HTC CORPORATION 2018 Annual General
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HTC CORPORATION 2018 Annual General Shareholders’ Meeting Agenda Book Table of Contents Index Meeting Procedure ································································································· 1 Meeting Agenda ···································································································· 2 Matters to Report ··································································································· 3 Adoption Matters ··································································································· 4 Discussion Matters ································································································· 5 Extraordinary Motions ····························································································· 5 Supplements Supplement 1:Fiscal 2017 Business Report ··································································· 6 Supplement 2:Supervisors Audit Report ····································································· 11 Supplement 3:Rules of Procedure for Board of Directors Meetings ······································ 12 Supplement 4:Fiscal 2017 CPA Audit Report and Financial Statements ································· 18 Supplement 5:Fiscal 2017 CPA Audit Report and Consolidated Financial Statements ················ 29 Supplement 6:The Chart of 2017 Deficit Compensation ··················································· 40 Supplement 7:Before and After Revision of the Article of Incorporation ······························· 41 Appendixes Appendix 1:Rules of Procedure for Shareholders Meetings ··············································· 43 Appendix 2:Articles of Incorporation ········································································ 46 Appendix 3:Shareholding Status and Minimum Shareholding Requirements of Directors and Supervisors ························································································ 51 Translation This English version is a translation based on the original Chinese version. Where any discrepancy arises between the two versions, the Chinese version shall prevail. HTC CORPORATION Procedure for 2018 Annual General Shareholders’ Meeting 1. Call Meeting to Order 2. Seating of the Chair 3. Opening Remarks by the Chair 4. Matters to Report 5. Adoption Matters 6. Discussion Matters 7. Extraordinary Motions 8. Closure of the Meeting - 1 - HTC CORPORATION Agenda for the 2018 Annual General Shareholders’ Meeting Time and Date: June 26, 2018 (Tuesday) at 9:00 a.m. Location: Chuto Hotel, Jin Long Room (No.398 Taoying Road, Taoyuan City) 1. Opening Remarks by the Chair 2. Matters to Report: Item 1:Fiscal 2017 Business Report Item 2:Supervisors Audit Report Item 3:Amendment of the Company’s “Rules of Procedure for Board of Directors Meetings” 3. Adoption Matters: Item 1:Adoption of the Fiscal 2017 Business Report and Financial Statements Item 2:Adoption of the Fiscal 2017 Deficit Compensation Proposal 4. Discussion Matters Item 1:Discussion on the proposal to partially amend the Articles of Incorporation 5. Extraordinary Motions 6. Closure of the Meeting - 2 - Matters to Report: Item 1 Title: Fiscal 2017 Business Report, submitted for review. (Proposed by the Board of Directors) Introduction: (1) Please refer to Supplement 1 of this handbook (page 6) for the Fiscal 2017 Business Report. (2) Please review. Item 2 Title: Supervisors Audit Report, submitted for review. (Proposed by the Board of Directors) Introduction: (1) Please refer to Supplement 2 of this handbook (page 11) for the Supervisors Audit Report. (2) Please review. Item 3 Title: Amendment of the Company’s “Rules of Procedure for Board of Directors Meetings”, submitted for review. (Proposed by the Board of Directors) Introduction: (1) Amendment to the Company's “Rules of Procedure for Board of Directors Meetings” is proposed according to the partial amendment to the “Regulations Governing Procedure for Board of Directors Meetings of Public Companies” by the Financial Supervisory Commission on July 28, 2017. Please refer to Supplement 3 of this handbook (page 12) for the revision of the company’s Rules of Procedure for Board of Directors Meetings adopted by the board of directors. (2) Please review. - 3 - Adoption Matters Item 1 Title: Adoption of the Fiscal 2017 Business Report and Financial Statements. (Proposed by the Board of Directors) Introduction: (1) The compilation of the Company's Fiscal 2017 Business Report and Financial Statements are completed and has been approved by the Board of Directors. The Financial Statements have been audited and certified by Hsu, Wen-Ya, CPA, and Casey Lai, CPA, of Deloitte & Touche. The Business Report and Financial