TBB — AGM Information 2016

Jul 22, 2016

Minutes for the 2016 Annual Meeting of Shareholders

Taiwan Business Bank

Date: June 24, 2016, Friday, at 9:00 a.m. Venue: 17[th] Floor, No. 30, Ta-Cheng Street, Taipei Auditorium of the Headquarter, Taiwan Business Bank Attendees: (to refer to the register of attendance) Chair: Robert Rueen-Fong Chu, Chairman of the Board of Directors, Taiwan Business Bank

Meeting Procedure

I. Welcome/ Introduction

Meeting is to commence as the shareholding of shareholders present has met the regulatory requirement.

• II. Opening Remarks by Chairman

III.Discussion Matter

• (1) Amend “Articles of Incorporation of Taiwan Business Bank”.

IV. Report Matter

• (1) Report the business operation of the Bank in 2015.

• (2) Audit Committee’s Review Report on 2015 financial statements.

• (3) Report the allocation of remuneration to employees and directors in 2015.

• V. Recognition Matter

• (1) 2015 financial statements are presented.

• (2) 2015 Statement of Surplus Allocation is presented.

VI. Discussion Matter

• (2) Issue new shares through capitalization of 2015 earnings.

• (3) Amend “The Procedure for Acquisition and Disposal of Assets of Taiwan Business Bank”.

VII. Special Motions

VIII. Adjournment

Discussion Matter

• I. Amend “Articles of Incorporation of Taiwan Business Bank”. Explanation:

• 1.In line with the incorporation law, deletes Section 2, 3 & 4 of Article 235 and adds Article 235-1. Articles of Incorporation should define that remuneration to employees be allocated based on a fixed amount or ratio of the profitability of current year. However, the accumulated deficit of the incorporation, if any, should be recovered. The same applies to remuneration to directors. Therefore, it is proposed to amend articles of incorporation of Taiwan Business Bank.

• 2.Key points of the amendment are as follows:

• (1) In response to the addition of Article 235-1, Articles of Incorporation should define that remuneration to employees be allocated based on a fixed amount or ratio of the profitability of current year. Also, according to the letter of explanation (No. 10402427800, Oct. 15, 2015) from the Ministry of Economic Affairs, the ratio of remuneration to directors can only be stipulated by way of an upper bounding method. Besides, in line with the current incorporation law, calculates the average rate of bonus to employees and remuneration to directors distributed in the last 6 years based on earnings before tax, and sets forth the allocation ratio and the distribution principle of remuneration to employees and directors (Article 41).

• (2) In line with the addition of Article 41, deletes Item 2&3 of Section 1 and Section 4 of the original article, and changes the wording and ordering of articles (Article 42).

• (3) In line with the addition of Article 41, changes the order of articles (Article 43, 44 and 45).

• 3.Please refer to the comparison table in the Meeting Handbook for details.

Shareholder Number 10973 expressed his opinion on the appropriation of remuneration to employees. He suggested that the appropriation shall be made at a fixed amount, not within a specific range.

The Chairman and lawyers have made an explanation on the above statement. The Chairman has put the matter to a vote and the result is as below:

Votes represented by shareholders in session	Affirmative	Affirmative	Negative	Invalid	Abstention /not voting
	Counts	Ratio (%)	Counts	Counts	Counts
3,768,156,014	3,330,714,039	88.39	1,859,539	0	435,582,436

Resolution: The matter was approved as submitted.

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Report Matter

• I. Report the business operation of the Bank in 2015.

Explanation:

Please refer to the Meeting Handbook.

Shareholder Number 10973 expressed his opinion on the implementation of the resolution on raising capital by issuing new shares in the previous meeting of shareholders.

The Chairman has made an explanation on the above statement.

Shareholder Number 7960 has raised a question of privilege.

The Chairman and lawyers have made an explanation on the above statement.

Resolution: Acknowledged.

• II. Audit Committee’s Review Report on 2015 financial statements.

• Explanation:

Please refer to the Meeting Handbook.

Shareholder Number 10973 expressed his opinion on the handling of

non-performing loans and bad debts and suggested to set an objective for such matters.

