2015 meeting handbook fst · 2020. 1. 22. · 2015 (reference no....

FORMOSA SUMCO TECHNOLOGY CORPORATION

2015 ANNUAL SHAREHOLDERS’ MEETING

MEETING HANDBOOK

(This English translation is prepared in accordance with the Chinese version and is for reference purposes only. If there are any inconsistency between the Chinese original and this translation, the Chinese version shall prevail.)

JUNE 18, 2015

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Table of Contents

Meeting Procedure …………………………………………… page 2

Meeting Agenda ……………………………..……………… page 3

Report Items ………………………………………………… page 5

Ratification Items …………………………………………… page 14

Discussion Items (I) ………………………………………… page 16

Election Items ………………………………………………… page 26

Discussion Items (II) ………………………………………… page 27

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2015 ANNUAL SHAREHOLDERS’ MEETING PROCEDURE

1. Call Meeting to Order

2. Chairman’s Address

3. Report Items

4. Ratification Items

5. Discussion Items (I)

6. Election Items

7. Discussion Items (II)

8. Extraordinary Motions

9. Meeting Adjourned

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2015 ANNUAL SHAREHOLDERS’ MEETING AGENDA Time: 10:00 a.m., Thursday, June 18, 2015 Venue: 2F meeting room,Building A,No.201, Dunhua N. Rd., Taipei 1. Report Items

(1) 2014 Business Report (2) Supervisors’ Review Report for 2014 (3)Establishment and Amendment of the Company’s “Code of Ethical

Conduct for Directors, Supervisors and Managers”

2. Ratification Items (1) Please approve the 2014 Business Report and Financial Statements

as required by the Company Act. (2) Please approve the Proposal for Distribution of 2014 Profits as

required by the Company Act.

3. Discussion Items (I) (1) To refer to the revisions of “Sample Template for XXX Co., Ltd.

Rules of Procedure for Shareholders Meetings” announced by the Letter of the Taiwan Stock Exchange Corporation dated January 28, 2015 (Reference No. Tai-Cheng-Chih-Li-Tzu-1040001716), the Company’s “Rules of Procedure for Shareholders’ Meeting” shall be amended accordingly. The corresponding comparison table for the current and amended articles is attached. Please discuss and resolve.

(2) To refer to the revisions of “Sample Template for XXX Co., Ltd. Procedures for Election of Directors and Supervisors” announced by the Letter of the Taiwan Stock Exchange Corporation dated January 28, 2015 (Reference No. Tai-Cheng-Chih-Li-Tzu-1040001716), the Company’s “Rules for Election of Directors and Supervisors” shall be amended accordingly. The corresponding comparison table for

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the current and amended articles is attached. Please discuss and resolve.

4. Election Items The term of office of the Company’s Directors and Supervisors have expired. Please elect the new Directors and Supervisors pursuant to the applicable laws.

5. Discussion Items (II) Appropriateness of releasing the newly elected Directors and the juristic person shareholder whose authorized representatives are elected as Directors, from non-competition restrictions. Please discuss and resolve.

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Report Items 1.About the Company’s business operation condition of 2014, please refer

to Business Report for further details (on page 6 of the Handbook.)

2.The Company’s Supervisors reviewed the 2014 Business Report and Financial Statements and issued their Review Report according to the applicable laws. Please refer to Supervisors’ Review Report (on page 10 of the Handbook.)

3.Establishment and Amendment of the Company’s “Code of Ethical Conduct for Directors, Supervisors and Managers” To refer to the revisions of the “Guidelines for the Adoption of Codes of Ethical Conduct for TWSE/TPEx Listed Companies” announced by the Letter of the Taiwan Stock Exchange Corporation dated January 28, 2015 (Reference No. Tai-Cheng-Chih-Li-Tzu-1040001716), the Board of Directors approved the rules of the “Code of Ethical Conduct for Directors, Supervisors and Managers” of the Company on December 22, 2014 and its amendment on March 13,2015 . Please refer to page 11 through page 13 of the Handbook for the amended “Code of Ethical Conduct for Directors, Supervisors and Managers.”

