Index. A. Rules and Procedures of the Shareholders Meeting... 1 B. Procedures of the Meeting... 4 C. Meeting Agenda... 5

Transcription

1 DISCLAIMER THIS IS A TRANSLATION OF THE AGENDA FOR THE 2016 ANNUAL SHAREHOLDERS MEETING (THE AGENDA ) OF WISTRON NEWEB CORPORATION ( WNC ) AND IS INTENDED SOLELY FOR REFERENCE. WNC HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE AGENDA SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

2 Index A. Rules and Procedures of the Shareholders Meeting... 1 B. Procedures of the Meeting... 4 C. Meeting Agenda... 5 I. Discussion Items (1)... 6 II. Report Items... 8 III. Ratification and Discussion Items (2)... 9 IV. Other Matters D. Appendix Articles of Incorporation Business Report Audit Committee s Review Report Earnings Appropriation Statement for Year The Impact of Stock Dividend Issuance on WNC s Business Performance, Earnings per Share, and Return on Shareholder Investment Shareholdings of Directors... 35

3 A. Rules and Procedures of the Shareholders Meeting 1. The Shareholders Meeting (the Meeting ) of Wistron NeWeb Corporation ( WNC ) shall be conducted in accordance with these rules and procedures. 2. WNC shall specify the sign-in start time, location, and other notices of the Meeting on the meeting notice. The sign-in start time described in the preceding item cannot be less than 30 minutes before the start time of the Meeting. A clear sign indicating the sign-in location must be set, and there shall be sufficient staff for the process. Shareholders attending the Meeting shall sign-in. The sign-in procedure is performed by submitting the attendance card. The number of shares represented by the attending shareholders shall be calculated in accordance with the attendance card submitted by the shareholders. The shares of shareholders exercising voting rights in written form or by means of electronic transmission shall also be included. Shareholders or their proxies (collectively referred to as shareholders ) shall attend the Shareholders Meeting on the basis of the attendance card. Solicitors soliciting proxy forms shall also bring identification documents for verification. 3. The attendance and voting shall be calculated in accordance with the shares. 4. The Meeting shall be held at the domicile of WNC or at any other appropriate place that is convenient for the shareholders to attend. The starting time of the Meeting shall not be earlier than 9:00 A.M. or later than 3:00 P.M. 5. The Meeting shall be convened by the Board of Directors (the BOD ), and the Chairman of the BOD shall be the Chairman presiding at the Meeting. If the Chairman of the BOD cannot preside over the Meeting for any reason, the Vice Chairman of the BOD shall preside over the Meeting. If WNC does not have a Vice Chairman of the BOD or the Vice Chairman of the BOD cannot fulfill his or her duty for any reason, the Chairman of the BOD shall appoint a deputy. If the Chairman of the BOD does not appoint a deputy, the Directors shall elect one Director as the deputy. The Director serving as the deputy must have served as a WNC Director for more than 6 months and have full understanding of WNC s financial and operations status. This rule is also applicable to a representative of an institutional shareholder serving as the deputy. If the Meeting is convened by any other person entitled to convene the Meeting, such person shall serve as the Chairman to preside over the Meeting. 6. WNC may appoint designated counsel, a CPA, or other related persons to attend the Meeting. 7. The proceedings of the shareholders sign-in process, the Meeting, voting, and the ballot recording process shall be recorded continuously with audio and visual equipment, and these records shall be preserved for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation. 8. The Chairman shall call the Meeting to order at the time scheduled for the Meeting. If the number of shares represented by the shareholders present at the meeting has not yet constituted a quorum (more than half of the total outstanding shares) at the time scheduled for the Meeting, the Chairman may postpone the Meeting. The postponements shall be limited to two times at the most, and the Meeting shall not be postponed for longer than one hour in total on the day of the scheduled meeting. If a quorum can still not be constituted but the shareholders present at the Meeting represent more than one-third of the total outstanding shares, a tentative resolution may be made -1-

4 in accordance with Paragraph 1 of Article 175 of the Company Act. If the quorum is constituted during the process of the Meeting, the Chairman may submit the aforesaid tentative resolution to the Meeting for approval in accordance with Article 174 of the Company Act. 9. If the Meeting is convened by the BOD, the agenda of the Meeting shall be set by the BOD. Unless otherwise resolved at the Meeting, the Meeting shall proceed in accordance with the agenda. During the Meeting, the Chairman may, at his or her discretion, set a time for intermission. Unless otherwise resolved at the Meeting, the Chairman cannot announce adjournment of the Meeting before the Meeting is finished. If the Chairman announces the adjournment in violation of these Rules and Procedures, the shareholders may, by more than half of the votes represented by the shareholders present at the Meeting, designate one person as the Chairman to continue the Meeting. 10. When a shareholder present at the Meeting wishes to speak, a Speech Note should be filled out with a summary of the speech, the shareholder s number, and the name of the shareholder. The sequence of speeches shall be decided by the Chairman. If a shareholder present at the Meeting submits a Speech Note but does not speak, no speech shall be deemed to have been made by the shareholder. If the contents of the speech of a shareholder are inconsistent with the contents of the Speech Note, the contents of the actual speech shall prevail. Unless otherwise permitted by the Chairman and the speaking shareholder, no shareholder shall interrupt the speeches of other shareholders. The Chairman shall stop such interruption. 11. Unless otherwise permitted by the Chairman, each shareholder shall not, for each discussion item, speak more than two times and shall not exceed 5 minutes each time. If the speech of any shareholder violates this provision or exceeds the scope of the discussion item, the Chairman may stop the speech of such shareholder. 12. Any legal entity designated as a proxy by shareholder(s) to be present at the Meeting may appoint only one representative to attend the Meeting. If two or more representatives are designated to attend the Meeting, only one representative may speak for each discussion item. 13. After the speech of a shareholder, the Chairman may respond himself/herself or appoint an appropriate person to respond. 14. The Chairman may, if it is deemed appropriate, announce an end to the discussion of any resolution and proceed to a vote. 15. The person(s) checking and the person(s) recording the ballots during a vote shall be appointed by the Chairman. The person(s) checking the ballots shall be a shareholder. Voting and ballot counting shall be conducted in public at the place of the shareholders meeting. Voting results, including the number of share votes received, shall be reported on-site immediately and recorded in writing. The voting results for election of Directors or Independent Directors at a shareholders meeting, including the elected person(s) and the number of share votes received, shall be announced on-site immediately. 16. Except as otherwise specified in the Company Act or the Articles of Incorporation of WNC, a resolution shall be adopted by more than half of the votes represented by the shareholders present at the Meeting. 17. If there is an amendment to or a substitute for a discussion item, the Chairman shall decide the sequence of voting for the discussion item and the amendment or substitute. If any one of the amendments, items, or substitutes has been adopted, the others shall be deemed vetoed, and no further voting will be necessary. For shareholders exercising voting rights in written form or by means of electronic transmission, their rights for -2-

