chailease holding company limited represented shares present;102,954,146 votes were either...
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CHAILEASE HOLDING COMPANY LIMITED
(“the Company”)
Minutes of 2013 Annual General Meeting
Time : May 30, 2013, 9:00 a.m.
Place : 2nd
Fl.,No. 399 Rueiguang Road, Taipei, Taiwan
11492
Present : 713,214,452shares(78.78% of issued shares)
Chairman: : Mr. Fong-Long (Albert) Chen
Minutes taken by : Ms. Jenny Wu
Quorum
As a quorum was present, the Chairman called the meeting to order.
A. Chairman’s Statement (omitted)
B. Matters to Report
Report No. 1
2012 Business Reports. (Please refer to Attachment 1)
Report No. 2
Audit Committee’s Review Report on the 2012 Financial Statements. (Please refer to Attachment 2)
Report No.3
To note the impact of the first-time adoption of IFRSs on the retained earnings and the appropriation
of special surplus reserve.
Explanation:
According to the mandate letters issued by the Financial Supervisory Commission on April
6, 2012, the Company needs to note the impact of the first-time adoption of IFRSs on the
retained earnings and the appropriation of special surplus reserve at the shareholders’
meeting.
1) The retained earnings of the Company decreased by NT$186,664 thousands for the
first-time adoption of IFRSs on January 1, 2012 and decreased by NT$541,551
thousands on January 1, 2013.
2) Due to the decrease in the retained earnings of the Company on the conversion date for
the first-time adoption of IFRSs, the Company doesn't need to appropriate special
surplus reserve for adoption of IFRSs on January 1, 2013 in accordance with the
foresaid mandate letters.
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C. Matters for Adoption
Proposal 1:
To accept 2012 Business Report and Financial Statements. (Proposed by the Board)
Explanation:
Chailease Holding Company Limited’s Financial Statements, including the balance sheet,
income statement, statement of changes in shareholders’ equity, and statement of cash flows,
were audited by independent auditors, Ms. Lin Wan-Wan and Ms. Chen, Yi-Chun the
partners of KPMG, Taipei. Also Business Report and Financial Statements have been
approved by the Board and examined by the Audit Committee of Chailease Holding
Company Limited.
The 2012 Business Report, independent auditors’ audit report, and the above-mentioned
Financial Statements are attached as Attachment 1and Attachment 3.
Voting Results: 727,589,205 shares were represented at the time of voting;623,173,433shares voted
for the proposal ,representing 85.64% of the total represented shares present;
626shares voted against the proposal, representing 0.000086% of the total
represented shares present;104,415,146 votes were either invalidly cast or
abstained, representing 14.36% of the total represented shares present。
RESOLVED, that the above proposal be and hereby was approved as proposed.
Proposal 2:
To approve the Proposal for Distribution of 2012 Profits. (Proposed by the Board)
Explanation:
The Company’s operating result of the year 2012 generated a net profit of
NT$4,141,047,030. The Company proposes the profit distribution proposal of 2012 as
follows:
1) To set aside the special surplus reserve of NT$64,864,800 as required by the Article 41
of the Securities and Exchange Act.
2) To pay a cash dividend per share of NT$2 totaling NT$1,810,600,756.
3) To pay a stock dividend per share of NT$ 1 totaling NT$905,300,370 by issuing
90,530,037 common share.
4) Distribution and Appropriation of retained earnings for the year 2012 is attached as
Attachment 4.
It is proposed to authorize the Board of Directors to determine the ex-dividend date and
ex-right date.
Voting Results: 727,589,205 shares were represented at the time of voting;624,634,433shares voted
for the proposal ,representing 85.84% of the total represented shares present;
626shares voted against the proposal, representing 0.000086% of the total
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represented shares present;102,954,146 votes were either invalidly cast or
abstained, representing 14.16% of the total represented shares present。
RESOLVED, that the above proposal be and hereby was approved as proposed.
D. Matters for Discussion
Proposal 1:
Proposal for a new share issue through capitalization of retained earnings. (Proposed by the Board)
Explanation:
For the needs of future business development, it is proposed to allot NTD 905,300,370 from
unappropriated retained earnings for capitalization and issue 90,530,037 new shares with
NTD10 par value as stock dividends;
The Company will pay a stock dividend of 100 shares to every 1,000 shares ("Dividend
Ratio") in proportion to the shareholdings shown on the shareholder register as of the
ex-right date, which will be issued at NTD10 par value. For fractional shares, the
shareholders may make an application with the Company's stock agent for aggregating their
fractional shares into one share within five days of the ex-right date; provided, however, that
if there are any fractional shares left, the Company will pay cash in NTD, rounded down to
NTD1, in lieu of stock dividends and the Chairman of the Board of Directors ("Chairman")
is authorized to allot such fractional shares for subscription by designated persons. The total
issued and outstanding common shares of the Company after the proposed capitalization
will be increased from 905,300,378 shares to 995,830,415 shares.
The shareholder’s rights and obligations of the new shares to be issued shall rank pari passu
in all respects with the issued and outstanding common shares of the Company.
Upon approvals of the Annual Shareholders’ Meeting and relevant competent authorities, it
is proposed to authorize the Board of Directors to determine the ex-right date.
It is proposed to authorize the Chairman to handle all matters relating to the proposed
capitalization depending on actual needs or accommodating the competent authority's
requirement to make any change thereto.
Voting Results: 727,589,205 shares were represented at the time of voting;625,974,736 shares
voted for the proposal ,representing 86.03% of the total represented shares present;
no votes were cast against the proposal;101,614,469 votes were either invalidly
cast or abstained, representing 13.97% of the total represented shares present。
RESOLVED, that the above proposal be and hereby was approved as proposed.
Proposal 2:
To revise the “Rules and Procedures of Shareholders’ Meeting”. (Proposed by the Board)
Explanation:
To meet the latest sample template for the Rules of Procedure for Shareholders Meetings
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“announced by TSE on February 27. 2013, it is proposed to amend the article 6, 7,9,12 and
13 of the Company’s “Rules and Procedures of Shareholders’ Meeting “.
Comparison Table for Amendments to the “Rules and Procedures of Shareholders’ Meeting”
is attached as Attachment 5.
Voting Results: 727,589,205 shares were represented at the time of voting;624,489,736 shares
voted for the proposal ,representing 85.82% of the total represented shares present;
16,000 shares voted against the proposal, representing 0.002% of the total
represented shares present;103,083,469 votes were either invalidly cast or
abstained, representing 14.17% of the total represented shares present。
RESOLVED, that the above proposal be and hereby was approved as proposed.
Proposal 3:
To revise the “Processing Procedures for the Acquisition and Disposal of Assets”. (Proposed by the
Board)
Explanation:
The subject amendments are to comply with the regulatory requirements by Taiwan
competent authority and to accommodate the needs of business development.
The main amendments are summarized as follows:
1) Equipment purchased for rent and sales is included in the applicable scope. (revised)
2) To add an Article to define the specific terms used in the Procedure. (added)
3) To adopt the definition of IFRSs for related-party and the Subsidiary (added )
4) The authority delegated for the transaction of other fixed assets, membership,
intangible assets, and other assets are expressed by NTD instead of USD. ( revised )
5) To empower the Chairman to approve a single transaction for the acquisition or
disposal of business-use machinery and equipment between the Company and its
subsidiaries within NT$300 million. (added)
6) As required by the Article 41 of the Securities and Exchange Act, the Company shall
set aside a special surplus reserve for the real property transaction between the investee
under the equity method and the related party (added)
7) To set the principle of approval for the Audit Committee or the Board of Directors on
the material acquisition or disposal of assets transaction (added)
8) To reorder the Articles of the Procedure according to the Regulations issued by Taiwan
competent authority. (revised)
Comparison Table for Amendments to “Processing Procedures for the Acquisition and
Disposal of Assets” is attached as Attachment 6.
Voting Results: 727,589,205 shares were represented at the time of voting;624,505,736shares voted
for the proposal ,representing 85.83% of the total represented shares present; no
votes were cast against the proposal;103,083,469 votes were either invalidly cast
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or abstained, representing 14.17% of the total represented shares present。
RESOLVED, that the above proposal be and hereby was approved as proposed.
Proposal 4:
To amend the Company’s “Procedures for Engaging in Derivatives Trading”. (Proposed by the
Board)
Explanation:
The subject amendments are to comply with the regulatory requirements by Taiwan
competent authority and to accommodate the needs of business development.
The main amendments are summarized as follows:
1) To adopt the IFRSs accounting processing for the derivatives trading (Article 3)
2) To remove the loss limit of the non-hedging derivatives trading and to add the loss limit
of hedging derivatives trading. (Article 3)
3) To add the procedure for the Company to correct the announcement and the procedure
for the Subsidiaries to report the relevant announcement information. (Article 5 and
Article 12)
The revised “Procedures for Engaging in Derivatives Trading” thereof shall be submitted at
the Shareholders' Meeting for approval.
Comparison Table of Amendments to “Procedures for Engaging in Derivatives Trading” is
attached as Attachment 7.
Voting Results: 727,589,205 shares were represented at the time of voting;624,505,736shares voted
for the proposal ,representing 85.83% of the total represented shares present; no
votes were cast against the proposal;103,083,469 votes were either invalidly cast
or abstained, representing 14.17% of the total represented shares present。
RESOLVED, that the above proposal be and hereby was approved as proposed.
Proposal 5:
To revise the “Operational Procedures for Loaning Funds to Others”. (Proposed by the Board)
Explanation:
To comply with the latest “Regulations Governing Loaning of Funds and Making of
Endorsements/Guarantees by Public Companies” announced by Financial Supervisory
Commission, Executive Yuan (FSC) on 6 July 2012, the original “Operational Procedures
for Loaning Funds to Others” shall be revised or added.
The main amendments are summarized as follows:
1) To unify and redefine the terms of the Operational Procedures. (revised)
2) To formulate the amount limit and the duration term of Inter-company loans between
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overseas Subsidiaries (added)
3) To set the principle of minimum lending rate (added)
4) The Company shall evaluate the status of its loans of funds and reserve sufficient
allowance for bad debts, and shall adequately disclose the relevant information in the
financial reports, and provide certified public accountants with relevant information for
implementation of necessary audit procedures (added)
The revised “Operational Procedures for Loaning Funds to Others” thereof shall be
submitted at the Shareholders' Meeting for approval.
Comparisons Tables of Amendments to ”Operational Procedures for Loaning Funds to
Others” is attached as Attachment 8.
Voting Results: 727,589,205 shares were represented at the time of voting;624,505,736shares voted
for the proposal ,representing 85.83% of the total represented shares present; no
votes were cast against the proposal;103,083,469 votes were either invalidly cast
or abstained, representing 14.17% of the total represented shares present。
RESOLVED, that the above proposal be and hereby was approved as proposed.
Proposal 6:
To amend the Company’s “Operational Procedures for Endorsements/Guarantees for Others".
(Proposed by the Board)
Explanation:
To comply with the latest “Regulations Governing Loaning of Funds and Making of
Endorsements/Guarantees by Public Companies” announced by Financial Supervisory
Commission, Executive Yuan(FSC) on 6 July 2012, the original “Operational Procedures for
Endorsements/Guarantees for Others” shall be revised or added
The main amendments are summarized as follows:
1) To unify and redefine the terms of the Operational Procedures. (revised)
2) To empower the Chairman to approve a single endorsement/ guarantee within NT$3
billion. (added)
3) When the Company makes an endorsement/ guarantee, the Company shall take into full
consideration each independent director’s opinion; and shall record the opinion in
Minutes of the Board of Directors’ Meeting. (added)
4) The Company shall evaluate or record the contingent loss for
endorsements/guarantees, and shall adequately disclose information on
endorsements/guarantees in the financial reports, and provide certified public
accountants with relevant information for implementation of necessary audit
procedures. (added)
The revised “Operational Procedures for Endorsements/Guarantees for Others” thereof
shall be submitted at the Shareholders' Meeting for approval.
