding as of December 31, 2011 and 2012.

3) Other share-based payment plans

These share-based payments were granted to employees. For the years ended December 31, 2011

and 2012, expenses incurred on other share-based payments were $1,434,996 (US$48,826

thousand) and $1,946,238 (US$65,818 thousand), respectively.

(21) Capital reserve

1) Pursuant to the R.O.C. Company Law, capital reserve arising from paid-in capital in excess of par

value on issuance of common stocks and donations can be used to cover accumulated deficit or to

issue new stocks or cash to shareholders in proportion to their share ownership, provided that the

Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires

that the amount of capital reserve to be capitalized mentioned above should not exceed 10% of the

paid-in capital each year. Capital reserve should not be used to cover accumulated deficit unless the

132

legal reserve is insufficient.

2) Please see Note 4 (16) for information on “Capital reserve from conversion right”.

(22) Retained earnings

1) In accordance with the Company’s Articles of Incorporation, current year’s earnings must be

distributed in the following order:

A. Covering accumulated deficit;

B. Setting aside as legal reserve equal to 10% of current year’s net income after tax and distribution

pursuant to clause (A);

C. Setting aside a special reserve in accordance with applicable legal and regulatory requirement;

D. 8% as bonuses to employees; qualified employees include employees of affiliates per criteria set

by Board of Directors; and

E. the remainder shall be distributed pursuant to the proposal of the board of directors in accordance

with the Company’s dividend policy.

The Company’s dividend policy requires the board of directors to consider the Company’s budget

for future capital expenditures and funding needs when proposing the distribution of earnings. The

proposal should be resolved during the Stockholders’ Meeting. Dividends may be distributed in the

form of cash or shares, or a combination of both, provided, however, that share dividends distributed

in respect of any fiscal year shall not exceed 90 percent of total dividends to stockholders.

2) Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion

to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal

reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is

permitted, provided that the balance of the reserve exceeds 25% of the Company’s paid-in capital.

3) The details of the undistributed earnings were as follows:

December 31,

2011 2012

Before new tax system was adopted $ 2,163,509 $ 2,163,509

After new tax system was adopted

Subjected to additional 10% corporate

income tax 241,745,894 288,455,052

Not subjected to additional 10% corporate

income tax 81,590,999 94,762,377

$ 325,500,402 $ 385,380,938

133

4) The details of imputation system were as follows:

December 31,

2011 2012

Balance of stockholders deductible tax account $ 36,036,198 $ 42,643,997

2011 (Actual) 2012 (Estimated)

Tax deductible rate of earnings distribution 14.07% 13.43%

5) The appropriations of 2010 and 2011 earnings had been resolved at the stockholders’ meeting on

June 8, 2011 and June 18, 2012, respectively. Details are summarized below:

2010 2011

Amount

Dividends per

share

(in dollars) Amount

Dividends per

share

(in dollars)

Legal reserve $ 7,715,455 $ - $ 8,159,100 $ -

Stock dividends 9,661,248 1.0 10,689,096 1.0

Cash dividends 9,661,248 1.0 16,033,645 1.5

$ 27,037,951 $ 2.0 $ 34,881,841 $ 2.5

As of March 25, 2013, the distribution of 2012 earnings had not been approved by the board of

directors. The information on distribution of earnings will be posted on the “Market Observation

Post System” of the TSEC.

6) The estimated amounts of employees’ bonus and directors’ and supervisors’ remuneration are

$5,874,552 and $0 for 2011, and $6,822,891 and $0 for 2012, respectively, based on a certain

percentage (8% and 0%) of net income, and are recognized as operating costs and expenses in

current year. The information on employees’ bonus and directors’ and supervisors’ remuneration is

posted on the “Market Observation Post System” at the website of the TSEC. The employee stock

bonus amounting to $5,874,552 for 77,860 thousand shares were determined based on the closing

price of the Company’s common stock, $75.45 (in dollars), on June 18, 2012, the previous day of

the 2012 shareholders’ meeting after taking into account the effects of ex-rights and ex-dividends.

134

(23) Earnings per common share

For the year ended December 31, 2011

Amount

Number of

shares (in

thousands)

Earnings per common share

(in dollars)

Before tax After tax Before tax After tax

Basic earnings per share:

Consolidated net income $102,536,200 $81,934,633 11,756,704 $ 8.72 $ 6.97

Minority interest ( 822,095) ( 343,634) ( 0.07) ( 0.03)

Net income attributable to

equity holders of the

Company $101,714,105 $81,590,999 $ 8.65 $ 6.94

Diluted earnings per share:

Consolidated net income $102,536,200 $81,934,633 $ 8.46 $ 6.76

Minority interest ( 822,095) ( 343,634) ( 0.07) ( 0.03)

Dilutive effect of stock

equivalents: Convertible bonds-overseas 645,094 535,428 280,047 0.06 0.05

Employees’ bonus-2011 - - 77,949 - -



Company $102,359,199 $82,126,427 12,114,700 $ 8.45 $ 6.78


Amount

Number of

shares (in

thousands)

Earnings per common share

(in dollars)

Before tax After tax Before tax After tax

Basic earnings per share:

Consolidated net income $118,379,091 $91,787,141 11,798,513 $ 10.03 $ 7.78

Minority interest 3,104,865 2,975,236 0.27 0.25



Company $121,483,956 $94,762,377 $ 10.30 $ 8.03

Diluted earnings per share:

Consolidated net income $118,379,091 $91,787,141 $ 9.73 $ 7.55

Minority interest 3,104,865 2,975,236 0.26 0.24

Dilutive effect of stock

equivalents: Convertible bonds-overseas 666,334 553,057 280,047 0.05 0.05

Employees’ bonus-2012 - - 84,423 - -



Company $122,150,290 $95,315,434 12,162,983 $ 10.04 $ 7.84

135

1) The number of shares had retroactively been adjusted by the stock dividends as of December 31,

2012.

2) Effective January 1, 2008, as employees’ bonus could be distributed in the form of stock, the diluted

EPS computation shall assume that distribution will be in the form of stocks in the calculation of the

weighted-average number of common shares outstanding during the reporting year, taking into

account the dilutive effects of stock bonus on potential common shares; whereas, the basic EPS

shall be calculated based on the weighted-average number of common shares outstanding during the

reporting year, which shall include the shares of employees’ stock bonus from the appropriation of

prior year earnings, which have already been resolved at the stockholders’ meeting held in the

reporting year.

(24) Personnel, depreciation and amortization expenses


2011 2012

Cost of sales

Personnel expenses

Salaries $ 110,968,317 $ 170,937,676

Labor and health insurances 5,386,897 8,054,777

Pension 6,207,278 12,738,742

Others 2,198,788 8,663,199

$ 124,761,280 $ 200,394,394

Depreciation $ 35,896,812 $ 47,362,616

Amortization $ 3,240,287 $ 3,995,479

Operating expenses

Personnel expenses

Salaries $ 50,821,014 $ 57,660,705

Labor and health insurances 2,443,243 3,648,094

Pension 2,112,878 2,911,845

Others 1,006,995 4,627,149

$ 56,384,130 $ 68,847,793

Depreciation $ 9,764,585 $ 10,798,926

Amortization $ 2,554,057 $ 5,726,306

136

5. RELATED PARTY TRANSACTIONS

1) Names of related parties and their relationship with the Company

Names of related parties Relationship with the Company

Foxconn Technology Co., Ltd. and subsidiaries

(FTCS)

Investee company accounted for under the equity

method

Pan International Industrial Corporation and

subsidiaries (PIICS)

"

Zhen Ding Technology Holding Limited

(ZDT-Cayman)

An indirectly-owned investee company accounted

for under the equity method

Foxsemicon Integrated Technology, Inc. and

subsidiaries (FITIS)

"

CyberTAN Technology, Inc. and subsidiaries

(CyberTANS)

"

Innolux Corporation and subsidiaries

(Formerly Chimei Innolux Corporation) (Innoluxs)

The Company’s chairman is the major

shareholder

SIO International Holdings Limited and subsidiaries

(SIOS)

"

Foxconn (Far East) Limited Subsidiary of the Company

Foxconn Slovakia, SPOL. S R.O. Indirect investment subsidiary of the Company

Hongfujin Precision Electronics (Chengdu) Limited

(Hongfujin (Chengdu))

"

Competition Team Technologies Ltd.

(Competition Team)

"

Competition Team Ireland Ltd.

(Competition Ireland)

"

All the transactions with subsidiaries disclosed below had been eliminated when preparing consolidated

financial statements. Except for transactions with the above related parties, there were no other material

transactions between related parties and the Company for the years ended December 31, 2011 and 2012.

Information on transactions with subsidiaries is disclosed in Note 11.

2) Significant transactions and balances with related parties

A. Sales


2011 % 2012 %

FTCS $ 83,882,312 2 $ 87,221,471 2

Innoluxs 18,552,703 1 15,230,714 1

SIOS - - 9,783,784 -

CyberTAN 6,757,308 - 3,382,280 -

Others 1,837,644 - 2,515,312 -

$ 111,029,967 3 $ 118,133,561 3

137

(1) The sales prices and credit terms to related parties were not significantly different from sales to

third parties, except for particular transactions with no similar transactions to compare with. For

these transactions, the prices and terms were determined in accordance with mutual agreements.

The credit term is disclosed in Note 11(1) 7).

(2) The Group sold materials to the above related parties for processing and repurchased the finished

goods. The sales amount of materials and repurchase price of finished goods were offset against

each other and shown at net amount in the financial statements.

B. Purchases


2011 % 2012 %

FTCS $ 36,978,255 1 $ 35,752,218 1

ZDT-Cayman 27,340,972 1 34,202,749 1

Innoluxs 16,890,277 1 27,072,913 1

PIICS 5,748,369 - 11,718,497 -

Others 3,478,012 - 4,746,415 -

$ 90,435,885 3 $ 113,492,792 3

The purchase prices and payment terms to related parties were not significantly different from

purchases from third parties, except for particular transactions with no similar transactions to

compare with. For these transactions, the prices and terms were determined in accordance with

mutual agreements. The payment terms to third parties are between 30 to 90 days.

C. Accounts receivable - related parties

December 31,

2011 % 2012 %

FTCS $ 15,187,492 3 $ 20,953,928 3

SIOS - - 8,938,992 2

Innoluxs 7,183,713 2 3,579,516 1

Others 2,920,606 - 1,997,215 -

$ 25,291,811 5 $ 35,469,651 6

D. Prepayment

December 31,

2011 2012

Others $ 44,225 $ 44,225

E. Other receivables

The Group purchased materials on behalf of Innoluxs and FTCS, etc. As of December 31, 2011 and

2012, other receivables amounted to $1,565,834 and $1,891,534, respectively.

138

F. Accounts payable - related parties

December 31,

2011 % 2012 %

FTCS $ 15,986,100 3 $ 18,228,693 3

ZDT-Cayman 6,424,374 1 8,479,854 1

Innoluxs 3,046,793 1 4,029,040 1

PIICS 1,917,629 - 4,009,801 1

Others 1,394,281 - 867,459 -

$ 28,769,177 5 $ 35,614,847 6

As of December 31, 2011 and 2012, a portion of accounts payable to FTCS in the amount of

$3,453,063 and $2,962,332, respectively, pertains to purchases of materials made by FTCS on behalf

of the Group.

G. Property transactions


Counterparty Transaction

Sales /

purchase price

Gain

on disposal

Receivables/(payables)

at December 31, 2011

FTCS, Innoluxs, ZDT-

Cayman, PIICS

Sale of fixed

assets

$ 808,617 $ 2,043 $ 312,527

FTCS, Innoluxs, Cyber

TANS, PIICS, FITIS

and ZDT-Cayman

Acquisition

of fixed

assets

389,431 - ( 93,543)


Counterparty Transaction

Sales /

purchase price

Gain

on disposal

Receivables/(payables)

at December 31, 2012


Cayman, PIICS

Sale of fixed

assets

$ 669,105 $ 11,615 $ 304,796


Cayman, PIICS and

FITIS

Acquisition

of fixed

assets

2,128,458 - ( 161,827)

Innoluxs Acquisition

of interest

115,404 - -

139

H. Guarantees

Endorsements and guarantees provided for the related parties as of December 31, 2011 and 2012 are

as follows:

December 31, 2011 December 31, 2012

Foxconn (Far East) Limited $ 25,879,995 $ 53,884,030

(USD 855 million)

(USD 1,330 million

and JPY 45 billion)

Foxconn Slovakia SPOL. S R.O. $ 20,603,999 $ 15,207,905

(EUR 526 million) (EUR 396 million)

Competition Ireland $ - $ 2,904,100

- (USD 100 million)

Competition Team $ - $ 27,248,800

-

(USD 700 million

and RMB 1.5 billion)

Hongfujin (Chengdu) $ - $ 5,182,150

-

(USD 50 million

and JPY 11 billion)

I. Salaries/rewards information of key management:


2011 2012

Salaries and bonuses $ 166,889 $ 120,805

Service execution fees 960 1,729

Employees’ bonuses 362,242 356,087

Share-based payment expenses 132,255 33,887

Total $ 662,346 $ 512,508

(A) Salaries and bonuses include regular wages, special responsibility allowances, pensions, various

bonuses and rewards, etc.

(B) Service execution fees include travel or transportation allowances, special expenditures, various

allowances, housing and vehicles offering, etc.

(C) Employees’ bonuses were those amounts estimated and accrued in the statement of income for

the current year.

(D) Share-based payment expenses were the compensation costs accounted for under R.O.C SFAS

No. 39.

(E) The relevant information above is shown in the Company’s annual report.

140

6. PLEDGED ASSETS

As of December 31, 2011 and 2012, the assets pledged as collateral were as follows:

December 31,

2011 2012

Assets Nature Book value Book value

Time deposits and cash

(shown as other

financial assets - current)

Short-term loans $ 46,741,750 $ 947,222

Time deposits and cash

(shown as other

financial assets

non-current)

Short-term loans, bond deposit as

security for court proceedings, security

deposit for employment of foreign

employees and customs deposits 24,179 854,748

$ 46,765,929 $ 1,801,970

7. COMMITMENTS AND CONTINGENT LIABILITIES

1) The Company entered into several contracts for the acquisition of machinery with total value of

approximately $18,049 million. As of December 31, 2012, the unpaid balance on these contracts

amounted to $4,204 million.

2) As of December 31, 2012, the Company’s subsidiaries’ future minimum lease payments for factories

and employees' dormitory were approximately $1,877 million as follows:

Year Amount (in millions)

2013 $ 538

2014 449

2015 383

2016 251

2017 and thereafter 256

$ 1,877

3) The Group entered into an agreement with Qualcomm Incorporated regarding mobile phone use right.

Under the agreement, the Group shall pay royalties based on sales volume of the related products.

4) The subsidiary, Syntrend Creative Park Co. Ltd., entered into a “Private Participation in Construction

and Operation of Taipei Information Park and Parking Lots” contract with Taipei City Government,

and the royalty shall be paid in accordance with the contract time schedule.

8. SIGNIFICANT CATASTROPHE

None.

9. SUBSEQUENT EVENTS

1) On January 7, 2013, following the approval from the SFB, the Company issued the 2012 1st domestic

unsecured bonds in the amount of $11,150,000.

141

2) On January 16, 2013, Hongfujin Precision Industrial (Shenzhen) Co., Ltd., a subsidiary of the

Company, sold the shares of Interface Optoelectronics (Shenzhen) Co., Ltd. to Blooming Progress

Limited in the amount of US$39,500 thousand.

3) The Company’s subsidiary, Foxconn (Far East) Ltd., prices the unsecured corporate bonds (“Bonds”)

guaranteed by the Company amounting to JPY 14 billion under the Medium-Term Note programme.

The term of the Bonds is 3 years plus 1 day. There are two series of the Bonds, one is JPY 10 billion

Bonds issued at a fixed rate of 1.28% and the other is JPY 4 billion Bonds issued at a floating rate of

3-month Libor plus 1.10%.

4) The Company’s board of directors resolved on March 25, 2013 for a subsidiary of the Company to sell

its 25% ownership in Mediamarkt (China) International Retail Holding Ltd. (Mediamarkt) including

Mediamarkt’s two subsidiaries in China namely, MediaMarkt (Shanghai) Consulting Service

Company Limited and MediaMarkt (Shanghai) Commercial & Trading Company Limited, to Media-

Saturn China-Holding Limited in the amount of US$17,500 thousand.

10. OTHERS

1) Fair value of financial instruments

December 31, 2011

Fair value

Non-derivative financial instruments Book value

Quotation

in an active

market

Estimated using

a valuation

technique Note

Assets:

Financial assets with fair values equal

to book values

$ 887,265,074 $ - $887,265,074 A

Open-end funds 24,412 24,412 - B

Available-for-sale financial assets 5,464,606 5,464,606 - C

Financial assets carried at cost - non-

current

4,046,796 - 4,046,796 D

Refundable deposits 1,323,105 - 1,316,389 E

Liabilities:

Financial liabilities with fair values

equal to book values

971,524,706 - 971,524,706 A

Long-term bonds payable 62,378,777 - 60,894,339 F

Derivative financial instruments

Assets:

Forward exchange contracts 45,917 - 45,917 G

Liabilities:


142

December 31, 2011

Fair value

Off-balance sheet financial instruments Book value

Quotation

in an active

market

Estimated using

a valuation

technique Note

Guarantees-USD $ 25,879,995

(US$ 855,000

thousand)

$ - $ 25,879,995

(US$ 855,000

thousand)

H

Guarantees-EUR 20,603,999

(EUR$ 526,000

thousand)

- 20,603,999

(EUR$ 526,000

thousand)

H

December 31, 2012

Fair value

Non-derivative financial

instruments Book value

Quotation

in an active

market

Estimated using

a valuation

technique Note

Assets:

Financial assets with fair values equal

to book values

$1,177,758,794 $ - $1,177,758,794 A

Open-end funds 83,265 83,265 - B

Available-for-sale financial assets 9,080,263 9,080,263 - C

Financial assets carried at cost - non-

current

8,620,722 - 8,620,722 D

Refundable deposits 879,643 - 867,760 E

Liabilities:

Financial liabilities with fair values

equal to book values

1,230,780,334 - 1,230,780,334 A

Long-term bonds payable 74,980,461 - 69,980,009 F

Derivative financial instruments

Assets:


Financial assets at fair value through

profit or loss

Corporation bonds 179,300 - 179,300 G

Liabilities:


143

December 31, 2012

Fair value

Off-balance sheet financial instruments Book value

Quotation

in an active

market

Estimated using

a valuation

technique Note

Guarantees-USD $ 60,309,380

(US$ 2,180,000

thousand)

$ - $ 63,309,380

(US$ 2,180,000

thousand)

H

Guarantees-EUR 15,207,905

(EUR$ 396,000

thousand)

- 15,207,905

(EUR$ 396,000

thousand)

H

Guarantees-JPY 18,989,600

(JPY$56,000,000

thousand)

- 18,989,600

(JPY$56,000,000

thousand)

H

Guarantees-RMB 6,920,100

(RMB1,500,000

thousand)

- 6,920,100

(RMB1,500,000

thousand)

H

The methods and assumptions used to estimate the fair values of the above financial instruments are

summarized below:

A. For short-term instruments, the fair values were determined based on their carrying values

because of the short maturities of the instruments. This method was applied to cash and cash

equivalents, notes and accounts receivable, other receivables, short-term loans, notes and accounts

payable, accrued expenses, current portion of long-term liabilities, other payables and other

current liabilities.

B. For Open-ended funds, the fair values were determined based on the funds’ net assets at December

31, 2011 and 2012.

C. Available-for-sale financial assets are regarded as quoted in an active market if quoted prices are

readily and regularly available from an exchange, dealer, broker industry group, pricing service or

regulatory agency, and those prices represent actual and regularly occurring market transactions on

an arm’s-length basis. If the market for a financial instrument is not active, the fair values are

determined using a valuation technique. The fair values of available-for-sale financial assets are

based on the quotation in the active markets as of December 31, 2011 and 2012.

D. As financial assets carried at cost are not quoted in an active market and their fair value cannot be

measured reliably, they are measured at cost.

E. The fair value of refundable deposits is based on the present value of expected future cash flows,

and the discount rate is based on the fixed rate of the one year time deposit given by the Post

Office as of December 31, 2011 and 2012.

F. The fair value of convertible bonds issued after January 1, 2006 is based on the present value of

expected cash flows amount. The discount rate is the effective interest rate of convertible bonds in

the current market, whose contractual terms are similar to those of convertible bonds issued by the

144

Company.

G. The fair values of derivative financial instruments which include unrealized gain or loss on

unsettled contracts were determined based on the amounts to be received or paid assuming that the

contracts were settled as of the reporting date.

H. The fair value of guarantees was based on the contract amounts.

2) Financial instruments with off-balance sheet credit risk

Please see Note 5. 2) H.

3) Financial risk control

A. The Group employs a comprehensive risk management and control system to clearly identify,

measure, and control the various kinds of financial risk it faces, including market risk, credit risk,

liquidity risk, and cash flow risk. Except for market risk, which is controlled by outside factors, the

remainder of the foregoing types of risk can be controlled internally or removed from business

processes. Therefore, the goal in managing each of these risks is to reduce them to zero.

As for market risk, the goal is to optimize its overall position through strict suggestion, execution

and audit processes, and proper consideration of a) long-term trends in the external

economic/financial environment, b) internal operating conditions, and c) the actual effects of market

fluctuations.

B. The risk management and control system of the Group is administered within a framework of

stratified responsibility:

(1) The board of directors formulates and approves the procedures; the senior officers designated by

the board make regular and unscheduled assessments of management procedures, organizational

structure, transaction flows, and whether there are any abnormal circumstances;

(2) The legal department reviews and examines transaction agreements;

(3) The finance department makes suggestions with regard to transactions and is responsible for

carrying them out;

(4) The accounting department manages the accounts;

(5) The audit department undertakes audits.

Under this framework, with its strict adherence to proper segregation of duties and adequate internal

control procedures, the Group seeks to minimize the potential adverse effects on the Group’s

financial performance.

4) Material financial risk information

A. Market risk

(1) Foreign exchange risk:

The Group’s major purchase and sale transactions are conducted in USD. The fair value

changes along with the foreign exchange rate fluctuations. However, the amounts and periods

of the Group’s accounts receivable and accounts payable are roughly equivalent, so the market

risk could mostly be offset. When temporary gap rises, the Group would enter into the forward

145

contract to hedge the risk. Accordingly, the Group expects no material risk as a whole.

(2) Futures market risk:

The Group is exposed to price risk because of investments in futures market instruments, which

have fair value in the active market. The Group sets limits to control the transaction volume and

the stop-loss amount of derivatives to reduce its futures market risk. As a result, there is no

significant future market risk.

(3) Interest rate risk:

The long-term bonds issued by the Group all have fixed interest rates, so there is no interest rate

risk.

(4) Stock price risk:

A. Issued by the Company:

The overseas convertible bonds issued by the Company are compound instruments, which

include the conversion rights, call option, and put option. Except that the fair value of the

bonds would be changed due to changes in market interest rate, their fair value is mainly

subject to the changes in the Company’s stock price. The Company could exercise the call

option to mitigate the stock price risk adequately.

B. Held by the Company:

Though price of available-for-sale financial assets and financial assets carried at cost held by

the Company fluctuates with the effects of market, it will not affect operating income but

stockholders’ equity of current year. Accordingly, the Company expects no material risk as a

whole.

(5) Certain transactions of the Group involve non-functional currencies which are exposed to

exchange rate fluctuations. The information on foreign currency denominated monetary assets

and liabilities which are significantly affected by exchange rate fluctuation is as follows:

(Foreign Currency: Functional Currency)

December 31,

2011 2012

Foreign currency

amount

(In thousands)

Exchange

rate

Foreign currency

amount

(In thousands)

Exchange

rate

Financial Assets

Monetary item

USD : NTD $ 16,044,545 30.28 $ 16,638,351 29.04

USD : RMB 4,118,073 6.2933 8,337,943 6.2305

CZK : EUR 4,065,821 0.0390 4,085,757 0.0398

Net effect in consolidated

entities with foreign

currency

USD : NTD 16,132,709 30.28 19,012,423 29.04

EUR : NTD 215,299 39.18 258,270 38.49

146

December 31,

2011 2012

Foreign currency

amount

(In thousands)

Exchange

rate

Foreign currency

amount

(In thousands)

Exchange

rate

Financial Liabilities

Monetary item

USD : RMB $ 11,775,142 6.2933 $ 16,937,054 6.2305

USD : NTD 11,235,440 30.28 12,226,807 29.04

JPY : NTD 74,763,422 0.3906 64,256,794 0.3364

JPY : RMB 23,475,230 0.0812 53,075,694 0.0722

B. Credit risk

(1) Receivables:

With respect to receivables of the Group, most of the debtors are well-known international

companies with very good credit standing and have no history of significant default. Moreover,

the adequacy of the allowance for doubtful accounts is assessed regularly, so there is no

material credit risk.

(2) Financial market:

i. The forward and futures transactions entered into by the Group are done with financial

institutions with very good credit standing. The Group does not expect these financial

institutions to default. Consequently, the likelihood that the credit risk would occur is low.

ii. Convertible bonds payable of the Company were issued in the primary market, so that the

Company is not exposed to credit risk that may arise from counterparties in the secondary

market.

(3) Asset transactions:

The Group has investments in available-for-sale financial assets and financial assets that are

measured at cost. Although the potential for credit risk does exist, there is an active market for

available-for-sale financial assets, and for financial assets measured at cost, the Group

performs impairment testing regularly. Moreover, the Group evaluated the counterparties’

credit standing when it entered into the transaction. Although the potential for credit risk does

exist, the Group does not expect material credit risk accordingly.

C. Liquidity risk

(1) Foreign exchange transactions:

For forward foreign exchange transactions entered into by the Group, the targets of the

transactions are all currencies traded in international foreign exchange markets with high

trading volumes and a large number of traders bidding. Trading is active with high liquidity.

Therefore, no material liquidity risk is expected.

147

(2) Futures transactions:

For futures transactions entered into by the Group, orders are placed on future exchanges in

New York, Chicago or London. The numbers of available future targets and international

market participants are adequate to facilitate easy entry and exit. Therefore, no material

liquidity risk is expected.

(3) Working capital:

The Group has good operating and credit conditions as well as sufficient working capital, so it

expects no significant liquidity risk arising from insufficient capital to meet contract

obligations.

(4) Convertible bonds:

(a)Overseas convertible bonds payable

The Company issued overseas convertible bonds in the amount of US$1 billion on October

12, 2010. The bonds will mature on October 12, 2013. The bondholders have no put options

in the bonds. The Company expects no significant liquidity risk.

D. Cash flow risk from movements of interest rates

(1) Long-term liabilities:

i. For the domestic bonds payable issued by the Company, there should be no cash flow risk

from movements of interest rates due to the fixed interest rate on the bond.

ii. As to the overseas bonds payable issued by the Company, there should be no material cash

flow risk from movements of interest rates due to the zero interest rate on the bond.

iii. Although the Company’s long-term loans bear short-term-floating-interest rate, current

short-term interest rate is much lower than long-term interest rate and is not possible to rise

significantly in the near future; thus, the Company expects no significant cash flow risk

would arise.

(2) Foreign exchange transactions:

The forward foreign currency transactions entered into by the Group are for the purpose of

hedging against short-term gaps of the net positions of foreign currency assets and liabilities. As

such, the amounts of the transactions are immaterial and their duration is short. Moreover,

because of the equivalent foreign currency cash outflows and inflows, the Group expects no

significant funding demand. Therefore, no material cash flow risk is expected from movements

of interest rates.

(3) Financial assets:

As the investments in available-for-sale financial assets, financial assets that are measured at

cost and futures transactions of the Group are not interest-rate type products, there is no cash

flow risk from movements in interest rates.

148

5) Elimination of intercompany transactions


Transactions Companies Amount

1) Elimination of long- Hyield Venture Capital Co., Ltd. $ 524,911,375

term investments Foxconn Holding Ltd.

and stockholders' Foxconn (Far East) Limited

equity Bao Shin International Investment Co., Ltd.

Hon Chi International Investment Co., Ltd.

Hon Yuan International Investment Co., Ltd.

Lin Yih International Investment Co., Ltd.

Premier Image Technology (H.K), Limited

Hon Hai/Foxconn Logistics California LLC.

Hon Hai/Foxconn Logistics Texas LLC.

Altus Technology Inc.

Foxconn Singapore (PTE) Ltd.

Ambit International Ltd.

Margini Holdings Ltd.

Image & Vision Investment Corp.

Foxconn Holdings B.V. -Netherland

Syntrend Creative Park Co., Ltd.

Foxconn SA B.V.

2) Elimination of

intercompany

receivables, payables

and prepayments

A. Accounts Foxconn Holding Ltd. 981,727,616

receivable, Foxconn (Far East) Limited

accounts payable Bao Shin International Investment Co., Ltd.

and other Hyield Venture Capital Co., Ltd.

receivables/ Hon Hai/Foxconn Logistics California LLC.

payables Hon Hai/Foxconn Logistics Texas LLC.





B. Prepayments Foxconn (Far East) Limited 567,821

Foxconn Holding Ltd.

3) Elimination of profit

and loss

A. Sales and purchases Foxconn (Far East) Limited 1,908,437,423



Hyield Venture Capital Co., Ltd.

Bao Shin International Investment Co., Ltd.



149






B. Logistics expenses Foxconn (Far East) Limited $ 1,348,758



C. Processing revenue Foxconn (Far East) Limited 99,152,222

and expenses

D. Unrealized Foxconn (Far East) Limited 2,649,176

intercompany Foxconn Holding Ltd.

gross profit Ambit International Ltd.





1) Elimination of long- Hyield Venture Capital Co., Ltd. $ 592,749,679

term investments Foxconn Holding Ltd.

and stockholders' Foxconn (Far East) Limited

equity Bao Shin International Investment Co., Ltd.


Hon Yuan International Investment Co., Ltd.

Lin Yih International Investment Co., Ltd.








Image & Vision Investment Corp.

Foxconn Holdings B.V. -Netherland

Syntrend Creative Park Co., Ltd.

Foxconn SA B.V.

2) Elimination of

intercompany

receivables, payables

and prepayments

150



A. Accounts Foxconn Holding Ltd. $ 1,131,719,356

receivable, Foxconn (Far East) Limited

accounts payable Bao Shin International Investment Co., Ltd.

and other Hyield Venture Capital Co., Ltd.

receivables/ Hon Hai/Foxconn Logistics California LLC.

payables Hon Hai/Foxconn Logistics Texas LLC.





B. Prepayments Foxconn (Far East) Limited 492,962


3) Elimination of profit

and loss

A. Sales and purchases Foxconn (Far East) Limited 2,389,418,255



Hyield Venture Capital Co., Ltd.







B. Logistics expenses Foxconn (Far East) Limited 1,426,388



C. Processing revenue Foxconn (Far East) Limited 99,216,499

and expenses

D. Unrealized Foxconn (Far East) Limited 2,426,897

intercompany Foxconn Holding Ltd.

gross profit Ambit International Ltd.



