Edgar Filing: TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD

Form 6-K

1934 Act Registration No. 1-14700

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of September 2011

Taiwan Semiconductor Manufacturing Company Ltd.

(Translation of Registrant’s Name Into English)

No. 8, Li-Hsin Rd. 6,

Hsinchu Science Park,

Taiwan

(Address of Principal Executive Offices)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F x Form 40-F ¨

(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes ¨ No x

(If “Yes” is marked, indicated below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82: .)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Taiwan Semiconductor Manufacturing Company Ltd.

Date: September 2, 2011	By	/s/ Lora Ho
		Lora Ho
		Senior Vice President & Chief Financial Officer

Taiwan Semiconductor Manufacturing Company Ltd. (the “Company”; “TSMC” (NYSE: TSM)) had been invited earlier in 2011 to participate as one of few companies listed on the Taiwan Stock Exchange in a case study project on using International Financial Reporting Standards (“IFRS”) in compiling listed company financial statements in Taiwan (“ROC”). The project is being coordinated by Taiwan’s official governmental agency in-charge of securities affairs, the ROC Financial Supervisory Commission, which is part of Taiwan’s executive branch or the Executive Yuan, to help Taiwanese listed companies better understand and apply the new IFRS accounting rules to be implemented in Taiwan in 2013.

In anticipation of the adoption of IFRS in the ROC in 2013, the Taiwan government project team has prepared a case-by-case analysis on each of the selected companies to illustrate the approach and effect of the adoption of IFRS on ROC GAAP financial statements. TSMC’s management has prepared an unaudited, pro forma presentation of its financial statements for the year ended and as of December 31, 2010, as if IFRS had been adopted by TSMC as of January 1, 2010 to assist in the case study and this presentation has been published today on the Taiwan Stock Exchange website at http://www.twse.com.tw/ch/listed/IFRS/planDomestic.php.

TSMC’s participation in this Taiwan government project is voluntary and that there is no legal requirement compelling TSMC to provide the unaudited, pro forma presentation of its financial statements at this point. The purpose of this case study 6-K filing is not for disclosure of material TSMC financial information, but is being furnished at this time as such information is being made public in the ROC. Investors who are seeking material TSMC financial information should instead be referred to other filings made by TSMC with the U.S. Securities Exchange Commission (such as its Annual Report on Form 20-F) or the Taiwan Financial Supervisory Commission.

An English summary version of the pro forma presentation of its financial statements is filed herewith. It is unaudited and in summary form, and is not necessarily indicative of the results of operations or related effects on our financial position that would have been obtained had we adopted IFRS at the beginning of 2010. Investors should not rely on the information filed herewith for any purpose.

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

IFRS PRO FORMA CONSOLIDATED BALANCE SHEET (unaudited)

AT DECEMBER 31, 2010 AND JANUARY 1, 2010

(In Thousands of New Taiwan Dollars, Except Par Value)


	December 31, 2010				January 1, 2010					December 31, 2010						January 1, 2010
	Amount		%		Amount		%			Amount			%			Amount			%

ASSETS									LIABILITIES AND EQUITY
CURRENT ASSETS									CURRENT LIABILITIES
Cash and cash equivalents	$	147,886,955		20	$	171,276,341		28	Short-term borrowings	$	31,213,944			4		$	—			—
Financial assets measured at fair value through profit or loss		28,890,614		4		14,576,027		3	Financial liabilities measured at fair value through profit or loss		19,002			—			25			—
Financial assets measured at amortized cost		4,796,589		1		9,944,843		2	Hedging derivative financial liabilities		814			—			—			—
Trade receivables from related parties		2,722		—		12,524		—	Trade payables		12,104,173			2			10,905,884			2
Notes and trade receivables		50,525,856		7		44,094,317		7	Payables to related parties		867,085			—			783,007			—
Other receivables from related parties		124,586		—		121,292		—	Current tax liabilities		8,564,303			1			12,388,257			2
Other receivables		1,021,552		—		1,849,987		—	Salary and bonus payables		6,424,064			1			9,317,035			2
Inventories		28,405,984		4		20,913,751		4	Accrued profit sharing to employees and bonus to directors and supervisors		11,096,147			2			6,818,343			1
Other current assets		2,037,647		—		1,368,838		—	Payables to contractors and equipment suppliers		43,259,857			6			28,924,265			5

