Stock No: 2812

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Taichung Commercial Bank Co., Ltd.

The 2018 Annual Meeting of Shareholders Annual meeting handbook

Time: 9:00 a.m. on June 5, 2018 Address: 10F, No. 87, Min Chuan Road, West District, Taichung City

Index

I. Meeting Agenda .................................................................................... 2 II. Management Presentation (Company Reports) .................................... 3 III. Proposals ............................................................................................. 31 IV. Discussions .......................................................................................... 35 V. Questions and Motions VI. Appendix 1. Independent Auditor’s Report and financial statements ................ 41 2. Rules of Procedure for Shareholder Meetings ............................... 67 3. Company Corporate Charter (Articles of Incorporation)............... 72 4. Shareholdings of Directors ............................................................. 81

Taichung Commercial Bank Co., Ltd.

The 2018 Annual Meeting of Shareholders Agenda

Report the number of shares represented by the attending shareholders and call the Meeting to Order
Chairperson Remarks
Management Presentation (Company Reports)
(1) The 2017 Business Reports
(2) Audit Committee’s Review Report on the 2017 Financial Statements
(3) The 2017 distribution of remuneration to employees and directors
(4) The 2017 authorized offering and issuance of perpetual noncumulative subordinated financial debentures
(5) The Bank’s “Procedural Rules of for Shareholders Meetings” amendments
(6) Report on the Institution of the Code of Conduct for the Directors and Managers of the Bank.
Proposals:
(1) The proposal of the 2017 Business Report and financial statements
(2) The 2017 proposed profit distribution
Discussions:
(1) The issuance of new shares for capitalization for earnings in 2017.
(2) Amendments to Company Corporate Charter (Articles of Incorporation)
Questions and Motions:
Adjournment

(The above proposals were presented by the Company’s relevant units to the Board for consideration)

Management Presentation (Company Reports)

No. 1

The 2017 Business Reports. (Please refer to Page 5~8 of the Annual Meeting Handbook)

The 2017 Business Report

I. Business result in 2017

(I) Domestic and foreign financial environment

Economic recovery continued to spillover worldwide in 2017. With the advanced nations and newly emerging economies taking the lead in recovery, global investment, trade, and industrial production picked up momentum, to the extent that consumers resumed their confidence and the trade in the financial market thrived. According to the forecasting of major international institutions, global economic performance in 2018 will be better than last year. This will help to bring about momentum for the export of Taiwan. Likewise, the Directorate-General of Budget, Accounting, and Statistics, Executive Yuan, forecasted that economic growth in Taiwan will achieve 2.42% in 2018. Yet, the spillover of the tax reform in the USA and the speed of rising interest rates, the localization and structural adjustment of the supply chain in Mainland China, the Brexit negotiation of the UK, the risk of geopolitics, the fluctuation of international oil prices and wholesale goods, the volatility of the global financial market and stock market, trade protectionism and other uncertainties will affect economic development worldwide.

(II) Changes in organization

The Board of Directors (the Board) appointed the Compliance Officer of the corporate headquarters to perform the role as designated person in charge of anti-money laundering and the combating of the financing of terrorism (AML/CFT) so as to vitalize the function of AML/CFT. This officer will be fully empowered to coordinate and monitor AML/CFT duties. In addition, the “AML Section” was established under the Legal Affairs and Compliance Department solely for performing related duties.
In responding to the rapid development of financial information and the protection of the rights of the consumers, the Bank has established the “Information Security Section” under the IT Department. This body will be responsible for administering the policy of information security and advocacy of related systems for assisting the Bank to upgrade its capacity in information security.
The Bank has made positive efforts in the development of consumer banking and expansion of its business territory, thereby establishing the “Consumer Banking Center” under the Consumer Banking Department.

(III) Operating result of business plans and strategies

The Bank had net income amounting to NTD3,633 million, which surpassed the amount of NTD3,515 million as was in the same period of the previous year. The ROA was 0.57% and ROE was 8.57%. In the scale of operation, the Bank had total assets of NTD663.0 billion, which indicated growth of NTD35.9 billion from the same period of the previous year. The overall operation indicated stable growth with wealth management, and consumer banking performed splendidly.
The capital adequacy rate was 12.68%, NPL rate was 0.42%, and bad debts coverage rate at 343.87%. In general, the overall level of capital adequacy and asset quality is sound and better than the same period of the previous year.
The Bank has been granted the patent in the technologies of “Over-the-Counter Identity authentication system of banking” and “ATM Combining the Biological Features and Barcode Authentication Functions”, and will continue to innovate for maintaining competitive advantages and optimizing the environment of consumer banking service.
The Bank has been approved by the competent authority to establish the “Yan Chao Branch” in Kaohsiung City in June 2017 after making tremendous efforts for the cause. This will be essential for the performance of corporate social responsibility and improvement of balanced development in the urban and rural zones. The Bank has been previously approved to establish the “Xin Gang Branch” in Chiayi County.

This branch was opened in October 2017. Currently, the Bank has 81 branches across Taiwan and a viable system of market channels.

The Bank has been conferred the “Financial Security Award” by the Joint Credit Information Center for 3 consecutive years. This is the recognition of the Bank for efforts and the pursuit of credit information security control, accuracy of credit information and protection of customer information.
The Bank won the “2017 Wealth Management Award”, “The Most Preferred Bank of Customers”, the 2017 “Excellent Potential Award” of the “Survey of Banking Industry” by Excellence magazine, and the “18[th] Gold Peak Award (Big Business) Top 10 Enterprises/Top 10 Entrepreneurs” awards. These awards show the trust and recognition of the customers of the Bank.
(IV) Budget execution in December 2017
The average deposit balance (including foreign currency) amounted to NTD 560.710 billion. The budget achievement rate was 100.49%, representing 4.62% growth from the NTD 535.924 billion in the same period of the previous year.
The average loan balance (including foreign currencies, but excluding guarantees, acceptances and delinquent accounts) amounted to NTD432.072 billion, which was an increase of NTD7,198 million or 1.69% from the same period of the previous year.
The average deposit balance in foreign currencies amounted to USD1,669 million or at the attainment rate of 110.04%, which was an increase by 21.03% from USD1,379 million in the same period of the previous year.
Commission income from wealth management amounted to NTD1,330 million or at the attainment rate of 139.26% of the goal, or growth of 13.52% from NTD1,172 million in the same period of the previous year.

(V) Financial income and expenditure, and profitability analysis

1. In 2017, the consolidated earnings before taxation amounted to NTD4.355 billion and the corporate earnings amounted to NTD3.633 billion. Earnings per share after taxation are NTD1.10. The EPS of the Bank has been higher than NTD1 for 6 consecutive years.
KPI: Key Performance Indicator

Indicators	2017 12.68% 0.57% 8.57% $1.10 0.42% 343.87%
Capital adequacy ratio (BIS)	12.68%
Return on Assets (ROA)	0.57%
Return on Equity (ROE)	8.57%
Earnings Per Share (EPS)	$1.10
NPL ratio	0.42%
Coverage ratio	343.87%

Information about the most recent credit rating

			Credit rating	Credit rating
Ri	D f i
atng agency	ate o ratng	Long-term	Short-term	Outlook

Fitch Rating Taiwan

2017.9.20 A-(twn) F2(twn) Stable

(VI) R&D

In the wake of the development of digital banking, the Bank established the “digital banking technology development strategy meeting” for the continuation of planning for the cloud payment and related banking technologies and services of the Bank. In addition, a digital big platform was constructed with dynamic differentiated services and digital analysis to provide customers innovative and diverse banking services.

II. Effect of external competitive environment, laws & regulations and entire business environment
(I) The Bank instituted the “Important Notice to AML/CFT”, “Regulations Governing the Assessment of the Risk of Money Laundering and Financing of Terrorism” and related control mechanism for the reinforcement of AML/CFT, complying with applicable laws, reducing the risks of transactions, products or services from being exploited as tools and media for money laundering and financing of terrorism, and the eventual discovery of illegal or illicit transactions. These will be essential for making a viable internal control system.
(II) The rapid development of banking technologies made information security of banks exposed to higher levels of risk. For better protection of information security, the Financial Supervisory Commission (FSC) recommended banks take incremental measures to establish a designated body for administering information security led by a designated officer at relevant levels of the hierarchy by taking the size of operation of domestic banks the complexity of business and operation risk in the conference for the “Discussion of the Establishment of Designated Information Security Body and Officers in Domestic Banks and Related Issues of Information Security”. This designated body shall be staffed with sufficient manpower and allocation of resources for the effective implementation of information security plans of banks and information security protection. In the future, this functional unit of information security will be upgraded to an independent department to maintain its independence in the pursuit of information security. The Bank has established an Information Security Section under the IT Department and will accomplish related plans and organization on schedule for proper performance of work in information security and intensification of related training.

III. Future development strategies

Despite the optimism of global economic recovery, the attention to potential risks cannot be neglected. The Bank will continue its stable pace in banking operation in 2018 with continued pursuit of risk management, compliance, and performance management. The Bank will continue its corporate policy of “Moving forward at stable paces in operation and create high return” and realize the 5 business strategies of “Careful about risk”, “Concern for quality”, “Widen interest spread”, “Increase revenues” , and “Yield synergy”.

IV. Summary of business plan 2018

(I) The Bank will continue to support the rules and regulations promulgated by the competent authority in establishing related internal code in responding to the assessment of the AML organizations in Asia-Pacific and the proper pursuit of AML/CFT. In addition, the Bank will also organize related training to strengthen the employees with related knowledge of anti-money laundering and make them well-prepared in launching AML.
(II) To upgrade the risk reduction techniques and advocacy of low capital consumption business, the Bank made capital consumption and risk reduction efficiency an integral

part of performance evaluation of the branches in 2018. Further to reducing the influence of loans on capital adequacy, the Bank also seeks to upgrade the overall return on assets.

(III) The Bank established 3 lines of defense for internal control to fortify risk management and internal control, and makes all functional units understand their roles in the overall risk a control structure of the bank. To fortify the function of the 2[nd] line of defense, the management functions of the corporate headquarters established the means and control measures for the identification and assessment of risks so that all could effectively assist and monitor the 1st line of defense in the identification and management of risk, and reduce operation risk.
(IV) In response to the unpredictable change in asset quality and economic development, the Bank treasures the adjustment of lending policy and materialization of the early warning system for credit review to safeguard the quality of loans, handle poorly performed loan position with full effort, and monitor the change in credit risk. These will be essential for the stable growth of loan assets of the Bank.
(V) The Bank will make the best use of its advantage in low cost and SME operation for yielding marketing results through integrated operation. With an emphasis on proper planning in financing and integration of the diversity of financial products, the Bank links the business for yielding synergy in making profit and the efficient use of capital. Further cultivation of customer relations with stronger bonding and permeability, and refining the operation between the parent and subsidiaries for synergy. Activate the planning for digital transformation in operation and establish the consumer banking center in lieu of physical channel deployment.
(VI) Expected business objectives

Scope of business	Targets of December 2018
Deposits (including foreign currencies)	NTD 581.987 billion
Lending (including foreign currencies)	NTD 455.699 billion
Foreign Exchanges Operations	Annual amount USD16,100 million

In 2018, the Bank will make further efforts in pursuing government policy, compliance with external legal requirements and internal code. The Bank will spare no effort in the development of different aspects of banking service and the continuation of broadening the scope of digital banking service. Under the fundamental philosophy of “We Do Our Best For You”, the Bank will move forward without procrastination to satisfy the needs of customers, will take “Whole-hearted concern for a bright future” as its mission, and “The first line in Taiwan”, “The most expected in society” and “The most trusted by customers” as its vision. The Bank will make its best efforts to emerge as the best financial institution and demonstrate the efficiency of its banking team. With equal concern in observation of applicable laws, performance management, information security and risk management, the Bank will achieve the goal of protecting the rights of customers, upgrading the core value of the organization, and protection of the rights and interests of the shareholders.

Best regards,

May I wish you all good health and good luck.

