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Article 3
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On the front cover of the prospectus, the common stock code shall be printed in the upper right hand corner, and the following particulars shall be printed in sequential order:
1. The name and seal of the company or preparatory office.
2. Where the prospectus is prepared for the purpose of issuing the following securities:
(1) Issuance of New Shares: the source of this new issue, types of new shares, number of shares, value, conditions of the issue, the public underwriting ratio, and manner of underwriting and sale allocation. If there are specially agreed conditions for preferred shares, the page number in the prospectus where these are set forth in full shall be separately noted.
(2) Issuance of Corporate Bonds: types, value, interest rate, conditions of issue, the public underwriting ratio, and manner of underwriting and sales allocation. If there are conversion or subscription features, the page number in the prospectus where these are set forth in full shall be separately noted.
(3) Issuance of Employee Stock Option Certificates: number of units issued, number of shares subscribable per stock option certificate, option exercise conditions, and method of performance. For option exercise conditions, readers may be referred simply to the page number in the prospectus where such conditions are listed in full.
(4) Establishment by Public Offering: authorized capital amount, source of the current issue of new shares, types of new shares, number of shares, value, conditions of issue and the number of shares subscribed by the promoters.
(5) Other.
3. Summary of the purpose of the capital application plan and the projected possible effect thus created. The page numbers in the prospectus where this is set forth in full shall also be noted.
4. The following statements shall be printed in a conspicuous manner:
(1) The effective registration (approval) of the securities may not be used to advertise the verification of the registration (application) items or the guarantee of the value of the securities.
(2) If this prospectus contains false or omitted information, the issuer and its responsible person and all other persons who sign or affix their seal on the prospectus shall be held liable in accordance with laws.
(3) The web addresses for enquiry about the prospectus, including the address of the information reporting website designated by the Securities and Futures Commission, Ministry of Finance (“SFC”) and the web address used by the company to disclose information relating to the prospectus.
5. Publication date.
Where there is a change in the common stock code referred to in the preceding paragraph, in the fiscal year that such change occurs and for the two consecutive fiscal years thereafter, the original stock code shall be printed in addition to the new stock code.
Where there is a change in the company name as referred to in the first paragraph, in the fiscal year that such change occurs and for the two consecutive fiscal years thereafter, the change shall be disclosed by printing the new and old names adjacently.
The prospectus prepared for the registration (application) for public offer and/or issue of securities shall note in its front cover that it is a draft version for such registration (application) purpose.
If stabilization operations are proposed in connection with cash capital increase in accordance with the relevant regulations, the following statement shall also be noted in the prospectus' front cover in a conspicuous type print: "To deal with price fluctuations in the stock market, the underwriter may proceed with stabilization operations regarding the issued shares of the current right issue if necessary."
Where an issuer is reporting (applying for) an issue of shares at below par value, it shall also note in a prominent font on the prospectus cover that the company is issuing the new shares at a discount.
Where new shares are issued upon merger or acquisition (including merger or consolidation, acquisition, or split) or acquisition of another company's shares, if there are any restrictions on transfer or pledge of the issued shares, such restrictions shall be noted in a prominent font on the cover of the prospectus. For cases of establishment by offering and of public offerings by companies whose shares are neither listed on the stock exchange (hereinafter, are "unlisted") nor traded on an over-the-counter (OTC) market, the following statement shall also be noted on the prospectus' front cover in a prominent font: "The shares are neither listed on the stock exchange nor traded on an OTC market."
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Article 6
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The content of a prospectus, unless otherwise regulated by Chapter III on the simplified prospectus or Chapter IV on the prospectus for establishment by offering, shall include the following items:
1. Company Summary: Including brief description of the company, company organization, capital and shares, status of issue of corporate bonds, preferred shares, overseas depositary receipts, employee stock option certificates, and mergers and acquisitions and assignments of shares of other companies.
2. Operation Summary: Including the operation of the company, fixed assets and other real properties, re-invested business, important contracts and any other items required to be described or supplemented.
3. Issuance plan and implementation status: Including analysis of the fund application plan for the previous cash capital increase, merger or acquisition, assignment of another company's shares, or issue of corporate bonds; analysis of the fund application plan for the current cash capital increase or issue of corporate bonds; and status of the current issue of new shares due to assignment of another company's shares, or current issue of new shares due to merger or acquisition.
4. Financial Summary: Including the summarized financial data for the most recent 5 years, financial statements, a financial summary, and other important matters, as well as review and analysis of financial condition and operating results, and an overview of the company's risk management.