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2014 Business Report I.2014 Business Report

The total revenue of the Corporation was 11,147,014,000, which was 115% of our target 9,723,108,000 and 13% increase as comparing to 9,862,583,000 in 2013. The income before income tax was 1,285,330,000, an increase of 792,569,000 as compared to the expected target income 492,761,000. The completion rate was 261%, an increase of 732,208,000 as comparing to the income 553,122,000 in 2013, representing a growth of 132%. In overall, following the global recovery in 2014, the semiconductor industry continued its prosperity as well. Meanwhile, the Corporation exerted all the strength to expand sales, among them, the sales volume of 200mm wafer was 5% growth and 22% increase in term of 300mm wafer as comparing with 2013. With various aggressive cost down and material price reduction strategies plus the goal of “full capacity, total sales” of 200mm and all-out extensive sales and capacity enhance of 300mm, the costs were reduced efficiently. Accordingly, the revenue of the Corporation in 2014 increased 1,284,431,000 and the income before income tax increased 732,208,000 as comparing to 2013. Despite of economic prosperity, the external environment is still full of impact and challenges. The Corporation always acts prudentially to ensure the sustainable operation of the Corporation. Holding the spirit of “get to the bottom of something and stops until attain perfection”, the Corporation pursues every little bit of rationality, implementing all kinds of automation, replacements and process and quality improvement to further enhance the capacity and reduce operating costs. In addition, facing the more strict quality requirements, the corporation also acts aggressively to achieve with full strength to provide best quality products and as the most trustworthy supplier of customers. In respect of environmental protection, the Corporation lays equal stress

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on industrial development and environmental protection. Through aggressive improvement on pollution prevention over the long run, best process technology adopted and advance pollution prevention facilities since the establishment of plant as well as strict control operation, all the pollutant handlings are better than the national control standards. However, due to rising environmental consciousness, all environmental requirements are getting higher, too. Therefore, the Corporation will continue various process improvement and environmental protection procedures to achieve the goal of zero pollution.

The production & sales conditions and operations of the Corporation in 2014 are described as follows: 1.Production & sales conditions:

Product Production Sales Volume

Silicon Wafer (thousand pcs) 6,729 6,793

The total amount of products sold in this year was 11,147,014,000, among them, the domestic sales 10,412,057,000 accounting for 93% while the oversea sales 734,957,000 accounting for 7% of total sales.

2.Operation: The sales revenue was 11,147,014,000 in 2014, representing an increase 1,284,431,000 as comparing to 9,862,583,000 in 2013. After deducted by the COGS 9596,533,000 and SG&A 323,592,000, the net operating income was 1,226,889,000, plus non-operating income 188,532,000 and minus non-operating expenses130,091,000, the income before income tax was 1,285,330,000 in 2014.

II. 2015 Business Goals and Outlook As to the outlook in 2015, the global semiconductor industry is expected prosperous continuously. Therefore, the market demand for 200mm wafer is still strong. Although the market supply and

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demand of 300mm wafer is still not yet in balance, it is expected to be benefited from the excited wafer foundry and DRAM market. Accordingly, the Corporation will actively conduct following activates to ensure the revenue and profitability at the ever-changing economic environment and further enhance the Corporation’s competitiveness to achieve best performance. 1. Constantly develop process improvement and TPM (Total

Production Management) activities, promote stabilized production and put an end to abnormal quality procedures to improve product quality and intensify the management of production equipment as well as enhance the quality of production site and provide customers with best products based on “stable production” and “best quality”.

2. To correspond with more strict quality requirements of customers, we will actively assure the connection with future technology and constant daily on-site improvement.

3. The Corporation will aggressively expand and sales and renew the long-term contract with key customers through the increase of customer satisfaction, higher level of operational activities, intensity of visit frequency and assignment of technicians for technical support to maintain the top share of market in Taiwan. In addition to the non-stop expanding the sales of oversea customers, the Corporation will also aggressively seek for the new clients to boost the oversea sales.

4. Actively response the requirements of customers, strongly promote and enhance Q (quality), C (cost), D (delivery) and S (service) such businesses to always become the No. 1 company trusted by the customers.

5. Maximize the local streamline production, sales and technological services such advantages to strengthen the competitiveness other than the price.

6. Take advantages of the outstanding production technology of Japan SUMCO and SUMCO TECHXIV and remarkable management

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system of FORMOSA Plastic Group to create superior operational performance.

As to the outlook of coming year, following 2015 operating

guidelines are established to build the most complete company system and consolidate the corporate competitiveness: 1. Carry out following “five zeros” for the sustainable operation and

growth of the Corporation. Zero violation, zero disaster, zero environmental accident, zero major equipment accident, zero major quality accident.

2. In respect of 300mm, initiate mass production system vertically to correspond with high-end process technology.

3. As to 200mm, assure normal function of equipment and implement productive improvements under full capacity and total sales to achieve stable production.

4. Promote cost reduction in both manufacturing and indirect departments as well as labor productive improvement.

5. Engage in sales and technical services from the perspective of customers to increase the sales volume.

6. Talents are the most important assets of the Corporation, and therefore do systematic talents training correspondently.

