QUANTA COMPUTER INC.

Transcription

1 [Translation] Stock Code: 2382 QUANTA COMPUTER INC Annual General Shareholders Meeting Meeting Minutes June 18,

2 QUANTA COMPUTER INC Annual General Shareholders Meeting Minutes Time: June 18, 2015 (Thursday) at 9:00 am Venue: Quanta Computer (No. 188, Wen-Hua 2 nd Rd., Guishan Dist., Taoyuan City, Taiwan) Total shares represented by shareholders present in person or proxy: 3,434,556,958 shares, or 88.91% of total outstanding shares of 3,862,627,432. Chairman: Barry Lam Attendees: Chung-Yi, Chiang (CPA); Pei-Chi, Hung (Lawyer) Recorder: Hsin-Yi, Chien The aggregate shareholding of the shareholders present in person or proxy constituted a quorum. The Chairman called the meeting to order. Chairman s Address: (Omitted) I. Report Items: None II. Approval Items Item 1. Description: To accept FY2014 business report and financial statements (including independent auditor's report and supervisor's review report) Quanta Computer s 2014 Financial Statements, including Balance Sheet, Income Statement, Statement of Changes in Shareholders Equity, and Cash Flow Statement, were audited and certified by KPMG Certified Public Accountants. Please refer to page 5 to 17 of this Handbook, and for financial reports please refer to website: Voting Results: The number of votes casted for the proposal was 3,061,594,738 or 89.14% of the votes represented by the shareholders present. RESOLVED, that the FY2014 Business Report and Financial Statements hereby were accepted as submitted. Shareholders Comments: Shareholder expressed concerns on meeting agenda, business report, financial reports, industry changes, business operations and supervisor s review report. Shareholder suggested the Company to consolidate shareholders comments and to respond to inquiries at once in order to expedite meeting process. 2

3 Shareholder then asked the Company to elebrate on the progress of lawsuite for Quanta Storage Inc. on page 115 as well as the Company s response and strategy to protect information security. Upon solicitation of comments by Chairman, CFO and lawyer, both shareholders had no further comments. Item 2. To approve the allocation of FY2014 distributable earnings Description: (1) The amount for FY2014 earnings available for distribution is derived from net income after tax and after a 10% legal capital reserve. In accordance to Article 27 of the Articles of Incorporation, the distribution details are shown below. (2) Allocation of distributable earnings is approved by the Board of Directors and reviewed by supervisors. Details of remuneration for the directors, supervisors and managers have also been approved by the second remuneration committee. (3) After shareholders meeting approval, the Board of Directors will separately announce the dividend distribution date. (4) Distribution of cash dividend will be rounded up to dollar, or yuan, the total round off will be allotted to other income. (5) Each of the following distribution items may need to be adjusted should regulations change or officials request resulting in adjustment on distribution plan. It is proposed to the shareholders meeting that the Board of Directors be authorized to make necessary adjustments on distribution plan in the event of regulation changes. Quanta Computer Inc. FY2014 Allocation of Distributable Earnings Item Undistributed surplus at the beginning of the period (IFRS) Add: adjustment on actuarial gains or losses for the period Less: changes in equity of affiliated companies Add: reversal of special reserve for the net debit balance of other equity Undistributed surplus at the beginning of the period post adjustment Add: net income after tax for the period Distributable earnings Less: legal reserve from surplus Distribution items: Less: cash dividends Undistributed earnings at the end of the period Notes: Employees Bonus in Cash Remuneration to Directors and Supervisors Unit: NT$ Total 31,234,530,202 2,842,853 (607,427) 4,839,887,299 36,076,652,927 18,884,396,210 54,961,049,137 (1,888,439,621) (15,450,509,728) 37,622,099,788 1,730,000,000 40,000,000 Note: The stock dividend is NT$0 per share, cash dividend is NT$4.00 per share. 3