5. Special Items to be Included: Including the state of corporate governance and other special items to be included.
6. Important Resolutions, the articles of incorporation, and relevant laws and regulations.
If the SFC has promulgated separate rules/regulations for special industries like banks, bill financing, securities, futures, insurance, financial holding, and investment trust, those rules/regulations shall be complied with.
Where applicable legal provisions exist, matters shall be handled in compliance therewith.
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Article 9
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The "company organization" shall include the following items:
1. Organization system: setting forth the Company's organizational structure and the business in which each major department engages.
2. Chart of Affiliated Enterprises: setting forth the relationship between the Company and its affiliated enterprises, cross-shareholding ratios, numbers of shares held, and actual investment amounts.
3.General manager, vice general manager, assistant vice general manager, and the manager of each department and branch institution: (Schedule 2)
(1) Name, work experience (educational background), amount and nature of shareholdings: setting forth the names; major work experience (educational background); positions concurrently held with other companies; job commencement date; number of shares held by them, their spouses, minor children, and under the name of other parties; and the acquisition of employee stock option certificates.
(2) For those who are the spouses of or are related to the general manager or vice general manager within the 2nd degree, they shall also set forth their corporate position, name and relationship to the general manager or vice general manager.
4. Directors and Supervisors: (Schedules 3 and 4)
(1) Name, work experience (educational background), amount and nature of shareholdings: setting forth the names; major work experience (educational background); positions concurrently held with this and other companies; appointment date and term; date of initial appointment; number of shares held by them at the time of appointment and those held presently by them, their spouses, minor children, and under the name of other parties, and the possession of professional knowledge. In the case of the representative of a corporate shareholder, the name of the corporate shareholder, and the names of the shareholders who hold more than 10% of the shares of such corporate shareholder, or those who rank in the top 10 in shareholdings, shall be noted.
(2) For those who are the spouses of or are related within the second degree to other managers, the directors or supervisors, they shall also set forth their corporate position, name and relationship to those other managers, the directors or supervisors.
5. Promoters:
(1) For companies established for less than one year, relevant information of promoters whose shareholding percentage is among the top ten of the Company shareholders shall be disclosed as pursuant to the previous subparagraph.
(2) For companies established for less than three years, disclosure shall be made according to the provisions under No. 6 of the ROC Statements of Financial Accounting Standards, where all the important transactions (including property transactions and financing of funds) between the promoters and the Company since incorporation, other than the normal business transactions, shall be disclosed. For property transactions, the nature and location of the transacted item and the method for determining the transaction price shall also be disclosed. For properties purchased from a promoter, if the promoter bought the properties less than two years before selling them out, the promoter's purchasing costs shall also be explained.
6. Remuneration to Directors, Supervisors, General Manager, and Vice General Manager (Schedule 4-1):
(1) Remuneration and transportation allowances paid to each director and supervisor for the most recent fiscal year; if a director concurrently holds a managerial position, his remuneration shall be respectively disclosed pursuant to his titles/positions.
(2) The total sum of the compensation, rewards, special allowance and bonus paid to the general manager and vice general manager for the most recent fiscal year.
(3) For remuneration other than those specified in the above two sub-paragraphs paid to the directors, supervisors, general manager and vice general manager, such as payments relating to provision of car, house/apartment and other exclusive personal expenses, the following information shall be disclosed: name, position, nature and cost of the provided property/asset, the actual or fair-market-value-calculated rental, and any other payments.
"Affiliated enterprise" in subparagraph 2 of the preceding paragraph refers to an affiliated enterprise meeting the requirements in Article 369-1 of the Company Act.
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Article 17
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The description of the "operation of the company" shall include the following particulars:
1. Business Content:
(1) Scope of Business: Setting forth the major business engaged in by the company and its percentage out of the entire company business, company's current products (services), and the new products (services) planned to be developed.
(2) Industry Summary: Describing the industry's current condition and development, relations with industries upstream, downstream and at the same level, various trends of product development and competition status.
(3) Technology and Research & Development Summary: Setting forth the technological arrangement in business operations, research & development, personnel involved in research & development and their educational background and employment history, along with their invested research costs each year for the last 5 years and any successfully developed technologies or products.
(4) Long and Short Term Plans for Business Development.
2. Summary of Market and Production/Sales
(1) Market Analysis: Analyzing the areas/regions of sales (supply) of the Company's major products (services), market share, market's future supply/demand conditions and development potential, anticipated sales volumes and basis therefor, competitive niche, and the advantageous and disadvantageous factors for future development and policies for dealing with them.
(2) Important use and production process for the major products.
(3) Supply status of the major raw materials.
