Hon Hai Prec.Ind.Co HHPD Half Yearly Report - Part 1

  Hon Hai Prec.Ind.Co (HHPD) - Half Yearly Report - Part 1

RNS Number : 1684N
Hon Hai Precision Industry Co Ld
26 September 2012








                     HON HAI PRECISION INDUSTRY CO., LTD.

                               AND SUBSIDIARIES

                    CONSOLIDATED FINANCIAL STATEMENTS AND

                      REPORT OF INDEPENDENT ACCOUNTANTS

                            JUNE 30, 2011 AND 2012













For the convenience of readers and for information purpose only, the auditors'
report and the  accompanying financial  statements have  been translated  into 
English from the original Chinese version prepared and used in the Republic of
China. In the event  of any discrepancy between  the English version and  the 
original Chinese version or any differences  in the interpretation of the  two 
versions, the Chinese-language auditors' report and financial statements shall
prevail.

       REVIEW REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

                                                                             

To the Board of Directors and Stockholders:

Hon Hai Precision Industry Co., Ltd.

We have  reviewed the  accompanying  consolidated balance  sheets of  Hon  Hai 
Precision Industry Co.,  Ltd. and  its subsidiaries as  of June  30, 2011  and 
2012, and  the  related  consolidated  statements of  income,  of  changes  in 
stockholders' equity and of cash flows  for the six-month periods then  ended, 
expressed in thousands of New  Taiwan dollars. These financial statements  are 
the responsibility of the Company's management. Our responsibility is to issue
a report  on these  financial statements  based  on our  reviews. We  did  not 
reviewthe financial  statements  of certain  consolidated  subsidiaries  which 
statements reflect  total  assets of  $167,258,168,000  and  $161,307,895,000, 
constituting 10.83% and 8.42% of the consolidated total assets as of June  30, 
2011 and  2012,  respectively,  and  total  revenues  of  $87,003,699,000  and 
$74,442,939,000, constituting  5.74%  and  3.93%  of  the  consolidated  total 
operating revenues for the six-month periods then ended, respectively.  Those 
statements were reviewed by  other auditors, whose  reports thereon have  been 
furnished to us, and our conclusion expressed herein, insofar as it relates to
the amounts included for these subsidiaries, is based solely on the reports of
the other auditors.

Except as explained in  the following paragraph, we  conducted our reviews  in 
accordance with  the  Statement  of  Auditing Standards  No.  36,  "Review  of 
Financial Statements" in the Republic of China. A review consists principally
of inquiries  of  company  personnel  and  analytical  procedures  applied  to 
financial data. It is substantially less  in scope than an audit conducted  in 
accordance with  generally  accepted auditing  standards  in the  Republic  of 
China, the objective of  which is the expression  of an opinion regarding  the 
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

As described  in Notes  1(2) and  4(8), the  financial statements  of  certain 
consolidated subsidiaries and long-term equity investments accounted for under
the  equity  method  were  not  reviewed  by  independent  accountants,  which 
statements reflect total  assets (including long-term  equity investments)  of 
$261,524,230,000 and $358,852,646,000, constituting  16.93% and 18.72% of  the 
consolidated total  assets,  and  total liabilities  of  $255,306,108,000  and 
$184,915,719,000, constituting  25.21% and  14.27% of  the consolidated  total 
liabilities as of June 30, 2011 and  2012, respectively, as well as total  net 
income (including investment income accounted for under the equity method)  of 
$1,124,754,000 and  $6,889,249,000,  constituting  4.11%  and  27.01%  of  the 
consolidated net income for the six-month periods then ended, respectively.

Based on our reviews and the reports of other auditors, except for the  effect 
of such adjustments, if any, as might have been determined to be necessary had
the financial statements  of certain consolidated  subsidiaries and  long-term 
investments been reviewed as explained in the preceding paragraph, we are  not 
aware of any material  modifications that should be  made to the  consolidated 
financial statements referred to above for  them to be in conformity with  the 
"Rules  Governing  the  Preparation  of  Financial  Statements  by  Securities 
Issuers" and  generally  accepted accounting  principles  in the  Republic  of 
China.