Shareholder Number 7960 expressed his opinion on the relocation of the Houli Branch to the Jiaxin Branch.

Shareholder Number 7336 expressed his opinion on the issue of making office

space on 2F of Da’an Branch available to two private labor unions free of charge.

The Chairman has made an explanation on the above statements.

Resolution: Acknowledged.

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• III. Report the allocation of remuneration to employees and directors in 2015. Explanation:

• Rules of Article 235-1 of the incorporation law were followed and related allocation measures were approved by the 6[th] meeting of the 3[rd] Remuneration Committee and the 6[th] meeting of the 14[th] Board of Directors.

• Remuneration to employees and directors in 2015 were both distributed in cash as follows:

• (1) Remuneration to employees (5.112%): NT$334,482,452

• (2) Remuneration to directors (0.6%): NT$39,258,504

The above proposed remuneration to employees and directors had been

recognized as expenses of current year in accordance with regulations.

Resolution: Acknowledged.

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Recognition Matter

• I. 2015 financial statements are presented and respectfully submitted for recognition. Explanation:

The Bank’s financial statements, which include Reports on Business Operations (see Meeting Handbook), Balance Sheets, Statements of Comprehensive Income, Statements of Equity Change, and Statements of Cash Flows, had been submitted to the 6[th] Temporary Board of Directors Meeting of the 14[th] Board of Directors. Please refer to the Meeting Handbook.

The result of the vote:

Votes represented by shareholders in session	Affirmative	Affirmative	Negative	Invalid	Abstention /not voting
	Counts	Ratio (%)	Counts	Counts	Counts
3,768,156,014	3,461,197,975	91.85	1,007,907	0	305,950,132

Resolution: The matter was approved as submitted.

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Taiwan Business Bank Business Operation Report in 2015

Because of worries about the heating up of geopolitical economic risks, the Greek bailouts, and the timetable of interest rate increases in the U.S., along with the falling prices of crude oil and bulk commodities, the slowdown of growth in mainland China and other emerging economies, and the turmoil in global financial markets, global economic growth in 2015 did not meet the optimistic expectations current at the beginning of the year and the pace of recovery lagged. According to data released by Global Insight in January 2016, global economic growth rate in 2015 amounted to 2.5%, down by 0.5% from the January 2015 forecast and lower than the 2.7% growth rate achieved the year before. This shows that although the global economy was continuing to recover, the strength of the recovery was weak.

Due to weakening global economic growth and the fall in prices of crude oil and other commodities in the first quarter of 2015, the growth in Taiwan’s commodity exports (in US dollar terms) turned negative; however, when exports were calculated in NT dollars with price factors excluded and exports of services added, the growth in exports of goods and services remained positive. In addition, private consumption grew at a steady pace because of a continued improvement in employment and incomes, driving Taiwan ’ s annualized economic growth rate for the quarter to 4.04%.In the second quarter, the domestic private consumption continued to grow moderately, but the global recovery was disappointing and the weakening of Taiwan’s goods exports intensified, depressing growth for the quarter to 0.57%. In the third quarter, despite an increased growth in private investment because of an expansion of advanced manufacturing processes by domestic semiconductor companies, plus increased investment in railroads and other mass transportation facilities, weakness in the global economic recovery and a continued drop in prices of crude oil and other materials, along with the crowding out effect of the increasing autonomy of supply chains in mainland China, the weakening of Taiwan’s exports expanded continuously; this, plus the impact of a large drop in domestic stock prices, caused consumer confidence to decline and the economic growth rate to drop further, to -0.80%. In the fourth quarter, investment in advanced processes by the domestic semiconductor industry and by railroads and other mass transportation facilities continued to grow and private consumption steadily heated up; but because of continued weakness in global economic growth and in external demand, the decline in Taiwan’s goods exports continued and economic growth rate for the quarter was -0.52%. According to figures compiled by the Directorate General of Budget, Accounting and Statistics, Taiwan’s economic growth rate in 2015 was 0.75%. With the disappointing global economic performance in 2015, domestic growth was slow and the expectation was that inflation would be moderate. To stimulate growth, the Central Bank lowered the

