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Article 23
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A Bills Finance Company 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 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 17).
- Significant capital expenditure and the source of funds: Give an explanation on material capital expenditure invested or committed in the last two years, and the nature, expected benefit, and the actual or expected sources of fund 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 18).
- Liquidity: Analyze liquidity in the last two years and the reason 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 liquidity has been or will be materially insufficient, the remedial measures that have been or will be taken shall be indicated (Form 19).
- Operating results: Analyze the constituent items of income or loss from continuing operations in the last two years, and 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 20).
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