Comparisons Table of Amendments to “Operational Procedures for
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Endorsements/Guarantees for Others” is attached as Attachment 9.
Voting Results: 727,589,205 shares were represented at the time of voting;622,646,736 shares
voted for the proposal ,representing 85.57% of the total represented shares present;
1,000 shares voted against the proposal, representing 0.00013% of the total
represented shares present;104,941,469 votes were either invalidly cast or
abstained, representing 14.42% of the total represented shares present。
RESOLVED, that the above proposal be and hereby was approved as proposed.
Proposal 7:
Proposal of release the prohibition on Directors and Independent Directors from participation in
competitive business. (Proposed by the Board)
Explanation:
This proposal is to comply with the Article 109 of the Articles of Association of the
Company which provides that “A director who does anything for himself or on behalf of
another person that is within the scope of the company’s business shall declare the essential
contents of such behavior to the general meeting and be approved by Supermajority
Resolution.”
The resolution to release the non-compete obligation of Directors (including Independent
Directors) has been adopted in the Company’s general meeting in 2012; however, some of
them conducted new business afterwards. It is hereby proposed pursuant to Article 109 of
the Articles of Association of the Company for approval by the Board of Directors that the
director (including the independent director) and its representative (in case of corporate
director) be released from non-compete obligation if he participates in operation of other
companies which are not the subsidiaries of the Company
List of Directors’ New Positions is attached in this Handbook, Attachment 10.
Voting Results: 727,589,205 shares were represented at the time of voting;621,035,510 shares
voted for the proposal ,representing 85.35% of the total represented shares present;
1,613,226 shares voted against the proposal, representing 0.22% of the total
represented shares present;104,940,469 votes were either invalidly cast or
abstained, representing 14.43% of the total represented shares present。
RESOLVED, that the above proposal be and hereby was approved as proposed.
E. Any Other Special Motion for Discussion No other motion was proposed, and the Chairman declared the meeting closed.
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Attachment 1
2012 Business Report
Stronger and More Solid Growth for Chailease in 2013
2012 was a bumper year for Chailease Holding. Annual profits grew by 69.18%, compared to the
previous year and we had a strong finish to the year, with revenues in December 2012 achieving a
monthly historic high of NT$2.244 billion.
China
Most notable last year was Chailease’s performance in China. In 2012, the percentage of the total
Chailease group profits attributable to China continued to increase substantially.
The contribution of the Chinese market share is expected to continue to grow. For 2013, China
continues to maintain steady overall economic growth, as well as strong GDP and capital investment
growth. This favorable overall environment is expected to benefit Chailease and profits from China
for 2013 are projected to surpass those of 2012.
Chailease remains focused on a growth strategy in China to increase its points of presence in first
and second-tier cities. We have more than 6,500 clients in China, approximately 90% of which are
Chinese enterprises. In the future, we aim to increase our focus on a strategy of localization, in
addition to continuing an annual expansion of 3 to 5 new branches. Our entire China market will also
be divided into five main regions: East, North, Central, Southeast and Southwest, and in-depth
industrial district surveys will be performed in each region. At the same time, manpower will be
increased at branches which have already been established for at least 4 to 5 years in order to expand
the scope of the operations in China.
Chailease has already accumulated a strong first-mover advantage in China, and we are committed to
the continued expansion of our operational footprint, and lead the competition in terms of dedication
to our internal control system and localized manpower training. As the foundations are laid in China,
Chailease will strive to replicate the business model which has been so successful in Taiwan, i.e.
expanding the product line to include factoring (accounts receivable financing), insurance brokerage,
and corporate long-term car rental services, in addition to offering traditional services such as
industrial machinery and equipment financing.
Taiwan
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Chailease was founded in Taiwan where it has thrived for thirty-six years and boasts numerous
branches offering innovative services. Since its inception, Chailease has provided services to its
SME customer base, which includes enterprises at varying stages of development with diverse
capital requirements. Chailease continues to launch a variety of innovative goods and services, and
now has more than 42% of the leasing market share in Taiwan. As the industry leader, Chailease
aims to strengthen brand competitiveness by offering more innovative, diversified and value-added
products, in addition to providing heartfelt, attentive service to clients.
Services and Products
Owing to Chailease’s extensive experience in providing services to SMEs, at times we can predict
what financing services clients will need before they even request it.
The best example of this is green financing, a tripartite combination of technical assessment,
manufacturing equipment, and energy-saving profit sharing, which assists enterprises in pursuing
sustainable development and simultaneously allows them to support the growing green energy
industry. After launching green financing, Chailease not only won wide praise, but also amassed
invaluable experience with suppliers from various fields.
This year, Chailease will launch its one-stop shopping “cloud platform,” which includes an
integration of hardware and software, communications, and data storage.
Due to Chailease’s impressive track record and unrivaled strategic vision, every new service we
introduce is marked with much fanfare. We are thus confident that the launch of our innovative new
products and services will be even more successful than ever before.
ASEAN Market
For 2013 and 2014, in addition to increasing profits in the Greater China market, we also aim to
make gains through the rapid rise of the ASEAN region. 2015 will be an especially important year
because ASEAN’s goal of regional economic integration will have been realized, allowing us to
accelerate our development in the region.
Chailease currently has four locations in Thailand and two in Vietnam. Thailand, in addition to being
ASEAN’s opinion leader, is also a world-class electronics and automobile manufacturer; moreover,
its government policies encourage investment. For these reasons, this year we plan to increase our
business base in Thailand to expand the size of our market share. We aim to accelerate the growth of
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our total assets in Thailand, thereby enabling it to become one of the major future growth engines to
incrementally drive the comprehensive development of Chailease in the ASEAN region.
Corporate Social Responsibility and Sustainability
In recent years, Chailease has made countless social contributions. In 2004, we established a charity
foundation and a youth career counseling program. In 2011, we began organizing an SME forum
which brings together successful small business owners who make their vast knowledge and
expertise available to other SMEs. Additionally, to fulfill our environmental responsibilities as global
citizens, Chailease has successfully introduced technology and equipment to help clients save energy
and reduce carbon emissions, and in the future we will begin providing solar power financing
services.
Outlook for 2013
In 2012, Chailease exceeded performance expectations, and has already begun to attract the attention
of numerous global institutional investors. Positive reactions from our regional market segments
confirm the effectiveness of Chailease’s precise market positioning strategy.
This year, driven by the momentum of a multifaceted approach to growth, Chailease will continue
striving to outperform the GDP growth rate in each of its major markets. Thus, Chailease will
continue the expansion of existing products and services, in addition to increasing efforts to gain
widespread customer acceptance of new services, all toward the ultimate goal of meeting our 2013
growth objectives for shareholders.
Aided by the modest recovery of the global economy, I am confident that for 2013 this strong growth
momentum can be sustained to achieve even better results in our three major markets: China, Taiwan
and ASEAN.
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Attachment 2
Chailease Holding Company Limited
Audit Committee’s Report
The Board of Directors has prepared the Company’s 2012 Business Report,
Financial Statements, and proposal for allocation of profits. The CPA, Ms. Wan
Wan Lin and Ms.Yi Chun, Chen of KPMG were retained to audit Chailease
Holding Company Limited’s Financial Statements and has issued an audit report
relating to the Financial Statement.
The Business Report, Financial Statements, and profit allocation proposal have
been reviewed and determined to be correct and accurate by the Audit committee
members of Chailease Holding Company Limited.
According to Article 14-4 of the Securities and Exchange Act, we hereby submit
this report.
Chailease Holding Company Limited
Chairman of the Audit Committee: Dar-Yeh Hwang
March 26, 2013
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Attachment 3
(English Translation of Financial Report Originally Issued in Chinese)
INDEPENDENT ACCOUNTANTS’ AUDIT REPORT
The Board of Directors of
Chailease Holding Company Limited
We have audited the accompanying consolidated balance sheets of Chailease Holding Company
Limited (the “Company”) and its subsidiaries (“the Group”) as of December 31 , 2012 and 2011, and
the related consolidated statements of income, consolidated changes in stockholders’ equity, and
consolidated statements of cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Group’s management. Our responsibility is to issue a report
on these consolidated financial statements based on our audits.
We conducted our audits in accordance with “Rules Governing Auditing and certification of
Financial Statements by Certified Public Accountants” and auditing standards generally accepted in
the Republic of China. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidences supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, based on our audit, the consolidated financial statements referred to the first
paragraph present fairly, in all material respects, the financial position of Chailease Holding
Company Limited and its subsidiaries as of December 31, 2012 and 2011, and the results of their
operations and their consolidated cash flows for the years then ended in conformity with the
Guidelines Governing the Preparation of Financial Reports by Securities Issuers and accounting
principles generally accepted in the Republic of China.
KPMG
CPA: Wan Wan, Lin
Yi Chun, Chen
Taipei, Taiwan, R.O.C.
March 26, 2013
Note to Readers
The accompanying consolidated financial statements are intended only to present the financial position, results of operations and cash flows in
accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures, and practices to audit such financial statements are those generally accepted and applied in the Republic of China.
The independent accountants’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language
independent accountants’ report and financial statements, the Chinese version shall prevail.