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policy interest rate by 0.125% in September and again in December, for a total reduction of 0.25%. In the area of exchange rates, in the first half of 2016, the New Taiwan Dollar appreciated slightly against the US Dollar; but in the second half of the year, the Chinese yuan underwent a large drop in value, leading to a trend of depreciation in Asian currencies. In addition, under the influence of the continued decline in Taiwan’s exports and the overselling of Taiwan stocks by foreign investors and the remittance of the proceeds off the island, plus the interest rate reductions by the Central Bank, at the end of 2015, the NT Dollar was trading at 33.066 to the US Dollar, representing a depreciation of 4.08%. The average exchange rate for the year was NT$31.898 to the US Dollar, a drop of 4.80% for the year.

Looking ahead to 2016 we see that despite such worries in the international economy as slowing growth in mainland China, falling international materials prices, and turbulence in global financial markets, major international forecasting institutions expect that moderate growth in the U.S. economy and quantitative easing monetary policies in Europe and Japan will lead to a slight improvement in global economic performance compared with 2015. According to the latest forecasts by major domestic and international institutions, Taiwan’s economy is also expected to improve in the new year. The government’s continuous efforts in recent years to deregulate the financial market, loosen restrictive measures, expand the scope of financial businesses, assist the financial industry with international development, and promote the orderly development of cross-strait financial businesses have enlarged the space for advancement of the banking business. The TBB will continue the profit growth momentum of the past year and focus on key businesses with development potential as our entire staff exerts its utmost concerted efforts with the aim of upgrading overall operating performance, achieving profit growth targets, and realizing four major operating principles--pursuit of business performance, enhancement of added values of employees, emphasis on shareholders’ equity, and fulfillment of corporate social responsibility--as we progress vigorously toward the ranks of outstanding banks and create an even better business performance.

Operating results of 2015 and Business plan of 2015 are as follow:

1. Operating results of 2015

• (1) Implementation of Business Plan

• A. Profitability

The Bank experienced stable growth in profitability and various areas of business in 2015, with a net profit after-tax of NT$5.113 billion (net profit before-tax was NT$6.169 billion), and carried out a capital increase via earnings. Pre-distribution (2014) annual dividends per share were NT$0.73.

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• B. Corporate Governance

• (A) The Bank ranked in the top 5% in the First Annual Corporate Governance Evaluation held by the Taiwan Stock Exchange, indicating substantial achievements in the establishment of a corporate governance system.

• (B)The Bank was awarded the highest rating of A++ in the Securities & Futures Institute’s 12th Information Disclosure Evaluation for Publicly Listed Companies, making the TBB the only government bank in Taiwan to win this highest ranking for seven years in a row.

• C. Core Business

• (A) Corporate Banking:

  • a. The Bank won Outstanding Awards from the Financial Supervisory Commission for the Program to Encourage Lending by Domestic Banks to Small and Medium Enterprises (Division A) and the Program to Encourage Lending by Domestic Banks to Creative Enterprises (Division A).

  • b. In recognition of the Bank’s outstanding performance in helping small and medium enterprises with financial services, it was presented four top Outstanding Bank for Small and Medium Enterprise Credit Guarantee Financing awards: the Credit Guarantee Partner Award, Direct Guarantee Performance Award, Assistance for Regional Development Award, and Young Entrepreneur Support Award.

  • c. In the handling of small and medium enterprise loans, The TBB scored first place in Taiwan in the value of loans transferred to the Small and Medium Enterprise Credit Guarantee Fund for guarantee.

  • d. In the aggressive promotion of policy project loans, the Bank took first place nationally with the extension of 12 project loans.

• (B)Foreign Exchange and Trade Financing

  • a. Strengthening the absorption of foreign-currency deposits and expanding the scale of deposits, and the accumulated average balance of foreign-currency deposits in 2015 grew 12.75% over 2014.

  • b. Foreign-currency loans were vigorously expanded to strengthen interest-spread income, and the average amount of foreign-currency loans in 2015 expanded by 7.20% over 2014.

• (C)Wealth Management

  • a. To meet market demand, the Bank introduced two discretionary investment-oriented insurance products, for which combined sales

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exceeded NT$10 billion.

