Stock Code 2317
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 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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. WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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: stockaffairs@foxconn.com
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
Dingpu No. 2 Factory Add: 2F, No. 53, Section 4, Zhongyang Road, Tucheng District, New Taipei City Tel: (02)2268-3466
Dingpu No. 5 Factory Add: 4F, No. 53, Section 4, Zhongyang Road, Tucheng District, New Taipei City Tel: (02)2268-3466
WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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
WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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!
1 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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.
2 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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
1. Increased capital to NT$2,279,000,000.
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
1. Increased capital to NT$3,580,000,000.
2. Reinvested Hongyang Venture Capital Investment Co., Ltd.
3. Reinvested Guifeng Co., Ltd.
In 1997
1. Increased capital to NT$5,118,000,000.
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
3 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 1. Increased capital to NT$7,346,000,000.
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
1. Increased capital to NT$11,000,000,000.
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
1. Increased capital to NT$14,529,000,000.
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
1. Increased capital to NT$17,687,800,000.
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
1. Increased capital to NT$20,648,970,000.
2. According to survey of Taiwan Ratings, it was the first largest manufacturing enterprise in Taiwan.
4 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 3. Won the first prize of the Best Corporate Strategy by Asiamoney.com.
4. Became the first largest exporter in Greater China.
In 2003
1. Increased capital to NT$25,109,744,000.
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
1. Increased capital to NT$32,310,231,030.
2. Acquired Eimo Oyji of Finland.
3. Merged Taiwan Ambit Microsystems (Stock) Company.
4. Became the first largest 3C OEM globally.
In 2005
1. Increased capital to NT$40,383,230,780.
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).
5 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 In 2006
1. Increased capital to NT$51,681,387,530.
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
1. Increased capital to NT$62,907,665,030.
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
1. Increased capital to NT$74,146,234,780.
2. Issued NT$5,180,000,000 of domestic unsecured ordinary corporate bonds.
3. Awarded as the Most Admired Enterprise in Taiwan by Common Wealth.
4. Ranked 132nd among Fortune Global 500 Enterprises.
In 2009
1. Increased capital to NT$85,789,318,550.
2. Issued NT$6,820,000,000 of domestic unsecured ordinary corporate bonds.
3. Ranked 109th among Fortune Global 500 Enterprises.
6 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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
1. Increased capital to NT$96,612,482,030.
2. Issued US$1,000,000,000 of overseas transferable corporate bonds.
3. Issued NT$6,000,000,000 of domestic unsecured ordinary 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
1. Increased capital to NT$106,890,066,630.
2. Issued NT$18,000,000,000 of domestic unsecured ordinary corporate bonds.
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
1. Increased capital to NT$108,358,665,270.
2. Issued NT$16,300,000,000 of domestic unsecured ordinary corporate bonds.
7 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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.
8 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 III. Corporate Governance Report
A. Organization Shareholders’ Meeting Supervisors
(1) Organization Chart Compensation Committee Board of Directors
Internal Audit Division
Executive Secretary
Chairman Chairman’s Office
President
iDPBG Business Group Group Business iDPBG
Global Legal Division Legal Global Group PCEBGBusiness Group Business NWInG Group Business iDSBG Group Business CNSBG
Global Procurement Division Procurement Global Systeminformation Division Group Business CMMSG Group Business CESBG Global R&D Center Center R&D Global Division Management Investment and F&A BusinessGroup SHZBG Human Human Group Business CCPBG
R esources esources
Division
9 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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.
10 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (3) Directors and Supervisors
Date: 04/28/2013 Shares currently Spouse or second-degree Shares held in Date of Shares held when held by their relative holding a Term First Current shareholding the name of Election elected spouses and Main working (education) Current positions in the Company and position as key manager, Title Name of Elected others (appoint minor children experience other companies director or supervisor Office Date ment) Relatio Number % Number % Number % Number % Title Name n Graduated from China Marine None None None Technical College Jun. 8, Director of Taiwan Electrical Gou, Tai-ming 2010 3 Feb. 20, 925,961,760 10.79 1,473,989,536 12.45 0 0 0 0 Equipment Association, None Chairman Jul. 1, (Terry Gou) 1974 Chairman of Mold Industry 2010 Association
Hon Chiao Jun. 8, None None None
International 2010 3 Jun. 10, 13,767,634 0.16 18,657,897 0.16 0 0 0 0 None None Jul. 1, Investment Co., 1995 Ltd 2010 President of Shenzhen Fujun Material None None None Technology Co., Ltd. President of Futaijie Science and Technology Director Development (Shenzhen) Co., Ltd. Jun. 8, Representative: Tatung Institute of Technology, Director of Fuhongyuan Environmental 2010 3 Jul. 1, 8,399,832 0.09 10,869,951 0.09 905,138 0 0 Tai, Jeng-wu Taiwan Technology (Shenzhen) Co., Ltd. Jul. 1, 2001 Representative of directors of Xinxi 2010 Technology (Stock) Company Representative of Fitipower Integrated Technology Inc. Hon Chiao None None None Jun. 8, International 2010 3 Jun. 15, 13,767,634 0.16 18,657,897 0.16 0 0 0 0 None None Investment Co., Jul. 1, 1998 Ltd 2010 Director None None None Jun. 8, Representative: Master’s Degree, University of 2010 3 Feb. 21, 20,470,434 0.23 17,120,384 0.14 3,097 0 0 0 None Illinois, U.S.A Lu, Sung-ching Jul. 1, 2000 2010 Hon Jin None None None Jun. 8, International Director 2010 3 Jun. 8, 961,344 0.01 1,302,812 0.01 0 0 0 0 None None Investment Co., Jul. 1, 2007 Ltd 2010
11 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Shares currently Spouse or second-degree Shares held in Date of Shares held when held by their relative holding a Term First Current shareholding the name of Election elected spouses and Main working (education) Current positions in the Company and position as key manager, Title Name of Elected others (appoint minor children experience other companies director or supervisor Office Date ment) Relatio Number % Number % Number % Number % Title Name n Master’s Degree of Institute of None None None Applied Physics, Chung Yuan
Christian University Jun. 8, Representative: Taiwan General Manager of Asia- 2010 3 Jun. 8, 3,120,623 0.04 6,344,859 50.05 1,535,802 0.01 0 0 None Lu, Fang-ming Pacific Region, Lingyun Science Jul. 1, 2010 and Technology Co. Ltd. General 2010 Manager of Taiwan Computer System, Hewlett Packard Hon Jin None None None Jun. 8, International 2010 3 Jun. 8, 961,344 0.01 1,302,812 0.01 0 0 0 0 None None Investment Co., Jul. 1, 2007 Ltd 2010 Director
Jun. 8, Supervisor of Bao Xin International Representative: International trade department of 2010 3 Jun. 8, 1,6,83,250 0.02 1,589,324 0.01 0 0 0 0 Investments Co., Ltd. Tamkang University None None None Chien, Yi-bin Jul. 1, 2007 Director of Expressive Profits Incorporated 2010 President of Ji-Tou United Accountant Firm Master’s Degree in Accounting, Jun. 8, Supervisor of I- Sheng Electric Independent National Taiwan University 2010 3 Jun. 8, 0 0 0 0 0 0 0 0 Wire & Cable Co., Ltd. Wu, Yu-Chi Bachelor degree in accounting, None None None Director Jul. 1, 2010 Supervisor of Procystal Technology Co., Tunghai University 2010 Ltd.
Jun. 8, Independent Master’s Degree in Finance, Liu, Cheng-Yu 2010 3 Jun. 8, 0 0 0 0 0 0 0 0 Attorney of I-Si Technology Law Firm National Taiwan University None None None Director Jul. 1, 2007 2010 Fu-Rui Jun. 8, International 2010 3 Jun. 15, 41,718,123 0.49 56,536,398 0.48 0 0 0 0 None None None None None Investment Co., Jul. 1, 1998 Ltd. 2010 Supervisor Master’s Degree in Accounting, Soochow University Jun. 8, Supervisor of Cheng Uei Precision Industry Representative: Deputy professor, Department 2010 3 Jun. 10, 14,706 0.00 0 0 0 0 0 0 Co., Ltd. None None None Wan, Jui-hsia Jul. 1, 2004 of Account, National Taiwan 2010 University
12 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Shares currently Spouse or second-degree Shares held in Date of Shares held when held by their relative holding a Term First Current shareholding the name of Election elected spouses and Main working (education) Current positions in the Company and position as key manager, Title Name of Elected others (appoint minor children experience other companies director or supervisor Office Date ment) Relatio Number % Number % Number % Number % Title Name n Independent Director of Cathay Financial Holdings Independent Director of Cathay Life Insurance Independent Director of Cathay Securities Corporation Independent Director of Cathay United Bank Master’s Degree, Graduate Supervisor of Maishi Venture Capital Jun. 8, School of Business, Nihon Huang, Qing- Investment Co., Ltd. Supervisor 2010 3 Jun. 8, 0 0 0 0 1,161,318 0.01 0 0 University, Japan Director of DFI Inc. None None None Yuan Jul. 1, 2007 PhD, Graduate School of Director of Taiwan Stock Exchange 2010 Business, Nihon University Corporation (TWSE) Independent Director of TAIWANGLASS GROUP Supervisor of Maishi #2 Venture Capital Investment Co., Ltd. President of WeiHeng Asset Management Co., Ltd
13 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (4) Major shareholders of institutional shareholders
Date: 04/28/2013 Name of Institutional Shareholder Name of Major Shareholders Percentage
Outstanding Growth Ltd., British Virgin Islands 90.99% Hongqiao International Investment Co., Ltd. Shijun International Investment Co., Ltd. 9.01% Hongyuan International Investment Co., Ltd. 50% Hongjing International Investment Co., Ltd. Hongqi International Investment Co., Ltd. 50% Xu Muji 99.83% Furui International Investment Co., Ltd. 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 INB Holdings Limited 100% Islands 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%
14 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (6) Professional knowledge and independence check matrix of directors and supervisors
Has over five years work experience and following Qualification professional qualifications Independence Attribute (See Notes Below)
Current Business, Legal Judge, Prosecutor, Business, Positions at Affairs, Finance, Attorney, CPA or Legal Affairs, Other Accounting, National Certified Finance, 1 2 3 4 5 6 7 8 9 10 Companies Name Lecturer or above in Professionals Accounting or Colleges in Related Related Work departments Experience 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.
15 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (7) Management Team Information
Date: 04/28/2013 Currently Holding Spouse or second- holding shares of shares in the Shareholding degree relative holding spouses and name of Inaugura Main experience (education a position as manager Title Name minor children others Current positions at other companies tion date experience)
Number % Number % Number % Title Name Relation
Graduated from China Marine Technical College Chairman Terry Feb. 20, Director of Taiwan Electrical and 1,473,989,536 12.45 0 0 0 0 None None None None Gou 1989 Appliances Equipment Association President Chairman of Mold Industry Association
President of Shenzhen Fujun Material Technology Co., Ltd. President of Futaijie Science and Technology Development (Shenzhen) Co., Ltd. Department Tai, Aug. 1, Tatung Institute of Technology, Director of Fuhongyuan Environmental General 10,869,951 0.09 905,138 0.01 0 0 None None None Jeng-wu 1992 Taiwan Technology (Shenzhen) Co., Ltd. Manager Representative of directors of Xinxi Technology (Stock) Company Representative of Fitipower Integrated Technology Inc.
Department Lu, Aug. 1, Master’s Degree, University of General Sung- 17,120,384 0.14 3,097 0.00 0 0 None None None None 1992 Illinois, U.S.A. Manager ching
16 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Currently Holding Spouse or second- holding shares of shares in the Shareholding degree relative holding spouses and name of Inaugura Main experience (education a position as manager Title Name minor children others Current positions at other companies tion date experience)
Number % Number % Number % Title Name Relation
President of Huai’an Fulitong Trade Co., Ltd. President of Qunkang Electronics (Kunshan) Department Co., Ltd. You, May 27, Graduated from Tamsui Institute of General 36,643,284 0.31 57,169,569 0.48 0 0 President of Fuyu Energy Technology None None None Xiang-fu 1992 Business Administration, Taiwan Manager (Kunshan) Co., Ltd. President of Fuyu ElectronicTechnology (Huai’an) Co., Ltd.
Master’s Degree of Institute of Applied Physics, Chung-Yuan Christian University Department Lu, Apr. 1, Taiwan General Manager of Asia- General Fang- 6,344,859 0.05 1,535,802 0.01 0 0 None None None None 2003 Pacific Region, Lingyun Science Manager ming and Technology Co., Ltd. General Manager of Taiwan Computer System, Hewlett Packard
17 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Currently Holding Spouse or second- holding shares of shares in the Shareholding degree relative holding spouses and name of Inaugura Main experience (education a position as manager Title Name minor children others Current positions at other companies tion date experience)
Number % Number % Number % Title Name Relation
Department Jiang, May 1, Univ. of Birmingham. UK General Hao- 2,958,872 0.02 0 0 0 0 None None None None 2005 Bachelor of EE Manager liang
Department Director of Expressive Profits Incorporated Chien, Jun. 1, International Trade Department of General 1,589,324 0.01 0 0 0 0 Representative of supervisors of Baoxin None None None Yi-bin 2005 Tamkang University, Taiwan Manager International Investment (Stock) Company
President of Hongzhun Precision Tooling (Kunshan) Department Co., Ltd. Xu, Jun. 1, Graduated from National Chin-Yi General 9,365,774 0.08 0 0 0 0 President of Hongzhun Precision Tooling None None None Mu-ji 2005 University of Technology, Taiwan Manager (Shenzhen) Co., Ltd.
18 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Currently Holding Spouse or second- holding shares of shares in the Shareholding degree relative holding spouses and name of Inaugura Main experience (education a position as manager Title Name minor children others Current positions at other companies tion date experience)
Number % Number % Number % Title Name Relation
Bachelor degree in economics, Department Zhong, Jan. 1, Iowa State University, U.S.A. President of Hongfujin Precision Industry General 186,045 0.00 0 0 0 0 None None None Yi-wen 2007 Manager of Hon Hai Precision (Shenzhen) Co., Ltd. Manager Industry (Stock) Company
President of Amworld Microsystems Enterprise Research Institute of (Shanghai) Ltd. Department Ling, Jan. 21, University of Washington, U.S.A. President of Ambit Microsystems (Shanghai) General 1,808,065 0.02 0 0 0 None None None Zhi-ping 2009 0 School of Business, Taiwan Ltd. Manager University President of Ambit Microsystems (Zhongshan) Ltd.
Director of Foxconn Precision Electronics (Yantai) Co., Ltd. Industrial Management Department Director of Jing Fu Tai Precision Electronics Deputy Xiong, of Taiwan Institute of Industrial (Yantai) Company Limited Department Aug. 31, Bing- 894,861 0.001 120,110 0.00 0 0 Skills Director of Fu Hongyuan (Shenzhen) None None None General 2008 zheng Industrial Engineering Department Company Limited Director Environmental Manager of Taiwan Institute of Technology 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. 19 Director of Foxconn Baja California S.A. de C.V. Director of Famous Rise International Ltd. WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Director of Universal Field International Ltd. Representative of directors of Pan- Currently Holding Spouse or second- holding shares of shares in the Shareholding degree relative holding spouses and name of Inaugura Main experience (education a position as manager Title Name minor children others Current positions at other companies tion date experience)
Number % Number % Number % Title Name Relation
President of Fertile Plan International Graduated from National Chengchi Logistics (Vietnam) Co., Ltd University, Taiwan Director of Foxconn (Far East) Ltd.(Cayman) Head Deputy general manager of Huafei Director of Foxconn (Far East) Ltd.(HK) Office Li, Oct. 17, 237,373 0.00 0 0 0 0 Color Display System (Stock) Director of Foxconn International Holdings None None None General Jin-ming 1997 Company Ltd. Manager Manager of Taiwan Philip (Stock) Board director of Foxconn Japan Co., Ltd. Company Director of Foxteq Holdings Inc. Director of Foxteq Integration, Inc.(Cayman) Director andof Foxteq president Investments of Hongyang Ltd. Venture Graduated from National Chiao CapitalDirector Investment of FUCHUAN (Stock) CO., Company Ltd. Tung University, Taiwan RepresentativeDirector of FUHONG of directors Precision of Hongqi Component Financial director of Vanguard International(Bac Giang) LTD.Investment (Stock) Company Financial Huang, Apr. 2,655,813 0.02 0 0 0 0 International Semiconductor RepresentativeDirector of FUNING of directors Precision of Baoxin Component None None None Director De-cai 15,1998 Corporation InternationalCo., LTD. Investment (Stock) Company Manager of Taiwan Philip (Stock) RepresentativeDirector of KCT of Engineering supervisors Co.,of Hongjing Ltd. Company InternationalDirectors of Liyi Investment International (Stock) Investment Company Representative(Stock) Company of supervisors of Liyi DirectorInternationalDirectors of of FAST Hongyuan Investment VICTOR International (Stock) LIMITED Company Master’s Degree in accounting, DirectorRepresentativeInvestment of Focus(Stock) of supervisorsPC Company Enterprises of Hongyuan Limited. Long Island University SupervisorInternationalDirector of ofHongjing investment FUCHUAN International (Stock) CO., LTD. Company Investment Manager of Deloitte & Touche, DirectorSupervis(Stock) Company orof ofFu Panll Bonus - International International Industrial Limited Accounting Chou, Jul. 20, 61,750 0.00 0 0 0 0 Taiwan DirectorCorporationDirectors of of FUYONG Hongqi Internat CO., LTDional Investment None None None Director Zong-kai 2010 Lecturer of Hsing Wu University , DirectorRepresentative(Stock) Company of Glory of StarSupervisors Investments of CyberTAN Limited. Taiwan DirectorTechnology,Supervisors of Great of Inc. Hongyang Name Investments Venture Capital Limited DirectorInvestment of GreatShenzhen(Stock) World Company Fuxuntong Technology Trading Pte. Ltd.Co., DirectorLtd. of HIGHHongfujin PRECISION Precision HOLDINGSIndustry (Shenzhen) Co., Ltd. LIMITED SupervisorPresident of of Shenzhen KCT Eng Futaitongineering Co.,International Ltd. DirectorLogistics of Co., Keep Ltd. 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
20 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (8) Remunerations paid to directors, supervisors and management team in the latest year
(a) Director Remuneration
Unit: NT$Thousand Juristic Juristic Juristic Juristic Juristic Director Director Juristic Director Director Independent Independent Title Director Director Representati Representati Director Representati Representati Director Director ve ve ve ve Hon Chiao Hon Jin Gou, Tai- International Tai, Jeng- Lu, Sung- International Lu, Fang- Chien, Yi- Liu, Cheng- Name ming Wu, Yu-Chi Investment wu ching Investment ming bin Yu (Terry Gou) Co., Ltd. Co., Ltd.
The Company 3,600 Remunerations All companies within the (A) consolidated financial 3,600 statements The Company 0 Retirement allowance All companies within the (B) consolidated financial 0 statements
The Company 0 Remuneration from distribution All companies within the of earnings consolidated financial 0 (C) statements The Company 480 Business execution All companies within the expenses (D) consolidated financial 480
statements Remuneration Directorsof The Company 0.00% Proportion of A, B, C and D to net profit after All companies within the tax consolidated financial 0.00% statements
21 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2
The Company 25,674 Remuneration, money award and All companies within the special expenses consolidated financial 25,674 etc. (E) statements
The Company 0 Retirement All companies within the allowance (F) consolidated financial 0 statements Cash 0 The Dividends Company Stock 213,283 Employee profit Dividends sharing from All Cash earnings 0 companies Dividends distribution (G) within the
time personnel consolidate Stock - 213,283 d financial Dividends statements The Company None Number of stock certificates of All companies within the employee (H) consolidated financial None statements Number of shares The Company None of Employees All companies within the Restricted Stock consolidated financial None
Relevantremuneration partof (I) statements The Company 0.26% Proportion of A, B, C, D, E, F and G to net All companies within the profit after tax consolidated financial 0.27% statements Is there any remuneration from other invested No businesses apart from subsidiaries
22 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Range of Remunerations
Names of directors Range of Remunerations paid to directors Summation of the first 4 items (A+B+C+D) Summation of the first 7 items (A+B+C+D+E+F+G) All companies involved in All companies in the financial The Company The Company financial statement (I) statement (J) Terry Gou, Hon Chiao Terry Gou, Hon Chiao International Investment Co., International Investment Co., Terry Gou, Hon Chiao Terry Gou, Hon Chiao Ltd., Tai Jeng-wu, Lu Sung- Ltd., Tai Jeng-wu, Lu Sung- International Investment Co., International Investment Co., Under NT$2,000,000 ching, Hon Jin International ching, Hon Jin International Ltd., Hon Jin International Ltd., Hon Jin International Investment Co., Ltd., Lu Fang- Investment Co., Ltd., Lu Fang- Investment Co., Ltd. Investment Co., Ltd. ming, Chien Yi-bin ming, Chien Yi-bin
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$100,000,000 - - Lu Fang-ming Lu Fang-ming
Total 9 9 9 9
23 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2
(b) Remunerations of Supervisors
Unit: NT$Thousand
Remuneration of supervisors Proportion of A, B and C Is there any Remuneration from Business execution to net profit after tax remuneration Remunerations (A) earnings distribution (B) expenses (C) from other Title Name invested All All All All businesses companies companies companies The companies in The The The apart from in the in the in the Company the financial Company Company Company subsidiaries financial financial financial statement statements statements statements Supervisor Huang, Qing-Yuan
Fu-Rui International 3,600 3,600 0 0 480 480 0.0043% 0.0044% No Investment Co., Ltd. Supervisor Representative: Wan Jui-hsia
24 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Range of Remunerations
Name of Supervisor Range of Remuneration Paid to Supervisors Summation of the first three items (A+B+C) The Company All companies in the financial statement (D)
Fu-Rui International Investment Co., Ltd. Fu-Rui International Investment Co., Ltd. Under NT$2,000,000 Representative: Wan Jui-Hsia 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) - -
NT$10,000,000 (included) ~ NT$15,000,000 (excluded) - -
NT$15,000,000 (included) ~ NT$30,000,000 (excluded) - -
NT$30,000,000 (included) ~ NT$50,000,000 (excluded) - -
NT$50,000,000 (included) ~ NT$100,000,000 (excluded) - -
Over NT$100,000,000 - -
Total 2 2
25 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (c) Remunerations paid to the management team
Unit: NT$Thousand Rate of total Number of
Money award and Earning distribution as dividends amount of A, B, Number of shares Remunerations Retirement stock special payment for personnel (D) C and D to pure of Employees (A) allowance (B) certificates of etc. (C) (Note) profits after tax Restricted Stock employee (%) All companies
involved in
The Company Title Name financial
statement
companies in the
The Company companies All in the financial statement The Company companies All in the financial statement The Company companies All in the financial statement Cash Dividends Stock Dividends Cash Dividends Stock Dividends The Company companies All in the financial statement The Company companies All in the financial statement The Company All financial statement Remunerationother from invested businessesapart from subsidiaries. General Terry Gou Manager Department Lu, General Sung-ching Manager Department You, Xiang- General fu Manager Department Tai, General Jeng-wu Manager Department 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 Lu, Fang- General ming Manager Department Jiang, General Hao-liang Manager Department Chien, General Yi-bin Manager Department Xu, General Mu-ji Manager
26 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Department Zhong, General Yi-wen Manager Department Ling, General Zhi-ping Manager Deputy Department Xiong, General Bing-zheng Manager Head Office Li, General Jin-ming Manager Financial Huang, Director De-cai Accounting Chou, Director 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.
27 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Range of Remunerations
Names of General Managers and Deputy General Managers Range of remuneration paid to the management team 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$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, 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$100,000,000 Lu, Fang-ming Lu, Fang-ming
Total 14 14
28 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (d) Employee profit sharing granted to the management team
Unit: NT$Thousand
Stock Dividends Cash Dividends Proportion of total amount to net Title Name Total (Note) (Note) profits after tax (%) General manager Terry Gou Department General Manager Lu, Sung-ching Department General Manager You, Xiang-fu Department General Manager Tai, Jeng-wu Department General Manager Lu, Fang-ming
Management Team Management Department General Manager Jiang, Hao-liang Department General Manager Chien, Yi-bin 356,087 0 356,087 0.376% 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 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.
29 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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.
Proportion of the total compensation to net profit after tax Item 2012 2011 Title All companies in All companies in the consolidated The Company the consolidated The Company financial financial statement statement Directors 0.256% 0.265% 0.261% 0.260%
Supervisors 0.004% 0.004% 0.005% 0.005% General Manager and Deputy 0.447% 0.461% 0.561% 0.559% General Managers
(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.
30 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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:
Attendance in Attendance rate Title Name By proxy Remarks person in person (%)
Chairman Terry Gou 2 2 40 -
Representative of Hon Chiao International Director 3 2 60 - Investment Co., Ltd.: Tai, Jeng-wu Representative of Hon Chiao International Director 2 0 40 - Investment Co., Ltd.: Lu, Sung-ching Representative of Hon Jin Director International Investment 5 0 100 - Co., Ltd.: Lu, Fang-ming Representative of Hon Jin Director International Investment 0 1 0 - Co., Ltd.: Chien, Yi-bin Independent Wu, Yu-Chi 5 0 100 - Director Independent Liu, Cheng-Yu 5 0 100 - Director 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.
31 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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:
Attendance in Title Name By proxy (%) Remarks person Representative of Fu-Rui Supervisor International Investment 5 100 - Co., Ltd.: Wan, Jui-hsia Supervisor Huang, Qing-Yuan 4 80 - Other noteworthy matters: 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.
32 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (4) Corporate governance implementation and the difference from the Corporate Governance Best Practice Principles for TWSE/GTSM-Listed Companies and reasons
Difference from corporate governance Item Operation practice principles for TWSE/GTSM-Listed companies and reasons 1. Equity structure and shareholder rights 1. An investor relation office was set up to deal with shareholder In conformity with the (1) How the Company handles shareholder suggestions of shareholders suggestions and disputes. corporate governance practice and disputes. 2. The Company can control the list of its major shareholders and final principles (2) Company’s control of the list of its major shareholders and final decision-makers, and disclose them legally. decision-makers 3. The Company, according to such relevant internal methods as operating (3) How the Company establishes its risk management mechanism and methods for operating, service and financial operations with specific firewalls involving related enterprises. 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. 2. Organization and responsibilities of the Board of Directors 1. Two Independent Directors were selected at the General Shareholder In conformity with the (1) Establishment of Independent Directors Meeting in 2010. corporate governance practice (2) Regular assessment on independence of CPA 2. Carry out regular assessment on independence of CPA. principles III. Establishment of communication channels with materially related Direct communication and dialogue with stakeholders shall be done when In conformity with the parties supervisors regard it necessary. corporate governance practice principles 4. Disclosure of information 1. The Company has established a website where relevant information on In conformity with the (1) Establishment of a Website where information on financial financial operations and business is disclosed, or the Company’s relevant corporate governance practice operations and corporate governance is disclosed. information on financial operations, business and corporate governance can principles (2) Use of other methods for information disclosure (such as setting an be inquired through an open information observation station. English website, appointing personnel in charge of collecting and 2. The Company has appointed special person in charge of information disclosing information, implementing spokesman system and disclosure of the open information observation station of exchange through publication of shareholder meeting records on the Company’s website). observation station and information release on website of company. 3. The Company has set up positions for spokesperson and deputy spokesperson. 5.Operation of Functional Commissions such as the Nomination, or The Company has set up the Compensation Committee according to the At present, the Company Compensation Committees established by the Company regulations. doesn’t set up such functional commissions as Nomination Committee and Audit Committee.
33 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Difference from corporate governance Item Operation practice principles for TWSE/GTSM-Listed 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.
34 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (5) Organization, responsibilities and operation status of the Compensation Committee:
(a) Information on members of the Compensation Committee
Has over 5 years of work experience and following professional qualifications. Independence Attribute (Note 2) Business, Judge, Business, Legal Prosecutor, Legal Conditions Current Affairs, Attorney, Affairs, Remarks ID positions at Finance, CPA or Finance, (Note 3) (Note 1) Name Accounting, National Accountin other 1 2 3 4 5 6 7 8 Lecturer or Certified g or companies above in Professionals Related Colleges in Work Related Experienc departments e Independent Wu, Yu-Chi 0 Director Independent Liu, Cheng-Yu 0 Director
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.
35 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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:
Attendance rate in Attendance in Title Name By proxy person (%) (B/A) Remarks person (B) (Note)
Convener Wu, Yu-Chi 2 0 100 - Member Liu, Cheng-Yu 2 0 100 - Member Lu, Fang-ming 2 0 100 - Other noteworthy matters: 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.
36 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (6) Performance of Social Responsibilities
Difference from the Corporate Social Responsibility Best Items Implementation Status Practice Principles for TWSE/GTSM-Listed Companies and reasons 1. Exercise and enhance corporate 1. At present, the Company has worked out its Conformity governance corporate social responsibility policy, covering ethnics, (1) The Company works out its corporate laborers, safety, health, environment and management, social responsibility policy and checks the and established Foxconn Global SER Committee results of the implementation. (FGSC) to drive and supervise the execution of (2) The Company sets up exclusively (or relevant CSR operations. concurrently) dedicated units to be in 2. In 2007, The Company set up FGSC organization, charge of proposing and enforcing the which is composed of 7 full-time personnel in charge corporate social responsibility policies. of driving and supervising relevant work, including the (3) The Company organizes regular implementation of internal audit, performance education and training on business ethnics assessment, CSR education and training, and the and advocating principles for directors, publication of CSR annual report. In addition, there are supervisors and employees, and should over 60 part-time personnel in each business group and incorporate the foregoing into its surrounding units in charge of executing CSR related employee performance assessment system work. to establish a clear and effective reward 3. The Company carries out regular trainings and and punishment system. 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.
2. Environment for sustainable 1. The Company actively advocates water recycling, Conformity development and adopts some renewable/biodegradable raw (1) The Company endeavors to utilize all materials to effectively reduce the impact of resources more efficiently and uses production and manufacturing on the environment. renewable materials which have a low 2. In response to the international trend and customer impact on the environment. requirements, the Company gradually established (2) Based on its industrial features, the environment management systems for its business Company establishes proper environment units, and passed the certification of ISO 14001. management systems. 3. In 2008, environmental protection office was (3) The Company establishes dedicated established to be in charge of planning, design, units or assigns dedicated personnel for management and operation maintenance of environment management to maintain the environmental protection facilities, which were environment. installed in all working areas. Moreover, the Company (4) The Company monitors the impact of obtained the discharge license issued by the climate change on its operations, and government, and assigned dedicated personnel to be in should establish company strategies to charge of equipment operation in accordance with laws save energy and reduce the emission of and regulations. carbon and greenhouse gas. 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.