									Accrued expenses and other current liabilities		10,779,923			1			12,635,182			2
Total current assets		263,692,505		36		264,157,920		44	Provisions		7,546,264			1			8,724,481			1

									Current portion of long-term borrowings		241,407			—			949,298			—

NON-CURRENT ASSETS
Financial assets measured at fair value through profit or loss		5,459,132		1		3,899,137		1	Total current liabilities		132,116,983			18			91,445,777			15

Financial assets measured at amortized cost		9,502,887		1		16,553,242		3
Investments accounted for using the equity method		26,292,385		4		18,581,150		3	NON-CURRENT LIABILITIES
Property, plant and equipment		388,488,412		53		273,724,914		45	Bonds payable		4,500,000			1			4,500,000			1
Intangible assets		11,731,982		2		12,389,872		2	Long-term borrowings		301,561			—			578,560			—
Deferred tax assets		13,154,703		2		12,358,612		2	Other long-term payables		6,554,208			1			5,602,420			1
Refundable deposits		8,677,970		1		2,733,143		—	Obligations under finance leases		694,986			—			707,499			—
Other non-current assets		1,372,911		—		210,737		—	Retirement benefit obligations		6,536,340			1			4,058,190			1

									Guarantee deposits		789,098			—			1,006,023			—
Total non-current assets		464,680,382		64		340,450,807		56	Others		381,182			—			322,850			—


									Total non-current liabilities		19,757,375			3			16,775,542			3


									Total liabilities		151,874,358			21			108,221,319			18


									EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT
									Share capital
									Common stock - NT$10 par value		259,100,787			35			259,027,066			43


									Capital surplus		55,701,695			8			55,486,010			9


									Retained earnings
									Appropriated as legal capital reserve		86,239,494			12			77,317,710			12
									Appropriated as special capital reserve		1,313,047			—			—			—
									Unappropriated earnings		175,630,328			24			101,681,795			17


									Total retained earnings		263,182,869			36			178,999,505			29


									Others		(6,045,608	)		(1	)		(1,072,381	)		—


									Equity attributable to owners of the Parent		571,939,743			78			492,440,200			81

									NON-CONTROLLING INTERESTS		4,558,786			1			3,947,208			1


									Total equity		576,498,529			79			496,387,408			82


TOTAL	$	728,372,887		100	$	604,608,727		100	TOTAL	$	728,372,887			100		$	604,608,727			100

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

IFRS PRO FORMA CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)

FOR THE YEAR ENDED DECEMBER 31, 2010

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)


	Amount			%

REVENUE	$	419,988,414			100

COST OF SALES		212,484,320			51


GROSS PROFIT		207,504,094			49


OPERATING EXPENSES
Research and development		29,706,662			7
Administration		12,794,562			3
Marketing		5,367,597			1


Total operating expenses		47,868,821			11


OTHER OPERATING GAINS AND LOSSES		(689,606	)		—


OPERATING PROFIT		158,945,667			38


NON-OPERATING INCOME AND EXPENSES
Settlement income		6,939,764			2
Share of profits of associates and joint venture accounted for using the equity method		2,252,325			1
Other income		1,717,630			—
Other gains and losses		1,005,132			—
Finance costs		(425,356	)		—
Net foreign exchange loss		(99,130	)		—


Total non-operating income and expenses		11,390,365			3


PROFIT BEFORE TAX		170,336,032			41

INCOME TAX EXPENSE		5,692,328			2


PROFIT FOR THE YEAR		164,643,704			39


OTHER COMPREHENSIVE INCOME
Exchange differences on translating foreign operations		(4,605,902	)		(1	)
Cash flow hedges		(814	)		—
Actuarial losses on defined benefit plan		(2,472,266	)		—
Share of other comprehensive income of associates and joint venture accounted for using the equity method		(359,736	)		—

