Inventec Corporation

Transcription

1 Stock Code: 2356 Inventec Corporation 2016 Annual General Shareholders Meeting Meeting Agenda (Translation) Time : Monday, June 20, :00 a.m. Place : No.1, Sec. 4, Zhongshan N. Rd., Zhongshan District., Taipei City. Reception Hall of the Grand Hotel Taipei. This English version is a translation based on the original Chinese version. Where any discrepancy arises between the two versions, the Chinese version shall prevail.

2 Table of Contents A. Meeting Agenda 01 B. Discussion Items (1).. 02 C. Report Items.. 05 D. Ratification Items.. 06 E. Discussion Items (2).. 07 F. Extraordinary Motions G. Adjournment. 12 Appendix Business Report Supervisors' Review Report Independent Auditors report and Individual Financial Statements for Year Independent Auditors report and Consolidated Financial Statements for Year Profit Distribution Table for Year Articles of Incorporation (Before Amendments) Procedures for Election of Directors and Supervisors (Before Amendments) Rules of Procedure for Shareholders Meetings Shareholdings of Directors and Supervisors

3 A. Meeting Agenda Time: Monday, June 20, :00 a.m. Place: No.1, Sec. 4, Zhongshan N. Rd., Zhongshan Dist., Taipei City. Reception Hall of the Grand Hotel Taipei 1. Call the Meeting to Order 2. Chairman Remarks 3. Discussion Items (1): To Amend the Company s Articles of Incorporation 4. Report Items: (1) 2015 Business Report (2) 2015 Supervisors' Review Report (3) The Status of Endorsement and Guarantee (4) The Status of Distribution Remuneration of Employees Directors and Supervisors in 2015 (5) The Execution Status of Subsidiary, TPV-INVENTA Holding Limited s Rectification Plans for the Balance of Monetary Loan Exceeds the Limit. 5. Ratification Items (1) Ratification of the 2015 Business Report and Financial Statements (2) Adoption of the Proposal for Distribution of 2015 Profits 6. Discussion Items (2) (1) Discussion of Rename and Amendments to the Procedures for Election of Directors and Supervisors (2) Proposal of Release the Prohibition on Director Huang, Kuo-Chun Chang, Chang-Pang and Chen, Ruey-Long from Participation in Competitive Business. 7. Extraordinary Motions 8. Adjournment 1

4 B. Discussion Items (1) Proposal: Discussion of Amendments to the Articles of Incorporation. Proposed by the Board Explanation: (1) Inventec should establish Audit Committee at Annual Meeting of Shareholders in 2017 according to the Financial Supervisory Commission s official document NO (2) To conform to the amendments and addition to Company Act of articles and official document NO NO of Ministry of Economic Affair, hereby propose to amend remuneration of employees directors and supervisors in Articles of Incorporation. (3) Please refer to the comparison chart of Amendments to Articles of Incorporation below. Chapter 4 Article 16 Comparison Chart of Amendments to Articles of Incorporation Original Version Amendment Version Reason Director and Supervisors Chapter 4 Director Supervisors and Audit Article 16 Committee The Company shall have seven directors (including two independent directors) and three supervisors. The term of their offices shall be three years. The election shall adopt the candidate nomination system which is conformed to the Article of the Company Act, and the shareholders shall elect the directors and supervisors from the list of the nominated candidates and the directors and supervisors may be re-elected for consecutive terms. Independent and non-independent directors shall be elected at the same time but on separate ballots. In case no election of new directors and supervisors is effected after expiration of the term of office of existing directors and supervisors, the term of office of out-going directors and supervisors shall be extended until the time new directors and supervisors have been elected and assumed their office. However, the competent authority may, ex officio, order the company to elect new directors and supervisors within a given time limit; and if no re-election is effected after expiry of the given time limit, the out-going directors The Company shall have seven to eleven directors (including not less than two independent directors, and not less than one-fifth of the director seats.) and three supervisors. The term of their offices shall be three years. The Company will replace supervisors with Audit Committee in accordance with article 14-4 of Securities and Exchange Act in The Audit Committee shall be composed of the entire number of independent directors. It shall not be fewer than three persons. The relative regulations of supervisors of the Articles will be null and void from the date of the establishment of the Audit Committee. The election shall adopt the candidate nomination system which is conformed to the Article of the Company Act, and the shareholders shall elect the directors and supervisors from the list of the nominated candidates and the directors and supervisors may be re-elected for consecutive terms. Independent and non-independent directors shall be elected at the same time but on separate ballots. In case no election of new directors and supervisors is effected after Conform to establish Audit Committee in the future and specify the effective date of remove the establishment of supervisors 2

