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These Supplemental Directions shall apply where any of the following circumstances exists with respect to the financial reports for the most recent 2 fiscal years for a public company applying for listing of its stock on the Taipei Exchange (TPEx):
- Its operating revenue derived from construction business represents 40 percent or more of its total operating revenue.
- Its gross profit derived from construction business represents 40 percent or greater of its total gross profit.
- Its operating revenue or gross profit derived from construction business is more than that derived from other business items.
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A construction company applying for TPEx listing of its stock shall meet the following requirements:
- Five full fiscal years shall have elapsed since its incorporation.
- The amounts of its year-end paid-in capital shall be NT$200 million or more for the most recent 2 fiscal years.
- The equity attributable to owners of the parent shown in the financial reports for the most recent period, and for the most recent fiscal year, shall reach 30 percent or more of the total value of its assets.
- The total net value of buildings and land held for sale and investment property shown in the financial reports for the most recent period and for the most recent fiscal year shall not exceed 70 percent of its net worth; provided that if the company has obtained the use license for less than one year, or where the company holds superficies rights and any construction may be leased but not sold, whereby such construction is reclassified under investment property, or the lease-out rate of the investment property reaches 50 percent or higher, such units or land may be excluded from the calculation.
- Its operating income and net income before tax for each of the most recent 3 fiscal years shall be in positive figures.
- Its profitability, after imputed calculation and deduction of the income and gross profit derived from the following activities by certified public accountants, remains in compliance with TPEx listing regulations:
- Purchase of completed or uncompleted (referring to those for which 40 percent or more of the total construction cost has already been invested) construction projects by others.
- Purchase or sale of bare land or buildings already built.
- Acquisition and subsequent sale of either land or buildings originally owned by the counterparty/parties as co-contractor.
- Sale of buildings or land to a related party.
- Where pro forma income statements for the most recent 3 fiscal years that are prepared by the completed-contract method where all income accounts are posted based on the percentage-of-completion method, or by the completed-contract method and the percentage-of-completion method, as the case may be, where only a portion of income accounts are posted based on the percentage-of-completion method, or by the percentage-of-completion method where all income accounts are posted based on the completed-contract method, and the above have been audited by certified public accountants, and where their evaluation by the recommending securities firm in conjunction with the original income statements shows that the construction company's profitability meets requirements under regulations governing TPEx listing.
The term "lease-out rate of the investment property" as used in paragraph 1, subparagraph 4 shall mean the ratio, in an individual construction project, of the floor area that is leased out under already-signed-and-effective lease(s) to the total floor area available for leasing. If the lease-out rate of the investment property referred to in the preceding paragraph reaches 50 percent or more, the recommending securities firm shall evaluate and explain the necessity and reasonableness of the applicant company's classification of the investment property, including, with respect to the purpose of the leasing project, whether the planning, motivation for leasing, decision-making process, counterparty(ies), lease period(s), agreement content, and terms and conditions of the transaction(s) are reasonable, and whether the income is long-term, stable, regular income.
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When applying for TPEx listing under the circumstance that the contractor company undertaking construction projects from the construction company during the most recent 2 fiscal years is a related party thereof, or that a contractor company undertakes construction products from the construction company in an annual amount of over NT200 million and of 10 percent or more of the operating revenue of the contractor company, the construction company shall meet the following requirements:
- The contractor company shall meet the following criteria:
- It shall be a Class A construction firm; and
- Its financial reports and reports on the gross profit margin gained from each individual project in the most recent 2 fiscal years shall have been jointly audited and attested by two certified public accountants of an joint accounting firm.
- A construction company shall annex in its application document for TPEx listing of its stock the contractor company's financial report for the most recent 2 fiscal years that have been audited and attested by certified public accountants, together with the construction company's and the contractor company's analyses of gross profit margin gained from each individual project. There shall not have been any irregularity in its gross profit margin for each individual project with that contractor company within the most recent 2 fiscal years.
- During the most recent 2 fiscal years, a professional institution has issued a report addressing each of the contracting process, contract pricing, and payment terms for the construction company's projects and has evaluated the same as reasonable.
- During the most recent 2 years, the contractor company has not violated any relevant building and construction acts or regulations, or breached any construction contracts between it and the construction company.
- During the most recent 2 years, there shall not have existed between the construction company and the contractor the circumstance specified in Article 10, paragraph 1, subparagraph 2 of the Rules Governing the Review of Securities for Trading on the TPEx.
- The construction company does not have unusual fund transfers with the contractor company.
The term "contractor company" as used herein means a contractor engaged in construction and civil engineering in accordance with the Regulations Governing the Construction Industry prescribed by the Ministry of the Interior.
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[deleted]
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Calculation of Periods:
- The term "the most recent 2 fiscal years" as used in 3.(3) hereof means the 2-year period terminating on the day on which the TPEx receives and handles the application for TPEx listing of such stock, provided that if there is a violation of relevant acts, regulations, or contracts, the period from submitting of the contract for TPEx listing to the date on which a letter is issued to notify the issuer of TPEx agreement to TPEx trading of the stock shall also be included.
- (Deleted)
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These Supplemental Directions shall not apply to public enterprises.
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These Supplemental Directions, and any amendments thereto, shall take effect after the board of directors of the TPEx has voted its approval and filed them with the competent authority for review and recordation.
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