(4) Description of major gross profit margin changes by each department classification or major product classification for the most recent two years: When the gross profit margin fluctuates over 20% from the previous year's rate, analysis of the key factors causing the price/volume changes and their impact on the gross profit margin shall be made. For construction companies or companies with construction departments, setting forth an analysis on the estimated recognized income and gross profit for each construction project during the year of report (application) and the preceding year, and describing whether there are any unusual events involved in the gross profit margin of each construction project and the expected sales for projects that have been completed but not yet sold. (Schedules 28, 29)
(5) List of principal suppliers and clients: Setting forth the names of any suppliers (clients) that have supplied (sold) 10% or more of the company's procurements (sales) in either of the preceding two years, and the monetary amount and the proportion of such procurements (sales) as a percentage of total procurements (sales), and explaining the reason for any change in the amount; provided however, that Where the company is prohibited by contract from revealing the name of a trading counterpart, or where a trading counterpart is an individual person who is not a related party, a code may be used in place of such trading counterpart's actual name. (Schedules 30, 31)
(6) Production for the most recent two years: Setting forth production by volume, production by value, and production capacity for the most recent two years by each department classification or major product classification, and an analysis of any changes. (Schedule 32)
(7) The sales volume and value for the most recent two years: Setting forth the sales volume and sales value for the most recent two years by each department classification or major product classification, and an analysis of any changes. (Schedule 33)
3. Number of employees for the most recent two years: Documenting the employees information for the past two years and up to the prospectus' publishing date of the current year. Such information shall be categorized by the nature of the works performed to include the statistics on the number of employees, average age, average years of service and the educational background breakdown. (Schedule 34)
4. Information on environmental protection expenditures:
(1) According to laws and regulations if it is required to apply for a permit for installing anti-pollution facilities, or permit of pollution drainage, or to pay anti-pollution fees, or to organize and set up an exclusively responsible unit/office for environmental issues, the description of the status of such applications, payment or establishment shall be made.
(2) Setting forth the company's investment on the major anti-pollution facilities, the use purpose of such facilities and the possible effects to be produced. (Schedule 35)
(3) Describing the process undertaken by the company on environmental pollution improvement for the most recent two years and up to the prospectus' publishing date. If there had been any pollution dispute, its handling process shall also be described.
(4) Describing the loss (including damages compensation paid) suffered by the company due to environmental pollution incidents occurred in the most recent two years and up to the prospectus' publishing date, the total penalty/fine amount, as well as disclosing its future preventive policies (including improvement measures) and possible expenses to be incurred (including possible loss if no preventive measures are taken, and the penalties and estimated damage compensation amount; if reasonable estimation cannot be made, explanation on the facts why it cannot be made shall be stated.)
(5) Explaining the current condition of pollution and the impact of its improvement to the profits, competitive position and capital expenditures of the company, as well as the projected major environment-related capital expenses to be made for the coming two years.
5. Labor relations:
(1) Setting forth all employee benefits, continuing education, training, retirement systems, and the status of their implementation, as well as the status of agreements between labor and management, and all measures aimed at preserving the rights and interests of employees.
(2) Describing the loss suffered by the company due to labor disputes occurring in the most recent two years and up to the prospectus' publishing date, and disclosing the estimated amount expected to be incurred for the present and future as well as the preventive measures. If a reasonable estimate cannot be made, an explanation of why it cannot be made shall be provided.
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Article 18
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Where fixed assets and other real properties or major assets are bought or sold, the following items shall be recorded:
1. Self-owned Assets:
(1) Setting forth the names, number, acquisition dates, acquisition cost, revaluation gains and non-depreciated balance amount of the fixed assets if the acquisition cost is 10% or more of the paid-in capital or NT$100,000,000 or more. The status of the fixed assets' use, insurance, encumbrances and any other restriction of rights shall also be disclosed. (Schedule 36)
(2) Setting forth the names, lot size, premises locations, acquisition dates, acquisition costs, revaluation gains, non-depreciated balance amount, published value or house/apartment's appraised value and the proposed future disposition or development plans of the idle real properties and the real properties which have been held for five years or more for investment purposes. (Schedule 37)
2. Rental properties:
(1) Capital lease: The standards and items to be disclosed are identical with item (1) of the previous subparagraph.