151

11. ADDITIONAL DISCLOSURES REQUIRED BY THE SECURITIES AND FUTURE COMMISSION (1)Related information of significant transactions

All the transactions with subsidiaries disclosed below had been eliminated when preparing consolidated financial statements. The disclosure information as follows is for reference only.

1) Loans to any company or person: None

2) Guarantee information:

Parties being guaranteed

Number

Name of the company

providing guarantee Name

Relationship with

the Company

Limit of

guarantee

for such party

Highest

outstanding

guarantee

amount 2012

Outstanding

guarantee

amount at

12/31/2012

Amount of

guarantee with

collateral placed

Ratio of

accumulated guarantee

amount to net assets

of the Company

Ceiling of the

outstanding guarantee

to the respective party

Note

0 Hon Hai Precision

Industry Co., Ltd.

Foxconn (Far East)

Limited

A wholly owned

subsidiary $ - $ 56,051,950 $ 53,884,030 $ - 8.33% $ - Note 1, 2, 3

0 Hon Hai Precision

Industry Co., Ltd.

Foxconn Slovakia,

Spol. S R. O.

An indirect wholly-

owned subsidiary - 20,790,255 15,207,905 - 2.35% - Note 1, 2, 3

0 Hon Hai Precision

Industry Co., Ltd.

Competition Team

Technologies

Limited

An indirect wholly-


0 Hon Hai Precision

Industry Co., Ltd.

Honfujin Precision

Electronics

(Chengdu) Limited

An indirect wholly-


0 Hon Hai Precision

Industry Co., Ltd.

Competition Team

Ireland Limited

An indirect wholly-


Note 1: The Company’s total endorsements and guarantees to others should not be in excess of the Company’s net assets.

Note 2: The Company’s endorsements and guarantees provided for a single party should not be in excess 50% of the Company’s net assets.

Note 3: The net assets referred above are based on the latest audited or reviewed financial statements.

3) Marketable securities held as of December 31, 2012:

December 31, 2012

General ledger Percentage Market value/

Name of investors Type and name of marketable securities (Note 1) Relationship with the Company accounts (Note 2) Number of shares Book value of ownership Net worth

Hon Hai Precision Industry Co.,

Ltd.

Common stock of Pan International Industrial

Corporation

Investee company accounted for under

the equity method (1)

106,178,272 $ 2,296,398 21 $ 2,111,036


Ltd.

Common stock of Foxconn Technology Co., Ltd. Investee company accounted for under

the equity method (1)

124,238,234 6,181,682 10 6,117,447


Ltd.

Common stock of Media Tek Inc. None (2)

2,134,259 690,433 - 690,433


Ltd.

Common stock of Innolux Co., Ltd.

(Formerly Chimei Innolux Corporation)


shareholder (3) 137,624,396 2,146,941 2 2,146,941

Note 1: Marketable securities disclosed above include listed stocks and open-end funds only. For other situation, please see Notes 4 (3) (6) and (7).

152

Note 2: Code of general ledger accounts: (1) Long-term investments accounted for under the equity method

(2) Available-for-sale financial assets-current

(3) Available-for-sale financial assets-non current

4) Marketable securities acquired or sold during 2012 in excess of $100,000 or over 20% of the company’s contributed capital:

Beginning Balance Addition Disposal Ending Balance

Type and

name of the

marketable

securities

General ledger

account Counterparty Number of shares Amount Number of shares Amount

Number

of shares

Selling

price

Book

value

Gain (loss)

on disposal Number of shares Amount

Foxconn (Far

East) Limited

Long-term

investments

accounted

for under the

equity

method

A wholly

owned

subsidiary

2,652,946,797 $ 63,748,370 729,997,990 $ 21,604,219 - $ - $ - $ - 3,382,944,787 $ 85,352,589

Foxconn Holding

Ltd.

Long-term

investments

accounted

for under the

equity

method

A wholly

owned

subsidiary

81,289,333 2,486,853 16,310,652 484,924 - - - - 97,599,985 2,971,777

Syntrend Creative

Park Co., Ltd.

Long-term

investments

accounted

for under the

equity

method

A wholly

owned

subsidiary

51,326,000 513,260 64,244,400 642,444 - - - - 115,570,400 1,155,704

5) Acquisition of real estate exceeding the amount of $100,000 or 20% of the Company’s contributed capital: None.

6) Disposal of real estate exceeding the amount of $100,000 or 20% of the Company’s contributed capital: None.

7) Related party purchases or sales transactions exceeding the amount of $100,000 or 20% of the Company’s contributed capital:

153

Descriptions of and reasons

for difference in transaction

terms compared to Notes and accounts

Transactions non-related party receivable/(payable)

Percentage of Percentage of total

total purchases, notes and accounts

Relationship sales, or other Credit receivable/ payable

Company Counterparty with the Company Purchases/sales Amount related accounts terms Unit price Terms Balance balance Note

Hon Hai Precision

Industry Co., Ltd.

Foxconn (Far East) Limited

and subsidiaries

Wholly-owned subsidiary and

its subsidiaries

Sales $ 39,825,230 2 45-90 days Note 1 Note 1 $ 36,362,495 7 Note 2


Foxconn CZ S. R. O. Indirect wholly owned subsidiary

Sales 16,849,018 1 60 days Note 1 Note 1 - - Note 2


Foxconn Singapore Pte. Ltd. Wholly-owned subsidiary

Sales 9,873,190 1 90 days Note 1 Note 1 1,948,822 -

Hon Hai Precision

Industry Co., Ltd.

SIO International Inc. Wholly-owned

subsidiary of SIO

Sales 9,555,961 - 60 days Note 1 Note 1 8,698,808 2

Hon Hai Precision

Industry Co., Ltd.

Foxconn Slovakia, Spol. S

R. O.

Indirect wholly-owned

subsidiary

Sales 6,786,299 - 60 days Note 1 Note 1 1,205,220 -

Hon Hai Precision

Industry Co., Ltd.

Foxconn Japan Co., Ltd. Indirect wholly-owned

subsidiary


Hon Hai Precision

Industry Co., Ltd.

Innolux Corporation Ltd.

(Formerly Chimei Innolux

Corporation)

The Company’s chairman is the

major shareholder

Sales 4,641,542 - 90 days Note 1 Note 1 469,585 -

Hon Hai Precision

Industry Co., Ltd.

Ingrasys Technology Co., Ltd. Indirect wholly-owned

subsidiary

Sales 4,066,179 - 60 days Note 1 Note 1 2,781,452 1

Hon Hai Precision

Industry Co., Ltd.

Ningbo Chi Mei

Optoelectronics Ltd.


subsidiary of Innolux



CyberTAN Technology, Inc. An indirectly-owned investee company accounted for under

the equity method

Sales 2,684,879 - 60 days Note 1 Note 1 346,315 - Note 2

Hon Hai Precision

Industry Co., Ltd.

Ingrasys Technology USA

Inc.


subsidiary

Sales 1,829,057 - 70 days Note 1 Note 1 - - Note 2

Hon Hai Precision

Industry Co., Ltd.

Ennoconn Corporation Indirect wholly-owned

subsidiary

Sales 1,491,504 - 60 days Note 1 Note 1 377,683 -

Hon Hai Precision

Industry Co., Ltd.

Foxconn Technology Co.,

Ltd.

Investee company accounted for

under the equity method


Hon Hai Precision

Industry Co., Ltd.

Foxteq Australia Pty Ltd. Indirect wholly-owned

subsidiary

Sales $ 1,258,130 - 60 days Note 1 Note 1 $ 276,616 -

http://www.ingrasys.com/

http://www.ingrasys.com/

154









Hon Hai Precision

Industry Co., Ltd.

Foxconn Technology Pte. Ltd. Indirect wholly-owned

Subsidiary of FTC

Sales 952,322 - 90 days Note 1 Note 1 153,272 - Note 2


Foxconn Rus, LLC Indirect wholly-owned subsidiary

Sales 840,496 - 45 days Note 1 Note 1 109,162 -


Ambit Microsystem (Shanghai) Co., Ltd.

Indirect wholly-owned subsidiary


Hon Hai Precision

Industry Co., Ltd.

Fukui Precision Component



subsidiary of ZDT-Cayman


Hon Hai Precision

Industry Co., Ltd.

Nanhai Chi Mei Electronics

Ltd.




Hon Hai Precision

Industry Co., Ltd.

Fuhong Precision Component

(Bac Giang) Limited


subsidiary

Sales 476,754 - 90 days Note 1 Note 1 1,963,023 - Note 2

Hon Hai Precision

Industry Co., Ltd.

Fenix Industria de Electronics

Ltda.


subsidiary



Ningbo Chi Mei Electronics Ltd.

Indirect wholly-owned subsidiary of Innolux


Hon Hai Precision

Industry Co., Ltd.

Foxconn Global Services

Division


subsidiary


Hon Hai Precision

Industry Co., Ltd.

Nanhai Chi Mei

Optoelectronics Corp.




Hon Hai Precision

Industry Co., Ltd.

Fuhongkang Technology



subsidiary of CyberTAN

Sales 231,780 - 90 days Note 1 Note 1 - -

Hon Hai Precision

Industry Co., Ltd.

SIO International Holdings

Limited


major shareholder


Hon Hai Precision

Industry Co., Ltd.

Funing Precision Component

Co., Ltd.


subsidiary

Sales 220,281 - 60 days Note 1 Note 1 1,227,814 - Note 2


Pan-International Industrial Co.

Investee company accounted for under the equity method

Sales $ 215,464 - 90 days Note 1 Note 1 $ 43,126 -

155









Hon Hai Precision

Industry Co., Ltd.

Foxstar Technology Co., Ltd. Investee company accounted for



Hon Hai Precision

Industry Co., Ltd.

Ability OPTO-Electronics


Investee company accounted for



Hon Hai Precision

Industry Co., Ltd.

Cheng Uei Precision

Industry Co., Ltd.

The chairman is a brother of

the Company’s chairman

Sales 193,649 - 30~90

days

Note 1 Note 1 30,458 -

Hon Hai Precision

Industry Co., Ltd.

Pan International Industrial

Electronics (Malaysia)


subsidiary of PIIC


Hon Hai Precision

Industry Co., Ltd.

Best Leap Enterprises

Limited


subsidiary

Purchase 760,977,081 26 90 days Note 1 Note 1 ( 128,769,081) ( 24)

Hon Hai Precision

Industry Co., Ltd.

Competition Team

Technologies Limited


subsidiary


Hon Hai Precision

Industry Co., Ltd.

Hongfujin Precision

Electronics (Chengdu) Co.,

Ltd.


subsidiary

Purchase 400,306,397 14 30~90

days

Note 1 Note 1 ( 82,100,323) ( 15)

Hon Hai Precision

Industry Co., Ltd.


and subsidiaries

Wholly-owned subsidiary

and its subsidiaries

Purchase 412,203,558 14 30~90

days

Note 1 Note 1 ( 91,657,738) ( 17) Note 3

Hon Hai Precision

Industry Co., Ltd.

Universal Field International

Limited


subsidiary



Foxconn CZ S. R. O. Indirect wholly-owned subsidiary



AMB Logistics Ltd. Indirect wholly-owned subsidiary

Purchase 23,931,474 1 60 days Note 1 Note 1 ( 741,723) -

Hon Hai Precision

Industry Co., Ltd.




major shareholder

Purchase 7,046,393 - 60 days Note 1 Note 1 ( 1,023,640) -

Hon Hai Precision

Industry Co., Ltd.

IRIS World Enterprises

Limited


subsidiary of ZDT-Cayman Purchase $ 4,601,475 - 90 days Note 1 Note 1 ($ 495,493) -

156









Hon Hai Precision

Industry Co., Ltd.

NSG Technology, Inc. Indirect wholly-owned

subsidiary Purchase 3,954,048 - 30 days Note 1 Note 1 - - Note 4


Fortune Source Enterprises Limited

Indirect wholly-owned subsidiary of PIIC

Purchase 2,623,306 - 90 days Note 1 Note 1 ( 964,788) -


CyberTAN Technology, Inc. An indirectly-owned investee company accounted for under

the equity method

Purchase 1,277,782 - 75 days Note 1 Note 1 ( 97,923) -

Hon Hai Precision

Industry Co., Ltd.

SIO International Inc. Wholly-owned subsidiary of

SIO Purchase 893,614 - 90 days Note 1 Note 1 ( 306,390) -

Hon Hai Precision

Industry Co., Ltd.

Ampower Technology Co.,

Ltd.

Indirectly-owned investee

company accounted for under the equity method

Purchase 466,890 - 90 days Note 1 Note 1 ( 46,453) -

Hon Hai Precision

Industry Co., Ltd.

FTC Technology Inc. Indirect wholly-owned

subsidiary of FTC Purchase 466,466 - 60 days Note 1 Note 1 ( 76,268) -

Hon Hai Precision

Industry Co., Ltd.

Foxconn Technology Pte.

Ltd.


subsidiary of FTC Purchase 459,239 - 90 days Note 1 Note 1 ( 89,434) -

Hon Hai Precision

Industry Co., Ltd.

Foxstar Technology Co.,

Ltd.

Investee company accounted

for under the equity method Purchase 307,047 - 60 days Note 1 Note 1 ( 98,496) -

Hon Hai Precision

Industry Co., Ltd.

Tekcon Electronics Corp. Indirect wholly-owned

subsidiary of PIIC Purchase 254,212 - 45 days Note 1 Note 1 ( 61,893) -


FTP Technology Inc. Indirect wholly-owned subsidiary of FTC



Pan-International Industrial Co.



Hon Hai Precision

Industry Co., Ltd.

Foxconn Global Services

Division


subsidiary



Foxconn Technology Co., Ltd


Purchase $ 145,408 - 60 days Note 1 Note 1 ($ 21,495) -

Hon Hai Precision Heroic Legend Enterprises Indirect wholly-owned Processing and 18,863,275 19 - Note 1 Note 1 ( 14,986,541) ( 17)

157









Industry Co., Ltd. Ltd. subsidiary molding costs (shown as accrued expenses)

Hon Hai Precision Success Rise Enterprises Ltd. Indirect wholly-owned Processing and 24,538,973 25 - Note 1 Note 1 ( 6,667,214) ( 8)

Industry Co., Ltd. subsidiary molding costs (shown as accrued expenses)

Hon Hai Precision Franklin Management Ltd. Indirect wholly-owned Processing and 16,503,053 17 - Note 1 Note 1 ( 14,846,695) ( 17)


Hon Hai Precision Best Leap Enterprises Ltd. Indirect wholly-owned Processing and 11,395,252 11 - Note 1 Note 1 ( 435,798) ( 1)


Hon Hai Precision Foxconn (Far East) Limited Wholly-owned subsidiary Processing and 12,746,052 13 - Note 1 Note 1 ( 21,732,987) ( 25)

Industry Co., Ltd. and subsidiaries and its subsidiaries molding costs (shown as accrued expenses)

Hon Hai Precision Beyond Maximum Industrial Indirect wholly-owned Processing and 10,944,341 11 - Note 1 Note 1 ( 1,878,416) ( 2)

Industry Co., Ltd. Ltd. subsidiary molding costs (shown as accrued expenses)

Hon Hai Precision Carston Ltd. Indirect wholly-owned Processing and 3,976,588 4 - Note 1 Note 1 ( 25,330,425) ( 30)


Note 1: The prices and terms to related parties were not significantly different from transactions with third parties, except for particular transactions with no similar transactions to compare with. For these transactions, the prices and

terms were determined in accordance with mutual agreements.

Note 2: The Group sold materials to the above related parties for processing and repurchased the finished goods. The sales amount of materials and repurchase price of finished goods were offset against each other and shown at net

amount in the financial statements.

Note 3: As of December 31, 2012, the Company’s prepayment was $79,379.

Note 4: As of December 31, 2012, the Company’s prepayment was $254,268.

8) Receivables from related parties exceeding the amount of $100,000 or 20% of the Company’s contributed capital as of December 31, 2012:

Overdue receivables

158

Relationship with Balance of receivables Turnover Subsequent Allowance for

Company Counterparty the Company from related parties rate Amount Actions taken collection bad debt

Hon Hai Precision

Industry Co., Ltd.

Foxconn (Far East) Limited and subsidiaries Wholly-owned subsidiary and its subsidiaries $ 36,362,495 3 $1,629,427 Subsequent Collection $15,091,777 $ -

Hon Hai Precision Foxconn (Far East) Limited and subsidiaries Wholly-owned subsidiary and its subsidiaries 64,308,654 - 7,971,583 Subsequent Collection 16,237,347 -

Industry Co., Ltd. (Shown as other receivables) (Note)

Hon Hai Precision Futaihua Industrial (Shenzhen) Co., Ltd. Indirect wholly-owned subsidiary 122,051,631 - 364,233 Subsequent Collection 44,303,256 -


Hon Hai Precision Hongfujin Precision Electronics (Zhengzhou) Indirect wholly-owned subsidiary 78,660,801 - - - 15,440,237 -

Industry Co., Ltd. Co., Ltd. (Shown as other receivables) (Note)

Hon Hai Precision Hongfujin Precision Electronics (Chengdu) Indirect wholly-owned subsidiary 69,893,800 - - - 47,464,031 -


Hon Hai Precision Hongfujin Precision Electronics (Chongqing) Indirect wholly-owned subsidiary 16,567,174 - - - 7,241,857 -


Hon Hai Precision Universal Field International Limited Indirect wholly-owned subsidiary 25,448,382 - 8,761 Subsequent Collection 16,120,147 -


Hon Hai Precision

Industry Co., Ltd.

SIO International Inc. Wholly-owned subsidiary of SIO 8,698,808 2 - - 6,632,855 -

Hon Hai Precision

Industry Co., Ltd.

Ingrasys Technology Co., Ltd. Indirect wholly-owned subsidiary 2,781,452 3 1,268,344 Subsequent Collection 74,424 -

Hon Hai Precision

Industry Co., Ltd.

Fuhong Precision Component (Bac Giang)

Limited

Indirect wholly-owned subsidiary 1,963,023 3 431,814 Subsequent Collection 920,561 -

Hon Hai Precision

Industry Co., Ltd.

Foxconn Singapore Pte. Ltd. Wholly-owned subsidiary 1,948,822 4 2,767 Subsequent Collection 1,619,362 -

Hon Hai Precision

Industry Co., Ltd.

Funing Precision Component Co. Ltd. Indirect wholly-owned subsidiary 1,227,814 4 162,051 Subsequent Collection 754,598 -

Hon Hai Precision

Industry Co., Ltd.

Foxconn Slovakia, Spol. S R. O. Indirect wholly-owned subsidiary 1,205,220 6 - - 822,578 -

Hon Hai Precision

Industry Co., Ltd.

Foxconn Japan Co., Ltd. Indirect wholly-owned subsidiary 1,194,376 5 - - 997,170 -

Hon Hai Precision

Industry Co., Ltd.

Ningbo Chi Mei Optoelectronics Ltd. Indirect wholly-owned subsidiary

of Innolux

1,161,217 3 348 Subsequent Collection 561,437 -

Hon Hai Precision

Industry Co., Ltd.

Foxconn Technology Co., Ltd. Investee company accounted for under the equity

method

1,154,671 2 346,121 Subsequent Collection 514,241 -

Hon Hai Precision

Industry Co., Ltd.

Interface Optoelectronics (Shenzhen) Co.,

Ltd.

Investee company accounted for under the equity

method

$ 871,651 6 $ 1,414 Subsequent Collection $ 737,243 $ -

159

Overdue receivables

Relationship with Balance of receivables Turnover Subsequent Allowance for

Company Counterparty the Company from related parties rate Amount Actions taken collection bad debt

Hon Hai Precision

Industry Co., Ltd.

Ambit Microsystem (Shanghai) Co., Ltd. Indirect wholly-owned subsidiary 653,432 5 62,525 Subsequent Collection 482,673 -

Hon Hai Precision

Industry Co., Ltd.




shareholder

469,585 2 - - 409,060 -

Hon Hai Precision

Industry Co., Ltd.

Ennoconn Corporation Indirect wholly-owned subsidiary 377,683 6 760 Subsequent Collection 381,054 -

Hon Hai Precision

Industry Co., Ltd.

CyberTAN Technology Inc. An indirectly-owned investee company

accounted for under the equity method

346,315 5 695 Subsequent Collection 275,770 -

Hon Hai Precision

Industry Co., Ltd.

New Ocean Precision Component (Jiangxi)

Co., Ltd.

Indirect wholly-owned subsidiary of PIIC 300,386 4 - - 102,972 -

Hon Hai Precision

Industry Co., Ltd.

Foxteq Australia Pty Ltd. Indirect wholly-owned subsidiary 276,616 4 - - 197,910 -

Hon Hai Precision

Industry Co., Ltd.

SIO International Holdings Limited The Company’s chairman is the major

shareholder

240,184 2 - - - -

Hon Hai Precision

Industry Co., Ltd.

Hon Fujin Precision Industry (Taiyuan) Co.,

Ltd.


of FTC

158,959 - 51,213 Subsequent Collection 100,989 -

Hon Hai Precision

Industry Co., Ltd.

Fukui Precision Component (Shenzhen) Co.,

Ltd.


of ZDT-Cayman

155,977 5 - - 70,531 -

Hon Hai Precision

Industry Co., Ltd.

Foxconn Technology Pte. Ltd. Indirect wholly-owned subsidiary

of FTC

153,272 6 - - - -

Hon Hai Precision

Industry Co., Ltd.

Nanhai Chi Mei Optoelectronics Ltd. Indirect wholly-owned subsidiary

of Innolux

145,779 4 132 Subsequent Collection 82,936 -

Hon Hai Precision

Industry Co., Ltd.

Fenix Industria de Electronics Ltda. Indirect wholly-owned subsidiary 134,812 4 2,472 Subsequent Collection 82,401 -

Hon Hai Precision

Industry Co., Ltd.

New Ocean Precision Component (Ganzhou)

Co., Ltd.

Indirect wholly-owned subsidiary of PIIC 125,242 6 992 Subsequent Collection 122,794 -

Hon Hai Precision

Industry Co., Ltd.

Ningbo Chi Mei Electronics Ltd. Indirect wholly-owned subsidiary

of Innolux

120,720 4 - - 76,112 -

Hon Hai Precision

Industry Co., Ltd.

Foxconn Rus, LLC Indirect wholly-owned subsidiary 109,162 - - - 109,162 -

Note: Receivables for payments made on behalf of others. 9) Information on derivative transactions: Please see Note 4(2).

(2) Disclosure information of Investee Company

(All the transactions with subsidiaries disclosed below had been eliminated when preparing consolidated financial statements. The disclosure information as follows is for reference only.)

160

1) Information on Investee Companies:

Original Held by the Company at December 31, 2012 Net income Investment Income

investment amount Percentage of (loss) of the (loss) recognized by

Main operating December 31, December 31, Number of ownership Investee Company the Company

Investor Investee company Address Activities Currency 2012 Currency 2011 shares (%) Currency Book value Currency Amount Currency Amount Note

Hon Hai Precision

Industry Co., Ltd.

Foxconn (Far East)

Limited

Cayman

Islands

Investment holding NTD $85,352,589 NTD $63,748,370 3,382,944,787 100 NTD $ 525,987,469 NTD $55,318,054 NTD $ 55,546,752 Note

1 Hon Hai Precision

Industry Co., Ltd. Hyield Venture Capital

Co., Ltd.

Taiwan Investment holding NTD 3,900,000 NTD 3,900,000 405,502,500 98 NTD 12,145,012 NTD 986,655 NTD 937,117 Note

1 Hon Hai Precision Industry Co., Ltd.


Taiwan Investment holding NTD 2,998,500 NTD 2,998,500 621,000,000 100 NTD 9,583,913 NTD 1,109,155 NTD 1,109,155 Note 1

Hon Hai Precision

Industry Co., Ltd. Margini Holdings

Limited

British Virgin Islands

Investment holding NTD 8,904,952 NTD 8,904,952 275,890,000 100 NTD 8,902,225 NTD 1,127,365 NTD 1,121,328 Note

1

Hon Hai Precision

Industry Co., Ltd. Ambit International

Ltd.

British Virgin Islands

Investment holding NTD 1,788,146 NTD 1,788,146 53,100,000 100 NTD 8,743,716 NTD 281,290 NTD 281,290 Note

1

Hon Hai Precision

Industry Co., Ltd. Foxconn Holding B.V.-

Netherland

Netherland Investment holding NTD 6,486,934 NTD 6,486,934 107,723,409 100 NTD 7,498,363 NTD 1,310,463 NTD 1,310,463 Note

1 Hon Hai Precision

Industry Co., Ltd. Foxconn Technology

Co., Ltd.

Taiwan Manufacture and design of monitors

NTD 481,782 NTD 481,782 124,238,234 10 NTD 6,181,682 NTD 8,377,059 NTD 854,687 Note

1, 3

Hon Hai Precision

Industry Co., Ltd. Foxconn Holding Ltd. British

Virgin Islands

Investment holding NTD 2,971,777 NTD 2,486,853 97,599,985 100 NTD 5,600,381 NTD 424,862 NTD 397,646 Note

1

Hon Hai Precision

Industry Co., Ltd. Hon Yuan International


Taiwan Investment holding NTD 1,611,500 NTD 1,611,500 267,000,000 100 NTD 3,652,466 NTD 333,582 NTD 333,378 Note


Hon Chi International


Taiwan Investment holding NTD 1,500,500 NTD 1,500,500 250,000,000 100 NTD 3,388,027 NTD 342,576 NTD 342,576 Note 1

Hon Hai Precision

Industry Co., Ltd. Foxconn Singapore

Pte. Ltd.

Singapore Investment holding NTD 1,661,610 NTD 1,661,610 53,037,545 100 NTD 2,488,716 NTD 78,156 NTD 81,434 Note

1 Hon Hai Precision

Industry Co., Ltd. Foxconn SA B.V.

Netherland Investment holding NTD 3,185,683 NTD 3,185,683 72,163,188 98 NTD 2,442,455 NTD 138,080 NTD 134,993 Note


Pan International Industrial Corporation

Taiwan Manufacture and marketing of

cables

NTD 2,042,398 NTD 2,042,398 106,178,272 21 NTD 2,296,398 NTD 401,900 NTD 91,152 Note 1, 2

Hon Hai Precision

Industry Co., Ltd. Lin Yih International


Taiwan Investment holding NTD 904,411 NTD 904,411 96,900,000 100 NTD 978,082 NTD 9,881 NTD 9,065 Note


Syntrend Creative Park

Co., Ltd.

Taiwan Retail of office machinery and equipment and electronic appliances, and information software services.

NTD 1,155,704 NTD 513,260 115,570,400 80 NTD 1,080,172 NTD ( 60,162) NTD ( 48,446) Note 1

Hon Hai Precision

Industry Co., Ltd. Premier Image

Technology (H.K)

Hong

Kong

Purchase and the

sales of cameras

NTD $ 22,311 NTD $ 22,311 1,409,000 2 NTD $ 174,408 NTD ($ 48,241) NTD ($ 785) Note

1, 5

161





Ltd. and related parts

Hon Hai Precision

Industry Co., Ltd. Altus Technology Inc. Taiwan Manufacture, design

and marketing of

cellular phone,

camera lens and

sensors

NTD 865,177 NTD 865,177 7,872,911 65 NTD 78,079 NTD ( 2,103) NTD ( 1,358) Note

1, 4

Hon Hai Precision

Industry Co., Ltd. Others Others NTD 163,446 NTD 163,446 - - NTD 180,052 NTD 164,674 NTD 81,654 Note

1 Hyield, Hon Yuan,

Bao Shin and

Hon Chi

Foxsemicon Integrated

Technology Inc.

Taiwan Manufacture of

semiconductor

machinery and

sales of computer

components

NTD 448,110 NTD 448,110 21,663,004 20 NTD 23,556 NTD ( 387,910) NTD ( 114,323) Note 6

Hyield, Hon Yuan,

Bao Shin and

Hon Chi

Foxconn Technology

Co., Ltd.

Taiwan Manufacture and

design of

monitors

NTD 1,992,567 NTD 1,992,567 246,469,620 20 NTD 12,489,422 NTD 8,377,059 NTD 1,678,519 Note

6

Hon Yuan, Bao

Shin, Hon Chi

and

Hon Yiing

Pan International

Industrial

Corporation


marketing of

cables

NTD 560,639 NTD 560,639 29,180,873 6 NTD 662,825 NTD 401,900 NTD 22,861 Note

6

Hyield, Hon Yuan,

Bao Shin, Lin Yih

and Hon Chi

Altus Technology Inc. Taiwan Manufacture,

marketing and

design of cellular

phone, camera

lens and sensors

NTD 284 NTD 284 4,317,089 35 NTD 42,815 NTD ( 2,103) NTD ( 745) Note 6

Hyield Antec Electronic

System Co., Ltd.


cable, electronic

equipment and

electron

component of

motor vehicles


6

Hyield, Hon Yuan,

Bao Shin, Lin Yih

and Hon Chi

CyberTAN

Technology, Inc.

Taiwan Manufacture, design

and marketing of

wireless network

equipment


6

Bao Shin and

Hyield

Ennoconn Corporation Taiwan Design and

manufacture of

NTD $ 261,706 NTD $ 244,291 24,916,107 49 NTD $ 465,553 NTD $ 179,196 NTD $ 95,196 Note 6

162





single board

computer,

embedded board,

industrial

motherboard

Bao Shin UVAT Technology Co.,

Ltd.


sales of vacuum

sputtering system

and vacuum

coating service


6、9

Hyield and Bao

Shin

Simplo Technology

Co., Ltd.

Taiwan Information service,

manufacture of

lighting

equipment, data

storage and

processing

system, electronic

components,

battery, power

generation/

transmission/

distribution

machinery, and

wireless

communication

system

NTD 1,433,855 NTD 1,433,855 26,575,186 9 NTD 2,231,052 NTD 3,302,612 NTD 321,203 Note

6

Hon Chi, Hon

Yuan, and Bao

Shin

Foxnum Technology

Co., Ltd.


sales of

machinery,

computer and

peripheral devices

NTD 464,736 NTD 464,736 46,473,600 85 NTD 1,197,379 NTD 282,144 NTD 274,509 Note 6

Hyield, Hon Yuan,

Bao Shin and

Hon Chi

G-TECH

Optoelectronics

Corporation


glass, glass

products and

electronic

components

NTD 1,669,704 NTD 1,669,704 73,128,667 28 NTD 2,943,407 NTD 747,711 NTD 224,126 Note

6, 9

Hyield and

Bao Shin

Advanced

Microelectronic

Taiwan Research,

development,

NTD $ 187,820 NTD $ 187,820 16,271,550 10 NTD $ 45,641 NTD ($ 300,571) NTD ($ 34,598) Note

6, 9

163





Products, Inc. design,

manufacture and

sales of integrated

circuit and semi-

conductor

components

Foxconn

International

Holdings Limited

Ways Technical Corp.,

Ltd.


plastic articles,

surface treatment,

and manufacture

and processing of

electronic

components


6, 9

Hyield and Bao

Shin

Bionet Corporation Taiwan Extraction, testing,

storage and

research on

umbilical cord

blood stem cells,

mesenchymal

stem cells, and

primary teeth


6, 9

Hyield Ingrasys Technology

Inc.