(Continued)


	Amount			%

Tax effect on other comprehensive income		418,843			—

OTHER COMPREHENSIVE INCOME FOR THE YEAR (NET OF TAX)	$	(7,019,875	)		(1	)


TOTAL COMPREHENSIVE INCOME FOR THE YEAR	$	157,623,829			38


PROFIT ATTRIBUTABLE TO:
Owners of the Parent	$	163,939,741			39
Non-controlling interests		703,963			—

	$	164,643,704			39


TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the Parent	$	156,918,257			38
Non-controlling interests		705,572			—

	$	157,623,829			38


EARNINGS PER SHARE (NT$)
Basic	$	6.33

Diluted	$	6.32

(Concluded)

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

IFRS PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

FOR THE YEAR ENDED DECEMBER 31, 2010

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)


	Equity Attributable to Owners of the Parent
																		Others
	Share Capital- Common Stock							Retained Earnings										Exchange Differences on Translating Foreign Operations			Cash Flow Hedges			Investments in Equity Instruments			Equity Attributable to Owners of the Parent			Non- controlling Interests			Total Equity
	Shares (In Thousands)		Amount		Capital Surplus			Legal Capital Reserve		Special Capital Reserve		Unappropriated Earnings			Total						Cash Flow Hedges			Investments in Equity Instruments						Non- controlling Interests			Total Equity

BALANCE AT JANUARY 1, 2010		25,902,706	$	259,027,066	$	55,486,010		$	77,317,710	$	—	$	101,681,795		$	178,999,505		$	(1,766,667	)	$	255		$	694,031		$	492,440,200		$	3,947,208		$	496,387,408

Appropriations of prior year’ s earnings
Legal capital reserve		—		—		—			8,921,784		—		(8,921,784	)		—			—			—			—			—			—			—
Special capital reserve		—		—		—			—		1,313,047		(1,313,047	)		—			—			—			—			—			—			—
Cash dividends - NT$3.00 per share		—		—		—			—		—		(77,708,120	)		(77,708,120	)		—			—			—			(77,708,120	)		—			(77,708,120	)


		25,902,706		259,027,066		55,486,010			86,239,494		1,313,047		13,738,844			101,291,385			(1,766,667	)		255			694,031			414,732,080			3,947,208			418,679,288


Profit for the year		—		—		—			—		—		163,939,741			163,939,741			—			—			—			163,939,741			703,963			164,643,704

Other comprehensive income for the year, net of income tax		—		—		—			—		—		(2,048,257	)		(2,048,257	)		(4,776,496	)		(5,475	)		(191,256	)		(7,021,484	)		1,609			(7,019,875	)


Total comprehensive income for the year		—		—		—			—		—		161,891,484			161,891,484			(4,776,496	)		(5,475	)		(191,256	)		156,918,257			705,572			157,623,829


Adjustment arising from changes in percentage of investments accounted for using the equity method		—		—		(17,885	)		—		—		—			—			—			—			—			(17,885	)		4,387			(13,498	)

Issue of ordinary shares under employee share option plan		7,372		73,721		171,103			—		—		—			—			—			—			—			244,824			—			244,824

Net change in net assets of associates and joint venture accounted for using the equity method		—		—		62,467			—		—		—			—			—			—			—			62,467			31,702			94,169

Decrease in non-controlling interests		—		—		—			—		—		—			—			—			—			—			—			(130,083	)		(130,083	)


BALANCE, DECEMBER 31, 2010		25,910,078	$	259,100,787	$	55,701,695		$	86,239,494	$	1,313,047	$	175,630,328		$	263,182,869		$	(6,543,163	)	$	(5,220	)	$	502,775		$	571,939,743		$	4,558,786		$	576,498,529

Taiwan Semiconductor Manufacturing Company Limited and Subsidiaries

IFRS PRO FORMA CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

FOR THE YEAR ENDED DECEMBER 31, 2010

(In Thousands of New Taiwan Dollars)


