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HON HAI PRECISION INDUSTRY CO., LTD.

Annual Report2012

Annual Report Website

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

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

Printing Date: April 30, 2013

Stock Code

2317

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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 SHALLGOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE

SUBJECT MATTER STATED HEREIN.

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I. Spokesperson: Deputy Spokesperson:

Name: Simon Hsing Name: Jack Hsiao

Title: Spokesperson Title: Director of Public Relations Office

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

E-mail:[email protected]

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

Head officeAdd: No. 66, Zhongshan Road, Tucheng Industrial Zone, Tucheng District, New Taipei CityTel: (02)2268-3466

Hsinchu Science Park Branch OfficeAdd: 5F-1, No. 5, Hsin-an Road, Hsinchu Science and Industrial Park, East Area, HsinchuCityTel: (03)578-4975

Neihu Branch OfficeAdd: 1F-11F, No. 32, Jihu Road, Neihu District, Taipei CityTel: (02)2799-6111

California (US) Branch OfficeAdd: 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 CityTel: (02)2268-3466

Minsheng FactoryAdd: No. 4-1, Minsheng Road, Tucheng Industrial Zone, Tucheng District, New Taipei City.Tel: (02)2267-6511

Dingpu No. 1 FactoryAdd: No. 53, Section 4, Zhongyang Road, Tucheng District, New Taipei CityTel: (02)2268-3466

Dingpu No. 2 FactoryAdd: 2F, No. 53, Section 4, Zhongyang Road, Tucheng District, New Taipei CityTel: (02)2268-3466

Dingpu No. 5 Factory

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

Tel: (02)2268-3466
mailto:[email protected]:[email protected]:[email protected]:[email protected]

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III. Share Transfer Agency

Name: Grand Fortune Securities Co., Ltd.Address: 3F, No. 51, Section 1, Minsheng East Road, Taipei CityTel: (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-lingCPA Firm: Pricewaterhouse Coopers (PwC) TaiwanAddress: 27F, No. 333, Section 1, Keelong Road, Taipei CityTel: (02)2729-6666Website: http://www.pwc.tw

V. Overseas trade places for listed negotiable securities

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

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

VI. Company Website: http://www.foxconn.com
http://www.gfortune.com.tw/http://www.gfortune.com.tw/http://www.pwc.tw/http://www.pwc.tw/http://www.londonstockexchange.com/http://www.londonstockexchange.com/http://www.sgx.com/wps/portal/marketplace/mp-ch/homehttp://www.sgx.com/wps/portal/marketplace/mp-ch/homehttp://www.foxconn.com/http://www.foxconn.com/http://www.foxconn.com/http://www.sgx.com/wps/portal/marketplace/mp-ch/homehttp://www.londonstockexchange.com/http://www.pwc.tw/http://www.gfortune.com.tw/

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Table of ContentsI. Letter to Shareholders .................................................................................................................. 1II. Company Introduction ................................................................................................................. 3

A. Founding date: February 20, 1974 ............................................................................................... 3B. Formation History ....................................................................................................................... 3

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

A. Organization ................................................................................................................................ 9B. Implementation of corporate governance .................................................................................. 31C. Information on Accountants Fees............................................................................................ 49D. Alternation of CPA .................................................................................................................... 49E. The Companys chairman, general manager, or any managerial officer in charge of

finance or accounting matters has in the most recent year held a position at theaccounting firm of its CPA or at an affiliated enterprise: .......................................................... 49

F. Transfer & pledge of stock equity by directors, supervisors, managerial officers andholders of 10% or more of company shares: ............................................................................. 50

G. Information on relation among top ten shareholders ................................................................. 52H. Combined shareholding percentage ........................................................................................... 53

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

A. Company capital and shares ...................................................................................................... 54B. Section on Corporate Bonds ...................................................................................................... 63C. Preferred Shares (with warrants): .............................................................................................. 67D. Global Depository Receipts (GDR) ........................................................................................... 67E. Subscription of warrants for employees: ................................................................................... 68F. Name of managers holding warrants for employees and top ten employees in terms of

subscription of warrants, and the acquisition status: ................................................................. 69G. Subscription of new shares for employee restricted stocks: ...................................................... 69H. 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: ..................... 69I. Issuance of new shares for merging and transferring the stocks of other companies: ............. 69J. Implementation of fund usage plan: .......................................................................................... 69

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

A. Business Activities .................................................................................................................... 70B. Production and Sales Status ....................................................................................................... 72C. Information on Environmental Protection Costs ....................................................................... 75D. Labor Relations ......................................................................................................................... 76

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

A. Most Recent 5-Year Concise Financial Information ................................................................. 81B. Most Recent 5-Year Financial Analysis .................................................................................... 85C. Audit Report by Supervisors ..................................................................................................... 89D. 2012 Financial Statements Consolidated With Subsidiaries Audited by CPA .......................... 91

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

A. 2012 vs. 2011 Financial Analysis ............................................................................................ 237B. 2012 vs. 2011 Operating Result Analysis ............................................................................... 237C. Cash Flow Analysis ................................................................................................................. 238

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

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

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

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1

I. Letter to ShareholdersAlthough the political and economic environments are so turbulent, the industrial aspects alsohave 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 theBoard of Directors of the Company, I want to thank all my colleagues for their hard workingand dedicated contributions. Once again, I sincerely thank our strategic partners andcustomers 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 ratepolicy to stimulate the economy, the debt problems of Greece, Italy and Spain expanded andonce 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. fiscalcliff problem has lowered global consumer confidence significantly, and bogged downeconomic 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 beeneased.

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 earnedour 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 againadvance to 43rd last year. In addition, our Company has already obtained 2,013 U.S. patentsin 2012, ranking 8th in the whole world. We have proved Hon Hais strong competitive

strength once again.

Looking forward to 2013, the steady growth of the U.S. economy may gradually lead theglobal economic recovery, but while the U.S. deficit reduction programs take effectautomatically, whether the debt ceiling can be increased and other issues will affect consumerconfidence. Meanwhile, the most important is that the U.S. policy of quantitative easing mayexit in the second half of this year, it will be a big challenge weather the economy is capableof 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 ecologicalstructure 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 scienceand technology, our Company is committed to efficiency, automation, unmanned

productions and globalization to enable our Company to continue to take the leadingposition in the eight-screens-one-network-one-cloud business territory. The Groupdescribes 2013 as a key year, and looks forward to extend the business from core

manufacturing and technology to technology services whichthe development goal is to gothrough 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 thedifficulties and challenges to bring you all more value!