President Chairman

Management Presentation (Company Reports)

No. 2

Audit Committee’s Review Report on the 2017 Financial Statements. (Please refer to Page 10 of the Annual Meeting Handbook)

Taichung Commercial Bank Co., Ltd. Audit Committee’ Review Report

The financial statements of the parent company only and consolidated financial statements in FY2017 of the Bank have been audited by the certified public accountants of Deloitte Taiwan with the issuance of auditors’ reports, which were released together with the report on operation and proposal for distribution of earnings. The Auditing Committee has review the aforementioned reports and statements and determined that they are presented fairly. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby present the report for your reference.

To:

2018 Shareholders’ meeting, Taichung Commercial Bank Co. Ltd.

Chairman of Audit Committee

March 13, 2018

Management Presentation (Company Reports) No. 3

The 2017 distribution of remuneration to employees and directors Explanation:

I. According to the Article 35 of the Company’s Articles of Incorporation, “If there is a profit, the Bank shall appropriate 0.5% to 3% as remuneration to the employees. The Board shall determine if stock or cash shall be released for such purpose. In addition, the Bank may allocate no more than 1.5% of the aforementioned amount as remuneration to the Directors and Supervisors. The distribution of remuneration to employees and directors should be reported in the shareholders’ meeting. If the Bank has accumulated deficit, an equivalent amount should be reserved for making up such loss, then the remuneration to employees and directors can be appropriated in accordance with the ratio stated in the preceding paragraph thereafter”.
II. As audited, the Bank did not appropriate remuneration to the employees and the Directors and income tax expense in 2017. The earnings in this year amounted to NTD4,356,773,339. The Bank planned to appropriate 0.6% and 1.4% of the aforementioned amount as remuneration to the employees and the Directors, which amounted to NTD26,140,640 and NTD60,994,827, respectively. All payments were effected in cash.

Management Presentation (Company Reports)

No. 4

The 2017 authorized offering and issuance of perpetual noncumulative subordinated financial debentures. (Please refer to Page 13~24 of the Annual Meeting Handbook)

Perpetual Non-Cumulative Unsecured Subordinated Financial Debentures Issued of 2017

I. Reasons for issuance:

TCB applied with FSC in 2016 for the offering of perpetual non-cumulative unsecured subordinated financial debentures amounting to NTD3,500 million so as to strengthen the financial structure, improve the capital adequacy ratio, and normalize the development of business. The application has been approved and came into effect under Letter Jin-Guan-Yin-Piao-Zi No. 10500210950 dated September 2, 2016 for the issuance of non-cumulative unsecured subordinated financial debentures 1[st] term, 2[nd] term and 3[rd] term for 2017 on March 28, May 18, August 28, 2017 and listed for trading at Gre Tai Securities Market.

The Bank has petitioned with FSC for the issuance of perpetual non- cumulative unsecured subordinated financial debentures amounting to NTD 5 billion and was approved by FSC under Letter Jin-Guan-Yin-Piao-Zi No. 10600229120 on September 22, 2017. The Bank issued the 4[th] and the 5[th] terms of perpetual noncumulative unsecured subordinated financial debentures in 2017 on December 5, 2017 and December 27, 2017, respectively, and listed the debentures for trading at Gre Tai Securities Market.

II. Bond Information:

	2017	2017	2017	2017	2017
Bond issues	1~~st~~term 2017	2~~nd~~term 2017	3~~rd~~term 2017	4~~th~~term 2017	5~~th~~term 2017
Bond code	G13014	G13015	G13016	G13017	G13018
Issue Date	2017/3/28	2017/5/18	2017/8/28	2017/12/5	2017/12/27
Duration	No maturitydate
Maturitydate	No maturitydate
Placement	Underwriters are not commissioned forpublic offering
Bond listing	OTC
Listing / issuing location	Taiwan R.O.C.
Issuingcurrency	NTD
Total Issued	NTD 1 billion	NTD 0.5 billion	NTD 0.5 billion	NTD 1.35 billion	NTD 2.65 billion
ListingDate	2017/3/28	2017/5/18	2017/8/28	2017/12/5	2017/12/27
Bond abbreviation	P06 Taichung Commercial Bank 1	P06 Taichung Commercial Bank 2	P06 Taichung Commercial Bank 3	P06 Taichung Commercial Bank 4	P06 Taichung Commercial Bank 5
Coupon rate	Floatingannual rate: 4.14%
Interest bearing and payment method	Annual interest is accrued at a simple interest rate and paid once a year.
The total annual interestpayment	NTD 41,400 thousand	NTD 20,700 thousand	NTD 20,700 thousand	NTD 55,890 thousand	NTD 109,710 thousand

III. Subscription object:

The debenture is offered for the professional investors meeting the requirements of the “Regulations Governing Offshore Structured Products”.

IV. Fund utilization efficiency:

The Bank issued the 1[st] to the 5[th] terms of of perpetual non-cumulative unsecured subordinated financial debentures in 2017 and listed the debentures for trading at TPEx. The purpose is to raise working capital and vitalize the capital structure, and upgrade the capital adequacy ratio and Class I capital ratio, which will help to upgrade the capital structure of the Bank substantially.

Regulations Governing the Offering of 1[st] term of the perpetual non-cumulative unsecured subordinated financial debentures in 2017

Taichung Commercial Bank (hereinafter referred to as “the Bank”) acted in compliance with FSC Letter JinGuan-Yin-Piao-Zi No. 10500210950 dated September 2, 2016 for the offering of perpetual non-cumulative unsecured subordinated financial debentures specified as follows:

Bond Name: Taichung Commercial Bank 1[st] term of perpetual non-cumulative unsecured subordinated financial debentures in 2017 (hereinafter referred to as “the debenture”)
Credit rating on the issuer: The Bank commissioned Fitch Ratings Taiwan as the credit rating institution to assess the credit standing of the Bank on: September 21, 2016; Subject of rating: the issuer. Credit rating result: A-(twn) for domestic long-term credit standing. The debenture will not be rated by other credit rating institutions.
Priority of creditor rights and investment risk:
(1) The priority (including principal and interest) of the bearers of the debenture in the entitlement of compensation is senior to the shareholders and junior to the bearers of tier 2 capital instruments, deposit account bearers and other creditors of the Bank. However, the priority of the bearers of the debenture for compensation will be the same as the shareholders of common stock in the event of the takeover of the Bank by the competent authority, order for discontinuation of operation and liquidation.
(2) The debenture is a form of unsecured debenture.
(3) The debenture is not a deposit and not protected by CDIC.
(4) The bearers of the debenture shall pay attention to the risk inherent to the underlying instrument.
1. Total Issued:

The debenture was offered at NTD1,000 million.

Book value:
The face value of each lot amounted to NTD10 million.
Issuing price:

The debenture is issued at par value as of the offering day.

Duration: The debenture was offered on March 28, 2017 with no maturity date.
Coupon rate: Coupon rate is index interest rate plus 3.08%. The indicator rate is the adjustable interest rate posted by Chunghua Post Co., Ltd offered for time deposit (not large sum) of 1-year term. The day for resetting of the coupon rate shall be the second business day prior to each value date
Interest bearing and payment method:
(1) The debentures shall accrued simple interest on a daily basis (act/act) at the coupon rate by the exact days of holding and payable annually on July 1 of each subsequent year. The calculation of the interest amount by the Bank shall be final.
(2) The interest payment from the debenture will be rounded to the nearest NT Dollar for each lot. The calculation of interest by the Bank shall prevail. If the day for principal repayment and interest payment is a day on which the Bank is not open for business, move forward to the next business day for payment without additional interest accrued. Those who claim principal and interest beyond the value date will receive no additional accrued interest.
(3) The Bank will withhold applicable income tax and supplementary premiums of the National Health Insurance Administration on the interest of the debenture at the time of disbursement.
Condition of interest payment:
(1) No interest will be paid if the Bank has no earnings in the previous fiscal year and no payment of dividends (including cash dividends and stock dividends). If the accumulated undistributed earnings net of the unamortized loss from the disposal of non-performing loans exceeds the amount of interest payments, and the payment does not cause a change to the original condition agreed on interest payment, this provision will not be applicable. Interest not being paid due to the aforementioned reasons cannot be accumulated or deferred.

(2) If the ratio between the equity capital and risk assets of the Bank on the interest payment day falls below the minimum ratio set forth in Article 5, Paragraph 1 of the “Regulations Governing the Capital Adequacy and Capital Category of Banks”, principal and interest payment shall be deferred. The accrued interests from the debenture will not yield further interest.
Early redemption rights:
If the ratio of regulatory capital to risk-weighted assets of the Bank after being redeemed shall meet the minimum rate stated of the competent authority after five years of issuance, and, at the approval of the competent authority, the Bank may proceed to early redemption with 30 days of notice in advance. Redemption will be made in whole at face value amount of the instruments plus all coupon yields.
Definitions
(1) “Ratio of regulatory capital to risk-weighted assets” as referred to in Article 10 and Article 11 shall be based on the definition of Article 44 of The Banking Act of The Republic of China and the “Regulations Governing the Capital Adequacy and Capital Category of Banks” announced by the Financial Supervisory Commission, and the annual financial reports or the interim reports audited by certified public accountants, as well as the ratio declared by the Bank by the end of March and August of each year with the Financial Supervisory Commission after review by certified public accountants.
(2) “Earnings” as referred to in Article 10 of These Regulations are the earnings net of taxation as stated in the comprehensive income statement covering the most recent year recognized by the General Meeting of shareholders.
The form of debenture:
The debenture will be issued in digital form and registered with the Taiwan Depository and Clearing Corporation.
Agent of principal and interest payment:
The Taipei Branch of the Bank will be responsible for handling principal and interest payment through remittance to bearers of the debenture as stated in the roster available from TDCC.
Other requirements:
(1) The debenture can be circulated, freely transferred, pledged under lien or as collateral freely but cannot be pledged as collateral for loans from the Bank.
(2) According to the Civil Code, any portion of principal not being claimed within a period of 15 years and interest not being claimed within a period of 5 years from the first day of payment shall be not be redeemed by the Bank.
(3) Subscribers of bearers of the debentures cannot claim for early redemption.
(4) In case the Bank proceeds to liquidation procedures or declaration of bankruptcy, no interest will be accrued for calculation from the day on which liquidation procedure starts or the day of bankruptcy declaration. Both the principal and interest shall be deemed immediately due. The bearers or the creditors of the debenture should waive the right of set-off.
(5) The debenture may be subject to transferred, succession, donation, repayment of principal and payment of interest and any other form of book transfer in accordance with the requirements of TDCC and other applicable legal rules. The applicants shall bear the expenses incurred thereof.
(6) In the event of the extinction of prescriptions, loss, theft, and impairment of the debenture, the Civil Code or applicable laws of the Republic of China effective at the time of offering shall be applicable.
Prospective investors of the debenture:
The debenture is offered for the professional investors meeting the requirements of the “Regulations Governing Offshore Structured Products”.
Notification:
Notification to the bearers or creditors of the debenture shall be made by announcement through the MOPS site of the Taiwan Stock Exchange Corporation.
Others not covered by These Regulations shall be governed by the “Regulations Governing Issuance of Bank Debentures by Banks” and other applicable legal rules, or related requirements of the competent authority.

Taichung Commercial Bank Co., Ltd.

Regulations Governing the Offering of 2[nd] term of the perpetual non-cumulative unsecured subordinated financial debentures in 2017

Bond Name: Taichung Commercial Bank 2[nd] term of perpetual non-cumulative unsecured subordinated financial debentures in 2017 (hereinafter referred to as “the debenture”)
Credit rating on the issuer: The Bank commissioned Fitch Ratings Taiwan as the credit rating institution to assess the credit standing of the Bank on: September 21, 2016; Subject of rating: the issuer. Credit rating result: A-(twn) for domestic long-term credit standing. The debenture will not be rated by other credit rating institutions.
Priority of creditor rights and investment risk:
(1) The priority (including principal and interest) of the bearers of the debenture in the entitlement of compensation is senior to the shareholders and junior to the bearers of tier 2 capital instruments, deposit account bearers and other creditors of the Bank. However, the priority of the bearers of the debenture for compensation will be the same as the shareholders of common stock in the event of the takeover of the Bank by the competent authority, order for discontinuation of operation and liquidation.
(2) The debenture is a form of unsecured debenture.
(3) The debenture is not a deposit and not protected by CDIC.
(4) The bearers of the debenture shall pay attention to the risk inherent to the underlying instrument.
1. Total Issued:
The debenture was offered at NTD500 million.
Book value:
The face value of each lot amounted to NTD10 million.
Issuing price:

The debenture is issued at par value as of the offering day.

