| Title： |
Criteria Governing Information to be Published in Annual Reports of Public Companies(2003.03.13) |
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Article 1
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These Guidelines are made in accordance with the provisions of Paragraph 3 of Article 36 of the Securities and Exchange Law.
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Article 2
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With the exception of banks, bills finance companies, financial holding companies, and other entities for which the competent authority has adopted other regulations, a public company shall include in its annual report all the items set forth in these Guidelines, and may also use as reference the Criteria Governing Information to be Published in Public Offering and Issuance Prospectuses. In addition, public companies shall also include a table of contents indicating page number for each item in the report. Where the company has nothing to report with respect to a particular item, or where the company is exempted from reporting requirements with respect to a particular item by order of the Ministry of Finance's Securities and Futures Commission (SFC), the annual report may carry a note indicating that the item in question is "not applicable" or "omitted."
Where the same information is required in more than one item of the annual report, the company may record the information in only one place, while in the other place(s) directing the reader to the page where the information is recorded.
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Article 3
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The basic principles for compiling an annual report for publication are as follows:
1. Particulars specified in the annual report shall be up to date, and shall not contain any false information or conceal any information;
2. The contents of the annual report shall be detailed and accurate. The language used shall be easy to understand, and the report shall appropriately utilize statistic charts, flow charts or other charts. When necessary, a company may publish a bilingual report, or publish a foreign language version under separate cover.
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Article 4
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The cover of an annual report shall specify the company name, the year of publication, the date of printing, and in the upper right-hand corner shall indicate the company's common stock code together with prominently printed URLs for relevant web locations (including the website specified by the SFC for reporting of information, as well as the webpage where the company discloses annual report-related information on its own website).
Where the common stock code referred to in the preceding paragraph has been changed, both the old and new codes shall appear side-by-side in the annual reports for the current year and the next two years thereafter.
In the event of a company name change as referred to in the first paragraph, the company's old and new names shall appear side-by-side in the annual reports for the current year and the next two years thereafter.
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Article 5
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The inside cover of an annual report shall specify the following:
1. the name, title, telephone number, and e-mail address of the spokesman or acting spokesman;
2. the address and telephone number of the company's headquarters, branch offices, and factories;
3. the name, address, e-mail address, and telephone number of the agency handling shares transfer;
4. the name of the certified public accountant who duly audited the annual financial report for the most recent fiscal year, and the name, address and telephone number of said person's accounting firm.
5. the name of any exchanges where the company's securities are traded offshore, and the method by which to access information on said offshore securities; and
6. the address of the company's website.
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Article 6
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The back cover of an annual report shall bear the following:
1. the corporate chop specimen; and
2. the chop or signature of the responsible person of the company.
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Article 7
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The contents of an annual report shall include:
1. a report to the shareholders;
2. a company overview: including a company introduction, a section on company organization, and disclosure of the company's capital and shares, corporate bonds, preferred shares, global depository receipts, employee stock option certificates, and any merger & acquisition activities (including mergers, acquisitions, and splits);
3. an overview of business operations;
4. information on implementation of the company's funds utilization plans;
5. an overview of the company's financial status;
6. a review and analysis of the company's financial condition, business performance, and risk management measures; and
7. other items deserving special mention.
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Article 8
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The report to the shareholders shall include the business report for the previous fiscal year and a summary of the business plan for the current fiscal year.
The business report for the previous fiscal year shall: review the implementation of the business plan; review budget implementation; provide an analysis of receipts, disbursements, and profitability; and examine research & development work.
The summary of the business plan for this year shall explain the business goals, expected sales volume, and other important production and sales policies for the current year.
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Article 9
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The company introduction shall specify the following:
1. the date of the company's incorporation;
2. a brief history of the company: This section shall include information on merger and acquisition activities during the most recent fiscal year and during the current fiscal year up to the date of printing of the annual report; instances where a major quantity of shares belonging to directors, auditors, or shareholders holding more than 10 percent stake in the company is transferred or otherwise changes hands; any change of managerial authority; and any other matters of material significance that could affect shareholders' equity. This section shall further explain how the above matters will affect the company. If information related to earlier fiscal years can help provide a significantly clearer understanding of the company's situation, such information may also be included in the annual report.
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Article 10
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The section on company organization shall specify the following items:
1. organizational chart: This chart shall specify the company's structure and the tasks of its principal divisions.
2. information on the company's directors, auditors, president, vice-presidents, assistant vice-presidents, and the chiefs of all the company's divisions and branches:
(1) directors and auditors: names; principal work experience and academic qualifications; date on which current position was assumed; term of contract; shares held by directors/auditors and their spouses, children of minor age, and other persons holding shares in their name (see Table 2).