As stated in Notes 4(2)  and 9, Hon Hai  Precision Industry Co., Ltd.  entered 
into an equity subscription contract with Sharp Corporation, a listed  company 
in Japan, as resolved by  the board of directors  on March 27, 2012.  However, 
Hon Hai Precision  Industry Co., Ltd.  could not get  the approval for  equity 
settlement because it was unable to provide documents before July 31, 2012  as 
required by  the  competent authorities.  As  such, this  equity  subscription 
arrangement no  longer met  the  recognition criteria  of a  forward  contract 
specified in  ROC SFAS  No. 34,  "Accounting for  Financial Instruments",  and 
therefore Hon Hai  Precision Industry  Co., Ltd. and  its subsidiary,  Foxconn 
(Far East) Ltd., reversed the loss  on valuation of financial liabilities  and 
financial liabilities of NT$ 4,513,255,000,  and reversed deferred income  tax 
assets and income tax  benefit of NT$ 501,753,000,  respectively, on July  31, 
2012 for those amounts  that had been recognized  during the six-month  period 
ended June 30, 2012. The net effect of such reversals was NT$ 4,011,502,000.

Hon Hai Precision Industry Co., Ltd. expects to adopt International  Financial 
Reporting    Standards,     International    Accounting     Standards,     and 
Interpretations/bulletins  (collectively   referred  herein   as  the   IFRSs) 
developed by the International  Financial Reporting Interpretations  Committee 
or  the  former  Standing  Interpretations  Committee  as  recognized  by  the 
Financial Supervisory Commission, Republic of  China and the "Rules  Governing 
the Preparation of Financial Statements by Securities Issuers" that are to  be 
applicable in 2013 in the preparation of consolidated financial statements  of 
Hon Hai  Precision  Industry Co.,  Ltd.  and its  subsidiaries  starting  from 
January 1, 2013.  Information relating  to the adoption  of IFRSs  by Hon  Hai 
Precision Industry  Co., Ltd.  is  disclosed in  Note  13 in  accordance  with 
Jin-Guan-Zheng-Shen-Zi  Order   No.  0990004943   of  the   former   Financial 
Supervisory Commission, Executive Yuan, Republic of China., dated February  2, 
2010.The IFRSs may  be subject  to changes  during the  time of  transition; 
therefore, the actual impact of IFRSs  adoption on Hon Hai Precision  Industry 
Co., Ltd. and its subsidiaries may also change.





PricewaterhouseCoopers, Taiwan

August 31, 2012



‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

The accompanying consolidated financial statements are not intended to present
the financial position and results of operations and cash flows in  accordance 
with accounting principles generally  accepted in countries and  jurisdictions 
other than the Republic of China.  The standards, procedures and practices  in 
the Republic of  China governing the  audit of such  financial statements  may 
differ from those generally accepted in countries and jurisdictions other than
the Republic of  China. Accordingly, the  accompanying consolidated  financial 
statements and report of independent accountants  are not intended for use  by 
those who  are  not  informed  about the  accounting  principles  or  auditing 
standards generally accepted in the Republic of China, and their  applications 
in practice.

As  the  financial  statements  are  the  responsibility  of  the  management, 
PricewaterhouseCoopers cannot accept any liability for the use of, or reliance
on, the English translation  or for any errors  or misunderstandings that  may 
derive from the translation.

            HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEETS

                                   JUNE 30,

               (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

                                 (UNAUDITED)

