One.
Letter to Shareholders
1
Two.
Company Profile
3
I.
Date of incorporation
4
II.
Company history
4
Three. Corporate Governance Report I.
Organization
II.
Information regarding directors, supervisors, management
6 7 10
team and ranch managers III.
Corporate governance practices and status of compliance
49
IV.
Independent auditor fees
70
V.
Change in status of independent auditors
70
VI.
Disclosure of any instance of a company director or
70
supervisor being hired by the independent auditing firm or its affiliates over the past year VII.
Changes in shares held and pledged by directors,
70
supervisors and major shareholders holding over 10% of outstanding shares VIII.
Information regarding whether top 10 shareholders are
77
related parties as defined by Financial Accounting Standard #6 IX.
Consolidated shareholdings
Four. Financing Status
77 78
I.
Capital and shares
79
II.
Corporate bonds
81
III.
Preferred shares
82
IV.
Global depository receipts (GDRs)
82
V.
Employee stock options
82
VI.
Mergers and acquisitions (M&A)
82
VII.
Implementation of capital expenditure plans
82
Five. Operational Highlights
Six.
83
I.
Business activities
84
II.
Market overview and dynamics
88
III.
Employee demographics
93
IV.
Environmental protection information and expenditures
93
V.
Labor relations
93
VI.
Important contracts
96
Financial Information
98
I.
Five-year condensed balance sheet and income statement
99
II.
Five-year financial analysis
101
III.
Financial statements
103
IV.
Solvency issues faced by the company and affiliates, and any
172
financial impact Seven. Financial Status, Operating Results, and Risk Management
173
I.
Financial position
174
II.
Operating results
175
III.
Cash flow
175
IV.
Major capital expenditures
176
V.
Investment strategies
176
VI.
Analysis and assessment of risk-related issues
177
VII.
Other significant events
182
Eight. Special Notes
183
I.
Information regarding affiliates
184
II.
Private placement securities
187
III.
Shares of the company held or disposed of by subsidiaries
188
IV.
Other supplementary information or explanation
188
V.
Significant issues during the past year and as of publication of
188
this annual report which might affect shareholder`s equity or price of shares pursuant to Item 2, paragraph 2, Article 36 of the Securities and Exchange Law
1
2
Reviewing the domestic and international economic situation in 2010, all countries continued to show a strong return to growth from lows in the previous year. Growth slowed in the second half of the year due to excessive rates on sovereign debt for Greek, Ireland and other Euro countries, and the implementation of a second round of quantitative easing (QE2) in the United States, leading to an economic imbalance between emerging and developed countries. However annual economic growth for the world’s major countries averaged 6.04%, with Asian newly-emerging nations achieving annual growth rates of 8.34%. Taiwan’s economy was boosted by substantial growth in exports, achieving annual growth rate of 10.82%. As economies rebounded, national currency intervention policies were gradually withdrawn, oil and gold prices rose along with interest rates and inflation, all of which had an effect on stock market performance. However, global stock markets still grew among high volatility, with the world’s major stock markets growing an average rate of 12.16% for the year. In the first half of 2010, Taiwan’s main stock market index dropped to 7,071, its lowest point in six months, dragged down by rises in gold, oil and international agricultural commodity prices, along with interest rate hiked by the central bank of the Republic of China (Taiwan). However, global stock indices began to rise in the second half, with foreign investors flooding into Taiwan with the announcement of the “Early Harvest” list for the manufacturing sector under the Economic Cooperation Framework Agreement (ECFA) and China’s “The 12th Five-year Plan”, the TAIEX reached an annual highest of 8,972 at the end of December, an increase of 1,900 for an annual growth rate of 9.58%. Overall, domestic securities had an eventful and up and down year, but still ended 2010 on a rising trend. In 2010 Yuanta Securities had consolidated total revenue of NT$14.971 billion, with after-tax profit of NT$5.02 billion, putting us significantly ahead of our industry competition in terms of year-on-year growth. Key performance indicators include: •Brokerage market share reached 11.19%, far ahead of our closest competitor at 3.22%; •From October (when the operation was brought back in-house) to December, margin lending and other credit transactions had average monthly financing of NT$49.688 billion for a 13.11% market share for the month; the average monthly margin balance was NT$5.505 billion for a 15.49% market share for the month; significantly ahead of our competitors in both measures; •Issues of warrants reached NT$24.663 billion for a market share of 15.11%, significantly ahead of our closest competitor at 5.67% •Investment bank underwriting (IPO/SPO) totaled NT$21.318 billion for a market share of 15.28%; in addition to advising many international companies in their first Taiwan listings, we secured industry leading IPO for IML Inc. •Our sub-brokerage led the securities industry with a market share of 7.46%. While creating excellent performance, Yuanta Securities has continued to strengthen corporate governance. In October, Yuanta Securities established a compensation committee to assist the board of directors in developing a fair salary structure and system, and to review Yuanta Securities’ overall human resources strategy. In addition, in compliance with the Yuanta Financial Holdings’ “Corporate Social Responsibility Policy and Practice” guidelines, Yuanta Securities is actively involved in activities to serve the community and maintain social welfare. In 2010, Taiwan Ratings gave Yuanta Securities a twAA- rating, with a “positive” ratings outlook, noting that Yuanta Securities has “excellent capital standards for its risk structure”, “is the obvious leader in Taiwan’s securities industry”, and that our “service coverage is better distributed than the competition”. Fitch Ratings gave Yuanta Securities an AA-(twn) rating, and a grade of B/C, the highest among all domestic securities firms, and a ratings outlook of “stable”. Over the years, Yuanta Securities’ operational performance has been recognized by the international financial media. In 2010, Asiamoney awarded Yuanta Securities seven honors including “Best Equity House in Taiwan in 2010”, “Best Debt House in Taiwan”,“ Best Local Brokerage in Taiwan”, “Best Research Coverage for small Caps”, “Most Improved Brokerage over past 12 Months”, “Most Independent Research Brokerage”, and “Best Sales Trading”. Finance Asia named Yuanta Securities “Best Broker in Taiwan in 2010”, while The Asset named us “Best Warrant Issuer in Taiwan”. It’s also worth mentioning that in November Yuanta Securities was awarded the “Job Creation Contribution award” by Executive Yuan, in recognition of Yuanta Securities’ cooperation with the government to create new employment opportunities and contributions to the care of vulnerable groups, as demonstrated by Yuanta Securities’ pledge to “Take from the community, give back to society”. Looking ahead, Yuanta Securities will continue to strengthen the development of each business unit, carefully implement internal audit/control and risk management, instill a spirit of solid corporate governance, actively adjust international coverage, expand business in Greater China, develop cooperation with mainland China brokerages in line with official government policy, and consistently execute our long-term Greater China blueprint.
3
4
I. Date of incorporation: June 26, 1996 II. Company history 1996 In June 1996, the government approved the establishment the company with paid-in capital of NT$1.00 bn. In August 1996 the company formally commenced operations as a proprietary bond trader. 1997 August of 1997 saw the company name changed to Fuhwa Securities Co. reflecting the widening range of services the company provided. In September, capital was increased by NT$332 mn and an additional public offering was carried out, following the merger with Shinong Securities Co., Ltd., bringing the total paid-in capital to NT$1.33 bn. In October, the company began to operate as an integrated securities firm offering securities brokerage, trading, underwriting and registrar services. 1998 A Hsinchu branch was opened in January 1998. In February, a capital increase of NT$2.67 billion boosted total paid-in capital to NT$4.00 bn. In the same month, the Jhenggong, Facai, Fuying, Yingge, Taoyuan, Dayi, Yongkang, Gaofu, Linyuan, and Jyuguang branches were opened. In May, the Jhanghua, Dasin, Dongtai, Sanmin, and Dunbei branches are opened, followed by the Nantou, Lujhu, and Jhubei branches in June, and the Sanduo branch in August. In September, the Miaoli and Shilin branches were opened, followed by the Siluo branch in October. Following this, headquarters and branch offices started to provide IB (Introducing Broker) services on a phased basis. In November the Guoyu, Jhushan, and Dalin branches were opened. 1999 In January 1999, the Dali, Jhongde, and Taiping branches were established. In August the Sanduo branch was renamed Cianjhen branch. In October, the Dasheng branch was renamed as the Taichung branch. In November, the company began conducting securities transactions electronically. 2000 In March 2000, Fuhwa Holdings (incorporated in the British Virgin Islands) was established and the Kinmen branch was opened. Capital was increased by NT$924.02 mn for a total paid-in capital of NT$4.92 bn following the acquisition of Everwell Securities in April, while the Yongsin, Songshan, Mengjia, Tianmu, and Dongmen branched open. In July, the Shueili and Fongyuan branches are opened. A capital increase of NT$358.99 mn sourced from earnings and capital reserves in August brings total paid-in capital to NT$5.28 bn. Fuhwa Securities (Hong Kong) is also founded. 2001 In January 2001 the company begins to engage in securities-related proprietary futures trading. The Shalu branch opened in the same month, followed by the Sinsing branch in June. A capital increase of NT$327 mn out of earnings, employee bonuses, and capital reserves as well as a further capital increase by NT$600 mn in cash brings paid-in capital to NT$6.21 bn. In November the company began to accept orders to buy and sell foreign securities (sub-brokerage), while the Pingdong, Pingnan, Chaojhou, and Cishan branches opened, and the Fushan branch closed. In December, an EGM (Extraordinary shareholders’ meeting) sees the approval of Yuanta Securities and Fuhwa Securities Finance jointly establishing Fuhwa Financial Holding Co., Ltd. In the same month the Jiali, Shanhua and Guiren branches are added, while the Shueili branch was closed. 2002 In January 2002, Fuhwa Investment Management (incorporated in the British Virgin Islands) was set up and officially brought into Fuhwa Financial Holdings as a subsidiary in February. In March, the Datung branch was opened. In September, a capital decrease of NT$257.01 mn was carried out through the cancellation of treasury shares, reducing total paid-in capital to NT$5.95 bn. A NT$1.00 bn cash capital increase in October increased paid-in capital to NT$6.95 bn. In December, six new branches opened, including the Shatian, Situn and Dajia branches. 2003 In April 2003, the Taipei branch was opened, while the Shalu branch was closed in June. A new branch opened in Toufen in July. 2004 In January 2004, the Dadu branch is renamed as the Tainan branch. The Guting branch is opened in February. Another capital increase of cash totaling NT$1.00 bn in March increases paid-in capital to NT$7.95 bn. Also in March the Fuxing and Dalong branches are opened, followed by the World Trade
5
Center branch in April. The Minzu, Zihyou. Huwei and Xindian branches opened their doors in May, followed by the Banciao branch in June. In August, Fuhwa Futures Management Co. is established. In September, a NT$460 mn capital increase (from earnings), raised paid-in capital to a total of NT$8.41 bn. In October, the Yongsin branch closed down. In December, the company’s designated operating funds for the proprietary trading of securities and futures was increased by NT$600 mn. 2005 In April 2005, a NT$489.95 mn capital increase (sourced from earnings) increased paid-in capital to NT$8.90 bn. In August, Fuhwa Securities (Hong Kong) was dissolved. In September, the Sanmin branch ceased operations, followed by the Guting branch in October and the Tainan and Fuxing branches in November. 2006 In January 2006, the Chenggong, Toufen, Dajia and Banciao branches are closed. A cash capital increase of NT$1.50 bn brings total paid-in capital to NT$10.40 bn. In March, the Cianjhen branch ceases operations and Fuhwa Investment Management (BVI) is dissolved. In October, Fuhwa Futures Management ceases operations and is dissolved. 2007 In June, the company changed its name to Yuanta Securities; Yuanta Securities then merged with Yuanta Core Pacific Securities, with Yuanta Securities being the successor company. Post-merger paid-in capital is valued at NT$69.68 bn. Following the merger, capital is decreased by NT$16.00 bn in September, reducing post-merger capital to NT$53.68 bn. At the same time, Judy Tu Ma is elected Chairperson. In order to attain synergies within the Yuanta Group, holdings in Yuanta Securities Investment Consulting and Yuanta Futures are sold to Yuanta Financial Holdings Company, making them wholly-owned subsidiaries of Yuanta FHC. Following the merger, the number of branches totals 149, but this was cut to 145 by year-end. 2008 In February, Yuanta Securities participated in the issuance of three equity warrants in Singapore, becoming the first securities firm in Taiwan to participate in an overseas equity warrant issuance. In March, the Stock Registrar Department moved to Chengde Road. In July, Yuanta Securities implemented a capital reduction of NTD 10.00 bn, bringing its equity (post-reduction) to NTD 43.68 bn. In September, Yuanta Securities obtained a letter of permission from the governing authority to perform wealth management services. Branch offices that were closed this year: Word Trade Center branch, northern Taichung branch, southern Chongcing branch (January), Sindian branch (August), Taichung downtown branch (September) for a total of five branches, bringing the total number of branch offices to 140. Overseas subsidiaries Fuhwa Holdings (BVI), Ltd. was renamed Yuanta Securities Holding (BVI), Ltd. in April and became a fully-held (100% equity) subsidiary of Yuanta Securities Asia Financial Services. 2009 In April Yuanta Securities launched our sub-brokerage operations and established a Strategic Trading Department. A capital increase of US$50 mn was made in sub-subsidiary Yuanta Securities (Hong Kong), increasing the company’s paid-in capital to HK$708mn. In May, Yuanta Securities underwrote the issuance of Taiwan depositary receipts (TDR) by Ju Teng, the world’s leading manufacturer of notebook computer casings. In July, the company was named Taiwan’s best securities firm for 2009 by FinanceAsia. In September, the company announced the establishment of Taiwan’s first China story-focused warrant product, the Hang Seng H-Share Index ETF (HSHETF) Warrants. In October, Asiamoney named Yuanta Securities Asia’s Best Securities Firm 1990-2008, making us the only Taiwanese company to receive the honor. 2010 With the February opening of the Nankan Branch, total branches numbered 141. In May, Yuanta Securities became the first to bring a foreign enterprise – IML Inc. - to Taiwan for a successful public listing. In June, Yuanta Securities carried out a capital increase of 327.374 million shares from the transfer of retained earnings to achieve equity of NT$4.6953 billion following the increase. In October, Yuanta Securities established a compensation committee, financing and other credit transaction operations were brought in-house, and the e-Commerce Department was renamed the Channel Marketing Department.
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7
I. Organization
1.Organization chart
Shareholders’ meeting Board Secretary Office
Board of Directors
Risk Management Department
Chairman of the Board
Compensation committee Audit & Approval Department
Audit Committee
Vice Chairman
President
Executive Vice Presidents
Branches
Brokerage Department
Wealth Management Department
Institutional Group
Foreign Equity Department
Channel Marketing Department
Registrar & Transfer Agency Department
Investment Banking Department
Proprietary Trading Department
Derivatives Department
Fixed Income Department
Accounting Department
Finance Department
Human Resources Department
International Operations Department
Legal Department
Legal Compliance Department
Information Technology Department
Health & Safety Administration Department
Settlement Department
General Manager Office
8
2. Departmental duties and responsibilities Department
Main duties and responsibilities
Board Secretary Office
Responsible for administrative matters pertaining to the board of directors, Audit Committee, and functional committees subordinate to the board of directors.
Audit & Approval Department
Audits all divisions (including subsidiaries) regarding their enforcement of internal controls. Makes improvement proposals and tracks corrective actions.
Risk Management Department
Manages and controls risks facing the company, such as market risk, credit risk, model risk, liquidity risk, and systemic risk. Monitors all sales divisions during securities trading hours and conducts post-trading analysis.
General Manager Office
Maps out short-, mid- and long-term development plans, analyzes sales performance, develops comprehensive marketing plans, conducts market surveys, communicates with the public, promotes corporate government practices and conducts research on ad-hoc projects.
Legal Department
The Legal Department is responsible for the drafting and management of all external contracts; consulting on and handling of legal disputes, lawsuits, and non-contentious cases.
Brokerage Department
Accepts orders to trade TSE/OTC listed stocks, futures and other financial products as approved by law.
Investment Banking Department
Manages financial and operational evaluation, M&A, and other consulting services for domestic and foreign issuing companies, as well as TSE/OTC IPOs, corporate financing, and underwriting and sale of equity securities.
Proprietary Trading Department
Uses company capital to trade TSE/OTC listed stocks, bonds, beneficiary certificates, valued securities and options or other derivative products as approved by law.
Finance Department
The Finance Department is responsible for overall financial structuring planning, cash flow management, treasury, etc.
Accounting Department
The Accounting Department is responsible for the establishment and implementation of the accounting system, tax planning and regular reporting; consolidating company-wide accounting and bookkeeping, publishing and reporting of financial statements; establishing company-wide budgets; planning and computation of profit center systems; and applying for administrative relief in certain tax cases.
Health & Safety Administration Department
The Health & Safety Administration Department is responsible for the procurement, repair and management of company assets, electronic machines, communications systems, equipment, and stationery articles used in the company, as well as occupational safety and health, general affairs, administration and the (re)application and documentation of related licenses with the competent authority, as well as the handling of matters related to the employee welfare and benefit committee.
Information Technology Department
Assesses, designs and promotes the computerization of various business processes, develops software for IT systems and maintains IT hardware equipment.
Human Resources Department
Recruits and hires new employees, plans and promotes personnel matters such as educational and professional training, employee development, performance control, payroll, and labor-management relations. Drafts and amends personnel rules and regulations, handles various personnel administrative duties such as leave of absence and insurance issues, licenses and certificates.
9
Fixed Income Department
The Fixed Income Department is responsible for the outright purchase/sell, repurchase and reselling transactions for bonds, bills, beneficial securities, and asset-backed securities; the planning for the issuance of bonds, beneficial securities, asset-backed securities, structured commodities and other fixed-return commodities; and trading in interest-derived commodities.
Settlement Department
Handles settlement and closure of securities trading for clients and engages in margin loan and securities financing transactions.
Channel Marketing Department
Responsible for channel strategy planning, Performance Evaluation, plan implementation, internet and e-commerce platform management, various channel marketing management systems and database control, customer service, channel service, marketing education and training, communication and coordination of support services, and channel administration.
Derivatives Department
Issues call warrants and develops and promotes new financial products both in Taiwan and abroad.
Registrar & Transfer Agency Department
Develops and undertakes registrar business, provides and handles shareholder services and collects shareholder proxy voting materials.
International Operations Department
Other than managing overseas investments, the Department plans and execute overseas business development strategies, along with assessing and creating new entities, businesses or products abroad. In collaboration with other functions at the headquarters, the Department supervises overseas subsidiaries and representative offices to implement management controls and systems conforming to the Company’s policies on corporate governance, business operations and regulatory compliance. With constant business performance reviews, the Department also assists overseas business platforms to enhance their efficiency.
Wealth Management Department
The Wealth Management Department is responsible for the integration of retail channel and institutional accounts and the overall coordination of development and planning for onshore and offshore financial commodities, including onshore and offshore channel training and support, transaction planning and implementation, as well as client asset distribution recommendations and management, market consulting services, wealth investment planning, insurance and tax assessments, and related matters.
Institutional Group
Executes orders from institutional investors to trade TSE/OTC listed securities, futures and other financial products as approved by law. Provides institutional investors with relevant market information, research reports as well as trading information and services for other financial products.
Foreign Equity Department
The Foreign Equity Department is responsible for the commissioned buying and selling of overseas securities, mutual funds, other financial commodities permitted by law, and also provides clients with related market information and services.
Legal Compliance Department
The Legal Compliance Department is responsible for establishing legal compliance systems and auditing the business unit compliance to ensure that all processes and management regulations comply with legal requirements.
Branches
Accepted orders to trade TSE/OTC listed securities, provide futures IB (introducing broker) services and engage in other financial products transactions.
Date elected (taken office)
29/06/10
29/06/10
29/06/10
Yuanta Financial Holdings Co., Ltd. Representative: Ting-chien (Tony) Shen
Yuanta Financial Holdings Independent Co., Ltd. Director Representative: Pao-kuei (Paul) Chu
Yuanta Financial Holdings Independent Co., Ltd. Representative: Director Tseng-chi Lin
Chairman
Title
Name
3 years
3 years
3 years
29/06/07
01/10/09
23/09/07
Term of First elected office (Note 2) %
Total of 4,367,938,789 shares collectively held by all directors and 100 supervisors on behalf of Yuanta Financial Holding Co., Ltd.
Shares held
Shareholding when elected
1. Information regarding directors and supervisors
%
Total of 4,695,313,318 shares collectively held by all directors and 100 independent directors on behalf of Yuanta Financial Holding Co., Ltd.
Shares held
Current shareholding
-
-
-
1
-
-
-
Spouse and minor children’s current shareholdings Shares % held
-
-
-
Shares held
-
-
-
%
Shareholding by nominee arrangement
Director general, Ministry of Finance, Taxation Agency Administrative vice minister, Ministry of Finance Independent director, Yuanta Core Pacific Securities Co., Ltd.
Current additional positions
Director, Yuanta Financial Holdings Taipei Municipal School of Commerce Co., Ltd. Director, Yuanta Core Pacific Securities President, Yuanta Financial Holdings Co., Ltd. Co., Ltd. Executive vice president, Yuanta Core Director, Yuanta Securities Asia Pacific Securities Co., Ltd. Financial Services Ltd. National Taiwan University, Department of Commerce Partnership Chairman and Administrative Representative, KPMG Certified Public Accountants Supervisor, DongJian Co., Ltd. Director, KPMG Global Board Independent Supervisor, ReaLy Corp. Committee member, Executive Yuan Independent non-executive director, Economic Reform Commission Finance Stella International Holdings and Taxation (Cayman Islands) Chairman, Taiwan CPA Association Independent non-executive director, Chairman,Taiwan Corporate Stella International Holdings (Hong Governance Association Kong) Independent Supervisor and Independent Dircetor, Yuanta Core Pacific Securities Co., Ltd. Independent Dircetor, Yuanta Commercial Bank Co., Ltd. Taiwan University, Department of Economics Director general, Taiwan Province Disbursement Office Director general, Ministry of Finance, National Tax Administration of Independent director, Yuanta Northern Taiwan Province Financial Holdings Co., Ltd. President Bureau of Labor Insurance President, International Fiscal Director general, Ministry of Finance, Association Taipei National Tax Administration
Education and selected past positions
II. Information regarding directors, supervisors, management team and branch managers
-
-
-
Position
-
-
-
Name
-
-
-
Relationship
Other heads, directors, or supervisors as spouse or kin within the second degree
Baseline date of data:Feb 28, 2011
10
Date elected (taken office)
29/06/10
29/06/10
29/06/10
29/06/10
29/06/10
Name
Yuanta Financial Holdings Co., Ltd. Representative: Chwo-ming (Joseph) Yu
Yuanta Financial Holdings Co., Ltd. Representative: Hung-chi (Alex) Lee
Yuanta Financial Holdings Co., Ltd. Representative: Kang-sheng Kao
Yuanta Financial Holdings Co., Ltd. Representative: Yueng-lin Ma
Yuanta Financial Holdings Co., Ltd. Representative: Yueh-tsang Lee
Title (Note 1)
Independent Director
Director
Director
Director
Director
3 years
3 years
3 years
3 years
3 years
Term of office
23/09/07
23/09/07
30/06/05
01/08/07
29/06/07
First elected (Note 2) Shares held
%
Shareholding when elected Shares held
%
Current shareholding
-
-
-
-
2
-
-
-
-
Spouse and minor children’s current shareholdings Shares % held
-
-
-
-
Shares held
-
-
-
-
%
Shareholding by nominee arrangement
Toyo University, Japan, Department of Sociology Chairman, Da-Fa Securities Co., Ltd. Director, Yuanta Core Pacific Securities Co., Ltd.
University of Michigan, USA, Ph.D. in business administration, Assistant professor of business administration, University of Illinois at Urbana-Champaign, USA Committee member, Ministry of Economic Affairs, Committee of Economic Research and Development Chair, Chengchi University, Department of Business Administration Acting dean, Chengchi University, College of Commerce Jury commission member, Outstanding SME Award Jury commission member, Manager Excellence Award Director, Chinese Petroleum Corporation (CPC), Director, Sunsino Development Associates Consultant, Hon Hai Precision Industry Company, Ltd Independent director Yuanta Core Pacific Securities Co., Ltd. MBA, George Washington University, USA Chairman, President, Deutsche Securities Co., Ltd., Taiwan Director, President, Credit Suisse Securities Co., Ltd., Taiwan, President, Barclays Securities Co., Ltd.,Taiwan Director, The First Securities Joint Stock Co. (Vietnam) Chung Hsing University, Department of Business Administration Chairman, Taiwan Futures Exchange Chairman, Taiwan Depository & Clearing Co., Ltd. Ministry of Finance, advisor, consultant Chairman, Fuwa Commercial Bank Co., Ltd. Chairman, Fuwa Securities Co., Ltd. Vice chairman, Yuanta Securities Co., Ltd. Chunghua College of Technology, Department of Electrical Engineering Sales manager, Han Hsin Industrial Co., Ltd. Chairman, Kuangli Electronics Co., Ltd. Director, Yuanta Core Pacific Securities Co., Ltd.
Education and selected past positions
Director,Yuanta Financial Holdings Co., Ltd. Director, Yuan Kun Construction Co., Ltd. Chairman, Yong Tong Investment Co., Ltd.
Director,Yuanta Financial Holdings Co., Ltd. Chairman, Yuanta Futures Co., Ltd. Director, Yuanta Securities Asia Financial Services Ltd. Chairman, Yuanta Securities (Hong Kong) Co., Ltd. Director, Taiwan Futures Exchange
President, Yuanta Securities Co., Ltd. Director, Yuanta Securities Asia Financial Services Ltd., Director, Yuanta Securities (Hong Kong) Co., Ltd. Director, Kim Eng Holdings Co., Ltd.
Professor, Chengchi University, Department of Business Administration Director, Hannstar Display Corporation Director, Advantech Foundation Director, Higher Education Foundation
Current additional positions
-
-
-
-
-
Position
-
-
-
-
-
Name
-
-
-
-
-
Relationship
Other heads, directors, or supervisors as spouse or kin within the second degree
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29/06/10
29/06/10
Yuanta Financial Holdings Co., Ltd. Representative: Rui-chen Ma
Yuanta Financial Holdings Co., Ltd. Representative: Cheng Fen
Director
Director
3 years
3 years
3 years
Term of office
29/06/10
23/09/07
23/09/07
First elected (Note 2) Shares held
%
Shareholding when elected Shares held
%
Current shareholding
-
-
-
-
Spouse and minor children’s current shareholdings Shares % held
-
-
Shares held
-
-
%
Shareholding by nominee arrangement
Tamkang University, Department of Business Administration President, Chun Chi Construction Co., Ltd. President, BES Engineering Co., Ltd. Director, Yuanta Core Pacific Securities Co., Ltd. President, Core Pacific City University of Tokyo, Japan, master’s degree Massachusetts Institute of Technology (MIT), USA, Department of Building Technology Director and supervisor, Yuanta Core Pacific Securities Co., Ltd. Director, Dasheng Asset Management Co., Ltd. MBA, Southeast University USA Deputy Commissioner,CHUNG-SHAN Institute of Science & Technlolgy Director, CTC Rehouse Co., LTD. Director, Yuanta Core Pacific Securities Co., Ltd. Special Assistant to the Chairman, Sampo Co., Ltd.
Education and selected past positions
Director, Chinese Culture Foundation Director, Yuanta Asset Management Co., Ltd. Director,Stcik Mark Investment Ltd. Director,Hsu Wang Solar Tech Ltd. Director, Chen Moai-Pang Memorial Foundation Director, Chen Zhang Xiu Ju Culture and Education Foundation
Director, Da Tian Investment Co., Ltd. Director, Yuang Long Construction Co., Ltd. Director, Tayuan Construction Co., Ltd. Director, Taiwan Tea Corporation;
Chairman, BES Machinery Co., Ltd. Director, China Petrochemical Development Corporation Co., Ltd. (CPDC) Supervisor, Core Asia Human Resource Managment Co., Ltd.
Current additional positions
-
-
-
Position
-
-
-
Name
3. Former vice Chairman Kang-sheng Kao stepped down as vice Chairman as of July 1, 2010.
3
2. On June 24, 2010, the first board meeting of the 7th board elected Ting-chien Shen as Chairman of the board, and board member Kang-sheng Kao as Vice Chairman.
-
-
-
Relationship
Other heads, directors, or supervisors as spouse or kin within the second degree
Note：1.Yuanta Securities’ institutional shareholder Yuanta Financial Holdings on June 29, 2010 appointed a new director and independent director to the seventh board of directors of the company, the term of which is from June 29, 2010 to June 28, 2013.
29/06/10
Director
Name
Date elected (taken office)
Yuanta Financial Holdings Co., Ltd. Representative: Ching-Kuang Shen
Title (Note 1)
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2. Major institutional shareholders Baseline date: Jul. 15, 2010
Major shareholders of institutional shareholders
Institutional shareholders Yuanta Financial Holding Co., Ltd.
Zun Jue Investment Co., Ltd. Yuan Hung Investment Co., Ltd. Yuan Hsiang Investment Co., Ltd. Yu Yang Investment Co., Ltd. Bank of Taiwan Co., Ltd. Yan Guanghua Co., Ltd. Land Bank of Taiwan Co., Ltd. HSBC has been commissioned to manage the account on behalf of the First Worldsec Securities Ltd. JP Morgan Chase Taipei Branch has been commissioned to manage the dedicated investment account on behalf of the Saudi Central Bank Lien Ta Investment Co., Ltd.
4.32% 3.52% 3.19% 3.09% 2.61% 2.40% 2.23% 2.21% 2.00% 1.93%
Note: Data for the company’s top 10 major shareholders are as of Yuanta Financial Holdings’ latest book close date (July 15, 2010).
3. Major institutional shareholders whose key shareholders are judicial persons Baseline date: Feb. 28, 2011
Major shareholders of institutional shareholders
Institutional shareholders Zun Jue Investment Co., Ltd.
Yuan Hung Investment Co., Ltd.
Yuan Hsiang Investment Co., Ltd.
Yu Yang Investment Co., Ltd. Bank of Taiwan Co., Ltd. Yan Guanghua Co., Ltd. Land Bank of Taiwan Co., Ltd. HSBC has been commissioned to manage the account on behalf of the First Worldsec Securities Ltd. JP Morgan Chase Taipei Branch has been commissioned to manage the dedicated investment account on behalf of the Saudi Central Bank. Lien Ta Investment Co., Ltd.
Teng Ta Investment Co., Ltd. Lien Ta Investment Co., Ltd. Chiu Ta Investment Co., Ltd. Lien Heng Investment Co., Ltd. Hsing Tsai Investment Co., Ltd. Wei-chien (Victor ) Ma Li-chuang (Judy) Tu Ma Yung-tsang Lin Er-tai Ma Hao Yang Mei Chia Li Investment Ltd. Lien Heng Investment Co., Ltd. Teng Ta Investment Co., Ltd. Li-chuang (Judy) Tu Ma Lien Ta Investment Co., Ltd. Lien Heng Investment Co., Ltd. Teng Ta Investment Co., Ltd. Chiu Ta Investment Co., Ltd. Li-chuang (Judy) Tu Ma Hsing Tsai Investment Co., Ltd. Zun Jue Investment Co., Ltd. Taiwan Financial Holdings Co., Ltd. Chung Yang Investment Co., Ltd. Ministry of Finance
18.91% 18.42% 17.31% 15.92% 10.08% 8.27% 4.69% 3.08% 1.68% 0.94% 45.88% 33.74% 15.38% 5.00% 44.38% 19.00% 18.69% 9.96% 5.01% 2.96% 100.00% 100.00% 100.00% 100.00%
NA NA Chiao Hua International Investment Lien Heng Investment Chiu Ta Investment Hsing Tsai Investment Li-chuang (Judy) Tu Ma Hung-lien Chen
4
45.79% 37.14% 14.02% 2.57% 0.47% 0.01%
14
4. Independence criteria of directors relevant word experience and supervisors Data as of Feb. 28, 2011 Requirements
Name Ting-chien Shen (Tony), chairman Pao-kuei (Paul) Chu, independent director Tseng-chi Lin, independent director Chwo-ming (Joseph) Yu, independent director
Over five years of experience in and the following professional qualifications University Working as a Work teaching in judge, attorney, experience in areas of lawyer, accountant commerce, law, commerce, or other positions finance, law, finance, that require accounting or accounting or professional related related certification corporate corporate experiences business
Independence criteria(Note 1)
1
2
3
4
5
Serving as an independent director of another listed company
6
7
8
9 10
-
-
-
-
-
-
-
Hung-chi (Alex) Lee,
Kang-sheng Kao, director
Yueng-lin Ma, director
Yueh-tsang Lee, director
-
Ching-kuang Shen, director
-
Jui-chen Ma, director
-
Cheng Fen, director
-
Note: A ““ is marked in the space beneath a condition number when a director or supervisor has met that condition during the two years prior to election and during his or her period of service; the conditions are as follows: (1)Not employed by the company or an affiliated business (2)Not a director or supervisor of an affiliated company (this restriction does not apply to independent directors of subsidiaries in which the company or its parent company directly or indirectly holds over 50% of the shareholder voting rights). (3)Not holding over 1% of company shares or being a top 10 natural person shareholder in one’s own name, held by a spouse or underage child, or held by nominee agreement. (4)Neither a spouse, second-degree relative or fifth degree direct relative of persons listed under the previous three items. (5)Neither a director, supervisor or employee of an institutional shareholder directly owning more than 5% of the company’s outstanding shares, nor one of the company’s top five institutional shareholders. (6)Neither a director, supervisor, manager or shareholder holding more than a 5% stake in certain companies or institutions that have a financial or business relationship with the company. (7)Does not provide professional commercial, legal, financial, accounting services or consulting to the company or its affiliated companies nor is an owner, partner, director, supervisor, manager in a proprietorship, partnership, company or institution that provides such services nor the spouse of such officeholders. (8)Not a spouse or second-degree relative of any other director. (9)Standing does not match any of the scenarios described in Article 30 of the Company Act. (10)Was not elected as the shareholder representative for a government agency or legal person pursuant to Article 27 of the Company Act.
5
15/07/08
15/07/08
01/03/09
Executive Vice President Tsai-yu Chang
Executive Vice President Ping-han Tsai
Executive Vice President Tien-fu Lin
21/08/07
Date elected (taken office)
23/09/07
Hung-chi (Alex) Lee
Name
Executive Vice President Cheng-ling Ho
President
Title
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
%
Shares
%
Shares
Shareholding %
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Direct, Yuanta Financial Holdings Co., Ltd. Supervisor, Yuanta Future Co., Ltd. Direct, Yuanta Foundation
General Program, Yu Da College of Business Accounting Training Session 52 Common Accounting Group and Session 57 Intermediate Accounting Group, Center for Public Administration and Business Management Education, National Chengchi University Vive Chairman, Yuanta Securities Finance Co., Ltd.
6
-
Vice Chairman, Yuanta Securities Asia Financial Services Ltd. Direct, Yuanta Securities (Hong Kong) Co., Ltd. MBA,University of Illinois ( USA) COO, ABN-AMRO Bank (China)
-
-
Position
-
-
Director, Yuanta Securities Asia Financial Services Ltd. Direct, Yuanta Securities (Hong Kong) Co., Ltd. Director, Kim Eng Holdings Co., Ltd.
Current additional positions
-
-
-
-
-
-
-
-
Name Relationship
Baseline date:Feb. 28, 2011 Spouse or relatives within two degrees who are managers, directors or supervisors
Supervisor, Yuanta Securities Finance Co., Ltd. Supervisor, Yuanta Venture Capital Co., Ltd. Director, Yuanta International Insurance Brokers Co., Ltd. EMBA, Chengchi University College of Liquidator, Yuanta Financial Consulting Co., Ltd. Commerce Executive Vice President, Yuanta Supervisor, Yuanta I Venture Capital Co., Ltd. Commercial Bank Director, Yuanta Securities Asia Financial services Ltd. Director,Yuanta Securities (BVI)Holdings Ltd. Direct, Yuanta Securities (Hong Kong) Co., Ltd.
Ph.D., Keio University (Japan) Graduate School of Business Administration Executive Vice President, Yuanta Core Pacific Securities Co., Ltd.
MBA, George Washington University (USA) Chairman and President, Deutsche Securities Co., Ltd., Taiwan
Education and selected past positions
5. Information regarding the president, Vice President, Assistant Vice Presidents, department and branch Managers
15
25/04/08
01/08/08
Hsiu-wei Chen
Wei-cheng Huang
Li-hui Tseng
Feng-hsiang Kuo
Su-ying Lee
Mei-ying Huang
Pei-Chen Lin
Hsin-yi Chiu
Yi-ju Hou
Senior Vice President
Vice President
Vice President, Investment Banking Department
Vice President, Investment Banking Department
Vice President, Investment Banking Department
Assistant Vice President, Investment Banking Department
Assistant Vice President, Investment Banking Department
Assistant Vice President, Investment Banking Department
Assistant Vice President, Investment Banking Department
12/05/10
01/03/10
01/03/10
01/03/10
01/04/10
01/07/10
01/12/10
04/05/09
Ming-Shan Li
Executive Vice President
01/05/09
Chun-jung Hsu
Name
Executive Vice President
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
%
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
Tung Hai University, Accounting Department Senior Manager, Yuanta Securities Co., Ltd. Cheng Kung University, Accounting Department Senior Manager, Yuanta Securities Co., Ltd. M.A. Financial Management, Sun Yatsen University Senior Manager, Yuanta Securities Co., Ltd. M.A. Financial Management, Sun Yatsen University Assistant Vice President, Taiwan Securities Co., Ltd.
7
-
Central University Department of Business Administration Senior Assistant Vice President, Yuanta Securities Co., Ltd.
-
Master’s degree, Taiwan University Graduate School of Finance & Banking Assistant Vice President, Yuanta Securities Co., Ltd.
-
Director, Kim Eng Holdings Co., Ltd.
MBA, University of California (USA) Executive Vice President, Yuanta Commercial Bank Co., Ltd.
MBA, Pepperdine University (USA) Direct, En Tie Commercial Bank Ltd.
-
Director, Yuanta Venture Capital Co., Ltd. Director, Yuanta I Venture Capital Co., Ltd. Director, Yuanta Securities Asia Financial services Ltd.
Chung Hsing University Graduate School of Law Vice President, Yuanta Securities Co., Ltd.
-
-
-
-
-
-
-
-
-
-
-
-
Affinity
-
-
-
-
-
-
-
-
-
Name Relationship
Assistant WenVice ching President Hsu
-
-
-
-
-
-
-
Direct, Yuanta Commercial Bank Co., Ltd. Direct, Yuanta Securities (Hong Kong) Co., Ltd.
MBA, Chengchi University Chairman and President, Citigroup Global Markets Taiwan Ltd
Position -
Current additional positions
-
Yilan Senior High School, general track Executive Vice President, Yuanta Securities Co., Ltd.
Education and selected past positions
Spouse or relatives within two degrees who are managers, directors or supervisors
16
Hung-chan Tseng
Senior Assistant Vice President, Fixed Income Department
01/06/09.
Chao-tzu Yang
Chih-hung Ma
Hsi-ying Chen
Vice President, International Operations Department
Vice President, International Operations Department
Assistant Vice President, International Operations Department
23/09/07
01/11/07
01/11/07
Assistant Vice President, Jun-chih Lien Fixed Income Department
17/10/09
23/09/07
Hsu-shu Mai
01/03/10
Vice President, Fixed Income Department
Tien-jen Huang
Assistant Vice President, Financial Transactions Department
10/12/09
17/10/09
Hsiang-shan Lin
Senior Vice President, Financial Transactions Department
01/12/10
Date elected (taken office)
Senior Vice President, Li-ming Wu Fixed Income Department
Ying-hui Peng
Name
Assistant Vice President, Investment Banking Department
Title
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
%
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
Director, Yuanta Securities Asia Financial Services Ltd. Direct, Yuanta Securities (Hong Kong) Co., Ltd.
Chung Hsing University Agricultural Marketing Department Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. Master’s degree, East Michigan University (USA) Graduate School of Business Administration Senior Assistant Vice President, Yuanta Securities Co., Ltd. M.A. Financial Management, Sun Yatsen University Senior Vice President, Yuanta Securities Co., Ltd. Master’s degree, Central Michigan University of Technology Management Assistant Vice President , Yuanta Securities Co., Ltd.
8
-
-
Master’s degree, Chinese Culture University Graduate School of Business Administration Senior Vice President, Yuanta Securities Co., Ltd.
Shih Chien College of Home Economics Department of Social Work Manager, Yuanta Core Pacific Securities Co., Ltd.
-
Master’s degree, Nationl Chiao Tung University of Information Manager, Yuanta Securities Co., Ltd.
-
-
Ph. D., Arizona State University (USA) Graduate School of Finance & Banking Senior Vice President, Yuanta Securities Co., Ltd.
M.S. Transportation Management Sciences, National Cheng Kung University Investment Manager, EMO Asset Management Corp.
-
Current additional positions
MBA,California State University, Sacramento Vice President, Polaris Securities Co., Ltd.
Education and selected past positions
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
17
Yao-cheng Kuo
Ya-wen Chang
Shuo-feng Chang
Yuan-chi Fang
Riga Saito
Hui-fen Lin
Tiffany Lin
Judy Chang
Daniel Patrick Clarke
Tzu-chun Kao
Chang-en Li
Assistant Vice President, International Operations Department
Vice President, Institutional Group
Vice President, Institutional Group
Assistant Vice President, Institutional Group
Assistant Vice President, Institutional Group
Assistant Vice President, Institutional Group
Assistant Vice President, Institutional Group
Assistant Vice President, Institutional Group
Senior Vice President, Proprietary Trading Department
Assistant Vice President, Proprietary Trading Department
Name
Assistant Vice President, International Operations Department
Title
01/03/10
08/02/11
06/10/08
01/02/08
01/02/08
01/02/08
01/02/08
01/11/10
01/06/10
09/01/08
23/09/07
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
%
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
Tamkang University Department of Banking & Finance Assistant Vice President, Yuanta Securities Co., Ltd. Chung Hsing University Economics Department Assistant Vice President, Yuanta Securities Co., Ltd. Soochow University Accounting Department Assistant Vice President, Yuanta Securities Co., Ltd. B.A. International Commerce, University of Northumbria, Newcastle Assistant Vice President, Citigroup Global Markets Inc. Taipei Branch Master’s degree, National Chiao Tung University of Technology Management President, Polaris MF Global Futures Co., Ltd. Master’s degree, Cheng Kung University Department of Industrial Management Manager, Yuanta Securities Co., Ltd.
9
-
McGill University (Canada) School of Business Assistant Vice President, Yuanta Securities Co., Ltd.
-
York University (Canada) Department of EconomicsDirect, Deutsche Bank, Taiwan -
-
M.A. International Business Management, Boston University Assistant Vice President, Yuanta Securities Co., Ltd.
MBA, University of Southern California Vice President, Fubon Securities Ltd.
-
Current additional positions
Master’s degree, Chung Cheng University. Graduate School of Business Administration Senior Manager, Yuanta Core Pacific Securities Co., Ltd.
Education and selected past positions
-
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
18
Kao-yi Su
Chien-tu Huang
Yao-ting Yu
Rong-fu Lee
Yong-hsien Chang
Chun-ching Chang
Chun-yen Liu
Chi-hsin Wei
Ching-tang Wu
Ching-tung Chang
Ah-yen Lee
Assistant Vice President, Proprietary Trading Department
Senior Vice President, Information Technology Department
Senior Assistant Vice President, Information Technology Department
Senior Assistant Vice President, Information Technology Department
Assistant Vice President, Information Technology Department
Assistant Vice President, Information Technology Department
Assistant Vice President, Information Technology Department
Senior Vice President, General Manager Office
Assistant Vice President, General Manager Office
Vice President, Audit & Approval Department
Name
Assistant Vice President, Proprietary Trading Department
Title
02/08/10
01/08/10
01/06/09
01/11/07
23/09/07
23/09/07
01/09/08
01/11/07.
01/08/07
01/10/10
01/10/10
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
Chengchi University, College of Commerce, EMBA Specialist Director, Fuhwa Securities B.S. Applied Mathematics, National Chengchi University Assistant Vice President, Polaris Securities Co., Ltd. Kuo Chi Junior College of Commerce Department of Public Finance and Taxation Manager, Yuanta Core Pacific Securities Co., Ltd. Ming Chuan Commercial College for Girls Department of Applied Computer Sciences Manager, Yuanta Core Pacific Securities Co., Ltd. M.S. Information Systems Management, Mingchuan UniversitySenior Senior Manager, Yuanta Securities Co. Ltd. MBA, Mississippi State University Vice President, Yuanta Financial Holdings Co., Ltd. MBA, Oklahoma City University Senior Manager, Yuanta Securities Co. Ltd. Master’s degree, Chia Yi University Graduate School of Management Vice President, Yuanta Securities Co., Ltd.
Ph.D., University of Texas at Austin (USA) School of Information, Vice Direct, Yuanta Securities Finance Co., President, Yuanta Core Pacific Securities Ltd. Co., Ltd.
-
Chung Yuan Christian University Department of Mathematics Vice President, Polaris MF Global Futures Co., Ltd.
Current additional positions
-
Education and selected past positions Master’s degree, National Chiao Tung University of Technology Management Assistant Vice President, Polaris MF Global Futures Co., Ltd.
10
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
19
01/06/08
01/09/10
01/03/10
23/09/07
Yueh-jung Liao
Yi-heng Hu
Wen-ching Hsu
Liao-chin Lin
Yi-wen Ma
Assistant Vice President, Finance Department
Vice President, Wealth Yi-ming Wang Management Department
Hung-lieh Liang
Senior Assistant Vice President, Finance Department
Vice President, Risk Hsuan-min Management Department Kuo
Hsien-ling Yeh
Senior Assistant Vice President, Accounting Department
Assistant Vice President, Wealth Management Department
Assistant Vice President, Wealth Management Department
Vice President, Foreign Equity Department
Assistant Vice President, Registrar Department
20/11/99
01/09/10
01/01/09
01/06/08
01/06/08
01/11/09
Tai-sheng Chuang
Vice President , Board Secretary Office
01/03/10
Yen-ying Liu
Name
Assistant Vice President, Audit & Approval Department
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
%
Education and selected past positions
-
-
-
-
-
-
-
-
M.A. Financial Management, National Sun Yat-sen University Senior Manager, Yuanta Securities Co., Ltd. M.A. International Business, Taiwan University Assistant Vice President, Yuanta Financial Holdings Co., Ltd. M.A. Accounting, Changhua University of Education Assistant Vice President, Yuanta Securities Co., Ltd. M.A. Financial, National Chiao Tung University Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. Ph.D in Law, Queen Mary, University of London Assistant Vice President, Yuanta Securities Co., Ltd. M.A. Finance, Taiwan University of Science and Technology Assistant Vice President, Yuanta Securities Co., Ltd. Chinese Culture University Department of Economics Manager, Grand China Securities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Affinity
-
-
-
-
Name Relationship
Assistant Hsin-yi Vice Chiu President
-
-
Supervisor, Yuanta International Insurance Brokers Co., Ltd. Director,Yuanta Securities (BVI)Holdings, Ltd. Supervisor, Yuanta Securities Finance Co., Ltd.