Duration:

The debenture was offered on May 18, 2017 with no maturity date.

Coupon rate: Coupon rate is index interest rate plus 3.08%. The indicator rate is the adjustable interest rate posted by Chunghua Post Co., Ltd offered for time deposit (not large sum) of 1-year term. The day for resetting of the coupon rate shall be the second business day prior to each value date
Interest bearing and payment method:
(1) The debentures shall accrued simple interest on a daily basis (act/act) at the coupon rate by the exact days of holding and payable annually on July 1 of each subsequent year. The calculation of the interest amount by the Bank shall be final.
(2) The interest payment from the debenture will be rounded to the nearest NT Dollar for each lot. The calculation of interest by the Bank shall prevail. If the day for principal repayment and interest payment is a day on which the Bank is not open for business, move forward to the next business day for payment without additional interest accrued. Those who claim principal and interest beyond the value date will receive no additional accrued interest.
(3) The Bank will withhold applicable income tax and supplementary premiums of the National Health Insurance Administration on the interest of the debenture at the time of disbursement.
Condition of interest payment:
(1) No interest will be paid if the Bank has no earnings in the previous fiscal year and no payment of dividends (including cash dividends and stock dividends). If the accumulated undistributed earnings net of the unamortized loss from the disposal of non-performing loans exceeds the amount of interest payments, and the payment does not cause a change to the original condition agreed on interest payment, this provision will not be applicable. Interest not being paid due to the aforementioned reasons cannot be accumulated or deferred.

(2) If the ratio between the equity capital and risk assets of the Bank on the interest payment day falls below the minimum ratio set forth in Article 5, Paragraph 1 of the “Regulations Governing the Capital Adequacy and Capital Category of Banks”, principal and interest payment shall be deferred. The accrued interests from the debenture will not yield further interest.
Early redemption rights:
If the ratio of regulatory capital to risk-weighted assets of the Bank after being redeemed shall meet the minimum rate stated of the competent authority after five years of issuance, and, at the approval of the competent authority, the Bank may proceed to early redemption with 30 days of notice in advance. Redemption will be made in whole at face value amount of the instruments plus all coupon yields.
Definitions
(1) “Ratio of regulatory capital to risk-weighted assets” as referred to in Article 10 and Article 11 shall be based on the definition of Article 44 of The Banking Act of The Republic of China and the “Regulations Governing the Capital Adequacy and Capital Category of Banks” announced by the Financial Supervisory Commission, and the annual financial reports or the interim reports audited by certified public accountants, as well as the ratio declared by the Bank by the end of March and August of each year with the Financial Supervisory Commission after review by certified public accountants.
(2) “Earnings” as referred to in Article 10 of These Regulations are the earnings net of taxation as stated in the comprehensive income statement covering the most recent year recognized by the General Meeting of shareholders.
The form of debenture:
The debenture will be issued in digital form and registered with the Taiwan Depository and Clearing Corporation.
Agent of principal and interest payment:
The Taipei Branch of the Bank will be responsible for handling principal and interest payment through remittance to bearers of the debenture as stated in the roster available from TDCC.
Other requirements:
(1) The debenture can be circulated, freely transferred, pledged under lien or as collateral freely but cannot be pledged as collateral for loans from the Bank.
(2) According to the Civil Code, any portion of principal not being claimed within a period of 15 years and interest not being claimed within a period of 5 years from the first day of payment shall be not be redeemed by the Bank.
(3) Subscribers of bearers of the debentures cannot claim for early redemption.
(4) In case the Bank proceeds to liquidation procedures or declaration of bankruptcy, no interest will be accrued for calculation from the day on which liquidation procedure starts or the day of bankruptcy declaration. Both the principal and interest shall be deemed immediately due. The bearers or the creditors of the debenture should waive the right of set-off.
(5) The debenture may be subject to transferred, succession, donation, repayment of principal and payment of interest and any other form of book transfer in accordance with the requirements of TDCC and other applicable legal rules. The applicants shall bear the expenses incurred thereof.
(6) The prescription of the debentures shall be governed by Civil Code and the law of the Republic of China or applicable legal rules at the time of issuance.
Prospective investors of the debenture:
The debenture is offered for the professional investors meeting the requirements of the “Regulations Governing Offshore Structured Products”.
Notification:
Notification to the bearers or creditors of the debenture shall be made by announcement through the MOPS site of the Taiwan Stock Exchange Corporation.
Others not covered by These Regulations shall be governed by the “Regulations Governing Issuance of Bank Debentures by Banks” and other applicable legal rules, or related requirements of the competent authority.

Taichung Commercial Bank Co., Ltd.

Regulations Governing the Offering of 3[rd] term of the perpetual non-cumulative unsecured subordinated financial debentures in 2017

Bond Name: Taichung Commercial Bank 3[rd] term of perpetual non-cumulative unsecured subordinated financial debentures in 2017 (hereinafter referred to as “the debenture”)
Credit rating on the issuer: The Bank commissioned Fitch Ratings Taiwan as the credit rating institution to assess the credit standing of the Bank on: September 21, 2016; Subject of rating: the issuer. Credit rating result: A-(twn) for domestic long-term credit standing. The debenture will not be rated by other credit rating institutions.
Priority of creditor rights and investment risk:
(1) The priority (including principal and interest) of the bearers of the debenture in the entitlement of compensation is senior to the shareholders and junior to the bearers of tier 2 capital instruments, deposit account bearers and other creditors of the Bank. However, the priority of the bearers of the debenture for compensation will be the same as the shareholders of common stock in the event of the takeover of the Bank by the competent authority, order for discontinuation of operation and liquidation.
(2) The debenture is a form of unsecured debenture.
(3) The debenture is not a deposit and not protected by CDIC.
(4) The bearers of the debenture shall pay attention to the risk inherent to the underlying instrument.
1. Total Issued:

The debenture was offered at NTD500 million.

Book value:

The face value of each lot amounted to NTD10 million.

Issuing price:

The debenture is issued at par value as of the offering day.

Duration: The debenture was offered on August 28, 2017 with no maturity date.
Coupon rate:

Coupon rate is index interest rate plus 3.08%. The indicator rate is the adjustable interest rate posted by Chunghua Post Co., Ltd offered for time deposit (not large sum) of 1-year term. The day for resetting of the coupon rate shall be the second business day prior to each value date

Interest bearing and payment method:
(1) The debenture yields simple interest from the day of offering at the coupon rate accrued daily (act/act). Interest is payable once annually and the amount of interest shall be determined by the Bank.
(2) The interest payment from the debenture will be rounded to the nearest NT Dollar for each lot. The calculation of interest by the Bank shall prevail. If the day for principal repayment and interest payment is a day on which the Bank is not open for business, move forward to the next business day for payment without additional interest accrued. Those who claim principal and interest beyond the value date will receive no additional accrued interest.
(3) The Bank will withhold applicable income tax and supplementary premiums of the National Health Insurance Administration on the interest of the debenture at the time of disbursement.
Condition of interest payment:
(1) No interest will be paid if the Bank has no earnings in the previous fiscal year and no payment of dividends (including cash dividends and stock dividends). If the accumulated undistributed earnings net of the unamortized loss from the disposal of non-performing loans exceeds the amount of interest payments, and the payment does not cause a change to the original condition agreed on interest payment, this provision will not be applicable. Interest not being paid due to the aforementioned reasons cannot be accumulated or deferred.

(2) If the ratio between the equity capital and risk assets of the Bank on the interest payment day falls below the minimum ratio set forth in Article 5, Paragraph 1 of the “Regulations Governing the Capital Adequacy and Capital Category of Banks”, principal and interest payment shall be deferred. The accrued interests from the debenture will not yield further interest.
Early redemption rights:
If the ratio of regulatory capital to risk-weighted assets of the Bank after being redeemed shall meet the minimum rate stated of the competent authority after five years of issuance, and, at the approval of the competent authority, the Bank may proceed to early redemption with 30 days of notice in advance. Redemption will be made in whole at face value amount of the instruments plus all coupon yields.
Definitions
(1) “Ratio of regulatory capital to risk-weighted assets” as referred to in Article 10 and Article 11 shall be based on the definition of Article 44 of The Banking Act of The Republic of China and the “Regulations Governing the Capital Adequacy and Capital Category of Banks” announced by the Financial Supervisory Commission, and the annual financial reports or the interim reports audited by certified public accountants, as well as the ratio declared by the Bank by the end of March and August of each year with the Financial Supervisory Commission after review by certified public accountants.
(2) “Earnings” as referred to in Article 10 of These Regulations are the earnings net of taxation as stated in the comprehensive income statement covering the most recent year recognized by the General Meeting of shareholders.
The form of debenture:
The debenture will be issued in digital form and registered with the Taiwan Depository and Clearing Corporation.
Agent of principal and interest payment:
The Taipei Branch of the Bank will be responsible for handling principal and interest payment through remittance to bearers of the debenture as stated in the roster available from TDCC.
Other requirements:
(1) The debenture can be circulated, freely transferred, pledged under lien or as collateral freely but cannot be pledged as collateral for loans from the Bank.
(2) According to the Civil Code, any portion of principal not being claimed within a period of 15 years and interest not being claimed within a period of 5 years from the first day of payment shall be not be redeemed by the Bank.
(3) Subscribers of bearers of the debentures cannot claim for early redemption.
(4) In case the Bank proceeds to liquidation procedures or declaration of bankruptcy, no interest will be accrued for calculation from the day on which liquidation procedure starts or the day of bankruptcy declaration. Both the principal and interest shall be deemed immediately due. The bearers or the creditors of the debenture should waive the right of set-off.
(5) The debenture may be subject to transferred, succession, donation, repayment of principal and payment of interest and any other form of book transfer in accordance with the requirements of TDCC and other applicable legal rules. The applicants shall bear the expenses incurred thereof.
(6) The prescription of the debentures shall be governed by Civil Code and the law of the Republic of China or applicable legal rules at the time of issuance.
Prospective investors of the debenture:
The debenture is offered for the professional investors meeting the requirements of the “Regulations Governing Offshore Structured Products”.
Notification:
Notification to the bearers or creditors of the debenture shall be made by announcement through the MOPS site of the Taiwan Stock Exchange Corporation.
Others not covered by These Regulations shall be governed by the “Regulations Governing Issuance of Bank Debentures by Banks” and other applicable legal rules, or related requirements of the competent authority.

Taichung Commercial Bank Co., Ltd.

Regulations Governing the Offering of 4[th] term of the perpetual non-cumulative unsecured subordinated financial debentures in 2017

Taichung Commercial Bank (hereinafter referred to as “the Bank”) acted in compliance with FSC Letter JinGuan-Yin-Piao-Zi No. 10600229120 dated September 22, 2017 for the offering of perpetual non-cumulative unsecured subordinated financial debentures specified as follows:

Bond Name: Taichung Commercial Bank 4[th] term of perpetual non-cumulative unsecured subordinated financial debentures in 2017 (hereinafter referred to as “the debenture”)
Credit rating on the issuer: The Bank commissioned Fitch Ratings Taiwan as the credit rating institution to assess the credit standing of the Bank on: September 20, 2017; Subject of rating: the issuer. Credit rating result: A-(twn) for domestic long-term credit standing. The debenture will not be rated by other credit rating institutions.
Priority of creditor rights and investment risk:
(1) The priority (including principal and interest) of the bearers of the debenture in the entitlement of compensation is senior to the shareholders and junior to the bearers of tier 2 capital instruments, deposit account bearers and other creditors of the Bank. However, the priority of the bearers of the debenture for compensation will be the same as the shareholders of common stock in the event of the takeover of the Bank by the competent authority, order for discontinuation of operation and liquidation.
(2) The Bank or its affiliates did not provide guarantee, collaterals or other arrangements to bolster the priority of the holders of the debentures in compensation.
(3) The debenture is a form of unsecured debenture.
(4) The debenture is not a deposit and not protected by CDIC.
(5) The bearers of the debenture shall pay attention to the risk inherent to the underlying instrument.
1. Total Issued:

The debenture was offered at NTD1,350 million.

