Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants Article 3

For the purposes of these Regulations, the terms "parent" and "subsidiary" shall have the meanings determined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.For the purposes of these Regulations, the term "major subsidiary" means any subsidiary with respect to which any of the following circumstances has applied to the financial statements for each of the most recent two fiscal years, or any subsidiary that the CPA deems to have a significant effect on the audited entity's financial statements:1. Where that subsidiary serves as a source of 15 percent or more of the consolidated operating revenue of the audited entity.2. Where that subsidiary serves as a source of 25 percent or more of the consolidated total purchase amount of the audited entity.3. Where that subsidiary serves as a source of 25 percent or more of consolidated total output value of the audited entity.4. Where the audited entity, if its stock is already listed on a stock exchange (hereinafter referred to as a "listed company") has original investments in that subsidiary in an accumulated amount of 40 percent or more of the paid-in capital of the audited entity and also NT$300 million or more, or, if a non-listed company, has original investments in that subsidiary in an accumulated amount of 40 percent or more of the paid-in capital of the audited entity and also NT$100 million or more. However, if the stock of a company has no par value or a par value other than NT$10, the aforesaid calculation of 40 percent of paid-in capital shall be replaced by 20 percent of the equity attributable to owners of the parent.5. Where the audited entity, if a listed company, has loaned funds to and/or provided endorsements/guarantees in favor of that subsidiary in a total amount of 40 percent or more of the audited entity's equity attributable to owners of the parent and also NT$300 million or more, or, if a non-listed company, has loaned of funds to and/or provided endorsements/guarantees in favor of that subsidiary in a total amount of 40 percent or more of the audited entity's equity attributable to owners of the parent and also NT$100 million or more.6. If the audited entity is a listed company, where the comprehensive income of that subsidiary alone accounts for 50 percent or more of the total amount of the comprehensive income on the consolidated financial statements and also NT$300 million or more, or if a non-listed company, where the comprehensive income of that subsidiary alone accounts for 50 percent or more of the total amount of the comprehensive income on the consolidated financial statements and also NT$100 million or more.