Tamkang University Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd. B.A. in Law, Fu Jen Catholic University Assistant Vice President, Yuanta Securities Finance Co., Ltd.
-
-
Position
Supervisor, Yuanta Investment Consulting Co., Ltd.
-
Current additional positions
Spouse or relatives within two degrees who are managers, directors or supervisors
Taiwan University Department of Law Chief Secretary, Yuanta Securities Co., Ltd.
MBA,Tunghai University Senior Manager, Yuanta Securities Co., Ltd.
11
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
20
Chin-pi Lin
Wen-ching Chiu
Wei-ho Liu
Chin-tai Tseng
Bo-ching Lee
Po-chih Liu
Shih-huan Chang
Kuang-hua Yu
Ming-lang Liao
Yuan-shan Lin
Assistant Vice President, Legal Department
Vice President, Compliance Department
Assistant Vice President, Compliance Department
Assistant Vice President, Administration & Labor Safety Department
Assistant Vice President, Human Resources Department
Assistant Vice President, Channel Marketing Department
Vice President, Financial Superintendence
Vice President, Financial Superintendence
Senior Assistant Vice President, Financial Superintendence
Name
Assistant Vice President, Settlement Department
Title
23/09/07
01/05/10
01/01/08
01/10/10
07/04/08
23/09/07
05/08/10
05/08/10
01/11/07
23/09/07
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
%
Education and selected past positions
-
-
-
Feng Chia University Department of Business Administration Manager, Yuanta Securities Co., Ltd. Taipei Municipal Yu Teh Senior High School, Electronic Engineering Department Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. M.A. Human Resources Management, National Sun Yat-sen University Assistant Vice President, MasterLink Securities Co., Ltd.
-
Dorector, Yuanta Securities Finance Co., Ltd.
Tamkang University, Department of Business Administration Vice President, Yuanta Securities Finance Co., Ltd. MBA, Providence University Executive Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
Dorector, Yuanta Securities Finance Co., Ltd.
China Junior College of Marine Technology, Marine Engineering Department Senior Assistant Vice President, Yuanta Securities Co., Ltd.
-
-
Southern Methodist University (USA) Graduate School of Law, Master’s degree Core Pacific Group, General Administration Dept, Head of Special Projects Office
M.A. Finance, Gloden Gate University Senior Manager, Yuanta Securities Co., Ltd.
-
-
Current additional positions
Chengchi University Department of Law Manager, Yuanta Securities Co., Ltd.
Songshan High School of Commerce, Department of Comprehensive Commerce Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
12
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
21
Chun-chieh Wang
Ming-jen Wang
Chen-hsiang Wu
Yu-cheng Chang
Chen-wen Hua
Yi-huang Chang
Wen-ming Hung
Chang-jung Chiang
Shao-hsing Kung
Tsung-wu Lai
Senior Assistant Vice President, Financial Superintendence
Senior Assistant Vice President, Financial Superintendence
Senior Assistant Vice President, Financial Superintendence
Senior Assistant Vice President, Financial Superintendence
Senior Assistant Vice President, Financial Superintendence
Vice President, Business Superintendence
Vice President, Business Superintendence
Vice President, Business Superintendence
Vice President, Business Superintendence
Name
Senior Assistant Vice President, Financial Superintendence
Title
23/09/07
23/09/07
01/08/09
01/08/09
01/08/10
01/08/10
01/01/08
01/11/07
23/09/07
07/07/05
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
Chinese Culture University Department of Finance & Banking Assistant Vice President, Yuanta Securities Co., Ltd. Master of Financial Management , Ming Chuang University Assistant Vice President, Yuanta Securities Co., Ltd. Soochow University Department of Political Science Vice President, Yuanta Securities Co., Ltd. Waseda University, Japan, School of Commerce Vice President, Yuanta Securities Co., Ltd., Tamkang University Department of Cooperative Economics Executive Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. Taiwan Institute of Industrial Technology Department of Industrial Relations Executive Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
-
Taiwan University Department of Economics Assistant Vice President,Yuanta Securities Co., Ltd. Tamsui Oxford College Department of Accounting & Statistics Manager, Yuanta Securities Co., Ltd.
-
Master’s degree, Taiwan University Department of Political Science Executive Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Master’s degree, Central University Graduate School of Finance & Banking Executive Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
13
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
22
Teng-hsi Lu
Chun-chieh Chen
Shih-hsiung Lin
Chao-min Mou
Hsien-chuan Meng
Yi-ching Koo
Yu-shun Yang
Chun-cheng Cheng
Ming Lin
Chih-hung Tsai
Senior Assistant Vice President, Business Superintendence
Senior Assistant Vice President, Business Superintendence
Senior Assistant Vice President, Business Superintendence
Senior Assistant Vice President, Business Superintendence
Senior Assistant Vice President, Business Superintendence
Senior Assistant Vice President, Business Superintendence
Senior Assistant Vice President, Business Superintendence
Senior Assistant Vice President, Business Superintendence
Senior Assistant Vice President, Business Superintendence
Name
Vice President, Business Superintendence
Title
23/09/07
23/09/07
23/09/07
23/09/07
01/04/03
23/09/07
23/09/07
23/09/07
02/04/04
01/09/10
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
Master’s degree, Sun Yat-sen University, College of Management Assistant Vice President, Yuanta Securities Co., Ltd. Master’s degree, Taipei University Department of Business Administration Executive Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. Chinese Culture University Department of Business Administration Executive Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. Tamsui Oxford College, Department of Business Administration Executive Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. Tamsui Oxford College Department of International Trade Executive Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
-
Chinese Culture University Department of Urban Affairs Assistant Vice President, Yuanta Securities Co., Ltd.
-
-
Chengchi University Department of International Trade Assistant Vice President, Yuanta Securities Co., Ltd.
MBA, American Coastline University Assistant Vice President, Yuanta Securities Co., Ltd.
-
Chinese Culture University Department of Economics Assistant Vice President, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Master’s degree, Kaohsiung University of Applied Technology, Graduate School of Business Administration Senior Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
14
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
23
01/01/10
01/06/08
Chen-jung Manager, Yunghe Branch Chen
Manager, East Pingtung Branch
01/01/10
01/07/08
01/01/08
01/08/10
01/01/10
Manager, Greater Tianmu Hui-ying Wu Branch
Manager, North Taoyuan Shih-kuo Lee Branch
Wen-pao Lee
Ming-chun Hsieh
Manager, Chengchung Branch
Manager, Tainan Branch
Manager, Tucheng Branch Yi-jui Kao
Chun-sung Hung
01/03/08
Kang Fan
Assistant Vice President, Brokerage Department
01/04/10
Cheng-chuan Chiu
Senior Assistant Vice President, Business Superintendence
23/09/07
Cheng-chung Lin
Name
Senior Assistant Vice President, Business Superintendence
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
Tamsui Oxford College Department of Banking Assistant Vice President, Yuanta Securities Co., Ltd. Master’s degree, Chengchi University Department of Statistics Assistant Vice President, Yuanta Securities Co., Ltd. Fuhsing College of Technology & Commerce Department of Mechanical Engineering Assistant Vice President, Yuanta Securities Co., Ltd. Chinese Culture University Department of Economics Manager, Yuanta Securities Co., Ltd. Soochow University Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd. Chinese Culture University Department of Law Assistant Vice President, Yuanta Securities Co., Ltd. Master’s degree, Taiwan University of Science & Technology Graduate School of Finance & Banking Assistant Vice President, Yuanta Securities Co., Ltd. Cheng Kung University Department of Business Administration Manager, Yuanta Securities Co., Ltd. Taiwan University Department of Agricultural Economics Assistant Vice President, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Master’s degree, Tamkang University, Graduate School of Mathematics Executive Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
15
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
24
Ching-tui Lin
Manager, Kaohsiung Branch
Manager, Lujhou Branch
Tsung-shan Chen
Yung-hui Manager, Datong Branch Chen
01/01/10
Hsiao-chi Nien
Manager, Caotun Branch
01/06/10
01/03/08
01/04/10
01/04/10
Manager, Zuoying Branch Hsiao-pei Su
01/06/08
01/08/10
Manager, Taichung Jhonggang Branch
01/03/08
Manager, Banciao Branch Yi-ting Fan
Hsin-liang Lin
Manager, Beitou Branch
01/03/08
Manager, Danshui Branch Chih-yu Chen
Chun-liang Pan
01/03/08
Name
Chih-hao Feng
Manager, Sinjhuang Branch
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
Tamkang University Department of Economic Cooperation Assistant Vice President, Yuanta Securities Co., Ltd. Southern Taiwan University of Technology, Junior College Section, Department of Industrial Management Assistant Vice President, Yuanta Securities Co., Ltd. Master’s degree, Chaoyang University of Technology, Graduate School of Finance & Insurance Assistant Vice President, Yuanta Securities Co., Ltd. Oriental High School, general track Assistant Vice President, Yuanta Securities Co., Ltd. Cheng Shiu University Department of Business Administration Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. Master’s degree, Changhua University of Education Department of Accounting Assistant Vice President, Yuanta Securities Co., Ltd. Master’s degree, Kaohsiung First University of Technology, Graduate School of Financial Operations Assistant Vice President, Yuanta Securities Co., Ltd. Providence University, Accounting Department Assistant Vice President, Yuanta Securities Co., Ltd. Fu-jen Catholic University Department of Economics Assistant Vice President, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Chihlee College of Business Department of International Trade Assistant Vice President, Yuanta Securities Co., Ltd.
16
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
25
01/08/10
01/11/07
23/09/07
01/01/10
23/09/07
01/06/08
Yu-lan Cheng
Manager, Dunnan Branch Shih-chin Luo
Tien-yo Sun
Ming-hsing Manager, Lugang Branch Yeh
Mu-hsin Hsu
Po-chien Hung
Manager, Sijhih Branch
Manager, Hsinchu Beimen Chia-hui Wu Branch
Kui-hsiang Wang
Manager, Neihu Branch
Manager, Dajia Branch
Manager, Sanchong Branch
Manager, Fengyuan Station Branch
01/01/10
01/11/07
01/08/10
Teng-rui Chu
Manager, Chenggong Branch
01/01/10
01/06/10
Mei-yun Wu
Name
Manager, Jhongsiao Yanji Chang-yu Branch Chen
Manager, Changhua Minsheng Branch
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
%
-
Tamsui Oxford College Department of Industrial Management Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
-
-
Chihlee College of Business Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd.
Shu-Te Junior College of Technology Department of Electrical Engineering Assistant Vice President, Yuanta Securities Co., Ltd.
-
Tamkang University Department of International Trade Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
-
-
Chinese Culture University Department of Business Administration Manager, Yuanta Securities Co., Ltd.
Paul Hsu Senior High School, mechanical engineering track Manager, Yuanta Securities Co., Ltd.
-
Feng Chia University Department of Economics Assistant Vice President, Yuanta Securities Co., Ltd.
-
-
Taiwan Institute of Arts Department of Radio & Television Manager, Yuanta Core Pacific Securities Co., Ltd.
Open University Department of Business Manager, Yuanta Securities Co., Ltd.
-
Ming Chuan University Department of Economics Manager, Yuanta Core Pacific Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Taichung College of Commerce Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd.
17
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
26
01/11/07
01/12/08
01/06/10
Huan-chang Hung
Ting-lin Wang
Chien-hua Wu
Chih-hsiung Chen
Pao-chi Hung
Kui-lung Liu
Shu-chuan Chen
De-liang Wu
Manager, Yuanli Branch
Manager, Pingtung Branch
Manager, Beitun Branch
Manager, Chungho Branch
Manager, Donggang Branch
Manager, Chiayi Branch
Manager, Sihu Branch
Manager, Shulin Branch
01/06/10
01/04/10
01/11/08
01/06/08
01/06/08
01/04/10
Yu-chin Lee
Manager, Siaogang Branch
01/06/10
01/06/10
Rui-hung Lee
Name
Manager, Keelung Branch Tai-yi Lai
Manager, Minsheng Branch
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
Soochow University Department of Business Administration Manager, Yuanta Securities Co., Ltd. Chinese Culture University Department of Labor Relations Assistant Vice President, Yuanta Securities Co., Ltd. United College of Technology Department of Mechanical Engineering Assistant Vice President, Yuanta Securities Co., Ltd. Cheng Hsiu Junior College of Technology Department of Electrical Engineering Manager, Yuanta Securities Co., Ltd. Datong College of Commerce Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd. Takming Junior College of Commerce Department of Finance Senior Manager, Yuanta Securities Co., Ltd. Tamkang University Department of Banking Manager, Yuanta Securities Co., Ltd.
-
Master’s degree, Kaohsiung First University of Science & Technology, Graduate Institute of Financial Operations Assistant Vice President, Yuanta Securities Co., Ltd. MBA, Changhua University of Education Manager, Yuanta Securities Co., Ltd.
-
Fu-jen Catholic University Department of Law Assistant Vice President, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Chin-Yi Institute of Technology Department of Computer Engineering Assistant Vice President, Yuanta Securities Co., Ltd.
18
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
27
01/08/10
01/08/10
23/09/07
01/04/10
01/06/08
Ting-yu Fan
Fu-chuan Yu
Yung-chi Wang
Peng-chih Fang
Manager, Nanyongkang Branch
Manager, Luodong Branch
Manager, Bo-ai Branch
Manager, Liuhe Branch
01/12/08
Chun-chieh Shen
Manager, Sinying Branch
Manager, Fuchung Branch Teh-chien Yu
23/09/07
Ching-an Chou
01/01/10
Manager, Siangshang Branch
Jung-tsai Liu
Manager, Dunsin Branch
01/01/10
01/01/10
Ming-wen Lin
Manager, Sinyi Branch
01/10/08
Manager, Tucheng Syuefu Wei-hsing Branch Tiao
Chung-yung Hsiao
Name
Manager, Kuting Branch
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
The Overseas Chinese Institute of Technology Department of International Trade Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. Chung Hsing University Department of Forestry Manager, Yuanta Securities Co., Ltd. Soochow University Department of Business Mathematics Manager, Yuanta Securities Co., Ltd. National University of Kaohsiung Department of Economic and Financial Law Deputy Manager, Yuanta Securities Co., Ltd. Yilan Senior High School of Commerce Department of Accounting & Statistics Manager, Yuanta Core Pacific Securities Co., Ltd. Cheng Kung University, Accounting Department Manager, Yuanta Securities Co., Ltd. Fortune Institute of Technology Department of Finance Manager, Yuanta Securities Co., Ltd.
-
Fu-jen Catholic University Department of Business Administration Manager, Yuanta Securities Co., Ltd. General Studies, St. Ignatius High School Manager, Yuanta Securities Co., Ltd.
-
Feng Chia University Department of Banking & Insurance Assistant Vice President, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Chung Hsing University Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd.
19
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
28
01/04/10
01/07/08
01/10/08
01/06/10
01/12/08
Manager, Jhongli Branch Tsai-chin Wei
Manager, Yuanlin Branch Chien-yu Chen
Kuan-chih Chen
Chiao-chu Chang
Wei-chieh Hsia
Ching-hua Wang
Manager, Chongching Branch
Manager, Beigang Branch
Manager, Fengyuan Jhongjheng Branch
Manager, Tainan Changrong Branch
01/01/10
01/01/10
01/03/08
Manager, Dunhua Branch Chen-fa Chen
Li-mei Chen
Manager, Sihwei Branch
01/07/08
01/06/10
Chien-hsi Hu
Name
Chen-ming Manager, Beining Branch Lin
Manager, Jhongli Jhongshan Branch
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
Open Business College Affiliated With Taipei College of Business, Department of Applied Business Studies Assistant Vice President, Yuanta Securities Co., Ltd. Kuochi Junior College of Commerce Department of International Trade Assistant Manager, Yuanta Securities Co., Ltd. Shih Hsin Vocational School of Industry & Commerce, Department of Comprehensive Commerce Assistant Vice President, Yuanta Securities Co., Ltd. Chung Hsing University Department of History Manager, Yuanta Securities Co., Ltd. Changhua University of Education Department of Accounting Manager, Yuanta Securities Co., Ltd. Fu-jen Catholic University Department of Business Administration Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. Chung Hsing University Department of Soil & Water Conservation Manager, Yuanta Securities Co., Ltd. Master’s degree, Changhua University of Education Department of Accounting Assistant Vice President, Yuanta Securities Co., Ltd. Tung Fang Junior College of Technology Department of Electrical Engineering Assistant Vice President, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Master’s degree, National Central University Graduate School of Management Assistant Vice President, Yuanta Securities Co., Ltd.
20
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
29
Chien-min Yeh
Manager, Hsinchu Dongmen Branch
01/11/08
01/09/08
01/06/08
23/09/07
Pei-heng Chuang
Chien-hsing Hsiao
Chih-yen Chen
Yen-chuan Lai
Pao-hui Hsu
Tsung-che Yang
Manager, Da-an Branch
Manager, Toufen Branch
Manager, Jhunan Branch
Manager, Dali Defen Branch
Manager, Fengshan Branch
Manager, Hualien Branch
01/06/08
01/11/08
01/06/10
Kuo-liang Chen
01/01/09
Manager, Mujha Branch
Manager, Syuejia Branch Ching-yao Lin
20/08/10
Wei-jen Chen
Manager, Tainan Simen Branch
01/01/10
01/06/10
Name
Manager, Shangsinjhuang Tung-liang Branch Chien
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Kun Shan University Department of Finance Deputy Manager, Yuanta Securities Co., Ltd. Da Chen Senior High School, mechanical engineering track Assistant Vice President, Yuanta Securities Co., Ltd. Master’s degree, Chinese Culture University Institute of Applied Chemistry Deputy Manager, Yuanta Securities Co., Ltd. Chinese Culture University Department of Applied Mathematics Manager, Yuanta Core Pacific Securities Co., Ltd. Tamkang University Department of International Trade Manager, Yuanta Securities Co., Ltd. Feng Chia University Department of Mechanical Engineering Manager, Yuanta Securities Co., Ltd. Tamsui Oxford College Department of Banking Management Manager, Yuanta Securities Co., Ltd. Tamkang College of Arts and Science Department of Business Administration Manager, Yuanta Securities Co., Ltd. Master’s degree, National Kaohsiung University of Applied Sciences Graduate School of Management Manager, Yuanta Securities Co., Ltd. Master’s degree, Dong Hwa University Department of Business Administration Manager, Yuanta Core Pacific Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Hwa Hsia College of Technology Department of Electrical Engineering Assistant Vice President, Yuanta Securities Co., Ltd.
21
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
30
01/11/07
Hung-chuan Chen
Chin-yuan Lin
Manager, Daya Minsing Branch
Manager, Renai Branch
01/01/10
01/03/08
Manager, Songnan Branch Mei-hui Lin
Cheng-liang Hou
Yu-chen Weng
Manager, Sindian Jhongjheng Branch
Manager, Nanshihjiao Branch
01/03/08
Manager, Guancian Branch
01/06/10
Manager, Songjiang Branch
Chi-hua Tseng
01/03/08
Yung-tao Manager, Yenping Branch Chung
Jung-chien Chen
23/09/07
Manager, Jingmei Branch Shi Du
01/04/10
01/04/10
Manager, Kaohsiung East Chen-chung Branch Luo
23/09/07
01/09/08
Manager, Jhudong Branch Shu-li Hsieh
Manager, Jiantan Branch
01/10/08
Name
Wen-cheng Yang
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Chengchi University Department of Western Languages Manager, Yuanta Securities Co., Ltd. Master’s degree, Providence University Graduate School of Management Manager, Yuanta Securities Co., Ltd. Chinese Culture University Department of Political Science Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd. Kaohsiung University of Applied Technology, Affiliated College Department of Banking & Insurance Manager, Yuanta Core Pacific Securities Co., Ltd. Chinese Culture University Department of Banking Manager, Yuanta Securities Co., Ltd. Tamshui Oxford College Department of Industrial Engineering & Management Manager, Yuanta Securities Co., Ltd. Tung Fang Junior College of Technology Department of Art & Crafts Manager, Yuanta Securities Co., Ltd. Taipei College of Business Department of Accounting & Statistics Manager, Yuanta Core Pacific Securities Co., Ltd. Chung Hsing University Department of Land Administration Assistant Vice President, Yuanta Securities Co., Ltd. EMBA, Chengchi University College of Commerce Assistant Vice President, Yuanta Securities Co., Ltd. Tamkang University Department of Business Administration Manager, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Chinese Culture University Department of Animal Husbandry Manager, Yuanta Securities Co., Ltd.
22
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
31
01/04/10
Manager, Tianmu North Branch
01/06/08
01/06/08
21/10/05
Ching-jen Chen
Hsiu-ju Huang
Shu-nu Chen
Yung-hung Teng
Manager, Shulu Branch
Manager, Cingshuei Branch
Manager, Daya Branch
Manager, Taipei Branch
01/06/08
01/06/10
Tsung-kuo Wang
Manager, Chengde Branch
01/09/08
Manager, Hsinchu Science Cheng-mao Ni Park Branch
01/06/10
01/08/10
Manager, Kaiyuan Branch Hsue-li Chang
Manager, Nanhai Branch
01/12/08
Hui-jung Manager, Douliou Branch Chang
Chen-hsiang Shen
01/06/10
Huo-shun Manager, Fuhsing Branch Hung
Chien-hsun Chen
01/01/10
Name
Manager, Heping Branch Hsien-ping Jui
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
Chinese Culture University Department of Oriental Languages Manager, Yuanta Securities Co., Ltd. Ling Tung College Department of Business Administration Manager, Yuanta Securities Co., Ltd.
-
-
Tamkang University Department of Banking Assistant Vice President, Yuanta Core Pacific Securities Co., Ltd.
Open Business College affiliated with Taipei College of Business, Department of International Trade Manager, Yuanta Securities Co., Ltd.
-
Wan Neng College of Technology Department of Industrial Engineering & Management Manager, Yuanta Securities Co., Ltd.
-
-
Taichung College of Commerce Department of International Trade Assistant Vice President, Yuanta Securities Co., Ltd.
Master’s degree, Chung Hsing University Department of Business Administration Manager, Yuanta Securities Co., Ltd.
-
Master’s degree, Chaoyang University of Technology, Graduate Institute of Business Administration Manager, Yuanta Securities Co., Ltd.
-
-
Shih Hsin Vocational School of Industry & Commerce, electronics track Assistant Vice President, Yuanta Securities Co., Ltd.
Ching Cheng High School, general track Manager, Yuanta Securities Co., Ltd.
-
Chinese Culture University Department of International Trade Manager, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Tamkang University Department of International Trade Manager, Yuanta Securities Co., Ltd.
23
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
32
01/02/08
01/04/06
01/08/10
01/09/08
01/11/07
01/07/10
01/06/08
01/04/10
01/08/10
01/04/10
Chueh-ping Su
Sheng-ming Hsiao
Chia-cheng Chen
Ming-hsing Lai
You-jen Lin
Ching-yi Wang
Tsung-sheng Wang
Chen-chang Chiu
Chao-hsiang Chung
Manager, Zihyou Branch
Manager, Fucheng Branch
Manager, Situn Branch
Manager, Taichung Branch
Manager, Bade Branch
Manager, Dayi Branch
Manager, Yongkang Branch
Manager, Hsinchu Branch
Manager, Dongtai Branch, Cheng-hung Manager Fu
Name
Manager, Huwei Branch
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
Ling Tung College Department of Banking & Insurance Manager, Yuanta Securities Co., Ltd. Nan Ya Institute of Technology Department of Chemical Engineering Manager, Yuanta Securities Co., Ltd. Master’s degree, Chung Yuan Christian University Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd. Chengchi University Department of Public Administration Assistant Vice President, Yuanta Securities Co., Ltd. Tunghai University Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd. Soochow University Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd. Chung Yuan Christian University Department of International Trade Deputy Manager, Yuanta Securities Co., Ltd. Wan Neng College of Technology & Commerce, Industrial Management Department Manager, Yuanta Securities Co., Ltd. R.O.C. Military Academy Department of Mechanical Engineering Manager, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Chinese Culture University Department of Public Administration Deputy Manager, Yuanta Securities Co., Ltd.
24
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
33
Cheng-cheng Chang
Manager, Taoyuan Branch
Ching-fu Chen
Manager, Jhubei Branch
Manager, Lujhu Branch
Yu-oh Hsu
Manager, Changhua Branch
Manager, Gaofu Branch
Hsien-feng Chou
Manager, Tianmu Branch Li-ching Hsu
01/06/10
Yuan-tsung Chen
Manager, Fuying Branch
01/11/10
15/04/07
01/10/08
01/06/10
Ming-chou Wei
01/06/08
01/01/10
01/08/10
Manager, Facai Branch
Manager, Nantou Branch Wen-tan Lin
Hsing-yung Teng
01/10/08
01/08/10
Name
Title
Manager, Yingge Branch Hao-yun Chen
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
Taiwan Ocean University Department of Shipping & Transportation Management Manager, Yuanta Securities Co., Ltd. Tamsui Oxford College Department of Tourism Assistant Vice President, Yuanta Securities Co., Ltd. Datong College of Commerce Department of Business Administration Manager, Yuanta Securities Co., Ltd. Feng Chia University Department of International Trade Assistant Vice President, Yuanta Securities Co., Ltd. Chung Hsing University Department of Finance Manager, Yuanta Securities Co., Ltd. Fu-jen Catholic University Department of Accounting & Statistics Manager, Yuanta Securities Co., Ltd. Fu-jen Catholic University Department of Business Administration Manager, Yuanta Securities Co., Ltd. Yu Da High School of Commerce and Home Economics, Combined Business Department Senior Manager, Yuanta Securities Co., Ltd. Kaohsiung University of Applied Science Department of Business Management Assistant Vice President, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Lunghwa University of Science & Technology, Affiliated College of Continuing Education Department of Finance & Banking Assistant Vice President, Yuanta Securities Co., Ltd.
25
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
34
Mei-hsueh Wang
Fa-hsin Hsieh
Manager, Jyuguang Branch
Manager, Miaoli Branch
01/08/10
Shun-chih Yang
Su-ching Chiang
Chung-kui Wu
Manager, Dalin Branch
Manager, Dongmen Branch
Manager, Chaojhou Branch
01/11/10
01/08/07
01/08/10
Ching-yueh Lin
Manager,Huashan Branch
01/01/10
01/11/08
Hsiu-ching Huang
Manager, Jhushan Branch
Chung-yi Manager, Jhongde Branch Chen
01/06/08
Mei-ling Huang
01/05/09
01/02/08
01/06/08
01/04/10
Date elected (taken office)
Manager, Taiping Branch
Cheng-nan Manager, Kinmen Branch Yao
Chun-chieh Lai
Name
Manager, Linyuan Branch
Title
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
Taichung College of Commerce Department of Business Administration Manager, Yuanta Securities Co., Ltd. Tunghai University Department of Information Sciences Assistant Vice President, Yuanta Securities Co., Ltd. Tamkang University Department of Economic Cooperation Manager, Yuanta Securities Co., Ltd. Tunghai University Department of Economic Deputy Manager, Yuanta Securities Co., Ltd. Taipei First Girls High School, general track Manager, Yuanta Securities Co., Ltd. Pingtung University of Technology Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd.
-
National Pingtung Agricultural College Department of Agricultural machinery engineering Deputy Manager, Yuanta Securities Co., Ltd.
-
-
Tamsui Oxford College, Department of Business Administration Deputy Manager, Yuanta Securities Co., Ltd.
Ming-Dao High School, general track Manager, Yuanta Securities Co., Ltd.
-
Sun Yat-sen University Department of Finance Manager, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Yung Ta Institute of Technology & Commerce Attached to Continuing Education Department of Business Management Deputy Manager, Yuanta Securities Co., Ltd.
26
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
35
01/08/10
01/06/08
01/11/08
01/07/10
Ting-feng Wang
Pin-chen Chen
Fu-teh Huang
Kun-tsung Chan
Chao-ming Hung
Manager, Jiali Branch
Manager, Dali Branch
Manager, Pingtung Minsheng Branch
Manager, Siluo Branch
Manager, Shihlin Branch
01/11/10
01/04/10
15/04/07
01/01/10
01/06/08
Manager, Sinsing Branch Sheng Huang
Ching-yu Wu
Hsien-chung Lee
Lieh-hsiung Chen
Manager, Cishan Branch
Manager, Songshan Branch
Manager, Mengjia Branch
Manager, Pingnan Branch Hui-shu Kuo
01/06/08
01/06/08
Yi-cheng Cheng
Name
Manager, Guei-ren Branch
Title
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
-
Shares
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
-
-
-
-
Northeastern University (Argentina) Department of Medical Science Manager, Yuanta Securities Co., Ltd. Feng Chia University Department of Economic Cooperation Assistant Vice President, Yuanta Securities Co., Ltd. Fu-jen Catholic University Department of Textile & Fashion Manager, Yuanta Securities Co., Ltd. Master’s degree, Changhua University of Education Department of Accounting Deputy Manager, Yuanta Securities Co., Ltd. Chung Hsing University Department of Economic Cooperation Assistant Vice President, Yuanta Securities Co., Ltd. Chung Yuan Christian University Department of Mathematics Assistant Vice President, Yuanta Securities Co., Ltd. B.A., National Kaohsiung First University of Science and Technology Deputy Manager, Yuanta Securities Co., Ltd. Tamkang University Department of Business Administration Assistant Vice President, Yuanta Securities Co., Ltd. Chinese Culture University Department of Information Management Assistant Vice President, Yuanta Securities Co., Ltd. Meiho Institute of Technology, Meiho Affiliated Institute of Continuing Education Department of Finance Manager, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Feng Chia University Department of Banking & Insurance Assistant Vice President, Yuanta Securities Co., Ltd.
27
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
-
-
-
-
-
-
-
-
Position
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
36
08/02/10
Liang-hao Manager, Nankan Branch Chen
Chun-hsiang Chen
Manager, Shanhua Branch
01/06/08
01/06/08
Name
Title
Manager, Datong Branch Chun-hsien Tu
Date elected (taken office)
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
Shares
-
-
-
%
-
-
Hsinchu Senior High Vocational School, general track Assistant Vice President, Yuanta Securities Co., Ltd. Soochow University Department of Business Administration Deputy Manager, Yuanta Securities Co., Ltd.
Current additional positions
-
Education and selected past positions Southern Taiwan College of Technology, junior college section Department of Electronic Engineering Assistant Vice President , Yuanta Securities Co., Ltd.
28
Shares
Shares
%
Shareholdings by Shareholding by spouse and nominee underage children arrangement
Shareholding
-
-
-
Position
-
-
-
-
-
-
Name Relationship
Spouse or relatives within two degrees who are managers, directors or supervisors
37
Yuanta Financial Holdings Co., Ltd. Representative: Pao-kuei (Paul) Chu
Yuanta Financial Holdings Co., Ltd. Representative: Tseng-chi Lin
Yuanta Financial Holdings Co., Ltd. Representative: Chwo-ming (Joseph) Yu
Yuanta Financial Holdings Co., Ltd. Representative: Hung-chi (Alex) Lee
Yuanta Financial Holdings Co., Ltd. Representative: Kang-sheng Kao
Yuanta Financial Holdings Co., Ltd. Representative: Yueng-lin Ma
Yuanta Financial Holdings Co., Ltd. Representative: Yueh-tsang Lee
Yuanta Financial Holdings Co., Ltd. Representative: Ching-Kuang Shen
Yuanta Financial Holdings Co., Ltd. Representative: Rui-chen Ma
Yuanta Financial Holdings Co., Ltd. Representative: Cheng Fen
Yuanta Financial Holdings Co., Ltd. Representative: Tien-fu Lin ( note3)
Yuanta Financial Holdings Co., Ltd. Representative: Ping-han Tsa ( note3)
Yuanta Financial Holdings Co., Ltd. Representative: Hsiu-wei Chen ( note3)
Yuanta Financial Holdings Co., Ltd. Representative: Chao-hsiung Li ( note3)
Director
President
Independent Director
Independent Director
Independent Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
29,789
Yuanta
29,789
0
0
0
0
Consolidated Consolidated Consolidated Yuanta Yuanta subsidiaries subsidiaries subsidiaries
Pension upon retirement (B)
3,631
Yuanta
3,631
Consolidated subsidiaries
0.67%
Yuanta
0.67%
Consolidated subsidiaries
56,316
Yuanta
96,299
Consolidated subsidiaries
0
Yuanta
0
Consolidated subsidiaries
Yuanta
Consolidated subsidiaries
253
0
253
0
Cash Shares Cash Shares
0
Yuanta
0
1.79%
Consolidated Yuanta subsidiaries
2.59%
Consolidated subsidiaries
395
Compensation from nonsubsidiary companies
Data as of FY2010 Unit: NT$ thousands Combined A, B, C, D,E,F ,and G total Number of employee amount as % of 2008 Employee profit sharing (G) stock options granted net income after tax in 2008 (H)
Compensation related to employee status Pension upson retirement (F)
Note 1: Payments to Directors are to be calculated in principle from the date of their actually taking office during the current fiscal year. Note 2: All remuneration information disclosed in this table differs from the concept of income as described in the Income Tax Act. Thus, the amounts computed and listed above are for the income of the given year. Note 3: Has left the company.
Yuanta Financial Holdings Co., Ltd. Representative:Ting-chien (Tony) Shen
Name
Chairman
Title
Compensation( A)
Directors’ compensation
Combined A, B ,Cand D total compensation as Salary, bonus and Profit distribution Business expenses % of 2008 net special discretionary (C) (D) allowance (E) income after tax
(1)Compensation paid to Directors (independent Directors)
6. Remuneration paid to Directors, Supervisors, Managers, Presidents and Vice Presidents in 2010
38
Kang-sheng Kao
NT$5,000 (inclusive) – NT$10,000
Total
More than NT$100,000
NT$50,000 (inclusive) – NT$100,000
NT$30,000 (inclusive) – NT$50,000
NT$15,000 (inclusive) – NT$30,000
33,420
Ting-chien (Tony) Shen
Chwo-ming (Joseph) Yu, Pao-kuei(Paul) Chu
NT$2,000 (inclusive) – NT$5,000
NT$10,000 (inclusive) – NT$15,000
Tien-fu Lin, Hsiu-wei Chen, Hung-chi (Alex) Lee, Jui-chen Ma, Ping-han Tsai, Ching-kuang Shen, Yueng-lin Ma, Yueh-tsang Lee, Chaohsiung Li, Tseng-chi Lin, Cheng Fen
Names of Directors Yuanta Securities
All invested enterprises
First five categories of compensation (A+B+C+D+E+F+G)
Unit: NT$ thousands
33,420
Ting-chien (Tony) Shen
Kang-sheng Kao
Chwo-ming (Joseph) Yu, Pao-kuei(Paul) Chu
Kang-sheng Kao
89,989
130,367
Hung-chi (Alex) Lee
Ting-chien (Tony) Shen, Hung-chi (Alex) Lee, Ting-chien (Tony) Shen, Ping-han Tsai Ping-han Tsai
Kang-sheng Kao
Chwo-ming (Joseph) Yu, Pao-kuei(Paul) Chu, Chwo-ming (Joseph) Yu, Pao-kuei(Paul) Chu, Hsiu-wei Chen, Tien-fu Lin, Hsiu-wei Chen, Tien-fu Lin,
Tien-fu Lin, Hsiu-wei Chen, Hung-chi (Alex) Jui-chen Ma, Ping-han Tsai, Ching-kuang Jui-chen Ma, Ping-han Tsai, Ching-kuang Lee, Jui-chen Ma, Ping-han Tsai, Ching-kuang Shen, Yueng-lin Ma, Yueh-tsang Lee, Chao- Shen, Yueng-lin Ma, Yueh-tsang Lee, ChaoShen, Yueng-lin Ma, Yueh-tsang Lee, Chaohsiung Li, Tseng-chi Lin, Chao-lin Yang hsiung Li, Tseng-chi Lin, Chao-lin Yang hsiung Li, Tseng-chi Lin, Cheng Fen
All invested enterprises
First three categories of compensation (A+B+C+D) Yuanta Securities
Less than NT$2,000
Range of compensation paid to Directors of Yuanta Securities
Range of Remuneration
39
Wen-ming Hung
Chang-jung Chiang
Ming-Shan Li
Ping-han Tsai
Cheng-ling Ho
Tsai-yu Chang
Chun-jung Hsu
Tien-fu Lin
Hung-chi (Alex) Lee
Name
Hsiu-wei Chen
Senior Vice President
Ching-tang Wu
Vice President Tai-sheng Chuang
Vice President Wei-cheng Huang
Senior Vice President
Vice President Kuang-hua Yu
Vice President Ming-lang Liao
Vice President Teng-hsi Lu
Vice President Tsung-wu Lai
Vice President Shao-hsing Kung
Executive Vice President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Senior Vice President Senior Vice President
President
Title
94,485
Yuanta Securities
102,803
Consolidated subsidiaries
Salary (A)
0
Yuanta Securities
0
Consolidated subsidiaries
Pension upon retirement (B)
(2) Remuneration paid to the presidents and vice presidents
251,570
Yuanta Securities
31
293,267
Consolidated subsidiaries
Cash incentives and special discretionary allowance etc. (C)
1,759
0
1,759
0
Yuanta Consolidated Securities subsidiaries Cash Shares Cash Shares
Employee profit sharing (D)
6.93%
Yuanta Securities
7.92%
Consolidated subsidiaries
Combined A, B, C,and D total compensation in % of net income after tax
0
Yuanta Securities
0
Consolidated subsidiaries
Employee stock options granted in 2008
243
Compensation from nonsubsidiary companies
Data as of FY2010 Unit: NT$ thousands
40
Yao-ting Yu
Li-ming Wu
Tzu-chun Kao
Chi-hsiu Fan Jiang
Hsiang-shan Lin
32
Note 1: Earnings distributed as employee bonuses are the amounts proposed and approved by the board of directors prior to the shareholders meeting. Note 2:.The principles for calculating all amounts paid to the president and vice presidents are calculated according to the actual time served in a given year. Note 3: All remuneration information disclosed in this table differs from the concept of income as described in the Income Tax Act. Thus, the amounts computed and listed above are for the income of the given year. Note 4: Has left the company.