                                  2011          2012          2012
                                       NT$            NT$            US$
ASSETS
Current Assets
Cash and cash equivalents (Note     $296,963,446  $637,339,044     21,329,955
4(1))
Financial assets at fair value
through profit or loss - current
(Note 4(2))                             47,935       139,524          4,669
Available-for-sale financial            858,749       672,254         22,498
assets - current (Note 4(3))
Accounts receivable, net (Notes                                     13,833,713
4(4))                                376,369,729    413,351,344
Accounts receivable, net -            11,321,416    14,648,865        490,257
related parties (Note 5)
Other receivables (Notes 4(5) and     28,053,648    32,275,867      1,080,183
5)
Other financial assets - current      99,924,789     58,416,794      1,955,047
(Note 6)
Inventories, net (Note 4(6))         323,578,155    309,969,848     10,373,824
Prepayments (Note 5)                   7,121,256      5,479,699        183,390
Deferred income tax assets -           5,522,155      6,595,755        220,741
current (Note 4(15))
                                   1,149,761,278  1,478,888,994     49,494,277
Funds and Investments
 Available-for-sale financial
assets  -  non-current
(Note 4(3))                            7,761,110      9,217,880        308,497
 Financial assets carried at          3,504,819      4,057,662        135,798
cost  -  non-current (Note 4(7))
 Long-term equity investments                                               
under the equity method (Note
4(8))                                 36,063,598    40,142,079      1,343,443
 Prepayments for long-term               88,332       25,775            863
investments (Note 4(8))
 Other financial assets -              28,085       23,100            773
non-current (Note 6)
                                     47,445,944    53,466,496      1,789,374
Property, Plant and Equipment
(Notes 4(9), 5 and 6)
 Cost
 Land                          4,209,510      4,168,602        139,511
 Buildings and               128,888,984                     5,173,608
improvements                                        154,587,408
 Machinery                   215,657,984    247,745,283      8,291,342
 Molding equipment             3,643,244      3,104,844        103,910
 Testing equipment            25,623,091     24,914,333        833,813
 Office equipment             14,827,426     15,390,775        515,086
 Tooling equipment             2,905,642      3,275,812        109,632
Other equipment                       37,110,624     41,275,443      1,381,374
Cost and revaluation                 432,866,505    494,462,500     16,548,276
Less: Accumulated depreciation     (159,117,785)  (180,732,418)    (6,048,608)
Accumulated impairment              ( 4,749,125)   ( 5,796,077)     (193,978)
Construction  in   progress   and                                    1,235,136
prepayments for equipment             41,706,959     36,905,859
                                     310,706,554    344,839,864     11,540,826
Intangible Assets (Note 4(10))
 Goodwill                              215,474       551,166        18,446
                                        215,474       551,166        18,446
Other Assets                                                          215,474
Deferred charges                      13,006,496     14,259,133        477,213
Other assets - other (Note 4(11))    23,411,348    24,472,739        819,034
                                     36,417,844    38,731,872      1,296,247
TOTAL ASSETS                      $1,544,547,094 $1,916,478,392    $64,139,170
                                                                $1,544,547,094

                                 (continued)

            HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES

                   CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                   JUNE 30,

               (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

                                 (UNAUDITED)

                                     2011           2012           2012
                                          NT$            NT$           US$
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
 Short-term loans (Note 4(12))      $313,200,899   $473,585,750 $15,849,590
Short-term notes and bills payable
(Note 4(13))                               998,941      5,494,490    183,885
 Financial liabilities at fair
value through profit or loss -
current (Note 4(2))                         125,086      4,573,592     153,065
 Accounts payable                    411,190,411    465,309,959  15,572,623
  Accounts   payable  -   related 
parties (Note 5)                         21,088,896     34,541,700   1,156,014
 Income tax payable (Note 4(15))      12,285,396     11,644,808     389,719
    Accrued    expenses    (Notes 
4(14)(20))                               61,096,133     86,720,463   2,902,291
 Dividends payable (Note 4(22))         9,661,248     16,033,645     536,601
 Payables for equipment (Note 5)        12,216,869     28,246,181     945,321
 Other payables                        5,282,601      5,428,083     181,663
 Receipts in advance                     6,574,344      5,686,135     190,299
 Long-term  liabilities  -  current 
portion (Notes 4(16)(17))                20,954,300      3,000,000     100,402
 Accrued warranty liabilities           19,413,227     16,056,743     537,374
 Other current liabilities             4,168,095      1,336,069    44,715
                                        898,256,446  1,157,657,618 38,743,562
Long-term Liabilities
 Bonds payable (Note 4(16))           58,621,373     77,326,947   2,587,917
 Long-term loans (Note 4(17))        48,656,713    53,504,834   1,790,657
                                        107,278,086    130,831,781   4,378,574
Other Liabilities
  Reserve  for  retirement   plan 
(Note 4(18))                              1,048,220      1,108,190      37,088
 Deferred income tax  liabilities 
- non-current (Note 4(15))                2,611,037        423,441      14,171
 Other liabilities - other             3,513,025      5,990,395    200,482
                                          7,172,282      7,522,026    251,741
Total Liabilities                     1,012,706,814  1,296,011,425 43,373,877
Stockholders' Equity
Stockholders'   Equity   of   Parent 
Company
 Capital stock (Note 4(19))
 Common stock                           96,612,482    106,890,967   3,577,342
Stock dividends distributable           15,216,376    16,563,649    554,339
 Capital reserve (Note 4(21))
Paid-in capital  in  excess  of  par 
value of common stock                    28,591,137     34,724,228   1,162,123
Capital reserve  from conversion  of 
convertible bonds                        18,482,483     18,482,483     618,557
Capital   reserve   from   long-term 
investments                              14,982,010     15,172,516     507,781
Capital  reserve   from   conversion 
right (Note 4(16))                        3,229,640      2,034,440      68,087
 Retained earnings (Note 4(22))
Legal reserve                            51,821,402     59,980,502   2,007,380
Undistributed earnings                  271,293,597    318,152,053  10,647,659
 Other adjustments to stockholders'
equity
Cumulative translation adjustments     ( 7,293,222)     10,292,480     344,461
Unrealized gain or loss on financial
instruments