5 and supervisors shall be discharged from such expiration date. Total registered shares owned by the directors and supervisors of the Company shall not be less than a specified percentage of the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies stipulated by the competent securities authority subject to Article 26 of the Securities and Exchange Act. (The following content omitted.) expiration of the term of office of existing directors and supervisors, the term of office of out-going directors and supervisors shall be extended until the time new directors and supervisors have been elected and assumed their office. However, the competent authority may, ex officio, order the company to elect new directors and supervisors within a given time limit; and if no re-election is effected after expiry of the given time limit, the out-going directors and supervisors shall be discharged from such expiration date. Total registered shares owned by the directors and supervisors of the Company shall not be less than a specified percentage of the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies stipulated by the competent securities authority subject to Article 26 of the Securities and Exchange Act. (The following content omitted.) Article 26 If the Company has profit as a result of the yearly accounting closing, the Corporation shall first pay taxes, offset its losses in previous years and set aside a legal capital reserve at 10% of the profits left over, until the accumulated legal capital reserve has equaled the total capital of the Corporation, then set aside special capital reserve in accordance with relevant laws or regulations or as requested by business, and then set aside not less than 3% of the balance as bonus to Employees and not more than 3% as remuneration in cash to Directors and Supervisors of this Corporation. Any rest balance, added to the accumulated undistributed earnings in previous years, shall be allocated according to shareholders' meeting resolution. This Corporation may issue stock bonuses to employees of an affiliated company meeting the conditions set by the Board of Directors. In consideration of the Company s capital requirements and long-term investment plans needs to be adopted, if the Company has profit, dividends paid by cash shall not be less than Article 26 Article 27 3 If the Company has a profit of the year shall distribute not less than 3% of the balance as remuneration to Employees and not more than 3% to Directors and Supervisors of the Corporation. However, require that earnings shall first be offset against any deficit. The Corporation may issue stock or distribute cash to employees and the qualification requirements including the employees of subsidiaries of the company. The conditions and measures set by the Board of Directors. If the Company has profit as a result of the yearly accounting closing, the Corporation shall first pay taxes, then offset its accumulated losses and set aside a legal capital reserve at 10% of the profits left over, until the accumulated legal capital reserve has equaled the paid-in capital of the Corporation then set aside special capital reserve in accordance with relevant laws or regulations or as requested by business. The remaining earnings along with accumulated retained earnings shall reserve appropriate quota depend on business demand, Comply with the amendments of Company Act and article changed Comply with the amendments of Company Act and article changed

6 10% of the total dividends. then distribute dividends according to shareholders' meeting resolution and the dividends shall not less than 10% of the current earnings. The dividend policy of the Company consider capital requirements in the future long-term investment plans needs to be adopted and stockholders demand of cash inflow, if the Company has profit, dividends paid by cash shall not be less than 10% of the total dividends. Article 27 If there is any matter not covered herein, the Company Act and the relevant laws and regulations shall govern. Article 28 If there is any matter not covered herein, the Company Act and the relevant laws and regulations shall govern. Article changed Article 28 This Articles of Incorporation was established on April 15, 1975 (contents omitted) The forty-eighth amendment was made on June 12, Article 29 This Articles of Incorporation was established on April 15, 1975 (contents omitted) The forty-eighth amendment was made on June 12, The forty-ninth amendment was made on June 20, Article changed as well as adds amendment number and date. Resolution: 4

7 C. Report Items Business Report (Please refer to Appendix 1) Supervisors' Review Report (Please refer to Appendix 2) 3. The Status of Endorsement and Guarantee The Company's aggregate amount of endorsements and guarantee on December 31, 2015 is as follows: Unit: NTD$ 1,000 Guarantor Guarantee Amounts TPV-INVENTA Holding Ltd., and Inventec Corporation TPV-INVENTA Technology Co., Ltd. 1,148,700 Inventec (Czech), s. r. o. 16,410 Total 1,165, The Status of Distribution Remuneration of Employees Directors and Supervisors in Explanation: (1) According to the article 26 of Articles of Incorporation (after amendment). (2) 2015 Profit before income tax and remuneration of employees directors and supervisors amount is NT $7,018,426,464. The board of directors resolved to distribute NT $336,884,470 to remuneration of employees in cash and NT$ 98, 257, 971 to remuneration of directors and supervisors. 5. The Execution Status of Subsidiary, TPV-INVENTA Holding Limited s Rectification Plan for the Balance of Monetary Loan Exceeds the Limit. Explanation: (1) According to the official document NO of Financial Supervisory Commission on October 29, (2) Subsidiary, TPV-INVENTA Holding Limited loaned funds to its wholly owned subsidiary TPV-INVENTA Technology (Fujian) Ltd and the balance of loan exceeds the limit. The rectification plan which is according to the procedure of monetary loan to others had been submitted to the board meeting on September 30, TPV-INVENTA Holding Limited increased investment in TPV-INVENTA Technology (Fujian) Ltd by means of debt-for-equity swap. The rectification plan and capital increase had been completed on 2015Q4. 5