Taiwan Design, research,

manufacture and

sales of data

storage and

processor


6

Hyield Burrage Capital

Healthcare Offshore

Fund II, Ltd.

Cayman

Islands

Investment

holding


6

Hyield, Hon Yuan,

Bao Shin and

Hon Chi

Fitipower Integrated

Technology Inc.


integrated

circuit/semi-

conductor

machinery and

sales of computer

components

NTD 585,000 NTD - 45,450,167 39 NTD 539,011 NTD ( 39,849) NTD 3,476 Note

6, 9

Hyield, Hon Yuan,

Bao Shin and

Hon Chi

Others Others NTD 958,692 NTD 995,692 - - NTD 623,356 NTD 463,369 NTD ( 54,999) Note

6, 8

Note 1: The investment income recognized for this period had eliminated unrealized gain or loss on the transactions between the Company and its investees.

164

Note 2: The Company and its subsidiaries, directly and indirectly, own 26.57% of Pan International Industrial Corporation’s outstanding shares.

Note 3: The Company and the direct and indirect investee companies own 29.97% of Foxconn Technology Co., Ltd.’s outstanding shares.

Note 4: The Company and the direct and indirect investee companies own 100% of Altus Technology Inc.’s outstanding shares.

Note 5: The Company and the direct and indirect investee companies own 99.96% of Premier Image Technology (H.K) Ltd.’s outstanding shares.

Note 6: Hyield Venture Capital Co., Ltd. is referred to as Hyield.

Hon Chi International Investment Co., Ltd. is referred to as Hon Chi.

Hon Yuan International Investment Co., Ltd. is referred to as Hon Yuan.

Bao Shin International Investment Co., Ltd. is referred to as Bao Shin.

Lin Yih International Investment Co., Ltd. is referred to as Lin Yih.

Hon Yiing International Investment Co., Ltd. is referred to as Hon Yiing.

Note 7: Because the foreign holding investee companies prepare consolidated financial statements only, the disclosure of the company’s investments over which the Company has significant influence or control, directly or

indirectly, is only disclosed to the level of the holding company.

Note 8: Due to the amount is insignificant, combined disclosure is adopted.

Note 9: The investee company, a listed or an OTC or Emerging company in Taiwan, has not released the 2012 annual financial information as of March 28, 2013. Thus, the net income for the first three quarter or semi-annual of the

investee company should be disclosed instead.

2) Loans to any company or person:

Maximum Nature of Business Allowance for Loan Total loan

Balance Ending Interest Financial Transaction Reason for Doubtful Asset Pledge limit per limit of the

No. Name of company Name of Counterparty Account During 2012 Balance Rate (%) Activity Amount Financing Accounts Item Value counterparty company loan Note

1 Hon Yuan International


Hon Hai Precision Industry

Co., Ltd.

Short-term loans-

Related parties

$ 293,000 $ 293,000 - Short term

financing $ - Business

operation $ - None $ - $ - $ - Note

1

2 Hon Chi International



Co., Ltd.

Short-term loans-

Related parties

265,000 265,000 - Short term

financing - Business

operation - None - - - Note

1

2 Hon Chi International

Investment Co., Ltd

UER Technology Corporation Short-term loans-

Related parties

200,000 200,000 1.625 Short term



1

3 Bon Shin International



Co., Ltd.

Short-term loans-

Related parties

450,000 450,000 - Short term



1

3 Bon Shin International


SetaBox Technology Co., Ltd. Short-term loans-

Related parties

150,000 150,000 1.15 Short term financing

- Business


1

4 Lin Yih International



Co., Ltd.

Short-term loans-

Related parties

99,000 97,000 - Short term



1

5 Hyield Venture Capital Co.,

Ltd.


Co., Ltd.

Short-term loans-

Related parties

1,500,000 1,000,000 - Short term



1

6 Hongfujin Precision Industrial


Fu Ding Precision Component


Entrusted Loans 117,438 - - Short term financing

- Business


2



Futaikang Precision

Component (Shenzhen) Co.,

Ltd.

Entrusted Loans 75,160 - - Short term



2

6 Hongfujin Precision Industrial Futaijie Science & Technology Entrusted Loans $ 65,765 $ - - Short term $ - Business $ - None $ - $ - $ - Note

165




(Shenzhen) Co., Ltd. Development (Shenzhen)

Co., Ltd.

financing operation 2



Fu Xun Tong Trading


Entrusted Loans 522,258 507,474 3.25~3.5 Short term



2



Fuhuajie Industrial (Shenzhen)

Limited

Entrusted Loans 2,677,575 - - Short term



2

7 Futaihua Industrial (Shenzhen)

Co., Ltd.

Shenzhen Fuhongjie

Technology Service Co., Ltd.




2


Co., Ltd.

Futaikang Precision

Component (Shenzhen) Co.,

Ltd.

Entrusted Loans 56,785 46,134 3.05 Short term financing

- Business


2


Co., Ltd.


Limited

Entrusted Loans 2,583,504 2,583,504 3.05 Short term financing

- Business


2


Co., Ltd.

Fuhonyang Precision

Industrial (Shenzhen) Co.,

Ltd.

Entrusted Loans 3,225,356 3,206,313 3.05 Short term



2


Co., Ltd.

Foxconn Precision Electronics

(Taiyuan) Co., Ltd.




2


Limited

Fujin Precision Industrial

(Jincheng) Co., Ltd.




2

8 Foxconn Precision Component


Shenzhen Fuhongjie

Technology Service Co., Ltd.

Entrusted Loans 108,043 - - Short term financing

- Business


2

9 Anpinda Precision Industrial

(Huizhou) Co., Ltd.

Jizhun Precision Industry

(Huizhou) Co., Ltd.




2

10 Foxconn (Kunshan) Computer

Connector Co., Ltd.

Foxconn Electronic Industrial

Development (Kunshan) Co.,

Ltd.

Entrusted Loans 839,639 839,639 2.6 Short term



2


Connector Co., Ltd.

Kangzhun Electronic

Technology (Kunshan) Co.,

Ltd.




2


Connector Co., Ltd.

Hongfujin Precision

Electronics (Zhengzhou)

Co., Ltd.




2

10 Foxconn (Kun Shan)

Computer Connector Co.,

Ltd.

Fuxiang Precision Industrial

(kunshan) Co., Ltd.



operation None Note

2

11 Hongzhun Precision Tooling

(Kunshan) Co., Ltd.

Fuyao Precision Component

(Kunshan) Co., Ltd.




2

11 Hongzhun Precision Tooling Foxconn Electronic Industrial Entrusted Loans $ 1,424,340 $ 1,384,020 2.28 Short term financing

$ - Business $ - None $ - $ - $ - Note

166




(Kunshan) Co., Ltd. Development (Kunshan) Co.,

Ltd.

operation 2


(Kunshan) Co., Ltd.

Kangzhun Electronic


Ltd.

Entrusted Loans 1,084,634 461,340 2.6 Short term



2


(Kunshan) Co., Ltd.


(Taiyuan) Co., Ltd.

Entrusted Loans 1,186,950 1,153,350 2 Short term financing

- Business


2


(Kunshan) Co., Ltd.

Qunkang Precision

Component (Kunshan) Co.,

Ltd.




2

12 Ambit Microsystem

(Shanghai) Co., Ltd.



Ltd.




2



Kangzhun Electronic


Ltd.

Entrusted Loans 1,661,730 1,457,834 2.28~2.6 Short term



2



Shanghai Foxconn Co., Ltd. Entrusted Loans 118,695 115,335 2.85 Short term



2

13 Fuxiang Precision Industrial

(Kunshan) Co., Ltd.


(Taiyuan) Co., Ltd.




2

14 Fulin Electronical Technology

(Changshu) Co., Ltd.

Kangzhun Electronic


Ltd.

Entrusted Loans 1,424,340 - 3.5 Short term financing

- Business


2

15 Fuyang Electronical

Technology (Changshu) Co.,

Ltd.


(Kunshan) Co., Ltd.


- Business


2

15 Fuyang Electronical

Technology (Changshu) Co.,

Ltd.



Ltd.


- Business


2

16 FuYu Energy Technology

(Kunshan) Co., Ltd.



Ltd.


- Business


2

17 Foxway Precision Industry

(Hangzhou) Co., Ltd.

Kangzhun Electronic


Ltd.


- Business


2

18 Fuzhun Precision Tooling

(Huaian) Co., Ltd.

Fuyu Electronical Technology

(Huaian)Co., Ltd.


- Business


2

167




19 Fu Tai Kang Electronics

Development (Yantai) Ltd.

YanTai FuHuaDa Precision


Entrusted Loans $ 235,790 $ - - Short term

financing $ - Business

operation $ - None $ - $ - $ - Note

2

19 Fu Tai Kang Electronics

Development (Yantai) Ltd.


(Yantai) Co., Ltd.




2

20 Hongfujin Precision Electrons

(Yantai) Co., Ltd.






2


(Yantai) Co., Ltd.

Foxconn Precision Electronic

(Yantai) Co., Ltd.

Entrusted Loans 2,550,094 2,442,359 0.36725~3.92

Short term financing

- Business


2


(Yantai) Co., Ltd.


(Taiyuan) Co., Ltd.


- Business


2

21 Hongfujin Precision

Electronics (Chengdu) Co.,

Ltd.

Futaihua Precision Electronics

(Chengdu) Co., Ltd.




2


Electronics (Zhenzhou) Co.,

Ltd.


(Taiyuan) Co., Ltd.


financing

- Business

operation

- None - - - Note

2



Ltd.

Fuding Precision (Zhengzhou)

Co., Ltd.

Entrusted Loans 1,614,690 1,614,690 2.6~3.1 Short term

financing

Business

operation

None Note

2

22

Hongfujin Precision


Ltd.


(Jiyuan) Co., Ltd.


financing

Business

operation

None Note

2

23 Foxconn (Far East) Limited Fujin Precision Industrial

(Jincheng) Co., Ltd.

Other

Receivables-

financing

5,109,350 4,936,970 0.56 Short term

financing

- Business

operation

- None - - - Note

2

23 Foxconn (Far East) Limited Margini Holdings Ltd. Other

Receivables-

financing

377,350 - - Short term



2

23 Foxconn (Far East) Limited Fu Ding Precision Industrial

(Zhengzhou) Co., Ltd.

Other

Receivables-

financing




2

23 Foxconn (Far East) Limited Fuyu Electronical Technology

(Huaian) Co., Ltd.

Other

Receivables-

financing




2

23 Foxconn (Far East) Limited Foxconn (Kun Shan)

Computer Connector Co.,

Ltd.

Other

Receivables-

financing




2

168




23 Foxconn (Far East) Limited Kangzhun Electronic


Ltd.

Other

Receivables-

financing

$ 1,803,300 $ 1,742,460 0.21 Short term

financing

$ - Business

operation

$ - None $ - $ - $ - Note

2

23 Foxconn (Far East) Limited Fuxiang Precision Industrial

(Kunshan) Co., Ltd.

Other

Receivables-

financing

2,973,600 $ 1,742,460 0.21 Short term



2

24 Foxconn CZ S. R. O. Foxconn TR Teknoloji Sanayi

Ltd. Sirketi

Other

Receivables-

financing

300,550 290,410 3.5 Short term



2

25 Shenzhen Fu Tai Hong

Precision Industry Co., Ltd.

Foxconn (Tianjin) Precision

Industry Co., Ltd

Entrusted Loans 807,126 784,278 3.25~3.5 Short term



3

25 Shenzhen Fu Tai Hong

Precision Industry Co., Ltd.


(Lang Fang) Co., Ltd.

Entrusted Loans 5,222,580 5,074,740 3~3.5 Short term



3


(Beijing) Co., Ltd.






3


(Beijing) Co., Ltd.

Futaijing Precision Electronics

(Beijing) Co., Ltd.

Entrusted Loans 7,596,480 7,381,440 3~3.5 Short term financing

- Business


3


(Beijing) Co., Ltd.


Industry Co., Ltd.

Entrusted Loans 1,424,340 1,384,020 3~3.5 Short term financing

- Business


3

27 Execustar International Ltd. Foxconn Precision Electronics


Other

Receivables

510,935 493,697 0.4416 Short term



3

28 Foxconn International

Holdings Limited


Industry Co., Ltd.

Other

Receivables

3,125,720 3,020,264 0.2071~

0.4615

Short term



3

28 Foxconn International

Holdings Limited


(Langfang) Co., Ltd.

Other

Receivables

3,967,260 3,833,412 0.2071~

0.55

Short term



3

Note 1: The ceiling on total loans granted by a domestic subsidiary to all parties is 40% of its net assets value; the ceiling on single loan granted by a domestic subsidiary to all parties is 10% of its net assets value.

Note 2: The policy for loans granted mutually between overseas subsidiaries of which the Company directly or indirectly holds 100% of their voting shares is as follows: ceiling on total loans granted by an overseas subsidiary to all

overseas subsidiaries is 20% of the Company’s net assets; limit on loans granted by an overseas subsidiary to a single overseas subsidiary is 10% of the Company’s net assets.

Note 3: The policy for loans granted by overseas subsidiaries of which Foxconn International Holdings Limited directly or indirectly holds 100% of their voting shares is as follows: ceiling on total loans granted by an overseas

subsidiary to all parties is 60% of the net assets of Foxconn International Holdings Limited; limit on loans granted by an overseas subsidiary to a single party is 30% of the net assets value of Foxconn International Holdings

Limited.

169

3) Guarantee information:

Parties being guaranteed

Number Name of guarantor Name of company Relationship with the Company

Limit of

guarantee

for such party

Highest

outstanding

guarantee amount

in 2012

Outstanding

guarantee

amount as of

12/31/2012

Amount of

guarantee with

collateral placed

Ratio of

accumulated

guarantee amount

to net assets

of the Company

Ceiling of

the outstanding

guarantee to the

respective party

Note


Industry (Shenzhen) Co.,

Ltd.

Fu Ding Precision

Component (Shenzhen)

Co., Ltd.

The Company and its subsidiaries hold

more than 50% of common shares of

the investee company

$ - $ 13,840 $ 13,840 $ - - $ - Note

1, 2, 3, 4



Ltd.

Fuhuajie Industrial

(Shenzhen) Limited




- 2,547,090 2,360,065 - 0.37 - Note

1, 2, 3, 4



Ltd.

Futaihua Industrial





- 12,172,275 2,934,428 - 0.45 - Note

1, 2, 3, 4

Note1: The Company’s total guarantees to others should not be in excess of the Company’s net assets.

Note2: The Company’s guarantees provided for a single party should not be in excess 50% of the Company’s net assets.

Note3: Guarantees to overseas subsidiaries of which the Company directly and indirectly hold 100% of their voting shares should not exceed 50% of the Company’s net assets; the limit of guarantee for a single entity should not be

in excess of 20% the Company’s net assets.

Note4: The net assets referred above are based on the latest audited or reviewed financial statements.

4)Marketable securities held as of December 31, 2012:

December 31, 2012

Type and name of Relationship of the issuers General ledger Number of shares Ownership Market Value/

Name of investors marketable securities (Note 1) with the investee company account (Note 1) (in thousands) Book value Percentage % Net worth Note

Bon Shin International Investment Co.,

Ltd.

Common stock of Pan International

Industrial Corporation

Investee company accounted for under the

equity method

(1) 3,601 $ 88,120 1 $ 71,066


Ltd.

Common stock of Foxconn Technology

Co., Ltd.


equity method

(1) 112,195 5,656,648 9 5,548,409


Ltd. Common stock of CyberTAN Technology

Inc.

Indirect investee company accounted for


(1) 2,182 33,589 1 33,551


Ltd. Common stock of Simplo Technology Co.,

Ltd.



(1) 12,884 1,081,616 4 726,172


Ltd. Common stock of Advanced

Microelectronic Products, Inc.



(1) 6,976 3,358 4 31,728

170

December 31, 2012



Bon Shin International Investment Co., Ltd.

Common stock of Bionet Corporation Indirect investee company accounted for


(1) 1,732 $ 57,961 4 $ 40,998


Ltd. Common stock of G-TECH

Optoelectronics Corporation



(1) 17,262 694,348 7 670,995


Ltd. Common stock of Ability OPTO-

Electronics Technology Co., Ltd.



(1) 10,000 133,585 8 133,585


Common stock of UVAT Technology Co.,

Ltd.



(1) 7,558 140,489 17 111,747


Ltd. Common stock of Foxsemicon Integrated

Technology Inc.



(1) 4,837 5,260 4 5,192


Ltd. Common stock of Shin Puu Technology

Co., Ltd.



(1) 1,475 28,633 8 28,633


Common stock of HealthConn Co. Indirect investee company accounted for


(1) 4,875 33,132 24 37,146


Ltd. Fitipower Integrated Technology Inc. Indirect investee company accounted for


(1) 14,140 167,693 12 172,644


Ltd. Common stock of Entire Technology Co.,

Ltd.

None (2) 2,100 87,045 1 87,045


Common stock of MiTAC Information

Technology Co.

None (3) 1,775 33,006 1 33,006


Ltd. Common stock of MiTAC Inc. None (3) 2,482 39,252 1 39,252

Hon Chi International Investment Co., Ltd. Common stock of Pan International



equity method

(1) 7,483 168,085 1 147,662

Hon Chi International Investment Co., Ltd. Common stock of Foxconn Technology

Co., Ltd.


equity method

(1) 28,338 1,468,014 2 1,401,386

Hon Chi International Investment Co., Ltd. Common stock of CyberTAN Technology

Inc.



(1) 2,835 43,649 1 43,598

Hon Chi International Investment Co., Ltd. Common stock of G-TECH




(1) 15,127 610,396 6 587,977

Hon Chi International Investment Co., Ltd. Common stock of Foxsemicon Integrated

Technology Inc.



(1) 4,947 5,379 5 5,309

Hon Chi International Investment Co., Ltd. Common stock of Shin Puu Technology

Co., Ltd.



(1) 695 13,482 4 13,482

Hon Chi International Investment Co., Ltd. Fitipower Integrated Technology Inc. Indirect investee company accounted for


(1) 10,100 119,780 9 123,317

171

December 31, 2012



Hon Yuan International Investment Co.,

Ltd.




equity method

(1) 17,676 $ 396,877 4 $ 348,802


Ltd.

Common stock of Foxconn Technology

Co., Ltd.


equity method

(1) 30,355 1,567,821 3 1,501,167


Ltd.

Common stock of CyberTAN Technology

Inc.



(1) 10,035 154,527 3 154,351


Ltd.

Common stock of G-TECH




(1) 24,858 999,862 9 966,233


Ltd.

Common stock of Foxsemicon Integrated

Technology Inc.



(1) 4,745 5,160 4 5,092


Ltd.

Fitipower Integrated Technology Inc. Indirect investee company accounted for


(1) 9,090 107,802 8 110,985


Ltd.

Common stock of Entire Technology Co.,

Ltd.

None (2) 2,206 91,441 2 91,441

Lin Yih International Investment Co., Ltd. Common stock of CyberTAN Technology

Inc.



(1) 10,035 154,527 3 154,351

Lin Yih International Investment Co., Ltd. Common stock of AcBel Polytech Inc. None (2) 3,857 79,261 1 79,261

Hyield Venture Capital Co., Ltd. Common stock of Foxconn Technology

Co., Ltd.


equity method

(1) 75,582 3,796,939 6 3,737,763

Hyield Venture Capital Co., Ltd. Common stock of CyberTAN Technology

Inc.



(1) 10,035 154,527 3 154,351

Hyield Venture Capital Co., Ltd. Common stock of Simplo Technology Co.,

Ltd.



(1) 13,691 1,149,436 5 771,658

Hyield Venture Capital Co., Ltd. Common stock of Advanced

Microelectronic Products, Inc.



(1) 9,296 42,283 6 42,283

Hyield Venture Capital Co., Ltd. Common stock of Bionet Corporation Indirect investee company accounted for


(1) 1,732 57,961 3 40,998

Hyield Venture Capital Co., Ltd. Common stock of G-TECH




(1) 15,882 638,801 6 617,316

Hyield Venture Capital Co., Ltd. Common stock of Foxsemicon Integrated

Technology Inc.



(1) 7,134 7,757 7 7,656

Hyield Venture Capital Co., Ltd. Common stock of Shin Puu Technology

Co., Ltd.



(1) 1,563 30,307 9 30,347

Hyield Venture Capital Co., Ltd. Fitipower Integrated Technology Inc. Indirect investee company accounted for


(1) 12,120 143,736 10 147,980

172

December 31, 2012



Hyield Venture Capital Co., Ltd. Common stock of HealthConn Co. Indirect investee company accounted for


(1) 4,875 $ 33,132 24 $ 37,146

Hyield Venture Capital Co., Ltd. Common stock of TXC Corporation None (2) 466 22,281 - 22,281

Hyield Venture Capital Co., Ltd. Common stock of Unimicron Corporation None (2) 3,400 104,720 - 104,720

Hyield Venture Capital Co., Ltd. Common stock of Foxlink Image


None (2) 3,098 69,085 2 69,085

Hyield Venture Capital Co., Ltd. Common stock of Innolux Corporation



shareholder

(2) 163,989 2,558,232 2 2,558,232

Hyield Venture Capital Co., Ltd. Common stock of Microelectronics

Technology Inc. None

(2) 2,300 33,465 1 33,465

Hyield Venture Capital Co., Ltd. Common stock of Deer Computer Co., Ltd. None (3) 435 4,467 15 4,467

Hyield Venture Capital Co., Ltd. Common stock of Tera Xtal Technology

Co., Ltd.

None (3) 2,395 28,740 1 28,740

Hyield Venture Capital Co., Ltd. Others (Note 2) None (1) - 98,922 - 98,922

Hon Yiing International Investment Co.,

Ltd.




equity method

(1) 421 9,743 - 8,312

Foxconn (Far East) Limited Foxconn International Holdings Ltd. Subsidiary owned by Foxconn (Far East)

Ltd.

(1) 5,081,035 70,942,322 69 70,942,322

Foxconn (Far East) Limited Zhen Ding Technology Holding Limited Indirect investee company accounted for


(1) 30,009 8,444,318 41 8,434,765

Foxconn (Far East) Limited Ampower Holdings Ltd. Indirect investee company accounted for


(1) 10,463 818,234 45 818,234

Foxconn (Far East) Limited Eson Precision Ind. Co., Ltd. Indirect investee company accounted for


(1) 44,036 1,491,078 29 1,491,078

Foxconn (Far East) Limited UER Holdings Corporation Indirect investee company accounted for


(1) 24,616 653,425 43 653,425

Foxconn (Far East) Limited Excelstor Group Ltd. Indirect investee company accounted for


(1) - 121,757 33 121,757

Foxconn (Far East) Limited Woodman Labs, Inc. None (3) 11,709 5,450,631 11 5,450,631

Foxconn (Far East) Limited Solytech Enterprise Corporation None (2) 6,430 67,199 3 67,199

Foxconn (Far East) Limited Olympus Corporation None (2) 3,314 2,060,892 3 2,060,892

Foxconn (Far East) Limited Shenzhen Yuto Printing Corporation None (3) 4,108 120,856 5 120,856

Foxconn (Far East) Limited Easpnet Inc. None (3) 6,246 24,952 18 24,952

Foxconn (Far East) Limited Others (Note 2) None (1)(2)(3) - 2,975,986 - 2,975,986

173

December 31, 2012



Foxconn Holding Ltd. Alliance Fiber Optic Products, Inc. Indirect investee company accounted for


(1) 8,000 $ 377,873 20 $ 377,873

Foxconn Holding Ltd. Venglobal Capital Fund III, L.P. Investee company accounted for under the

equity method

(1) - 224,804 - 224,804

Foxconn Holding Ltd. S.A.S Dragon Holdings Ltd. None (2) 46,000 249,503 - 249,503

Foxconn Holding Ltd. P. I. E Industrial Berhad None (2) 2,227 86,777 - 86,777

Foxconn Holding Ltd. Invensense Inc. None (2) - 463,434 - 463,434

Foxconn Holding Ltd. Dimandhead Venture L. P. None (3) - 315,932 - 315,932

Foxconn Holding Ltd. Riverwood Capital L. P. None (3) - 845,580 - 845,580

Foxconn Holding Ltd. Aptina Acquisition L. P. None (3) 5,000 153,564 5 153,564

Foxconn Holding Ltd. WIMM Labs Ltd. None (3) - 297,704 - 297,704

Foxconn Holding Ltd. Fuhu Inc. None (3) - 290,400 - 290,400

Foxconn Holding Ltd. Innovation Works Limited None (3) - 75,504 - 75,504

Foxconn Holding Ltd. Innovation Works Development Fund. L. P. None (3) - 209,088 - 209,088

Foxconn Holding Ltd. Firebrand Wireless LLC. None (3) - 81,725 - 81,725

Foxconn Holding Ltd. Others (Note 2) None (1)(3) - 197,392 - 197,392

Foxconn Singapore Pte. Ltd. P. I. E Industrial Berhad None (2) 10 420 - 420

Foxconn International Holdings Limited

Common stock of Ways Technical Corp.,

Ltd.



(1) 12,105 722,359 13 722,359


Diabell Co., Ltd. Indirect investee company accounted for


(1) 75 205,168 20 205,168


Common stock of Ability OPTO-

Electronics Technology Co., Ltd.



(1) 8,000 106,868 6 106,868


Ways Transworld Inc. Indirect investee company accounted for


(1) 12,100 108,618 50 108,618

Note 1: Code of general ledger accounts: (1) Long-term investment accounted for under the equity method

(2) Available-for-sale financial assets-non–current

(3) Financial assets carried at cost - non-current

Note 2: Due to the amount is insignificant, combined disclosure is adopted.

174

5) Marketable securities acquired or sold during the year ended December 31, 2012 in excess of $100,000 or 20% of total contributed capital:

Type and name

of marketable

securities

Relationship

of the issuers

with the

Company

Beginning balance Addition Disposal Ending balance

Investor

General ledger

account Counterparty

Number of

Shares

(in thousands) Amount

Number of

Shares


Number of

Shares

(in thousands) Selling price Book value

Gain (loss)

on disposal

Number of

Shares


Hyield, Bao Shin,

Hon Yuan and

Hon Chi

Fitipower

Integrated

Technology Inc.

Long-term investments

accounted for under

the equity method

Note 2 None - $ - 45,000 $ 585,000 - $ - $ - $ - 45,000 $ 585,000

Hyield and Hon

Chi

Chi Lin

Technology

Co., Ltd.

Financial assets carried

at cost

Note 3 None 13,476 336,886 - - 13,476 336,886 336,886 - - -

Hyield and Hon

Chi

Chi Lin

Optoelectronics

Co., Ltd.


at cost

Note 3 None 19,524 488,114 - - 19,524 488,114 488,114 - - -

Hyield Microelectronics

Technology Inc.

Financial assets-

corporate bonds

designated as at fair

value through profit

or loss

Note 3 None - - - 200,000 - - - - - 200,000


Woodman Labs Inc.


at cost

Note 2 None - - 11,709 5,450,631 - - - - 11,709 5,450,631

Foxconn (Far

East) Limited Olympus

Corporation

Available for sale

financial assets-non–

current

Public Market None - - 7,998 3,676,887 4,683 2,408,075 2,180,833 365,019 3,315 1,496,054

Foxconn (Far

East) Limited Others Available for sale

financial assets-non–

current

Public Market None 19,142 440,222 26,203 3,875,403 41,656 4,690,874 3,986,647 704,227 3,689 328,978

Foxconn (Far

East) Limited ShenZhen

Futaihong

Bright Real

Estate Co., Ltd.


accounted for under

the equity method

Note 4 None - 2,252,912 - - - 2,940,354 2,252,912 762,534 - -


Ways Technical

Corp., Ltd.


accounted for under

the equity method

Public Market None 19,405 947,772 - - 7,300 497,428 356,544 121,169 12,105 591,228


Interface

Optoelectronics

(Shenzhen)

Co., Ltd.


accounted for under

the equity method

Note 5 None - - - 1,147,080 - - - - - 1,147,080

Foxconn (Far

East) Limited Interface

Technology

(Chengdu) Co.,

Ltd.


accounted for under

the equity method

Note 5 None - - - 744,851 - - - - - 744,851

175

Type and name

of marketable

securities

Relationship

of the issuers

with the

Company

Beginning balance Addition Disposal Ending balance

Investor

General ledger

account Counterparty

Number of

Shares


Number of

Shares


Number of

Shares

(in thousands) Selling price Book value

Gain (loss)

on disposal

Number of

Shares

(in thousands) Amount Foxconn (Far

East) Limited Excel Victory

Ltd.


accounted for under

the equity method

Note 5 None - $ - 3,000,000 $ 115,404 - $ - $ - $ - 3,000,000 $ 115,404

Note 1: The amount referred above is determined based on initial cost.

Note 2: Acquired through private placement.

Note 3: Innolux Corporation Ltd. (Formerly: Chimei Innolux Corporation)

Note 4: Shenzhen Urban Construction Investment and Development Corporation.

Note 5: Blooming Progress Limited.

6) Acquisition of real estate exceeding the amount of $100,000 or 20% of total contributed capital: None.

7) Disposal of real estate exceeding the amount of $100,000 or 20% of total contributed capital:

Property disposed of by Property Date of disposal

Date of original

acquisition Book value

Disposal

amount

Status of collection of proceeds

Gain (loss) on disposal

Counter

party Relationship

Reason for

disposal

Basis or reference used in setting

the price

Other

commitments

Chi Mei Communication

System, Inc.

Land and building 2012.10.3 Note 1 $ 629,602 $ 458,849 $ 458,849 $ 170,753 Note 2 No Disposal of idle

assets

Note 3 None

Note 1: Land and building were acquired on May 23, 2005 and December 31, 2002, respectively.

Note 2: Chi Mei Corporation

Note 3: By reference to the appraisal reports issued by the Elite Appraisers Firm and Evermore Consulting Co., Ltd.

8) Related party purchases or sales transactions in excess of $100,000 or 20% of total contributed capital: please see information on significant transactions in Note 11(1) and the following disclosures.

Difference with general Notes and accounts

Transactions transactions receivable (payable)

Relationship with Percentage of Percentage

Company Counterparty the Company Purchases /sales Amount purchases / sales Terms Unit price Terms Balance of balance Note

Ambit Microsystems (Zhong shan)

Corporation

Unique Logistics Ltd. Note 2 Sales $ 3,489,981 72 45 days Note 1 Note 1 $ - -

Ambit Microsystem (Zhong shan)

Co., Ltd.

Ambit Microsystem Co., Ltd. Note 2 Sales 1,312,412 27 45 days Note 1 Note 1 1,299,771 99

Unique Logistics Ltd. Ambit Microsystems (Zhong shan)

Corporation

Note 2 Sales 1,586,678 32 60 days Note 1 Note 1 - -

Ambit Microsystem (Shanghai) Co.,

Ltd.