	Amount

CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year	$	170,336,032
Adjustments for:
Net gain arising on financial assets measured at fair value through profit or loss		(815,188	)
Amortization of premium/discount of financial assets		34,142
Impairment of other receivables		48,372
Share of profits of associates and joint venture accounted for using the equity method		(2,252,325	)
Depreciation of property, plant and equipment		85,573,387
Impairment of property, plant and equipment		319
Net loss on disposal of property, plant and equipment and intangible assets		633,230
Amortization of intangible assets		2,236,716
Settlement income from receiving equity securities		(4,434,364	)
Interest income		(1,665,193	)
Dividends income		(52,437	)
Interest expense		425,356
Net foreign exchange loss		219,241
Changes in operating assets and liabilities:
Decrease (increase) in
Derivative financial instruments		198,172
Trade receivables from related parties		9,802
Notes and trade receivables		(6,431,539	)
Other receivables from related parties		(3,294	)
Other receivables		519,421
Inventories		(7,492,233	)
Other current assets		(827,520	)
Increase (decrease) in:
Trade payables		1,198,289
Payables to related parties		84,078
Salary and bonus payable		(2,892,971	)
Accrued profit sharing to employees and bonus to directors and supervisors		4,277,804
Accrued expenses and other current liabilities		215,641
Provisions		(1,178,217	)
Retirement benefit obligations		5,884
Deferred revenue		(59,150	)


Net cash generated from operations		237,911,455
Income taxes paid		(9,818,418	)


Net cash generated by operating activities		228,093,037

(Continued)


	Amount

CASH FLOWS FROM INVESTING ACTIVITIES
Interest received	$	1,886,731
Dividends received		372,439
Payments for property, plant and equipment		(186,944,203	)
Payments to acquire financial assets measured at fair value through profit or loss		(50,153,262	)
Payments to acquire financial assets measured at amortized cost		(4,101,501	)
Payments for investments accounted for using the equity method		(6,242,350	)
Proceeds from disposal of financial assets measured at fair value through profit or loss		38,058,623
Proceeds from redemption of financial assets measured at amortized cost		15,943,000
Proceeds from disposal of property, plant and equipment		115,524
Payments for intangible assets		(1,801,728	)
Increase in refundable deposits		(6,440,410	)
Proceeds from refundable deposits		59,547
Purchase of other assets		(1,063,058	)


Net cash used in investing activities		(200,310,648	)


CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings		31,213,944
Repayment of long-term borrowings		(967,034	)
Repayment of other long-term payables		(1,107,333	)
Interest paid		(392,805	)
Decrease in guarantee deposits		(232,925	)
Proceeds from donation		49,021
Proceeds from issue of ordinary shares under employee share options		244,824
Cash dividends paid		(77,708,120	)
Decrease in non-controlling interests		(130,083	)


Net cash used in financing activities		(49,030,511	)


EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES		(2,141,264	)


NET DECREASE IN CASH AND CASH EQUIVALENTS		(23,389,386	)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR		171,276,341


CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	$	147,886,955

(Concluded)

Reconciliation of ROC GAAP to IFRS Pro Forma

(In Thousands of New Taiwan Dollars)

A.	Condensed Consolidated Balance Sheet at January 1, 2010


ROC GAAP			Reconciliations			IFRS Pro Forma (unaudited)
Item	Amount		Amount			Amount		Item	Notes
Current assets
Cash and cash equivalents	$	171,276,341	$	—		$	171,276,341	Cash and cash equivalents
Financial assets		24,520,870		—			24,520,870	Financial assets	1
Accounts receivable-Trade		35,382,360		8,724,481			44,106,841	Accounts receivable-Trade	2
Inventories		20,913,751		—			20,913,751	Inventories
Other current assets		7,710,426		(4,370,309	)		3,340,117	Other current assets	3