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FORMOSA SUMCO TECHNOLOGY CORPORATION Supervisors’ Review Report

The Board of Directors has prepared the Company’s 2014 Business Report, Proposal for Profits Distribution, and Financial Statements audited by the CPA. We as the Supervisors of the Company have examined the aforementioned documents and found no unconformities. According to Article 219 of Company Act, we hereby submit this report. Please be advised accordingly. Submitted to: The Company’s 2015 Annual Shareholders’ Meeting

Supervisors: Lin Sheng Guan Inoue Fumio

March 24, 2015

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Formosa SUMCO Technology Corporation Code of Ethical Conduct for Directors, Supervisors and

Managers Approved by Board of Directors on December 22, 2014

Amended by Board of Directors on March 13, 2015

Chapter 1 General Principles Article 1: The Code of Ethical Conduct (the “Code”) of Formosa

SUMCO Technology Corporation (the “Company”) is established to stipulate rules for Directors, Supervisors, and managers (including President, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Chief Financial Officer, Chief Accounting Officer, and other persons authorized to manage affairs and sign documents on behalf of the Company) to abide by in terms of ethical conduct when engaging in business activities within the scope of their authority, to prevent unethical conduct or any conduct that may damage the interest of the Company and its shareholders.

Chapter 2 Content of the Code Article 2: Directors, Supervisors, and managers shall conduct corporate

affairs on the basis of integrity, faithfulness, compliance with laws, fairness and righteousness and with an ethical, self-disciplined attitude.

Article 3: Directors, Supervisors, and managers shall avoid any conflicts of interest arising when their personal interest intervenes, or is likely to intervene in the overall interest of the Company, including but not limited to unable to perform their duties in an objective and efficient manner, or taking advantage of their position in the Company to obtain improper benefits for either themselves or their spouse, parents, children, or relatives within the second degree of kinship. To prevent conflicts of interest, any matters pertaining to lending funds, providing guarantees, and major asset transactions between the Company and the above-mentioned persons or their affiliated enterprise thereof shall be submitted to the Board of Directors for its approval

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in advance. The corresponding purchase (or sale) of goods shall be dealt with the best interest of the Company.

Article 4: When the Company has an opportunity for profit, the Directors, Supervisors, and managers have the responsibility to conserve the reasonable and lawful benefits that can be obtained by the Company. The Directors, Supervisors, and managers shall not obtain personal gain by using the Company property or information or taking advantage of their positions. Unless otherwise stipulated in the Company Act or Articles of Incorporation, they shall not engage in activities that compete with the business of the Company.

Article 5: The Directors, Supervisors, and managers shall be bound by the obligation to maintain the confidentiality of any information regarding the Company itself or its suppliers and customers, except when authorized or required by law to disclose such information. Confidential information includes any undisclosed information that, if exploited by a competitor or disclosed, could result in damage to the Company or the suppliers and customers.

Article 6: The Directors, Supervisors, and managers shall treat all suppliers and customers, competitors, and employees fairly, and may not obtain improper benefits through manipulation, nondisclosure, or misuse of the information learned by virtue of their positions, or through misrepresentation of important matters, or through other unfair trading practices.

Article 7: The Directors, Supervisors, and managers shall have the responsibility to safeguard the Company’s assets, to use the assets for official business purpose properly, and to avoid any impact on the Company’s profitability resulting from theft, negligence in care or waste of the assets.

Article 8: The Directors, Supervisors, and managers shall comply with applicable laws and the Company’s regulations.

Article 9: When a director, supervisor, or manager is found by employee to have committed a violation of a law, regulation or the Code, the employee shall report to the Supervisors, their direct managers, president office personnel, chief internal auditor, or other appropriate personnel with sufficient evidence. Once the misconduct is confirmed, the Company will reward the above-mentioned employee in accordance

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with the Company's rules for employment management. The Company shall handle the above-mentioned report properly and confidentially. The Company also shall use its best efforts to ensure the safety of the conscientious reporter and protect him/her from all kinds of reprisals.

Article 10: Where a director, supervisor, or manager is verified to have violated the Code, in addition to being subject to punishment under the Company's rules for employment management, the Company shall report the violation to the Board of Directors. The person involved in the violation shall be liable for civil, criminal or administrative responsibilities required by law and the Company shall disclose the violation on the Market Observation Post System (“MOPS”) immediately, including: the date of the violation, description of the violation, the provisions of the Code violated, and the disciplinary actions taken.

Chapter 3 Procedures for Exemption Article 11: Where a Director, Supervisor, or manager is to be exempted

from the Code due to special circumstances, such exemption shall be approved by an majority vote at a meeting of the Board of Directors attended by over two-third of the Directors in person or through representation. The Company shall immediately disclose on the MOPS, including: date of exemption granted by the Board of Directors, any opposing or qualified opinion expressed by the independent directors, and the period of, reasons for, and the provisions of the Code behind the application of the exemption for shareholders to evaluate the appropriateness and to safeguard the interests of the Company.