  - b. To promote the fund custodian business, the Bank raised the Yuanta Emerging Indonesian Opportunity Bond Fund with outstanding sales results.

  - c. With vigorous promotion of a special program aimed at the marketing of designated financial service products, fee income from the wealth management business rose 35.21% in 2015.

• D. Products Innovation

• (A) Internet cashier services offer convenient online payment services for small sellers (in microbusinesses such as specialty agricultural products and homestay accommodation).

• (B) In response to the advent of the aging society, the Bank introduced a program of elderly care trust combined with mortgage life insurance.

• (C)A special loan program was introduced to provide borrowers with insurance against death, disability, and critical illness along with the funds they need.

• (D) A credit loan program was introduced to serve the government employees and teachers of the entire country by satisfying their needs for consumption and investment capital.

• (E)In response to the development of mobile payments, the Bank inaugurated the mobile credit card to provide customers with a diversified range of products and services.

• (F) The iPass co-branded card, combining the functions of a credit card with iPass small payments, was issued.

• E. Expansion of Scope of Channel Services

• (A) The Bank has actively engaged in international deployment, with the Yangon Representative Office opening for business on Dec. 7, 2015 and the Wuhan Branch opening on Dec. 29 that year. In addition, permission from the U.S. Federal Reserve for the establishment of the New York Branch was received on Dec. 31, 2015, and an application for the establishment of a Tokyo Branch was approved by the Financial Supervisory Commission on Jan. 4, 2016.

• (B)The 100%-invested TBB (Cambodia) Microfinance Institution Plc opened for business in Cambodia on Aug. 10, 2015, marking the first operating base to be established by the TBB in the Southeast Asian market. It will take advantage of the opportunities of rapid economic growth in the region.

• (C)To continue developing and assisting small and medium business clients in industrial zones, the Bank reinforced development of its core industrial zone SME business with the opening of the Ta Fa Branch on

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Dec. 28, 2015 to provide customers with even more outstanding services.

• F.Information Operations

• (A) In coordination with the 12 online services included in the Financial Supervisory Commission’s Digital Finance Environment 3.0 plan, the TBB has completed development and has put online 11 of the e-services. The exception is the joint marketing of businesses within the financial holding company scope.

• (B)The Bank achieved outstanding success in the promotion of e-banking, and this achievement was recognized by two awards, the Best Development Award for Electronic Payment Business and the Outstanding Innovative Award for Electronic Payment Business, presented by the Financial Information Service Co.

• (C)The Bank inaugurated the TBB My Dream fans club on Facebook, with all kinds of financial products presented on the fans’ page in line with advertisements for marketing activities, thereby enhancing the Bank’s exposure.

• G. Corporate Social Responsibility

• (A) To conform to international standards, the Bank’s CSR report for 2014 was compiled in accordance with GRI G4 international criteria. The Bank responds to the hopes and needs of stakeholders by publishing its CSR report annually and by carrying through with the Corporate Social Responsibility Best Practice Principles, actively implementing CSR and fulfilling its values of sustainable operations.

• (B)To carry through with the principle of care for society and fulfill its CSR, the Bank contributes to 40 disadvantaged groups and subsidizes breakfasts for elementary school students in remote areas, in this way helping disadvantaged groups and participating actively in social welfare.

• (C)The Bank has been awarded for excellence in green procurement for four consecutive years by the Environmental Protection Administration of the Executive Yuan and the Department of Environmental Protection of the Taipei City Government.

• (D) The Bank won an energy-conservation enterprise award from the Bureau of Energy, Ministry of Economic Affairs and an outstanding award from the Taiwan Power Company in the small and medium enterprise electricity-conservation competition.

• (E)The Bank’s headquarters building acquired ISO50001 energy management system certification in response to the promotion of energy conservation by the Taipei City Government.

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  - (F) The Bank is committed to publicizing campus and community financial know-how, promoting correct financial management concepts, and propagating anti-financial fraud education with the aim of laying down a solid foundation for financial education. In recognition of this effort, the Bank was awarded by the Banking Bureau of the Financial Supervisory Commission for its promotion of campus and community financial know-how activities.

