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1     Basis:
    These Principles are adopted pursuant to Article 8 of the Taipei Exchange (TPEx) Rules Governing Information Reporting by Companies with TPEx listed Securities.
2     Name of the Special Section:
    Pursuant to Article 8 of the aforementioned Rules Governing Information Reporting, the TPEx may, if it deems necessary, set up a special section on its designated Internet information reporting system, and publish thereon summarized financial information compiled from the information reported by companies with TPEx listed securities to bring such information to the attention of investors. The name of the special section is the "Key Financials Section."
3     Purpose:
    The content of the Key Financials Section is taken from the data that the companies input into the Market Observation Post System (MOPS). If there is any false representation in the disclosed information, each such company shall be liable in accordance with law. The Key Financials Section only provides a compilation of financial key points of the information disclosed on the MOPS, for users' easy reference, and to remind and alert investors, and reinforce early-warning functions. Investors shall still carefully review the information related to the financial and business operations of each such company in the MOPS prior to making any investment.
4     Principles for Handling Information Disclosure
  1. Disclosure Items:
    1. The content of the Key Financials Section comprises (1) industry categories, (2) ticker codes, (3) company name, and (4) net worth per share, and also includes itemized information based on the following indicators:
      Indicator 1: Where the trading method is altered or trading is suspended. ("trading suspended" refers to suspension of trading pursuant to Article 12-1 of the TPEx Rules Governing Securities Trading on the TPEx)
      Indicator 2: Where the financial report for the most recent period shows net worth per share lower than NT$10, and deficits for the most recent 3 consecutive years.
      Indicator 3: Where the financial report for the most recent period shows that net worth per share is lower than NT$10, the debt ratio is higher than 60%, and the current ratio is lower than 1 (excluding financial and insurance enterprises).
      Indicator 4: Where the financial report for the most recent period shows that net worth per share is lower than NT$10, and the net cash flows from operating activities for the most recent 2 years and for the most recent period are both negative.
      Indicator 5: Where the share pledge ratio on shareholding of all directors, supervisors, and 10% or greater shareholders reaches 90% or more for the most recent month.
      Indicator 6: Where the balance of loans to others of the most recent month accounts for 30% or more of the net worth on the most recent financial report (excluding financial and insurance enterprises).
      Indicator 7: Where the balance of endorsements and guarantees for the most recent month accounts for 150% or more of the net worth on the most recent financial report (excluding financial and insurance enterprises).
      Indicator 8: Where the shareholding percentage of the directors or supervisors has been insufficient for 3 consecutive months.
      Indicator 9: Where any of the following circumstances exists:
      1. Material deficiency in the design or operation of the internal control system.
      2. Audit or review report issued by a certified public accountant (CPA) stating substantial uncertainity about the ability to continue as a going concern.
      3. Financial report for the most recent period showing current ratio lower than 1, debt ratio higher than 60%, and high-liquidity assets lower than 50% of the sum of short-term borrowings, short-term notes payable, and long-term liabilities due within 1 year (financial and insurance enterprises may be exempted from the application of this item).
      4. Relevant data showing substantial doubt about asset preservation and debt repayment, or a likelihood of material adverse impact on shareholder equity.
      5. Where the financial report for the most recent period shows net worth per share lower than NT$10, and the number of common shares listed on the TPEx is less than 50% of the total common shares issued by the issuer.
      6. In the case of a TPEx primary listed company, the financial report for the most recent period shows that the operating revenue and the accounts receivable turnover as compared to those in the same period of the preceding year have declined by 50% or more and 30% or more, respectively, or alternatively, that the operating revenue and the inventory turnover as compared to those in the same period of the preceding year have declined by 50% or more and 30% or more, respectively.
      7. In the case of a TPEx primary listed company, the financial report for the most recent period shows that the operating revenue and the net income before tax as compared to those in the same period of the preceding year have declined by 30% or more and 50% or more, respectively, and the total amount of net income before tax for the most recent four quarters is below NT$4 million.
      8. A TPEx primary listed company has failed to duly designate an agent for litigious and non-litigious matters.
      9. Other information that the TPEx, in its overall consideration, considers should be disclosed.
    2. For the purposes of Indicator 9, "high-liquidity assets" means cash and cash equivalents, financial assets at fair value through profit or loss – current, financial assets at fair value through other comprehensive income – current, and non-current assets that are TWSE or TPEx listed securities (including unrealized valuation amounts).
    3. The TPEx may make adjustments to the relevant indicators in the Key Financials Section based on assessment on the general market environment, in order to alert users and improve early-warning efficiency.
    4. "Net worth" in these Principles means the equity attributable to owners of the parent on the balance sheet prepared under the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry. In the case of a company with shares having no par value or a par value other than NT$10, accumulated earnings (or accumulated deficit) will replace net worth per share in the abovementioned disclosures, and accumulated deficit will replace net worth per share lower than NT$10 as the screening criteria for the abovementioned indicators.
  2. Disclosure Method:
    1. When information disclosed in the Key Financials Section meets the conditions triggering any of the abovementioned indicators, it shall be marked in red to remind users to pay attention to the difference.
    2. If the information under any indicator meets any of the following conditions, the red marking shall be removed:
      1. Indicator 1: the reason for the altered trading method or suspension of trading is eliminated.
      2. Indicators 2 to 4: The financial report for the most recent period, audited or reviewed by the CPA, is found by the TPEx to be free of the circumstances which triggered the indicator.
      3. Indicator 5: The share pledge ratio filed for the most recent month does not reach the amount triggering the indicator.
      4. Indicators 6 to 8: The data filed for the most recent month is found by the TPEx to be free of the circumstances triggering the indicator.
      5. Indicator 9: The financial report for the most recent period, audited or reviewed by the CPA, or any other relevant data, is found by the TPEx to be free of the circumstances triggering the indicator.
    3. When any of the indicators 2, 3, and 4 is marked in red in the Key Financials Section, the information regarding net worth per share in the Key Financials Section shall also be marked in red.
    4. The numeric values under each indicator shall be in parameter configuration, so that they can be flexibly adjusted as necessary.
  3. Time for Information Updates:
  4. Information disclosed in the Key Financials Section is from the content of the financial report for the most recent period that a company has filed and reported, and any other of the most recent information that a company has disclosed on the MOPS. Such information is automatically updated every night through the computer system, and the latest information is disclosed on the MOPS at midnight (00:00) of the following day.
5     Approval and Amendment of the Principles:
    These Principles, and any amendments hereto, shall be implemented following submission to and approval by the TPEx president.