(2) Operating lease: For all the operating lease assets the rent amount of which exceeds NT$5 million a year, their names, number, lease term, annual lease amount, names of lessors, and the current status of use shall be set forth. (Schedule 38)
3. Status of major asset buy/sale transactions: Setting forth the buy/sale information of the company and the subsidiary company for the most recent two years and up to the prospectus' publishing date if the transaction price is 20% or more of the paid-in capital or NT$300,000,000 or more. The information shall include the transaction price, disposition profit or loss, the trading counter party (buyer or seller) and their relationship with the company. (Schedule 39)
4. Each factory's current condition and facility productivity ratio for most recent two years. (Schedule 40, 41)
The definition of a subsidiary company for subparagraph 3 of the preceding paragraph, subparagraph 4 of Article 19, and subparagraph 3 of Article 27, is prescribed in Number 5 and 7 of the Statement of Financial Accounting Standards promulgated by the Accounting Research and Development Foundation.
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Article 22
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In the analysis of the previous cash capital increase, merger or acquisition, issue of new shares due to acquisition of shares of another company, or plan of utilization of capital from issuance of corporate bonds, the following particulars shall be specified:
1. Contents of the plan: for the previous cash capital increase, merger or acquisition, issue of new shares due to acquisition of shares of another company, or corporate bond issue plan, and, as of the quarter preceding the date on which the prospectus was printed, for every preceding cash capital increase, merger or acquisition, issue of new shares due to acquisition of shares of another company, or corporate bonds issue plan that has not yet been completed or the actual completion date of which was no more than three years from the date of the report (application), a detailed explanation shall be given of the specific content of each such plan, including the content of each and every changed plan, the source of capital and its usage, reasons for the change, the effects before and after the change, the date that the changed plan was proposed to the shareholders meeting, and the date on which the above information was posted to the information reporting website designated by the SFC shall also be published.
2. Implementation status: Analyzing, item by item up to the quarter immediately preceding the prospectus' publishing date, the status of the plans' implementation and the comparison with the originally projected effects based on the purpose of each of the above-mentioned plans. If the implementation progress or effect does not reach the projected target, a concrete explanation on the causes, impact on the shareholders' equity and improvement plans shall be made. If the content of any of the plans referred to in the preceding subparagraph is as set forth in the following sub-subparagraphs, the information set forth herein below shall also be disclosed:
(1) For acquiring or merging with, or taking assignment of, other companies, or expanding or newly constructing fixed assets, a comparison description on the fixed assets, operating income, operating expenses and operating profits, etc. shall be made.
(2) For re-investing in other companies, description of the re-invested business' operation status and its impact to the company's investment profit/loss shall be made.
(3) For strengthening the operating capital or paying off liabilities, a comparison description on the increase and decrease of current assets, current liabilities, total liabilities, interests payments, operating revenues, and the retained earning per share etc. as well as financial structure analysis shall be made.
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Article 29
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The "special items to be included" shall set forth the important contents of the registration (application) statement, including:
1. Summary of the internal control system: The prospectus shall set forth the certified public accountant's suggestions for improving the internal control system and improvements to major flaws discovered through internal auditing in the most recent three fiscal years, and shall also disclose the following items:
(1) Internal control statement.
(2) Where the company has retained certified public accountants to exclusively review its internal control systems, the prospectus shall set forth the reason for doing so, the certified public accountants' review opinions, measures the company has taken for improvement, and the condition of improvement on lacking items.
2. Those who have retained the SFC approved or recognized credit rating institutions to conduct credit rating/evaluation shall disclose the credit rating/evaluation report issued by the credit rating institutions.
3. Summary opinion from the securities underwriter's assessment.
4. Attorney's legal opinion.
5. Summary opinion stated in the case checklist schedule written by the issuer and reviewed by a certified public accountant.
6. The improvement status of the items notified to be corrected, if at the time the company applied for effective registration (or approval) of the previous offering and issuance of securities the SFC had notified it to make self-correction on certain items.
7. The items notified to be further disclosed, if at the time the company applied for effective registration (or approval) of the current offering and issuance of securities the SFC had notified it to make supplemental disclosure on certain items.
8. The statement or promised items disclosed in the prospectus from the company's registration (application) for offering and issuance of securities for the first time, the preceding time, and within the most recent three years, and the current state of fulfillment of such.
9. The major content of any dissenting opinion of any director or supervisor regarding any material resolution passed by the board of directors, where there is a record or written statement of such opinion, for the most recent five years and up to the date of printing of the prospectus.
10. Status of private placements of common shares in the three most recent fiscal years: Shall disclose the dates and quantities passed by the shareholders meeting; basis and reasonableness of the setting of price; means of selecting the specified persons (where the offerees have already been arranged, the names of the offerees and relationship between the offerees and the company shall also be described); the reasons necessitating the private placement. (Schedule 56)
11. Any legal sanctions against the company or its internal personnel, or any disciplinary action taken by the company against its own personnel for violation of internal controls, during the most recent fiscal year or during the current year up to the date of printing of the prospectus; and a description of the main shortcomings in the company's internal control system as well as an indication of measures for improvement.