• (2) Budget implementation

• A. Average deposits was NT$1,198.627 billion, an increase of 5.33% over 2014.

• B. The annual average amount of loans outstanding by the Bank was NT$1,012.708 billion, an increase of 6.11% from the year before.

• C. The amount of foreign exchange transactions undertaken during the year totaled US$65.106 billion, a growth of 4.67% from the previous year.

• D. Fee income from life insurance and property insurance was NT$1.619 billion, up 61.09% from the year before.

• E. The budget achievement rates for the above items were between 90.73% and 132.31%.

• (3) Revenues, expenditures and profitability

• A. Revenues and Expenditures

Net income in 2015 amounted to NT$19.886 billion, bad debt expenses and guarantee liability provisions were NT$2.327 billion, operating expenses were NT$11.39 billion, and net income before tax from continuing operations was NT$6.169 billion (a growth of 12.63% from 2014); net profit after-tax was NT$5.113 billion, giving a return on assets (after tax) of 0.36%, return on equity (after tax) of 7.84%, profit margin (after tax) of 25.71%, and after-tax earnings per share of NT$0.90.

• B. Profitability

The various items of pre-provision, pre-tax net income (including recovered bad debts) totaled NT$9.39 billion, an increase of NT$285 million over 2014. To strengthen loan risk appetite, the Bank allocated NT$3.221 billion in reserves against bad debts, giving a coverage ratio of 231.22%; it also wrote off bad debts in the amount of NT$3.095 billion, giving a non-performing loan ratio of 0.48%. Before-tax profit in 2015 amounted to NT$6.169 billion, an increase of NT$692 million compared with 2014; this was due primarily to a growth in loans and deposits, an increase in net interest earnings, and expansion of the wealth management business and increase in net fee income.

• (4) Research and development

• A. Establishment of an Exclusive Unit for Industry Research

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• (A) A total of 162 industry analysis reports were written and published in the Bank’s E-Library in 2015 for colleagues to peruse.

• (B) Elite professionals from industry, government, and academe are invited to speak on an irregular basis to help the Bank’s employees understand the latest trends in industrial development.

• B. Encouragement of Innovation and Professionalism in Line with Business Development Needs

• (A) Employees are encouraged to take the initiative in carrying out innovation and suggesting new financial products and methods of business improvement that will enhance the Bank’s business competitiveness. A total of 66 employee suggestions were accepted in 2015.

• (B) Business lectures are held on a scheduled basis and a rich variety of digital learning courses are offered to encourage employees to engage in further on-the-job studies and absorb new knowledge that will strengthen their competitiveness and enhance their professional know-how.

2. Business plan of 2016

• (1) Operating Directions and Policies

• In response to the shift in the development of financial markets toward Asia, aging populations, mobile functions, and internationalized renminbi (RMB), and to coordinate with the Financial Supervisory Commission’s encouragement of financial institutions to deploy in Asia and establish Asia-Pacific wealth-management centers, promote financial infrastructure construction, the digitization of the financial environment, and other key financial development strategies, the Bank has formulated six major strategies and promoted “deep-rooting plans” for financial infrastructure construction in order to reinforce its customer service foundation. The Bank will also strengthen policy finance, lending, and guidance, will deepen cultivation of the specialized field of small and medium enterprise businesses, and will strive to develop in the direction of niche banking.

• A. Augmentation of Equity Capital and Expansion of Business Capabilities

  • (A) Reinforcement of investor relations and highlighting of the Bank’s reasonable share value.

  • (B) Augmentation of capital and enhancement of business expansion capability.

• B. Addition of Overseas Units and Integration of Channel Services

  • (A) Expansion of deployment in overseas markets and heightening of the proportion of overseas branch profits.

  • (B) Adaptation to local conditions and maintenance of close customer

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relations.

• C. Optimization of Human Resources and Strengthening of Manpower Training

  • (A) Strengthened training of international personnel and development of sufficient seed personnel for overseas branches.

  • (B) Optimization of human resources, provision of assistance in career transition, and establishment of a corporate culture of shared learning and know-how.

• D. Reinforcement of Technological Investment and Development of Digital Finance

  • (A) Reinforcement of investment in IT installations and enhancement of information system performance.