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

and their families. I also encourage the Companys management team continue to work hardto maintain the excellent operating results. Thank you so much for all your support.

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II. Company IntroductionA. Founding date: February 20, 1974

Listing date: June 18, 1991

B. Formation HistoryIn 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

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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 Weekof 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 FOTIHoldings 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 & Poors (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.

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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 InvestorRelation 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 Worlds Most Admired Companies in

Electronics byFortune.

8. Became a member of Electronic Industry Code of Conduct (EICC), dedicatedto promoting corporate social and environmental responsibilities (hereinafterreferred to as SER).

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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 questionnairesurvey of 104 Job Bank.

5. Selected as the Most Desirable Company of office staff of Taiwan accordingto 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 Worlds Top 10 Chinese Enterprises of the Year byAsiaweek.

6. Ranked 154thamong 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 132ndamong 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 109thamong Fortune Global 500 Enterprises.

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

5. Awarded as the Best Management Enterprise in Taiwan by Finance Asia.6. Recognized as one of Asias 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 176thamong 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 TaiwanRatings.

7. Ranked 194thamong the Global 500 Enterprises by (Britain) Financial Times.8. Ranked 112thamong 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 189thamong 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 tothe evaluation of Taiwan Ratings.

6. Ranked 60thamong 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.

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III. Corporate Governance ReportA. Organization

(1)Organization Chart

Chairman Chairmans Office

Board of Directors

President

HumanR

esourcesDivision

CESBGBu

sinessGroup

iDSBGBusinessGroup

iDPBGBusinessGroup

CNSBGBu

sinessGroup

CMMSGB

usinessGroup

NWInGBusinessGroup

SHZBG

B

usinessGroup

GlobalR&

DCenter

F&Aand

Investment

Managem

entDivision

SysteminformationDivision

GlobalProcurementDivision

GlobalLegalDivision

PCEBGBu

sinessGroup

Executive Secretary

Internal Audit Division

CCPBGBusinessGroup

Shareholders Meeting

Compensation Committee

Supervisors

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(2)Department functionsInternal 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 theimplementation of overall businesses, guiding and supervising the departments to dealwith 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 andintegrate R&D with production and manufacturing.

System Information Division

Responsible for establishing, maintaining, managing, controlling and auditing theglobal information system of the Company and setting up safe management andcontrol and firewall and other relevant mechanisms. Also in charge of connectingglobal network communication systems of the Company, ERP, KM, virtual office andother platforms.

Global Procurement Division

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

manufacturing and adjusting the procurement strategies according to industrialprospects.

Global Legal Division

Responsible for developing, applying and maintaining intellectual property rights forthe 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.

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(3)Directors and SupervisorsDate: 04/28/2013

Title Name

Date of

Election

(appointment)

Term

of

Office

First

Elected

Date

Shares held when

electedCurrent shareholding

Shares currently

held by their

spouses and

minor children

Shares held in

the name of

othersMain working (education)

experience

Current positions in the Company and

other companies

Spouse or second-degree

relative holding a

position as key manager,

director or supervisor

Number % Number % Number % Number % Title NameRelatio

n

ChairmanGou, Tai-ming

(Terry Gou)

Jun. 8,2010Jul. 1,2010

3 Feb. 20,

1974

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

Graduated from China MarineTechnical CollegeDirector of Taiwan ElectricalEquipment Association,

Chairman of Mold IndustryAssociation

None

None None None

Director

Hon Chiao

International

Investment Co.,

Ltd

Jun. 8,2010Jul. 1,2010

3 Jun. 10,1995

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

None None None

Representative:

Tai, Jeng-wu

Jun. 8,2010Jul. 1,2010

3 Jul. 1,2001

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

President of Shenzhen Fujun MaterialTechnology Co., Ltd.President of Futaijie Science and TechnologyDevelopment (Shenzhen) Co., Ltd.Director of Fuhongyuan EnvironmentalTechnology (Shenzhen) Co., Ltd.Representative of directors of XinxiTechnology (Stock) CompanyRepresentative of Fitipower IntegratedTechnology Inc.

None None None

Director

Hon Chiao

International

Investment Co.,

Ltd

Jun. 8,2010Jul. 1,2010

3 Jun. 15,1998

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

None None None

Representative:

Lu, Sung-ching

Jun. 8,2010Jul. 1,2010

3 Feb. 21,2000

20,470,434 0.23 17,120,384 0.14 3,097 0 0 0 Masters Degree, University ofIllinois, U.S.A

None

None None None

Director

Hon Jin

International

Investment Co.,

Ltd

Jun. 8,2010Jul. 1,2010

3 Jun. 8,2007

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

None None None

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Title Name

Date of

Election

(appoint

ment)

Term

of

Office

First

Elected

Date

Shares held when


Shares currently

held by their

spouses and

minor children

Shares held in

the name of


experience


other companies


relative holding a




n

Representative:

Lu, Fang-ming

Jun. 8,2010Jul. 1,2010

3 Jun. 8,2010

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

Masters Degree of Institute ofApplied Physics, Chung YuanChristian UniversityTaiwan General Manager of AsiaPacific Region, Lingyun Scienceand Technology Co. Ltd. GeneraManager of Taiwan ComputerSystem, Hewlett Packard

None

None None None

Director

Hon JinInternational

Investment Co.,

Ltd

Jun. 8,2010Jul. 1,2010

3 Jun. 8,2007

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

None None None

Representative:

Chien, Yi-bin

Jun. 8,2010Jul. 1,2010

3 Jun. 8,2007

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

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

None None None

ndependent

DirectorWu, Yu-Chi

Jun. 8,2010Jul. 1,2010

3 Jun. 8,2010

0 0 0 0 0 0 0 0

Masters Degree in Accounting,National Taiwan UniversityBachelor degree in accounting,Tunghai University

President of Ji-Tou United Accountant Firm

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

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

Supervisor of Procystal Technology Co.,

Ltd.

