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Article 6
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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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