2013 Annual Report

HON HAI PRECISION INDUSTRY CO., LTD.

Annual Report

2013

Annual Report Website

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

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

Printing Date: April 30, 2014

THIS IS A TRANSLATION OF THE 2013 ANNUAL REPORT (THE "ANNUAL REPORT") OF HON HAI PRECISION INDUSTRY CO., LTD. (THE "COMPANY"). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE ANNUAL REPORT SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

I. Spokesperson: Deputy Spokesperson:

Name: Simon Hsing Name: Wenmin Chu

Title: Spokesperson Title: Director of Public Relations Office

Tel: (02)2268-3466#3629 Tel: (02)2268-3466#3869

E-mail: [email protected]

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

Head office

Add: No. 66, Zhongshan Road, Tucheng Industrial Zone, Tucheng District, New Taipei City

Tel: (02)2268-3466

Hsinchu Science Park Branch Office

Add: 5F-1, No. 5, Hsin-an Road, Hsinchu Science and Industrial Park, East Area, Hsinchu City

Tel: (03)578-4975

Neihu Branch Office

Add: 1F-11F, No. 32, Jihu Road, Neihu District, Taipei City

Tel: (02)2799-6111

California (US) Branch Office

Add: 288 S. Mayo Ave City of Industry, CA 91789 U.S.A.

Tel: 1-714-680-2066

Huyue Factory

Add: No. 2, Zihyou Street, Tucheng Industrial Zone, Tucheng District, New Taipei City

Tel: (02)2268-3466

Minsheng Factory

Add: No. 4-1, Minsheng Road, Tucheng Industrial Zone, Tucheng District, New Taipei City.

Tel: (02)2267-6511

Dingpu No. 1 Factory

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

Tel: (02)2268-3466

Dingpu No. 2 Factory

Add: 2F, No. 53, Section 4, Zhongyang Road, Tucheng District, New Taipei City

Tel: (02)2268-3466

Dingpu No. 5 Factory

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

Tel: (02)2268-3466

III. Share Transfer Agency

Name: Grand Fortune Securities Co., Ltd.

Address: 3F, No. 51, Section 1, Minsheng East Road, Taipei City

Tel: (02)2562-1658

Website: http://www.gfortune.com.tw 

IV. Contact information of the Certified Public Accountants for the Latest Financial Repot

Name: Hsu,Yong-jian, Xue,Ming-ling

CPA Firm: Pricewaterhouse Coopers (PwC) Taiwan

Address: 27F, No. 333, Section 1, Keelong Road, Taipei City

Tel: (02)2729-6666

Website: http://www.pwc.tw 

V. Overseas trade places for listed negotiable securities

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

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

I. Letter to Shareholders

"Change" shall be the watchword we used to describe the global political, economic and industrial circumstance in the past year. The IMF (International Monetary Fund) downgraded global economic growth rate six times within a year. This shows that the economic recovery strength is far behind our expectations. The changes are also more difficult to be predicted. The Company has entered its 40th anniversary since its founding. In an environment of such dramatic change, we are proud of our high consolidated revenue and profit figures in the last fiscal year. I would like to thank all my colleagues, partners, clients, and suppliers for their confidence in us. I also would like to thank all shareholders for their long-term support of the Company.

In reviewing the 2013 global economic environment, mature markets such as the U.S. and Japan have shown progress under governmental stimulus policies. The European market has temporarily stabilized after experiencing difficulties for many years. However, emerging markets, such as former BRIC countries, have experienced volatilities in stocks, bonds and foreign exchanges markets and the strength of economic growth has substantially cooled down while U.S. Fed. (Federal Reserve Board) announced quantitative easing and a gradual exit while international capital withdrew from emerging markets.

In the meantime, the industrial structure has changed into an ecosystem war instead of the old contest of hardware brand names in this "post-PC era". The acquisition and consolidation of industry entities will continue to proceed, this emphasizes that companies must establish new business models in order to succeed.

Under such a strange and ever-changing environment, our Company is still developmentally stable and is recognized by other business parties. According to the U.S. Fortune "Global 500" ranking report, our Company has moved up in ranking once again from 43rd in 2012 to 30th last year while we continue to strengthen in technical development. In addition, our Company obtained 2,279 U.S. patents in 2013, ranking 8th in the whole world. This dense layout patent network will ensure that the Company continues to innovate and consolidate our competitive advantage.

Looking forward to 2014, we believe persistence can conquer all and wisdom is invincible. When facing uncertainties and continued shuffling in the technology industry, the Company will keep enhancing our competitiveness, deepening our global layout, and gripping worldwide market opportunities for growth.

As shown on the actual technical development layout, the Company is highly involved in research and development of new products, technologies and applications. The Company is also actively recruiting professionals in various fields. The long-term research directions including the information industry, telecommunications industry, consumer electronics, automation equipment, optoelectronics, precision machinery, electric cars, etc., have established rapid production capabilities from components, modules, products assembling to the integrated services.

Today, the Company has expanded from the existing IIDM manufacturing base (Integration-Innovation-Design-Manufacturing) into cloud services, wireless 4G-LTE networking services and e-commerce. A full "eight screens one network one cloud blue print" will cover working, education, entertainment, social / family relations, security, health, e-commerce, environmentally friendly cars and eight other major new technologies of life. In the future 5G era, the Company will focus on the development of automation and artificial intelligence, combining hardware/software capabilities, using technology to improve human life, and creating greater value for shareholders.

Once again, on behalf of all shareholders of the Company, I sincerely thank all the employees and their families. I also encourage the Company's management team continue to work hard to maintain the excellent operating results. Thank you so much for all your support.

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