| Article 24 | The following items shall be included in the analysis regarding the allocation plan for capital raised through the previous: (a) cash capital increase; (b) issuance of new shares to carry out a merger or acquisition, or to accept transfer of shares of another company; (c) issuance of financial bonds; or (d) issuance of corporate bonds:
1.Contents of the plan: Analyses regarding the previous plan for cash capital increase, merger or acquisition, issuance of new shares to accept transfer of shares of another company, issuance of financial bonds, or issuance of corporate bonds. In the case of any previous plan for cash capital increase, merger or acquisition, issuance of new shares to accept transfer of shares of another company, issuance of financial bonds, or issuance of corporate bonds that was still uncompleted as of the quarter preceding the date of publication of the prospectus, or in the case of any completed plan where not more than three years passed between the date of registration (application) and the actual completion date, explain in detail the contents of each plan for cash capital increase mentioned above, including information on any change to the plans, the sources and uses of capital, reasons for any changes, a comparison of return on capital raised before and after the change, and date on which the change of plans was submitted to the shareholders meeting. The date on which the information was submitted to an information reporting website designated by the FSC shall also be published.
2.Implementation status: Analyze, item by item, the status of the plan's implementation and compare with the originally projected returns as of the quarter preceding the publication date of the prospectus based on the purpose of each of the above-mentioned plans. If the implementation progress or the returns do not reach the projected target, provide a concrete explanation of the reasons, the impact on shareholders' equity, and plans for corrective action. Where the content of any of the plans referred to in the preceding subparagraph conform with the conditions in any of the following sub-items, they shall additionally disclose the following:
A.If the purpose is merger, acquisition, or acceptance of transfer of the shares of another financial institution, or for expansion or new construction of real properties or equipment, provide a comparison of the real properties or equipment, revenues, expenses, losses, and income before tax.
B.If the purpose is to invest in other companies, provide a description of the investee enterprise's operation status and its impact upon the company's investment profit/loss.
C.If the purpose is to strengthen operating capital or pay off liabilities, provide a comparison of the increase and decrease of current assets, current liabilities, and total liabilities, revenues, expenses, losses, and earnings per share, and analyze the company's financial structure. |
| Article 25 | In the section providing analysis of the allocation plan for capital raised through the current cash capital increase, issuance of financial bonds, issuance of corporate bonds, or issuance of employee stock warrants or new restricted employee shares, include the following particulars:
1.Sources of capital: Indicate whether the capital source for the current plan is a cash capital increase, an issue of financial bonds, or an issue of corporate bonds. If the capital is to be used to acquire or invest in another company, or for the expansion or new installation of real properties or equipment, indicate the total dollar amount under the plan. If the capital to be raised through the current public offering is insufficient, describe the capital raising methods.
2.For the current issue of financial bonds, disclose the approval date and approval document number of the central competent authority, par value, place of issue, currency, price, total amount, interest rate, term, underwriter, certifying financial institution, the fundraising plan for financial bond redemption, and the method for custody of the funds raised, unpaid balance from the previous offering of financial bonds, paid-in capital, and net worth after final report for the preceding year, and the ratio of the reported issue amount plus the balance of already issued and outstanding bonds to the net worth after final report of the preceding year. If a rating is made by the credit rating institution approved or recognized by the FSC, the name of such institution, date of rating and rating grade shall also be disclosed. If they are attached with conversion, exchange, or subscription rights, the issuance and conversion, exchange, or subscription rules, the possible dilution conditions and influence on shareholders' equity caused by the terms of issuance, and the monetary amount already converted, exchanged, or subscribed up to the prospectus publication date shall also be disclosed.
3.For the current issue of corporate bonds, disclose in accordance with Article 248 the Company Act the relevant particulars and the plan for raising and maintaining custody of the capital to be used for redemption. If an FSC approved or recognized credit rating institution has been engaged to conduct a credit rating of the bonds, disclose the name of the credit rating institution, the date of the rating, and the credit rating results. If conversion, exchange, or warrant rights are attached to the bonds, disclose the issuance and conversion, exchange, or warrant exercise rules, possibility of dilution of equity under the terms and conditions of issuance, and effect on shareholder equity.
4.For the current issue of preferred shares, disclose the par value per share, issue price, number of shares, purpose and use of the capital, possible dilution of shareholder's equity under the terms and conditions of issuance, effect on shareholder equity, effect of buyback on regulatory capital and ratio of regulatory to risk-weighted assets, and the items provided under Article 157 of the Company Act shall be disclosed. If conversion or warrant rights are attached, the issuance and conversion rules or warrant exercise rules (including enjoyment and assumption, after the compulsory conversion of the original preferred shares, of rights and obligations existing on the original preferred shares before conversion, such as dividends that have not yet been distributed).
5.For preferred shares that are not exchange-listed or OTC-listed, disclose the purpose of the issue, reasons why such shares are not to be listed, effect on existing shareholders and potential investors, and whether there is any plan to apply for an exchange or OTC listing.
6.Where new shares are to be issued by a company that has been granted approval under Article 5 of the Taipei Exchange Rules Governing the Review of Emerging Stocks for Trading on the TPEx to register its stock for OTC trading, indicate the company's plans to obtain an exchange (or OTC) listing.
7.Where employee stock warrants are to be issued, disclose the rules governing the issuance and exercise of employee stock warrants.
8.Where new restricted employee shares are to be issued, disclose the rules governing the issuance of new restricted employed shares.
9.Explanation of the feasibility, necessity, and reasonableness of the current plan and an analysis of the influence of each type of funding on the dilution of earnings per share for the year of the company's report (application) and the following year. For issuance of stock at below par value, the necessity and reasonableness of issuing new shares at a discount shall be explained, as well as the reasons for not using other capital raising methods and the reasonableness thereof, and amount of offsets against capital reserves or retained earnings.