5 Other Matters and amendments to the original discussion items will be regarded as waived. 18. The Chairman may direct a sergeant-at-arms (or security guards) to assist in preserving order in the Meeting place. Such disciplinary officers (or security guards) shall wear badges marked sergeant-at-arms when assisting in maintaining order. 19. In case of a force majeure, the Chairman may decide to temporarily suspend the Meeting and announce, depending on the situation, when the Meeting will be resumed or may, by resolution of the shareholders present at the Meeting, resume the Meeting within five days without further notice or public announcement. 20. Any matter not provided for in these Rules and Procedures shall be handled in accordance with the Company Act and the Articles of Incorporation of WNC. 21. These Rules and Procedures shall be effective from the date they are approved at the shareholders meeting. The same applies in case of revision. The first version was approved on July 27, The first amendment was approved on August 26, The second amendment was approved on June 12, The third amendment was approved on June 11,

6 B. Procedures of the Meeting 1. Declaration of the Commencement of the Meeting 2. Opening Remarks by the Chairman 3. Discussion Items (1) 4. Report Items 5. Ratification and Discussion Items (2) Each item for discussion and/or ratification will be voted on by poll after discussions on all items are completed. 6. Other Matters 7. Adjournment -4-

7 C. Meeting Agenda Time: Thursday, June 16, 2016 at 9:00 A.M. Location: 2 Prosperity Road I, Hsinchu Science Park, Hsinchu (Meeting Room 203 of the Allied Association for Science Park Industries) I. Discussion Items (1) 1. Discussion on the amendments to the Articles of Incorporation II. Report Items 1. Business Report for Year Audit Committee s Review Report 3. Report on the 2015 distribution results of remunerations to employees and directors 4. Report on the results of the issuance of corporate bonds III. Ratification and Discussion Items (2) 1. Ratification of the 2015 Business Report and Financial Statements 2. Ratification of the proposal for distribution of 2015 profits 3. Discussion on the capitalization of earnings through the issuance of new shares 4. The proposal and discussion of the issuance of restricted stock awards to key employees IV. Other Matters V. Adjournment -5-

8 I. Discussion Items (1) ITEM 1 Proposal: Details: Submitting (by the BOD) a resolution to amend certain parts of the Articles of Incorporation 1. In response to regulatory and operational needs, it is proposed to amend certain parts of WNC s Articles of Incorporation. The following is a comparison between the pre-amendment and the amended versions. 2. Please discuss. Comparison between the original Articles of Incorporation and its Amended Version Items Original Version Amended Version Reasons Article 18 If WNC shows a year-end profit, 10% of the profit net of tax and the amount to make up any accumulated losses shall be set aside as a legal reserve, and thereafter an amount shall be set aside or reversed as a special reserve (hereinafter referred to as Current Year Earnings ) in accordance with the Securities and Exchange Act. The Current Year Earnings together with the balance of the unappropriated retained earnings of the previous year, if any, will be distributed in accordance with the following: If WNC shows an year-end annual profit (the profit herein indicates the pretax profit without deducting the remuneration to employees and directors), 10% of the profit net of tax and the amount to make up any accumulated losses shall be set aside as a legal reserve, and thereafter an amount shall be set aside or reversed as a special reserve (hereinafter referred to as Current Year Earnings ) in accordance with the Securities and Exchange Act. The Current Year Earnings together with the balance of the unappropriated retained earnings of the previous year, if any, To comply with amendments to the Company Act and with practical needs 1. No less than 5% of the Current Year Earnings as employees bonuses; where such bonuses are distributed by shares, employees of controlled companies, with qualifications set by the Board of the profit will be distributed appropriated in accordance with the following. However, the amount to make up any accumulated losses shall be set aside: Directors, can be included; 1. No less than 5% of the Current Year Earnings 2. One percent (1%) of the Current Year Earnings as remuneration in cash to directors; as employee bonuses remuneration; where such bonuses remuneration is distributed by shares or as cash; employees of controlled 3. The rest as working capital for WNC and no less than 10% of the Current companies, with qualifications set by the Board of Directors, can be included; Year Earnings as dividends to shareholders. 2. No more than one percent (1%) of the Current Year Earnings as remuneration in cash to directors. 3. The rest as working capital for WNC and no less than 10% of the Current Year Earnings as Article 18-1 (Newly added) dividends to shareholders. If WNC shows a year-end after-tax profit, it shall firstly make up any accumulated losses. Thereafter a 10% appropriation of the remaining amount shall be set aside towards the legal reserve, unless the amount in the legal reserve is already equal to or greater than the total paid-in capital. Thereafter an amount shall be set aside or reversed as a special reserve in accordance with related laws, regulations, or provisions of the competent authorities. Distribution of the remaining profit after setting aside the abovementioned amounts, together with the balance of the unappropriated retained earnings of the previous year, shall be proposed, -6- To comply with amendments to the Company Act and with practical needs

9 Items Original Version Amended Version Reasons with no less than 10% as dividends to shareholders, by the Board of Directors and ratified at the shareholders meeting. Article 21 The twenty-second amendment was approved on June 10, The twenty-second amendment was approved on June 10, The twenty-third amendment was approved on June 16, Adjustments to and addition of corresponding amendment dates Resolution: -7-

10 II. Report Items 1. Business Report for Year 2015 (Please refer to Appendix 2.) 2. Audit Committee s Review Report (Please refer to Appendix 3.) 3. Report on the 2015 distribution results of remunerations to employees and directors Details: (1) In accordance with Article 18 of the amended Articles of Incorporation that WNC proposes to amend at the General Shareholders Meeting in 2016, WNC shall deduct the remuneration to employees and directors from its pretax annual profit. After setting aside the amount to make up any accumulated losses, the remaining profit, if any, shall be distributed at no less than 5% to employees as remuneration and at no more than 1% to directors as remuneration. (2) In accordance with the amended Articles of Incorporation, the proposed 2015 distribution of remuneration for employees and directors is as follows, in the form of cash: a. Remuneration for employees: NT$268,971,489 b. Remuneration for directors: NT$19,212,250 (3) There is no difference between the BOD s proposed amount of remuneration to be distributed to employees and directors and the amount listed in the 2015 financial statements. 4. Report on the results of the issuance of corporate bonds WNC commenced its second issuance of domestic unsecured convertible corporate bonds, the details of which are included below: Second domestic unsecured convertible corporate bonds Date of BOD resolution November 11, 2015 Date of issuance January 5, 2016 Purpose of issuance Nominal value and quantity Amount of issuance To secure financial support for WNC s operations The nominal value of each bond is NT$100,000 and the quantity offered is 15,000. Each bond is issued in accordance with its nominal value, and the amount of issuance is NT$1.5 billion. Interest rate The nominal interest rate is 0%. Conditions Conversion of bonds The bond has a three-year maturity and can be converted to WNC s common shares from the next day passing the one month mark of the bond s issuance until its expiration date. No conversions have been exercised as of the end of the book closure date. -8-