  • (B) Accelerated use of big data collection and analysis, and reinforcement of CRM for targeted marketing.

  • (C) Real/virtual integration and synchronous advancement, and optimization of the customer experience.

• E.Optimization of Internal Processes and Strengthening of Risk Management

  • (A) Reinforcement of operational and customer management processes.

  • (B) Strengthening of strategic alliances and introduction of innovative capacity.

  • (C) Implementation of risk management mechanisms to enhance asset quality.

• F.Reinforcement of Corporate Governance and Fulfillment of Corporate Social Responsibility

  • (A) Reinforcement of corporate governance, and enhancement of information disclosure and transparency.

  • (B) Realization of consumer protection and the Equator Principles, care for disadvantaged groups, emphasis on energy conservation and carbon reduction, and fulfillment of social responsibility.

• (2) Business Target

• To give equal weight to the protection of shareholder interests, improvement of the capital structure, and upgrading of asset quality, the Bank, in consideration to economic growth forecasts of 2016 by the Directorate General of Budget, Accounting and Statistics and the reduction of interest rates by the Central Bank on Sept. 24, 2015, as well as the application of IFRS 9’s “Financial Instruments” in 2018, is required to increase provisions of various kinds.

• A. Annual average deposit balance, NT$1,222.335 billion.

• B. Annual average loans outstanding, NT$1,061.199 billion.

• C. Total foreign exchange transactions, US$72.00 billion.

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3. Result of Latest Credit Rating

Date of Rating	Rating Company	Ratings	Ratings	Outlook
		Long-term Credit	Short-term Credit
JAN. 15, 2016	Taiwan Ratings	twA+	twA-1	Positive

Note: The TBB’s level of capital has improved, and capital and profit are maintained at suitable levels; the Bank’s rating outlook has been raised from “stable” to “positive”.

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• II. 2015 report on surplus allocation is presented and respectfully submitted for recognition.

Explanation:

• 1.The undistributed earnings at the beginning of 2015 was NT$ 15,324,214.73, minus the “Defined benefit plans actuarial gains” of NT$ 254,555,190, and plus NT$ 5,113,035,082.82 of the net income after tax in the fiscal year of 2015,the statement of which were audited by Fung-Huei Lee, CPA and Fu Wei Chen, CPA of KPMG. The allocation of surplus is conducted in conformity with The Articles of Incorporation of Taiwan Business Bank and related laws as follows:

• (1) NT$ 1,462,141,232.26 is to be set aside to Legal Reserve.

• (2) NT$ 0 is to be set aside to Special Reserve.

• A. According to the letter dated April 6[th] , 2012 from Financial Supervisory Commission, with the issuing number 1010012865.

• B. The credit amount of shareholders’ equity on book as of December 31, 2015 is NT$ 126,948,308.86, which includes “exchange difference from translation of foreign operating departments’ financial statements”, NT$ 221,642,603.52 and “unrealized loss from available-for-sale financial assets”, NT$ 94,694,294.66. No special reserve is required.

• (3) Shareholders’ bonus – cash dividend (0.1 dollar per share): NT$568,466,179. The cash dividend is rounded off to the whole dollar.

• (4) Shareholders’ bonus – stock dividend (0.5 dollar per share): NT$2,842,339,000.

• (5) NT$865,796.29 is to be set aside to end-of-period undistributed earnings.

• 2.Table of Year 2015 Surplus Allocation of Taiwan Business Bank is attached. Please refer to the Meeting Handbook.

Shareholder Number 10973 suggested the Bank to implement the acquisition of treasury shares so as to increase the stock price.

Shareholder Number 117930 stated that since the stock price of the Bank is lower than the face value, the Bank should set a higher ratio for cash dividend or the remuneration to employees or directors should be relevant to the ratios of stock dividend and cash dividend for release.

The Chairman and related personnel designated by the Chairman have made an explanation on the above statements, respectively.

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The Chairman has put the matter to a vote and the result is as below:

Votes represented by shareholders in session	Affirmative	Affirmative	Negative	Invalid	Abstention /not voting
	Counts	Ratio (%)	Counts	Counts	Counts
3,768,171,680	3,479,671,221	92.34	3,741,266	0	284,759,193

Resolution: The matter was approved as submitted.