Book value:

The face value of each lot amounted to NTD10 million.

Issuing price:

The debenture is issued at par value as of the offering day.

Duration: The debenture was offered on December 5, 2017 with no maturity date.
Coupon rate: Coupon rate is index interest rate plus 3.08%. The indicator rate is the adjustable interest rate posted by Chunghua Post Co., Ltd offered for time deposit (not large sum) of 1-year term. The day for resetting of the coupon rate shall be the second business day prior to each value date
Interest bearing and payment method:
(1) The debenture yields simple interest from the day of offering at the coupon rate accrued daily (act/act). Interest is payable once annually and the amount of interest shall be determined by the Bank.
(2) The interest payment from the debenture will be rounded to the nearest NT Dollar for each lot. The calculation of interest by the Bank shall prevail. If the day for principal repayment and interest payment is a day on which the Bank is not open for business, move forward to the next business day for payment without additional interest accrued. Those who claim principal and interest beyond the value date will receive no additional accrued interest.
(3) The Bank will withhold applicable income tax and supplementary premiums of the National Health Insurance Administration on the interest of the debenture at the time of disbursement.
Condition of interest payment:
(1) No interest will be paid if the Bank has no earnings in the previous fiscal year and no payment of dividends (including cash dividends and stock dividends). If the accumulated undistributed earnings net of the unamortized loss from the disposal of non-performing loans exceeds the amount of interest payments, and the payment does not cause a change to the original condition

agreed on interest payment, this provision will not be applicable. Interest not being paid due to the aforementioned reasons cannot be accumulated or deferred.

(2) If the ratio between the equity capital and risk assets of the Bank on the interest payment day falls below the minimum ratio set forth in Article 5, Paragraph 1 of the “Regulations Governing the Capital Adequacy and Capital Category of Banks”, principal and interest payment shall be deferred. The accrued interests from the debenture will not yield further interest.
Early redemption rights:
If the ratio of regulatory capital to risk-weighted assets of the Bank after being redeemed shall meet the minimum rate stated of the competent authority after five years of issuance, and, at the approval of the competent authority, the Bank may proceed to early redemption with 30 days of notice in advance. Redemption will be made in whole at face value amount of the instruments plus all coupon yields.
Definitions
(1) “Ratio of regulatory capital to risk-weighted assets” as referred to in Article 10 and Article 11 shall be based on the definition of Article 44 of The Banking Act of The Republic of China and the “Regulations Governing the Capital Adequacy and Capital Category of Banks” announced by the Financial Supervisory Commission, and the annual financial reports or the interim reports audited by certified public accountants, as well as the ratio declared by the Bank by the end of March and August of each year with the Financial Supervisory Commission after review by certified public accountants.
(2) “Earnings” as referred to in Article 10 of These Regulations are the earnings net of taxation as stated in the comprehensive income statement covering the most recent year recognized by the General Meeting of shareholders.
The form of debenture:
The debenture will be issued in digital form and registered with the Taiwan Depository and Clearing Corporation.
Agent of principal and interest payment:
The Taipei Branch of the Bank will be responsible for handling principal and interest payment through remittance to bearers of the debenture as stated in the roster available from TDCC.
Other requirements:
(1) The debenture can be circulated, freely transferred, pledged under lien or as collateral freely but cannot be pledged as collateral for loans from the Bank.
(2) According to the Civil Code, any portion of principal not being claimed within a period of 15 years and interest not being claimed within a period of 5 years from the first day of payment shall be not be redeemed by the Bank.
(3) Subscribers of bearers of the debentures cannot claim for early redemption.
(4) In case the Bank proceeds to liquidation procedures or declaration of bankruptcy, no interest will be accrued for calculation from the day on which liquidation procedure starts or the day of bankruptcy declaration. Both the principal and interest shall be deemed immediately due. The bearers or the creditors of the debenture should waive the right of set-off.
(5) The debenture may be subject to transferred, succession, donation, repayment of principal and payment of interest and any other form of book transfer in accordance with the requirements of TDCC and other applicable legal rules. The applicants shall bear the expenses incurred thereof.
(6) The prescription of the debentures shall be governed by Civil Code and the law of the Republic of China or applicable legal rules at the time of issuance.
Prospective investors of the debenture:
The debenture is offered for the professional investors meeting the requirements of the “Regulations Governing Offshore Structured Products”.
Notification:
Notification to the bearers or creditors of the debenture shall be made by announcement through the MOPS site of the Taiwan Stock Exchange Corporation.
Others not covered by These Regulations shall be governed by the “Regulations Governing Issuance of Bank Debentures by Banks” and other applicable legal rules, or related requirements of the competent authority.

Taichung Commercial Bank Co., Ltd.

Regulations Governing the Offering of 5[th] term of the perpetual non-cumulative unsecured subordinated financial debentures in 2017

Bond Name: Taichung Commercial Bank 5[th] term of perpetual non-cumulative unsecured subordinated financial debentures in 2017 (hereinafter referred to as “the debenture”)
Credit rating on the issuer: The Bank commissioned Fitch Ratings Taiwan as the credit rating institution to assess the credit standing of the Bank on: September 20, 2017; Subject of rating: the issuer. Credit rating result: A-(twn) for domestic long-term credit standing. The debenture will not be rated by other credit rating institutions.
Priority of creditor rights and investment risk:
(1) The priority (including principal and interest) of the bearers of the debenture in the entitlement of compensation is senior to the shareholders and junior to the bearers of tier 2 capital instruments, deposit account bearers and other creditors of the Bank. However, the priority of the bearers of the debenture for compensation will be the same as the shareholders of common stock in the event of the takeover of the Bank by the competent authority, order for discontinuation of operation and liquidation.
(2) The Bank or its affiliates did not provide guarantee, collaterals or other arrangements to bolster the priority of the holders of the debentures in compensation.
(3) The debenture is a form of unsecured debenture.
(4) The debenture is not a deposit and not protected by CDIC.
(5) The bearers of the debenture shall pay attention to the risk inherent to the underlying instrument.
1. Total Issued:

The debenture was offered at NTD2,650 million.

Book value:

The face value of each lot amounted to NTD10 million.

Issuing price:

The debenture is issued at par value as of the offering day.

Duration: The debenture was offered on December 27, 2017 with no maturity date.
Coupon rate: Coupon rate is index interest rate plus 3.08%. The indicator rate is the adjustable interest rate posted by Chunghua Post Co., Ltd offered for time deposit (not large sum) of 1-year term. The day for resetting of the coupon rate shall be the second business day prior to each value date
Interest bearing and payment method:
(1) The debenture yields simple interest from the day of offering at the coupon rate accrued daily (act/act). Interest is payable once annually and the amount of interest shall be determined by the Bank.
(2) The interest payment from the debenture will be rounded to the nearest NT Dollar for each lot. The calculation of interest by the Bank shall prevail. If the day for principal repayment and interest payment is a day on which the Bank is not open for business, move forward to the next business day for payment without additional interest accrued. Those who claim principal and interest beyond the value date will receive no additional accrued interest.
(3) The Bank will withhold applicable income tax and supplementary premiums of the National Health Insurance Administration on the interest of the debenture at the time of disbursement.
Condition of interest payment:
(1) No interest will be paid if the Bank has no earnings in the previous fiscal year and no payment of dividends (including cash dividends and stock dividends). If the accumulated undistributed earnings net of the unamortized loss from the disposal of non-performing loans exceeds the amount of interest payments, and the payment does not cause a change to the original condition

agreed on interest payment, this provision will not be applicable. Interest not being paid due to the aforementioned reasons cannot be accumulated or deferred.

(2) If the ratio between the equity capital and risk assets of the Bank on the interest payment day falls below the minimum ratio set forth in Article 5, Paragraph 1 of the “Regulations Governing the Capital Adequacy and Capital Category of Banks”, principal and interest payment shall be deferred. The accrued interests from the debenture will not yield further interest.
Early redemption rights:
If the ratio of regulatory capital to risk-weighted assets of the Bank after being redeemed shall meet the minimum rate stated of the competent authority after five years of issuance, and, at the approval of the competent authority, the Bank may proceed to early redemption with 30 days of notice in advance. Redemption will be made in whole at face value amount of the instruments plus all coupon yields.
Definitions
(1) “Ratio of regulatory capital to risk-weighted assets” as referred to in Article 10 and Article 11 shall be based on the definition of Article 44 of The Banking Act of The Republic of China and the “Regulations Governing the Capital Adequacy and Capital Category of Banks” announced by the Financial Supervisory Commission, and the annual financial reports or the interim reports audited by certified public accountants, as well as the ratio declared by the Bank by the end of March and August of each year with the Financial Supervisory Commission after review by certified public accountants.
(2) “Earnings” as referred to in Article 10 of These Regulations are the earnings net of taxation as stated in the comprehensive income statement covering the most recent year recognized by the General Meeting of shareholders.
The form of debenture:
The debenture will be issued in digital form and registered with the Taiwan Depository and Clearing Corporation.
Agent of principal and interest payment:
The Taipei Branch of the Bank will be responsible for handling principal and interest payment through remittance to bearers of the debenture as stated in the roster available from TDCC.
Other requirements:
(1) The debenture can be circulated, freely transferred, pledged under lien or as collateral freely but cannot be pledged as collateral for loans from the Bank.
(2) According to the Civil Code, any portion of principal not being claimed within a period of 15 years and interest not being claimed within a period of 5 years from the first day of payment shall be not be redeemed by the Bank.
(3) Subscribers of bearers of the debentures cannot claim for early redemption.
(4) In case the Bank proceeds to liquidation procedures or declaration of bankruptcy, no interest will be accrued for calculation from the day on which liquidation procedure starts or the day of bankruptcy declaration. Both the principal and interest shall be deemed immediately due. The bearers or the creditors of the debenture should waive the right of set-off.
(5) The debenture may be subject to transferred, succession, donation, repayment of principal and payment of interest and any other form of book transfer in accordance with the requirements of TDCC and other applicable legal rules. The applicants shall bear the expenses incurred thereof.
(6) The prescription of the debentures shall be governed by Civil Code and the law of the Republic of China or applicable legal rules at the time of issuance.
Prospective investors of the debenture:
The debenture is offered for the professional investors meeting the requirements of the “Regulations Governing Offshore Structured Products”.
Notification:
Notification to the bearers or creditors of the debenture shall be made by announcement through the MOPS site of the Taiwan Stock Exchange Corporation.
Others not covered by These Regulations shall be governed by the “Regulations Governing Issuance of Bank Debentures by Banks” and other applicable legal rules, or related requirements of the competent authority.