Vice President Arthur Lo (note 4)
Yu-ling Huang (note 4) Chang-hsing Lin Vice President (note 4)
Senior Vice President
Vice President Yuan-chi Fang
Vice President Shuo-feng Chang
Vice President Yi-ming Wang
Vice President Hsuan-min Kuo
Senior Vice President
Vice President Hsu-shu Mai
Senior Vice President Senior Vice President Senior Vice President
Vice President Feng-hsiang Kuo
Vice President Su-ying Lee
Vice President Li-hui Tseng
Vice President Chih-hung Ma
Vice President Chao-tzu Yang
Senior Vice President
Vice President Wei-ho Liu
Vice President Liao-chin Lin
Vice President Ah-yen Lee
41
Ming-shan Li, Ping-han Tsai
NT$30,000 (inclusive) – NT$50,000
Total
More than NT$100,000 347,814
Hung-chi (Alex) Lee, Tien-fu Lin
NT$15,000 (inclusive) – NT$30,000
NT$50,000 (inclusive) – NT$100,000
Hsiang-shan Lin, Tzu-chun Kao, Chun-jung Hsu, Tsai-yu Chang
Hung-chi (Alex) Lee
Ming-shan Li, Ping-han Tsai
Tien-fu Lin
398,072
Chang-hsing Lin, Yu-ling Huang Arthur Lo, Li-hui Tseng, Hsu-shu Mai, Ming-lang Liao, Su-ying Lee, Feng-hsiang Kuo, Yuan-chi Fang Liao-chin Lin, Wei-cheng Huang, Teng-hsi Lu, Tai-sheng Chuang, Hsuan-min Kuo, Chao-tzu Yang, Chang-jung Chiang, Shao-hsing Kung, Hsiu-wei Chen, Tsung-wu Lai, Ah-yen Lee, Kuang-hua Yu, Yi-ming Wang, Ching-tang Wu, Wen-ming Hung, Cheng-ling Ho, Yao-ting Yu, Wei-ho Liu, Shuo-feng Chang, Li-ming Wu, Chi-hsiu Fan Jiang Hsiang-shan Lin, Tzu-chun Kao, Chun-jung Hsu, Tsai-yu Chang, Chihhung Ma
Chang-hsing Lin, Yu-ling Huang, Chih-hung Ma
Consolidated Subsidiaries and all affiliated companies
Unit: NT$ thousands
Arthur Lo, Li-hui Tseng, Hsu-shu Mai, Ming-lang Liao, Su-ying Lee, Feng-hsiang Kuo, Yuan-chi Fang Liao-chin Lin, Wei-cheng Huang, Teng-hsi Lu, Tai-sheng Chuang, Hsuan-min Kuo, Chao-tzu Yang, Chang-jung Chiang, Shao-hsing Kung, Hsiu-wei Chen, Tsung-wu Lai, Ah-yen Lee, Kuang-hua Yu, Yi-ming Wang, Ching-tang Wu, Wen-ming Hung, Cheng-ling Ho, Yao-ting Yu, Wei-ho Liu, Shuo-feng Chang, Li-ming Wu, Chi-hsiu Fan Jiang
Yuanta Securities
Name of the president and Vice Presidents
NT$10,000 (inclusive) – NT$15,000
NT$5,000 (inclusive) – NT$10,000
NT$2,000 (inclusive) – NT$5,000
Less than NT$2,000
Range of compensation paid to the President and Vice Presidents of Yuanta Securities
Range of Remuneration
42
43
(3) Employee bonus amount paid to managers Baseline date:Feb. 28, 2011 Unit: NT$ thousands Title Manager
Name
President
Hung-chi (Alex) Lee
Executive Vice President
Tien-fu Lin
Executive Vice President
Cheng-ling Ho
Executive Vice President
Ping-han Tsai
Executive Vice President
Ming-Shan Li
Executive Vice President
Chun-jung Hsu
Executive Vice President
Tsai-yu Chang
Senior Vice President
Hsiu-wei Chen
Vice President
Wei-cheng Huang
Assistant Vice President, Human Resources Department Senior Vice President, Proprietary Trading Department Assistant Vice President, Proprietary Trading Department Assistant Vice President, Proprietary Trading Department Assistant Vice President, Proprietary Trading Department Vice President, Investment Banking Department Vice President, Investment Banking Department Vice President, Investment Banking Department Assistant Vice President, Investment Banking Department Assistant Vice President, Investment Banking Department Assistant Vice President, Investment Banking Department Assistant Vice President, Investment Banking Department Assistant Vice President, Investment Banking Department
Cash bonus amount
Total
Total as % of 2009 net income after tax
0
8,044
8,044
0.16%
Po-chih Liu Tzu-chun Kao Kao-yi Su Chien-tu Huang Chang-en Li Li-hui Tseng Su-ying Lee Feng-hsiang Kuo Mei-ying Huang Pei-Chen Lin Hsin-yi Chiu Yi-ju Hou Ying-hui Peng
Vice President, Institutional Group
Shuo-feng Chang
Vice President, Institutional Group
Yuan-chi Fang
Assistant Vice President, Institutional Group Assistant Vice President, Institutional Group Assistant Vice President, Institutional Group Assistant Vice President, Institutional Group Assistant Vice President, Institutional Group Vice President, Compliance Department Assistant Vice President, Compliance Department Assistant Vice President, Legal Department Assistant Vice President, Registrar Department Senior Vice President, Financial Transactions Department Assistant Vice President, Financial Transactions Department
Stock bonus amount
Riga Saito Hui-fen Lin Tiffany Lin Judy Chang Daniel Patrick Clarke Wei-ho Liu Chin-tai Tseng Wen-ching Chiu Yi-wen Ma Hsiang-shan Lin Tien-jen Huang
34
44
Title Vice President, Risk Management Department Vice President, Foreign Equity Department Senior Assistant Vice President, Finance Department Assistant Vice President, Finance Department Vice President, Financial Superintendence Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Vice President, Wealth Management Department Assistant Vice President, Wealth Management Department Assistant Vice President, Wealth Management Department Vice President, International Operations Department Vice President, International Operations Department Assistant Vice President, International Operations Department Assistant Vice President, International Operations Department Assistant Vice President, International Operations Department Senior Assistant Vice President, Accounting Department Senior Vice President, Fixed Income Department Vice President, Fixed Income Department Senior Assistant Vice President, Fixed Income Department Assistant Vice President, Fixed Income Department Assistant Vice President, Settlement Department Vice President, Business Superintendence Vice President, Business Superintendence Vice President, Business Superintendence Vice President, Business Superintendence Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence
Stock bonus amount
Name Hsuan-min Kuo Liao-chin Lin Yi-heng Hu Wen-ching Hsu Kuang-hua Yu Ming-lang Liao Chen-wen Hua Chen-hsiang Wu Yi-huang Chang Chun-chieh Wang Yuan-shan Lin Ming-jen Wang Yu-cheng Chang Yi-ming Wang Hsien-ling Yeh Hung-lieh Liang Chao-tzu Yang Chih-hung Ma Yao-cheng Kuo Ya-wen Chang Hsi-ying Chen Yueh-jung Liao Li-ming Wu Hsu-shu Mai Hung-chan Tseng Jun-chih Lien Chin-pi Lin Chang-jung Chiang Wen-ming Hung Shao-hsing Kung Tsung-wu Lai Teng-hsi Lu Cheng-chuan Chiu Chao-min Mou
35
Cash bonus amount
Total
Total as % of 2009 net income after tax
45
Title Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Vice President , Board Secretary Office Senior Vice President, Information Technology Department Senior Assistant Vice President, Information Technology Department Senior Assistant Vice President, Information Technology Department Assistant Vice President, Information Technology Department Assistant Vice President, Information Technology Department Assistant Vice President, Information Technology Department Assistant Vice President, Channel Marketing Department Assistant Vice President, Administration & Labor Safety Department Vice President, Audit & Approval Department Assistant Vice President, Audit & Approval Department Senior Vice President, General Manager Office Assistant Vice President, General Manager Office Assistant Vice President, Brokerage Department
Stock bonus amount
Name Yu-shun Yang Cheng-chung Lin Chun-cheng Cheng Ming Lin Chih-hung Tsai Chun-chieh Chen Hsien-chuan Meng Shih-hsiung Lin Yi-ching Koo Tai-sheng Chuang Yao-ting Yu Yong-hsien Chang Rong-fu Lee Chun-yen Liu Chun-ching Chang Chi-hsin Wei Shih-huan Chang Bo-ching Lee Ah-yen Lee Yen-ying Liu Ching-tang Wu Ching-tung Chang Kang Fan
Manager, Bade Branch
Ching-yi Wang
Manager, Sanchong Branch
Mu-hsin Hsu
Manager, Shangsinjhuang Branch
Tung-liang Chien
Manager, Tucheng Branch
Yi-jui Kao
Manager, Tucheng Syuefu Branch
Wei-hsing Tiao
Manager, Shihlin Branch
Chao-ming Hung
Manager, Greater Tianmu Branch
Hui-ying Wu
Manager, Dajia Branch
Kui-hsiang Wang
Manager, Datong Branch
Yung-hui Chen
Manager, Da-an Branch
Pei-heng Chuang
Manager, Dali Branch
Pin-chen Chen
Manager, Dali Defen Branch
Yen-chuan Lai
Manager, Dalin Branch
Shun-chih Yang
Manager, Dayi Branch
Tsung-sheng Wang
Manager, Datong Branch
Chun-hsien Tu
36
Cash bonus amount
Total
Total as % of 2009 net income after tax
46
Title
Stock bonus amount
Name
Manager, Daya Branch
Shu-nu Chen
Manager, Daya Minsing Branch
Hung-chuan Chen
Manager, Yenping Branch
Yung-tao Chung
Manager, Siaogang Branch
Yu-chin Lee
Manager, Chungho Branch
Chih-hsiung Chen
Manager, Jhongli Jhongshan Branch
Chien-hsi Hu
Manager, Jhongli Branch
Tsai-chin Wei
Manager, Renai Branch
Chin-yuan Lin
Manager, Neihu Branch
Yu-lan Cheng
Manager, Liuhe Branch
Peng-chih Fang
Manager, Tianmu Branch
Li-ching Hsu
Manager, Taiping Branch
Mei-ling Huang
Manager, Douliou Branch
Hui-jung Chang
Manager, Mujha Branch
Kuo-liang Chen
Manager, Tianmu North Branch
Chien-hsun Chen
Manager, Beitun Branch
Chien-hua Wu
Manager, Beitou Branch
Chun-liang Pan
Manager, North Taoyuan Branch
Shih-kuo Lee
Manager, Beigang Branch
Chiao-chu Chang
Manager, Beining Branch
Chen-ming Lin
Manager, Kuting Branch
Chung-yung Hsiao
Manager, Taichung Jhonggang Branch
Hsin-liang Lin
Manager, Taichung Branch
You-jen Lin
Manager, Taipei Branch
Yung-hung Teng
Manager, Tainan Branch
Ming-chun Hsieh
Manager, Tainan Simen Branch
Wei-jen Chen
Manager, Tainan Changrong Branch
Ching-hua Wang
Manager, Sihwei Branch
Li-mei Chen
Manager, Zuoying Branch
Hsiao-pei Su
Manager, Minsheng Branch
Rui-hung Lee
Manager, Yunghe Branch
Chen-jung Chen
Manager, Yongkang Branch
Chen-chang Chiu
Manager, Siangshang Branch
Ching-an Chou
Manager, Chenggong Branch
Teng-rui Chu
Manager, Sijhih Branch
Tien-yo Sun
Manager, Jhushan Branch
Hsiu-ching Huang
Manager, Jhubei Branch
Hsing-yung Teng
Manager, Jhudong Branch
Shu-li Hsieh
Manager, Jhunan Branch
Chih-yen Chen
Manager, Hsinchu Science Park Branch
Cheng-mao Ni
Manager, Zihyou Branch
Sheng-ming Hsiao
Manager, Situn Branch
Ming-hsing Lai
Manager, Sihu Branch
Shu-chuan Chen
Manager, Siluo Branch
Kun-tsung Chan
Manager, Shulu Branch
Ching-jen Chen
Manager, Jiali Branch
Ting-feng Wang
Manager, Heping Branch
Hsien-ping Jui
37
Cash bonus amount
Total
Total as % of 2009 net income after tax
47
Title
Stock bonus amount
Name
Manager, Fuchung Branch
Teh-chien Yu
Manager, Fucheng Branch
Chia-cheng Chen
Manager, Jhongsiao Yanji Branch
Chang-yu Chen
Manager, Chengde Branch
Tsung-kuo Wang
Manager, Dongmen Branch
Su-ching Chiang
Manager, East Pingtung Branch
Chun-sung Hung
Manager, Dongtai Branch, Manager
Cheng-hung Fu
Manager, Kaohsiung East Branch
Chen-chung Luo
Manager, Donggang Branch
Pao-chi Hung
Manager, Linyuan Branch
Chun-chieh Lai
Manager, Banciao Branch
Yi-ting Fan
Manager, Songshan Branch
Hsien-chung Lee
Manager, Songjiang Branch
Chi-hua Tseng
Manager, Songnan Branch
Mei-hui Lin
Manager, Hualien Branch
Tsung-che Yang
Manager, Huwei Branch
Chueh-ping Su
Manager, Kinmen Branch
Cheng-nan Yao
Manager, Sinyi Branch
Ming-wen Lin
Manager, Nanyongkang Branch
Ting-yu Fan
Manager, Nantou Branch
Wen-tan Lin
Manager, Nankan Branch
Liang-hao Chen
Manager, Nanhai Branch
Chen-hsiang Shen
Manager, Nanshihjiao Branch
Yu-chen Weng
Manager, Chengchung Branch
Wen-pao Lee
Manager, Pingtung Branch
Ting-lin Wang
Manager, Pingtung Minsheng Branch
Fu-teh Huang
Manager, Pingnan Branch
Hui-shu Kuo
Manager, Miaoli Branch
Fa-hsin Hsieh
Manager, Yuanli Branch
Huan-chang Hung
Manager, Chongching Branch
Kuan-chih Chen
Manager, Yuanlin Branch
Chien-yu Chen
Manager, Taoyuan Branch
Cheng-cheng Chang
Manager, Caotun Branch
Hsiao-chi Nien
Manager, Kaohsiung Branch
Ching-tui Lin
Manager, Gaofu Branch
Hsien-feng Chou
Manager, Keelung Branch
Tai-yi Lai
Manager, Jhongde Branch
Chung-yi Chen
Manager, Danshui Branch
Chih-yu Chen
Manager, Cingshuei Branch
Hsiu-ju Huang
Manager, Jyuguang Branch
Mei-hsueh Wang
Manager, Lugang Branch
Ming-hsing Yeh
Manager, Bo-ai Branch
Yung-chi Wang
Manager, Fuhsing Branch
Huo-shun Hung
Manager, Dunhua Branch
Chen-fa Chen
Manager, Dunsin Branch
Jung-tsai Liu
Manager, Dunnan Branch
Shih-chin Luo
Manager, Jingmei Branch
Shi Du
38
Cash bonus amount
Total
Total as % of 2009 net income after tax
48
Title
Stock bonus amount
Name
Manager, Facai Branch
Ming-chou Wei
Manager, Shanhua Branch
Chun-hsiang Chen
Manager,Huashan Branch
Ching-yueh Lin
Manager, Kaiyuan Branch
Hsue-li Chang
Manager, Hsinchu Branch
Chao-hsiang Chung
Manager, Hsinchu Beimen Branch
Chia-hui Wu
Manager, Hsinchu Dongmen Branch
Chien-min Yeh
Manager, Sindian Jhongjheng Branch
Cheng-liang Hou
Manager, Sinjhuang Branch
Chih-hao Feng
Manager, Sinsing Branch
Sheng Huang
Manager, Sinying Branch
Chun-chieh Shen
Manager, Lujhu Branch
Ching-fu Chen
Manager, Chiayi Branch
Kui-lung Liu
Manager, Changhua Branch
Yu-oh Hsu
Manager, Changhua Minsheng Branch
Mei-yun Wu
Manager, Cishan Branch
Ching-yu Wu
Manager, Fuying Branch
Yuan-tsung Chen
Manager, Mengjia Branch
Lieh-hsiung Chen
Manager, Fengshan Branch
Pao-hui Hsu
Manager, Jiantan Branch
Wen-cheng Yang
Manager, Chaojhou Branch
Chung-kui Wu
Manager, Syuejia Branch
Ching-yao Lin
Manager, Shulin Branch
De-liang Wu
Manager, Toufen Branch
Chien-hsing Hsiao
Manager, Guancian Branch
Jung-chien Chen
Manager, Guei-ren Branch Manager, Fengyuan Jhongjheng Branch Manager, Fengyuan Station Branch
Wei-chieh Hsia
Manager, Luodong Branch
Fu-chuan Yu
Cash bonus amount
Total
Total as % of 2009 net income after tax
Yi-cheng Cheng Po-chien Hung
Manager, Lujhou Branch
Tsung-shan Chen
Manager, Yingge Branch
Hao-yun Chen
7. Compensation paid to directors, supervisors, presidents, and vice presidents in previous two years (1) Analysis of total compensation paid as a percentage of net income Unit: NTD thousand
Category
Net income
Directors’ compensation
2009
4,861,193
38,706
2010
5,019,939
33,420
Year
Supervisors’ compensation
As % of net income
Presidents’ and vice presidents’ compensation
0.80%
0
0%
232,330
4.78%
0.67%
0
0%
347,814
6.93%
As % of net income
(2) Pay standards and policy, procedures for determining compensation, and performance
39
As % of net income
49
Compensation is paid as an exchange for employee labor, and to provide employees with the fiscal resources to earn a living. The company seeks to attract highly skilled individuals, and to retain talent with development potential so as to form teams and contribute to corporate performance. Performance is in turn reflected in employee compensation, as well as increased shareholder equity, enhanced economic development, and prosperity. In order to closely align employees' individual work goals with Yuanta Securities’ business objectives as well as stockholder interests, and attract outstanding talent to serve the company, Yuanta Securities has adopted a performance-oriented overall compensation strategy and positioning, and designed a highly competitive salary policy. Salaries are rationally determined on the basis of the company's operating results and individual performance, and employees are given long-term compensation plans. This policy is intended as an incentive for outstanding performance on the part of employees, and seeks to create a win-win outcome for the employees, Yuanta Securities, and stockholders. Yuanta Securities adopts the same principles when determining compensation for high-level managers. By using a base salary combined with cash awards for a more competitive and motivating compensation scheme, we hope to encourage our management team to maximize their overall performance and achieve results. All in all, compensation consists of several components, primarily consisting of a base salary, allowances and various incentives in combination with annual leave, insurance and other social welfare benefits for a comprehensive payroll framework that also allows the company to maintain costs at a reasonable level. Company statutes stipulate that should there be earnings at the end of the fiscal year after payment of taxes and recovery of losses in accordance with legal requirements, funds for the statutory surplus reserve and the special reserve shall be appropriated first, then 0.5%-1% of the balance shall be appropriated for directors’ compensation and 0.5%-1.5% for employee bonuses. The disbursement of such compensations and bonuses will take place after the Shareholders’ Meeting has approved the profit distribution proposal prepared and submitted by the Board of Directors.
III. Corporate governance practices and status of compliance 1. Operations of the Board The board held 14 meetings(A) in the past year, and the attendance record of board members is listed below:
Title Chairman Independent Director Independent Director Independent Director Director Director
Name Yuanta Financial Holding representative: Ting-chien (Tony) Shen Yuanta Financial Holding representative: Pao-kuei (Paul)Chu Yuanta Financial Holding representative: Tseng-chi Lin Yuanta Financial Holding representative: Chwo-ming (Joseph) Yu Yuanta Financial Holding representative: Hung-chi (Alex) Lee
Yuanta Financial Holding representative: Kang-sheng Kao 40
Actual attendance (B)
Attendance by proxy
Actual attendance rate (%) (B/A) (Note)
14
1
93
15
0
100
15
0
100
13
2
87
14
1
93
15
0
100
Remarks
50
Director Director Director Director
Yuanta Financial Holding representative: Yueng-lin Ma Yuanta Financial Holding representative: Yueh-tsang Lee Yuanta Financial Holding representative: Ching-Kuang Shen Yuanta Financial Holding representative: Rui-chen Ma
10
5
67
15
0
100
11
4
73
9
6
60
Director
Yuanta Financial Holding representative: Cheng Fen
7
0
100
Former Director
Yuanta Financial Holding representative: Tien-fn Lin
6
2
75
Former Director
Yuanta Financial Holding representative: Chao-hsiung Li
4
3
50
Former Director
Yuanta Financial Holding representative: Ping-han Tsai
8
0
100
Former Director
Yuanta Financial Holding representative: Hsiu-wei Chen
8
0
100
Has became director on 29/06/10, Held 7 times during tenure Has retired on 28/06/10, Held 8 times during tenure Has retired on 28/06/10, Held 8 times during tenure Has retired on 28/06/10, Held 8 times during tenure Has retired on 28/06/10, Held 8 times during tenure
Other required information: I.Concerning items listed in Article 14-3 of the Securities and Exchange Act as well as items in board resolutions regarding which independent directors have voiced opposing or qualified opinions on the record or in writing, the minutes shall clearly state the meeting date, period, content of the resolution, opinions of all independent directors, and the company’s handling of the opinions of the independent directors: None. II.When a director recuses himself or herself from a resolution, the minutes shall clearly state the director’s name, content of the resolution, reason for recusal, and participation in voting: 1. January 28, 2010: 33rd meeting of the 6th board of directors Summary: Proposed standards for trading of equity securites issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Independent director Chwo-ming Yu concurrently serves as a director of HannStar Display Corporation; independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation and ReaLy Development & Construction Corporation; director Ching-kuang Shen concurrently serves as a director of CPC; and director Rui-chen Ma, represented by director Ping-han Tsai, concurrently serves as a director of the Taiwan Tea Corporation. The above named consequently recused themselves from discussion and voting on the proposal. 2. February 25, 2010: 34th meeting of the 6th board of directors (1)Summary: Proposed to open derivatives hedging accounts for Yuanta Securities (Hong Kong) Corporation as an interested party. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Vice Chairman Kang-sheng Kao concurrently serves as the chairman of Yuanta Securities (Hong Kong) Corporation, for which directors Hung-chi (Alex) Lee and Ping-han Tsai also concurrently serve as directors. The above named consequently recused themselves from participating or serving as representatives in the discussion and voting concerning the above companies they serve. (2) Summary: Proposed to trade equity securites issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation; independent director Chwo-ming Yu concurrently serves as a director of HannStar Display Corporation; director Ching-kuang Shen concurrently serves as a director of CPC. The above named consequently recused themselves from participating or serving as representatives in the discussion and voting concerning the above companies they serve. 3. March 25, 2010: 35th meeting of the 6th board of directors (1) Summary: Proposed to donate NT$5 million to the Yuanta Cultural and Educational Foundation. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not 41
51
participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Tien-fu Lin concurrently serves as a director of the Yuanta Cultural and Educational Foundation, and thus recused himself from participating in the discussion or voting of the proposal. (2) Summary: Proposed to renew lease for expanded space with interested party Yuanta Futures. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Tien-fu Lin concurrently serves as an auditor of Yuanta Futures, thus he recused himself from discussion and voting on the proposal. (3) Summary: Proposed to trade corporate bonds and financial bonds issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: A. Chairman Ching-kuang Shen, Vice Chairman Kang-sheng Kao, and independent director Tseng-chi Lin concurrently serve as directors of Yuanta Financial Holdings, and thus recused themselves from discussion and voting on matters related to that company. B. Independent director Pao-kuei Chu assumed the powers of chairman with regard to the discussion and voting. (4) Summary: Proposed to trade equity securites issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Independent director Chwo-ming Yu concurrently serves as a director of HannStar Display Corporation; independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation; director Ching-kuang Shen concurrently serves as a director of CPC. The above named consequently recused themselves from discussion and voting on the proposal. 4. April 29, 2010: 37th meeting of the 6th board of directors (1) Summary: Proposed to jointly purchase “ Financial Markets Risk Management Information System” with interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: A. Vice Chairman Kang-sheng Kao, Chairman Ting-chien (Tony) Shen and independent director Tseng-chi Lin concurrently serve as directors of Yuanta Financial Holdings; and director Tien-fu Lin concurrently serves as an auditor of Yuanta Futures. The above named consequently recused themselves from discussion and voting on the proposal. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed to suspend trading floor operations by interested parties on relevant floors during the sale of relevant floors of the Yuanta Financial Holding Tower. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: A. Vice Chairman Kang-sheng Kao, Chairman Ting-chien (Tony) Shen and independent director Tseng-chi Lin concurrently serve as directors of Yuanta Financial Holdings, and thus recused themselves from discussion and voting on the proposal. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (3) Summary: Proposed to increase the rent and square footage on the 7th floor of the Yuanta Financial Holding Tower to Yuanta Finanical Holdings as an interested party. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: A. Vice Chairman Kang-sheng Kao, Chairman Ting-chien (Tony) Shen, and independent director Tsengchi Lin concurrently serve as directors of Yuanta Financial Holdings, and thus recused themselves from discussion and voting on the proposal. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (4) Summary: Proposed to revise parts of the content of the “Contract for Futures Trading Auxiliary Services” with Yuanta Futures as an interested party. 42
52
Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Director Tien-fu Lin concurrently serves as an auditor of Yuanta Futures, and thus recused himself from discussion and voting on the proposal. (5) Summary: Proposed to trade equity securites issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Independent director Chwo-ming Yu concurrently serves as a director of HannStar Display Corporation; independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation; director Ching-kuang Shen concurrently serves as a director of CPC. The above named consequently recused themselves from discussion and voting on the proposal. 5. May 27, 2010: 38th meeting of the 6th board of directors (1) Summary: Proposed for Yuanta Securities Asia Financial Services Ltd. to increase capitalization of its subsidiary, Yuanta Securities (Hong Kong) Corporation by US$50 million Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: A. Director Ping-han Tsai concurrently serves as chairman of Yuanta Securities Asia Financial Services Ltd., while Chairman Ting-chien (Tony) Shen, Vice Chairman Kang-sheng Kao, and directors Hung-chi (Alex) Lee and Hsiu Wei Chen serve as directors of the same. Vice Chairman Kang-sheng Kao concurrently serves as chairman of Yuanta Securities (Hong Kong) Corporation, while directors Hungchi (Alex) Lee and Ping-han Tsai serve as directors of the same. The above named recused themselves from discussion and voting on the proposal. B. Independent director Tseng-chi Lin assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed to renew the “Futures Advisory Appointment Contract” with Yuanta Futures as an interested party. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Tien-fu Lin concurrently serves as an auditor of Yuanta Futures, and thus recused himself from discussion and voting on the proposal. (3) Summary: Proposed to open a securities trading account for Yuanta Futures as an interested party. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Tien-fu Lin concurrently serves as an auditor of Yuanta Futures, and thus recused himself from discussion and voting on the proposal. (4) Summary: Proposed to trade equity securites issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation and director Ching-kuang Shen concurrently serves as a director of CPC, thus they recused themselves from discussion and voting on the proposal. 6. June 24, 2010: 39th meeting of the 6th board of directors (1) Summary: Proposed to integrate and upgrade a common “e-Learning Platform” with relevant interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: A. Chairman Ting-chien (Tony) Shen, Vice Chairman Kang-sheng Kao and independent director Tseng-chi Lin concurrently serve as directors of Yuanta Financial Holdings; director Ping-han Tsai, representing director Tien-fu Lin, concurrently serves as an auditor of Yuanta Futures. The above named consequently recused themselves from discussion and voting on the proposal. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed to increase trading and adjust brokerage fees for international futures trading by Yuanta Futures as an interested party. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Ping-han Tsai, representing director Tien-fu Lin, concurrently serves as an 43
53
auditor of Yuanta Futures, and thus recused himself from discussion and voting on the proposal. (3) Summary: Proposed to sign the addendum to the “Information Systems Outsourcing Contract” with Yuanta Futures as an interested party. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Ping-han Tsai, representing director Tien-fu Lin, concurrently serves as an auditor of Yuanta Futures, and thus recused himself from discussion and voting on the proposal. (4) Summary: Proposed to act as financial consultants on the issue of corporate bonds or financial bonds where the issues are interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: A. Chairman Ting-chien (Tony) Shen, Vice Chairman Kang-sheng Kao and independent director Tsengchi Lin concurrently serve as directors of Yuanta Financial Holdings, and thus recused themselves from discussion and voting on the proposal which involved that company. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (5) Summary: Proposed to issue corporate bonds and financial bonds by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: A. Chairman Ting-chien (Tony) Shen, Vice Chairman Kang-sheng Kao and independent director Tsengchi Lin concurrently serve as directors of Yuanta Financial Holdings, and thus recused themselves from discussion and voting on the proposal which involved that company. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (6) Summary: Proposed to trade equity securites issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation while director Yueh Tsang Lee, representing Director Ching-kuang Shen, concurrently serves as a director of CPC, and thus recused themselves from discussion and voting on the proposal concerning those companies. 7. July 21, 2010: 2nd meeting of the 7th board of directors (1) Summary: Proposed to revise parts of Yuanta Securities’ charter. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Given their connection to the proposal, independent directors Pao-kuei Chu, Tseng-chi Lin and Chwo-ming Yu recused themselves from discussion and voting on the proposal. (2) Summary: Proposed to trade equity securities issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Director Ching-kuang Shen concurrently serves as a director of CPC, and thus recused himself from discussion and voting on the proposal. 8. August 26, 2010: 3rd meeting of the 7th board of directors (1) Summary: Proposed agreement to lift competition restrictions on directors. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: A. Given their connection to the proposal, Chairman Ting-chien (Tony) Shen, directors Hung-chi (Alex) Lee and Kang-sheng Kao recused themselves from parts of the discussion and voting on the proposal. B. Independent director Pao-kuei Chu assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed agreement to lift competition restrictions on managers. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Hung-chi (Alex) Lee serves as the president of Yuanta Securities and is thus a party to the proposal, thus he recused himself from some discussion and voting on the proposal. 44
54
(3) Summary: Proposed to purchase 2010 Mid-Autumn Festival gifts from interested party Taipei World Trade Center Club. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Yueng-lin Ma is a blood relative within the second degree of kinship of Taipei World Trade Center Club Chairman Rudy Ma, and did not participate in discussion and voting. (4) Summary: Proposed to open a hedging account to increase transaction items and reduce remuneration for interested party Yuanta Securities (Hong Kong) Corporation. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Directors Kang-sheng Kao and Hung-chi (Alex) Lee respectively and concurrently serve as chairman and director of Yuanta Securities (Hong Kong) Corporation, and thus recused themselves from discussion and voting. (5) Summary: Proposed to trade equity securities issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Director Ching-kuang Shen concurrently serves as a director at CPC, and thus recused himself from discussion and voting. 9. September 30, 2010: 4th meeting of the 7th board of directors (1) Summary: Proposed to retain PriceWaterhouseCoopers to advise Yuanta Securities on the first stage of implementing International Financial Reporting Standards (IFRS). Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: A. Chairman Ting-chien (Tony) Shen, independent director Tseng-chi Lin, director Kang-sheng Kao, and director Yueh Tsang Lee concurrently serve as directors of Yuanta Financial Holdings; director Kangsheng Kao concurrently serves as chairman of Yuanta Futures, director Chen Fang concurrently serves as a director of Yuanta International Asset Management together with director Yueng-lin Ma. The above named consequently did not participate or make representations in the discussion and voting. B. Accountant Se-kai Lin did not attend. C. Independent director Pao-kuei Chu assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed Equity Securities Lending between Yuanta Securities and interested party Yuanta Securities (Hong Kong) Corporation Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Directors Kang-sheng Kao and Hung-chi (Alex) Lee concurrently and respectively serve as chairman and director of Yuanta Securities (Hong Kong) Corporation and thus recused themselves from discussion and voting. (3) Summary: Proposed to trade equity securities issued by interested parties for stock and future contract trading given TSEC carry trade requirements. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Independent director Chwo-ming Yu concurrently serves as a director of HannStar Display Corporation, and thus recused himself from discussion and voting on portions of the proposal concerning that company. (4) Summary: Proposed to trade equity securities issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Director Ching-kuang Shen, concurrently serves as a director of CPC, and thus recused himself from discussion and voting on the proposal concerning that company. (5) Summary: Proposed to increase/decrease trading of equity securities issued by interested parties in order to hedge holdings of call (put) warrants and other equity derivatives. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Director Ching-kuang Shen concurrently serves as a director of CPC and director Ruichen Ma concurrently serves as a director of Taiwan Tea Corporation, thus they recused themselves from discussion and voting on parts of the proposal related to those respective companies. 10. October 28, 2010: 5th meeting of the 7th board of directors 45
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(1) Summary: Proposed to renew the Addendum to the “Contract for Futures Trading Auxiliary Services” with Yuanta Futures as an interested party. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Kang-sheng Kao concurrently serves as chairman of Yuanta Futures, and thus recused himself from discussion and voting. (2) Summary: Proposed to hedge holdings of call (put) warrants, structured products, equity derivative products and asset swaps by trading corporate bonds issued by interested parties and related underlying transactions. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Director Ching-kuang Shen concurrently serves as a director of CPC and director Yueh Tsang Lee, representing director Rui-chen Ma, concurrently serves as a director of Taiwan Tea Corporation. Thus both recused themselves from discussion and voting on parts of the proposal related to those respective companies. (3) Summary: Proposed to trade equity securities issued by interested parties, and related underlying transactions. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Director Ching-kuang Shen concurrently serves as a director of CPC and thus recused himself from discussion and voting on parts of the proposal related to that company. 11. November 25, 2010: 6th meeting of the 7th board of directors (1) Summary: Proposed for joint funding with interested parties of the “IT Server Room Internet Basic Infrastructure Upgrade Project” Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: A. Chairman Ting-chien (Tony) Shen, independent director Tseng-chi Lin, director Kang-sheng Kao and director Yueh Tsang Lee concurrently serve as directors Yuanta Financial Holdings, which is related to this project; director Kang-sheng Kao concurrently serves as chairman of Yuanta Futures together with director Yong Ling Ma. The above named consequently recused themselves from discussion and voting on parts of the proposal related to those companies. B. Independent director Pao-kuei Chu assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed to transfer convertible bonds for interested party ReaLy Development & Construction Corp. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Independent director Pao-kuei Chu concurrently serves as an auditor of ReaLy Development & Construction Company, and thus recused himself from discussion and voting. (3) Summary: Proposed that the Proprietary Trading Department trade equity securities issued by interested parties and other related underlying transactions. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Hung-chi (Alex) Lee, representing director Ching-kuang Shen, concurrently serves as a director of CPC, and thus recused himself from discussion and voting for parts of discussion and voting related to that company. 12. December 30, 2010: 7th meeting of the 7th board of directors (1) Summary: Proposed to act as financial adviser for the trading of corporate bonds and financial bonds for interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: A. Chairman Ting-chien (Tony) Shen, independent director Tseng-chi Lin, director Kang-sheng Kao, and director Yueh Tsang Lee, concurrently serve as directors of Yuanta Financial Holdings, with director Yueh Tsang Lee representing director Yong Ling Ma. The above named consequently recused themselves from discussion and voting on the proposal. B. Independent director Pao-kuei Chu assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed to trade corporate bonds and financial bonds issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not 46
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participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: A. Chairman Ting-chien (Tony) Shen, independent director Tseng-chi Lin, director Kang-sheng Kao, and director Yueh Tsang Lee, concurrently serve as directors of Yuanta Financial Holdings, with director Yueh Tsang Lee representing director Yong Ling Ma. The above named consequently recused themselves from discussion and voting on the proposal. B. Independent director Pao-kuei Chu assumed the powers of chairman with regard to the discussion and voting. (3) Summary: Proposed to trade convertible bonds issued by interested parties. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Independent director Pao-kuei Chu concurrently serves as an auditor of ReaLy Development & Construction Company, and thus recused himself from discussion and voting. (4) Summary: Proposed to hedge holdings of call (put) warrants, structured products, equity derivative products and asset swaps by trading corporate bonds issued by interested parties and related underlying transactions. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal without objection. Main points of discussion: Director Ching-kuang Shen concurrently serves as a director of CPC and director Chen Fang, representing director Rui-chen Ma, concurrently serves as a director of Taiwan Tea Corporation, and thus recused themselves from parts of discussion and voting related to those companies. (5) Summary: Proposed for the Proprietary Trading Department to trade equity securities issued by interested parties along with related underlying transactions. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: Director Ching-kuang Shen concurrent serves as a director of CPC and thus recused himself from parts of discussion and voting related to that company. (6) Summary: Proposed to set the final version of Yuanta Securities’ “Method of Appointing and Remunerating Directors and Auditors”. Resolution: Apart from those directors who recused themselves due to conflicts of interest and thus did not participate in parts of discussion and voting, the remaining directors approved the proposal in full. Main points of discussion: A.Chairman Ting-chien (Tony) Shen, director Hung-chi (Alex) Lee and director Kang-sheng Kao concurrently serve as directors of Yuanta Securities Asia Financial service Ltd. directors Kang-sheng Kao and Hung-chi (Alex) Lee concurrently and respectively serve as chairman and director of Yuanta Securities (Hong Kong) Corporation; director Hung-chi (Alex) Lee concurrently serves as a director of Kim Eng Holdings, Ltd. The above named recused themselves from discussion and voting. B. Independent director Pao-kuei Chu assumed the powers of chairman with regard to the discussion and voting. III.Assessment of goals and their implementation of strengthening the functions of the board of directors (such as by establishment of an audit committee and increasing information transparency, etc.) during the current year and previous year: In order to strengthen the role of the board of directors, the company has drafted many corporate governance-related rules and guidelines, including Corporate Governance Best Practice Principles, rules of order of the board of directors, the scope and responsibilities of directors, the scope and responsibilities of independent directors, self-evaluation form for newly appointed directors, director continuing education guidelines, Audit Committee charter, guidelines for communication between the Audit Committee and internal auditors, guidelines for communication between the Audit Committee and the risk management division, guidelines for communication between the Audit Committee and the certified public accountants, Audit Committee self-evaluation guidelines, methods of communication between interested parties and the Audit Committee, regulations governing transaction between the company and interested parties, and general authorization rules governing transactions other than credit extension with interested parties as listed in Article 45 of the Financial Holding Company Act. These rules and regulations are to be followed at all times, and may be modified as needed.
Note:Actual attendance rate was calculated on the basis of the number of board meetings held during each director’s term and the number of meetings actually attended by that director.
47
57
2. Operations of the audit committee The committee held 13 meetings(A) in the most recent year, and the attendance records of the independent directors are listed below: Title
Name
Independent Yuanta Financial Holding representative: director Pao-kuei (Paul)Chu Independent Yuanta Financial Holding representative: director Tseng-chi Lin Independent Yuanta Financial Holding representative: director Chwo-ming (Joseph) Yu Other required information:
Actual attendance (B)
Attendance by proxy
Actual attendance rate (%) (A/B)(Note 1)
17
0
100
17
0
100
15
2
88
Remarks
I. Concerning items listed in Article 14-5 of the Securities and Exchange Act and resolution items not passed by the Audit Committee but receiving the consent of two thirds of the directors, the meeting date, period, content of the resolution, results of Audit Committee resolution, and the company’s handling of the Audit Committee's opinions shall be clearly stated: 1. July 20, 2010: 2nd meeting of the 7th Audit Committee Summary: Proposed to revise portions of the Corporate Charter. Resolution: As three independent directors are interested parties in the proposal, no resolution was possible, and the proposal was forwarded to the board of directors for deliberation. II. To avoid conflicts of interest given that independent directors are interested parties, in implementing the motion, each independent director is named, along with the content of the motion, the potential conflicts of interest, and actual participation and voting. 1. February 23, 2010: 32nd meeting of the 6th Audit Committee (1) Summary: Proposed to trade equity securities issued by interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: Independent director Chwo-ming Yu concurrently serves as a director of HannStar Display Corporation and independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation. Thus they recused themselves from discussion and voting on the proposal. 2. March 23, 2010: 33rd meeting of the 6th Audit Committee (1) Summary: Proposed to trade corporate bonds and financial bonds issued by interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: A. Independent director Tseng-chi Lin concurrently serves as independent director of Yuanta Financial Holdings, and thus recused himself from discussion and voting on the proposal. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed to trade equity securities issued by interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: Independent director Chwo-ming Yu concurrently serves as a director of HannStar Display Corporation and independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation; thus they recused themselves from discussion and voting on the proposal. 3. April 20, 2010: 35th meeting of the 6th board of directors (1) Summary: Proposed to suspend trading floor operations by interested parties during the sale of relevant floors of the Yuanta Financial Holding Tower Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: A. Independent director Tseng-chi Lin concurrently serves as independent director of Yuanta Financial Holdings, and thus recused himself from discussion and voting on the proposal. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed to increase the rent and square footage on the 7th floor of the Yuanta Financial Holding Tower to Yuanta Finanical Holdings as an interested party. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: A. Independent director Tseng-chi Lin concurrently serves as independent director of Yuanta Financial Holdings, and thus recused himself from discussion and voting on the proposal. 48
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B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (3) Summary: Proposed to trade equity securites issued by interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: Independent director Chwo-ming Yu concurrently serves as a director of HannStar Display Corporation and independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation, thus they recused themselves from discussion and voting on the proposal related to those companies. (4) Summary: Proposed to jointly purchase “Financial Markets Risk Management Information System” with interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: A. Independent director Tseng-chi Lin concurrently serve as directors of Yuanta Financial Holdings and thus recused himself from discussion and voting on the proposal related to that company. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. 4. May 18, 2010: 36th meeting of the 6th Audit Committee Summary: Proposed to trade equity securites issued by interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: Independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation and thus recused himself from discussion and voting on the proposal related to that company. 5. June 15, 2010: 37th meeting of the 6th Audit Committee (1) Summary: Proposed to integrate and upgrade a common “e-Learning Platform” with relevant interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: A. Independent director Tseng-chi Lin concurrently serve as directors of Yuanta Financial Holdings and thus recused himself from discussion and voting on the proposal related to that company. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed to act as financial consultants on the issue of corporate bonds or financial bonds where the issues are interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: A. Independent director Tseng-chi Lin concurrently serves as independent director of Yuanta Financial Holdings, and thus recused himself from discussion and voting on the proposal. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (3) Summary: Proposed to trade corporate bonds and financial bonds issued by interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: A. Independent director Tseng-chi Lin concurrently serves as independent director of Yuanta Financial Holdings, and thus recused himself from discussion and voting on the proposal. B. Independent director Chwo-ming Yu assumed the powers of chairman with regard to the discussion and voting. (2) Summary: Proposed to trade equity securities issued by interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: Independent director Pao-kuei Chu concurrently serves as an auditor of Sesoda Corporation and thus recused himself from discussion and voting on the proposal related to that company. 6. July 20, 2010: 2nd meeting of the 7th Audit Committee Summary: Proposed to revise portions of the Corporate Charter Resolution: As three independent directors are interested parties on the proposal, no resolution was possible, and the proposal was forwarded to the board of directors for deliberation. 7. September 21, 2010: 5th meeting of the 7th Audit Committee (1) Summary: Proposed to retain PriceWaterhouseCoopers to advise Yuanta Securities on the first stage of implementing International Financial Reporting Standards (IFRS). Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: A. Independent director Tseng-chi Lin concurrently serves as independent director of Yuanta Financial Holdings, and thus recused himself from discussion and voting on the proposal. B. Accountant Se-kai Lin recused himself. 49
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(2) Summary: Proposed to trade equity securities issued by interested parties for stock and future contract trading given TSEC carry trade requirements Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: Independent director Chwo-ming Yu concurrently serves as a director of HannStar Display Corporation, and thus recused himself from discussion and voting on portions of the proposal concerning that company. 8. November 16, 2010: 8th meeting of the 7th Audit Committee (1)Summary: Proposed to joint funding with interested parties of the “IT Server Room Internet Basic Infrastructure Upgrade Project” Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: Independent director Tseng-chi Lin concurrently serves as independent director of Yuanta Financial Holdings, and thus recused himself from discussion and voting on the proposal. (2) Summary: Proposed to transfer convertible bonds for the interested party ReaLy Development & Construction Corp. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: A. Independent director Pao-kuei Chu concurrently serves as an auditor of ReaLy Development & Construction Company, and thus recused himself from discussion and voting. B. Independent director Tseng-chi Lin assumed the powers of chairman with regard to the discussion and voting. 9. December 21, 2010: 9th meeting of the 7th Audit Committee (1) Summary: Proposed to act as financial consultants on the issue of corporate bonds or financial bonds where the issues are interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: Independent director Tseng-chi Lin concurrently serves as independent director of Yuanta Financial Holdings, and thus recused himself from discussion and voting on the proposal. (2) Summary: Proposed to trade corporate bonds and financial bonds issued by interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: Independent director Tseng-chi Lin concurrently serves as independent director of Yuanta Financial Holdings, and thus recused himself from discussion and voting on the proposal. (3) Summary: Proposed to trade convertible bonds issued by interested parties. Resolution: Passed, and forwarded to the board of directors for deliberation. Main points of discussion: A. Independent director Pao-kuei Chu concurrently serves as an auditor of ReaLy Development & Construction Company, and thus recused himself from discussion and voting. B. Independent director Tseng-chi Lin assumed the powers of chairman with regard to the discussion and voting. III. State of independent director communication with internal audit executive and certified public accountants (communication matters, methods, and results concerning corporate finances and business, etc.): 1.Yuanta Securities established an Audit Committee on June 29, 2007. All independent directors serve as members of this committee, which meets regularly once each month. The certified public accountants and audit executive are invited to attend as observers. 2.The committee drafted "Audit Committee and Internal Audit Department Communication Process Guidelines" and "Communication Procedures for Audit Committee and Certified Public Accountants" on August 13, 2007; the committee shall meet with at least internal audit personnel and the certified public accountants once each year in the absence of management. 3.This year (2010), the Audit Committee made monthly appraisals of the status of internal audit implementation, and monitored the implementation of the internal control system and annual internal audit plan, internal control issues and the state of improvement, internal control self-assessment results, internal control statements, and internal audit plans. The results were passed, and reported to the board for resolution. 4.The independent directors and certified public accountants held annual pre-financial statement audit and semiannual post-financial statement audit meetings in March and August, 2010, respectively, and reported the results to the Audit Committee for deliberation. The results were passed, and reported to the board for resolution. Post-financial statement review meetings for the first and third quarters were held in May and November respectively, and the results were reported to the Audit Committee.
Note:Actual attendance rate was calculated on the basis of the number of board audit committee held during each independent director’s term and the number of meetings actually attended by that independent director.
50
Baseline date: Feb.. 2011
Full compliance
Same as above.
(1) Yuanta Securities and its affiliates independently conduct their finances and operations. (2) Yuanta Securities conducts all transactions with its affiliates in line with the “Rules Governing Transactions With Interested Parties”,” the General Authorization Rules Governing Transactions Other than Credit Extension With Full compliance Interested Parties as Listed in Article 45 of the Financial Holding Company Ac”t and “Regulations for Financial Transactions between Related Enterprises”.
Full compliance
This item is not applicable, since all shares of Yuanta Securities are owned by Yuanta Financial Holding.
Implementation Status
51
The results are summarized below: (1) On July 29, 2010, Yuanta Financial Holding designated Pao-kuei (Paul) Chu Tseng-chi Lin and Chwo-ming (Joseph) Yu as independent directors of Yuanta Financial Holdings, and established an “Audit Committee” and a Full compliance “Compensation Committee”. (2) On Aug. 21, 2007, the board of directors set “Regulations for the Responsibilities of Independent Directors” to clarify the authority of independent directors. 2. Regular evaluation of The results are summarized below: independence of certified public (1) At least once each year the company’s Audit and Approval Department reviews the independent nature of accountants in accordance with Gazette 10 of the Code of Ethics for Certified Public Accountants. Together with accountants related statements from the accountants, the review is submitted to the Audit Committee and the board of directors Full compliance for evaluation. (2) Yuanta Securities further determined the Communication Procedures for Audit Committee and Certified Public Accountants to serve as a basis for assessing interaction, communication, and evaluation between the Audit Committee and certified public accountants. III.Communication channels with (1) The company's communication with interested parties shall consist of direct contact conducted by personnel from the interested parties Office of the President, Financial Department, E-commerce Department, and other relevant units in accordance with the attributes of the matters concerning the interested party in question; the Legal Affairs Department shall assist in resolving any legal disputes that may arise. (2) Yuanta Securities has determined Regulations Governing Interested Parties' Recommendations and Complaints for Full compliance the Audit Committee, and has established e-mail addresses on Yuanta Securities’ internal and external web sites to serve as means by which interested parties can communicate their opinions and other relevant information to the members of the Audit Committee. (3) Relevant communication channels can be found on Yuanta Securities’ web site: www.yuanta.com.tw.
II. Composition and responsibilities of the board of directors 1. Independent directors
3. Risk management mechanism and firewall between the company and its affiliates
I. Shareholding structure and shareholder rights 1. Handling of shareholder suggestions or disputes 2. The company has a roster of its major, actually controlling shareholders as well as controllers of such
Item
Non-compliance with Corporate Governance Best Practice Principles for TSEC/GTSM Listed Companies
(1) Status of corporate governance, any non-compliance with the Corporate Governance Best Practice Principles for TSEC/GTSM Listed Companies, and reasons for such
3.Status of corporate governance
60
Non-compliance with Corporate Governance Best Practice Principles for TSEC/GTSM Listed Companies
(1) Relevant units of Yuanta Securities have completed all information reporting and disclosure work within the prescribed periods as required by relevant regulations and the competent authority. (2) Yuanta Securities has also established an English section of the company web site (www.yuanta.com.tw) to enable foreign investors and institutional customers to access information concerning Yuanta Securities. (3) Yuanta Securities has established spokespersons: The chief and deputy spokespersons are Executive Vice President Full compliance Lawrence Lee and Executive Vice President Tsai Yu Chang respectively. The spokespersons are responsible for announcing information externally in accordance with Yuanta Securities’ policies and needs. (4) Placement of investor conference proceedings on the corporate website: not applicable.
The “About Yuanta” section on the company web site ： www.yuanta.com.tw provides information concerning company finances, business, corporate governance, and other major relevant matters. Full compliance
Implementation Status
52
I. Audit Committee (1) Yuanta Securities has established the Audit Committee Organizational Rules and has formed an Audit Committee; when necessary, Yuanta Securities shall also establish other functional committees. (2) In accordance with Article 4 of Yuanta Securities’ Audit Committee Organizational Rules, all independent directors shall serve as members of the committee. The committee shall have at least three members, one of whom shall be the chairman. At least one member shall possess a professional knowledge of securities and derivatives, accounting, or finance. (3) The Audit Committee shall meet regularly once each month. Certified public accountants, executives, and other personnel shall be invited to attend in a non-voting capacity. (4) Yuanta Securities has established the Audit Committee Agenda Planning Regulations to ensure that annual corporate governance matters are arranged properly so as to avoid error and omission. At the end of the year, Yuanta Securities shall determine issues for regular monthly meetings and governance matters to be implemented next year. (5) Yuanta Securities has established the Audit Committee and Internal Audit Department Communication Procedures Full compliance and Audit Committee and Risk Management Department Communication Procedures to serve as a basis for communication and facilitate the Audit Committee's review of the performance of the internal audit and risk management departments. Yuanta Securities also established the Communication Procedures for Audit Committee and Certified Public Accountants in order to strengthen communication with certified public accountants. (6) Yuanta Securities has established the Audit Committee Self-assessment Operating Guidelines to provide a basis for self-assessment by individual Audit Committee members. luation. II. Compensation Committee On September 30, 2010, the board of directors passed the establishment of a “Compensation Committee” and “Organizational Regulations”. Committee members consist of Yuanta Securities’ three independent directors, and its responsibilities consist of assisting the board of directors in a fair and transparent manner to set performance appraisal standards and compensation for managers, and to set the compensation structure and system for the board of directors. In principle, the committee meets every six months but may momentarily meet in necessary. VI. If the company has established rules of corporate governance in accordance with the Corporate Governance Best-Practice Principles for TSE/GTSM Listed Companies. please clearly describe the functioning of such rules and any discrepancies with the company's rules of corporate governance practice:
IV. Information disclosure 1. Corporate website disclosing information on the company’s finances, business and corporate governance status 2. Other forms of information disclosure (such as English website, designating professionals to collect and disclose information, establishing a spokesperson system, posting investor conference proceedings on the company website) V. Does the company have functional committees such as a nomination or remuneration committee, and their operational status thereof
Item
61
Implementation Status
Non-compliance with Corporate Governance Best Practice Principles for TSEC/GTSM Listed Companies
53
Yuanta Securities has determined rules of corporate governance practice reflecting Yuanta Securities’ operating environment and practical needs on the basis of the Corporate Governance BestPractice Principles for Securities Firms, and has also drafted accompanying rules and regulations. Communication procedures involving audits, risk management, and certified public accountants, and the committee's self-assessment operating regulations have been implemented in accordance with relevant regulations, and implementation results are in compliance with regulations. VII. Other important information facilitating understanding of the functioning of corporate governance (such as the state of employees' rights and interests, concern for employees, investor relations, vendor relations, rights of interested parties, continuing education of directors and supervisors, implementation of risk management policy and risk assessment criteria, implementation of customer policy, and liability insurance purchased by the company for directors and supervisors): 1. Yuanta Securities has included a dedicated section "Respect for Investors and Interested Parties" in its rules of corporate governance practice to guide day-to-day operations; the key points of this section are as follows: Yuanta Securities maintains open channels of communication with investors, correspondent banks or other creditors, companies and manufacturers, or other stakeholders, and respects and protects their due legal rights and interests. Should their legal rights and interests be violated, the company will respond properly in accordance with the principle of good faith Yuanta Securities provides adequate information to correspondent banks and other creditors to enable them to make judgments and decisions regarding Yuanta Securities’ operational and financial situation. Should their legal rights be violated, Yuanta Securities shall respond positively and take full responsibility to ensure the creditor gains compensation through proper channels. Apart from respecting and maintaining the legal rights and interests of investors, Yuanta Securities shall also perform business in accordance with the principles of trust and honesty, and shall properly resolve trading disputes. Yuanta Securities shall establish communication channels with employees, and encourage employees to communicate directly with management, the directors, and supervisors, enabling employees to appropriately express their opinions concerning Yuanta Securities’ operations and financial status, and major decisions affecting employees' interests. In order to maintain normal business development and maximize benefit to shareholders, Yuanta Securities shall maintain the rights and interests of investors as well as orderliness in the securities market, and emphasize its corporate social responsibilities. Yuanta Securities shall establish a recommendation and complaint system providing an effective means of communication by Yuanta Securities and employees, investors, and interested parties; relevant matters shall be implemented in accordance with Yuanta Securities’ Regulations Governing Interested Parties' Recommendations and Complaints to the Risk Management Committee." 2. Yuanta Securities has established the "Regulations Governing Interested Parties' Recommendations and Complaints for the Audit Committee," and has set up e-mail addresses on Yuanta Securities’ internal and external web sites to enable interested parties to express their opinions to the Audit Committee and provide channels for communicating information. 3. Continuing education of directors and supervisors: Please see the attached table in the annual report. 4. Implementation of risk management policy and risk assessment criteria: (1) Yuanta Securities has established a Risk Management Department, directly subordinate to the board of directors and acting under the supervision of the Audit Committee. (2) Addressing different types of risk and operations, Yuanta Securities has determined risk management mechanisms and implementation plans consistent with its operating strategies, capital structure, and market situations. Yuanta Securities has also established a risk management information system facilitating the implementation of overall risk management and effectively controlling risk associated with Yuanta Securities’ operations. (3) The Company makes and annual assessment of existing and potential risks as well as the disclosure status of value at risk limits and qualitative information related to risk management; each month an appraisal is made of risk management implementation and a report is filed to serve as reference for risk management and improvement. (4) Yuanta Securities has further established the Communication Procedures for the Audit Committee and Risk Management Department to provide a basis for day-to-day communication, interaction, and evaluation between the Audit Committee and Risk Management Department. 5. Customer policy implementation: Yuanta Securities has established the following channels in order to protect investors' rights and interests and prevent illegal circumstances from damaged customers' rights and interests, and Yuanta Securities’ corporate image: (1) Yuanta Securities has established a customer service center exclusively responsible for resolving customers' problems. If a customer complaint occurs, the customer service center shall notify the relevant authorized or responsible unit, which shall resolve the problem within a prescribed period of time. To ensure the protection of customers' rights and interests, customer service results are reviewed at irregular intervals. (2) The parent company and its subsidiaries have all designated audit personnel responsible for constantly monitoring the trading situations of trading personnel in accordance with relevant audit guidelines. To prevent fraud on the part of trading personnel and the occurrence of trading disputes, various measures are in effect, including the recording of telephone communications between trading personnel and customers.