37 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Difference from the Corporate Social Responsibility Best Items Implementation Status Practice Principles for TWSE/GTSM-Listed Companies and reasons 3. Protect social public interests 1. The Company abides by the labor law of the region Conformity (1) According to the relevant labor laws (or the country) where its working plants are located and internationally acknowledged human by transferring relevant contents into its labor rights of laborers, the Company management policy. The Company has established establishes proper management methods, corresponding procedures and special lines for labor procedures and non-discrimination management to ensure the legal interests and rights of employment policy to ensure the legal its employees. rights and interests of employees. 2. The Company provides safe and healthy working (2) The Company provides safe and environment for its employees and focus on employee healthy working environment for its health care, a health management center to provide employees and organizes training on employee health and health-related advice and safety and health on a regular basis. assistance, and regular health and safety at work (3) The Company establishes regular seminars. communication mechanism for 3. The Company regularly holds various employees, and informs employees of the communication meetings with employees to convey operation changes that may have the Company’s policies and information. significant impact on employees in a 4. The Company follows the regulations on limited reasonable way. use/prohibited use of hazardous substance and conflict (4) The Company works out and discloses minerals in an all-round way and provides relevant its policies on consumer rights and information to customers. interests and establishes transparent and 5. The Company has thousands of suppliers in different effective procedures for accepting regions, but we learn from each other for common consumer complaints in its products and progress in the aspects of society and environment like service. hazardous substance control, environmental protection, (5) The Company cooperates with its labor safety and health, human rights, conflict metal suppliers to jointly foster a stronger sense and carbon footprint. At the same time, our suppliers of corporate social responsibilities. are required to practice their corporate social (6) Through commercial activities, non- responsibilities. cash property endowments, voluntary 6. As the Company actively participates in social service or other free professional services, activities for public interests and charitable activities, the company participates in community donations are provided for affected people in the Flood development and charities events. of August 8th (in Taiwan), Sichuan Earthquake, Japan Earthquake as well as Floral Expo Charitable Garden Party.
4. Enhance information disclosure 1. A special column for “corporate responsibilities” is Conformity (1) The ways for the company to disclose established on the Company’s website.
38 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Difference from the Corporate Social Responsibility Best Items Implementation Status Practice Principles for TWSE/GTSM-Listed Companies and reasons relevant critical and reliable information 2. As a EICC member, the Company is dedicated to on corporate social responsibilities. promoting social and environmental responsibilities (2) The Company compiles with the (hereinafter referred to as SER), and worked out report on corporate social responsibilities “Foxconn Global Codes of Conducts: Social and to disclose the performance of corporate Environmental Responsibilities”. social 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.
39 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (7) Status of Implementation of Integrity Management
Implementation of Integrity Operation
Difference from the Integrity Operation Practice Principles for Items Implementation TWSE/GTSM-Listed Companies and reasons 1. Adopt integrity operation policy and The Company sticks to the corporate Conformity scheme culture with integrity operation as the (1) The company clarifies the integrity core and works out codes of conduct operation policy in its regulations and (CoC) for stakeholders to perform external documents and the commitment of relevant social and environmental board of directors and managers to active responsibilities, including Letter of implementation. Commitment of Manufacturers signed (2) The company works out scheme, with suppliers, clearly stating that operation procedures and guidelines of suppliers should ensure transparent and conducts for employee education and fair commercial trading activities. In training to prevent dishonest behaviors addition, the Company has made (3) When working out a scheme to prevent commitment to customers and dishonest behaviors, the company adopts shareholders in its CoC. measures to prevent bribery and illegal The Company carries out education and political contributions in business activities training for all employees on CoC every with high risks of dishonest behaviors. 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. 2. Put integrity operation into practice The Company adheres to integrity Conformity (1) The company should keep its culture and operation, commits to commercial activities away from people abiding by requirements of international with records of dishonest behaviors, and and domestic laws and regulations on articles on honest behaviors shall be anti-corruption and anti-bribery, takes explicitly stated in commercial contracts. zero-tolerance policy for any behavior or (2) The company sets up company sets up activity against the regulations, and exclusively (or concurrently) dedicated strictly prohibits any corruption, bribery, units to be in charge of corporate integrity embezzlement and other illegal earning operation and supervision of the board of activities. All employees shall receive directors. anti-corruption trainings for at least 2 (3) The company works out policies to hours every year. In addition, the prevent interest conflicts and provide Company asks its downstream suppliers, proper statement channels. manufacturers and customers to strictly (4) The company shall establish effective implement high-standard anti-corruption accounting system, internal control system policies as the premise for cooperation. and auditing of internal auditors to put After approved by the chairman of the integrity operation into practice. 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
40 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Difference from the Integrity Operation Practice Principles for Items Implementation TWSE/GTSM-Listed Companies 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 The Company establishes various Conformity channels and punishments for violation reporting channels so that employees against the regulations of integrity and relevant people can report the operation as well as the appeal system. 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. 4. Enhance information disclosure On the Company’s official website both Conformity (1) The company establishes a website to in Chinese and English disclose relevant information on integrity (http://www.foxconn.com), there are operation. relevant information on integrity (2) Other information disclosure methods operation such as annual report on of the company (such as setting up an corporate social and environmental English website, appointing a dedicated responsibilities and CoC. person in charge of collecting and disclosing company information through the website etc.).
41 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Difference from the Integrity Operation Practice Principles for Items Implementation TWSE/GTSM-Listed Companies 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
42 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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.
43 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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.
Hon Hai Precision Industry Co., Ltd.
Chairman: Gou, Tai-ming [signature and seal]
President: Gou, Tai-ming [signature and seal]
44 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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
45 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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
46 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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
47 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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
48 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 C. Information on Accountants’ Fees
(1) Range of accountants’ fee
Inspection CPA Firm Name of accountant Remarks period PricewaterhouseCoopers Hsu, Yong-jian Xue, Ming-ling 2012 - Taiwan
Unit: NT$Thousand
Fee items Audit fee Non-audit fee Total Range of amount 1 Under 2 million 2 2 million(included) ~ 4 million 3 4 million(included) ~ 6 million 4 6 million(included) ~8 million 5 8 million(included) ~ 10 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
49 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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 2012 Current year to 04/30 Title Name Shareholding Pledged Shares Shareholding Pledged Shares Increase/Decrease Increase/Decrease Increase/Decrease Increase/Decrease Chairman Terry Gou 133,999,048 370,000,000 0 10,000,000 Representative of Hongqiao International Investment Co., Ltd.: Tai, Director 1,696,172 0 0 0 Jeng-wu Representative of Hongqiao International Investment Co., Ltd.: Lu, Director 1,696,172 0 0 0 Sung-ching Representative of Hongjing International Investment Co., Ltd.: Lu, Director 118,437 0 0 0 Fang-ming Representative of Hongjing International Investment Co., Ltd.: Director 118,437 0 0 0 Chien, Yi-bin Independent Director Wu, Yu-Chi 0 0 0 0
Independent Director Liu, Cheng-Yu 0 0 0 0 Representative of Furui International Investment Co., Ltd.: Wan, Jui- Supervisor 5,139,672 600,000 0 0 hsia 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
50 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 2012 Current year to 04/30 Title Name Shareholding Pledged Shares Shareholding Pledged Shares Increase/Decrease Increase/Decrease Increase/Decrease 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.
51 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 G. Information on relation among top ten shareholders
Date: 04/28/2013
Spouse & Minor Shares Held Shareholding Minor through Other Parties Related Party (Note) Name Shareholding Shares held Remark Number % Number % Number % Name Relation
Terry Gou 1,473,989,536 12.45 - - - - None None - Citibank Hosting Hon Hai Precision Industry Co., 303,140,549 2.56 - - - - None None - Ltd. Depositary Receipts Account Chase Bank Hosting Central Bank of Saudi Arabia 230,646,627 1.95 - - - - None None - Investment Account Standard Chartered Bank hosting Sanskrit Vanguard 210,784,314 1.78 - - - - None None - Emerging Markets Equity Index Fund account Citibank Hosting Government of Singapore 172,755,725 1.46 - - - - None None - Investment Account JP Morgan Chase Bank hosting Abu Dhabi 140,926,047 1.19 - - - - None None - Investment Authority Investment Account Standard Chartered Bank Hosting the Fidelity Puritan 127,600,000 1.08 - - - - None None - Trust: Fidelity low-priced stocks Fund Standard Chartered Bank hosting iShares MSCI 119,635,231 1.01 - - - - None None - Emerging Markets Index Fund Investment Account 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.
52 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 H. Combined shareholding percentage
04/28/2013; unit: 1,000 shares Investment by directors, Investment by the Company supervisors, managers, direct or Combined investment Shift in investment indirect control groups 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.
53 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 IV. Company Shares and Fund Raising
A. Company capital and shares
(1) Capital and Shares
04/28/2013; Unit: 1,000 shares Authorized Capital Issued shares Options, bonds, Type Non-issued warrants, other Outstanding Total Total Shares convertible Shares shares Registered Common Shares 11,835,867 11,835,867 2,664,133 500,000 15,000,000 (Listed Stock)
(2) Sources of Capital
Unit: NT$1,000; 1,000 shares Authorized capital Paid-in capital Remarks stock Property other Issue than Year/ Approval date price Source of capital cash month Shares Amount Shares Amount and document (NT$) (NT$1,000) offset by No. the number of shares Capital increase 10 NT$93,000 by earnings 1991/06 100,000 1,000,000 80,300 803,000 None - 42 Capital increase NT$90,000 by cash Capital increase NT$132,850 by earnings 1992/07 10 100,000 1,000,000 97,600 976,000 Capital increase None - NT$40,150 by capital reserve Capital increase NT$103,200 by earnings 1993/08 10 150,000 1,500,000 112,800 1,128,000 Capital increase None - NT$48,800 by capital reserve Capital increase NT$118,600 by earnings 1994/08 10 150,000 1,500,000 130,300 1,303,000 Capital increase None - NT$56,400 by capital reserve Capital increase NT$445,700 by earnings June 19, 1995 1995/06 10 250,000 2,500,000 187,900 1,879,000 Capital increase None (84), TCZ(I) No. NT$130,300 by capital 36224 reserve
54 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Authorized capital Paid-in capital Remarks stock Property other Issue than Year/ Approval date price Source of capital cash month Shares Amount Shares Amount and document (NT$) (NT$1,000) offset by No. the number of shares October 09, 1995 Capital increase 1995/10 48 250,000 2,500,000 227,900 2,279,000 None (84), TCZ(I) No. NT$400,000 by cash 52879 Capital increase July 9, 1996 (85), 1996/10 10 450,000 4,500,000 358,000 3,580,000 NT$1,301,000 by None TCZ(I) No. 41678 earnings Capital increase NT$1,108,400 by June 30, 1997 earnings 1997/09 10 600,000 6,000,000 511,800 5,118,000 None (86), TCZ(I) No. Capital increase 51749 NT$429,600 by capital reserve Capital increase NT$1,818,560 by July 10, 1998 1,000,00 earnings 1998/08 10 10,000,000 734,600 7,346,000 None (87), TCZ (I) No. 0 Capital increase 58651 NT$409,440 by capital reserve Capital increase June 30, 1999 1,300,00 1999/08 10 13,000,000 1,050,000 10,500,000 NT$3,154,000 by None (88),TCZ(I) No. 0 earnings 58593 August 9, 1999 220.7 1,300,00 Capital increase 1999/11 13,000,000 1,100,000 11,000,000 None (88),TCZ(I) No. 5 0 NT$500,000 by cash 63098 Capital increase June 22, 2000 2,400,00 2000/08 10 24,000,000 1,452,900 14,529,000 NT$3,529,000 by None (89),TCZ(I) No. 0 earnings 54010 Capital increase June 13, 2001 2,400,00 2001/08 10 24,000,000 1,768,780 17,687,800 NT$3,158,800 by None (90), TCZ(I) No. 0 earnings 137713 Capital increase June 27, 2002 3,000,00 2002/08 10 30,000,000 2,064,897 20,648,970 NT$2,961,170 by None (91), TCZ(I) No. 0 earnings 135225 Capital increase June 12, 2003 3,000,00 2003/08 10 30,000,000 2,519,174 25,191,744 NT$4,542,774 by None (92), TCZ(I) No. 0 earnings 920128415 Capital increase January 27, 2004 3,600,00 2004/07 10 36,000,000 2,757,198 27,571,989 NT$2,380,244 by None (93), TCZ(I) No. 0 merging 920162759 Capital increase NT$4,738,011 by July 21, 2004, 4,600,00 2004/10 10 46,000,000 3,231,023 32,310,231 earnings; Converse None JGZYZ 0 NT$231 Euro-convertible No.0930132689 bond 4,600,00 Converse NT$76,957 2005/05 10 46,000,000 3,238,718 32,387,189 None - 0 Euro-convertible bond 5,300,00 Converse NT$458,061 2005/08 10 53,000,000 3,284,525 32,845,251 None - 0 Euro-convertible bond
55 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Authorized capital Paid-in capital Remarks stock Property other Issue than Year/ Approval date price Source of capital cash month Shares Amount Shares Amount and document (NT$) (NT$1,000) offset by No. the number of shares Capital increase January 29, 2005, 5,300,00 2005/09 10 53,000,000 4,003,171 40,031,717 NT$7,186,466 by None JGZYZ 0 earnings No.0940131076 5,300,00 Converse NT$351,514 2005/11 10 53,000,000 4,038,323 40,383,231 None - 0 Euro-convertible bond 5,300,00 Converse NT$616,303 2006/04 10 53,000,000 4,099,953 40,999,534 None - 0 Euro-convertible bond Capital increase July 11, 2006, 5,700,00 2006/09 10 57,000,000 4,989,944 49,899,441 NT$8,899,907 by None JGZYZ 0 earnings No.0950129699 Capital increase October 19, 2006, 5,700,00 2007/03 10 57,000,000 5,168,139 51,681,388 NT$1,781,947 by None JGZYZ 0 merging No.0950147071 Capital increase July 09, 2007, 7,000,00 2007/09 10 70,000,000 6,290,767 62,907,665 NT$11,226,277 by None JGZYZ 0 earnings No.0960035148 Capital increase June 30, 2008, 8,120,00 2008/10 10 81,200,000 7,414,623 74,146,235 NT$11,238,569 by None JGZYZ 0 earnings No.0970032402 Capital increase April 28, 2009, 9,300,00 2009/06 10 93,000,000 8,578,932 85,789,319 NT$11,643,084 by None JGZYZ 0 earnings No.0980017596 Capital increase July 01, 2010, 10,820,0 2010/09 10 108,200,000 9,661,248 96,612,482 NT$10,823,163 by None JGZFZ 00 earnings No.0990034120 Capital increase June 20, 2011, 12,230,0 10,689,09 106,890,96 2011/08 10 122,300,000 NT$10,278,485 by None JGZFZ 00 7 7 earnings No.1000028108 Capital increase July 5, 2012 12,230,0 11,835,86 118,358,66 2012/09 10 122,230,000 NT$11,467,698 by None JGZFZ No. 00 7 5 earnings 1010029788
(3) Information on shelf registration system:
None
56 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (4) Shareholder Structure
04/28/2013
Shareholder Foreign Financial Juridical Private Structure Governments institutions & Total institutions Person Investors foreigners Quantity 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.
57 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (6) List of major shareholders
04/28/2013 Shares Shareholdings Shares held Major Shareholder’s name (%)
Terry Gou 1,473,989,536 12.45% Citibank Hosting Hon Hai Precision Industry Co., Ltd. 303,140,549 2.56% Depositary Receipts Account Chase Bank Hosting Central Bank of Saudi Arabia 230,646,627 1.95% Investment Account Standard Chartered Bank hosting Sanskrit Vanguard 210,784,314 1.78% Emerging Markets Equity Index Fund account Citibank Hosting Government of Singapore Investment 172,755,725 1.46% Account JP Morgan Chase Bank hosting Abu Dhabi Investment 140,926,047 1.19% Authority Investment Account Standard Chartered Bank Hosting the Fidelity Puritan Trust: 127,600,000 1.08% Fidelity low-priced stocks Fund Standard Chartered Bank hosting iShares MSCI Emerging 119,635,231 1.01% Markets Index Fund Investment Account Cathay Life Insurance Co., Ltd. 112,369,247 0.95%
JP Morgan Hosting ABP pension fund account 111,109,232 0.94%
58 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (7) Information on Market Price, Equity, Earnings, Dividends Per Share & Relatives
Year Current year to 2011 2012 Item March 31, 2013
Before 126.50 117.00 Highest adjustment 89.90 Market Price Per After adjustment 115.00 105.00 Before Share 61.50 79.00 (Note 1) Lowest adjustment 79.70 After adjustment 61.50 70.45 Average 92.89 92.08 83.62 Before distribution 54.06 54.62 57.33 Equity Per Share After distribution - - Weighted average shares (1,000 10,661,194 11,798,513 11,834,564 Earnings per shares) share Before Earnings per 7.65 8.03 1.38 (Note 2) adjustment share (NT$) After adjustment 6.94 - - Cash dividend 1.5 1.5 - Stock Dividends Appropriated 1.0 1.0 - from Retained Dividends per Earnings Stock Dividends share Stock Dividends (Note 3) Appropriated None None - from Capital Reserve Accumulated Unappropriated None None - Dividends P/E ratio 12.14 11.47 - Investment Price-dividend ratio 61.93 61.39 - return analyses 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.
59 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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$1.5 for each share. After gaining the approval of the General Meeting of Shareholder, the Board of Directors shall formulate the base day for distribution.
(9) Influence of non-compensated distribution of shares and the present occasion on the Company’s business performance, earnings per share, and shareholder rights
Year 2013 Item (estimate)
Amount of paid-in capital in opening period (NT$) 118,358,665,270
Cash dividend per share (NT$) 1.5 Dividend Stock dividends per share for capital increase by retained earnings Distribution 0.1 (Shares) (Note 1) Stock dividends per share for capital increase by capital reserve - (Shares) Operating profit
Change in operating profit compared with the previous year
After-tax net profit Business Performance Change in after-tax net profit compared with the previous year N/A (Note 2) Variation Earnings per share
Change in earnings per share compared with the previous year
Average return on investment (Average annual EP ratio) If retained earnings for capital increase all Pro forma EPS N/A (Note 2) converted to cash dividends Pro forma average ROI Pro forma earnings Pro forma EPS If no capital increase by capital reserve N/A (Note 2) per share and Pro forma average ROI price/earnings ratio If no capital increased by capital reserve but Pro forma EPS capital increase by earnings shifted to cash N/A (Note 2) dividends 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.”
60 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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.
61 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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 Employee Stock Dividends: Employee Stock Dividends: Employee Cash Directors and Amount Number of Shares Dividends Supervisors
5,874,551,962 77,860,198 22 0 Note: NT$75.45 per share is determined as the calculating basis by the closing price of the Company on June 15, 2012 and taking account of the influence of the ex-right and ex-dividend factors.
(2) In the case of any differences between the actual distributed and recognized number, please state the difference, reasons and response:
The Company’s actually distributed number does not differ from the recognized one.
(11) Share repurchases:
None
62 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 B. Section on Corporate Bonds
(1) Corporate Bonds
Unit: NT$ 2005 Unsecured Corporate Bonds, 2009 Unsecured 2010 Unsecured 2011 Unsecured Corporate Bond Type Phase I Corporate Bonds, Corporate Bonds, Corporate Bonds, Phase I Phase I Phase I Bonds A-E
September 22, 2005 - Issuing (handling) date October 6, 2009 December 27, 2010 March 8, 2011 September 28, 2005
Denomination 1,000,000 1,000,000 1,000,000 1,000,000 Issuing and transaction Market (listed) Market (listed) Market (listed) Market (listed) location 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% 10-year period 5-year period 5-year period 5-year period Due date: September Deadline Due date: October 6, Due date: December Due date: March 8, 22, 2015 - September 2014 27, 2015 2016 28, 2015 Guarantee Agency None None None None Bank SinoPac Bank SinoPac Bank SinoPac Bank SinoPac Consignee Company Limited Company Limited Company Limited Company Limited Underwriting institution None None None None Certified lawyer None None None None CPA None None None None Respectively repay Respectively repay Respectively repay 50% in the fourth and Repayment in lump 50% in the fourth and 50% in the fourth and Repayment method fifth years from the sum upon maturity fifth years from the fifth years from the expiration of issue expiration of issue date expiration of issue date date Outstanding principal 5,500,000,000 6,820,000,000 6,000,000,000 6,000,000,000 Terms of redemption or None None None None advance repayment Restrictive clause None None None None Rating agency: Rating agency: Rating agency: Rating agency: Name of credit rating China Credit Rating China Credit Rating China Credit Rating China Credit Rating agency Co., Ltd. Co., Ltd. Rating Co., Ltd. Rating Co., Ltd. Rating Rating date Rating date: August date: December 26, date: December 3, date: December 21, Rating of corporate bonds 23, 2005 2008 2010 2010 Rating result: twAA Rating result: twAA+ Rating result: twAA+ Rating result: twAA+
63 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 As of the printing date of this Annual Report, amount of (exchanged or subscribed) N/A N/A N/A N/A Other ordinary shares, rights GDRs or other attached securities converted: Issuance and conversion (exchange or None None None None subscription) method Issuance and conversion, exchange or subscription method, issuing condition None None None None dilution, and impact on existing shareholders’ equity
Transfer Agent None None None None
Unit: NT$
2011 Unsecured Corporate Bonds, Phase II 2011 Unsecured 2012 Unsecured Corporate Bond Type Corporate Bonds, Corporate Bonds, Bond A Bond B Bond C Phase III Phase I 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 Issuing and transaction Market (listed) Market (listed) Market (listed) location Issue by Issue by Issue price Issue by denomination denomination 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% 5-year period 7-year period 10-year period 5-year period 5-year period Deadline Due date: Due date: Due date: Due date: July 18, Due date: March 1, June 14, 2016 June 14, 2018 June 14, 2021 2016 2017 Guarantee Agency None None None Bank SinoPac Bank SinoPac Consignee Bank SinoPac Company Limited Company Limited Company Limited Underwriting institution None None None Certified lawyer None None None CPA None None None Repayment in lump Repayment in lump Repayment method Repayment in lump sum upon maturity sum upon maturity 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 None None None or advance repayment
64 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Restrictive clause None None None Rating agency: Rating agency: Name of credit rating Rating agency: China Credit Rating China Credit Rating agency: China Credit Rating Co., Ltd. Co., Ltd. Co., Ltd. Rating date: Rating date: May 19, 2011 Rating date: June 23, Rating date: Rating of corporate Rating result: twAA+ 2011 December 16, 2011 bonds: Rating result: twAA+ Rating result: twAA+ As of the printing date of this Annual Report, amount of (exchanged or subscribed) NA NA NA Other ordinary rights shares, GDRs attached or other securities converted: Issuance and conversion (exchange or None None None subscription) method Issuance and conversion, exchange or subscription method, issuing condition None None None dilution, and impact on existing shareholders’ equity Transfer Agent None None None
Unit: NT$ 2013 Unsecured Corporate 2012 Unsecured 2012 Unsecured 2012 Unsecured Bonds, Phase I Corporate Bond Type Corporate Bonds, Corporate Bonds, Corporate Bonds, Phase II Phase III Phase IV 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 Issuing and transaction Market (listed) Market (listed) Market (listed) Market (listed) location 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% 5-year 7-year period 5-year period 3-year period 5-year period period Deadline Due date: Due date: 05/23/2017 Due date:08/06/2015 Due date: 10/11/2017 Due date: 01/30/2020 01/30/2018 Guarantee Agency None None None None Bank SinoPac Bank SinoPac Bank SinoPac Bank SinoPac Company Consignee Company Limited Company Limited Company Limited Limited
65 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 Underwriting institution None None None None Certified lawyer None None None None CPA None None None None
Repayment in lump Repayment in lump Repayment in lump Repayment in lump sum Repayment method sum upon maturity sum upon maturity sum upon maturity 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 None None None None or advance repayment Restrictive clause None None None None Rating agency: Rating agency: Rating agency: Rating agency: Name of credit rating China Credit Rating China Credit Rating China Credit Rating China Credit Rating Co., agency: Co., Ltd. Co., Ltd. Co., Ltd. Ltd. Rating date: Rating date: April 24, Rating date: July 11, Rating date: Rating date: September Rating of corporate bonds: 2012 2012 September 12, 2012 12, 2012 Rating result: twAA+ Rating result: twAA+ Rating result: twAA+ Rating result: twAA+ As of the printing date of this Annual Report, amount of (exchanged or subscribed) N/A N/A N/A N/A ordinary Other shares, GDRs rights or other attached securities converted: Issuance and conversion (exchange or None None None None subscription) method Issuance and conversion, exchange or subscription method, issuing condition None None None dilution, and impact on None existing shareholders’ equity
Transfer Agent None None None None
66 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (2) Convertible Bonds
Corporate Bond Type First-time unsecured Euro-convertible bonds
Year From the current year to 2012 Item 04/30/2013 Market Highest 106.279 103.693 price of converti Lowest 96.104 99.857 ble bonds Average 101.127 101.072
Conversion price 111.592 Issuing (handling) date Issued on October 12, 2010 and conversion price in NT$152.75 issuing Method of performing Issuance of new shares conversion obligations
(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.)
67 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 04/28/2013
Issue date: Item October 7, 1999 March 17, 2005
Issuing location: Europe, Asia, USA Issuing location: Europe, Asia, USA Issuing and transaction location: Transaction location: London Stock Transaction location: London Stock Exchange Exchange
Total amount: USD 416,700,000 USD 257,178,618.20
Unit issue price: USD 13.89 USD 8.7577 (1) 25,000,000 units Total of issued unit (2) 5,000,000 units 29,366,000 units 30,000,000 units in total (1) Issuance of new shares for cash increase The Company’s common shares held Source of negotiable securities (2) The Company’s common shares by the original shareholders held by the original shareholders Amount of negotiable securities 60,000,000 common shares 58,732,000 common shares
1. Right to vote 1. Right to vote GDR holders’ 2. Right to distribute dividend, 2. Right to distribute dividend, rights and obligations subscribe new shares and other rights 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 Issue cost: amortized by the issuing companies and shareholder participants incurred during the issuance and according to the actual shares issued duration Expenses incurred in the duration: amortized by the issuing company
Important conventions about The depositary institute performs the obligations for GDR holders, while the depositary and escrow guarantee agency keeps GDR common shares. agreement
(unit: USD) (unit: perunit price Market Highest 7.82
2012 Lowest 5.2
Average 6.51
Current Highest 6.145
year to Lowest 4.998 04/30/2013 Average 5.572
E. Subscription of warrants for employees:
None
68 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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.
69 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 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
70 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (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%
71 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 B. Production and Sales Status
(1) Key Accounts in the Past Two Years
(a) Key Suppliers
Unit: NT$million 2011 2012 As of end of Q1, 2013 Percentage of Percentage Relationship Relationship Relationship total Net of total Net Percentage of total Item From Amount with the From Amount with the From Amount with the Purchases Purchases Net Purchases (%) issuer issuer issuer (%) (%) 1 Vendor ac 904,830 35.08% Note 1 Vendor ac 760,977 26% Note 1 Vendor ac 134,111 18% Note 1 2 Vendor af 445,389 15% Note 1 Vendor af 128,751 17% Note 1 Vendor ag 400,306 14% Note 1 Others 1,674,814 64.92% Other 1,331,113 45% Others 214,277 65% - Total Net Total Net Total Net 477,139 100% - 2,579,644 100.00% 2,937,785 100% Purchases Purchases Purchases Note 1: Indirect investment subsidiary of the Company. Note 2: Changes were due to market trend dynamics and customer demand variation.
72 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (b) Key Buyers
Unit: NT$million 2011 2012 As of end of Q1, 2013 Percentage of Relationship Percentage Relationship Relationship Percentage of total Item From Amount total Net with the From Amount of total Net with the From Amount with the Net Sales (%) Sales (%) issuer Sales (%) issuer issuer Customer 1 1,350,164 48.68% Nil Customer E 1,840,779 57.19% Nil Customer E 387,543 60.55% Nil E Customer 2 343,170 12.37% Nil Customer A 329,113 10.22% Nil Customer A 65,037 10.16% Nil A Others 1,079,977 38.95% - Others 1,049,036 32.59% - Others 205,735 29.29% - Total Net Total Net Total Net 2,773,311 100.00% - 3,218,928 100.00% - 658,315 100.00% - Sales Sales Sales 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$Thousand Quantity 2011 2012 & Value
Capacity Quantity Value Capacity Quantity Value Major Product 3C Electronics 18,531,684 16,350,881 2,677,526,630 24,871,337 21,943,981 3,090,181,680
73 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 (3) Sales Value in the Most Recent Years
Unit: 1,000 pcs, NT$Thousand Quantity & 2011 2012 Value Domestic Export Domestic Export
Major Product Quantity Value Quantity Value Quantity Value Quantity Value 3,187,695,80 3C Electronics 78,851 13,452,920 16,176,352 2,755,589,938 156,408 25,369,524 19,688,931 9 Service and Management Fee － － － 4,268,520 － － － 5,863,062 Incomes
(4) Taiwan Employee Data during the Past Two Years and Up to Apr. 30, 2013
Year 2011 2012 Up to Apr. 30, 2013
Staff 6,651 6,568 6,487 Employee Operator 18 35 34 Number Total 6,669 6,603 6,521 Average Age 38.20 38.53 38.53 Average Seniority 5.90 6.34 6.57 PhD Degree 2.07% 2.01% 2.07% Master Degree 44.08% 45.49% 45.67% Education College 50.74% 49.37% 49.15% Distribution % High School 2.76% 2.73% 2.70% Below High School 0.34% 0.39% 0.41%
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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.
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(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 None None pollution control 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
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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.
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(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.
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(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
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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.
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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 Before Distribution 1,189,622,293 Current liabilities After Distribution Note 2 Non-current liabilities 119,674,734 Before Distribution 1,309,297,027 Total liability After Distribution Note 2 Equity attributable to owners of parent 678,517,673 Share capital 118,358,665 Capital surplus 58,889,659 Before Distribution 476,124,374 Retained earnings After Distribution Note 2 Other equity interest 25,163,876 Treasury shares (18,901) Non-controlling interests 37,519,080 Before Distribution 716,036,75 Total equity After Distribution Note 2 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.