3. equity transfers and equity pledges (or changes thereto) during the preceding fiscal year or in the current fiscal year up to the date of printing of the annual report, involving equity interests belonging to directors, auditors, top management, and shareholders with a stake of 10 percent or more in the company. Where the recipient of the equity transfer or equity pledge has ties to the company, the recipient's name shall be disclosed along with a note explaining: (a) the nature of his or her ties to any directors, auditors, and/or shareholders with a stake of 10 percent or more; and (b) the number shares that he or she has received or been pledged (see Table 3).
4. the total number of shares and total equity stake held in any single enterprise by the company, its directors and auditors, and any companies controled either directly or indirectly by the company (see Table 4).
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Article 11
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The section on capital and shares shall specify the following items:
1. source of capital: The annual report shall disclose the types of shares issued by the company during the preceding fiscal year and in the current fiscal year up to the date of the printing of the report (see Table 5).
2. shareholder structure: statistics on the ratios between the various types of shareholders (see Table 6).
3. equity diffusion: The annual report shall include separate tables on the number of shareholders and the percentage of shares held by different shareholders.
4. list of principal shareholders: The annual report shall list all shareholders with a stake of 5 percent or greater, or shall list the top ten shareholders, specifying the number of shares and stake held by each shareholder on the list (see Table 8).
5. share prices for the past two fiscal years, together with the company's net worth per share, earnings per share, dividends per share, and related information (see Table 9).
6. company's dividend policy and implementation thereof: The annual report shall disclose the dividend policy adopted in the company's articles of incorporation, as well as the dividend distributions proposed at the most recent shareholders' meeting.
7. effect upon business performance and earnings per share of any stock dividend distribution proposed or adopted at the most recent shareholders' meeting.
8. employee dividends and compensation of directors and auditors:
(1) the multiples or ranges with respect to employee dividends and director/auditor compensation, as set forth in the company's articles of incorporation.
(2) information on any employee stock dividend distribution proposal adopted at the most recent shareholders' meeting:
(i) distribution of cash dividends or stock dividends to employees, and compensation for directors and auditors.
(ii) the number of shares involved in any proposed distribution of employee stock dividends, and the size of such a distribution of such a distribution as a percentage of capital increase paid out of earnings.
(iii) The annual report shall assess the effect upon imputed earnings per share of any proposed distribution of employee dividends and director/auditor compensation.
(3) use of earnings in the preceding fiscal year for distribution of employee dividends and director/auditor compensation: The annual report shall disclose: (i) actual distributions of employee dividends and director/auditor compensation at the time of the preceding fiscal year's earnings distributions; (ii) the amount of such distributions as set forth in the proposal adopted at the director's meeting; and (iii) the degree of discrepancy between the two.
9. share repurchases: Where a company has applied in the preceding fiscal year or during the current fiscal year prior to the date of printing of the annual report, to repurchase its own shares, the company shall explain the purpose, period, and price range of the repurchase, the types, quantity, and total value of shares repurchased, the number of shares retired or resold, the quantity of total treasury stock holdings, and total treasury stock holdings as a percentage of total shares issued (see Table 10).
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Article 12
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The annual report shall provide information on the company's issuance of corporate bonds, including unretired bonds and unissued bonds for which an issue is currently under preparation, and in accordance with Article 248 of the Company Law the report shall disclose all the matters set forth thereunder and explain their effect upon shareholders' equity. Any privately placed corporate bonds shall be prominently identified as such (see Table 11).
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Article 13
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The section on preferred shares shall include both outstanding and unissued shares for which an issue is currently under preparation, and shall disclose any conditions attaching to issuance and their effect upon shareholders' equity. The information on preferred shares shall also specify the matters listed under Article 157 of the Company Law (see Table 12).
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Article 14
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The section on global depository receipts shall include information on receipts issues that remain partially outstanding, and on unissued receipts for which an issue is currently under preparation. Also to be disclosed are the date of issue, total value of issue, the rights and responsibilities of the holders of global depository receipts, and related matters. Any privately placed global depository receipts shall be prominently identified as such (see Table 13).
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Article 15
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The section on employee share subscription warrants shall specify the following matters:
1. The annual report shall disclose unexpired employee subscription warrants issued by the company in existence as of the date of printing of the annual report, and shall explain the effect of such warrants upon shareholders' equity. Any privately placed employee subscription warrants shall be prominently identified as such (see Table 14).
2. The annual report shall disclose the names of top-level company executives holding employee share subscription warrants and the cumulative number of such warrants exercised by said executives as of the date of printing of the annual report. The annual report shall also disclose the names of the ten employees holding employee subscription warrants authorizing purchase of the most shares, along with the cumulative number of warrants exercised by these ten employees, as of the date of printing of the annual report.
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