(English Translation of Financial Report Originally Issued in Chinese)
CHAILEASE HOLDING COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2012 and 2011
(Amounts Expressed in Thousands of New Taiwan Dollars)
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ASSETS December 31, 2012 December 31, 2011
Amount % Amount %
Current assets
Cash and cash equivalents (Notes (2), (4)(a) and (5)) $ 10,131,431 6 6,558,070 5
Financial assets at fair value through profit or loss – current (Notes (2) and (4)(b))
236,246 -
240,841 -
Held-to-maturity financial assets – current (Notes (2) and (4)(b)) 1,997,100 1 280,000 -
Accounts receivable, net (Notes (2), (4)(d) and (5)) 5,164,152 3 5,155,618 4
Installment sales receivable, net (Notes (2) and (4)(e)) 37,441,082 23 27,995,540 21
Capital leases receivable, net (Notes (2), (4)(f) and (5)) 44,829,940 27 35,254,755 27
Loans, net (Notes (2), (4)(g), (5) and (6)) 17,495,030 10 12,884,462 9
Other receivables (Notes (2) and (5)) 1,142,337 1 787,662 1
Other financial assets – current (Note (6)) 5,515,405 3 5,142,620 4
Costs and estimated earnings in excess of billings on
uncompleted contracts (Notes (2), (4)(j),(5) and (6))
970,877 1 638,924 -
Other current assets (Notes (2), (4)(h), (4)(r) and (5)) 2,660,739 2 1,925,740 1
127,584,339 77 96,864,232 72
Funds and Long-term Investments
Long-term investments under the equity method
(Notes (2), (4)(i) and (6))
7,062 - 1,243 -
Financial assets at fair value through profit or loss - non-current
(Notes (2), (4)(b) and (4)(c))
1,791,558 1 1,838,291 1
Other financial assets – non-current (Notes (2), 4(k), (5) and (6)) 2,179,987 1 1,959,921 2
Held-to-maturity financial assets – non-current
(Notes (2) and (4)(b))
490,000 - - -
Financial investments carried at cost – non-current
(Notes (2), (4)(b), (5) and (6))
1,436,728 1 1,445,986 1
5,905,335 3 5,245,441 4
Property and Equipment (Notes (2), (4)(l), (4)(m),(5) and (6))
Land 45,892 - 95,064 -
Buildings 132,281 - 175,904 -
Transportation equipment 100,971 - 95,379 -
Miscellaneous equipment 571,907 - 503,387 -
Assets held for lease 11,664,821 7 15,717,875 12
Leasehold improvements 99,431 - 84,817 -
12,615,303 7 16,672,426 12
Less: Accumulation depreciation (4,123,305) (2) (5,103,279) (4)
Less: Accumulation impairment (2,161,900) (1) (2,962,281) (2)
Prepayments for equipment 3,378 - 3,418 -
6,333,476 4 8,610,284 6
Intangible Assets 23,087 - 24,669 -
Other Assets
Long-term installment sales receivable, net (Notes (2) , (4)(e) 17,058,782 10 15,241,608 11
Long-term capital leases receivable, net (Notes (2) and (4)(f)) 7,045,484 4 6,627,901 5
Long-term loans, net (Notes (2), (4)(g) and (6)) 1,884,222 1 2,035,045 1
Other assets (Notes (2) and (4)(r)) 957,981 1 1,069,310 1
26,946,469 16 24,973,864 18
TOTAL ASSETS $ 166,792,706 100 135,718,490 100
(English Translation of Financial Report Originally Issued in Chinese)
CHAILEASE HOLDING COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2012 and 2011
(Amounts Expressed in Thousands of New Taiwan Dollars)
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LIABILITIES AND STOCKHOLDERS’S EQUITY December 31, 2012 December 31, 2011
Amount % Amount %
Current Liabilities
Short-term debts (Notes (4)(n), (5), and (6)) $ 32,055,644 19 27,361,601 20
Short-term bills payable, net (Notes (4)(o) and (6)) 18,987,943 11 12,469,447 9
Financial liabilities at fair value through profit or loss –
current (Notes (2) and (4)(b))
5,007 - 757 -
Derivative financial liabilities for hedging - current
(Notes (2) and (4)(b))
11,396 - 15,988 -
Accounts and notes payable 1,772,933 1 2,312,484 2
Income tax payable 673,990 - 669,271 -
Other financial liabilities – current (Note (5)) 2,090,294 2 1,530,520 1
Billings for land and buildings (Notes (2) and (4)(j)) 302,039 - 173,091 -
Current portion of long-term debts (Notes (4)(n), (4)(p),
(5), and (6))
44,748,177 27 32,367,377 24
Other current liabilities 1,149,487 1 815,982 1
Guarantee deposits 13,566,301 8 8,364,406 6
115,363,211 69 86,080,924 63
Long-Term Liabilities
Bonds payable (Notes (4)(p), (5), and (6)) 6,948,536 4 5,175,290 4
Long-term debts (Notes (4)(n), (5), and (6)) 15,197,148 9 22,342,408 16
Other financial liabilities – non-current 2,264,709 2 3,862,266 3
24,410,393 15 31,379,964 23
Other Liabilities
Other liabilities (Notes (4)(l), (4)(q), and (4)(r)) 1,166,125 1 901,183 1
Total Liabilities 140,939,729 85 118,362,071 87
Stockholders' Equity (Notes (2) and (4)(s))
Common stock 9,053,004 5 7,853,004 6
Capital surplus
Additional paid-in capital 9,387,469 6 4,623,522 3
Long-term investments under equity method 26,006 - 70,898 -
Retained earnings
Undistributed earnings 5,699,285 3 3,364,429 3
Other adjustments to stockholders’ equity
Cumulative translation adjustment (30,414) - 199,033 -
Unrecognized pension cost (23,055) - (16,045) -
Unrealized loss on financial instruments (11,396) - (15,974) -
24,100,899 14 16,078,867 12
Minority interests 1,752,078 1 1,277,552 1
Total Stockholders’ equity 25,852,977 15 17,356,419 13
Commitments and contingencies (Notes (5) and (7))
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$ 166,792,706
100
135,718,490
100
(English Translation of Financial Report Originally Issued in Chinese)
CHAILEASE HOLDING COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Income
For the years ended December 31, 2012 and 2011
(Amounts Expressed in Thousands of New Taiwan Dollars, Except for Share Data)
16
For the years ended December 31,
2012 2011
Amount % Amount %
Operating revenue
Sales revenue $ 2,632,479 12 1,063,537 6
Interest revenue - installment sales 4,643,450 21 4,022,343 24
Interest revenue - capital leases 6,114,388 28 3,885,519 23
Rental revenue - operating leases 2,901,738 13 3,551,780 21
Interest revenue - others 1,211,019 5 977,120 6
Interest revenue - loans 1,031,198 5 805,131 5
Construction revenue 556,898 3 67,009 -
Commission -revenue 252,709 1 154,067 1
Others 2,741,379 12 2,243,044 14
22,085,258 100 16,769,550 100
Operating costs
Costs of goods sold (2,415,197) (11) (990,452) (6)
Interest expense (Note (4)(j),(5)) (3,758,898) (17) (2,946,170) (18)
Costs of operating leases (Note (4)(m)) (2,596,324) (12) (3,748,702) (22)
Construction cost (380,379) (2) (44,154) -
Others (529,681) (2) (384,419) (2)
(9,680,479) (44) (8,113,897) (48)
Gross Profit 12,404,779 56 8,655,653 52
Operating Expenses (Notes (4)(l) and (5)) (7,089,563) (32) (4,922,674) (30)
Operating Profit 5,315,216 24 3,732,979 22
Non-Operating Revenue and Gains
Interest income 169,274 1 63,681 1
Investment income recognized under equity method (Notes (2)
and (4)(i))
111 - 109 -
Dividend income 29,995 - 30,280 -
Gain on disposal of assets (Note (4)(h)) 194,600 1 41,481 -
Gain on disposal of investments 1,329 - 2,541 -
Others (Note (5)) 789,161 3 341,442 2
1,184,470 5 479,534 3
Non-Operating Expenses and Losses
Interest expense (Note (4)(j)) (206,724) (1) (138,209) (1)
Loss on disposal of assets (Note (4)(m)) (30,690) - (89,610) (1)
Impairment loss (Notes (2), (4)(b) and (4)(h)) (8,192) - (51,659) -
Loss on valuation of financial assets (Notes (2) and (4)(b)) (21,293) - (85,844) -
Loss on valuation of financial liabilities (Notes (2) and (4)(b)) (4,275) - (757) -
Others (5,022) - (7,624) -
(276,196) (1) (373,703) (2)
Consolidated Income before Income Tax 6,223,490 28 3,838,810 23
Income Tax Expense (Notes (2) and (4)(r)) (1,833,981) (8) (1,202,172) (7)
Consolidated Net Income $ 4,389,509 20 2,636,638 16
Attributable to
Stockholders of the Company $ 4,141,047 19 2,447,690 15
Minority interests 248,462 1 188,948 1
$ 4,389,509 20 2,636,638 16
Before
Income tax
After
Income tax
Before
Income tax
After
Income tax
Earnings per share attributable to parent company
(NT dollars) (Notes (2) and (4)(u))
$7.28
5.11
4.84
3.35
(English Translation of Financial Report Originally Issued in Chinese)
CHAILEASE HOLDING COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
For the years ended December 31, 2012 and 2011
(Amounts Expressed in Thousands of New Taiwan Dollars)
17
Retained Earnings Equity adjustment
Common
Stock
Capital
Surplus
Undistributed
Earnings
Cumulative
Translation
Adjustment
Unrecognized
pension cost
Unrealized Gain or
Loss on Financial
Instruments Minority Interests Total
Balance as of January 1, 2011 $6,910,684 3,714,991 1,737,951 (312,994) (10,195) (13,571) 1,225,986 13,252,852
Capital increase in cash
942,320 908,531 - - - - - 1,850,851
Net consolidated income for the year ended December 31, 2011
- - 2,447,690 - - - 188,948 2,636,638
2010 earnings distribution and appropriation :
Cash dividends
- - (821,212) - - - - (821,212) Cumulative translation adjustment to long-term
equity investments
- - - 512,027 - - - 512,027
Changes in minority interests - - - - - - (137,382) (137,382) Recognition of change in investee companies'
stockholders' equity
- 70,898 - - (5,850) (2,403) - 62,645
Balance as of December 31, 2011 $ 7,853,004 4,694,420 3,364,429 199,033 (16,045) (15,974) 1,277,552 17,356,419
Capital increase in cash of minority interests - - - - - - 560,812 560,812 Capital increase in cash 1,200,000 4,763,947 - - - - - 5,963,947
Net consolidated income for the year ended
December 31, 2012
- - 4,141,047 - - - 248,462 4,389,509 2011 earnings distribution and appropriation :
Cash dividends
- - (1,806,191) - - - - (1,806,191)
Changes in hedges of a net investment in a foreign operation
- - - 3,243 - - - 3,243
Unrealized translation gains from loans of foreign
operation
- - - 105,168 - - - 105,168 Cumulative translation adjustment to long-term
equity investments
- - - (337,858) - - - (337,858)
Changes in minority interests - - - - - - (334,748) (334,748) Recognition of change in investee companies'
stockholders' equity
- (44,892) - - (7,010) 4,578 - (47,324)
Balance as of December 31, 2012 $ 9,053,004 9,413,475 5,699,285 (30,414) (23,055) (11,396) 1,752,078 25,852,977
(English Translation of Financial Report Originally Issued in Chinese)
CHAILEASE HOLDING COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2012 and 2011
(Amounts Expressed in Thousands of New Taiwan Dollars)
18
For the years ended December 31,
2012 2011
Cash flows from operating activities
Consolidated net income $ 4,389,509 2,636,638
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,864,069 2,198,381
Compensation costs on stock received by the employees - 70,933
Investment income recognized under equity method (111) (109)
Cash dividends received from long-term investments at equity method
100 100
(Gain) loss on sale, disposal and retirement of assets, net (18,833) 53,043
Gain on disposal of foreclosed assets (143,050) -
Gain on disposal of investments (1,329) (2,541)
Loss on valuation of financial instruments 25,568 86,601
Impairment loss on loans and receivables 1,950,245 852,636
Impairment loss on fixed assets, leased assets and investments 885,738 1,741,831
Amortization of unrealized gain on leaseback transactions (100,288) (100,288)
Cumulative translation adjustments realized 122,632 -
Loss on sale of financial assets - 9,533
Change in operating assets and liabilities:
Financial assets at fair value through profit or loss - current 30,000 33,673
Costs and estimated earnings in excess of billings on uncompleted contracts
(331,953) (104,236)
Other current assets (441,946) (943,381)
Other financial assets - current - 18,962
Prepaid pension cost 236 700
Other financial liabilities - current 575,794 395,897
Other current liabilities 497,300 625,075
Deferred income tax assets and liabilities, net 223,391 42,434
Other liabilities 50,793 68,113
Other – unrealized interest revenue 2,508,166 4,646,238
Net cash provided by operating activities 12,086,031 12,330,233
Cash flows from investing activities:
Increase in accounts receivable (373,110) (3,436,395)
Increase in installment sales receivable (22,710,047) (18,445,596)
Increase in capital leases receivable (15,748,131) (25,692,101)
Proceeds from financial assets securitization 11,134,550 10,885,123
Increase in -loans, net (4,576,627) (5,929,578)
Increase in other receivables (363,354) (194,724)
Increase in financial assets carried at cost - non-current (1,137) (115,030)
Increase in available-for-sale financial assets - (843)
Increase in held-to-maturity financial assets – current (1,717,100) (280,000)
Increase in held-to-maturity financial assets – non-current (490,000) -
Proceeds from return of capital by investee 320 6,416
(Decrease) increase in notes and accounts payable (481,024) 1,194,673
Increase in long-term investments under equity method (5,914) -
Purchase of property and equipment (2,127,303) (1,909,496)
Proceeds from sales of property and equipment 1,586,666 1,373,024
Proceeds from sales of investments 2,629 846,684
Increase in restricted assets (447,615) (2,680,140)
Purchase of intangible assets (2,065) (3,389)
Increase in other financial assets - non-current (115,075) (15,348)
Increase in other assets (23,553) (75,078)
Net cash used in investing activities (36,457,890) (44,471,798)
(English Translation of Financial Report Originally Issued in Chinese)
CHAILEASE HOLDING COMPANY LIMITED AND ITS SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2012 and 2011
(Amounts Expressed in Thousands of New Taiwan Dollars)
19
For the years ended December 31,
2012 2011
Cash flows from financing activities:
Increase in short-term debts $ 4,751,492 601,003
Increase in short-term bills payable 7,342,820 4,834,421
Increase in guarantee deposits received 3,919,908 3,849,322
Increase in bonds payable 6,521,738 4,100,000
Increase in long-term debts 75,430,085 35,262,926
Repayment of long-term debts (74,070,962) (15,739,061)
Cash dividends paid (1,806,185) (821,212)
Capital increase in cash 5,963,947 1,850,851
Cash dividends paid to minority interests (116,122) (121,829)
Changes in minority interests (225,770) -
Subsidiaries’ capital increase in cash by minority interests 560,812 -
Net cash provided by financing activities 28,271,763 33,816,421
Exchange rate effects (326,543) 535,810
Net increase in cash and cash equivalents 3,573,361 2,210,666
Cash and cash equivalents, beginning of year 6,558,070 4,347,404
Cash and cash equivalents, end of year $ 10,131,431 6,558,070
Supplemental disclosures of cash flow information:
Cash paid for interest during the year (excluding capitalized interest)
$ 4,273,422
3,172,462
Cash paid for income tax during the year $ 1,593,961 700,343
Non-cash investing and financing activities:
Reclassification of current portion of long-term debts $ 44,748,177 32,367,377
20
Attachment 4
Chailease Holding Company Limited
Distribution and Appropriation of Retained Earnings for the year
of 2012
Item NTD
Opening balance of retained earnings 1,558,237,972
Net Profit of 2012 4,141,047,030
Available retained earnings for distribution 5,699,285,002
Special surplus reserve (64,864,800)
Cash dividend-NT$2 per share (1,810,600,756)
Stock dividend-NT$1 per share (905,300,370)
Ending balance of retained earnings 2,918,519,076
Note: The employees’ bonus of NT$414,105 and the directors’ bonus of NT$ 3,312,840
have been estimated as the expense for the year of 2012.