8 D. Ratification Items Item 1 Proposed by the Board Proposal: Ratification of the 2015 Business Report and Financial Statements. Explanation: The Company s 2015 Individual Financial Statements and Consolidated Financial Statements, including the balance sheet, comprehensive income statement, statements of cash flows, and statement of changes in equity, were audited by independent accountants, Chen, Ying-Ru and Yang, Leou-Fong of KPMG Certified Public Accountants. Also Business Report and Financial Statements have been approved by the Board and examined by the Supervisors of Inventec Corporation. (Please refer to Appendix 1 for Business Report, Appendix 3 for Independent Accountants Audit Report and Individual Finance Statements, and Appendix 4 for Independent Accountants Audit Report and Consolidated Finance Statements.) Resolution: Item2 Proposed by the Board Proposal: Adoption of the Proposal for Distribution of 2015 Profits Explanation: (1) With regard to earnings in 2015, an earnings distribution table has been prepared in accordance with the Company s Articles of Incorporation. The distributable net profit for 2015 is NT$ 5,973,402,758 and the proposed cash dividend to shareholders is NT$1.4 per share (NT $5,022,465,092).The earnings distribution table was reviewed by the Supervisors and attached in Appendix 5. (2) In the event that, before the distribution record date, the proposed profit distribution is affected by buyback of shares, it is proposed that the Board of Directors be authorized to adjust the cash distribution ratio based on the number of actual shares outstanding on the record date. (3) Upon the approval of the Annual Meeting of Shareholders, it is proposed that the Board of Directors is authorized to resolve the ex-dividend record date. Resolution: 6

9 E. Discussion Items (2) Item1 Proposed by the Board Proposal: Discussion of Rename and Amendments to the Procedures for Election of Directors and Supervisors. Explanation: (1) Inventec will establish Audit Committee in accordance with the Financial Supervisory Commission s official document NO at Annual Meeting of Shareholders in Therefore, the Company shall delete the relative regulations of Supervisors in Procedures for Election of Directors and Supervisors and rename it to Procedures for Election of Directors. (2) Please refer to the comparison chart of Amendments to Procedures for Election of Directors and Supervisors below. Comparison Chart of Amendments to Procedures for Election of Directors and Supervisors Current Name Revised Name Reason Procedures for Election of Directors Procedures for Election of Directors and Supervisors Article 1 Delete relative wording of Supervisors to comply with the amendments of the article. Original Version Amendment Version Reason To ensure a just, fair, and open Article 1 To ensure a just, fair, and open Delete relative election of directors and election of directors, elections of wording of supervisors, elections of directors directors shall be conducted in and supervisors shall be conducted accordance with the Procedures Supervisors. in accordance with the Procedures adopted pursuant to Corporate adopted pursuant to Corporate Governance Best Practice Governance Best Practice Principles for TWSE/GTSM Listed Principles for TWSE/GTSM Companies unless applicable laws Listed Companies unless and regulations or articles of applicable laws and regulations or incorporation provide otherwise. articles of incorporation provide otherwise. Article 2 Article 3 Directors and supervisors shall be elected in the shareholders' meeting. Directors and supervisors who shall be elected among the persons with disposing capacity, even though not shareholders. The overall composition of the board of directors shall be taken into consideration in the selection of the Corporation's directors. Each board member shall have the necessary knowledge, skill, and Article 2 Article 3 Directors shall be elected in the shareholders' meeting. Directors who shall be elected among the persons with disposing capacity, even though not shareholders. The overall composition of the board of directors shall be taken into consideration in the selection of the Corporation's directors. Besides, the Company shall consider of variety to compose of the board of directors Delete relative wording of Supervisors. Amend wording. 7

10 Article 4 Article 5 experience to perform their duties; the abilities that must be present in the board as a whole are as follows: the ability to make judgments about operations Accounting and financial analysis ability Business management ability Crisis management ability Knowledge of the industry International market perspective Leadership ability Decision-making ability. Supervisors shall meet the following qualifications: Integrity and a practical attitude Impartial judgment Professional knowledge Broad experience Ability to read financial statements. In addition to the requirements of the preceding paragraph, at least one among the supervisors of this Corporation must be an accounting or finance professional. When the position of independent director has been created, the election of independent directors of this Corporation shall comply with the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, and shall be conducted in accordance with the Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies. The number of directors and supervisors will be as specified in this Corporation's articles of incorporation. The election shall adopt the candidate nomination system which is conformed to the Article of the Company Act, and the shareholders shall elect the directors and supervisors from the list of the nominated candidates. Independent and non-independent directors shall be elected at the same time but on separate ballots. When the government or a juristic person is a shareholder of the company, then except with the approval of the Competent Authority, a representative of the government or juristic person may Article 4 Article 5 8 and think about operation operation type and development demand to make an appropriate diversity policy, including but not limited to the following standards: 1. Basic conditions and value: gender age nationality and culture. 2. Professional knowledge and techniques: professional background (like legislation accounting industry finance marketing or technology) professional techniques and industrial experience. Each board member shall have the necessary knowledge, skill, and experience to perform their duties; the abilities that must be present in the board as a whole are as follows: the ability to make judgments about operations Accounting and financial analysis ability Business management ability Crisis management ability Knowledge of the industry International market perspective Leadership ability Decision-making ability. When the position of independent director has been created, the election of independent directors of this Corporation shall comply with the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, and shall be conducted in accordance with the Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies. At least one of the independent directors should have accounting or financial specialty. The number of directors will be as specified in this Corporation's articles of incorporation. The election shall adopt the candidate nomination system which is conformed to the Article of the Company Act, and the shareholders shall elect the directors from the list of the nominated candidates. Independent and non-independent directors shall be elected at the same time but on separate ballots. Except where the Competent Authority has granted approval, the following relationships may not exist among more than half of a company's directors: 1. A spousal relationship. Amend wording. Delete relative wording of Supervisors