Total current assets		259,803,748		4,354,172			264,157,920	Total current assets


Long-term investments
Investments accounted for using the equity method	$	17,871,208	$	709,942		$	18,581,150	Investments accounted for using the equity method
Financial assets		19,974,295		478,084			20,452,379	Financial assets	1

Total long-term investments		37,845,503		1,188,026			39,033,529


Property, plant and equipment		273,674,787		50,127			273,724,914	Property, plant and equipment


Intangible assets		12,389,872		—			12,389,872	Intangible assets


Other assets		10,982,310		4,320,182			15,302,492	Other assets	3


Total assets	$	594,696,220	$	9,912,507		$	604,608,727	Total assets


Current liabilities
Accounts payable	$	11,688,891	$	—		$	11,688,891	Trade payables
Income tax payable		8,800,249		3,588,008			12,388,257	Current tax liabilities	4
Payables to contractors and equipment suppliers		28,924,265		—			28,924,265	Payables to contractors and equipment suppliers
Accrued expenses and other current liabilities		28,770,585		—			28,770,585	Accrued expenses and other current liabilities
		—		8,724,481			8,724,481	Provisions	2
Current portion of long-term bank loans		949,298		—			949,298	Current portion of long-term borrowings

Total current liabilities		79,133,288		12,312,489			91,445,777	Total current liabilities


Long-term liabilities		11,388,479		—			11,388,479	Long-term liabilities


Other liabilities		5,125,905		261,158			5,387,063	Other liabilities	5


Total liabilities		95,647,672		12,573,647			108,221,319	Total liabilities


Equity attributable to shareholders equity of the parent		495,082,712		(2,642,512	)		492,440,200	Equity attributable to owners of the Parent

Minority interests		3,965,836		(18,628	)		3,947,208	Non-controlling interests

Total shareholders’ equity		499,048,548		(2,661,140	)		496,387,408	Total equity	6


Total liabilities and shareholders’ equity	$	594,696,220	$	9,912,507		$	604,608,727	Total liabilities and equity

B.	Condensed Consolidated Balance Sheet at December 31, 2010


ROC GAAP			Reconciliations			IFRS Pro Forma (unaudited)
Item	Amount		Amount			Amount		Item	Notes
Current assets
Cash and cash equivalents	$	147,886,955	$	—		$	147,886,955	Cash and cash equivalents
Financial assets		33,687,203		—			33,687,203	Financial assets	1
Accounts receivable-Trade		42,982,314		7,546,264			50,528,578	Accounts receivable-Trade	2
Inventories		28,405,984		—			28,405,984	Inventories
Other current assets		8,556,861		(5,373,076	)		3,183,785	Other current assets	3

Total current assets		261,519,317		2,173,188			263,692,505	Total current assets


Long-term investments
Investments accounted for using the equity method	$	25,815,385	$	477,000		$	26,292,385	Investments accounted for using the equity method
Financial assets		13,960,143		1,001,876			14,962,019	Financial assets	1

Total long-term investments		39,775,528		1,478,876			41,254,404


Property, plant and equipment		388,444,023		44,389			388,488,412	Property, plant and equipment


Intangible assets		11,731,982		—			11,731,982	Intangible assets


Other assets		17,458,054		5,747,530			23,205,584	Other assets	3


Total assets	$	718,928,904	$	9,443,983		$	728,372,887	Total assets


Current liabilities
Short-term loans	$	31,213,944	$	—		$	31,213,944	Short-term borrowings
Accounts payable		12,971,258		—			12,971,258	Trade payables
Income tax payable		7,184,697		1,379,606			8,564,303	Current tax liabilities	4
Payables to contractors and equipment suppliers		43,259,857		—			43,259,857	Payables to contractors and equipment suppliers
Accrued expenses and other current liabilities		28,319,950		—			28,319,950	Accrued expenses and other current liabilities
		—		7,546,264			7,546,264	Provisions	2
Current portion of long-term bank loans		241,407		—			241,407	Current portion of long-term borrowings

Total current liabilities		123,191,113		8,925,870			132,116,983	Total current liabilities