11 III. Ratification and Discussion Items (2) ITEM 1 Proposal: Details: Submitting (by the BOD) WNC s 2015 business report and financial statements for ratification. 1. Submitting for ratification WNC s business report and financial statements for Year 2015 (including Balance Sheets, the Statements of Comprehensive Income, the Statements of Changes in Equity, and the Statements of Cash Flows), which have all been adopted by the BOD by a resolution and examined by the Audit Committee. (Please refer to Appendix 2.) 2. Submit for ratification. ITEM 2 Proposal: Details: Submitting (by the BOD) the proposal for distribution of 2015 profits for ratification. 1. WNC s profit after taxes for Year 2015 is NT$1,972,507,908. After deducting the legal reserve of NT$197,250,791; adding the previous year s unappropriated retained earnings of NT$3,059,183,613; and deducting changes in the remeasurements of the defined benefit plans of NT$58,205,410 for the period; the total amount eligible for appropriation is NT$4,776,235,320. The dividends and bonus proposed to be allocated to shareholders amount to NT$1,340,898,522 comprising stock dividends of NT$100,567,380 and cash dividends of NT$1,240,331,142. Calculating on the basis of WNC s issued common stock of 335,224,633 shares, the stock dividend bonus is NT$0.3 per share allocated according to face value, and cash dividends are NT$3.7 per share. 2. After the adoption of the resolution at the shareholders meeting, the power with respect to setting of the record date and other relevant matters is reserved for the BOD. 3. With respect to the dividends and bonus to shareholders as earnings, the calculation of the proportion of the shareholder s deductible tax amount shall be made separately. 4. In the event that, before the record date, the proposed earnings distribution plan is affected due to revisions to relevant laws or regulations, upon the request of the competent authority, or a change to WNC s common shares (such as repurchasing of WNC s stock shares for transfer or cancellation, capital increase by cash, transferring convertible bonds to common stocks, or restricted stock shares withdraw or cancellation) which results in a change to the shareholder s allotment of shares or the dividend-payout ratio, the BOD is authorized to make necessary adjustments at its full discretion. 5. Please refer to Appendix 4 for the Earnings Appropriation Statement for Year Submit for ratification. -9-

12 ITEM 3 Proposal: Details: Submitting (by the BOD) a resolution to increase capital by capitalization of earnings through the issuance of new shares. 1. For future business development, WNC is proposing to appropriate the shareholders dividends and bonus of NT$100,567,380 from the 2015 earnings to increase capital by issuing 10,056,738 shares. 2. Upon the approval for the aforementioned proposal from the competent authority, each shareholder will be entitled to receive thirty surplus earning shares per 1,000 shares (tentative calculation) held by such shareholders based on the name and the shares registered in the shareholders roster on the record date. Shareholders are advised to consolidate the fractional share of less than one share to make up one share by their own means for registration within five days as of the record date; otherwise the fractional shares shall be paid in cash (rounding down to the nearest New Taiwan Dollar) by the par value and purchased by persons designated by the Chairman of the BOD. 3. The new issue of shares from the capital increase carries identical obligations and rights as the original shares. 4. After the adoption at the shareholders meeting, the BOD is authorized to carry out matters relating to the setting of the record date for new shares from the capital increase. 5. In the event that, before the record date, the capitalization proposal is affected due to revisions to relevant laws or regulations or upon the request of the competent authority or changes to WNC s common shares (such as repurchasing of WNC s stock shares for transfer or cancellation, capital increase by cash, transfer of convertible bonds to common stocks, or cancellation of Restricted Stock Awards), which results in changes in the shareholders allotment of shares, the BOD is authorized to make necessary adjustments at its full discretion. 6. Please discuss. -10-

13 ITEM 4 Proposal: Details: Submitting (by the BOD) a resolution to issue Restricted Stock Awards to key employees. 1. To award outstanding employees and retain key employees, issuance of Restricted Stock Awards pursuant to Article 267 of the Company Act and the Regulations Governing the Offering and Issuance of Securities by Securities Issuers released by the Financial Supervisory Commission is proposed. 2. The issuance of Restricted Stock Awards may be reported in installments to the competent authority for registration within one year of the resolution of the Annual Shareholders Meeting. In accordance with practical needs, the Chairman of the Board shall set up the actual Issue Date(s) in one tranche or in installments within one year following the date of receipt of effective registration from the competent authority. 3. The following matters are included for the issuance of Restricted Stock Awards: 1) Issue amount: Not exceeding 2.5% of the outstanding shares of WNC, with 7,500,000 shares tentatively allotted. 2) The conditions of issuance: a) Issue price: Granted to employees for free. b) Vesting conditions: Qualified with both time-based and performance-based requirements set by the issuance rules of the Restricted Stock Awards. c) Type of shares: WNC s common shares. d) Measures to be taken when employees fail to meet the vesting conditions or in the event of bequeathal: Their shares shall be forfeited and written off. 3) Qualifications for employees and the shares granted: a) Limited to full-time employees who are exhibiting outstanding performance by the Issue Date. b) The actual qualified employees and the amount of shares granted shall be determined by seniority, position, performance, contribution and any other factors with consideration given to WNC s operational needs and business development strategy pursuant to the issuance rules of the Restricted Stock Awards set by WNC within the extent permitted by law. 4) The reasons necessitating the issuance of Restricted Stock Awards: To attract and retain talent, enhance employees cohesion and sense of belonging to WNC, and foster the best interests of WNC and its shareholders. 5) The estimated expense amount, dilution of WNC s earnings per share (EPS) and other impacts on stockholder s equity: a) The estimated expense amount -11-

14 Based on the closing price of WNC common stock on March 7, 2016 of NT$83.1, the yearly amortization of the expense amount for 2016, 2017, 2018, and 2019 shall be NT$69,250,000; NT$207,750,000; NT$207,750,000; and NT$138,500,000 respectively. b) The dilution of WNC s earnings per share and any other impacts on shareholders equity Based on the aggregate of 335,224,633 outstanding shares of WNC, the dilution of WNC s earnings per share for 2016, 2017, 2018, and 2019 shall be NT$0.21, NT$0.62, NT$0.62, and NT$0.41 respectively. 6) Concluding from the preceding evaluation, there shall be limited effects on dilution of WNC s earnings per share in the future years and no major effect on the shareholders equity. 4. If some revision or adjustment must be made due to the competent authority s instruction, amendment to the laws and regulations, financial market conditions, or other objective circumstances, it is proposed at the Annual Shareholders Meeting the Board of Directors be authorized with full power and authority to handle all issues regarding the issuance of Restricted Stock Awards. 5. The Restricted Stock Awards issued may be held in a security trust account. 6. With respect to the issuance of Restricted Stock Awards, the relevant restrictions, important agreements, and any other matters not set forth here shall be dealt with in accordance with applicable laws and regulations and the issuance rules set by WNC. 7. Please discuss. Voting by the shareholders on the above items IV. Other Matters V. Adjournment -12-

15 D. Appendix Appendix 1 Wistron NeWeb Corporation 1. Articles of Incorporation Chapter I Article 1 Article 2 Article 3 Article 4 Article 5 Article 6 General Provisions This company is incorporated in accordance with the provisions under the Company Act pertaining to companies limited by shares in the name of Wistron NeWeb Corporation ( WNC ). The business items of WNC are set out as follows: 1. CC01060 Manufacture of wired communication equipment 2. CC01070 Manufacture of wireless communication equipment 3. CC01101 Manufacture of restricted radio frequency machinery, with permission only for radio transmitters 4. CC01080 Manufacture of electronic components and parts 5. F Import trading business of restricted radio frequency machinery, with permission only for radio transmitters 6. F Import/export trading and dealer businesses 7. F Manufacturing and shipment 8. F Manufacturing and shipment Research, development, manufacturing and sales of the following products: (1) Satellite communications product series (2) Mobile and portable communication product series Import/export trade service of the above-mentioned products If WNC becomes a limited liability shareholder of other companies, the total amount of its investments in such other companies is not subject to the restriction set forth in Article 13 of the Company Act requiring the amount not exceeding 40% of the amount of its own paid-up capital. The headquarters of WNC is located in the Hsinchu Science Park. Subject to the approval of the Board of Directors, WNC may set up branch offices at other appropriate locations. Public announcements of WNC shall be made in accordance with Article 28 of the Company Act. WNC may engage in external guarantees to meet business or investment needs. Chapter II Share Capital Article 7 The total capital amount of WNC is NT$5 billion, which is divided into 500 million shares with a par value of NT$10 each and will be issued in installments by the Board of Directors. An amount of -13-