Chapter 4 Method of information disclosure Article 12: The Company shall disclose the Code on the Company’s

website, annual reports, prospectuses, and the MOPS. Any amendment is subject to the same procedure.

Chapter 5 Additional Provision Article 13: The Code shall be implemented after approval by the Board

of Directors and shall be reported to each supervisor and to a shareholders meeting. Any amendment is subject to the same procedure.

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Ratification Items Proposal 1 Proposal: For approval of the 2014 Business Report and Financial Statements as required by the Company Act.

Proposed by the Board of Directors Explanation: 1. The preparation of the Company’s 2014 Consolidated and Individual

Financial Statements were completed and the same were approved at the 1st meeting of the Board in 2015 and audited by independent auditors, Miss Yang Ching-Ting and Mr. Walter Liu, of Deloitte. The aforesaid Financial Statements together with the Business Report were reviewed by the supervisors, which the Supervisors’ Review Report is presented.

2. For the aforementioned Business Report, please refer to page 6 through page 9 of the Meeting Handbook. As for the Financial Statements, please refer to page 28 through page 32 of the Handbook. Please approve the Business Report and the Financial Statements.

Resolution:

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Ratification Items Proposal 2 Proposal: For Approval of the Proposal for Distribution of 2014 Profits as required by the Company Act.

Proposed by the Board of Directors Attachment: Please refer to page 33 of the Handbook for the Statement of Profits Distribution. Resolution:

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Discussion Items (I) Proposal 1 Proposal: To refer to the revisions of “Sample Template for XXX Co., Ltd. Rules of Procedure for Shareholders Meetings” announced by the Letter of the Taiwan Stock Exchange Corporation dated January 28, 2015 (Reference No. Tai-Cheng-Chih-Li-Tzu-1040001716), the Company’s “Rules of Procedure for Shareholders’ Meeting” shall be amended accordingly. The corresponding comparison table for the articles before and after the amendment is attached. Please discuss and resolve.

Proposed by the Board of Directors Article Article before Amendment Article after Amendment

Article 3 (above omitted) To convene a shareholders’ meeting, the Company shall prepare a meeting handbook. The Company shall prepare electronic versions of a shareholders’ meeting notice and proxy forms, and causes of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the MOPS no later than 30 days prior to the Scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the Scheduled Special Shareholders’ Meeting date. The Company shall prepare

(above omitted) To convene a shareholders’ meeting, the Company shall prepare a meeting handbook. The Company shall prepare electronic versions of a shareholders’ meeting notice and proxy forms, and causes of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the MOPS no later than 30 days prior to the Scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the Scheduled Special Shareholders’ Meeting date. The Company shall prepare

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Article Article before Amendment Article after Amendment electronic versions of a shareholders’ meeting handbook and supplemental meeting materials and upload them to the MOPS no later than 21 days prior to the Scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the Scheduled Special Shareholders’ Meeting date. In addition, the Company shall also have prepared a shareholders’ meeting handbook and supplemental meeting materials and made them available for review by shareholders at any time no later than 15 days prior to the scheduled shareholders’ meeting date. The meeting agenda and supplemental materials shall also be displayed at company and its shareholder services agent as well as being distributed on-site at the meeting place. The reasons for convening a shareholders’ meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the

electronic versions of a shareholders’ meeting handbook and supplemental meeting materials and upload them to the MOPS no later than 21 days prior to the Scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the Scheduled Special Shareholders’ Meeting date. In addition, the Company shall also have prepared a shareholders’ meeting handbook and supplemental meeting materials and made them available for review by shareholders at any time no later than 15 days prior to the scheduled shareholders’ meeting date. The meeting agenda and supplemental materials shall also be displayed at the Company and at the professional shareholder services agent engaged by the Company as well as being distributed on-site at the meeting place. The reasons for convening a shareholders’ meeting shall be specified in the meeting notice

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Article Article before Amendment Article after Amendment meeting notice may be given in electronic form. Election or dismissal of directors or supervisors, amendments to the Articles of Incorporation, the dissolution, merger, or demerger of the corporation, or any matter under paragraph 1 of Article 185 of the Company Act or Articles 26-1 and 43-6 of the Securities and Exchange Act shall be set out in the causes in the notice to convene the shareholders’ meeting. None of the above matters may be raised by an extraordinary motion. (below omitted)

and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form. Election or dismissal of directors or supervisors, amendments to the Articles of Incorporation, the dissolution, merger, or demerger of the corporation, or any matter under paragraph 1 of Article 185 of the Company Act or Articles 26-1 and 43-6 of the Securities and Exchange Act, Articles 56-1 and 60-2 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out in the causes in the notice to convene the shareholders’ meeting. None of the above matters may be raised by an extraordinary motion. (below omitted)