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Concise Statement of Comprehensive Income
Unit: NT$Thousand
Period Item As of March 31, 2013
Operating revenue 809,011,951
Gross profit (loss) from operations 45,913,087
Net operating income (loss) 13,906,991
Non-operating income and expenses 8,690,182 Profit (loss) from continuing operations before 22,597,173 tax Profit (loss) from continuing operations 16,350,324
Loss from discontinuing operations -
Net Profit (loss) 16,350,324
Other comprehensive income, net 17,466,671
Total comprehensive income 33,816,995
Profit (loss), attributable to owners of parent 16,352,513 Profit (loss), attributable to non-controlling (2,189) interests Comprehensive income, attributable to owners 33,710,832 of parent Comprehensive income, attributable to non- 106,163 controlling interests Basic earnings per share 1.38
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(2) Concise Balance Sheet and Income Statement – R.O.C. GAAP
Concise Balance Sheet – R.O.C. GAAP
Unit: NT$Thousand Period Most Recent 5-Year Financial Information Item
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 290,037,817 361,366,109 428,619,217 534,685,388 603,762,719 investments Fixed assets (Note 38,966,815 31,592,786 28,828,180 33,886,138 26,828,097 1) 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 Before 261,521,745 357,287,001 650,838,634 861,779,296 988,892,523 liabilitie Dist. s After 269,677,831 374,444,865 641,177,386 845,745,651 Note 2 Dist. Long-term 16,680,000 29,539,400 45,635,371 84,299,377 75,366,400 liabilities Other liabilities 9,295,396 6,790,115 4,801,573 4,215,877 4,853,916 Total Before 287,497,141 393,616,516 701,275,578 950,294,550 1,069,112,839 liabilitie Dist. s After 295,653,227 410,774,380 710,936,826 934,260,905 Note 2 Dist. 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 Before 208,944,248 265,351,332 315,053,301 377,321,804 445,361,440 d Dist. earnings After 189,666,227 237,898,750 295,730,805 361,288,159 Note 2 Dist. Unrealized gain (loss) of financial 4,727,053 16,902,917 13,265,130 1,802,723 4,169,293 instruments Translation adjustments and 20,423,841 14,522,082 (9,330,319) 21,141,456 1,395,612 other equity adjustment Unrecognized - - - - - pension cost Stockho Before 361,166,847 439,855,454 480,592,756 577,831,688 646,532,187 lders’ Dist. Equity After 353,010,761 422,697,590 470,931,508 561,798,043 Note 2 Dist. 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.
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Concise Income Statement – R.O.C. GAAP
Unit: NT$Thousand Period Most Recent 5-Year Financial Information
Item 2008 2009 2010 2011 2012
Operating revenue 1,473,026,282 1,420,573,052 2,313,129,125 2,773,311,378 3,218,928,395
Gross profit t 59,407,893 63,675,490 100,920,995 107,826,879 152,199,836
Operating income 26,687,988 24,788,398 35,444,869 31,500,286 45,925,843 Non-operating 41,917,316 58,471,359 53,937,373 64,478,317 64,038,228 income Non-operating 4,566,805 1,148,277 4,941,502 4,187,129 2,497,303 expense Income from continuing 64,038,499 82,111,480 84,440,740 91,791,474 107,466,768 operations before income taxes Net income for continuing 55,133,175 75,685,105 77,154,551 81,590,999 94,762,377 operations Income from discontinued 0 0 0 0 0 operations Extraordinary gain 0 0 0 0 0 (loss) Translation adjustments and 0 0 0 0 0 other equity adjustment Net income 55,133,175 75,685,105 77,154,551 81,590,999 94,762,377 Basic earnings per share (NT$) 4.67 6.41 6.54 6.94 8.03 (Note 1) 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.
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(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, Modified unqualified － Yan-song Li opinion 2009 Yong-jian Hsu, Modified unqualified － Yan-song Li opinion 2010 Yong-jian Hsu, Modified unqualified － Yan-song Li opinion 2011 Yong-jian Hsu, Modified unqualified Internal administrative Ming-ling Xue opinion organizational changes 2012 Yong-jian Hsu, Modified unqualified － Ming-ling Xue opinion
B. Most Recent 5-Year Financial Analysis
(1) Financial Analysis
Period As of March 31, 2013 Item Financial Total liabilities to total assets 64.65 Ratio % Long-term debts to fixed assets 200.88 Ability to Current ratio 126.63 payoff debt Quick ratio 95.31 (%) Interest protection 13.26 A/R turnover (times) 6.32 A/R turnover days 58 Inventory turnover (times) 8.08 Ability to Account payable turnover (times) 5.69 operate Days sales outstanding 45 Fixed assets turnover (times) 7.96 Total assets turnover (times) 1.59 Return on assets (%) 0.87 Return on equity (%) 2.34 To pay-in capital Operating income 11.75 Profitability % PBT 19.09 Net margin (%) 2.02 EPS (NT$) 1.38 Cash flow ratio (%) 1.98 Cash flow % Cash flow adequacy ratio (%) 72.05 Cash reinvestment ratio (%) 2.25 Operating leverage 7.96 Leverage Financial leverage 1.15
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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
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(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 Most recent 5-Year Financial Information
Item 2008 2009 2010 2011 2012
Financial Total liabilities to total assets 44.32 47.31 59.34 62.19 62.32 Ratio % Long-term debts to fixed assets 969.66 1,485.77 1,825.39 1,953.99 2,690.83 Ability to Current ratio 121.68 123.01 111.09 111.21 109.59 payoff debt Quick ratio 85.52 97.33 93.26 95.82 99.75 (%) Interest protection 35.65 108.17 95.23 51.24 50.14 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 Ability to Account payable turnover (times) 10.76 7.56 7.42 6.29 5.94 operate 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 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 Earning To pay-in Operating income 38.29 28.89 36.69 29.47 38.80 ability capital % 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 ratio (%) 23.04 15.59 17.64 (註 2) 11.13 Cash flow % 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 Operating leverage 1.80 2.02 1.75 1.93 1.63 Leverage 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
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(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)
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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
Hon Hai Precision Industry Co., Ltd.
Supervisor: Huang, Qing-yuan
On the Date of May 16, 2013
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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
Hon Hai Precision Industry Co., Ltd.
Supervisor: Fu-Rui International Investment Co., Ltd.
Representative: Wan, Jui-hsia
On the Date of May 16, 2013
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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.
91 WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2 REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE
To the Board of Directors and Stockholders: Hon Hai Precision Industry Co., Ltd.
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.
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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.
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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)
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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.
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HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES 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 After Before After income income income income tax tax tax 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
The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 28, 2013.
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HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) Capital Stock Retained Earnings Other Adjustments to Stockholders’ Equity Unrealized gain Cumulative ( loss) on Undistributed translation financial Minority Common stock Capital Reserves Legal reserve earnings adjustments instruments Treasury stock 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 $5,874,552 had been deducted from the Consolidated Statement of Income in 2011. The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 28, 2013.
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HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) 2011 2012 NT$ 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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HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES 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
The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 28, 2013.
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HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES 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.
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Ownership percentage (%) Investor Subsidiaries Main operating activities 2011.12.31 2012.12.31 Note 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% International companies primarily engaged in Investment manufacturing and sale of Co., Ltd. and machinery and equipment. subsidiaries 〃 Hon Chi Domestic investments in 100% 100% International companies primarily engaged in 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.
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Ownership percentage (%) Investor Subsidiaries Main operating activities 2011.12.31 2012.12.31 Note 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.
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Ownership percentage (%) Investor Subsidiaries Main operating activities 2011.12.31 2012.12.31 Note 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.
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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
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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
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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
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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”.
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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
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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
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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.
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(2) Financial assets and liabilities at fair value through profit or loss December 31, 2011 Contract amount (Nominal principal) Book value (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)
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December 31, 2012 Contract amount (Nominal principal) Book value (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:
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December 31, 2011 Accounts Interest receivable rate sold/ Amount Institutions (%) derecognized advanced Amount retained Limit Mega International 1.70 $ 3,466,775 $ 3,466,775 $ - $22,710,000 Commercial Bank Taipei Fubon Bank 1.28~1.30 24,224,000 24,224,000 - 43,906,000 Mizuho Corporate 1.07 5,753,200 5,753,200 - 18,168,000 Bank Sumitomo Mitsui 0.95 10,598,000 10,598,000 - 10,598,000 Banking Corporation Standard Chartered 1.50 Commercial Bank 340,374 340,374 - 3,633,600 $ 44,382,349 $44,382,349 $ - $99,015,600
December 31, 2012 Accounts Interest receivable rate sold/ Amount Institutions (%) derecognized advanced Amount retained Limit Mega International 0.90 $ 8,712,000 $ 8,712,000 $ - $21,780,000 Commercial Bank Taipei Fubon Bank 0.99 23,232,000 23,232,000 - 36,300,000 Mizuho Corporate 0.94 5,227,200 5,227,200 - 8,712,000 Bank 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.
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(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.
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(8) Long-term equity investments accounted for under the equity method December 31, 2011 December 31, 2012 Ownership Ownership Percentage Percentage Investee Company (%) Book value (%) 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 Accumulated Net Original cost depreciation 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 Accumulated Net Original cost depreciation 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 For the years ended December 31, 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
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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 Accumulated
Original Cost 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: For the years ended December 31, 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%
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(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 4,442,314 15,697,913 materials) 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
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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.
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(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 First debenture issue of 2010 6,000,000 6,000,000 First debenture issue of 2011 6,000,000 6,000,000 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
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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 Normal bonds Issuance date Period Amount interest rate Payment term Bond Da to September 2005 10 years $ 500,000 2.37% Principal is due at maturity. De 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: Nominal Issuance date Period Amount interest rate Payment term 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.
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4) First debenture issue of 2010 On December 17, 2010, 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 Issuance date Period Amount interest rate Payment term December 2010 5 years $ 6,000,000 1.43% Pay half of principal each in the fourth and fifth year. Interest is paid annually at simple interest rate. 5) First debenture issue of 2011 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 Issuance date Period Amount interest rate Payment term March 2011 5 years $ 6,000,000 1.47% Pay half of principal each in the fourth and fifth year. Interest is paid annually at simple interest rate. 6) Second debenture issue of 2011 On June 1, 2011, following the approval from the SFB, the Company issued domestic unsecured bonds in the amount of $7,050,000. The terms of these domestic unsecured bonds are summarized as follows: Normal Type of bonds Issuance date Period Amount interest rate Payment term Bond A June 2011 5 years $ 3,000,000 1.43% Principal is due at maturity. Interest is paid annually at simple interest rate. Bond B June 2011 7 years $ 2,650,000 1.66% Principal is due at maturity. Interest is paid annually at simple interest rate. Bond C June 2011 10 years $ 1,400,000 1.82% Principal is due at maturity. Interest is paid annually at simple interest rate. 7) Third debenture issue of 2011 On July 6, 2011, following the approval from the SFB, the Company issued domestic unsecured bonds in the amount of $4,950,000. The terms of these domestic unsecured bonds are summarized as follows: Nominal Issuance date Period Amount interest rate Payment term
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Nominal Issuance date Period Amount interest rate Payment term July 2011 5 years $ 4,950,000 1.51% Principal is due at maturity. Interest is paid annually at simple interest rate. 8) First debenture issue of 2012 On December 28, 2011, following the approval from the SFB, the Company issued domestic unsecured bonds in the amount of $9,000,000. The terms of these domestic unsecured bonds are summarized as follows: Nominal Issuance date Period Amount interest rate Payment term March 2012 5 years $ 9,000,000 1.34% Principal is due at maturity. Interest is paid annually at simple interest rate. 9) Second debenture issue of 2012 On May 11, 2012, 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 Issuance date Period Amount interest rate Payment term May 2012 5 years $ 6,000,000 1.43% Principal is due at maturity. Interest is paid annually at simple 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 Issuance date Period Amount interest rate Payment term August 2012 3 years $ 8,000,000 1.18% Principal is due at maturity. Interest is paid annually at simple interest rate.
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11) Fourth debenture issue of 2012 On September 28, 2012, following the approval from the SFB, the Company issued domestic unsecured bonds in the amount of $3,300,000. The terms of these domestic unsecured bonds are summarized as follows: Nominal Issuance date Period Amount interest rate Payment term October 2012 5 years $ 3,300,000 1.35% Principal is due at maturity. Interest is paid annually at simple 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 2008/8/21~2013/8/21 $ 12,263,400 (USD405 million) Ltd., etc. syndicated loan 〞 2008/9/11~2013/9/11 13,626,000 (USD450 million) ING Bank, N.V. etc. 2010/10/22~2015/10/22 5,681,100 (EUR145 million) syndicated loan Mizuho Corporate Bank 2011/3/31~2014/3/31 19,920,600 (JPY51 billion) Ltd., etc. syndicated loan China Development 2011/8/12~2014/8/12 2,000,000 (NTD2.5 billion) Industrial Bank First Commercial Bank 2011/11/30~2026/11/30 109,000 (NTD2.5 billion) $ 53,600,100 Interest rate 0.7729%~1.8040%
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Institution Loan period December 31, 2012 Limit Mizuho Corporate Bank 2008/8/21~2013/8/21 $ 11,761,200 (USD405 million) Ltd., etc. syndicated loan 〞 2008/9/11~2013/9/11 6,534,000 (USD225 million) ING Bank, N.V. etc. 2010/10/22~2015/10/22 5,581,050 (EUR145 million) syndicated loan Mizuho Corporate Bank 2011/3/31~2014/3/31 17,156,400 (JPY51 billion) Ltd., etc. syndicated loan China Development 2011/8/12~2014/8/12 2,000,000 (NTD2.5 billion) Industrial Bank First Commercial Bank 2011/11/30~2026/11/30 763,000 (NTD2.5 billion) Mizuho Corporate Bank 2012/6/28~2015/6/28 3,742,703 (JPY11 billion) Ltd. 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$630 million, had been reclassified to ‘current liabilities’ in the third quarter of 2012. 3) Foxconn Slovakia, SPOL. S R.O., a subsidiary of the Company, entered into a syndicated credit facility agreement with ING Bank N.V. etc. as the lead bank and obtained a credit line in the amount of EUR 410 million, of which EUR 265 million had been repaid in advance in the fourth quarter of 2011. Starting from the fourth quarter in 2011, the credit line amounted to EUR 145 million, and the Company is the guarantor of the loan. 4) Throughout the term of Mizuho Corporate Bank Ltd., China Development Industrial Bank, First Commercial Bank, etc. syndicated term loan agreement, the Group shall maintain the agreed financial ratios, to be tested semi-annually and annually on an audited consolidated basis. (18) Retirement plan 1) The Company participates in a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees for services provided prior to July 1, 2005, and employees who choose to remain in the defined benefit pension plan subsequent to the enforcement of the Labor Pension Act on July 1, 2005. The Company contributes on a monthly basis an amount equal to 2.1%
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of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. A. In 2011 and 2012, the related actuarial assumptions used to calculate the pension liability were as follows: 2011 2012 Discount rate 1.90% 1.75% Rate of increase in compensation 3.00% 3.00% Expected return rate on plan assets 1.90% 1.75% B. Funded status of the pension plan December 31, 2011 2012 Benefit obligation: Vested benefit obligation ($ 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
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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.
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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: Quantity Contract Vesting conditions/ Type of arrangement Grant date granted period 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 December 29, 2006 5,748,145 - Note (2) payment plans 〞 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. Note 4: Of the shares granted, 20,362,078 shares cannot be sold within 1 to 3 years from the grant date. Note 5: Of the shares granted, 13,939,379 shares cannot be sold within 1 to 2 years from the grant date. Note 6: Of the shares granted, 14,934,766 shares cannot be sold within 1 to 2 years from the grant date.
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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: Stock Exercise Expected Expected Risk-free price price price dividend interest Fair value per Grant date (HK$) (HK$) volatility yield rate rate share (US$) September 12, 2007(A) 19.46 20.63 36% - 3.92% 0.86 July 8, 2011 3.62 3.62 37% - 0.297%~ 0.11 0.667% 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: For the years ended December 31, 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
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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
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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 Dividends per Dividends per share share Amount (in dollars) Amount (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.
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(23) Earnings per common share For the year ended December 31, 2011 Earnings per Number of common share Amount shares (in (in dollars) Before tax After tax thousands) 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 - - Net income attributable to equity holders of the Company $102,359,199 $82,126,427 12,114,700 $ 8.45 $ 6.78
For the year ended December 31, 2012 Earnings per Number of common share Amount shares (in (in dollars) Before tax After tax thousands) 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 Net income attributable to equity holders of the 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 - - Net income attributable to equity holders of the Company $122,150,290 $95,315,434 12,162,983 $ 10.04 $ 7.84
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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 For the years ended December 31, 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
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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 Investee company accounted for under the equity (FTCS) method Pan International Industrial Corporation and " subsidiaries (PIICS) Zhen Ding Technology Holding Limited An indirectly-owned investee company accounted (ZDT-Cayman) for under the equity method Foxsemicon Integrated Technology, Inc. and " subsidiaries (FITIS) CyberTAN Technology, Inc. and subsidiaries " (CyberTANS) Innolux Corporation and subsidiaries The Company’s chairman is the major (Formerly Chimei Innolux Corporation) (Innoluxs) 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 For the years ended December 31, 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
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(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 For the years ended December 31, 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.
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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 For the year ended December 31, 2011 Sales / Gain Receivables/(payables) Counterparty Transaction purchase price on disposal at December 31, 2011 FTCS, Innoluxs, ZDT- Sale of fixed $ 808,617 $ 2,043 $ 312,527 Cayman, PIICS assets
FTCS, Innoluxs, Cyber Acquisition 389,431 - ( 93,543) TANS, PIICS, FITIS of fixed and ZDT-Cayman assets
For the year ended December 31, 2012 Sales / Gain Receivables/(payables) Counterparty Transaction purchase price on disposal at December 31, 2012 FTCS, Innoluxs, ZDT- Sale of fixed $ 669,105 $ 11,615 $ 304,796 Cayman, PIICS assets FTCS, Innoluxs, ZDT- Acquisition 2,128,458 - ( 161,827) Cayman, PIICS and of fixed FITIS assets Innoluxs Acquisition 115,404 - - of interest
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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 1,330 million
(USD 855 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: For the years ended December 31, 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.
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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 Short-term loans $ 46,741,750 $ 947,222 (shown as other financial assets - current) Time deposits and cash Short-term loans, bond deposit as (shown as other security for court proceedings, security financial assets deposit for employment of foreign non-current) 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.
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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 Quotation Estimated using in an active a valuation Non-derivative financial instruments Book value market technique Note Assets: Financial assets with fair values equal $ 887,265,074 $ - $887,265,074 A to book values 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- 4,046,796 - 4,046,796 D current Refundable deposits 1,323,105 - 1,316,389 E Liabilities: Financial liabilities with fair values 971,524,706 - 971,524,706 A equal to book values Long-term bonds payable 62,378,777 - 60,894,339 F Derivative financial instruments Assets: Forward exchange contracts 45,917 - 45,917 G Liabilities: Forward exchange contracts 251,834 - 251,834 G
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December 31, 2011 Fair value Quotation Estimated using in an active a valuation Off-balance sheet financial instruments Book value market technique Note Guarantees-USD $ 25,879,995 $ - $ 25,879,995 H (US$ 855,000 (US$ 855,000 thousand) thousand) Guarantees-EUR 20,603,999 - 20,603,999 H (EUR$ 526,000 (EUR$ 526,000 thousand) thousand)
December 31, 2012 Fair value Quotation Estimated using Non-derivative financial in an active a valuation instruments Book value market technique Note Assets: Financial assets with fair values equal $1,177,758,794 $ - $1,177,758,794 A to book values 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- 8,620,722 - 8,620,722 D current Refundable deposits 879,643 - 867,760 E Liabilities: Financial liabilities with fair values 1,230,780,334 - 1,230,780,334 A equal to book values Long-term bonds payable 74,980,461 - 69,980,009 F Derivative financial instruments Assets: Forward exchange contracts 56,955 - 56,955 G Financial assets at fair value through profit or loss Corporation bonds 179,300 - 179,300 G Liabilities: Forward exchange contracts 66,767 - 66,767 G
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December 31, 2012 Fair value Quotation Estimated using Off-balance sheet financial in an active a valuation instruments Book value market technique Note Guarantees-USD $ 60,309,380 $ - $ 63,309,380 H (US$ 2,180,000 (US$ 2,180,000 thousand) thousand) Guarantees-EUR 15,207,905 - 15,207,905 H (EUR$ 396,000 (EUR$ 396,000 thousand) thousand) Guarantees-JPY 18,989,600 - 18,989,600 H (JPY$56,000,000 (JPY$56,000,000 thousand) thousand) Guarantees-RMB 6,920,100 - 6,920,100 H (RMB1,500,000 (RMB1,500,000 thousand) thousand) 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
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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
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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 Foreign currency amount Exchange amount Exchange (In thousands) rate (In thousands) 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
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December 31, 2011 2012 Foreign currency Foreign currency amount Exchange amount Exchange (In thousands) rate (In thousands) 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.
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(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.
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5) Elimination of intercompany transactions For the year ended December 31, 2011 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. Foxconn Singapore (PTE) Ltd. Ambit International Ltd. Margini Holdings Ltd. Premier Image Technology (H.K), Limited 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 Foxconn Holding Ltd. Foxconn Singapore (PTE) Ltd. Hyield Venture Capital Co., Ltd. Bao Shin International Investment Co., Ltd. Ambit International Ltd. Hon Chi International Investment Co., Ltd.
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For the year ended December 31, 2011 Transactions Companies Amount Altus Technology Inc. Premier Image Technology (H.K), Limited Margini Holdings Ltd. B. Logistics expenses Foxconn (Far East) Limited $ 1,348,758 Hon Hai/Foxconn Logistics California LLC. Hon Hai/Foxconn Logistics Texas LLC. 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. Premier Image Technology (H.K), Limited Margini Holdings Ltd.
For the year ended December 31, 2012 Transactions Companies Amount 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 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
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For the year ended December 31, 2012 Transactions Companies Amount 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. Foxconn Singapore (PTE) Ltd. Ambit International Ltd. Margini Holdings Ltd. Premier Image Technology (H.K), Limited B. Prepayments Foxconn (Far East) Limited 492,962 Foxconn Holding Ltd. 3) Elimination of profit and loss A. Sales and purchases Foxconn (Far East) Limited 2,389,418,255 Foxconn Holding Ltd. Foxconn Singapore (PTE) Ltd. Hyield Venture Capital Co., Ltd. Bao Shin International Investment Co., Ltd. Ambit International Ltd. Hon Chi International Investment Co., Ltd. Altus Technology Inc. Premier Image Technology (H.K), Limited Margini Holdings Ltd. B. Logistics expenses Foxconn (Far East) Limited 1,426,388 Hon Hai/Foxconn Logistics California LLC. Hon Hai/Foxconn Logistics Texas LLC. 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. Premier Image Technology (H.K), Limited Margini Holdings Ltd.
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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 Highest Outstanding Ratio of Limit of outstanding guarantee Amount of accumulated guarantee Ceiling of the Name of the company Relationship with guarantee guarantee amount at guarantee with amount to net assets outstanding guarantee Number providing guarantee Name the Company for such party amount 2012 12/31/2012 collateral placed of the Company to the respective party Note 0 Hon Hai Precision Foxconn (Far East) A wholly owned $ - $ 56,051,950 $ 53,884,030 $ - 8.33% $ - Note 1, 2, 3 Industry Co., Ltd. Limited subsidiary
0 Hon Hai Precision Foxconn Slovakia, An indirect wholly- - 20,790,255 15,207,905 - 2.35% - Note 1, 2, 3 Industry Co., Ltd. Spol. S R. O. owned subsidiary
0 Hon Hai Precision Competition Team An indirect wholly- - 27,436,200 27,248,800 - 4.21% - Note 1, 2, 3 Industry Co., Ltd. Technologies owned subsidiary Limited 0 Hon Hai Precision Honfujin Precision An indirect wholly- - 5,622,950 5,182,150 - 0.80% - Note 1, 2, 3 Industry Co., Ltd. Electronics owned subsidiary (Chengdu) Limited 0 Hon Hai Precision Competition Team An indirect wholly- - 2,936,500 2,904,100 - 0.45% - Note 1, 2, 3 Industry Co., Ltd. Ireland Limited owned subsidiary
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., Common stock of Pan International Industrial Investee company accounted for under (1) 106,178,272 $ 2,296,398 21 $ 2,111,036 Ltd. Corporation the equity method Hon Hai Precision Industry Co., Common stock of Foxconn Technology Co., Ltd. Investee company accounted for under (1) 124,238,234 6,181,682 10 6,117,447 Ltd. the equity method Hon Hai Precision Industry Co., Common stock of Media Tek Inc. None 2,134,259 690,433 - 690,433 (2) Ltd. Hon Hai Precision Industry Co., Common stock of Innolux Co., Ltd. The Company’s chairman is the major (3) 137,624,396 2,146,941 2 2,146,941 Ltd. (Formerly Chimei Innolux Corporation) shareholder
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).