16 Article 8 Article 9 Chapter III Article 10 Article 11 Article 12 NT$250 million from the above total capital amount divided into 25 million shares with a par value of NT$10 each are reserved for the issuance of employee stock options. The shares in WNC will be registered shares duly certified by three or more of the directors of WNC, numbered and issued in accordance with the law. WNC may adopt book-entry transfer of shares instead of issuance of share certificates; the same applies with issuance of other securities of WNC. Unless otherwise provided by laws or regulations, the conduct of the shareholder services of WNC shall comply with the Company Act and Regulations Governing the Administration of Shareholder Services of Public Companies. Shareholders Meeting The shareholders meetings of WNC are divided into ordinary shareholders meetings and extraordinary shareholders meetings. The ordinary shareholders meeting will be duly convened by the Board of Directors within six months following the close of each fiscal year. Extraordinary shareholders meetings may be convened when necessary in accordance with laws and regulations. A shareholder unable to personally attend the shareholders meeting for whatever cause may vote by proxy with a duly signed and executed appointment form issued by WNC specifying the authorized powers. Except for securities trust enterprises, when a person acts as a proxy for two or more shareholders, the represented shares which exceed 3% of the total voting rights of the outstanding shares of WNC are not entitled to vote. An appointment of a proxy is effective when a signed appointment form is received by WNC five days before the shareholders meeting. When two or more appointment forms are received by WNC, the first one received shall have effect. Except as otherwise provided by the relevant laws or regulations, shareholders may pass resolutions on a matter at a shareholders meeting if a quorum representing 50% or more of the outstanding shares of WNC. If a quorum exists, a resolution is approved if more than 50% of the votes represented at the meeting are in favor of the resolution. Chapter IV Directors and Audit Committee Article 13 WNC will have a Board of Directors ( BOD ) consisting of seven to nine directors, and the directors will be elected from the roster of director candidates via the candidate nomination system at the shareholders meeting. The BOD meeting will decide the number of directors. Each director will serve a term of three years and may be re-elected. In case no election of new directors is effected after expiration of the term of office of existing directors, the term of office of the outgoing directors shall be extended until such time that new -14-

17 directors have been elected and have assumed their office. WNC may purchase liability insurance for directors to protect them against potential liabilities arising from the exercise of their duties. The compensation or transportation allowance paid to directors shall be determined by Board of Directors resolution according to the industry standard, no matter whether WNC is experiencing a profit or loss. Article 13-1 Article 13-2 Article 14 Article 14-1 Article 15 Chapter V Article 16 Among the above-mentioned directors, there will be at least three independent directors who will be elected from the roster of independent director candidates at the shareholders meeting. With respect to the independent director s profession, shares owned, work restrictions, independence, nomination method, and other matters, all aspects should comply with the relevant regulations of the competent authority. Pursuant to Article 14-4 of the SEA, WNC shall establish an Audit Committee. The Audit Committee shall be composed of the entire number of independent directors. The authority of the Audit Committee and other compliance issues shall be in accordance with the Company Act, the SEA, other relevant laws and regulations, and WNC by-laws. The directors shall organize the Board of Directors in accordance with the regulations and resolutions of shareholders meetings. The Chairman of the Board of Directors represents WNC and is elected from among the directors by a majority of the directors present at a meeting with attendance of two-thirds of the directors and may also elect in the same manner a Vice Chairman of the Board. The BOD may create various functional committees. The reasons for calling the BOD meeting should be recorded, and every director should be notified seven days prior to the meeting. However, in the case of an emergency situation, a BOD meeting can be called at any time. The meeting notice may be prepared in either written or electronic format. If the Chairman of the Board is absent or unable to attend the BOD meeting for some reason, the Vice Chairman shall act as his proxy. If the Vice Chairman of the Board is absent or unable to attend the BOD meeting for some reason, the Chairman of the Board shall elect one director to be the proxy of the Chairman. In the absence of such a designation, the directors shall elect a meeting chairman from among themselves. If the director is not able to attend a meeting in person, he or she may appoint another director as proxy. A director can serve as proxy for only one director. Managerial Officers WNC will have one chief executive officer, one president, BG general managers, and a number of vice presidents, whose appointment, discharge, and remuneration will be determined in accordance with -15-

18 Chapter VI Accounting Article 17 Article 18 Article 19 Chapter VII Article 20 Article 29 of the Company Act. The Board of Directors will prepare the documents set forth below after the end of the fiscal year for submission to the shareholders meeting for approval: 1. Business report; 2. Financial statements; 3. Profit distribution proposal or proposal to make up the loss. If WNC shows a year-end profit, 10% of the profit net of tax and the amount to make up any accumulated losses shall be set aside as a legal reserve, and thereafter an amount shall be set aside or reversed as a special reserve (hereinafter referred to as Current Year Earnings ) in accordance with the Securities and Exchange Act. The Current Year Earnings together with the balance of the unappropriated retained earnings of the previous year, if any, will be distributed in accordance with the following: 4. No less than 5% of the Current Year Earnings as employees bonuses; where such bonuses are distributed by shares, employees of controlled companies, with qualifications set by the Board of Directors, can be included; 5. One percent (1%) of the Current Year Earnings as remuneration in cash to directors; 6. The rest as working capital for WNC and no less than 10% of the Current Year Earnings as dividends to shareholders. In consideration that WNC is involved in a capital- and technologically-intensive industry and in consideration that WNC is expanding and to ensure its continued and steady growth, a long-term investment plan must be adopted. Therefore, WNC adopts a residual dividend policy as its dividend policy. The cash dividends shall not be less than 10% of the total dividends. Supplementary Provisions Matters not prescribed under the Articles of Incorporation shall be in accordance with the Company Act. Article 21 The first version of these Procedures was approved on November 26, The first amendment was approved on January 16, The second amendment was approved on June 11, The third amendment was approved on July 27, The fourth amendment was approved on February 18, The fifth amendment was approved on July 18, The sixth amendment was approved on May 30, The seventh amendment was approved on September 14, The eighth amendment was approved on December 13, The ninth amendment was approved on March 29, The tenth amendment was approved on August 26, The eleventh amendment was approved on May 22,

19 The twelfth amendment was approved on June 10, The thirteenth amendment was approved on June 23, The fourteenth amendment was approved on June 14, The fifteenth amendment was approved on June 15, The sixteenth amendment was approved on June 11, The seventeenth amendment was approved on June 14, The eighteenth amendment was approved on June 17, The nineteenth amendment was approved on June 12, The twentieth amendment was approved on June 11, The twenty-first amendment was approved on June 6, The twenty-second amendment was approved on June 10,