(Note 4(3))                               5,301,623      2,676,600      89,578
 Treasury stock                      ( 18,901)     ( 18,901)       (633)
Stockholders' equity of parent
company                                 498,218,627    584,951,017  19,576,674
Minority interest                       33,621,653    35,515,950  1,188,619
Total stockholders' equity              531,840,280    620,466,967  20,765,293
Commitments      and      Contingent 
Liabilities (Note 7)
Subsequent Events (Note 9)
TOTAL LIABILITIES AND  STOCKHOLDERS' $1,544,547,094 $1,916,478,392 $64,139,170
EQUITY

 The accompanying notes are an integral part of these consolidated financial
                                 statements.

     See review report of independent accountants dated August 31, 2012.

            HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF INCOME

                   FOR THE SIX-MONTH PERIODS ENDED JUNE 30,

                (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,

                       EXCEPT EARNINGS PER SHARE DATA)

                                 (UNAUDITED)

                           2011              2012             2012
                                  NT$              NT$              US$
Operating Revenue
 Sales (Note 5)              $1,515,196,651   $1,893,202,811      $63,360,201
Operating Costs
  Cost   of  goods   sold   (1,405,121,972)  (1,755,977,207)     (58,767,644)
(Notes 4(6)(24) and 5)
Gross profit                     110,074,679      137,225,604        4,592,557
Operating expenses  (Notes 
4(20)(24))
  Sales   and   marketing      (30,802,678)     (46,474,091)      (1,555,358)
expenses
       General        and      (32,498,147)     (34,054,838)      (1,139,720)
administrative expenses
 Research and development      (18,269,283)     (19,952,629)        (667,759)
expenses
Total operating expenses        (81,570,108)    (100,481,558)      (3,362,837)
Operating income                 28,504,571      36,744,046        1,229,720
Non-operating  income  and 
gains
 Interest income                  2,330,042        6,590,196          220,555
 Investment income
accounted for under

the equity method (Note
4(8))                              1,824,433        1,253,439           41,949
  Gain  on  disposal   of                 -        1,026,809           34,365
investments (Note 4(3))
                                   4,859,721                -                -
 Foreign exchange gain  - 
net
   Other    non-operating         3,354,015        2,974,632         99,553
income (Note 5)
Total non-operating income       12,368,211      11,845,076         396,422
and gains
Non-operating expenses and
losses
 Interest expense              ( 2,394,765)     ( 4,998,819)        (167,297)
                                                                      (10,212)
 Foreign exchange loss  -                 -       ( 305,141)
net
 Financing charges  (Note 
4(4))                             ( 150,627)       ( 123,803)          (4,143)
 Impairment loss (Notes 4
(9))                                       -     ( 1,780,642)       ( 59,593)
 Loss on valuation of
financial assets (Note
4(2))                                  (491)          (3,568)            (119)
 Loss on valuation of
financial liabilities
(Note 4(2))                       ( 124,525)     ( 4,445,125)       ( 148,766)
   Other    non-operating 
losses                            ( 380,656)       ( 405,910)       ( 13,585)
Total        non-operating      ( 3,051,064)     (12,063,008)       ( 403,715)
expenses and losses
Income before income tax          37,821,718       36,526,114        1,222,427
Income tax  expense  (Note      (10,486,289)     (11,016,719)       ( 368,699)
4(15))
Consolidated net income          $27,335,429      $25,509,395         $853,728
Attributable to:
 Equity holders of the        $27,384,194      $27,533,493         $921,469
Company
 Minority interest             ( 48,765)     ( 2,024,098)       ( 67,741)
                                 $27,335,429      $25,509,395         $853,728
                             Before  After  Before  After  Before  After