Statements have been audited by the Supervisors, and are hereby submitted for adoption by this Annual General Shareholders’ Meeting. (2) Please refer to Supplement 1 (page 6), Supplement 4 (page 18) and Supplement 5 (page 29) of this handbook for the Fiscal 2017 Business Report, the CPA Audit Report issued by Deloitte & Touche and the Financial Statements, respectively. (3) Adoption requested. Resolution: Item 2 Title: Adoption of the Fiscal 2017 Deficit Compensation Proposal. (Proposed by the Board of Directors) Introduction: (1) The Company's net loss for Fiscal 2017 was NT$16,905,712,247. Please refer to Supplement 6 of this handbook (page 40) for the Chart of the Deficit Compensation for Fiscal 2017. It is proposed not to distribute share dividends to the shareholders. (2) Adoption requested. Resolution: - 4 - Discussion Matters: Item 1 Title: Discussion on the proposal to partially amend the Articles of Incorporation is submitted for discussion. (Proposed by the Board of Directors) Introduction: (1) Partial amendment to the Company’s Articles of Incorporation is proposed due to establish an audit committee as required by laws and regulations and to change the number of seats of directors based on actual needs. (2) Please refer to Supplement 7 of this handbook (page 41) for the Before and After Revision of the Articles of Incorporation (3) Resolution requested. Resolution: Extraordinary Motions Closure of the Meeting - 5 - Supplement 1 HTC CORPORATION Fiscal 2017 Business Report In the year that HTC celebrated its 20th anniversary, we want to express our deep appreciation towards our shareholders for your dedicated support and commitment to our pursuit of brilliance. Over the last three years, we’ve been working hard to position HTC for the future, focusing on delivering the innovation and technology that defines HTC and devoting the necessary resources to create great products. We produced another strong year of innovation in 2017, recording more technology firsts and consolidating our position as thought leaders across our product groups. In September 2017, we entered a ground-breaking business cooperation agreement with Google, Inc., whereby the ‘Powered by HTC’ engineering and technical teams working on Google’s Pixel smartphones were transferred to Google in a deal worth $1.1 billion. Building on our decade-long strategic relationship with Google, this agreement allows us to strengthen our HTC-branded smartphone business, enabling a more focused product portfolio, greater operational efficiency and financial flexibility. It also enables HTC to continue investing in emerging frontier technologies, including VR, AR, AI, Smart IoT and Blockchain which will be vital across all of our businesses and present significant long-term growth opportunities. This agreement also represents a substantial investment in Taiwan as a key innovation and engineering hub, and it is a true testament to the engineering and innovation powerhouse that HTC has built over the last twenty years. The teams that have been transferred to Google will continue to play a key role in building the Android ecosystem for the benefit of the whole industry. This move, combined with the significant effort we have made in strengthening and investing in our innovation teams, streamlining our business processes and reducing our operating expenditure over the past three years, has created a solid foundation on which we can build the future of HTC. HTC VISION: VIVE Reality Early in 2018, we defined a new vision for HTC, a vision to unite all teams and businesses around a single direction: VIVE Reality. VIVE was founded three years ago on the uniting of humanity and technology to unleash the imagination. VIVE Reality describes the convergence of Virtual and Augmented Reality (VR and AR), artificial intelligence (AI), high-speed connectivity and other emerging technologies, where humans interact with virtual and augmented reality environments naturally and natively. 5G and subsequent wireless connectivity standards will usher in a whole new era of experiences that will truly revolutionize the way we live, work, and play. Light-speed data transmission and edge computing will enable access to immersive content anywhere, in real time. In this new ecosystem, smartphones will continue to play a vital role, and indeed will be the first step towards 5G for most of us, although they may take on different forms in the future as the need for device-based computing power diminishes. 5G and AI are - 6 - complementary technologies for VR and AR, enabling each device to provide the most immersive experiences for consumers and enterprises. This convergence of technologies is reflected in HTC’s realigned organization, with the VIVE and smartphone businesses collectively able to leverage the technical expertise and