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1     To protect investors and implement the information disclosure, a public company acquiring and disposing of assets shall be required to comply with these Key Points.
2     These Key Points are handled in accordance with Item 2 of Paragraph 2 of Article 36 and Article 38 of Securities & Exchange Law.
3     The term "assets" as used in these Key Points shall include long and short term securities investments (which include stocks, government bonds, corporate bonds, domestic beneficiary certificate, foreign mutual fund, depositary receipts, etc.), real estate (which includes inventory of construction enterprise) and other fixed assets.
4     Unless the following situations apply, a public company acquiring or disposing of assets, in which any transactional amount or the accumulated amount of transactions with the same party within one year is NT$100,000,000 or more, or the purchase or sale of the same securities reaches 20% of its paid-in capital, shall place a public announcement and report to the Securities and Exchange Commission (as hereinafter "SEC") of the Ministry of Finance:
  1. The acquired and disposed assets are the machines and equipments which are for business use, the trading counterparties are not actual related parties, and individual transactional amount or the accumulated amount of transactions with the same party within one year does not reach NT$300,000,000 or more.
  2. Where the entity engages in investment as its exclusive business, to engage in the trading of securities on a centralized exchange market or OTC exchange.
  3. A public company which engages in the construction business and such company acquires or disposes real properties for the purpose of construction, the trading counterparties are not actual related parties, and the individual transactional amount or the accumulated amount of transactions with the same party within one year does not reaches NT$300,000,000 or more.
  4. Engaging in transaction of bonds with call or put conditions.
    The term "engages in investment as its exclusive business" as used in Item 2 of preceding Paragraph means that any public company uses "investment" as its scope of business recorded in its articles of incorporation or business license, or securities firms (dealers and underwriters), financial enterprises, or insurance enterprises which are able to engage in the investment in securities business pursuant to the provisions of Securities & Exchange Law, Banking Law, or Insurance Law.
    After a public company placed a public announcement and reported to the competent authority because its purchase or sale of the same securities on a centralized exchange market or OTC exchange within a year exceeds 20% of its paid-in capital or NT$100,000,000, if it again purchases or sells the same securities, and such accumulated transaction amount reaches NT$50,000,000, the company shall place a public announcement and report to the competent authority again.
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  1. A public company acquiring and disposing of assets, in which the transaction amount reaches the standard stipulated in Point IV of these Key Points, shall place a public announcement within two days from the date of the occurrence of events and enclose the newspapers recording the public announcement, contracts, appraisal or analysis reports and other related documents and report to the SEC; a public company whose stocks have been listed on the Taiwan Stock Exchange or OTC exchange, in addition to copying separately the documents of the public announcement to the Taiwan Stock Exchange Corporation, ROC OTC Securities Exchange, the Securities Dealers Association, and Securities & Futures Institute, shall also give the appraisal or analysis reports to Securities & Futures Institute for the public to review.
  2. The term "the date of the occurrence of events" as used in the preceding Paragraph, in principle means the date of contract signing, the date of payment, the date of consignment trading, the date of transfer, the date of resolution of board of directors or other date which can confirm the trading counterparty and trading amount (whichever is earlier); if a public company is engaged in foreign investments, it shall mean the above-said dates or the date of receiving the approval letter from the competent authority, whichever is earlier.
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    1. To engage in transaction of securities on a centralized exchange market or OTC exchange, a public announcement of the following items shall be made (See Attachment I: the form of a public announcement)
    1. Name of securities.
    2. Date of transaction.
    3. Volume of transaction, price per unit, and total transaction price.
    4. The loss or profit from the disposal (acquisition of securities is not required to be listed).
    5. Current holding in the securities being traded and shareholding percentage.
    6. The current ratio of long or short term securities investment to the total assets and shareholder's equity as shown in the most recent financial statement, the status of the restriction of rights, and the operational capital as shown in the most recent financial statement.
    7. Specific purpose of the acquisition or disposal.
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  1. Name and nature of transacted asset (If the asset is real property, the address and tract number shall be indicated).
  2. The date of the occurrence of the event.
  3. Volume of transaction unit, price per unit, total transaction price.
  4. The special issuance terms of the securities, for example: interest, rate of dividends, guarantee provided or not, etc. (an asset which is not bonds or preferred stocks is not required to be listed).