20 Appendix 2 2. Business Report Looking back on the past year, developments and applications in the area of the Internet of Things, Internet of Vehicles, Industry 4.0, and the Smart Home were in the limelight of the communications industry across the globe. These developments are generally in line with WNC s technology roadmaps and development plans over the past; as a result, we have been able to sustain respectable growth momentum over the past years. Looking into the future, we are confident that favorable factors such as market demand and customer trust will help us generate sustainable and stable profits and growth. Financial and Operational Results In 2015, WNC s consolidated revenue was NT$52.18 billion with an annual growth rate of 29%. Consolidated gross profit was NT$6.93 billion, and consolidated profit after tax was NT$1.97 billion. Basic earnings per share were NT$5.97. Research and Development Status The age of the IoE (Internet of Everything) has accelerated the evolution of communications technologies and increased the needs for cross-industry and cross-technology integration, as well as the integration of software and hardware. It has also, however, deepened the difficulty of integration between different systems. WNC s products and applications encompass various short-distance, mid-distance, and long-distance communications products. With our expertise in antenna and RF design, software and hardware development, user interface design, and extensive experience in integration across different product lines, we expect to integrate IoT solutions in the new age and continue to launch communications products that fulfill market demand and lead industry trends. In 2015, WNC won the CES Innovation Award with its 24GHz Radar System and RFID Smart Shelf System ; concurrently, we were also honored with the Hsinchu Science Park R&D Accomplishment Award. This is the sixth time WNC has won this prestigious award, showing that our research efforts have been recognized both at home and abroad. Furthermore, as of the end of 2015, WNC has over 1,800 approved patents and patents pending. Operation and Management In response to a need for business development and capacity expansion, the second plant of the Wistron NeWeb (Kunshan) Corporation was completed during the third quarter of 2015 and became operational in the fourth quarter. Also in the fourth quarter, we purchased the S1 property, a new plant on Lihsin Rd. VI, Hsinchu Science Park, to serve as WNC s main production site in Taiwan. S1 is projected to commence operation in the second quarter of 2016 to meet capacity requirements in the future. In recent years, world economies have experienced slow growth, and markets still appear to be fickle and ever-changing. This has led to challenges such as rapidly changing business environments and product life cycles and constantly fluctuating exchange rates of the world s major currencies. In order to remain highly competitive in such an environment and secure a place in the ever-changing ICT market, we have optimized our existing value chain and developed new products and technologies through a holistic perspective that is more in-tune with international developments. We have implemented ongoing internal improvement projects to -18-

21 enhance our problem-solving capabilities and flexibilities and have also improved our responsiveness to the diverse and pressing demands of customers and from the markets. In 2015, we participated in the first Corporate Governance Evaluation organized by the Taiwan Stock Exchange (TWSE) and the Taipei Exchange (TPEx), and we were rated among the top 20% of all publicly traded companies. We were also included as a component of the TWSE Corporate Governance 100 Index and the Taiwan Top Salary 100 Index by the TWSE, and we ranked among the top 50 enterprises in the Large Enterprises group for the 2015 Excellence in CSR by the CommonWealth Magazine Group. These recognitions demonstrate WNC s efforts in implementing our social responsibilities as a responsible corporate citizen and that our efforts have been appreciated by our stakeholders. We expect that through the corporate social responsibility report we publish each year in June, our stakeholders can be fully informed of our endeavors, achievements, and goals. Future Outlook Looking towards 2016, changes and uncertainties still prevail in the business environment where WNC operates. In response to this, WNC will continue to strengthen our core capabilities and actively develop forward-looking technologies and products based on the four themes of Smart Home, Mobile Communications, Telematics, and Internet of Things. We will also strive to optimize our organizational capabilities and competitiveness to provide our customers with products and services that are more flexible and of higher quality. As we face a highly competitive business environment and more diverse customer needs, we will adhere to Fundamentals Advocacy, one of our core values. We will remain cautiously optimistic as we continue to drive WNC s growth and earn the highest profits for our shareholders by maintaining stable, positive corporate operating growth. On behalf of all WNC employees, we wish to thank all of our shareholders for their continued encouragement and support. Thank you! Chairman: Haydn Hsieh Managerial Officer: Jeffrey Gau Controller: Jona Song -19-

22 Independent Auditors Report The Board of Directors Wistron NeWeb Corporation: We have audited the accompanying balance sheets of Wistron NeWeb Corporation as of December 31, 2015 and 2014, and the related statements of comprehensive income, changes in equity, and cash flows for the years ended December 31, 2015 and These parent-company-only financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these parent-company-only financial statements based on our audits. We conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statement by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those standards and regulations require that we plan and perform the audit to obtain reasonable assurance about whether the parent-company-only financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the parent-company-only financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall parent-company-only financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the parent-company-only financial statements referred to above present fairly, in all material respects, the financial position of Wistron NeWeb Corporation as of December 31, 2015 and 2014, and the results of its operations and its cash flows for the years then ended, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. March 16, 2016 The accompanying parent-company-only financial statements are intended only to present the financial position, results of operations, and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent-company-only financial statements are those generally accepted and applied in the Republic of China. The auditors report and the accompanying parent-company-only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language auditors report and parent-company-only financial statements, the Chinese version shall prevail. -20-

23 Wistron NeWeb Corporation Balance Sheets December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars) December 31, 2015 December 31, 2014 Assets Amount % Amount % Current assets: Cash and cash equivalents $ 1,460, ,908, Financial assets at fair value through profit or loss-current Available-for-sale financial assets-current 739, ,219,611 6 Notes receivable 8,156-3,135 - Accounts receivable, net 6,606, ,270, Accounts receivable from related parties 5,049, ,189, Inventories, net 2,700, ,701,013 8 Other financial assets-current 87,360-29,323 - Other current assets 113, ,528 1 Total current assets 16,766, ,605, Non-current assets: Financial assets carried at cost-non-current 110, ,064 1 Investments accounted for using equity method 5,308, ,079, Property, plant and equipment 2,837, ,291, Intangible assets 56,179-59,345 - Deferred tax assets 142, ,752 - Refundable deposits 3,339-4,010 - Other non-current assets 137, ,092 1 Total non-current assets 8,595, ,834, Total assets $ 25,362, ,440,

24 Wistron NeWeb Corporation Balance Sheets (Continued) December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars) December 31, 2015 December 31, 2014 Liabilities and Equity Amount % Amount % Current liabilities: Short-term borrowings $ 1,412, ,258 5 Financial liabilities at fair value through profit or loss-current Notes and accounts payable 2,432, ,322, Accounts payable to related parties 5,940, ,554, Salary and bonus payable 1,147, ,780 4 Other accrued expenses 562, ,223 2 Provisions-current 231, ,200 1 Other current liabilities 638, ,844 2 Total current liabilities 12,364, ,726, Non-current liabilities: Deferred tax liabilities 515, ,687 2 Net defined benefit liabilities-non-current 85,477-21,127 - Other non-current liabilities 4, Equity Total non-current liabilities 605, ,814 2 Total liabilities 12,969, ,204, Ordinary share capital 3,353, ,287, Capital surplus 2,369, ,369, Retained earnings 6,476, ,515, Other equity interest 192, ,291 - Total equity 12,392, ,235, Total liabilities and equity $ 25,362, ,440,