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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 General ledger Number Selling Book Gain (loss) securities account Counterparty Number of shares Amount Number of shares Amount of shares price value on disposal Number of shares Amount Foxconn (Far Long-term A wholly 2,652,946,797 $ 63,748,370 729,997,990 $ 21,604,219 - $ - $ - $ - 3,382,944,787 $ 85,352,589 East) Limited investments owned accounted subsidiary for under the equity method Foxconn Holding Long-term A wholly 81,289,333 2,486,853 16,310,652 484,924 - - - - 97,599,985 2,971,777 Ltd. investments owned accounted subsidiary for under the equity method Syntrend Creative Long-term A wholly 51,326,000 513,260 64,244,400 642,444 - - - - 115,570,400 1,155,704 Park Co., Ltd. investments owned accounted subsidiary for under the equity method 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:
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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 Foxconn (Far East) Limited Wholly-owned subsidiary and Sales $ 39,825,230 2 45-90 days Note 1 Note 1 $ 36,362,495 7 Note 2 Industry Co., Ltd. and subsidiaries its subsidiaries Hon Hai Precision Foxconn CZ S. R. O. Indirect wholly owned Sales 16,849,018 1 60 days Note 1 Note 1 - - Note 2 Industry Co., Ltd. subsidiary Hon Hai Precision Foxconn Singapore Pte. Ltd. Wholly-owned subsidiary Sales 9,873,190 1 90 days Note 1 Note 1 1,948,822 - Industry Co., Ltd. Hon Hai Precision SIO International Inc. Wholly-owned Sales 9,555,961 - 60 days Note 1 Note 1 8,698,808 2 Industry Co., Ltd. subsidiary of SIO Hon Hai Precision Foxconn Slovakia, Spol. S Indirect wholly-owned Sales 6,786,299 - 60 days Note 1 Note 1 1,205,220 - Industry Co., Ltd. R. O. subsidiary Hon Hai Precision Foxconn Japan Co., Ltd. Indirect wholly-owned Sales 5,867,759 - 90 days Note 1 Note 1 1,194,376 - Industry Co., Ltd. subsidiary Hon Hai Precision Innolux Corporation Ltd. The Company’s chairman is the Sales 4,641,542 - 90 days Note 1 Note 1 469,585 - Industry Co., Ltd. (Formerly Chimei Innolux major shareholder Corporation) Hon Hai Precision Ingrasys Technology Co., Ltd. Indirect wholly-owned Sales 4,066,179 - 60 days Note 1 Note 1 2,781,452 1 Industry Co., Ltd. subsidiary Hon Hai Precision Ningbo Chi Mei Indirect wholly-owned Sales 3,207,447 - 90 days Note 1 Note 1 1,161,217 - Industry Co., Ltd. Optoelectronics Ltd. subsidiary of Innolux Hon Hai Precision CyberTAN Technology, Inc. An indirectly-owned investee Sales 2,684,879 - 60 days Note 1 Note 1 346,315 - Note 2 Industry Co., Ltd. company accounted for under the equity method
Hon Hai Precision Ingrasys Technology USA Indirect wholly-owned Sales 1,829,057 - 70 days Note 1 Note 1 - - Note 2 Industry Co., Ltd. Inc. subsidiary Hon Hai Precision Ennoconn Corporation Indirect wholly-owned Sales 1,491,504 - 60 days Note 1 Note 1 377,683 - Industry Co., Ltd. subsidiary Hon Hai Precision Foxconn Technology Co., Investee company accounted for Sales 1,279,685 - 60 days Note 1 Note 1 1,154,671 - Industry Co., Ltd. Ltd. under the equity method
Hon Hai Precision Foxteq Australia Pty Ltd. Indirect wholly-owned Sales $ 1,258,130 - 60 days Note 1 Note 1 $ 276,616 - Industry Co., Ltd. subsidiary
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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 Foxconn Technology Pte. Ltd. Indirect wholly-owned Sales 952,322 - 90 days Note 1 Note 1 153,272 - Note 2 Industry Co., Ltd. Subsidiary of FTC Hon Hai Precision Foxconn Rus, LLC Indirect wholly-owned Sales 840,496 - 45 days Note 1 Note 1 109,162 - Industry Co., Ltd. subsidiary Hon Hai Precision Ambit Microsystem Indirect wholly-owned Sales 828,625 - 60 days Note 1 Note 1 653,432 - Note 2 Industry Co., Ltd. (Shanghai) Co., Ltd. subsidiary Hon Hai Precision Fukui Precision Component Indirect wholly-owned Sales 643,203 - 90 days Note 1 Note 1 155,977 - Note 2 Industry Co., Ltd. (Shenzhen) Co., Ltd. subsidiary of ZDT-Cayman Hon Hai Precision Nanhai Chi Mei Electronics Indirect wholly-owned Sales 484,298 - 90 days Note 1 Note 1 145,779 - Industry Co., Ltd. Ltd. subsidiary of Innolux Hon Hai Precision Fuhong Precision Component Indirect wholly-owned Sales 476,754 - 90 days Note 1 Note 1 1,963,023 - Note 2 Industry Co., Ltd. (Bac Giang) Limited subsidiary Hon Hai Precision Fenix Industria de Electronics Indirect wholly-owned Sales 463,609 - 90 days Note 1 Note 1 134,812 - Industry Co., Ltd. Ltda. subsidiary Hon Hai Precision Ningbo Chi Mei Electronics Indirect wholly-owned Sales 451,685 - 90 days Note 1 Note 1 120,720 - Industry Co., Ltd. Ltd. subsidiary of Innolux Hon Hai Precision Foxconn Global Services Indirect wholly-owned Sales 449,461 - 90 days Note 1 Note 1 48,485 - Industry Co., Ltd. Division subsidiary Hon Hai Precision Nanhai Chi Mei Indirect wholly-owned Sales 256,896 - 90 days Note 1 Note 1 12,200 - Industry Co., Ltd. Optoelectronics Corp. subsidiary of Innolux Hon Hai Precision Fuhongkang Technology Indirect wholly-owned Sales 231,780 - 90 days Note 1 Note 1 - - Industry Co., Ltd. (Shenzhen) Co., Ltd. subsidiary of CyberTAN Hon Hai Precision SIO International Holdings The Company’s chairman is the Sales 227,822 - 60 days Note 1 Note 1 240,184 - Industry Co., Ltd. Limited major shareholder Hon Hai Precision Funing Precision Component Indirect wholly-owned Sales 220,281 - 60 days Note 1 Note 1 1,227,814 - Note 2 Industry Co., Ltd. Co., Ltd. subsidiary
Hon Hai Precision Pan-International Industrial Investee company accounted for Sales $ 215,464 - 90 days Note 1 Note 1 $ 43,126 - Industry Co., Ltd. Co. under the equity method
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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 Foxstar Technology Co., Ltd. Investee company accounted for Sales 201,432 - 90 days Note 1 Note 1 84,631 - Industry Co., Ltd. under the equity method
Hon Hai Precision Ability OPTO-Electronics Investee company accounted for Sales 193,729 - 60 days Note 1 Note 1 50,578 - Industry Co., Ltd. Technology Co., Ltd. under the equity method
Hon Hai Precision Cheng Uei Precision The chairman is a brother of Sales 193,649 - 30~90 Note 1 Note 1 30,458 - Industry Co., Ltd. Industry Co., Ltd. the Company’s chairman days Hon Hai Precision Pan International Industrial Indirect wholly-owned Sales 118,805 - 90 days Note 1 Note 1 15,589 - Industry Co., Ltd. Electronics (Malaysia) subsidiary of PIIC
Hon Hai Precision Best Leap Enterprises Indirect wholly-owned Purchase 760,977,081 26 90 days Note 1 Note 1 ( 128,769,081) ( 24) Industry Co., Ltd. Limited subsidiary
Hon Hai Precision Competition Team Indirect wholly-owned Purchase 445,389,241 15 90 days Note 1 Note 1 ( 101,807,174) ( 19) Industry Co., Ltd. Technologies Limited subsidiary
Hon Hai Precision Hongfujin Precision Indirect wholly-owned Purchase 400,306,397 14 30~90 Note 1 Note 1 ( 82,100,323) ( 15) Industry Co., Ltd. Electronics (Chengdu) Co., subsidiary days Ltd. Hon Hai Precision Foxconn (Far East) Limited Wholly-owned subsidiary Purchase 412,203,558 14 30~90 Note 1 Note 1 ( 91,657,738) ( 17) Note 3 Industry Co., Ltd. and subsidiaries and its subsidiaries days Hon Hai Precision Universal Field International Indirect wholly-owned Purchase 163,072,275 6 90 days Note 1 Note 1 ( 18,426,473) ( 3) Industry Co., Ltd. Limited subsidiary Hon Hai Precision Foxconn CZ S. R. O. Indirect wholly-owned Purchase 88,053,588 3 60 days Note 1 Note 1 ( 3,997,441) ( 1) Industry Co., Ltd. subsidiary Hon Hai Precision AMB Logistics Ltd. Indirect wholly-owned Purchase 23,931,474 1 60 days Note 1 Note 1 ( 741,723) - Industry Co., Ltd. subsidiary Hon Hai Precision Innolux Corporation Ltd. The Company’s chairman is the Purchase 7,046,393 - 60 days Note 1 Note 1 ( 1,023,640) - Industry Co., Ltd. (Formerly Chimei Innolux major shareholder Corporation) Hon Hai Precision IRIS World Enterprises Indirect wholly-owned Purchase $ 4,601,475 - 90 days Note 1 Note 1 ($ 495,493) - Industry Co., Ltd. Limited subsidiary of ZDT-Cayman
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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 NSG Technology, Inc. Indirect wholly-owned Purchase 3,954,048 - 30 days Note 1 Note 1 - - Note 4 Industry Co., Ltd. subsidiary Hon Hai Precision Fortune Source Enterprises Indirect wholly-owned Purchase 2,623,306 - 90 days Note 1 Note 1 ( 964,788) - Industry Co., Ltd. Limited subsidiary of PIIC Hon Hai Precision CyberTAN Technology, Inc. An indirectly-owned investee Purchase 1,277,782 - 75 days Note 1 Note 1 ( 97,923) - Industry Co., Ltd. company accounted for under the equity method Hon Hai Precision SIO International Inc. Wholly-owned subsidiary of Purchase 893,614 - 90 days Note 1 Note 1 ( 306,390) - Industry Co., Ltd. SIO Hon Hai Precision Ampower Technology Co., Indirectly-owned investee Purchase 466,890 - 90 days Note 1 Note 1 ( 46,453) - Industry Co., Ltd. Ltd. company accounted for under the equity method Hon Hai Precision FTC Technology Inc. Indirect wholly-owned Purchase 466,466 - 60 days Note 1 Note 1 ( 76,268) - Industry Co., Ltd. subsidiary of FTC Hon Hai Precision Foxconn Technology Pte. Indirect wholly-owned Purchase 459,239 - 90 days Note 1 Note 1 ( 89,434) - Industry Co., Ltd. Ltd. subsidiary of FTC Hon Hai Precision Foxstar Technology Co., Investee company accounted Purchase 307,047 - 60 days Note 1 Note 1 ( 98,496) - Industry Co., Ltd. Ltd. for under the equity method Hon Hai Precision Tekcon Electronics Corp. Indirect wholly-owned Purchase 254,212 - 45 days Note 1 Note 1 ( 61,893) - Industry Co., Ltd. subsidiary of PIIC Hon Hai Precision FTP Technology Inc. Indirect wholly-owned Purchase 192,906 - 60 days Note 1 Note 1 ( 43,414) - Industry Co., Ltd. subsidiary of FTC Hon Hai Precision Pan-International Industrial Investee company accounted Purchase 192,020 - 90 days Note 1 Note 1 ( 68,249) - Industry Co., Ltd. Co. for under the equity method Hon Hai Precision Foxconn Global Services Indirect wholly-owned Purchase 159,886 - 90 days Note 1 Note 1 ( 159,886) - Industry Co., Ltd. Division subsidiary
Hon Hai Precision Foxconn Technology Co., Investee company accounted Purchase $ 145,408 - 60 days Note 1 Note 1 ($ 21,495) - Industry Co., Ltd. Ltd for under the equity method
Hon Hai Precision Heroic Legend Enterprises Indirect wholly-owned Processing and 18,863,275 19 - Note 1 Note 1 ( 14,986,541) ( 17)
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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 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) Industry Co., Ltd. subsidiary molding costs (shown as accrued expenses) Hon Hai Precision Best Leap Enterprises Ltd. Indirect wholly-owned Processing and 11,395,252 11 - Note 1 Note 1 ( 435,798) ( 1) Industry Co., Ltd. subsidiary molding costs (shown as accrued expenses) 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) Industry Co., Ltd. subsidiary molding costs (shown as accrued expenses) 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
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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 Foxconn (Far East) Limited and subsidiaries Wholly-owned subsidiary and its subsidiaries $ 36,362,495 3 $1,629,427 Subsequent Collection $15,091,777 $ - Industry Co., Ltd. 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 - Industry Co., Ltd. (Shown as other receivables) (Note) 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 - Industry Co., Ltd. Co., Ltd. (Shown as other receivables) (Note) Hon Hai Precision Hongfujin Precision Electronics (Chongqing) Indirect wholly-owned subsidiary 16,567,174 - - - 7,241,857 - Industry Co., Ltd. Co., Ltd. (Shown as other receivables) (Note) Hon Hai Precision Universal Field International Limited Indirect wholly-owned subsidiary 25,448,382 - 8,761 Subsequent Collection 16,120,147 - Industry Co., Ltd. (Shown as other receivables) (Note) Hon Hai Precision SIO International Inc. Wholly-owned subsidiary of SIO 8,698,808 2 - - 6,632,855 - Industry Co., Ltd. Hon Hai Precision Ingrasys Technology Co., Ltd. Indirect wholly-owned subsidiary 2,781,452 3 1,268,344 Subsequent Collection 74,424 - Industry Co., Ltd. Hon Hai Precision Fuhong Precision Component (Bac Giang) Indirect wholly-owned subsidiary 1,963,023 3 431,814 Subsequent Collection 920,561 - Industry Co., Ltd. Limited Hon Hai Precision Foxconn Singapore Pte. Ltd. Wholly-owned subsidiary 1,948,822 4 2,767 Subsequent Collection 1,619,362 - Industry Co., Ltd. Hon Hai Precision Funing Precision Component Co. Ltd. Indirect wholly-owned subsidiary 1,227,814 4 162,051 Subsequent Collection 754,598 - Industry Co., Ltd. Hon Hai Precision Foxconn Slovakia, Spol. S R. O. Indirect wholly-owned subsidiary 1,205,220 6 - - 822,578 - Industry Co., Ltd. Hon Hai Precision Foxconn Japan Co., Ltd. Indirect wholly-owned subsidiary 1,194,376 5 - - 997,170 - Industry Co., Ltd. Hon Hai Precision Ningbo Chi Mei Optoelectronics Ltd. Indirect wholly-owned subsidiary 1,161,217 3 348 Subsequent Collection 561,437 - Industry Co., Ltd. of Innolux Hon Hai Precision Foxconn Technology Co., Ltd. Investee company accounted for under the equity 1,154,671 2 346,121 Subsequent Collection 514,241 - Industry Co., Ltd. method Hon Hai Precision Interface Optoelectronics (Shenzhen) Co., Investee company accounted for under the equity $ 871,651 6 $ 1,414 Subsequent Collection $ 737,243 $ - Industry Co., Ltd. Ltd. method
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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 Ambit Microsystem (Shanghai) Co., Ltd. Indirect wholly-owned subsidiary 653,432 5 62,525 Subsequent Collection 482,673 - Industry Co., Ltd. Hon Hai Precision Innolux Corporation Ltd. The Company’s chairman is the major 469,585 2 - - 409,060 - Industry Co., Ltd. (Formerly Chimei Innolux Corporation) shareholder Hon Hai Precision Ennoconn Corporation Indirect wholly-owned subsidiary 377,683 6 760 Subsequent Collection 381,054 - Industry Co., Ltd. Hon Hai Precision CyberTAN Technology Inc. An indirectly-owned investee company 346,315 5 695 Subsequent Collection 275,770 - Industry Co., Ltd. accounted for under the equity method Hon Hai Precision New Ocean Precision Component (Jiangxi) Indirect wholly-owned subsidiary of PIIC 300,386 4 - - 102,972 - Industry Co., Ltd. Co., Ltd. Hon Hai Precision Foxteq Australia Pty Ltd. Indirect wholly-owned subsidiary 276,616 4 - - 197,910 - Industry Co., Ltd. Hon Hai Precision SIO International Holdings Limited The Company’s chairman is the major 240,184 2 - - - - Industry Co., Ltd. shareholder Hon Hai Precision Hon Fujin Precision Industry (Taiyuan) Co., Indirect wholly-owned subsidiary 158,959 - 51,213 Subsequent Collection 100,989 - Industry Co., Ltd. Ltd. of FTC Hon Hai Precision Fukui Precision Component (Shenzhen) Co., Indirect wholly-owned subsidiary 155,977 5 - - 70,531 - Industry Co., Ltd. Ltd. of ZDT-Cayman Hon Hai Precision Foxconn Technology Pte. Ltd. Indirect wholly-owned subsidiary 153,272 6 - - - - Industry Co., Ltd. of FTC Hon Hai Precision Nanhai Chi Mei Optoelectronics Ltd. Indirect wholly-owned subsidiary 145,779 4 132 Subsequent Collection 82,936 - Industry Co., Ltd. of Innolux Hon Hai Precision Fenix Industria de Electronics Ltda. Indirect wholly-owned subsidiary 134,812 4 2,472 Subsequent Collection 82,401 - Industry Co., Ltd. Hon Hai Precision New Ocean Precision Component (Ganzhou) Indirect wholly-owned subsidiary of PIIC 125,242 6 992 Subsequent Collection 122,794 - Industry Co., Ltd. Co., Ltd. Hon Hai Precision Ningbo Chi Mei Electronics Ltd. Indirect wholly-owned subsidiary 120,720 4 - - 76,112 - Industry Co., Ltd. of Innolux Hon Hai Precision Foxconn Rus, LLC Indirect wholly-owned subsidiary 109,162 - - - 109,162 - Industry Co., Ltd. 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.)
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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 Foxconn (Far East) Cayman 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 Industry Co., Ltd. Limited Islands 1 Hon Hai Precision Hyield Venture Capital 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 Industry Co., Ltd. Co., Ltd. 1 Hon Hai Precision Bao Shin International 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 Industry Co., Ltd. Investment Co., Ltd. 1 Hon Hai Precision Margini Holdings British 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 Industry Co., Ltd. Limited Virgin 1 Islands Hon Hai Precision Ambit International British 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 Industry Co., Ltd. Ltd. Virgin 1 Islands Hon Hai Precision Foxconn Holding B.V.- 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 Industry Co., Ltd. Netherland 1 Hon Hai Precision Foxconn Technology Taiwan Manufacture and NTD 481,782 NTD 481,782 124,238,234 10 NTD 6,181,682 NTD 8,377,059 NTD 854,687 Note Industry Co., Ltd. Co., Ltd. design of 1, 3 monitors Hon Hai Precision Foxconn Holding Ltd. British 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 Industry Co., Ltd. Virgin 1 Islands Hon Hai Precision 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 Industry Co., Ltd. Investment Co., Ltd. 1 Hon Hai Precision 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 Industry Co., Ltd. Investment Co., Ltd. 1 Hon Hai Precision Foxconn Singapore 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 Industry Co., Ltd. Pte. Ltd. 1 Hon Hai Precision 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 Industry Co., Ltd. 1 Hon Hai Precision Pan International Taiwan Manufacture and NTD 2,042,398 NTD 2,042,398 106,178,272 21 NTD 2,296,398 NTD 401,900 NTD 91,152 Note Industry Co., Ltd. Industrial marketing of 1, 2 Corporation cables Hon Hai Precision 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 Industry Co., Ltd. Investment Co., Ltd. 1 Hon Hai Precision Syntrend Creative Park Taiwan Retail of office NTD 1,155,704 NTD 513,260 115,570,400 80 NTD 1,080,172 NTD ( 60,162) NTD ( 48,446) Note Industry Co., Ltd. Co., Ltd. machinery and 1 equipment and electronic appliances, and information software services. Hon Hai Precision Premier Image Hong Purchase and the NTD $ 22,311 NTD $ 22,311 1,409,000 2 NTD $ 174,408 NTD ($ 48,241) NTD ($ 785) Note Industry Co., Ltd. Technology (H.K) Kong sales of cameras 1, 5
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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 Ltd. and related parts Hon Hai Precision Altus Technology Inc. Taiwan Manufacture, design NTD 865,177 NTD 865,177 7,872,911 65 NTD 78,079 NTD ( 2,103) NTD ( 1,358) Note Industry Co., Ltd. and marketing of 1, 4 cellular phone, camera lens and sensors Hon Hai Precision Others Others NTD 163,446 NTD 163,446 - - NTD 180,052 NTD 164,674 NTD 81,654 Note Industry Co., Ltd. 1 Hyield, Hon Yuan, Foxsemicon Integrated Taiwan Manufacture of NTD 448,110 NTD 448,110 21,663,004 20 NTD 23,556 NTD ( 387,910) NTD ( 114,323) Note Bao Shin and Technology Inc. semiconductor 6 Hon Chi machinery and sales of computer components Hyield, Hon Yuan, Foxconn Technology Taiwan Manufacture and 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 Bao Shin and Co., Ltd. design of 6 Hon Chi monitors Hon Yuan, Bao Pan International Taiwan Manufacture and NTD 560,639 NTD 560,639 29,180,873 6 NTD 662,825 NTD 401,900 NTD 22,861 Note Shin, Hon Chi Industrial marketing of 6 and Corporation cables Hon Yiing Hyield, Hon Yuan, Altus Technology Inc. Taiwan Manufacture, NTD 284 NTD 284 4,317,089 35 NTD 42,815 NTD ( 2,103) NTD ( 745) Note Bao Shin, Lin Yih marketing and 6 and Hon Chi design of cellular phone, camera lens and sensors Hyield Antec Electronic Taiwan Manufacture of NTD 970,000 NTD 970,000 60,010,000 100 NTD 401,401 NTD ( 31,143) NTD ( 26,414) Note System Co., Ltd. cable, electronic 6 equipment and electron component of motor vehicles Hyield, Hon Yuan, CyberTAN Taiwan Manufacture, design NTD 357,396 NTD 357,396 35,122,013 11 NTD 540,819 NTD 69,766 NTD 5,108 Note Bao Shin, Lin Yih Technology, Inc. and marketing of 6 and Hon Chi wireless network equipment
Bao Shin and Ennoconn Corporation Taiwan Design and NTD $ 261,706 NTD $ 244,291 24,916,107 49 NTD $ 465,553 NTD $ 179,196 NTD $ 95,196 Note Hyield manufacture of 6
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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 single board computer, embedded board, industrial motherboard Bao Shin UVAT Technology Co., Taiwan Manufacture and NTD 180,000 NTD 180,000 7,557,835 17 NTD 140,489 NTD ( 245,657) NTD ( 36,462) Note Ltd. sales of vacuum 6、9 sputtering system and vacuum coating service Hyield and Bao Simplo Technology Taiwan Information service, NTD 1,433,855 NTD 1,433,855 26,575,186 9 NTD 2,231,052 NTD 3,302,612 NTD 321,203 Note Shin Co., Ltd. manufacture of 6 lighting equipment, data storage and processing system, electronic components, battery, power generation/ transmission/ distribution machinery, and wireless communication system Hon Chi, Hon Foxnum Technology Taiwan Manufacture and NTD 464,736 NTD 464,736 46,473,600 85 NTD 1,197,379 NTD 282,144 NTD 274,509 Note Yuan, and Bao Co., Ltd. sales of 6 Shin machinery, computer and peripheral devices Hyield, Hon Yuan, G-TECH Taiwan Manufacture of NTD 1,669,704 NTD 1,669,704 73,128,667 28 NTD 2,943,407 NTD 747,711 NTD 224,126 Note Bao Shin and Optoelectronics glass, glass 6, 9 Hon Chi Corporation products and electronic components
Hyield and Advanced Taiwan Research, NTD $ 187,820 NTD $ 187,820 16,271,550 10 NTD $ 45,641 NTD ($ 300,571) NTD ($ 34,598) Note Bao Shin Microelectronic development, 6, 9
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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 Products, Inc. design, manufacture and sales of integrated circuit and semi- conductor components Foxconn Ways Technical Corp., Taiwan Manufacture of NTD 591,228 NTD 947,772 12,105,248 13 NTD 722,359 NTD 469,370 NTD 58,024 Note International Ltd. plastic articles, 6, 9 Holdings Limited surface treatment, and manufacture and processing of electronic components Hyield and Bao Bionet Corporation Taiwan Extraction, testing, NTD 100,000 NTD 100,000 3,464,022 7 NTD 115,922 NTD 62,772 NTD 4,478 Note Shin storage and 6, 9 research on umbilical cord blood stem cells, mesenchymal stem cells, and primary teeth Hyield Ingrasys Technology Taiwan Design, research, NTD 250,705 NTD 222,340 37,410,000 100 NTD 980,698 NTD 300,394 NTD 283,517 Note Inc. manufacture and 6 sales of data storage and processor Hyield Burrage Capital Cayman Investment NTD 441,300 NTD 441,300 15,000,000 100 NTD 411,026 NTD 58,212 NTD 58,212 Note Healthcare Offshore Islands holding 6 Fund II, Ltd. Hyield, Hon Yuan, Fitipower Integrated Taiwan Manufacture of NTD 585,000 NTD - 45,450,167 39 NTD 539,011 NTD ( 39,849) NTD 3,476 Note Bao Shin and Technology Inc. integrated 6, 9 Hon Chi circuit/semi- conductor machinery and sales of computer components Hyield, Hon Yuan, Others Others NTD 958,692 NTD 995,692 - - NTD 623,356 NTD 463,369 NTD ( 54,999) Note Bao Shin and 6, 8 Hon Chi Note 1: The investment income recognized for this period had eliminated unrealized gain or loss on the transactions between the Company and its investees.
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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 Short-term loans- $ 293,000 $ 293,000 - Short term $ - Business $ - None $ - $ - $ - Note Investment Co., Ltd. Co., Ltd. Related parties financing operation 1 2 Hon Chi International Hon Hai Precision Industry Short-term loans- 265,000 265,000 - Short term - Business - None - - - Note Investment Co., Ltd. Co., Ltd. Related parties financing operation 1 2 Hon Chi International UER Technology Corporation Short-term loans- 200,000 200,000 1.625 Short term - Business - None - - - Note Investment Co., Ltd Related parties financing operation 1 3 Bon Shin International Hon Hai Precision Industry Short-term loans- 450,000 450,000 - Short term - Business - None - - - Note Investment Co., Ltd. Co., Ltd. Related parties financing operation 1 3 Bon Shin International SetaBox Technology Co., Ltd. Short-term loans- 150,000 150,000 1.15 Short term - Business - None - - - Note Investment Co., Ltd. Related parties financing operation 1 4 Lin Yih International Hon Hai Precision Industry Short-term loans- 99,000 97,000 - Short term - Business - None - - - Note Investment Co., Ltd. Co., Ltd. Related parties financing operation 1 5 Hyield Venture Capital Co., Hon Hai Precision Industry Short-term loans- 1,500,000 1,000,000 - Short term - Business - None - - - Note Ltd. Co., Ltd. Related parties financing operation 1 6 Hongfujin Precision Industrial Fu Ding Precision Component Entrusted Loans 117,438 - - Short term - Business - None - - - Note (Shenzhen) Co., Ltd. (Shenzhen) Co., Ltd. financing operation 2 6 Hongfujin Precision Industrial Futaikang Precision Entrusted Loans 75,160 - - Short term - Business - None - - - Note (Shenzhen) Co., Ltd. Component (Shenzhen) Co., financing operation 2 Ltd. 6 Hongfujin Precision Industrial Futaijie Science & Technology Entrusted Loans $ 65,765 $ - - Short term $ - Business $ - None $ - $ - $ - Note
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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 (Shenzhen) Co., Ltd. Development (Shenzhen) financing operation 2 Co., Ltd. 6 Hongfujin Precision Industrial Fu Xun Tong Trading Entrusted Loans 522,258 507,474 3.25~3.5 Short term - Business - None - - - Note (Shenzhen) Co., Ltd. (Shenzhen) Co., Ltd. financing operation 2 6 Hongfujin Precision Industrial Fuhuajie Industrial (Shenzhen) Entrusted Loans 2,677,575 - - Short term - Business - None - - - Note (Shenzhen) Co., Ltd. Limited financing operation 2 7 Futaihua Industrial (Shenzhen) Shenzhen Fuhongjie Entrusted Loans 37,857 - - Short term - Business - None - - - Note Co., Ltd. Technology Service Co., Ltd. financing operation 2 7 Futaihua Industrial (Shenzhen) Futaikang Precision Entrusted Loans 56,785 46,134 3.05 Short term - Business - None - - - Note Co., Ltd. Component (Shenzhen) Co., financing operation 2 Ltd. 7 Futaihua Industrial (Shenzhen) Fuhuajie Industrial (Shenzhen) Entrusted Loans 2,583,504 2,583,504 3.05 Short term - Business - None - - - Note Co., Ltd. Limited financing operation 2 7 Futaihua Industrial (Shenzhen) Fuhonyang Precision Entrusted Loans 3,225,356 3,206,313 3.05 Short term - Business - None - - - Note Co., Ltd. Industrial (Shenzhen) Co., financing operation 2 Ltd. 7 Futaihua Industrial (Shenzhen) Foxconn Precision Electronics Entrusted Loans 7,216,656 7,012,368 3.5 Short term - Business - None - - - Note Co., Ltd. (Taiyuan) Co., Ltd. financing operation 2 7 Futaihua Industrial (Shenzhen) Fujin Precision Industrial Entrusted Loans 4,640,800 4,613,400 3.25 Short term - Business - None - - - Note Limited (Jincheng) Co., Ltd. financing operation 2 8 Foxconn Precision Component Shenzhen Fuhongjie Entrusted Loans 108,043 - - Short term - Business - None - - - Note (Shenzhen) Co., Ltd. Technology Service Co., Ltd. financing operation 2 9 Anpinda Precision Industrial Jizhun Precision Industry Entrusted Loans 2,427,571 2,427,571 3.05 Short term - Business - None - - - Note (Huizhou) Co., Ltd. (Huizhou) Co., Ltd. financing operation 2 10 Foxconn (Kunshan) Computer Foxconn Electronic Industrial Entrusted Loans 839,639 839,639 2.6 Short term - Business - None - - - Note Connector Co., Ltd. Development (Kunshan) Co., financing operation 2 Ltd. 10 Foxconn (Kunshan) Computer Kangzhun Electronic Entrusted Loans 474,780 - - Short term - Business - None - - - Note Connector Co., Ltd. Technology (Kunshan) Co., financing operation 2 Ltd. 10 Foxconn (Kunshan) Computer Hongfujin Precision Entrusted Loans 1,414,740 - - Short term - Business - None - - - Note Connector Co., Ltd. Electronics (Zhengzhou) financing operation 2 Co., Ltd. 10 Foxconn (Kun Shan) Fuxiang Precision Industrial Entrusted Loans 1,180,300 1,153,350 2.28 Short term - Business None Note Computer Connector Co., (kunshan) Co., Ltd. financing operation 2 Ltd. 11 Hongzhun Precision Tooling Fuyao Precision Component Entrusted Loans 70,737 - - Short term - Business - None - - - Note (Kunshan) Co., Ltd. (Kunshan) Co., Ltd. financing operation 2 11 Hongzhun Precision Tooling Foxconn Electronic Industrial Entrusted Loans $ 1,424,340 $ 1,384,020 2.28 Short term $ - Business $ - None $ - $ - $ - Note financing
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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 (Kunshan) Co., Ltd. Development (Kunshan) Co., operation 2 Ltd. 11 Hongzhun Precision Tooling Kangzhun Electronic Entrusted Loans 1,084,634 461,340 2.6 Short term - Business - None - - - Note (Kunshan) Co., Ltd. Technology (Kunshan) Co., financing operation 2 Ltd. 11 Hongzhun Precision Tooling Foxconn Precision Electronics Entrusted Loans 1,186,950 1,153,350 2 Short term - Business - None - - - Note (Kunshan) Co., Ltd. (Taiyuan) Co., Ltd. financing operation 2 11 Hongzhun Precision Tooling Qunkang Precision Entrusted Loans 337,094 327,551 3.1 Short term - Business - None - - - Note (Kunshan) Co., Ltd. Component (Kunshan) Co., financing operation 2 Ltd. 12 Ambit Microsystem Foxconn Electronic Industrial Entrusted Loans 768,675 - - Short term - Business - None - - - Note (Shanghai) Co., Ltd. Development (Kunshan) Co., financing operation 2 Ltd. 12 Ambit Microsystem Kangzhun Electronic Entrusted Loans 1,661,730 1,457,834 2.28~2.6 Short term - Business - None - - - Note (Shanghai) Co., Ltd. Technology (Kunshan) Co., financing operation 2 Ltd. 12 Ambit Microsystem Shanghai Foxconn Co., Ltd. Entrusted Loans 118,695 115,335 2.85 Short term - Business - None - - - Note (Shanghai) Co., Ltd. financing operation 2 13 Fuxiang Precision Industrial Foxconn Precision Electronics Entrusted Loans 1,178,950 - - Short term - Business - None - - - Note (Kunshan) Co., Ltd. (Taiyuan) Co., Ltd. financing operation 2 14 Fulin Electronical Technology Kangzhun Electronic Entrusted Loans 1,424,340 - 3.5 Short term - Business - None - - - Note (Changshu) Co., Ltd. Technology (Kunshan) Co., financing operation 2 Ltd. 15 Fuyang Electronical Fuxiang Precision Industrial Entrusted Loans 811,118 747,371 2.6 Short term - Business - None - - - Note Technology (Changshu) Co., (Kunshan) Co., Ltd. financing operation 2 Ltd. 15 Fuyang Electronical Foxconn Electronic Industrial Entrusted Loans 1,384,020 1,384,020 2.6 Short term - Business - None - - - Note Technology (Changshu) Co., Development (Kunshan) Co., financing operation 2 Ltd. Ltd. 16 FuYu Energy Technology Foxconn Electronic Industrial Entrusted Loans 626,508 622,809 2.28 Short term - Business - None - - - Note (Kunshan) Co., Ltd. Development (Kunshan) Co., financing operation 2 Ltd. 17 Foxway Precision Industry Kangzhun Electronic Entrusted Loans 461,340 461,340 2.6 Short term - Business - None - - - Note (Hangzhou) Co., Ltd. Technology (Kunshan) Co., financing operation 2 Ltd. 18 Fuzhun Precision Tooling Fuyu Electronical Technology Entrusted Loans 954,974 954,974 2.6 Short term - Business - None - - - Note (Huaian) Co., Ltd. (Huaian)Co., Ltd. financing operation 2
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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 19 Fu Tai Kang Electronics YanTai FuHuaDa Precision Entrusted Loans $ 235,790 $ - - Short term $ - Business $ - None $ - $ - $ - Note Development (Yantai) Ltd. Electronics Co., Ltd. financing operation 2 19 Fu Tai Kang Electronics Foxconn Precision Electronics Entrusted Loans 730,949 415,206 3.92 Short term - Business - None - - - Note Development (Yantai) Ltd. (Yantai) Co., Ltd. financing operation 2 20 Hongfujin Precision Electrons YanTai FuHuaDa Precision Entrusted Loans 330,106 - - Short term - Business - None - - - Note (Yantai) Co., Ltd. Electronics Co., Ltd. financing operation 2 20 Hongfujin Precision Electrons Foxconn Precision Electronic Entrusted Loans 2,550,094 2,442,359 0.36725~ Short term - Business - None - - - Note (Yantai) Co., Ltd. (Yantai) Co., Ltd. 3.92 financing operation 2 20 Hongfujin Precision Electrons Foxconn Precision Electronics Entrusted Loans 2,373,900 2,306,700 4.2 Short term - Business - None - - - Note (Yantai) Co., Ltd. (Taiyuan) Co., Ltd. financing operation 2 21 Hongfujin Precision Futaihua Precision Electronics Entrusted Loans 282,948 - - Short term - Business - None - - - Note Electronics (Chengdu) Co., (Chengdu) Co., Ltd. financing operation 2 Ltd. 22 Hongfujin Precision Foxconn Precision Electronics Entrusted Loans 1,186,950 1,153,350 3.1 Short term - Business - None - - - Note Electronics (Zhenzhou) Co., (Taiyuan) Co., Ltd. financing operation 2 Ltd. 22 Hongfujin Precision Fuding Precision (Zhengzhou) Entrusted Loans 1,614,690 1,614,690 2.6~3.1 Short term Business None Note Electronics (Zhenzhou) Co., Co., Ltd. financing operation 2 Ltd. 22 Hongfujin Precision Futaihua Precision Electronics Entrusted Loans 2,320,400 2,306,700 2.6 Short term Business None Note Electronics (Zhenzhou) Co., (Jiyuan) Co., Ltd. financing operation 2 Ltd. 23 Foxconn (Far East) Limited Fujin Precision Industrial Other 5,109,350 4,936,970 0.56 Short term - Business - None - - - Note (Jincheng) Co., Ltd. Receivables- financing operation 2 financing 23 Foxconn (Far East) Limited Margini Holdings Ltd. Other 377,350 - - Short term - Business - None - - - Note Receivables- financing operation 2 financing 23 Foxconn (Far East) Limited Fu Ding Precision Industrial Other 446,040 - - Short term - Business - None - - - Note (Zhengzhou) Co., Ltd. Receivables- financing operation 2 financing 23 Foxconn (Far East) Limited Fuyu Electronical Technology Other 450,825 - - Short term - Business - None - - - Note (Huaian) Co., Ltd. Receivables- financing operation 2 financing 23 Foxconn (Far East) Limited Foxconn (Kun Shan) Other 895,054 - - Short term - Business - None - - - Note Computer Connector Co., Receivables- financing operation 2 Ltd. financing
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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 23 Foxconn (Far East) Limited Kangzhun Electronic Other $ 1,803,300 $ 1,742,460 0.21 Short term $ - Business $ - None $ - $ - $ - Note Technology (Kunshan) Co., Receivables- financing operation 2 Ltd. financing 23 Foxconn (Far East) Limited Fuxiang Precision Industrial Other 2,973,600 $ 1,742,460 0.21 Short term - Business - None - - - Note (Kunshan) Co., Ltd. Receivables- financing operation 2 financing 24 Foxconn CZ S. R. O. Foxconn TR Teknoloji Sanayi Other 300,550 290,410 3.5 Short term - Business - None - - - Note Ltd. Sirketi Receivables- financing operation 2 financing 25 Shenzhen Fu Tai Hong Foxconn (Tianjin) Precision Entrusted Loans 807,126 784,278 3.25~3.5 Short term - Business - None - - - Note Precision Industry Co., Ltd. Industry Co., Ltd financing operation 3 25 Shenzhen Fu Tai Hong Foxconn Precision Electronics Entrusted Loans 5,222,580 5,074,740 3~3.5 Short term - Business - None - - - Note Precision Industry Co., Ltd. (Lang Fang) Co., Ltd. financing operation 3 26 Foxconn Precision Component Foxconn Precision Electronics Entrusted Loans 3,560,850 3,460,050 3.5 Short term - Business - None - - - Note (Beijing) Co., Ltd. (Lang Fang) Co., Ltd. financing operation 3 26 Foxconn Precision Component Futaijing Precision Electronics Entrusted Loans 7,596,480 7,381,440 3~3.5 Short term - Business - None - - - Note (Beijing) Co., Ltd. (Beijing) Co., Ltd. financing operation 3 26 Foxconn Precision Component Foxconn (Tianjin) Precision Entrusted Loans 1,424,340 1,384,020 3~3.5 Short term - Business - None - - - Note (Beijing) Co., Ltd. Industry Co., Ltd. financing operation 3 27 Execustar International Ltd. Foxconn Precision Electronics Other 510,935 493,697 0.4416 Short term - Business - None - - - Note (Lang Fang) Co., Ltd. Receivables financing operation 3 28 Foxconn International Foxconn (Tianjin) Precision Other 3,125,720 3,020,264 0.2071~ Short term - Business - None - - - Note Holdings Limited Industry Co., Ltd. Receivables 0.4615 financing operation 3 28 Foxconn International Foxconn Precision Electronics Other 3,967,260 3,833,412 0.2071~ Short term - Business - None - - - Note Holdings Limited (Langfang) Co., Ltd. Receivables 0.55 financing operation 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.