AMB Logistics Ltd. Note 2 Sales 27,659,650 75 60 days Note 1 Note 1 1,456,576 42


Ltd.

Amworld Microsystems (Shanghai) Ltd. Note 2 Sales 2,641,109 10 90 days Note 1 Note 1 186,276 5


Ltd.

Funing Precision Component Co., Ltd. Note 2 Sales 126,949 1 60 days Note 1 Note 1 17,456 1


Ltd.

Foxconn Technology (India) Private Limited Note 2 Sales 187,463 2 120 days Note 1 Note 1 123,279 4

176






Ltd.

Hongfujin Precision Electronics (Chongqing)

Co., Ltd

Note 2 Sales $ 471,007 2 90 days Note 1 Note 1 $ 15,568 -


Ltd.

CyberTAN Technology Inc. Note 7 Sales 241,496 1 90 days Note 1 Note 1 194,116 6


Ltd.

System Intergation Electronics (Hangzhou)

Co., Ltd.

Note 2 Sales 34,479 - 60 days Note 1 Note 1 17,630 -


Ltd.

Foxconn Technology Pte. Ltd. Note 3 Purchases 171,800 - 30 days Note 1 Note 1 ( 45,896) -


Ltd.

IRIS World Enterprises Ltd. Note 4 Purchases 293,003 1 90 days Note 1 Note 1 ( 65,826) ( 1)

Ingrasys Technology Co., Ltd. Ingrasys Technology USA Inc. Note 2 Sales 3,851,947 50 90 days Note 1 Note 1 1,470,556 62

Ingrasys Technology Co., Ltd. PCE Paragon Solutions Kft. Note 2 Sales 382,571 5 45 days Note 1 Note 1 110,099 5

Foxnum Technology Co., Ltd. Hongfujin Precision Industry (Shenzhen) Co.,

Ltd.

Note 2 Sales 119,483 8 90 days Note 1 Note 1 475 -

Foxnum Technology Co., Ltd. Fujin Precision Industry (Jincheng) Co. Ltd. Note 2 Sales 1,254,069 86 30 days Note 1 Note 1 139,166 84

FIH (Hong Kong) Limited Shenzhen Fu Tai Hong Precision Industry Co.,

Ltd.

Note 2 Sales 585,142 2 45 days Note 1 Note 1 107,827 2

FIH (Hong Kong) Limited Chi Mei Communication System, Inc. Note 2 Sales 11,196,892 36 90 days Note 1 Note 1 1,083,664 20

FIH (Hong Kong) Limited Foxconn India PVT. Ltd. Note 2 Sales 238,584 1 45 days Note 1 Note 1 107,616 2

FIH (Hong Kong) Limited Sutech Industry Inc. Note 2 Sales 4,780,868 15 75 days Note 1 Note 1 492,850 9

FIH (Hong Kong) Limited Foxconn Precision Electronics (Lang Fang)

Co., Ltd.

Note 2 Sales 1,030,227 3 45 days Note 1 Note 1 148,297 3

FIH (Hong Kong) Limited Shenzhen Fuhongjie Technology Service Co.,

Ltd.


FIH (Hong Kong) Limited Futaihua Industrial (Shenzhen) Limited Note 2 Sales 180,600 1 30 days Note 1 Note 1 129,558 2

Honxun Electrical Industry


Hon Fujin Precision Industry (Taiyuan) Co.

Ltd.

Note 3 Purchase 103,049 1 60 days Note 1 Note 1 ( 87,387) ( 5)

Shenzhen Fu Tai Hong Precision

Industry Co., Ltd.

FIH (Hong Kong) Limited Note 2 Sales 2,252,706 12 60 days Note 1 Note 1 192,756 5


Industry Co., Ltd.

Foxconn Precision Electronics (Lang Fang)

Co., Ltd.


177






Industry Co., Ltd.

NanNing FuTaiHong Precision Industry Co.

Ltd.

Note 2 Sales $ 1,504,892 8 60 days Note 1 Note 1 $ 759,974 18


Industry Co., Ltd.

Hongfujin Precision Industrial (Shenzhen)

Co., Ltd.



Industry Co., Ltd.

Futaihua Industrial (Shenzhen) Limited Note 2 Sales 242,156 1 60 days Note 1 Note 1 163,982 4


Industry Co., Ltd.

Fuhuajie Industrial (Shenzhen) Co., Limited Note 2 Sales 181,925 1 90 days Note 1 Note 1 23,745 1


Industry Co., Ltd.

Hon Fujin Precision Industrial (Taiyuan) Co.,

Ltd.

Note 3 Purchase 213,869 1 60 days Note 1 Note 1 ( 34,698) ( 1)

Foxconn Precision Component

(Beijing) Co., Ltd.



(Beijing) Co., Ltd.

Foxconn (Tianjin) Precision Industry Co., Ltd. Note 2 Sales 245,402 5 30 days Note 1 Note 1 163,709 12


(Beijing) Co., Ltd.

Futaijing Precision Electronics (Beijing) Co.,

Ltd.



(Beijing) Co., Ltd.


Co., Ltd.



(Beijing) Co., Ltd.

Hon Fujin Precision Industrial (Taiyuan) Co.,

Ltd.

Note 3 Purchases 126,772 4 60 days Note 1 Note 1 ( 73,364) ( 4)

Foxconn (Tianjin) Precision Industry

Co., Ltd.



Co., Ltd.

Innolux Display Corporation Note 6 Purchases 128,862 7 60 days Note 1 Note 1 ( 3,783) -


Co., Ltd.


Futaijing Precision Component

(Beijing) Co., Ltd.

FIH (Hong Kong) Limited Note 2 Sales 215,702 - 30 days Note 1 Note 1 83,795 1


(Beijing) Co., Ltd.

Foxconn Precision Component (Beijing) Co.,

Ltd.

Note 2 Sales 204,381 - 60 days Note 1 Note 1 183,779 2

178






(Beijing) Co., Ltd.

Foxconn Precision Electronics (Langfang)

Co., Ltd.

Note 2 Sales $ 447,744 1 45 days Note 1 Note 1 $ 202,857 2


(Beijing) Co., Ltd.

Hongfujin Precision Industry (Yantai) Co.,

Ltd.



(Beijing) Co., Ltd.



Note 6 Purchases 1,009,105 2 60 days Note 1 Note 1 ( 202,638) ( 2)


(Beijing) Co., Ltd.







Shenzhen Fu Tai Hong Precision Industry Co.,

Ltd.




Foxconn Precision Component (Beijing) Co.,

Ltd.

Note 2 Sales 1,428,144 4 45 days Note 1 Note 1 1,026,944 14



Foxconn (Tianjin) Precision Industry Co., Ltd. Note 2 Sales 482,392 1 45 days Note 1 Note 1 234,987 3




Ltd.




Eliteday Enterprises Limited. Note 2 Sales 8,655,997 25 60 days Note 1 Note 1 142,851 2



Hongfujin Precision Industry (Shenzhen) Co.,

Ltd.










Ltd.




IRIS World Enterprises Limited Note 4 Purchases 225,040 1 60 days Note 1 Note 1 ( 37,755) -

Eliteday Enterprises Limited Foxconn India Private Limited Note 2 Sales 410,029 5 45 days Note 1 Note 1 60,611 7

Eliteday Enterprises Limited FIH Europe Limited (Hungary) Note 2 Sales 619,183 7 60 days Note 1 Note 1 7,488 1

Eliteday Enterprises Limited Foxconn Do Brasil Ind. E Comercio De

Eletronicos Ltda.

Note 2 Sales 147,610 2 60 days Note 1 Note 1 - -

179





Eliteday Enterprises Limited Foxconn Precision Electronics (Langfang)

Co., Ltd.


NanNing FuTaiHong Precision

Industry Co., Ltd.


Ltd.


FuTaiJing Precision Electrons

(Yantai) Co., Ltd


FuTaiJing Precision Electrons

(Yantai) Co., Ltd


Ltd.


Foxway Precision Industry


System Integration Electronics (Hangzhou)

Co., Ltd.


Carston Ltd. Competition Team Ireland Limited Note 2 Subcontract

Revenue

384,978 5 90 days Note 1 Note 1 - -

Carston Ltd. Lakers Trading Ltd. Note 6 Subcontract

Revenue

686,231 9 90 days Note 1 Note 1 1,040,837 4

Carston Ltd. High Tempo International Ltd. Note 3 Subcontract

Revenue

1,794,704 22 90 days Note 1 Note 1 - -

Carston Ltd. IRIS World Enterprises Ltd. Note 4 Sales 232,083 3 90 days Note 1 Note 1 157,711 -

Carston Ltd. High Tempo International Ltd. Note 3 Subcontract Fee 2,562,469 40 90 days Note 1 Note 1 ( 295,371) ( 21)

Carston Ltd. Foxconn Technology Pte. Ltd. Note 3 Subcontract Fee 203,616 3 90 days Note 1 Note 1 ( 11,871) ( 1)

Carston Ltd. IRIS World Enterprises Limited Note 4 Subcontract Fee 113,724 2 90 days Note 1 Note 1 - -

Hongfujin Precision Industrial


Ambit Microsystem (Shanghai) Co., Ltd. Note 2 Sales 276,479 - 90 days Note 1 Note 1 33,965 -




Ltd.




Carston Ltd. Note 2 Subcontract

Revenue

2,448,197 2 90 days Note 1 Note 1 283,725 1



Fu Ding Precision Component (Shenzhen)

Co., Ltd.




Kangzhun Electronic Technology (Kunshan)

Co., Ltd.




Foxconn Electronic Industrial Development

(Kunshan) Co., Ltd.


180







Heroic Legend Enterprises Ltd. Note 2 Subcontract

Revenue

$ 14,223,306 14 90 days Note 1 Note 1 $ 1,053,441 4



Yantaishi Fulitong International Trading Co.,

Ltd.




Franklin Management Ltd. Note 2 Subcontract

Revenue

11,046,984 11 90 days Note 1 Note 1 2,188,020 8



Fujin Precision Industrial (Jincheng) Co., Ltd. Note 2 Sales 1,074,007 1 90 days Note 1 Note 1 726,532 3



Hongzhun Precision Tooling (Kunshan) Co.,

Ltd.




Jizhun Precision Industry (Huizhou) Co., Ltd. Note 2 Sales 490,660 - 90 days Note 1 Note 1 342,537 1



Hongfujin Precision Industrial (Wuhan) Co.,

Ltd.




Futaihua Industrial (Shenzhen) Limited Note 2 Sales 10,784,469 11 90 days Note 1 Note 1 2,996,182 11



Fuhuajie Industrial (Shenzhen) Limited Note 2 Sales 707,849 1 90 days Note 1 Note 1 626,068 2



Honfujin Precision Electronics (Chongqing)

Co., Ltd.




Hongfujing Precision Electronics (Tianjin)

Co., Ltd.




Hongfujin Precision Electronics (Chengdu)

Limited




NanNing FuGui Precision Industrial Co., Ltd. Note 2 Sales 395,918 - 90 days Note 1 Note 1 318,769 1



Futaihua Precision Electronics (Zhenzhou)

Limited




Hongfujin Precision Electronics (Zhenzhou)

Limited




Foxconn Precision Electronics (Taiyuan) Co.,

Ltd.




Futaihua Precision Electronics (Jiyuan)

Limited




Interface Technology (Chengdu) Co., Ltd. Note 10 Sales 234,138 - 30 days Note 1 Note 1 101,304 -

181







Innocom Technology (Shenzhen) Co., Ltd. Note 6 Sales $ 170,109 - 90 days Note 1 Note 1 $ 21,713 -



Nanhai Chi Mei Electronics Corporation Note 6 Sales 162,670 - 90 days Note 1 Note 1 1,589 -




Ltd.




Fuzhun Precision (Shenzhen) Industry Co.,

Ltd.





Ltd.

Note 3 Purchases 1,711,515 16 90 days Note 1 Note 1 ( 1,658,010) ( 39)



Fuhuigang Industrial (Shenzhen) Co., Ltd. Note 3 Purchases 148,887 1 90 days Note 1 Note 1 ( 28,220) ( 1)





Note 5 Purchases 188,638 2 90 days Note 1 Note 1 - -

Fu Ding Precision Component


Beyond Maximum Industrial Ltd. Note 2 Subcontract

Revenue

8,801,240 97 30 days Note 1 Note 1 1,439,760 93

Fuhong Precision Component


Best Matrix Enterprises Ltd. Note 2 Subcontract

Revenue

585,039 99 30 days Note 1 Note 1 - -

Champ Tech Optical (Foshan)

Corporation


Co., Ltd.



Corporation



Corporation

Foxconn Technology Pte. Ltd. Note 3 Sales 2,449,477 52 30 days Note 1 Note 1 634,546 48


Corporation

Foxconn Technology Co., Ltd. Note 7 Sales 594,552 13 30 days Note 1 Note 1 132,601 10


Corporation

Fuyu Technology (Nanyang) Co., Ltd. Note 3 Sales 119,438 3 90 days Note 1 Note 1 138,997 10


Corporation

Dongguan Pan-International Wire & Cable

Co., Ltd.


Fu Ding Electronical Technology

(Jiashan) Co., Ltd.


Fu Ding Electronical Technology

(Jiashan) Co., Ltd.

Foxconn Technology Pte. Ltd. Note 3 Purchases 210,845 3 90 days Note 1 Note 1 ( 16,238) ( 1)

182





Fuhonyang Precision Industrial


MWM Co., Ltd. Note 2 Subcontract

Revenue

$ 2,916,390 98 60 days Note 1 Note 1 $ 1,550,134 82

Kangzhun Electronic Technology

(Kunshan) Co., Ltd.

Ambit Microsystem (Shanghai) Co., Ltd. Note 2 Sales 286,034 1 30 days Note 1 Note 1 62,885 1


(Kunshan) Co., Ltd.

Qunkang Precision Component (Kunshan)

Co., Ltd.



(Kunshan) Co., Ltd.

Tripleheads International Ltd. Note 2 Sales 746,703 4 90 days Note 1 Note 1 496,611 6


(Kunshan) Co., Ltd.

Fusing International Inc. Note 2 Sales 323,496 2 90 days Note 1 Note 1 319,167 4


(Kunshan) Co., Ltd.


Co., Ltd.

Note 2 Sales 120,520 1 30 days Note 1 Note 1 134 -


(Kunshan) Co., Ltd.

Innolux Corporation Ltd. (Formerly Chimei

Innolux Corporation)



(Kunshan) Co., Ltd.



(Kunshan) Co., Ltd.

Pan International Industrial Co. Note 7 Purchases 289,257 2 90 days Note 1 Note 1 ( 215,187) ( 2)


(Kunshan) Co., Ltd.

Smart Top International Ltd. Note 2 Sales 548,841 3 90 days Note 1 Note 1 255,196 11


(Kunshan) Co., Ltd.

Foxconn Technology Pte. Ltd. Note 3 Purchases 327,945 1 90 days Note 1 Note 1 - -


(Kunshan) Co., Ltd.

IRIS World Enterprises Ltd. Note 4 Purchases 175,724 1 90 days Note 1 Note 1 ( 13,299) -

Foxconn (Kunshan) Computer

Connector Co., Ltd.

Foxconn Electronic Industrial Development

(Kunshan) Co., Ltd.

Note 2 Sales 684,936 5 90 days Note 1 Note 1 1,106,416 36


Connector Co., Ltd.

Success Rise Enterprises Ltd. Note 2 Subcontract

Revenue

13,351,462 94 90 days Note 1 Note 1 1,379,694 46


Connector Co., Ltd.


Ltd.

Note 3 Purchases 381,014 3 60 days Note 1 Note 1 ( 13,845) -


Development (Kunshan) Co., Ltd.

Foxconn (Kunshan) Computer Connector

Co., Ltd.

Note 2 Subcontract

Revenue

8,899,679 97 30 days Note 1 Note 1 3,309,438 79

183






Development (Kunshan) Co., Ltd.

Foxsemicon Integrated Technology

(Shanghai) Inc.

Note 9 Purchases $ 352,258 2 30 days Note 1 Note 1 ($ 82,304) ( 2)

Qunkang Precision Component

(Kunshan) Co., Ltd.

Smart Top International Ltd. Note 2 Sales 4,158,372 74 90 days Note 1 Note 1 2,201,885 100

Competition Team Technology Ltd. Futaihua Precision Electronics (Zhenzhou)

Limited

Note 2 Sales 1,534,356 - 90 days Note 1 Note 1 254,238 -

Competition Team Technology Ltd. Hongfujin Precision Electronics (Zhenzhou)

Limited

Note 2 Sales 5,045,426 1 90 days Note 1 Note 1 596,527 -

Hightech Electronics Components

Inc.

Foxconn Image & Printing Product Pte. Ltd. Note 2 Sales 15,617,564 13 60 days Note 1 Note 1 6,900,380 21


Inc.


Co., Ltd.



Inc.

Fusing International Inc. Pte. Ltd. Note 2 Sales 7,723,017 6 60 days Note 1 Note 1 4,224,630 13


Inc.

Competition Team Ireland Limited Note 2 Sales 12,029,829 10 60days Note 1 Note 1 3,864,411 12


Inc.

Foxconn Japan Ltd. Note 2 Sales 702,648 1 60 days Note 1 Note 1 140,984 -


Inc.

Foxconn Singapore Pte. Ltd. Note 2 Sales 183,224 - 60 days Note 1 Note 1 57,913 -

Smart Top International Ltd. Hongye Precision Component (Kunshan) Co.,

Ltd.

Note 2 Sales 208,860 3 60days Note 1 Note 1 189,151 9

Smart Top International Ltd. Competition Team Ireland Limited Note 2 Sales 3,951,529 95 90days Note 1 Note 1 1,994,615 87

Best Ever Industries Ltd. Futaihua Industrial (Shenzhen) Limited Note 2 Sales 2,982,792 16 90 days Note 1 Note 1 634,037 12

Best Ever Industries Ltd. Hongfujin Precision Electronics (Chengdu)

Limited


Best Ever Industries Ltd. Hongfujin Precision Electronics (Zhenzhou)

Limited


Best Ever Industries Ltd. Foxconn Precision Electronics (Taiyuan) Co.,

Ltd.


Best Leap Enterprises Limited Fusing International Inc. Pte. Ltd. Note 2 Sales 4,941,655 1 90 days Note 1 Note 1 1,009,145 1

Best Leap Enterprises Limited Futaihua Industrial (Shenzhen) Limited. Note 2 Sales 3,597,602 - 90 days Note 1 Note 1 1,218,551 1

Best Leap Enterprises Limited Foxconn Technology Pte. Ltd. Note 3 Sales 230,798 - 90 days Note 1 Note 1 8,937 -

184





Skilltop Limited Foxconn Image & Printing Product Pte. Ltd. Note 2 Sales $ 21,311,986 93 45 days Note 1 Note 1 $ 1,340,788 12

Skilltop Limited Fuhuajie Industrial (Shenzhen) Limited Note 2 Sales 643,670 3 45 days Note 1 Note 1 628,274 5

Skilltop Limited Fusing International Inc. Note 2 Sales 392,136 2 90 days Note 1 Note 1 385,108 2

Skilltop Limited Competition Team Ireland Limited Note 2 Sales 606,633 3 90 days Note 1 Note 1 595,760 2

Tripleheads International Ltd. Competition Team Ireland Limited Note 2 Sales 686,688 92 90 days Note 1 Note 1 377,215 4

Hongfutai Precision Electrons

(Yantai) Co., Ltd.

Dragon Spirit Industries Ltd. Note 2 Sales 7,836,936 12 30 days Note 1 Note 1 - -


(Yantai) Co., Ltd.


Ltd.



(Yantai) Co., Ltd.

Hongfujin Precision Electrons (Yantai) Co.,

Ltd.



(Yantai) Co., Ltd.

Universal Field International Limited Note 2 Sales 49,479,435 73 30 days Note 1 Note 1 11,206,431 77


(Yantai) Co., Ltd.



(Yantai) Co., Ltd.

Pan Interation Industrial Co. Note 7 Purchases 591,534 1 90 days Note 1 Note 1 ( 109,845) ( 1)


(Yantai) Co., Ltd.

IRIS World Enterprises Ltd. Note 4 Purchases 193,679 - 90 days Note 1 Note 1 ( 18,425) -


(Yantai) Co., Ltd.

Honghuasheng Precision Electronics (YanTai)

Co., Ltd.

Note 8 Purchases 219,887 - 90 days Note 1 Note 1 ( 16,099) -

Foxconn CZ S.R.O. Foxconn Global Services Division S.R.O. Note 2 Sales 180,405 - 45 days Note 1 Note 1 29,967 -

Foxconn CZ S.R.O. Foxconn Rus, LLC Note 2 Sales 982,393 1 45 days Note 1 Note 1 133,665 1

Foxconn CZ S.R.O. Foxconn TR Teknoloji San. Ltd. Sti. Note 2 Sales 404,378 - 45 days Note 1 Note 1 338,972 3

Foxconn CZ S.R.O. Innolux Corporation


Note 5 Purchases 137,181 - 45 days Note 1 Note 1 - -

Foxconn CZ S.R.O. CyberTAN Technology Inc. Note 7 Purchases 814,881 1 45 days Note 1 Note 1 ( 51,657) -

Foxconn Global Services Division Foxconn CZ S.R.O. Note 2 Sales 319,399 17 45 days Note 1 Note 1 72,834 22

Foxconn Global Services Division Foxconn Slovakia, SPOL. S R.O. Note 2 Sales 169,838 9 45 days Note 1 Note 1 396 -

Fujin Precision Industrial (Jincheng)

Co., Ltd.


Co., Ltd.


185






Co., Ltd.

Fu Ding Electronical Technology (Jiashan)

Co., Ltd.

Note 2 Sales $ 156,962 - 90 days Note 1 Note 1 $ - -


Co., Ltd.

Hongzhun Precision Tooling (Kunshan) Co.,

Ltd.

Note 2 Sales 463,492 1 90 days Note 1 Note 1 29,219 -


Co., Ltd.

Futaihua Industrial (Shenzhen) Co., Ltd. Note 2 Sales 2,664,247 8 90 days Note 1 Note 1 808,655 5


Co., Ltd.


Co., Ltd.



Co., Ltd.

Fu Ding Precision Electronics (Zhengzhou)

Co., Ltd.



Co., Ltd.

Futaihua Industrial (Shenzhen) Co., Ltd. Note 2 Sales 1,742,470 5 90 days Note 1 Note 1 1,286,241 7


Co., Ltd.

Hongfujin Precision Electronics (Zhengzhou)

Co., Ltd.



Co., Ltd.

Fast Victor Limited Note 2 Sales 2,880,209 9 90 days Note 1 Note 1 135,647 1


Co., Ltd.

WWW (Jincheng) Co., Ltd. Note 2 Sales 674,156 2 90 days Note 1 Note 1 293,875 2


Co., Ltd.

MWM Co., Ltd. Note 2 Sales 1,049,255 3 90 days Note 1 Note 1 577,395 3


Co., Ltd.


Ltd.



Co., Ltd.


Limited



Co., Ltd.

Hongfujin Precision Electronics (Taiyuan)

Co., Ltd.


Hongzhun Precision Tooling



Co., Ltd.

Note 2 Subcontract

Revenue

120,888 100 90 days Note 1 Note 1 45,476 97


(Kunshan) Co., Ltd.

Fu Ding Electronical Technology (Jiashan)

Co., Ltd.



(Kunshan) Co., Ltd.

Kangzhun Electronic Technology (Kunshan)

Co., Ltd.


186






(Kunshan) Co., Ltd.

Fuxiang Precision Industrial (Kunshan) Co.,

Ltd.



(Kunshan) Co., Ltd.

Foxconn (Kun Shan) Computer Connector

Co., Ltd.



(Kunshan) Co., Ltd.

Futaihua Industrial (Shenzhen) Co., Ltd. Note 2 Sales 603,906 7 60 days Note 1 Note 1 77,569 1


(Kunshan) Co., Ltd.


Co., Ltd.



(Kunshan) Co., Ltd.

Hongfujin Precision Industry (Taiyuan) Co.,

Ltd.


Foxconn EMS Inc. Carston Ltd. Note 2 Sales 174,306 14 30 days Note 1 Note 1 34,898 9

PCE Technology Inc. Heroic Legend Enterprises Ltd. Note 2 Sales 168,736 5 30 days Note 1 Note 1 35,194 21

PCE Technology Inc. Franklin Management Ltd. Note 2 Sales 113,274 5 30 days Note 1 Note 1 29,534 27

QHUB Logistics Corporation Foxconn / Hon Hai Logistics Texas LLC. Note 2 Sales 158,786 54 7 days Note 1 Note 1 - -

Shenzhen Fuhongjie Technology

Service Co., Ltd.

Carston Ltd. Note 2 Subcontract

Revenue

668,687 72 30 days Note 1 Note 1 74,249 73

Jizhun Precision Industry (Huizhou)

Co., Ltd.


Co., Ltd.


Shenzhen Fertile Plan International

Logistics Co., Ltd.

NanNing FuGui Precision Industrial Co., Ltd. Note 2 Sales 101,604 17 90 days Note 1 Note 1 22,571 15

Fuzhun Precision Tooling (Huaian)

Co., Ltd.

Fuyu Electronical Technology (Huaian) Co.,

Ltd.


Fuzhun Precision Tooling (Huaian)

Co., Ltd.

Huaian Fulitong Trading Co., Ltd. Note 2 Sales 493,764 39 30 days Note 1 Note 1 383,858 33

Fuyu Electronical Technology

(Huaian) Co., Ltd.

Success Rise Enterprises Ltd. Note 2 Subcontract

Revenue

10,321,071 100 30 days Note 1 Note 1 3,224,509 87

PCE Paragon Solutions (USA) Inc. PCE Paragon Solutions Kft. Note 2 Sales 146,343 37 30 days Note 1 Note 1 28,509 33

Funing Precision Component Co.,

Ltd.

FIH (Hong Kong) Limited Note 2 Sales 105,096 2 45 days Note 1 Note 1 16,719 1

Foxconn Baja California S.A. De

C.V.

Competition Team Ireland Limited Note 2 Sales 125,083 6 60 days Note 1 Note 1 3,337 1


(Wuhan) Co., Ltd.

Top Step Enterprises Limited Note 2 Sales 99,499,196 93 60 days Note 1 Note 1 7,243,984 89

187






(Wuhan) Co., Ltd.


Co., Ltd.

Note 2 Sales $ 301,164 - 90 days Note 1 Note 1 $ - -


(Wuhan) Co., Ltd.

FTP Technology Inc. Note 3 Purchases 949,174 1 30 days Note 1 Note 1 ( 289,208) ( 2)


(Wuhan) Co., Ltd.

Foxconn Technology Co., Ltd. Note 3 Purchases 743,063 - 90 days Note 1 Note 1 ( 215,388) ( 1)


(Wuhan) Co., Ltd.

IRIS World Enterprises Limited Note 4 Purchases 2,249,818 1 90 days Note 1 Note 1 ( 174,127) ( 1)


(Wuhan) Co., Ltd.

Pan International Industrial Co. Note 7 Purchases 1,025,533 1 90 days Note 1 Note 1 ( 237,155) ( 1)

Hongfujin Precision Electrons

(Yantai) Co., Ltd.

AMB Logistics Ltd. Note 2 Sales 1,169,018 1 60 days Note 1 Note 1 872,992 3


(Yantai) Co., Ltd.


Ltd.



(Yantai) Co., Ltd.

Futaijing Precision Electronics (Yantai) Co.,

Ltd.



(Yantai) Co., Ltd.

Competition Team Technology Pte. Ltd. Note 2 Sales 3,429,823 2 30 days Note 1 Note 1 914,768 3


(Yantai) Co., Ltd.

Hongfutai Precision Electrons(Yantai) Co.,

Ltd.



(Yantai) Co., Ltd.

Full Profit International Limited Note 2 Sales 1,008,692 - 30 days Note 1 Note 1 254,515 1


(Yantai) Co., Ltd.



(Yantai) Co., Ltd.

Foxconn Precision Electronics (Yantai) Co.,

Ltd.



(Yantai) Co., Ltd.

YanTai FuHuaDa Precision Electronics Co.,

Ltd.



(Yantai) Co., Ltd.

NanNing FuGui Precision Industrial Co., Ltd. Note 2 Sales 137,491 - 90 days Note 1 Note 1 126,927 -


(Yantai) Co., Ltd.

Competition Team Ireland Limited Note 2 Sales 867,633 - 90 days Note 1 Note 1 31,963 -

188






(Yantai) Co., Ltd.

Foxconn Technology Co., Ltd. Note 7 Sales $ 76,108,306 34 30 days Note 1 Note 1 $ 15,288,164 46


(Yantai) Co., Ltd.

Foxconn Technology Co., Ltd. Note 7 Purchases 2,990,004 9 90 days Note 1 Note 1 ( 2,054,799) ( 6)


(Yantai) Co., Ltd.

Pan International Industrial Co. Note 7 Purchases 4,145,266 2 90 days Note 1 Note 1 ( 1,345,486) ( 4)


(Yantai) Co., Ltd.

IRIS World Enterprises Limited Note 4 Purchases 1,522,882 1 90 days Note 1 Note 1 ( 50,437) -


(Yantai) Co., Ltd.

Innolux Corporation


Note 5 Purchases 1,402,624 1 90 days Note 1 Note 1 ( 115,803) -

Falcon Precision Trading Limited Fusing International Inc. Note 2 Sales 2,448,371 96 45 days Note 1 Note 1 2,180,795 36

Falcon Precision Trading Limited Hongfujin Precision Electronics (Chengdu)

Limited



Limited

Hongfutai Precision Electrons (Yantai) Co.,

Ltd.



Limited

Hongfujin Precision Industry (Yantai) Co.,

Ltd.


Top Step Enterprises Limited Hongfujin Precision Industrial (Wuhan) Co.,

Ltd.


Top Step Enterprises Limited Foxconn Image & Printing Product Pte. Ltd. Note 2 Sales 3,374,411 3 60 days Note 1 Note 1 256,098 2

Foxconn Technology CZ S. R. O. Innolux Corporation (Formerly Chimei



Foxconn Technology CZ S. R. O. Innolux Corporation (Formerly Chimei



FuYu Energy Technology

(Kunshan) Co., Ltd.


Ltd.


Fugion Material Technology

(Shenzhen) Limited


Co., Ltd.



(Shenzhen) Limited

Fuhong Precision Component (Shenzhen) Co.,

Ltd.



(Shenzhen) Limited

Fu Ding Precision Component (Zhengzhou)

Co., Ltd.


189






(Shenzhen) Limited

Fukui Precision Component (Shenzhen) Co.,

Ltd.


Huaian Fulitong Trading Co., Ltd. Foxconn Precision Electronics (Lang Fang)

Co., Ltd.


Huaian Fulitong Trading Co., Ltd. Foxconn (Kunshan) Computer Connector Co.,

Ltd.