Item
62
Implementation Status
Non-compliance with Corporate Governance Best Practice Principles for TSEC/GTSM Listed Companies
Kang-sheng Kao
Director
Director
Chwo-ming (Joseph) Yu Hung-chi (Alex) Lee
Tseng-chi Lin
Pao-kuei (Paul)Chu
Ting-chien (Tony) Shen
Name
Independent director
Independent director
Independent director
Chairman
Title
29/06/10
29/06/10
29/06/10
29/06/10
29/06/10
29/06/10
Date of appointment
01/11/10 18/11/10 04/01/10 02/07/10
01/11/10 18/11/10 04/01/10 02/07/10
02/07/10
02/07/10
02/07/10
02/07/10
24/09/10
24/09/10
24/09/10
24/09/10
21/07/10
01/07/10
01/07/10
21/07/10
06/05/10
06/05/10
02/07/10
24/02/10
24/02/10
02/07/10
02/07/10
End of continuing education
02/07/10
Start of continuing education
(2) Status of continuing education of directors
1
Directors and supervisors: risk and preventing
Cross-Strait M&A Development & Opportunities
2010 Conference for Public Traded Companies Responsible Person: Corporate Governance Corporate financial reporting and supervision to strengthen internal controls An Introduction to CG Watch 2010, with a Special Focus on Taiwan.
54
Taiwan Securities Association
Taiwan Securities Association
Taiwan Securities Association
Taiwan Securities Association
Improvement and strengthening of corporate governance
Improvement and strengthening of corporate governance
Corporate financial reporting and supervision to strengthen internal controls
Improvement and strengthening of corporate governance
3
3
3
3
3
3
1
3
3
3
1
Responsibilities of directors, supervisors and managers: responding to the D&O liability insurance plan
Improvement and strengthening of corporate governance
1
3
Hours of continuing education
Why markets need to be opened
Improvement and strengthening of corporate governance
Class name
Taiwan Academy of Banking and Trust Law: Trust Corporate Law and Practical Problems Finance
Taiwan Securities Association
Taiwan Corporate Governance Association
Taiwan Securities Association
Taiwan Stock Exchange
Taiwan Securities Association
Taiwan Corporate Governance Association Taiwan Corporate Governance Association Taiwan Corporate Governance Association
Taiwan Securities Association
Hosting Association
Date from Jan. 01, 2010 to Dec. 31, 2010
(3) On August 21, 2007 the company’s Board of Directors approved Regulations Governing Interested Parties' Recommendations and Complaints for the Audit Committee, and established email addresses on Yuanta Securities’ internal and external web sites to serve as means by which clients and investors can communicate their opinions and other relevant information to the members of the Audit Committee. 6. Purchase of liability insurance by the company for directors and supervisors: The parent financial holding company has purchased insurance. VIII. If the company conducts a corporate governance self-assessment report or commissions a professional organization to compile a corporate governance assessment report, the results of selfassessment (or commissioned assessment), major deficiencies (or suggestions), and improvements should be stated: None
Item
63
Rui-chen Ma
Cheng Fen
Director
Director
29/06/10
24/09/10 02/07/10 24/09/10
02/07/10 24/09/10
04/11/10
18/11/10
24/09/10
End of continuing education
24/09/10
04/11/10
18/11/10
24/09/10
Start of continuing education
Taiwan Securities Association
3 3
Improvement and strengthening of corporate governance
3
3
3
3
Hours of continuing education
Corporate financial reporting and supervision to strengthen internal controls
Corporate financial reporting and supervision to strengthen internal controls
Taiwan Corporate Governance Association Taiwan Securities Association
Group Governance Work
Cross-Strait M&A Development & Opportunities
Corporate financial reporting and supervision to strengthen internal controls
Class name
Taiwan Securities Association
Taiwan Securities Association
Taiwan Securities Association
Hosting Association
Status Yuanta Securities is a subsidiary of Yuanta Financial Holdings and, as such, is bound by Yuanta Financial Holding’s “Corporate Social Responsibility Code of Practice” and “Corporate Social Responsibility Policies and Management Regulations”, which are implemented as follows: 1. (1) On October 26, 2010, the board of directors of Yuanta Financial Holdings approved its “Corporate Social Responsibility Code of Practice”, and actual performance is based on the “Corporate Responsibility Code of Practice for Listed Companies” (2) To promote corporate social responsibility, on December 26, 2010 the board of directors of Yuanta Financial Holdings approved the adoption of Article 5 of the “Corporate Social Responsibility Codes of Practice” as Yuanta Securities’ “Corporate Social Responsibility Policy and Management Regulations”. 2. Article 4 of Yuanta Financial Holding’s “Corporate Social Responsibility Policy and Management Regulations” states that organizational structure and duties and responsibilities should be based on corporate social responsibility. Assignments for the convener and deputy convener were completed on December 30, 2010, with the first meeting set for January 5, 2011. In accordance with the resolutions, the
Item
I. Promote the implementation of corporate governance 1.Review implementation effectiveness of Yuanta Securities social responsibility policy and system. 2. Promotion of social responsibility by Yuanta Securities’ functional units. 3.Yuanta Securities holds regular educational and training activities to raise awareness of business ethics for directors, supervisors and employees, and has integrated a clear and effective system of incentives and disciplinary actions into its employee performance appraisal system.
5. Implementation of Social Responsibility
Article 11 of the “Corporate Social Responsibility Code of Practice for Listed Companies” holds that “directors, supervisors and employees should receive regular training in business ethics to create a fair competitive environment as per Article 10, and the staff performance appraisal system should combine incentives with a clear and effective disciplinary system.” Participation in such training is now a component of performance evaluation for all employees of Yuanta Financial Holdings and all subsidiaries.
Non-compliance with “Corporate Responsibility Code of Practice for Listed Companies”
On September 30, 2010, the board of directors approved the “Compensation Committee” and “Organization Regulations”. The committee is made up of Yuanta Securities’ three independent directors, and its responsibilities consist of assisting the board of directors in a fair and transparent manner to set performance appraisal standards and compensation for managers, and to set the compensation structure and system for the board of directors. In principle, the committee meets every six months, but may momentarily meet in necessary.
4. Remuneration committee:
29/06/10
Ching-kuang Shen
Director
29/06/10
29/06/10
Yueh-tsang Lee
Director
29/06/10
Date of appointment
Yueng-lin Ma
Name
Director
Title
64
responsible unit set work objectives for the coming year. 3. Yuanta Financial Holdings staff are held to the highest standards of ethical conduct, and all relevant disclosure provisions are readily available on the staff web portal. Staff found to be in violation of relevant provisions is disciplined according to the severity of the infraction, and infraction are taken into account in the performance appraisal system. II. Development of a sustainable environment 1. Yuanta Financial Holdings has taken the following steps to raise the effectiveness of Full compliance. 1. Company is striving to raise its resource usage effectiveness, its use of resources and recyclable materials: reduce its environmental impact and improve its use of (1) Recycling and re-use of energy products, including the promotion and reporting recyclable materials. of paper recycling and re-use. 2. Company has established an environmental management (2) Properly handling waste material, including the promotion and reporting of waste system appropriate to the characteristics of its industry. reduction and separation, and waste water handling. 3. Environmental management units and staff dedicated to (3) Use of low-energy, green office supplies and equipment, including revision of improving Yuanta Securities’ environmental performance. procurement practices, reviewing more purchasing options, and including raising 4. Company is mindful of the impact of climate change on its efficiency in routine checks. operations, and is developing a strategy to reduce carbon 2. Established an environmental management system and dedicated units (including emissions and other greenhouse gasses. water conservation, energy conservation, carbon and greenhouse gas reduction, and other related environmental measures): (1) Meeting Taipei City internal management specifications for office building climate control. (2) The headquarters building meets many green building provisions, the documentation of which shall be produced. (3) To conserve water, and reduce carbon and greenhouse gas emissions, water and electricity conservation results are reported regularly. (4) In compliance with regulations, all offices are non-smoking, and smoking is only allowed in specified outdoor areas. In addition, premises are regularly disinfected and screened for rodents and insect pests. (5) The building’s management committee has responsibility for environmental management and preservation. III. Social welfare 1. To protect employee rights, Yuanta Financial Holdings follows the Labor Law in Full compliance. 1. Yuanta Securities is in full compliance with the relevant setting rules and regulations related to personnel management and, in accordance labor laws, and established appropriate management with law, holds a labor relations conference to promote harmonious labor relations and create a mutually beneficial situation. practices and procedures to protect the legitimate interests 2. Article 16 of the Council of Labor Affairs “Labor Safety and Health Training Regulat of its employees. ions”, states “When hiring new workers, employers are responsible for all aspects of 2. Yuanta Securities provides its employees with a safe and health and safety training.” To ensure the health and safety of its employees, Yuanta healthy work environment, a regularly implements Financial Holdings hired workplace-safety-certified executives to lead “New Emplo employee safety and health education measures. yee Labor Safety and Health Training” for 2010. The training included: a summary o 3. Yuanta Securities has developed and announced its f job safety and health laws and regulations, dealing with emergency situations, fire consumer protection policy, ensuring the transparency and drills and first aid, and other knowledge related to workplace health and safety. effectiveness of procedures for dealing with consumer 3. (1) To guarantee the confidentiality of client information, Yuanta Financial Holdings complaints regarding its products or services. has established “Measures for client data confidentiality for Yuanta Financial Hol 4. Yuanta Securities works with its suppliers to raise dings and its subsidiaries”, with relevant information posted publicly on the Yuant corporate social responsibility. a Financial Holdings website. 5. Through industry activities, in-kind donations, (2) Yuanta Financial Holdings consumer hotline: volunteerism or other free professional services, Yuanta Securities participates in community development and Tel: 02-2173-6054 65
57
6. Corporate observance of ethical business practices and adopted measures Yuanta Securities’ commitment to ethical business practices are set forth in Yuanta Securities’ “Ethical Code of Conduct”, “Methods for Stakeholder Suggestions and Complaints to the Audit Committee” and “Regulations for the Board of Directors”, among other regulations. Both employers and employees are committed to ethical business practices and, directors and managers are required to lead by example in acting in good faith and establishing a corporate culture of integrity. Yuanta Securities also presents a forthright, transparent and responsible business philosophy, and continues to promote policies based on good faith, establish mechanisms for good corporate governance and risk control, and create an operating environment conducive to sustainable development.
Fax: 02-2772-5831 Email:
[email protected] When a consumer complaint is received, the relevant agencies are immediately n otified to simultaneously report case status and progress to Yuanta Financial Hol dings. 4. In cooperation with suppliers, Yuanta Securities works to enhance corporate social responsibility, actively selecting energy-saving, green office equipment, business machines, IT equipment, lighting, etc. Office equipment not currently in use automatically enters power-saving mode, conventional light bulbs are replaced with energy-saving bulbs, and air conditioners at headquarters use R410A Freon to prevent ozone depletion. 5. Through its subsidiaries, Yuanta Financial Holdings has contributed to the establishm ent of the “Yuanta Cultural and Educational Foundation” which works to promote co mmunity education and social welfare. The Foundation takes an active role in educat ion, public welfare and cultural activities, and is a concrete manifestation of Yuanta Securities’ commitment to corporate social responsibility. The Foundation’s educatio n efforts focus on cultivating financial talent through training, seminars and lectures. Its public welfare work focuses on assisting education efforts for disadvantaged grou ps, the promotion of universal healthcare and cultural and educational activities to pr omote social improvement. In culture, the Foundation works to support local artists. On November 30, 2010, Yuanta Securities was honored with the “3rd Job Creation Cont ribution Award” by the Executive Yuan in recognition of Yuanta Securities’ assistance t o the government in creating employment opportunities for members of disadvantaged groups. IV. Strengthening information transparency 1. Information is available through Yuanta Financial Holdings website. Full compliance. 1. Method of company’s disclosure of information related to 2. Yuanta Financial Holdings is currently preparing its 2011 Corporate Social the relevance and reliability of Yuanta Securities’ Responsibility Report, which will document Yuanta Securities’ efforts in this area. commitment to corporate social responsibility. 2. Yuanta Securities documents its efforts in a Corporate Social Responsibility Report. V. Following the “Corporate Responsibility Code of Practice for Listed Companies”, Yuanta Securities has developed its own code of corporate social responsibility. Describe any differences between the code and actual practice: As a member of the Yuanta Financial Holdings Group, Yuanta Financial Holdings established the “Yuanta Financial Holdings Corporate Social Responsibility Regulations” and “Yuanta Financial Holdings Corporate Social Responsibility Policy and Management Regulations” to be applied to all Group subsidiaries, as described in items 1-4. VI. Other important information regarding Yuanta Securities’ corporate responsibility (including Yuanta Securities’ efforts in environmental protection, community involvement, social contribution, social services, social welfare, consumer rights, human rights, and public health and safety) can be found on the Yuanta Financial Holdings corporate website. VII. Verification of Company products or Corporate Social Responsibility Report according the standards of relevant certifying organizations: n/a.
charitable activities related to the public interest.
66
58
7. Methods for conducting queries on Yuanta Securities’ Corporate Governance Best Practice Principles and related rules and regulations Yuanta Securities has established corporate governance practices, related rules and regulations in view of our operating environment and practical needs with reference to the Corporate Governance Best-Practice Principles for Securities Firms. The Corporate Governance Best-Practice Principles and related rules and regulations can be found on the “About Us” page of our official website at http://www.yuanta.com.tw. 8. Other information enabling better understanding of the company’s corporate governance: None
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9. Punishment of the company or its internal personnel in accordance with law, the company's punishment of its internal personnel for violating internal control system regulations, main deficiencies, and improvements during the most recent year and up to the date of publication of this annual report: (1) On February 11, 2010, pursuant to Chin-Kuan-Cheng-Chuan-Tzu No. 0990003694, Yuanta Securities was found in violation of the Securities Broker Management Regulations article 2, section 2, and Rules Governing Responsible Persons and Associated Persons of Securities Firms article 4, section 2, and was ordered to take corrective action. Improvements: A. Yuanta Securities has disciplined all responsible parties. B. Yuanta Securities has implemented training for the involved parties, and auditors have provided courses on regulatory compliance to ensure future compliance. C. Yuanta Securities’ Audit Department has strengthened oversight of the brunch to prevent a recurrence. (2) On February 22, 2010, pursuant to Chin-Kuan-Cheng-Chuan-Tzu No. 0990008030 and 09900080301, Yuanta Securities was found in violation of Securities Broker Management Regulations article 19, section 4, item 1, and Rules Governing Responsible Persons and Associated Persons of Securities Firms article 18, item 2, line 22 and article 20, resulting in a warning to Yuanta Securities and requiring Yuanta Securities to have relevant personnel provide reports for future reference. Improvements: A. Yuanta Securities has disciplined all involved parties, and required them to attend regulatory compliance
(3)
(4)
(5)
(6)
(7)
training to ensure future compliance. B. Yuanta Securities’ Hong Kong subsidiary has begun development of standard operating procedures (SOP) to clearly define the operational implementation of standard procedures to prevent recurrence of inappropriate behavior. On April 28, 2010, pursuant to Chin-Kuan-Cheng-Chuan-Tzu No. 0990019822 and 09900198221, Yuanta Securities was found during the term of former chairman Victor Ma and former director Li Ping Tu, to have violated the Money Laundering Control Act, article 11, item 2, requiring Yuanta Securities to relieve these directors of their positions and file a report for future reference. Improvements: All items in question have been rectified. On May 4, 2010, pursuant to Chin-Kuan-Cheng-Chuan-Tzu No. 0990022372 and 09900223721, Yuanta Securities was found in violation of the Securities Broker Management Regulations article 2, section 2 and Rules Governing Responsible Persons and Associated Persons of Securities Firms article 18, item 2, line 9. In addition to requiring corrective action, Yuanta Securities was also ordered to suspend the professional licenses of the involved parties and file a report for future reference. Improvements: A. Yuanta Securities has disciplined all responsible parties. B. All items in question have been rectified. On July 1, 2010, pursuant to Chin-Kuan-Cheng-Chuan-Tzu No. 0990029641 and 09900296411, Yuanta Securities was found in violation of Securities Broker Management Regulations article 2, item 2 and Rules Governing Responsible Persons and Associated Persons of Securities Firms article 18, item 2, line 9. In addition to requiring corrective action, Yuanta Securities was also ordered to suspend the professional licenses of the involved parties and file a report for future reference. Improvements: A. Yuanta Securities has disciplined all responsible parties. B. All items in question have been rectified. On August 23, 2010, pursuant to Chin-Kuan-Cheng-Chuan-Tzu No. 0990040703, Yuanta Securities was found in violation of Futures Broker Management Regulations article 2, item 2; article 12; article 27, item 2; and Rules Governing Responsible Persons and Associated Persons of Futures Firms article 16, item 4. In addition to a fine of NT$360,000, Yuanta Securities was required to suspend the professional licenses of the involved parties. Improvements: A. Yuanta Securities has disciplined all responsible parties and strengthened internal controls for proprietary futures trading. B. All items in question have been rectified. On September 23, 2010, pursuant to Chin-Kuan-Cheng-Chuan-Tzu No. 0990039770, and 09900397701 to 09900397705, Yuanta Securities was found in violation of the Securities Broker Management Regulations 59
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article 2, item 2 and article 31, item 4; Rules Governing Responsible Persons and Associated Persons of Securities Firms article 18, item 2, line 17, line 23, item 3 and article 11, section 1, item 1, line 3; and pursuant to Chin-Kuan-Cheng-Chuan-Tzu No. 09600340632 of July 11, 2007. In addition to requiring corrective action, Yuanta Securities was also ordered to suspend the professional licenses of the involved parties and file a report for future reference. Improvements: A. Yuanta Securities has disciplined all responsible parties. B. Yuanta Securities’ Audit Department has strengthened oversight to prevent a recurrence. 9. Shareholder meeting(s) and significant board resolutions during the most recent year and up to the date of publication of this annual report: (1) Major resolutions of the 35th meeting of the 6th board of directors on March 25, 2010: A. Yuanta Securities’ 2009 distribution of earnings. B. Use of earnings for capital increase through issuance of new shares. (2) Major resolutions of the 36th meeting of the 6th board of directors on March 25, 2010: A. Yuanta Securities’ 2009 Financial Documents (Exercised by the shareholder meeting B. Yuanta Securities’ 2009 distribution of earnings (Exercised by the shareholder meeting according to the Corporate Law and Regulations). C. Use of earnings for capital increase through issuance of new shares (Exercised by the shareholder meeting according to the Corporate Law and Regulations). (3) Major resolutions of the 38th meeting of the 6th board of directors on May 27, 2010: A. To increase capitalization of Yuanta Securities (Hong Kong) Corporation by US$50 million through subsidiary Yuanta Securities Asia Financial Services. B. To transfer authority to conduct business to interested party Yuanta Securities Finance Corp. (4) Major resolutions of the 39th meeting of the 6th board of directors on June 24, 2010: To participate and subscribe in the 2010 cash injection of subsidiary Yuanta Securities Investment Trust Corp. (5) Major resolutions of the 40th meeting of the 6th board of directors on June 24, 2010: To revise certain articles of Yuanta Securities’ Articles of Constitution (Exercised by the shareholder meeting according to the Company Act and related regulations). (6) Major resolutions of the 2th meeting of the 7th board of directors on July 21, 2010: A. To revise certain articles of Yuanta Securities’ Articles of Constitution (Exercised by the shareholder meeting according to the Company Act and related regulations). B. To report appointments and removals of internal audit supervisors and audit managers to the competent authorities. (7) Major resolutions of the 3th meeting of the 7th board of directors on August 26, 2010: A. To rescind competition restrictions on directors (Exercised by the shareholder meeting according to the Company Act and related regulations). B. To rescind competition restrictions on managers (Exercised by the shareholder meeting according to the Company Act and related regulations). (8) Major resolutions of the 6th meeting of the 7th board of directors on November 25, 2010: 60
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A. To revise certain articles of Yuanta Securities’ Articles of Constitution (Exercised by the shareholder meeting according to the Company Act and related regulations). B. To reassign relevant reinvestment business to parties represented by directors, and to rescind competition restrictions. (9) Major resolutions of the 7th meeting of the 7th board of directors on December 30, 2010: To sell Yuanta Securities’ property in the Taipei Financial Center Tower by public tender. 10. Recorded or written statements made by any director or supervisor which specified dissent to important resolutions passed by the board of directors: None. In 2010, and as of publication of the 2010 annual report, there were no major instances to report. 11.Resignation of any individual associated with the financial statements in 2010, and as of publication of the 2010 financial statements: Date：Feb. 28, 2011
Title
Name
Starting Date
Ending Date
Internal Auditing Executive
Wei-ho Liu
14/05/09
02/08/10
Reason for resignation Changes to positions
Note: Individuals include the chairman, president, accounting managers and internal auditing management
IV. Independent auditor fees 1.Disclosure of non-audit fees paid to independent auditing firm and its affiliates, and their origin, if said fees represent one quarter (1/4) or more of audit fees Unit: NT$ thousands
Name of auditing firm
Names of auditors
Audit Fee
Price Waterhouse Coopers
Se-kai (Sk) Lin Chin-tze Huang
5,545
Non-audit fees The audited System Commercial Human period Other Subtotal design registration resources 01/01//10~ 0 160 662 2,705 3,527 31/12/10
Remarks
2.Change in independent auditing firm resulting in to a reduction in auditing fees, amount and percentage of reduction, and reason for change: Non 3.Reduction in audit fees by more than 15% compared with the previous year: None
V. Change in status of independent auditors Not applicable.
VI. Disclosure of any instance of a company director or supervisor having held a position in the independent auditing firm or its affiliates over the past year None
VII. Change in shares held and pledged by directors, supervisors and major shareholders holding over 10% of outstanding shares 61
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1. Change in shareholdings of directors, supervisors, managers and major shareholders 2010 Title
Chairman Independent director Independent director Independent director Director Director Director Director Director Director Director
Name Yuanta Financial Holdings Co., Ltd. Representative: Ting-chien (Tony) Shen Yuanta Financial Holdings Co., Ltd. Representative: Pao-kuei (Paul) Chu Yuanta Financial Holdings Co., Ltd. Representative: Tseng-chi Lin Yuanta Financial Holdings Co., Ltd. Representative: Chwo-ming (Joseph) Yu Yuanta Financial Holdings Co., Ltd. Representative:Hung-chi (Alex) Lee Yuanta Financial Holdings Co., Ltd. Representative: Kang-sheng Kao Yuanta Financial Holdings Co., Ltd. Representative: Yueng-lin Ma Yuanta Financial Holdings Co., Ltd. Representative: Yueh-tsang Lee Yuanta Financial Holdings Co., Ltd. Representative: Ching-Kuang Shen Yuanta Financial Holdings Co., Ltd. Representative: Rui-chen Ma Yuanta Financial Holdings Co., Ltd. Representative: Cheng Fen
Shareholding increase (decrease)
Pledged shares increase (decrease)
Date:Feb. 28, 2011 As of Feb. 28, 2011 Pledged Shareholding shares increase increase (decrease) (decrease)
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President
Hung-chi (Alex) Lee
Executive Vice President
Cheng-ling Ho
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Executive Vice President
Tsai-yu Chang
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Executive Vice President
Ping-han Tsai
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Executive Vice President
Tien-fu Lin
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Executive Vice President
Chun-jung Hsu
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Executive Vice President
Ming-Shan Li
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Senior Vice President
Hsiu-wei Chen
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Vice President
Wei-cheng Huang
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Vice President, Investment Banking Department
Li-hui Tseng
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Vice President, Investment Banking Department
Feng-hsiang Kuo
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Vice President, Investment Banking Department
Su-ying Lee
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Mei-ying Huang
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Pei-Chen Lin
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Hsin-yi Chiu
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Yi-ju Hou
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Ying-hui Peng
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Hsiang-shan Lin
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Tien-jen Huang
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Senior Vice President, Fixed Income Department
Li-ming Wu
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Vice President, Fixed Income Department
Hsu-shu Mai
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Senior Assistant Vice President, Fixed Income Department
Hung-chan Tseng
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Chao-tzu Yang
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Chih-hung Ma
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Assistant Vice President, Investment Banking Department Assistant Vice President, Investment Banking Department Assistant Vice President, Investment Banking Department Assistant Vice President, Investment Banking Department Assistant Vice President, Investment Banking Department Senior Vice President, Financial Transactions Department Assistant Vice President, Financial Transactions Department
Assistant Vice President, Fixed Income Department Jun-chih Lien Vice President, International Operations Department Vice President, International Operations Department
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2010 Title Assistant Vice President, International Operations Department Assistant Vice President, International Operations Department Assistant Vice President, International Operations Department
Name
Shareholding increase (decrease)
Pledged shares increase (decrease)
As of Feb. 28, 2011 Pledged Shareholding shares increase increase (decrease) (decrease)
Hsi-ying Chen
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Yao-cheng Kuo
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Ya-wen Chang
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Vice President, Institutional Group
Shuo-feng Chang
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Vice President, Institutional Group
Yuan-chi Fang
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Riga Saito
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Hui-fen Lin
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Tiffany Lin
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Judy Chang
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Assistant Vice President, Institutional Group
Daniel Patrick Clarke
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Po-cheng Chang
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Assistant Vice President, Institutional Group
Chih-cheng Hu
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Assistant Vice President, Institutional Group
Yung-tse Lin
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Tzu-chun Kao
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-
-
-
Chang-en Li
-
-
-
-
Kao-yi Su
-
-
-
-
Chien-tu Huang
-
-
-
-
Shih-liang Chang
-
-
-
-
Yao-ting Yu
-
-
-
-
Rong-fu Lee
-
-
-
-
Yong-hsien Chang
-
-
-
-
Chun-ching Chang
-
-
-
-
Chun-yen Liu
-
-
-
-
Chi-hsin Wei
-
-
-
-
Senior Vice President, General Manager Office
Ching-tang Wu
-
-
-
-
Assistant Vice President, General Manager Office
Ching-tung Chang
-
-
-
-
Assistant Vice President, General Manager Office
Ching-sun Yang
-
-
-
-
Vice President, Audit & Approval Department
Ah-yen Lee
-
-
-
-
Assistant Vice President, Audit & Approval Department
Yen-ying Liu
-
-
-
-
Vice President , Board Secretary Office
Tai-sheng Chuang
-
-
-
-
Yueh-jung Liao
-
-
-
-
Yi-heng Hu
-
-
-
-
Assistant Vice President, Finance Department
Wen-ching Hsu
-
-
-
-
Vice President, Risk Management Department
Hsuan-min Kuo
-
-
-
-
Vice President, Wealth Management Department
Yi-ming Wang
-
-
-
-
Hsien-ling Yeh
-
-
-
-
Hung-lieh Liang
-
-
-
-
Vice President, Foreign Equity Department
Liao-chin Lin
-
-
-
-
Assistant Vice President, Registrar Department
Yi-wen Ma
-
-
-
-
Senior Vice President, Proprietary Trading Department Assistant Vice President, Proprietary Trading Department Assistant Vice President, Proprietary Trading Department Assistant Vice President, Proprietary Trading Department Assistant Vice President, Proprietary Trading Department Senior Vice President, Information Technology Department Senior Assistant Vice President, Information Technology Department Senior Assistant Vice President, Information Technology Department Assistant Vice President, Information Technology Department Assistant Vice President, Information Technology Department Assistant Vice President, Information Technology Department
Senior Assistant Vice President, Accounting Department Senior Assistant Vice President, Finance Department
Assistant Vice President, Wealth Management Department Assistant Vice President, Wealth Management Department
63
73
2010 Title
Name
Shareholding increase (decrease)
Pledged shares increase (decrease)
As of Feb. 28, 2011 Pledged Shareholding shares increase increase (decrease) (decrease)
Assistant Vice President, Settlement Department
Chin-pi Lin
-
-
-
-
Assistant Vice President, Legal Department
Wen-ching Chiu
-
-
-
-
Vice President, Compliance Department
Wei-ho Liu
-
-
-
-
Assistant Vice President, Compliance Department
Chin-tai Tseng
-
-
-
-
Bo-ching Lee
-
-
-
-
Po-chih Liu
-
-
-
-
Shih-huan Chang
-
-
-
-
Vice President, Financial Superintendence
Kuang-hua Yu
-
-
-
-
Vice President, Financial Superintendence
Ming-lang Liao
-
-
-
-
Yuan-shan Lin
-
-
-
-
Chun-chieh Wang
-
-
-
-
Ming-jen Wang
-
-
-
-
Chen-hsiang Wu
-
-
-
-
Yu-cheng Chang
-
-
-
-
Chen-wen Hua
-
-
-
-
Yi-huang Chang
-
-
-
-
Vice President, Business Superintendence
Wen-ming Hung
-
-
-
-
Vice President, Business Superintendence
Chang-jung Chiang
-
-
-
-
Vice President, Business Superintendence
Shao-hsing Kung
-
-
-
-
Vice President, Business Superintendence
Tsung-wu Lai
-
-
-
-
Vice President, Business Superintendence
Teng-hsi Lu
-
-
-
-
Chun-chieh Chen
-
-
-
-
Shih-hsiung Lin
-
-
-
-
Chao-min Mou
-
-
-
-
Hsien-chuan Meng
-
-
-
-
Yi-ching Koo
-
-
-
-
Yu-shun Yang
-
-
-
-
Chun-cheng Cheng
-
-
-
-
Ming Lin
-
-
-
-
Chih-hung Tsai
-
-
-
-
Cheng-chung Lin
-
-
-
-
Cheng-chuan Chiu
-
-
-
-
Assistant Vice President, Brokerage Department
Kang Fan
-
-
-
-
Manager, Yunghe Branch
Chen-jung Chen
-
-
-
-
Manager, East Pingtung Branch
Chun-sung Hung
-
-
-
-
Manager, Greater Tianmu Branch
Hui-ying Wu
-
-
-
-
Manager, North Taoyuan Branch
Shih-kuo Lee
-
-
-
-
Manager, Chengchung Branch
Wen-pao Lee
-
-
-
-
Assistant Vice President, Administration & Labor Safety Department Assistant Vice President, Human Resources Department Assistant Vice President, Channel Marketing Department
Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence Senior Assistant Vice President, Financial Superintendence
Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence Senior Assistant Vice President, Business Superintendence
64
74
2010 Title
Name
Shareholding increase (decrease)
Pledged shares increase (decrease)
As of Feb. 28, 2011 Pledged Shareholding shares increase increase (decrease) (decrease)
Manager, Tainan Branch
Ming-chun Hsieh
-
-
-
-
Manager, Tucheng Branch
Yi-jui Kao
-
-
-
-
Manager, Sinjhuang Branch
Chih-hao Feng
-
-
-
-
Manager, Danshui Branch
Chih-yu Chen
-
-
-
-
Manager, Beitou Branch
Chun-liang Pan
-
-
-
-
Manager, Taichung Jhonggang Branch
Hsin-liang Lin
-
-
-
-
Manager, Banciao Branch
Yi-ting Fan
-
-
-
-
Manager, Zuoying Branch
Hsiao-pei Su
-
-
-
-
Manager, Caotun Branch
Hsiao-chi Nien
-
-
-
-
Manager, Kaohsiung Branch
Ching-tui Lin
-
-
-
-
Manager, Datong Branch
Yung-hui Chen
-
-
-
-
Manager, Lujhou Branch
Tsung-shan Chen
-
-
-
-
Manager, Changhua Minsheng Branch
Mei-yun Wu
-
-
-
-
Manager, Jhongsiao Yanji Branch
Chang-yu Chen
-
-
-
-
Manager, Chenggong Branch
Teng-rui Chu
-
-
-
-
Manager, Neihu Branch
Yu-lan Cheng
-
-
-
-
Manager, Dunnan Branch
Shih-chin Luo
-
-
-
-
Manager, Sijhih Branch
Tien-yo Sun
-
-
-
-
Manager, Hsinchu Beimen Branch
Chia-hui Wu
-
-
-
-
Manager, Lugang Branch
Ming-hsing Yeh
-
-
-
-
Manager, Dajia Branch
Kui-hsiang Wang
-
-
-
-
Manager, Sanchong Branch
Mu-hsin Hsu
-
-
-
-
Manager, Fengyuan Station Branch
Po-chien Hung
-
-
-
-
Manager, Minsheng Branch
Rui-hung Lee
-
-
-
-
Manager, Keelung Branch
Tai-yi Lai
-
-
-
-
Manager, Siaogang Branch
Yu-chin Lee
-
-
-
-
Manager, Yuanli Branch
Huan-chang Hung
-
-
-
-
Manager, Pingtung Branch
Ting-lin Wang
-
-
-
-
Manager, Beitun Branch
Chien-hua Wu
-
-
-
-
Manager, Chungho Branch
Chih-hsiung Chen
-
-
-
-
Manager, Donggang Branch
Pao-chi Hung
-
-
-
-
Manager, Chiayi Branch
Kui-lung Liu
-
-
-
-
Manager, Sihu Branch
Shu-chuan Chen
-
-
-
-
Manager, Shulin Branch
De-liang Wu
-
-
-
-
Manager, Kuting Branch
Chung-yung Hsiao
-
-
-
-
Manager, Sinyi Branch
Ming-wen Lin
-
-
-
-
Manager, Dunsin Branch
Jung-tsai Liu
-
-
-
-
Manager, Tucheng Syuefu Branch
Wei-hsing Tiao
-
-
-
-
Manager, Siangshang Branch
Ching-an Chou
-
-
-
-
Manager, Sinying Branch
Chun-chieh Shen
-
-
-
-
Manager, Fuchung Branch
Teh-chien Yu
-
-
-
-
Manager, Nanyongkang Branch
Ting-yu Fan
-
-
-
-
Manager, Luodong Branch
Fu-chuan Yu
-
-
-
-
Manager, Bo-ai Branch
Yung-chi Wang
-
-
-
-
Manager, Liuhe Branch
Peng-chih Fang
-
-
-
-
Manager, Jhongli Jhongshan Branch
Chien-hsi Hu
-
-
-
-
Manager, Beining Branch
Chen-ming Lin
-
-
-
-
65
75
2010 Title
Name
Shareholding increase (decrease)
Pledged shares increase (decrease)
As of Feb. 28, 2011 Pledged Shareholding shares increase increase (decrease) (decrease)
Manager, Sihwei Branch
Li-mei Chen
-
-
-
-
Manager, Dunhua Branch
Chen-fa Chen
-
-
-
-
Manager, Jhongli Branch
Tsai-chin Wei
-
-
-
-
Manager, Yuanlin Branch
Chien-yu Chen
-
-
-
-
Manager, Chongching Branch
Kuan-chih Chen
-
-
-
-
Manager, Beigang Branch
Chiao-chu Chang
-
-
-
-
Manager, Fengyuan Jhongjheng Branch
Wei-chieh Hsia
-
-
-
-
Manager, Tainan Changrong Branch
Ching-hua Wang
-
-
-
-
Manager, Shangsinjhuang Branch
Tung-liang Chien
-
-
-
-
Manager, Tainan Simen Branch
Wei-jen Chen
-
-
-
-
Manager, Hsinchu Dongmen Branch
Chien-min Yeh
-
-
-
-
Manager, Syuejia Branch
Ching-yao Lin
-
-
-
-
Manager, Mujha Branch
Kuo-liang Chen
-
-
-
-
Manager, Da-an Branch
Pei-heng Chuang
-
-
-
-
Manager, Toufen Branch
Chien-hsing Hsiao
-
-
-
-
Manager, Jhunan Branch
Chih-yen Chen
-
-
-
-
Manager, Dali Defen Branch
Yen-chuan Lai
-
-
-
-
Manager, Fengshan Branch
Pao-hui Hsu
-
-
-
-
Manager, Hualien Branch
Tsung-che Yang
-
-
-
-
Manager, Jiantan Branch
Wen-cheng Yang
-
-
-
-
Manager, Jhudong Branch
Shu-li Hsieh
-
-
-
-
Manager, Daya Minsing Branch
Hung-chuan Chen
-
-
-
-
Manager, Renai Branch
Chin-yuan Lin
-
-
-
-
Manager, Kaohsiung East Branch
Chen-chung Luo
-
-
-
-
Manager, Songnan Branch
Mei-hui Lin
-
-
-
-
Manager, Sindian Jhongjheng Branch
Cheng-liang Hou
-
-
-
-
Manager, Nanshihjiao Branch
Yu-chen Weng
-
-
-
-
Manager, Jingmei Branch
Shi Du
-
-
-
-
Manager, Guancian Branch
Jung-chien Chen
-
-
-
-
Manager, Yenping Branch
Yung-tao Chung
-
-
-
-
Manager, Songjiang Branch
Chi-hua Tseng
-
-
-
-
Manager, Heping Branch
Hsien-ping Jui
-
-
-
-
Manager, Tianmu North Branch
Chien-hsun Chen
-
-
-
-
Manager, Fuhsing Branch
Huo-shun Hung
-
-
-
-
Manager, Douliou Branch
Hui-jung Chang
-
-
-
-
Manager, Kaiyuan Branch
Hsue-li Chang
-
-
-
-
Manager, Hsinchu Science Park Branch
Cheng-mao Ni
-
-
-
-
Manager, Nanhai Branch
Chen-hsiang Shen
-
-
-
-
Manager, Chengde Branch
Tsung-kuo Wang
-
-
-
-
Manager, Shulu Branch
Ching-jen Chen
-
-
-
-
Manager, Cingshuei Branch
Hsiu-ju Huang
-
-
-
-
Manager, Daya Branch
Shu-nu Chen
-
-
-
-
Manager, Taipei Branch
Yung-hung Teng
-
-
-
-
Manager, Huwei Branch
Chueh-ping Su
-
-
-
-
Manager, Zihyou Branch
Sheng-ming Hsiao
-
-
-
-
Manager, Fucheng Branch
Chia-cheng Chen
-
-
-
-
Manager, Situn Branch
Ming-hsing Lai
-
-
-
-
66
76
2010 Title
Manager, Taichung Branch
Name
You-jen Lin
Shareholding increase (decrease) -
Pledged shares increase (decrease) -
As of Feb. 28, 2011 Pledged shares increase (decrease)
Shareholding increase (decrease) -
-
Manager, Bade Branch
Ching-yi Wang
-
-
-
-
Manager, Dayi Branch
Tsung-sheng Wang
-
-
-
-
Manager, Yongkang Branch
Chen-chang Chiu
-
-
-
-
Manager, Hsinchu Branch
Chao-hsiang Chung
-
-
-
-
Manager, Dongtai Branch, Manager
Cheng-hung Fu
-
-
-
-
Manager, Taoyuan Branch
Cheng-cheng Chang
-
-
-
-
Manager, Yingge Branch
Hao-yun Chen
-
-
-
-
Manager, Jhubei Branch
Hsing-yung Teng
-
-
-
-
Manager, Lujhu Branch
Ching-fu Chen
-
-
-
-
Manager, Nantou Branch
Wen-tan Lin
-
-
-
-
Manager, Facai Branch
Ming-chou Wei
-
-
-
-
Manager, Fuying Branch
Yuan-tsung Chen
-
-
-
-
Manager, Changhua Branch
Yu-oh Hsu
-
-
-
-
Manager, Tianmu Branch
Li-ching Hsu
-
-
-
-
Manager, Gaofu Branch
Hsien-feng Chou
-
-
-
-
Manager, Linyuan Branch
Chun-chieh Lai
-
-
-
-
Manager, Jyuguang Branch
Mei-hsueh Wang
-
-
-
-
Manager, Miaoli Branch
Fa-hsin Hsieh
-
-
-
-
Manager, Kinmen Branch
Cheng-nan Yao
-
-
-
-
Manager, Taiping Branch
Mei-ling Huang
-
-
-
-
Manager, Jhushan Branch
Hsiu-ching Huang
-
-
-
-
Manager, Jhongde Branch
Chung-yi Chen
-
-
-
-
Manager,Huashan Branch
Ching-yueh Lin
-
-
-
-
Manager, Dalin Branch
Shun-chih Yang
-
-
-
-
Manager, Dongmen Branch
Su-ching Chiang
-
-
-
-
Manager, Chaojhou Branch
Chung-kui Wu
-
-
-
-
Manager, Guei-ren Branch
Yi-cheng Cheng
-
-
-
-
Manager, Jiali Branch
Ting-feng Wang
-
-
-
-
Manager, Dali Branch
Pin-chen Chen
-
-
-
-
Manager, Pingtung Minsheng Branch
Fu-teh Huang
-
-
-
-
Manager, Siluo Branch
Kun-tsung Chan
-
-
-
-
Manager, Shihlin Branch
Chao-ming Hung
-
-
-
-
Manager, Sinsing Branch
Sheng Huang
-
-
-
-
Manager, Cishan Branch
Ching-yu Wu
-
-
-
-
Manager, Songshan Branch
Hsien-chung Lee
-
-
-
-
Manager, Mengjia Branch
Lieh-hsiung Chen
-
-
-
-
Manager, Pingnan Branch
Hui-shu Kuo
-
-
-
-
Manager, Shanhua Branch
Chun-hsiang Chen
-
-
-
-
Manager, Datong Branch
Chun-hsien Tu
-
-
-
-
Manager, Nankan Branch
Liang-hao Chen
-
-
-
-
2.Information on transfer of equity: None 3. Information on pledge of equity: None
67
77
VIII. Information regarding whether or not top 10 shareholders are related parties as defined by Financial Accounting Standard No. 6 Date: Feb. 28, 2011
Name
Yuanta Financial Holdings Co., Ltd.
Shareholding by spouse and minor children
Shares held
Shareholding by nominee arrangement
Shares
Ownership (%)
Shares
Ownership (%)
Shares
Ownership (%)
4,695,313,318
100%
-
-
-
-
Names and relationship of related parties as defined by SFA No. 6 among top 10 shareholders, their spouses, and second degree or closer blood relatives
Remarks
Name
Relationship
-
-
-
-
IX. Consolidated Shareholdings
Investees (Note 1)
Yuanta Securities Investment Trust Yuanta International Insurance Brokerage, Co. Ltd.
Investment by directors, supervisors, and managers Investment by Yuanta in businesses under direct or indirect control Shares Ownership Shares Ownership (1,000) (%) (1,000) (%) 128,955 80.60 － －
Date: Feb. 28, 2011
Total investment Shares (1,000) 128,955
Ownership (%) 80.60
－
500
100.00
500
100.00
174,063
100.00
－
－
174,063
100.00
1,660
5.53
－
－
1,660
5.53
Taiwan Stock Exchange Corporation (TSEC)
34,107
5.84
－
－
34,107
5.84
Taiwan Futures Exchange Corporation (TFEC) Taiwan Depository & Clearing Corporation (TDCC). Fuchi management consultant Co., Ltd (former Fubon Securities Finance Co., Ltd) Global Securities Finance Corporation Taiwan High Speed Rail 2003 convertible preferred shares (Note 2)
21,866
8.18
－
－
21,866
8.18
100
0.03
－
－
100
0.03
8
0.82
－
－
8
0.82
5,781
0.77
－
－
5,781
0.77
50,000
1.86
－
－
50,000
1.86
Yuanta Securities Asia Financial Service Taiwan Integrated Shareholder Service Company
Note 1: Long term investments Note 2: Class A registered convertible preferred shares.
68
－
78
79
Section Four Financing Status I. Capital and shareholding 1. Sources of capital (1) Shares issued in 2010 and as of publication of the 2010 Annual Report Data: Feb. 28, 2011
Month /year June 2010
Authorized capital
Issue price
10
Paid-in capital
Remarks
Shares
Amount
Shares
Amount
5,400,000,000
54,000,000,000
4,695,313,318
46,953,133,180
Capital increase Source of capital by assets other Others than cash Surplus of None Note 327,374,529 shares
Note: Including 17,566,239 private equity shares, according to Chin-Kuan-Cheng-Chuan-Tzu No. 0990029135 of June 7, 2010
(2) Shares categorization Date: Feb. 28, 2011
Authorized capital
Category of shares Common shares
Remarks
Outstanding shares
Unissued shares
Total
4,695,313,318
704,686,682
5,400,000,000
-
2. Shareholder structure Date: Feb. 28, 2011
Shareholders
Governmental institutions
Financial institutions
Other institutions
Individuals
Foreign institutions and natural persons
No. of shareholders
0
1
0
0
0
1
Shareholding
0
4,695,313,318
0
0
0
4,695,313,318
Holding percentage
0
100%
0
0
0
100%
Number
Total
3. Distribution profile and shareholder ownership 10 doller NT per share Date: Feb. 28, 2011
Shareholder ownership (unit: share)
Number of shareholders
Shares held
Ownership (%)
Above 1,000,001
1
4,695,313,318
100%
Total
1
4,695,313,318
100%
4. Major shareholders Date: Feb. 28, 2011
Shareholder name Yuanta Financial Holding Co., Ltd.
Item
Shares held
Ownership (%)
4,695,313,318
100%
69
80
5. Market price per share, book value, earnings, dividends and related information for the past two years Unit: NT$
Year
2010 ( Note 1)
2009
Year-to- Feb. 28, 2011 ( Note 2)
Highest
NA
NA
NA
Market price per Lowest share Average
NA
NA
NA
NA
NA
NA
Before distribution
12.68
12.72
13.10
After distribution
Note 1
11.76
NA
4,695,313
4,367,939
4,695,313
1.07
1.11
0.31
After distribution
Note 1
1.04
NA
Cash dividend
Note 1
0.0833
NA
Form retained earnings
Note 1
0.7495
NA
Form capital reserve
Note 1
－
NA
Outstanding dividend accumulated
－
－
NA
Price/Earnings (P/E) ratio(Note 1)
NA
NA
NA
Price/dividend (P/D) ratio(Note 2）
NA
NA
NA
Cash dividend yield(Note 3)
NA
NA
NA
Item
Book value per share
Earnings per share
Dividends per share
Return on investment
Weighted average Number of shares (1,000) Before distribution
Stock dividend
Note 1: Resolved by the Board of Directors (acting on behalf of the stockholder’s meeting). Note 2: Year-to-Feb. 28 ,2011 data is un-audited.