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3) Guarantee information:
Parties being guaranteed Ratio of Highest Outstanding accumulated Ceiling of Limit of outstanding guarantee Amount of guarantee amount the outstanding guarantee guarantee amount amount as of guarantee with to net assets guarantee to the Number Name of guarantor Name of company Relationship with the Company for such party in 2012 12/31/2012 collateral placed of the Company respective party Note 1 Hongfujin Precision Fu Ding Precision The Company and its subsidiaries hold $ - $ 13,840 $ 13,840 $ - - $ - Note Industry (Shenzhen) Co., Component (Shenzhen) more than 50% of common shares of 1, 2, 3, 4 Ltd. Co., Ltd. the investee company 1 Hongfujin Precision Fuhuajie Industrial The Company and its subsidiaries hold - 2,547,090 2,360,065 - 0.37 - Note Industry (Shenzhen) Co., (Shenzhen) Limited more than 50% of common shares of 1, 2, 3, 4 Ltd. the investee company 1 Hongfujin Precision Futaihua Industrial The Company and its subsidiaries hold - 12,172,275 2,934,428 - 0.45 - Note Industry (Shenzhen) Co., (Shenzhen) Co., Ltd. more than 50% of common shares of 1, 2, 3, 4 Ltd. the investee company 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., Common stock of Pan International Investee company accounted for under the (1) 3,601 $ 88,120 1 $ 71,066 Ltd. Industrial Corporation equity method Bon Shin International Investment Co., Common stock of Foxconn Technology Investee company accounted for under the (1) 112,195 5,656,648 9 5,548,409 Ltd. Co., Ltd. equity method Bon Shin International Investment Co., Common stock of CyberTAN Technology Indirect investee company accounted for (1) 2,182 33,589 1 33,551 Ltd. Inc. under the equity method Bon Shin International Investment Co., Common stock of Simplo Technology Co., Indirect investee company accounted for (1) 12,884 1,081,616 4 726,172 Ltd. Ltd. under the equity method Bon Shin International Investment Co., Common stock of Advanced Indirect investee company accounted for (1) 6,976 3,358 4 31,728 Ltd. Microelectronic Products, Inc. under the equity method
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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., Common stock of Bionet Corporation Indirect investee company accounted for (1) 1,732 $ 57,961 4 $ 40,998 Ltd. under the equity method Bon Shin International Investment Co., Common stock of G-TECH Indirect investee company accounted for (1) 17,262 694,348 7 670,995 Ltd. Optoelectronics Corporation under the equity method Bon Shin International Investment Co., Common stock of Ability OPTO- Indirect investee company accounted for (1) 10,000 133,585 8 133,585 Ltd. Electronics Technology Co., Ltd. under the equity method Bon Shin International Investment Co., Common stock of UVAT Technology Co., Indirect investee company accounted for (1) 7,558 140,489 17 111,747 Ltd. Ltd. under the equity method Bon Shin International Investment Co., Common stock of Foxsemicon Integrated Indirect investee company accounted for (1) 4,837 5,260 4 5,192 Ltd. Technology Inc. under the equity method Bon Shin International Investment Co., Common stock of Shin Puu Technology Indirect investee company accounted for (1) 1,475 28,633 8 28,633 Ltd. Co., Ltd. under the equity method Bon Shin International Investment Co., Common stock of HealthConn Co. Indirect investee company accounted for (1) 4,875 33,132 24 37,146 Ltd. under the equity method Bon Shin International Investment Co., Fitipower Integrated Technology Inc. Indirect investee company accounted for (1) 14,140 167,693 12 172,644 Ltd. under the equity method Bon Shin International Investment Co., Common stock of Entire Technology Co., None (2) 2,100 87,045 1 87,045 Ltd. Ltd. Bon Shin International Investment Co., Common stock of MiTAC Information None (3) 1,775 33,006 1 33,006 Ltd. Technology Co. Bon Shin International Investment Co., Common stock of MiTAC Inc. None (3) 2,482 39,252 1 39,252 Ltd. Hon Chi International Investment Co., Ltd. Common stock of Pan International Investee company accounted for under the (1) 7,483 168,085 1 147,662 Industrial Corporation equity method Hon Chi International Investment Co., Ltd. Common stock of Foxconn Technology Investee company accounted for under the (1) 28,338 1,468,014 2 1,401,386 Co., Ltd. equity method Hon Chi International Investment Co., Ltd. Common stock of CyberTAN Technology Indirect investee company accounted for (1) 2,835 43,649 1 43,598 Inc. under the equity method Hon Chi International Investment Co., Ltd. Common stock of G-TECH Indirect investee company accounted for (1) 15,127 610,396 6 587,977 Optoelectronics Corporation under the equity method Hon Chi International Investment Co., Ltd. Common stock of Foxsemicon Integrated Indirect investee company accounted for (1) 4,947 5,379 5 5,309 Technology Inc. under the equity method Hon Chi International Investment Co., Ltd. Common stock of Shin Puu Technology Indirect investee company accounted for (1) 695 13,482 4 13,482 Co., Ltd. under the equity method Hon Chi International Investment Co., Ltd. Fitipower Integrated Technology Inc. Indirect investee company accounted for (1) 10,100 119,780 9 123,317 under the equity method
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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 Hon Yuan International Investment Co., Common stock of Pan International Investee company accounted for under the (1) 17,676 $ 396,877 4 $ 348,802 Ltd. Industrial Corporation equity method Hon Yuan International Investment Co., Common stock of Foxconn Technology Investee company accounted for under the (1) 30,355 1,567,821 3 1,501,167 Ltd. Co., Ltd. equity method Hon Yuan International Investment Co., Common stock of CyberTAN Technology Indirect investee company accounted for (1) 10,035 154,527 3 154,351 Ltd. Inc. under the equity method Hon Yuan International Investment Co., Common stock of G-TECH Indirect investee company accounted for (1) 24,858 999,862 9 966,233 Ltd. Optoelectronics Corporation under the equity method Hon Yuan International Investment Co., Common stock of Foxsemicon Integrated Indirect investee company accounted for (1) 4,745 5,160 4 5,092 Ltd. Technology Inc. under the equity method Hon Yuan International Investment Co., Fitipower Integrated Technology Inc. Indirect investee company accounted for (1) 9,090 107,802 8 110,985 Ltd. under the equity method Hon Yuan International Investment Co., Common stock of Entire Technology Co., None (2) 2,206 91,441 2 91,441 Ltd. Ltd. Lin Yih International Investment Co., Ltd. Common stock of CyberTAN Technology Indirect investee company accounted for (1) 10,035 154,527 3 154,351 Inc. under the equity method 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 Investee company accounted for under the (1) 75,582 3,796,939 6 3,737,763 Co., Ltd. equity method Hyield Venture Capital Co., Ltd. Common stock of CyberTAN Technology Indirect investee company accounted for (1) 10,035 154,527 3 154,351 Inc. under the equity method Hyield Venture Capital Co., Ltd. Common stock of Simplo Technology Co., Indirect investee company accounted for (1) 13,691 1,149,436 5 771,658 Ltd. under the equity method Hyield Venture Capital Co., Ltd. Common stock of Advanced Indirect investee company accounted for (1) 9,296 42,283 6 42,283 Microelectronic Products, Inc. under the equity method Hyield Venture Capital Co., Ltd. Common stock of Bionet Corporation Indirect investee company accounted for (1) 1,732 57,961 3 40,998 under the equity method Hyield Venture Capital Co., Ltd. Common stock of G-TECH Indirect investee company accounted for (1) 15,882 638,801 6 617,316 Optoelectronics Corporation under the equity method Hyield Venture Capital Co., Ltd. Common stock of Foxsemicon Integrated Indirect investee company accounted for (1) 7,134 7,757 7 7,656 Technology Inc. under the equity method Hyield Venture Capital Co., Ltd. Common stock of Shin Puu Technology Indirect investee company accounted for (1) 1,563 30,307 9 30,347 Co., Ltd. under the equity method Hyield Venture Capital Co., Ltd. Fitipower Integrated Technology Inc. Indirect investee company accounted for (1) 12,120 143,736 10 147,980 under the equity method
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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 Hyield Venture Capital Co., Ltd. Common stock of HealthConn Co. Indirect investee company accounted for (1) 4,875 $ 33,132 24 $ 37,146 under the equity method 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 Technology Co., Ltd. Hyield Venture Capital Co., Ltd. Common stock of Innolux Corporation The Company’s chairman is the major (2) 163,989 2,558,232 2 2,558,232 (Formerly Chimei Innolux Corporation) shareholder Hyield Venture Capital Co., Ltd. Common stock of Microelectronics (2) 2,300 33,465 1 33,465 None Technology Inc. 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 None (3) 2,395 28,740 1 28,740 Co., Ltd. Hyield Venture Capital Co., Ltd. Others (Note 2) None (1) - 98,922 - 98,922 Hon Yiing International Investment Co., Common stock of Pan International Investee company accounted for under the (1) 421 9,743 - 8,312 Ltd. Industrial Corporation equity method Foxconn (Far East) Limited Foxconn International Holdings Ltd. Subsidiary owned by Foxconn (Far East) (1) 5,081,035 70,942,322 69 70,942,322 Ltd. Foxconn (Far East) Limited Zhen Ding Technology Holding Limited Indirect investee company accounted for (1) 30,009 8,444,318 41 8,434,765 under the equity method Foxconn (Far East) Limited Ampower Holdings Ltd. Indirect investee company accounted for (1) 10,463 818,234 45 818,234 under the equity method Foxconn (Far East) Limited Eson Precision Ind. Co., Ltd. Indirect investee company accounted for (1) 44,036 1,491,078 29 1,491,078 under the equity method Foxconn (Far East) Limited UER Holdings Corporation Indirect investee company accounted for (1) 24,616 653,425 43 653,425 under the equity method Foxconn (Far East) Limited Excelstor Group Ltd. Indirect investee company accounted for (1) - 121,757 33 121,757 under the equity method 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
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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 Foxconn Holding Ltd. Alliance Fiber Optic Products, Inc. Indirect investee company accounted for (1) 8,000 $ 377,873 20 $ 377,873 under the equity method Foxconn Holding Ltd. Venglobal Capital Fund III, L.P. Investee company accounted for under the (1) - 224,804 - 224,804 equity method 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., Indirect investee company accounted for (1) 12,105 722,359 13 722,359
Ltd. under the equity method Foxconn International Holdings Limited Diabell Co., Ltd. Indirect investee company accounted for (1) 75 205,168 20 205,168 under the equity method Foxconn International Holdings Limited Common stock of Ability OPTO- Indirect investee company accounted for (1) 8,000 106,868 6 106,868 Electronics Technology Co., Ltd. under the equity method Foxconn International Holdings Limited Ways Transworld Inc. Indirect investee company accounted for (1) 12,100 108,618 50 108,618 under the equity method 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.
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5) Marketable securities acquired or sold during the year ended December 31, 2012 in excess of $100,000 or 20% of total contributed capital: Relationship Beginning balance Addition Disposal Ending balance Type and name of the issuers Number of Number of Number of Number of of marketable General ledger with the Shares Shares Shares Gain (loss) Shares Investor securities account Counterparty Company (in thousands) Amount (in thousands) Amount (in thousands) Selling price Book value on disposal (in thousands) Amount Hyield, Bao Shin, Fitipower Long-term investments Note 2 None - $ - 45,000 $ 585,000 - $ - $ - $ - 45,000 $ 585,000 Hon Yuan and Integrated accounted for under Hon Chi Technology Inc. the equity method Hyield and Hon Chi Lin Financial assets carried Note 3 None 13,476 336,886 - - 13,476 336,886 336,886 - - - Chi Technology at cost Co., Ltd. Hyield and Hon Chi Lin Financial assets carried Note 3 None 19,524 488,114 - - 19,524 488,114 488,114 - - - Chi Optoelectronics at cost Co., Ltd. Hyield Microelectronics Financial assets- Note 3 None - - - 200,000 - - - - - 200,000 Technology Inc. corporate bonds designated as at fair value through profit or loss Foxconn (Far Woodman Labs Financial assets carried Note 2 None - - 11,709 5,450,631 - - - - 11,709 5,450,631 East) Limited Inc. at cost Foxconn (Far Olympus Available for sale Public Market None - - 7,998 3,676,887 4,683 2,408,075 2,180,833 365,019 3,315 1,496,054 East) Limited Corporation financial assets-non– current Foxconn (Far Others Available for sale 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 East) Limited financial assets-non– current Foxconn (Far ShenZhen Long-term investments Note 4 None - 2,252,912 - - - 2,940,354 2,252,912 762,534 - - East) Limited Futaihong accounted for under Bright Real the equity method Estate Co., Ltd. Foxconn (Far Ways Technical Long-term investments Public Market None 19,405 947,772 - - 7,300 497,428 356,544 121,169 12,105 591,228 East) Limited Corp., Ltd. accounted for under the equity method Foxconn (Far Interface Long-term investments Note 5 None - - - 1,147,080 - - - - - 1,147,080 East) Limited Optoelectronics accounted for under (Shenzhen) the equity method Co., Ltd. Foxconn (Far Interface Long-term investments Note 5 None - - - 744,851 - - - - - 744,851 East) Limited Technology accounted for under (Chengdu) Co., the equity method Ltd.
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Relationship Beginning balance Addition Disposal Ending balance Type and name of the issuers Number of Number of Number of Number of of marketable General ledger with the Shares Shares Shares Gain (loss) Shares Investor securities account Counterparty Company (in thousands) Amount (in thousands) Amount (in thousands) Selling price Book value on disposal (in thousands) Amount Foxconn (Far Excel Victory Long-term investments Note 5 None - $ - 3,000,000 $ 115,404 - $ - $ - $ - 3,000,000 $ 115,404 East) Limited Ltd. accounted for under the equity method 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: Date of Status of Basis or reference original Disposal collection Gain (loss) Counter Reason for used in setting Other Property disposed of by Property Date of disposal acquisition Book value amount of proceeds on disposal party Relationship disposal the price commitments Chi Mei Communication Land and building 2012.10.3 Note 1 $ 629,602 $ 458,849 $ 458,849 $ 170,753 Note 2 No Disposal of idle Note 3 None System, Inc. assets 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) Unique Logistics Ltd. Note 2 Sales $ 3,489,981 72 45 days Note 1 Note 1 $ - - Corporation Ambit Microsystem (Zhong shan) Ambit Microsystem Co., Ltd. Note 2 Sales 1,312,412 27 45 days Note 1 Note 1 1,299,771 99 Co., Ltd. Unique Logistics Ltd. Ambit Microsystems (Zhong shan) Note 2 Sales 1,586,678 32 60 days Note 1 Note 1 - - Corporation Ambit Microsystem (Shanghai) Co., AMB Logistics Ltd. Note 2 Sales 27,659,650 75 60 days Note 1 Note 1 1,456,576 42 Ltd. Ambit Microsystem (Shanghai) Co., Amworld Microsystems (Shanghai) Ltd. Note 2 Sales 2,641,109 10 90 days Note 1 Note 1 186,276 5 Ltd. Ambit Microsystem (Shanghai) Co., Funing Precision Component Co., Ltd. Note 2 Sales 126,949 1 60 days Note 1 Note 1 17,456 1 Ltd. Ambit Microsystem (Shanghai) Co., Foxconn Technology (India) Private Limited Note 2 Sales 187,463 2 120 days Note 1 Note 1 123,279 4 Ltd.
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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 Microsystem (Shanghai) Co., Hongfujin Precision Electronics (Chongqing) Note 2 Sales $ 471,007 2 90 days Note 1 Note 1 $ 15,568 - Ltd. Co., Ltd Ambit Microsystem (Shanghai) Co., CyberTAN Technology Inc. Note 7 Sales 241,496 1 90 days Note 1 Note 1 194,116 6 Ltd. Ambit Microsystem (Shanghai) Co., System Intergation Electronics (Hangzhou) Note 2 Sales 34,479 - 60 days Note 1 Note 1 17,630 - Ltd. Co., Ltd. Ambit Microsystem (Shanghai) Co., Foxconn Technology Pte. Ltd. Note 3 Purchases 171,800 - 30 days Note 1 Note 1 ( 45,896) - Ltd. Ambit Microsystem (Shanghai) Co., IRIS World Enterprises Ltd. Note 4 Purchases 293,003 1 90 days Note 1 Note 1 ( 65,826) ( 1) Ltd. 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., Note 2 Sales 119,483 8 90 days Note 1 Note 1 475 - Ltd. 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., Note 2 Sales 585,142 2 45 days Note 1 Note 1 107,827 2 Ltd. 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) Note 2 Sales 1,030,227 3 45 days Note 1 Note 1 148,297 3 Co., Ltd. FIH (Hong Kong) Limited Shenzhen Fuhongjie Technology Service Co., Note 2 Sales 130,488 - 60 days Note 1 Note 1 7,322 - 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. Note 3 Purchase 103,049 1 60 days Note 1 Note 1 ( 87,387) ( 5) (Hangzhou) Co., Ltd. Ltd. Shenzhen Fu Tai Hong Precision FIH (Hong Kong) Limited Note 2 Sales 2,252,706 12 60 days Note 1 Note 1 192,756 5 Industry Co., Ltd. Shenzhen Fu Tai Hong Precision Foxconn Precision Electronics (Lang Fang) Note 2 Sales 831,766 4 45 days Note 1 Note 1 682,907 16 Industry Co., Ltd. Co., Ltd.
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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 Shenzhen Fu Tai Hong Precision NanNing FuTaiHong Precision Industry Co. Note 2 Sales $ 1,504,892 8 60 days Note 1 Note 1 $ 759,974 18 Industry Co., Ltd. Ltd. Shenzhen Fu Tai Hong Precision Hongfujin Precision Industrial (Shenzhen) Note 2 Sales 389,221 2 45 days Note 1 Note 1 184,701 4 Industry Co., Ltd. Co., Ltd. Shenzhen Fu Tai Hong Precision Futaihua Industrial (Shenzhen) Limited Note 2 Sales 242,156 1 60 days Note 1 Note 1 163,982 4 Industry Co., Ltd.
Shenzhen Fu Tai Hong Precision Fuhuajie Industrial (Shenzhen) Co., Limited Note 2 Sales 181,925 1 90 days Note 1 Note 1 23,745 1 Industry Co., Ltd. Shenzhen Fu Tai Hong Precision Hon Fujin Precision Industrial (Taiyuan) Co., Note 3 Purchase 213,869 1 60 days Note 1 Note 1 ( 34,698) ( 1) Industry Co., Ltd. Ltd. Foxconn Precision Component FIH (Hong Kong) Limited Note 2 Sales 1,288,198 27 30 days Note 1 Note 1 56,709 4 (Beijing) Co., Ltd. Foxconn Precision Component Foxconn (Tianjin) Precision Industry Co., Ltd. Note 2 Sales 245,402 5 30 days Note 1 Note 1 163,709 12 (Beijing) Co., Ltd. Foxconn Precision Component Futaijing Precision Electronics (Beijing) Co., Note 2 Sales 189,832 4 45 days Note 1 Note 1 167,795 12 (Beijing) Co., Ltd. Ltd. Foxconn Precision Component Foxconn Precision Electronics (Lang Fang) Note 2 Sales 253,427 5 45 days Note 1 Note 1 72,510 5 (Beijing) Co., Ltd. Co., Ltd. Foxconn Precision Component Hon Fujin Precision Industrial (Taiyuan) Co., Note 3 Purchases 126,772 4 60 days Note 1 Note 1 ( 73,364) ( 4) (Beijing) Co., Ltd. Ltd. Foxconn (Tianjin) Precision Industry FIH (Hong Kong) Limited Note 2 Sales 11,494,753 93 60 days Note 1 Note 1 518,907 53 Co., Ltd. Foxconn (Tianjin) Precision Industry Innolux Display Corporation Note 6 Purchases 128,862 7 60 days Note 1 Note 1 ( 3,783) - Co., Ltd. Foxconn (Tianjin) Precision Industry IRIS World Enterprises Ltd. Note 4 Purchases 415,779 23 90 days Note 1 Note 1 ( 50,598) ( 3) Co., Ltd. Futaijing Precision Component FIH (Hong Kong) Limited Note 2 Sales 215,702 - 30 days Note 1 Note 1 83,795 1 (Beijing) Co., Ltd. Futaijing Precision Component Foxconn Precision Component (Beijing) Co., Note 2 Sales 204,381 - 60 days Note 1 Note 1 183,779 2 (Beijing) Co., Ltd. Ltd.
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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 Futaijing Precision Component Foxconn Precision Electronics (Langfang) Note 2 Sales $ 447,744 1 45 days Note 1 Note 1 $ 202,857 2 (Beijing) Co., Ltd. Co., Ltd. Futaijing Precision Component Hongfujin Precision Industry (Yantai) Co., Note 2 Sales 111,699 - 45 days Note 1 Note 1 1,108 - (Beijing) Co., Ltd. Ltd. Futaijing Precision Component Innolux Corporation Ltd. Note 6 Purchases 1,009,105 2 60 days Note 1 Note 1 ( 202,638) ( 2) (Beijing) Co., Ltd. (Formerly Chimei Innolux Corporation) Futaijing Precision Component IRIS World Enterprises Ltd. Note 3 Purchases 608,401 1 60 days Note 1 Note 1 ( 180,173) ( 2) (Beijing) Co., Ltd. Foxconn Precision Electronics FIH (Hong Kong) Limited Note 2 Sales 12,414,627 36 30 days Note 1 Note 1 746,307 10 (Langfang) Co., Ltd. Foxconn Precision Electronics Shenzhen Fu Tai Hong Precision Industry Co., Note 2 Sales 170,764 - 30 days Note 1 Note 1 140,273 2 (Langfang) Co., Ltd. Ltd. Foxconn Precision Electronics Foxconn Precision Component (Beijing) Co., Note 2 Sales 1,428,144 4 45 days Note 1 Note 1 1,026,944 14 (Langfang) Co., Ltd. Ltd. Foxconn Precision Electronics Foxconn (Tianjin) Precision Industry Co., Ltd. Note 2 Sales 482,392 1 45 days Note 1 Note 1 234,987 3 (Langfang) Co., Ltd. Foxconn Precision Electronics Futaijing Precision Electronics (Beijing) Co., Note 2 Sales 405,700 1 45 days Note 1 Note 1 112,966 2 (Langfang) Co., Ltd. Ltd. Foxconn Precision Electronics Eliteday Enterprises Limited. Note 2 Sales 8,655,997 25 60 days Note 1 Note 1 142,851 2 (Langfang) Co., Ltd. Foxconn Precision Electronics Hongfujin Precision Industry (Shenzhen) Co., Note 2 Sales 113,456 - 60 days Note 1 Note 1 27,126 - (Langfang) Co., Ltd. Ltd. Foxconn Precision Electronics Innolux Corporation Ltd. Note 6 Purchases 1,103,405 5 45 days Note 1 Note 1 ( 506,970) ( 6) (Langfang) Co., Ltd. (Formerly Chimei Innolux Corporation) Foxconn Precision Electronics Hon Fujin Precision Industry (Taiyuan) Co., Note 3 Purchases 519,761 2 90 days Note 1 Note 1 ( 368,898) ( 5) (Langfang) Co., Ltd. Ltd. Foxconn Precision Electronics IRIS World Enterprises Limited Note 4 Purchases 225,040 1 60 days Note 1 Note 1 ( 37,755) - (Langfang) Co., Ltd. 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 Note 2 Sales 147,610 2 60 days Note 1 Note 1 - - Eletronicos Ltda.
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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 Eliteday Enterprises Limited Foxconn Precision Electronics (Langfang) Note 2 Sales $ 1,423,956 17 7 days Note 1 Note 1 $ 366,772 41 Co., Ltd. NanNing FuTaiHong Precision Shenzhen Fu Tai Hong Precision Industry Co., Note 2 Sales 1,843,795 74 60 days Note 1 Note 1 860,295 52 Industry Co., Ltd. Ltd. FuTaiJing Precision Electrons FIH (Hong Kong) Limited Note 2 Sales 1,272,026 32 30 days Note 1 Note 1 421,475 20 (Yantai) Co., Ltd FuTaiJing Precision Electrons Futaijing Precision Electronics (Beijing) Co., Note 2 Sales 2,644,433 68 45 days Note 1 Note 1 1,657,101 79 (Yantai) Co., Ltd Ltd. Foxway Precision Industry System Integration Electronics (Hangzhou) Note 2 Sales 110,641 22 45 days Note 1 Note 1 18,946 22 (Hangzhou) Co., Ltd. Co., Ltd. Carston Ltd. Competition Team Ireland Limited Note 2 Subcontract 384,978 5 90 days Note 1 Note 1 - - Revenue Carston Ltd. Lakers Trading Ltd. Note 6 Subcontract 686,231 9 90 days Note 1 Note 1 1,040,837 4 Revenue Carston Ltd. High Tempo International Ltd. Note 3 Subcontract 1,794,704 22 90 days Note 1 Note 1 - - Revenue 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 - (Shenzhen) Co., Ltd. Hongfujin Precision Industrial Shenzhen Fu Tai Hong Precision Industry Co., Note 2 Sales 328,406 - 90 days Note 1 Note 1 124,028 - (Shenzhen) Co., Ltd. Ltd. Hongfujin Precision Industrial Carston Ltd. Note 2 Subcontract 2,448,197 2 90 days Note 1 Note 1 283,725 1 (Shenzhen) Co., Ltd. Revenue Hongfujin Precision Industrial Fu Ding Precision Component (Shenzhen) Note 2 Sales 3,392,067 3 90 days Note 1 Note 1 1,254,847 5 (Shenzhen) Co., Ltd. Co., Ltd. Hongfujin Precision Industrial Kangzhun Electronic Technology (Kunshan) Note 2 Sales 138,689 - 90 days Note 1 Note 1 119,083 - (Shenzhen) Co., Ltd. Co., Ltd. Hongfujin Precision Industrial Foxconn Electronic Industrial Development Note 2 Sales 171,059 - 90 days Note 1 Note 1 110,126 - (Shenzhen) Co., Ltd. (Kunshan) Co., Ltd.