Huaian Fulitong Trading Co., Ltd. Foxconn Electronic Industrial Development

(Kunshan) Co., Ltd.


Foxconn Image & Printing Product

Pte. Ltd.

Fuhuajie Industrial (Shenzhen) Limited Note 2 Sales 333,071 1 60 days Note 1 Note 1 - -

Foxconn Image & Printing Product

Pte. Ltd.


Co., Ltd.


Futaihua Industrial (Shenzhen) Co.,

Ltd.


Ltd.



Ltd.


Co., Ltd.



Ltd.

Best Leap Enterprises Limited Note 2 Sales 782,867,169 90 90 days Note 1 Note 1 131,860,729 83


Ltd.

Fujin Precision Industrial (Jincheng) Co., Ltd. Note 2 Sales 3,127,252 - 90 days Note 1 Note 1 3,643,963 2


Ltd.


Co., Ltd.



Ltd.

Futaihua Precision Electronics (Zhengzhou)

Co., Ltd.

Note 2 Sales 2,869,305 - 90 days Note 1 Note 1 1,102,065 1


Ltd.


Co., Ltd.



Ltd.


Ltd.



Ltd.


Limited



Ltd.

Fuhong Precision Component (Bac Giang)

Limited


190






Ltd.

Foxconn CMMSG Industria De Eletronicos

Ltd.

Note 2 Sales $ 2,298,167 - 90 days Note 1 Note 1 $ 1,127,182 1


Ltd.

Nanning Funing Precision Electronics Co.,

Ltd.



Ltd.


Ltd.



Ltd.


Ltd.



Ltd.

Foxconn Technology Pte. Ltd. Note 3 Purchases 1,684,472 1 90 days Note 1 Note 1 ( 336,565) -


Ltd.


Ltd.

Note 3 Purchases 662,652 1 90 days Note 1 Note 1 ( 215,125) -


Ltd.

Innolux Corporation (Formerly Chimei




Ltd.

IRIS World Enterprises Limited Note 4 Purchases 8,335,077 7 90 days Note 1 Note 1 ( 1,810,394) ( 1)


Limited

Skilltop Limited Note 2 Sales 22,863,975 45 90 days Note 1 Note 1 2,683,902 39


Limited

Foxconn Image & Printing Product Pte. Ltd. Note 2 Sales 409,864 1 30 days Note 1 Note 1 186,758 3


Limited


Co., Ltd.



Limited

Pan-International Industrial Co. Note 7 Purchases 258,965 6 90 days Note 1 Note 1 ( 10,918) -


Limited

IRIS World Enterprises Limited Note 4 Purchases 546,415 13 90 days Note 1 Note 1 ( 14,507) -

Hongfujin Precision Electronics

(Chongqing) Co., Ltd.

Ambit Microsystem (Shanghai) Co., Ltd. Note 2 Sales 696,385 - 60 days Note 1 Note 1 7,563 -



HighTech Electronics Components Inc. Note 2 Sales 121,082,335 84 60 days Note 1 Note 1 29,666,431 91



Fujun Precision Electronics (Chongqing) Co.,

Ltd.


191







Innolux Corporation


Note 5 Purchases $ 2,428,314 6 90 days Note 1 Note 1 ($ 13,410) -



Innocom Technology (Shenzhen) Co., Ltd. Note 6 Purchases 303,488 - 60 days Note 1 Note 1 ( 147,711) -



Nanhai Chi Mei Electronics Ltd. Note 6 Purchases 104,539 - 60 days Note 1 Note 1 ( 14,773) -




Ltd.

Note 3 Purchases 356,964 - 30 days Note 1 Note 1 ( 119,463) -



Pan-International Industrial Co. Note 7 Purchases 243,592 - 60 days Note 1 Note 1 ( 80,885) -



IRIS World Enterprises Limited Note 4 Purchases 1,102,450 1 60 days Note 1 Note 1 ( 179,293) -


(Yantai) Co., Ltd.

FIH (Hong Kong) Limited Note 2 Sales 521,485 13 60 days Note 1 Note 1 - -


(Yantai) Co., Ltd.


Ltd.



(Yantai) Co., Ltd.

YanTai FuHuaDa Precision Electronics

Limited



(Yantai) Co., Ltd.

Pan-International Industrial Co. Note 7 Purchases 118,386 4 90 days Note 1 Note 1 ( 51,514) ( 11)

Chongqingshi Futaitong Logistics

Limited Co., Limited


Co., Ltd.


Chongqingshi Futaitong Logistics

Limited Co., Limited

HongDaoFu (Chongqing) Technology Co.,

Ltd.



(Tianjin) Co., Ltd.

Profit New Limited Note 2 Sales 16,427,949 67 90 days Note 1 Note 1 3,435,836 84

FuXun Tong Trading (ShenZhen)

Co., Ltd.


FuXun Tong Trading (ShenZhen)

Co., Ltd.

ZhengZhou XunFeng Trading Co., Ltd. Note 2 Sales 143,806 4 90 days Note 1 Note 1 14,424 4


(Chengdu) Co., Ltd.


Ltd.


192






(Chengdu) Co., Ltd.

Falcon Precision Trading Limited Note 2 Sales $ 2,546,681 - 90 days Note 1 Note 1 $ 284,989 -


(Chengdu) Co., Ltd.



(Chengdu) Co., Ltd.

Foxconn Technology Pte. Ltd. Note 3 Purchases 367,178 - 90 days Note 1 Note 1 ( 107,699) -


(Chengdu) Co., Ltd.

IRIS World Enterprises Limited Note 4 Purchases 4,058,727 - 90 days Note 1 Note 1 ( 935,341) ( 1)


(Chengdu) Limited


Limited



(Chengdu) Limited

Interface Technology (Chengdu) Co., Ltd. Note 10 Sales 252,353 9 30 days Note 1 Note 1 222,330 13

Fu Ding (Zhengzhou) Precision

Industry Co., Ltd.

Fujin Precision Industrial (Jincheng) Co., Ltd. Note 2 Sales 102,075 7 90 days Note 1 Note 1 118,767 8


Industry Co., Ltd.

Futaihua Precision Electronics (Zhenzhou)

Limited



Industry Co., Ltd.


Limited



Industry Co., Ltd.


Limited



Industry Co., Ltd.


Ltd.


Fujun Precision Electronics


Fuhuajie Industrial (Shenzhen) Limited Note 2 Sales 548,042 10 45 days Note 1 Note 1 637,666 38

Fujun Precision Electronics


Innocom Technology (Chongqing) Co., Ltd. Note 2 Purchases 534,961 10 30 days Note 1 Note 1 ( 282,846) ( 1)


Electronics Limited



Electronics Limited

FuXun Tong Trading(ShenZhen) Co., Ltd. Note 2 Sales 185,809 1 90 days Note 1 Note 1 216,195 8

Anpinda Precision Industrial

(Huizhou) Co., Ltd.

Glorious Prospect Enterprises Ltd. Note 2 Sales 22,504,978 100 90 days Note 1 Note 1 4,860,952 98

193





System Integration Electronics


Ambit Microsystem (Shanghai) Co., Ltd. Note 2 Sales $ 320,577 7 45 days Note 1 Note 1 $ 33,916 7

Wang Hui Trading Co., Ltd. Kantron International Trading (Shenzhen) Co.,

Ltd.


NanNing FuGui Precision Industrial

Co., Ltd.


Ltd.



Co., Ltd.

Mega Well Limited Note 2 Sales 23,123,969 97 60 days Note 1 Note 1 6,269,967 94


Co., Ltd.

IRIS World Enterprises Limited Note 4 Purchases 975,134 25 90 days Note 1 Note 1 - -


(Zhengzhou) Limited

Competition Team Technologies Limited Note 2 Sales 1,575,267 8 90 days Note 1 Note 1 38,904 -


(Zhengzhou) Limited



(Zhengzhou) Limited


Limited



(Zhengzhou) Limited


Ltd.



(Zhengzhou) Limited


Ltd.



(Zhengzhou) Limited

Competition Team Technologies Limited Note 2 Sales 528,064,023 91 90 days Note 1 Note 1 126,198,176 87


(Zhengzhou) Limited



(Zhengzhou) Limited


Limited

Note 2 Sales 2,288,141 - 90 days Note 1 Note 1 723,523 -


(Zhengzhou) Limited


Ltd.



(Zhengzhou) Limited


Ltd.



(Zhengzhou) Limited

Foxconn Technology Pte. Ltd. Note 3 Purchases 612,418 1 90 days Note 1 Note 1 ( 226,097) -

194






(Zhengzhou) Limited

Pan-International Industrial Co. Note 7 Purchases $ 230,777 - 90 days Note 1 Note 1 ($ 140,257) -


(Zhengzhou) Limited

IRIS World Enterprises Limited Note 4 Purchases 6,880,474 6 90 days Note 1 Note 1 ( 3,312,462) ( 2)

ZhengZhou XunFeng Trading Co.,

Ltd.


Limited


ZhengZhou XunFeng Trading Co.,

Ltd.


Limited


Fusing International Inc. Innolux Corporation Ltd. Note 6 Sales 753,157 7 90 days Note 1 Note 1 100,054 3

Fusing International Inc. Innolux Corporation Ltd. Note 6 Purchases 471,928 4 60 days Note 1 Note 1 - -

Fusing International Inc. Innolux Corporation



ChengDu XunFeng Trading Co., Ltd. Hongfujin Precision Electronics (Chengdu)

Limited


ChongQing HongFuZhun Trading

Co., Ltd.


Co., Ltd.


HongZhaoDa Integrated Innovative

Service (Kunshan) Co., Ltd.

Smart Top International Ltd. Note 2 Sales 1,607,783 100 45 days Note 1 Note 1 114,887 100

Competition Team Ireland Limited Foxconn CZ S.R.O. Note 2 Sales 479,025 1 45 days Note 1 Note 1 37,683 -

Competition Team Ireland Limited Fuhuajie Industrial (Shenzhen) Limited Note 2 Sales 177,579 - 60 days Note 1 Note 1 73,423 1

Competition Team Ireland Limited Hongfujin Precision Electronics (Chongqing)

Co., Ltd.


Competition Team Ireland Limited Fusing International Inc. Note 2 Sales 1,390,779 2 60 days Note 1 Note 1 329,013 4

Competition Team Ireland Limited Innolux Corporation (Formerly Chimei


Note 5 Sales 1,660,185 3 60 days Note 1 Note 1 25,538 -

Competition Team Ireland Limited Innocom Technology (Chongqing) Co., Ltd. Note 2 Sales 2,236,542 4 90 days Note 1 Note 1 275,733 3

Competition Team Ireland Limited Innolux Corporation (Formerly Chimei


Note 5 Purchases 4,582,419 10 60 days Note 1 Note 1 ( 1,092,306) ( 13)

WWW (Jincheng) Co., Ltd. Foxconn (Tianjin) Precision Industry Co., Ltd Note 2 Sales 101,597 3 90 days Note 1 Note 1 36,061 3

WWW (Jincheng) Co., Ltd. Hongfujin Precision Industry (Shenzhen) Co.,

Ltd.


WWW (Jincheng) Co., Ltd. Fuhonyang Precision Industrial (Shenzhen)

Co., Ltd.


WWW (Jincheng) Co., Ltd. Best Ever Industries Ltd. Note 2 Sales 304,077 8 60 days Note 1 Note 1 44,260 4

WWW (Jincheng) Co., Ltd. Fujin Precision Industrial (Jincheng) Co., Ltd. Note 2 Sales 346,107 9 90 days Note 1 Note 1 29,773 3

195





Fortune Co., Ltd. Best Ever Industries Ltd. Note 2 Sales $ 199,921 100 90 days Note 1 Note 1 $ 146,993 100

MWM Co., Ltd. Best Ever Industries Ltd. Note 2 Sales 4,017,106 100 90 days Note 1 Note 1 2,041,392 98

Mexus Solutions Inc. Franklin Management Ltd. Note 2 Sales 126,569 59 30 days Note 1 Note 1 25,132 65


(Taiyuan) Co., Ltd.



(Taiyuan) Co., Ltd.


Limited



(Taiyuan) Co., Ltd.

Fast Victor Limited Note 2 Sales 95,486,777 79 90 days Note 1 Note 1 26,224,472 33


(Taiyuan) Co., Ltd.

Foxconn CMMSG Industria De Eletronicos

Ltda.



(Taiyuan) Co., Ltd.

IRIS World Enterprises Limited Note 4 Purchases 660,552 - 90 days Note 1 Note 1 - -

Scientific-Atlanta de Mexico S de R.

L. de C. V.

Competition Team Ireland Limited Note 2 Sales 2,353,028 100 7 days Note 1 Note 1 72,495 3


(Jiyuan) Limited

Fujin Precision Industrial (Jincheng) Co., Ltd. Note 2 Sales 341,145 2 90 days Note 1 Note 1 338,551 7


(Jiyuan) Limited


Limited


Ambit Microsystems Corporation

Limited

Ambit Microsystems (Zhong shan)

Corporation


Innocom Technology (Chongqing)

Co., Ltd.

Fujun Precision Electronics (Chongqing) Co.,

Ltd.



Co., Ltd.

Lakers Trading Ltd. Note 6 Sales 1,661,558 34 90 days Note 1 Note 1 89,158 21


Co., Ltd.

Hightech Electronics Components Inc. Note 2 Sales 1,509,474 31 60 days Note 1 Note 1 - -

NSG Technology Inc. Heroic Legend Enterprises Ltd. Note 2 Sales 387,505 8 30 days Note 1 Note 1 1,723 1

NSG Technology Inc. Competition Team Ireland Limited Note 2 Sales 231,990 5 30 days Note 1 Note 1 13,260 11

Foxconn Japan Ltd. Beyond Maximum Industrial Ltd. Note 2 Sales 125,782 2 90 days Note 1 Note 1 16,484 1

Foxconn Japan Ltd. Innolux Corporation (Formerly Chimei


Note 5 Purchases 152,173 2 90 days Note 1 Note 1 - -

Foxconn Japan Ltd. Foxconn Technology Pte. Ltd. Note 3 Purchases 264,749 4 90 days Note 1 Note 1 ( 125,159) ( 8)

Foxconn Singapore Pte. Ltd. Foxconn TR Teknoloji San. Ltd. Note 2 Sales 3,242,771 30 45 days Note 1 Note 1 361,939 20

196





Premier Image Technology (China)

Ltd.


Ltd.



Ltd.

Jumbo Rise Management Limited Note 2 Sales 23,826,813 84 90 days Note 1 Note 1 4,996,287 67


Ltd.

Foxconn MOEBG Industria de Eletronicos

Ltda.



Ltd.

Innolux Corporation (Formerly Chimei




Ltd.

Pan International Industry Co., Ltd. Note 8 Purchases 1,090,595 15 90 days Note 1 Note 1 ( 388,910) ( 10)


Ltd.

Dongguan Pan-International Wire & Cable

Co., Ltd.



Ltd.

IRIS World Enterprises Limited Note 4 Purchases 169,879 2 90 days Note 1 Note 1 ( 37,356) ( 1)

Foxconn Slovakia, SPOL. S R.O. Foxconn RUS, LLC Note 2 Sales 229,105 74 60 days Note 1 Note 1 14,134 25

Foxconn Slovakia, SPOL. S R.O. Chimei Optoelectronics (Singapore) Pte. Ltd. Note 6 Purchases 694,970 9 60 days Note 1 Note 1 ( 108) -

Fuhong Precision Component (Bac

Giang) Limited

Funing Precision Component Co., Ltd. Note 2 Sales 207,307 4 60 days Note 1 Note 1 23,732 2

Fenix Industria DE Eletronicos Ltda. Foxconn CMMSG Industria De Eletronicos

Ltda.


Foxconn CMMSG Industria De

Eletronicos Ltda.


Note 1: The prices and terms to related parties were not significantly different from transaction with third parties, except for particular transactions with no similar transactions to compare with. For these transactions, the prices

and terms were determined in accordance with mutual agreements.

Note 2: The investee and the counterparty are both indirect subsidiaries of the Company.

Note 3: The counterparty of the investee is an indirect subsidiary of FTC.

Note 4: The counterparty of the investee is an indirect subsidiary of Zhen Ding Technology Holding Limited.

Note 5: The Company’s chairman is a major shareholder of the counterparty.

Note 6: The counterparty of the investee is an indirect subsidiary of Innolux.

Note 7: The counterparty of the investee is an investee of the Company accounted for under the equity method.

Note 8: The counterparty of the investee is an indirect subsidiary of PIIC.

Note 9: The counterparty of the investee is an indirect subsidiary of FITI.

Note 10: The counterparty of the investee is an indirect investee of the Company accounted for under the equity method.

197

9) Receivable from related parties in excess of $100,000 or 20% of total contributed capital: please refer to information on significant transactions in Notes 11(1) and (2) and the following disclosures.

Balance of Overdue receivables Allowance for

receivable doubtful

Relationship with from related Turnover Action adopted for Subsequent accounts

Company Counterparty the company parties rate Amount overdue accounts collection provided

Ambit Microsystems (Zhong shan) Corporation Ambit Microsystems Corporation Limited Note 1 $ 1,299,771 5 $ - - $1,299,771 $ -

Ambit Microsystem (Shanghai) Co., Ltd. AMB Logistics Ltd. Note 1 1,456,576 25 30,683 Subsequent collection 728,409 -

Ambit Microsystem (Shanghai) Co., Ltd. Amworld Microsystems (Shanghai) Ltd. Note 1 186,276 5 11,204 Subsequent collection 186,276 -

Ambit Microsystem (Shanghai) Co., Ltd. Foxconn Technology (India) Private Limited Note 1 123,279 2 20,831 Subsequent collection 23,728 -

Ambit Microsystem (Shanghai) Co., Ltd. CyberTAN Technology Inc. Note 7 194,116 3 4,677 Subsequent collection 156,147 -

Ingrasys Technology Co., Ltd. Ingrasys Technology USA Inc. Note 1 1,470,556 5 398,018 Subsequent collection 398,000 -

Ingrasys Technology Co., Ltd. PCE Paragon Solutions KFT. Note 1 110,099 7 11,145 Subsequent collection 11,142 -

Foxnum Technology Co., Ltd. Fujin Precision Industrial (Jincheng) Co., Ltd. Note 1 139,166 7 101,577 Subsequent collection 101,091 -

FIH (Hong Kong) Limited Shenzhen Fu Tai Hong Precision Industry Co., Ltd. Note 1 107,827 9 - - 213 -

FIH (Hong Kong) Limited Chi Mei Communication System ,Inc. Note 1 1,083,664 5 - - 759,216 -

FIH (Hong Kong) Limited Foxconn India Pvt. Ltd. Note 1 107,616 3 - - 62,662 -

FIH (Hong Kong) Limited Sutech Industry Inc. Note 1 492,850 3 - - 492,850 -

FIH (Hong Kong) Limited Foxconn Precision Electronics (Langfang) Co., Ltd. Note 1 148,297 2 - - 134,979 -

FIH (Hong Kong) Limited Futaihua Industrial (Shenzhen) Limited Note 1 129,558 3 - - 106,560 -

Shenzhen Fu Tai Hong Precision Industry Co., Ltd. FIH (Hong Kong) Limited Note 1 192,756 2 - - 31,132 -

Shenzhen Fu Tai Hong Precision Industry Co., Ltd. Foxconn Precision Electronics (Langfang) Co., Ltd. Note 1 682,907 1 - - 51,809 -

Shenzhen Fu Tai Hong Precision Industry Co., Ltd. Nanning Futaihong Precision Electronics Co., Ltd. Note 1 759,974 3 - - 193,953 -

Shenzhen Fu Tai Hong Precision Industry Co., Ltd. Hongfujin Precision Industry (Shenzhen) Co., Ltd. Note 1 184,701 2 - - 175,389 -

Shenzhen Fu Tai Hong Precision Industry Co., Ltd. Futaihua Industrial (Shenzhen) Limited Note 1 163,982 2 - - 163,982 -

Foxconn Precision Component (Beijing) Co., Ltd. Foxconn (Tianjin) Precision Industry Co., Ltd. Note 1 163,709 3 - - 77,320 -

Foxconn Precision Component (Beijing) Co., Ltd. Futaijing Precision Electronics (Beijing) Co., Ltd. Note 1 167,795 1 - - 93,907 -

Foxconn (Tianjin) Precision Industry Co., Ltd. FIH (Hong Kong) Limited Note 1 518,907 7 - - 518,907 -

Futaijing Precision Electronics (Beijing) Co., Ltd. Foxconn Precision Component (Beijing) Co., Ltd. Note 1 183,779 2 - - 145,867 -

Futaijing Precision Electronics (Beijing) Co., Ltd. Foxconn Precision Electronics (Langfang) Co., Ltd. Note 1 202,857 3 - - 119,785 -

Foxconn Precision Electronics (Langfang) Co., Ltd. FIH (Hong Kong) Limited Note 1 746,307 11 - - 746,307 -

Foxconn Precision Electronics (Langfang) Co., Ltd. ShenZhen Fu Tai Hong Precision Industry Co., Ltd. Note 1 140,273 1 - - 92,677 -

Foxconn Precision Electronics (Langfang) Co., Ltd. Foxconn Precision Component (Beijing) Co., Ltd. Note 1 1,026,944 2 - - 140,743 -

Foxconn Precision Electronics (Langfang) Co., Ltd. Foxconn (Tianjin) Precision Industry Co., Ltd. Note 1 234,987 2 - - 106,748 -

Foxconn Precision Electronics (Langfang) Co., Ltd. Futaijing Precision Electronics (Beijing) Co., Ltd. Note 1 112,966 2 - - 93,450 -

Foxconn Precision Electronics (Langfang) Co., Ltd. Eliteday Enterprises Limited Note 1 142,851 12 - - 142,851 -

Eliteday Enterprises Limited Foxconn Precision Electronics (Langfang) Co., Ltd. Note 1 366,772 2 - - 192 -

198


receivable doubtful



Nanning Futaihong Precision Industry Co., Ltd Shenzhen Fu Tai Hong Precision Industry Co., Ltd Note 1 $ 860,295 3 $ - - $ 235,179 $ -

Futaijing Precision Electronics (Yantai) Co., Ltd. FIH (Hong Kong) Limited Note 1 421,475 6 - - 421,475 -

Futaijing Precision Electronics (Yantai) Co., Ltd. Futaijing Precision Electronics (Beijing) Co., Ltd. Note 1 1,657,101 3 - - 1,237,984 -

Carston Ltd. Lakers Trading Ltd. Note 2 1,040,837 1 845,278 Subsequent collection - -

Carston Ltd. IRIS World Enterprises Limited Note 2 157,711 3 - - - -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Shenzhen Fu Tai Hong Precision Industry Co., Ltd Note 2 124,028 2 37 Subsequent collection 32,898 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Carston Ltd. Note 1 283,725 8 - - 60,873 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Fu Ding Precision Component (Shenzhen) Co., Ltd Note 1 1,254,847 2 287 Subsequent collection 1,254,847 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Kangzhun Electronic Technology (Kunshan) Co., Note 1 119,083 2 2,241 Subsequent collection 109,166 -

Ltd.

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Foxconn Electronic Industrial Development Note 1 110,126 3 16,592 Subsequent collection 108,224 -

(Kunshan) Co., Ltd

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Heroic Legend Enterprises Ltd. Note 1 1,053,441 7 - - 219,062 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Yantaishi Fulitong International Trading Co., Ltd. Note 1 233,522 1 16,556 Subsequent collection - -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Franklin Management Ltd. Note 1 2,188,020 10 - - 392,783 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Fujin Precision Industrial (Jincheng) Co., Ltd. Note 1 726,532 1 5,047 Subsequent collection 156,105 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Jizhun Precision Industry (Huizhou) Co., Ltd. Note 1 342,537 3 75,648 Subsequent collection 331 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Futaihua Industrial (Shenzhen) Limited Note 1 2,996,182 4 38,010 Subsequent collection 280,839 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Fuhuajie Industrial (Shenzhen) Limited Note 1 626,068 2 5,295 Subsequent collection 36,478 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Hongfujin Precision Industry (Tianjin) Co., Ltd. Note 1 101,384 1 27 Subsequent collection 4,307 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Hongfujin Precision Electronics (Chengdu) Limited Note 1 2,351,974 3 5,330 Subsequent collection 1,118,144 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. NanNing FuGui Precision Industrial Co., Ltd Note 1 318,769 2 10,322 Subsequent collection 406 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Futaihua Precision Electronics (Zhengzhou) Limited Note 1 471,664 2 28,537 Subsequent collection 89,655 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Hongfujin Precision Electronics (Zhengzhou) Note 1 1,373,925 2 57,526 Subsequent collection 559,312 -

Limited

Hongfujin Precision Industry (Shenzhen) Co., Ltd. WWW (Jincheng) Co., Ltd. Note 1 200,229 - 183,198 Subsequent collection 196,280 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Foxconn Precision Electronics (Taiyuan) Co., Ltd. Note 1 397,375 2 16,952 Subsequent collection - -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Futaihua Precision Electronics (Jiyuan) Limited Note 1 741,040 2 11,095 Subsequent collection 154,033 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Interface Technology (Chengdu) Co., Ltd. Note 1 101,304 5 21,502 Subsequent collection - -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Interface Optoelectronics (SZ) Co., Ltd Note 1 124,920 1 21,607 Subsequent collection 42,649 -

Hongfujin Precision Industry (Shenzhen) Co., Ltd. Fuzhun Precision (Shenzhen) Industry Co., Ltd Note 4 116,336 4 2,282 Subsequent collection 23,937 -

Fu Ding Precision Component (Shenzhen) Co., Ltd. Beyond Maximum Industrial Limited Note 1 1,439,760 24 - - 1,439,760 -

199


receivable doubtful



Champ Tech Optical (Foshan) Corporation Foxconn Technology Pte. Ltd. Note 4 $ 634,546 5 $ 392,871 Subsequent collection $ 516,947 $ -

Champ Tech Optical (Foshan) Corporation Fuyu Technology (Nanyang) Co., Ltd. Note 4 138,997 2 134,596 Subsequent collection - -

Champ Tech Optical (Foshan) Corporation Foxconn Technology Co., Ltd. Note 7 132,601 5 77,254 Subsequent collection 131,052 -

Fu Ding Electronical Technology (Jiashan) Co., Ltd. Futaihua Industrial (Shenzhen) Limited Note 1 1,060,772 4 - - 138,943 -

Fuhonyang Precision Industrial (Shenzhen) Co., MWM Co., Ltd. Note 1 1,550,134 17 - - - -

Ltd.

Kangzhun Electronic Technology (Kunshan) Co., Fu Ding Electronical Technology (Jiashan) Co., Ltd. Note 1 246,810 - - - 6,292 -

Ltd.

Kangzhun Electronic Technology (Kunshan) Co., Qunkang Precision Component (Kunshan) Co., Ltd. Note 1 116,933 2 10,299 Subsequent collection 2,085 -

Ltd.

Kangzhun Electronic Technology (Kunshan) Co., Tripleheads International Ltd. Note 1 496,611 - 137,772 Subsequent collection 135,268 -

Ltd.

Kangzhun Electronic Technology (Kunshan) Co., Fusing International Inc. Note 1 319,167 2 70,632 Subsequent collection - -

Fuxiang Precision Industrial (Kunshan) Co., Ltd. Smart Top International Ltd. Note 1 255,196 - 255,196 Subsequent collection - -

Ltd.

Foxconn (Kunshan) Computer Connector Co., Ltd. Foxconn Electronic Industrial Development Note 1 1,106,416 - 1,068,116 Subsequent collection 30,695 -

(Kunshan) Co., Ltd.

Foxconn (Kunshan) Computer Connector Co., Ltd. Success Rise Enterprise Limited Note 1 1,379,694 10 - - - -

Foxconn Electronic Industrial Development Foxconn (Kunshan) Computer Connector Co., Ltd. Note 1 3,309,438 3 - - 2,313,712 -

(Kunshan) Co., Ltd.

Qunkang Precision Component (Kunshan) Co., Ltd. Smart Top International Ltd. Note 1 2,201,885 - 596,003 Subsequent collection - -

Competition Team Technology Pte. Ltd. Futaihua Precision Electronics (Zhengzhou) Limited Note 1 254,238 2 - - - -

Competition Team Technology Pte. Ltd. Hongfujin Precision Electronics (Zhengzhou) Note 1 596,527 6 - - - -

Limited

Hightech Electronics Components Inc. Foxconn Image & Printing Product Pte. Ltd. Note 1 6,900,380 4 13,619 Subsequent collection 395,504 -

Hightech Electronics Components Inc. Fusing International Inc. Note 1 4,224,630 4 81,499 Subsequent collection 2,366,722 -

Hightech Electronics Components Inc. Competition Team Ireland Limited Note 1 3,864,411 6 15,591 Subsequent collection 452,759 -

Hightech Electronics Components Inc. Foxconn Japan Ltd. Note 1 140,984 10 66 Subsequent collection 1,903 -

Smart Top International Ltd. Hongye Precision Component (Kunshan) Co., Ltd. Note 1 189,151 1 118,298 Subsequent collection - -

Smart Top International Ltd. Competition Team Ireland Limited Note 1 1,994,615 2 528,048 Subsequent collection - -

Best Ever Industries Ltd. Futaihua Industrial (Shenzhen) Limited Note 1 634,037 5 - - - -

Best Ever Industries Ltd. Hongfujin Precision Electronics (Chengdu) Limited Note 1 401,847 7 - - - -

200


receivable doubtful



Best Ever Industries Ltd. Hongfujin Precision Electronics (Zhengzhou) Note 1 $ 1,362,843 6 $ - - $ - $ -

Limited

Best Leap Enterprises Limited Fusing International Inc. Note 1 1,009,145 3 - - 816,024 -

Best Leap Enterprises Limited Futaihua Industrial (Shenzhen) Limited Note 1 1,218,551 - 46,997 Subsequent collection 1,218,551 -

Skilltop Limited Foxconn Image & Printing Product Pte. Ltd. Note 1 1,340,788 12 41,657 Subsequent collection 290,400 -

Skilltop Limited Fuhuajie Industrial (Shenzhen) Limited Note 1 628,274 5 - - - -

Skilltop Limited Honfujin Precision Electronics (Chongqing) Co., Ltd. Note 1 199,399 3 - - 193,554 -

Skilltop Limited Fusing International Inc. Note 1 385,108 2 - - - -

Skilltop Limited Competition Team Ireland Limited Note 1 595,760 2 - - - -

Tripleheads International Ltd. Competition Team Ireland Limited Note 1 377,215 2 - - 305,243 -

Hongfutai Precision Electrons (Yantai) Co., Ltd. Universal Field International Limited Note 1 11,206,431 6 1,976,784 Subsequent collection 11,206,431 -

Hongfutai Precision Electrons (Yantai) Co., Ltd. Hongfujin Precision Industry (Yantai) Co., Ltd. Note 1 1,195,803 2 1,714 Subsequent collection 884,101 -

Foxconn CZ S.R.O. Foxconn RUS, LLC Note 1 133,665 5 - - 117,260 -

Foxconn CZ S.R.O. Foxconn TR Teknoloji San. Ltd. Sti. Note 1 338,972 2 194,852 Subsequent collection 5,834 -

Fujin Precision Industrial (Jincheng) Co., Ltd. Hongfujin Precision Electronics (Shenzhen) Co., Ltd. Note 1 127,276 4 - - - -

Fujin Precision Industrial (Jincheng) Co., Ltd. Futaihua Industrial (Shenzhen) Limited Note 1 808,655 5 140,977 Subsequent collection 16,223 -

Fujin Precision Industrial (Jincheng) Co., Ltd. Hongfujin Precision Electronics (Chengdu) Co., Ltd. Note 1 500,820 7 - - - -

Fujin Precision Industrial (Jincheng) Co., Ltd. Futaihua Precision Electronics (Zhengzhou) Limited Note 1 1,286,241 2 - - - -

Fujin Precision Industrial (Jincheng) Co., Ltd. Hongfujin Precision Electronics (Zhengzhou) Co., Note 1 8,510,137 2 - - - -

Ltd.