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Discussion Matter

• II. Issue new shares through capitalization of 2015 earnings.

Explanation:

1. Response to the requirement of common equity of Basel III to reinforce the capital structure and increase the profitability. In accordance with Article 240 of the Company Act, the management plans to withdraw earnings to issue dividends stocks of 284,233,090 shares.

2. The total amount of new shares and conditions of issuance for capital increase:

3. (1) It is proposed to inject capital by NT$2,842,330,900, and issue 284,233,090 shares with the face value per share of NT$10. They are all registered common shares.

4. (2) After approval of competent authority for this capital injection by earnings recapitalization submitted upon approval of shareholders meeting, the Board of Directors is authorized to determine ex-dividend date otherwise. The stock dividend is 50 shares over each thousand in accordance with shareholding ratio specified in the stock ledger as of the ex-dividend date. For share less than one, shareholders may apply to stock service agent for combining the fractional stock within five days from ex-dividend date. For failure to combine by deadline or there is still fractional stock after combination, the fractional stock will be distributed by cash (rounded to dollar). The cumulative number of fractional shares to authorize the chairman to contact specific people to subscribe at par.

5. (3) If the shareholders’ stock dividend ratio is altered due to buyback of shares or transfer, conversion and cancellation of treasury stocks or other circumstances, it is proposed to be authorized the Board of Directors by shareholders’ meeting for affairs regarding modification.

6. (4) The shareholders’ rights and obligations of the new shares are the same as those of existing shares.

7. The effect on performance and EPS of the stock dividends distribution: the EPS of 2015 is NT$0.90, the EPS after dividend distribution is NT$0.86, the difference is minor and there’s no effect on the performance.

8. The paid-in capital after this capital increase shall be NT$59,688,948,770, which is still under the total capital NT$60 billion. (Currently the total capital stated in “Articles of Incorporation of Taiwan Business Bank” is NT$80 billion.)

9. For anything not mentioned in this proposal, the Board of Directors is duly authorized for management.

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The result of the vote:

Votes represented by shareholders in session	Affirmative	Affirmative	Negative	Invalid	Abstention /not voting
	Counts	Ratio (%)	Counts	Counts	Counts
3,768,171,680	3,479,875,574	92.34	1,010,413	0	287,285,693

Resolution: The matter was approved as submitted.

• III. Amend “The Procedure for Acquisition and Disposal of Assets of Taiwan Business Bank”.

Explanation:

1. In accordance with relevant regulations of Financial Supervisory Commission and Taiwan Stock Exchange, it is proposed to amend “The Procedure for Acquisition and Disposal of Assets of Taiwan Business Bank” (hereafter referred to as the Procedure).

2. Key points of the amendment of the Procedure are briefly described below:

3. (1) According to Article 2 of “Regulations Governing Internal Operating Systems and Procedures for Banks Conducting Financial Derivatives Business”, adds gold into the combination of structured products. (Item 5 of Article 15)

4. (2) According to the explanation letter (No. 1030023428, June 25, 2014) from Financial Supervisory Commission, deletes Article 23 of the Procedure regarding audit procedures of financial derivatives, and applies relevant regulations directly including “Regulations Governing Internal Operating Systems and Procedures for Banks Conducting Financial Derivatives Business” and “Implementation Regulations of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries”.

5. (3) In line with rules regarding filing deadlines for public announcements in “regulations Governing the Acquisition and Disposal of Assets by Public Companies” and “Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material information of Companies with listed Securities”, amends filing deadlines for public announcements of relevant

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transactions in the Procedure. (Section 4 of Article 27, Section 1 of Article 33,

Article 34)

1. Please refer to the comparison table in Meeting Handbook for details.

Shareholder Number 10973 suggested that lending of the Bank’s own assets to

stakeholders and non-stakeholders without compensation should be listed in Article 33 for announcement and declaration.

The Chairman has made an explanation on the above statement.