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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 Hongfujin Precision Industrial Heroic Legend Enterprises Ltd. Note 2 Subcontract $ 14,223,306 14 90 days Note 1 Note 1 $ 1,053,441 4 (Shenzhen) Co., Ltd. Revenue Hongfujin Precision Industrial Yantaishi Fulitong International Trading Co., Note 2 Sales 377,013 - 120 days Note 1 Note 1 233,522 1 (Shenzhen) Co., Ltd. Ltd. Hongfujin Precision Industrial Franklin Management Ltd. Note 2 Subcontract 11,046,984 11 90 days Note 1 Note 1 2,188,020 8 (Shenzhen) Co., Ltd. Revenue Hongfujin Precision Industrial Fujin Precision Industrial (Jincheng) Co., Ltd. Note 2 Sales 1,074,007 1 90 days Note 1 Note 1 726,532 3 (Shenzhen) Co., Ltd. Hongfujin Precision Industrial Hongzhun Precision Tooling (Kunshan) Co., Note 2 Sales 285,394 - 90 days Note 1 Note 1 86,364 - (Shenzhen) Co., Ltd. Ltd. Hongfujin Precision Industrial Jizhun Precision Industry (Huizhou) Co., Ltd. Note 2 Sales 490,660 - 90 days Note 1 Note 1 342,537 1 (Shenzhen) Co., Ltd. Hongfujin Precision Industrial Hongfujin Precision Industrial (Wuhan) Co., Note 2 Sales 210,217 - 90 days Note 1 Note 1 53,423 - (Shenzhen) Co., Ltd. Ltd. Hongfujin Precision Industrial Futaihua Industrial (Shenzhen) Limited Note 2 Sales 10,784,469 11 90 days Note 1 Note 1 2,996,182 11 (Shenzhen) Co., Ltd. Hongfujin Precision Industrial Fuhuajie Industrial (Shenzhen) Limited Note 2 Sales 707,849 1 90 days Note 1 Note 1 626,068 2 (Shenzhen) Co., Ltd. Hongfujin Precision Industrial Honfujin Precision Electronics (Chongqing) Note 2 Sales 155,927 - 30 days Note 1 Note 1 77,795 - (Shenzhen) Co., Ltd. Co., Ltd. Hongfujin Precision Industrial Hongfujing Precision Electronics (Tianjin) Note 2 Sales 104,120 - 60 days Note 1 Note 1 101,384 - (Shenzhen) Co., Ltd. Co., Ltd. Hongfujin Precision Industrial Hongfujin Precision Electronics (Chengdu) Note 2 Sales 3,944,111 4 90 days Note 1 Note 1 2,351,974 8 (Shenzhen) Co., Ltd. Limited Hongfujin Precision Industrial NanNing FuGui Precision Industrial Co., Ltd. Note 2 Sales 395,918 - 90 days Note 1 Note 1 318,769 1 (Shenzhen) Co., Ltd. Hongfujin Precision Industrial Futaihua Precision Electronics (Zhenzhou) Note 2 Sales 662,044 1 90 days Note 1 Note 1 471,664 2 (Shenzhen) Co., Ltd. Limited Hongfujin Precision Industrial Hongfujin Precision Electronics (Zhenzhou) Note 2 Sales 2,221,685 2 90 days Note 1 Note 1 1,373,925 5 (Shenzhen) Co., Ltd. Limited Hongfujin Precision Industrial Foxconn Precision Electronics (Taiyuan) Co., Note 2 Sales 457,662 - 90 days Note 1 Note 1 397,375 1 (Shenzhen) Co., Ltd. Ltd. Hongfujin Precision Industrial Futaihua Precision Electronics (Jiyuan) Note 2 Sales 904,100 1 30 days Note 1 Note 1 741,040 3 (Shenzhen) Co., Ltd. Limited Hongfujin Precision Industrial Interface Technology (Chengdu) Co., Ltd. Note 10 Sales 234,138 - 30 days Note 1 Note 1 101,304 - (Shenzhen) Co., Ltd.
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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 Hongfujin Precision Industrial Innocom Technology (Shenzhen) Co., Ltd. Note 6 Sales $ 170,109 - 90 days Note 1 Note 1 $ 21,713 - (Shenzhen) Co., Ltd. Hongfujin Precision Industrial Nanhai Chi Mei Electronics Corporation Note 6 Sales 162,670 - 90 days Note 1 Note 1 1,589 - (Shenzhen) Co., Ltd. Hongfujin Precision Industrial Hon Fujin Precision Industry (Taiyuan) Co., Note 3 Sales 332,422 - 90 days Note 1 Note 1 35,613 - (Shenzhen) Co., Ltd. Ltd. Hongfujin Precision Industrial Fuzhun Precision (Shenzhen) Industry Co., Note 3 Sales 246,561 - 90 days Note 1 Note 1 116,336 - (Shenzhen) Co., Ltd. Ltd. Hongfujin Precision Industrial Hon Fujin Precision Industry (Taiyuan) Co., Note 3 Purchases 1,711,515 16 90 days Note 1 Note 1 ( 1,658,010) ( 39) (Shenzhen) Co., Ltd. Ltd. Hongfujin Precision Industrial Fuhuigang Industrial (Shenzhen) Co., Ltd. Note 3 Purchases 148,887 1 90 days Note 1 Note 1 ( 28,220) ( 1) (Shenzhen) Co., Ltd. Hongfujin Precision Industrial Innolux Corporation Ltd. Note 5 Purchases 188,638 2 90 days Note 1 Note 1 - - (Shenzhen) Co., Ltd. (Formerly Chimei Innolux Corporation) Fu Ding Precision Component Beyond Maximum Industrial Ltd. Note 2 Subcontract 8,801,240 97 30 days Note 1 Note 1 1,439,760 93 (Shenzhen) Co., Ltd. Revenue Fuhong Precision Component Best Matrix Enterprises Ltd. Note 2 Subcontract 585,039 99 30 days Note 1 Note 1 - - (Shenzhen) Co., Ltd. Revenue Champ Tech Optical (Foshan) Foxconn Precision Electronics (Lang Fang) Note 2 Sales 120,510 3 90 days Note 1 Note 1 33,110 2 Corporation Co., Ltd. Champ Tech Optical (Foshan) Futaihua Industrial (Shenzhen) Limited Note 2 Sales 550,577 12 90 days Note 1 Note 1 92,126 7 Corporation Champ Tech Optical (Foshan) Foxconn Technology Pte. Ltd. Note 3 Sales 2,449,477 52 30 days Note 1 Note 1 634,546 48 Corporation Champ Tech Optical (Foshan) Foxconn Technology Co., Ltd. Note 7 Sales 594,552 13 30 days Note 1 Note 1 132,601 10 Corporation Champ Tech Optical (Foshan) Fuyu Technology (Nanyang) Co., Ltd. Note 3 Sales 119,438 3 90 days Note 1 Note 1 138,997 10 Corporation Champ Tech Optical (Foshan) Dongguan Pan-International Wire & Cable Note 8 Purchases 127,007 4 90 days Note 1 Note 1 ( 63,871) ( 4) Corporation Co., Ltd. Fu Ding Electronical Technology Futaihua Industrial (Shenzhen) Limited Note 2 Sales 2,719,222 27 90 days Note 1 Note 1 1,060,772 37 (Jiashan) Co., Ltd. Fu Ding Electronical Technology Foxconn Technology Pte. Ltd. Note 3 Purchases 210,845 3 90 days Note 1 Note 1 ( 16,238) ( 1) (Jiashan) Co., Ltd.
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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 Fuhonyang Precision Industrial MWM Co., Ltd. Note 2 Subcontract $ 2,916,390 98 60 days Note 1 Note 1 $ 1,550,134 82 (Shenzhen) Co., Ltd. Revenue Kangzhun Electronic Technology Ambit Microsystem (Shanghai) Co., Ltd. Note 2 Sales 286,034 1 30 days Note 1 Note 1 62,885 1 (Kunshan) Co., Ltd. Kangzhun Electronic Technology Qunkang Precision Component (Kunshan) Note 2 Sales 124,073 1 60 days Note 1 Note 1 116,933 1 (Kunshan) Co., Ltd. Co., Ltd. Kangzhun Electronic Technology Tripleheads International Ltd. Note 2 Sales 746,703 4 90 days Note 1 Note 1 496,611 6 (Kunshan) Co., Ltd. Kangzhun Electronic Technology Fusing International Inc. Note 2 Sales 323,496 2 90 days Note 1 Note 1 319,167 4 (Kunshan) Co., Ltd. Kangzhun Electronic Technology Hongfujin Precision Electronics (Chongqing) Note 2 Sales 120,520 1 30 days Note 1 Note 1 134 - (Kunshan) Co., Ltd. Co., Ltd. Kangzhun Electronic Technology Innolux Corporation Ltd. (Formerly Chimei Note 5 Purchases 534,641 4 90 days Note 1 Note 1 ( 375,170) ( 3) (Kunshan) Co., Ltd. Innolux Corporation) Kangzhun Electronic Technology Foxconn Technology Pte. Ltd. Note 3 Purchases 580,718 4 90 days Note 1 Note 1 ( 230,266) ( 2) (Kunshan) Co., Ltd. Kangzhun Electronic Technology Pan International Industrial Co. Note 7 Purchases 289,257 2 90 days Note 1 Note 1 ( 215,187) ( 2) (Kunshan) Co., Ltd. Fuxiang Precision Industrial Smart Top International Ltd. Note 2 Sales 548,841 3 90 days Note 1 Note 1 255,196 11 (Kunshan) Co., Ltd. Fuxiang Precision Industrial Foxconn Technology Pte. Ltd. Note 3 Purchases 327,945 1 90 days Note 1 Note 1 - - (Kunshan) Co., Ltd. Fuxiang Precision Industrial IRIS World Enterprises Ltd. Note 4 Purchases 175,724 1 90 days Note 1 Note 1 ( 13,299) - (Kunshan) Co., Ltd. Foxconn (Kunshan) Computer Foxconn Electronic Industrial Development Note 2 Sales 684,936 5 90 days Note 1 Note 1 1,106,416 36 Connector Co., Ltd. (Kunshan) Co., Ltd. Foxconn (Kunshan) Computer Success Rise Enterprises Ltd. Note 2 Subcontract 13,351,462 94 90 days Note 1 Note 1 1,379,694 46 Connector Co., Ltd. Revenue Foxconn (Kunshan) Computer Fuzhun Precision (Shenzhen) Industry Co., Note 3 Purchases 381,014 3 60 days Note 1 Note 1 ( 13,845) - Connector Co., Ltd. Ltd. Foxconn Electronic Industrial Foxconn (Kunshan) Computer Connector Note 2 Subcontract 8,899,679 97 30 days Note 1 Note 1 3,309,438 79 Development (Kunshan) Co., Ltd. Co., Ltd. Revenue
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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 Foxconn Electronic Industrial Foxsemicon Integrated Technology Note 9 Purchases $ 352,258 2 30 days Note 1 Note 1 ($ 82,304) ( 2) Development (Kunshan) Co., Ltd. (Shanghai) Inc. Qunkang Precision Component Smart Top International Ltd. Note 2 Sales 4,158,372 74 90 days Note 1 Note 1 2,201,885 100 (Kunshan) Co., Ltd. Competition Team Technology Ltd. Futaihua Precision Electronics (Zhenzhou) Note 2 Sales 1,534,356 - 90 days Note 1 Note 1 254,238 - Limited Competition Team Technology Ltd. Hongfujin Precision Electronics (Zhenzhou) Note 2 Sales 5,045,426 1 90 days Note 1 Note 1 596,527 - Limited Hightech Electronics Components Foxconn Image & Printing Product Pte. Ltd. Note 2 Sales 15,617,564 13 60 days Note 1 Note 1 6,900,380 21 Inc. Hightech Electronics Components Hongfujin Precision Electronics (Chongqing) Note 2 Sales 353,621 - 60 days Note 1 Note 1 77,890 - Inc. Co., Ltd. Hightech Electronics Components Fusing International Inc. Pte. Ltd. Note 2 Sales 7,723,017 6 60 days Note 1 Note 1 4,224,630 13 Inc. Hightech Electronics Components Competition Team Ireland Limited Note 2 Sales 12,029,829 10 60days Note 1 Note 1 3,864,411 12 Inc. Hightech Electronics Components Foxconn Japan Ltd. Note 2 Sales 702,648 1 60 days Note 1 Note 1 140,984 - Inc. Hightech Electronics Components Foxconn Singapore Pte. Ltd. Note 2 Sales 183,224 - 60 days Note 1 Note 1 57,913 - Inc. Smart Top International Ltd. Hongye Precision Component (Kunshan) Co., Note 2 Sales 208,860 3 60days Note 1 Note 1 189,151 9 Ltd. 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) Note 2 Sales 2,707,971 14 90 days Note 1 Note 1 401,847 8 Limited Best Ever Industries Ltd. Hongfujin Precision Electronics (Zhenzhou) Note 2 Sales 4,147,488 22 90 days Note 1 Note 1 1,362,843 26 Limited Best Ever Industries Ltd. Foxconn Precision Electronics (Taiyuan) Co., Note 2 Sales 146,674 1 90 days Note 1 Note 1 26,916 1 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 -
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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 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 Dragon Spirit Industries Ltd. Note 2 Sales 7,836,936 12 30 days Note 1 Note 1 - - (Yantai) Co., Ltd. Hongfutai Precision Electrons Hongfujin Precision Industrial (Wuhan) Co., Note 2 Sales 185,379 - 30 days Note 1 Note 1 99,894 1 (Yantai) Co., Ltd. Ltd. Hongfutai Precision Electrons Hongfujin Precision Electrons (Yantai) Co., Note 2 Sales 2,634,742 4 30 days Note 1 Note 1 1,195,803 8 (Yantai) Co., Ltd. Ltd. Hongfutai Precision Electrons Universal Field International Limited Note 2 Sales 49,479,435 73 30 days Note 1 Note 1 11,206,431 77 (Yantai) Co., Ltd. Hongfutai Precision Electrons Foxconn Technology Pte. Ltd. Note 3 Purchases 837,614 1 90 days Note 1 Note 1 ( 137,974) ( 1) (Yantai) Co., Ltd. Hongfutai Precision Electrons Pan Interation Industrial Co. Note 7 Purchases 591,534 1 90 days Note 1 Note 1 ( 109,845) ( 1) (Yantai) Co., Ltd. Hongfutai Precision Electrons IRIS World Enterprises Ltd. Note 4 Purchases 193,679 - 90 days Note 1 Note 1 ( 18,425) - (Yantai) Co., Ltd. Hongfutai Precision Electrons Honghuasheng Precision Electronics (YanTai) Note 8 Purchases 219,887 - 90 days Note 1 Note 1 ( 16,099) - (Yantai) Co., Ltd. Co., Ltd. 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 - - (Formerly Chimei Innolux Corporation) 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) Hongfujin Precision Industrial (Shenzhen) Note 2 Sales 408,936 1 90 days Note 1 Note 1 127,276 1 Co., Ltd. Co., Ltd.
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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 Fujin Precision Industrial (Jincheng) Fu Ding Electronical Technology (Jiashan) Note 2 Sales $ 156,962 - 90 days Note 1 Note 1 $ - - Co., Ltd. Co., Ltd. Fujin Precision Industrial (Jincheng) Hongzhun Precision Tooling (Kunshan) Co., Note 2 Sales 463,492 1 90 days Note 1 Note 1 29,219 - Co., Ltd. Ltd. Fujin Precision Industrial (Jincheng) Futaihua Industrial (Shenzhen) Co., Ltd. Note 2 Sales 2,664,247 8 90 days Note 1 Note 1 808,655 5 Co., Ltd.
Fujin Precision Industrial (Jincheng) Hongfujin Precision Electronics (Chengdu) Note 2 Sales 1,652,473 5 90 days Note 1 Note 1 500,820 3 Co., Ltd. Co., Ltd. Fujin Precision Industrial (Jincheng) Fu Ding Precision Electronics (Zhengzhou) Note 2 Sales 750,677 2 90 days Note 1 Note 1 1,338 - Co., Ltd. Co., Ltd. Fujin Precision Industrial (Jincheng) Futaihua Industrial (Shenzhen) Co., Ltd. Note 2 Sales 1,742,470 5 90 days Note 1 Note 1 1,286,241 7 Co., Ltd. Fujin Precision Industrial (Jincheng) Hongfujin Precision Electronics (Zhengzhou) Note 2 Sales 11,039,566 34 90 days Note 1 Note 1 8,510,137 49 Co., Ltd. Co., Ltd. Fujin Precision Industrial (Jincheng) Fast Victor Limited Note 2 Sales 2,880,209 9 90 days Note 1 Note 1 135,647 1 Co., Ltd. Fujin Precision Industrial (Jincheng) WWW (Jincheng) Co., Ltd. Note 2 Sales 674,156 2 90 days Note 1 Note 1 293,875 2 Co., Ltd. Fujin Precision Industrial (Jincheng) MWM Co., Ltd. Note 2 Sales 1,049,255 3 90 days Note 1 Note 1 577,395 3 Co., Ltd. Fujin Precision Industrial (Jincheng) Foxconn Precision Electronics (Taiyuan) Co., Note 2 Sales 977,942 3 90 days Note 1 Note 1 218,615 1 Co., Ltd. Ltd. Fujin Precision Industrial (Jincheng) Futaihua Precision Electronics (Jiyuan) Note 2 Sales 2,959,965 9 90 days Note 1 Note 1 2,271,853 13 Co., Ltd. Limited Fujin Precision Industrial (Jincheng) Hongfujin Precision Electronics (Taiyuan) Note 3 Sales 2,025,198 6 90 days Note 1 Note 1 2,113,040 12 Co., Ltd. Co., Ltd. Hongzhun Precision Tooling Hongfujin Precision Industrial (Shenzhen) Note 2 Subcontract 120,888 100 90 days Note 1 Note 1 45,476 97 (Shenzhen) Co., Ltd. Co., Ltd. Revenue Hongzhun Precision Tooling Fu Ding Electronical Technology (Jiashan) Note 2 Sales 1,330,069 16 30 days Note 1 Note 1 426,221 6 (Kunshan) Co., Ltd. Co., Ltd. Hongzhun Precision Tooling Kangzhun Electronic Technology (Kunshan) Note 2 Sales 3,571,283 43 90 days Note 1 Note 1 4,465,913 66 (Kunshan) Co., Ltd. Co., Ltd.
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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 Hongzhun Precision Tooling Fuxiang Precision Industrial (Kunshan) Co., Note 2 Sales $ 660,066 8 90 days Note 1 Note 1 $ 61,562 1 (Kunshan) Co., Ltd. Ltd. Hongzhun Precision Tooling Foxconn (Kun Shan) Computer Connector Note 2 Sales 911,413 11 90 days Note 1 Note 1 306,797 5 (Kunshan) Co., Ltd. Co., Ltd. Hongzhun Precision Tooling Futaihua Industrial (Shenzhen) Co., Ltd. Note 2 Sales 603,906 7 60 days Note 1 Note 1 77,569 1 (Kunshan) Co., Ltd. Hongzhun Precision Tooling Hongfujin Precision Electronics (Chengdu) Note 2 Sales 406,535 5 90 days Note 1 Note 1 216,215 3 (Kunshan) Co., Ltd. Co., Ltd. Hongzhun Precision Tooling Hongfujin Precision Industry (Taiyuan) Co., Note 3 Sales 159,738 2 90 days Note 1 Note 1 32,607 - (Kunshan) Co., Ltd. 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 Carston Ltd. Note 2 Subcontract 668,687 72 30 days Note 1 Note 1 74,249 73 Service Co., Ltd. Revenue Jizhun Precision Industry (Huizhou) Hongfujin Precision Industrial (Shenzhen) Note 2 Sales 1,538,726 61 90 days Note 1 Note 1 511,480 54 Co., Ltd. Co., Ltd. Shenzhen Fertile Plan International NanNing FuGui Precision Industrial Co., Ltd. Note 2 Sales 101,604 17 90 days Note 1 Note 1 22,571 15 Logistics Co., Ltd. Fuzhun Precision Tooling (Huaian) Fuyu Electronical Technology (Huaian) Co., Note 2 Sales 760,590 60 30 days Note 1 Note 1 743,467 64 Co., Ltd. Ltd. Fuzhun Precision Tooling (Huaian) Huaian Fulitong Trading Co., Ltd. Note 2 Sales 493,764 39 30 days Note 1 Note 1 383,858 33 Co., Ltd. Fuyu Electronical Technology Success Rise Enterprises Ltd. Note 2 Subcontract 10,321,071 100 30 days Note 1 Note 1 3,224,509 87 (Huaian) Co., Ltd. Revenue 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., FIH (Hong Kong) Limited Note 2 Sales 105,096 2 45 days Note 1 Note 1 16,719 1 Ltd. Foxconn Baja California S.A. De Competition Team Ireland Limited Note 2 Sales 125,083 6 60 days Note 1 Note 1 3,337 1 C.V. Hongfujin Precision Industrial Top Step Enterprises Limited Note 2 Sales 99,499,196 93 60 days Note 1 Note 1 7,243,984 89 (Wuhan) Co., Ltd.
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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 Hongfujin Precision Industrial Hongfujin Precision Electronics (Chongqing) Note 2 Sales $ 301,164 - 90 days Note 1 Note 1 $ - - (Wuhan) Co., Ltd. Co., Ltd. Hongfujin Precision Industrial FTP Technology Inc. Note 3 Purchases 949,174 1 30 days Note 1 Note 1 ( 289,208) ( 2) (Wuhan) Co., Ltd. Hongfujin Precision Industrial Foxconn Technology Co., Ltd. Note 3 Purchases 743,063 - 90 days Note 1 Note 1 ( 215,388) ( 1) (Wuhan) Co., Ltd. Hongfujin Precision Industrial IRIS World Enterprises Limited Note 4 Purchases 2,249,818 1 90 days Note 1 Note 1 ( 174,127) ( 1) (Wuhan) Co., Ltd. Hongfujin Precision Industrial Pan International Industrial Co. Note 7 Purchases 1,025,533 1 90 days Note 1 Note 1 ( 237,155) ( 1) (Wuhan) Co., Ltd. Hongfujin Precision Electrons AMB Logistics Ltd. Note 2 Sales 1,169,018 1 60 days Note 1 Note 1 872,992 3 (Yantai) Co., Ltd. Hongfujin Precision Electrons Futaijing Precision Electronics (Beijing) Co., Note 2 Sales 7,957,826 4 45 days Note 1 Note 1 1,046,516 3 (Yantai) Co., Ltd. Ltd. Hongfujin Precision Electrons Futaijing Precision Electronics (Yantai) Co., Note 2 Sales 2,430,262 1 90 days Note 1 Note 1 2,406,492 7 (Yantai) Co., Ltd. Ltd. Hongfujin Precision Electrons Competition Team Technology Pte. Ltd. Note 2 Sales 3,429,823 2 30 days Note 1 Note 1 914,768 3 (Yantai) Co., Ltd. Hongfujin Precision Electrons Hongfutai Precision Electrons(Yantai) Co., Note 2 Sales 1,521,568 1 90 days Note 1 Note 1 850,198 3 (Yantai) Co., Ltd. Ltd. Hongfujin Precision Electrons Full Profit International Limited Note 2 Sales 1,008,692 - 30 days Note 1 Note 1 254,515 1 (Yantai) Co., Ltd. Hongfujin Precision Electrons Universal Field International Limited Note 2 Sales 107,086,065 48 30 days Note 1 Note 1 6,581,778 20 (Yantai) Co., Ltd. Hongfujin Precision Electrons Foxconn Precision Electronics (Yantai) Co., Note 2 Sales 424,816 - 90 days Note 1 Note 1 75,444 - (Yantai) Co., Ltd. Ltd. Hongfujin Precision Electrons YanTai FuHuaDa Precision Electronics Co., Note 2 Sales 5,059,763 2 90 days Note 1 Note 1 3,085,985 9 (Yantai) Co., Ltd. Ltd. Hongfujin Precision Electrons NanNing FuGui Precision Industrial Co., Ltd. Note 2 Sales 137,491 - 90 days Note 1 Note 1 126,927 - (Yantai) Co., Ltd. Hongfujin Precision Electrons Competition Team Ireland Limited Note 2 Sales 867,633 - 90 days Note 1 Note 1 31,963 - (Yantai) Co., Ltd.
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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 Hongfujin Precision Electrons Foxconn Technology Co., Ltd. Note 7 Sales $ 76,108,306 34 30 days Note 1 Note 1 $ 15,288,164 46 (Yantai) Co., Ltd. Hongfujin Precision Electrons Foxconn Technology Co., Ltd. Note 7 Purchases 2,990,004 9 90 days Note 1 Note 1 ( 2,054,799) ( 6) (Yantai) Co., Ltd. Hongfujin Precision Electrons Pan International Industrial Co. Note 7 Purchases 4,145,266 2 90 days Note 1 Note 1 ( 1,345,486) ( 4) (Yantai) Co., Ltd. Hongfujin Precision Electrons IRIS World Enterprises Limited Note 4 Purchases 1,522,882 1 90 days Note 1 Note 1 ( 50,437) - (Yantai) Co., Ltd. Hongfujin Precision Electrons Innolux Corporation Note 5 Purchases 1,402,624 1 90 days Note 1 Note 1 ( 115,803) - (Yantai) Co., Ltd. (Formerly Chimei Innolux Corporation) 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) Note 2 Sales 2,550,172 100 30 days Note 1 Note 1 282,498 3 Limited Universal Field International Hongfutai Precision Electrons (Yantai) Co., Note 2 Sales 421,662 - 90 days Note 1 Note 1 156,972 1 Limited Ltd. Universal Field International Hongfujin Precision Industry (Yantai) Co., Note 2 Sales 828,169 1 30 days Note 1 Note 1 178,852 1 Limited Ltd. Top Step Enterprises Limited Hongfujin Precision Industrial (Wuhan) Co., Note 2 Sales 1,987,696 2 45 days Note 1 Note 1 603,873 6 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 Note 5 Sales 380,188 20 45 days Note 1 Note 1 316,888 69 Innolux Corporation) Foxconn Technology CZ S. R. O. Innolux Corporation (Formerly Chimei Note 5 Purchases 145,572 76 45 days Note 1 Note 1 ( 121,821) ( 53) Innolux Corporation) FuYu Energy Technology Hongfujin Precision Industrial (Wuhan) Co., Note 2 Sales 230,979 55 60 days Note 1 Note 1 268,752 48 (Kunshan) Co., Ltd. Ltd. Fugion Material Technology Fu Ding Precision Component (Shenzhen) Note 2 Sales 1,323,602 19 90 days Note 1 Note 1 195,898 44 (Shenzhen) Limited Co., Ltd. Fugion Material Technology Fuhong Precision Component (Shenzhen) Co., Note 2 Sales 161,488 2 90 days Note 1 Note 1 26,932 6 (Shenzhen) Limited Ltd. Fugion Material Technology Fu Ding Precision Component (Zhengzhou) Note 2 Sales 455,173 7 90 days Note 1 Note 1 59,077 13 (Shenzhen) Limited Co., Ltd.