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Article Article before Amendment Article after Amendment Article 6 (above omitted)

Shareholders and their proxies (collectively, "shareholders") shall attend shareholders’ meetings based on attendance cards, sign-in cards, or other certificates of attendance. Solicitors soliciting proxy forms shall also bring identification documents for verification. (below omitted)

(above omitted) Shareholders and their proxies (collectively, "shareholders") shall attend shareholders’ meetings based on attendance cards, sign-in cards, or other certificates of attendance. The Company shall not impose arbitrary requirements on shareholders to provide additional evidentiary documents beyond those showing eligibility to attend. Solicitors soliciting proxy forms shall also bring identification documents for verification. (below omitted)

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It is advisable that shareholders’ meetings convened by the Board of Directors be attended by a majority of the Directors. If a shareholders’ meeting is convened by a party having the convening right but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves. (below omitted)

(above omitted) It is advisable that shareholders’ meetings convened by the Board of Directors be chaired by the Chairman, that a majority of the Directors and at least one supervisor attend in person, and that at least one member of each functional committee attend as representative. Attendance details should be recorded in the Shareholders Meeting minutes. If a shareholders’ meeting is convened by a party having the convening right but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves. (below omitted)

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Except as otherwise provided in the Company Act and in the Company's Articles of Incorporation, the adoption of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the Chair or a person designated by the Chair shall announce the total number of voting rights represented by the attending shareholders. Resolution shall be deemed adopted and shall have the same effect as if it was voted by casting ballots if no objection is voiced by any of the attending shareholders after solicitation by the Chair. If objection is voiced after solicitation by the Chair, such resolution shall be voted in accordance with the provisions of the preceding paragraph. Except for the proposals enumerated on the Meeting Agenda, other motions or amendments/alternatives to original proposals posed by

(above omitted) Except as otherwise provided in the Company Act and in the Company's Articles of Incorporation, the adoption of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the Chair or a person designated by the Chair shall announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the MOPS. When there is an amendment or an alternative to a proposal, the Chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the

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Article Article before Amendment Article after Amendment shareholders shall be seconded by other shareholders. Total number of shares represented by the proposing shareholders and the seconding shareholders shall be one percent or more of the issued voting shares of the Company. When there is an amendment or an alternative to a proposal, the Chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required. (below omitted)

other proposals will then be deemed rejected, and no further voting shall be required. (below omitted)

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The meeting minutes shall accurately record the year, month, day, and place of the meeting, the Chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the duration of the existence of the Company. If the resolution of the meeting has been adopted in the manner that no objection is voiced by any of the attending shareholders after solicitation by the Chair, the meeting minutes shall describe that “Upon solicitation of comments by the Chair, this Proposal was adopted unanimously without objections by the shareholders present.” However, if objection is voiced after solicitation by the Chair, the resolution has been adopted by casting ballots and its voting rights adopted as well as the percentage of voting rights shall be record clearly.

(above omitted) The meeting minutes shall accurately record the year, month, day, and place of the meeting, the Chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the duration of the existence of the Company.

Resolution:

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Discussion Items (I) Proposal 2 Proposal: To conform with the revisions of “Sample Template for XXX Co., Ltd. Procedures for Election of Directors and Supervisors” announced by the Letter of the Taiwan Stock Exchange Corporation dated January 28, 2015 (Reference No. Tai-Cheng-Chih-Li-Tzu-1040001716), the Company’s “Rules for Election of Directors and Supervisors” shall be amended. The corresponding comparison table for the articles before and after the amendment is attached. Please discuss and resolve.

Proposed by the Board of Directors

Article Article before Amendment Article after Amendment

Article 2 The single open-ballot, cumulative election method will be used for election of the directors and supervisors at the Company. 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. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.

The cumulative voting system shall be used for election of the directors and supervisors at the Company. 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. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.

Article 9 The voting rights shall be calculated on site immediately after the end of the poll and the Chair shall announce the voting results on site immediately.

The voting rights shall be calculated on site immediately after the end of the poll and the Chair shall announce the voting results on site immediately,

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including the names of those elected as directors and supervisors and the numbers of votes with which they were elected. 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 1 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.

Article 10 The Board of directors shall issue notifications separately to the persons elected as directors or supervisors.

(Current Article 10 was deleted)

Article 10 The Rules, and any amendments hereto, shall be implemented after approval by a shareholders meeting.