  5. The trading counterparty and its relationship with the company (If the trading counterparty is a natural person, and is not the actual related party of the company, the name of the trading counterparty is not required to be disclosed).
  6. Where the trading counterparty is an actual related party, a public announcement shall also include the reason for choosing the related party as trading counterparty and the identity of the previous owner (including its relationship with the company and the trading counterparty), price of transfer and the date of acquisition.
  7. The anticipated loss or profit from the disposal (acquisition of Assets is not required to be listed).
  8. Terms of delivery or payment.
  9. The manner of decision of this transaction (such as tenders invitation, bids comparison or price negotiation), the reference basis for the decision on price and department responsible for decision making.
  10. Names of professional appraisal institutions or securities analysis specialists and their appraisal or analysis opinions. If appraisal reports can not be acquired in time, the reason for not being able to obtain such report shall be indicated. If the situations of the provision of Sub-item 1 or 2 of Item 1 of Paragraph 1 of Point VII of these Key Points exist, the reason of difference and the opinion of the auditing certified public accountant shall be placed into a public announcement.
  11. Current holding of the securities being transacted and its shareholding ratio (The transaction which does not belong to the transaction of securities is not required to be listed).
  12. The current ratio of long or short term securities investments to the total assets and shareholders equity of the most recent financial statement, the status of restriction of rights, and the operational capital as shown in the most recent financial statement.
  13. If there is broker, and the broker is an actual related party, the identity of the broker and the broker's fee to be paid.
  14. Specific purpose or use for the acquisition or disposition.
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  1. A public company acquiring or disposing assets shall, according to the kinds of assets, respectively mandate objective, fair, unprejudiced, and independent experts to submit their reports pursuant to the following provisions:
    1. In acquiring or disposing real properties or other fixed assets, unless otherwise acquired from a government institution, commissioned others to build on its own land, or acquired the machines and equipments for business use from unrelated parties, the company shall consult in advance professional appraisal institutions to submit reports (See Attachment IV: the item required to be recorded on appraisal reports of real property), and is required to comply with the following provisions:
      1. If the difference between the appraisal of appraisal institutions and transaction amount is 20% or more, a certified public accountant shall be retained to handle the matter pursuant to the provisions of Article 13 of the statements of Financial Accounting Standards No. 20 and express specific opinion on the reason for the difference and the appropriateness of the transaction price.
      2. If the transaction amount is NT$1,000,000,000 or more, two or more professional appraisal institutions shall be retained to conduct an appraisal. If the difference of appraisal between two or more appraisal institutions reaches 10% of transaction amount or more, a certified public accountant shall handle the matter pursuant to Article 13 of the statements of Financial Accounting Standards No. 20 and express specific opinion as to the appropriateness of the transaction price.
      3. If the appraisal is conducted before the date of contract formation, the date of submitting the report and the date of contract formation shall not exceed three months; provided, however, that if the Government Assessed Current Land Price of the same period is used and the assessment is not more than six months old, the original appraisal institution may submit the opinion to supplement it.
      4. If the appraisal report or the opinion of the Certified Public accountant referred to Item 1 or 2 cannot be acquired in time with valid reason, it shall be acquired within two weeks from the date of the occurrence of the event, and the original transaction amount and appraisal report shall be supplementally placed into a public announcement. If the situations referred to in the preceding items 1 or 2 occur, the matter shall be reported to competent authorities after placing a public announcement on the reason of difference and the opinion of certified public accountant.
      5. If an appraisal institution submits an "assessed current value report" or "evaluation report" to substitute for an appraisal report, the content thereof is still required to comply with the above-referred provisions on items required to be recorded in the appraisal report.
        The term "professional appraisal institutions", means that the business of appraising real property or other fixed asset is recorded as a scope of business in its articles of incorporation or business license, and that the appraisal institution or appraisal personnel and the transacting parties are not related parties or actual related parties as defined in the Statements of Financial Accounting Standards No. 6.