                             income  income  income  income  income  income

                             tax    tax  tax    tax  tax    tax
Earnings per common  share 
(Note 4(23))
Basic earnings per  common 
share
Consolidated net income     $ 3.22   $2.33  $3.10   $2.17  $0.10   $0.07
Minority interest income     (0.01)        -  0.17   0.17  0.01   0.01
Net income attributable to
equity holders of

 the Company                $ 3.21    $2.33   $3.27    $2.34   $0.11    $0.08
Diluted    earnings    per 
common share
Consolidated net income     $ 3.14   $2.28  $3.06   $2.13  $0.10   $0.07
Minority interest income     (0.01)        -  0.16   0.17  0.01   0.01
Net income attributable to
equity holders of

 the Company                $ 3.13    $2.28   $3.22    $2.30   $0.11    $0.08

 The accompanying notes are an integral part of these consolidated financial
                                 statements.

     See review report of independent accountants dated August 31, 2012.

            HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES

          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                   FOR THE SIX-MONTH PERIODS ENDED JUNE 30,

               (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

                                 (UNAUDITED)

                                                                                 Other Adjustments of

               Capital Stock                        Retained Earnings          Stockholders' Equity
                                                                                  Cumulative   Unrealized
                               Stock                                                             gain or
                             dividends                                            translation    loss on
                                          Capital                 Undistributed                financial  Treasury  Minority
              Common                              Legal                    
              stock        distributable reserves  reserve     earnings     adjustments  instruments stock      interest Total
2011-New
Taiwan
Dollars
Balance at
January 1,
2011           $96,612,482           $ - $65,011,063 $44,105,947  $270,947,354 ($9,330,319) $13,265,130 ($18,901) $32,853,249 $513,446,005
Appropriation
of 2010
earnings
(Note 1):
Legal reserve            -              -           -   7,715,455    (7,715,455)             -           -         -           -             -
Cash
dividends                -              -           -           -    (9,661,248)             -           -         -           -   (9,661,248)
Stock
dividends                -      9,661,248           -           -    (9,661,248)             -           -         -           -             -
Employees'
stock bonus              -      5,555,128           -           -              -             -           -         -           -     5,555,128
Consolidated
net income
for the
period                   -              -           -           -     27,384,194             -           -         -   ( 48,765)    27,335,429
Unrealized
loss on
financial
assets                   -              -           -           -              -             - (6,150,461)         -           -   (6,150,461)
Adjustments
due to
changes in
equities of
long-term
investments              -              -    274,207           -              -             - (1,813,046)         -           -   (1,538,839)
Cumulative
translation
adjustment               -              -           -           -              -     2,037,097           -         -           -     2,037,097
Minority
interest                 -              -           -           -              -             -           -         -     817,169       817,169
Balance at     $96,612,482    $15,216,376 $65,285,270 $51,821,402   $271,293,597  ($7,293,222) $ 5,301,623 ($18,901) $33,621,653  $531,840,280
June 30, 2011
2012-New
Taiwan
Dollars
Balance at
January 1,
2012          $106,890,967           $ - $70,693,639 $51,821,402  $325,500,402  $21,141,456 $ 1,802,723 ($18,901) $37,187,796 $615,019,484
Appropriation
of 2011
earnings
(Note 2):
Legal reserve            -              -           -   8,159,100    (8,159,100)             -           -         -           -             -
Cash
dividends                -              -           -           -   (16,033,645)             -           -         -           -  (16,033,645)
Stock
dividends                -     10,689,097           -           -   (10,689,097)             -           -         -           -             -
Employees'
stock bonus              -      5,874,552           -           -              -             -           -         -           -     5,874,552
Consolidated
net income
for the
period                   -              -           -           -     27,533,493             -           -         - (2,024,098)    25,509,395
Unrealized
loss on
financial
assets                   -              -           -           -              -             -   1,335,705         -           -     1,335,705
Adjustments
due to
changes in
equities of
long-term
investments              -              -   (279,972)           -              -             -   (461,828)         -           -     (741,800)
Cumulative
translation
adjustment               -              -           -           -              -  (10,848,976)           -         -           -  (10,848,976)
Minority
interest                 -              -           -           -              -             -           -         -     352,252       352,252
Balance at    $106,890,967    $16,563,649 $70,413,667 $59,980,502   $318,152,053   $10,292,480 $ 2,676,600 ($18,901) $35,515,950  $620,466,967
June 30, 2012
2012- US
Dollars
(Unaudited)
Balance at
January 1,
2012           $ 3,577,342           $ - $ 2,365,918 $ 1,734,317   $10,893,588     $707,546     $60,332   ($ 633) $ 1,244,571  $20,582,981
Appropriation
of 2011
earnings
(Note 2):
Legal reserve            -              -           -    273,063      (273,063)             -           -         -           -             -
Cash
dividends                -              -           -           -      (536,601)             -           -         -           -     (536,601)
Stock
dividends                -       357,734           -           -      (357,734)             -           -         -           -             -
Employees'
stock bonus              -       196,605           -           -              -             -           -         -           -      196,605
Consolidated
net income
for the
period                   -              -           -           -       921,469             -           -         -   ( 67,741)      853,728
Unrealized
loss on
financial
assets                   -              -           -           -              -             -      44,702         -           -        44,702
Adjustments
due to
changes in
equities of
long-term
investments              -              -     (9,370)           -              -             -   ( 15,456)         -           -     ( 24,826)
Cumulative
translation
adjustment               -              -           -           -              -     (363,085)           -         -           -     (363,085)
Minority
interest                 -              -           -           -              -             -           -         -      11,789       11,789
Balance at     $ 3,577,342       $554,339 $ 2,356,548 $ 2,007,380    $10,647,659      $344,461     $89,578    ($633) $ 1,188,619   $20,765,293
June 30, 2012