12. Other necessary items to be supplemented and explained.
When the issuer, depending on the nature of the business engaged in, has retained experts who have specialized knowledge and abundant experiences in the technology, business, finance and etc. areas to conduct certain comparative analysis over the issuer's current business operational status against the future development after the current issuance of securities, the evaluation and opinion of such experts shall be disclosed.
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Article 29-1
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A company listed on the stock exchange or traded on an OTC market shall record the following matters relating to the state of its implementation of corporate governance:
1. The state of the company's implementation of corporate governance, any departure of such implementation from the Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies, and the reason for any such departure (see Schedule 56-1);
2. If the company has adopted corporate governance best-practice principles or related bylaws, it shall disclose how these are to be searched.
3. Any other material information that would afford a better understanding of the status of the company's implementation of corporate governance may also be disclosed.
The provisions of the preceding paragraph shall also apply to any securities firm, securities investment trust enterprise, securities investment consulting enterprise, or futures commission merchant that is a public company.
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Article 32
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Where a company reports (or applies for approval of) the offering and issuance of securities in accordance with the provisions of paragraph 2 of Article 6 of the Criteria Governing the Offering and Issuance of Securities by Securities Issuers, if the prospectus for companies listed on the stock exchange or traded on an OTC market, written in accordance with Chapter II, has been posted (in the form of electronic files, prepared in the format prescribed by the SFC) to the information reporting website designated by the SFC and has been provided in printed book format at the following places for investors to read, a simplified version of the prospectus may be used for delivery to the subscribers and offerees:
1. Taiwan Stock Exchange Corporation
2. GreTai Securities Market
3. Securities & Futures Institute
4. Chinese Securities Association
5. The head office of the lead underwriter and co-underwriter for this offering and issuance.
Any party to which the following circumstances apply shall not be restricted by the regulations of the preceding paragraph and may directly deliver the simplified version of its prospectus to subscribers or offerees:
1. The party is preparing to issue common corporate bonds and, within the last year, has obtained a rating report from an SFC-approved or SFC-recognized rating institution or a guaranty from a financial institution.
2. The party has handled a public offering and issuance of securities during the same accounting year in accordance with the regulations of the preceding paragraph, and is once again registering (or applying for approval of) the public offering and issuance of securities.
3. The party is a company not listed on the stock exchange or traded on an OTC market issuing new shares in connection with a cash capital increase (in which case it is exempt from public offering requirements), corporate bonds with warrants, convertible corporate bonds, new shares due to merger or acquisition, or new shares due to acquisition of another company's shares, or is a public company issuing employee stock option certificates.
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Article 33
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In addition to the descriptions required on the front of the cover, inside the cover, and on the back of the cover of the simplified version of the prospectus in accordance with Articles 3 to 5, the front of the cover shall have a label stating simplified version of the prospectus in prominent type, and inside the cover, there shall be additional information on the web site and locations where investors can find the prospectus written in accordance with Chapter II.
The contents of the simplified version of the prospectus shall include the following:
1. Summary of the condition of the company: the items required under Article 8; subparagraphs 2 and 4 of paragraph 1 of Article 9; subparagraphs 2, 4 and 7 of Article 10; and sub-subparagraphs 3 and 4 of subparagraph 3 of Article 10.
2. Summary of the condition of operation: the items required under sub-subparagraphs 1 to 3 of subparagraph 1 and sub-subparagraphs 1 and 4 of subparagraph 2 of Article 17, subparagraph 3 of paragraph 1 of Article 18, subparagraphs 1 and 3 of Article 19, Article 20, and subparagraph 1 of Article 21.
3. Issuance plan and implementation status: the items required under Article 23, Article 24, and subparagraphs 1 to 5 of Article 25.
4. Summary of Financial Affairs: items required under subparagraph 4 of Article 26, Article 27 (not including notes to the financial statements and appended figures), subparagraph 4 of Article 28, and Article 28-1.
5. Special items: items required under sub-subparagraph 2 of subparagraph 1 of paragraph 1 of Article 29, subparagraphs 2, 3, 4, 5, 7, and 9 of paragraph 1 of Article 29, and the provisions of Article 29-1.
Publicly issued companies satisfying the criteria of subparagraph 2 of paragraph 2 of the preceding Article shall, in the simplified version of their prospectus for the current offering and issuance of securities, in addition to following the regulations in the preceding paragraph, disclose the contents of any changes or additions made to the previous prospectus.
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