Long-term liabilities		12,050,755		—			12,050,755	Long-term liabilities


Other liabilities		4,982,631		2,723,989			7,706,620	Other liabilities	5


Total liabilities		140,224,499		11,649,859			151,874,358	Total liabilities


Equity attributable to shareholders equity of the parent		574,144,918		(2,205,175	)		571,939,743	Equity attributable to owners of the Parent


Minority interests		4,559,487		(701	)		4,558,786	Non-controlling interests

Total shareholders’ equity		578,704,405		(2,205,876	)		576,498,529	Total equity	6


Total liabilities and shareholders’ equity	$	718,928,904	$	9,443,983		$	728,372,887	Total liabilities and equity

C.	Condensed Consolidated Statement of Comprehensive Income for the Year ended December 31, 2010


ROC GAAP			Reconciliations			IFRS Pro Forma (unaudited)
Item	Amount		Amount			Amount			Item	Notes
Net sales	$	419,537,911	$	450,503		$	419,988,414		Revenue	7

Cost of sales		212,484,320		—			212,484,320		Cost of sales


Gross profit		207,053,591		450,503			207,504,094		Gross profit


Operating expenses
Research and development		29,706,662		—			29,706,662		Research and development
Administration		12,803,997		(9,435	)		12,794,562		Administration
Marketing		5,367,597		—			5,367,597		Marketing

Total operating expenses		47,878,256		(9,435	)		47,868,821


		—		(689,606	)		(689,606	)	Other operating gains and losses	8


Operating profit		159,175,335		(229,668	)		158,945,667		Operating profit


Non-operating income and expenses, net		11,095,060		295,305			11,390,365		Non-operating income and expenses, net


Profit before tax		170,270,395		65,637			170,336,032		Profit before tax

Income tax expense		7,988,465		(2,296,137	)		5,692,328		Income tax expense	9


Profit for the year	$	162,281,930	$	2,361,774			164,643,704		Profit for the year

							(4,605,902	)	Exchange differences on translating foreign operations
							(814	)	Cash flow hedges
							(2,472,266	)	Actuarial losses on defined benefit plan
							(359,736	)	Share of other comprehensive income of associates and joint venture accounted for using the equity method
							418,843		Tax effect of other comprehensive Income

							(7,019,875	)	Other comprehensive income for the year

						$	157,623,829		Total comprehensive income for the year

D.	Condensed Consolidated Statement of Cash Flows for the Year ended December 31, 2010


ROC GAAP				Reconciliations			IFRS Pro Forma (unaudited)
Item	Amount			Amount			Amount			Item	Notes

Net cash inflow (outflow) from:
Operating activities	$	229,475,766		($	1,382,729	)	$	228,093,037		Operating activities	10

Investing activities		(202,086,182	)		1,775,534			(200,310,648	)	Investing activities	10

Financing activities		(48,637,706	)		(392,805	)		(49,030,511	)	Financing activities	10

		(21,248,122	)		—			(21,248,122	)

Cash and cash equivalents at the beginning of the year		171,276,341			—			171,276,341		Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on the balance of cash held in foreign currencies		(2,141,264	)		—			(2,141,264	)	Effects of exchange rate changes on the balance of cash held in foreign currencies

Cash and cash equivalents at the end of the year	$	147,886,955		$	—		$	147,886,955		Cash and cash equivalents at the end of the year

Notes of ROC GAAP to IFRS Pro Forma Reconciliation

(In Thousands of New Taiwan Dollars)

1.	Financial assets


January 1, 2010
ROC GAAP				IFRS Pro Forma (unaudited)
Category	Amount			Category	Amount			Difference

Financial assets at fair value through profit or loss	$	186,081		Financial assets measured at fair value through profit or loss	$	18,475,164
Available-for-sale financial assets		15,747,995		Financial assets measured at amortized cost		26,498,085
Held-to-maturity financial assets		25,498,085				—
Financial assets carried at cost		3,063,004				—

	$	44,495,165			$	44,973,249		$	478,084
Current Portion		(24,520,870	)	Current Portion		(24,520,870	)		—