21
Attachment 5 Chailease Holding Company Limited
Comparison Table for the amendments to “Rules and Procedure of Shareholders’ Meeting”
Article Article after amendment Article before amendment
Article 6
The Company shall itemize the time, place and any further information for
shareholders’ registration on the meeting notice to shareholders. The reception
for shareholders’ registration shall start at least 30 minutes before the meeting
with specific direction and appropriate staffs arrangement.
Shareholders attending the Meeting shall have attendance card, sign-in card or
other certificate of attendance issued by the Company. The proxy Solicitor
shall provide ID document for verification.
The Company shall prepare an attendance book for shareholders to sign in, or
the shareholder present may hand in an attendance card in lieu of signing on
the attendance book.
The Company shall prepare Agenda Handbooks, Annual report, attendance
card and voting card for the meeting and the relevant materials, which will be
sent to or made available to the attending Shareholders. Where voting powers
of election of directors at a shareholders' meeting are to be exercised, a printed
ballot shall also be sent to the shareholders as well.
………..
The Company shall prepare an attendance book for
shareholders to sign in, or the shareholder present may hand in
an attendance card in lieu of signing on the attendance book.
The Company shall prepare Agenda Handbooks, Annual report,
attendance card and voting card for the meeting and the relevant
materials, which will be sent to or made available to the
attending Shareholders. Where voting powers of election of
directors at a shareholders' meeting are to be exercised, a
printed ballot shall also be sent to the shareholders as well.
Shareholders attending the Meeting shall have attendance card,
sign-in card or other certificate of attendance issued by the
Company. The proxy Solicitor shall provide ID document for
verification.
……………..
Article 7
If a shareholders’ meeting is called by the board of directors, the board
chairman shall preside at the said shareholders meeting. In case the chairman
If a shareholders’ meeting is called by the board of directors,
the board chairman shall preside at the said shareholders
22
Article Article after amendment Article before amendment
is on leave of absence, or cannot exercise his powers and authority, the vice
chairman shall act in lieu of him. If there is no vice chairman, or the vice
chairman is also on leave of absence, or cannot exercise his powers and
authority, the chairman shall designate a managing director to act in lieu of
him; if there is no managing director, the chairman shall designate a director
to act in lieu of him. If the chairman does not designate a director, the
managing directors or directors shall elect one from among themselves to act
in lieu of the chairman.
If the other director acts for the board chairman as the shareholders’ meeting
chairman, he/she shall be a director or the representative of an institutional
director who is holding a post at least 6 months and familiar with the financial
and business of the company.
…………………
meeting. In case the chairman is on leave of absence, or cannot
exercise his powers and authority, the vice chairman shall act in
lieu of him. If there is no vice chairman, or the vice chairman is
also on leave of absence, or cannot exercise his powers and
authority, the chairman shall designate a managing director to
act in lieu of him; if there is no managing director, the chairman
shall designate a director to act in lieu of him. If the chairman
does not designate a director, the managing directors or
directors shall elect one from among themselves to act in lieu of
the chairman.
……………….
Article 9 …………………
The whole process of the Meeting including shareholders’ registration, report,
discussion and voting shall be audio and video recorded continually and these
recordings shall be preserved for at least one year. If litigation occurs
regarding any matter resolved by the meeting and procedures, the relevant
audio or video recordings shall continue to be retained until the litigation is
concluded. The recording may be performed by means of electronic
transmission.
……………………..
The process of the Meeting shall be tape recorded or videotaped
and these tapes shall be preserved for at least one year. If
litigation occurs regarding any matter resolved by the meeting
and procedures, the relevant audio or video recordings shall
continue to be retained until the litigation is concluded. The
recording may be performed by means of electronic
transmission.
Article 12 …………….
Vote counting for proposed or elected matter shall be conducted in public at
………………
The results of resolution(s) shall be announced in the meeting,
23
Article Article after amendment Article before amendment
the place of the meeting. The results of resolution(s) including its poll shall be
announced on-site immediately at the meeting, and recorded in the meeting
minutes.
and recorded in the meeting minutes.
Article 13 …………..
Where there is a proposal for election or discharge of directors in a general
meeting shall be conducted in accordance with the Company’s Articles of
Association and the Rules for election of Directors, and the results of the
election including the names list and its poll should be announced on-site at
the meeting.
………..
Where there is a proposal for election of directors in a general
meeting shall be conducted in accordance with the Company’s
Articles of Association, and the results of the election should be
announced by the Chairman at the meeting.
………..
24
Attachment 6
Chailease Holding Company Limited
Comparison Table for the Amendments to “Processing Procedures for the Acquisition and Disposal of Assets
Article after Amendment Article before Amendment
Article 2 The term “assets” as used in the Procedures includes the
following:
2. Real property and other fixed assets. (Note: If a business
that engages in construction business, fixed assets shall include
inventory.)
Article 2 The term “assets” as used in the Procedures includes the
following:
2. Real property and other fixed assets,. (Note: If a business that
engages in construction business, fixed assets shall include
inventory.) but does not include equipment that are
purchased for rent and sales.)
Article 3 Terms used in the Procedures are defined as follows:
1. “Derivatives”: Forward contracts, options contracts, futures
contracts, leverage contracts, swap contracts, and compound
contracts combining the above products, whose value is
derived from assets, interest rates, foreign exchange rates,
indexes or other interests. The term "forward contracts" does
not include insurance contracts, performance contracts,
after-sales service contracts, long-term leasing contracts, or
long-term purchase (sales) agreements.
2. “Assets acquired or disposed through mergers, demergers,
acquisitions, or share transfer in accordance with Acts of law”:
Refers to assets acquired or disposed through mergers,
25
Article after Amendment Article before Amendment
demergers, or acquisitions conducted under the Business
Mergers and Acquisitions Act, Financial Holding Company
Act, Financial Institution Merger Act and other Acts, or share
transfer through issuance of new shares under Article 156,
paragraph 6 of the Company Act.
3. "Related party": As defined in Statement of Financial
Accounting Standards No. 6 published by the ROC Accounting
Research and Development Foundation (hereinafter "ARDF")
and International Financial Reporting Standards No. 24. as a
transition phase, the definition from both standards shall apply.
4. "Subsidiary": As defined in Statements of Financial Accounting
Standards Nos. 5 and 7 published by the ARDF and
International Financial Reporting Standards No. 27.
5. "Professional appraiser": Refers to a real property appraiser or
other person duly authorized by an act of law to engage in the
value appraisal of real property or other fixed assets.
6. "Date of occurrence": Refers to the date of contract signing,
date of payment, date of consignment trade, date of transfer,
date of boards of directors resolutions, or other date that can
confirm the counterparty and monetary amount of the
transaction, whichever date is earlier; provided, for investment
for which approval of the Competent Authority is required, the
earlier of the above date or the date of receipt of approval by
the Competent Authority shall apply.
26
Article after Amendment Article before Amendment
7. "Mainland China area investment": Refers to investments in the
mainland China area approved by the Ministry of Economic
Affairs Investment Commission or conducted in accordance
with the provisions of the Regulations Governing Permission
for Investment or Technical Cooperation in the Mainland Area.
8. "Latest financial statement": Refers to the financial statements
of the Company audited or reviewed by certified public
accountant (“CPA”) which has been published in accordance
with applicable regulation before the subject acquisition or
disposal of assets.
Article 5 Professional appraisers and their officers, certified public
accounts, attorneys, and securities underwriters that provide the
Company with appraisal reports, certified public accountant’s
opinions, attorney’s opinions, or underwriter’s opinions shall not
be a related party of any party to the transaction.
Article 22 Professional appraisers and their officers, certified public
accounts, attorneys, and securities underwriters that provide the
Company with appraisal reports, certified public accountant’s
opinions, attorney’s opinions, or underwriter’s opinions shall
not be a related party of any party to the transaction.
Article 7
2. Terms and conditions of the transaction and level of
authorization
(3) Transaction of other fixed assets: the handling department
shall clearly state the reasons, trading price and payment
terms for the transaction, for single transaction amount
below NT$9,000,000, the case shall be submitted to the
Article 4 The decision on the Company’s acquiring, disposing and trading
terms of assets shall be handled according to the following
operation procedure:
4. Transaction of other assets (include other fixed assets,
membership cards, intangible assets, and other important
assets): the handling department shall clearly state the
reasons, trading price and payment terms for the transaction,
27
Article after Amendment Article before Amendment
President for approval in writing; for transaction amount
above NT$9,000,000, it shall be approved by the Chairman;
and for transaction amount above NT$30,000,000, the
documents needed in previous subparagraph shall be
prepared and submitted to the Board of Directors for
approval.
If the transaction amount reached the standard that require
public announcement and reporting as defined in Article 25,
all cases shall be approved by the Board of Director’s
resolutions in advance.
for single transaction amount below US$300,000, the case
shall be submitted to the President for approval in writing;
for transaction amount above US$300,000, it shall be
approved by the Chairman; and for transaction amount above
US$1,000,000, the documents needed in previous article
shall be prepared and submitted to the Board of Directors for
approval.
Article 8
Procedures for acquisition or disposal of membership or
intangible assets are as follows:
1. Evaluation and operating procedures
Acquisition or disposal of membership or intangible assets shall
follow the Company’s internal control procedures.
2.Terms and conditions of the transaction and level of
authorization
Transaction of membership, intangible assets, the handling
department shall clearly state the reasons, trading price and
payment terms for the transaction, for single transaction amount
below NT$9,000,000, the case shall be submitted to the President
Article 4
Transaction of other assets (include other fixed assets,
membership cards, intangible assets, and other important assets):
the handling department shall clearly state the reasons, trading
price and payment terms for the transaction, for single
transaction amount below US$300,000, the case shall be
submitted to the President for approval in writing; for transaction
amount above US$300,000, it shall be approved by the
Chairman; and for transaction amount above US$1,000,000, the
documents shall be prepared and submitted to the Board of
Directors for approval.
28
Article after Amendment Article before Amendment
for approval in writing; for transaction amount above
NT$9,000,000, it shall be approved by the Chairman; and for
transaction amount above NT$30,000,000, the documents shall be
prepared and submitted to the Board of Directors for approval.