None None None

ndependent

DirectorLiu, Cheng-Yu

Jun. 8,2010Jul. 1,2010

3 Jun. 8,2007

0 0 0 0 0 0 0 0Masters Degree in Finance,

National Taiwan UniversityAttorney of I-Si Technology Law Firm None None None

Supervisor

Fu-Rui

International

Investment Co.,Ltd.

Jun. 8,2010Jul. 1,2010

3 Jun. 15,1998

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

Representative:

Wan, Jui-hsia

Jun. 8,2010Jul. 1,2010

3 Jun. 10,2004

14,706 0.00 0 0 0 0 0 0

Masters Degree in Accounting,Soochow UniversityDeputy professor, Departmentof Account, National TaiwanUniversity

Supervisor of Cheng Uei Precision IndustryCo., Ltd. None None None

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Title Name

Date of

Election

(appoint

ment)

Term

of

Office

First

Elected

Date

Shares held when


Shares currently

held by their

spouses and

minor children

Shares held in

the name of


experience


other companies


relative holding a




n

upervisor Huang, Qing-Yuan

Jun. 8,

2010Jul. 1,2010

3 Jun. 8,2007

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

Masters Degree, GraduateSchool of Business, Nihon

University, JapanPhD, Graduate School ofBusiness, Nihon University

Independent Director of Cathay FinancialHoldingsIndependent Director of Cathay LifeInsuranceIndependent Director of Cathay SecuritiesCorporationIndependent Director of Cathay United BankSupervisor of Maishi Venture Capital

Investment Co., Ltd.Director of DFI Inc.Director of Taiwan Stock ExchangeCorporation (TWSE)Independent Director of TAIWANGLASSGROUPSupervisor of Maishi #2 Venture CapitalInvestment Co., Ltd.President of WeiHeng Asset ManagementCo., Ltd

None None None

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(4)Major shareholders of institutional shareholdersDate: 04/28/2013

Name of Institutional Shareholder Name of Major Shareholders Percentage

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

Shijun International Investment Co., Ltd. 9.01%

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

Hongqi International Investment Co., Ltd. 50%

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

Chien, Yi-bin 0.17%

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

Name Major shareholders Percentage

Outstanding Growth Ltd., British VirginIslands

INB Holdings Limited 100%

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

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

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

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

Name

Has over five years work experience and following

professional qualifications Independence Attribute (See Notes Below)

Current

Positions at

Other

Companies

Business, LegalAffairs, Finance,

Accounting,Lecturer or above inColleges in Related

departments

Judge, Prosecutor,Attorney, CPA or

National CertifiedProfessionals

Business,Legal Affairs,

Finance,Accounting orRelated Work

Experience

1 2 3 4 5 6 7 8 9 10

Gou, Tai-ming 0

Tai, Jeng-wu 0

Lu, Sung-ching 0

Lu, Fang-ming 0

Chien, Yi-bin 0

Wu, Yu-Chi 0

Liu, Cheng Yu 0

Huang, Qing-Yuan 3

Wan, Jui-hsia 0

Notes:The Directors and Supervisors comply with the following conditions from two years before being elected and during his tenure in office:(1) Not an employee of this Company or its affiliates.(2) Not a Director or Supervisor of the Company or its affiliates. (However, this does not apply, in cases where the person is an Independent Director of the company,

its parent company, or any subsidiary in which the company directly or indirectly holds more than 50% of the voting shares.)(3) Not a natural-person shareholder who holds shares, together with those held by the persons 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 numb er of outstanding shares of the Companyor 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 financialrelationship 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, providescommercial, 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.

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(7)Management Team InformationDate: 04/28/2013

Title NameInaugura

tion date

Shareholding

Currently

holding shares of

spouses and

minor children

Holding

shares in the

name of

othersMain experience (education

experience)Current positions at other companies

Spouse or second-

degree relative holding

a position as manager

Number % Number % Number % Title Name Relation

hairman

ndresident

TerryGou Feb. 20,1989 1,473,989,536 12.45 0 0 0 0

Graduated from China MarineTechnical College

Director of Taiwan ElectricalAppliances Equipment AssociationChairman of Mold IndustryAssociation

None None None None

DepartmentGeneralManager

Tai,Jeng-wu

Aug. 1,1992

10,869,951 0.09 905,138 0.01 0 0Tatung Institute of Technology,Taiwan

President of Shenzhen Fujun MaterialTechnology Co., Ltd.President of Futaijie Science and TechnologyDevelopment (Shenzhen) Co., Ltd.Director of Fuhongyuan EnvironmentalTechnology (Shenzhen) Co., Ltd.Representative of directors of XinxiTechnology (Stock) CompanyRepresentative of Fitipower IntegratedTechnology Inc.

None None None


Lu,Sung-ching

Aug. 1,1992

17,120,384 0.14 3,097 0.00 0 0 Masters Degree, University ofIllinois, U.S.A.

None None None None

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Title NameInaugura

tion date

Shareholding

Currently

holding shares of

spouses and

minor children

Holding

shares in the

name of



Spouse or second-




Department

GeneralManager

You,Xiang-fu

May 27,1992

36,643,284 0.31 57,169,569 0.48 0 0 Graduated from Tamsui Institute ofBusiness Administration, Taiwan

President of Huaian Fulitong Trade Co., Ltd.President of Qunkang Electronics (Kunshan)Co., Ltd.

President of Fuyu Energy Technology(Kunshan) Co., Ltd.President of Fuyu ElectronicTechnology(Huaian) Co., Ltd.

None None None


Lu,Fang-ming

Apr. 1,2003

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

Masters Degree of Institute ofApplied Physics, Chung-YuanChristian UniversityTaiwan General Manager of Asia-Pacific Region, Lingyun Scienceand Technology Co., Ltd.General Manager of Taiwan

Computer System, Hewlett Packard

None None None None

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Title NameInaugura

tion date

Shareholding

Currently

holding shares of

spouses and

minor children

Holding

shares in the

name of



Spouse or second-





Jiang,Hao-liang

May 1,2005

2,958,872 0.02 0 0 0 0Univ. of Birmingham. UKBachelor of EE

None None None None


Chien,Yi-bin

Jun. 1,2005

1,589,324 0.01 0 0 0 0International Trade Department ofTamkang University, Taiwan

Director of Expressive Profits IncorporatedRepresentative of supervisors of BaoxinInternationalInvestment (Stock) Company

None None None


Xu,Mu-ji

Jun. 1,2005

9,365,774 0.08 0 0 0 0Graduated from National Chin-YiUniversity of Technology, Taiwan

President of Hongzhun Precision Tooling(Kunshan)Co., Ltd.

