Chapter IX Other Disclosures |
| Article 21 | A Bank shall explain its business conditions as follows:
- Significant business matters: The Bank shall provide explanations of matters which have had a significant effect on business in the last five years, such as merger with, acquisition of, or otherwise combination with another company, investing in affiliated enterprises, reorganization, procurement or disposal of major assets, significant change in operation method or business activity, etc.
- Information on investment in overseas branch units, subsidiary banks, branch banks and offices: The Bank shall provide an overview of overseas enterprises and offices invested by it and of enterprises and offices invested by such overseas enterprises, specifying the original investment amount, investment gains/losses, cash dividends, such enterprise's endorsements and guarantees to and loans from outside, etc.
- Remuneration and related information on directors, supervisors, general manager, and vice general manager (Form 8):
- Transportation allowance and remuneration to each director and supervisor in the most recent accounting year. If a director concurrently acts as manager, the remuneration shall be respectively disclosed based on his/her position.
- Total salaries, cash awards, special allowance, and bonuses paid to the general manager and vice general manager in the most recent accounting year.
- If remuneration other than those described in the preceding two items, such as automobile, house, or other personal expenditures, is provided to directors, supervisors, general manger, or vice general manager, the name, position, the nature and cost of the assets provided, actual rental or rental imputed based on fair market price, and other payment shall be disclosed.
- Where any of the chairman, general manager, or manager in charge of finance or accounting of the Bank has during the past twelve months held a position at the accounting firm of a certified public accountant or an affiliated enterprise of such accounting firm, the name, position held, and period during which the position was held shall be disclosed. An "affiliated enterprise of a certified public accountant's accounting firm" as referred to in these Regulations means an enterprise in which accountants at the accounting firm of the certified public accountant hold more than 50% of the shares or hold more than half of the directors' positions, or those companies or institutions listed as affiliated enterprises in the external publications or printed materials of the accounting firm of the certified public accountant.
- Labor-management relations (Form 9):
- Significant employee welfare programs, the retirement system and status of implementation thereof, and arrangements between labor and management of the Bank shall be disclosed.
- Loss caused to the Bank by labor disputes during the last thee years shall be explained. Any amount already incurred or estimated likely to be incurred in the future and counter measures shall be also disclosed. If the amount cannot be reasonably estimated, such fact shall be explained.
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| Article 22 | A Bank shall disclose the market value, dividends, and shareholding dispersion of securities issued by it:
- Market value information: If the securities of the Bank have been listed on a stock exchange or over-the-counter market, it shall disclose the highest and lowest trade price in each quarter of the last two years (Form 10).
- Dividend information: Information on the details of the dividend policy, the cash dividend per share distributed in the last two years, and the amount of dividends from earnings and capital reserves shall be provided. If there is any accumulated unpaid dividend, the amount thereof shall be disclosed. In case of any material change or expected material change in the dividend policy of the Bank, an explanation shall be given (Form 11).
- Shareholding dispersion: An explanation on the condition of dispersion of the common shares and preferred shares of the Bank on the balance sheet date shall be provided (Form 12).
- If the Bank distributes shares as a result of capital increase out of earnings or capital reserves, it shall further disclose the information of cash dividend and market value retroactively adjusted based on the number of shares after distribution.
- The Bank shall disclose the current period condition of transfer of shares and/or pledge of or change in equity interests of its directors, supervisors, managers, and shareholders holding 10% or more of its total shares (Form 13).
- If the Bank is approved to offer and issue securities by the shelf registration system, it shall disclose the approved amount and relevant information of the securities to be issued or already issued (Form 14).
- Where the Bank has issued or privately placed employee stock option certificates which are still in circulation and have not been exercised, it shall compile a disclosure statement based on the issuance dates, giving information on the total number of units issued, the total number of units still in circulation, the number of shares which may be purchased through options, the initial date on which the options may be exercised, the option purchase price, the exercise method, and the market value of common stocks (Form 15).
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| Article 23 | A Bank shall disclose the following financial information for the last five years:
- Condensed balance sheet and income statement (Form 16);
- Material financial ratio analysis (Form 17); and
- Significant information which may increase the understanding of financial condition, operating results, cash flows, or changing trends relating thereto (e.g., impact of change in commodity price and exchange rate).
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| Article 24 | A Bank shall review its financial condition, operating results, and cash flows and analyze the cause of change. The content shall at least cover the following matters, and review may be conducted on a departmental basis depending on actual need:
- Financial condition: the principal reasons for material changes in assets, liabilities, and shareholders' equity in the last two years and their effects. Shall include an explanation of planned future responsive measures when the effect is material (Form 18).
- Significant capital expenditure and the source of funds: Give an explanation on significant capital expenditure invested or committed in the last two years, and the nature, expected benefit, and the actual or expected sources of funds of the capital expenditure to be invested in the coming five years. If material change is expected in the corresponding cost of capital of future borrowings and capital increase or in the policy of borrowing and capital increase, an explanation shall be provided (Form 19).