The Rules, and any amendments hereto, shall be implemented after approval by a shareholders meeting. (Current Article order adjusted)

Resolution:

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Election Items Proposal: The term of office of the Company’s Directors and Supervisors have expired. Please elect the new Directors and Supervisors pursuant to the applicable laws.

Proposed by the Board of Directors Explanation: 1. The Company’s current directors and supervisors have their term of

office expired on June 24, 2015. To conform to the provision promulgated by the securities competent authority, which requires the Company shall establish an Audit Committee to substitute the supervisors, it is proposed to elect 9 directors (including 2 independent directors) and 2 supervisors . The term of office of the new Directors (including independent directors) and Supervisors shall be three years, starting from June 18, 2015 to June 17, 2018.

2. The election of Independent Directors shall adopt the candidate nomination system in accordance with Article 192-1 of the Company Act and Article 13 of the Company's Articles of Incorporation. The Company has examined and approved the qualification of 2 Independent Director Candidates in the Board of Directors Meeting on May 7, 2015. The names of the 2 Independent Director Candidates are listed below:

The names of the 2 Independent Director Candidates are listed below:

Name Education Major Experience Shareholding(Share) Wang Chih-Kang Ph.D in

philosophy,Texas A&M University,USA

Chairman of CTBC Investments Co., Ltd.

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Hatanaka Norikazu Bachelor’s degree in Department of Foreign Languages, Tenri University,Japan

Chairman of Sokuwa Co., Ltd.

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Resolution:

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Discussion Items (II) Proposal 1 Proposal: Appropriateness of releasing the newly elected Directors and the juristic person shareholder whose authorized representatives are elected as Directors, from non-competition restrictions. Please discuss and resolve.

Proposed by the Board of Directors Explanation: 1. According to Article 209 of the Company Act, any Director conducting

business for himself/herself or on another’s behalf, and the scope of which coincides with the Company’s business scope, shall explain at the Shareholders’ Meeting the essential contents of such conduct and obtain approval from shareholders in the Meeting.

2. Meanwhile, according to Explanation Letter No.89206938 on Article 209 of the Company Act, announced by the Ministry of Economic Affairs dated April 24, 2000, where the juristic person shareholder's authorized representatives are elected as directors according to Article 27-2 of the Company Act, both the juristic person shareholder and the authorized representatives shall be subject to the non-competition restrictions under Article 209 of the Company Act.

3. If the newly-elected Directors and the juristic person shareholder whose authorized representatives are elected as directors in this Annual Shareholders’ Meeting conduct competitive businesses that are subject to the non-competition restrictions under Article 209 of the Company Act and the interest of the Company is not impaired, it is proposed to release the Directors and juristic person shareholders whose authorized representatives are elected as directors from such non-competition restrictions after having assumed office.

(Proclaim the information of engaging in competitive businesses conducted by the Directors and the juristic person shareholders)

Resolution:

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FORMOSA SUMCO TECHNOLOGY CORPORATION BALANCE SHEETS DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars) 2014 2013 ASSETS Amount % Amount % CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) $ 2,245,067 10 $ 72,017 ‐ Accounts receivable, net (Notes 4 and 7) 1,521,887 7 1,447,159 7 Accounts receivables from related parties, net (Notes 4, 7 and 21) 113,384 ‐ 130,637 1 Other receivables (Notes 4, 7 and 21) 9,856 ‐ 22,421 ‐ Inventories (Notes 4, 5 and 8) 1,743,834 8 2,038,786 9 Prepayments (Notes 4 and 11) 136,052 1 134,328 1

Total current assets 5,770,080 26 3,845,348 18

NON‐CURRENT ASSETS Available‐for‐sale financial assets ‐ non‐current (Note 4) 223 ‐ 266 ‐ Property, plant and equipment (Notes 4, 5, 9 and 22) 15,481,904 71 17,321,344 79 Intangible assets (Notes 4, 5, 10 and 21) 33,739 ‐ 67,480 ‐ Deferred tax assets (Notes 4, 5 and 17) 310,095 1 353,890 2 Prepayment for equipment (Notes 4 and 23) 256,049 1 78,509 ‐ Refundable deposits (Note 4) 265 ‐ 478 ‐ Other non‐current assets (Notes 4 and 11) 117,711 1 237,312 1

Total non‐current assets 16,199,986 74 18,059,279 82

TOTAL $ 21,970,066 100 $ 21,904,627 100 LIABILITIES AND EQUITY CURRENT LIABILITIES Short‐term borrowings (Notes 4 and 12) $ ‐ ‐ $ 605,400 3 Trade payables (Note 4) 440,002 2 589,120 3 Trade payables to related parties (Notes 4 and 21) 251,395 1 111,568 ‐ Other payables (Notes 4, 13, 15 and 21) 506,550 2 426,373 2 Current tax liabilities (Notes 4 and 17) 155,607 1 70,996 ‐ Current portion of long‐term borrowings (Notes 4, 12, 21 and 22) 345,458 2 345,458 2 Other current liabilities 6,439 ‐ 5,959 ‐

