PART I An ADS holder or the depositary, without obtaining further approvals from the Central Bank of the  Republic of China (Taiwan) or any other governmental authority or agency of the Republic of China, may  convert NT dollars into other currencies, including U.S. dollars, in respect of:  •  the proceeds of the sale of common shares represented by ADSs or received as share dividends with  respect to the common shares and deposited into the depositary receipt facility; and  •  any cash dividends or distributions received from the common shares.  In addition, the depositary may also convert into NT dollars incoming payments for purchases of common  shares for deposit in the depositary receipt facility against the creation of additional ADSs. If you withdraw the  common shares underlying your ADSs and become a holder of our common shares, you may convert into NT  dollars subscription payment for rights offerings. The depositary may be required to obtain foreign exchange  payment approval from the Central Bank of the Republic of China (Taiwan) on a payment-by-payment basis  for conversion from NT dollars into foreign currencies of the proceeds from the sale of subscription rights of  new common shares. Although it is expected that the Central Bank of the Republic of China (Taiwan) will grant  approval as a routine matter, required approvals may not be obtained in a timely manner, or at all.  Exchange Controls  Taiwan’s Foreign Exchange Control Statute and regulations provide that all foreign exchange transactions  must be executed by banks designated to handle foreign exchange transactions by the Financial Supervisory  Commission and by the Central Bank of the Republic of China (Taiwan). Current regulations favor trade- related foreign exchange transactions. Consequently, foreign currency earned from exports of merchandise and  services may now be retained and used freely by exporters. All foreign currency needed for the importation of  merchandise and services may be purchased freely from the designated foreign exchange banks.  Aside from trade-related foreign exchange transactions, Taiwan companies and residents may remit to and  from Taiwan foreign currencies of up to US$50 million (or its equivalent) and US$5 million, (or its equivalent),  respectively, in each calendar year. These limits apply to remittances involving a conversion between New  Taiwan dollars and U.S. dollars or other foreign currencies. A requirement is also imposed on all private  enterprises to register all medium and long-term foreign debt with the Central Bank of the Republic of China  (Taiwan).  In addition, a foreign person without an alien resident card or an unrecognized foreign entity may remit to  and from Taiwan foreign currencies of up to US$100,000 per remittance if required documentation is provided  to Taiwan authorities. This limit applies only to remittances involving a conversion between New Taiwan dollars  and U.S. dollars or other foreign currencies.  E. Taxation  Republic of China Taxation  The discussion below describes the principal Republic of China tax consequences of the ownership and  disposition of ADSs representing common shares and of common shares. It applies to you only if you are:  • an individual who is not a citizen of the Republic of China, who owns ADSs or common shares and  who is not physically present in Taiwan for 183 days or more during any calendar year; or  • a corporation or a non-corporate body that is organized under the laws of a jurisdiction other than the  Republic of China for profit-making purposes and has no fixed place of business or other permanent  establishment in Taiwan.  You should also consult your tax advisors concerning the tax consequences of owning ADSs and common  shares in the Republic of China and any other relevant taxing jurisdiction to which they are subject.  112