6. Yuanta's dividend policy and status of implementation (1)Dividend policy from the Articles of Incorporation Yuanta Securities allocates dividends based on earnings from the year, while maintaining consistency on a yearto-year basis. The total proposed dividend by the board of directors in principle should not be less than 50% of net earnings for the year. If distributable earnings are lower than net earnings for that year, distributable earnings can be used as the basis of dividend distribution. The cash portion of the dividend shall not be less than 10% of the total dividend distributed. (2)Dividend distribution proposed at the shareholders' meeting Pending the resolution of the board of directors (acting on behalf of the shareholders) annual earnings for 2010 NT$3,513,957,208 will be distributed to shareholders as a cash dividend. 7. Impact on company financial results and EPS due to the issuance of bonus shares as proposed in the shareholders' meeting: Distribution of 2010 earnings does not include stock dividends and therefore disclosure is not required. 8. Employee bonuses and remuneration for directors and supervisors (1)The range of bonuses paid to employees and remuneration paid to directors and supervisors as set forth in Yuanta's Articles of Incorporation According to Article 22 of Yuanta's Articles of Incorporation, the amount distributed from earnings at yearend for corporate income tax and to amend for any previous losses shall first be withheld. Then, a sum of 10% 70
81
is to be withheld for legal reserve and 20% for special reserve. Of the remaining amount, and 0.5%-1.5% paid as bonuses to employees. (2) Bonuses paid to employees as approved by the board of directors A. Distribution of earnings for 2010, as approved by the board of directors (acting on behalf of the shareholders) included employee cash bonuses of NT$44,627,257. B.Proposed stock bonus to employees and its ratio to total capital increment from earnings: Yuanta Securities did not allocate a stock bonus to employees in 2010. C.Earnings per share after proposed allocation of bonus to employees and remuneration to directors and supervisors:EPS: NT$1.07 after allocations. As of January 1, 2008, Yuanta Securities adopted the newly-released SFAS #39 “Share-Based Payment Accounting Standards” and, as of March 16, 2007 Yuanta Securities adopted the ROC Accounting Research and Development Foundation’s “Accounting Principles for Employee Bonuses and Remuneration of Directors and Supervisors” (Chi-Mi-Tzu No. 52). As employee bonuses and remuneration for directors and supervisors have already been expensed, there is no impact on earnings per share. (3)Information regarding the use of previous year earnings to pay bonuses to employees and compensation to directors and supervisors Distribution of earnings for 2009 as approved at the 36rd meeting of the 6th board of directors on March 25, 2010 (representing the shareholders’ meeting),there was no discrepancy between the actual amount allocated and the amount of bonuses, to be paid to employees and compensation paid to directors and supervisors. Actual cash bonuses paid to employees amounted to NT$47,287,432, paid to directors and supervisors amounted to NT$0. 9. Information regarding Yuanta's repurchase of its own shares: Not applicable
II. Status of corporate bonds 1. Outstanding and proposed corporate bonds: None Yuanta Securities has no outstanding or proposed corporate bonds in 2010, as of the publication of the 2010 annual report. 2. Corporate bonds due within one year: None Yuanta Securities had no corporate bonds due within one year in 2010 and as of the publication of the 2010 annual report. 3. Issuance of convertible corporate bonds: None Yuanta Securities issued no convertible corporate bonds in 2010 and as of the publication of the 2010 annual report. 4. Issuance of exchangeable corporate bonds: None
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Yuanta Securities issued no exchangeable corporate bonds in 2010 and as of the publication of the 2010 annual report. 5. Offering and issuance of common corporate bonds by means of shelf registration: None Yuanta Securities did not offer or issue any common corporate bonds by means of shelf registration in 2010 and as of publication of the 2010 Annual Report. 6. Issuance of warrant bonds: None Yuanta Securities did not issue warrant bonds in 2010 and as of the publication of the 2010 annual report. 7. Private placement corporate bonds over the past three years: None Yuanta Securities has not issued private placement bonds over the past three years
III. Preferred Shares Yuanta Securities did not issue preferred shares in 2010 and as of publication of the 2010 Annual Report.
IV. Global depository receipts (GDRs) Yuanta did not issue GDRs in 2010 and as of publication of the 2010 Annual Report.
V. Employee stock options Yuanta did not issue employee stock options in 2010 and as of publication of the 2010 Annual Report.
VI. Mergers and acquisitions (M&A) 1. Information regarding M&As during the past year and as of publication of the 2010 annual report, including acquisition of other companies' newly issued shares: Yuanta did not issue M&As in 2010 and as of publication of the 2010 Annual Report. 2. Board decisions regarding M&As or purchase of newly issued shares of other companies in 2010 and as of publication date of the Annual Report: Yuanta Securities had no mergers, acquisitions, or issue of new shares after assignment of shares by another company during 2010 and up to the date of publication of this annual report.
VII. Implementation of capital expenditure plans No t app licab le
72
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Section Five Operational Highlights I. Business Activities 1. Business Scope (1 ) Main business operations A. Consigned stock trading in the stock market. B. Stock trading on its own behalf in the stock market. C. Consigned stock trading in the company’s business premises. D. Stock trading on its own behalf in the company’s business premises. E. Underwriting of stocks. F. Handling services for stock matters. G. Assistance operations for futures trading. H. Proprietary trading of stock-related futures. I. Consigned trading of foreign stock. J. Short-term finance bills operations. K. Trust Operations. L. Other operations approved by regulatory agencies. (2) Revenue breakdown of major businesses unit: NT$ thousands
Business
2010 Revenue
2009 %
Revenue
%
Brokerage
10,172,873
67.95
10,256,569
71.43
Proprietary trading
3,705,572
24.75
3,234,498
22.53
Underwriting
1,092,868
7.30
867,555
6.04
Total
14,971,313
100.00
14,358,622
100.00
Note: This information was taken from itemized financial data contained in financial reports for 2010 and 2009 prepared by certified public accountants.
(3) Products and services currently offered by Yuanta Securities Yuanta Securities is a large-scale integrated securities firm engaged in a wide variety of businesses including brokerage, proprietary trading, Investment banking, bond, new financial instruments, transfer agent and registrar, and wealth management services. Yuanta Securities offers consigned trading of securities issued by TSE/OTC listed companies, as well as margin lending and securities financing, loans and securities loans, futures trading and other credit trading services, and sub-brokerage of foreign securities. In addition to proprietary trading of securities and derivatives, Yuanta Securities provides professional assistance to publicly listed companies with securities related services including domestic/overseas IPO and listing, fund raising, corporate bonds underwriting, as well as professional consulting on mergers/ acquistions and financial planning. Yuanta Securities trades bonds, bills and asset-backed securities in both outright buys and sells and with repurchase or reverse repurchase agreements, issues other securities (e.g. call/put warrants), and designs and issues structured
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products. Yuanta Securities represents and assists publicly listed companies with registrar services, and provides wealth management products and customer asset management services. Highly integrated human and operational assets allow Yuanta Securities to provide superior value added services, and strengthen the company's reputation as a professional financial service provider. (4) Development plans for new products and services In accordance with deregulatory measures adopted by Taiwan Stock Exchange, the company plans to issue warrants and callable bull/bear contracts (CBBC) linked to foreign indices, and to strengthen investment bank, wealth management, sub-brokerage operations, and trust operations in order to provide investors with more comprehensive services. 2. Overview of business performance (1) Business overview and future prospects Beginning in 2010, the focus of the global economy gradually moved from Europe and North America to the emerging countries of Asia. Given this shift, Taiwan’s stock market faces multiple challenges, but also has opportunities for broad development. First, the global securities market has gradually focused its attention on Asia’s emerging economies, with a particular emphasis on the Greater China region. Taiwan’s stock market has advantages in its extensive operating experience and its cross-strait cultural connections, making it the perfect gateway to the Greater China market. At the same time, Taiwan’s unique position in the IT industry and its reputation for strong corporate governance and market transparency will help Taiwan attract international capital and globalizing securities firms. We expect the future of securities market will be more competitive and yet the market potential and opportunities are borderless. Second, a succession of agreements and MOUs between Taiwan and China has gradually relaxed trade and economic restrictions. Taiwan’s securities firms not only have the opportunity to expand the scale of their domestic business, but also have future opportunities to partner with China securities firms, expanding their business scope through equity participation and joint ventures, and allowing Taiwan’s financial institutions to enter a new phase of operational and competitive advantage. Third, to satisfy international standards and our investors’ demands, Yuanta Securities is placing new emphasis on diversifying product lines and developing wealth management capabilities. Taiwan is moving towards globalized and diversified development, and investors are demanding more sophisticated financial products and investment services. Therefore, we are actively developing a diversified product line and wealth management services to drive the sustainable development of domestic financial institutions. (2) Relationships between up-, mid-, and down-streams of the industry As Yuanta Securities only engage in securities services, operations do not involve raw materials and commercial products. (3) Development trends and competition facing each business segment A. Brokerage services
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In recent years, the brokerage business has remained fragmented, but the trend is towards consolidation with large-scale brokerages growing through mergers and acquisitions, seeking to accelerate their growth and reduce operating costs. In the future, Yuanta Securities will continue to develop its corporate business, while raising market share per branch and reducing costs, seeking out appropriate M&A targets, and maintaining its leading position in the brokerage business. B. Proprietary services While global stock markets rebounded last year, amid large fluctuations domestic brokerages used different trading strategies in the search of steady profits. In the coming year, as economic growth gradually slows, factors affecting the financial markets will begin to emerge. In addition to its continuous improvement of risk management, Yuanta Securities will maintain steady profits through strategic model trading to avoid systemic risk and diversifying risk through overseas transactions. C. Investment Banking services Since changing its name last year from the Underwriting Department, the Investment Banking Department has expanded its traditional underwriting business to overseas markets with unprecedented success during the year of 2010. The IML listing kicked off 2010, followed by sensational IPOs for TPK, 85°C, and AirTAC. Challenging the traditional view among underwriters that capital gains are the primary source of income, the Yuanta Investment Banking Department’s first listing had the highest consultation delivery rate in the market, making Yuanta Securities top performer of the year. In the future, Yuanta Securities will continue to bring foreign companies to list in Taiwan, developing not only IPOs, but also TDRs. In all cases, regardless of IPO, SPO or FA, Yuanta Securities implements strict risk management practices for carefully-selected cases, continuously improving the resource integration and competitive advantage of the entire group, and expanding synergies to provide clients with a full range of capital and strategic planning. D. Fixed income In 2010, the Euro zone debt crisis and loose currency policies in the United States sent a continuous wave of hot money into Taiwan, bringing yields on 10-year public bonds and 5-year CPC corporate bonds to record lows of 1.15% and 1.08%, respectively. With steady and efficient operations, Yuanta Securities’ domestic underwriting and convertible bond asset swap businesses have maintained their industry-leading positions, with fixed income earning steady profits. This year, with the European and American economies warming up and rising inflation, the Central Bank may continue to raise interest rates, thus increasing operating risk in the bond markets. Yuanta Securities will adjust its operational strategies in a timely manner according to market changes to take advantage of profitable opportunities while actively developing its overseas bond trading businesses, exploiting profitable products and maintaining its leading position, with the aim of serving our clients and pursuing maximum profits for the company. E. Overseas business Recently, cross-strait financial restrictions have been relaxed and domestic securities brokers are accelerating and broadening their entry into the mainland China securities market. Within the confines of the law, Yuanta Securities is actively seeking partnership opportunities with mainland China brokerages, 75
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and will continue to focus on expanding its business in Hong Kong and Shanghai to develop its Greater China Research Team, develop a first-rate Greater China capital markets platform, and take full advantage of all future business development opportunities. F. Derivatives business In mid 2010, the implementation of a new system for the individual matching of warrants not only increased the trading frequency in warrants, but also helped the warrant trading market to mature and reduced the waiting times for single commissions, thus increasing investor interest in the warrants market and contributing to clear growth in terms of transaction volume and broker over subscriptions. In terms of product lines, Yuanta Securities will exploit its existing strengths to continue to develop new types of warrant products to seize new opportunities. In terms of marketing, Yuanta Securities is jointly hosting a series of seminars with Taiwan Stock Exchange Co. and staging warrants trading competitions to raise investor recognition of warrants, thus expanding Yuanta Securities’ market share towards becoming the No. 1 warrants broker in Asia. In recent years, structured products have gradually met with broader approval among domestic investors, providing investors with a variety of financial products to meet their level of risk tolerance. We anticipate that the market of structured products will continue to expand. Structured products distributed by brokerages are subject to a 10% separation tax, compared with tax-free overseas structured products, thus less investors are able to participate. We believe that investors seeking to avoid currency risks will invest in NT$denominated structured products to make up for inadequate NT$ asset allocation. G. Wealth Management “Wealth Management” was originally developed overseas and domestic brokerages were restricted from entering this field until the recent passage of the “Securities Brokers Trust Wealth Management” guidelines by the competent authorities. For years, Yuanta Securities has been the leading brokerage in Taiwan, and years of continuously growing client assets and pioneering diverse services put Yuanta Securities in an excellent position to begin vigorous preparation to enter the wealth management business in 2010. With the concerted effort of our colleagues at all levels, Yuanta Securities was able to quickly secure the approval of the competent authorities on November 9, 2010, launching the development of wealth management at Yuanta Securities. The development of wealth management at Yuanta Securities adds to our ability to create wealth for our clients while reducing their risk and improving the operating efficiency of their capital. More importantly, it allows us to help investors broaden their horizons. From a view towards “asset allocation”, we can assist clients in different life stages manage their assets, and work with clients to help them achieve happiness and financial security. In Taiwan, wealth management is primarily a business dominated by banks. But overseas, wealth management has been primarily promoted by brokerages. Given the large scale of Taiwan’s banking industry and the strength of Yuanta Securities, there must be an opportunity to create a different business peak. Looking ahead, domestic and international competition will prove advantageous to those with strong and deep product lines. Yuanta Securities will continue to deepen its customer service, promoting the concept of household finance to provide families with complete financial assistance. At the same time, Yuanta Securities will expand its total assets under management (AUM), and accumulate new assets, while
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working with its clients to develop new and different sources of income. Yuanta Securities will rely on its existing clients and investment advantages, and leverage the sophisticated functionality of the wealth management platform to create synergies for our customers and establish us as the industry benchmark for wealth management brokerage services. 3. Overview of technology and research: Not applicable Securities firms operate under government licensure and scrutiny; its operations must comply with government rules and regulations, while introduction and sale of new products must receive prior approval by competent authority. Therefore this section relating to technology and research is not directly applicable to the securities industry. 4. Long-term and short term business development plans (1) Long-Term business development plans A. In core industries, seek mergers and strategic partnership opportunities with domestic and foreign securities companies. B. Continue to introduce and consolidate a wide variety of financial products. C. Responding to global financial centers trending towards Asia, Yuanta Securities has set Greater China as the axis for our strategic development, and we are tirelessly working to establish ourselves as the best and most professional securities broker in Greater China. (2) Short-term plans A. Leverage channel advantages to strengthen operational efficiency of branch offices, and promote overseas sub-brokerage services. B. Aggressively seek TDR issuance opportunities from overseas Taiwanese businesses, and continue to strengthen international M&A consulting operations. C. Actively seek equity investment and joint venture opportunities with Chinese securities firms; consolidate foreign networks; and increase the efficiency of overseas trading platforms.
II. Market overview and dynamics 1. Market analysis (1) Customer profile and regions Yuanta Securities will focus its services on domestic and foreign institutional investors and the domestic investing public. As of the end of 2010, Yuanta had a total of 141 securities business offices Taiwan-wide, ready to accept customers' orders for trades of listed and OTC securities, domestic futures, bonds, and derivatives, and was also actively promoting overseas sub-brokerage services. Yuanta Securities will adjust its overseas coverage, focusing on accelerating its entrance into the Greater China market, in addition to its stake in Vietnam First Securities.
(2)Market share analysis
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2010 The top five market share of integrated securities firms
11.19%
Yuanta 7.97%
KGI 6.37%
Fubon 4.84%
SinoPac
4.32%
Polairs
Source: Taiwan Stock Exchange (TSE), GreTai Securities Market (OTC)
2010 The top five Balance of convertible bond asset swap contracts of integrated securities firms Unit: NT$100mn
114.0
Yuanta GCSC
81.5
KGI
80.9
MasterLink Polaris
43.1 40.8
Source: GreTai Securities Market (OTC)
2010 The top five market share of average margin loan blance (including securities dealers and securities finance firms)
19.33%
Yuanta 8.87%
KGI Fubon
6.50%
MasterLink
5.56%
Polairs
5.43%
Source: Taiwan Stock Exchange (TSE), GreTai Securities Market (OTC)
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2010 The top five market share of average securities loan balance (including securities dealers and securities finance firms)
20.78%
Yuanta 9.97%
KGI SinoPac Polairs President
6.90% 6.38% 6.03%
Source: Taiwan Stock Exchange (TSE), GreTai Securities Market (OTC)
2010 The top five issuing warrants of integrated securities firms Unit: NT$100mn
246
Yuanta 154
SinoPac KGI
144
Capital
143 133
Fubon
Source: Taiwan Stock Exchange (TSE), GreTai Securities Market (OTC)
2010 The top five market share of sub-brokerage in the industry
7.47%
Yuanta
7.00%
Capital
6.37%
KGI 4.43%
Fubon Polairs
4.23%
Source: Taiwan Securities Association
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2010 The top five market share of Investment banking – IPO/SPO
Yuanta
15.28% 13.16%
KGI 11.10%
Polairs Capital GCSC
8.32% 7.08%
Source: Taiwan Stock Exchange (TSE), GreTai Securities Market (OTC)
(3) Projected market supply-demand dynamics and growth potential The June 2010 signing of the ECFA formally opened a new era of cross-Strait economic and trade relations. The ECFA has created unprecedented opportunities for cross-strait economic interaction, creating a watershed in cross-Strait economic cooperation but also bringing new vitality and opportunities for Taiwan’s economic development. Companies today urgently require financing and, whether they’ve come to Taiwan for a public listing or to distribute TDR, these new policies have the financing pipeline, which we will expect to attract more capital back to Taiwan and attract quality businesses to come list in Taiwan. Moreover, in recent years, the government has been pushing economic growth and improving the investment climate by continuously relaxing restrictions in the securities industry, leading to the domestic introduction of all kinds of new financial services and products such as individual auction trading systems for warrants. This increased diversity in financial products provides investors and brokers with a greater variety of investment vehicles and channels, resulting in greater market activity. In the future, further deregulation of financial services will expand the scope of the brokerage business and lead to greater profitability. (4)Competitive niches, advantages and challenges to long term competitiveness, and countermeasures
A. Competitive niches and long term prospects Yuanta Securities is not only the industry leader, but also the securities brokerage with the broadest coverage, the greatest number of branches and the strongest channels. These are the key to our stable, long-term reign as Taiwan’s leading securities firm. Reports produced by Yuanta Securities’ research team have earned the admiration of professional investors and provide an excellent legal foundation for business expansion. In terms of international coverage, Yuanta Securities has a long-term presence in Southeast Asia, Beijing and Shanghai, and has begun laying a solid foundation for future advances in Greater China. In the future, in addition to continually strengthening our traditional businesses, Yuanta Securities will actively develop the Greater China market and new types of business to provide our clients with broader, more complete and more valuable services.
B. Competitive advantages Yuanta Securities’ Taiwan-wide sales channels form a huge business distribution network. Our channels are a key advantage, allowing us to provide clients with fast and complete financial products of all kinds.
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In investment business, this year we had a list of continuous issues including IML, 85°C (KY Foods). Thus, whether it’s for domestic firms or expatriate Taiwanese returning for their first listing, or for TDR or financial consulting, Yuanta Securities is able to call on the resources and competitive advantages of the entire Yuanta Group to create synergies and provide clients with comprehensive financial management planning. We lead the industry in operational performance, financial robustness, risk management and the implementation of corporate governance, all of which is of great benefit to the operational expansion and business development. Our highly rigorous and professional research reports provide our clients with confidence and show the value we place on our relationship with our clients. With the support of our Greater China research team, we are expanding our corporate brokerage operations in mainland China and Hong Kong.
C. Challenges facing Yuanta Securities Traditional brokerage and proprietary trading services are highly sensitive to low stock market price levels and trading volume fluctuations. This can cause unstable service charge revenue and investment returns. Amid the global economic slowdown, loose monetary and economic policies are gradually tightening and interest rates are rising around the world, possibly prompting investors to adjust their portfolios which would have an impact on capital momentum in stock markets. The signing of the MOU was only a precondition to liberalization, the ECFA “Early Harvest List” does not include the securities industry, and issues related to business locations and scope still need to be included in market access negotiations. D. Strategic countermeasures We will continue to develop and strengthen our brokerage, proprietary trading , investment banking , bonds, warrants, sub-brokerage and wealth management, establishing balanced growth between all businesses while diversifying revenue sources, business resources and development. We will actively expand the breadth of our products, integrating financial products from across the group and continuously introduce high-quality diversified products. Given the advantage of our strong sales channels , we will offer our clients a greater variety of financial services while simultaneously expanding our profit scope and strengthening profitability. We will carefully monitor cross-strait liberalization and keep our finger on the pulse of developments, allowing Yuanta Securities to quickly and efficiently further improve our existing overseas business platform to establish Yuanta Securities’ next foundation for competitiveness.
2. End use applications and manufacturing processes for main products: not applicable Yuanta Securities is a securities services firm; the services and goods it provides do not have physical manufacturing processes. 3. Supply of raw materials: not applicable
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Yuanta Securities is a securities services firm; the services and goods it provides do not use physical raw materials. 4. Customers purchasing (selling) over 10% of total production during the past two years, percent purchased (sold), and reasons for increase or decrease: not applicable Yuanta Securities is a securities services firm; the services it provides are not appraisable using this type of index, and Yuanta Securities cannot provide such statistics in a fashion similar to manufacturing firms. 5. Output volume and value over the past two years: not applicable Yuanta Securities is a securities services firm; the services it provides are not appraisable using this type of index, and Yuanta Securities cannot provide such statistics in a fashion similar to manufacturing firms. 6. Sales volume and value over the past two years: not applicable Yuanta Securities is a securities services firm; the services it provides are not appraisable using this type of index, and Yuanta Securities cannot provide such statistics in a fashion similar to manufacturing firms.
III. Employee demographics Baseline date: Feb. 28, 2011
Year Number of employees Average age Average years of service Ph. D. Masters Educational College/University level Senior high school Below senior high school
2009
2010
Year to Feb. 28, 2011
4,483 39 8.97 3 364 3,227 878
4,477 39.21 9.68 4 381 3,248 835
4,451 39.38 9.83 4 382 3,227 829
11
9
9
IV. Environmental protection information and expenditures As a securities services firm, Yuanta Securities provides services that do not harm the environment or conflict with environmental protection laws and regulations. Yuanta Securities has never been penalized for violating environmental regulations.
V. Labor relations 1. Employee benefits, education, training, retirement programs and their implementation, and relations between labor and management: In addition to labor insurance, health insurance, and collective insurance as mandated by law, Yuanta Securities employees benefit from the establishment of an Employee Welfare Committee which manages employee welfare related issues including maternity leave and allowances, wedding/funeral subsidies, emergency assistance, educational scholarships, seasonal bonuses, and health check-ups. In addition, the Employee Pension Fund Management Committee and Labor Pension Reserve Fund Oversight Committee help manage the labor pension 82
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rules and regulations and make allocations to the pension reserve funds each month in order to protect employees' interests. On the educational front, the company's continued education and training programs, which include practical instructional classes and a corporate educational website, have been recognized with awards from the government. In recognition of our harmonious labor relations, in 2010, Yuanta Securities was honored for the third time with the “Job Creation Contribution Award”, reflecting our smooth business operations and excellent execution. (1) Employee benefits programs In order to ensure a high quality of life for employees and to improve operational efficiency, Yuanta Securities offers employees the following benefits:
Annual leave
Labor insurance, health insurance, and collective insurance
Marriage, funeral, pregnancy, anniversary, injury, and childbirth allowances
Scholarships for children of employees
Seasonal bonuses (New Years, Dragon Boat, and Mid-Autumn festivals)
Physical exams
Employee scholarships
Recreation facilities
Employee pension reserve fund
Day care
Emergency funds
Profit share bonuses
(2) Continuing education and training programs Status of Yuanta Securities’ educational and training programs: Year Summary Total outlay on education and training
2010
2011 (Note 2 )
NT$11,256,600
NT$12,327,300
Total hours
5,244.5 hours
5,261.5 hours
Total number of courses (Note 1 )
464 classes
467 classes
Note 1: Based on planned number of courses and course hours Note 2: 2011 courses and course hours are estimates; actual figures will be calculated at year end
Yuanta Securities encourages continued education and training by offering courses to meet a wide variety of professional needs. A. Classroom instruction In order to promote employees' professional growth, Yuanta Securities offers various professional courses either inside or outside the company. Courses consist of the three areas of management, professional skills, and general applied knowledge. In addition, "summit forums" seminars are held regularly to meet the needs of parent company and subsidiary executives and managers. Elite personnel from industry, government, academia, and the research communities are invited to share their experience and unique insights at these forums. Yuanta hopes that providing better self-enrichment channels to personnel will simultaneously improve the competitiveness of the company and its employees. B. Online courses
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The online Yuanta Securities e-Institute, which is part of the company's intranet, provides employees access to interactive multimedia professional training courses that are continually updated. These courses can be accessed, giving workers the flexibility to arrange studies to suit their schedules, as well as allowing easy use rate and results analysis, and eliminating the need for commuting to classes. C. Training for new employees In order to assist new employees to adapt to their positions as smoothly as possible, Yuanta Securities offers the “New Employee Orientation and Training” program, which uses leading instructors and intensive training to provide employees with a series of comprehensive professional training sessions. Course content is tailored to individual needs and covers both technical operations and corporate culture. D. Guidelines for Yuanta Securities’ educational and training programs include:
Guidelines for Educational and Training Programs for Employees
Guidelines for Incentives Regarding International Finance-Related Certifications
Guidelines for Enforcement of Educational and Training Programs, 2011
3) Retirement benefits and implementation In order to protect the welfare of retired employees and strengthen labor relations, Yuanta Securities provides retirement benefits in accordance with the Labor Standards Law and Labor Pension Act, as well as contributes to pension reserve funds on a regular basis. Yuanta Securities’ Pension Reserve Fund Supervisory Committee is responsible for overseeing management and use of the funds. Pension eligibility and amounts are determined by relevant laws and regulations. 4) Relations between labor and management In order to promote harmonious labor relations, Yuanta Securities has implemented comprehensive regulations and a competitive, equitable wage structure as well as an employee profit sharing plan. Yuanta Securities management maintains close relations with its employees, and has not experienced any labor disputes. 2. Loss incurred due to labor disputes, anticipated futures losses, and countermeasures: None In 2010 and as of publication of this annual report Yuanta Securities has experienced no losses due to labor disputes.
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Yuanta Securities Co., Ltd.; Chunghwa Telecom
Yuanta Securities Co., Ltd.; Ring Line Corporation
Yuanta Securities Co., Ltd.; Stark Technology Inc.
Yuanta Securities Co., Ltd.; Cathay Life Insurance Corp.
Yuanta Securities Co., Ltd.; Syspower
Telecom service agreement
Network equipment purchasing agreement
Computer equipment purchasing agreement
Property transaction agreement
Data usage agreement
Yuanta Securities Co., Ltd.; Yuanta Securities Finance Co., Ltd.
Yuanta Securities Co., Ltd.; SYSTEX Corporation
Software purchase agreement
Authorization to conduct business
Involved parties
Contract Type
VI. Major Contracts
Enterprise agreement to purchase Microsoft software from SYSTEX.
Summary
Using May 28, 2010 as the reference date (October 18, 2010)
February 1, 2011 to December 31, 2011
Signed on January 21, 2011, with title transfer on February 21, 2011.
Signed on March 12, 2010
Signed on March 3, 2010
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Yuanta Securities purchased from Yuanta Securities Finance’s margin trading business and securities lending business and their respective clients.
A data usage agreement was signed in accordance with the “Trading Data Use Management Act” by which Syspower provides equities and futures trading data.
Yuanta Securities sold units 2 and 3 on the 6th floor of 88 Tunhua North Road, Taipei, and 3 parking spaces to Cathay Life Insurance.
COS brokerage system development requirements.
COS brokerage system development requirements.
Covering each branch in Taiwan for a period of 24 months beginning Chunghwa Telecom will provide Yuanta Securities with after the equipment is delivered and digital switchboards, network equipment, recording inspected and the delivery receipt is equipment, as well as installation service. signed.
2009/01/01~2011/12/31
Duration of contract
The sale will be declared null and void if any of the following conditions are found to be true. The seller may, within five days of the event, return all payments received to the buyer and the buyer shall return all transferred business interests. In the event of damages which cannot be remedied, compensation should be in accordance with the purchase price: (A) This transaction has yet to secure official approval. (B) Either party may recused from the agreement for
Stark Technology Inc. provides a three year service warrantee from the day of delivery. Violation of the agreement can result in fines and compensation for damages.
Restrictive terms
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Option agreement
January 1, 2011 to December 31, 2011
Yuanta Securities Co., Ltd.; Yuanta Securities Investment Consulting Co., Ltd.
Securities investment consultant appointment
Signed on January 6, 2011 (with Yuanta Securities Finance anticipated implementation Asia Co. Ltd. (seller) Aseam Credit Sdn Bhd(buyer) duration of 4 to 6 months following signing).
Duration of contract
Involved parties
Contract Type
On January 6, 2011 Yuanta Securities Finance Asia Co. Ltd sold 168,467,566 shares in Kim Eng Holdings Limited to Aseam Credit Sdn Bhd for SG$3.10 per share. The total transaction value was SG$522,277,354.60 (approximately NT$12,205,621,777).
To appoint Yuanta Securities Investment Consulting Co. Ltd. as the domestic and international issuer of equity securities, and for investment consulting services.
Summary
This contract will be automatically terminated if: 1. The buyer is unable to obtain the approval of competent authorities for Kim Eng Holdings Limited and its subsidiaries, and in accordance with preconditions; or 2. The buyer separately purchases equity in Kim Eng Holdings Limited from Yuanta Securities Finance Asia and the owner’s family, but the purchase agreement with the operating shareholders is terminated.
either of the following reasons 1. Force majeure 2. Other factors not attributable to either party.
Restrictive terms
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98
99
Section Six Financial Information I. Five –year condensed financial statements 1. Five-year condensed balance sheet Unit: NT$1,000
Year Item Current assets Long-term investments Fixed assets Intangible assets Other assets Total assets Before distribution Current liabilities After distribution Long term liabilities Other liabilities Before distribution Total liabilities After distribution Common stock Capital reserve Before distribution After distribution Unrealized profit (loss) on financial products Cumulative translation adjustments Before Total distribution shareholders After equity distribution Retained earnings
Five-year balance sheet figures (Note1)
Year to Feb. 28, 2011 (Note 3)
2006 20,986,972
2007 74,862,061
2008 66,490,233
2009 55,064,137
2010 97,162,786
1,898,811
19,527,092
18,579,925
17,602,744
17,883,271
19,083,878
1,244,332
7,474,714
4,088,867
5,531,244
5,425,872
5,392,450
449,972
343,331
252,757
189,981
127,795
117,431
99,599,365
1,408,759
2,329,646
6,878,498
5,826,049
5,729,644
5,710,721
26,023,230
104,698,876
96,337,074
84,571,987
126,411,334
130,447,402
14,236,581
38,920,260
41,371,737
27,573,537
63,989,414
67,762,084
14,716,101
44,940,869
44,836,183
27,937,287
0
0
0
0
0
0
660,807
1,141,640
1,293,884
1,438,379
2,866,040
1,190,076
14,897,388
40,061,900
42,665,621
29,011,916
66,855,454
68,952,160
15,376,908
46,082,509
46,130,067
29,375,666
10,402,938
53,679,388
43,679,388
43,679,388
46,953,133
46,953,133
83,785
1,310,491
1,350,402
1,354,235
1,380,724
1,380,724
685,029
8,806,379
8,070,207
9,466,954
10,849,398
12,671,372
205,509
2,785,770
4,605,761
5,829,459
4,642
101,944
(234,660)
365,124
255,653
147,734
(50,552)
738,774
806,116
694,370
116,972
342,279
11,125,842
64,636,976
53,671,453
55,560,071
59,555,880
61,495,242
10,646,322
58,616,367
50,207,007
55,196,321
Note 2
Note 2
Note 2
Note 2
Note 1: Data for each full year above has been audited and certified by an independent auditor. Note 2: The appropriate of 2010 earnings was resolved by the Board of Directors (acting on behalf of the stockholder’s meeting). Note 3: Year-to-Feb. 28 ,2011 data is un-audited.
87
NA
NA
NA
NA
100
2. Five-year summarized income statement Unit: NT$1,000
Five-year income statement (Note 1)
Year
Item
2006
2007
2008
2009
Year to Feb. 28, 2011(Note 3)
2010
4,190,006
16,758,482
14,591,110
14,358,622
14,971,313
3,208,063
(3,594,972)
(9,678,151)
(10,756,680)
(9,740,545)
(10,473,701)
(2,211,851)
Operating profits
595,034
7,080,331
3,834,430
4,618,077
4,497,612
996,212
Non-operating income
451,878
2,550,039
2,430,970
1,419,292
1,462,217
965,449
Non-operating expenses
(97,429)
(447,774)
(189,159)
(83,480)
(382,495)
(339,708)
Operating income Operating expenses
Pre-tax profit (loss)
949,483
9,182,596
6,076,241
5,953,889
5,577,334
1,621,953
Net profit (loss)
571,347
8,600,870
5,284,437
4,861,193
5,019,939
1,455,974
Cumulative impact of changes in accounting principles
113,682
0
0
0
0
0
Current profit (loss)
685,029
8,600,870
5,284,437
4,861,193
5,019,939
1,455,974
0.68
1.69
1.07
1.04
1.07
0.31
EPS (Unit: $NT; Note 2)
Note 1: Data for each full year above has been audited and certified by an independent auditor. Note 2: Retroactively adjusted earnings per share (EPS). Note 3: Year-to-Feb. 28 ,2011 data is un-audited.
3. Names and audit opinion of certified public accountants over the past five years year
Auditing firm
CPA
Audit opinion
2006
KPMG
Yen Ling Fang, Siou Yu Lin
Modified unqualified opinion
2007
PriceWaterhouseCoopers
Jia Yu Wang, Chin Tze Huang (Note 2)
Modified unqualified opinion
2008
PriceWaterhouseCoopers
Se Kai Lin, Chin Tze Huang (Note 3)
Unqualified opinion
2009
PriceWaterhouseCoopers
Se Kai Lin, Chin Tze Huang
Unqualified opinion
2010
PriceWaterhouseCoopers
Se Kai Lin, Chin Tze Huang
Modified unqualified opinion
Note 1: In connection with the group’s overall planning, Yuanta Securities changed its independent auditors for the auditing of financial statements from Yen Ling Fang and Siou Yu Lin of KPMG Taiwan to Jia Yu Wang and Chin Tze Huang of PriceWaterhouseCoopers Taiwan, starting with the 2007 half year financial report. These changes were approved at the 44th meeting of the 5th board of directors on June 21, 2007. Note 2: In order to accommodate internal adjustments at PriceWaterhouseCoopers Taiwan, Yuanta Securities changed its independent auditors for the auditing of its financial statements from Jia Yu Wang and Chin Tze Huang to Se Kai Lin and Chin Tze Huang, starting with the 2008 second quarter financial report
88
101
II. Five year financial analysis Year Item (Note 4)
Five year financial analysis (Note 1) 2007 2006 2008 2009 2010 (Note 2)
Year to Feb. 28, 2011(Note 3)
Capital Structure
Debt ratio (%)
57
38
44
34
53
53
Long term capital to fixed assets (%)
894
865
1,313
1,004
1,098
1,140
Current ratio
147
192
161
200
152
147
Stability
Quick ratio
147
192
161
199
152
147
Interest coverage ratio
4.51
15.44
15.76
118
39
45
Accounts receivable turnover (times)
NA
NA
NA
NA
NA
NA
Cash cycle (days)
NA
NA
NA
NA
NA
NA
Inventory turnover (times)
NA
NA
NA
NA
NA
NA
Accounts payable turnover (times)
NA
NA
NA
NA
NA
NA
Operating cycle (days)
NA
NA
NA
NA
NA
NA
Operating performance
Profitability
Fixed asset turnover (times)
3
2
4
3
3
0.59
Total asset turnover (times)
0.16
0.16
0.15
0.17
0.12
0.02
Return on assets (%)
2
14
6
5
5
1.16
Return on equity (%)
6
23
9
9
9
2.41
6
13
9
11
10
2.12
Income to capital (%)
Operating income Income before tax
Net income to sales (%) EPS (NT$) Cash flow ratio (%) Cash flow
Leverage
9
17
14
14
12
3.45
14
51
36
34
34
45
0.68
1.69
1.07
1.04
1.07
0.31
1
9
30
29
－
－
137
173
172
155
122
－
Cash flow reinvestment (%)
1
4
12
8
－
－
Operating leverage
－
－
－
－
－
－
Cash flow adequacy ratio (%)
Financial leverage 1.00 1.00 1.00 1.00 1.02 1.02 Please explain reasons for fluctuations in each financial ratio during the past two years (not necessary if fluctuations are under 20%) 1. The ratio of liabilities to assets rose by 56% due to the transfer of a portion of the margin trading and securities lending claims of Yuanta Securities Finance Co. Ltd leading to a 130% total increase in liabilities and a 49% increase in total assets, resulting in an increased liability to asset ratio over the previous year. 2. Current ratio and quick ratio decreased 24% due to the transfer of a portion of the margin trading and securities lending claims of Yuanta Securities Finance Co. Ltd leading to a 132% increase in current liabilities and a 76% increase in current assets, resulting in lower current and quick ratios than in the previous year. 3. Interest coverage fell 67% due to increases in short-term lending and payable commercial paper raising interest costs by 186% and thus resulting in lower interest coverage than the previous year. 4. Fixed assets turnover fell by 29% due to the transfer of part of the margin trading business of Yuanta Securities Finance Co. Ltd, increasing margin loan receivables and increasing total assets by 49%. 5. The equity capital adequacy ratio fell by 21% due to the transfer of a portion of the margin trading and securities lending claims of Yuanta Securities Finance Co. Ltd leading to a reduction in operating cash flow, the continued increase of capital expenditures and cash dividend distribution.
Note 1: Data for each full year above has been audited and certified by an independent auditor. Note 2: Data for 2007 includes the profit/loss of the merged company Yuanta Core Pacific Securities for the period of Apr. 2, 2007 to Sept. 23, 2007. Note 3: Year-to-Mar 31 (2010) data is unaudited. Note 4: The analysis of the item for calculating formula is as follows. 1. Capital structure (1) Debt ratio = Total liabilities / Total assets (2) Long-term capital to fixed assets = (Total equity + Long-term liabilities) / Net fixed assets 2. Stability (1) Current ratio = Current assets / Current liabilities (2) Quick ratio = (Current assets - inventory - prepaid expenses) / Current liabilities (3) Interest coverage ratio = EBIT / Current interest expenses 3. Operating performance (1) Accounts receivable turnover (including account receivable and note receivable resulting from operations) = Net sales / Average accounts receivable balance for each period (including account receivable and note receivable resulting from operations) (2) Average cash cycle (days) = 365 / Accounts receivable turnover (3) Inventory turnover = COGS / Average inventory (4) Accounts payable turnover (including account payable and note payable resulting from operations) = COGS / Average accounts payable balance for each period (including account payable and note payable resulting from operations) (5) Average operating cycle (days) = 365 / Inventory turnover
89
102
(6) Fixed asset turnover = Net sales / Net fixed assets (7) Total asset turnover = Net sales / Total assets 4. Profitability (1) Return on assets = [Net profit (loss) + interest expense × (1 - tax rate)] / average total assets (2) Return on equity = Net profit (loss) / average total equity (3) Net margin = Net profit (loss) / net sales (4) EPS = (Net profit - dividend on preferred stock) / Weighted average outstanding shares 5. Cash flow (1) Cash flow ratio = Net cash flow from operations / Current liabilities (2) Cash flow adequacy ratio = Net cash from operations over the past five years / (Capital expenses + change in inventory + cash dividends) over the past five years (3) Cash flow reinvestment ratio = (Net cash flow from operations - cash dividends) / (Gross fixed assets + long term investments + other assets + operating capital). 6. Leverage (1) Operating leverage = (Net operating revenues - variable operating costs and expenses) / Operating profits (2) Financial leverage = Operating profit / (Operating profit - interest expense)
90
103
III.Financial statements
YUANTA SECURITIES CO., LTD. NON-CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2010 AND 2009
---------------------------------------------------------------------------------------------- -------------------------------------For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.
104
REPORT OF INDEPENDENT ACCOUNTANTS
PWCR10000352 To the Board of Directors and Stockholders of Yuanta Securities Co., Ltd. We have audited the accompanying non-consolidated balance sheets of YUANTA SECURITIES CO., LTD. as of December 31, 2010 and 2009, and the related non-consolidated statements of income, of stockholders’ equity and of cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the “Rules Governing the Examination 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the non-consolidated financial statements referred to above present fairly, in all material respects, the financial position of YUANTA SECURITIES CO., LTD. as of December 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended in conformity with the “Rules Governing the Preparation of Financial Statements by Securities Firms”, “Rules Governing the Preparation of Financial Statements by Futures Commission Merchants”, “Business Entity Accounting Law”, “Regulation on Business Entity Accounting Handling” and generally accepted accounting principles in the Republic of China.
92
105
As described in Note 5 to the non-consolidated financial statements, Yuanta Securities Co., Ltd. entered into an agreement relating to the transfer of the right of claim on margin loans and short sales of securities and on borrowing of securities with Yuanta Securities Finance Co., Ltd. amounting to NT $34,186,074 thousand. The effective date of the transfer was set on October 18, 2010. We have also audited the consolidated financial statements of the Company and its subsidiaries as of and for the years ended December 31, 2010 and 2009. Our reports on these consolidated financial statements expressed a modified unqualified and unqualified opinions, respectively.
PricewaterhouseCoopers March 8, 2011 Taipei, Taiwan Republic of China
------------------------------------------------------------------------------------------------------------------------------------The accompanying non-consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying non-consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the reponsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation. 93
Securities brokerage debit accounts net (Note 4(27)) TOTAL ASSETS
Other Assets Business security deposits (Notes 5 and 6) Exchange clearing deposits Deposits-out (Note 6) Rental assets (Notes 4(8), 5 and 6) Idle assets (Notes 4(8) and 6) Deferred income tax assets noncurrent (Note 4(25)) Other assets - others
Intangible Asset Other intangibles (Note 4(8))
Fixed Assets (Notes 4(8), 5, 6 and 7) Land Buildings Equipment Prepayments for land and buildings Prepayments for equipment Leasehold improvements Leased assets Less: accumulated impairment accumulated depreciation
Funds And Investments (Notes 4(3)(4)(7)(9), 6 and 10) Long-term investments accounted for under the equity method Available-for-sale financial assets - noncurrent Held-to-maturity financial assets - noncurrent Financial assets at fair value through profit or loss - noncurrent (Note 4(2))
ASSETS Current Assets Cash and cash equivalents (Notes 4(1) and 5) Financial assets at fair value through profit or loss - current (Notes 4(2), 5, 6 and 10) Receivables from margin loans (Note 4(6)) Refinancing deposits receivable (Note 5) Bonds purchased under resale agreements (Notes 4(5) and 5) Receivables from security lending Security borrowing collateral price Security borrowing margin (Note 5) Notes receivable Accounts receivable (Note 5) Prepayments Other receivables Other receivables - related parties (Note 5) Restricted assets - current (Notes 5 and 6) Available-for-sale financial assets current (Notes 4(3) and 5) Held-to-maturity financial assets current (Notes 4(4) and 6) Non-current assets held for sale
( (
$
$
(
100
5
136,024 113,152 5,729,644
81,966 126,411,334
1 1 3 -
-
2 2 1 1) 4
840,000 909,268 158,413 3,432,411 140,376
127,795
2,793,400 2,167,786 1,054,507 148,920 316,525 91,581 24,814) 1,122,033) 5,425,872
14
77
399,991 125,737 97,162,786
51,917 17,883,271
2
2,587,671
12 2 -
2 1 1 1
2,081,058 40,320 252,699 1,675,314 6,481 1,510,513 38,233 110,618 59,300 1,531,452
14,835,393 2,130,972 864,989
5 24 41 -
5,577,842
%
29,999,874 51,115,235 50,448
2010 AMOUNT
( (
$
$
(
100
7
1 1 1 4 -
-
4 3 1 1) 7
21
17 4 -
1 65
3
1 1 -
35 -
24
%
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
Significant Commitments (Note 7) Significant subsequent events (Note 9)
Stockholders' Equity Common stock (Note 4(19)) Capital Reserve (Note 4(20)) Paid in capital in excess of par Long-term investment Capital surplus from business combination Employee stock options Retained Earnings Legal reserve (Note 4(21)) Special reserve (Note 4(22)) Unappropriated earnings (Note 4(23)) Cumulative translation adjustments Unrealized gain or loss on financial instruments (Notes 4(3) and 10)
Other Liabilities Reserve for default (Note 4(16)) Reserve for trading loss (Note 4(17)) Deposits-in Accrued pension liability - noncurrent (Note 4(18)) Reserve for bad debts Receipts of underwriting share capital under custody
LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Short-term loans (Note 4(10)) Commercial paper payable (Note 4(11)) Bonds sold under repurchase agreements (Notes 4(12), 5 and 6) Financial liabilities at fair value through profit or loss - current (Notes 4(13) and 10) Guarantee deposit received from short sales Deposit payable for short sales Guarantee deposit received from security lending (Note 4(14)) Accounts payable Advance collections Collections for third parties Other payables (Notes 4(15)(25)) Other payables - related parties (Notes 4(15)(25) and 5) Deferred income tax liabilities current (Note 4(25)) Other financial liabilities – current (Note 10)
94
The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 8, 2011.