    2. Where securities investments are acquired or disposed, unless they are otherwise transacted on a centralized exchange market or OTC exchange, or is an open-ended domestic beneficiary certificates or foreign mutual funds, or an original subscription of stocks (including subscription of stocks to incorporate the company and subscription of new capitalization shares by cash), securities analysis experts shall be retained to express their opinions on the reasonableness of transaction price prior to the date of transaction. While the securities analysis experts express their opinions, the basis of their judgment and proof of their qualification shall be stated in detail.
      The term "securities analysis experts" means the parties who engage in the related research of securities, have the excellent grades, and have proper proof documents, or a person in charge of the same business for five years or more, and further that these analysts and the transacting parties are not related parties or actual related parties as stipulated in Statements of Financial Accounting Standards No. 6.
  2. A public company which acquires real property from an actual related party shall enclose related documents of the computed cost of real property and the examining opinion of the certified public accountant and report to the Securities and Exchange Commission pursuant to Point IV of "Handling Key Points for Public Companies Purchasing Real Property from Related Parties" promulgated by the Securities & Exchange Commission on August 25, 1994 per Ruling Ref. No. Taiwan-Finance-Securities-(I)-01667. Transaction amount reaching the standard of Point IV of these Key Points shall be further publicly announced.
  3. A public company whose stocks are publicly listed on Taiwan Stock Exchange or OTC Exchange that has transaction in bonds with put or call conditions shall collect the information on the average daily balance, balance for the previous month, and the loss and profit on property dispositions, and business operation condition every month, and place such informations in a public announcement and report to the competent authority.
  4. A public company which will acquire real property by the ways of mandating others to build on its land, cooperatively building with others to split the units, cooperatively building with others to acquire the proportion of profits, or cooperatively building with others to separately sell the units, and if the value of each individual contract mandating others to build, or cooperation contracts, or the total trading with the same counterparty at different times within one year is 20% or more of its paid-in capital or is NT$500,000,000 or more, it shall handle the matter in accordance with the provisions of Point V of these Key Points, and place the following important contents of the contract into a public announcement:
    1. Type of contract.
    2. The date of occurrence of the event.
    3. The contract counterparty and the relationship between it and the company.
    4. The major contents of the contract (including amount of contract and the starting and end date of contract), restrictive terms and other important agreed matters.
    5. Name of professional appraisal institution and the results of its appraisal.
    6. Specific purpose of acquisition
  5. Where a subsidiary is not a domestic public company, if the subsidiary acquiring or disposing of assets reaches the standard of these Key Points required to place a public announcement and report to the competent authorities, the parent company shall place a public announcement, report to the competent authorities and transmit the required copies.
  6. Where any item required to be placed into a public announcement pursuant to these provisions is not placed in the announcement and it is required to be supplemented, the whole announcement shall be remade and placed into a public announcement and reported to the competent authority.
  7. Government enterprises shall not be required to prescribe the "Handling Procedure for Acquiring or Disposing of Assets" if it falls under the provision of "Statute Governing Audit of Government Agencies' Construction/Engineering Work and Purchase, Order and Sale of Properties". However, a public announcement and a report to the competent authority shall be made pursuant to these provisions, and they can be substituted by the public announcement of public tender invitations or disposal of assets, and the appraisal or analysis reports need not be included.
  8. A public company acquiring or disposing of assets reaching the standard required to place a public announcement and report to the competent authority as stipulated in Point IV of these Key Points, where its trading counterparties are actual related parties, it shall disclose in the notes section of financial statements the contests of the public announcement, and report to the shareholders meeting.
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  1. A public company shall prescribe the "Handling Procedure for Acquiring or Disposing of Assets" in accordance with the provisions of the preceding points, and report to the shareholders meeting after the resolution of the board of directors. The Handling Procedure shall at a minimum be recorded with the following contents:
    1. Procedure of evaluation and operation.
    2. Procedure for deciding transaction terms (including way of deciding price, basis of reference, and level of management authorization).
    3. Implementing department
    4. Procedure of placing a public announcement and reporting to the competent authority.
    5. Scope and amount of investment.
    6. Other items required to be handled pursuant to these Key Points.
  2. The total amount of real property a public company may purchase for non-business use or the total amount of securities and the limitation on the amount of investment in individual securities shall be placed into "Handling Procedure for Acquiring or Disposing of Assets" after each respective amount has been set by the boards of directors.