11 Article 6 not concurrently be selected or serve as the director or supervisor of the company. Except where the Competent Authority has granted approval, the following relationships may not exist among more than half of a company's directors: 1. A spousal relationship. 2. A familial relationship within the second degree of kinship. Except where the Competent Authority has granted approval, a company shall have at least one or more supervisors, or one or more supervisors and directors, among whom no relationship under the preceding subparagraphs exists. When a company convenes a shareholder meeting for the election of supervisors or directors and the original selectees do not meet the conditions of the two preceding paragraphs, determination of which directors or supervisors are elected shall be made according to the following provisions: 1. When there are some among the directors who do not meet the conditions, the election of the director receiving the lowest number of votes among those not meeting the conditions shall be deemed invalid. 2. When there are some among the supervisors who do not meet the conditions, the provisions of the preceding subparagraph shall apply mutatis mutandis. 3. When there are some among the directors and supervisors who do not meet the conditions, the election of the supervisor receiving the lowest number of votes among those not meeting the conditions shall be deemed invalid. The single open cumulative ballot method shall be used for election of the directors and supervisors at this Corporation. Each share will have voting rights in number equal to the directors or supervisors to be elected, and may be cast for a single candidate or split among multiple candidates. The board of directors shall prepare separate ballots for directors and supervisors in numbers corresponding to the directors or Article 6 2. A familial relationship within the second degree of kinship. When a company convenes a shareholder meeting for the election of directors and the original selectees do not meet the conditions of the two preceding paragraphs, the election of the director receiving the lowest number of votes among those not meeting the conditions shall be deemed invalid. The cumulative voting system shall be used for election of the directors at this Corporation. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. The board of directors shall prepare separate ballots for directors in numbers corresponding to the directors to be elected. The number of voting rights associated with each ballot shall be specified on the Delete relative wording of Supervisors. 9

12 Article 7 Article 12 Article 13 supervisors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders. The number of directors and supervisors shall be provided by the the Articles of Incorporation of the Company. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. A candidate simultaneously elected as a director and supervisor shall, at the candidate's own discretion, decide to serve as either director or supervisor. The position left vacant by such decision shall be filled by the candidate with the next most votes in the original election before the date the new registration license.when two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance. The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, including the list of persons elected as directors or supervisors with which they were elected, shall be announced by the chair on the site. The board of directors of this Corporation shall issue notifications to the persons elected as directors or supervisors. Article 7 Article 12 Article 13 ballots, which shall then be distributed to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders. The number of directors shall be provided by the the Articles of Incorporation of the Company. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. The position left vacant by such decision shall be filled by the candidate with the next most votes in the original election before the date the new registration license.when two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance. The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, including the list of persons elected as directors and the numbers of votes with which they were elected, shall be announced by the chair on the site. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation. The board of directors of this Corporation shall issue notifications to the persons elected as directors. Delete relative wording of Supervisors. Comply with the amendments of relative Act. Delete relative wording of Supervisors. Resolution: 10

13 Item2 Proposed by the Board Proposal: Proposal for Release the Prohibition on Director Huang, Kuo-Chun Chang, Chang- Pang and Chen, Ruey-Long from Participation in Competitive Business. Explanation: (1) According to provisions of Company Act Article 209 Item 1, a director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval. (2) The meeting of shareholders on June 12, 2014 approved that the prohibition of business strife on current directors were lifted from the on board date. (3) Proposal for release the prohibition on current director from participation in competitive business. Please refer the list of current director s new position in other companies below. List of Current Director s New Position in Other Companies Position Name Serve in other Company Position in other company Director Huang, Kuo-Chun TPV-INVENTA Holding Limited Chairman / Legal representative of Inventec (Cayman) Corp TPV-INVENTA Technology Co, Ltd Chairman / Legal representative of TPV-INVENTA Holding Limited TPV-INVENTA Technology(Fujian) Co, Ltd Chairman / Legal representative of TPV-INVENTA Holding Limited Independent director Chang,Chang- Pang Maxigen Biotech Inc Director/ Legal representative of Global Financial Services Jintex Corporation LTD Supervisor Global Financial Services Director/ Legal representative of Global Investment Holdings Global Investment Holdings Executive Director/ Legal representative of Zi-Yu Investment CO.,LTD Zi-Yu Investment CO.,LTD Director Independent director Chen, Ruey-Long Teknowledge Development Corporation Director/ Legal representative Ren-Dian Investment CO.,LTD Bank of Panhsin HannStar Board Corporation 11 Director Director

