PART II 129 Audit Committee.  On April 1, 2003, the SEC adopted final rules relating to the audit committee  requirements. NYSE-listed foreign private issuers were required to comply with the related NYSE listing  requirements by July 31, 2005. Our audit committee was established in September 2004, and is comprised of our  three independent directors. According to the NYSE listing standards, the board must review status of any audit  member that serves on more than three audit committees. There is no such requirement under the R.O.C. law.  R.O.C. law requires all independent directors of a public company to be members of the audit committee if the  company has established such a committee. R.O.C. law allows a person to serve as an independent director on up  to four R.O.C. public companies.  In addition, under the R.O.C. requirements, our board of directors is not required to make a formal  determination of a director’s independence. Nevertheless, we believe that our independent directors are free from  any business or other relationships that would impair the exercise of their independent judgment. Furthermore,  pursuant to the NYSE listing standards, non-executive directors must meet on a regular basis without the  management directors present. All of our directors attend our board of directors’ meetings; however, no separate  meeting is held among non-executive directors.  Director Independence.  Under the NYSE listing standards applicable to U.S. companies, independent  directors must comprise a majority of the board of directors. The R.O.C. Securities Exchange Act requires  the independent directors of a public company to comprise of no less than one-fifth of the board of directors.  We currently have three independent directors on our thirteen-member board of directors. Our standards for  determining director independence, which comply with requirements under the R.O.C. Company Act and R.O.C.  Securities Exchange Act for director independence, may differ from the standards imposed by the NYSE.  The Legal Framework.  In general, corporate governance principles for Taiwanese companies are set forth  in the Company Act of the Republic of China, or R.O.C. Company Act, the R.O.C. Securities Exchange Act,  regulations promulgated by the Securities and Futures Bureau of the Financial Supervisory Commission and, to  the extent they are listed on the Taiwan Stock Exchange, listing rules of the Taiwan Stock Exchange. Corporate  governance principles under provisions of R.O.C. law may differ in significant ways to corporate governance  standards for U.S. companies listed on the NYSE. Committed to high standards of corporate governance, we  have generally brought our corporate governance in line with U.S. regulations, including the formation of an  audit committee. However, we have not adopted certain recommended NYSE corporate governance standards  where such standards are not in conformity with R.O.C. laws or regulations or generally prevailing business  practices in Taiwan. We believe the following to be the significant differences between our corporate governance  practices and NYSE corporate governance rules applicable to U.S. companies listed on the NYSE.  Under Section 303A of the NYSE Listed Company Manual, NYSE-listed non-U.S. companies may, in  general, follow their home country corporate governance practices in lieu of most of the new NYSE corporate  governance requirements. However, all NYSE-listed foreign private issuers must comply with NYSE Sections  303A.06, 303A.11, 303A.12(b) and 303A.12(c).  As a R.O.C. company listed on the New York Stock Exchange, or NYSE, we are subject to the U.S.  corporate governance rules to the extent that these rules are applicable to foreign private issuers. The following  summary details the significant differences between our corporate governance practices and corporate governance  standards for U.S. companies (i.e. non-foreign private issuers) under the NYSE listing standards.  Not applicable.  Not applicable.  None.  ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES  ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED  PURCHASERS  ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT  ITEM 16G. CORPORATE GOVERNANCE 