If the transaction amount reached the standard that require public
announcement and reporting as defined in Article 25, all cases
shall be approved by the Board of Director’s resolutions in
advance.
Article 12 Other assets transactions:
Transaction of other assets, the handling department shall
clearly state the reasons, trading price and payment terms for
the transaction, for single transaction amount below
NT$9,000,000, the case shall be submitted to the President for
approval in writing; for transaction amount above
NT$9,000,000, it shall be approved by the Chairman; and for
transaction amount above NT$30,000,000, the documents
needed in previous article shall be prepared and submitted to
the Board of Directors for approval.
If the transaction amount reached the standard that require
public announcement and reporting as defined in Article 25, all
cases shall be approved by the Board of Directors’s
resolutions in advance.
Article 4. Transaction of other assets (include other fixed assets,
membership cards, intangible assets, and other important
assets): the handling department shall clearly state the
reasons, trading price and payment terms for the transaction,
for single transaction amount below US$300,000, the case
shall be submitted to the President for approval in writing; for
transaction amount above US$300,000, it shall be approved
by the Chairman; and for transaction amount above
US$1,000,000, the documents needed in previous article shall
be prepared and submitted to the Board of Directors for
approval.
If the transaction amount reached the standard that require
public announcement and reporting as defined in Article 6,
except for the acquisition or disposal of machine equipment
for business purposes could be subsequently ratified by the
Board of Directors, all the other cases shall be approved by
29
Article after Amendment Article before Amendment
Board of Directors’ resolutions in advance
Article 14 Resolution Procedure:
With respect to the acquisition or disposal of business-use
machinery and equipment between the Company and its
Subsidiaries, the Board of Directors may delegate the Chairman
to decide such matters when the transaction is within
NT$300,000,000 and have the decisions subsequently submitted
to and ratified by the next Board of Directors’ Meeting.
Article 12 Resolution Procedure:
With respect to the acquisition or disposal of business-use
machinery and equipment between the Company and its
Subsidiaries, the Board of Directors may delegate the Chairman
to decide such matters when the transaction is within a certain
amount and have the decisions subsequently submitted to and
ratified by the next Board of Directors’ Meeting.
Article 16
3. When the Company acquires real property from a related
party and results of appraisals conducted in accordance with
the provisions of previous Article 15 and Article 16 are
uniformly lower than the transaction price, the following
steps shall be taken:
(1)A special reserve shall be set aside in accordance with
the provisions of Article 41, paragraph 1 of the
Securities and Exchange Act (the Act) against the
difference between the real estate transaction price and
the appraised cost, and may not be distributed or used for
Article 14
3. When the Company acquires real property from a related
party and results of appraisals conducted in accordance with
the provisions of previous Article are uniformly lower than
the transaction price, the following steps shall be taken:
(1)A special reserve shall be set aside in accordance with the
provisions of Article 41, paragraph 1 of the Securities and
Exchange Act against the difference between the real
estate transaction price and the appraised cost, and may
not be distributed or used for capital increase or issuance
of bonus shares. The Company may not utilize the special
reserve until it has recognized a loss on decline in market
value of the assets it purchased at a premium, or they have
30
Article after Amendment Article before Amendment
capital increase or issuance of bonus shares. If the
Company uses the equity method to account for its
investment in another company, then the special
reserve called for under Article 41, paragraph of the
Act shall be set aside pro rata in a proportion
consistent with the share of public company's equity
stake in the other company. The Company may not
utilize the special reserve until it has recognized a loss
on decline in market value of the assets it purchased at a
premium, or they have been disposed of, or adequate
compensation has been made, or the status quo ante has
been restored, or there is other evidence confirming that
there are nothing unreasonable about the transaction, and
the FSC has given its consent.
been disposed of, or adequate compensation has been
made, or the status quo ante has been restored, or there is
other evidence confirming that there are nothing
unreasonable about the transaction, and the FSC has given
its consent.
Article 21 When participating in a merger, demerger, acquisition, or
transfer of another company’s shares, the Company that is
listed on an exchange or has its shares traded on the premise of
security dealers shall prepare a full written record of the
following information and retain it for five years for reference:
1. Basic identification data for personnel: Including the
occupational titles, names, and national ID numbers (or
Article 23 When participating in a merger, demerger, acquisition, or
transfer of another company’s shares, the Company that is
listed on an exchange or has its shares traded on the premise of
security dealers shall prepare a full written record of the
following information and retain it for five years for reference:
1. Basic identification data for personnel: Including the
occupational titles, names, and national ID numbers (or
passport numbers in the case of foreign nationals) of all
31
Article after Amendment Article before Amendment
passport numbers in the case of foreign nationals) of all
persons involved in the planning or implementation of any
merger, demerger, acquisition, or transfer of another
company’s shares prior to disclosure of the information.
2. Dates of important events: including the signing of any
letter of intent or memorandum of understanding, the hiring
of a financial or legal advisor, the execution of a contract,
and the convening of a board of directors meeting.
3. Important documentations and meeting minutes: including
merger, demerger, acquisition, and transfer of shares, any
letter of intent or memorandum of understanding, material
contracts, and the minutes of board of directors meeting.
When participating in a merger, demerger, acquisition, or
transfer of another company's shares, a company that is listed
on an exchange or has its shares traded on an OTC market shall,
commencing immediately from the date of passage of a
resolution by the board of directors, report (in the prescribed
format and via the Internet-based information system) the
information set out in subparagraphs 1 and 2 of the preceding
paragraph to the FSC for recordation.
Where the companies participating in a merger, demerger,
acquisition, or transfer of another company's shares is neither
persons involved in the planning or implementation of any
merger, split, acquisition, or transfer of another
company’s shares prior to disclosure of the information.
2. Dates of important events: including the signing of any
letter of intent or memorandum of understanding, the
hiring of a financial or legal advisor, the execution of a
contract, and the convening of a board of directors
meeting.
3. Important documentations and meeting minutes: including
merger, split, acquisition, and transfer of shares, any letter
of intent or memorandum of understanding, material
contracts, and the minutes of board of directors meeting.
32
Article after Amendment Article before Amendment
listed on an exchange nor has its shares traded on an OTC
market, the company(s) so listed or traded shall sign an
agreement with such company whereby the latter is required to
abide by the Article 20 and the provisions of paragraphs 1 and 2.
Article 25 Public announcement and reporting procedure:
1. Under any of following circumstances, the in-charging
department shall publicly announce and relevant information
on FSC’s designated website in the appropriate format as
prescribed by regulations on the day of the occurrence of the
fact:
(1). Acquisition or disposal of real property from or to a
related party, or acquisition or disposal of assets other
than real property from or to a related party where the
transaction amount reaches 20 percent or more of paid-in
capital, 10 percent or more of the company's total assets,
or NT$300 million or more; provided, this shall not apply
to trading of government bonds or bonds under
repurchase and resale agreements.
(2). Merger, demerger, acquisition, or transfer of shares.
(3).Losses from derivatives trading reaching the limits on
aggregate losses or losses on individual contracts set out
in the procedures adopted by the company.
Article 6 Public announcement and reporting procedure:
1. Under any of following circumstances, the in-charging
department shall publicly announce and relevant information
on FSC’s designated website in the appropriate format as
prescribed by regulations on the day of the occurrence of the
fact:
(1) Acquisition or disposal of assets from related party where
the transaction amount reaches 20% or more of the
Company’s paid-in capital, 10% or more of the Company’s
total assets, or NT$ 300,000,000, provided, this shall not
apply to trading of government bonds or bonds under
repurchase and resale agreements.
(2) Conduct merger, split, acquisition or transfer of shares.
(3) Engage in derivative product transactions and the loss from
the engagement has reached loss ceiling for the full or
individual contract defined in “Handling Procedure for
derivative product transaction”.
(4) Engage in investment in mainland China and Asset
transaction except the four items indicated above, when
(a)single transaction amount
33
Article after Amendment Article before Amendment
(4). Where an asset transaction other than any of those
referred to in the preceding three subparagraphs, a
disposal of receivables by a financial institution, or an
investment in the mainland China area reaches 20 percent
or more of paid-in capital or NT$300 million; provided,
this shall not apply to the following circumstances:
A. Trading of government bonds.
B. Securities trading by investment professionals on
foreign or domestic securities exchanges or
over-the-counter markets.
C. Trading of bonds under repurchase/resale agreements.
D. Where the type of asset acquired or disposed is
equipment/machinery for business use, the trading
counterparty is not a related party, and the transaction
amount is less than NT$500 million.
F. Where land is acquired under an arrangement on
engaging others to build on the company's own land,
engaging others to build on rented land, joint
construction and allocation of housing units, joint
construction and allocation of ownership percentages, or
joint construction and separate sale, and the amount the
company expects to invest in the transaction is less than
(b) the accumulated transaction amount with the same
trading partner on acquiring or disposing similar
characteristic assets
(c)the accumulated amount in acquiring or disposing the
same real estate development project within in one year
(acquiring and disposing are counted separately)
(d)the amount accumulated within one year from acquiring
or disposing the same security (acquiring and disposing
are counted separately)
Reaches more than 20% of the Company’s paid-in capital or
NT$ 300,000,000, the public announcement matter is to be
handled by the Accounting and Financial Department.
Within one year as used in above paragraph refers to the
year preceding the base date of occurrence of the current
transaction. Items duly announced in accordance with
“Regulations Governing the Acquisition and Disposal of
Assets by Public Company” do not need to be entered
again.
However, this shall not apply to the following
circumstances:
(1).Trading of government bonds.
(2).Trading of bonds under repurchase/resale agreements.
(3).Where the type of asset acquired or disposed is
equipment/machinery for operational use, the trading
34
Article after Amendment Article before Amendment
NT$500 million. counterparty is not a related party, and the transaction
amount is less than NT$ 500,000,000.
(4).Where land is acquired under an arrangement for
commissioned construction on self-owned land or
commissioned construction on rented land, joint
construction and allocation of housing units, joint
construction and allocation of ownership percentages, or
join construction and separate sale, and the amount the
company expects to invest in the transaction is less than
NT$ 500,000,000.
Article 29
With respect to the Company's acquisition or disposal of assets
that is subject to the approval of the Board of Directors under
the Procedures or other laws or regulations, the transaction shall
be approved by more than half of all Audit Committee Members
and submitted to the Board of Directors for a resolution.
If approval of more than half of all audit committee members as
required in the preceding paragraph is not obtained, the
transaction may be implemented if approved by more than
two-thirds of all directors, and the resolution of the Audit
Committee shall be recorded in the Minutes of the Board of
Directors’ Meeting.
35
Attachment 7 Chailease Holding Company Limited
Comparisons table for the Amendments to “Procedures for Engaging in Derivatives Trading”
No. of
Article Article After Amendment Article before Amendment
Article 3
Transaction Principals and Guidelines: 1.~3.(1) is omitted.
3.(2) Accounting and Financial Department:
Regularly disclose information and Relevant Accounting
Processing shall be in accordance with generally accepted
accounting principles (GAAP) and other applicable laws and
regulations.
The GAAP described in the preceding paragraph shall mean the
following, as endorsed by the Financial Supervisory Commission
(FSC), Executive Yuan: International Financial Reporting
Standards (IFRS), International Accounting Standards (IAS), and
Interpretations developed by the International Financial Reporting
Interpretations Committee (IFRIC) or the former Standing
Interpretations Committee (SIC).
……. 6. For operation of non-hedging derivative trading, the amount of
loss ceiling for each contract is 20% of an individual contract; the
loss ceiling for accumulated loss is 10% of the net worth in latest
financial statements in the financial year.
Transaction Principals and Guidelines: ……. 1.~3.(1) is omitted.