25 Wistron NeWeb Corporation Statements of Comprehensive Income For the years ended December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars) For the years ended December 31, Amount % Amount % Net operating revenues $ 52,436, ,114, Operating costs 46,677, ,794, Gross profit 5,758, ,319, Unrealized profit (loss) from sales (151,380) - 27,237 - Realized gross profit 5,607, ,346, Operating expenses: Selling 1,254, ,391 3 General and administrative 555, ,839 1 Research and development 1,910, ,517,941 4 Total operating expenses 3,719, ,962,171 8 Net operating income 1,887, ,384,525 3 Non-operating income and expenses: Other income 87,104-49,132 - Other gains and losses, net 107,211-33,654 - Finance costs (11,106) - (28,738) - Share of profit of subsidiaries accounted for using equity method 385, ,696 1 Total non-operating income and expenses 568, ,744 1 Income before income tax 2,456, ,685,269 4 Income tax expenses 483, ,881 - Net income 1,972, ,376,388 4 Other comprehensive income: Items that will not be reclassified subsequently to profit or loss Remeasurements of the defined benefit plans (70,127) - (5,495) - Income tax relating to items that will be not reclassified subsequently 11, Total items that will not be reclassified subsequently to profit or loss (58,205) - (4,561) - Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign financial statements (5,836) - 189,560 - Unrealized gains (losses) on available-for-sale financial assets (3,429) - (8,149) - Income tax relating to items that may be reclassified subsequently (32,225) - Total items that may be reclassified subsequently to profit or loss (8,273) - 149,186 - Other comprehensive income (66,478) - 144,625 - Total comprehensive income $ 1,906, ,521,013 4 Earnings per share (New Taiwan dollars) Basic earnings per share $ Diluted earnings per share $

26 Wistron NeWeb Corporation Statements of Changes in Equity For the years ended December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars) Ordinary share capital Advance receipts for share capital Capital surplus Legal reserve Retained earnings Special reserve Unappropriated retained earnings Total Exchange differences on translation of foreign financial statements Other equity interest Unrealized gains (losses) on availablefor-sale Deferred financial compensation assets cost Balance as of January 1, 2014 $ 3,212,730 12,284 2,212,882 1,105, ,123 3,959,468 5,173,321 90,422 12,760 (191,794) (88,612) 10,522,605 Net income for the period ,376,388 1,376, ,376,388 Other comprehensive income for the period (4,561) (4,561) 157,335 (8,149) - 149, ,625 Total comprehensive income for the period ,371,827 1,371, ,335 (8,149) - 149,186 1,521,013 Appropriation and distribution of retained earnings: Appropriation for legal reserve ,833 - (151,833) Cash dividends distributed to shareholder (965,304) (965,304) (965,304) Stock dividends distributed to shareholder 64, (64,354) (64,354) Exercise of employee share options 8,900 (12,284) 20, ,019 Issuance of restricted stock awards 3,900-13, (17,299) (17,299) - Compensation cost of issued restricted stock awards , ,016 19, ,165 Expiration of restricted stock awards (2,250) - 2, Balance as of December 31, ,287,634-2,369,650 1,257, ,123 4,150,237 5,515, ,757 4,611 (190,077) 62,291 11,235,498 Net income for the period ,972,508 1,972, ,972,508 Other comprehensive income for the period (58,205) (58,205) (4,844) (3,429) - (8,273) (66,478) Total comprehensive income for the period ,914,303 1,914,303 (4,844) (3,429) - (8,273) 1,906,030 Appropriation and distribution of retained earnings : Appropriation for legal reserve ,639 - (137,639) Cash dividends distributed to shareholder (887,661) (887,661) (887,661) Stock dividends distributed to shareholder 65, (65,753) (65,753) Compensation cost of issued restricted stock awards , , ,592 Expiration of restricted stock awards (200) Balance as of December 31, 2015 $ 3,353,187-2,369,850 1,395, ,123 4,973,487 6,476, ,913 1,182 (51,485) 192,610 12,392,459 Note 1: Remuneration to directors and employees bonuses in the amount of $13,665 and $204,975, respectively, had been charged against statement of comprehensive income. Note 2: Remuneration to directors and employees bonuses in the amount of $12,387 and $184,910, respectively, had been charged against statement of comprehensive income. Total Total equity -24-

27 Wistron NeWeb Corporation Statements of Cash Flows For the years ended December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars) For the years ended December 31, Cash flows from operating activities: Net income before tax $ 2,456,423 1,685,269 Adjustments: Adjustments to reconcile profit (loss) Depreciation (including depreciation of investment property) 374, ,638 Amortization 61,575 73,094 Provision for doubtful accounts, net 12,882 49,355 Net loss (gain) on financial assets and liabilities at fair value through profit or loss (1,042) 396 Interest expense 11,106 28,738 Interest income (11,242) (20,882) Compensation cost of issued restricted stock awards 138, ,165 Share of profit of subsidiaries accounted for using equity method (385,553) (246,696) Loss (gain) on disposal of investment, net 16,043 (17,475) Unrealized loss (profit) from sales 151,380 (27,237) Adjustment for other non-cash-related losses, net 9,767 9,641 Provision for inventory devaluation loss 56,810 64,754 Total adjustments to reconcile profit (loss) 435, ,491 Changes in operating assets and liabilities: Notes receivable (5,021) (571) Accounts receivable (1,349,548) (1,102,817) Accounts receivable from related parties (2,860,039) (572,860) Inventories (1,056,473) (856,743) Other operating assets 88,974 (226,401) Notes and accounts payable 109, ,482 Accounts payable to related parties 1,386,206 2,082,864 Other operating liabilities 532,183 57,388 Total changes in operating assets and liabilities (3,153,981) 116,342 Total adjustments (2,718,686) 469,833 Cash flows generated from (used in) operations (262,263) 2,155,102 Interest received 13,067 22,469 Interest paid (10,777) (16,522) Income tax paid (283,987) (264,056) Net cash flows generated from (used in) operating activities (543,960) 1,896,993 Cash flows from investing activities: Acquisition of available-for-sale financial assets (1,912,000) (1,571,000) Proceeds from disposal of available-for-sale financial assets 2,396,443 2,821,517 Acquisition of financial assets carried at cost-non-current (7,713) (91,132) Proceeds from capital return of financial assets carried at cost-non-current 22,345 - Proceeds from disposal of financial assets carried at cost-non-current 22,076 - Acquisition of investments accounted for using equity method (5,272) (482,803) Acquisition of property, plant and equipment (917,308) (443,740) Proceeds from disposal of property, plant and equipment 8,630 7,605 Acquisition of intangible assets (58,409) (77,502) Decrease in refundable deposits 671 1,624 Capital received from an associate 4,836 6,178 Net cash flows generated from (used in) investing activities (445,701) 170,747 Cash flows from financing activities: Increase (decrease) in short-term borrowings 429,084 (424,392) Repayments of bonds - (1,500,000) Cash dividends paid (887,661) (965,304) Exercise of employee share options - 17,019 Net cash flows used in financing activities (458,577) (2,872,677) Net decrease in cash and cash equivalents (1,448,238) (804,937) Cash and cash equivalents at beginning of period 2,908,893 3,713,830 Cash and cash equivalents at end of period $ 1,460,655 2,908,