Note 1: Directors' and supervisors' remuneration amounting to $0 and
employees' bonus amounting to $5,555,128 had been deducted from the
Consolidated Statement of Income in 2010.
Note 2: Directors' and supervisors' remuneration amounting to $0 and
employees' bonus amounting to $5,874,552had been deducted from the
Consolidated Statement of Income in 2011.

 The accompanying notes are an integral part of these consolidated financial
                                 statements.

     See review report of independent accountants dated August 31, 2012.

            HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                   FOR THE SIX-MONTH PERIODS ENDED JUNE 30,

               (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

                                 (UNAUDITED)

                                         2011         2012         2012
                                             NT$          NT$          US$
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income                  $ 27,335,429 $ 25,509,395    $853,728
Adjustments  to  reconcile  consolidated 
net  income  to  net  cash  provided  by 
operating activities:
Depreciation                               19,763,572   27,386,303     916,543
Amortization  of  intangible  and  other 
assets                                      2,357,190    5,716,935     191,330
Reversal of allowance for doubtful
accounts                                  (1,183,157)            -           -
Gain on disposal of property, plant and
equipment, net                             ( 296,482)   ( 213,139)    ( 7,133)
Loss on impairment                                  -    1,780,642     59,593
Loss on valuation of financial assets
and liabilities, net                          91,163    4,481,928     149,998
Provision for inventory obsolescence
and market

 price decline                            1,325,259    1,561,596      52,262
Investment income accounted for under
the equity method                       (1,824,433)  (1,253,439)    (41,949)
Effect of foreign currency translation
of bonds payable
                                                    -   ( 381,675)    (12,774)
Amortization of discount on bonds
payable                                       315,775      329,845     11,039
Loss (gain) on disposal of investments         3,234  (1,026,809)    (34,365)
Changes in assets and liabilities:
Financial assets at  fair value  through 
profit or loss - current                            -      11,312        379
Accounts receivable                        15,353,169   37,406,640   1,251,896
Accounts receivable - related parties       7,507,084   10,642,946     356,190
Inventories                              (66,052,277)   63,073,734   2,110,901
Other receivables                           2,839,637    3,808,891     127,473
Prepayments                               (2,000,159)    1,640,220      54,894
Accounts payable                            7,446,215 (54,415,143) (1,821,123)
Accounts payable - related parties        (2,447,316)    5,772,523     193,190
Accrued expenses                            1,997,327    5,272,130     176,443
Accrued warranty liabilities                5,859,427  (5,360,710)  ( 179,408)
Receipts in advance                        ( 234,184)      101,354       3,392
Income tax payable                        (2,340,608)  (8,294,695)  ( 277,600)
Accrued pension liabilities                  (42,792)       43,890       1,469
Other   payables   and   other   current 
liabilities                                 1,273,288  (2,251,190)   ( 75,341)
Deferred income tax                       (1,730,874)       50,358      1,685
Net   cash    provided   by    operating 
activities                                 15,315,487  121,393,842   4,062,712
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition  of   property,  plant   and 
equipment                                (47,837,133) (21,826,107)  ( 730,459)
Increase in other assets                  (7,854,079)  (5,341,986)  ( 178,781)
Increase in long-term equity investments   ( 689,284)   ( 585,000)    (19,578)
Acquisition of land use right              ( 147,097)     (11,639)       (389)
Increase in  other  financial  assets  - 
current and non-current                  (41,633,754) (12,562,205)  ( 420,422)
Acquisition of financial assets  carried 
at cost                                    ( 366,665)   ( 338,610)    (11,333)
Proceeds  from  disposal  of   property, 
plant and equipment                           780,678    2,783,652      93,161
Financial assets  /  liability  at  fair 
value through profit or loss               ( 112,185)   ( 205,917)    ( 6,891)
Proceeds  from  disposal  of  funds  and 
investments                                     7,591    6,556,477     219,427
  Acquisition   of   available-for-sale 
financial assets                           ( 107,944)  (7,552,438)  ( 252,759)
 Proceeds  from  disposal of  land  use 
right                                       1,788,666            -           -
Net cash used in investing activities    (96,171,206) (39,083,773) (1,308,024)