The Chairman has put the matter to a vote and the result is as below:

Votes represented by shareholders in session	Affirmative	Affirmative	Negative	Invalid	Abstention /not voting
	Counts	Ratio (%)	Counts	Counts	Counts
3,768,171,680	3,479,743,248	92.34	1,007,967	0	287,420,465

Resolution: The matter was approved as submitted.

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Questions and Motions

Shareholder Number 10973 expressed his opinion on the dissolution of the Debt Management Section of the Regional Operation Division, and whether to reassign this function to the Collection of Overdue Accounts at the branches and make an investment for the establishment of an asset management subsidiary.

Shareholder Number 128151, representative of Sun Moon Lake International Recreation and Leisure Co., Ltd., suggested that the credit officers of the Bank shall pay frequent visits to businesses in China to keep track on their financial status in light of the increasing investment risk in China.

The Chairman responded to the aforementioned statements and extended his gratitude to all shareholders for their suggestions.

The Chairman announced the adjournment of the meeting.

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Appendix

1. The Rules of Shareholders ’ Meeting of Taiwan Business Bank

• (1) Article 1 (Applicable Principles)

• (2) Article 2 (Convention and Notice of Shareholders ’ Meeting)

• (3) Article 3 (Preparation for Sign in Book such Documents)

• (4) Article 4 (Principle of Meeting Place and Time)

• (5) Article 5 (Calculation of Attending Shares and Call for Meeting)

• (6) Article 6 (Discussion)

• (7) Article 7 (Tape-recording and Video-taping of the Meeting Process as Evidence)

• (8) Article 8 (Chairman and Observers of Shareholders ’ Meeting)

• (9) Article 9 (Speak of Shareholders)

• (10) Article 10 (Voting, Voting Supervision and Avoidance of Conflict of Interest)

• (11) Article 11 (Meeting Order Maintenance)

• (12) Article 12 (Proxy and Authorization of Shareholders)

• (13) Article 13 (Announcement)

• (14) Article 14 (Meeting Minute and Signature)

• (15) Article 15 (Election)

• (16) Article 16 (Rest, Resume the Meeting)

• (17) Article 17 (Implementation)

2. Articles of Incorporation of Taiwan Business Bank

• (1) Chapter 1 (Applicable Principles)

• (2) Chapter 2 (Shares)

• (3) Chapter 3 (Business)

• (4) Chapter 4 (Meeting of Shareholders)

• (5) Chapter 5 (Board of Directors)

• (6) Chapter 6 (Supervisor)

• (7) Chapter 7 (Manager)

• (8) Chapter 8 (Accounting)

• (9) Chapter 9 (Appendix)

3. The Procedure for Acquisition and Disposal of Assets of Taiwan Business Bank

• (1) Chapter 1 (Applicable Principles)

• (2) Chapter 2 (Evaluation and Operating Procedures)

• (3) Chapter 3 (Procedures for Public Announcements and Declarations)

• (4) Chapter 4 (Control Procedures for Acquisition and Disposal of Assets by Subsidiary Companies)

• (5) Chapter 5 (Penal Clause)

• (6) Chapter 6 (Appendix)

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4. Shareholding of Directors:

Title	Name	Number of Shares	Shareholding Ratio (%)
Chairman of the Board	Robert Rueen-Fong Chu	125,410,308	2.21
Managing Director	Tzeng-Show Lin	(125,410,308)	(2.21)
Managing Director	Hong-Chi Chang	979,134,407	17.22
Managing Director	Lin Shiu Yen	(125,410,308)	(2.21)
Independent ManagingDirector	Chih Yu Cheng	0	0
Director	Wang Wen-Chieh	(125,410,308)	(2.21)
Director	Hung-Sheng Yu	(125,410,308)	(2.21)
Director	Lillian L. Lin	(979,134,407)	(17.22)
Director	Wan Fu Lin	(979,134,407)	(17.22)
Director	Lu Cheng-Lung	2,104,848	0.04
Director	Kau Jong-Jyr	1,632,911	0.03
Director	Wang Che Nan	(1,632,911)	(0.03)
Director	Huang Chung-Min	137,997,877	2.43
Independent Director	Chau-Chen Yang	0	0
Independent Director	Yaw-Huei Huang	0	0
Total		1,246,280,351	21.93

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