357,832 84,571,987
160,028 113,152 5,826,049
840,000 870,469 263,637 3,475,188 103,575
189,981
2,940,401 2,176,000 901,454 38,098 22,849 299,692 38,861 24,814) 861,297) 5,531,244
52,619 17,602,744
14,017,999 3,132,641 399,485
500,031 55,064,137
2,191,235
943,181 12,793 70,712 256,335 12,595 972,436 77,999 89,227 57,501 245,149
29,099,867 -
20,535,076
2009 AMOUNT
YUANTA SECURITIES CO.,LTD BALANCE SHEETS DECEMBER 31 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
$
$
100
47
255,653 59,555,880
126,411,334
2 3 4 -
1,943,153 3,886,306 5,019,939 116,972
1 -
1,230,544 12,950
37
1 2 53
1,311,330 2,866,040 66,855,454
38,699 98,531
1 -
882,038 214,743
46,953,133
-
51 200,000 200,000 57,929
5,334 63,989,414
1
6 1 5
7,900,902 501,368 6,664 265,702 6,614,681 1,363,544
4 4 4
12
15,320,159 5,271,444 4,562,551 5,423,593
6 8
%
6,955,570 9,797,902
2010 AMOUNT
$
$
84,571,987
365,124 55,560,071
1,457,034 3,148,727 4,861,193 694,370
1,230,544 -
28,758 94,933
43,679,388
1,438,379 29,011,916
832,385 215,113
200,000 133,864 57,017
79,935 179,220 27,573,537
1,439,596
2,767,692 281,227 66,891 313,904 7,186,325
15,208,950
49,797 -
2009 AMOUNT
-
100
66
2 4 6 1
1 -
-
52
2 34
1 1
-
32
2
3 9
18
%
106
107
YUANTA SECURITIES CO.,LTD STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED) 2010 AMOUNT Revenues Securities brokerage fees (Note 5) Service fees for security lending Borrowed stock revenue Underwriting fees Gain on sales of trading securities (Notes 4(2) and 5) Stock custodial income Interest income (Note 5) Dividend income Gain on valuation of trading securities (Note 4(2)) Gain on warrants issuance (Notes 4(13) and 10) Commission income - futures (Note 5) Gain on trading of financial instruments - futures (Note 10) Other operating income (Notes 4(28) and 5) Non-operating income (Notes 4(29) and 5) Expenses Handling charges - brokerage Handling charges - dealing Service charges – refinancing Service charges – underwriting Loss on sales of trading securities (Notes 4(2) and 5) Interest expense (Note 5) Loss on short covering and trading securities Valuation Loss on short covering and trading securities - rs financing covering Loss on short covering and trading securities - rs valuation Loss from security borrowing Warrant issuance expenses (Note 10) Loss on warrants issuance Service charges - exchange clearing Loss on trading of financial instruments - futures (Note 10) Loss on trading of financial instruments - otc (Note 10) Operating expenses (Notes 4(30) and 5) Other operating expenses (Note 5) Non-operating expenses Income before income tax Income tax expense (Note 4(25)) Net income Basic earnings per share(in dollars) (Notes 3 and 4(26)) Net income
$
8,202,083 210 83,447 742,111 1,686,591 180,898 928,575 251,904 428,711 195,222
50 4 10 1 6 2 3 1
1,147,557 1,124,004 1,462,217 16,433,530
7 7 9 100
( ( ( ( ( (
457,240) ( 34,388) 599) 15,349) 1,448) 59,755)
(
96,282) (
(
7,566)
( ( (
2,195) 4,428) 78,267) 10,942)
( (
2009 AMOUNT
%
3) ( - ( - ( - (
152,536) 8,350,531) 127,866) 382,495) 10,856,196) 5,577,334 557,395) 5,019,939
( $
Before Tax $
1.19
3) -
( ( (
17,656) 39,719) 178,753) ( 10,067)
1) -
7) (
543,113) (
4)
323,545) ( 7,989,417) ( 16,412) 83,480) ( 9,824,025) ( 5,953,889 1,092,696) ( 4,861,193
2) 51) 1) 62) 38 7) 31
(
1) ( 51) ( 1) ( 2) ( 66) ( 34 3) ( 31 $
1.07
Before Tax $
The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 8, 2011. 95
3 7 9 100
-
After Tax $
532,500 1,053,208 1,419,292 15,777,914
59,308)
-
(
57 2 13 1 3 1 3 1
493,759) ( 23,516) 6,043) 39,237)
- (
( ( ( ( (
9,033,832 177 1,764 296,196 2,018,390 180,191 499,564 137,450 392,647 212,703
1)
1,074,309) (
( ( ( ( (
$
%
1.27
After Tax $
1.04
$
$
43,679,388
$
$
1,943,153
-
3,598 22,891 1,380,724
46,953,133 $
-
-
-
3,273,745
486,119 -
1,457,034
1,457,034
-
-
528, 444 -
928,590
-
$
$
$
Legal reserve
-
$
1,354,235
3,833 1,354,235
43,679,38 8 $
-
1,350,402
-
$ -
43,679,388 -
$
Capital Reserves
(
$
$
$
$
3,886, 306
-
234,660 ) 972,239 -
3,148,727
3,148,727
-
1,291,547 -
1,857,180
Special reserve
( ( (
(
( ( (
$
$
$
$
5,019,939
-
-
486,119 ) 234,660 972,239 ) 363,750 ) 3,273,745 ) 5,019,939
4,861,193
4,861,193
-
-
528,444 ) 1,291,547 ) 3,464,446 ) 4,861,193
5,284,437
Unappropriated earnings
The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 8, 2011.
Note 1:Directors' and supervisors' remuneration of $17,322 and employees' bonus of $17,322 had been deducted from the statement of income. Note 2:Employees' bonus of $47,287 had been deducted from the statement of income.
Year 2009 Balance at January 1, 2009 Appropriation of prior year's earnings(Note 1) Legal reserve Special reserve Cash dividends Net income for 2009 Cumulative translation adjustment derived from long-term foreign investments Adjustment to capital reserve due to non-proportional investment in investee's increase in capital Unrealized gain or loss on financial instruments Balance at December 31, 2009 Year 2010 Balance at January 1, 2010 Appropriation of prior year's earnings (Note 2) Appropriation of legal reserve Reversal of special reserve Appropriation of special reserve Appropriation of cash dividends Distribution of stock dividends Net income for 2010 Transfer of gain on disposal of fixed assets to capital reserve Cumulative translation adjustment derived from long-term foreign investments Unrealized loss on financial instruments Treasury stocks of parent company reissued to employees Balance at December 31, 2010
Common Stock
Retained Earnings
YUANTA SECURITIES CO.,LTD STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
(
(
$
$
$
$
116,972
577,398 )
-
694,370
694,370
111,746 )
-
806,116
Cumulative Translation Adjustments
( $
$
$
( $
(
(
(
(
$
$
$
109,471 ) ( 255,653 $
-
-
365,124
599,784 365,124
-
-
234,660 )
Unrealized Gain or Loss on Financial Instruments
3,598 109,471 ) 22,891 59,555,880
577,398 )
363,750 ) 5,019,939
55,560,071
3,833 599,784 55,560,071
111,746 )
3,464,446 ) 4,861,193
53,671,453
Total
108
109
YUANTA SECURITIES CO.,LTD STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) 2010 CASH FLOWS FROM OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities (Gain) loss on valuation of trading securities Impairment loss on investment in bonds without active markets (Gain) loss on valuation of open-end mutual fund, beneficiary certificates and money market instruments (Reversal of) provision for trading loss Loss (gain) on short covering and trading securities - valuation Write off of bad debts and allowance for uncollectible accounts Reversal of provision for bad debts Investment income accounted for under the equity method Dividends received from long-term equity investments accounted for under the equity method Gain on disposal of investment in bonds without active markets - noncurrent Loss on valuation of financial assets at fair value through profit or loss - noncurrent Reversal of investment in bonds without active markets - noncurrent Gain on disposal of fixed assets Loss on disposal of fixed assets
$
2009
5,019,939 96,282 -
( (
$ (
487,355) 94,708
147,725 ( 66,136 2,195 370) 1,278 537,390) (
39,858) 133,864 17,656 161 420,509)
4,255 (
(
Impairment loss on non- financial assets (including other intangibles)
397,523
11,400)
-
705 - ( 203,739) ( 765 84,875 368,379 62,185 13,992
Depreciation (including rental and idle assets) Amortization
Compensation cost of employee stock options
Changes in assets and liabilities Financial assets at fair value through profit or loss -current Receivables from margin loans Refinancing deposits receivable Bonds purchased under resale agreements Receivables from refinance guaranty Receivables from security lending
Security lending deposits
Accounts and notes receivable Prepayments Other receivables Deferred income tax assets Acquisition of available-for-sale financial assets - current Bonds sold under repurchase agreements Financial liabilities at fair value through profit or loss - current Guarantee deposit received from short sales Deposit payable for short sales Guarantee deposit received from security lending Notes payable Accounts payable Advance collections Collections for third parties Other payables Other financial liabilities - current Accrued pension liability - noncurrent Underwriting share capital collected on behalf of others Securities brokerage debit and credit account - net Net cash provided by operating activities (Continued)
97
( ( ( ( ( ( ( ( (
( (
( ( ( (
4,861,193
1,049,219) 3,152,482) 50,448) 1,137,877) 27,527) 181,987) 524,476) 449,848 42,766 7,086) 50,597) 315,715 111,209 2,501,557 70,977) 83,152) 2,460,802 220,141 60,227) 48,202) 712,189) 179,220) 49,653 1,311,330 275,866 5,519,033
1,717 50,316) 54,930) 15,347 332,074 62,776 -
( ( ( ( (
(
(
( ( (
15,850,392 2,411,234 11,241) 4,877) 196,431) 593,405) 32,345) 4,123 133,081 654,152 14,012,337) 2,297,675 84,275) 174,732 64,459 129,610 1,543,740) 985,994) 33,119 311,038) 8,840,945
110 YUANTA SECURITIES CO.,LTD STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) 2010 YUANTA SECURITIES CO.,LTD STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31 CASH FLOWS FROM INVESTING ACTIVITIES (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) Increase in claim on margin loans and short sales of securities and on 2010 ($ 34,186,074) borrowing of securities (Increase) decrease in restricted assets CASH FLOWS FROM INVESTING ACTIVITIES
(
2009
$
1,286,303)
2009
711,578
Acquisition of fixed Increase in claim on assets margin loans and short sales of securities and on
(
Proceeds fromofdisposal of fixed assets borrowing securities
($
Increase businessinsecurity deposits (Increase)indecrease restricted assets
(
- ( 1,286,303)
35,000) 711,578
Increase in exchange clearing deposits Acquisition of fixed assets
((
38,799) (( 496,443)
53,651) 672,714)
496,443) ( 15,630 34,186,074)
Proceeds from from disposal sale of available-for-sale Proceeds of fixed assets financial assets - current
10,671 15,630
Proceeds sale ofsecurity available-for-sale Increase infrom business deposits financial assets - noncurrent
13,965-
Proceedsinfrom disposal of available-for-sale financial assets - noncurrent Increase exchange clearing deposits
(
(Increase)from decrease in available-for-sale deposits-out Proceeds sale of financial assets - current equityfrom method Proceeds disposal of available-for-sale financial assets - noncurrent Acquisition of available-for-sale (Increase) decrease in deposits-outfinancial assets - current
148,587 35,000)
46,096 38,799) (
53,651)
-((
256,969)
(
775,016) 30,915 - ( 36,817,103) ( 256,969)
( (
Increase in short-term notes and bills payable Net cash used in investing activities
(
(
Net cash provided by (used financing activities Increase in short-term notesin)and bills payable
218,944) 115,586) 49,797-
9,797,902 ( 36,817,103) 911
218,944) 9,550) -
6,905,773 30,915
(Decrease) increase in FINANCING deposits-in ACTIVITIES CASH FLOWS FROM
9,550) 148,587
(
Return of share capital due to capital reduction in investee company that equity method was recognized as "availible - for - sale financial assets - non - current" Acquisition of available-for-sale financial assets - current Net cash used in investing activities Acquisition of held-to-maturity financial assets - non-current CASH FLOWS FROM FINANCING ACTIVITIES Return of share capital due to capital reduction in investee company that Increase in short-term loans - for - sale financial assets - non - current" was recognized as "availible
Cash dividends paid loans Increase in short-term
(
775,016) 46,096 105,224
Acquisition of of long-term held-to-maturity assets - non-current Acquisition equity financial investments accounted for under the
14,108
13,965 (
14,108-
(
105,224 10,671
Acquisition of long-term equity investments accounted under the Proceeds from sale of available-for-sale financial assetsfor - noncurrent
$
672,714)
115,586)
(
22,489)
363,750) ( 6,905,773
3,464,446) 49,797
16,340,836 9,797,902
(
3,437,138) -
Net (decrease) increase cash and cash equivalents (Decrease) increase in in deposits-in
(
14,957,234) 911 (
5,288,221 22,489)
Cash cash equivalents at beginning of year Cashand dividends paid
(
20,535,076 363,750) (
15,246,855 3,464,446)
5,577,842 16,340,836
20,535,076 3,437,138)
Cash andprovided cash equivalents end of year activities Net cash by (usedatin) financing
$
SUPPLEMENTAL DISCLOSURES OF equivalents CASH FLOW INFORMATION Net (decrease) increase in cash and cash
(
($
14,957,234)
5,288,221
Cashand paid forequivalents interest at beginning of year Cash cash
$
144,310 20,535,076
$
56,123 15,246,855
Cashand paid for equivalents income tax at end of year Cash cash
$$
1,509,246 5,577,842
$$
2,928,320 20,535,076
Cash paid for interest
$
144,310
$
56,123
Cash paid for income tax
$
1,509,246
$
2,928,320
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 8, 2011.
98 The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 8, 2011.
98
111
YUANTA SECURITIES CO.,LTD NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 AND 2009 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)
1. HISTORY AND ORGANIZATION 1) Yuanta Securities Co., Ltd. (“the Company”) was incorporated as a company limited by shares under the provisions of the Company Law of the Republic of China (R.O.C.) and commenced commercial operations in 1996. The Company is mainly engaged in the underwriting, dealing, brokerage and financing of marketable securities, futures, warrants and derivative financial instruments.
As of
December 31, 2010, the Company had approximately 4,500 employees. 2) In accordance with the resolution adopted by the first stockholders’ special meeting on December 10, 2001, the Company decided to jointly establish Yuanta Financial Holding Co., Ltd. with Yuanta Securities Finance Co., Ltd. by way of shares conversion based on the Financial Holding Company Act. The shares conversion base date was set on February 4, 2002. 3) In accordance with the resolution adopted by the Board of Directors on April 10, 2007, the Company decided to merge with Yuanta Core Pacific Securities Co., Ltd, as approved by the Commerce Services, Ministry of Economic Affairs, R.O.C., on October 23, 2007. The merger date was set on September 23, 2007. 4) The Company changed its name from Fuhwa Securities Co., Ltd. to Yuanta Securities Co., Ltd., as approved by the Ministry of Economic Affairs, R.O.C. on June 14, 2007. 5) As of December 31, 2010, the Company had 141 branches. 6) The Company’s parent company is Yuanta Financial Holding Co., Ltd. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements are prepared in accordance with the “Rules Governing the Preparation of Financial Statements by Securities Firms”, “Rules Governing the Preparation of Financial Statements by Futures Commission Merchants”, “Business Entity Accounting Law”, “Regulation on Business Entity Accounting Handling” and generally accepted accounting principles in the Republic of China. The Company’s significant accounting policies are described below:
99
112
1)
Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses during the reporting period. Actual results could differ from those assumptions and estimates.
2)
Cash equivalents Cash and cash equivalents include cash on hand and in banks and other short-term highly liquid investments which are readily convertible to known amount of cash and subject to insignificant risk of changes in value resulting from fluctuations in interest rates.
3)
Financial assets and financial liabilities at fair value through profit or loss A. Equity securities and beneficiary certificates are accounted for using trade date accounting while debt securities are accounted for using settlement date accounting at fair value. Option transactions are recognized based on fair value on the date of trading. Derivative non-option transactions are recognized at a fair value of zero on the date of trading. B. These financial instruments are subsequently remeasured and stated at fair value, and the gain or loss is recognized in profit or loss. The fair value of listed stocks, OTC stocks and closed-end mutual funds is based on closing prices at the balance sheet date. The fair value of open-end mutual funds is based on the net asset value at the balance sheet date. C. Financial assets and liabilities designated at fair value through profit or loss are those that meet one of the following requirements: (A) the product is a mixed product; (B) the designation can significantly eliminate the inconsistency in measurement or recognition; or (C) the position is mutually managed in accordance with the risk management or investment strategies of the Company and is designated for the purpose of fair value evaluation. D. On September 30, 2008 and October 2, 2008, the Company reclassified “financial assets held for trading” (excluding derivative financial instruments) to “ available-for-sale financial assets current” in accordance with the amended paragraph 104 of R.O.C. SFAS No. 34 “Financial Instruments: Recognition and Measurement” as those assets were no longer held for sale in the short-term.
100
113
4)
Receivables from security lending A. For managing the security lending business, the amount of lending to customers is recognized as “receivables from security lending- customers giving securities purchased as pledges” or “receivables from security lending- customers giving their holding securities as pledges” at the second business date following the transaction date. Allowance for doubtful accounts is provided according to the evaluation of the collectibility of receivables from security lending at the end of period, and recognized as “allowance for doubtful accounts- receivables from security lendingcustomers giving securities purchased as pledges” or “allowance for doubtful accounts- receivables from security lending- customers giving their holding securities as pledges”. B. The interest on receivables from security lending would start to accrue from the second business date following the transaction date, and are recognized as interest revenue. The service charges on security lending are recognized as service charges revenue.
5) Available-for-sale financial assets A. Equity securities and beneficiary certificates are accounted for using trade date accounting while debt securities are accounted for using settlement date accounting at fair value. B. Available-for-sale financial assets, except for delisted stocks, are remeasured and stated at fair value or fundamental value derived from model evaluation, and the gain or loss is recognized in equity. The fair value of listed stocks, OTC stocks, closed-end mutual funds and beneficiary certificates is determined based on the closing prices at the balance sheet date. The fair value of open-end mutual funds is based on the net asset value at the balance sheet date. Unlisted and emerging stocks are stated at cost. C. If there is any objective evidence that the financial asset is impaired, a loss is recognized. Subsequent recovery of fair value is recognized in equity. Recovery of fair value of debt instruments is recognized in current operations. 6)
Held-to-maturity financial assets A. Held-to-maturity financial assets are accounted for using settlement date accounting, and are stated initially at its fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. B. These financial assets are carried at amortized cost. C. If there is any objective evidence that the financial asset is impaired, a loss is recognized. Subsequent recovery of fair value is recognized in equity. Recovery of fair value of debt instruments is recognized in current operations.
101
114
7) Allowance for doubtful accounts Allowance for doubtful accounts is provided based on the management assessment and collectibility of the ending balances of receivables from margin loans, refinancing deposits receivable, notes receivable, accounts receivable, other receivables and overdue accounts. In addition, the Company and its subsidiaries provided an allowance starting from July 1, 1999 up to July 1, 2003 in accordance with Tai-Tsai-Cheng No. 88282416 and Tai-Tsai-Cheng No. 88791625, respectively. 8) Bonds sold under repurchase agreements and bonds purchased under resale agreements Bonds sold with repurchase or purchased with resale agreements are stated at cost. The variance between the contracted price and the cost is amortized over the period of the transactions. 9) Futures transaction The security deposits made by the dealer department when undertaking futures transaction are recognized as “financial assets at fair value through profit or loss- current- futures transaction security depositsown funds”. The futures transaction security deposits-own funds are adjusted based on the difference between the futures index at the closing-out date and the futures index at balance sheet date; options premium paid by the dealer department upon purchase of options for trading is recognized as “purchase of options – futures”; options premium received by the dealing department upon sale of options is recognized as “liability on sale of options – futures”. Realized futures transaction income (loss) is recognized at the closing-out date. The unclosing-out position is evaluated at end of period, and the unrealized futures transaction income (loss) is recognized as “derivative instruments income (loss) futures- futures contract income (loss)”. 10) Investments accounted for under the equity method A. Long-term equity investments in which the Company holds more than 20% of the investee company’s voting shares or has the ability to exercise significant influence on the investee’s operational decisions are accounted for under the equity method. The excess of the initial investment cost over the acquired net asset value of the investee attributable to goodwill is no longer amortized, effective January 1, 2006. Retrospective adjustment of the amount of goodwill amortized in previous year(s) is not required. The excess of acquired net asset value of investee over the initial investment cost is allocated proportionately and applied as a reduction to the book values of identifiable non-current assets, and any remaining amount of such excess after this allocation is credited to extraordinary gains. However, negative goodwill prior to December 31, 2005 is continuously amortized.
102
115
B. If an investee company issues new shares and original shareholders do not purchase or
acquire
new shares proportionately, then the investment percentage, and therefore the equity in net assets for the investment that an investor company has invested, will be changed. Such difference shall be used to adjust the “additional paid-in capital” and the “long-term investments” accounts. If the adjustment stated above is to debit the “additional paid-in capital” account and the book balance of additional paid-in capital from long-term investments is not enough to be offset, then the difference shall be debited to the “retained earnings” account. C. Exchange differences arising from translation of the financial statements of overseas investee companies accounted for under the equity method are recorded as “cumulative translation adjustments” under stockholders’ equity. 11) Fixed assets / Idle assets / Rental assets A. Fixed assets are stated at cost. Interests incurred on loans used to bring the asset to the condition and location for its intended use are capitalized. Depreciation is provided using the straight-line method based on the estimated economic useful lives of the assets plus one year as residual value, except for leasehold improvements which are amortized based on useful lives or the terms of the contract. Fully depreciated assets still in use are depreciated based on the residual value over the re-estimated useful lives. The estimated useful lives of major fixed assets range from 3 to 8 years, except for buildings which are 27 to 55 years. B. Major renewals and improvements are capitalized and depreciated accordingly. Maintenance and repairs are expensed as incurred. C. When an asset is sold or retired, the cost and accumulated depreciation are removed from the respective accounts and the resulting gain or loss is included in current operations. D. The rental payments on capital lease should be capitalized as leased assets and a lease liability should be recognized. All capital leased property should be depreciated. If the lease contract contains a bargain purchase option or allows the transfer of ownership at the end of the term, then the depreciation should be determined based on the leased property’s useful economic life. Otherwise, the lease term is used. If the Company sells its property to others and immediately leases it back, the gain or loss resulting from the sale of leased property should be deferred using the “unearned gain or loss on sales-leaseback” account. The amortization of the unearned gain or loss on sales-leaseback depends on the nature of the lease. If the fair value of the leased property is smaller than its book value on disposal, then the Company should recognize the difference between the fair value and the book value as a loss in the current period.
116
E. Fixed assets not used for operations are reclassified as idle assets or rental assets and are stated at the lower of net realizable value or book value. Any loss is charged to non-operating expense. 12) Intangible assets Business rights are stated at cost and amortized over 10 years based on the straight-line method. 13) Non-current assets held for sale For non-current assets held for sale (disposal group), they are highly probable to be sold within one year; they are measured at the lower of carrying value or net fair value and reclassified as current assets. Relevant depreciation provision is stopped. 14) Impairment of non-financial assets The Company recognizes impairment loss when there is indication that the recoverable amount of an asset is less than its carrying amount. The recoverable amount is the higher of the fair value less costs to sell and value in use. When the impairment no longer exists, the impairment loss recognized in prior years shall be recovered. The recoverable amount of goodwill, intangible assets with indefinite useful lives and intangible assets which have not yet been available for use shall be evaluated periodically. Impairment loss is recognized whenever there is indication that the recoverable amount of these assets is less than their respective carrying amount. Impairment loss of goodwill recognized in prior years is not recoverable in the following years. 15) Financial institution asset securitization A. According to the “Statute for Financial Asset Securitization” and the “Trust Law”, in using special purpose trusts, the Company transfers bonds held as well as related rights and obligations to trustees as the basis for the issuance of beneficiary certificates, and accordingly receives funds raised thereon. Under the transaction structure, the transaction is deemed as a sale since the Company loses control over the transferred assets. On the other hand, the transfer of subordinated bonds is not treated as a sale and instead as a long-term investment since those bonds are held for the purpose of assuming the risk for all beneficiary certificates. B. Due to the lack of market quotes for subordinated bonds or seller-side beneficiary certificates, the Company adopts the expected reset interest rates and residual cash flow discount rate as the basis for estimating fair market values of seller-side beneficiary certificates. These are then evaluated based on the present value of expected future cash flow amount at the balance sheet date with the resulting gain or loss recognized as current year’s profit or loss. Subordinated bonds are amortized by the discount method. At the maturity of subordinated bonds, the distributed amount is charged against their cost and recognized as investment income/loss. The distributed interest for seller-side beneficiary certificates is charged against the book value of available-for-sale financial assetsnon-current. 16) Pension plan Under the defined benefit pension plan, net periodic pension costs are recognized in accordance with the actuarial calculations. Net periodic pension costs include service cost, interest cost, expected return on plan assets, and amortization of unrecognized net transition obligation and gains or losses on plan assets. Under the defined contribution pension plan, net periodic pension costs are recognized as incurred. 17) Share-based payment ─ employee compensation plan In accordance with the “Regulations Governing the Transfer of the Company’s Reacquired Shares to Employees” as prescribed by the Company’s parent company-Yuanta Financial Holding Co., Ltd, all regular employees of the Company are entitled to parent company stock options. For 104
117
treasury stocks of parent company reissued to employees as compensation, compensation cost is recognized using the fair value method, in accordance with EITF 96-266, “Accounting for Transfer of Enterprise’s Treasury Stocks to Employees”, dated October 12, 2007, as prescribed by the R.O.C. Accounting Research and Development Foundation. The cost of the services received during the vesting period is measured based on the option pricing model at the grant date, and is amortized as payroll expenses during that period. 18) Employees’ bonuses and directors’ and supervisors’ remuneration Effective January 1, 2008, pursuant to EITF 96-052 of the Accounting Research and Development Foundation, R.O.C., dated March 16, 2007, “Accounting for Employees’ Bonuses and Directors’ and Supervisors’ Remuneration”, the costs of employees’ bonuses and directors’ and supervisors’ remuneration are accounted for as expenses and liabilities, provided that such a recognition is required under legal or constructive obligation and those amounts can be estimated reasonably. However, if the accrued amounts for employees’ bonuses and directors’ and supervisors’ remuneration are significantly different from the actual distributed amounts resolved by the stockholders at their stockholders’ meeting subsequently, the significance differences shall be recognized as gain or loss in the following year. In accordance with the Gin-Guan-Zheng (6) Letter No. 0960013218 of the Financial Supervisory Commission, dated March 30, 2007,the Company calculates the number of shares of employees’ stock bonus based on the net asset value per share on its latest financial statements which were audited by independent auditors. 19) Revenues and expenses Revenues and expenses are recorded as follows: A. Gains (losses) on sale of securities, securities brokerage fees, and commissions on brokerage and trading are recognized on the transaction date. B. Interest revenues or interest expenses on margin loans and short sales of securities and bonds purchased under resale agreements, bonds sold under repurchase agreements are recognized respectively over the loan period, short selling period and trading period on an accrual basis. C. Underwriting fees and related service charges: application fees are recognized when collected; underwriting fees revenue and service charges expenditures are recognized when the contract is completed. D. Stock custodian income is recognized monthly based on the terms of the contract. E. Commission income – Futures is recognized on the transaction date. The Company assists in futures transactions and fees collection. F. Gain (losses) on future contracts: The margin of futures transactions is recognized as cost. Costs and expenses are recognized as incurred. G. Options transaction income (loss): The premium of options transaction is recognized as cost. The options are evaluated monthly based on the market value. Options transaction income (loss) arising from settlement is recognized in current period’s profit or loss. 20) Income tax A. Provision for income tax includes deferred income tax resulting from temporary differences, investment tax credits and loss carryforward. Valuation allowance on deferred tax assets is provided to the extent that it is more likely than not that the tax benefit will not be realized. Over or under provision of prior years’ income tax liabilities is included in current year’s income tax. When a change in the tax laws is enacted, the deferred tax liability or asset should be recomputed
118
accordingly in the period of change. The difference between the new amount and the original amount, that is, the effect of changes in the deferred tax liability or asset, should be recognized as an adjustment to income tax expense (benefit) for income from continuing operations in the current period. B. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings. C. According to Article 49 of the Financial Holding Company Act and Income Tax Act, the Company elects its parent company, Yuanta Financial Holding Co., Ltd., as the taxpayer to file the consolidated profit-seeking enterprise income tax returns. In addition to the consolidated income tax returns, the Company has to compute its income tax on an individual filing basis pursuant to the ROC SFAS No. 22, “Accounting for Income Tax”, and records the tax receipts and tax payments arising from the consolidated income tax returns in current period’s deferred income tax assets (liabilities), income tax payable (refundable) and other receivables (payables)affiliates in the Company’s financial statements. 21) Foreign currency transactions A. The Company maintains its accounts in New Taiwan dollars. Transactions denominated in foreign currencies are translated into New Taiwan dollars at the spot exchange rates prevailing at the transaction dates. B. Receivables, other monetary assets and liabilities denominated in foreign currencies are translated at the spot exchange rates prevailing at the balance sheet date. Exchange gains or losses are recognized in profit or loss. C. When a gain or loss on a non-monetary item is recognized directly in equity, any exchange component of that gain or loss shall be recognized directly in equity. Conversely, when a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss shall be recognized in profit or loss. 22) Classification of current and non-current assets and liabilities A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets: a) Assets arising from operating activities that are expected to be realized or consumed, or are intended to be sold within the normal operating cycle; b) Assets held mainly for trading purposes; c) Assets that are expected to be realized within twelve months from the balance sheet date; and d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date. B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities: a) Liabilities arising from operating activities that are expected to be paid off within the normal operating cycle; b) Liabilities arising mainly from trading activities; c) Liabilities that are to be paid off within twelve months from the balance sheet date; and d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. 106
119
23) Settlement date accounting When settlement date accounting is used, any change in the fair value of the asset during the period between the trade date and the settlement date is not recognized for assets carried at cost or amortized cost. For financial assets and financial liabilities at fair value through profit or loss, the change in fair value is recognized in profit or loss. For available-for-sale financial assets, the change in fair value is recognized directly in equity. 3. CHANGES IN ACCOUNTING PRINCIPLES None 4. DETAILS OF SIGNIFICANT ACCOUNTS 1)
CASH AND CASH EQUIVALENTS
Dec. 31, $
Petty cash Demand deposits Time deposits Foreign currency deposits Cash equivalents - commercial paper (expiring within three months)
$
107
2010 5,167 139,055 5,008,601 195,067 5,347,890 229,952 5,577,842
$
$
2009 5,094 158,739 16,370,000 44,078 16,577,911 3,957,165 20,535,076
120
2)
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS A. Details of financial assets at fair value through profit or loss are as follows: Dec. 31, 2010 Current items: Financial assets held for trading: Open-end mutual funds beneficiary certificates and money market instruments Open-end mutual funds beneficiary certificates Adjustment of open-end mutual funds beneficiary certificates
$
2009
600,120 7,033
$
5,382,430 154,757
607,153
5,537,187
3,388,976 9,696,326 1,541,894 5,111,432 882,018 340,300 73,181 44,800
2,370,644 12,920,319 1,129,371 2,213,038 572,038 7,351 124,122 -
21,078,927 216,524
19,336,883 408,507
21,295,451
19,745,390
Trading securities - underwriter Convertible corporate bonds Others
6,400 124,500
228,100 74,233
Adjustment of trading securities - underwriter
130,900 2,752
302,333 34,451
Trading securities - dealer Government bonds Corporate bonds Listed (TSE and OTC) stocks Convertible corporate bonds Emerging stocks Foreign securities Exchange traded funds Others Adjustment of trading securities - dealer
133,652
336,784
Trading securities - hedging Listed (TSE and OTC) stocks Convertible corporate bonds Exchange traded funds Warrants Foreign securities Taiwan Depositary Receipts
6,098,583 123,741 66,170 65,684 13,170 23,199
2,103,803 37,021 36,314 4,840 -
Adjustment of trading securities - hedging
6,390,547 233,282
2,181,978 106,814
6,623,829
2,288,792
1,382 836,723 501,684
2,014 457,719 142,493
1,339,789
602,226
-
594,200
Derivatives Bought options Futures guarantee deposits receivable Derivative financial instrument assets - OTC Designated as at fair value through profit or loss: Convertible corporate bonds option Adjustment of financial assets designated as at fair value through profit or loss
- ( -
Total Noncurrent items: Financial assets at fair value through profit or loss Government bonds Adjustment of financial assets designated as at fair value through profit or loss
$
29,999,874
$
29,099,867
$
49,990
$
49,987
$
51,917
$
52,619
1,927
Total
108
4,712) 589,488
2,632
121
B. Changes in financial assets at fair value through profit or loss are as follows: For the year ended Dec. 31, 2010
Open-end mutual funds beneficiary certificates
$
Trading securities - dealer Trading securities - underwriter Trading securities - hedging Total
( $
Gain/(loss)
Gain/(loss)
on disposal
on valuation
203,739 ($ 1,537,545 (
147,725) 191,051)
149,046 (
31,699)
1,448)
126,468
1,888,882 ($
244,007)
For the year ended Dec. 31, 2009
Open-end mutual funds beneficiary certificates
$
Trading securities - dealer
Gain/(loss)
Gain/(loss)
on disposal
on valuation
54,930 1,262,067
$
39,858 91,225
Trading securities - underwriter
188,699
194,914
Trading securities - hedging
567,624
106,508
Total
For derivatives, please refer to Note 10(5).
$
2,073,320
$
432,505
122
3)
AVAILABLE-FOR-SALE FINANCIAL ASSETS 1.Current:
Items
Dec. 31, 2010
2009
Bonds Government bonds Adjustment of financial assets designated as at fair value through profit or loss Total
$
Trading securities-dealer Listed (TSE and OTC) stocks Separate trading of registered interest and principal of securities Adjustment of financial assets designated as at fair value through profit or loss Total Lending securities Listed (TSE and OTC) stocks Adjustment of financial assets designated as at fair value through profit or loss Total Others Subordinated beneficiary securities Seller beneficiary securities Adjustment of financial assets designated as at fair value through profit or loss Total Total
499,965 $
-
143 500,108
-
1,251,025
1,664,501
-
14,847
102,214 1,353,239
287,762 1,967,110
295,219
182,611
39,623 334,842
41,514 224,125
398,699 6,163 ( $
5,380) 399,482 2,587,671 $
2,191,235
(1) Due to the global financial crisis in 2008, the Company reclassified certain listed stocks amounting to $1,233,646 from “financial assets at fair value through profit or loss” to “availablefor-sale financial assets” on September 30, 2008 and October 2, 2008 in accordance with the amended paragraph 104 of R.O.C. SFAS No. 34, " Financial Instruments: Recognition and Measurement". The relevant information is set forth below: A. As of December 31, 2010, the fair value of the above reclassified assets which had not yet been disposed was as follows: Dec. 31, 2010 Listed (TSE and OTC) stocks
$
-
B. Information on change in fair value of the reclassified assets for the years ended December 31, 2010 and 2009 is as follows:
110
123
For the years ended Dec. 31, 2010 2009
Recognized Recognized in in Recognized Recognized stockholders’ stockholders’ in gain in gain equity equity or loss or loss Listed (TSE and OTC) stocks
$ 169,802
$
-
$
16,437
$
73,815
C. If the above listed stocks had not been reclassified to “available-for-sale financial assets current” on September 30, 2008 and October 2, 2008, gain (loss) from changes in fair value of those stocks should have been recognized for the following periods: Amount For the period from September 30 to December 31, 2008 For the year ended December 31, 2009 For the year ended December 31, 2010
($
($
277,453) 73,815 203,638)
(2) Information on related gain for the years ended December 31, 2010 and 2009 is as follows:
Realized disposal gain : Listed (TSE and OTC) stocks
$
For the years ended Dec. 31 2010 2009 628,067 $ 224,777
(3) For details of status of the subordinated bonds and seller-side beneficiary certificates held by the former Yuanta Core Pacific Securities Co., Ltd. due to conducting asset securitization transactions, please refer to Note 4(9).
111
124
2. Non-current: Dec. 31, Items
2010 Amount
Unlisted stocks Taiwan Securities Central Custody Depository Co., Ltd. $ 1,469 Taiwan Stock Exchange Corporation 1,170,440 Taiwan Futures Exchange 175,548 Top Taiwan VI Venture Capital Co., Ltd. 50,980 Others 16,600 1,415,037
Subtotal Valuation allowance Total
Percentage of ownership
Amount
Percentage of ownership
0.03% $ 1,469 5.84% 1,170,440 8.18% 175,548
0.03% 5.84% 8.18%
0.77% -
50,980 82,211 1,480,648
0.77% -
500,000
1.86%
500,000
1.86%
215,859 215,859 2,130,896 76 $ 2,130,972
-
Convertible preferred stocks: Taiwan High Speed Rail Corporation 92 convertible preferred stocks Others: Government Bond 95A1 Government Bond 97A4 Subordinated beneficiary securities Seller beneficiary securities
2009
498,009 218,121 401,076 43,773 1,160,979 3,141,627 - ( 8,986) $ 3,132,641
-
-
A. The Company holds more than 5% of the Taiwan Futures Exchange Corporation’s paid-in capital due to the merger with Yuanta Core Pacific Securities Co., Ltd. Accordingly, the Company had obtained approval through Gin-Gwen-Shun Letter No. 0960056710 of the Financial Supervisory Commission, Executive Yuan, R.O.C.. B. The Company holds more than 5% of the Taiwan Stock Exchange Corporation’s paid-in capital due to merger with Yuanta Core Pacific Securities Co., Ltd. According to the Gin-Gwen-Shun Letter No. 09600259123 of the Financial Supervisory Commission, Executive Yuan, R.O.C., the Company is not required to report this event.
112
125
4)
HELD-TO-MATURITY FINANCIAL ASSETS Dec. 31, 2010 Current: Government bonds Noncurrent: Government bonds
2009
$
399,991
$
500,031
$
864,989
$
399,485
As of December 31, 2010 and 2009, the effective annual interest rates of government bonds ranged from 0.88% to 2.25% and 1.76% to 1.88%, respectively. 5)
BONDS PURCHASED UNDER RESALE AGREEMENTS
Dec. 31, $
Government bonds
2010 2,081,058 $
2009 943,181
As of December 31, 2010 and 2009, bonds purchased under resale agreements were due within one year. Under the agreements, bonds will be resold at agreed-upon prices plus interest on the specific dates after transactions. The total resale prices are fixed at $2,081,170 and $943,093 with annual interest rates ranging from -0.15% to 0.43% and -0.2%, respectively. 6)
RECEIVABLES FROM MARGIN LOANS Stocks that clients purchased by loans were pledged as collaterals for receivables from margin loans. Annual interest rate on the loans was 5.975% for 2010.
7)
INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD Dec. 31, 2010 Percentage Amount of ownership
Investments accounted for under the equity method Yuanta Securities Asia Financial Services Ltd. Yuanta Insurance Brokers Co., Ltd. Yuanta Securities Investment Trust Co., Ltd. Total
$10,894,724 14,377 3,926,292 $14,835,393
Dec. 31, 2009 Percentage Amount of ownership 100.00% 100.00% $ 11,217,767 100.00% 100.00% 11,376 80.60% 2,788,856 83.19% $ 14,017,999
A. Net investment loss accounted for under the equity method for the years ended December 31, 2010 and 2009 were $537,390 and $420,509, respectively, which were based on the investees’ financial statements for the corresponding period audited by independent auditors. B. Pursuant to the resolution adopted by the Board of Directors on June 24, 2010, the Company subscribed to 40,131,135 shares of its subsidiary- Yuanta Securities Investment Trust Co., Ltd. at $18 per share (totaling $722,360) in 2010. 8)
IMPAIRMENT OF NON-FINANCIAL ASSETS Accumulated impairment as of December 31, 2010 and 2009 are as follows:
126
2010
Long-term investments accounted for under the equity method Fixed assets - land Fixed assets - buildings Rental assets - land Rental assets - buildings Idle assets - land Idle assets - buildings Intangible assets Total
Beginning balance $ 284,527 $ 14,385 10,429 16,268 11,943 27,017 16,665 $ 381,234 $
Increase
Ending balance
Decrease
- $ 71,763 13,112 84,875 $
- $ 284,527 14,385 10,429 16,268 11,943 98,780 13,112 16,665 - $ 466,109
2009
Long-term investments accounted for under the equity method
Beginning balance $ 284,527 $
Increase
Ending balance
Decrease - $
- $ 284,527
Fixed assets - land
14,385
-
-
14,385
Fixed assets - buildings
10,429
-
-
10,429
Rental assets - land
16,268
-
-
16,268
Rental assets - buildings
11,943
-
-
11,943
Idle assets - land Intangible assets
27,017 16,665
-
-
27,017 16,665
- $
- $ 381,234
Total
$ 381,234 $
Note: Effective January 1, 2006, Yuanta Core Securities Co., Ltd adopted R.O.C. SFAS Nos. 5 and 35, and accordingly discontinued the amortization of goodwill. An impairment loss was recognized (recorded as a deduction of long-term investments accounted for under the equity method).
114
127
9) ASSET SECURITIZATION A. Summary of major terms: On September 5, 2005, Yuanta Core Securities Co., Ltd. sold bonds totaling $9,562,268 to a financial institution under asset securitization for issuance of beneficiary certificates in the amount of $10,000,000. Details of beneficiary certificates issued are as follows: a. Principal only pass-through beneficiary certificates – type A: Par value of $7,300,000, with a maturity date of September 5, 2009 b. Principal only pass-through beneficiary certificates – type B: Par value of $1,300,000, with a maturity date of September 16, 2010 c. Principal only pass-through beneficiary certificates – type C: Par value of $1,000,000, with a maturity date of March 15, 2011 d. Subordinated beneficiary certificates: Par value of $400,000, with a maturity date of March 15, 2011 e. Seller beneficiary certificates: The coupon interest of bonds is used to repay principal and interest at each interest payment date to mitigate possible interest rate risk, and the seller beneficiary certificates, with total book value of $397,019, will be bought back by Yuanta Core Securities Co., Ltd. All of the above beneficiary certificates are zero-coupon. The Company acquired a subordinated beneficiary certificate listed above at a cost of $366,107 to enhance the credit of the beneficiary certificates. In the event of default, the investors and the trustees have no recourse against the Company except for the bond security. B. Major assumptions used to measure rights retained: As of December 31, 2010 and 2009, the major assumptions used to measure the rights retained are as follows: Dec. 31, 2010 Subordinated beneficiary certificate Expected weighted-average years Expected credit loss rate Discount rate
0.2 years 0.64%
115
Dec. 31, 2009
Seller's Subordinated Seller's beneficiary beneficiary beneficiary certificate certificate certificate 0.52%
1.2 years 0.74%
0.38 years 0.57%
128
C. Sensitivity analysis: As of December 31, 2010 and 2009, the sensitivity of fair value of the residual cash flows is as follows if the discount rates change unfavorably: Dec. 31, 2010 Subordinated beneficiary certificate Book value of rights kept Expected weighted-average years Discount rate Impact results of 10% unfavorable change Impact results of 20% unfavorable change
$
Dec. 31, 2009
Seller's beneficiary certificate
399,482 $ 0.2 years 0.64%
Subordinated Seller's beneficiary beneficiary certificate certificate
$ 396,472 $ 20,303 1.2 years 0.38 years 0.52% 0.74% 0.57%
(
51)
- (
350) (
4)
(
103)
- (
699) (
9)
D. Expected loss rates of static groups: During the years ended December 31, 2010 and 2009 , the expected and actual credit loss rate were both 0%. E. Cash flows The cash flows received from and used in securitization trust are summarized as follows:
Dec. 31, 2010 Cash received from securitization Cash received from other cash flows of rights retained
$
$ 10)
Dec 31, 2009 - $
-
24,636
148,587
24,636 $
148,587
SHORT-TERM DEBT
Dec.31, 2010
Unsecured bank loan Secured bank loan
$ $
Range of interest rate
6,955,000 $ 570 6,955,570 $ 0.65%~0.73%
Dec. 31, 2009
45,000 4,797 49,797 0.50%~1.82%
129
11)
COMMERCIAL PAPER PAYABLE (2009:None.)
Dec. 31, 2010
Par value on issuance $ Less:Discount on commercial paper payable ( $ Total Interest rate 12)
9,800,000 2,098) 9,797,902 0.64%~0.69%
BONDS SOLD UNDER REPURCHASE AGREEMENTS
Dec. 31, 2010 Government bonds Corporate bonds Others Total
$
$
5,681,976 $ 9,440,127 198,056 15,320,159 $
2009 3,226,965 11,981,985 15,208,950
As of December 31, 2010 and 2009, bonds sold under repurchase agreements were due within one year. Under the agreements, bonds will be repurchased at agreed-upon prices plus interest on the specific dates after transactions. The total repurchase prices are fixed at $15,322,627 and $15,210,889, with annual interest rates ranging from 0.4% to 0.53% and -0.3% to 0.45%, respectively (in U.S. dollars).
130
13) FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Dec. 31, 2010
2009
Warrants: Proceeds received from issuance of warrants Gain (loss) on price fluctuation
$
14,510,506 $ 1,822,813 (
10,077,990 1,437,684)
Market value (A)
16,333,319
8,640,306
Repurchase of warrants Gain (loss) on price fluctuation
12,955,586 1,981,293 (
8,652,110 461,894)
Market value (B)
14,936,879
8,190,216
Warrants - net (A-B)
1,396,440
450,090
Derivative financial instrument liabilities - OTC
1,202,416
499,787
1,565
923
Security lending payable - hedging Security lending payable - adjustment of valuation on hedging
255,195
88,616
12,079
12,737
Security lending payable - unhedging
422,040
22,015
4,975
2,122
694,289 1,976,734
125,490 1,691,402
Sold options-futures
Security lending payable - adjustment of valuation on unhedging Subtotal Designated financial liabilities at fair value- current Total
$
5,271,444
$
2,767,692
A. For derivative financial instruments and designated financial liabilities at fair value- current, please refer to Note 10(5). B. The warrants assumed are all American-style warrants. Warrants are stated as liabilities for issuance of warrants at issuance price prior to expiration. Upon repurchasing warrants after issuance, the amounts of repurchase are recognized as repurchase of warrants and used as a deduction of liabilities for issuance of warrants. The warrants have six months to one year exercise period from the date of issuance. The issuer has the option to settle either by cash or stock delivery. 14)
GUARANTEE DEPOSIT RECEIVED FROM SECURITY LENDING (December 31, 2009: None.) Guarantee deposit received from security lending was $7,900,902 as of December 31, 2010.
15)
OTHER PAYABLES
118
131
Dec. 31, 2010
2009
Related parties: Consolidated income tax payable
$
1,362,146
$
4,720
1,398
Others Total
1,434,876
$
1,363,544
$
1,439,596
$
4,767,385
$
5,593,195
Non-related parties: Income tax payable Salaries and wages payable Payables on construction Others $
Total
16)
1,105,393
846,568
95,840
124,519
646,063
622,043
6,614,681
$
7,186,325
RESERVE FOR DEFAULT A. In accordance with the “Rules Governing the Administration of Securities Firms” , the Company provides a monthly default reserve of 0.0028% of the settlement value. B. The above reserve shall be used only to offset against actual loss resulting from customers’ default on securities transactions or other losses approved by the Securities and Futures Bureau (SFB).
17)
RESERVE FOR TRADING LOSS In accordance with the “Rules Governing the Administration of Securities Firms” and the “Rules Governing Futures Commission Merchants”, the Company provides a monthly reserve for trading loss on realized gain of the futures department at 10% of the net gain from trading of securities. This reserve shall only be used to offset actual loss on securities trading.