                                 (Continued )

            HON HAI PRECISION INDUSTRY CO., LTD. AND SUBSIDIARIES

              CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                   FOR THE SIX-MONTH PERIODS ENDED JUNE 30,

               (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

                                 (UNAUDITED)

                                      2011         2012         2012
                                           NT$           NT$          US$
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans          $ 111,817,899 $ 213,063,001   $7,130,623
(Decrease)    increase    in    other 
liabilities-other                       ( 420,484)    1,251,420      41,882
Increase in minority interest              817,169      352,252     11,789
Increase in long-term loans              12,103,923     4,583,900      153,410
Payment of long-term loans              (5,819,060)   (3,336,750)   ( 111,672)
Increase in bonds payable                13,050,000    15,000,000     502,008
Decrease  in  short-term  notes   and   (8,592,347)   (2,494,822)     (83,495)
bills payable
Net  cash   provided   by   financing   122,957,100   228,419,001    7,644,545
activities
Net  effect  of  changes  in  foreign       620,742   (3,183,659)   ( 106,548)
currency exchange rates
Net  increase   in  cash   and   cash 
equivalents                              42,722,123   307,545,411   10,292,685
Cash   and   cash   equivalents    at 
beginning of period                     254,241,323   329,793,633   11,037,270
Cash and cash  equivalents at end  of 
period                                $ 296,963,446 $ 637,339,044 $ 21,329,955
Supplemental disclosures of cash flow
information:
Cash  paid  during  the  period   for 
interest                                 $1,539,380    $3,757,630     $125,757
Cash  paid  during  the  period   for 
income tax                              $13,101,110   $17,921,629     $599,787
Cash  paid  or  on  credit  for   the 
acquisition of  property,  plant  and 
equipment
Increase  in   property,  plant   and 
equipment                               $48,813,450   $22,231,033     $744,011
Add: Payable - beginning balance         11,197,683    28,177,904      943,036
Less: Payable - ending balance         (12,216,869)  (28,246,181)   ( 945,321)
Effect of changes in foreign currency
exchange rates                              42,869   ( 336,649)    (11,267)
Cash paid                               $47,837,133   $21,826,107     $730,459
Investing  activities  with  no  cash 
flow effect:
Unrealized    loss    on    financial 
instruments
Adjustment for  change  in  value  of 
available-for-sale

financial assets                       ($6,150,461)    $1,335,705     $ 44,702
Valuation  of  long-term  investments 
accounted for under

the equity method                       (1,813,046)     (461,828)     (15,456)
                                       ($7,963,507)     $ 873,877     $ 29,246
Financing  activities  with  no  cash 
flow effect:
Cash dividends payable                   $9,661,248   $16,033,645     $536,601
Employees' stock bonus payable           $5,555,128    $5,874,552     $196,605
Increase  (decrease)  in   cumulative    $2,037,097 ($10,848,976)   ($363,085)
translation adjustments

                                      

                                      

                                      

                                      

                                      

                                      

 The accompanying notes are an integral part of these consolidated financial
                                 statements.

      See review report of independent accountants dated August 31, 2012

                                      

Should the format of the tables in this announcement be corrupted or difficult
to read, please follow the link below:



http://www.rns-pdf.londonstockexchange.com/rns/1684N_1-2012-9-26.pdf



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR GXGDCCBDBGDL -0- Sep/26/2012 06:45 GMT
 
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