Total current liabilities 1,705,451 8 2,154,874 10

NON‐CURRENT LIABILITIES Long‐term borrowings (Notes 4, 12, 21 and 22) 345,458 2 690,916 3 Accrued pension liabilities (Notes 4, 5 and 14) 259,739 1 262,098 1 Guarantee deposits (Note 4) 1,612 ‐ 1,911 ‐ Other non‐current liabilities 18,756 ‐ 14,094 ‐

Total non‐current liabilities 625,565 3 969,019 4

Total liabilities 2,331,016 11 3,123,893 14

EQUITY (Notes 4, 15, 17 and 19) Share capital Ordinary shares 7,756,966 35 7,756,966 36

Capital surplus 5,739,080 26 5,739,080 26 Retain earnings Legal reserve 988,813 5 957,405 4 Unappropriated earnings 5,154,006 23 4,327,055 20 Total retained earnings 6,142,819 28 5,284,460 24

Other equity 185 ‐ 228 ‐

Total equity 19,639,050 89 18,780,734 86 TOTAL $ 21,970,066 100 $ 21,904,627 100 The accompanying notes are an integral part of the financial statements.

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FORMOSA SUMCO TECHNOLOGY CORPORATION STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars, Except Earnings Per Share) 2014 2013 Amount % Amount % NET REVENUE (Notes 4, 21 and 27) $11,147,014 100 $ 9,862,583 100 COST OF REVENUE (Notes 8, 10, 14, 16 and 21) (9,596,533) (86) (9,008,810) (91) GROSS PROFIT 1,550,481 14 853,773 9 OPERATING EXPENSES (Notes 14, 16 and 21) Marketing (155,700) (1) (123,186) (1)Administrative (167,892) (2) (159,602) (2)

Total operating expenses (323,592) (3) (282,788) (3)

INCOME FROM OPERATIONS 1,226,889 11 570,985 6 NON‐OPERATING INCOME AND EXPENSES (Notes 4, 9, 16 and 21) Other income 37,380 ‐ 14,879 ‐Other gains and losses 38,482 1 (10,197) ‐Finance costs (17,421) ‐ (22,545) ‐

Total non‐operating income and expenses 58,441 1 (17,863) ‐

INCOME BEFORE INCOME TAX 1,285,330 12 553,122 6 INCOME TAX EXPENSE (Notes 4, 5 and 17) (198,528) (2) (239,045) (3) NET INCOME 1,086,802 10 314,077 3 OTHER COMPREHENSIVE INCOME (LOSS) (Notes 4, 14, 15 and 17) Unrealized loss on available‐for‐sale financial assets (43) ‐ (13) ‐

Actuarial gain from defined benefit plans 5,139 ‐ 7,279 ‐Income tax expense related to components of other comprehensive income (873) ‐ (1,237) ‐

Other comprehensive income for the year, net of income tax 4,223 ‐ 6,029 ‐

TOTAL COMPREHENSIVE INCOME FOR THE $ 1,091,025 10 $ 320,106 3 EARNINGS PER SHARE (Note 18) Basic earnings per share $1.40 $0.40Diluted earnings per share $1.40 $0.40

The accompanying notes are an integral part of the financial statements.

30

FORMOSA SUMCO TECHNOLOGY CORPORATION STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars) Unrealized

Gain (Loss) on Available‐

Retained Earnings for‐sale Unappropriated Financial Share Capital Capital Surplus Legal Reserve Earnings Total Assets Total BALANCE, JANUARY 1, 2013 $ 7,756,966 $ 5,739,080 $ 949,088 $ 4,092,823 $ 5,041,911 $ 241 $ 18,538,198 Appropriation of the 2012 earnings Legal capital reserve ‐ ‐ 8,317 (8,317 ) ‐ ‐ ‐Cash dividends distributed by the Company ‐ ‐ ‐ (77,570 ) (77,570 ) ‐ (77,570 )

‐ ‐ 8,317 (85,887 ) (77,570 ) ‐ (77,570 )

Net income in 2013 ‐ ‐ ‐ 314,077 314,077 ‐ 314,077 Other comprehensive income in 2013, net of income tax ‐ ‐ ‐ 6,042 6,042 (13 ) 6,029