Fujin Precision Industrial (Jincheng) Co., Ltd. Fast Victor Limited Note 1 135,647 42 - - - -

Fujin Precision Industrial (Jincheng) Co., Ltd. WWW (Jincheng) Co., Ltd. Note 1 293,875 1 - - - -

Fujin Precision Industrial (Jincheng) Co., Ltd. MWM Co., LTD. Note 1 577,395 2 - - - -

Fujin Precision Industrial (Jincheng) Co., Ltd. Foxconn Precision Electronics (Taiyuan) Co., Ltd. Note 1 218,615 2 - - - -

Fujin Precision Industrial (Jincheng) Co., Ltd. Futaihua Precision Electronics (Jiyuan) Limited Note 1 2,271,853 3 1,177,277 Subsequent collection 329,932 -

Fujin Precision Industrial (Jincheng) Co., Ltd. Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Note 4 2,113,040 2 - - - -

Hongzhun Precision Tooling (Kunshan) Co., Ltd. Fu Ding Electronical Technology (Jiashan) Co., Ltd. Note 1 426,221 2 239,328 Subsequent collection 371,976 -

Hongzhun Precision Tooling (Kunshan) Co., Ltd. Kangzhun Electronic Technology (Kunshan) Co., Note 1 4,465,913 1 3,202,111 Subsequent collection 304,856 -

Ltd.

Hongzhun Precision Tooling (Kunshan) Co., Ltd. Foxconn (Kunshan) Computer Connector Co., Ltd. Note 1 306,797 4 164,097 Subsequent collection 82,152 -

Hongzhun Precision Tooling (Kunshan) Co., Ltd. Foxconn Electronic Industrial Development Note 1 870,557 - 847,849 Subsequent collection 7,796 -

(Kunshan) Co., Ltd.

201


receivable doubtful



Hongzhun Precision Tooling (Kunshan) Co., Ltd Hongfujin Precision Electronics (Chengdu) Limited Note 1 $ 216,215 3 $ 39,968 Subsequent collection $ 201,720 $ -

Jizhun Precision Industry (Huizhou) Co., Ltd. Hongfujin Precision Industry (Shenzhen) Co., Ltd. Note 1 511,480 6 16,307 Subsequent collection 321,003 -

Fuzhun Precision Tooling (Huaian) Co., Ltd. Fuyu Electronical Technology (Huaian) Co., Ltd. Note 1 743,467 1 131,533 Subsequent collection - -

Fuzhun Precision Tooling (Huaian) Co., Ltd. Huaian Fulitong Trading Co., Ltd. Note 1 383,858 2 74,177 Subsequent collection - -

Fuyu Electronical Technology (Huaian) Co., Ltd. Success Rise Enterprises Limited Note 1 3,224,509 6 - - - -

Hongfujin Precision Industrial (Wuhan) Co., Ltd. Top Step Enterprises Limited Note 1 7,243,984 14 - - 7,243,984 -

Hongfujin Precision Electrons (Yantai) Co., Ltd. Futaijing Precision Electronics (Beijing) Co., Ltd. Note 2 1,046,516 6 1,023,565 Subsequent collection 1,023,565 -

Hongfujin Precision Electrons (Yantai) Co., Ltd. Futaijing Precision Electrons (Yantai) Co., Ltd Note 2 2,406,492 2 643,943 Subsequent collection 643,943 -

Hongfujin Precision Electrons (Yantai) Co., Ltd. AMB Logistics Ltd. Note 1 872,992 2 812,888 Subsequent collection 812,888 -

Hongfujin Precision Electrons (Yantai) Co., Ltd. Competition Team Technology Pte. Ltd. Note 1 914,768 7 18,993 Subsequent collection 637,762 -

Hongfujin Precision Electrons (Yantai) Co., Ltd. Hongfutai Precision Electrons (Yantai) Co., Ltd Note 1 850,198 3 17,958 Subsequent collection 323,939 -

Hongfujin Precision Electrons (Yantai) Co., Ltd. Full Profit International Limited Note 1 254,515 4 169,353 Subsequent collection 146,818 -

Hongfujin Precision Electrons (Yantai) Co., Ltd. Universal Field International Limited Note 1 6,581,778 8 1,279,666 Subsequent collection 6,581,778 -

Hongfujin Precision Electrons (Yantai) Co., Ltd. YanTai FuHuaDa Precision Electronics Limited Note 1 3,085,985 3 477,001 Subsequent collection 1,477,042 -

Hongfujin Precision Electrons (Yantai) Co., Ltd. NanNing FuGui Precision Industrial Co., Ltd Note 1 126,927 2 50,109 Subsequent collection 119,468 -

Hongfujin Precision Electrons (Yantai) Co., Ltd. Foxconn Technology Co., Ltd Note 7 15,288,164 6 388,764 Subsequent collection 11,742,028 -

Falcon Precision Trading Limited Fusing International Inc. Note 1 2,180,795 2 - - - -

Falcon Precision Trading Limited Hongfujin Precision Electronics (Chengdu) Co., Ltd. Note 1 282,498 - 51 Subsequent collection 51 -

Universal Field International Limited Hongfutai Precision Electrons (Yantai) Co., Ltd. Note 1 156,972 - - - 131,518 -

Universal Field International Limited Hongfujin Precision Electrons (Yantai) Co., Ltd. Note 1 178,852 - 32,159 Subsequent collection 124,873 -

Top Step Enterprises Limited Hongfujin Precision Industry (Wuhan) Co., Ltd. Note 1 603,873 8 - - - -

Top Step Enterprises Limited Foxconn Image & Printing Product Pte. Ltd. Note 1 256,098 2 - - - -

Foxconn Technology CZ S. R. O. Innolux Corporation Ltd. Note 3 316,888 - 316,888 Subsequent collection 50,646 -


FuYu Energy Technology (Kunshan) Co., Ltd. Hongfujin Precision Industry (Wuhan) Co., Ltd. Note 1 268,752 2 - - 268,752 -

Fugion Material Technology (Shenzhen) Limited Fu Ding Precision Component (Shenzhen) Co., Ltd. Note 1 195,898 7 - - 191,458 -

Huaian Fulitong Trading Co., Ltd. Foxconn Electronic Industrial Development Note 1 192,997 3 35,407 Subsequent collection 58,501 -

(Kunshan) Co., Ltd.

Foxconn Image & Printing Product Pte. Ltd. Hongfujin Precision Industry (Chongqing) Co., Ltd. Note 1 186,355 1 86,994 Subsequent collection 152,151 -

Futaihua Industrial (Shenzhen) Limited Hongfujin Precision Industry (Shenzhen) Co., Ltd. Note 1 114,378 1 - - 31,576 -

Futaihua Industrial (Shenzhen) Limited Best Leap Enterprises Limited Note 1 131,860,729 3 - - 83,150,010 -

Futaihua Industrial (Shenzhen) Limited Fujin Precision Industrial (Jincheng) Co., Ltd. Note 1 3,643,963 1 - - 3,068,042 -

202


receivable doubtful



Futaihua Industrial (Shenzhen) Limited Hongfujin Precision Electronics (Chengdu) Limited Note 1 $ 3,952,654 2 $ - - $ - $ -

Futaihua Industrial (Shenzhen) Limited Futaihua Precision Electronics (Zhengzhou) Limited Note 1 1,102,065 1 - - 479,170 -

Futaihua Industrial (Shenzhen) Limited Hongfujin Precision Electronics (Zhenzhou) Limited Note 1 7,326,521 2 - - 4,136,110 -

Futaihua Industrial (Shenzhen) Limited Foxconn Precision Electronics (Taiyuan) Co., Ltd. Note 1 1,473,771 1 - - - -

Futaihua Industrial (Shenzhen) Limited Futaihua Precision Electronics (Jiyuan) Limited Note 1 1,937,113 1 - - 1,923,428 -

Futaihua Industrial (Shenzhen) Limited Fuhong Precision Component (Bac Giang) Limited Note 1 1,084,734 1 - - 256,554 -

Futaihua Industrial (Shenzhen) Limited Foxconn CMMSG Industria de Eletronicos Ltda. Note 1 1,127,182 2 - - 189,045 -

Futaihua Industrial (Shenzhen) Limited Hongfujin Precision Industry (Taiyuan) Co., Ltd. Note 4 140,282 2 - - 12,797 -

Fuhuajie Industrial (Shenzhen) Limited Skilltop Limited Note 1 2,683,902 1 148,574 Subsequent collection 1,223,714 -

Fuhuajie Industrial (Shenzhen) Limited Foxconn Image & Printing Product Pte. Ltd. Note 1 186,758 1 31,749 Subsequent collection - -

Fuhuajie Industrial (Shenzhen) Limited Hongfujin Precision Electronics (Chongqing) Co., Note 1 3,238,990 2 214,122 Subsequent collection 3,007,279 -

Ltd.

Hongfujin Precision Electronics (Chongqing) Co., Hightech Electronics Components Inc. Note 1 29,666,431 5 - - - -

Ltd.

Hongfujin Precision Electronics (Chongqing) Co., Fujun Precision Electronics (Chongqing) Co., Ltd. Note 1 2,161,370 2 - - - -

Ltd.

Foxconn Precision Electronics (Yan Tai) Co., Ltd YanTai FuHuaDa Precision Electronics Limited Note 1 169,201 7 - - 169,168 -

Chongqingshi Futaitong Logistics Limited Co., Ltd. Hongfujin Precision Electronics (Chongqing) Co., Note 1 163,850 3 - - - -

Ltd.

Hongfujin Precision Electronics (Tianjin) Co., Ltd. Profit New Limited Note 1 3,435,836 6 - - 3,382,358 -

Hongfujin Precision Electronics (Chengdu) Co., Falcon Precision Trading Limited Note 1 284,989 18 - - - -

Ltd.

Hongfujin Precision Electronics (Chengdu) Co., Futaihua Industrial (Shenzhen) Limited Note 1 4,540,794 7 2,603 Subsequent collection 2,603 -

Ltd.

Hongfujin Precision Electronics (Chengdu) Co., Hongfujin Precision Electronics (Chengdu) Co., Ltd. Note 1 1,311,037 4 215,039 Subsequent collection 551,322 -

Ltd.

Hongfujin Precision Electronics (Chengdu) Co., Interface Technology (Chengdu) Co., Ltd. Note 1 222,330 2 223,566 Subsequent collection - -

Ltd.

Fu Ding (ZhengZhou) Precision Industry Co., Ltd Fujin Precision Industrial (Jincheng) Co., Ltd. Note 1 118,767 2 - - - -

Fu Ding (ZhengZhou) Precision Industry Co., Ltd Hongfujin Precision Electronics (Zhengzhou) Note 1 177,392 2 - - 177,392 -

Limited

Fu Ding (ZhengZhou) Precision Industry Co., Ltd Futaihua Precision Electronics (Jiyuan) Limited Note 1 677,721 2 - - - -

203


receivable doubtful



Fu Ding (ZhengZhou) Precision Industry Co., Ltd Hon Fujin Precision Industry (Taiyuan) Co., Ltd. Note 4 $ 493,945 2 $ - - $ - $ -

Fujun Precision Electronics (Chongqing) Co., Ltd. Fuhuajie Industrial (Shenzhen) Limited Note 1 637,666 2 - - - -

YanTai FuHuaDa Precision Electronics Limited Universal Fiele International Limited Note 1 1,165,314 12 - - 1,165,314 -

YanTai FuHuaDa Precision Electronics Limited FuXun Tong Trading(Shenzhen) Co., Ltd. Note 1 216,195 2 - - - -

Anpinda Precision Industrial (Huizhou) Co., Ltd. Glorious Prospect Enterprises Ltd. Note 1 4,860,952 4 - - 3,548,400 -

Wang Hui Trading Co., Ltd. Kantron International Trading (Shenzhen) Co., Ltd. Note 7 113,753 5 - - - -

NanNing FuGui Precision Industrial Co., Ltd. Hongfujin Precision Industry (Shenzhen) Co., Ltd. Note 1 309,727 1 - - 2,182 -

NanNing FuGui Precision Industrial Co., Ltd. Mega Well Limited Note 1 6,269,967 1 311,133 Subsequent collection 4,021,733 -

Futaihua Precision Electronics (Zhengzhou) Futaihua Industrial (Shenzhen) Limited Note 1 5,254,452 2 - - - -

Limited

Futaihua Precision Electronics (Zhengzhou) Hongfujin Precision Electronics (Zhengzhou) Note 1 2,091,461 7 - - - -

Limited Limited

Futaihua Precision Electronics (Zhengzhou) Foxconn Precision Electronics (Taiyuan) Co., Ltd. Note 1 914,597 4 - - - -

Limited

Hongfujin Precision Electronics (Zhengzhou) Competition Team Technology Limited Note 1 126,198,176 6 - - 126,198,176 -

Limited

Hongfujin Precision Electronics (Zhengzhou) Futaihua Industrial (Shenzhen) Limited Note 1 6,418,015 2 - 3,221,926 -

Limited

Hongfujin Precision Electronics (Zhengzhou) Futaihua Precision Electronics (Zhengzhou) Limited Note 1 723,523 2 - - - -

Limited

Hongfujin Precision Electronics (Zhengzhou) Foxconn Precision Electronics (Taiyuan) Co., Ltd. Note 1 12,043,997 6 - - 12,043,997 -

Limited

ZhengZhou XunFeng Trading Co., Ltd. Futaihua Precision Electronics (Zhengzhou) Co., Ltd. Note 1 496,703 2 - - 200,678 -

ZhengZhou XunFeng Trading Co., Ltd. Hongfujin Precision Electronics (Zhengzhou) Note 1 2,010,346 9 - - 1,283,736 -

Limited

Fusing International Inc. Innolux Corporation Ltd. Note 2 100,054 15 100,054 Subsequent collection 100,054 -

ChengDu XunFeng Trading Co., Ltd. Hongfujin Precision Electronics (Chengdu) Limited Note 1 1,160,881 5 12,500 Subsequent collection 80,753 -

HongZhaoDa Integrated Innovative Service Smart Top International Ltd. Note 1 114,887 14 114,887 Subsequent collection 114,887 -

(Kunshan) Co., Ltd.

Competition Team Ireland Limited Honfujin Precision Electronics (Chongqing) Co., Ltd. Note 1 3,316,751 6 504,133 Subsequent collection 2,186,341 -

Competition Team Ireland Limited Fusing International Inc. Note 1 329,013 8 - - 163,292 -

Competition Team Ireland Limited Innocom Technology (Chongqing) Co., Ltd. Note 2 275,733 16 69,093 Subsequent collection 142,948 -

204


receivable doubtful



WWW (Jincheng) Co., Ltd. Hongfujin Precision Industry (Shenzhen) Co., Ltd. Note 1 $ 242,188 1 $ - - $ - $ -

WWW (Jincheng) Co., Ltd. Fuhonyang Precision Industrial (Shenzhen) Co., Ltd. Note 1 341,383 2 - - - -

Fortune Co., Ltd. Best Ever Industries Ltd. Note 1 146,993 2 - - 133,553 -

MWM Co., Ltd. Best Ever Industries Ltd. Note 1 2,041,392 3 - - - -

Foxconn Precision Electronics (Taiyuan) Co., Ltd. Futaihua Industrial (Shenzhen) Limited Note 1 6,779,289 5 6,779,289 Subsequent collection 6,527,095 -

Foxconn Precision Electronics (Taiyuan) Co., Ltd. Hongfujin Precision Electronics (Zhengzhou) Note 1 5,672,591 3 - Subsequent collection 5,617,632 -

Limited

Foxconn Precision Electronics (Taiyuan) Co., Ltd. Fast Victor Limited Note 1 26,224,112 7 - Subsequent collection 17,806,048 -

Foxconn Precision Electronics (Taiyuan) Co., Ltd. Foxconn CMMSG Industria de Eletronicos Ltda. Note 1 1,307,447 2 861,788 Subsequent collection 254,653 -

Futaihua Precision Electronics (Jiyuan) Limited Fujin Precision Industrial (Jincheng) Co., Ltd. Note 1 338,551 2 - - - -

Futaihua Precision Electronics (Jiyuan) Limited Hongfujin Precision Electronics (Zhengzhou) Note 1 4,668,016 6 - - - -

Limited

Ambit Microsystems Corporation Limited Ambit Microsystems (Zhong shan) Corporation Note 1 604,953 2 - - 392,620 -

Innocom Technology (Chongqing) Co., Ltd. Fujun Precision Electronics (Chongqing) Co., Ltd. Note 1 282,847 4 - - - -

Foxconn Singapore Pte. Ltd. Foxconn TR Teknoloji San. Ltd. Sti. Note 1 361,939 10 83,548 Subsequent collection 360,193 -

Premier Image Technology (China) Ltd. Hongfujin Precision Electrons (Yantai) Co., Ltd. Note 1 575,733 3 36,626 Subsequent collection 277,104 -

Premier Image Technology (China) Ltd. Premier Image Technology (HK) Ltd. Note 1 1,079,426 - 1,079,426 Subsequent collection - -

Premier Image Technology (China) Ltd. Jumbo Rise Management Limited Note 1 4,996,287 5 - - - -

Foxconn CMMSG Industria de Eletronicos Ltda. Futaihua Industrial (Shenzhen) Limited Note 1 125,154 2 - - - -

Note 1: The investee and the counterparty are both indirect subsidiaries of the Company.

Note 2: The counterparty of the investee is an indirect subsidiary of Innolux.

Note 3: The Company’s chairman is a major shareholder of the counterparty.

Note 4: The counterparty of the investee is an indirect subsidiary of FTC.

Note 5: The counterparty of the investee is an investee of the Company accounted for under the equity method.

Note 6: The counterparty of the investee is an indirect subsidiary of Zhen Ding Technology Holding Limited.

Note 7: The counterparty of the investee is an indirect subsidiary of PIIC.

205

10) Information on derivative transactions: a) As of December 31, 2012, the information on derivative financial instruments of investee companies is as follows:

b) Additional disclosure:

As of December 31, 2012, the Company recognized net gain of $62,957 on derivative transactions (including net loss of $9,812 on valuation of financial assets and liabilities on December 31, 2012).

Derivative financial instrument

Contract amount

(in thousands) Maturity Book Value Fair Value

Forward exchange contracts:

SELL USD/BUY KRW USD 1,800 2013.02.26~2013.05.23 $ 288 $ 288

KRW 1,949,780

SELL USD/BUY MXN USD 66,950 2013.01.03~2013.03.21 ( 31,419) ( 31,419)

MXN 858,763

SELL USD/BUY RMB USD 250,000 2013.08.05~2013.08.15 49,946 49,946

RMB 1,582,660

SELL EUR/BUY USD EUR 6,600 2013.01.10~2013.03.21 ( 5,474) ( 5,474)

USD 8,555

BUY EUR/ SELL INR EUR 68 2013.01.04 35 35

INR 4,867

BUY JPY / SELL BRL JPY 5,430 2013.02.14~2013.02.21 ( 285) ( 285)

BRL 150

BUY JPY/ SELL INR JPY 1,958 2013.01.04~2013.01.18 ( 23) ( 23)

INR 1,295

BUY USD / SELL BRL USD 5,100 2013.01.03~2013.02.28 ( 3,297) ( 3,297)

BRL 10,722

BUY USD/SELL INR USD 4,937 2013.01.01~2013.3.22 451 451

INR 271,957

BUY USD/SELL RMB USD 210,372 2013.01.22~2013.03.20

( 20,034) ( 20,034)

RMB 1,317,491

206

(3)Disclosure of information on indirect investments in Mainland China

1)Information on investments in Mainland China

Name of investee in

Mainland China Main activities of investee Capital

Method of

investment

Balance of

amount remitted

from Taiwan

as of Jan. 1, 2012

Transactions during

Jan. 1 ~Dec. 31, 2012

Balance of

amount remitted

from Taiwan as of

Dec. 31, 2012

Ownership

percentage held

by the Company

(Direct/indirect)

Investment income

(loss) recognized

during Jan. 1~

Dec. 31, 2012

Book value of

investment as of

Dec. 31, 2012

Profit remitted to

Taiwan during

Jan. 1~

Dec. 31, 2012

Note

Remittance

out

Remittance

in

Foxconn Precision

Component (Beijing)

Co., Ltd.

Manufacturing of

telecommunication cases

$ 1,997,952 Note 1 (2) $ - $ - $ - $ - 69.49 $ 472,137 $ 16,591,093 $ - Note 2

Fujin Precision

Industry (Shenzhen)

Co., Ltd.

Manufacturing and processing of

computer cases, computer

peripherals, etc.

1,523,148 Note 1

(2)&(3)

145,200 - - 145,200 100 21,116 2,330,151 126,614 Note 2

Shenzhen Fu Tai Hong

Precision Industry

Co., Ltd.

Manufacturing and marketing of

computer cases, micro ribbon

connectors for terminals, etc.

5,184,221 Note 1 (2) - - - - 69.49 ( 2,472,474) 10,593,350 - Note 2

Foxconn Precision

Component


Manufacturing of connectors,

micro ribbon connectors for

terminals, micro-computers,

mouse cables, monitor cables,

etc.

1,729,040 Note 1

(2)&(3)

87,120 - - 87,120 100 13,393 1,971,711 - Note 2

Honxun Electrical

Industry (Hangzhou)

Co., Ltd.




3,682,272 Note 1 (2) - - - - 69.49 162,435 5,984,417 - Note 2

Hongzhun Precision

Tooling (Shenzhen)

Co., Ltd.


computer cases and computer

peripherals, etc.

435,600 Note 1 (2) - - - - 100 7,753 641,030 - Note 2

Foxconn Computer

Connectors

(Kunshan) Co., Ltd.

Manufacturing of connectors,


terminals, micro-computers,

mouse cables, monitor cables,

etc.

1,295,184 Note 1

(2)&(3)

145,200 - - 145,200 100 590,130 5,410,017 207,346 Note 2

Fu Ding Precision

Component



connectors, micro ribbon


1,393,920 Note 1 (2) - - - - 100 771,670 4,769,598 - Note 2

Hong Fujin Precision

Industrial (Shenzhen)

Co., Ltd.


computer case and computer

peripherals, etc.

4,907,760 Note 1 (2) - - - - 100 3,679,317 63,333,051 1,016,981 Note 2

207

Name of investee in


Method of

investment

Balance of

amount remitted

from Taiwan

as of Jan. 1, 2012

Transactions during

Jan. 1 ~Dec. 31, 2012

Balance of

amount remitted

from Taiwan as of

Dec. 31, 2012

Ownership

percentage held

by the Company

(Direct/indirect)

Investment income

(loss) recognized

during Jan. 1~

Dec. 31, 2012

Book value of

investment as of

Dec. 31, 2012

Profit remitted to

Taiwan during

Jan. 1~

Dec. 31, 2012

Note

Remittance

out

Remittance

in

Foxconn Electronic

Industrial

Development

(Kunshan) Co., Ltd.




$ 1,974,720 Note 1 (2) $ - $ - $ - $ - 100 $ 172,372 $ 3,553,732 $ - Note 2

Futaije Science &

Technology

Development


Manufacturing and design

of computer components

keyboards, etc.

348,480 Note 1 (2) - - - - 100 9,404 555,104 - Note 2

Fuhon Precision

Component





333,960 Note 1 (2) - - - - 100 16,598 1,310,359 63,017 Note 2

Hongzhun Precision

Tooling (Kunshan)

Co., Ltd.


computer cases

2,497,440 Note 1 (2) - - - - 100 1,106,086 12,636,692 78,989 Note 2

Kangzhun Precision

Tooling (Kunshan)

Co., Ltd.


computer components,

computer peripherals, etc.

4,065,600 Note 1 (2) 842,160 - - 842,160 100 ( 909,550) 3,184,403 - Note 2

Futaikang Precision

Computer (Shenzhen)

Co., Ltd.




166,980 Note 1 (2) - - - - 100 1,767 256,622 - Note 2

Qunkang Precision

Component

(Kunshan) Co., Ltd.


switching hub and router cases

174,240 Note 1 (2) - - - - 100 ( 139,037) 95,574 - Note 2

Fujin Precision

Industrial (Jincheng)

Co., Ltd.


computer cases

8,799,120 Note 1 (2) 1,481,040 2,904,000 - 4,385,040 100 3,409,727 14,767,933 - Note 2

Honyeh Precision

Component

(Kunshan) Co., Ltd.


computer components

168,432 Note 1 (2) - - - - 100 28,787 437,317 42,108 Note 2

Fuhonyang Precision

Industrial (Shenzhen)

Co., Ltd.



connectors for terminals,

computer cases, etc.

1,248,720 Note 1 (2) 667,920 580,800 - 1,248,720 100 34,864 1,834,475 - Note 2

Foxway Precision Manufacturing and marketing of 363,000 Note 1 (2) - - - - 100 35,949 928,069 - Note 2

208

Name of investee in


Method of

investment

Balance of

amount remitted

from Taiwan

as of Jan. 1, 2012

Transactions during

Jan. 1 ~Dec. 31, 2012

Balance of

amount remitted

from Taiwan as of

Dec. 31, 2012

Ownership

percentage held

by the Company

(Direct/indirect)

Investment income

(loss) recognized

during Jan. 1~

Dec. 31, 2012

Book value of

investment as of

Dec. 31, 2012

Profit remitted to

Taiwan during

Jan. 1~

Dec. 31, 2012

Note

Remittance

out

Remittance

in

Industry (Hangzhou)

Co., Ltd.

router components

Hongfutai Precision

Electrons (Yantai)

Co., Ltd.


auto digital signal process

device and components

$ 4,297,920 Note 1 (2) $ - $ - $ - $ - 100 ($ 3,322,095) $ 11,576,853 $ - Note 2

Ambit Microsystems

(Zhong shan)

Corporation


power supplies

1,486,848 Note 1

(2)&(3)

711,480 - - 711,480 100 1,084,254 2,688,314 - Note 2

Ambit Microsystems



power supplies, modems and

ADSL devices

2,131,536 Note 1

(2)&(3)

1,335,840 - - 1,335,840 100 270,787 7,784,837 - Note 2

Amlink (Shanghai) Ltd. Manufacturing and marketing of

power supplies, modems and

ADSL devices

580,800 Note 1

(2)&(3)

203,280 - - 203,280 44.81 8,210 527,726 - Note 2

Fuxian Precision

Industry (Kunshan)

Co., Ltd.


computer case

4,065,600 Note 1 (2) - - - - 100 148,509 5,498,996 - Note 2

Dong Guan Hong Song

Precision Component

Co., Ltd.


keypad and computer

Components

290,400 Note 1 (2) - - - - 100 78,418 372,854 - Note 2

Foxconn (Tianjin)

Precision Industry

Co., Ltd.


wireless phone and components

1,533,312 Note 1 (2) - - - - 69.49 ( 1,155,338) ( 613,254) - Note 2

Fugion Material

Technology

(Shenzhen) Limited


potassium aurous cyanide

107,448 Note 1 (2) - - - - 70 22,893 126,599 - Note 2

Antec Automotive

Electric System

(Kunshan) Co., Ltd.


automobile

276,025 Note 1 (2) 145,200 - - 145,200 100 ( 19,919) 114,019 - Note 2

Liuzhou Antec

Fangshen Electric

System Co., Ltd.


automobile

- Note 1 (2) - - - - - - - - Note 2

Foxconn Precision

Electronics (Yantai)

Co., Ltd.


telecommunication peripherals

1,190,640 Note 1 (2) 952,158 - - 952,158 100 ( 259,452) 1,144,517 - Note 2

209

Name of investee in


Method of

investment

Balance of

amount remitted

from Taiwan

as of Jan. 1, 2012

Transactions during

Jan. 1 ~Dec. 31, 2012

Balance of

amount remitted

from Taiwan as of

Dec. 31, 2012

Ownership

percentage held

by the Company

(Direct/indirect)

Investment income

(loss) recognized

during Jan. 1~

Dec. 31, 2012

Book value of

investment as of

Dec. 31, 2012

Profit remitted to

Taiwan during

Jan. 1~

Dec. 31, 2012

Note

Remittance

out

Remittance

in

Premier Image

Technology (China)

Limited

Manufacturing and sale of

cameras.

4,407,228 Note 1

(2)&(3)

18,876 - - 18,876 99.96 ( 64,643) 11,730,478 - Note 2

Fu Zhun Precision

Tooling (Huai an)

Co., Ltd.

Designing, manufacturing and

marketing of computer

components

$ 2,880,768 Note 1 (2) $ - $ - $ - $ - 100 $ 227,932 $ 4,933,013 $ - Note 2

Fu Yu Electronical

Technology (Huaian)

Co., Ltd.

Designing and marketing of

connectors and cables

7,730,448 Note 1 (2) 3,484,800 1,452,000 - 4,936,800 100 483,787 9,637,541 - Note 2

CJ Electric System Co.,

Ltd.


automobile

63,888 Note 1 (2) - - - - 50 23,550 158,955 - Note 2

Foxconn Precision

Electronics (Taiyuan)

Co., Ltd.



terminals, etc.

6,693,720 Note 1 (2) 2,087,818 - - 2,087,818 100 5,487,171 10,905,517 - Note 2

Jizhun Precision

Industry (Huizhou)

Co., Ltd.


computer cases, router,

notebook, etc.

958,320 Note 1 (2) - - - - 100 ( 698,092) 326,414 - Note 2

Fukui Precision

Component



electronics devices and cable

5,839,276 Note 1 (2) - - - - 41.36 1,336,956 4,947,454 - Note 2

Futaijing Precision

Electronics (Beijing)

Co., Ltd.