14 Asia Cement Corporation PowerGate Optical Inc Gintech Energy Corporation Director/ Legal representative of Da-Ju Chemicals and Fiber CO.,LTD Director/ Legal representative of Teknowledge Development Corporation Director Resolution: F. Extraordinary Motions G. Adjournment 12

15 Appendix 1 Business Report Thank you for attending Inventec s annual shareholders meeting, the operation performance of 2015 is summarized below: with regard to revenue and profit making, the individual revenue and consolidated revenue of the Company reached approximately NTD289.3 billion and NTD395.4 billion, respectively. The product portfolio is mainly computer products; compared to 2014 (in 2014, individual revenue and consolidated revenue were approximately NTD330.7 billion and NTD435.5 billion, respectively), the individual revenue has decreased by 12.5%, while the consolidated revenue decreased by 9.2%. Regarding product category, due to the continuous downturn of notebook computer market, the popularity degree of the new operation platform was not as expected, the annual revenue decreased by 25.28%; driven by the continuous fermentation of cloud computing market issues, the revenue performance in server products has been relatively stable, with the annual revenue in 2015 increasing by 24.05%. With regard to wireless devices and mobile communication products, thanks to customer product hot sales and the expansion of production capacity, the operation income contributed approximately NTD46.9 billion of revenue, and the annual revenue performance increased by 0.29%. As for solar energy products, the overall revenue contribution of the Group s solar energy products was approximately NTD12.9 billion, an increase of 14.79% year-on-year. In regard to profit making, the annual net profit attributable to parent company shareholders reached approximately NTD5.5 billion, with earnings per share of NTD1.55, a reduction of approximately NTD1.5 billion from the previous year, profit making decreased by 21.6%, the main reason is that the notebook computer market is facing slow-moving growth and price competition. Nevertheless, the server and mobile communication product markets are continuing to experience stable growth; furthermore, with regard to reinvestment business, under the supply chain vertical integration and organizational merger, the Company hopes to improve its business turnover and profit making capacity to bring positive benefit to the Group s performance. This year s business plan summary and future development strategies: Due to the continuous downturn of the global economy in 2016, the shipment volume of traditional notebook computers continues to be impacted by the stagnated growth in the change of ultimate consumer habits; faced with the challenges of the information industry operating environment, Inventec will adhere to innovative thinking, adjust its operating strategy, and actively face future challenges to seek new kinetic energy for operation growth. With regard to 13

16 personal computer products, Inventec will continuously coordinate with the demand of major international manufacturers and develop light, thin, and portable products to meet market trends and consumer demands; regarding enterprise solutions (including servers, storage, and LAN switches), Inventec will continue to focus on the hardware leading foundation of network integration, storage, computation modules, etc. and adhere to main trends in cloud application, integrate software and hardware development capability, and actively develop customers to continuously expand its leading position in the server-related product market; furthermore, with regard to wireless devices and smart mobile products, we will gradually improve the proportion of automated processes in order to reduce production costs, as well as coordinate with advanced technological solutions to provide end customers with smart home and wireless intelligent end products; as for the solar energy industry, through vertical integration of Inventec Solar Energy Corporation and Inventec Energy Corporation, we will continue to cut costs in the hopes of gradually improving operation efficiency to expand market competitiveness; in order to capture the opportunity of the handheld wireless devices for Industrial usage market, Inventec Corporation and Advantech Co., Ltd. form a strategic alliance to establish a Joint Venture Company, we hope to further provide a complete solution to the customer and become the pioneer of industrial smart mobile devices through combining the advantages of both parties in the aspect of research and development, manufacturing and brand; finally, regarding research and development innovation, in 2015, the product research and development costs of the Group reached NTD8.8 billion; in the future, we will continue to work hard at product innovation, automated processes, etc. in order to maintain core competitiveness. When pursuing an enterprise s sustainable operation and creating enterprise value, Inventec also fulfills its corporate citizenship responsibility. Through Inventec Group Charity Foundation, it has gathered the Group s caring volunteers to actively promote relevant volunteer businesses such as social care, emergency relief, environmental protection, culture promotion, etc. over the long term in order to practice the social service philosophy of Inventec Group, namely environmental protection, culture, poverty relief, and community. In the past year, whether in the Formosa dust explosion incident or Taiwan earthquake, you can always witness the social responsibility spirit of Inventec Group in treating others as ourselves and loving others as ourselves and assisting disaster stricken populations to live through hard times. Looking toward 2016, Inventec will continue to adhere to the operation philosophy of Innovation, Quality, Open mind and Execution, in addition to caring for its existing customers, Inventec will continuously improve its management performance to consolidate its long-term 14