10.Explanation of the mechanism for setting the current issue price, conversion price, exchange price, or subscription price.
11.Capital utilization estimates and possible resulting effects: Explanation of the progress of the capital utilization and the projected resultant effects after the completion of the current plan:
A.For acquisition of other financial institutions, or expanding or newly constructing real properties and equipment, the projected possible changes and other potential effects of the real properties and equipment, revenues, operating expenses, and operating profits upon the completion of the current plan shall be described.
B.For investment in another enterprise, the following items shall be set forth:
a.The after-tax net profit of the invested company for the most recent two years, purposes of the investment, planned use of the funds and the relatedness of the enterprise's operations to the company's line of business, and the projected loss/profits from investment and its impact on the company's operations. If 20% or more of the investee enterprise's common shares are held, the projected schedule for fund use by the investee enterprise, the year limit for recovery of the invested funds, the projected effect each year before recovery of the funds, and its influence on the company's profitability and earnings per share.
b.If investing in an enterprise that requires special approval, the status of approval or permission from the competent authority in charge of such special permit enterprise, and whether any terms or conditions attached to the approval or permission have an effect on this public offering and issuance of securities.
C.For replenishing operating capital or paying off liabilities, set forth the following items:
a.The amount of debt matured annually, the redemption plan, how the company's financial burden will be reduced, a description of current capital utilization, amount of capital needed and how it is to be used, and a projected schedule of monthly cash receipts and expenditures during the year of the registration (application) and the year after that. (Attachment 55)
b.The policy for collection of accounts receivable and payment of accounts payable, capital expenditure plan, and the financial leverage and debt ratio (or the regulatory capital and the ratio of regulatory capital to risk-weighted assets) for the year of registration (application) and the year after that, and the reasons for paying off liabilities or replenishing operating capital.
c.If the capitalization increase plan involves paying off liabilities, indicate the purpose for borrowing funds and the effect achieved in doing so. If the funds were borrowed for purchasing land for construction or to pay for construction costs, the estimated total amount needed from purchase of the land for construction through completion of the project, the source of extra capital needed, the capital for each stage of construction and the progress of the construction, the original reason for borrowing funds, and the anticipated possible effects of such recognition and the status of realization thereof.
d.If the total amount of future major capital expenditures and long-term equity investment as estimated in the projected schedule of cash receipts and expenditures reaches 60% or more of the capital planned to be raised this time, describe the necessity, planned sources of funding and benefits of such expenditures and investment.
D.For buying land for construction or paying construction costs, indicate the estimated total amount needed from the time of land purchase through completion of the construction, the source of extra capital needed, the capital for each stage of construction, and the progress of the construction, and explain the benefits of the capital increase or bond issue in terms of the timing and amount when recognizing profits or losses.
E.For purchasing an unfinished project and assuming the burden of the seller's unfulfilled contract, indicate the buyer's reason for the transfer, the basis on which the acquisition price was determined, and the effect of the process of acquisition on the rights and obligations of the parties to the contract. |
| Article 27 | For the current issue of new shares due to acquisition or merger, the following particulars shall be specified:
1.Plan content:
A.Content of the merger or acquisition plan: including the purpose of the merger or acquisition; the integration plan for financial, business, personnel, information, etc. affairs after the merger or acquisition and anticipated benefits; the share conversion ratio and the basis upon which it was calculated; proposed schedule; items that materially affect the share conversion ratio after the public announcement of the merger or acquisition; effects on net value per share and earnings per share; matters related to the assumption of rights and obligations of the extinguished company (including principles for handling treasury shares and already-issued equity securities), and the basic information of the company to be merged or acquired (Attachment 56).
B.Content of the demerger plan: the purpose of the demerger; estimated value of the operations and assets planned to be assigned to the existing company or new company; share conversion rates and the basis upon which they were calculated; the total number and the types and quantities of the shares to be acquired by the demerged company or its shareholders; matters related to assumption by the existing company or new company of rights and obligations of the demerged company (including principles for handling treasury shares and already-issued equity securities); matters related to the reduction, if any, in capital of the demerged company; anticipated benefits of the demerger.
2.Merger or acquisition contract.
3.Opinion of an independent professional on the reasonableness of the share conversion rate of the merger or acquisition plan.
4.Any restrictions on future transfer or pledge of new shares issued due to the merger or acquisition.
5.The projected consolidated balance sheet as of the record date for calculating the share conversion ratio between the acquiring and target companies.
6.Financial reports of the target company for the most recent two fiscal years, audited and certified by a certified public accountant(s). (If the target company is not a publicly issued company, its financial statement may be audited/certified by a single certified public accountant.)
7.Minutes of the shareholders meeting of the acquiring company at which the resolution for merger was passed; however, this restriction shall not apply where any law or regulation provides otherwise.
8.Summary of the target company's financial and business conditions:
A.The main content of the target company's business operations, current products and their uses or current services, the condition of the supply of the main raw materials, and the sales areas for the main products or services shall be set forth.
B.If the target company is not a public company, specify any circumstances in which the amount of purchases/sales of the target company's major assets has reached 20 percent of the company's paid-in capital, or NT$300 million or more during the most recent two fiscal years or during the current period up to the publication date of the prospectus. (Attachment 57)
C.In accordance with subparagraph 1 of Article 22, a summary of the target company's investee enterprises shall be set forth.
D.In accordance with Article 23, important contracts signed by the target company shall be set forth and the effect on the company's financial and business conditions after the merger shall be described.
E.In accordance with subparagraph 2 of Article 9, major litigious, non-litigious, and administrative disputes of the target company and related companies shall be set forth and the effect on the company's financial and business conditions after the merger shall be described. |