Total comprehensive income in 2013 ‐ ‐ ‐ 320,119 320,119 (13 ) 320,106

BALANCE, DECEMBER 31, 2013 7,756,966 5,739,080 957,405 4,327,055 5,284,460 228 18,780,734 Appropriation of the 2013 earnings Legal capital reserve ‐ ‐ 31,408 (31,408 ) ‐ ‐ ‐Cash dividends distributed by the Company ‐ ‐ ‐ (232,709 ) (232,709 ) ‐ (232,709 )

‐ ‐ 31,408 (264,117 ) (232,709 ) ‐ (232,709 )

Net income in 2014 ‐ ‐ ‐ 1,086,802 1,086,802 ‐ 1,086,802 Other comprehensive income in 2014, net of income tax ‐ ‐ ‐ 4,266 4,266 (43 ) 4,223

Total comprehensive income in 2014 ‐ ‐ ‐ 1,091,068 1,091,068 (43 ) 1,091,025

BALANCE, DECEMBER 31, 2014 $ 7,756,966 $ 5,739,080 $ 988,813 $ 5,154,006 $ 6,142,819 $ 185 $ 19,639,050 The accompanying notes are an integral part of the financial statements.

31

FORMOSA SUMCO TECHNOLOGY CORPORATION STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars) 2014 2013 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax $ 1,285,330 $ 553,122Adjustments for: Depreciation expenses 2,025,554 1,967,518Amortization expenses 79,153 112,419Interest expense 17,421 22,545Interest income (4,161) (586)Dividend income (8) (1)Reversal of write‐down of inventories (36,737) (29,810)Impairment loss of property, plant and equipment 10,438 ‐Gain on foreign exchange, net (8,371) (8,292)Other items 1,981 (16)

Changes in operating assets and liabilities Increase in trade receivables (33,211) (93,753)Decrease in other receivables 12,565 7,226(Increase) decrease in inventories 331,689 (139,432)Decrease in prepayments 72,803 116,005Increase (decrease) in trade payables (24,035) 207,302Increase in other payables 70,355 58,533Increase in other current liabilities 480 483Increase in accrued pension cost 2,780 2,723

Cash generated from operations 3,804,026 2,775,986Interest received 4,161 586Dividend received 8 1Interest paid (18,933) (41,285)Income tax paid (71,334) (26,830)

Net cash generated from operating activities 3,717,928 2,708,458 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of property, plant and equipment (120,183) (249,048)Increase in prepayment for equipment (244,591) (103,191)Refundable deposits (paid) refunded 213 (243)(Increase) decrease in other investing activities 53 (52)

Net cash used in investing activities (364,508) (352,534)

CASH FLOWS FROM FINANCING ACTIVITIES Repayments of short‐term borrowings (605,400) (1,863,900)Repayments of short‐term bills payable ‐ (300,000)Repayments of long‐term borrowings (345,458) (345,458)Guarantee deposits received (refunded) (299) 630Increase (decrease) in other non‐current liabilities 4,662 (13,873)Cash dividends (232,709) (77,576)

(Continued)

32

FORMOSA SUMCO TECHNOLOGY CORPORATION STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousands of New Taiwan Dollars) 2014 2013

Net cash used in financing activities (1,179,204) (2,600,177) EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (1,166) (4,929)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,173,050 (249,182) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 72,017 321,199 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 2,245,067 $ 72,017 The accompanying notes are an integral part of the financial statements. (Concluded)

33

Formosa SUMCO Technology Corporation Statement of Profits Distribution

For the year of 2014 Unit：NT$

Items Amount Items Amount Explanation Available for Distribution: (1) Unappropriated

retained earnings of previous years

(2)Adjustment due to IFRS conversion

(3) Net profit after tax of current year

4,062,938,512

4,265,370

1,086,802,248

Distribution Items: (1) Appropriation of legal reserve

(10% of the after-tax profit ) (2) Distribution of dividends and

bonus in cash ( $1 per share)

(3) Unappropriated retained earnings carried forward to next year

108,680,225

775,696,599

4,269,629,306

1.Capital :NT$7,756,965,990 Number of shares:775,696,599 2. The Company plans to distribute dividends of

$1 per share for current year (among which, $0.582 will be distributed as dividends and $0.418 will be distributed as bonus); all of which are cash dividends.

3. The Company distributes dividends and bonus for a total of $775,696,599; all of which are from net profit after tax of 2014.

4. Bonus for employees amounted to $1,580,000. Compensation of directors and supervisors amounted to $0.

5. While the distribution of cash dividends to each individual shareholder is less than 1 dollar, the distribution will be rounded to the nearest dollar.

Total 5,154,006,130 Total 5,154,006,130

2015 meeting handbook fst · 2020. 1. 22. · 2015 (reference no....

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