17 competitive advantage through product diversification, strategic investment, human resource inventory, and organization optimization in order to expand the Group s operation scale and its growth space in profit making. This is the everlasting commitment of the Inventec management team to its shareholders and investors. Again, thanks to every shareholder for their support of and guidance to Inventec. Best regards, Chairman: Lee, Tsu-Chin President: Huang, Kuo-Chun Accounting Officer: Yu, Chin-Pao 15

18 Appendix 2 Supervisors' Review Report Date: Apr.28, 2016 The Board of Directors has prepared and submitted to us the Company s 2015 financial statements which have been audited and certified by Chen Ying Ju and Yang Liu Fong of KPMG Certified Public Accountants, along with Company's business report and earnings distribution proposals. We, the Supervisors, have duly examined the same as correct and accurate. We hereby report to the 2016 Annual General Shareholders Meeting in accordance with Article 219 of the Company Act for your review. Inventec Corporation Supervisor: Wang, Ping-Hui Supervisor: Cheng, Hsien-Ho Supervisor: Shyh Shiunn Investment Corp. (Representative: Yang, Chiung-Nan) 16

19 Appendix 3- Independent Auditors Report and Individual Financial Statements for Year 2015 Independent Auditors Report The Board of Directors of Inventec Corporation: We have audited the accompanying balance sheets of Inventec Corporation (the "Company") as of December 31, 2015, and 2014, and the related statements of comprehensive income, changes in equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of certain investees accounted for under the equity method, in which the Company's long term equity investments amounted to $22,083,104 thousand, representing 14.41% of total assets as of December 31, 2014, and related investment income was $976,579 thousand, representing 11.14% of net income before tax for the years ended December 31, The financial statements of these investees accounted for under the equity method were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts for these companies, were based solely on the reports of other auditors. We conducted our audits in accordance with "Regulation Governing Auditing and Certification of Financial Statements by Certified Public Accountants" and auditing standards generally accepted in the Republic of China. Those regulations and standards require that we plan and perform the audit to obtain reasonable assurance about whether the non consolidated financial statements are free of material misstatements. An audit includes examining, on a test basis, evidences supporting the amounts and disclosures in the non consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall non consolidated financial statement presentation. We believe that our audits and the reports issued by other auditors provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of other auditors, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2015 and 2014, and the results of their operations and their cash flows for the years then ended, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. KPMG CPA:Ying Ru, Chen Leou Fong, Yang Taipei, Taiwan, R.O.C March 22, 2016 Note to Readers The accompanying financial statements are intended only to present the financial position, results of operations and cash flows in accordance with the International Financial Reporting Standards approved by the Financial Supervisory Commissions in the Republic of China and not those of any 17

20 other jurisdictions. The standards, procedures, and practices to audit such financial statements are those generally accepted and applied in the Republic of China. The independent auditors' report and the accompanying 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 financial statements, the Chinese version shall prevail. 18

21 (English Translation of Financial Report Originally Issued in Chinese) INVENTEC CORPORATION Balance Sheets December 31, 2015 and 2014 (Amounts Expressed in Thousands of New Taiwan Dollars) Assets Amount % Amount % Current assets: 1100 Cash and cash equivalents (Notes (4) and (6)(a)) $ 6,486, ,959, Current financial assets at fair value through profit or loss (Notes (4) and (6)(b)) 85,770-65, Current available-for-sale financial assets (Notes (4) and (6)(b)) 574, , Accounts receivable, net (Notes (4) and (6)(c)) 28,243, ,650, Accounts receivable due from related parties, net (Notes (4), (6)(c) and (7)) 20,960, ,081, Other receivables (Notes (4), (6)(c) and (7)) 34,049, ,814, Inventories, manufacturing business, net (Notes (4) and (6)(d)) 818, , Other current assets others (Notes (4) and (6)(i)) 413,371-90,234 - Non-current assets: 91,631, ,949, Non-current available-for-sale financial assets (Notes (4) and (6)(b)) 331, , Non-current financial assets at cost (Notes (4) and (6)(b)) 220, , Investments accounted for using equity method (Notes (4), (6)(e) and (6)(f)) 36,111, ,739, Property, plant, and equipment (Notes (4) and (6)(g)) 5,739, ,820, Intangible assets (Notes (4) and (6)(h)) 56,851-86, Other non-current assets others (Notes (4), (6)(i), (6)(m), (7) and (8)) 1,622, , ,082, ,291, LIABILITIES AND EQUITY Amount % Amount % Current Liabilities: 2100 Short-term borrowings (Note (6)(j)) $ 5,380, ,054, Current financial liabilities at fair value through profit or loss (Notes (4) and (6)(b)) , Notes payable - related parties (Note (7)) 12,132-24, Accounts payable 26,274, ,694, Accounts payable - related parties (Note (7)) 22,571, ,385, Current tax liabilities 622, , Other payables (Note (7)) 5,210, ,256, Long-term borrowings current portion (Note (6)(j)) ,029, Other current liabilities others 5,555, ,211, Unearned revenue 2,577, ,254,427 2 Non-current Liabilities: 68,203, ,810, Long-term borrowings (Note (6)(j)) 9,189, Net defined benefit liabilities-non-current (Notes (4) and (6)(l)) 993, , Other non-current liabilities- others (Notes (4) and (6)(m)) 846, ,966-11,029, ,852,928 1 Total Liabilities 79,232, ,663, Ordinary share (Note (6)(n)) 35,874, ,874, Capital surplus (Note (6)(n)) 2,912, ,920,718 2 Retained earnings(note (6)(n)): 3310 Legal reserve 8,354, ,644, Unappropriated retained earnings 6,529, ,129, Other equity (Note (6)(n)) 2,809, ,009,234 2 Total equity 56,480, ,578, TOTAL ASSETS $ 135,713, ,241, TOTAL LIABILITIES AND EQUITY $ 135,713, ,241, Please refer to financial statements. 19

