Page 3 - TSMC 2018 Annual Report

1Letter to Shareholders 3 2Company Profile 9
2 1 An Introduction to TSMC 9
2 2 2 2 Market/Business Summary 9
2 3 Organization 16
2 4 Board Members 18
2 2 5 Management Team 24
3Corporate Governance 33
3 3 3 1 Overview 33
3 3 2 Board of Directors 34
3 3 3 3 Major Decisions of Shareholders’ Meeting and Board Meetings 40
3 4 Taiwan Corporate Governance Implementation as Required by Taiwan Financial Supervisory Commission 42
3 5 Code of Ethics and Business Conduct 46
3 6
Regulatory Compliance 50
3 7 Internal Control System Execution Status 52
3 8
Status of Personnel Responsible for the Company’s
Financial and Business Operation 53
3 3 9
Information Regarding TSMC’s Independent Auditor 53
3 10 Material Information Management Procedure 55
4Capital and Shares 57
4 1 Capital and Shares 57
4 4 2 Issuance of Corporate Bonds 64
4 3 Preferred Shares 66
4 4 4 4 Issuance of American Depositary Shares 66
4 5 Status of Employee Stock Option Plan 68
4 6
6
Status of Employee Restricted Stock 68
4 7 Status of New Share Issuance in Connection with Mergers and Acquisitions 68
4 8
8
Financing Plans and Implementation 68
5Operational Highlights 71
5 1 1 Business Activities 71
5 2 2 Technology Leadership 72
5 3 Manufacturing Excellence 77
5 4 Customer Trust
80
5 5 5 5 Human Capital 82
5 6
Material Contracts 87
6
Financial Highlights and Analysis 89
6
1 Financial Highlights 89
6
2 Financial Status and Operating Results 95
6
3 Risk Management 100
7 Corporate Social Responsibility 115
7 1 7 2 7 3 7 4 7 5 7 6
8
Overview 115
Environmental Safety and Health (ESH) Management 120 TSMC Education and Culture Foundation 129 TSMC Charity Foundation 130 TSMC i-Charity 131 Social Responsibility Implementation Status as Required by the Taiwan Financial Supervisory Commission 132
Subsidiary Information and Other Special Notes 135 8
1 1 Subsidiaries 135 8
2 Status of TSMC Common Shares and ADRs Acquired Disposed of and Held by Subsidiaries 139 8
3 3 Special Notes 139