18)
ACCRUED PENSION LIABILITIES A. The Company has a defined benefit plan in accordance with the Labor Standards Law that provides benefits based on an employees’ length of service and average salary or wage of the last 6 months prior to retirement. Two units are accrued for each year of service for the first 15 years and one unit is accrued for each additional year thereafter, up to a maximum of 45 units. The Company contributes monthly an amount equal to 2% of employees’ monthly base salaries and wages to an independent fund with the Bank of Taiwan, the trustee. For the years ended December 31, 2010 and 2009, the Company recognized net periodic pension cost of $75,675 and $60,534, respectively. The fund balances were $515,326 and $485,232 as of December 31, 2010 and 2009, respectively. Additionally, the former Yuanta Core Pacific Securities Co., Ltd. contributed an extra amount of $223,176 and $225,351 to the retirement fund under the name of the Employee Retirement Fund Committee as of December 31, 2010 and 2009, respectively. B. Effective July 1, 2005, in accordance with the Labor Pension Act, the Company established a defined contribution plan covering employees with R.O.C nationality. The employees have the option to participate in the New Plan. Under the New Plan, the Company contributes monthly an amount not less than 6% of employees’ salaries to the employees’ personal pension account with the “Bureau of Labor Insurance”. Benefits accrued under the New Plan are portable upon termination of employment. The total pension expenses amounted to $143,209 and $135,089 under the New Plan for the years ended December 31, 2010 and 2009, respectively. C. Reconciliation of the plan funded status:
119
132
Dec. 31, 2010
2009
Benefit obligation Vested benefit obligation
($
Non-vested benefit obligation
(
1,234,074) (
1,198,442)
Accumulated benefit obligation
(
1,339,864) (
1,284,158)
Effect of future salary increases
(
410,820) (
421,044)
Projected benefit obligation
(
1,750,684) (
1,705,202)
738,502
710,584
Fair value of plan assets
105,790) ($
85,716)
Funded status
(
1,012,182) (
994,618)
Unrealized transition obligation
(
29,333) (
35,398)
25,578
28,420
134,500
169,812
881,437) ($
831,784)
Unrealized prior service cost Unrealized pension income ($
Accrued pension liability
$
Vested benefit
115,019
$ 2009
2010 Service cost
$
interest cost Expected return on plan assets Amortization of unreconized net transition obligation Amortization of unrecognized prior service cost Amortization of unrecognized pension income
56,519
$
$
47,076
38,367
34,018
(15,988)
(10,103)
(6,065)
(6,065)
2,842
2,842
- (
Net periodic pension cost
96,504
75,675
7,234) 60,534
Discount rate
1.75%
2.25%
Rate of salary increase
2.00%
2.00%
Expected return rate on plan assets
1.75%
2.25%
120
133
19) COMMON STOCK A. As of December 31, 2010 and 2009, the Companys authorized capital was both $54,000,000, and the paid-in capital was 4,695,313 thousand shares (including 251,941 thousand shares through private placement) and 4,367,939 thousand shares (including 234,375 thousand shares through private placement), respectively, with a par value of $10 (in dollars) per share. B. Pursuant to the resolution adopted by the Board of Directors (acting on behalf of stockholders’ meeting) on March 25, 2010, the Company capitalized retained earnings by $3,273,745 (shown as “stock dividend distributable”), with the base day of July 13, 2010 for ex-rights/ex-dividends. This capital increase became effective as reported to the Financial Supervisory Commission, Executive Yuan on June 7, 2010. 20)
CAPITAL RESERVE The R.O.C. Securities and Exchange Law requires that capital reserve shall be exclusively used to cover accumulated deficits or to increase capital and shall not be used for any other purpose. However, capital reserve arising from paid-in capital in excess of par value on issuance of common stock and donations can be capitalized once a year, provided that the Company has no accumulated deficits and the amount to be capitalized does not exceed 10% of the paid-in capital. In addition, unless the legal reserve is insufficient to cover any accumulated deficits, capital reserve cannot be used for this purpose.
21) LEGAL RESERVE As required by the Company Law, 10% of the current year's earnings, after paying all taxes and offsetting prior years' operating losses, if any, shall be set aside as legal reserve until the cumulative balance equals the total amount of paid-in capital. The legal reserve shall be used exclusively to cover accumulated deficit or to increase capital and shall not be used for any other purpose. Such capitalization shall not be permitted unless the Company has already accumulated a legal reserve of at least fifty percent of its paid-in capital, and only half of such legal reserve may be capitalized. 22)
SPECIAL RESERVE According to the “Rules Governing the Administration of Securities Firms”, 20% of the current year's earnings, after paying all taxes and offsetting prior years' operating losses, if any, shall be set aside as special reserve until the cumulative balance equals the total amount of paid-in capital. The special reserve shall be used exclusively to cover accumulated deficit or to increase capital and shall not be used for any other purpose. Such capitalization shall not be permitted unless the Company has already accumulated a special reserve of at least fifty percent of its paid-in capital and only half of such special reserve may be capitalized. Besides, in accordance with the Gin-Guan-Zheng (1) Letter No. 095000507, dated January 27, 2006, effective January 1, 2007, special reserve shall be set aside up to an amount equal to the sum of “unrealized loss on financial instruments” under stockholders’ equity.
23) UNAPPROPRIATED EARNINGS A. Under the Company's Articles of Incorporation (as amended on October 29, 2009), the current year's earnings, if any, shall first be used to pay income tax and offset prior year's operating 121
134
losses and then 10% and 20% of the remaining amount shall be set aside as legal reserve and special reserve, respectively. Bonus distributed to the employees should account for 0.5%~1.5% of the total distributed amount. Appropriation of the remainder and the prior year's unappropriated earnings shall be proposed by the Board of Directors and resolved by the stockholders. Transportation allowances and conference attendance fees are paid to the directors and supervisors by reference to industry standards. B. After the Company became the subsidiary of Fuhwa Financial Holding Co., Ltd., the authority for exercising the duties of stockholders at the stockholders’ meeting was transferred to the Board of Directors based on related laws. C. The appropriation of 2009 and 2008 earnings had been resolved by the Board of Directors (acting on behalf of stockholders) on March 25, 2010 and March 23, 2009, respectively. Details are summarized below:
Legal reserve Special reserve Cash dividends Stock dividends Remuneration to directors and supervisors Employees' cash bonus Total
Amount $ 486,119 972,239 363,750 3,273,745
$
2009 2008 Dividends per share Dividends per share (in dollars) Amount (in dollars) - $ 528,444 1,291,547 $ 0.0833 3,464,446 $ 0.7932 $ 0.7495 -
47,287 5,143,140
$
17,322 17,322 5,319,081
-
As of the financial reporting date, the appropriation of 2010 earnings had not been resolved by the Board of Directors. Information on the appropriation of the Company’s earnings as resolved by the Board of Directors and approved by the stockholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. D. Employees’ bonus and directors’ and supervisors’ remuneration for the years ended December 31, 2010 and 2009 were accrued at $44,541 and $0, $47,537 and $0, respectively, which were estimated based on certain percentages (2010: 1.27% and 0%, 2009: 1.3% and 0%, respectively), as prescribed by the Company's Articles of Incorporation, of net income in this period after taking into account the legal reserve, special reserve and other factors, and were recognized as operating expenses for the year ended December 31, 2010 and 2009. Information on the appropriation of the Company’s employees’ bonus and directors’ and supervisors’ remuneration as resolved by the Board of Directors (acting on behalf of stockholders) will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. The actual distribution of 2009 earnings is as stated in the previous paragraph. The difference between employees’ bonus for 2009 as resolved by the Board of Directors (acting on behalf of stockholders) and that of $47,537 accrued in the financial statements of 2009, amounting to $250, had been adjusted in the statement of income for the year ended December 31, 2010. 24) Share-based payment ─ employee compensation plan
135
A. As of December 31, 2010, the Company’s share-based payment transactions are set out below:
Type of arrangement Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees
Contract Period
Actual resignation rate in the current Estimated future Vesting conditions resignation rate period
Grant date
Quantity granted
Note 1
628
Note 1
666
Note 1
164
Note 1
164
Note 1
170
Note 1
23
Note 1
23
Note 1
23
Note 2
176
Note 2
176
Note 2
135
Note 2
140
Note 2
143
Note 2
62
Note 2
63
Note 2
63
98.1.21~ Vesting service 100.3.31 period: 2.189 years Vesting service 98.7.7~ period: 1.2329 99.9.30 years Vesting service 98.7.7~ period: 2.2329 100.9.30 years Vesting service 98.7.7~ period: 3.2356 101.9.30 years Vesting service 98.10.20~ period: 0.94521 99.9.30 years Vesting service 98.10.20~ period: 1.94521 100.9.30 years Vesting service 98.10.20~ period: 2.94795 100.9.30 years Vesting service 99.2.10~ period: 0.6356 99.9.30 years Vesting service 99.2.10~ period: 1.6356 100.9.30 years Vesting service 99.3.31~ period: 1.0000 100.3.31 years Vesting service 99.3.31~ period: 2.0027 101.3.31 years Vesting service 99.3.31~ period: 3.0027 102.3.31 years Vesting service 99.5.31~ period: 1.3342 100.9.30 years Vesting service 99.5.31~ period: 2.3370 101.9.30 years Vesting service 99.5.31~ period: 3.3370 102.9.30 years
Note 2
93
99.7.15~ Vesting service 100.9.30 period: 1.211 years
98.1.21~ Vesting service 99.3.31 period: 1.189 years
123
3.50%
3.50%
4.20%
4.20%
9.15%
9.15%
54.88%
54.88%
55.29%
55.29%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
24.43%
24.43%
23.86%
23.86%
48.15%
48.15%
48.57%
48.57%
48.25%
48.25%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
50.54%
50.54%
136
Type of arrangement Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees
Grant date
Quantity granted
Contract Period
Note 2
93
99.7.15~ 101.9.30
Note 2
94
99.7.15~ 102.9.30
Note 2
66
99.7.29~ 100.9.30
Note 2
66
99.7.29~ 101.9.30
Note 2
66
99.7.29~ 102.9.30
Note 2
22
99.8.13~ 100.9.30
Note 2
22
99.8.13~ 101.9.30
Note 2
22
99.8.13~ 102.9.30
Actual resignation rate in the current Vesting conditions period Vesting service period: 2.2137 years 50.54% Vesting service period:3.2137 years 51.06% Vesting service period: 1.1726 years 0.00% Vesting service period: 2.1753 years 0.00% Vesting service period: 3.1753 years 0.00% Vesting service period: 1.1315 years 0.00% Vesting service period: 2.1342 years 0.00% Vesting service period: 3.1342 years 0.00%
Estimated future resignation rate
50.54% 51.06% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Note 1:First granted in year 2009 and then granted in installments within the contract period. Note 2:First granted in year 2010 and then granted in installments within the contract period. B. Details of the employee stock options are set out below:
Dec. 31, 2010 Weighted-average No. of shares (In exercise price (In thousands) dollars) Options outstanding at beginning of period
$
Options granted ( Options waived ( Options exercised Options outstanding at end of period Options exercisable at end of period
1,861 $ 1,502 80) 911) 2,372
11.89 17.68 11.89 11.89 15.56
2,372
15.56
C. For the stock options granted on or after January 1, 2009 with the compensation cost accounted for using the fair value method, their fair value on the grant date is estimated using the Black-Scholes option-pricing model. The weighted-average parameters used in the estimation of the fair value are as follows:
125
137
Type of arrangement Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees
Expected price volatility
Expected Expected Risk-free Fair vesting dividend interest value per period yield rate rate unit
Grant date
Stock price
Exercise price
98.1.21~ 99.3.31
12.20
11.89
59.83%
1.1890
5.33%
0.74%
2.8061
98.1.21~ 100.3.31
12.20
11.89
53.70%
2.1890
5.33%
1.09%
3.1048
98.7.7~ 99.9.30
23.40
11.89
62.76%
1.2329
0.77%
0.30%
12.3252
98.7.7~ 100.9.30
23.40
11.89
57.25%
2.2329
0.77%
0.59%
12.9063
23.40
11.89
50.65%
3.2356
0.77%
0.89%
13.1091
24.30
11.89
56.03%
0.9452
0.74%
0.45%
12.6937
24.30
11.89
56.68%
1.9452
0.74%
0.67%
13.4810
24.30
11.89
52.27%
2.9479
0.74%
0.79%
13.8549
99.2.10~ 99.9.30
19.25
11.89
38.53%
0.6356
0.94%
0.18%
7.3778
99.2.10~ 100.9.30
19.25
11.89
51.37%
1.6356
0.94%
0.49%
8.4721
99.3.31~ 100.3.31
19.05
19.45
43.92%
1.0000
4.72%
0.45%
2.6998
99.3.31~ 101.3.31
19.05
19.45
52.91%
2.0027
4.72%
0.81%
4.4628
99.3.31~ 102.3.31
19.05
19.45
52.57%
3.0027
4.72%
0.94%
5.0977
98.7.7~ 101.9.30 98.10.20 ~ 99.9.30 98.10.20 ~ 100.9.30 98.10.20 ~ 100.9.30
126
138
Type of arrangement Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees Treasury stock transferred to employees
Expected price volatility
Expected Expected Risk-free vesting dividend interest Fair value per unit period yield rate rate
Grant date
Stock price
Exercise price
99.5.31~ 100.9.30
17.00
19.45
42.28%
1.3342
5.29%
0.60%
1.9290
99.5.31~ 101.9.30
17.00
19.45
52.53%
2.3370
5.29%
0.79%
3.5083
99.5.31~ 102.9.30
17.00
19.45
51.21%
3.3370
5.29%
0.93%
3.9010
99.7.15~ 100.9.30
18.15
19.45
37.38%
1.2110
4.96%
0.46%
1.9745
99.7.15~ 101.9.30
18.15
19.45
51.05%
2.2137
4.96%
0.77%
3.9182
99.7.15~ 102.9.30
18.15
19.45
51.14%
3.2137
4.96%
0.89%
4.4932
99.7.29~ 100.9.30
17.90
19.45
36.46%
1.1726
5.03%
0.41%
1.7608
99.7.29~ 101.9.30
17.90
19.45
50.24%
2.1753
5.03%
0.69%
3.6671
99.7.29~ 102.9.30
17.90
19.45
51.17%
3.1753
5.03%
0.83%
4.3253
99.8.13~ 100.9.30
19.50
19.45
35.44%
1.1315
4.62%
0.56%
2.4371
99.8.13~ 101.9.30
19.50
19.45
49.60%
2.1342
4.62%
0.70%
4.4934
99.8.13~ 102.9.30
19.50
19.45
50.81%
3.1342
4.62%
0.82%
5.2246
Expenses incurred on share-based payment transactions are shown below:
For the year ended Dec. 31, 2010 $ 13,992
Equity-settled
25)
INCOME TAX A. Income tax expense and payable are reconciled as follows:
127
4.
139
For the years ended Dec. 31, 2010 2009 Income tax payable Consolidated income tax payable for the parent company Deferred income tax from temporary differences (Over)/under provision of prior year's income tax Unpaid income tax in prior year Tax effect of amendments to the tax laws Tax on separately taxed income Prepaid income tax Income tax expense Income tax expense - current Retention tax (10%) on unappropriated earnings Income tax expense
$
4,767,385
$
5,593,195
1,362,146 62,610) 64,540) 5,532,706) ( 12,014 9,641 66,065 557,395 $
1,434,876 90,446 118,902 6,312,253) 42,635 40,192 84,703 1,092,696
$
557,395 $ -
1,092,696 -
$
557,395
$
1,092,696
( ( (
$
B. Details of deferred tax assets (liabilities) are as follows: Dec. 31, 2010 Amount Tax effect Deferred income tax assets - current: Gain on valuation of financial instruments Unrealized gain on warrants Unrealized lawsuit loss Deferred income tax assets- noncurrent: Reserve for default Accrued pension liability Reserve for loss on doubtful accounts Impairment loss - building Financial and tax difference for depreciation of fixed assets
($ 132,806) ($ 32,429 69,000 ($ $ 200,000 832,382 216,753 22,371
$
( 256,047) (
Valuation allowance for deferred income tax assets
Dec. 31, 2009 Amount Tax effect
22,577) ($ 132,809) ($ 5,513 ( 335,865) ( 11,730 69,000 5,334) ( 34,000 141,505 36,848 3,803
$ 200,000 832,385 216,751 22,371
26,562) 67,173) 13,800 79,935)
$ 40,000 166,477 43,350 4,474
43,528) ( 256,054) ( 51,210) 172,628 203,091
( 36,604) $ 136,024
( 43,063) $ 160,028
C. The Company’s unappropriated earnings represent earnings generated since 1998.
Dec.31 , $
Balance of imputation credit account
Expected (actual) rate of imputation credit account
2010 2,079,970 $ 2009 20.48%(Note 1)
2009 2,622,869 2008 33.33%(Note 2)
Note 1: The creditable tax rate for 2010 was estimated based on the balance of the imputation tax credit account as at December 31, 2010. Note 2: The actual creditable tax rate for 2009.
128
140
D. As of December 31, 2010, the Company’s income tax returns through 2005 have been assessed and approved by the Tax Authority. E. The Tax Authority has assessed additional income tax of $566,235. The Company has filed appeals with the Ministry of Finance; however, the Company has accrued these assessments in the financial statements. F. The Tax Authority has assessed an additional income tax of $5,264,371 on Yuanta Core Securities, Co., Ltd. (2003~2005). The Company has filed appeals with the Ministry of Finance; however, the Company has accrued these assessments in the financial statements. 26) EARNINGS PER SHARE The basic earnings per share for the years ended December 31, 2010 and 2009 are reconciled as follows: For the year ended Dec. 31, 2010 Weighted-average Earnings per share outstanding (in NT dollars) common stock Before tax After tax (thousand shares) Before tax After tax Basic earnings per share Net income
$
5,577,334
$
5,019,939
4,695,313
$
1.19
$
1.07
For the year ended Dec. 31, 2009 Weighted-average Earnings per share outstanding (in NT dollars) common stock Before tax After tax (thousand shares) Before tax After tax Basic earnings per share Net income
$
5,953,889
$
4,861,193
27)SECURITIES BROKERAGE ACCOUNTS - NET
129
4,695,313
$
1.27
$
1.04
141
Dec. 31, 2010 Debits: Cash in bank - settlement Accounts receivable - customers' purchases -TAIEX and OTC Accounts receivable - settlement Net exchange clearing receivable
$
Credits: Accounts payable - customers' purchases - TAIEX and OTC Accounts payable - settlement Net exchange clearing payable Securities brokerage accounts - net
$
105,093
2009 $
135,558
327,600 26,136,894 6,240,503
234,780 39,595,726 1,034,660
32,810,090
41,000,724
292,873 31,057,347 1,377,904
303,348 37,346,620 2,992,924
32,728,124 81,966
40,642,892 357,832
$
28) OTHER OPERATING INCOME For the years ended Dec. 31, 2010 2009 Rewards for the commission of securities and finance businesses Others
130
$
1,067,906 56,098
$
993,782 59,426
$
1,124,004
$
1,053,208
142
29) NON-OPERATING INCOME For the years ended Dec. 31, 2010 2009 Financial revenue Long-term investments- investment income accounted for under the equity method Gain on valuation of open-end mutual funds and money market instruments Gain on disposal of open-end mutual funds and money market instruments Rebates from banks
$
93,573
$
131,354
537,390
420,509
203,739
54,930
-
Rental revenue Others $
39,858
198,203
297,604
234,969 194,343
269,708 205,329
1,462,217
$
1,419,292
30) PERSONNEL, DEPRECIATION AND AMORTIZATION EXPENSES For the year ended Dec. 31, 2010 Nature/ Function
Dealing
Brokerage
Underwriting
Administration
Total
Personnel Expenses Salaries
$
169,483
$
3,126,773
$
230,754
$
1,181,032
$
4,708,042
Insurance
6,036
202,038
9,852
31,334
249,260
Pension
7,403
148,718
10,589
52,174
218,884
Others
3,727
111,535
8,387
25,033
148,682
Depreciation (Note)
2,800
300,780
6,013
58,786
368,379
-
62,185
-
-
62,185
Amortization
For the year ended Dec. 31, 2009 Nature/ Function
Dealing
Brokerage
Underwriting
Administration
Total
Personnel Expenses Salaries
$
177,862
$
3,264,981
$
188,188
$
909,248
$
4,540,279
Insurance
5,488
180,945
9,538
29,193
225,164
Pension
7,660
140,458
9,866
37,639
195,623
Others
3,636
108,912
7,665
21,221
141,434
Depreciation (Note)
2,288
263,159
4,957
61,670
332,074
-
62,776
-
-
62,776
Amortization
Note:Depreciation of rental assets and idle assets, recorded as “non-operating expenses,” is included in the Administration Department. For the years ended December 31, 2010 and 2009, the amounts were $40,943 and $46,020, respectively. 5. RELATED PARTY TRANSACTIONS 1) Names and relationship of related parties Names of related parties Yuanta Financial Holdings Co., Ltd.
Relationship with the Company Parent company
143
Names of related parties
Relationship with the Company
Yuanta Futures Co., Ltd.
Affiliated company
Yuanta Securities Investment Consulting Co., Ltd.
Affiliated company
Yuanta Securities Investment Trust Co., Ltd. (Y.S.I.T. Co.)
A majority-owned subsidiary
Yuanta Securities Finance Co., Ltd. (Y.S.F. Co.)
Affiliated company
Yuanta Financial Consulting Co., Ltd.
Affiliated company
Yuanta Commercial Bank (Y.C.B.)
Affiliated company
Yuanta Securities Asia Financial Services Ltd,
A majority-owned subsidiary
Yuanta Insurance Brokers Co.,Ltd.
A majority-owned subsidiary
Yuanta Construction Development Co., Ltd.
Affiliated company
HannStar Display Co., Ltd.
Affiliated company
Yuanta I Venture Capital Co., Ltd.
Affiliated company
Yuanta Venture Capital Co., Ltd. (Yuanta Venture Capital)
Affiliated company
Yuanta Life Insurance Agent Co., Ltd.
Affiliated company
Yuanta Property Insurance Agent Co., Ltd.
Affiliated company
Yuanta Securities Holding(BVI)Limited (Yuanta B.V.I)
Indirect subsidiary of the Company
Fund of Y.S.I.T. Co.
Fund managed by the affiliated company
Yuanta Educational Foundation
Related party in substance (The chairman of the Foundation had resigned as chairman of Yuanta Financial Holdings Co., Ltd. in May, 2009)
Yuanta Asset Management Co., Ltd. (Yuanta Asset Management)
Affiliated company
Yuanta Leasing Co., Ltd.
Affiliated company
Modern Investment Hsu Tong Investment Tsun Chueh Investment Hanns. G Inc. (Hanns. G)
Affiliated company Affiliated company Affiliated company Affiliated company
Kim Eng Holding Limited
Investee company accounted for under the equity method
Yuanta Securities (Hong Kong) Company Limited
Indirect subsidiary of the Company
Director , Supervisor , managing director , vice-president etc.
The main managers of the Company
2) Significant related party transactions and balances A. The futures commission income and futures guarantee deposits-own capital and commission income receivable (shown under “accounts receivable”) generated from conducting futures transactions on behalf of related parties are as follows:
132
144
For the year ended Dec. 31, 2010 Futures guarantee Service charges Commission Commission income-futures income receivable deposits-own capital exchange clearing
Related Party Yuanta Futures Co., Ltd.
$
195,222
$
15,514
$
836,723
$
10,942
For the year ended Dec. 31, 2009 Commission Commission Futures guarantee Service charges income-futures income receivable deposits-own capital exchange clearing
Related Party Yuanta Futures Co., Ltd.
$
212,703
$
14,979
$
457,719
$
10,067
The Company received the futures commission income in accordance with the contract prices. B. Bank deposits, interest income and interest receivables: a. For the year ended Dec. 31, 2010 Ending balance of bank deposits
Related party $
Y.C.B.
3,239,237
Interest income (Note) $
6,461
Interest receivable (Note) $
1,183
For the year ended Dec. 31, 2009 Ending balance of bank deposits
Related party $
Y.C.B.
96,062
Interest income (Note) $
11,102
Interest receivable (Note) $
131
Note: Including the interest of demand deposits, time deposits and business security deposits. b. As of December 31, 2010, the Company provided the Yuanta Commercial Bank with time deposits of $6,000 as a guarantee for loan limit (recognized in “restricted assets-current”). C. Extension compensation revenues generated from transfer of margin loans and short sales business to related parties are as follows: (recognized in “other operating income” and “accounts receivable” for extension compensation receivables):
For the year ended Dec. 31 2010 Related party Y.S.F. Co.
Commission Commission revenue receivable $ 1,067,906 $ For the year ended Dec. 31 2009
Related party Y.S.F. Co.
Commission Commission revenue receivable $ 993,782 $ 109,387
The terms of the above transactions are not significantly different from those of regular transactions. The dealing of the above transactions was entrusted to Yuanta Securities Finance Co., Ltd.
145
D. Income tax refundable/payable resulting from the consolidated income tax return: (recognized in “other receivables/payables) Dec. 31, 2010 Related party
2009
Amount
%
Amount
%
Income tax refundable Yuanta Financial Holdings Co., Ltd.
$
53,410
$
1,362,146
-
$
53,410
99
$
1,434,876
-
Income tax payable Yuanta Financial Holdings Co., Ltd.
99
E. Open-end mutual funds beneficiary certificates and money market instruments (December 31, 2010: None.)
Dec. 31, 2009 Related party
Cost
Fund of Y.S.I.T. Co.
$
%
4,901,624
91
F. Available-for-sale financial assets-current (December 31, 2010: None.) Dec. 31, 2009 Balance HannStar Display Co., Ltd.
$
Gain on valuation
Gain -
$
11,427
$
-
G. Business security deposits The Company deposited time deposits in the bank listed below as business security deposits for entering into securities and futures business. Related party $
Y.C.B.
Dec. 31, 2010 840,000 $
2009 840,000
H. Refundable deposits for security lending Below is the cash balance the Company deposited with a related party for security lending service: Related party
Dec. 31, 2010 $ 212,772
Y.S.F. Co.
Dec. 31, 2009 $ 145,198
I. Refinancing deposits receivable Related party $
Y.S.F. Co. J. Deposits-in (rent deposit)
134
Dec. 31, 2010 50,448
$
Dec. 31, 2009 -
Related party 146
$
Y.S.F. Co.
Dec. 31, 2010 212,772
$
Dec. 31, 2009 145,198
I. Refinancing deposits receivable Related party
Dec. 31, 2010 $ 50,448
Y.S.F. Co.
Dec. 31, 2009 $ -
J. Deposits-in (rent deposit)
Dec. 31, Related party Y.S.F. Co. Yuanta Financial Holding Co.,Ltd. Y.C.B. Others
2010 $
134
$
2009 5,067 11,763 30,542 9,182 56,554
$
$
5,628 11,202 30,542 8,270 55,642
147
K. Bond transactions a. Bonds purchased under resale agreements For the year ended Dec. 31, 2010 Related party
Maximum balance Ending balance
Y.C.B.
$
209,596
$
-
Range 0%~-0.2%
Interest income ($
20)
For the year ended Dec. 31, 2009 Related party
Maximum balance Ending balance
Y.C.B.
$
2,109,351
$
209,596
Range 0%~-1.0%
Interest income ($
296)
b. Bonds sold under repurchase agreements Related parties Fund of Y.S.I.T. Co. Y.C.B. Tsun Chueh Investment
For the year ended Dec. 31, 2010 Maximum balance Ending balance Range Interest income $ 2,539,895 $ 718,221 0.17%~0.5% $ 4,587 448,301 0.25% 3 21 - 0.25%~0.3% 355,000 $ 718,221 $ 4,611 For the year ended Dec. 31, 2009
Related parties
Maximum balance Ending balance
Fund of Y.S.I.T. Co. Y.C.B. Yuanta Futures Co., Ltd. Tsun Chueh Investment
$
4,704,653 421,734 150,064 355,000
$
$
2,539,636 355,000 2,894,636
Range
Interest income
0.11%~0.6% 0.05%~0.11% 0.40% 0.25%~1.1%
$
$
6,685 1 64 14 6,764
c. Bonds sold and purchased For the year ended Dec. 31, 2010 Related Parties
Bonds purchased $
Y.C.B.
4,329,818
Bonds sold $
1,855,214
For the year ended Dec. 31, 2009 Related Parties Y.C.B.
Bonds purchased
Bonds sold
$
1,683,074 2,457,652
$
4,179,949 567,436
$
4,140,726
$
4,747,385
Fund of Y.S.I.T. Co
The above bond transactions were matched by the Electronic Bond Trading System of GreTai Securities Market. d. In May 2009, the Company purchased real estate from Yuanta Asset Management in the amount of $272,935, which were recognized as land and buildings of $190,397 and $82,538, respectively. The purchase price was decided based on the appraisal report issued by Sinyi Real Estate Appraisers Firm.
148
e. In August 2009, the Company purchased real estate from Y.S.F. Co. in the amount of $68,685, which were recognized as land and buildings of $47,901 and $20,784, respectively. The purchase price was decided based on the appraisal report issued by Sinyi Real Estate Appraisers Firm. L. Subsidy revenue The subsidy revenue coming from a related party using the Company’s office space are shown below: (recognized in “non-operating income” and “accounts receivable” for subsidy revenue receivable at the end of the period) For the year ended Dec. 31, 2010 Related party
Subsidy revenue $
Y.C.B.
63,144
Receivable $
4,524
For the year ended Dec. 31, 2009 Related party Y.C.B.
Subsidy revenue $
162,884
Receivable $
3,835
The terms of the above transactions are not significantly different from those with third parties.
149
M. Securities brokerage fees The related parties committed to the Company to purchase and sell securities. The securities brokerage fees generated from those transactions are shown below: For the years ended Dec. 31, Related parties
2010
Y.S.F. Co.
2009
$
141
Yuanta Financial Holding Co.,Ltd
$
2,560 -
Y.C.B.
31 7,142
Fund of Y.S.I.T. Co.
1,686
3,512
Yuanta Development
3,377
269
Kim Eng Holding Limited
4,448
3,457
Yuanta Securities (Hong Kong) Company Limited
1,175
21,890
Others
1,066
825
$
19,066
5,909
$
38,422
The terms of the above securities brokerage transactions are not significantly different from those with third parties. N. Other non-operating income – rental revenues The rental revenues derived from the Company leasing its own assets to related parties are as follows:
For the years ended Dec. 31, Related parties Yuanta Financial Holdings Co., Ltd.
2010 $
Y.C.B.
2009
46,080
$
43,490
122,421 21,121
158,767 23,179
659
669
Yuanta Life Insurance Agent Co., Ltd.
2,973
3,021
Yuanta Management Co., Ltd.
4,256
4,345
127
163
2,424
2,438
Y.S.F. Co. Yuanta Property Insurance Agent Co., Ltd.
Yuanta Leasing Co., Ltd. Yuanta Venture Capital Co., Ltd. $
200,061
$
236,072
The rentals were determined by reference to the rental rates of nearby office buildings and by contracts between the related parties. O. Operating expenses - service fees Service fees generated from a related party offering the Company investment strategies and advice are as follows:
150
For the years ended Dec. 31, Related party
2010 $
Yuanta Securities Investment Consulting Co., Ltd.
2009
251,926
$
209,459
Service fees were determined by contracts between the related parties. P. Other operating expenses- other
Payment given to related party in relation to the transfer of margin loans and short sales and security borrowing businesses to the company are shown below: For the years ended Dec. 31, Related party
2010 $
Y.S.F. Co.
2009 $
117,500
-
Q. Salaries/rewards information of key management: For the years ended Dec.31, Item Salaries
2010 $
Bonus
2009
115,171 307,181
$
127,304 231,482
Service execution fees
7,867
13,343
Earnings distribution
1,759
1,674
$
431,978
$
373,803
For relevant information, please refer to the annual report. R. Others a. The Company provided Yuanta Commercial Bank Co., Ltd. with beneficiary certificates of $0 and $2,641,024 as well as land and buildings of $2,243,945 and $805,593 as collateral to secure loan ceiling of $2,300,000 and $2,174,000 for the years ended December 31, 2010 and 2009, respectively. Please refer to Note 6 for information on pledged assets. b. The Company made donations of $5,000 and $5,000 to Yuanta Educational Foundation for the years ended December 31, 2010 and 2009, respectively. Such amounts were recognized in operating expenses - donation. c. According to the appropriation of the 2009 earnings as resolved by the Board of Directors (acting on behalf of stockholders) on March 25, 2010, cash dividends totaling $363,750 would be distributed to the parent company - Yuanta Financial Holdings Co., Ltd. This amount had been fully paid on July 27, 2010. d. On May 28, 2010, the Company entered into an agreement with Yuanta Securities Finance Co., Ltd. relating to the transfer of the right of claim on margin loans and short sales of securities and borrowing of securities, with the transfer effective date set on October 18, 2010. This transfer had been approved by the Financial Supervisory Commission, Executive Yuan on August 11, 2010. All debts, tax duties, disputes with customers and compensation payable occurring prior to the transfer effective date belong to Yuanta Securities Finance Co., Ltd. and those occurring after the transfer effective date belong to the Company. The contract amount of the transfer of the right of
151
claim on margin loans and short sales of securities and borrowing of securities was $34,186,074. As of December 31, 2010, the full contract amount had been paid. 6. PLEDGED ASSETS As of December 31, 2010, assets pledged or restricted for use were as follows: Dec. 31, Asset Restricted assets Time deposits (Note 2)
Structured notes Restricted demand deposits Financial assets at fair value through profit or loss - current: Open - end mutual funds beneficiary certificates Trading securities - dealing (par value) Funds and investments Financial assets at fair value through profit or loss noncurrent (Note 1) Available-for-sale financial assets - current (Note 1) Available-for-sale financial assets - noncurrent (Note 1) Held-to-maturity financial assets Current (Note 1) Held-to-maturity financial assets Noncurrent (Note 1) Fixed assets (including rental and idle assets) (Note 2) Other assets Operating guarantee deposits Deposits-out
2010 $
2009
162,000
58,122
$
197,000 Security for settlement limit, deposits for short-term loans and commercial papers payable 48,149 Structured notes
1,311,330
14,852,200
Purpose
- Underwriting share capital, warrants proceeds collected on behalf of others 3,108,770 Security for settlement limit 14,886,300 Securities for bonds sold with repurchase agreements
51,917
52,618 General business security
500,109
- General business security
215,934 399,991 606,272 4,300,829
840,000 -
726,698 Security for sale of assets and general business security 500,031 General business security 399,485 General business security, compensation reserve 2,883,247 Security for exchange clearing, shortterm loans 840,000 General business security 93,500 Security for income tax assessment
Note 1： As of December 31, 2010 and 2009, the Company provided financial bonds with par value of $1,500,000 and $1,450,000, respectively, which are certified by the Central Bank of China to Cathay United Bank, as general business security. Note 2： The Company provided time deposits and fixed assets as collaterals for short-term loans. As of December 31, 2010 and 2009, loans of $570 and $4,797, respectively, had been drawn down.
152
7. SIGNIFICANT COMMITMENTS 1) The Company entered into various operating lease agreements and the future minimum rental commitments are as follows:
Period 2011 2012 2013 2014 2015 and thereafter
$
$
Amount 168,090 127,346 88,479 50,235 29,750 463,900
8. SIGNIFICANT LOSS FROM NATURAL DISASTER: None. 9. SIGNIFICANT SUBSEQUENT EVENTS: A. On December 30, 2010, the Board of Directors adopted a resolution to sell the real estate “Taipei Financial Building Center” owned by the Company through an auction. The contract date for sales of the real estate was on January 21, 2011, and the title to the real estate was transferred on February 21, 2011. Total sales amount and disposal gain was $382,900 and $258,037, respectively. The real estate had been reclassified to “assets held for sale” at the lower of carrying value or net fair value on the balance sheet date. B. The Board of Directors of the Company on January 5, 2011 adopted a resolution to sell 168,476,566 shares of Kim Eng Holding Limited held by the Company’s subsidiary- Yuanta Securities Asia Financial Services Ltd, to ASEAM CREDIT SDN BHD (subsidiary of Maybank, Malaysia). The selling price per share is to be SGD 3.1 (= NTD 72.45). The total transaction amount is to be SGD 522,277,354.6 (= NTD 12,205,622,000). The gain on disposal of shares is estimated at NTD 7,187,000,000. Under the contract, the shares settlement and payment collection can be done on condition that the transaction has gained an approval of the local competent authorities of Kim Eng Holdings Limited and all its subsidiaries. Moreover, ASEAM CREDIT SDN BHD must purchase the shares of Kim Eng Holdings Limited simultaneously from Yuanta Securities Asia Financial Services Ltd, and family management stockholders of Kim Eng Holdings Limited, respectively. If the shares sales contract between the family management stockholders of Kim Eng Holdings Limited and ASEAM CREDIT SDN BHD is terminated, the contract between Yuanta Securities Asia Financial Services Ltd, and ASEAM CREDIT SDN BHD would be also terminated automatically. C. The amended “Rules Governing the Administration of Securities Firms” (“Rules”) was enacted by the Financial Supervisory Commission on January 11, 2011, through the Gin-Gwen-Tz (Quan) Letter No. 09900738571. The amended Rules eliminated Articles 11 and 12, which prescribed previously that securities firms must provide reserve for trading loss and reserve for default. Thus, reserve for trading loss and reserve for default that had been provided as of December 31, 2010 should be reclassified to “Special reserve”. The special reserve shall be used exclusively to cover accumulated deficit or to 141
153
increase capital and shall not be used for any other purpose. Such capitalization shall not be permitted unless the Company had already accumulated a special reserve of at least fifty percent of its paid-in capital stock and only half of such special reserve may be capitalized. 10.OTHERS:
142
154
1) The fair values of the financial instruments
Dec. 31, 2010 Fair value
Financial assets Non-derivative financial instruments Financial assets with fair value equal to book value Financial assets for trading purpose Available-for-sale financial assets Held-to-maturity financial assets-current Held-to-maturity financial assets-noncurrent Financial assets at fair value through profit or loss-Noncurrent Operating guarantee deposits Exchange clearing deposits Deposits-out Derivative financial instruments Bought options Futures guarantee deposits receivable Financial assets designated as at fair value through profit or loss - current
Book value
$
Quotations in an Estimated using a active market valuation technique
64,011,280 $ 28,660,085 2,803,606 399,991 864,989
- $ 28,660,085 2,803,606 -
51,917 840,000 909,268 158,413
51,917 -
840,000 909,268 158,413
1,382 836,723
1,382 836,723
-
-
-
-
501,684
-
Derivative financial instrument assets - OTC
501,684 $ 100,039,338 $
32,353,713 $
64,011,280 400,029 862,292
67,682,966
Dec. 31, 2010 Fair value Quotations in an Estimated using a active market valuation technique
Book value Financial liabilities Non-derivative financial instruments Financial liabilities with fair value equal to book value $ 56,726,828 $ Security lending payable-hedging 267,274 Security lending payable-unhedging 427,015 Derivative financial instruments Sold options 1,565 Warrants 16,333,319 Repurchase of warrants ( 14,936,879) ( 1,202,416 Derivative financial instrument liabilities Other financial liabilities-current Financial liabilities designated as at fair value 1,976,734 through profit or loss - current $
61,998,272 $
143
- $ 267,274 427,015
56,726,828 -
1,565 16,333,319 14,936,879) -
1,202,416 -
-
1,976,734
2,092,294 $
59,905,978
155
Dec. 31, 2009 Fair value
Financial assets Non-derivative financial instruments Financial assets with fair value equal to book value Financial assets for trading purpose Available-for-sale financial assets Held-to-maturity financial assets-current Held-to-maturity financial assets-noncurrent Financial assets at fair value through profit or loss-Noncurrent Operating guarantee deposits Exchange clearing deposits Deposits-out Derivative financial instruments Bought options Futures guarantee deposits receivable Financial assets designated as at fair value through profit or loss - current Derivative financial instrument assets - OTC
Book value
$
$
Quotations in an Estimated using a active market valuation technique
23,195,005 $ 27,908,153 3,343,228 500,031 399,485
- $ 27,908,153 2,917,933 -
23,195,005 425,295 500,436 406,898
52,619 840,000 870,469 263,637
52,619 -
840,000 870,469 263,637
2,014 457,719
2,014 457,719
-
589,488 142,493 58,564,341 $
31,338,438 $
589,488 142,493 27,233,721
Dec. 31, 2009 Fair value Quotations in an Estimated using a active market valuation technique
Book value Financial liabilities Non-derivative financial instruments Financial liabilities with fair value equal to book value $ 17,194,842 $ Security lending payable-hedging 101,353 Security lending payable-unhedging 24,137 Derivative financial instruments Sold options 923 Warrants 8,640,306 Repurchase of warrants ( 8,190,216) ( 499,787 Derivative financial instrument liabilities 179,220 Other financial liabilities-current Financial liabilities designated as at fair value through profit or loss - current 1,691,402 $ 20,141,754 $
- $ 101,353 24,137 923 8,640,306 8,190,216) 576,503 $
17,194,842 499,787 179,220 1,691,402 19,565,251
The following methods and assumptions were used to estimate the fair value of each class of financial instruments: 144
156
A. For short-term instruments, the fair values were determined based on their carrying values because of the short maturities of the instruments. This method was applied to cash and cash equivalents, bonds purchased under resale agreements, margin loans receivable, receivables from security lending, receivables from refinance guaranty, notes receivable, accounts receivable, other receivables, restricted assets, short – term loans, bonds sold under repurchase agreements, notes payable, accounts payable, other payables (excluding income tax payable) and deposits-in. B. Financial assets for trading purpose include non-derivatives and derivatives. The fair value of non-derivative financial instruments was based on active quoted market price. The fair value of derivatives was based on active quoted market price if available. When market price was unavailable, fair value was determined based on the amounts to be received or paid assuming that the contracts were settled as of the reporting date. C. For available-for-sale financial assets, the fair value was based on active quoted market price. If the market for a financial instrument is not active, an entity establishes fair value by using a valuation technique. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. The discount rates used were the same as those of financial instruments with similar terms and characteristics, including credit status of the debtor, fixed rate covered period, maturity date and contract currency. Unlisted stocks were valued at cost because of the difficulty in obtaining a reasonable estimation. D. For held-to-maturity financial assets, the fair value was based on active quoted market price. If the market for a financial instrument is not active, an entity establishes fair value by using a valuation technique. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. The discount rates used were the same as those of financial instruments with similar terms and characteristics, including credibility of the debtor, fixed rate covered period, maturity date and contract currency. The fair values of operating security deposits, exchange clearing deposits, and deposits-out at the balance sheet date were valued at book value since the impact of discount rates was insignificant. E. The fair values of business security deposits, exchange clearing deposits and deposits-in were determined based on their carrying values because their present value of expected cash flow amount is approximately equal to their carrying value. 2) As of December 31, 2010 and 2009, the financial assets with fair value risk due to the change of interest amounted to $74,837,125 and $19,126,376, respectively, the financial liabilities with fair value risk due to the change of interest amounted to $42,059,775 and $15,258,747, respectively, the financial assets with cash flow risk due to the change of interest amounted to both $0, and the financial liabilities with cash flow risk due to the change of interest amounted to $181,837 and $90,623, respectively. 3) For available-for-sale financial assets, during the years ended December 31, 2010 and 2009, the amount of (loss) gain recognized directly in equity was $183,614 and ($531,225), respectively, and
157
the amount removed from equity and recognized in profit or loss was $628,067 and $224,777, respectively. 4) Procedure of financial risk control and hedge A. Financial risk control The risks faced by the Company include market risk, credit risk, liquidity risk, operating risk and legal risk. So the Company continually raises the fullness of the risk management mechanisms and strictly monitors the overall risk status to ensure the risk management execution conforms to the Company’s risk management policies. An independent risk management department was established under the Board of Directors to operate risk management tasks and efficiently control the Company’s risks. B. Hedging strategies (financial hedging): The Company adjusts positions’ market risk and credit risk to tolerable limits based on market dynamics, business strategies, financial instruments characteristics and risk management rules and by employing appropriate derivative instruments operations. It also regulates derivative undertaking lines, risk limits, hedging strategies and hedging operation mechanism based on its risk tolerable ability to ensure the rationality and effectiveness of hedging.
158
5)Significant financial risk information A. Derivative financial instruments a. Derivative financial instruments were as follows: Dec. 31, 2010 Derivative Financial Assets Interest rate swap contracts
$
Cross currency swap contracts
Derivative Financial Liabilities -
$
78,417
571
-
Asset IRS contracts
-
103,420
Asset swap options
501,085
1,020,579
28
1,976,734 -
Structured notes (Note 1) Equity derivatives $
501,684
$
3,179,150
Dec. 31, 2009 Derivative Financial Assets Interest rate swap contracts
$
Derivative Financial Liabilities -
$
53,632
Cross currency swap contracts
-
174
Asset IRS contracts
-
36,991
Asset swap options
142,282
408,990
211 -
1,691,402 179,220
Structured notes Nominal amount of structured notes (Note 2) $
142,493
$
2,370,409
Note 1：Recorded under “financial liabilities designated at fair value through profit or loss – current” Note 2：Recorded under “other financial liabilities – noncurrent”.
147
159
b. Gain (loss) on derivative financial instruments were as follows: For the year ended Dec. 31, 2010 Gain (loss) on Derivative Financial Assets - OTC Interest rate swaps
($
Unrealized gain (loss) included
31,369) ($
IRS asset swaps
24,785)
105,150
14,490
Options - asset swaps
(
211,422) (
612)
Structured notes
(
13,222) (
2,623)
Equity derivatives Cross currency swap contracts (Note)
(
1,673) ( 14,616
980) 746
($
137,920) ($
13,764)
For the year ended Dec. 31, 2009 Gain (loss) on Derivative Financial Assets - OTC Interest rate swaps
($
31,728) $
IRS asset swaps Options - asset swaps
Unrealized gain (loss) included 52,608
38,929 (
9,985
267,271) (
Bond options
116,483)
3
-
Structured notes
(
58,245) (
86,653)
Equity - linked note Cross currency swap contracts (Note)
(
5,233) 5,608 (
883)
($
317,937) ($
141,426)
Note：Recorded under “other operating income – others” c. Futures transactions engaged in by the Company: a) Balances of futures guarantee deposits receivable: Dec. 31, 2010
Dec.31, 2009
Futures guarantee deposits receivable
$
836,723
$
457,719
Excess margin
$
518,307
$
414,819
b) Gains on futures For the years ended Dec. 31, 2010
2009 42,844) $
($
Gains on futures
38,370
c)Gains (losses) on options For the years ended Dec. 31, 2010 $
Gains (losses) on options
d. Gain (loss) on warrants are as follows: 148
116,092 ($
2009 48,983)
160
For the years ended Dec. 31, 2010
2009
Account
A. Gain (loss) on valuation Liabilities of options issued
$
Repurchase of options issued
(
Exercise of options issued
(
Trading securities-hedging
5,155,802 ($ 9,913,019) Gain (loss) on warrants 1,057,100) 10,765,035 issuance Gain (loss) on warrants 7,173) ( 127,771
Security lending payable-hedging
658 (
Futures transactions-hedging Options transactions-hedging B. Gain (loss) on sale Repurchase of options issued
1,163 286 ( (
Trading securities-hedging
B.