4 Voting Results: The number of votes casted for the proposal was 3,065,348,738 or 89.25% of the votes represented by the shareholders present. RESOLVED, that the allocation of FY2014 distributable earnings hereby were accepted as submitted. Shareholders Comments: Shareholder asked the Company to explain dividend policy. Upon solicitation of comments by Chairman shareholder had no further comments. III. Discussion Items: Item 1. To approve the revision of the of the Articles of Incorporation Description: (1) To accommodate the amendment of the Company Law, TSE regulations and development of the Company. (2) Comparison of Amendments on the Articles of Incorporation is described in Attachment V. Voting Results: The number of votes casted for the proposal was 3,065,348,598 or 89.25% of the votes represented by the shareholders present. RESOLVED, that the revision of the of the Articles of Incorporation hereby were accepted as submitted. IV. Special Motion: NONE Shareholders Comments: Shareholder raised concerns on the Company s cloud business development, industry seasonality, financials on regional sales, Supervisors execusion on supervision and auditing. Upon solicitation of comments by Chairman, Supervisors and CFO shareholder had no further comments. V. Meeting Adjourned: 10:20am **In case of any discrepancy between the English and Chinese version of those minutes of 2015 Annual General Shareholders Meeting, the Chinese version shall prevail. 4

5 Attachment I (English Translation of Financial Report Originally Issued In Chinese) Independent Auditors Report The Board of Directors of Quanta Computer Inc.: We have audited the accompanying consolidated balance sheets of Quanta Computer Inc. and its subsidiaries ( the Group ) as of December 31, 2014 and 2013, and the consolidated statements of comprehensive income, changes in stockholders equity, and cash flows for the years ended December 31, 2014 and The Company s management is responsible for the preparation and presentation of the consolidated financial statements. Our responsibility is to issue a report on these consolidated financial statements based on our audits. We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards 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 financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to in the first paragraph present fairly, in all material respects, the consolidated financial position of Quanta Computer Inc. and its subsidiaries as of December 31, 2014 and 2013, and the results of their consolidated operations and their consolidated cash flows for the years then ended, in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China. 5

6 Quanta Computer Inc. has additionally prepared the parent company only financial statements as of and for the years ended December 31, 2014 and 2013, on which we have issued an unqualified opinion. KPMG CPA: Chiang, Chung Yi Yang, Leou Fong Taipei, Taiwan, R.O.C. March 30, 2015 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 R.O.C Financial Supervisory Commissions and not those of any other jurisdictions. The standards, procedures, and practices to audit such financial statements are those generally accepted and applied in the Republic of China. The 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. 6

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12 (English Translation of Financial Report Originally Issued In Chinese) Independent Auditors' Report The Board of Directors of Quanta Computer Inc.: We have audited the accompanying parent company only balance sheets of Quanta Computer Inc. as of December 31, 2014 and 2013, and the parent company only statements of comprehensive income, changes in stockholders' equity, and cash flows for the years ended December 31, 2014 and The Company' s management is responsible for the preparation and presentation of the parent company only financial statements. Our responsibility is to issue a report on these financial statements based on our audits. We conducted our audits in accordance with the "Rules Governing the Audit of Financial Statements by Certified Public Accountants" and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the parent company only financial statements referred to in the first paragraph present fairly, in all material respects, the parent company only financial position of Quanta Computer Inc. as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended, in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers. KPMG CPA: Chiang, Chung Yi Yang, Leou Fong Taipei, Taiwan, R.O.C. March 30, 2015 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 R.O.C Financial Supervisory Commissions and not those of any other jurisdictions. The standards, procedures, and practices to audit such financial statements are those generally accepted and applied in the Republic of China. The 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