President of Hongzhun Precision Tooling(Shenzhen)Co., Ltd.

None None None

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Title NameInaugura

tion date

Shareholding

Currently

holding shares of

spouses and

minor children

Holding

shares in the

name of



Spouse or second-





Zhong,Yi-wen

Jan. 1,2007

186,045 0.00 0 0 0 0

Bachelor degree in economics,Iowa State University, U.S.A.Manager of Hon Hai PrecisionIndustry (Stock) Company

President of Hongfujin Precision Industry(Shenzhen) Co., Ltd.

None None None


Ling,Zhi-ping

Jan. 21,2009

1,808,065 0.02 0 0 00

Enterprise Research Institute ofUniversity of Washington, U.S.A.School of Business, TaiwanUniversity

President of Amworld Microsystems(Shanghai) Ltd.President of Ambit Microsystems (Shanghai)Ltd.President of Ambit Microsystems(Zhongshan) Ltd.

None None None

DeputyDepartmentGeneral

Manager

Xiong,Bing-zheng

Aug. 31,2008

894,861 0.001 120,110 0.00 0 0

Industrial Management Departmentof Taiwan Institute of IndustrialSkillsIndustrial Engineering Department

of Taiwan Institute of Technology

Director of Foxconn Precision Electronics(Yantai) Co., Ltd.Director of Jing Fu Tai Precision Electronics(Yantai) Company LimitedDirector of Fu Hongyuan (Shenzhen)Company Limited Director Environmental

TechnologyDirector of Hongfujin Precision Electronics(Yantai) Co., Ltd.

None None None

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Title NameInaugura

tion date

Shareholding

Currently

holding shares of

spouses and

minor children

Holding

shares in the

name of



Spouse or second-




HeadOfficeGeneralManager

Li,Jin-ming

Oct. 17,1997

237,373 0.00 0 0 0 0

Graduated from National ChengchiUniversity, TaiwanDeputy general manager of HuafeiColor Display System (Stock)CompanyManager of Taiwan Philip (Stock)Company

President of Fertile Plan InternationalLogistics (Vietnam) Co., LtdDirector of Foxconn (Far East) Ltd.(Cayman)Director of Foxconn (Far East) Ltd.(HK)Director of Foxconn International HoldingsLtd.Board director of Foxconn Japan Co., Ltd.Director of Foxteq Holdings Inc.Director of Foxteq Integration, Inc.(Cayman)

None None None

inancialDirector

Huang,De-cai

Apr.15,1998

2,655,813 0.02 0 0 0 0

Graduated from National ChiaoTung University, TaiwanFinancial director of VanguardInternational SemiconductorCorporationManager of Taiwan Philip (Stock)Company

Director and president of Hongyang VentureCapital Investment (Stock) CompanyRepresentative of directors of HongqiInternational Investment (Stock) CompanyRepresentative of directors of BaoxinInternational Investment (Stock) CompanyRepresentative of supervisors of HongjingInternational Investment (Stock) CompanyRepresentative of supervisors of Liyi

None None None

AccountingDirector

Chou,Zong-kai

Jul. 20,2010

61,750 0.00 0 0 0 0

Masters Degree in accounting,Long Island UniversityManager of Deloitte & Touche,TaiwanLecturer of Hsing Wu University ,Taiwan

Director of FAST VICTOR LIMITEDDirector of Focus PC Enterprises Limited.Supervisor of FUCHUAN CO., LTD.Director of Full Bonus International LimitedDirector of FUYONG CO., LTDDirector of Glory Star Investments Limited.Director of Great Name Investments LimitedDirector of Great World Technology Pte. Ltd.Director of HIGH PRECISION HOLDINGS

None None None

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

Unit: NT$Thousand

Title DirectorJuristicDirector

JuristicDirectorRepresentative


JuristicDirector



IndependentDirector

IndependentDirector

NameGou, Tai-ming(Terry Gou)

Hon ChiaoInternationalInvestmentCo., Ltd.

Tai, Jeng-wu

Lu, Sung-ching

Hon JinInternationalInvestmentCo., Ltd.

Lu, Fang-ming

Chien, Yi-bin

Wu, Yu-ChiLiu, Cheng-Yu

RemunerationofDirectors

Remunerations(A)

The Company 3,600

All companies within theconsolidated financialstatements

3,600

Retirementallowance(B)

The Company 0


0

Remunerationfrom distributionof earnings(C)

The Company 0


0

Businessexecutionexpenses (D)

The Company 480


480

Proportion of A, B, Cand D to net profit aftertax

The Company 0.00%


0.00%

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Relevantremunerationofpart-timepersonnel

Remuneration,money award andspecial expensesetc. (E)

The Company 25,674


25,674

Retirementallowance (F)

The Company 0


0

Employee profitsharing fromearningsdistribution (G)

The

Company

CashDividends

0

StockDividends

213,283

Allcompanieswithin theconsolidated financialstatements

CashDividends

0

StockDividends

213,283

Number of stockcertificates ofemployee (H)

The Company None


None

Number of sharesof EmployeesRestricted Stock(I)

The Company None


None

Proportion of A, B, C,D, E, F and G to netprofit after tax

The Company 0.26%


0.27%

Is there any remuneration from other investedbusinesses apart from subsidiaries

No

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Range of Remunerations

Range of Remunerations paid to directors

Names of directors

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

The CompanyAll companies involved in

financial statement (I)The Company

All companies in the financial

statement (J)

Under NT$2,000,000

Terry Gou, Hon ChiaoInternational Investment Co.,Ltd., Tai Jeng-wu, Lu Sung-ching, Hon Jin InternationalInvestment Co., Ltd., Lu Fang-ming, Chien Yi-bin

Terry Gou, Hon ChiaoInternational Investment Co.,Ltd., Tai Jeng-wu, Lu Sung-ching, Hon Jin InternationalInvestment Co., Ltd., Lu Fang-ming, Chien Yi-bin

Terry Gou, Hon ChiaoInternational Investment Co.,Ltd., Hon Jin InternationalInvestment Co., Ltd.