3.(2) Accounting and Financial Department:
I. Regularly disclose information according to Financial Accounting
Standards No.36-“Financial Instruments: Disclosure and
Presentation”
II. Relevant Accounting Processing: Processing according to Financial
Accounting Standards No 14, No 34, generally accepted Accounting
Principles and relevant laws and regulations.
……
6. For operation of non-hedging derivative products, the amount of loss
ceiling for each contract is 10% of an individual contract; the loss
ceiling for accumulated loss is 10% of the planned net profit before
tax.
36
No. of
Article Article After Amendment Article before Amendment
…… (2). Exchange rate related products: If the exchange rate related
derivative product operation is for the needs of paying off the
foreign currency payment entrusted by the customers,
customer’s power of attorney must be submitted to sales
department head for approval and then the case should be
operated by Financial and Accounting Department; the
authorization level for other exchange rate products are as
follow:
…… (2). Exchange rate related products: If the exchange rate related
derivative product operation is for the needs of paying off the
foreign currency payment entrusted by the customers, customer’s
power of attorney must be submitted to sales department head for
approval and then the case should be operated by Financial and
Accounting Department; the authorization level for other
exchange rate products are as follow:
Article 5
Public Disclosure of information:
1. According to “Regulations Governing the Acquisition and
Disposal of Assets by Public Companies”, the Company
shall compile monthly reports on the status of derivatives
trading engaged in up to the end of the preceding month by
itself and any subsidiaries that are not domestic public
companies and enter the information in the prescribed
format into the information reporting website designated by
the FSC by the 10th day of each month.
2. Under any of the following circumstances, the Company
shall publicly announce and report the relevant information
on the FSC's designated website in the appropriate format as
prescribed by regulations on the date of occurrence of the
event:
(1) Losses from derivatives trading reaching the limits on
aggregate losses or losses on individual contracts set out
Public Disclosure of information:
1. According to “Regulations Governing the Acquisition and
Disposal of Assets by Public Companies”, the Company shall
compile monthly reports on the status of derivatives trading
engaged in up to the end of the preceding month by itself and
any subsidiaries that are not domestic public companies and
enter the information in the prescribed format into the
information reporting website designated by the FSC by the 10th
day of each month.
2. If the trading loss of derivative products the Company engaged in
reaches the amount of loss ceiling for all or individual contract,
the Company shall publicly announce the relevant information
within 2 days from the date of occurrence of such loss.
37
No. of
Article Article After Amendment Article before Amendment
in the procedures adopted by the company
(2) Unrealized Losses from derivatives trading reaching 3%
of net worth of the Company.
(3) When the Company at the time of public announcement
makes an error or omission in an item required by the
Procedures to be publicly announced and so is required to
correct it, all the items shall be again publicly announced
and reported in their entirety.
(4) Change to the originally publicly announced and reported
information.
Article 7
The Board of Directors shall comply with the following principles
to supervise the Company’s engagement in derivative product
transactions:
1. Designate senior management personnel to pay continuous
attention to monitoring and controlling derivatives trading
risk.
2. Regular assess trading performance to see whether it conforms
to existing operating strategies and whether the risk the
Company assumes is within the bearable range of the
Company.
The senior management personnel designated by the Board of
Directors shall:
1. Periodically evaluate the risk management measures currently
employed are appropriate and are faithfully conducted in
accordance with the Procedures for engaging in derivatives
trading formulated by the Company.
2. When irregular circumstances are found in the course of
supervising trading and profit-loss circumstances, appropriate
measures shall be adopted and a report immediately made to
The Board of Directors shall comply with the following principles to
supervise the Company’s engagement in derivative product
transactions:
1. Designate senior management personnel to pay continuous
attention to monitoring and controlling derivatives trading risk.
2. Regular assess trading performance to see whether it conforms to
existing operating strategies and whether the risk the Company
assumes is within the bearable range of the Company.
The senior management personnel designated by the Board of
Directors shall:
1. Periodically evaluate the risk management measures currently
employed are appropriate and are faithfully conducted in
accordance with the Procedures for engaging in derivatives
trading formulated by the Company.
2. When irregular circumstances are found in the course of
supervising trading and profit-loss circumstances, appropriate
measures shall be adopted and a report immediately made to the
to the Board of Directors. If there are already independent
38
No. of
Article Article After Amendment Article before Amendment
the Audit Committee and the Board of Directors.
The risk assessing, monitoring and controlling personnel, and
operation personnel such as trading personnel and confirmation
and settlement personnel shall belong to different departments,
and shall report assessment items to the Board of Directors or
senior management personnel with no responsibility for trading or
position decision-making every half a year.
directors, the independent directors must attend the Board of
Directors meeting and express their opinions.
The risk assessing, monitoring and controlling personnel, and
operation personnel such as trading personnel and confirmation and
settlement personnel shall belong to different departments, and shall
report assessment items to the Board of Directors or senior
management personnel with no responsibility for trading or position
decision-making every half a year.
Article 12
Subsidiary controlling procedure
1. The subsidiary of the Company shall follow the rules in
“Regulations Governing the Acquisition and Disposal of Assets
by Public Companies” and draft the Procedures for engaging in
derivative product transaction and check whether its operating
procedure complies with the principles and regulations by itself
and whether it conducts the relevant matters according to the
regulations in defined processing procedure.
2. The Company’s internal auditor shall review the subsidiary’s
self-examination report on its compliance to the Procedures for
derivative product transactions and relevant matters.
3. The Company’s subsidiary shall report its engagement with
derivatives trading by the fifth day of each month in writing to
the Company’s Accounting and Financial Department. The
Company shall publicly announce the relevant information of
the subsidiaries. If the amount of loss from engaging in
derivative trading reaches the loss ceiling defined in the
Procedures for all or individual contract, the Subsidiary shall
hand over the relevant information to the Company on the date
of occurrence of such loss. The Company shall publicly
announce the relevant information for the subsidiaries.
Subsidiary controlling procedure
1. The subsidiary of the Company shall follow the rules in
“Regulations Governing the Acquisition and Disposal of Assets by
Public Companies” and draft the Procedures for engaging in
derivative product transaction and check whether its operating
procedure complies with the principles and regulations by itself and
whether it conducts the relevant matters according to the regulations
in defined processing procedure.
39
No. of
Article Article After Amendment Article before Amendment
4. If the unrealized losses on derivatives trading of the major
Subsidiaries reach to 3 % or more of the net worth of the
Company, the major Subsidiaries shall report to the Company
in the on the date of occurrence. The Company shall publicly
announce the relevant information for the Subsidiaries.
5. When the Subsidiaries find an error or omission on the public
announcement which is required to announce by the
Procedures, the Subsidiaries shall report to the Company on the
date of occurrence. And, the Company shall correct and
announce again.
2. The Company’s internal auditor shall review the subsidiary’s
self-examination report on its compliance to the Procedures for
derivative product transactions and relevant matters.
Article 13
The Procedures shall have the agreement of more than 1/2 of the
members in Audit Committee and then submitted to the Board of
Directors for approval; after it is passed by the Board of Directors,
it would be sent to the Shareholders’ meeting for final approval.
It would then be bulletined for enforcement. When the Procedures
is amended, the same procedure shall be applied. If any director
expresses dissent and it is contained in the minutes or a written
statement, the company shall submit the director's dissenting
opinion to Audit Committee. When the Procedures is submitted for discussion by the Board of
Directors, the Board of Directors shall take into full consideration
each independent director's opinions. If an independent director
objects to or expresses reservations about any matter, it shall be
recorded in the Minutes of the Board of Directors’ Meeting.
If the Procedures does not have the agreement from more than 1/2
of the members in the Audit Committee, it could be approved
The Procedures shall have the agreement of more than 1/2 of the
members in Audit Committee and then submitted to the Board of
Directors for approval; after it is passed by the Board of Directors, it
would be sent to the Shareholders’ meeting for final approval. It
would then be bulletined for enforcement. When the Procedures is
amended, the same procedure shall be applied. If any director
expresses dissent and it is contained in the minutes or a written
statement, the company shall submit the director's dissenting opinion to
Audit Committee.
When the Procedures is submitted for discussion by the Board of
Directors, the Board of Directors shall take into full consideration each
independent director's opinions. If an independent director objects to or
expresses reservations about any matter, it shall be recorded in the
Minutes of the Board of Directors’ Meeting.
If the Procedures does not have the agreement from more than 1/2 of
the members in the Audit Committee, it could be approved upon by
40
No. of
Article Article After Amendment Article before Amendment
upon by more than 2/3 of the all the directors in the Board and the
resolution of the Audit Committee shall be recorded in the Minute
of Board of Directors’ Meeting.
more than 2/3 of the all the directors in the Board and the resolution of
the Audit Committee shall be recorded in the Minute of Board of
Directors’ Meeting.
41
Attachment 8
Chailease Holding Company Limited
The Comparison Table of Amendments to the “Operational Procedures for Loaning Funds to Others”
No of
Article Article after Amendments Article before Amendments
Article 1 Except the other rules regulated in the laws and the statutes,
Chailease Holding Company Limited (“the Company”) shall
comply with the “Operational Procedures for Loaning Funds to
Others” (“the Procedures”) when loaning funds to others.
Except the other rules regulated in the laws, Chailease Holding
Company Limited. (“the Company”) shall comply with the
“Operational Procedures for Loaning Funds to Others” (“the
Procedures”) when loaning funds to others.
Article 3
Evaluation standard for loaning funds:
1. Companies or businesses that have business transaction calls
for a loan arrangement with the Company.
2. Companies or businesses that have the short-term financing
facility needs include under the following circumstances:
(1) Companies or businesses that the Company directly or
indirectly holds more than 50% of the voting shares have
short-term financing facility needs due to business needs.
(2) Other companies or businesses have short-term financing
needs due to operating working capital needs.
(3) The Company’s Board of Directors agrees to grant loans.
Evaluation standard for loaning funds:
1. Companies or businesses that have business transaction calls
for a loan arrangement with the Company.
2. Companies or businesses that have the short-term financing
facility needs include under the following circumstances:
(1) Companies or businesses that the Company holds more
than 50% of the voting shares have short-term financing
facility needs due to business needs.
(2) Other companies or businesses have short-term financing
needs due to operating working capital needs.
(3) The Company’s Board of Directors agrees to grant loans.
Article 4
Total capital for loaning funds and the limitation for single
borrower:
1. The Company’s aggregate amount of loans granted (including
business transaction and short-term financing facility needs)
must not exceed the net worth in latest financial reports.
2. However, for aggregate amount of loans granted to others
Total capital for loaning funds and the limitation for single
borrower:
1. The Company’s aggregate amount of loans granted (including
business transaction and short-term financing facility needs)
must not exceed the net worth in latest financial reports.
2. However, for aggregate amount of loans granted to others
42
No of
Article Article after Amendments Article before Amendments
under Paragraph 2 of Article 2 in the Procedures shall not
exceed 40% of the net worth in the latest financial reports.
The restriction shall not apply to inter-company loans of funds
between subsidiaries that are not located in the territory of the
Republic of China (Taiwan) of which the Company holds,
directly or indirectly, 100% of the voting shares. However the
setting of the amount limits and the durations of loans shall
still apply.
3. The amount of each loan granted to any single borrower
(including business relationship and short term financial needs
capital) must not exceed 5% of the total loanable capital; but
the amount of loan granted to the accommodator who ask for
the loans based on business relationship transactions with the
Company shall not exceed the total amount of business
transaction of the last operating cycle.
Before conducting fund loaning and loan application
operations, the Company shall carefully evaluate whether the
applicant meets the regulations in Paragraph 1 of Article 2 in
the Procedures. If the criteria are met, then the Company shall
calculate the individual’s aggregate amount including the one
in application. If the total amount already exceeds the loan
quotas calculated based on “business relationship transaction”
in that loan application point, then the excess of the amount of
loan application shall be classified under “short-term
financing” category, and the case shall be submitted to the
Board of Directors for resolution with a clear list of all loan
category and amount granted to the individual.
