Chapter I General Principles |
| Article 1 | These Regulations are prescribed in accordance with paragraph 2 of Article 14 of the Securities and Exchange Act.
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| Article 2 | The financial reports of a publicly held bills finance company (hereinafter, "Bills Finance Company") shall be prepared in accordance with these Regulations. Matters not provided for herein shall be handled in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and generally accepted accounting principles promulgated by the Financial Accounting Standards Committee of the Accounting Research and Development Foundation of the Republic of China. A Bills Finance Company shall handle its accounting affairs, upon which the preparation of its financial reports is based, in accordance with the Business Accounting Act and other applicable acts and regulations.
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| Article 3 | A Bills Finance Company shall establish its accounting system based on the nature of its accounting affairs, the actual status and development of its business, and its management needs in preparation for possible audit. The content of the accounting system referred to in the preceding paragraph shall, according to the nature of the business operations, include a general description, account titles, accounting documents, account books, descriptions and uses of accounting statements, guidelines and procedures for handling accounting affairs, internal accounting controls, administration of accounting affairs, and handling of computerized accounting affairs, etc.
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| Article 4 | "Financial report" shall mean financial statements, list of major account titles, and other disclosures or explanations under these Regulations, which help users to make decisions. A financial statement shall include a balance sheet, income statement, statement of changes in shareholders' equity, cash flow statement, and the footnotes thereto.
A Bills Finance Company, unless newly established, shall prepare the major statements and footnotes thereto referred to in the preceding paragraph by comparing two consecutive periods, and the responsible person, manager, and handling accountant shall sign or seal each page of such statements.
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| Article 5 | The content of a financial report shall fairly present the financial position, operating results, and cash flows of a Bills Finance Company without misleading any interested party in making judgments and decisions. If a financial report is in violation of these Regulations or any other relevant provisions, upon being notified by the competent authority after auditing to make adjustments, the Bills Finance Company shall make adjustments and corrections. If the adjusted amount reaches a level set by the competent authority, a corrected financial report shall be re-announced, and at the time of re-announcement shall specify the reasons, items, and amount of the adjustment as notified by the competent authority.
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| Article 6 | In order to thoroughly disclose the information on the financial condition, operating results, and cash flows, the financial reports shall provide notes and explanations on the matters specified below:
- Historical changes and development of the Bills Finance Company and its business scope;
- A declaration that the financial statements were prepared in conformance with these Regulations and other applicable acts and regulations (the titles of the acts or regulations shall be expressly stated) and generally accepted accounting principles;
- Summary of significant accounting policies and the basis on which they are judged;
- Where for some special reason the accounting treatment changes, affecting the comparison of the financial information between the two successive periods, the reason for the change and its effect on the financial statements shall be explained;
- If there is a need to note the estimation and valuation basis of any amount in the financial report, it shall be noted.
- If any account title contained in the financial report is restricted by any act or regulation, contract, or otherwise, the circumstances, time limit and relevant matters shall be stated;
- Standards for classifying assets and liabilities as either current or non-current;
- Significant commitments and contingent liabilities (including off-balance sheet items);
- Information relevant to financial products (including derivatives);
- Management policies and practices in relation to various risks such as credit, market, liquidity, and operational and legal risks, and exposure to major risks. The following information shall be disclosed under its respective risk category:
- Asset quality (Form A), overview of main businesses (Form B), lending risk concentration (Form C), policies on reserves and provisions for losses, and changes in allowance for bad debts (credit risk);
- Information on significant concentration of risks in relation to assets, liabilities and off-balance sheet items (credit risk);
- Averages of interest assets and interest liabilities and average interest rate during the current period (market risk);
- Interest rate sensitivity information (market risk) (Form D);
- List of capital sources and uses (liquidity risk) (Form E);
- Special matters (operational risk and legal risk) (Form F);
- Capital adequacy (Form G);
- Change in capital structure;
- Addition, expansion, construction, lease, obsolescence, lying idle, sale, pledge, transfer or long-term rent of major assets;
- Major investments in other enterprises;
- Loss caused by major disasters;
- Progression or conclusion of material litigation;
- Signing, completion, cancellation, or voidance of material contracts;
- Information related to employee pension funds;
- Major organizational adjustments and significant reformation of management system;
- Material effects of changes in government acts and regulations;
- Segment financial information;
- Material effect of suspension of business;
- Transfer of the major part of business and assets/liabilities from or to another financial institution;
- Long-term and short-term borrowings and lendings;
- Information in relation to income tax;
- Significant transactions with related parties;
- Loans to banks and other enterprises in the same industry and overdrafts and borrowings by banks;
- Where the Bills Finance Company is a subsidiary of a financial holding company, allocation of the revenue, cost, expense, and gain/loss incurred between it and the financial holding or any other subsidiary in their business interchanges or transactions, joint business promotion, information sharing, and common use of business facilities or premises.
- Other disclosures necessary to avoid misleading users or to facilitate fair presentation of the financial report.
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| Article 7 | Notes shall be provided with respect to any of the following subsequent events occurring from the balance sheet date to the financial report submission date:
- Change in capital structure;
- Long-term and short-term borrowings in substantial amounts (exclusive of short-term borrowings from banks and other enterprises in the same industry);
- Addition, expansion, construction, lease, obsolescence, lying idle, sale, pledge, or transfer of major assets;
- Major investments in other enterprises;
- Loss caused by major disasters;
- Significant asset deterioration and loan write-offs;
- Progression or conclusion of material litigation;
- Signing, completion, cancellation, or voidance of material contracts;
- Major organizational adjustments and significant reformation of management system;
- Material effects of changes in government acts and regulations;
- Other significant events or measures capable of affecting the financial condition, operating results, or cash flows.
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