22 (English Translation of Financial Report Originally Issued in Chinese) INVENTEC CORPORATION Statements of Comprehensive Income For the Years Ended December 31, 2015 and 2014 (Amounts Expressed in Thousands of New Taiwan Dollars) Amount % Amount % 4110 Sales revenue (Notes (4), (6)(p) and (7)) $ 289,354, ,784, Operating costs(notes (4), (6)(d) and (7)) 277,304, ,437, Gross profit from operation 12,049, ,346, Less:Unrealized profit (loss) from sales(note (7)) 15,615-12, Plus:Realized profit (loss) on from sales(note (7)) 12,315-16,869 - Gross profit from operation 12,046, ,351,512 4 Operating expenses: 6100 Selling expenses 1,643,997-2,090, Administrative expenses 1,954, ,015, Research and development 4,645, ,774,060 1 Total operating expenses 8,244, ,879,880 3 Operating profit 3,801, ,471,632 1 Non-operating income and expenses:(notes (4), (6)(e) and (6)(r)) 7010 Other income 22,553-29, Other gains and losses 1,499, ,690, Finance costs (183,330) - (274,464) Share of profit (loss) of associates and joint ventures accounted for using equity method 1,442,902-2,847,851 1 Total non-operating income and expenses 2,781, ,293, Profit before income tax 6,583, ,764, Less: Tax expense (Notes (4) and (6)(m)) 1,019,651-1,667, Profit for the period 5,563, ,097,815 2 Other comprehensive income (loss): 8310 Items that will not be reclassified subsequently to profit or loss 8311 Remeasurement from the defined benefit plans (51,776) - 11, Share of other comprehensive income of associates and joint ventures accounted for using equity method (4,895) - (19,290) Income tax expense related to items that will not be reclassified subsequently 8,802 - (1,913) - Total items that will not be reclassified subsequently to profit or loss (47,869) - (9,951) Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on transition of foreign financial statements 3,751-43, Unrealized losses on available-for-sale financial assets 55, Share of other comprehensive income of associates and joint ventures accounted (258,721) - 1,324,064 - for using equity method 8399 Income tax benefit (expense) related to items that are or may be reclassified subsequently Total items that may be reclassified subsequently to profit or loss (199,884) - 1,367,970 - Other comprehensive income (loss) for the period, net of tax (247,753) - 1,358, Total comprehensive income for the period $ 5,315, ,455,834 2 Earning per share attributable to stockholders of parent (Notes (4) and (6)(o)) 9750 Basic earnings per share (NT dollars) $ Diluted earnings per share (NT dollars) $ Please refer to financial statements. 20