Terry Gou, Hon ChiaoInternational Investment Co.,Ltd., Hon Jin InternationalInvestment Co., Ltd.

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

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(b)Remunerations of SupervisorsUnit: NT$Thousand

Title Name

Remuneration of supervisors

Proportion of A, B and Cto net profit after tax

Is there anyremunerationfrom otherinvestedbusinessesapart fromsubsidiaries

Remunerations (A)Remuneration fromearnings distribution (B)

Business executionexpenses (C)

TheCompany

Allcompanies inthe financial

statement

TheCompany

Allcompaniesin the

financialstatements

TheCompany

Allcompaniesin the

financialstatements

TheCompany

Allcompaniesin the

financialstatements

Supervisor Huang, Qing-Yuan

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

Supervisor

Fu-Rui InternationalInvestment Co., Ltd.

Representative:Wan Jui-hsia

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Range of Remuneration Paid to Supervisors

Name of Supervisor

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

The Company All companies in the financial statement (D)

Under NT$2,000,000Fu-Rui International Investment Co., Ltd.Representative: Wan Jui-Hsia

Fu-Rui International Investment Co., Ltd.Representative: Wan Jui-Hsia

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

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





Over NT$100,000,000 - -

Total 2 2

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26

(c)Remunerations paid to the management teamUnit: NT$Thousand

Title Name

Remunerations(A)

Retirementallowance (B)

Money award andspecial paymentetc. (C)

Earning distribution as dividendsfor personnel (D)(Note)

Rate of totalamount of A, B,C and D to pureprofits after tax(%)

Number ofstockcertificates ofemployee

Number of sharesof EmployeesRestricted Stock

Remunerationfromo

therinvested

businessesapartfroms

ubsidiaries.

TheCompany

Allcom

paniesinthe

financia

lstatement

TheCompany

Allcom

paniesinthe

financia

lstatement

TheCompany

Allcom

paniesinthe

financia

lstatement

The Company

All companiesinvolved infinancialstatement

TheCompany

Allcom

paniesinthe

financia

lstatement

TheCompany

Allcom

paniesinthe

financia

lstatement

TheCompany

Allcom

paniesinthe

financia

lstatement

Cash

Dividen

ds

Stock

Dividen

ds

Cash

Dividen

ds

Stock

Dividen

ds

GeneralManager

Terry Gou

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


Lu,Sung-ching


You, Xiang-fu


Tai,Jeng-wu


Lu, Fang-ming


Jiang,Hao-liang


Chien,Yi-bin


Xu,Mu-ji

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Zhong,Yi-wen


Ling,Zhi-ping

DeputyDepartmentGeneralManager

Xiong,Bing-zheng

Head OfficeGeneralManager

Li,Jin-ming

Financial

Director

Huang,

De-caiAccountingDirector

Chou,Zong-kai

Note: NT$6,822,891Thousand of earnings were distributed to employees as dividends in 2012 according to the resolution of board of directors. In thisyear, the actual distribution rate will be considered for distributing dividends.

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Range of remuneration paid to the management team

Names of General Managers and Deputy General Managers

The Company All companies in the financial statement (E)

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

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

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


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

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

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

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

Total 14 14

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(d)Employee profit sharing granted to the management teamUnit: NT$Thousand

Note: As of the printing date of this Annual Report, the distribution list of employee profit sharing has not been fixed, and shall be proposed asstipulated according to the actual distribution of the last year.

Title NameStock Dividends

(Note)

Cash Dividends

(Note)Total

Proportion of total amount to net

profits after tax (%)

ManagementTeam

General manager Terry Gou

356,087 0 356,087 0.376%

Department General Manager Lu, Sung-ching

Department General Manager You, Xiang-fu

Department General Manager Tai, Jeng-wu

Department General Manager Lu, Fang-ming

Department General Manager Jiang, Hao-liang

Department General Manager Chien, Yi-bin

Department General Manager Xu, Mu-ji

Department General Manager Zhong, Yi-wen

Department General Manager Ling, Zhi-ping

Department Vice President Xiong, Bing-zheng

Head Office General Manager Li, Jin-ming

Financial Director Huang, De-cai

Accounting Director Chou, Zong-kai

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(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.

ItemTitle

Proportion of the total compensation to net profit after tax

2012 2011

The CompanyAll companies inthe consolidatedfinancial statement

The Company

All companies inthe consolidatedfinancialstatement

Directors 0.256% 0.265% 0.261% 0.260%

Supervisors 0.004% 0.004% 0.005% 0.005%

General Manager and DeputyGeneral Managers

0.447% 0.461% 0.561% 0.559%

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

(i) According to the distribution of earnings as stipulated in the CompanyArticles of Incorporation, except employee profit sharing, there is nodistribution to directors or supervisors.

(ii) The remunerations paid to general managers and deputy generalmanagers during the recent two years include salary, money award andemployee profit sharing from earnings distribution. As for salary and

money award, the payment is handled according to the relevantprocedures of the Companys personnel regulations. As for employeeprofit sharing from earnings distribution, the distribution is proposedby board of directors according to the distribution of annual earningsand the earnings distribution as stipulated in the Company Articles ofIncorporation and upon the approval of the shareholder meeting.

(iii) According to the Companys policy for payment of compensation,reasonable compensation shall be paid based on job evaluation of the

personnel in the Company.

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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) withtheir attendance shown as follows:

Title NameAttendance in

personBy proxy

Attendance rate

in person (%)Remarks

Chairman Terry Gou 2 2 40 -

Director

Representative of HonChiao InternationalInvestment Co., Ltd.: Tai,Jeng-wu

3 2 60 -

Director

Representative of Hon

Chiao InternationalInvestment Co., Ltd.: Lu,Sung-ching

2 0 40 -

DirectorRepresentative of Hon JinInternational InvestmentCo., Ltd.: Lu, Fang-ming

5 0 100 -

DirectorRepresentative of Hon JinInternational InvestmentCo., Ltd.: Chien, Yi-bin

0 1 0 -

IndependentDirector

Wu, Yu-Chi 5 0 100 -

Independent

Director Liu, Cheng-Yu 5 0 100 -

Other noteworthy matters:1. Matters specified in Article 14.3 of Taiwans Securities and Exchange Act or Board resolutions where otherIndependent Directors have expressed opposition or qualified opinions that have been noted in the record ordeclared in writing: None2. Avoidance of Conflict of Interest by directors. None3. Assessment of objectives (such setting of an audit committee and improvement of information transparencyetc.) and implementation status in the area of strengthening the powers of the board of directors for current andimmediately past years: None.