Management Presentation (Company Reports)

No. 5

The Bank’s “Procedural Rules of for Shareholders Meetings” amendments. (Please refer to Page 26~27 of the Annual Meeting Handbook)

The “Procedural Rules for Board of Directors Meetings of Taichung Commercial Bank” amendment before and after

Clauses after the amendment Existing clauses
Article 7 Article 7 The Bank should have the following The Bank should have the following matters proposed to the Board of matters proposed to the Board of Directors for discussion. Directors for discussion. 1. The Bank’s business plans; 1. The Bank’s business plans; 2. Annual financial reports and semi2. Annual financial reports and semiannual financial reports; But the semiannual financial reports; But the semiannual financial report is not required annual financial report is not required by law and regulations to be audited by law and regulations to be audited by the CPAs; therefore, it is not by the CPAs; therefore, it is not subject to this requirement. subject to this requirement.
1. According to Article 14-1 of the 3. According to Article 14-1 of the Securities and Exchange Act, or the Securities and Exchange Act, or the revision of the internal control system revision of the internal control and the Assessment of the system. effectiveness of the internal control system .
1. The Procedures for the Acquisition 4. The Procedures for the Acquisition and Disposal of Assets, the trade of and Disposal of Assets, the trade of derivatives, loaning of funds, making derivatives, loaning of funds, making of endorsement/guarantees, and other of endorsement/guarantees, and other significant financial business acts significant financial business acts should be enacted or amended in should be enacted or amended in accordance with Article 36-1 of the accordance with Article 36-1 of the Securities and Exchange Act. Securities and Exchange Act.
Remark
1. The functions of the Auditing Committee as stated in Article 14-5 of the Securities and Exchange Act, the “Assessment of the effectiveness of the internal control system” is a key audit matter and shall be subject to the discussion of the Board and thereby stated in Subparagraph 3 of Paragraph 1.

Clauses after the amendment	Existingclauses	Remark
Article 7 The Bank should have the following matters proposed to the Board of Directors for discussion. 1. The Bank’s business plans; 2. Annual financial reports and semi- annual financial reports; But the semi- annual financial report is not required by law and regulations to be audited by the CPAs; therefore, it is not subject to this requirement. 3. According to Article 14-1 of the Securities and Exchange Act, or the revision of the internal control system and the Assessment of the effectiveness of the internal control system. 4. The Procedures for the Acquisition and Disposal of Assets, the trade of derivatives, loaning of funds, making of endorsement/guarantees, and other significant financial business acts should be enacted or amended in accordance with Article 36-1 of the Securities and Exchange Act. 5. Offer, issuance, or private placement of equity-based marketable securities 6. The appointment and dismissal of the officer of Finance, Accounting, Risk Management, Compliance, and Internal Audit Office. 7. Donation to a related party or a significant donation to a non-related party. However, the charitable donation for an emergency relief of major natural disasters may be submitted in the next Board meeting for ratification. 8. Performance evaluation criteria and remuneration standards of the management, and remuneration structure and system of the Board of Directors 9. The matters to be resolved in the shareholders’ meeting or Board meeting in accordance with Article 14-3 of the Securities and Exchange Act, the other law and regulations, or the Articles of Association, or the major matters to be resolved in accordance with the requirements of the competent authorities. The “related party” in Subparagraph 7 in the preceding paragraph refers to the “related party” described in the “Regulations Governingthe Preparation	Article 7 The Bank should have the following matters proposed to the Board of Directors for discussion. 1. The Bank’s business plans; 2. Annual financial reports and semi- annual financial reports; But the semi- annual financial report is not required by law and regulations to be audited by the CPAs; therefore, it is not subject to this requirement. 3. According to Article 14-1 of the Securities and Exchange Act, or the revision of the internal control system. 4. The Procedures for the Acquisition and Disposal of Assets, the trade of derivatives, loaning of funds, making of endorsement/guarantees, and other significant financial business acts should be enacted or amended in accordance with Article 36-1 of the Securities and Exchange Act. 5. Offer, issuance, or private placement of equity-based marketable securities 6. The appointment and dismissal of the officer of Finance, Accounting, Risk Management, Compliance, and Internal Audit Office. 7. Donation to a related party or a significant donation to a non-related party. However, the charitable donation for an emergency relief of major natural disasters may be submitted in the next Board meeting for ratification. 8. Performance evaluation criteria and remuneration standards of the management, and remuneration structure and system of the Board of Directors. 9. The matters to be resolved in the shareholders’ meeting or Board meeting in accordance with Article 14-3 of the Securities and Exchange Act, the other law and regulations, or the Articles of Association, or the major matters to be resolved in accordance with the requirements of the competent authorities. The “related party” in Subparagraph 7 in the preceding paragraph refers to the “related party” described in the “Regulations Governingthe Preparation	1. The functions of the Auditing Committee as stated in Article 14-5 of the Securities and Exchange Act, the “Assessment of the effectiveness of the internal control system” is a key audit matter and shall be subject to the discussion of the Board and thereby stated in Subparagraph 3 of Paragraph 1. 2. For clarifying the authority and responsibility of the Independent Directors, and a higher level of participation in the performance of the Board, the particulars specified in Paragraph 5 shall be revised to explicitly state the seats of independent Directors reserved by the Company with at least 1 seat present in the session of the Board. In the resolution for motions presented in the Board session as stated in Paragraph 1, the presence of all Independents Directors is required. If particular Independent Director cannot attend the meeting in person, another Independent Director shall be appointed as proxy to the meeting. 3. The “criteria for outlaw” as stated in Paragraph 5 is not the “criteria for effective”. Violation of Paragraph 5 shall be subject to administrative penalty pursuant to Subparagraph 7, Paragraph 1, Article 178 of the Securities and Exchange Act. If the a quorum is granted for a session of the Board, the absence of Independent Directors in the session will be irrelevant with the validity of such session of the Board. 4. The text of Paragraph 2, 3 are hereby amended.

of Financial Reports by Securities Issuers.” The alleged “significant donation to a non-related party” refers to the donation amount of each transaction or the cumulative donation amount to one donee within one year for over NTD100 million, 1% of the net operating income stated in the most recent financial report audited by the CPAs, or 5% of the paidin capital.

The alleged “within one year” in the preceding paragraph is the year prior to the current Board meeting convening date, retroactively; also, the proposal that is already resolved in the Board meeting is not subject to this requirement.

For a foreign company’s stock share without a par value or without a NTD10 par value, the criteria of “5% of paid-in capital” stated in Paragraph 2 in the preceding paragraph will be replaced with “2.5% of shareholders’ equity.”

If the Bank has reserved seats for If the Bank has independent directors Independent Directors, at least 1 seat appointed, for the matters to be resolved shall be present in the session of the in the Board meeting in accordance with Board . In the resolution for motions ~~Article 14-3 of the Securities and~~ presented in the Board session as stated ~~Exchange Act~~ , the independent directors in Paragraph 1 , the presence of all ~~should~~ attend the Board meeting in independent Directors is required. If person or have other independent particular Independent Director cannot directors attend the meeting by proxy. attend the meeting in person, another The objections or reservations, if any, of Independent Director shall be appointed the independent directors should be as proxy to the meeting. The objections detailed in the minutes of the Board or reservations, if any, of the independent meeting. If the independent directors directors should be detailed in the cannot attend the Board meeting in minutes of the Board meeting. If the person to express their objections or independent directors cannot attend the reservations, in addition to being Board meeting in person to express their justified, they shall issue a written objections or reservations, in addition to opinion in advance to be detailed in the being justified, they shall issue a written minutes of Board meeting. opinion in advance to be detailed in the minutes of Board meeting. The resolutions reached in the board meeting that are subject to the following The resolutions reached in the board circumstances should be documented in meeting that are subject to the following the minutes of the meeting and disclosed circumstances should be documented in on the reporting system designated by the the minutes of the meeting and disclosed competent authorities within two days on the reporting system designated by the from the board meeting date: competent authorities within two days I. The objections or reservations of the from the board meeting date: independent directors that are I. The objections or reservations of the recorded or in writing; independent directors that are II. The matters that are not approved by recorded or in writing; the Audit Committee, but with the II. The matters that are not approved by consent of two thirds of the Board of the Audit Committee, but with the Directors; consent of two thirds of the Board of Directors;

No. 6

Management Presentation (Company Reports)

Report on the Institution of the Code of Conduct for the Directors and Managers of the Bank. (Please refer to Page 29~30 of the Annual Meeting Handbook)

Code of Conduct for the Bank Directors and Managers

Instituted by the Board in the 2[nd] session of the 23[rd] term of the Board on 2017.7.13

Article 1 Purpose of institution and normative reference

This Code was instituted pursuant to Subparagraph 1, Paragraph 1, Article 7 of the “Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries” and as the guideline for the Directors and Managers of the Bank (including the President and officers at equivalent ranks, Vice President and officers at equivalent ranks, Assistant Vice President and officers at equivalent ranks, persons in charge of treasury, person in charge of accounting, and other officers in charge of administrative affairs and those who re authorized to affix signature on behalf of and in the name of the Bank) in their behavioral patterns in conformity to moral standard and the better understanding of the stakeholders on the ethic code of the Bank.

Article 2: The content

The Code of Conduct for the Directors and Managers of the Bank covers the following:

(I) Prevention of the conflict of interest:

Directors and Managers of the Bank shall handle official duties in an objective manner with efficiency, and shall not allow themselves, their spouses, parents, children or kindred within the 2[nd] tier under the Civil Code access to illicit benefits by making use of their job positions and functions. The Bank may finance or act as guarantor in favor of the affiliates of the aforementioned personnel, engaged in major asset trade, purchase or selling with related parties of the Company and shall duly observe applicable rules and regulations. Likewise, Directors and Managers shall voluntarily explain if there is potential conflict of interest with the Company.

(II) Avoidance of seeking personal interest:

Directors or Managers of the Bank shall avoid the following:

(1) Seeking opportunities for personal interest with the use of company assets, information, or the duties and functions they performed.
(2) Acquisition of personal interest with the use of company assets, information, or the duties and functions they performed.
(3) Engagement in competition with the Company. If there is an opportunity for profit making for the Company, it is the responsibility of the Directors and Managers to augment the legitimate profit for the Company.

(III) Confidentiality

Directors and Managers shall keep the information of the customers of the Bank in strict confidence unless otherwise authorized or dictated by law for disclosure. Information for non-disclosure includes the undisclosed information possibly be used by competitors or the disclosure of which may cause damage to the Company or the customers.

(IV) Fair Trade

Directors and Managers shall treat the customers, competitors, and the employees of the Company fairly, and shall not manipulate, conceal, and use in

foul means of the information being accessed to by virtue of the duties of functions they performed, present misstatement on materiality, or engaged in any other forms of unfair trade for purpose of getting illicit benefits.

(V) Protection and appropriate use of company assets: It is the responsibility of the Directors and Managers to protection company assets and to ensure the legitimate use in official duties.
(VI) Compliance with applicable laws
Directors and Managers shall duly observe the Securities and Exchange Act and other applicable laws.
(VII) Encourage the reporting of any illegal act or act of defiance of the Code of Conduct: The Bank encourages employees to report to the managers, person in charge of internal audit, or any other appropriate officers on any suspected violation or violation of applicable laws or the Code of Conduct.

The safety of the informants will be safeguarded.

(VIII) Penalty:

In the event of defiance of the Code of Conduct by Director or Manager, the Bank will respond in accordance with the Company Act, the Articles of Incorporation, and other applicable rules and regulations. In addition, the Bank will disclose such act of defiance on MOPS specifying the date of violation, the reason of violation, the legal rules violated and the action taken in response to the act. Those who were accused of acting in defiance of the Code of Conduct shall be granted the opportunity to present an opinion or file a complaint.

(IX) Response to the concern of material damage:

If there is an alleged material damage to the Company as discovered by the Directors and Managers, take appropriate action immediately and notify the Auditing Committee or the Independent Directors of the Auditing Committee with report to the Board. In addition, supervision of the Company for reporting to the competent authority is necessary.

Article 3: The Waiver Procedure

The waiver of the Code of Conduct to Directors and Supervisors shall be granted by the Board with disclosure on the MOPS of the date of resolution of the Board for the waiver, the adverse opinion or qualified opinion of the Independent Directors, the duration of waiver, the reason for waiver and the applicable standard for the waiver so that the Shareholders’ Meeting could evaluate if the decision of the Board is appropriate. This will be essential for the control of unauthorized or suspicious waiver and guarantee a due procedure for the waiver of the Code of Conduct for the protection of the Company.

Article 4 Means of Disclosure

This Code of Conduct shall be disclosed at the official website, annual reports, prospectus of the Company and MOPS. The same procedure is applicable to any amendment thereto.