2,178,000 Note 1 (2) - - - - 69.49 ( 33,366) 1,436,304 - Note 2

Foxconn Precision

Electronics



cell phone and components

8,581,320 Note 1 (2) - - - - 69.49 ( 1,843,381) 10,585,987 - Note 2

Foxconn Good Field

Precision Industry

(Dalian) Co., Ltd.


electronics calculator and

components

67,373 Note 1 (2) - - - - 40 ( 2,845) 35,476 - Note 2

Fuyu Energy

Electronically

Technology

(Kunshan) Co., Ltd.



terminals

580,800 Note 1 (2) - - - - 100 ( 26,026) 943,361 - Note 2

Hongfujin Precision

Industrial (Wuhan)


computer and digital camera

8,502,912 Note 1 (2) 4,149,816 1,452,000 - 5,601,816 100 1,343,531 11,960,214 - Note 2

210

Name of investee in


Method of

investment

Balance of

amount remitted

from Taiwan

as of Jan. 1, 2012

Transactions during

Jan. 1 ~Dec. 31, 2012

Balance of

amount remitted

from Taiwan as of

Dec. 31, 2012

Ownership

percentage held

by the Company

(Direct/indirect)

Investment income

(loss) recognized

during Jan. 1~

Dec. 31, 2012

Book value of

investment as of

Dec. 31, 2012

Profit remitted to

Taiwan during

Jan. 1~

Dec. 31, 2012

Note

Remittance

out

Remittance

in

Co., Ltd. components

Amworld

Microsystems

(Shanghai) Ltd.


switch supply and modem

493,680 Note 1 (2) - - - - 100 11,757 630,235 - Note 2

Hongqunsheng

Precision Electronics

(Yingkou) Co., Ltd.


printed circuit board

$ 1,928,231 Note 1 (2) $ - $ - $ - $ - 41.36 ($ 93,157) $ 388,308 $ - Note 2

Hongqisheng Precision

Electronics

(Qinhuangdao) Co.,

Ltd.


electronics calculator and

component

5,300,528 Note 1 (2) - - - - 41.36 258,049 2,543,516 - Note 2

Hongfujin Precision

Electrons (Yantai)

Co., Ltd.



computer

2,056,032 Note 1 (2) - - - - 100 4,135,620 33,339,308 - Note 2

Foxconn (Nanjing)

Communications Co.,

Ltd.


handset and components

508,200 Note 1 (2) - - - - 69.49 68,417 268,592 - Note 2

Foxconn (Nanjing)

Software Co., Ltd.

Computer software, hardware

and other digital product

929,280 Note 1 (2) - - - - 100 ( 32,159) 675,937 - Note 2

Honghuasheng


(YanTai) Co., Ltd.

Print circuit board products

manufacturing and sales

- Note 1 (2) - - - - - - - - Note 4

Fulin Electronical

Technology




computer

1,582,680 Note 1 (2) - - - - 100 48,609 1,499,616 - Note 5

Fuyang Electronical

Technology




computer

1,469,424 Note 1 (2) - - - - 100 18,271 1,605,156 - Note 5

Fu Tai Kang

Electronics

Development

(YanTai) Ltd.

Marketing of computer chassis

and metal stamping parts

871,200 Note 1 (2) - - - - 100 21,666 1,138,544 - Note 2

Foxconn (Shenyang)

precision Industry

Co., Ltd.

Numeric control machine tool

manufacturing

1,449,096 Note 1 (2) - - - - 69.23 ( 33,694) 1,192,644 - Note 2

211

Name of investee in


Method of

investment

Balance of

amount remitted

from Taiwan

as of Jan. 1, 2012

Transactions during

Jan. 1 ~Dec. 31, 2012

Balance of

amount remitted

from Taiwan as of

Dec. 31, 2012

Ownership

percentage held

by the Company

(Direct/indirect)

Investment income

(loss) recognized

during Jan. 1~

Dec. 31, 2012

Book value of

investment as of

Dec. 31, 2012

Profit remitted to

Taiwan during

Jan. 1~

Dec. 31, 2012

Note

Remittance

out

Remittance

in

Hong Heng Sheng

Electronical

Technology (Huaian)

Co., Ltd.

Print circuit board product

manufacturing and sales

4,318,282 Note 1 (2) - - - - 41.36 ( 155,656) 1,651,119 - Note 2

Alibaba (China)


Providing software and

technology services

$ - Note 1 (2) $ - $ - $ - $ - - $ - $ - $ - Note 6

Alibaba (China)

Software Co., Ltd.


technology services

- Note 1 (2) - - - - - - - - Note 6

Alibaba (Shanghai)



technology services

- Note 1 (2) - - - - - - - - Note 6

Beijing Sinya Online

Information



technology services

- Note 1 (2) - - - - - - - - Note 6

Hongfuqiang Precision

Electronics (Yingkou)

Co., Ltd.



computer

72,600 Note 1 (2) - - - - 100 - 79,944 - Note 2

Fu Ding Electronical

Technology (Jiashan)

Co., Ltd.



computer

6,127,440 Note 1 (2) 3,920,400 2,207,040 - 6,127,440 100 2,578,949 10,040,840 - Note 2

Fuhuajie Industrial

(Shenzhen) Limited



computer

3,339,600 Note 1 (2) 3,339,600 - - 3,339,600 100 ( 2,385,074) 800,799 - Note 2

GDS Software


Computer software, hardware

and other digital product

290,400 Note 1 (2) - 290,400 - 290,400 76.92 5,630 270,662 - Note 2

Futaihua Industrial




computer

10,744,800 Note 1 (2) 9,292,800 1,452,000 - 10,744,800 100 23,259,305 72,427,816 - Note 2

Dong Guan Eson

Precision Tooling Co.,

Ltd.


telecommunication cases

215,186 Note 1 (2) - - - - 28.81 6,425 89,767 - Note 2

Kunshan Eson

Precision Engineering

Co., Ltd.


electronic components

871,490 Note 1 (2) - - - - 28.81 26,368 506,948 - Note 2

Wuxi XinGuan Metal Manufacturing and marketing of 406,560 Note 1 (2) - - - - 28.81 456 87,307 - Note 2

212

Name of investee in


Method of

investment

Balance of

amount remitted

from Taiwan

as of Jan. 1, 2012

Transactions during

Jan. 1 ~Dec. 31, 2012

Balance of

amount remitted

from Taiwan as of

Dec. 31, 2012

Ownership

percentage held

by the Company

(Direct/indirect)

Investment income

(loss) recognized

during Jan. 1~

Dec. 31, 2012

Book value of

investment as of

Dec. 31, 2012

Profit remitted to

Taiwan during

Jan. 1~

Dec. 31, 2012

Note

Remittance

out

Remittance

in

Science &


plastic mould

Kunshan Eson

Technology Inc.



computer

290,400 Note 1 (2) - - - - 9.51 790 29,281 - Note 2

Yantai Jiray Electronic



monitoring device

$ 149,846 Note 1 (2) $ - $ - $ - $ - 18.73 ($ 5,002) $ 52,686 $ - Note 2

Yantai Zheng Yi

Precision Electronic

Co., Ltd.


monitoring device

63,888 Note 1 (2) - - - - 28.81 ( 3,503) 10,443 - Note 2

Guangzhou OED

Technologies Co.,

Ltd.


mould and tooling

209,733 Note 1 (2) - - - - 5.76 ( 2,969) 11,314 - Note 2

MediaMarkt (Shanghai)

Commercial &

Trading Company

Limited

E-book key material and

components manufacturing and

sales

5,808,000 Note 1 (2) - - - - 25 ( 1,344,427) - - Note 2

Hongfujin Precision

Electronics



computer chassis and metal

stamping parts

5,536,476 Note 1 (2) 5,536,476 - - 5,536,476 100 ( 752,311) 3,756,991 - Note 2

System Integration

Electronics

(Hangzhou)Co., Ltd.


electronic components,

network communication

equipment, high-end routers

and high-end switches

798,600 Note 1 (2) 837,795 - - 837,795 100 137,422 1,291,116 - Note 2

Champ Tech Optical

(Foshan) Corporation


unassembled Optical

components

1,355,297 Note 1 (2) 1,358,503 194,859 - 1,553,362 100 151,017 2,009,231 - Note 2

Innovation (Beijing)

Software

Development Co., Ltd

Design and publish of computer

software

- Note 1 (2) - - - - - - - - Note 7

MediaMarkt (Shanghai)

Consulting Service

Co., Ltd.

Management Consulting

Services

- Note 1 (2) - - - - - - - - Note 8

213

Name of investee in


Method of

investment

Balance of

amount remitted

from Taiwan

as of Jan. 1, 2012

Transactions during

Jan. 1 ~Dec. 31, 2012

Balance of

amount remitted

from Taiwan as of

Dec. 31, 2012

Ownership

percentage held

by the Company

(Direct/indirect)

Investment income

(loss) recognized

during Jan. 1~

Dec. 31, 2012

Book value of

investment as of

Dec. 31, 2012

Profit remitted to

Taiwan during

Jan. 1~

Dec. 31, 2012

Note

Remittance

out

Remittance

in

Spreadcomm

Technology Corp.

Developing of computer and

communications software, and

technical services

220,704 Note 1 (2) - - - - 69.49 ( 54,374) 38,502 - Note 2

Futaihua Precision

Electronics



cell phone

2,904,000 Note 1 (2) 987,360 - - 987,360 100 3,129,506 6,188,303 - Note 2

Hongfujin Precision

Electronics (Tianjin)

Co., Ltd.


server

$ 1,974,720 Note 1 (2) $ 1,974,720 $ - $ - $ 1,974,720 100 ($ 1,279,420) $ 417,229 $ - Note 2

Hongfujin Precision

Electronics



cell phone and components

14,520,000 Note 1 (2) 2,904,000 2,904,000 - 5,808,000 100 11,453,330 28,477,994 - Note 2

Hongfujin Precision

Electronics (Chengdu)

Co., Ltd.


tablet PC

10,164,000 Note 1 (2) 2,904,000 2,904,000 - 5,808,000 100 5,376,985 19,743,016 - Note 2

Fuding Precision

Industrial



new electronic components

1,161,600 Note 1 (2) 290,400 - - 290,400 100 ( 159,187) 353,614 - Note 2

YanTai FuHuaDa


Co., Ltd.


new electronic components

290,400 Note 1 (2) 290,400 - - 290,400 100 45,987 531,019 - Note 2

Fujun Precision

Electronics



switches and routers

435,600 Note 1 (2) 435,600 - - 435,600 100 ( 116,095) 325,811 - Note 2

Futaihua Precision

Electronics (Chengdu)

Co., Ltd.


compression molding plastic

injection mold and metal

1,335,840 Note 1 (2) 348,480 987,360 - 1,335,840 100 354,390 1,644,377 - Note 2

Anpinda Precision

Industrial (Huizhou)

Co., Ltd.



computer

1,452,000 Note 1 (2) 1,161,600 - - 1,161,600 100 1,123 1,302,391 - Note 2

NanNing FuGui

Precision Industrial

Co., Ltd


network communication

equipment

1,452,000 Note 1 (2) 1,234,200 - - 1,234,200 100 399,269 1,639,976 - Note 2

NanNing Fu Tai Hong Manufacturing and marketing of 1,452,000 Note 1 (2) - - - - 69.49 12,045 995,301 - Note 2

214

Name of investee in


Method of

investment

Balance of

amount remitted

from Taiwan

as of Jan. 1, 2012

Transactions during

Jan. 1 ~Dec. 31, 2012

Balance of

amount remitted

from Taiwan as of

Dec. 31, 2012

Ownership

percentage held

by the Company

(Direct/indirect)

Investment income

(loss) recognized

during Jan. 1~

Dec. 31, 2012

Book value of

investment as of

Dec. 31, 2012

Profit remitted to

Taiwan during

Jan. 1~

Dec. 31, 2012

Note

Remittance

out

Remittance

in

Precision Industry

Co., Ltd

cell phone

WWW (Jincheng) Co.,

Ltd.


lens module

754,603 Note 1 (2) 464,640 - - 464,640 76.85 ( 13,650) 704,721 - Note 2

UER Technology

(Shenzhen)

Corporation


lithium Battery

- Note 1 (2) - - - - - - - - Note 9

Tianjin

Funayuanchuang



liquid crystal display

components

$ 784,080 Note 1 (2) $ - $ 493,680 $ - $ 493,680 62.96 ($ 38,747) $ 416,210 $ - Note 2

FuYu Energy

Technology (Funing)

Co., Ltd.

Engaged in the production and

marketing of operating solar

energy battery business.

- Note 1 (2) - - - - - - - - Note 10

Futaihua Precision

Electronics (Jiyuan)

Limited

Engaged of wireless handsets of

wired telephones, cellular

networks or other wireless IP

telephone

2,904,000 Note 1 (2) - 726,000 - 726,000 100 1,706,125 4,640,323 - Note 2

Hongfujin Precision

Industry (Loyang)

Co., Ltd.

Engaged in the operation of

automated equipment,

multipurpose industrial robots,

the equipment enclosure sheet

metal production and

marketing business

- Note 1 (2) - - - - - - - - Note 11

Futaijing Precision

Electronics (Yantai)

Co., Ltd.


handset component product

580,800 Note 1 (2) - - - - 69.49 5,873 415,879 - Note 2

Foxconn (Tianjin)


A set of parts of the GSM digital

handheld wireless phones,

GSM, CDMA and other

CDMA handheld wireless

telephones

- Note 1 (2) - - - - - - - - Note 12

Zhong Zhun Precision

Industries (Luoyang)

Co., Ltd.

Reducer、Other transmission

shafts and cranks

- Note 1 (2) - - - - - - - - Note 13

215

Name of investee in


Method of

investment

Balance of

amount remitted

from Taiwan

as of Jan. 1, 2012

Transactions during

Jan. 1 ~Dec. 31, 2012

Balance of

amount remitted

from Taiwan as of

Dec. 31, 2012

Ownership

percentage held

by the Company

(Direct/indirect)

Investment income

(loss) recognized

during Jan. 1~

Dec. 31, 2012

Book value of

investment as of

Dec. 31, 2012

Profit remitted to

Taiwan during

Jan. 1~

Dec. 31, 2012

Note

Remittance

out

Remittance

in

Hongfutai Precision

Industry (Hen Yang)

Co., Ltd.

Work holders 1,103,520 Note 1 (3) - 1,103,520 - 1,103,520 100 ( 1,491) 1,112,707 - Note 2

Innocom Technology

(Chongqing) Co.,

Ltd.

LCD related products, modules,

components and systems

manufacture

87,120 Note 1 (2) - 115,404 - 115,404 100 - 190,277 - Note 2

Funeng Energy

Technology Service

(Nanyang) Co., Ltd.

Electromechanical

telecommunications and circuit

equipment installation.

- Note 1 (2) - - - - - - - - Note 14

Note 1: The methods of remittance of investments to mainland China are as follows:

(1) Company funds are remitted from Taiwan through an investee company located outside of Taiwan and mainland China.

(2) Investee company established by the Company and located outside of Taiwan and mainland China remits its own funds directly to the investee companies located in mainland China. (3) Investee company located outside of Taiwan and mainland China remits its own funds directly to the investee companies located in mainland China.

(4) Directly investing in companies in mainland China.

(5) Others.

Note 2: Investment income or losses recognized during 2012 were based on the investee’s audited financial statements.

Note 3: The shares of Liuzhou Antec Fangshen Electric System Co., Ltd. have been sold out on February, 2012. As of December 31, 2012, the funds have not been remitted back.

Note 4: During the year ended December 31, 2012, the shares of Honghuasheng Precision Electronic (Yantai) Co., Ltd. had been transferred to Pan International Industrial Co., Ltd.

Note 5: The Company was approved by Investment Commission, MOEA of the merger of Fulin Electronical Technology (Changshu) Co., Ltd. and Fuyang Electronical Technology (Changshu) Co., Ltd. which is surviving entity. As of

December 31, 2012, the merger has not been completed.

Note 6: The Company held indirectly ownership of the Mainland China subsidiaries of Alibaba (China) Technology Co., Ltd., Alibaba (China) Software Co., Ltd., Alibaba (Shanghai) Technology Co., Ltd., and Beijing Sinya Online

Information Technology Co., Ltd., which have been sold out on June, 2012.

Note 7: The Company held indirectly 6.75% ownership of the Innovation Work Limited, and the investment amount of the Company approved by the Investment Commission of the Ministry of Economic Affairs was US$2,600,000.

Note 8: The Company was approved by Investment Commission, MOEA of an investment of US$ 8,750,000 in MediaMarkt (Shanghai) Consulting Service Co., Ltd.. As of December 31, 2012, the funds have not been remitted.

Note 9: The Company was approved by Investment Commission, MOEA of an investment in UER Technology (Chengdu) Corporation, which has been rescinded on February 13, 2012.

The Company was approved by Investment Commission, MOEA of an investment of US$ 18,000,000 in UER Technology (Shenzhen) Corporation, which has not yet been established as of December 31, 2012.

Note 10: The Company was approved by Investment Commission, MOEA of an investment of US$ 30,000,000 in FuYu Energy Technology (Funing) Co., Ltd., which has not yet been established as of December 31, 2012.

Note 11: The Company was approved by Investment Commission, MOEA of an investment of US$ 17,500,000 in Hongfujin Precision Industry (Loyang) Co., Ltd., which has not yet been established as of December 31, 2012.

Note 12: The Company was approved by Investment Commission, MOEA of an investment in Foxconn (Tian Jin) Technology Co., Ltd., which has been rescinded on September 19, 2012.

Note 13: The Company was approved by Investment Commission, MOEA of an investment of US$ 7,320,000 in Zhong Zhun Precision Industries (Luoyang) Co., Ltd., which has not yet been established as of December 31, 2012.

Name of Company

Accumulated amount wired

out from Taiwan to mainland

China as of December 31, 2012

Investment amount

approved by FIC of MOEA

Ceiling of investment

amount of the Company

Hon Hai Precision Industry Co., Ltd. $ 73,505,945 $ 174,016,782 $ -

216

Note 14: The Company was approved by Investment Commission, MOEA of an investment of US$ 35,000,000 in Funeng Energy Technology Service (Nanyang) Co., Ltd.. As of December 31, 2012, the funds have not been remitted.

Note 15: The Company was approved by Investment Commission, MOEA of an investment of US$ 3,000,000 in Guangxuhui Technology (Shenzhen) Co., Ltd., which had been liquidated in 2005.

Note 16: The Company was approved by Investment Commission, MOEA of an investment of US$ 625,000 in Shanghai Premier Image Trade Co., Ltd., which had been liquidated in April, 2009.

Note 17: The Company was approved by Investment Commission, MOEA of an investment of US$ 684,000 in Dongfeng Antec (Wuhan) Automobile Electric System Co., Ltd. All of the shares had been transferred to Teamsmart

Corporation during 2009.

Note 18: The Company invests in the company via investee companies in Mainland China including Lang Fang Fertile Plan Logistics Co., Ltd., YanTai Futaitong International Logistics Co., Ltd., Shanghai Futaitong International

Logistics CO., Ltd., Huaian Fulitong Trading Co., Ltd., Shanghai Foxconn Co., Ltd., Yantaishi Fulitong International Trading Co., Ltd., Shenzhen Fuhongjie Technology Service Co., Ltd., Shenzhen Fertile Plan(Futaitong)

international Logistics Co., Ltd., Shanghai KetaiHuajie Investment Co., Ltd., Shan Hai Pengzhan Investment Co., Ltd., Chongqingshi Futaitong Logistics Limited Co., Limited, FuXun Tong Trading(ShenZhen) Co., Ltd.,

FoShan ShunDe Jishun Precision Industrial Co., Ltd., JiaXing Wanmabenteng Commerce Co., Ltd., HuaiAn Futaitong Logistics Co., Ltd., ChongQing Shendeng Technology Co., Ltd., HongQingXin Precision Electronics

(ChongQing) Co., Ltd., ChengDu Futaitong Logistics Co., Ltd., ShenZhen Wanmabenteng Commerce Co., Ltd., ZhengZhou Wanmada Commerce Co., Ltd., ChengDu Wanmada Commerce Co., Ltd., KunShan Junteng

Commerce Co., Ltd., Yantaishi Wanmabenteng Commerce Co., Ltd., Wang Hui Trading Co., Ltd. -China Shanghai, Efeihu (Beijing) E-commerce Ltd., Efeihu (Chengdu) E-commerce Ltd., HongZhaoDa Integrated Innovative

Service (KunShan) Co., Ltd., Wan Ma Da Trading Co., Ltd., -China GuangXi, Efeihu (Wuhan) E-commerce Ltd., Wan Ma Ben Teng Trading Co., Ltd. -China TianJin, ZhengZhou XunFeng Trading Co., Ltd., ChengDu

XunFeng Trading Co., Ltd., Zhengzhou Airport Fertile Plan Logistics Co., Ltd., Wan Ma Ben Teng Trading Co., Ltd. -China HuNan, Wan Ma Ben Teng Trading Co., Ltd. -China Jiangx, Xiang Ma Trade Co., Ltd.- China

Chongqing., Tian Zhen Foxconn Photovoltaic Electricity Generation Co., Ltd., Da Tong Foxconn Photovoltaic Electricity Generation Co., Ltd., Yang Gao Foxconn Photovoltaic Electricity Generation Co., Ltd., HenYang

FuXiangYun Cuiture Co.,Ltd., ChongQing HongFuZhun Trading Co., Ltd., Foxstar Technology Co., Ltd., Synergy Technology （ChengDu）Co., Ltd., Harbing GDS Technology Co., Ltd., and Fu You Wan De Trading Co.,

Ltd.. Except for the investment via the holding companies in Mainland China, other investments shall be approved by Investment Commission of the Ministry of Economic Affairs.

2) Significant transactions with investee in Mainland China:

The Company subcontracted the processing of products to Foxconn (Far East) Limited’s subsidiaries located in Mainland China. All intercompany transactions were eliminated when preparing consolidated financial statements.

Transactions Difference with general transactions Ending

Note Relationship with the company Purchases / sales Amount Unit price Terms Balance

Best Leap Enterprises Limited Indirect investee company accounted for


Purchases $ 760,977,081 Note Note ($ 128,769,081)

Competition Team Technology Limited-

Bahamas



Purchases 445,389,241 " " ( 101,801,174)

Foxconn (Far East) Limited and

subsidiaries

Wholly-owned subsidiary

and subsidiaries

Purchases 412,203,558 " " ( 91,657,738)


Co., Ltd.



Purchases 400,306,397 " " ( 82,100,323)

Universal Field International Limited Indirect investee company accounted for


Purchases 163,072,275 " " ( 18,426,473)

Foxconn CZ S.R.O. Indirect investee company accounted for


Purchases 88,053,588 " " ( 3,997,441)

AMB Logistics Ltd. Indirect investee company accounted for


Purchases 23,931,474 " " ( 741,723)

NSG Technology Indirect investee company accounted for


Purchases 3,954,048 " " -

Foxconn Global Services Division S.R.O. Indirect investee company accounted for


Purchases 159,886 " " ( 159,886)

Foxconn (Far East) Limited and Wholly-owned subsidiary Sales 39,825,230 " " 36,362,495

217

subsidiaries and subsidiaries

Note: The prices and terms to related parties were not significantly different from transaction with third parties, except for particular transactions with no similar transactions to compare with. For these transactions, the prices and terms are

determined in accordance with mutual agreements.

2012 2011

Processing Cost Prepayments Payable Processing Cost Prepayments Payable

Success Rise Enterprises Ltd. $ 24,538,973 $ - $ 6,667,214 $ 21,204,392 $ - $ 2,227,618

Heroic Legend Enterprises Ltd. 18,863,275 - 14,986,541 25,377,089 - 12,465,540

Franklin Management Ltd. 16,503,053 - 14,846,695 8,229,082 - 9,375,977

Foxconn (Far East) Limited and subsidiaries

12,746,052 - 21,732,987 13,329,535 - 6,541,619

Best Leap Enterprises Limited 11,395,252 - 435,798 17,166,854 - 3,498,644

Beyond Maximum Industrial Ltd. 10,944,341 - 1,878,416 8,744,143 - 3,313,136

Carston Ltd. 3,976,588 - 25,330,425 4,368,017 - 28,048,035

$ 98,967,534 $ - $ 85,878,076 $ 98,419,112 $ - $ 65,470,569

(4) The relationship and significant transactions between the Company and its subsidiaries


Description of transactions

The percentage of total

Number Relationship consolidated revenue or total

(Note a) Name of company Name of counterparties (Note b) Account Amount Transaction terms consolidated assets (Note d)

0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Sales $ 39,825,230 Note c 1

0 Hon Hai Precision Industry Co., Ltd. Best Leap Enterprises Limited 1 Purchases 760,977,081 Note c 19

0 Hon Hai Precision Industry Co., Ltd. Competition Team Technology Limited 1 Purchases 445,389,241 Note c 11

0 Hon Hai Precision Industry Co., Ltd. Hongfujin Precision Electronics (Chengdu) Co., Ltd. 1 Purchases 400,306,397 Note c 10

0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Purchases 412,203,558 Note c 10

0 Hon Hai Precision Industry Co., Ltd. Universal Field International Limited 1 Purchases 163,072,275 Note c 4

0 Hon Hai Precision Industry Co., Ltd. Foxconn CZ S. R. O. 1 Purchases 88,053,588 Note c 2

0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Accounts receivable 36,362,495 Note c 1

0 Hon Hai Precision Industry Co., Ltd. Best Leap Enterprises Limited 1 Accounts payable ( 128,769,081) Note c 6

0 Hon Hai Precision Industry Co., Ltd. Competition Team Technology Limited 1 Accounts payable ( 101,807,174) Note c 5

0 Hon Hai Precision Industry Co., Ltd. Hongfujin Precision Electronics (Chengdu) Co., Ltd. 1 Accounts payable ( 82,100,323) Note c 4

0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Accounts payable ( 91,657,738) Note c 4

0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Accrued expenses ( 21,732,987) Note c 1

0 Hon Hai Precision Industry Co., Ltd. Carston Ltd. 1 Accrued expenses ( 25,330,425) Note c 1

0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Other receivables 64,308,654 Note c 3

0 Hon Hai Precision Industry Co., Ltd. Futaihua Industrial (Shenzhen) Co., Ltd. 1 Other receivables 122,051,631 Note c 6

218





0 Hon Hai Precision Industry Co., Ltd. Hongfujin Precision Electronics (Zhengzhou) Co., Ltd. 1 Other receivables 78,660,801 Note c 4

0 Hon Hai Precision Industry Co., Ltd. Hongfujin Precision Electronics (Chengdu) Co., Ltd. 1 Other receivables 69,893,800 Note c 3

0 Hon Hai Precision Industry Co., Ltd. Universal Field International Limited 1 Other receivables 25,448,382 Note c 1

1 Hongfutai Precision Electronics

(Yantai) Co., Ltd.

Universal Field International Limited 3 Sales 49,479,435 Note c 1


(Wuhan) Co., Ltd.

Top Step Enterprises Limited 3 Sales 99,499,196 Note c 3

3 Hongfujin Precision Electronics

(Yantai) Co., Ltd.


4 Futaihua Industrial (Shenzhen) Co.,

Ltd.

Best Leap Enterprises Limited 3 Sales 782,867,169 Note c 20

4 Futaihua Industrial (Shenzhen) Co.,

Ltd.

Best Leap Enterprises Limited 3 Accounts receivable 131,860,729 Note c 6



0 Hightech Electronics Components Inc. 3 Sales 121,082,335 Note c 3



0 Hightech Electronics Components Inc. 3 Accounts receivable 29,666,431 Note c 1



Competition Team Technologies Limited 3 Sales 528,064,023 Note c 13



Competition Team Technologies Limited 3 Accounts receivable $ 126,198,176 Note c 6

7 Foxconn Precision Electronics

(Taiyuan) Co., Ltd.

Fast Victor Limited 3 Sales 95,486,777 Note c 3

7 Foxconn Precision Electronics

(Taiyuan) Co., Ltd.

Fast Victor Limited 3 Accounts receivable 26,224,112 Note c 2






0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Sales $ 53,634,030 Note c 2

0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Purchases 302,063,412 Note c 9

0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Accounts receivable 37,322,266 Note c 2

0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Other receivables 67,767,858 Note c 4

0 Hon Hai Precision Industry Co., Ltd. Foxconn (Far East) Limited and subsidiaries 1 Accounts payable ( 92,445,026) Note c 5

0 Hon Hai Precision Industry Co., Ltd. Best Leap Enterprises Limited 1 Purchases 904,829,843 Note c 26

0 Hon Hai Precision Industry Co., Ltd. Best Leap Enterprises Limited 1 Accounts payable ( 142,271,576) Note c 8

219





0 Hon Hai Precision Industry Co., Ltd. Carston Ltd. 1 Accrued expenses ( 28,048,035) Note c 2

0 Hon Hai Precision Industry Co., Ltd. Competition Team Technology Limited 1 Purchases 153,710,732 Note c 4

0 Hon Hai Precision Industry Co., Ltd. Competition Team Technology Limited 1 Accounts payable ( 43,622,684) Note c 3

0 Hon Hai Precision Industry Co., Ltd. Foxconn CZ S. R. O. 1 Purchases 101,500,784 Note c 3

0 Hon Hai Precision Industry Co., Ltd. Universal Field International Limited 1 Purchases 166,342,084 Note c 5

0 Hon Hai Precision Industry Co., Ltd. Universal Field International Limited 1 Other receivables 27,388,492 Note c 2

0 Hon Hai Precision Industry Co., Ltd. Universal Field International Limited 1 Accounts payable ( 26,278,390) Note c 2

0 Hon Hai Precision Industry Co., Ltd. Futaihua Industrial (Shenzhen) Co., Ltd. 1 Other receivables 133,859,236 Note c 8

0 Hon Hai Precision Industry Co., Ltd. Hongfujin Precision Electronics (Chengdu) Co., Ltd. 1 Purchases 227,068,983 Note c 7

0 Hon Hai Precision Industry Co., Ltd. Hongfujin Precision Electronics (Chengdu) Co., Ltd. 1 Other receivables 39,766,610 Note c 2

0 Hon Hai Precision Industry Co., Ltd. Hongfujin Precision Electronics (Chengdu) Co., Ltd. 1 Accounts payable ( 45,330,111) Note c 3

0 Hon Hai Precision Industry Co., Ltd. Hongfujin Precision Electronics (Zhengzhou) Co., Ltd. 1 Other receivables 34,580,826 Note c 2

1 Skilltop Limited Foxconn Image & Printing Product Pte. Ltd. 3 Sales 41,600,373 Note c 1

2 Ambit Microsystem (Shanghai) Co.,

Ltd.

AMB Logistics Ltd. 3 Sales 37,988,785 Note c 1

3 Futaihua Industrial (Shenzhen) Co., Ltd. Best Leap Enterprises Limited 3 Sales 934,049,393 Note c 27

3 Futaihua Industrial (Shenzhen) Co., Ltd. Best Leap Enterprises Limited 3 Accounts receivable 116,716,083 Note c 7

3 Fuhuajie Industrial (Shenzhen) Limited Skilltop Limited 3 Sales $ 41,797,064 Note c 1


(Yantai) Co., Ltd.

Dragon Spirit Industries Ltd. 3 Sales 35,102,347 Note c 1


(Yantai) Co., Ltd.



(Wuhan) Co.,Ltd.