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18 Attachment II Business Report The worldwide personal computer industry faced minor shipment decline in 2014 from the previous year, fortunately, the magnitude of decline was significantly smaller. The mild shipment decline in 2014 signaled the market is gradually recovering and stablizing after recent sharp corrections. However, the PC industry is still expected to see minor decline in During the time of industry transition, Quanta should remain competitive and stay cautious to weather the challenges ahead. Looking back into 2014, Quanta Computer continued to promote the Three-Five Year Plan led by the four Corporate principles of Superior Quality, Superior Technology, Superior Management, and Superior Outcome. These Corporate principles serve as guidance for continuous improvement on overall operation followed by the ideology of innovation is the core motivation and change is the action model to encourage innovative thinking and to implement various enhancements. The Company strives to deliver superior outcome, continuously identify innovation and breakthrough in every aspect of the business from production to management. Quanta s performance for FY2014 and outlook for FY2015 are as follow: I. Revenue and Income Consolidated revenue in year 2014 was NT$926.3BN, an increase of 5.2% from the previous year. Net income after tax in FY2014 and FY2013 was NT$19.2BN and NT$19.1BN respectively. Net income attributable to owners of parent in FY2014 and FY2013 was NT$18.9BN and NT$18.6BN respectively. EPS in FY2014 was NT$4.90, an increase of 1.23% from the previous year. Non-operating income was NT$10.4BN. Quanta Computer was able to deliver stable growth in 2014 despite volatility in the PC industry. To cope with changes in the industry, the Company s effort to diversify into non-notebook business is beginning to bear fruits, strong progress in Cloud Computing related business is especially encouraging. The Company continues to invest in diversification in order to find the right balance between revenue mix and profitability. Furthermore, higher degree of automation is fully implemented in order to build stronger supply chain, to integrate seamless logistics flow and to strengthen product development capability. The ultimate outcome is to boost productivity per capita. Taking advantage of the Company s strength in product delivery efficiency and flexibility as well as large economy of scale, Quanta is able to sustain its competitiveness through reinforcing its leading edge in research and development as well as innovative design capability. Furthermore, Quanta Computer proactively plays the role of a respectable corporate citizen by taking responsibilities and obligations as a member of the global village. The Company is dedicated to provide solutions that address user s needs by integrating our expertise in both software and hardware. Building on the spirit of creativity, innovation and entrepreneurship, the Company continues to create value that brings human-centric value proposition to the society. The Company has been publishing Corporate Social Responsibility Reports every year since year Third party validation was introduced in 2014 and onwards to improve reliability and quality of the CSR reports and to further enhance the Company s corporate governance and information transparency

19 II. Outlook in 2015 Quanta has been promoting the Three Five-Year Plan since year 2000 and year 2015 is the last year of the plan. A strong foundation has been established after the Company invested ample resources and efforts during the first four years of the third Five-Year Plan. The strong foundation enables the Company to systematically operate overall business, to discover greater potential after dedicated hardwork and to embrace stronger growth rate. Quanta continues to follow the four Corporate principles of Superior Quality, Superior Technology, Superior Management, and Superior Outcome in all business conducts to deliver superior outcome. As the global economy gradually recovers in year 2015, Quanta s core notebook business will continue to grow and the Company will further devote adequate resources to diversify into new business development. Cloud related business and wearable devices are expected to lead the Company s growth, to accelerate revenue and to add fuel to the Company s profitability. To embrace the ever-changing challenges, Quanta must push our limits to think creatively and to take new initiatives to ultimately achieve sustainability. The following four action plans will lead the Company to embrace upcoming new challenges: Identify opportunities ahead of competitions - Gain insights into competitive landscape, foresee future trend, provide customer-driven services, deliver innovative and breakthrough solutions, identify opportunities and act ahead of competitions. Acceleration - Focus on delivering high quality and strong performance to elevate overall operation performance. Simplicity Review and simplify overall operation flow, focus on simplicity, reduce the variety of component types and volume, simplify production and maximize efficiency. Cost Savings - Manage cost savings from material, labor, time, and space. Create the greatest value through minimizing cost and delivering superior products. To succeed in the dynamic competitive landscape, Quanta must utilize its strength in innovative thinking and leverage breakthrough technology to achieve greater improvement and to sustain its competitive edge. With strong efforts devoted by the entire organization and its employees, together we can put creative thinking into action plans and to accelerate overall business operation to the next level of success. Building on the superior corporate value of Truthfulness, Kindness, Beauty, Honesty, Trust and Caring, Quanta will undoubtedly create greater business value and continue to grow. Chairman: Vice Chairman: Chief Financial Officer: Barry Lam C.C. Leung Elton Yang