- Liquidity: Analyze liquidity in the last two years and the reasons for any increase or decrease therein, and explain the circumstances of any changes in future working capital demand, the working capital amount to be generated from operations, and working capital requirements, or amounts obtainable from other parties, based on operational trends, capital demand, and other material commitments, transactions, or non-transaction matters. If it is discovered that the liquidity has been or will be materially insufficient, the remedial measures that have been or will be taken shall be indicated (Form 20).
- Operating results: Analyze the constituent items of the income or loss from continuing operations for the last two years, and the significant transactions, non-transactions, or changes in the economic environment that affect the increase/decrease of such items. When there is significant increase/decrease in the revenues or expenses, the cause of such change shall be explained. If material change has occurred or is expected to occur in the operating policy, market situation, or any other internal or external elements, thus resulting in material increase or decrease in the revenue or expense of the continuing operations, an explanation of such fact and the impact shall be given (Form 21).
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| Article 25 | A Bank shall in its financial reports disclose information on the professional fees of its certified public accountant and any change in its certified public accountant in accordance with these Regulations.
The Bank shall in its financial reports disclose the following information on the professional fees of its certified public accountant:
- "Professional fees for auditing services" referred to herein means the professional fees paid by the Bank to a certified public accountant for auditing, review, and secondary reviews of financial reports, financial forecast reviews, and tax certification. Professional fees for non-auditing services means professional fees paid for other than the above services.
- When professional fees paid to a certified public accountant or the accounting firm of a certified public accountant or its affiliate enterprises for non-auditing services account for a proportion equal to one-quarter or more of the fees paid for auditing, or when fees paid for non-auditing services reach NT$500,000 or more, the amount of fees paid for both auditing and non-auditing services as well as the nature of the non-auditing services performed shall be disclosed (Form 22).
- When the Bank changes its accounting firm and the amount of fees paid for auditing services during the year in which the change is made are lower than for the previous year, the amount by which the fees decreased, the proportional decrease, and the reasons therefor shall be disclosed.
- When the amount of fees paid for auditing services is lower than for the previous year by 15 percent or more, the amount by which the fees decreased, the proportional decrease, and the reasons therefor shall be disclosed.
If the Bank has replaced its certified public accountant in the last two years or in the subsequent period, it shall disclose the following information on the change in certified public accountant (Form 23):
- Regarding the former certified public accountant:
- Date of and cause for replacing the certified public accountant. Explain whether the certified public accountant voluntarily terminated or ceased accepting the engagement, or whether the Bank terminated or discontinued the appointment.
- If such former certified public accountant issued any audit report with other than an unqualified opinion during the preceding two years, the opinion and the reason shall be provided.
- Whether there is any different opinion between the Bank and the former certified public accountant with regard to accounting principles or practices, disclosure of financial reports, or auditing scope or steps.
- If there is any different opinion, a detailed explanation of the nature of each different opinion, the handling by the Bank (including whether or not the former certified public accountant has been authorized to give full reply to the successor accountant's inquiries on the difference of opinion) and the final result of the handling shall be provided.
- Where the former certified public accountant has notified the Bank that it lacks a sound internal control system so that the financial report is not reliable, or where the former certified public accountant has notified the Bank that he/she could not rely on the Bank's statement, or that he/she did not want to be associated with its financial report, such shall be disclosed.
- Where the former certified public accountant has notified the Bank that the auditing scope had to be expanded, or that there was data showing that if the auditing scope was expanded, the credibility of the financial report already issued or soon to be issued might be damaged, or where the former certified public accountant has notified the Bank that based on the collected data, the credibility of the financial report already issued or soon to be issued might be damaged, but where due to replacement of the certified public accountant or for other reason, the auditing scope was never expanded by the former certified public accountant, such shall be disclosed
- Regarding the successor certified public accountant:
- Name of the successor accounting firm and certified public accountant and date of engagement.
- Before the Bank officially engages the successor certified public accountant, if it inquired with such accountant about the accounting treatment method of a specific transaction or the applicable accounting principle and his/her possible opinion on the financial report, it shall disclose the matters it inquired about and the result thereof.
- The Bank shall consult with and obtain the written opinion of the successor certified public accountant in connection with any discrepancy of opinion between it and the former certified public and disclose the same.
- The Bank shall send a letter to the former certified public accountant regarding the matters provided in paragraph 3, subparagraph 1, and subparagraph 2, item 3, and notify such accountant to reply within 10 days if he/she has a different opinion. The Bank shall disclose the reply letter of the former certified public accountant.
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| Article 26 | A Bank preparing financial reports and making disclosures in accordance with the provisions of this chapter shall seek a certified public accountant to issue a review opinion, in accordance with other regulations governing key points for examination of disclosure items for financial reports.
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