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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 Fugion Material Technology Fukui Precision Component (Shenzhen) Co., Note 4 Sales $ 340,362 5 90 days Note 1 Note 1 $ 58,031 13 (Shenzhen) Limited Ltd. Huaian Fulitong Trading Co., Ltd. Foxconn Precision Electronics (Lang Fang) Note 2 Sales 177,802 8 60 days Note 1 Note 1 69,987 9 Co., Ltd. Huaian Fulitong Trading Co., Ltd. Foxconn (Kunshan) Computer Connector Co., Note 2 Sales 106,131 5 30 days Note 1 Note 1 91,749 12 Ltd. Huaian Fulitong Trading Co., Ltd. Foxconn Electronic Industrial Development Note 2 Sales 310,002 14 30 days Note 1 Note 1 192,997 26 (Kunshan) Co., Ltd. Foxconn Image & Printing Product Fuhuajie Industrial (Shenzhen) Limited Note 2 Sales 333,071 1 60 days Note 1 Note 1 - - Pte. Ltd. Foxconn Image & Printing Product Honfujin Precision Electronics (Chongqing) Note 2 Sales 334,431 1 60 days Note 1 Note 1 186,355 3 Pte. Ltd. Co., Ltd. Futaihua Industrial (Shenzhen) Co., Hongfujin Precision Industry (Shenzhen) Co., Note 2 Sales 221,534 - 90 days Note 1 Note 1 114,378 - Ltd. Ltd. Futaihua Industrial (Shenzhen) Co., Fu Ding Precision Component (Shenzhen) Note 2 Sales 158,024 - 90 days Note 1 Note 1 25,033 - Ltd. Co., Ltd. Futaihua Industrial (Shenzhen) Co., Best Leap Enterprises Limited Note 2 Sales 782,867,169 90 90 days Note 1 Note 1 131,860,729 83 Ltd. Futaihua Industrial (Shenzhen) Co., Fujin Precision Industrial (Jincheng) Co., Ltd. Note 2 Sales 3,127,252 - 90 days Note 1 Note 1 3,643,963 2 Ltd. Futaihua Industrial (Shenzhen) Co., Hongfujin Precision Electronics (Chengdu) Note 2 Sales 10,618,756 1 90 days Note 1 Note 1 3,952,654 3 Ltd. Co., Ltd. Futaihua Industrial (Shenzhen) Co., Futaihua Precision Electronics (Zhengzhou) Note 2 Sales 2,869,305 - 90 days Note 1 Note 1 1,102,065 1 Ltd. Co., Ltd. Futaihua Industrial (Shenzhen) Co., Hongfujin Precision Electronics (Zhengzhou) Note 2 Sales 17,771,198 2 90 days Note 1 Note 1 7,326,521 5 Ltd. Co., Ltd. Futaihua Industrial (Shenzhen) Co., Foxconn Precision Electronics (Taiyuan) Co., Note 2 Sales 1,292,555 - 90 days Note 1 Note 1 1,473,771 1 Ltd. Ltd. Futaihua Industrial (Shenzhen) Co., Futaihua Precision Electronics (Jiyuan) Note 2 Sales 2,630,914 - 90 days Note 1 Note 1 1,937,113 1 Ltd. Limited Futaihua Industrial (Shenzhen) Co., Fuhong Precision Component (Bac Giang) Note 2 Sales 1,648,774 - 90 days Note 1 Note 1 1,084,734 1 Ltd. Limited
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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 Futaihua Industrial (Shenzhen) Co., Foxconn CMMSG Industria De Eletronicos Note 2 Sales $ 2,298,167 - 90 days Note 1 Note 1 $ 1,127,182 1 Ltd. Ltd. Futaihua Industrial (Shenzhen) Co., Nanning Funing Precision Electronics Co., Note 3 Purchases 198,286 - 90 days Note 1 Note 1 - - Ltd. Ltd. Futaihua Industrial (Shenzhen) Co., Hon Fujin Precision Industry (Taiyuan) Co., Note 3 Sales 472,196 - 90 days Note 1 Note 1 140,282 - Ltd. Ltd. Futaihua Industrial (Shenzhen) Co., Hon Fujin Precision Industry (Taiyuan) Co., Note 3 Purchases 1,305,912 1 90 days Note 1 Note 1 ( 462,123) - Ltd. Ltd. Futaihua Industrial (Shenzhen) Co., Foxconn Technology Pte. Ltd. Note 3 Purchases 1,684,472 1 90 days Note 1 Note 1 ( 336,565) - Ltd. Futaihua Industrial (Shenzhen) Co., Fuzhun Precision (Shenzhen) Industry Co., Note 3 Purchases 662,652 1 90 days Note 1 Note 1 ( 215,125) - Ltd. Ltd. Futaihua Industrial (Shenzhen) Co., Innolux Corporation (Formerly Chimei Note 5 Purchases 202,158 - 30 days Note 1 Note 1 - - Ltd. Innolux Corporation) Futaihua Industrial (Shenzhen) Co., IRIS World Enterprises Limited Note 4 Purchases 8,335,077 7 90 days Note 1 Note 1 ( 1,810,394) ( 1) Ltd. Fuhuajie Industrial (Shenzhen) Skilltop Limited Note 2 Sales 22,863,975 45 90 days Note 1 Note 1 2,683,902 39 Limited Fuhuajie Industrial (Shenzhen) Foxconn Image & Printing Product Pte. Ltd. Note 2 Sales 409,864 1 30 days Note 1 Note 1 186,758 3 Limited Fuhuajie Industrial (Shenzhen) Hongfujin Precision Electronics (Chongqing) Note 2 Sales 4,001,810 8 90 days Note 1 Note 1 3,238,990 47 Limited Co., Ltd. Fuhuajie Industrial (Shenzhen) Pan-International Industrial Co. Note 7 Purchases 258,965 6 90 days Note 1 Note 1 ( 10,918) - Limited Fuhuajie Industrial (Shenzhen) IRIS World Enterprises Limited Note 4 Purchases 546,415 13 90 days Note 1 Note 1 ( 14,507) - Limited Hongfujin Precision Electronics Ambit Microsystem (Shanghai) Co., Ltd. Note 2 Sales 696,385 - 60 days Note 1 Note 1 7,563 - (Chongqing) Co., Ltd. Hongfujin Precision Electronics HighTech Electronics Components Inc. Note 2 Sales 121,082,335 84 60 days Note 1 Note 1 29,666,431 91 (Chongqing) Co., Ltd. Hongfujin Precision Electronics Fujun Precision Electronics (Chongqing) Co., Note 2 Sales 5,256,778 4 30 days Note 1 Note 1 2,161,370 7 (Chongqing) Co., Ltd. Ltd.
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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 Hongfujin Precision Electronics Innolux Corporation Note 5 Purchases $ 2,428,314 6 90 days Note 1 Note 1 ($ 13,410) - (Chongqing) Co., Ltd. (Formerly Chimei Innolux Corporation) Hongfujin Precision Electronics Innocom Technology (Shenzhen) Co., Ltd. Note 6 Purchases 303,488 - 60 days Note 1 Note 1 ( 147,711) - (Chongqing) Co., Ltd. Hongfujin Precision Electronics Nanhai Chi Mei Electronics Ltd. Note 6 Purchases 104,539 - 60 days Note 1 Note 1 ( 14,773) - (Chongqing) Co., Ltd. Hongfujin Precision Electronics Hon Fujin Precision Industry (Taiyuan) Co., Note 3 Purchases 356,964 - 30 days Note 1 Note 1 ( 119,463) - (Chongqing) Co., Ltd. Ltd. Hongfujin Precision Electronics Pan-International Industrial Co. Note 7 Purchases 243,592 - 60 days Note 1 Note 1 ( 80,885) - (Chongqing) Co., Ltd. Hongfujin Precision Electronics IRIS World Enterprises Limited Note 4 Purchases 1,102,450 1 60 days Note 1 Note 1 ( 179,293) - (Chongqing) Co., Ltd. Foxconn Precision Electronics FIH (Hong Kong) Limited Note 2 Sales 521,485 13 60 days Note 1 Note 1 - - (Yantai) Co., Ltd. Foxconn Precision Electronics Hongfujin Precision Electrons (Yantai) Co., Note 2 Sales 715,291 18 90 days Note 1 Note 1 69,165 11 (Yantai) Co., Ltd. Ltd. Foxconn Precision Electronics YanTai FuHuaDa Precision Electronics Note 2 Sales 1,056,579 26 45 days Note 1 Note 1 169,201 28 (Yantai) Co., Ltd. Limited Foxconn Precision Electronics Pan-International Industrial Co. Note 7 Purchases 118,386 4 90 days Note 1 Note 1 ( 51,514) ( 11) (Yantai) Co., Ltd. Chongqingshi Futaitong Logistics Honfujin Precision Electronics (Chongqing) Note 2 Sales 296,486 54 30 days Note 1 Note 1 163,850 71 Limited Co., Limited Co., Ltd. Chongqingshi Futaitong Logistics HongDaoFu (Chongqing) Technology Co., Note 7 Sales 200,052 37 60 days Note 1 Note 1 53,229 23 Limited Co., Limited Ltd. Hongfujin Precision Electronics Profit New Limited Note 2 Sales 16,427,949 67 90 days Note 1 Note 1 3,435,836 84 (Tianjin) Co., Ltd. FuXun Tong Trading (ShenZhen) Futaihua Industrial (Shenzhen) Limited Note 2 Sales 140,708 5 90 days Note 1 Note 1 18,051 5 Co., Ltd. FuXun Tong Trading (ShenZhen) ZhengZhou XunFeng Trading Co., Ltd. Note 2 Sales 143,806 4 90 days Note 1 Note 1 14,424 4 Co., Ltd. Hongfujin Precision Electronics Hongfujin Precision Industry (Shenzhen) Co., Note 2 Sales 125,062 - 30 days Note 1 Note 1 44,899 - (Chengdu) Co., Ltd. Ltd.
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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 Hongfujin Precision Electronics Falcon Precision Trading Limited Note 2 Sales $ 2,546,681 - 90 days Note 1 Note 1 $ 284,989 - (Chengdu) Co., Ltd. Hongfujin Precision Electronics Futaihua Industrial (Shenzhen) Limited Note 2 Sales 19,590,798 2 90 days Note 1 Note 1 4,540,794 5 (Chengdu) Co., Ltd. Hongfujin Precision Electronics Foxconn Technology Pte. Ltd. Note 3 Purchases 367,178 - 90 days Note 1 Note 1 ( 107,699) - (Chengdu) Co., Ltd. Hongfujin Precision Electronics IRIS World Enterprises Limited Note 4 Purchases 4,058,727 - 90 days Note 1 Note 1 ( 935,341) ( 1) (Chengdu) Co., Ltd. Futaihua Precision Electronics Hongfujin Precision Electronics (Chengdu) Note 2 Sales 2,416,964 86 90 days Note 1 Note 1 1,311,037 79 (Chengdu) Limited Limited Futaihua Precision Electronics Interface Technology (Chengdu) Co., Ltd. Note 10 Sales 252,353 9 30 days Note 1 Note 1 222,330 13 (Chengdu) Limited Fu Ding (Zhengzhou) Precision Fujin Precision Industrial (Jincheng) Co., Ltd. Note 2 Sales 102,075 7 90 days Note 1 Note 1 118,767 8 Industry Co., Ltd. Fu Ding (Zhengzhou) Precision Futaihua Precision Electronics (Zhenzhou) Note 2 Sales 101,146 7 90 days Note 1 Note 1 99,820 6 Industry Co., Ltd. Limited Fu Ding (Zhengzhou) Precision Hongfujin Precision Electronics (Zhenzhou) Note 2 Sales 180,100 13 90 days Note 1 Note 1 177,392 11 Industry Co., Ltd. Limited Fu Ding (Zhengzhou) Precision Futaihua Precision Electronics (Jiyuan) Note 2 Sales 582,468 42 90 days Note 1 Note 1 677,721 43 Industry Co., Ltd. Limited Fu Ding (Zhengzhou) Precision Hon Fujin Precision Industry (Taiyuan) Co., Note 3 Sales 424,521 31 90 days Note 1 Note 1 493,945 32 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 (Chongqing) Co., Ltd. Fujun Precision Electronics Innocom Technology (Chongqing) Co., Ltd. Note 2 Purchases 534,961 10 30 days Note 1 Note 1 ( 282,846) ( 1) (Chongqing) Co., Ltd. YanTai FuHuaDa Precision Universal Field International Limited Note 2 Sales 7,593,657 58 30 days Note 1 Note 1 1,165,314 45 Electronics Limited YanTai FuHuaDa Precision FuXun Tong Trading(ShenZhen) Co., Ltd. Note 2 Sales 185,809 1 90 days Note 1 Note 1 216,195 8 Electronics Limited Anpinda Precision Industrial Glorious Prospect Enterprises Ltd. Note 2 Sales 22,504,978 100 90 days Note 1 Note 1 4,860,952 98 (Huizhou) Co., Ltd.
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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 System Integration Electronics Ambit Microsystem (Shanghai) Co., Ltd. Note 2 Sales $ 320,577 7 45 days Note 1 Note 1 $ 33,916 7 (Hangzhou) Co., Ltd. Wang Hui Trading Co., Ltd. Kantron International Trading (Shenzhen) Co., Note 2 Sales 163,823 40 30 days Note 1 Note 1 113,753 83 Ltd. NanNing FuGui Precision Industrial Hongfujin Precision Industry (Shenzhen) Co., Note 2 Sales 282,368 1 60 days Note 1 Note 1 309,727 5 Co., Ltd. Ltd. NanNing FuGui Precision Industrial Mega Well Limited Note 2 Sales 23,123,969 97 60 days Note 1 Note 1 6,269,967 94 Co., Ltd. NanNing FuGui Precision Industrial IRIS World Enterprises Limited Note 4 Purchases 975,134 25 90 days Note 1 Note 1 - - Co., Ltd. Futaihua Precision Electronics Competition Team Technologies Limited Note 2 Sales 1,575,267 8 90 days Note 1 Note 1 38,904 - (Zhengzhou) Limited Futaihua Precision Electronics Futaihua Industrial (Shenzhen) Limited Note 2 Sales 8,410,066 43 90 days Note 1 Note 1 5,254,452 63 (Zhengzhou) Limited Futaihua Precision Electronics Hongfujin Precision Electronics (Zhengzhou) Note 2 Sales 7,683,619 39 90 days Note 1 Note 1 2,091,461 25 (Zhengzhou) Limited Limited Futaihua Precision Electronics Foxconn Precision Electronics (Taiyuan) Co., Note 2 Sales 2,020,969 10 90 days Note 1 Note 1 914,597 11 (Zhengzhou) Limited Ltd. Futaihua Precision Electronics Hon Fujin Precision Industry (Taiyuan) Co., Note 3 Purchases 296,523 3 30 days Note 1 Note 1 ( 126,247) ( 2) (Zhengzhou) Limited Ltd. Hongfujin Precision Electronics Competition Team Technologies Limited Note 2 Sales 528,064,023 91 90 days Note 1 Note 1 126,198,176 87 (Zhengzhou) Limited Hongfujin Precision Electronics Futaihua Industrial (Shenzhen) Limited Note 2 Sales 10,712,805 2 90 days Note 1 Note 1 6,418,015 4 (Zhengzhou) Limited Hongfujin Precision Electronics Futaihua Precision Electronics (Zhengzhou) Note 2 Sales 2,288,141 - 90 days Note 1 Note 1 723,523 - (Zhengzhou) Limited Limited Hongfujin Precision Electronics Foxconn Precision Electronics (Taiyuan) Co., Note 2 Sales 37,285,491 6 90 days Note 1 Note 1 12,043,997 8 (Zhengzhou) Limited Ltd. Hongfujin Precision Electronics Hon Fujin Precision Industry (Taiyuan) Co., Note 3 Purchases 2,132,588 2 90 days Note 1 Note 1 ( 637,671) - (Zhengzhou) Limited Ltd. Hongfujin Precision Electronics Foxconn Technology Pte. Ltd. Note 3 Purchases 612,418 1 90 days Note 1 Note 1 ( 226,097) - (Zhengzhou) Limited
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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 Hongfujin Precision Electronics Pan-International Industrial Co. Note 7 Purchases $ 230,777 - 90 days Note 1 Note 1 ($ 140,257) - (Zhengzhou) Limited Hongfujin Precision Electronics IRIS World Enterprises Limited Note 4 Purchases 6,880,474 6 90 days Note 1 Note 1 ( 3,312,462) ( 2) (Zhengzhou) Limited ZhengZhou XunFeng Trading Co., Futaihua Precision Electronics (Zhengzhou) Note 2 Sales 887,853 7 90 days Note 1 Note 1 496,703 20 Ltd. Limited ZhengZhou XunFeng Trading Co., Hongfujin Precision Electronics (Zhengzhou) Note 2 Sales 11,282,306 93 90 days Note 1 Note 1 2,010,346 80 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 Note 5 Purchases 2,067,170 17 45 days Note 1 Note 1 ( 46,987) ( 1) (Formerly Chimei Innolux Corporation) ChengDu XunFeng Trading Co., Ltd. Hongfujin Precision Electronics (Chengdu) Note 2 Sales 3,796,784 100 30 days Note 1 Note 1 1,160,881 100 Limited ChongQing HongFuZhun Trading Hongfujin Precision Electronics (Chongqing) Note 2 Sales 272,605 86 60 days Note 1 Note 1 3,273 100 Co., Ltd. Co., Ltd. HongZhaoDa Integrated Innovative Smart Top International Ltd. Note 2 Sales 1,607,783 100 45 days Note 1 Note 1 114,887 100 Service (Kunshan) Co., Ltd. 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) Note 2 Sales 10,387,851 17 60 days Note 1 Note 1 3,316,751 37 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 - Innolux Corporation) 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) Innolux Corporation) 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., Note 2 Sales 322,111 8 90 days Note 1 Note 1 242,188 23 Ltd. WWW (Jincheng) Co., Ltd. Fuhonyang Precision Industrial (Shenzhen) Note 2 Sales 719,262 18 90 days Note 1 Note 1 341,383 33 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
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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 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 Foxconn Precision Electronics Futaihua Industrial (Shenzhen) Limited Note 2 Sales 15,920,413 13 90 days Note 1 Note 1 6,779,289 8 (Taiyuan) Co., Ltd. Foxconn Precision Electronics Hongfujin Precision Electronics (Zhengzhou) Note 2 Sales 8,694,459 7 90 days Note 1 Note 1 5,672,591 7 (Taiyuan) Co., Ltd. Limited Foxconn Precision Electronics Fast Victor Limited Note 2 Sales 95,486,777 79 90 days Note 1 Note 1 26,224,472 33 (Taiyuan) Co., Ltd. Foxconn Precision Electronics Foxconn CMMSG Industria De Eletronicos Note 2 Sales 1,322,984 1 90 days Note 1 Note 1 1,307,447 2 (Taiyuan) Co., Ltd. Ltda. Foxconn Precision Electronics IRIS World Enterprises Limited Note 4 Purchases 660,552 - 90 days Note 1 Note 1 - - (Taiyuan) Co., Ltd. Scientific-Atlanta de Mexico S de R. Competition Team Ireland Limited Note 2 Sales 2,353,028 100 7 days Note 1 Note 1 72,495 3 L. de C. V. Futaihua Precision Electronics Fujin Precision Industrial (Jincheng) Co., Ltd. Note 2 Sales 341,145 2 90 days Note 1 Note 1 338,551 7 (Jiyuan) Limited Futaihua Precision Electronics Hongfujin Precision Electronics (Zhenzhou) Note 2 Sales 14,077,244 97 90 days Note 1 Note 1 4,668,016 92 (Jiyuan) Limited Limited Ambit Microsystems Corporation Ambit Microsystems (Zhong shan) Note 2 Sales 614,146 72 60 days Note 1 Note 1 604,953 51 Limited Corporation Innocom Technology (Chongqing) Fujun Precision Electronics (Chongqing) Co., Note 2 Sales 534,961 11 90 days Note 1 Note 1 282,847 67 Co., Ltd. Ltd. Innocom Technology (Chongqing) Lakers Trading Ltd. Note 6 Sales 1,661,558 34 90 days Note 1 Note 1 89,158 21 Co., Ltd. Innocom Technology (Chongqing) Hightech Electronics Components Inc. Note 2 Sales 1,509,474 31 60 days Note 1 Note 1 - - Co., Ltd. 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 - - Innolux Corporation) 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
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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 Premier Image Technology (China) Hongfujin Precision Electrons (Yantai) Co., Note 2 Sales $ 1,410,490 5 90 days Note 1 Note 1 $ 575,733 8 Ltd. Ltd. Premier Image Technology (China) Jumbo Rise Management Limited Note 2 Sales 23,826,813 84 90 days Note 1 Note 1 4,996,287 67 Ltd. Premier Image Technology (China) Foxconn MOEBG Industria de Eletronicos Note 2 Sales 236,089 1 90 days Note 1 Note 1 42,641 1 Ltd. Ltda. Premier Image Technology (China) Innolux Corporation (Formerly Chimei Note 5 Purchases 899,628 12 60 days Note 1 Note 1 ( 53,849) ( 1) Ltd. Innolux Corporation) Premier Image Technology (China) Pan International Industry Co., Ltd. Note 8 Purchases 1,090,595 15 90 days Note 1 Note 1 ( 388,910) ( 10) Ltd. Premier Image Technology (China) Dongguan Pan-International Wire & Cable Note 8 Purchases 233,363 3 90 days Note 1 Note 1 ( 60,018) ( 2) Ltd. Co., Ltd. Premier Image Technology (China) IRIS World Enterprises Limited Note 4 Purchases 169,879 2 90 days Note 1 Note 1 ( 37,356) ( 1) Ltd. 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 Funing Precision Component Co., Ltd. Note 2 Sales 207,307 4 60 days Note 1 Note 1 23,732 2 Giang) Limited Fenix Industria DE Eletronicos Ltda. Foxconn CMMSG Industria De Eletronicos Note 2 Sales 1,051,604 76 90 days Note 1 Note 1 79,207 67 Ltda. Foxconn CMMSG Industria De Futaihua Industrial (Shenzhen) Limited Note 2 Sales 455,019 1 90 days Note 1 Note 1 125,154 2 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.
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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 -
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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 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 -
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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 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 - - - -
199
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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 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.
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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 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 - (Formerly Chimei Innolux Corporation) 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 -
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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 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 - - - -
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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 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 -
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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 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.
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10) Information on derivative transactions: a) As of December 31, 2012, the information on derivative financial instruments of investee companies is as follows:
Contract amount Derivative financial instrument (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 ( 20,034) ( 20,034) 2013.01.22~2013.03.20 RMB 1,317,491 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).
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(3)Disclosure of information on indirect investments in Mainland China 1)Information on investments in Mainland China Balance of Transactions during Balance of Ownership Investment income Profit remitted to amount remitted Jan. 1 ~Dec. 31, 2012 amount remitted percentage held (loss) recognized Book value of Taiwan during Name of investee in Method of from Taiwan Remittance Remittance from Taiwan as of by the Company during Jan. 1~ investment as of Jan. 1~ Mainland China Main activities of investee Capital investment as of Jan. 1, 2012 out in Dec. 31, 2012 (Direct/indirect) Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 Note Foxconn Precision Manufacturing of $ 1,997,952 Note 1 (2) $ - $ - $ - $ - 69.49 $ 472,137 $ 16,591,093 $ - Note 2 Component (Beijing) telecommunication cases Co., Ltd. Fujin Precision Manufacturing and processing of 1,523,148 Note 1 145,200 - - 145,200 100 21,116 2,330,151 126,614 Note 2 Industry (Shenzhen) computer cases, computer (2)&(3) Co., Ltd. peripherals, etc. Shenzhen Fu Tai Hong Manufacturing and marketing of 5,184,221 Note 1 (2) - - - - 69.49 ( 2,472,474) 10,593,350 - Note 2 Precision Industry computer cases, micro ribbon Co., Ltd. connectors for terminals, etc. Foxconn Precision Manufacturing of connectors, 1,729,040 Note 1 87,120 - - 87,120 100 13,393 1,971,711 - Note 2 Component micro ribbon connectors for (2)&(3) (Shenzhen) Co., Ltd. terminals, micro-computers, mouse cables, monitor cables, etc. Honxun Electrical Manufacturing and marketing of 3,682,272 Note 1 (2) - - - - 69.49 162,435 5,984,417 - Note 2 Industry (Hangzhou) computer cases, micro ribbon Co., Ltd. connectors for terminals, etc. Hongzhun Precision Manufacturing and marketing of 435,600 Note 1 (2) - - - - 100 7,753 641,030 - Note 2 Tooling (Shenzhen) computer cases and computer Co., Ltd. peripherals, etc. Foxconn Computer Manufacturing of connectors, 1,295,184 Note 1 145,200 - - 145,200 100 590,130 5,410,017 207,346 Note 2 Connectors micro ribbon connectors for (2)&(3) (Kunshan) Co., Ltd. terminals, micro-computers, mouse cables, monitor cables, etc. Fu Ding Precision Manufacturing and marketing of 1,393,920 Note 1 (2) - - - - 100 771,670 4,769,598 - Note 2 Component connectors, micro ribbon (Shenzhen) Co., Ltd. connectors for terminals, etc. Hong Fujin Precision Manufacturing and marketing of 4,907,760 Note 1 (2) - - - - 100 3,679,317 63,333,051 1,016,981 Note 2 Industrial (Shenzhen) computer case and computer Co., Ltd. peripherals, etc.
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Balance of Transactions during Balance of Ownership Investment income Profit remitted to amount remitted Jan. 1 ~Dec. 31, 2012 amount remitted percentage held (loss) recognized Book value of Taiwan during Name of investee in Method of from Taiwan Remittance Remittance from Taiwan as of by the Company during Jan. 1~ investment as of Jan. 1~ Mainland China Main activities of investee Capital investment as of Jan. 1, 2012 out in Dec. 31, 2012 (Direct/indirect) Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 Note
Foxconn Electronic Manufacturing and marketing of $ 1,974,720 Note 1 (2) $ - $ - $ - $ - 100 $ 172,372 $ 3,553,732 $ - Note 2 Industrial computer cases, micro ribbon Development connectors for terminals, etc. (Kunshan) Co., Ltd. Futaije Science & Manufacturing and design 348,480 Note 1 (2) - - - - 100 9,404 555,104 - Note 2 Technology of computer components Development keyboards, etc. (Shenzhen) Co., Ltd. Fuhon Precision Manufacturing and marketing of 333,960 Note 1 (2) - - - - 100 16,598 1,310,359 63,017 Note 2 Component connectors, micro ribbon (Shenzhen) Co., Ltd. connectors for terminals, etc. Hongzhun Precision Manufacturing and marketing of 2,497,440 Note 1 (2) - - - - 100 1,106,086 12,636,692 78,989 Note 2 Tooling (Kunshan) computer cases Co., Ltd. Kangzhun Precision Manufacturing and marketing of 4,065,600 Note 1 (2) 842,160 - - 842,160 100 ( 909,550) 3,184,403 - Note 2 Tooling (Kunshan) computer components, Co., Ltd. computer peripherals, etc. Futaikang Precision Manufacturing and marketing of 166,980 Note 1 (2) - - - - 100 1,767 256,622 - Note 2 Computer (Shenzhen) connectors, micro ribbon Co., Ltd. connectors for terminals, etc. Qunkang Precision Manufacturing and marketing of 174,240 Note 1 (2) - - - - 100 ( 139,037) 95,574 - Note 2 Component switching hub and router cases (Kunshan) Co., Ltd. Fujin Precision Manufacturing and marketing of 8,799,120 Note 1 (2) 1,481,040 2,904,000 - 4,385,040 100 3,409,727 14,767,933 - Note 2 Industrial (Jincheng) computer cases Co., Ltd. Honyeh Precision Manufacturing and marketing of 168,432 Note 1 (2) - - - - 100 28,787 437,317 42,108 Note 2 Component computer components (Kunshan) Co., Ltd. Fuhonyang Precision Manufacturing and marketing of 1,248,720 Note 1 (2) 667,920 580,800 - 1,248,720 100 34,864 1,834,475 - Note 2 Industrial (Shenzhen) connectors, micro ribbon Co., Ltd. connectors for terminals, computer cases, etc. Foxway Precision Manufacturing and marketing of 363,000 Note 1 (2) - - - - 100 35,949 928,069 - Note 2 207
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Balance of Transactions during Balance of Ownership Investment income Profit remitted to amount remitted Jan. 1 ~Dec. 31, 2012 amount remitted percentage held (loss) recognized Book value of Taiwan during Name of investee in Method of from Taiwan Remittance Remittance from Taiwan as of by the Company during Jan. 1~ investment as of Jan. 1~ Mainland China Main activities of investee Capital investment as of Jan. 1, 2012 out in Dec. 31, 2012 (Direct/indirect) Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 Note Industry (Hangzhou) router components Co., Ltd. Hongfutai Precision Manufacturing and marketing of $ 4,297,920 Note 1 (2) $ - $ - $ - $ - 100 ($ 3,322,095) $ 11,576,853 $ - Note 2 Electrons (Yantai) auto digital signal process Co., Ltd. device and components Ambit Microsystems Manufacturing and marketing of 1,486,848 Note 1 711,480 - - 711,480 100 1,084,254 2,688,314 - Note 2 (Zhong shan) power supplies (2)&(3) Corporation Ambit Microsystems Manufacturing and marketing of 2,131,536 Note 1 1,335,840 - - 1,335,840 100 270,787 7,784,837 - Note 2 (Shanghai) Co., Ltd. power supplies, modems and (2)&(3) ADSL devices Amlink (Shanghai) Ltd. Manufacturing and marketing of 580,800 Note 1 203,280 - - 203,280 44.81 8,210 527,726 - Note 2 power supplies, modems and (2)&(3) ADSL devices Fuxian Precision Manufacturing and marketing of 4,065,600 Note 1 (2) - - - - 100 148,509 5,498,996 - Note 2 Industry (Kunshan) computer case Co., Ltd. Dong Guan Hong Song Manufacturing and marketing of 290,400 Note 1 (2) - - - - 100 78,418 372,854 - Note 2 Precision Component keypad and computer Co., Ltd. Components Foxconn (Tianjin) Manufacturing and marketing of 1,533,312 Note 1 (2) - - - - 69.49 ( 1,155,338) ( 613,254) - Note 2 Precision Industry wireless phone and components Co., Ltd. Fugion Material Manufacturing and marketing of 107,448 Note 1 (2) - - - - 70 22,893 126,599 - Note 2 Technology potassium aurous cyanide (Shenzhen) Limited Antec Automotive Manufacturing and marketing of 276,025 Note 1 (2) 145,200 - - 145,200 100 ( 19,919) 114,019 - Note 2 Electric System automobile (Kunshan) Co., Ltd. Liuzhou Antec Manufacturing and marketing of - Note 1 (2) ------Note 2 Fangshen Electric automobile System Co., Ltd. Foxconn Precision Manufacturing and marketing of 1,190,640 Note 1 (2) 952,158 - - 952,158 100 ( 259,452) 1,144,517 - Note 2 Electronics (Yantai) telecommunication peripherals Co., Ltd. 208
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Balance of Transactions during Balance of Ownership Investment income Profit remitted to amount remitted Jan. 1 ~Dec. 31, 2012 amount remitted percentage held (loss) recognized Book value of Taiwan during Name of investee in Method of from Taiwan Remittance Remittance from Taiwan as of by the Company during Jan. 1~ investment as of Jan. 1~ Mainland China Main activities of investee Capital investment as of Jan. 1, 2012 out in Dec. 31, 2012 (Direct/indirect) Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 Note Premier Image Manufacturing and sale of 4,407,228 Note 1 18,876 - - 18,876 99.96 ( 64,643) 11,730,478 - Note 2 Technology (China) cameras. (2)&(3) Limited Fu Zhun Precision Designing, manufacturing and $ 2,880,768 Note 1 (2) $ - $ - $ - $ - 100 $ 227,932 $ 4,933,013 $ - Note 2 Tooling (Huai an) marketing of computer Co., Ltd. components Fu Yu Electronical Designing and marketing of 7,730,448 Note 1 (2) 3,484,800 1,452,000 - 4,936,800 100 483,787 9,637,541 - Note 2 Technology (Huaian) connectors and cables Co., Ltd. CJ Electric System Co., Manufacturing and marketing of 63,888 Note 1 (2) - - - - 50 23,550 158,955 - Note 2 Ltd. automobile Foxconn Precision Manufacturing and marketing of 6,693,720 Note 1 (2) 2,087,818 - - 2,087,818 100 5,487,171 10,905,517 - Note 2 Electronics (Taiyuan) micro ribbon connectors for Co., Ltd. terminals, etc. Jizhun Precision Manufacturing and marketing of 958,320 Note 1 (2) - - - - 100 ( 698,092) 326,414 - Note 2 Industry (Huizhou) computer cases, router, Co., Ltd. notebook, etc. Fukui Precision Manufacturing and marketing of 5,839,276 Note 1 (2) - - - - 41.36 1,336,956 4,947,454 - Note 2 Component electronics devices and cable (Shenzhen) Co., Ltd. Futaijing Precision Manufacturing and marketing of 2,178,000 Note 1 (2) - - - - 69.49 ( 33,366) 1,436,304 - Note 2 Electronics (Beijing) computer cases, micro ribbon Co., Ltd. connectors for terminals, etc. Foxconn Precision Manufacturing and marketing of 8,581,320 Note 1 (2) - - - - 69.49 ( 1,843,381) 10,585,987 - Note 2 Electronics cell phone and components (Langfang) Co., Ltd. Foxconn Good Field Manufacturing and marketing of 67,373 Note 1 (2) - - - - 40 ( 2,845) 35,476 - Note 2 Precision Industry electronics calculator and (Dalian) Co., Ltd. components Fuyu Energy Manufacturing and marketing of 580,800 Note 1 (2) - - - - 100 ( 26,026) 943,361 - Note 2 Electronically micro ribbon connectors for Technology terminals (Kunshan) Co., Ltd. Hongfujin Precision Manufacturing and marketing of 8,502,912 Note 1 (2) 4,149,816 1,452,000 - 5,601,816 100 1,343,531 11,960,214 - Note 2 Industrial (Wuhan) computer and digital camera 209
WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2
Balance of Transactions during Balance of Ownership Investment income Profit remitted to amount remitted Jan. 1 ~Dec. 31, 2012 amount remitted percentage held (loss) recognized Book value of Taiwan during Name of investee in Method of from Taiwan Remittance Remittance from Taiwan as of by the Company during Jan. 1~ investment as of Jan. 1~ Mainland China Main activities of investee Capital investment as of Jan. 1, 2012 out in Dec. 31, 2012 (Direct/indirect) Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 Note Co., Ltd. components Amworld Manufacturing and marketing of 493,680 Note 1 (2) - - - - 100 11,757 630,235 - Note 2 Microsystems switch supply and modem (Shanghai) Ltd. Hongqunsheng Manufacturing and marketing of $ 1,928,231 Note 1 (2) $ - $ - $ - $ - 41.36 ($ 93,157) $ 388,308 $ - Note 2 Precision Electronics printed circuit board (Yingkou) Co., Ltd. Hongqisheng Precision Manufacturing and marketing of 5,300,528 Note 1 (2) - - - - 41.36 258,049 2,543,516 - Note 2 Electronics electronics calculator and (Qinhuangdao) Co., component Ltd. Hongfujin Precision Manufacturing and marketing of 2,056,032 Note 1 (2) - - - - 100 4,135,620 33,339,308 - Note 2 Electrons (Yantai) computer components, Co., Ltd. computer Foxconn (Nanjing) Manufacturing and marketing of 508,200 Note 1 (2) - - - - 69.49 68,417 268,592 - Note 2 Communications Co., handset and components Ltd. Foxconn (Nanjing) Computer software, hardware 929,280 Note 1 (2) - - - - 100 ( 32,159) 675,937 - Note 2 Software Co., Ltd. and other digital product Honghuasheng Print circuit board products - Note 1 (2) ------Note 4 Precision Electronics manufacturing and sales (YanTai) Co., Ltd. Fulin Electronical Manufacturing and marketing of 1,582,680 Note 1 (2) - - - - 100 48,609 1,499,616 - Note 5 Technology computer components, (Changshu) Co., Ltd. computer Fuyang Electronical Manufacturing and marketing of 1,469,424 Note 1 (2) - - - - 100 18,271 1,605,156 - Note 5 Technology computer components, (Changshu) Co., Ltd. computer Fu Tai Kang Marketing of computer chassis 871,200 Note 1 (2) - - - - 100 21,666 1,138,544 - Note 2 Electronics and metal stamping parts Development (YanTai) Ltd. Foxconn (Shenyang) Numeric control machine tool 1,449,096 Note 1 (2) - - - - 69.23 ( 33,694) 1,192,644 - Note 2 precision Industry manufacturing Co., Ltd. 210
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Balance of Transactions during Balance of Ownership Investment income Profit remitted to amount remitted Jan. 1 ~Dec. 31, 2012 amount remitted percentage held (loss) recognized Book value of Taiwan during Name of investee in Method of from Taiwan Remittance Remittance from Taiwan as of by the Company during Jan. 1~ investment as of Jan. 1~ Mainland China Main activities of investee Capital investment as of Jan. 1, 2012 out in Dec. 31, 2012 (Direct/indirect) Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 Note Hong Heng Sheng Print circuit board product 4,318,282 Note 1 (2) - - - - 41.36 ( 155,656) 1,651,119 - Note 2 Electronical manufacturing and sales Technology (Huaian) Co., Ltd.