Article 5 Implementation

This Code of Conduct shall be effective upon the resolution of the Board and forwarded to the Auditing Committee, reported to the Shareholders’ Meeting. The same procedure is applicable to any amendment thereto.

Proposals

Proposals No. 1

Proposal: The 2017 Business Report and Financial Statements are presented for adoption.

Explanation: The Board of Directors of the Bank has passed the Report on Operation, Financial Statements of individual entities and consolidated financial statements of the Bank covering FY2017 (refer to P.5~8 and 41~66 Annual Meeting Handbook) subject to the finalization of the Auditing Committee.

Resolutions:

Proposals No. 2

Proposal: The 2017 Profit Distribution Proposal is presented for adoption.

Explanation:

I. The corporate earnings of the Bank in 2017 amounted to NTD3,632,541,781.8. With the addition of undistributed earnings at the beginning amounting to NTD1,120,517.49 and the defined benefit plan reassessed value of negative NTD3,007,532 in 2017, the Bank shall appropriate 30% or NTD1,089,196,430.18 as legal reserve under law, and 1% of corporate earnings or NTD36,325,417.82 as special reserve under FSC Letter Jin-Guan-Yin-Fa-Zi No. 10510001512. The earnings that could be appropriated for distribution amounted to NTD2,505,132,919.29 and will be distributed as follows:
(I) Shareholder dividends – stock dividends (NTD0.25 per share): NTD823,294,750.
(II) Shareholder dividends – cash dividend (NTD0.45 per share): NTD1,481,930,542.
II. Taichung Commercial Bank 2017 Profit Distribution Statement. Please refer to Page 34 of the Annual Meeting Handbook

Resolutions:

Taichung Commercial Bank Co., Ltd.

Earnings Distribution Statement

2017

Unit: NTD Unappropriated earnings - beginning $ 1,120,217.49 The defined benefit plans re-measured (3,007,532.00) amount is recognized in the “retained earnings” account. Adjusted unappropriated earnings (1,887,014.51) Net income 3,632,541,781.80 Legal reserve appropriated (1,089,196,430.18) Special reserve as required by law (36,325,417.82) Current distributable earnings 2,505,132,919.29 Distributions Shareholder dividends – stock 823,294,750 (NTD0.25/share) Shareholder dividends – cash 1,481,930,542 2,305,225,292.00 (NTD0.45/share) Unappropriated earnings - ending $ 199,907,627.29

Discussions

Discussions No. 1

Proposal: Proposing to have new shares issued through capitalization of earnings in 2017, please proceed to discuss.

Explanation:

The Company for business needs plans to appropriate stock dividends of NTD823,294,750 from the 2017 distributable earnings with 82,329,475 shares issued at the ratio of 25 shares distributed per thousand shares at NTD10 par.
The earnings distribution is calculated in accordance with the shareholders and their respective shareholding ratio in the register of shareholders. Fractional share distribution is to be consolidated by shareholders and registered with the Company’s Stock Department for stock consolidation within five days from the record date. Fractional share that is not consolidated or remains a fractional share after consolidation should be paid with an equivalent cash amount (rounded up to the dollar). Fractional shares will be purchased by persons arranged by the Chairman as authorized by the Board. In the event that the total number of outstanding shares in circulation and the shareholders’ dividend ratio are affected as a result of the company’s issuing new shares or financial bonds conversion through capitalization, employee’s exercising warrants, repurchasing shares of the Company or transferring treasury shares to employees and canceling treasury shares, it is proposed to authorize the Board of Directors in the meeting of shareholders to arrange the necessary adjustments.
The capitalization of retained earnings into new shares is pending on the final approval of the General Meeting of Shareholders and the approval of the competent authority. Once approved, the General Meeting of Shareholders is requested to authorize the Board of Directors to set the dividend day.
The terms and conditions of the capitalization of retained earnings into new shares may be subject to alteration at the request of the competent authority. The General Meeting of Shareholders is requested to authorize the Board of Directors with full power of attorney to make such alteration as per the request of the competent authority.
The shareholder’s rights and obligations for the new shares are the same as those of the existing shares.
The new shares issued through capitalization in accordance with Article 10 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers are without a delivered printed stock but by a book-entry delivery.

Resolutions:

Discussions No. 2

Proposal: The Company Corporate Charter (Articles of Incorporation) amendment is submitted for discussion. Explanation:

Amendment to Subparagraph 1, Subparagraph 9, and Subparagraph 10 of Article 5-1, and Paragraph 1, Article 36 for the revision of the rights and obligations of preferred shares and the conditions of offering, and related clauses.
The mapping of the Articles of Incorporation before and after the amendment is shown in the table below. (Please refer to Page 38~39 of the Annual Meeting Handbook)
Resolutions:

“Taichung Commercial Bank’s Corporate Charter” (Articles of Incorporation) amended before and after

Clauses after the amendment	Original clause	Remark
Article 5-1 1. If the Bank has earnings after account settlement, it shall appropriate the payment of applicable taxes and for write-off loss carried forward from previous periods. If there is still a balance, appropriate it for the legal reserve and appropriate or reversespecial reserve as required by law. The remainder shall be distributed as the stock dividend of the year at the first priority. 9. There is non-maturity date for preferred shares issued by the Bank and the holders of preferred shares are not entitled to claim for the redemption of the shares. The Bank may redeem the outstanding preferred shares in whole or in part from the day after the5th anniversary of the offering of preferred shares under law or at the permission of the competent authority. Redemption will be made at the offering price. The preferred shares not being redeemed still be granted the rights and obligations as mentioned in preceding paragraphs. Where the Bank may determine to pay stock dividend in particular year, the payable dividend to the deadline of redemption shall be calculated on the exact number of outstanding days. 10. If the preferred shares issued by the Bank have a maturity date, it shall be no less than5 years. Holders of preferred shares are not entitled to request the Bank for redemption of the shares before maturity. At maturity or the day after the 5th anniversary of the issuance day and as permitted by applicable laws and the competent authority, the Bank may redeem the shares at the offering price and under related regulations of issuance, issue new shares for compulsory conversation with the preferred shares (in the ratio of 1:1), or redeem by another means as permitted by law. If the Bank cannot	Article 5-1 1. If the Bank has earnings after account settlement, it shall appropriate the payment of applicable taxes and for write-off loss carried forward from previous periods. If there is still a balance, appropriate it for the legal reserve and special reserve as required by law. The remainder shall be distributed as the stock dividend of the year at the first priority. 9. There is non-maturity date for preferred shares issued by the Bank and the holders of preferred shares are not entitled to claim for the redemption of the shares. The Bank may redeem the outstanding preferred shares in whole or in part from the day after the7th anniversary of the offering of preferred shares under law or at the permission of the competent authority. Redemption will be made at the offering price. The preferred shares not being redeemed still be granted the rights and obligations as mentioned in preceding paragraphs. Where the Bank may determine to pay stock dividend in particular year, the payable dividend to the deadline of redemption shall be calculated on the exact number of outstanding days. 10. If the preferred shares issued by the Bank have a maturity date, it shall be no less than 7years. Holders of preferred shares are not entitled to request the Bank for redemption of the shares before maturity. At maturity or the day after the 5th anniversary of the issuance day and as permitted by applicable laws and the competent authority, the Bank may redeem the shares at the offering price and under related regulations of issuance, issue new shares for compulsory conversation with the preferred shares (in the ratio of 1:1), or redeem by another means as permitted by law. If the Bank cannot	Amendment to Subparagraph 1, Subparagraph 9 and Subparagraph 10, Paragraph 1, Article 5-1 for the revision of the rights and obligations of preferred shares and the conditions of offering, and related clauses

Clauses after the amendment	Original clause	Remark
redeem the preferred shares in whole or in part at maturity under objective factors or force majeure, the rights inherent to the preferred shares shall prevail under the same conditions for issuance provided under related regulations for issuance until the whole issue was redeemed by the Bank.	redeem the preferred shares in whole or in part at maturity under objective factors or force majeure, the rights inherent to the preferred shares shall prevail under the same conditions for issuance provided under related regulations for issuance until the whole issue was redeemed by the Bank.
Article 36 If the Bank has earnings after account settlement, appropriate for payment of applicable taxes as required by law and for write-off loss carried forward, followed by the appropriation of 30% as legal reserve. No further appropriation is necessary if the amount of legal reserve is equivalent to the paid-in capital of the Bank. The remainder shall be appropriatedor reverse for special reserve, followed by the distribution of dividends of preferred shares. If there is still a balance, pool up with accumulated undistributed earnings and the amount of reversal of special reserve as required by law for the distribution of dividends and bonuses to the shareholders at the proposal of the Board and ratification of the General Meeting. For the earnings distribution proposed to the Board of Directors in the shareholders’ meeting for resolution in the preceding paragraph, a working capital should be reserved first according to the changes in the operating environment, business operation, and investment, the ratio of cash and stock dividends should be proposed, of which, cash dividends should not be less than 10% of the total dividend amount. If the capital adequacy ratio fails to reach the legal ratio, the earnings shall be allocated in accordance with the Banking Act and the competent authority’s requirements.	Article 36 If the Bank has earnings after account settlement, appropriate for payment of applicable taxes as required by law and for write-off loss carried forward, followed by the appropriation of 30% as legal reserve. No further appropriation is necessary if the amount of legal reserve is equivalent to the paid-in capital of the Bank. The remainder shall be appropriated for special reserve, followed by the distribution of dividends of preferred shares. If there is still a balance, pool up with accumulated undistributed earnings and the amount of reversal of special reserve as required by law for the distribution of dividends and bonuses to the shareholders at the proposal of the Board and ratification of the General Meeting. For the earnings distribution proposed to the Board of Directors in the shareholders’ meeting for resolution in the preceding paragraph, a working capital should be reserved first according to the changes in the operating environment, business operation, and investment, the ratio of cash and stock dividends should be proposed, of which, cash dividends should not be less than 10% of the total dividend amount. If the capital adequacy ratio fails to reach the legal ratio, the earnings shall be allocated in accordance with the Banking Act and the competent authority’s requirements.	Amendment to Paragraph 1 for revision of related clauses on the offering of preferred shares.
The 39th amendment was implemented on June 5, 2018.		Addition of the record on the amendment.

Appendices

Appendix 1

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Auditor’s Report

To: Taichung Commercial Bank Co., Ltd.

Audit opinions

We have audited the accompanying individual balance sheet of Taichung Commercial Bank Co., Ltd. and subsidiary as of December 31, 2017 and 2016, and the related individual statement of income, individual statement of changes in shareholders equity, individual statement of cash flows, and Note of the individual financial statements (including major accounting policy) for the years then ended.

In our opinion, said the individual financial statements in all material respects, the Financial Status of the Bank as of December 31, 2017 and 2016, and its individual financial performance and individual cash flows of January 1 to December 31, 2017 and 2016 in conformity with the generally accepted accounting principles in the Republic of China.

The basis for opinions

We conducted the audit in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the accounting principles generally accepted in the Republic of China. Our responsibilities under those standards are further described in the responsibilities of auditors for the audit of the separate financial statements. We are independent of Taichung Commercial Bank and its subsidiaries in accordance with the Code of Ethics for certified public accountants in the part relevant to the audit of the consolidated financial statements of Taichung Commercial Bank, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believed that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matter

Key audit matters are those matter that, in our professional judgment, were of most significant in our audit of the individual financial statements of Taichung Commercial Bank in 2017. These matters were addressed in the content of our audit of the individual financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on those matters.

Key audit procedures of the consolidated financial statements of Taichung Commercial Bank and its subsidiaries in 2017 included:

Evaluate the impairment of discounts and loans to customers

Notes to key audit matters

As stated in Note 11, Taichung Commercial Bank had impairment in discounts and loans to customers amounting to NTD429,656,232 thousand and NTD770,744 thousand in 2017, respectively. These accounted for 65.45% of the total assets and 7.45% of net income, which are of significance to the overall financial reporting. As stated in Note 5 (1), in consideration of the overall impairment of Taichung Bank, material estimation and judgment of the management are involved, included the estimation of cash flows, recovery rate and impairment rates in the future. For these reasons, impairment of discounts and loans to the customers are determined as key audit matters.

