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These Key Points are enacted pursuant to Paragraph 5 of Article 42 of the Operating Rules of the TWSE in order to make distinct classification of industries for companies whose stocks are initially listed and to satisfy the need for making adjustment thereto in case of changes in the business of a company after its listing.
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Having referred to the "Standard Industrial Classification of ROC " published by the Directorate General of Budget, Accounting & Statistics of Executive Yuan, the TWSE has issued these Key Points to classify the listed companies into twenty nine (29) categories including: cement industry; food industry; plastic industry; textile industry; electric machinery industry; electrical and cable industry; chemical industry; biotechnology and medical care industry; glass and ceramic industry; paper and pulp industry; iron and steel industry; rubber industry; automobile industry; semiconductor industry; computer and peripheral equipment industry; optoelectronic industry; communications and internet industry; electronic parts and components industry; electronic products distribution industry; information service industry; other electronic industry; building material and construction industry; shipping and transportation industry; tourism industry; financial and insurance industry; trading and consumers' goods industry; gas and electricity industry; general industry and other industry; provided that the TWSE may make additions or changes to the categories of industries based on the market needs after reporting to and obtaining the approval of the competent authority.
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3
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Where the financial statements for the most recent two (2) fiscal years of an issuing company which applies for an initial listing of its stock conform to any of the following conditions, the industry to which the company belongs shall be categorized in accordance with the respective Item set forth below:
- Where the operating income derived by the company from any of its business activities represents fifty percent (50%) or more of its overall operating income, it shall belong to the category of industry covering the said business activity for the purpose of listing its stock;
- Where no operating income derived by the company from any of its business activities represents fifty percent (50%) or more of its overall operating income, yet the operating income derived from each of three (3) individual business activities represents twenty percent (20%) or more of its overall operating income, and the company has adopted a diversified operation policy, it shall be categorized as "general industry" for the purpose of listing its stock;
- Where the industry category of the company cannot be determined in accordance with either Item (1) or (2) above, nor can it be categorized into any of the industries set forth in Point 2 hereof, then it shall be categorized as "other industry" for the purpose of listing its stock.
Where an issuing company applies for initial listing of its stock and the operating income derived by the company from any of its business activities as contained in its financial statements for the most recent one (1) fiscal year represents eighty percent (80%) or more of its overall operating income, it shall belong to the industry category covering the said business activity for the purpose of listing its stock.
Where an issuing company which initially applies to be categorized under, or a listed company which applies for adjusting its categorization into, the biotechnology and medical care industry and its main business activity is in the biological technology or the production and distribution of biotechnological foods, the company may only be categorized under the biotechnology and medical care industry if approvals of the Department of Health, Executive Yuan, and other relevant competent authorities have been obtained.
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When determining the industry category applicable to a company which applies for initial listing of its stock in accordance with Point 3 above, the TWSE may take into consideration the functions and purposes of its major products, the loss and profit ratio of its business departments, the proportions in which its assets are allocated to its business departments, and other relevant evidentiary information.
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The TWSE will conduct a periodic review of the industry category of all listed companies on a biyearly basis. For any company which has changed the nature of its business or has adjusted its business strategy, the industry category to which it belongs shall be adjusted in accordance with Points 3 and 4 above based on its financial statements for the most recent two (2) fiscal years submitted by the said company pursuant to the provisions of Article 36 of the Securities and Exchange Act. The adjustment of the applicable industry category shall take effect upon being publicly announced after it has been reported to and approved by the competent authority; provided that where a company has changed the nature of its business in a special circumstance, the TWSE may report such change, if deemed necessary, as a special case to the competent authority and, after being approved, make a public announcement of adjusting the industry category of the company by taking into consideration its financial statements for the most recent fiscal year.
Where considering adjustment of the industry category of a listed company pursuant to the preceding paragraph, notwithstanding that the operating income of its newly added business activities conforms to the criteria for operating income as set forth in Point 3 hereof, no adjustment will be made thereto if the profit of such business department fails to reach 2% of the capital stock in its final accounts for the year in question based on a calculation using the information of such business department.
The TWSE may adjust the industry category of a listed company to an appropriate category, if the listed company is unable to classify its industry reasonably according to its operating revenue, or for other special reasons.
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These Key Points shall take effect upon being publicly announced after they are submitted to and approved by the competent authority. Subsequent amendment hereto shall be effected in the same manner.
Note: This English translation is for reference only. In case of any discrepancy between the Chinese version as published by the TSEC and this English translation, the Chinese version shall prevail.
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