Top Step Enterprises Limited 3 Sales 92,793,098 Note c 3


(Chongqing) Co., Ltd

Hightech Electronics Components Inc. 3 Sales 61,976,821 Note c 2


(Yantai) Co., Ltd.



(Yantai) Co., Ltd.

Universal Field International Limited 3 Accounts receivable 19,733,437 Note c 1



Competition Team Technology Limited 3 Sales 161,277,425 Note c 5



Competition Team Technology Limited 3 Accounts receivable 44,021,902 Note c 3

Note a: The information of transactions between the Company and the consolidated subsidiaries should be noted in “Number” column.

220

1. Number 0 represents the Company.

2. The consolidated subsidiaries are numbered in order from number 1.

Note b: The transaction relationships with the counterparties are as follows:

1. The Company to the consolidated subsidiaries.

2. The consolidated subsidiaries to the Company.

3. The consolidated subsidiaries to another consolidated subsidiaries.

Note c: The prices and terms to related parties were not significantly different from transactions with third parties, except for particular transactions with no similar transactions to compare with. For these transactions, the prices and terms

were determined in accordance with mutual agreements.

Note d: In calculating the ratio, the transaction amount is divided by consolidated total assets for balance sheet accounts and is divided by consolidated total revenues for income statement accounts.

Note e: For balance sheet accounts, transactions exceeding 1% of the consolidated total assets should be disclosed; for income statement accounts, transactions exceeding 1% of the consolidated total revenue should be disclosed.

All the transactions had been eliminated when preparing consolidated financial statement.

221

12. OPERATING SEGMENTS INFORMATION

1) The Group has adopted eCMMS (E-enabled Components, Modules, Moves & Services) strategy,

and provided a one-stop shop to its customers, which are primarily in the 3C industries, with a

total solution for design, development, engineering, procurement, manufacturing, logistics and

after-sales service. The Group segregates operating segments from both a customer service and

product perspective.

In accordance with R.O.C. SFAS No. 41, “Operating Segments”, the Group has determined the

operating segments and reportable operating segments. Operating segments which have met

certain quantitative threshold are disclosed individually or aggregately as reportable operating

segments; other segments which have not met the quantitative threshold are included in the ‘all

other segments’. The Group has identified the electronic manufacturing integrated services

department, which provides global 3C production-related one-stop services, as a reportable

operating segment.

The chief operating decision maker assesses performance and allocates resources of the operating

segments based on each operating segment’s revenue and operating income after adjusting the

internal costs and allocated expenses. Except that recognition of internal costs shall be in

accordance with the Group’s related internal calculation basis, the operating segments’

accounting policies are the same as disclosed in Note 2.

2) Financial information of reportable segment

The financial information of reportable segment provided to chief operating decision

maker is as follows:

2011 2012

Net external revenue $ 3,147,460,520 $ 3,880,825,993

Revenue from internal customers 279,268,751 526,688,317

Segment revenue $ 3,426,729,271 $ 4,407,514,310

Segment income $ 96,229,483 $ 122,477,734

Segment assets (Note) $ - $ -

Note: The chief operating decision maker does not use the measured amount of the assets as a

measurement indicator; therefore, the measured amount of the Group’s assets shall be

disclosed as $0.

3) Reconciliation information of segment income, assets, and liabilities

The reconciliations of a pre-tax income between reportable segments and continuing operations

were as follows:

Operating revenue 2011 2012

Total reported segment revenue $ 3,426,729,271 $ 4,407,514,310

Other operating segment revenue 62,760,660 55,771,358

Elimination of intersegment revenue ( 36,808,658) ( 557,890,346)

Total corporate revenue $ 3,452,681,273 $ 3,905,395,322

222

Profit and loss 2011 2012

Income of reported segment $ 96,229,483 $ 122,477,734

Income of other operating segments ( 1,700,469) ( 11,589,301)

Elimination of intersegment transactions and

internal costs and allocated expenses

adjustments 8,007,186 7,490,658

Income before income tax $ 102,536,200 $ 118,379,091

4) Revenue information by product

Revenues from external customers are mainly derived from assembling of 3C products. The

breakdown of retail and wholesale results are shown in Note 12.

5) Revenue information by geographic area

2011 2012

Revenue Non-current assets Revenue Non-current assets

United States of

America $ 987,885,444 $ 2,408,224 $1,140,906,312 $ 1,751,004

Ireland 763,130,682 52 1,096,315,965 173,191

China 439,784,193 283,402,318 340,938,734 342,166,834

Singapore 388,658,671 271,999 334,362,334 151,407

Japan 247,835,759 27,689 217,845,375 22,082

Taiwan 108,466,630 36,351,485 111,468,690 30,944,534

Others 516,919,894 75,059,340 663,557,912 62,804,923

$3,452,681,273 $ 397,521,107 $3,905,395,322 $ 438,013,975

Revenue by geographic area of the Group is based on the location of customers. Non-current

assets include fixed assets, intangible assets, and other assets.

6) Information on major customers

Sales to a single customer which represent over 10% of net operating revenues were (in millions):

Customers 2011 2012

Customer E $ 1,350,423 $ 1,865,774

Customer C 459,723 459,975

13. DISCLOSURES RELATING TO THE ADOPTION OF IFRSs

Pursuant to the regulations of the Financial Supervisory Commission, Executive Yuan, R.O.C.,

effective January 1, 2013, a public company whose stock is listed on the Taiwan Stock Exchange

Corporation or traded in the GreTai Securities Market should prepare financial statements in

accordance with the International Financial Reporting Standards (“IFRSs”), International

Accounting Standards (“IASs”), and relevant interpretations and interpretative bulletins that are

ratified by the Financial Supervisory Commission.

The Company discloses the following information in advance prior to the adoption of IFRSs under

223

the requirements of Jin-Guan-Zheng-Shen-Zi Order No. 0990004943 of the Financial Supervisory

Commission, dated February 2, 2010:

A. Major contents and status of execution of the Company’s plan for IFRSs adoption:

The Company has formed an IFRSs group, which is responsible for setting up a plan relative to

the Company’s transition to IFRSs. The major contents and status of execution of this plan are

outlined below:

Working Items for IFRSs Adoption Status of Execution

a. Formation of an IFRSs group Completed

b. Setting up a plan relative to the Company’s

transition to IFRSs

Completed

c. Identification of the differences between current

accounting policies and IFRSs

Completed

d. Identification of consolidated entities under the

IFRSs framework

Completed

e. Evaluation of the impact of each exemption and

option on the Company under IFRS 1 – First-time

Adoption of International Financial Reporting

Standards

Completed

f. Evaluation of needed information system

adjustments

Completed

g. Evaluation of needed internal control adjustments Completed

h. Establish IFRSs accounting policies Completed

i. Selection of exemptions and options available under

IFRS 1 - First-time Adoption of International

Financial Reporting Standards

Completed

j. Preparation of statement of financial position on the

date of transition to IFRSs

Completed

k. Preparation of IFRSs comparative financial

information for 2012

In process

l. Completion of relevant internal control (including

financial reporting process and relevant information

system) adjustments

Completed

B. Material differences that may arise between current accounting policies used in the preparation

of financial statements and IFRSs and “Rules Governing the Preparation of Financial

Statements by Securities Issuers” that will be used in the preparation of financial statements in

the future:

The Company uses the IFRSs already ratified currently by the Financial Supervisory

Commission and the “Rules Governing the Preparation of Financial Statements by Securities

224

Issuers” that will be applied in 2013 as the basis for evaluation of material differences in

accounting policies as mentioned above. However, the Company’s current evaluation results

may be different from the actual differences that may arise when new issuances of or

amendments to IFRSs are subsequently ratified by the Financial Supervisory Commission or

relevant interpretations or amendments to the “Rules Governing the Preparation of Financial

Statements by Securities Issuers” come in the future.

The Company has identified material differences that may arise between current accounting

policies used in the preparation of financial statements and IFRSs and “Rules Governing the

Preparation of Financial Statements by Securities Issuers” that will be used in the preparation

of financial statements in the future, and the effects of exemptions selected by the Company

under IFRS 1, “First-time Adoption of International Financial Reporting Standards” (refer to

Note 13(3)) are set forth below:

1. Reconciliation of significant differences as of January 1, 2012

GAAP (R.O.C.) Adjustment IFRSs Description

Available-for-sale

financial assets -

non-current $ 4,790,319 $ 4,575,192 $ 9,365,511 (1)(2)

Financial assets

carried at cost -

non-current 4,046,796 ( 28,740) 4,018,056 (2)

Equity investments

under the equity

method 40,259,657 ( 2,467,599) 37,792,058 (1)

Property, Plant and

Equipment 355,373,481 12,792,611 368,166,092 (3)(8)

Other assets -

other 26,350,582 874,893 27,225,475 (3)(4)

Investment

property - 1,434,274 1,434,274 (4)

Deferred charges 15,101,778 ( 15,101,778) - (8)

Deferred income

tax assets - current 8,016,419 ( 8,016,419) - (12)

Deferred income

tax assets – non-

current - 10,560,705 10,560,705 (6)(7)(12)

Others 1,276,372,393 - 1,276,372,393

Total Assets $ 1,730,311,425 $ 4,623,139 $ 1,734,934,564

225


Financial

liabilities at fair

value through

profit or loss –

non-current

$ - $ 470,158 $ 470,158 (5)

Accrued expenses 87,322,885 1,809,910 89,132,795 (6)

Reserve for

retirement plan 1,064,300 453,411 1,517,711 (7)

Deferred income

tax liabilities -

non-current 1,793,747 2,133,854 3,927,601 (12)

Others 1,025,111,009 - 1,025,111,009

Total Liabilities 1,115,291,941 4,867,333 1,120,159,274

Capital reserve

from long-term

investments 15,452,488 ( 15,452,488) - (1)(9)

Capital reserve

from conversion

right 2,034,440 ( 2,034,440) - (5)

Cumulative

translation

adjustments 21,141,456 ( 94,099) 21,047,357 (1)(6)

Unrealized gain

or loss on

financial

instruments 1,802,723 2,645,108 4,447,831 (1)(2)

Undistributed

earnings 325,500,402 14,691,725 340,192,127

(1)(5)

(6)(7)(9)

Others 249,087,975 - 249,087,975

Total

Stockholders'

Equity 615,019,484 ( 244,194) 614,775,290

Total Liabilities

and Stockholders’

Equity $1,730,311,425 $ 4,623,139 $ 1,734,934,564

226

2. Reconciliation of significant differences as of December 31, 2012


Available-for-sale

financial assets -

non-current $ 8,302,853 $ 4,195,864 $ 12,498,717 (1)(2)

Financial assets

carried at cost -

non-current 8,620,722 ( 28,740) 8,591,982 (2)

Equity investments

under the equity

method 44,492,047 ( 2,533,104) 41,958,943 (1)

Property, Plant and

Equipment 390,298,219 14,856,857 405,155,076 (3)(8)

Other assets -

other 23,596,212 3,953,366 27,549,578 (3)(4)

Investment

property - 1,354,852 1,354,852 (4)

Deferred charges 20,165,075 ( 20,165,075) - (8)

Deferred income

tax assets - current 6,751,334 ( 6,751,334) - (12)

Deferred income

tax assets – non-

current - 10,951,902 10,951,902 (6)(7)(12)

Others 1,542,177,055 - 1,542,177,055

Total Assets $2,044,403,517 $ 5,834,588 $ 2,050,238,105

227


Financial

liabilities at fair

value through

profit or loss –

non-current

$ - $ 15,288 $ 15,288 (5)

Accrued expenses 137,224,165 2,328,293 139,552,458 (6)

Reserve for

retirement plan 1,103,395 628,051 1,731,446 (7)

Deferred income

tax liabilities -

non-current 468,606 3,680,359 4,148,965 (12)

Others 1,223,876,198 - 1,223,876,198

Total Liabilities 1,362,672,364 6,651,991 1,369,324,355

Capital reserve

from long-term

investments 16,928,977 ( 16,294,126) 634,851 (1)(9)

Capital reserve

from conversion

right 2,034,440 ( 2,034,440) - (5)

Cumulative

translation

adjustments 1,395,612 ( 25,101) 1,370,511 (1)(6)

Unrealized gain

or loss on

financial

instruments 4,169,293 2,265,753 6,435,046 (1)(2)

Undistributed

earnings 385,380,938 14,410,421 399,791,359

(1)(5)

(6)(7)(9)

Minority Interest 35,198,966 860,090 36,059,056 (9)

Others 236,622,927 - 236,622,927

Total

Stockholders'

Equity 681,731,153 ( 817,403) 680,913,750

Total Liabilities

and Stockholders’

Equity $2,044,403,517 $ 5,834,588 $ 2,050,238,105

228

3. Reconciliation of significant differences for the year ended December 31, 2012


Operating revenue $ 3,905,395,322 $ - $ 3,905,395,322

Operating cost ( 3,575,766,285) ( 79,379,769) ( 3,655,146,054)

(6)(7)

(10)(11)

Gross profit 329,629,037 ( 79,379,769) 250,249,268

Operating

expenses ( 221,178,556) 78,827,558 ( 142,350,998)

(6)(7)

(10)(11)

Operating income 108,450,481 ( 552,211) 107,898,270

Non-operating

income and gains 23,932,586 345,205 24,277,791 (1)(5)

Non-operating

expenses and

losses ( 14,003,976) - ( 14,003,976)

Income before

income tax 118,379,091 ( 207,006) 118,172,085

Income tax

expense ( 26,591,950) 86,601 ( 26,505,349) (6)(7)

Consolidated net

income $ 91,787,141 ($ 120,405) $ 91,666,736

Attributable to:

Equity holders of

the Company $ 94,762,377 ($ 120,405) $ 94,641,972

Minority interest ( 2,975,236) - ( 2,975,236)

$ 91,787,141 ($ 120,405) $ 91,666,736

229

Description of the reconciliation of significant differences:

Increase (Decrease)

Item Explanation Account at transition date December 31, 2012

(1) Investments in associates / Equity investments under the equity

method

In accordance with current accounting standards in R.O.C., if

an investor company holds less than 20% of the investee

company’s voting shares without losing significant influence

over an investee company, the investments should be accounted

for under equity method. In accordance with IAS 28,

“Investments in Associates”, when an investment ceases to be

an associate, the investment should be reclassified as

“Available-for-sale financial assets” and measured at its fair

value at the date when it ceases to be an associate.

Available-for-sale

financial assets - non-

current

$ 4,530,477 $ 4,153,041

Unrealized gain or loss

on financial instruments

2,629,133 2,251,670

Undistributed earnings ( 535,814) ( 535,814)

Gain on equity

investments under the

equity method

- ( 254,621)

Capital reserve from

long-term investments

( 8,172) 10,280

Cumulative translation

adjustments

( 22,269) 3,466

Equity investments


( 2,467,599) ( 2,533,104)

Dividend income - 144,956

230

Increase (Decrease)


(2) Financial assets: equity instruments

In accordance with the pre-amended “Rules Governing the

Preparation of Financial Statements by Securities Issuers”,

before July 7, 2011, unlisted stocks and emerging stocks held

by the Company should be measured at cost and recognized in

“Financial assets carried at cost”. However, in accordance with

IAS 39, “Financial Instruments: Recognition and

Measurement”, investments in equity instruments without an

active market but with reliable fair value measurement (i.e. the

variability of the estimation interval of reasonable fair values of

such equity instruments is insignificant, or the probability for

these estimates can be made reliably) should be measured at

fair value.

Available-for-sale

financial assets - non-

current

$ 44,715 $ 42,823

Unrealized gain or loss

on financial instruments

15,975 14,083


at cost - non-current

( 28,740) ( 28,740)

(3) Prepayments for equipment

In accordance with the “Rules Governing the Preparation of

Financial Statements by Securities Issuers”, prepayments for

the acquisition of property, plant and equipment are classified

as “Property, plant and equipment”. However, under IFRSs, it

should be classified as “Other assets – non-current”.

Other assets – non-

current

2,309,167 5,308,218

Prepayments for

equipment

( 2,309,167) ( 5,308,218)

(4) Property, plant and equipment

In accordance with current accounting standards in R.O.C., the

Company’s property that is leased to others is presented in

‘Other assets’ account. In accordance with IAS 40, “Investment

Property”, property that meets the definition of investment

property is classified and accounted for as ‘Investment

property’.

Investment property 1,434,274 1,354,852

Other assets– non-

current

( 1,434,274) ( 1,354,852)

231

Increase (Decrease)


(5) Financial instruments: presentation

In accordance with current accounting standards in R.O.C., the

conversion price of convertible bonds overseas should be

converted to an agreed conversion price in New Taiwan dollars

with a fixed exchange rate applicable on conversion of bonds.

The conversion rights which are converted to a fixed amount of

common shares should be classified as equity instruments.

However, in accordance with IAS 32, “Financial Instruments:

Presentation”, the conversion rights which do not meet the

criteria of equity instruments should be classified as financial

liabilities.

Financial liabilities at

fair value through profit

or loss - non-current

$ 470,158 $ 15,288

Undistributed earnings 1,564,282 1,564,282


conversion right

( 2,034,440) ( 2,034,440)

Gain on valuation

financial liabilities

- 454,870

(6) Employee benefits

The current accounting standards in R.O.C. do not specify the

rules on the cost recognition for accumulated unused

compensated absences. The Company recognizes such costs as

expenses upon actual payment. However, IAS 19, “Employee

Benefits”, requires that the costs of accumulated unused

compensated absences should be accrued as expenses at the end

of the reporting period.

Accrued expenses 1,809,910 2,328,293

Undistributed earnings ( 1,404,728) ( 1,404,728)

Deferred income tax

assets - non-current

333,352 413,440

Cumulative translation

adjustments

( 71,830) ( 28,567)

Operating cost - salaries - 429,714

Operating expenses -

salaries

- 141,711

Tax expense - ( 89,867)

232

Increase (Decrease)


(7) Pensions

(i) The discount rate used to calculate pensions shall be

determined with reference to the factors specified in

R.O.C. SFAS 18, paragraph 23. However, IAS 19,

“Employee Benefits”, requires an entity to determine the

rate used to discount employee benefits with reference to

market yields on high quality corporate bonds that match

the currency at the end day of the reporting period and

duration of its pension plan; when there is no deep market

in corporate bonds, an entity is required to use market

yields on government bonds (at the end day of the

reporting period) instead.

Reserve for retirement

plan

$ 453,411 $ 628,051

Undistributed earnings

( 376,331) ( 376,331)

Deferred income tax


77,080 106,769

Operating cost - salaries - ( 2,953)

Operating expenses -

salaries

- ( 16,261)

Tax expense - 3,266

(ii) The Company recognized all accumulated actuarial gain or

loss associated with the employee benefits plans in

“Retained earnings’ at the date of transition to IFRSs.

Actuarial loss on

defined benefit pension

plan

- ( 160,899)

(iii) In accordance with current accounting standards in R.O.C.,

the unrecognized transitional net benefit obligation should

be amortized on a straight-line basis over the average

remaining service period of employees still in service and

expected to receive benefits. However, as this is the

Company’s first-time adoption of IFRSs, the transition

provisions of IAS 19, “Employee Benefits”, do not apply

to the Company. Accordingly, there is no unrecognized

transitional net benefit obligation.

(iv) In accordance with current accounting standards in R.O.C.,

actuarial pension gain or loss of the Group is recognised in

net pension cost of current period using the ‘corridor’

233

method. However, in accordance with IAS 19, ‘Employee

Benefits’, the Group selects to recognise immediately

actuarial pension gain or loss in other comprehensive

income.

Increase (Decrease)


(8) Deferred charges Property, plant and equipment

$ 15,101,778 $ 20,165,075

In accordance with current accounting standards in R.O.C., cost of tools is recognized in “Deferred Charges”. However, under IFRSs, it should be recognized in “Property, plant and equipment”.

Deferred charges ( 15,101,778) ( 20,165,075)

(9) Capital reserve

A. The Company has elected not to apply the requirements in IFRS 3, ‘Business Combinations’, retrospectively to business combinations and investments in associates that occurred prior to the date of transition to IFRSs, and has adjusted the retained earnings on the date of transition to IFRSs for the capital surplus under ROC GAAP that did not meet the regulations of IFRSs.

Undistributed earnings 15,444,316 15,444,316


long-term investments ( 15,444,316) ( 15,444,316)

B. In addition, when a subsidiary issues new shares and parent company does not purchase or acquire new shares proportionately that results in a change of parent company’s ownership percentage and a change of the equity in net assets for the investment that parent company has invested, but that does not result in a loss of control over the subsidiary, in accordance with current accounting standards in ROC, such differences shall be used to adjust the ‘capital


difference between the

price for acquisition or

disposal of subsidiaries

and carrying amount

- ( 860,090)

Minority interest - 860,090

234

surplus—long-term equity investments’ and ‘long-term equity investments’. However, in accordance with IAS 27, ‘Consolidated and Separate Financial Statements’, a change in parent company’s ownership interest in a subsidiary that does not result in a loss of control over the subsidiary should be accounted for as transactions with non-controlling interests, and adjustments to the carrying amounts of controlling interests and non-controlling interests should be made to reflect the change in parent company’s relative ownership interest in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in ‘capital surplus—the difference between the consideration paid or received for acquisition or disposal of the ownership interest in a subsidiary and the carrying amount.

Increase (Decrease)

Item Explanation Account at transition day December 31, 2012

(10) Product warranty costs

Under current accounting standards in ROC, the Company presents product warranty costs in ‘selling expenses’. However, under IFRSs, they shall be presented in ‘cost of goods sold’.

Operating cost $ - $ 34,382,737

Operating expenses - ( 34,382,737)

(11) Royalty expenses

The Company pays royalties based on the sale volume of the related product as required by the contract. Under current accounting standards in ROC, the royalties are presented in ‘selling expenses’. However, under IFRSs, they shall be presented in ‘cost of goods sold.

Operating cost - 44,570,271

Operating expenses - ( 44,570,271)

(12) Income taxes

In accordance with current accounting standards in R.O.C., a

deferred tax asset or liability should, according to the

classification of its related asset or liability, be classified as

current or noncurrent. However, a deferred tax asset or liability

Deferred income tax


10,150,273 10,431,693

Deferred income tax

assets - current

( 8,016,419) ( 6,751,334)

235

that is not related to an asset or liability for financial reporting

should be classified as current or noncurrent according to the

expected period to realize or settle a deferred tax asset or

liability. However, under IAS 1, “Presentation of Financial

Statements”, an entity should not classify a deferred tax asset or

liability as current. In addition, as the Company’s deferred tax

assets and liabilities do not meet the criteria of offsetting

deferred tax assets and liabilities under IAS 12, “Income

Taxes”, they shall not be offset.

Deferred income tax

liabilities - non-current

2,133,854 3,680,359

236

C. Exemptions elected in accordance with IFRS 1, “First-time Adoption of International

Financial Reporting Standards” and the “Rules Governing the Preparation of

Financial Statements by Securities Issuers” that will be applied in 2013 are set forth

below:

1. Business combinations

The Company has elected not to apply the requirements in IFRS 3, “Business

combinations”, retrospectively to business combinations that occurred prior to

transition to IFRSs (Transition Date). This exemption is also applied to investments

in associates of the Company.

2. Share-based payment

The Company has elected not to apply the requirements in IFRS 2, “Share-based

payment”, retrospectively to the equity instruments and liabilities that have been

settled due to share-based payment transactions prior to the Transition Date.

3. Leases

The Company has elected to apply the transitional provisions in IFRIC 4,

“Determining Whether an Arrangement Contains a Lease”. Therefore, the

Company determines whether an arrangement contains a lease based on the facts

and circumstances on the Transition Date.

4. Employee benefits

The Company has elected to recognize all accumulated actuarial gain or loss

associated with the employee benefits plans in ‘Retained earnings’ at the date of

transition to IFRSs, and to disclose the present value of defined benefit obligation,

fair value of plan assets, gain or loss on plan assets and experience adjustments in

accordance with paragraph 120A (P), IAS 19, “Employee Benefits”, based on their

prospective amounts of financial periods from the date of transition to IFRSs.

5. Compound financial instruments

The Company has elected not to segregate between liability components and equity

components of compound financial instruments whose liability components were

not outstanding at the Transition Date.

6. Designation of previously recognized financial instruments

The Company reclassified part of financial assets carried at cost to available-for-

sale financial assets on the Transition Date.

7. Decommissioning liabilities in property, plant and equipment

The Company measured decommissioning liabilities in property, plant and

equipment in accordance with IAS 37, “Provisions, Contingent Liabilities and

Contingent Assets” on the Transition Date.

8. Borrowing costs

The Company has elected to apply the transition provisions in paragraphs 27 and

28 in IAS 23, “Borrowing Costs”, amended in 2007, from the Transition Date.

9. Transfers of assets from customers

The Company has elected to apply the transitional provisions in paragraph 22 of

IFRIC 18, “Transfers of Assets from Customers” from the Transition Date.

The above exemptions are different from the actual selection at the Transition Date

due to the issuance of related regulations by competent authorities, changes in

economic environment, and assessment by the Company.

237

VII. Financial Analysis

A. 2012 vs. 2011 Financial Analysis

Unit: NT$Thousand

Year

Item 2012 2011

Difference Ratio change

analysis and

explanation Amount %

Current assets 1,083,776,739 958,370,691 125,406,048 13.09%

Fund and Long-term equity

investments 603,762,719 534,685,388 69,077,331 12.92%

Fixed assets 26,828,097 33,886,138 (7,058,041) (20.83)% (Note 2)

Other assets 1,277,471 1,184,021 93,450 7.89%

Total assets 1,715,645,026 1,528,126,238 187,518,788 12.27%

Current liabilities 988,892,523 861,779,296 127,113,227 14.75%

Other liabilities 4,853,916 4,215,877 638,039 15.13%

Total liabilities 1,069,112,839 950,294,550 118,818,289 12.50%

Common stock 118,358,665 106,890,967 11,467,698 10.73%

Capital surplus 77,266,078 70,693,639 6,572,439 9.30%

Retained earnings 445,361,440 377,321,804 68,039,636 18.03%

Total stockholders’ equity 646,532,187 577,831,688 68,700,499 11.89%

Note 1: Items will be analyzed and explained if ratio changed more than ±20% and changed amount excess NT$10 million. Note 2: Fixed assets variance analysis: Compare to previous year, the amount of fixed asset of year 2012 decreased mainly due to significantly reduced the new equipment procurement and sale of equipment to overseas subsidiaries.

B. 2012 vs. 2011 Operating Result Analysis

Unit: NT$Thousand

Year

Item 2012 2011 Amount

changed

Change

percentage

(%)

Variance

analysis

Revenues 3,218,928,395 2,773,311,378 445,617,017 16.07%

Cost of revenues (3,066,728,559) (2,665,484,499) 401,244,060 15.05%

Gross profit 152,199,836 107,826,879 44,372,957 41.15% 1

Operating expenses (106,273,993) (76,326,593) 29,947,400 39.24% 2

Operating income 45,925,843 31,500,286 14,425,557 45.80% 3

Non-operating income 64,038,228 64,478,317 (440,089) (0.68)%

Non-operating expenses (2,497,303) (4,187,129) (1,689,826) (40.36)% 4

Income (loss) before 107,466,768 91,791,474 15,675,294 17.08%

238

income taxes

Income tax benefit

(expense) (12,704,391) (10,200,475) 2,503,916 24.55% 5

Net income (loss) 94,762,377 81,590,999 13,171,378 16.14%

Variance analysis: 1. Due to product mix changed resulting in improved gross margin. 2. Due to higher royalty fees and warranty expenses from mobile device products resulting in increased operating

expenses in 2012. 3. Due to revenue grew coupled with magnitude of gross margin increased more than operating expenses resulting

in bigger change in magnitude of operating income. 4. Due to the company has more USD currency assets than USD currency liabilities coupled with TWD

depreciated against USD in year 2012 resulting in a larger exchange losses; besides, the company created large JPY liabilities due to equipment procurement coupled with NTD appreciated against JPY resulting in exchange gains. Net net, as a result of insignificant exchange loss in year 2012.

5. Due to higher net income resulting in higher income tax expenses.

C. Cash Flow Analysis

(1) 2012 vs. 2011 Liquidity Analysis

Year

Item 2012 2011 Ratio Change (%)

Cash flow ratio (%) 11.13% Note -

Cash Flow Adequacy Ratio (%) 113.81 83.09 36.97

Cash reinvestment ratio (%) 12.36 Note -

Variance Analysis: Due to operating cash flow increased significantly in 2012

resulting in a great improvement in Cash Flow Adequacy Ratio.

Note: The ratio will not be listed because of negative number.

(2) Cash Flow Forecast in 2013

Unit: NT$Thousand

Cash beginning

balance

(1)

Cash flow from operating

activities

(2)

Cash flow-in

(out)

(3)

Cash ending

balance

(shortage)

(1)+(2)-(3)

Plan for cash ending balance

shortage

Investment

activities

Financing

act

ivities

71,517,954 3,100,537,942 3,148,476,782 23,579,114 - 6,981,879

Cash flow variance analysis for year 2013:

(1) Operating activities: company expects revenue and profit will continue to grow.

(2) Investment activities: company expects expansion of production facilities to meet business demand.

(3) Financing activities: company expects to distribute cash dividends, borrow short-term loans and issue

unsecured bonds in 2013.

239

VIII. Special Notes

A. Consolidated Financial Statements of Affiliates


Affiliates Consolidated Financial Statement Announcements

From 2012 fiscal year, the companies which should be included in the consolidated

financial statements of the Company pursuant to the Affiliates Consolidated Business

Reports and Consolidated Financial Statements Preparation of Affiliation Reports are

the same as those should be included pursuant to the Statement of Financial

Accounting Standards No. 7, and also the affiliates consolidated financial statements

should be disclosed information on supra parent company have already been disclosed

in the consolidated financial statements of the Company. Therefore the Company will

not prepare a separate affiliates consolidated financial statements.

Hereby declare

Company Name: Hon Hai Precision Industry Co., Ltd.

Chairman: Gou, Tai-Ming (Terry Gou)

On the Date of: 4/16/2013

240

B. Affiliated Companies Reports:

None

(1) The most recent fiscal year and up to the date of this Annual Report printed,

Private Placement Securities:

None

(2) The most recent fiscal year and up to the date of this Annual Report printed,

subsidiary companies holding or disposal of the Company’s stock list:

Name of

Subsidiaries

Paid-in

capital

Source

of

funds

The

Company’s

ownership

The date

of the

acquisition

or disposal

Number of

shares or

amount

Number

of

shares

or

amount

of

disposal

Investment

gains and

losses

Shares as

of the

date of

this

Annual

Report

printed

Set

pledge

Endorsement

amount of

the

Company

Loan

amount

of the

Company

Hongjing

International

Investment

Co., Ltd.

20,000,000 Own

funds 100% 2012

118,437

Shares(P.S.) N/A N/A

1,302,812

Shares N/A N/A N/A

(3) Other supplementary information:

None

(4) Matters affect the shareholders’ equity or the price of securities:

None

241


Chairman: Gou, Tai-Ming (Terry Gou)

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