(2)Operation status of Audit Committee:The Company does not have an audit committee.

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(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) withthe attendance of supervisors shown as follows:

Title Name Attendance inperson

By proxy (%) Remarks

SupervisorRepresentative of Fu-RuiInternational InvestmentCo., Ltd.: Wan, Jui-hsia

5 100 -

Supervisor Huang, Qing-Yuan 4 80 -

Other noteworthy matters:1. Organization and responsibilities of supervisors

(a) Communication of between supervisors with and the Companys employees and shareholders:Supervisors regard direct connection and dialogue with the Companys 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 bythe audit director of audit items to supervisors in the next following month after the audit iscompleted.(2) Audit director shall attend the regular meeting of the Board of Directors and make preparethe audit service report to which supervisors do not have any no objection.(3) Supervisors carry out face-to-face regular quarterly communication and communication inwritten 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 recorddate and session of the board meeting, content of the resolution, resolution of the meeting and theresponse of the Company regarding the supervisors opinion: None.

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(4)Corporate governance implementation and the difference from the Corporate Governance Best Practice Principles forTWSE/GTSM-Listed Companies and reasons

Item Operation

Difference fromcorporate governancepr ac ti ce pr inc ip le s fo rTWSE/GTSM-Listedcompanies and reasons

1. Equity structure and shareholder rights(1) How the Company handles shareholder suggestions of shareholdersand disputes.(2) Companys control of the list of its major shareholders and finaldecision-makers(3) How the Company establishes its risk management mechanism and

firewalls involving related enterprises.

1. An investor relation office was set up to deal with shareholdersuggestions and disputes.2. The Company can control the list of its major shareholders and finaldecision-makers, and disclose them legally.3. The Company, according to such relevant internal methods as operatingmethods for operating, service and financial operations with specific

companies and group enterprises, supervision methods for subsidiaries,endorsement guarantee method, capital loan and other methods and assetsto get or deal with assets, has established proper risk management andcontrol mechanism and firewalls. Those who have business contact withany materially related enterprise shall be deemed as independent thirdperson so as to avoid non-conventional transactions.

In conformity with thecorporate governance practiceprinciples

2. Organization and responsibilities of the Board of Directors(1) Establishment of Independent Directors(2) Regular assessment on independence of CPA

1. Two Independent Directors were selected at the General ShareholderMeeting in 2010.2. Carry out regular assessment on independence of CPA.


III. Establishment of communication channels with materially relatedparties

Direct communication and dialogue with stakeholders shall be done whensupervisors regard it necessary.


4. Disclosure of information(1) Establishment of a Website where information on financialoperations and corporate governance is disclosed.(2) Use of other methods for information disclosure (such as setting anEnglish website, appointing personnel in charge of collecting anddisclosing information, implementing spokesman system andpublication of shareholder meeting records on the Companys website).

1. The Company has established a website where relevant information onfinancial operations and business is disclosed, or the Companys relevantinformation on financial operations, business and corporate governance canbe inquired through an open information observation station.2. The Company has appointed special person in charge of informationdisclosure of the open information observation station of exchange throughobservation station and information release on website of company.3. The Company has set up positions for spokesperson and deputyspokesperson.


5.Operation of Functional Commissions such as the Nomination, orCompensation Committees established by the Company

The Company has set up the Compensation Committee according to theregulations.

At present, the Companydoesnt set up such functionalcommissions as NominationCommittee and AuditCommittee.

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Item Operation

Difference fromcorporate governancepr ac ti ce pr inc ip le s fo rTWSE/GTSM-Listedcompanies 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, pleasestate 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 syste ms are made according to the spirit andstandards in Corporate Governance Best Practice Principles for TWSE/GTSM-Listed Companies.

7. Other important information for better understanding the Companys 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 groupactivities and supply of entertainment facilities, subsidy for health diagnosis and medical consulting, supply of employee dormitory, care for lodging life of employees and parking lotetc.(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 Companys 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 Companys 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 (orrecommendations) and improvement: NA.

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(5)Organization, responsibilities and operation status of the Compensation Committee:(a)Information on members of the Compensation Committee

ID(Note 1)

Conditions

Name

Has over 5 years of work experience andfollowing professional qualifications. Independence Attribute (Note 2)

Currentpositions atothercompanies

Remarks(Note 3)

Business,LegalAffairs,Finance,Accounting,Lecturer orabove inColleges in

Relateddepartments

Judge,Prosecutor ,Attorney,CPA orNa t io na lCert if iedProfessionals

Business,LegalAffairs,Finance,Accounting orRelatedWork

Experience

1 2 3 4 5 6 7 8

IndependentDirector

Wu, Yu-Chi 0

IndependentDirector

Liu, Cheng-Yu 0

Director Lu, Fang-ming 0 Yes

Note 1: For ID column, please fill in director, Independent Director or others.Note 2: If the member complies with the following conditions from 2 years before being elected and during his tenure in office, please mark in the correspondingspace.

(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 sharevolume 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 precedingthree 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 orranks 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 orbusiness 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, orinstitution 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 theCompensation Committee of a Company Whose Stock is listed on the Stock Exchange or Traded over the Counter.

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(b)Operation status of the Compensation Committee(1)There are 3 members in the Companys 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 andattendance of the Committee are shown as follows:

Title NameAttendance inperson (B)

By proxyAttendance rate inperson (%) (B/A)

(Note)Remarks

Convener Wu, Yu-Chi 2 0 100 -

Member Liu, Cheng-Yu 2 0 100 -

Member Lu, Fang-ming 2 0 100 -

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 ofthe meeting and the response of the Company regarding the Compensation Committees opinion (if thecompensation approved by the Board of Directors is superior to the proposal of the Compensationcommittee, the difference and causes shall be stated clearly).2. If members have opposition or qualified opinions to the resolution of the Compensation Committee thathave been noted in the record or declared in writing, meeting minutes shall record date and session of themeeting, content of resolution, proposals of all members and the response.