28 Independent Auditors Report The Board of Directors Wistron NeWeb Corporation: We have audited the accompanying consolidated balance sheets of Wistron NeWeb Corporation and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for the years ended December 31, 2015 and These consolidated financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statement by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those standards and regulations require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Wistron NeWeb Corporation and subsidiaries as of December 31, 2015 and 2014, and the results of their consolidated operations and their consolidated cash flows for the years then ended, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed by Financial Supervisory Commission of the Republic of China. We have also audited the parent-company-only financial statements of Wistron NeWeb Corporation as of and for the years ended December 31, 2015 and 2014, on which we have issued an unqualified report. We have reviewed the consolidated financial statements referred to in the first paragraph which have been translated into United States dollars solely for the convenience of the readers. Please see note 14 of the consolidated financial statements. March 16, 2016 The accompanying consolidated financial statements are intended only to present the financial position, results of operations, and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China. The auditors report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language auditors report and consolidated financial statements, the Chinese version shall prevail. -26-

29 Wistron NeWeb Corporation and Subsidiaries Consolidated Balance Sheets December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars) December 31, 2015 December 31, 2014 Assets Amount % Amount % Current assets: Cash and cash equivalents $ 3,218, ,230, Financial assets at fair value through profit or loss-current Available-for-sale financial assets-current 739, ,219,611 5 Notes receivable 322, ,180 1 Accounts receivable, net 9,298, ,185, Accounts receivable from related parties 138, ,111 1 Inventories, net 6,588, ,467, Other financial assets-current 118,208-57,669 - Other current assets 196, ,598 1 Total current assets 20,621, ,821, Non-current assets: Financial assets carried at cost-non-current 110, ,064 1 Investments accounted for using equity method 151, ,828 - Property, plant and equipment 6,398, ,232, Intangible assets 56,773-59,682 - Deferred tax assets 294, ,120 1 Refundable deposits 8,937-12,069 - Other non-current assets 214, ,424 1 Total non-current assets 7,234, ,007, Total assets $ 27,856, ,829,

30 Wistron NeWeb Corporation and Subsidiaries Consolidated Balance Sheets (Continued) December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars) December 31, 2015 December 31, 2014 Liabilities and Equity Amount % Amount % Current liabilities: Short-term borrowings $ 2,067, ,024,739 9 Financial liabilities at fair value through profit or loss-current Notes and accounts payable 9,180, ,471, Accounts payable to related parties 113,498-97,468 - Salary and bonus payable 1,411, ,827 4 Other accrued expenses 1,038, ,281 3 Provisions-current 231, ,200 1 Other current liabilities 815, ,200 3 Total current liabilities 14,858, ,115, Non-current liabilities: Deferred tax liabilities 515, ,687 2 Net defined benefit liabilities-non-current 85,477-21,127 - Other non-current liabilities 4, Equity: Total non-current liabilities 605, ,814 2 Total liabilities 15,463, ,593, Ordinary share capital 3,353, ,287, Capital surplus 2,369, ,369, Retained earnings 6,476, ,515, Other equity interest 192, ,291 - Total equity 12,392, ,235, Total liabilities and equity $ 27,856, ,829,

31 Wistron NeWeb Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the years ended December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars) For the years ended December 31, Amount % Amount % Net operating revenues $ 52,183, ,326, Operating costs 45,252, ,906, Gross profit 6,930, ,420, Operating expenses: Selling 1,620, ,259,763 3 General and administrative 917, ,941 2 Research and development 2,044, ,646,923 4 Total operating expenses 4,583, ,711,627 9 Net operating income 2,347, ,708,627 4 Non-operating income and expenses: Other income 108,104-73,747 - Other gains and losses, net 103,909-37,380 - Finance costs (27,798) - (50,085) - Share of profit of associates accounted for using equity method 17,717-10,520 - Total non-operating income and expenses 201,932-71,562 - Income before income tax 2,549, ,780,189 4 Income tax expenses 577, ,801 1 Net income 1,972, ,376,388 3 Other comprehensive income: Items that will not be reclassified subsequently to profit or loss Remeasurements of the defined benefit plans (70,127) - (5,495) - Income tax relating to items that will be not reclassified subsequently 11, Total items that will not be reclassified subsequently to profit or loss (58,205) - (4,561) - Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign financial statements (5,836) - 189,560 1 Unrealized gains (losses) on available-for-sale financial assets (3,429) - (8,149) - Income tax relating to items that may be reclassified subsequently (32,225) - Total items that may be reclassified subsequently to profit or loss (8,273) - 149,186 1 Other comprehensive income (66,478) - 144,625 1 Total comprehensive income $ 1,906, ,521,013 4 Earnings per share (New Taiwan dollars) Basic earnings per share $ Diluted earnings per share $

32 Wistron NeWeb Corporation and Subsidiaries Consolidated Statements of Changes in Equity For the years ended December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars) Ordinary share capital Advance receipts for share capital Capital surplus Legal reserve Retained earnings Special reserve Unappropriated retained earnings Total Exchange differences on translation of foreign financial statements Other equity interest Unrealized gains (losses) on availablefor-sale Deferred financial compensation assets cost Balance as of January 1, 2014 $ 3,212,730 12,284 2,212,882 1,105, ,123 3,959,468 5,173,321 90,422 12,760 (191,794) (88,612) 10,522,605 Net income for the period ,376,388 1,376, ,376,388 Other comprehensive income for the period (4,561) (4,561) 157,335 (8,149) - 149, ,625 Total comprehensive income for the period ,371,827 1,371, ,335 (8,149) - 149,186 1,521,013 Appropriation and distribution of retained earnings: Appropriation for legal reserve ,833 - (151,833) Cash dividends distributed to shareholder (965,304) (965,304) (965,304) Stock dividends distributed to shareholder 64, (64,354) (64,354) Exercise of employee share options 8,900 (12,284) 20, ,019 Issuance of restricted stock awards 3,900-13, (17,299) (17,299) - Compensation cost of issued restricted stock awards , ,016 19, ,165 Expiration of restricted stock awards (2,250) - 2, Balance as of December 31, ,287,634-2,369,650 1,257, ,123 4,150,237 5,515, ,757 4,611 (190,077) 62,291 11,235,498 Net income for the period ,972,508 1,972, ,972,508 Other comprehensive income for the period (58,205) (58,205) (4,844) (3,429) - (8,273) (66,478) Total comprehensive income for the period ,914,303 1,914,303 (4,844) (3,429) - (8,273) 1,906,030 Appropriation and distribution of retained earnings: Appropriation for legal reserve ,639 - (137,639) Cash dividends distributed to shareholder (887,661) (887,661) (887,661) Stock dividends distributed to shareholder 65, (65,753) (65,753) Compensation cost of issued restricted stock awards , , ,592 Expiration of restricted stock awards (200) Balance as of December 31, 2015 $ 3,353,187-2,369,850 1,395, ,123 4,973,487 6,476, ,913 1,182 (51,485) 192,610 12,392,459 Total Total equity -30-