4,365) issuance Gain (loss) on warrants 105,031 issuance Loss on valuation of trading securities Loss on short covering 15,602) and trading securities - valuation 20 Gain on futures 209) Loss on options
3,662,818) ( 1,026,404) Loss on warrants issuance 39,250
Security lending payable-hedging (
7,763) (
Options transactions-hedging
68,737 (
559,728 Gain (loss) on sale of trading securities-hedging Loss on short covering and trading securities - Bonds 44,574) purchased under resale agreements financing covering 5,265) Loss on options
Information on financial instruments: a. Futures The Company engages in the business of futures dealers, so futures and futures options are traded for the purpose of efficient employment of capital. As of December 31, 2010 and 2009, TX futures guarantee deposits receivable includes the balance of excess futures guarantee deposits of $518,307 and $414,819, respectively. Please refer to “Disclosures of futures department”. b. Warrants For information regarding the issuance of warrants, please refer to Note 4(13). c. Convertible bond asset swaps and options The Company engages in the business of asset swaps and options. Under an asset swap, the Company sells convertible bonds to the counterparty and receives proceeds. Over the contract period, the Company exchanges its cash flows with the counterparty and retains the right to buyback the convertible bonds. Under an option transaction, the Company keeps the right to buyback the convertible bonds or the counterparty has the right to buy the convertible bonds. The Company can clear the position by rendering its currently owned bonds. As of December 31, 2010 and 2009, notional amounts of convertible bond options purchased were $3,965,800 and $1,049,100, respectively; notional principal of convertible bond options sold were $7,429,400 and $2,742,500, respectively. d. Structured notes
149
161
The Company combines fixed income instruments with call or put options into structured notes, which are further categorized into Equity-Linked Notes (ELN), Principal Guaranteed Notes (PGN) and Credit-Linked Notes (CLN). On trade date, the contracted amounts were collected in full from the counterparties. The payout amount on maturity will depend on the price fluctuation of the instruments linked to these contracts. All the linked products are financial instruments under the supervision of the Securities and Futures Bureau. As of December 31, 2010 and 2009, the nominal principal of ELN was $274,500 and $960,400, respectively, the nominal principal of PGN was $900,000 and $159,200, respectively, and the nominal principal of CLN was $800,500 and $751,700, respectively. e. Interest rate swaps The purpose of the Company to enter into an interest rate swap contract is to earn the interest gap based on the Company’s estimation toward the interest rate trend. The contracts entered with financial institutions are valid for 1～5 years. On settlement date, interest is received and paid according to the production of nominal principal and difference in interest rates. Most of the counterparties are financial institutions. As of December 31, 2010 and 2009, the nominal principal was $124,924,555 and $133,597,735,respectively. C. Information of financial risk a. Market risk Market risk management includes setting market risk limits, regulating hierarchical authorizing rules, effective risk management procedures and timely monitoring and control. The objective of setting annual risk limits is to control market risk within the tolerable scope. Internal operational limits and approval authority are regulated by the hierarchical authorizing rules. The risk management department of the Company conducts market risk measurement and monitoring based on the relevant risk management rules, and also adopts VaR (value at risk) models in conducting market risk quantification management to control the changes of transaction risk. The risk management department also provides risk management reports to the senior management for them to timely control market risk. b. Credit risk The Company establishes an internal credit rating system by integrating external credit rating information and internal credit rating model. Additionally, the Company sets credit limit for each issuer and counterparty based on the internal credit rating system, and calculates credit risk exposure position for each business to control the overall credit risk being within the limit approved. The Company also employs credit risk model to quantify credit risk, evaluate and control credit risk with rationality and effectiveness to ensure the overall credit risk being within the bearable limits. c. Liquidity risk Liquidity risk includes market liquidity risk and cash liquidity risk. Market liquidity risk occurs when the volume of transactions is insufficient in the market so that the Company will suffer difficulty when disposing its position within a reasonable time. To lower market liquidity risk, the Company sets position limits for different businesses and securities, respectively, to keep their market liquidity. As to cash liquidity, in addition to employing stress testing model in conducting situation simulation analyses, the Company also lays down cash control plans in response based on the testing results.
150
162
d. Operational risk Operational procedures and controlling emphasis are regulated for different businesses, which are included in the rules of the internal control system and internal auditing system. The Company also conducts legal compliance and internal control self-assessment management to ensure the completeness and effectiveness of the operational procedures and controlling emphasis. e. Legal risk Legal risk management includes the assessments of new and ongoing lawsuits, analysis of legitimacy of each contract and transaction, to avoid any severe impact on the Company’s operations or financial condition as a result of unenforceable contracts, lawsuits or unfavorable rulings.
4. Information on effect of fluctuations in foreign exchange rates: The Company’s business involves some foreign currency operations. In accordance with EITF 100-046 of the R.O.C. Accounting Research and Development Foundation, dated February 18, 2011, the information on monetary assets and liabilities denominated in foreign currencies whose values would be materially affected by the fluctuations of the foreign exchange rates is disclosed as follows:
151
163
Currency
Effect on profit or loss Financial Assets Cash and bank deposits
USD
Dec. 31, 2010
Dec. 31, 2009
Foreign Currency Amount
Foreign Currency Amount
（in thousands）
$
Rate
Currency
161,451
30.217 (Note)
USD
30.217 (Note) 30.217 (Note) 30.217 (Note) 30.217 (Note) 30.217 (Note)
-
Financial assets at fair value through profit or loss
USD
6,897
Accounts receivable
USD
929
Prepaid payables and Other payables
USD
99
Others
USD
553
USD
459
Consignment trading Net amount Financial Liabilities Financial liabilities at fair value through profit or loss
USD
Guarantee deposit received from security lending USD Other current liabilities
USD
Effect on stockholders' equity Financial assets Long-term investments accounted for under the equity method USD
（in thousands）
$
Rate
1,162
32.238 (Note)
USD
4,372
USD
10
32.238 (Note) 32.238 (Note)
-
-
USD
550
USD
38
32.238 (Note) 32.238 (Note)
393 30.217 (Note)
-
-
-
157,527 30.217 (Note) 587 30.217 (Note)
-
-
-
373,352
29.13
USD
USD
354 32.238 (Note)
351,341
31.99
(Note) Because the net effect of value fluctuations on such monetary assets and liabilities denominated in foreign currencies due to changes in foreign exchange rates is insignificant, they are not adjusted based on the foreign exchange rates at balance sheet date.
164
11.ADDITIONAL DISCLOSURES REQUIRED BY THE SECURITIES AND FUTURES BUREAU (1)Related information of significant transactions A. Lending to others：Except for RP/RS trading on the Taiwan Over-The-Counter Securities Exchange, the Company did not grant loans to stockholders or others.
B. Endorsements and guarantees for others：None. C. Acquisitions of real estate exceeding NT$100,000,000 or 20 percent of contributed capital： None D. Disposals of real estate exceeding NT$100,000,000 or 20 percent of contributed capital：None E. Purchases or sales transactions discount on Broker’s charges with related parties in excess of NT$5,000,000：None. F.
Receivables from related parties exceeding NT$100,000,000 or 20 percent of contributed capital：. None.
153
Grand Asia Capital Services Pte. Ltd.
Kim Eng Holdings Ltd.
Yuanta Securities (Hong Kong) Ltd.
Singapore
Singapore
British Virgin Islands British Virgin Islands Hong kong Securities brokerage, underwriting and consulting Securities investment and holding Investment consulting
Securities investment and holding Investment brokerage
ROC
Yuanta Securities Investment Trust Company Yuanta Securities Holding (BVI) Limited
Grand Asia Asset Management Ltd.
Investment trust
ROC
Yuanta Insurance Brokers Co., Ltd.
Securities investment and holding Insurance brokerage
Bermudas Islands
Address
Major operating activities
Yuanta Securities Asia Financial Services Ltd.
Name of the investment company
Note : Net income is recognized based on the current audited financial statements.
Grand Asia Asset Management Ltd.
Yuanta Securities Asia Financial Services Ltd.
Yuanta Securities Co., Ltd.
Name of the investor
(2)Disclosure information of investee company
10,857
2,525,300
4,680,701
15,320
343
3,772,631
5,550
10,857
2,525,300
3,071,351
15,320
343
2,997,615
5,550
Original investment Balance on Balance on December December 31, 2010 31, 2009 $ 6,211,249 $ 6,211,249
500
168,477
1,098,133
1,000
10
128,955
100.00%
29.19%
100.00%
50.00%
100.00%
80.60%
100.00%
100.00%
174,063
500
Percentage
Thousands of shares
9,297
6,398,371
2,658,860
38,035
13,954
3,926,292
14,377
$ 10,894,724
Book value
Period-end holding balance
1,490
1,892,525
(420,636)
16,744
6,099
415,201
7,256
Net income (loss) of investee company $ 190,666
- Indirect subsidiary of the Company ( Note ) - Indirect subsidiary of the Company ( Note )
Investment income (loss) Note recognized by the Company $ 190,666 Subsidiary of the Company ( Note ) 7,256 Subsidiary of the Company ( Note ) 339,468 Subsidiary of the Company ( Note ) - Indirect subsidiary of the Company ( Note ) - Indirect subsidiary of the Company ( Note ) - Indirect subsidiary of the Company ( Note )
165
Amount of transactions Reason for with the short-term borrower financing Business revolving fund Allowance for doubtful accounts -
Limit on loans granted to a Ceiling on total Item Value single party loans granted $ 10,894,724 - $ 10,894,724
Collateral
Relationship Subsidiary of which the endorser / guarantor owns more than 50% ownership
Limit on Maximum outstanding Outstanding endorsements / endorsement/guarantee endorsement/guarantee guarantees amount during the year amount at December31, provided for a single party ended December 31, 2010 2010 $ 10,894,724 $ 772,088 -
Actual amount $ -
Amount of Ratio of accumulated Ceiling on total endorsements / endorsement/guarantee amount of guarantees secured amount to net asset value endorsements / with collateral of the Company guarantees provided $ $10,894,724
155
3. Acquisitions of real estate exceeding NT$100,000,000 or 20 percent of contributed capital：None. 4. Disposals of real estate exceeding NT$100,000,000 or 20 percent of contributed capital：None. 5. Purchases or sales transactions discount on Broker’s charges with related parties in excess of NT$5,000,000：None. 6. Receivables from related parties exceeding NT$100,000,000 or 20 percent of contributed capital：None.
financial statements audited or reviewed by an independent accountant.
(Note) According to the Company’s “Procedures For Provision Of Endorsements And Guarantees”, total endorsements and guarantees provided to others cannot exceed the net assets value in the Company’s latest
Number Endorser / guarantor Company name 1 Yuanta Securities Yuanta Securities Asia Financial (Hong Kong) Services Ltd. Company Limited
Party being endorsed/guaranteed
2. Endorsements and guarantees provided during the year ended December 31, 2010：
an independent accountant.
(Note) According to the Company’s “Procedures For Loans Granted To Others”, total loans granted to others cannot exceed the net assets value in the Company’s latest financial statements audited or reviewed by
Number Creditor Borrower 1 Yuanta Yuanta Securities Securities Asia (Hong Kong) Financial Company Limited Services Ltd.
Maximum outstanding balance during the year ended Balance at General ledger December 31, December 31, account 2010 2010 Interest Rate Nature of loan Accounts $ 2,126,490 $ 0.3867%~ Short-term receivable 1.0365% financing related party
1. Loans granted during the year ended December 31, 2010：
166
A)
200,000
Asia Pacific Ventrue Investment
c.Revenue from assets management business, service contents and litigation：None.
b.Derivative financial instrument transactions and the source of capital：None.
Total
Adjustment of available-for-sale financial assets
Accumulated Impairment
500,000
1,166,519
Asia Tech Taiwan Venture Fund, Lp
Asia Pacific Networks Value Investment Ltd.
5,000,000 2,000.000
PCCW Capital I I Bonds
13,403,600
1,500,000
1,000,000
168,476,566
10,000
1,098,132,525
Number of shares
Singapore Telecom Bonds
The First Securities Joint Stock Company Ltd.
Global Strategic Investment Fund
Available-for-sale financial assets – noncurrent:
Grand Asia Assets Management Ltd.
Kim Eng Holdings Limited
Yuanta Securities Holding (BVI) Limited
Yuanta Securities Ltd. (HK)
Long-term equity investments accounted for under the equity method:
Securities type and name
a.Securities held as of December 31, 2010：
Yuanta Securities Asia Financial Services Ltd.：
7.Disclosure required by Ministry of Finance, Ruling No. 0920004507 dated October 31, 2003：
$
10.00
10.00
1.00
102.23
102.42
0.90
1.00
1.31
1.30
47.90
0.08
Carrying value Price per share
$ 340,811,610
217,662
( 1,077,098)
2,000,000
5,000,000
1,166,519
2,044,617
5,121,241
12,129,485
1,500,000
1,305,703
219,648,791
479,038
$ 91,275,652
Amount
$
10.00
10.00
0.51
107.67
104.60
0.90
0.67
1.31
1.91
47.90
0.08
Fair value Price per share
$ 443,243,397
-
2,000,000
5,000,000
589,959
2,153,420
5,230,100
12,129,485
999,462
1,305,703
322,080,578
479,038
$ 91,275,652
Amount
Note
In U.S. Dollars
167
Yuanta Securities Asia Financial Services Ltd. Income Statement For the year ended December 31, 2010
( (
Non-operating expenses
Total
Net income
(
Operating expenses
$ 6,049,440
426,127 ) (
183,284 ) (
47,046,144
Cumulative translation adjustments
93
7)
3)
4)
100
28
72
In U.S. Dollars %
Total Liabilities and Stockholders' Equity
Total shockholders' equity
91
$ 374,042,293
374,003,588
129,613,297
3,998,437
19,282,676
Unrealized profit or loss on financial instruments
174,063,034
Retained earnings
-
38,705 38,705
Capital reserve
$
Amount
-
-
100
100
35
1
12
5
47
%
In U.S. Dollars
Common stock
Stockholders' Equity
Total liabilities
Other payables
Current Liabilities
Liabilities and Stockholders' Equity
8
83
9
-
9
%
100
242,843 ) (
6,475,567
Total
Expenses
1,835,563
$ 4,640,004
Amount
Non-operating income and gain
Investment income accounted for under the equity method
Revenues
Items
e.Income Statement
$ 374,042,293
Total Assets
340,811,610
28,102,426
312,709,184
33,196,830
99,280
33,097,550
33,853
$
Amount
Yuanta Securities Asia Financial Services Ltd. Balance Sheet December 31, 2010
Fixed Assets
Total funds and investments
Available-for-sale financial assets - noncurrent
Long-term equity investments accounted for under the equity method
Funds and Investments
Total current assets
Other receivables
Cash and bank deposits
Current Assets
Assets
d.Balance sheet
168
0.64
319,150
14,833
247,737
39,959
31,063
$ 652,742
$
0.64
0.49
7.08
4.00
$2.07
319,150
14,833
247,737
39,959
31,063
$ 652,742
$
Fair value Price per share Amount
In U.S. Dollars
28
652,742
Total funds and investments
$ 2,672,597
333,592
Financial assets accounted for under the cost method - noncurrent
Total Assets
Share capital
319,150
Long-term equity investments accounted for under the equity method
Total Liabilities and Stockholders' Equity
Total stockholders' equity
24 100
Retained earnings
12
12
Stockholders' Equity
76
Total liabilities
Funds and investments
2,019,855
Total current assets
48
Accrued expenses
1,279,265
Accounts receivable
$ 740,590
Liabilities and Stockholders' Equity
Cash and bank deposits
%
Current liabilities
Amount
Grand Asia Asset Management Ltd. Balance Sheet December 31, 2010
Current assets
Assets
d.Balance sheet
and the Company had no litigation.
61,192
2,611,405
611,405
2,000,000
61,192
$ 2,672,597
$
Amount
98
23
75
2
2
100
%
In U.S. Dollars
c.Revenue from assets management business, service contents and litigation：Grand Asia Asset Management Ltd. provided consulting services to GAAM Holding Limited and earned revenues of $617,000；
b.Derivative financial instrument transactions and the source of capital：None.
Total
Grand Asia Capital Services Pte. Ltd.
500,000
0.49
30,000
Long-term equity investment accounted for under the equity method:
Ocon Inc.
7.08
35,000
Grand Asia Special Innovation Direct Investment Ltd.
4.00
$2.07
15,000 10,000
Carrying value Price per share Amount
Digital Ct Investment Ltd.
Number of shares
Top Fortune Direct Investment Ltd.
Securities type and name Financial assets accounted for under the cost method:
B)Grand Asia Asset Management Ltd. a.Securities held as of December 31, 2010：
169
Grand Asia Asset Management Ltd. Income Statement For the year ended December 31, 2010
Total Assets
Assets Current Assets Cash and bank deposits Notes receivable Other receivables Total current assets
d.Balance sheet：
$
$
531,238 71
29 )
8)
223,739 ) (
21 )
62,561 ) (
100
754,977 161,178 ) (
15
85
%
115,928
639,049
Amount
In U.S. Dollars
$
$
528,480
478,626 49,442 412 528,480
Amount
%
100
91 9 100
Stockholders' Equity Common stock Retained earnings Total shockholders' equity Total Liabilities and Stockholders' Equity
Liabilities and Stockholders' Equity Current Liabilities Other liabilities Total liabilities
Yuanta Securities Holding (BVI) Limited Balance Sheet December 31 , 2010
c.Revenue from assets management business, service contents and litigation：None.
b.Derivative financial instrument transactions and the source of capital：None.
a.Securities held as of December 31, 2010：None.
(3)Yuanta Securities Holding (BVI) Limited
Net income
(
Total
( (
Non-operating expense
Operating expenses
Expenditures
Total
Non-operating income and gains
Operating revenues
Accounts Revenues
e. Income Statement
$
$
10,000 469,038 479,038 528,480
2 89 91 100
9 9
In U.S. Dollars % 49,442 49,442
Amount
170
Yuanta Securities Holding (BVI) Limited Income Statement For the year ended December 31, 2010
( (
203,801 203,801 5) 5) 95
100 100
In U.S. Dollars %
10,293) ( 10,293) ( $ 193,508
$
Amount
10,172,873
3,756,322
59,823,208
362,965 402,875
$
$
$
$ $
1,688,964
$
6,013 18,985
677,216
$
$ $
1,092,868
$ $
$
$
$
2010 $
Underwriter
2,800 8,843
35,326,682
1,657,207
3,705,572
Dealer
( ( (
$
$ $
$ $
$
14,971,313 $ 1,462,217 16,433,530 6,090,745 $ 1,462,217 85,769) 296,726) 1,593,133) 5,577,334 96,838,854 $ 17,883,271 11,689,209 126,411,334 $ $
Total
325,935 538,981
6,575,660
3,862,270
10,256,569
Broker
$ $
$
$
$
4,957 26,679
583,932
587,550
$ $
$
$
$
2009 867,555
Underwriter
2,288 12,315
28,083,172
1,471,631
3,234,498
Dealer
( ( (
$
$ $
$ $
$
Total 14,358,622 1,419,292 15,777,914 5,921,451 1,419,292 11,689) 71,791) 1,303,374) 5,953,889 35,242,764 17,602,744 31,726,479 84,571,987
160
(2) Segment income (loss) refers to segment revenue minus segment costs and expenses. Segment costs and expenses are directly related to the creation of segment revenue. When segment costs or expenses cannot be directly attributed to a specific segment, they shall be distributed to each segment in proportion to their number of personnel.
(1) Segment revenue refers to operating and non-operating revenues from external customers.
Segment revenue － external revenue Administrative revenue Total revenue Segment income Various administrative revenue Financial expenses Other expenses Oprating expenses Income before tax Segment identifiable assets Funds and investments Administrative assets Total assets Depreciation and amortization Capital expenditure
Broker
A. Financial information by industry: The Company is primarily engaged in securities broker, underwriter and dealer. Financial information by industry for the Company for the years 2010 and 2009 is as follows:
12.SEGMENT INFORMATION
Not applicable.
(3)Disclosure of information on i ndirect investments in Mainland China
Accounts Revenues Non-operating income and gain Total Expenses Operating expenses Total Net income
e.Income Statement
171
161
In 2010 and as of the publication date of the 2010 Annual report, Yuanta and its affiliates did not encounter financial difficulty. Affiliates are defined in Article 369-1 of Yuanta Securities Law.
IV. Solvency issues faced by the company and affiliates, and any financial impact: None
D . Information on major customers: no single customer accounting for 10% or more than 10% of the Company’s operating revenue.
C . Export sales by geographic area: no export sales.
B. Financial information by geographic area: n o o v e r s e a s o p e r a t i n g s e g m e n t .
(3) Segment identifiable assets refer to tangible and intangible assets directly attributable to a segment.
172
173
174
Section Seven Financial Status, Operating Results, and Risk Management I. Financial status Unit: NT$1,000
Year
2010
2009
Current assets
97,162,786
55,064,137
42,098,649
76
Funds and long term investments
17,883,271
17,602,744
280,527
2
Fixed assets
5,425,872
5,531,244
(105,372)
-2
Other assets
5,729,644
5,826,049
(96,405)
-2
Total assets
126,411,334
84,571,987
41,839,347
49
Current liabilities
63,989,414
27,573,537
36,415,877
132
Othert liabilities
2,866,040
1,438,379
1,427,661
99
Total liabilities
66,855,454
29,011,916
37,843,538
130
Common stock
46,953,133
43,679,388
3,273,745
7
Capital reserve
1,380,724
1,354,235
26,489
2
Retained earnings
10,849,398
9,466,954
1,382,444
15
Total equity
59,555,880
55,560,071
3,995,809
7
Item
Increase (decrease)
% change
Note 1: Significant changes in assets, liabilities, and equity over the past two years (20% or more, or over NT$10 million in value), their causes, effects, and relevant countermeasures. (1) Fixed assets increased 49% over 2009, due to the transfer of a portion of the margin trading claims of Yuanta Securities Finance Co. Ltd. increasing margin loan receivables and resulting in a 76% increase in current assets. (2) Liabilities increased 130% over 2009, due to the transfer of a portion of the margin trading and securities lending claims of Yuanta Securities Finance Co. Ltd., leading to a 132% increase in current liabilities which, along with underwriting collections, resulted in other liabilities increasing 99%. Note 2: Major changes in current debts and long term debts due within one year, their causes and effects, and relevant countermeasures. (1) Current liabilities increased 132% from 2009, due to the transfer of a portion of the margin trading claims of Yuanta Securities Finance Co. Ltd., and increased margin deposits, short selling and securities lending deposits. (2) The Company has no long-term debts due within one year.
162
175
II. Operating results Unit: NT$1,000
Year
2010
2009
14,971,313
14,358,622
612,691
4
(10,473,701)
(9,740,545)
(733,156)
8
Operating profits
4,497,612
4,618,077
(120,465)
-3
Non-operating revenue
1,462,217
1,419,292
42,925
3
Non-operating expenditures
(382,495)
(83,480)
(299,015)
358
Pre-tax profit from continuing operations
5,577,334
5,953,889
(376,555)
-6
Income tax expenses
(557,395)
(1,092,696)
535,301
-49
Net profit from continuing operations
5,019,939
4,861,193
158,746
3
Item Revenues Operating expenses
Increase (decrease)
% change
Note 1: Analysis of financial ratio changes within the past two years: (1) Operating expenses increased primarily due to losses resulting from reversal of fund valuation gain and idle assets impairment. (2) Income tax decreased primarily due to a reduction in the annual income tax rate to 17%. (3) Overall, after-tax income increased in 2010. Note 2: Reasons for changes in operations (when said changes are the result of adjustments to sales prices or costs, product mix, product quantity, or product replacement): information about the financial and operational impact of and response to existing or potential changes in operational strategy, market conditions, economic environment, or other internal or external factors: None Note 3: Predicted sales volume in the coming year and supporting data, plus reasons for continued growth or decline of predicted sales volume. (1) Business cycle and economic growth indicators and political stability will cause fluctuations in the securities market. (2) Easing of restrictions on financial markets and the continued introduction of new financial products will help increase stock market capacity, and expand the market and help generate profits for securities firms.
III. Cash Flow Unit: NT$1,000
Initial cash balance
Net cash from operations in 2010
Net cash outflow
Amount of cash surplus
20,535,076
5,519,033
20,476,267
5,577,842
Corrective actions against cash deficit Investment plan
Financial plan
NA
NA
1. Analysis of changes in cash flow for 2010 (1) Operating activities cash inflow total about NT$5.5 billion: Cash inflow from operations totaled NT$5.1 billion and net cash inflow of NT$0.4 billion due to changes in assets and liabilities accounting. (2) Annual cash outflow totaled about NT$20.5 billion: Net cash outflows from investing activities was about NT$36.8 billion, while net cash income from financing activities was about NT$16.3 billion.
176
2. Liquidity analysis and countermeasures against cash insufficiency (1) Liquidity analysis for the past two years Item\Year Cash flow ratio Cash flow adequacy ratio Cash flow reinvestment ratio
2010
2009
Change (%)
Note
29
Note
122
155
-33
Note
8
Note
Analysis of changes in these ratios: Cash flow adequacy ratio: the 2010 transfer of the margin trading operations of Yuanta Securities Finance Co. Ltd. resulted in reduced cash flow, and the continued increase in capital expenditures and cash dividends. Note: Cash flow from operational activities is a net outflow. The ratio calculation has no analytical meaning and is not published.
(2) Analysis of cash flow in the upcoming year
Unit:NT$1,000
Initial cash balance
Anticipated cash flow from operations
Anticipated total cash outflow
Cash surplus
5,577,842
7,161,098
6,233,768
6,505,172
Countermeasures against cash insufficiency Investment plan Financing plan N/A
N/A
IV. Major capital expenditures 1.Utilization of major capital expenditures and capital sources : None 2. Anticipated potential returns (1)The additional output volume, value and gross profit anticipated : None (2)Other benefits (product quality, reduced pollution, reduced costs etc.) : None
V. Investment strategies
Item
Description
Yuanta Securities Asia Financial Services
Yuanta Securities Investment Trust
Yuanta Insurance Agent
Unit:NT$1,000 Baseline date:Dec. 31, 2010
Original Book value investment
Strategy
6,211,249 10,894,724 Overseas diversification
3,772,631
5,550
Main reason for profit or loss Investment showed growth and generated a profit of 190,666 in 2010.
Investment performed well and generated 339,468 in Provide securities 3,926,292 investment trust services 2010, this period, demonstrating a satisfactory profitability Provide life insurance 14,377 brokerage services
Investment showed growth and generated a profit of 7,256 in 2010.
Corrective action
Other future investment plans
-
-
-
-
-
-
177
VI. Analysis and assessment of risk-related issues 1.Impact of interest and exchange rate changes and inflation, and their future countermeasures: (1) Interest rates Based on the market situation and operational needs, the company immediately adjusts interest rate related positions and conducts hedging operations to contain the impact of interest rate fluctuations on the company’s profitability within a reasonable scope of the company’s tolerance level for financial risk; at the same time the company complies with internal operating procedures, has established a risk management system, and works in conjunction with value at risk evaluation and interest rate sensibility analysis mechanisms to effectively monitor changing risk trends regarding the positions held by the company and to contain the adverse impact of fluctuating interest rates on profits. (2) Exchange rates Given trends for financial globalization, Yuanta Securities is not only working to grow in the domestic financial markets, but is continuing to develop business overseas. Foreign direct investment and financial transactions may affect Yuanta Securities’ net worth and profitability due to exchange rate fluctuations. However, our main income sources are primarily domestic and only a small percentage of Yuanta Securities’ profits and net worth is exposed to exchange rate fluctuations. Foreign direct investment is influenced by currency fluctuations, and accumulated conversion adjustments may have a direct impact on Yuanta Securities’ net worth, but it will not affect current profitability. Therefore, for currency risk generated by overseas investments and transactions, Yuanta Securities adopts appropriate risk management and hedging strategies on a case-by-case basis according to the risk characteristics and its potential effect on Yuanta Securities’ net worth and profitability, thus ensuring that exchange rate fluctuations do not influence Yuanta Securities’ overall operations, and that control is maintained within a pre-set range of risk management goals. (3) Inflation Yuanta Securities is in the financial business. Inflation affects the prices and values of Yuanta Securities’ financial assets or liability commitments, and thus can indirectly influence Yuanta Securities’ net worth and profitability. Analysis and management of inflation movements that could affect financial asset prices have already been incorporated into the company’s operational and risk management systems.
2.Policy on high-risk, high-leverage investments, loaning of funds, endorsements and guarantees as well as derivatives transactions, major causes for profits or losses and future countermeasures: (1)The company has not carried out any high-risk, high-leverage investments during the most recent
165
178
fiscal year. (2) The company has not loaned funds to other parties or given endorsements or guarantees during the most recent fiscal year. (3) Yuanta Securities is in the financial business. Inflation affects the prices and values of Yuanta Securities’ financial assets or liability commitments, and thus can indirectly influence Yuanta Securities’ net worth and profitability. A. TSEC traded derivatives Derivative products traded on centralized markets include call (put) warrants traded on the Taiwan Stock Exchange and futures, options and futures options traded on the Taiwan Futures Exchange. In the market the company strives for stability and emphasizes market risk management. Among these derivatives the company adopts dynamic hedge measures for call (put) warrants to evade market risk related to the issuance of warrants; futures, index options, and interest rate futures operations are conducted within a strict operational system and risk management mechanism. In times of abnormal or dramatic market movements, exchange-traded derivative products might incur losses. But the adverse effects of such abnormal volatility have already been factored into the risk assessment procedures for derivatives trading, while the necessary risk management mechanisms and controls have been set up. B. OTC traded derivatives On the OTC market, Yuanta Securities engages in the trading of derivatives including convertible corporate bond asset swaps, interest rate derivatives, bond derivatives, equity derivatives and credit derivatives. Yuanta Securities primarily plays the role of market broker, generating profits mainly from risk-neutral interest spreads or premiums. In addition, Yuanta Securities mitigates interest rate risks through interest rate derivatives and bond derivatives; currency fluctuation risks through currency exchange rate derivatives; stock market volatility risks through equity derivatives; and credit spread or default risks through credit derivatives. Through adequate hedging in OTC derivatives, Yuanta Securities can adjust and control its overall risk exposure within an optimal range, thus ensuring operational and revenue stability. 3.Future R&D plans and expected R&D expenditure: None. 4.Impact on the company’s financial standing due to changes in major domestic or foreign policies and laws, and countermeasures: As the ECFA agreement comes into force, cross-strait warming will coincide with the relaxation on all types of financial restrictions, and securities firms expect development opportunities in China to grow. Yuanta Securities is responding to these new cross-Strait developments by adjusting its overseas coverage to focus on the Greater China region. In the future, as the competent authorities liberalize cross-Strait financial policy, Yuanta Securities is well positioned in terms of capital and
179
expertise to execute its long-planned Greater China development blueprint. 5.Impact of technological or industrial changes on the company’s financial standing, and countermeasures: None 6.Impact of changes in corporate image on the company’s crisis management, and coun ter me asures: Yuanta Securities’ has established the posts of spokesperson and deputy spokesperson, who are in charge of overall corporate image creation and cultivation, along with work relating to crisis management while always maintaining good interaction with the media. In addition, Yuanta Securities has established Guidelines on Crisis Management Policy and Procedures to plan ahead and form standard operating procedures for all possible corporate crises. Should Yuanta Securities encounter major events that are of material importance or could affect Yuanta Securities’ good image, information can be immediately disclosed at the Market Observation Post System and explained in detail in press releases to all major media outlets to dispel concerns among investors and the general public. Yuanta Securities has always maintained a business philosophy emphasizing stability and pragmatism, and makes utmost efforts to provide investors with the best service quality. Yuanta Securities continues to be a market leader in all segments of its operations. Our balanced capital structure not only enhances overall operational synergies, but also effective reduces volatility within the operational environment, thus maintaining our enduring good image as the leading securities firm in Taiwan. Taiwan Ratings Corp and Fitch Ratings respectively assigned Yuanta Securities twAA- and AA-(twn) credit ratings, thus affirming Yuanta Securities’ excellent creditworthiness and risk management capabilities. Yuanta Securities has always been at the forefront of international standards, pursuing sound management and information transparency. In addition to the Audit Committee, in October 2010 the Company established a Compensation Committee to assist the board of directors in ensuring the fair management of the pay structure and system, thus making Yuanta Securities one of the few companies in the financial industry to implement a director and supervisor system and to actualize the spirit of corporate governance in Taiwan. Looking toward the future, Yuanta Securities will continue to recruit top people and strengthen the quality of our professional talent. By integrating our channels with the resources of Yuanta Financial Holdings, we will provide our clients with the most practical and comprehensive service and achieve optimal effectiveness. 7. Expected benefits and possible risks of mergers and acquisitions, and countermeasures: In terms of market share, Yuanta Securities is Taiwan’s largest securities firm, and its business locations cover a wide geographical range. Should there be opportunities to merge core brokerage operations, the company could increase the density of its distribution channel network and expand its marketing network, realizing economies of scale and consolidating the competitive advantages of the company’s different operations. 8. Expected benefits and possible risks of business expansion, and countermeasures: 167
180
The company has expanded its retail network to 141 branches island wide, making Yuanta Securities the leading securities brokerage in terms of number of outlets as well as market share. In the future we will integrate the securities business within the financial holding company and continue to streamline geographically redundant locations, personnel, resources and equipment to further raise the market share of each single location. The company has sound capital and ample funding, and is prepared to take advantage of opportunities to expand operational scope through mergers and acquisitions. Experiences with mergers in recent years have proven that their advantages far outweigh the risks, and that careful planning and assessment can maximize shareholder benefits. 9.Risk from centralized purchasing or selling, and countermeasures: None. The company is a securities services firm. Our operations and the services that we provide do not face risk from centralized purchasing or selling. 10.Impact and risk associated with large share transfers or changes in shareholdings, and countermeasures: In the most recent fiscal year and up to the date of publication of this Annual Report, there have been no large transfers or changes in shareholdings by directors, supervisors or major shareholders holding more than 10%, no changes in management rights or other issues that could affect shareholder equity. 11.Impact and risk associated with changes in management rights, and countermeasures: Equity concentration in the hands of the company’s management team is higher than for industry peers so that risk associated with a change in management rights is extremely low. After the financial holding company to which Yuanta Securities belongs changed its name to Yuanta Financial Holdings, it made utmost efforts to integrate the resources of all group subsidiaries to provide customers with diversified services. For cross-departmental communication Yuanta Securities has established a General Manager Office with a precise division of labor and the sole duty to facilitate communication between the various departments and subsidiaries. The board of directors has formulated a detailed Delineation of Rights and Obligations Table and a Detailed Table on the Decentralization of Responsibility to bring the spirit of the rule of law into corporate culture, and ensure the consolidation of management rights and achieve corporate sustainability. 12.Litigation and non-litigation matters: (1) Currently pending material litigation, non-litigation matters, or administrative lawsuits in which the company is involved:
Unit:NT$1,000 Case
Monetary amount
Date of start of proceedings
Main parties to the lawsuit
168
Status of the proceedings up to the date of publication of this annual report
Remarks
12.Litigation and non-litigation matters:
181
(1) Currently pending material litigation, non-litigation matters, or administrative lawsuits in which the company is involved:
Unit:NT$1,000 Monetary Monetary amount
Case
Civil lawsuit against a salesclerk of now defunct Tingkong Securities Financial impact on charges of seizing, stealing and 52,179 selling shares of others
Administrative suit in connection with cost recognized regarding call (put) warrants by now defunct Core Pacific Securities for 1999 profitseeking enterprise income tax Administrative suit in connection with cost recognized regarding call (put) warrants by now defunct Yuanta Securities for 1999 profitseeking enterprise income tax Administrative suit in connection with cost recognized regarding call (put) warrants by now defunct Yuanta Core Pacific Securities for 2000 profit-seeking enterprise income tax Administrative suit in connection with cost recognized regarding call (put) warrants by now defunct Yuanta Core Pacific Securities for 2001 profit-seeking enterprise income tax Administrative suit in connection with cost recognized regarding call (put) warrants by now defunct Yuanta Core Pacific Securities for 2002 profit-seeking enterprise income tax Administrative suit in connection with cost recognized regarding call (put) warrants by now defunct Yuanta Core Pacific Securities for 2003 profit-seeking enterprise income tax Administrative suit in connection with cost recognized regarding call (put) warrants by now defunct Yuanta Core Pacific Securities for 2004 profit-seeking enterprise income tax Administrative suit in connection with cost recognized regarding call (put) warrants for 2002 profitseeking enterprise income tax
Date Date of of start start of of proceedings
September 1997
Financial impact 88,376
March 2005
Financial impact 147,056
May 2005
Main Main parties parties to to the the lawsuit
Status Status of of the the proceedings proceedings up up to to the the date date of publication of this annual report
On December 23, 2009, Taiwan's Supreme Court ruled to overrule the high court's second verdict, and sent the The now defunct bask to the high court for retrial, Tingkong 168 Securities, Tsai case resulting in clarification and a reduction Hsiu-chin and plaintiff of the plaintiff's verdict by Chang Yi-hui NT$3,864,115 on appeal. The firm has engaged the firm of Tsar & Tsai to handle the follow up litigation. The now defunct Yuanta Core Pacific Securities After an retrial was rejected in April. and the Taipei National 2009 the company asked for a Tax Administration, constitutional interpretation. Ministry of Finance The now defunct Yuanta The Supreme Administrative Court in Securities and the Taipei Jan. 2010 ruled against the company, in National Tax May 2010 the company asked for a Administration, Ministry constitutional interpretation. of Finance
April 2005
The now defunct Yuanta Core Pacific Securities and the Taipei National Tax Administration, Ministry of Finance
The Supreme Administrative Court in Nov. 2007 ruled against the company; in Jan. 2008 the company asked for a constitutional interpretation.
July 2007
The now defunct Yuanta Core Pacific Securities and the Taipei National Tax Administration, Ministry of Finance
The Supreme Administrative Court in May. 2010 ruled against the company; in July 2010 the company asked for a constitutional interpretation.
July 2007
The now defunct Yuanta Core Pacific Securities and the Taipei National Tax Administration, Ministry of Finance
The Supreme Administrative Court in Sept. 2008 ruled against the company; in August 2009 the company asked for a constitutional interpretation.
Jan. 2010
The now defunct Yuanta Core Pacific Securities The Supreme Administrative Court in and the Taipei National Jan. 2011 ruled against the company. Tax Administration, Ministry of Finance
Financial impact 2,746,326
Nov. 2009
The now defunct Yuanta Core Pacific Securities and the Taipei National Tax Administration, Ministry of Finance
The Administrative Division of the Taipei High Court in March 2010 ruled against the company; the company has filed an appeal.
Financial impact 59,272
Oct. 2009
The company and the Taipei National Tax Administration, Ministry of Finance
The Administrative Division of the Taipei High Court in May 2010 ruled against the company; the company has filed an appeal.
Financial impact 631,846
Financial impact 1,093,882
Financial impact 335,723
Financial impact 890,388
Remarks
Since the company has already provisioned for the amounts listed on the left, the outcome of the rulings will not cause material losses to the company or affect shareholder interest.
(2) Li Mei Wu, current Senior Vice President of the Fixed Income Department, and Hong Chan Tzeng, Senior Assistant Vice President of the Fixed Income Department, have been charged by prosecutors with violations of the Securities Trading Law in arranging the debt structuring of Yuanta Investment Trust Co. Ltd (Yuanta Trust) during their tenures at Yuanta Core Pacific Securities. The case is currently before Taiwan’s High Court, and has not had significant impact on Yuanta Securities’ operations or shareholder interests.
169
182
13Other significant risk events and solution: Value at risk (VaR) of positions held by the company in 2010 (99%, one day, unit: NT$1, 000): Risk Type
2010 Year end value
VaR average
Minimum VaR
Maximum VaR
Interest risk
18,572
17,510
10,880
37,383
Equity risk
137,628
125,107
58,940
176,252
Subtotal
156,200
142,617
－
－
Minus: asset diversification effects
(10,669)
(12,273)
－
－
Total VaR
145,531
130,344
66,625
185,758
VII. Other significant events: None
170
183
184
Section Eight Special Notes I. Information on the Company's affiliates 1. Organizational chart of the Company's affiliates Date: Dec. 31, 2010
Yuanta Insurance Agent Co. Ltd.
Paid-in capital: NT$5,000,000 Shareholding: 100%
Yuanta Securities Investment Trust Co., Ltd. 復華控股(維京群島) 有限 公司
Paid-in capital: NT$1,600,000,000 Shareholding: 80.60%
Yuanta Securities Asia Financial Services Ltd.
Paid-in capital: US$174,063,034 Shareholding: 100%
Co., Ltd.
Yuanta Securities Holdings (BVI) Co., Ltd.
Paid-in capital: US$10,000 Shareholding: 100%
Yuanta Securities (HK) Co., Ltd.
Paid-in capital: HK$1,098,132,525 Shareholding: 100%
Yuanta Securities Co., Ltd.
Yuanta Securities (HK) Co., Ltd. Shanghai Office
Grand Asia Asset Management
Paid-in capital: US$2,000,000 Shareholding: 50%
Grand Asia Capital Services Pte. (Singapore)
Paid-in capital: SG$500,000 Shareholding: 100%
Yuanta Securities Co., Ltd. Beijing Office
Note: Grand Asia Asset Management Co., Ltd. has a 100% stake in Grand Asia Capital Services Pte. Co., Ltd.
(Singapore). Yuanta Securities has a 50% stake in Tinghwa Financial Management Consulting Co. Ltd. (Singapore).
171
185
2. Names, founding dates, locations, paid-in capital and major business operations of affiliates Unit：$1000 Date: March 31, 2010
Company name
Date founded
Address
Yuanta Securities Asia Financial Services Ltd.
1996.06.11
Clarendon House 2 Church Street Hamilton HM11, Burmuda
Yuanta Securities Investment Trust Co., Ltd.
1992.08.14
6F, No.225, Sec. 3, Nanking E. Rd., Taipei
Yuanta Insurance Agent Co., Ltd.
2001.07.05
9F., No.66, Sec. 1, Dunhua S. Rd., Taipei
Yuanta Securities (HK) Co., Ltd.
1992.10.22
23F., Li Po Chun Chambers, 189 Des Voeux Road Central, HK
Yuanta Securities Holdings (B.V.I.) Co., Ltd
2002.11.06
Grand Asia Asset Management Co., Ltd.
1997.04.04
Grand Asia Capital Services Pte. Co., Ltd. (Singapore) Yuanta Securities (HK) Co., Ltd. Shanghai Office Yuanta Securities Co., Ltd. Beijing Office
2004.06.04 1998.01.27 2003.11.26
Tropic Isle Building, P.O.Box 438, Road Town, Tortola, British Virgin Islands P.O. Box957, Offshore Incorporations Centre, Road Town, Tortols, British Virgin Islands 50 Raffles Place, #15-05/06 Singapore Land Ttower, Singapore 048623 1233 Lu-chia-tsui-huan Rd Huiya Bldg. Room 705-708, Putung New District, Shanghai. 7 Jianguo Mennei Ave. Guanghua Chang'an Bldg. 2, 17F, Dongcheng District, Beijing 100005
172
Paid-in capital
US$174,063 NT$1,600,000 NT$5,000
Major business operations Investment holdings Securities investment trust Insurance brokerage
Consigned HK$1,098,133 trading, proprietary trading, and Investment US$10 underwriting holdings consultinng US$2,000
Investment consulting
Financial and SG$500 strategic consulting and investment China market None development data collection None
China market data collection
186
3. Directors, supervisors, and presidents of affiliates Date: Dec. 31, 2010
Company name
Title
Name of representative
Shares held Shares (1,000) Shareholding
Yuanta Financial Holdings Co., Ltd. Representative:
Yuanta Securities Asia Financial Services Ltd.
Chairman
Cheng-hsin Wang
Vice Chairman
Ping-han Tsai
Director
Kang-sheng Kao
Director
Hung-chi (Alex) Lee
Director
Ting-chien (Tony) Shen
Director
Tsai-yu Chang
Director
Hsiu-wei Chen
Director
Chao-tzu Yang
Chairman
Wei Shin Ma
Director
Cun-chen Tu
Director
Shu-fen Chou
Yuanta Securities Investment Director Trust Co., Ltd. Supervisor
Yueh-ching Tsao
174,063
0
0% (Note 1)
0
0%
Cheng-he Chen
Supervisor
Chun-chieh Huang
Prasident
Chun-chen Tu
Director
Nian-tse Ho
100%
Yuanta Securities Co., Ltd. Representative:
Yuanta International Insurance Brokers Co., Ltd.
Chairman
Wen-liang Li
Director
Wen-ming Hung
Director
Yu-shun Yang
Supervisor
Yueh-jung Liao
Prasident
Wen-liang Li
500
100%
1,098,133
100%
10
100%
1,000
50%
Yuanta Securities Asia Financial Services Ltd. Representative: Chairman
Kang-sheng Kao
President
Hung-chi (Alex) Lee
Director
Ping-han Tsai
Director
Ya-yen Wen
Yuanta Securities (HK) Co., Director Ltd. Director
Han-hung Tan
Director
Jun-hui Huang
Director
Chao-tzu Yang
Director
Ming-Shan Li
Director
Ming-pei Pan
Prasident
Ming-pei Pan
Director
Tsai-yu Chang
Director
Yueh-jung Liao
Yuanta Securities Holdings (BVI) Co., Ltd. Grand Asia Asset Management Co., Ltd.
Tsai-yu Chang
Chairman
Ming-cheng (Frank) Kuo
President
Hsiao-tsui Yu
Director
Yi-hua Lu
Director
Knag-pao Ho
173
187
Shares held
Company name
Title
Name of representative
Chairman
Ming-cheng (Frank) Kuo
Grand Asia Capital Services Pte. Co., Ltd. (Singapore)
President
Hsiao-tsui Yu
Director
Yi-hua Lu
Director
Knag-pao Ho
Director
Phua Kay Choon James
Shares (1,000) Shareholding
50% (Note 2)
250
Note: 1. Yuanta Securities Co., Ltd. holds 128,955 thousand shares of Yuanta Securities Investment Trust Co., Ltd., accounting for a stake of 80.60%.
2. Grand Asia Asset Management Co., Ltd. has a 100% stake in Grand Asia Capital Services Pte. Co., Ltd. (Singapore). Yuanta Securities has a 50% stake in Tinghwa Financial Management Consulting Co. Ltd. (Singapore).
4. Financial status of affiliates Unit: NT$1,000 Date: Dec. 31, 2010
Company name
Capital
Total assets
Total liabilities
Net equity
Operating Operating revenue profit
Net income EPS (NT$) this period (after taxes) (after taxes)
Yuanta Securities Asia Financial Services
5,070,456 10,895,852
1,128 10,894,724
146,244
138,590
190,666
1.10
Yuanta Securities Investment Trust Co., Ltd.
1,600,000 3,058,487
265,304 2,793,183
1,144,339
544,400
415,201
3.23
14,377
19,469
8,682
7,256
14.51
4,115,801 4,456,526 1,797,666 2,658,860
6,062,405
(435,371)
(420,636)
(0.38)
Yuanta Insurance Agent Co., Ltd. Yuanta Securities (HK) Co., Ltd.
5,000
Yuanta Financial Holdings (BVI) Co., Ltd.
15,571
1,194
291
15,395
1,441
13,954
-
(324)
6,099
609.90
Grand Asia Asset Management Co., Ltd.
58,260
77,853
1,783
76,070
20,142
15,062
16,744
8.37
Grand Asia Capital Services Pte. Co., Ltd. (Singapore)
9,613
9,855
558
9,297
13,710
653
1,490
2.98
Note: Exchange rates as of Dec. 31, 2010: US$/NT$= average 31.518
ending 29.13
HK$/NT$= average 4.062
ending 3.748
II. Private placement of securities: None In 2010 and as of publication of this annual report, the Company has no privately placed securities.
174
188
III. Shares of the Company held or disposed of by subsidiaries: None In 2010 and as of publication of this annual report, the Company's subsidiaries did not hold or dispose of the Company's stock.
IV. Other supplementary information or explanations: None V. Significant issues during the past year and as of publication of this annual report which might affect shareholders' equity or price of shares pursuant to Item 2, Paragraph 2, Article 36 of the Securities and Exchange Law: None
175