4. The aggregate amount of loan of a single borrower (including
business relationship and short-term financing capital) should
not exceed 10% of the total loanable capital of the Company.
under Paragraph 2 of Article 2 in the Procedures shall not
exceed 40% of the net worth in the latest financial reports.
The restriction shall not apply to inter-company loans of funds
between subsidiaries that are not located in the territory of the
Republic of China (Taiwan) of which the Company holds
100% of the voting shares.
3. The amount of each loan granted to any single borrower
(including business relationship and short term financial needs
capital) must not exceed 5% of the total loanable capital; but
the amount of loan granted to the accommodator who ask for
the loans based on business relationship transactions with the
Company shall not exceed the total amount of business
transaction of the last operating cycle.
Before conducting fund loaning and loan application
operations, the Company shall carefully evaluate whether the
applicant meets the regulations in Paragraph 1 of Article 2 in
the Procedures. If the criteria are met, then the Company shall
calculate the individual’s aggregate amount including the one
in application. If the total amount already exceeds the loan
quotas calculated based on “business relationship transaction”
in that loan application point, then the excess of the amount of
loan application shall be classified under “short-term
financing” category, and the case shall be submitted to the
Board of Directors for resolution with a clear list of all loan
category and amount granted to the individual.
4. The aggregate amount of loan of a single borrower (including
business relationship and short-term financing capital) should
not exceed 10% of the total loanable capital of the Company.
43
No of
Article Article after Amendments Article before Amendments
The net worth described in the Procedures is referred to the latest
balance sheet equity attributable to the owners of the Company
which is attested by the certificated public accountant.
Article 5
Period and Interest Calculation Method for Loans Granted:
The loan period is limited to 1 year (including the extension of
deadline when expiration is reached), but if the company’s
operating cycle is longer than 1 year, subject to operating cycle.
When the period is due, the full amount of loan should be settled,
if there is still a need for loans, the borrower need to re-apply
under the regulations in this Operating Procedure. The method for
calculating interests is based on the benchmark interest rates with
some markup and the interests are calculated monthly, quarterly or
calculated at the loan due date. And the interest rate shall not be
lower than the highest borrowing interest rate from banks or the
funding cost of the Company.
Period and Interest Calculation Method for Loans Granted:
The loan period is limited to 1 year (including the extension of
deadline when expiration is reached), but if the company’s
operating cycle is longer than 1 year, subject to operating cycle.
When the period is due, the full amount of loan should be settled,
if there is still a need for loans, the borrower need to re-apply
under the regulations in this Operating Procedure. The method for
calculating interests is based on the benchmark interest rates with
some markup and the interests are calculated monthly, quarterly or
calculated at the loan due date.
Article 7
The evaluation procedure and report indicated in previous Article
should include:
1. The Necessity and reasonableness for granting the loans to
others.
2. Borrower credit status and risk assessment.
3. Impact on the Company’s business operations, financial
condition and shareholders’ equity
4. Whether collateral should be obtained and appraisal of the value
thereof.
The evaluation procedure and report indicated in previous Article
should include:
1. The Necessity and reasonableness for granting the loans to
others.
2. Borrower credit status and risk assessment.
3. Whether collateral should be obtained and appraisal of the value
thereof.
Article 8
Information Disclosure:
1. Regular Bulletin and Report Items:
Information Disclosure:
1. Regular Bulletin and Report Items:
44
No of
Article Article after Amendments Article before Amendments
The Accounting and Financial Department of the Company shall
announce and report the previous month's loan balances of the
Company and subsidiaries by the 10th day of each month in
compliance with the Regulations of the Financial Supervisory
Committee of the Executive Yuan.
2. Irregular Bulletin Items:
When the loans granted by the Company and its subsidiary reach
one of the following criteria, the Accounting and Financial
Department shall announce and report the matters on the date of
its occurrence:
(1) The aggregate balance of loans to others by the Company
and the Subsidiary reaches 20% or more of the net worth as
stated in the Company’s the latest financial statement.
(2) The balance of loans by the Company and the Subsidiary to
a single enterprise reaches 10% or more of the net worth as
stated in the Company’s the latest financial statement.
(3) The amount of new loans of funds by the Company or the
Subsidiaries reaches NT$10 million or more, and reaches 2
% or more of the Company's net worth as stated in its latest
financial statement.
The Company shall announce and report on behalf of the
Subsidiaries thereof that is not a public company of Republic of
China any matters that such subsidiary is required to announce
and report.
Any subsidiary of the Company shall provide the Accounting and
Financial Department of the Company with the written details
before or at least on the occurrence date, which shall be stipulated
in the “Operational Procedures for Loaning Funds to Others” of
each subsidiary.
The Accounting and Financial Department of the Company shall
announce and report the previous month's loan balances of the
Company and subsidiaries by the 10th day of each month in
compliance with the Regulations of the FS C.
2. Irregular Bulletin Items:
When the loans granted by the Company and its subsidiary reach
one of the following criteria, the Accounting and Financial
Department shall announce and report the matters within 2 days
from its occurrence:
(1) The aggregate balance of loans to others by the Company
and the Subsidiary reaches 20% or more of the net worth as
stated in the Company’s the latest financial statement.
(2) The balance of loans by the Company and the Subsidiary to
a single enterprise reaches 10% or more of the net worth as
stated in the Company’s the latest financial statement.
(3) The amount of new loans of funds by the Company or the
Subsidiaries reaches NT$10 million or more, and reaches 2
% or more of the Company's net worth as stated in its latest
financial statement.
The Company shall announce and report on behalf of any
subsidiary thereof that is not a public company of Republic of
China any matters that such subsidiary is required to announce
and report.
45
No of
Article Article after Amendments Article before Amendments
3. “Date of occurrence” in these Procedures means the date of
contract signing, date of payment, dates of boards of directors
resolutions, or other date that can confirm the counterparty and
monetary amount of the transaction, whichever date is earlier.
4. The company shall evaluate the status of its loans of funds and
reserve sufficient allowance for bad debts, and shall adequately
disclose the relevant information in the financial reports and
provide certified public accountants with relevant information for
implementation of necessary audit procedures.
Article 10
Should the Company’s manager or employee handling the fund
loaning business violated the “Regulations Governing Loaning of
Funds and Making of Endorsements/Guarantees by Public
Companies” bulletined by the Financial Supervisory Commission
of the Executive Yuan or the Procedures; he/she shall be dealt with
according to the Company’s “Regulations governing employee
rewards and punishment”.
If the fund is loaned to the Company’s related persons or
enterprises, the Procedures and “Regulations governing Related
Person Transaction” shall be followed and complied to handle the
case.
Should the Company’s manager or employee handling the fund
loaning business violated the “Regulations Governing Loaning of
Funds and Making of Endorsements/Guarantees by Public
Companies” bulletined by the FSC or the Procedures; he/she shall
be dealt with according to the Company’s “Regulations governing
employee rewards and punishment”.
If the fund is loaned to the Company’s related persons or
enterprises, the Procedures and “Regulations governing Related
Person Transaction” shall be followed and complied to handle the
case.
Article 11
Procedures for controlling and managing loans of funds to others by
subsidiaries:
If the Subsidiary of the Company is engaged in loaning funds to
others, it shall draft and follow its own “Internal audit mechanism”
and “Operational Procedure for Loaning Funds to Others”, and it
shall report to the Company’s Accounting and Financial
If the Subsidiary of the Company is engaged in loaning funds to
others, it should draft and follow its own “Internal audit
mechanism” and “Operating Procedure for Loaning Company
Funds”, and it shall report to the Company’s Accounting and
Financial Department in writing the situation of funds loaning to
others in last month on the fifth day of each month.
46
No of
Article Article after Amendments Article before Amendments
Department in writing the situation of funds loaning to others
within the prescribed time limit.
The Company’s Audit Department shall include Subsidiary’s fund
loaning operation as one of the audit item and list such audit report
as a necessary item in reporting audit business to the Board of
Directors and the Audit Committee.
The Company’s Audit Department shall include Subsidiary’s fund
loaning operation as one of the audit item and list such audit report
as a necessary item in reporting audit business to the Board of
Directors and the Audit Committee.
Article 12
The Procedures is decided by the Audit Committee and the Board
of Directors, and then it shall be enforced after it is submitted to
the Shareholders’ Meeting for approval. If any director expresses
the dissent and it is contained in the minutes or a written
statement, the Company shall submit the dissenting opinions to the
Shareholders’ Meeting for discussion. The same process shall be
followed for amendments to the Procedures.
When the Procedures is submitted to the Board of Directors for
discussion, the Board of Directors shall take into full consideration
each independent director's opinion; independent directors'
opinions specifically expressing assent or dissent and their reasons
for dissent shall be included in the Minutes of the Board of
Directors’ Meeting.
The Procedures is decided by the Audit Committee and the Board
of Directors, and then it shall be enforced after it is submitted to
the Shareholders’ Meeting for approval. If any director expresses
the dissent and it is contained in the minutes or a written
statement, the Company shall submit the dissenting opinions to the
Audit Committee and the Shareholders’ Meeting for discussion.
The same process shall be followed for amendments to the
Procedures.
When the Procedures is submitted to the Board of Directors for
discussion, the Board of Directors shall take into full consideration
each independent director's opinion; independent directors'
opinions specifically expressing assent or dissent and their reasons
for dissent shall be included in the minutes of the Board of
Directors’ Meeting.
47
Attachment 9 Chailease Holding Company Limited
Comparison Table of amendments to the “Operational Procedures for Endorsements/Guarantees”
No of
Article
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Article 5 The net worth described in the Procedures is referred to the
latest balance sheet equity attributable to the owners of the
Company which is attested by the certified public accountant.
Article 6 Before making an endorsement/guarantee for others, the
Company shall carefully evaluate the endorsed/guaranteed
company, including the amount, the duration, the reasons, the
credit status and collateral through the detailed reviewing
process. The Company can perform the endorsement/guarantee
only after the evaluation has been submitted to and approved by
the Board of Directors. The Chairman may be empowered by
the Company’s Board of Directors to approve a single
endorsement/guarantee within NT$ 3 billion amount; however,
the subsequent submission to the next Board of Directors'
meeting for ratification is required.
The detailed reviewing procedures including:
1. The necessity and reasonableness of endorsements /
guarantees.
2. Credit status and risk assessment of the entity for which the
endorsement/guarantee is made.
3. The impact on the Company's business operations, financial
condition, and shareholders' equity.
4. Whether collateral must be obtained and appraisal of the
value thereof.
Before making an endorsement/guarantee for others, the
Company shall carefully evaluate the endorsed/guaranteed
company, including the amount, the duration, the reasons, the
credit status and collateral through the detailed reviewing
process. The Company can perform the endorsement/guarantee
only after the evaluation has been submitted to and approved by
the Board of Directors. The Chairman may be empowered by
the Company’s Board of Directors to approve a single
endorsement/guarantee within a specific amount; however, the
subsequent submission to the next Board of Directors' meeting
for ratification is required.
The detailed reviewing procedures including:
1. The necessity and reasonableness of endorsements
/guarantees.
2. Credit status and risk assessment of the entity for which the
endorsement/guarantee is made.
3. The impact on the Company's business operations, financial
condition, and shareholders' equity.
4. Whether collateral must be obtained and appraisal of the
value thereof.
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5. For circumstances in which an entity for which the
Company makes any endorsement/guarantee is a subsidiary
whose net worth is lower than half of its paid-in capital, the
Company shall execute reviewing procedures and make the
report to the Chairman.
When the Company makes endorsements/guarantees to others,
the Board of Directors shall take into full consideration each
independent director's opinion; independent directors' opinions
specifically expressing assent or dissent and their reasons for
dissent shall be included in the Minutes of the Board of
Directors.
5. For circumstances in which an entity for which the
Company makes any endorsement/guarantee is a subsidiary
whose net worth is lower than half of its paid-in capital, the
Company shall execute reviewing procedures and make the
report to the Chairman.