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(6)Performance of Social Responsibilities

Items Implementation Status

Difference from the

Corporate Social

Responsibil ity Best

Practice Principles for

TWSE/GTSM-ListedCompaniesand

reasons

1. Exercise and enhance corporategovernance(1) The Company works out its corporatesocial responsibility policy and checks theresults of the implementation.(2) The Company sets up exclusively (orconcurrently) dedicated units to be incharge of proposing and enforcing thecorporate social responsibility policies.(3) The Company organizes regular

education and training on business ethnicsand advocating principles for directors,supervisors and employees, and shouldincorporate the foregoing into itsemployee performance assessment systemto establish a clear and effective rewardand punishment system.

1. At present, the Company has worked out itscorporate social responsibility policy, covering ethnics,laborers, safety, health, environment and management,and established Foxconn Global SER Committee(FGSC) to drive and supervise the execution ofrelevant CSR operations.2. In 2007, The Company set up FGSC organization,which is composed of 7 full-time personnel in chargeof driving and supervising relevant work, including theimplementation of internal audit, performance

assessment, CSR education and training, and thepublication of CSR annual report. In addition, there areover 60 part-time personnel in each business group andsurrounding units in charge of executing CSR relatedwork.3. The Company carries out regular trainings and

propaganda on corporate business ethnics for itsemployees every year. For its new employees,trainings on personnel rules, management system,

business ethnics and morals are carried out on theirfirst working day to clarify their due responsibilitiesand obligations.

Conformity

2. Environment for sustainabledevelopment(1) The Company endeavors to utilize allresources more efficiently and usesrenewable materials which have a lowimpact on the environment.(2) Based on its industrial features, theCompany establishes proper environmentmanagement systems.(3) The Company establishes dedicatedunits or assigns dedicated personnel forenvironment management to maintain theenvironment.(4) The Company monitors the impact ofclimate change on its operations, andshould establish company strategies tosave energy and reduce the emission ofcarbon and greenhouse gas.

1. The Company actively advocates water recycling,and adopts some renewable/biodegradable rawmaterials to effectively reduce the impact of

production and manufacturing on the environment.2. In response to the international trend and customerrequirements, the Company gradually establishedenvironment management systems for its businessunits, and passed the certification of ISO 14001.3. In 2008, environmental protection office wasestablished to be in charge of planning, design,management and operation maintenance ofenvironmental protection facilities, which wereinstalled in all working areas. Moreover, the Companyobtained the discharge license issued by thegovernment, and assigned dedicated personnel to be incharge of equipment operation in accordance with lawsand regulations.4. From 2008, the Company started the examination ofthe emission of carbon dioxide, and some workingareas obtained certificates after passing thecertification. At the same time, the examination reportwas submitted to relevant UN agencies with a view toactively participating in important international topics.The Company also started to promote energymanagement by means of working out the objectives

of energy conservation and emission reduction andendeavoring to the achieve them.

Conformity

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Difference from the

Corporate Social



TWSE/GTSM-Listed

Companiesand

reasons3. Protect social public interests(1) According to the relevant labor lawsand internationally acknowledged humanrights of laborers, the Companyestablishes proper management methods,

procedures and non-discriminationemployment policy to ensure the legalrights and interests of employees.(2) The Company provides safe andhealthy working environment for itsemployees and organizes training onsafety and health on a regular basis.

(3) The Company establishes regularcommunication mechanism foremployees, and informs employees of theoperation changes that may havesignificant impact on employees in areasonable way.(4) The Company works out and disclosesits policies on consumer rights andinterests and establishes transparent andeffective procedures for acceptingconsumer complaints in its products andservice.(5) The Company cooperates with its

suppliers to jointly foster a stronger senseof corporate social responsibilities.(6) Through commercial activities, non-cash property endowments, voluntaryservice or other free professional services,the company participates in communitydevelopment and charities events.

1. The Company abides by the labor law of the region(or the country) where its working plants are located

by transferring relevant contents into its labormanagement policy. The Company has establishedcorresponding procedures and special lines for labormanagement to ensure the legal interests and rights ofits employees.2. The Company provides safe and healthy workingenvironment for its employees and focus on employeehealth care, a health management center to provideemployee health and health-related advice andassistance, and regular health and safety at work

seminars.3. The Company regularly holds variouscommunication meetings with employees to conveythe Companys policies and information.4. The Company follows the regulations on limiteduse/prohibited use of hazardous substance and conflictminerals in an all-round way and provides relevantinformation to customers.5. The Company has thousands of suppliers in differentregions, but we learn from each other for common

progress in the aspects of society and environment likehazardous substance control, environmental protection,labor safety and health, human rights, conflict metal

and carbon footprint. At the same time, our suppliersare required to practice their corporate socialresponsibilities.6. As the Company actively participates in socialactivities for public interests and charitable activities,donations are provided for affected people in the Floodof August 8th (in Taiwan), Sichuan Earthquake, JapanEarthquake as well as Floral Expo Charitable GardenParty.

Conformity

4. Enhance information disclosure(1) The ways for the company to disclose

1. A special column for corporate responsibilities isestablished on the Companys website.

Conformity

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Difference from the

Corporate Social



TWSE/GTSM-Listed

Companiesand

reasonsrelevant critical and reliable informationon corporate social responsibilities.(2) The Company compiles with thereport on corporate social responsibilitiesto disclose the performance of corporatesocial responsibilities.

2. As a EICC member, the Company is dedicated topromoting social and environmental responsibilities(hereinafter referred to as SER), and worked outFoxconn Global Codes of Conducts: Social and

Environmental Responsibilities.

5. If the Company makes its own corporate social responsibilities according to the rule of Corporate Social ResponsibilityBest 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. Forits new employees, trainings on personnel rules, management system, business ethnics and morals are carried out on theirfirst working day to clarify their due rights and obligations. However, the Company hasnt prepared its own Corporate

Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies, which will be worked out in the futureaccording to the specific regulations.

6. Other important information for better understanding of corporate social responsibilities (such as systems and measuresthat 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 othercorporate 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 putinto 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 organicdisplay 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 educationand 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 itssuppliers every year.

7. Clear statement shall be made if the products or corporate social responsibility report of the Company pass theinspection of relevant certification agencies:The Company hasnt 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.

