|
Article 40
|
A public company shall execute at least the following control activities when supervising and managing its subsidiaries' financial and business information:<br/>1. Supervise the establishment of independent financial and business information systems by its subsidiaries.<br/>2. Establish effective financial and business communication systems between it and each subsidiary; in addition to the major financial and business matters referred to in the preceding article that shall be reported prior to their occurrence, the subsidiary shall also immediately report to the company the occurrence of any other material event that, under the Act or any applicable regulations, shall be announced or reported as likely to affect company rights and interests and securities prices.<br/>3. Obtain, and analyze and review, at least on a quarterly basis, each subsidiary's monthly management reports, including business report, monthly statement of production and sales volumes, monthly balance sheet, monthly income statement, monthly cash flow statement, aging account receivable analysis and delinquent debt report, aging inventory analysis, monthly report on loaned funds, and monthly report on endorsements/guarantees.<br/>4. Arrange for each subsidiary to provide necessary financial and business information or retain CPAs to audit or review each subsidiary's financial report in compliance with the requirements of laws and regulations regarding matters to be publicly announced or reported and the time limits therefor.<br/>The FSC shall prescribe compliance matters in connection with companies' obtaining, and analyzing and reviewing, of each subsidiary's monthly management reports under subparagraph 3 of the preceding paragraph.
|