20 Attachment III Supervisors Review Report 30 March 2015 The Board of Directors have prepared and submitted to us the Company's 2014 Financial Statement and audit report which have been audited and certified by KPMG, along with the business report and proposal for profit allocation. We, the Supervisors, have duly examined the same as correct and accurate. We hereby report to the 2015 Annual General Meeting of Shareholders in accordance to Article 219 of the Company Law. Quanta Computer lnc. Supervisors: Eddie Lee ( 李政霖 ) Steven Chang ( 張景溢 ) Representative of CianYu Investment Ltd. Doris Shen ( 沈素碧 )

21 Attachment IV The Impact of Stock Dividend Issuance on Business Performance, EPS, and Shareholder Return Rate Not available (Company does not simulate or report financial forecast for year 2014, and therefore there will be no forecasted profit or EPS.)

22 Attachment V. Amendments to the Articles of Incorporation Quanta Computer Inc. Articles of Incorporation Before Amendment After Amendment Remark Article 5: The head office of this Corporation shall be in Tao Yuan Shien, Taiwan. Pursuant to the resolutions adopted by the Board of Directors, this Corporation may, if necessary, set up branches or factories within and outside the R.O.C. Article 5: The head office of this Corporation shall be in Tao Yuan City, Taiwan. Pursuant to the resolutions adopted by the Board of Directors, this Corporation may, if necessary, set up branches or factories within and outside the R.O.C. Article 17 This Corporation will have five (5) directors and three (3) supervisors who shall be elected by shareholders with the legal capacity. The election of the independent directors and supervisors shall adopt candidates nomination system, and the shareholders shall elect among the nominees listed in the roster of independent directors and supervisors candidates. The total number of shares of this Corporation held by directors and supervisors shall be subject to the regulations set by the competent authority in charge of securities. Article 30 The twenty seventh amendment was made on June 24, Article 17 This Corporation will have five to nine (5-9) directors and three (3) supervisors who shall be elected by shareholders with the legal capacity. The election of the independent directors and supervisors shall adopt candidates nomination system, and the shareholders shall elect among the nominees listed in the roster of independent directors and supervisors candidates. The total number of shares of this Corporation held by directors and supervisors shall be subject to the regulations set by the competent authority in charge of securities. Article 30 The twenty eighth amendment was made on June 18, Amend due to address changes from Tao Yuan Shien to Tao Yuan City Amend in accordance to business development needs. Adding the twenty eighth amendment date

23 Attachment VI. Quanta Computer Inc. Shareholdings of Directors and Supervisors as of April 20, 2015 Position Name Elected Date Common Shares Held at Previous Election Percentage of Total Number of Issued and Common Outstanding Shares Common Shares Current Common Shares Held Number of Common Shares Percentage of Total Issued and Outstanding Common Shares Chairman Barry Lam ,738, % 415,738, % Vice-Chairman C.C. Leung ,645, % 115,645, % Director C.T. Huang ,078, % 9,163, % Independent Director Wei-Ta Pan , % 6, % Independent Director Chi-Chih Lu % % Supervisor Eddie Lee % % Supervisor Steven Chang % % Supervisor CianYu Investment Ltd , % 572,401, % Total 1,140,870,162 1,112,955,162 Note Other entitlement of 4,000,000 shares Note 1: Issued Capital Stock on June 24, 2013: 3,854,258,432 shares at NT$ 10 par value Note 2: Issued Capital Stock on April 20, 2015: 3,862,627,432 shares at NT$ 10 par value Note 3: QCI s Directors are required to hold in the aggregate no less than 92,703,058 QCI shares. As of April 20, 2015, QCI s Directors together held 540,547,071 QCI shares Note 4: QCI s Supervisors are required to hold in the aggregate no less than 9,270,305 QCI shares. As of April 20, 2015, QCI s Supervisors together held 572,401,374 QCI shares Note 5: Independent Directors and Supervisors shareholdings are not included in the required amount