33 Wistron NeWeb Corporation and Subsidiaries Consolidated Statements of Cash Flows For the years ended December 31, 2015 and 2014 (expressed in thousands of New Taiwan dollars) For the years ended December 31, Cash flows from operating activities: Net income before tax $ 2,549,631 1,780,189 Adjustments: Adjustments to reconcile profit (loss) Depreciation (including depreciation of investment property) 1,103, ,717 Amortization 62,660 75,140 Provision for doubtful accounts, net 12,882 49,355 Net loss (gain) on financial assets and liabilities at fair value through profit or loss (1,042) 396 Interest expense 27,798 50,085 Interest income (21,732) (35,198) Compensation cost of issued restricted stock awards 138, ,165 Share of profit of associates accounted for using equity method (17,717) (10,520) Loss (gain) on disposal of investment, net 16,043 (17,475) Adjustment for other non-cash-related losses, net 22,954 27,462 Provision for inventory devaluation loss 56,810 64,754 Total adjustments to reconcile profit (loss) 1,400,616 1,264,881 Changes in operating assets and liabilities: Notes receivable (150,527) (47,883) Accounts receivable (2,126,003) (1,998,021) Accounts receivable from related parties 14,283 15,563 Inventories (2,177,395) (1,393,859) Other operating assets 84,448 (254,875) Notes and accounts payable 1,708,856 2,415,554 Accounts payable to related parties 16,030 (8,028) Other operating liabilities 706,730 46,485 Total changes in operating assets and liabilities (1,923,578) (1,225,064) Total adjustments (522,962) 39,817 Cash flows generated from operations 2,026,669 1,820,006 Interest received 23,558 37,047 Interest paid (29,104) (37,637) Income tax paid (453,548) (395,272) Net cash flows generated from operating activities 1,567,575 1,424,144 Cash flows from investing activities: Acquisition of available-for-sale financial assets (1,912,000) (1,571,000) Proceeds from disposal of available-for-sale financial assets 2,396,443 2,821,517 Acquisition of financial assets carried at cost-non-current (7,713) (91,132) Proceeds from capital return of financial assets carried at cost-non-current 22,345 - Proceeds from disposal of financial assets carried at cost-non-current 22,076 - Acquisition of property, plant and equipment (2,216,225) (1,100,655) Proceeds from disposal of property, plant and equipment 9,362 1,169 Acquisition of intangible assets (59,731) (77,958) Decrease (increase) in refundable deposits 3,132 (991) Capital received from an associate 4,836 6,178 Net cash flows used in investing activities (1,737,475) (12,872) Cash flows from financing activities: Increase (decrease) in short-term borrowings 43,141 (226,589) Repayments of bonds - (1,500,000) Cash dividends paid (887,661) (965,304) Exercise of employee share options - 17,019 Net cash flows used in financing activities (844,520) (2,674,874) Effect of exchange rate changes 3,007 85,616 Net decrease in cash and cash equivalents (1,011,413) (1,177,986) Cash and cash equivalents at beginning of period 4,230,147 5,408,133 Cash and cash equivalents at end of period $ 3,218,734 4,230,

34 ` Appendix 3 Wistron NeWeb Corporation 3. Audit Committee s Review Report The Board of Directors has prepared the Wistron NeWeb Corporation 2015 business report, financial statements, and the profit allocation proposal. The CPA firm KPMG was retained to audit the financial statements of Wistron NeWeb Corporation and has issued an audit report relating to the financial statements. The business report, financial statements, and the profit allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee of Wistron NeWeb Corporation. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, I hereby submit this report. Wistron NeWeb Corporation, 2016 Annual Shareholders Meeting Chairman of the Audit Committee: Robert Hung March 16,

35 ` Appendix 4 4. Earnings Appropriation Statement for Year 2015 Unit: NT$ Unappropriated retained earnings at beginning of period 3,059,183,613 Minus: Changes in the remeasurements of the defined benefit plans (58,205,410) Adjusted unappropriated retained earnings 3,000,978,203 Plus: Profit after tax of the year 1,972,507,908 Minus: 10% legal reserve (197,250,791) Retained earnings for appropriation 4,776,235,320 Minus: Appropriation items: Shareholder dividend and bonus: - Stock dividend: $0.3 per share 100,567,380 - Cash dividend: $3.7 per share 1,240,331,142 Subtotal 1,340,898,522 Unappropriated retained earnings at end of period 3,435,336,798 Notes: 1. The shareholder cash dividend distribution is rounded down to the nearest NT dollar. Amounts rounded off will be credited to other income of WNC. Chairman: Haydn Hsieh Managerial Officer: Jeffrey Gau Controller: Jona Song -33-

36 ` Appendix 5 5. The Impact of Stock Dividend Issuance on WNC s Business Item Performance, Earnings per Share, and Return on Shareholder Investment Year Unit: NT$ Year 2016 (Forecast) Beginning Paid-in Capital 3,352,246,330 Dividend Distribution Business Performance Variation Cash dividend per share Stock dividend per share for capital increase from retained earnings 1 Stock dividend per share for capital increase from capital reserve 1 Operating income Year-on-year increase / decrease (%) of operating income Profit after tax Year-on-year increase / decrease (%) of profit after tax Earnings per share Year-on-year increase / decrease of earnings per share 0.03 shares 0 shares N/A 2 Pro forma earnings per share and its P/E ratio Average annual return on investment (reciprocal of the average annual P/E ratio) If cash dividend is distributed instead of capital increase from retained earnings If no capital increase from capital reserve If no capital increase from capital reserve and if cash dividend is distributed instead of capital increase from retained earnings Pro forma earnings per share Pro forma average annual return on investment Pro forma earnings per share Pro forma average annual return on investment Pro forma earnings per share Pro forma average annual return on investment N/A 2 Notes: 1. Pending resolution at the 2016 annual shareholders meeting. 2. WNC is not required to disclose its 2016 financial forecast pursuant to the Regulations Governing the Publication of Financial Forecasts of Public Companies. -34-

37 ` Appendix 6 Wistron NeWeb Corporation 6. Shareholdings of Directors (As of April 18, 2016) Directors: Name Number of Shares Legal Representative of Wistron Corporation: Frank F.C. Lin (Fu-Chien Lin) Legal Representative of Wistron Corporation: Henry Lin (Chin-Tsai Lin) 83,004,015 83,004,015 Haydn Hsieh (Hong-Po Hsieh) 5,662,126 Jeffrey Gau (Jiahn-Rong Gau) 2,257,206 Max Wu (Guang-Yi Wu) 0 Philip Peng (Chin-Bing Peng) 119,249 S.T. Peng (Song-Tsuen Peng) 0 Robert Hung (Yung-Chen Hung) 0 Neng-Pai Lin 0 Total 91,042,596 The current number of outstanding shares of WNC is 335,224,633 shares. According to the Examination and Implementation Rules for Shareholding Percentage of Directors and Supervisors of Public Offering Companies, WNC s directors shall hold no less than 13,408,985 shares. The shareholding percentages of the directors conform to the statutory requirement. In addition, due to the fact that WNC has already instituted an audit committee according to the relevant laws, WNC is exempt from the requirements of Article 2 of the above rules regarding the minimum shareholding ratio of supervisors. -35-

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