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(7)Status of Implementation of Integrity ManagementImplementation of Integrity Operation

Items Implementation

Difference from the Integrity

Operation Practice Pri nciples for

TWSE/GTSM-L isted Companies

and reasons

1. Adopt integrity operation policy andscheme(1) The company clarifies the integrityoperation policy in its regulations andexternal documents and the commitment of

board of directors and managers to activeimplementation.(2) The company works out scheme,operation procedures and guidelines ofconducts for employee education and

training to prevent dishonest behaviors(3) When working out a scheme to preventdishonest behaviors, the company adoptsmeasures to prevent bribery and illegal

political contributions in business activitieswith high risks of dishonest behaviors.

The Company sticks to the corporateculture with integrity operation as thecore and works out codes of conduct(CoC) for stakeholders to performrelevant social and environmentalresponsibilities, includingLetter ofCommitment of Manufacturerssignedwith suppliers, clearly stating thatsuppliers should ensure transparent andfair commercial trading activities. In

addition, the Company has madecommitment to customers andshareholders in its CoC.The Company carries out education andtraining for all employees on CoC everyyear regularly. For its new employees,trainings on personnel regulations,management system, business ethnicsand morals are provided to clearly statetheir due rights and obligations.The Company, strictly sticking to

business ethnics from its top level todown level, establishes integrity

corporate culture and creates anoperation environment for sustainabledevelopment based on transparent,incorruptible and responsible operationconcepts.

Conformity

2. Put integrity operation into practice(1) The company should keep itscommercial activities away from peoplewith records of dishonest behaviors, andarticles on honest behaviors shall beexplicitly stated in commercial contracts.(2) The company sets up company sets upexclusively (or concurrently) dedicated

units to be in charge of corporate integrityoperation and supervision of the board ofdirectors.(3) The company works out policies to

prevent interest conflicts and provideproper statement channels.(4) The company shall establish effectiveaccounting system, internal control systemand auditing of internal auditors to putintegrity operation into practice.

The Company adheres to integrityculture and operation, commits toabiding by requirements of internationaland domestic laws and regulations onanti-corruption and anti-bribery, takeszero-tolerance policy for any behavior oractivity against the regulations, andstrictly prohibits any corruption, bribery,

embezzlement and other illegal earningactivities. All employees shall receiveanti-corruption trainings for at least 2hours every year. In addition, theCompany asks its downstream suppliers,manufacturers and customers to strictlyimplement high-standard anti-corruption

policies as the premise for cooperation.After approved by the chairman of theGlobal SER Committee and the generalmanagers of the business group, thecodes of conducts on corporate socialand environmental responsibilities have

become the basic principles andstandards of the Company to deal with

Conformity

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and reasons

relationship with all stakeholders(employees, customers, shareholders,

suppliers, public community, investorsand non-governmental organizations).The whole management team of theCompany must strictly abide by the

principles of conducts and the statedspirit and guiding principle. Under thesupervision of board of directors,directors of each business group mustensure their commercial operations inconformity with the regulations of CoC.The Company demands all newemployees to sign theAgreement on

Integrity, Incorruption and

Confidentiality of Intellectual PropertyRightsand asks other employees toabide by it. At the same time, theCompany also requires that its suppliersor other cooperators should sign the

Letter of Commitment of Manufacturersto ensure transparent and faircommercial trading activities. TheCompany holds annual suppliermeetings and carries out irregular SERaudit, conveying its requirements forsuppliers.The Company establishes accounting

and internal control systems to putintegrity operation into practice. Afterits internal auditors work out and reviewthe annual audit program according tothe risk evaluation results, the Companywill compile them into audit report andsubmit it to the board of directors.

3. The company establishes reportingchannels and punishments for violationagainst the regulations of integrityoperation as well as the appeal system.

The Company establishes variousreporting channels so that employeesand relevant people can report theimproper business behaviors through thesystem. Anyone who violates theregulations on integrity operation will be

punished according to the Companysregulations on reward and punishment.In case of any illegal affairs, legalactions will be taken as well.

Conformity

4. Enhance information disclosure(1) The company establishes a website todisclose relevant information on integrityoperation.(2) Other information disclosure methodsof the company (such as setting up anEnglish website, appointing a dedicated

person in charge of collecting anddisclosing company information throughthe website etc.).

On the Companys official website bothin Chinese and English(http://www.foxconn.com), there arerelevant information on integrityoperation such as annual report oncorporate social and environmentalresponsibilities and CoC.

Conformity
http://www.foxconn.com/http://www.foxconn.com/http://www.foxconn.com/http://www.foxconn.com/

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and reasons

5. If the company makes its own integrity operation according to theIntegrity Operation Best Practice Principles forTWSE/GTSM-Listed Companies, please state the differences.

The Company has its own regulations on integrity and incorruption, which shall be respected by all employees, managersand board of directors.

6. Other important information for better understanding of the integrity operation (such as the companys determination onadvocating the integrity operation and policy among manufacturers who have business dealings with the company, invitingthem to participate in relevant trainings and review and revise the regulations on integrity operation).

Please refer to the Companys official website:http://www.foxconn.com/CSR_REPORT.html (Annual Report onCorporate Social and Environmental Responsibilities).

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

(9)Other Important Corporate Governance Information:None
http://www.foxconn.com/CSR_REPORT.htmlhttp://www.foxconn.com/CSR_REPORT.htmlhttp://www.foxconn.com/CSR_REPORT.html

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(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, wehereby states as follows:

(1) The Companys board of directors and management team understand their responsibilities ofdeveloping, implementing and maintaining the Companys 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 businessoperation (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 relevantlaws/regulations and company policies;

(2) Due to the innate limitation in designing a faultless internal control system, this system canonly assure the reasonableness of the above three objectives have been fairly achieved. Inaddition, the effectiveness of internal control system could alter over time due to the change of

business environment or situation. Since the Companys internal control system has includedself-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 ismade 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 fivefactors 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 Companys internal control system (includingsubsidiary governance) dated December 31, 2012has effectively assured that the followingobjectives have been reasonably achieved during the assessing period: (a) The degree thateffectiveness and efficiency of business operation; (b) The reliability of the financial and relatedreports; (c) The compliance of the relevant laws/regulations and company policies

(6) This Statement is a significant part of the Companys annual report and prospectus availableto the general public. If it contains false

2012 annual rpt e

Documents