Alibaba (China) Providing software and $ - Note 1 (2) $ - $ - $ - $ - - $ - $ - $ - Note 6 Technology Co., Ltd. technology services Alibaba (China) Providing software and - Note 1 (2) ------Note 6 Software Co., Ltd. technology services Alibaba (Shanghai) Providing software and - Note 1 (2) ------Note 6 Technology Co., Ltd. technology services Beijing Sinya Online Providing software and - Note 1 (2) ------Note 6 Information technology services Technology Co., Ltd. Hongfuqiang Precision Manufacturing and marketing of 72,600 Note 1 (2) - - - - 100 - 79,944 - Note 2 Electronics (Yingkou) computer components, Co., Ltd. computer Fu Ding Electronical Manufacturing and marketing of 6,127,440 Note 1 (2) 3,920,400 2,207,040 - 6,127,440 100 2,578,949 10,040,840 - Note 2 Technology (Jiashan) computer components, Co., Ltd. computer Fuhuajie Industrial Manufacturing and marketing of 3,339,600 Note 1 (2) 3,339,600 - - 3,339,600 100 ( 2,385,074) 800,799 - Note 2 (Shenzhen) Limited computer components, computer GDS Software Computer software, hardware 290,400 Note 1 (2) - 290,400 - 290,400 76.92 5,630 270,662 - Note 2 (Shenzhen) Co., Ltd. and other digital product Futaihua Industrial Manufacturing and marketing of 10,744,800 Note 1 (2) 9,292,800 1,452,000 - 10,744,800 100 23,259,305 72,427,816 - Note 2 (Shenzhen) Co., Ltd. computer components, computer Dong Guan Eson Manufacturing and marketing of 215,186 Note 1 (2) - - - - 28.81 6,425 89,767 - Note 2 Precision Tooling Co., telecommunication cases Ltd. Kunshan Eson Manufacturing and marketing of 871,490 Note 1 (2) - - - - 28.81 26,368 506,948 - Note 2 Precision Engineering electronic components Co., Ltd. Wuxi XinGuan Metal Manufacturing and marketing of 406,560 Note 1 (2) - - - - 28.81 456 87,307 - Note 2 211
WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2
Balance of Transactions during Balance of Ownership Investment income Profit remitted to amount remitted Jan. 1 ~Dec. 31, 2012 amount remitted percentage held (loss) recognized Book value of Taiwan during Name of investee in Method of from Taiwan Remittance Remittance from Taiwan as of by the Company during Jan. 1~ investment as of Jan. 1~ Mainland China Main activities of investee Capital investment as of Jan. 1, 2012 out in Dec. 31, 2012 (Direct/indirect) Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 Note Science & plastic mould Technology Co., Ltd. Kunshan Eson Manufacturing and marketing of 290,400 Note 1 (2) - - - - 9.51 790 29,281 - Note 2 Technology Inc. computer components, computer
Yantai Jiray Electronic Manufacturing and marketing of $ 149,846 Note 1 (2) $ - $ - $ - $ - 18.73 ($ 5,002) $ 52,686 $ - Note 2 Technology Co., Ltd. monitoring device Yantai Zheng Yi Manufacturing and marketing of 63,888 Note 1 (2) - - - - 28.81 ( 3,503) 10,443 - Note 2 Precision Electronic monitoring device Co., Ltd. Guangzhou OED Manufacturing and marketing of 209,733 Note 1 (2) - - - - 5.76 ( 2,969) 11,314 - Note 2 Technologies Co., mould and tooling Ltd. MediaMarkt (Shanghai) E -book key material and 5,808,000 Note 1 (2) - - - - 25 ( 1,344,427) - - Note 2 Commercial & components manufacturing and Trading Company sales Limited Hongfujin Precision Manufacturing and marketing of 5,536,476 Note 1 (2) 5,536,476 - - 5,536,476 100 ( 752,311) 3,756,991 - Note 2 Electronics computer chassis and metal (Chongqing) Co., Ltd. stamping parts System Integration Manufacturing and marketing of 798,600 Note 1 (2) 837,795 - - 837,795 100 137,422 1,291,116 - Note 2 Electronics electronic components, (Hangzhou)Co., Ltd. network communication equipment, high-end routers and high-end switches Champ Tech Optical Manufacturing and marketing of 1,355,297 Note 1 (2) 1,358,503 194,859 - 1,553,362 100 151,017 2,009,231 - Note 2 (Foshan) Corporation unassembled Optical components Innovation (Beijing) Design and publish of computer - Note 1 (2) ------Note 7 Software software Development Co., Ltd MediaMarkt (Shanghai) Management Consulting - Note 1 (2) ------Note 8 Consulting Service Services Co., Ltd. 212
WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2
Balance of Transactions during Balance of Ownership Investment income Profit remitted to amount remitted Jan. 1 ~Dec. 31, 2012 amount remitted percentage held (loss) recognized Book value of Taiwan during Name of investee in Method of from Taiwan Remittance Remittance from Taiwan as of by the Company during Jan. 1~ investment as of Jan. 1~ Mainland China Main activities of investee Capital investment as of Jan. 1, 2012 out in Dec. 31, 2012 (Direct/indirect) Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 Note Spreadcomm Developing of computer and 220,704 Note 1 (2) - - - - 69.49 ( 54,374) 38,502 - Note 2 Technology Corp. communications software, and technical services Futaihua Precision Manufacturing and marketing of 2,904,000 Note 1 (2) 987,360 - - 987,360 100 3,129,506 6,188,303 - Note 2 Electronics cell phone (Zhengzhou) Co., Ltd.
Hongfujin Precision Manufacturing and marketing of $ 1,974,720 Note 1 (2) $ 1,974,720 $ - $ - $ 1,974,720 100 ($ 1,279,420) $ 417,229 $ - Note 2 Electronics (Tianjin) server Co., Ltd. Hongfujin Precision Manufacturing and marketing of 14,520,000 Note 1 (2) 2,904,000 2,904,000 - 5,808,000 100 11,453,330 28,477,994 - Note 2 Electronics cell phone and components (Zhengzhou) Co., Ltd. Hongfujin Precision Manufacturing and marketing of 10,164,000 Note 1 (2) 2,904,000 2,904,000 - 5,808,000 100 5,376,985 19,743,016 - Note 2 Electronics (Chengdu) tablet PC Co., Ltd. Fuding Precision Manufacturing and marketing of 1,161,600 Note 1 (2) 290,400 - - 290,400 100 ( 159,187) 353,614 - Note 2 Industrial new electronic components (Zhengzhou) Co., Ltd. YanTai FuHuaDa Manufacturing and marketing of 290,400 Note 1 (2) 290,400 - - 290,400 100 45,987 531,019 - Note 2 Precision Electronics new electronic components Co., Ltd. Fujun Precision Manufacturing and marketing of 435,600 Note 1 (2) 435,600 - - 435,600 100 ( 116,095) 325,811 - Note 2 Electronics switches and routers (Chongqing) Co., Ltd. Futaihua Precision Manufacturing and marketing of 1,335,840 Note 1 (2) 348,480 987,360 - 1,335,840 100 354,390 1,644,377 - Note 2 Electronics (Chengdu) compression molding plastic Co., Ltd. injection mold and metal Anpinda Precision Manufacturing and marketing of 1,452,000 Note 1 (2) 1,161,600 - - 1,161,600 100 1,123 1,302,391 - Note 2 Industrial (Huizhou) computer components, Co., Ltd. computer NanNing FuGui Manufacturing and marketing of 1,452,000 Note 1 (2) 1,234,200 - - 1,234,200 100 399,269 1,639,976 - Note 2 Precision Industrial network communication Co., Ltd equipment NanNing Fu Tai Hong Manufacturing and marketing of 1,452,000 Note 1 (2) - - - - 69.49 12,045 995,301 - Note 2 213
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Balance of Transactions during Balance of Ownership Investment income Profit remitted to amount remitted Jan. 1 ~Dec. 31, 2012 amount remitted percentage held (loss) recognized Book value of Taiwan during Name of investee in Method of from Taiwan Remittance Remittance from Taiwan as of by the Company during Jan. 1~ investment as of Jan. 1~ Mainland China Main activities of investee Capital investment as of Jan. 1, 2012 out in Dec. 31, 2012 (Direct/indirect) Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 Note Precision Industry cell phone Co., Ltd WWW (Jincheng) Co., Manufacturing and marketing of 754,603 Note 1 (2) 464,640 - - 464,640 76.85 ( 13,650) 704,721 - Note 2 Ltd. lens module UER Technology Manufacturing and marketing of - Note 1 (2) ------Note 9 (Shenzhen) lithium Battery Corporation
Tianjin Manufacturing and marketing of $ 784,080 Note 1 (2) $ - $ 493,680 $ - $ 493,680 62.96 ($ 38,747) $ 416,210 $ - Note 2 Funayuanchuang liquid crystal display Technology Co., Ltd. components FuYu Energy Engaged in the production and - Note 1 (2) ------Note 10 Technology (Funing) marketing of operating solar Co., Ltd. energy battery business. Futaihua Precision Engaged of wireless handsets of 2,904,000 Note 1 (2) - 726,000 - 726,000 100 1,706,125 4,640,323 - Note 2 Electronics (Jiyuan) wired telephones, cellular Limited networks or other wireless IP telephone Hongfujin Precision Engaged in the operation of - Note 1 (2) ------Note 11 Industry (Loyang) automated equipment, Co., Ltd. multipurpose industrial robots, the equipment enclosure sheet metal production and marketing business Futaijing Precision Manufacturing and marketing of 580,800 Note 1 (2) - - - - 69.49 5,873 415,879 - Note 2 Electronics (Yantai) handset component product Co., Ltd. Foxconn (Tianjin) A set of parts of the GSM digital - Note 1 (2) ------Note 12 Technology Co., Ltd. handheld wireless phones, GSM, CDMA and other CDMA handheld wireless telephones Zhong Zhun Precision Reducer、Other transmission - Note 1 (2) ------Note 13 Industries (Luoyang) shafts and cranks Co., Ltd. 214
WorldReginfo - d3b3ceed-c3d8-4f51-b1ad-78d7192647d2
Balance of Transactions during Balance of Ownership Investment income Profit remitted to amount remitted Jan. 1 ~Dec. 31, 2012 amount remitted percentage held (loss) recognized Book value of Taiwan during Name of investee in Method of from Taiwan Remittance Remittance from Taiwan as of by the Company during Jan. 1~ investment as of Jan. 1~ Mainland China Main activities of investee Capital investment as of Jan. 1, 2012 out in Dec. 31, 2012 (Direct/indirect) Dec. 31, 2012 Dec. 31, 2012 Dec. 31, 2012 Note Hongfutai Precision Work holders 1,103,520 Note 1 (3) - 1,103,520 - 1,103,520 100 ( 1,491) 1,112,707 - Note 2 Industry (Hen Yang) Co., Ltd. Innocom Technology LCD related products, modules, 87,120 Note 1 (2) - 115,404 - 115,404 100 - 190,277 - Note 2 (Chongqing) Co., components and systems Ltd. manufacture Funeng Energy Electromechanical - Note 1 (2) ------Note 14 Technology Service telecommunications and circuit (Nanyang) Co., Ltd. equipment installation.
Accumulated amount wired
out from Taiwan to mainland Investment amount Ceiling of investment
Name of Company China as of December 31, 2012 approved by FIC of MOEA amount of the Company
Hon Hai Precision Industry Co., Ltd. $ 73,505,945 $ 174,016,782 $ -
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. 215
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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 Relationship with the company Purchases / sales Amount Unit price Terms Balance Note Best Leap Enterprises Limited Indirect investee company accounted for Purchases $ 760,977,081 Note Note ($ 128,769,081) under the equity method Competition Team Technology Limited- Indirect investee company accounted for Purchases 445,389,241 " " ( 101,801,174) Bahamas under the equity method Foxconn (Far East) Limited and Wholly-owned subsidiary Purchases 412,203,558 " " ( 91,657,738) subsidiaries and subsidiaries Hongfujin Precision Electronics (Chengdu) Indirect investee company accounted for Purchases 400,306,397 " " ( 82,100,323) Co., Ltd. under the equity method Universal Field International Limited Indirect investee company accounted for Purchases 163,072,275 " " ( 18,426,473) under the equity method Foxconn CZ S.R.O. Indirect investee company accounted for Purchases 88,053,588 " " ( 3,997,441) under the equity method AMB Logistics Ltd. Indirect investee company accounted for Purchases 23,931,474 " " ( 741,723) under the equity method NSG Technology Indirect investee company accounted for Purchases 3,954,048 " " - under the equity method Foxconn Global Services Division S.R.O. Indirect investee company accounted for Purchases 159,886 " " ( 159,886) under the equity method Foxconn (Far East) Limited and Wholly-owned subsidiary Sales 39,825,230 " " 36,362,495 216
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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 12,746,052 - 21,732,987 13,329,535 - 6,541,619 subsidiaries 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 For the year ended December 31, 2012 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
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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. 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 Universal Field International Limited 3 Sales 49,479,435 Note c 1 (Yantai) Co., Ltd. 2 Hongfujin Precision Industrial Top Step Enterprises Limited 3 Sales 99,499,196 Note c 3 (Wuhan) Co., Ltd. 3 Hongfujin Precision Electronics Universal Field International Limited 3 Sales 107,086,065 Note c 3 (Yantai) Co., Ltd. 4 Futaihua Industrial (Shenzhen) Co., Best Leap Enterprises Limited 3 Sales 782,867,169 Note c 20 Ltd. 4 Futaihua Industrial (Shenzhen) Co., Best Leap Enterprises Limited 3 Accounts receivable 131,860,729 Note c 6 Ltd. 5 Hongfujin Precision Electronics 0 Hightech Electronics Components Inc. 3 Sales 121,082,335 Note c 3 (Chongqing) Co., Ltd. 5 Hongfujin Precision Electronics 0 Hightech Electronics Components Inc. 3 Accounts receivable 29,666,431 Note c 1 (Chongqing) Co., Ltd. 6 Hongfujin Precision Electronics Competition Team Technologies Limited 3 Sales 528,064,023 Note c 13 (Zhengzhou) Co., Ltd. 6 Hongfujin Precision Electronics Competition Team Technologies Limited 3 Accounts receivable $ 126,198,176 Note c 6 (Zhengzhou) Co., Ltd. 7 Foxconn Precision Electronics Fast Victor Limited 3 Sales 95,486,777 Note c 3 (Taiyuan) Co., Ltd. 7 Foxconn Precision Electronics Fast Victor Limited 3 Accounts receivable 26,224,112 Note c 2 (Taiyuan) Co., Ltd. For the year ended December 31, 2011 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 $ 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 8 218
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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. 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., AMB Logistics Ltd. 3 Sales 37,988,785 Note c 1 Ltd. 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 4 Hongfutai Precision Electronics Dragon Spirit Industries Ltd. 3 Sales 35,102,347 Note c 1 (Yantai) Co., Ltd. 4 Hongfutai Precision Electronics Universal Field International Limited 3 Sales 82,182,678 Note c 2 (Yantai) Co., Ltd. 5 Hongfujin Precision Industrial Top Step Enterprises Limited 3 Sales 92,793,098 Note c 3 (Wuhan) Co.,Ltd. 6 Hongfujin Precision Electronics Hightech Electronics Components Inc. 3 Sales 61,976,821 Note c 2 (Chongqing) Co., Ltd 7 Hongfujin Precision Electrons Universal Field International Limited 3 Sales 84,522,212 Note c 2 (Yantai) Co., Ltd. 7 Hongfujin Precision Electrons Universal Field International Limited 3 Accounts receivable 19,733,437 Note c 1 (Yantai) Co., Ltd. 8 Hongfujin Precision Electronics Competition Team Technology Limited 3 Sales 161,277,425 Note c 5 (Zhengzhou) Co., Ltd. 8 Hongfujin Precision Electronics Competition Team Technology Limited 3 Accounts receivable 44,021,902 Note c 3 (Zhengzhou) Co., Ltd. Note a: The information of transactions between the Company and the consolidated subsidiaries should be noted in “Number” column. 219
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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.
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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
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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
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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 Completed transition to IFRSs c. Identification of the differences between current Completed accounting policies and IFRSs d. Identification of consolidated entities under the Completed IFRSs framework e. Evaluation of the impact of each exemption and Completed option on the Company under IFRS 1 – First-time Adoption of International Financial Reporting Standards f. Evaluation of needed information system Completed adjustments g. Evaluation of needed internal control adjustments Completed h. Establish IFRSs accounting policies Completed i. Selection of exemptions and options available under Completed IFRS 1 - First-time Adoption of International Financial Reporting Standards j. Preparation of statement of financial position on the Completed date of transition to IFRSs k. Preparation of IFRSs comparative financial In process information for 2012 l. Completion of relevant internal control (including Completed financial reporting process and relevant information system) adjustments
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
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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
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GAAP (R.O.C.) Adjustment IFRSs Description Financial $ - $ 470,158 $ 470,158 (5) liabilities at fair value through profit or loss – non-current 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 (1)(5) earnings 325,500,402 14,691,725 340,192,127 (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
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2. Reconciliation of significant differences as of December 31, 2012 GAAP (R.O.C.) Adjustment IFRSs Description 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
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GAAP (R.O.C.) Adjustment IFRSs Description Financial $ - $ 15,288 $ 15,288 (5) liabilities at fair value through profit or loss – non-current 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 (1)(5) earnings 385,380,938 14,410,421 399,791,359 (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
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3. Reconciliation of significant differences for the year ended December 31, 2012 GAAP (R.O.C.) Adjustment IFRSs Description Operating revenue $ 3,905,395,322 $ - $ 3,905,395,322 (6)(7) Operating cost ( 3,575,766,285) ( 79,379,769) ( 3,655,146,054) (10)(11) Gross profit 329,629,037 ( 79,379,769) 250,249,268 Operating (6)(7) expenses ( 221,178,556) 78,827,558 ( 142,350,998) (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
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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 Available-for-sale $ 4,530,477 $ 4,153,041 an investor company holds less than 20% of the investee financial assets - non- company’s voting shares without losing significant influence current over an investee company, the investments should be accounted Unrealized gain or loss 2,629,133 2,251,670 for under equity method. In accordance with IAS 28, on financial instruments “Investments in Associates”, when an investment ceases to be Undistributed earnings ( 535,814) ( 535,814) an associate, the investment should be reclassified as Gain on equity - ( 254,621) “Available-for-sale financial assets” and measured at its fair investments under the value at the date when it ceases to be an associate. equity method Capital reserve from ( 8,172) 10,280 long-term investments Cumulative translation ( 22,269) 3,466 adjustments Equity investments ( 2,467,599) ( 2,533,104) under the equity method Dividend income - 144,956
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Increase (Decrease) Item Explanation Account at transition date December 31, 2012 (2) Financial assets: equity instruments In accordance with the pre-amended “Rules Governing the Available-for-sale $ 44,715 $ 42,823 Preparation of Financial Statements by Securities Issuers”, financial assets - non- before July 7, 2011, unlisted stocks and emerging stocks held current by the Company should be measured at cost and recognized in Unrealized gain or loss 15,975 14,083 “Financial assets carried at cost”. However, in accordance with on financial instruments IAS 39, “Financial Instruments: Recognition and Financial assets carried ( 28,740) ( 28,740) Measurement”, investments in equity instruments without an at cost - non-current 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. (3) Prepayments for equipment In accordance with the “Rules Governing the Preparation of Other assets – non- 2,309,167 5,308,218 Financial Statements by Securities Issuers”, prepayments for current the acquisition of property, plant and equipment are classified Prepayments for ( 2,309,167) ( 5,308,218) as “Property, plant and equipment”. However, under IFRSs, it equipment should be classified as “Other assets – non-current”. (4) Property, plant and equipment In accordance with current accounting standards in R.O.C., the Investment property 1,434,274 1,354,852 Company’s property that is leased to others is presented in Other assets– non- ( 1,434,274) ( 1,354,852) ‘Other assets’ account. In accordance with IAS 40, “Investment current Property”, property that meets the definition of investment property is classified and accounted for as ‘Investment property’.
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Increase (Decrease) Item Explanation Account at transition date December 31, 2012 (5) Financial instruments: presentation In accordance with current accounting standards in R.O.C., the Financial liabilities at $ 470,158 $ 15,288 conversion price of convertible bonds overseas should be fair value through profit converted to an agreed conversion price in New Taiwan dollars or loss - non-current with a fixed exchange rate applicable on conversion of bonds. Undistributed earnings 1,564,282 1,564,282 The conversion rights which are converted to a fixed amount of Capital reserve from ( 2,034,440) ( 2,034,440) common shares should be classified as equity instruments. conversion right However, in accordance with IAS 32, “Financial Instruments: Gain on valuation - 454,870 Presentation”, the conversion rights which do not meet the financial liabilities criteria of equity instruments should be classified as financial liabilities. (6) Employee benefits The current accounting standards in R.O.C. do not specify the Accrued expenses 1,809,910 2,328,293 rules on the cost recognition for accumulated unused Undistributed earnings ( 1,404,728) ( 1,404,728) compensated absences. The Company recognizes such costs as Deferred income tax 333,352 413,440 expenses upon actual payment. However, IAS 19, “Employee assets - non-current Benefits”, requires that the costs of accumulated unused Cumulative translation ( 71,830) ( 28,567) compensated absences should be accrued as expenses at the end adjustments of the reporting period. Operating cost - salaries - 429,714 Operating expenses - - 141,711 salaries Tax expense - ( 89,867)
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Increase (Decrease) Item Explanation Account at transition date December 31, 2012 (7) Pensions (i) The discount rate used to calculate pensions shall be Reserve for retirement $ 453,411 $ 628,051 determined with reference to the factors specified in plan R.O.C. SFAS 18, paragraph 23. However, IAS 19, Undistributed earnings ( 376,331) ( 376,331) “Employee Benefits”, requires an entity to determine the
rate used to discount employee benefits with reference to Deferred income tax 77,080 106,769 assets - non-current market yields on high quality corporate bonds that match the currency at the end day of the reporting period and Operating cost - salaries - ( 2,953) duration of its pension plan; when there is no deep market Operating expenses - - ( 16,261) in corporate bonds, an entity is required to use market yields on government bonds (at the end day of the salaries reporting period) instead. Tax expense - 3,266
(ii) The Company recognized all accumulated actuarial gain or Actuarial loss on - ( 160,899) loss associated with the employee benefits plans in defined benefit pension “Retained earnings’ at the date of transition to IFRSs. plan (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’ 232
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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) Item Explanation Account at transition date December 31, 2012 (8) Deferred charges Property, plant and $ 15,101,778 $ 20,165,075 equipment In accordance with current accounting standards in R.O.C., cost Deferred charges ( 15,101,778) ( 20,165,075) of tools is recognized in “Deferred Charges”. However, under IFRSs, it should be recognized in “Property, plant and equipment”. (9) Capital reserve A. The Company has elected not to apply the requirements in Undistributed earnings 15,444,316 15,444,316 IFRS 3, ‘Business Combinations’, retrospectively to business combinations and investments in associates that Capital reserve from ( 15,444,316) ( 15,444,316) occurred prior to the date of transition to IFRSs, and has long-term investments 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. B. In addition, when a subsidiary issues new shares and parent Capital reserve from - ( 860,090) company does not purchase or acquire new shares difference between the proportionately that results in a change of parent company’s price for acquisition or ownership percentage and a change of the equity in net assets for the investment that parent company has invested, disposal of subsidiaries but that does not result in a loss of control over the and carrying amount subsidiary, in accordance with current accounting standards Minority interest - 860,090 in ROC, such differences shall be used to adjust the ‘capital
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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 Operating cost $ - $ 34,382,737 presents product warranty costs in ‘selling expenses’. However, under IFRSs, they shall be presented in ‘cost of Operating expenses - ( 34,382,737) goods sold’.
(11) Royalty expenses
The Company pays royalties based on the sale volume of the Operating cost - 44,570,271 related product as required by the contract. Under current accounting standards in ROC, the royalties are presented in Operating expenses - ( 44,570,271) ‘selling expenses’. However, under IFRSs, they shall be presented in ‘cost of goods sold. (12) Income taxes In accordance with current accounting standards in R.O.C., a Deferred income tax 10,150,273 10,431,693 deferred tax asset or liability should, according to the assets - non-current classification of its related asset or liability, be classified as Deferred income tax ( 8,016,419) ( 6,751,334) current or noncurrent. However, a deferred tax asset or liability assets - current
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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.
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VII. Financial Analysis
A. 2012 vs. 2011 Financial Analysis
Unit: NT$Thousand
Difference Year Ratio change Item 2012 2011 analysis and Amount % explanation
Current assets 1,083,776,739 958,370,691 125,406,048 13.09% Fund and Long-term equity 603,762,719 534,685,388 69,077,331 12.92% investments 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 Change Amount Variance Item 2012 2011 percentage changed 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%
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income taxes Income tax benefit (12,704,391) (10,200,475) 2,503,916 24.55% 5 (expense) 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 Plan for cash ending balance Cash ending Cash beginning Cash flow from operating Cash flow-in shortage balance balance activities (out) Financing (shortage) Investment (1) (2) (3) act (1)+(2)-(3) activities 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.
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VIII. Special Notes
A. Consolidated Financial Statements of Affiliates
Hon Hai Precision Industry Co., Ltd.
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
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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:
Number Shares as of of the The date Endorsement Loan Source The Number of shares Investment date of Name of Paid-in of the Set amount of amount of Company’s shares or or gains and this Subsidiaries capital acquisition pledge the of the funds ownership amount amount losses Annual or disposal Company Company of Report disposal printed Hongjing International Own 118,437 1,302,812 20,000,000 100% 2012 N/A N/A N/A N/A N/A Investment funds Shares(P.S.) Shares Co., Ltd.
(3) Other supplementary information:
None
(4) Matters affect the shareholders’ equity or the price of securities:
None
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Hon Hai Precision Industry Co., Ltd.
Chairman: Gou, Tai-Ming (Terry Gou)
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