Article 7 Operation Procedure
1. The in-charge department of the Company, which initiates
an endorsement/guarantee according to the Procedures, must
inform the Accounting and Financial Department of such
endorsement/guarantee activity. The Accounting and
Financial Department shall prepare a memorandum book for
all endorsement/guarantee activities and record the
following information in details: the entity for which the
endorsement/guarantee is made, the amount, the date of
approval by the board of directors or of authorization by the
Chairman, the date of the endorsement/guarantee, and the
matters that shall be carefully evaluated. Where as a result
of changes of condition, the entity for which an
endorsement/guarantee is made no longer meets the
requirements of the Procedures, or the amount of
endorsement/ guarantee exceeds the limit, the Company
shall adopt the rectification plans and submit the
rectification plans to Audit Committee, and shall complete
the rectification according to the timeframe set out in the
Operation Procedure
1. The in-charge department of the Company, which initiates
an endorsement/guarantee according to the Procedures,
must inform the Accounting and Financial Department of
such endorsement/guarantee activity. The Accounting and
Financial Department shall prepare a memorandum book
for all endorsement/guarantee activities and record the
following information in details: the entity for which the
endorsement/guarantee is made, the amount, the date of
approval by the board of directors or of authorization by
the Chairman, the date of the endorsement/guarantee, and
the matters that shall be carefully evaluated. Where as a
result of changes of condition, the entity for which an
endorsement/guarantee is made no longer meets the
requirements of the Procedures, or the amount of
endorsement/ guarantee exceeds the limit, the Company
shall adopt the rectification plans and submit the
rectification plans to Audit Committee, and shall complete
the rectification according to the timeframe set out in the
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plan.
2. Before making any endorsement/guarantee pursuant to
Article 3 paragraph 2, the Subsidiary in which the Company
holds, directly or indirectly, 90% or more of the voting
shares shall submit the proposed endorsement/guarantee to
the Company’s board of directors for a resolution, provided
that this restriction shall not apply to
endorsements/guarantees made between companies in which
the Company holds, directly or indirectly, 100% of the
voting shares.
3. For circumstances in which an entity for which the
Company makes any endorsement/guarantee is a subsidiary
whose net worth is lower than half of its paid-in capital, the
Business Management Department shall reviewing the
appropriation before making any endorsement/guarantee
pursuant to business condition of this subsidiary and
submitted to the Chairman for resolution quarterly.
In the case of the Subsidiary with shares having no par value
other than NT$10, for the paid-in capital in the calculation
under subparagraph 3 of the preceding paragraph, the sum of the
share capital plus paid-in capital in excess of par shall be
substituted.
plan.
2. Before making any endorsement/guarantee pursuant to
Article 3 paragraph 2, the Subsidiary in which the
Company holds, directly or indirectly, 90% or more of the
voting shares shall submit the proposed
endorsement/guarantee to the Company’s board of
directors for a resolution, provided that this restriction shall
not apply to endorsements/guarantees made between
companies in which the Company holds, directly or
indirectly, 100% of the voting shares.
3. For circumstances in which an entity for which the
Company makes any endorsement/guarantee is a subsidiary
whose net worth is lower than half of its paid-in capital, the
Business Management Department shall reviewing the
appropriation before making any endorsement/guarantee
pursuant to business condition of this subsidiary and
submitted to the Chairman for resolution quarterly.
Article 8 Information Disclosure
1. The Company shall announce and report the previous month's
balance of endorsements/guarantees of itself and its
Information Disclosure
1. The Company shall announce and report the previous month's
balance of endorsements/guarantees of itself and its
Subsidiaries by the 10th day of each month.
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Subsidiaries by the 10th day of each month.
2. The Accounting and Financial Department of the Company
shall announce and report such event at the date of
occurrence when the balance of endorsements/guarantees
reaches one of the following levels:
(1) The aggregate balance of endorsements / guarantees by
the Company and its Subsidiaries reaches 50 percent or
more of the Company's net worth as stated in its latest
financial statement.
(2) The balance of endorsements / guarantees by the
Company and its Subsidiaries for a single enterprise
reaches 20 percent or more of the Company's net worth
as stated in its latest financial statement.
(3) The balance of endorsements / guarantees by the
Company and its Subsidiaries for a single enterprise
reaches NT$10 million or more and the aggregate
amount of all endorsements/guarantees for, investment
a long-term nature in, and balance of loans to, such
enterprise reaches 30 percent or more of Company's net
worth as stated in its latest financial statement.
(4) The amount of new endorsements / guarantees made by
the Company or its Subsidiaries reaches NT$30 million
or more, and reaches 5 percent or more of the
2. The Accounting and Financial Department of the Company
shall announce and report such event at the date of
occurrence when the Company’s and its Subsidiaries’
balance of endorsements/guarantees reaches one of the
following levels:
(1) The aggregate balance of endorsements / guarantees by
the Company reaches 50 percent or more of the
Company's net worth as stated in its latest financial
statement.
(2) The balance of endorsements / guarantees by the
Company for a single enterprise reaches 20 percent or
more of the Company's net worth as stated in its latest
financial statement.
(3) The balance of endorsements / guarantees by the
Company for a single enterprise reaches NT$10 million
or more and the aggregate amount of all
endorsements/guarantees for, investment a long-term
nature in, and balance of loans to, such enterprise
reaches 30 percent or more of Company's net worth as
stated in its latest financial statement.
(4) The amount of new endorsements / guarantees made by
the Company reaches NT$30 million or more, and
reaches 5 percent or more of the Company's net worth
as stated in its latest financial statement.
3. The Company shall announce and report on behalf of any
Subsidiary thereof that is not a Company of the Republic of
China any matters that such Subsidiary is required to
announce and report pursuant to the fourth subparagraph of
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Company's net worth as stated in its latest financial
statement.
3. The Company shall announce and report on behalf of any
Subsidiary thereof that is not a Company of the Republic of
China any matters that such Subsidiary is required to
announce and report pursuant to the fourth subparagraph of
preceding paragraph. The balance of
endorsements/guarantees of the subsidiary shall be
calculated pursuant to the ratio occupied in the Company’s
net worth.
4.“Date of occurrence” in these Procedures means the date of
contract signing, date of payment, dates of Boards of
Directors resolutions, or other date that can confirm the
counterparty and monetary amount of the transaction,
whichever date is earlier.
5. The Company shall evaluate or record the contingent loss for
endorsements / guarantees, and shall adequately disclose
information on endorsements / guarantees in the financial
reports and provide certified public accountants with
relevant information for implementation of necessary audit
procedures.
preceding paragraph. The balance of
endorsements/guarantees of the subsidiary shall be
calculated pursuant to the ratio occupied in the Company’s
net worth.
Article 11 The in-charge department and the Subsidiaries of the Company,
which have made any endorsement/guarantee, shall provide the
Accounting and Financial Department of the Company with the
written details of endorsements/guarantees for the previous
month before the fifth day of each month.
The aggregate amount of endorsements/guarantees reaches the
standard of irregular for announce and report stipulated in the
The in-charge department and the Subsidiaries of the Company,
which have made any endorsement/guarantee, shall provide the
Accounting and Financial Department of the Company with the
written details of endorsements/guarantees for the previous
month before the fifth day of each month.
The aggregate amount of endorsements/guarantees reaches the
standard of irregular for announce and report stipulated by FSC,
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paragraph 2 of Article 8 in the Procedures, the in-charge
department and the Subsidiary of the Company, shall provide
the Accounting and Financial Department of the Company with
the written details before or at least on the occurrence date.
the in-charge department and the Subsidiary of the Company,
shall provide the Accounting and Financial Department of the
Company with the written details before on the occurrence date.
Article12
The Company’s managers or personnel in charge who violate
the “Regulations Governing Loaning of Funds and Making of
Endorsements/Guarantees by Public Companies” enacted by the
Financial Supervisory Commission of the Executive Yuan or the
Procedures shall be penalized in accordance with the
Company’s regulation on employee reward and punishments.
If the entity for which the endorsement/guarantee by the
Company is Company’s party or related company, the Company
shall process the matters in accordance with this Procedures or
the Operational Procedures for Party’s transaction.
The Company’s managers or personnel in charge who violate
the “Regulations Governing Loaning of Funds and Making of
Endorsements/Guarantees by Public Companies” enacted by
FSC or the Procedures shall be penalized in accordance with the
Company’s regulation on employee reward and punishments.
If the entity for which the endorsement/guarantee by the
Company is Company’s party or related company, the Company
shall process the matters in accordance with this Procedures or
the Operational Procedures for Party’s transaction.
Article 14 Where the Company needs to exceed the limits set out in the
Procedures to satisfy its business requirements, and where the
conditions set out in the Procedures are complied with, it shall
obtain approval from the board of directors and half or more of
the directors shall act as joint guarantors for any loss that may
be caused to the Company by the excess
endorsement/guarantee. It shall also amend the Procedures
accordingly and submit the same to the Shareholders' Meeting
Where the Company needs to exceed the limits set out in the
Procedures to satisfy its business requirements, and where the
conditions set out in the Procedures are complied with, it shall
obtain approval from the board of directors and half or more of
the directors shall act as joint guarantors for any loss that may
be caused to the Company by the excess
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for ratification after the fact. If the Shareholders' meeting does
not give consent, the Company shall adopt a plan to discharge
the amount in excess within a given time limit.
When the Company makes endorsements/guarantees for others,
it shall take into full consideration the opinions of each
independent director; independent directors' opinions
specifically expressing assent or dissent and the reasons for
dissent shall be included in the Minutes of the Board of
Directors’ Meeting.
endorsement/guarantee. It shall also amend the Procedures
accordingly and submit the same to the Shareholders' Meeting
for ratification after the fact. If the Shareholders' meeting does
not give consent, the Company shall adopt a plan to discharge
the amount in excess within a given time limit.
Article 15 After receiving approval of the Audit Committee and the Board
of Directors, the Procedures shall be submitted to the
Shareholders' Meeting for approval. If any director expresses
the dissent and it is contained in the minutes or a written
statement, the Company shall submit the dissenting opinions for
discussion by the Shareholders' Meeting. The same process shall
apply to any amendments of the Procedures.
When the Company submits this Procedures for discussion by
the Board of Directors, the Board of Directors shall take into
full consideration each independent director's opinions; the
independent directors' opinions specifically expressing assent or
dissent and the reasons for dissent shall be included in the
Minutes of the Board of Directors’ Meeting.
After receiving approval of the Audit Committee and the Board
of Directors, the Procedures shall be submitted to the Audit
Committee and the Shareholders' Meeting for approval. If any
director expresses the dissent and it is contained in the minutes
or a written statement, the Company shall submit the dissenting
opinions for discussion by the Shareholders' Meeting. The same
process shall apply to any amendments of the Procedures.
When the Company submits this Procedures for discussion by
the Board of Directors, the Board of Directors shall take into
full consideration each independent director's opinions; the
independent directors' opinions specifically expressing assent or
dissent and the reasons for dissent shall be included in the
Minutes of the Board of Directors’ Meeting.
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Attachment 10
Chailease Holding Company Limited
List of Directors’ New Positions in other Institutions
Title Name New positions
Beacon Hill Co., Ltd. Representative of
Corporate Director
Mr. Mao-Nan Chien Chairman of GigaMedia Limited
Wiedner Co., Ltd. Representative of
Corporate Director
Mr. Chi-Ching (Dirk) Chen Manager of Hoshin GigaMedia Center Inc., FunTown Branch
Director of GigaMedia Cloud Services Co., Ltd.
Independent Director Mr. Dar-Yeh Hwang Consulting Member, Central Deposit Insurance Corporation
Vice Chairman, Academic Committee of AFMA, Peking University
Independent Director Steven Jeremy Goodman Director and CEO of Teras Group Pte Ltd.
Independent Director Chin Fock Hong Director of Shared Services for Charities Ltd.
Director of Binjaitree