The disclosures of the accounting policies, accounting estimates, and uncertainty of assumption related to the estimation of discount and loans to customers’ impairment are specified in Note 4 (12) and Note 5 (1) and Note 11.

Audit response

We understand and examine the internal control related to the assessment of impairment of discount and loans to customers of Taichung Commercial Bank.
We examined the impairment of discount and loans to customers of individual cases of Taichung Commercial Bank and its subsidiaries recognized for material impairment, on a selective basis, on the reasonability of future cash flows of collaterals.
We examined the impairment of discount and loans to customer in aggregate of Taichung Commercial Bank and its subsidiaries through an understanding of the significant parameters used in the model for testing impairment (recovery ratio and probability of impairment) for assessing the reasonability of future cash flows with relevance to the experience and economic conditions for the time being.

Discount and loan interest income

Notes to key audit matters

As stated in Note 28, Taichung Commercial Bank had interest income from discounts and loans to customers amounted to NTD10,148,998 thousand or at 98.08% of net income in 2017. This remained the primary source of income for Taichung Commercial Bank. Taichung Commercial Bank processed loan applications through an approval procedure along the line of corporate hierarchy. Applications, upon approval, will be registered into the loan system with information on the conditions of lending and related matters entered into the system manually. Loans will be released upon the final approval of the supervisors and interest income will be calculated automatically by the systems relevant to the conditions of lending on individual cases at the end of each month. Taichung Commercial Bank relies highly on the computer system for the automatic calculation of interest income from discounts and loans to customers, which made the data input on the conditions of related lending cases and the computing logics for the accurate calculation of interest income from discounts and loans to customers essential. We therefore considered the interest income from discounts and loans to customers as a key audit matter.

The disclosures of the accounting policies and disclosures related to the estimation of interest income from discount and loans to customers are specified in Note 4 (14) and Note 28 (1).

Audit response

Understand and examine the internal control of interest income from discount and loans to customer, including the understanding and testing of the internal control of the general computer system and the application system.

We checked the monthly interest income in the system, on a selective basis, with reference to the approved agreement on loans to determine the conditions of lending are congruent with the information used in the system for calculation of interest income. We also compared the interest income and the computing results from the system through a new round of calculation to examine no significant difference of the computing system of Taichung Commercial Bank and its subsidiaries.

Responsibilities of Management and Those in Charge with Governance of the Individual Financial Statements

The Management is responsible for the preparation and fair presentation of the separate financial statements in accordance with the Criteria for the Compilation of Financial Statements by Banks, and for such internal control as the management determines is necessary to enable the preparation of the separate financial statements to be free from material misstatement whether due to fraud or error.

In preparing the consolidated financial statements, the management is responsible for assessing the ability of Taichung Bank as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate Taichung Commercial Bank or to create operations, or has no realistic alternative but to do so.

Those in charge of governance (including the Auditing Committee) are responsible for overseeing the reporting process of Taichung Commercial Bank.

Auditor’s Responsibilities for the Audit of the Individual Financial Statements

Our objectives are to obtain reasonable assurance about whether the individual financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue and auditor’s report. Reasonable assurance is a high level of assurance, but is not a guarantee that and audit conducted in accordance with the accounting principles generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. If fraud or errors are considered materials, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these individual financial statements.

As part of an audit in accordance with the accounting principles generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also perform the following works:

Identify and assess the risks of material misstatement of the individual financial statements, whether due to fraud or error, design, and perform audit procedures responsive risks, and obtain evidence that is sufficient and appropriate to provide a basis of our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control effective in Taichung Commercial Bank.
Evaluate the appropriateness of accounting policies used and the reasonability of accounting estimates and related disclosures made by the management.
Conclude the appropriateness of the use of the going concern basis of accounting by the management, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Taichung Commercial Bank and its ability to continue as a going concern. If we conclude that a

material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the individual financial statements or, if such disclosure are inappropriate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause Taichung Commercial Bank to cease to continue as a going concern.

Evaluate the overall presentation, structure, and content of the individual statements, including related notes, whether the individual statements represent the underlying transactions and events in a matter that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information or the entities or business activities with Taichung Commercial Bank to express an opinion on the individual financial statements. We are responsible for the direction, supervision, and performance of the audit of Taichung Commercial Bank. We remain solely responsible for our audit opinion.

We communicate with those in charge of governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings (including any significant deficiencies in internal control that we identify during our audit).

We also provide those in charge of governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, (related safeguards).

From the matters communicated with those in charge of governance, we determine those matters that were of most significance in the audit of the individual financial statements of Taichung Commercial Bank of 2017 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communications.

Deloitte & Touche

Kuan-Chung Lai, CPA Wen-Ya Hsu, CPA

Securities and Futures Bureau Approval Securities and Futures Bureau Approval Document No. Document No. Tai-Cai-Zheng (6) Zi No. 0920123784 Tai-Cai-Zheng (6) Zi No. 0920123784

Date：March 14, 2018

Taichung Commercial Bank Co., Ltd. Individual Balance Sheet

December 31, 2017 and 2016

Unit: NTD thousand

Code 11000 11500 12000 12500 13000 13500 14000 14500 15000 15500 18500 18700 19000 19300 19500 10000 Code 21000 22000 22500 23000 23200 23500 24000 25500 25600 29300 29500 20000 31101 31500 32001 32003 32011 32500 30000	Assets Cash and cash equivalents Due from the Central Bank and lend to banks Financial assets at fair value through profit and loss Bonds and securities sold under repurchase agreements Receivables – net Discounts and loans – net Available-for-salefinancial assets – net Held-to-maturityfinancial assets – net Investment by equity method – net Other financial assets – net Property, plant, and equipment – net Invest in investment property – net Intangible assets – net Deferred income tax assets Other assets Total assets Liabilities and equity Due to Central Bank and other banks Financial liabilities at fair value through profit and loss Bills and bonds sold under repurchase agreements Payables Current income tax liability Deposits and remittances Financial bonds payable Other financial liabilities Liability reserve Deferred tax liabilities Other liabilities Total liabilities Equity Capital stock Common stock capital Capital surplus Retained earnings Legal reserve Special reserve Undistributed earnings Other equity Total equity Total Liabilities and Equity		December 31,2017	December 31,2017	% 2 5 5 2 1 65 5 13 1 - 1 - - - - 100 1 - 1 2 - 86 3 - - - - 93 5 - 1 - 1 - 7 100		December 31,2016	December 31,2016
			Amount $ 13,944,328 30,121,642 30,965,512 11,283,082 6,329,074 429,656,232 31,192,871 85,542,095 4,735,107 1,067,625 9,296,259 22,750 115,605 635,955 1,581,823 $ 656,489,960 $ 9,518,872 207,225 4,307,810 12,195,742 223,235 567,255,591 17,500,000 43,434 1,389,979 111,021 335,111 613,088,020 32,931,789 684,156 5,896,530 73,833 3,630,655 184,977 43,401,940 $ 656,489,960				Amount $ 13,322,512 86,216,971 22,215,900 3,627,189 4,074,854 423,900,603 37,330,850 14,276,270 4,498,154 1,171,178 9,371,517 78,268 124,544 660,071 1,679,982 $ 622,548,863 $ 11,617,728 162,792 4,222,258 9,125,347 13,662 541,242,709 13,000,000 73,496 1,307,838 111,021 289,977 581,166,828 32,381,307 684,156 4,881,792 38,685 3,382,461 13,634 41,382,035 $ 622,548,863		%
									2 14 4 1 1 68 6 2 1 - 1 - - - - 100 2 - 1 1 - 87 2 - - - - 93 5 - 1 - 1 - 7 100

Chairman: Chin-Yuan Lai

Manager: Deh-Wei Chia

Chief accountant: Chin-Min Liao

Taichung Commercial Bank Co., Ltd.

Individual comprehensive income statement

January 1 to December 31, 2017 and 2016

Unit: NTD thousands, except Earnings Per Share (NTD)

Code 41000 Interest revenue 51000 Interest expenses 49010 Net interest income Net income (loss) other than interest income 49100 Service Fee, Net 49200 Gains of financial assets and liabilities measured at fair value through profit or loss 49300 Realized net gain on available-for-sale financial assets 49600 Exchange loss 49700 Net asset impairment reversals gain (loss) 49750 Shareholdings in the subsidiaries, affiliated companies and joint ventures under the equity method 49863 Net gain from asset trade 58000 Net income other than interest income 4xxxx Net revenue 58200 Bad debt expense and guaranty reserve Operating expenses 58500 Employee benefits expenses 59000 Depreciation and amortization expenses 59500 Business and administrative expenses 58400 Total operating expenses		2017		% 112 36) 76 15 5 - 1 ) - 2 3 - 100 9) 29 ) 3 ) 18) 50)		2016		% 114 37) 77 13 7 2 2 ) 1 2 - - 100 7) 31 ) 2 ) 18) 51)	Percentage of Variation (%)
		Amount $ 11,591,419 3,768,078) 7,823,341 1,553,501 472,898 27,608 91,229 ) 50,533 ) 252,540 348,277 11,676 10,348,079 946,897) 3,001,210 ) 258,431 ) 1,871,903) 5,131,544)				Amount $ 11,104,933 3,605,776) 7,499,157 1,293,689 643,530 157,149 197,395 ) 106,146 233,705 287 41,662 9,777,930 690,250) 2,998,217 ) 225,242 ) 1,781,736) 5,005,195)
	( ( ( ( ( ( ( (		( ( ( ( ( ( (		( ( ( ( ( ( (		( ( ( ( ( ( (		4 5 4 20 ( 27 ) ( 82 ) ( 54 ) ( 148 ) 8 121,251 ( 72 ) 6 37 - 15 5 3

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Code 61001 Income before tax from continuing operations 61003 Income tax expenses 64000 Current year net income after tax Other comprehensive profit or loss 65200 Titles not reclassified as profit (loss) accounts: 65201 Reevaluation of determined benefit plan 65207 Other comprehensive profit (loss) of the subsidiary, affiliated company and joint venture under the equity method 65220 Incomes tax related to titles not subject to reclassification The total of titles not reclassified as profit (loss) accounts (after taxation) 65300 Titles that could be reclassified as profits (loss) accounts in the future 65301 Exchange differences from the translation of financial statements of foreign operations 65302 Unrealized valuation gains (losses) of available-for- sale financial assets 65306 Other comprehensive profit (loss) of the subsidiary, affiliated company and joint venture under the equity method 65320 Income tax related to titles that could be reclassified The total of the titles that could be reclassified as profits (loss) accounts in the future (after taxation) 65000 Other comprehensive net income (after tax) 66000 Current period other comprehensive income (after tax) (Continued on next page)		2017		% 41 6) 35 - - - - - 2 - - 2 2 37		2016		% 42 6) 36 2 ) - - 2) - 3 ) - - 3) 5) 31	Percentage of Variation (%)
		Amount $ 4,269,638 637,096) 3,632,542 3,687 ) 53 626 3,008) 2,856 ) 196,642 15,029 ) 7,414) 171,343 168,335 $ 3,800,877				Amount $ 4,082,485 567,670) 3,514,815 183,108 ) 137 ) 31,128 152,117) 10,738 ) 264,891 ) 58,909 ) 113) 334,651) 486,768) $ 3,028,047
	( ( ( ( ( (		(		( ( ( ( ( ( ( ( ( (		( ( ( ( ( (		5 12 3 ( 98 ) 139 ( 98 ) ( 98 ) ( 73 ) 174 ( 74 ) 6,461 151 135 26

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Code Earnings per share Business units in continuing operation 67501 Basic 67701 Diluted		2017	%		2016	%	Percentage of Variation (%)
		Amount $ 1.10 $ 1.10			Amount $ 1.07 $ 1.07

Chairman: Chin-Yuan Lai

Manager: Deh-Wei Chia

Chief accountant: Chin-Min Liao

Taichung Commercial Bank Co., Ltd.