23 (English Translation of Financial Report Originally Issued in Chinese) INVENTEC CORPORATION Statements of Changes in Equity For the Years Ended December 31, 2015 and 2014 (Amounts Expressed in Thousands of New Taiwan Dollars) Other Equity Interest Capital Stock Retained Earnings Exchange Differences on Unrealized Gains (Losses) Translation of on Share Capital Capital Surplus Legal Reserve Unappropriated Retained Earnings Foreign Financial Statements Available-for-Sale Financial Assets Total Equity Balance, January 1, 2014 $ 35,874,751 2,895,677 6,936,854 7,488,577 1,495, ,155 54,837,123 Net income for the period ,097, ,097,815 Other comprehensive income (loss) for the period (9,951) 1,373,853 (5,883) 1,358,019 Total comprehensive income (loss) for the period ,087,864 1,373,853 (5,883) 8,455,834 Appropriation and distribution of retained earnings:(note1) Legal reserve appropriated ,417 (707,417) Cash dividends of ordinary share (5,739,960) - - (5,739,960) Others - 25, ,041 Balance, December 31, ,874,751 2,920,718 7,644,271 8,129,064 2,868, ,272 57,578,038 Net income for the period ,563, ,563,633 Other comprehensive income (loss) for the period (47,869) (264,790) 64,906 (247,753) Total comprehensive income (loss) for the period ,515,764 (264,790) 64,906 5,315,880 Appropriation and distribution of retained earnings:(note2) Legal reserve appropriated ,781 (709,781) Cash dividends of ordinary share (6,278,081) - - (6,278,081) Others - (7,934) - (127,199) - - (135,133) Balance, December 31, 2015 $ 35,874,751 2,912,784 8,354,052 6,529,767 2,604, ,178 56,480,704 Note 1: Emoluments to directors amounted to $127,335 and bonuses to employees amounted to $445,673 were charged against earnings. Note 2: Emoluments to directors amounted to $127,761 and bonuses to employees amounted to $447,162 were charged against earnings. Please refer to financial statements. 21

24 (English Translation of Financial Report Originally Issued in Chinese) INVENTEC CORPORATION Statements of Cash Flows For the Years Ended December 31, 2015 and 2014 (Amounts Expressed in Thousands of New Taiwan Dollars) Cash flows from operating activities: Profit before income tax $ 6,583,284 8,764,913 Adjustments to reconcile profit before income tax to net cash provided by operating activities: Depreciation expense 215, ,497 Amortization expense 503, ,696 Provision for bad debt expense 3,766 20,375 Interest expense 183, ,464 Interest income (22,553) (29,625) Share of loss (profit) of associates and joint ventures accounted for using equity method (1,442,902) (2,847,851) Gain on disposal of property, plant, and equipment - (2,871) Loss (gain) on disposal of investments (994) 1,212 Impairment loss on financial assets - 87,021 Impairment loss on non-financial assets - 12,307 Total adjustments to reconcile loss (559,686) (1,307,775) Change in operating assets and liabilities: Change in operating assets: Increase in financial assets held for trading (20,534) (17,239) Decrease (Increase) in accounts receivable 5,524,841 (1,901,314) Decrease in other receivables 14,766,269 47,155,765 (Increase) decrease in inventories 40,704 (141,228) (Increase) decrease in other current assets (323,136) 75,147 Total changes in operating assets 19,988,144 45,171,131 Changes in operating liabilities: (Decrease) Increase in financial liabilities held for trading (17,095) 14,852 Decrease in notes payable (12,131) (26,239) Decrease in accounts payable (13,234,310) (46,374,021) (Decrease )Increase in other payables (50,231) 1,381,497 Increase in other current liabilities 3,344, ,654 Decrease in net defined benefit liabilities-non-current (15,147) (13,139) Increase in deferred income 323, ,880 Total changes in operating liabilities (9,661,746) (43,599,516) Total changes in operating assets and liabilities 10,326,398 1,571,615 Total adjustments 9,766, ,840 Cash inflow generated from operations 16,349,996 9,028,753 Interest received 21,849 28,218 Dividends received 1,268, ,000 Interest paid (182,674) (281,678) Income taxes paid (1,499,812) (1,135,483) Net cash flows from operating activities 15,957,359 8,135,810 Please refer to financial statements. 22

25 (English Translation of Financial Report Originally Issued in Chinese) INVENTEC CORPORATION Statements of Cash Flows (CONT'D) For the Years Ended December 31, 2015 and 2014 (Amounts Expressed in Thousands of New Taiwan Dollars) Cash flows from investing activities: Proceeds from capital reduction of available-for-sale financial assets 35,371 6,650 Acquisition of financial assets at cost (15,235) (123,200) Proceeds from capital reduction of financial assets at cost 88,354 - Acquisition of investments accounted for using equity method (1,074,394) (50,940) Proceeds from disposal of investments accounted for using equity method 482,184 - Acquisition of property, plant and equipment (131,683) (88,628) Proceeds from disposal of property, plant and equipment - 19,199 Acquisition of intangible assets (239,021) (374,603) Increase in other non-current assets (780,940) (301,533) Net cash used in investing activities (1,635,364) (913,055) Cash flows from financing activities: Decrease in short-term borrowings (674,419) (4,172,234) Proceeds from long-term borrowings 9,189, ,250 Repayments from long-term debt (15,029,000) - Decrease in other non-current liabilities (2,651) (4,554) Cash dividends paid (6,278,081) (5,739,960) Net cash used in financing activities (12,794,551) (9,066,498) Net (decrease) increase in cash and cash equivalents 1,527,444 (1,843,743) Cash and cash equivalents at beginning of period 4,959,500 6,803,243 Cash and cash equivalents at end of period $ 6,486,944 4,959,500 Please refer to financial statements. 23