	$	19,974,295			$	20,452,379		$	478,084


December 31, 2010
ROC GAAP				IFRS Pro Forma (unaudited)
Category	Amount			Category	Amount			Difference

Financial assets at fair value through profit or loss	$	6,886		Financial assets measured at fair value through profit or loss	$	34,349,746
Available-for-sale financial assets		29,916,777		Financial assets measured at amortized cost		14,299,476
Held-to-maturity financial assets		13,299,476				—
Financial assets carried at cost		4,424,207				—

	$	47,647,346			$	48,649,222		$	1,001,876

Current Portion		(33,687,203	)	Current Portion		(33,687,203	)		—

	$	13,960,143			$	14,962,019		$	1,001,876

Under ROC GAAP, financial assets are classified as financial assets at fair value through profit or loss, available-for-sale financial assets, held-to-maturity financial assets, financial assets carried at cost, or loans and receivables.

Under IFRS, financial assets are classified either as financial assets measured at fair value through profit or loss, or as financial assets measured at amortized cost.

The amount difference is mainly due to certain financial assets carried at cost under ROC GAAP are required to be measured at fair value under IFRS.

2.	Accounts receivables-trade / Provisions

Under IFRS, the allowance and others is a present obligation with uncertain timing and amount that arises from past events, and is reclassified as provisions accordingly.

3.	Other current assets / Other assets

The reconciliation is mainly due to the deferred tax asset is classified as non-current asset under IFRS.

Under ROC GAAP, a deferred tax asset is classified as current or non-current in accordance with the classification of its related asset or liability. However, if a deferred income tax asset does not relate to an asset in the financial statements, it is classified as either current or non-current based on the expected length of time before it is realized or settled.

4.	Income tax payable (IFRS: Current tax liabilities)

In the ROC, a 10% tax is imposed on unappropriated earnings. For ROC GAAP purposes, the Company records the 10% tax on unappropriated earnings in the year of shareholders’ approval.

Under IFRS, the 10% tax on unappropriated earnings should be accrued during the period the earnings arise and adjusted to the extent that distributions are approved by the shareholders in the following year.

5.	Other liabilities

The reconciliation is mainly due to the accumulated actuarial gains and losses for all defined benefit plans reset to zero on the date of transition to IFRS. The actuarial gains and losses are subsequently recognized in other comprehensive income in the period in which they occur.

6.	Total shareholders’ equity

The reconciliation of shareholder’s equity between ROC GAAP and IFRS is as follows:


	Note	December 31, 2010			January 01, 2010

ROC GAAP		$	578,704,405		$	499,048,548
Adjustments for:
Recognition and measurement of financial assets	1		1,001,876			478,084
Unappropriated earnings tax on earnings	4		(1,379,606	)		(3,588,008	)
Defined benefit plans	5		(2,305,146	)		(261,158	)
Others			477,000			709,942

IFRS pro forma		$	576,498,529		$	496,387,408

7.	Net sales (IFRS: Revenue)

Under IFRS, in addition to net sales, technical service income is classified under revenue based on the nature of operating transactions.

8.	Other operating gains and losses

Under IFRS, certain non-operating gains and losses under ROC GAAP, including rental revenue, net loss on disposal of property, plant and equipment, and casualty loss, are classified as other operating gains and losses based on the nature of operating transactions.

9.	Income tax expense

In the ROC, a 10% tax is imposed on unappropriated earnings. For ROC GAAP purposes, the Company records the 10% tax on unappropriated earnings in the year of shareholders’ approval.

The reconciliation is mainly due to the accrued 10% tax on unappropriated earnings for 2010, offset by additional investment tax credits recognized in 2010 and the reversal of the accrued 10% tax on unappropriated earnings for 2009.

10.

Consolidated statement of cash flow

Under ROC GAAP, the amounts of interest received, dividends received and interest paid should be classified as cash flow from operating activities.

Under IFRS, the amounts of interest and the dividends received are classified as cash flow from investing activity according to their nature. The amount of interest paid is classified as cash flow from financing activity.