Individual Statements of Changes in Shareholders’ Equity

January 1 to December 31, 2017 and 2016

Unit: NTD thousand

							Unit: NTD thousand
Code A1 Balance as of January 1, 2016 The 2015 appropriation and distribution of earnings B1 Legal reserve B5 Cash dividends B9 Stock dividends D1 2016 net income D3 Other comprehensive net income in 2016 (after tax) D5 Other comprehensive income in 2016 Z1 Balance as of December 31, 2016 The 2016 appropriation and distribution of earnings B1 Legal reserve B3 Appropriation of special reserve B5 Cash dividends B9 Stock dividends D1 2017 net income D3 Other comprehensive net income in 2017 (after tax) D5 Other comprehensive income in 2017 Z1 Balance as of December 31, 2017 Chairman: Chin-Yuan Lai	Capital stock Common stock $ 31,840,027 - - 541,280 - - - 32,381,307 - - - 550,482 - - - $ 32,931,789	Capital surplus $ 684,156 - - - - - - 684,156 - - - - - - - $ 684,156		Retained earnings	Undistributed earnings $ 3,075,778 ( 922,734 ) ( 1,592,001 ) ( 541,280 ) 3,514,815 ( 152,117) 3,362,698 3,382,461 ( 1,014,738 ) ( 35,148 ) ( 1,780,972 ) ( 550,482 ) 3,632,542 ( 3,008) 3,629,534 $ 3,630,655	Other equity Exchange differences from the translation of financial statements of foreign operations Unrealized gain on available-for-sale financial instruments $ 51,153 $ 297,132 - - - - - - - - ( 74,336) ( 260,315) ( 74,336) ( 260,315) ( 23,183 ) 36,817 - - - - - - - - - - ( 15,324) 186,667 ( 15,324) 186,667 ($ 38,507) $ 223,484 Chief accountant: Chin-Min Liao	Total equity
			Legal reserve Special reserve $ 3,959,058 $ 38,685 922,734 - - - - - - - - - - - 4,881,792 38,685 1,014,738 - - 35,148 - - - - - - - - - - $ 5,896,530 $ 73,833 Manager: Deh-Wei Chia
							$ 39,945,989 - ( 1,592,001 ) - 3,514,815 ( 486,768) 3,028,047 41,382,035 - - ( 1,780,972 ) - 3,632,542 168,335 3,800,877 $ 43,401,940

Taichung Commercial Bank Co., Ltd.

Individual Statements of Cash Flow

January 1 to December 31, 2017 and 2016

Unit: NTD thousand

Code
Cash flow from operating activities
A10000
Current year net profit before taxation

Profits and loss
A20100
Depreciation expenses
A20200
Amortization expenses
A20300
Appropriation of bad debt expense
A20400
Gain (loss) on financial assets and
liabilities at fair value through
profit and loss
A22500
Disposal and obsolescence loss (gain)
of property and equipment
A22700
Capital gain from disposition of
investment property
A20900
Interest expenses
A21200
Interest revenue

A21300
Dividend income

A21800
Net change in other provisions for
liabilities
A22400
The profit or loss in the subsidiary,
affiliated company and joint
ventures recognized under the
equity method
A23100
Gain on disposal of investments

A23500
Financial assets impairment loss
(reversal gain)
A24100
Unrealized foreign currency exchange
loss
A20010
Total income, expense and loss

Changes in operating activities related
assets/liabilities
A41110
Due from Central Bank and lend to
Banks
A41120
Financial assets at fair value through
profit and loss
A41150
Accounts receivable

A41160
Discounts and loans

A41190
Other financial assets

A41990
Other assets
A42110
Due to Central Bank and other banks
A42120
Financial liabilities at fair value
through profit and loss
A42140
Bills and bonds sold under repurchase
agreements
A42150
Payables

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Code A42160 Customer deposits and remittances A42170 Other financial liabilities A42180 Employee benefit liabilities reserve A42990 Other liabilities A40000 Total changes in operating activities related assets/liabilities A33000 Cash inflow from operating activities A33100 Interest received A33200 Dividends received A33300 Interest payment A33500 Income tax payment AAAA Net cash inflow from operating activities Cash flow from investing activities B00300 Acquisition of available-for-sale financial assets B00400 Disposition of available-for-sale financial assets B00900 Acquisition of held-to-maturity financial assets B01000 Disposition of held-to-maturity financial assets B01100 Return of capital from held-to-maturity B02700 Acquisition of Property, plant, and equipment B02800 Disposal of Property, plant, and equipment B03700 Decrease (increase) in refundable deposits B04500 Acquisition of Intangible assets B05500 Acquisition of investment property BBBB Net cash outflow from investing activities Cash flow from financing activities C01400 Issuance of financial bonds C01500 Repayment of financial bonds C04500 Cash dividend released CCCC Net cash inflow (outflow) from financing activities DDDD Impact of changes in exchange rate on cash and cash equivalents EEEE Current cash and cash equivalents increase (decrease) E00100 Balance of cash and cash equivalents, beginning of period E00200 Balance of cash and cash equivalent, end of period	2017 $ 26,012,882 ( 30,062 ) ( 24,423 ) 45,134 9,379,331 6,835,459 11,676,535 22,230 ( 3,637,226 ) ( 410,195) 14,486,803 ( 1,050,000 ) 7,319,614 ( 748,721,306 ) 258,565 676,269,904 ( 122,022 ) - 63,679 ( 52,367 ) 403,950 (65,629,983) 6,000,000 ( 1,500,000 ) ( 1,780,972) 2,719,028 ( 2,856) ( 48,427,008 ) 87,238,346 $ 38,811,338	2016
		$ 34,696,239 73,127 ( 10,964 ) 49,668 26,473,495 23,033,186 10,984,230 23,746 ( 3,631,086 ) ( 793,467) 29,616,609 ( 23,673,428 ) 9,823,915 ( 10,960,910 ) 150,570 1,632,655 ( 415,612 ) 1,130 ( 215,130 ) ( 34,444 ) - (23,691,254) 1,500,000 ( 4,400,000 ) ( 1,592,001) ( 4,492,001) ( 10,738) 1,422,616 85,815,730 $ 87,238,346

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Ending cash and cash equivalents adjustment

Ending cash and cash equivalents adjustment
Code E00210 Cash and cash equivalents on the balance sheet E00220 The “Due from Central Bank and Banks” in compliance with the definition of cash and cash equivalents under IAS 7 E00230 The “bonds and securities sold under repurchase agreements” that meet the definitions of cash and cash equivalents under IAS 7 E00200 Balance of cash and cash equivalent, end of period	December 31,2017 $ 13,944,328 13,583,928 11,283,082 $ 38,811,338	December 31,2016
			$ 13,322,512 70,288,645 3,627,189 $ 87,238,346

Chairman: Chin-Yuan Lai

Manager: Deh-Wei Chia Chief accountant: Chin-Min Liao

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Auditor’s Report

To: Taichung Commercial Bank Co., Ltd.

Audit opinions

We have audited the accompanying consolidated balance sheet of Taichung Commercial Bank Co., Ltd. and subsidiary as of December 31, 2017 and 2016, and the related consolidated statement of income, consolidated statement of changes in shareholders equity, consolidated statement of cash flows, and Note of the consolidated financial statements (including major accounting policy) for the years then ended.

In my opinion, the financial statements as referred to present fairly, in all material aspects the financial position of Taichung Commercial Bank as of December 31, 2017 and 2016, and the results of its operations and cash flows for the years then ended in conformity with the Criteria for the Compilation of Financial Statements by Banks, Criteria for the Compilation of Financial Statements by Securities Firms, and applicable IFRS, IAS,SIC, and IFRIC as recognized by the Financial Supervisory Commission .

The basis for opinions

We conducted the audit in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the accounting principles generally accepted in the Republic of China. Our responsibilities under those standards are further described in the responsibilities of auditors for the audit of the consolidated financial statements. We are independent of Taichung Commercial Bank and its subsidiaries in accordance with the Code of Ethics for certified public accountants in the part of relevant to the audit of the consolidated financial statements of Taichung Commercial Bank, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believed that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matter

Key audit matters are those matter that, in our professional judgment, were of most significant in our audit of the consolidated statements of Taichung Commercial Bank in 2017. These matters were addressed in the content of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on those matters.

Key audit procedures of the consolidated financial statements of Taichung Commercial Bank and its subsidiaries in 2017 included:

Evaluate the impairment of discounts and loans to customers

Notes to key audit matters

As stated in Note 11, Taichung Commercial Bank and its subsidiaries had impairment in discounts and loans to customers amounting to NTD430,857,960 thousand and NTD770,744 thousand in 2017, respectively. These accounted for 64.98% of the total assets and 6.76% of net income, which are of significance to the overall financial reporting. As stated in Note 5 (1), in consideration of the overall impairment of Taichung Bank and its subsidiaries, material estimation and judgment of the management are involved, included the estimation of cash flows, recovery rate and impairment rates in the future. For these reasons, impairment of discounts and loans to the customers are determined as key audit matters. The disclosures of the accounting policies, accounting estimates, and uncertainty of assumption related to the estimation of discount and loans to customers’ impairment are specified in Note 4 (12) and Note 5 (1) and Note 11.

Audit response

Understand and examine the internal control of discount and loans to customer impairment of Taichung Commercial Bank and its subsidiaries.
We examined the impairment of discount and loans to customers of individual cases of Taichung Commercial Bank and its subsidiaries recognized for material impairment, on a selective basis, on the reasonability of future cash flows of collaterals.
We examined the impairment of discount and loans to customer in aggregate of Taichung Commercial Bank and its subsidiaries through an understanding of the significant parameters used in the model for testing impairment (recovery ratio and probability of impairment) for assessing the reasonability of future cash flows with relevance to the experience and economic conditions for the time being.

Discount and loan interest income

Notes to key audit matters

As stated in Note 31, Taichung Commercial Bank and its subsidiaries had interest income from discounts and loans to customers amounted to NTD10,212,314 thousand or at 89.62% of net income in 2017. This remained the primary source of income for Taichung Commercial Bank and its subsidiaries. Taichung Commercial Bank processed loan applications through an approval procedure along the line of corporate hierarchy. Applications, upon approval, will be registered into the loan system with information on the conditions of lending and related matters entered into the system manually. Loans will be released upon the final approval of the supervisors and interest income will be calculated automatically by the systems relevant to the conditions of lending on individual cases at the end of each month. Taichung Commercial Bank and its subsidiaries highly rely on the computer system for the automatic calculation of interest income from discounts and loans to customers, which made the data input on the conditions of related lending cases and the computing logics for the accurate calculation of interest income from discounts and loans to customers essential. We therefore considered the interest income from discounts and loans to customers as a key audit matter.

The disclosures of the accounting policies, accounting estimates, and uncertainty of assumption related to the estimation of interest income from discount and loans to customers are specified in Note 4 (14) and Note 31 (1).

Audit response

Understand and examine the internal control of interest income from discount and loans to customer, including the understanding and testing of the internal control of the general computer system and the application system.
We checked the monthly interest income in the system, on a selective basis, with reference to the approved agreement on loans to determine the conditions of lending are congruent with the information used in the system for calculation of interest income. We also compared the interest income and the computing results from the system through a new round of calculation to examine whether there is significant difference of the computing system of Taichung Commercial Bank and its subsidiaries.

Other information

We have also audited the individual financial statements of the Bank for 2017 and 2016, and have expressed modified unqualified opinions on such financial statements.

Responsibilities of Management and Those in Charge with Governance of the Consolidated Financial Statements

The Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Criteria for the Compilation of Financial Statements by Banks, Criteria for the Compilation of Financial Statements by Securities Firms, and applicable IFRS, IAS,SIC, and IFRIC as recognized by the Financial Supervisory Commission, and for such internal control as the management determines is necessary to enable the preparation of the consolidated financial statements to be free from material misstatement whether due to fraud or error.

In preparing the consolidated financial statements, the management is responsible for assessing the ability of Taichung Bank and its subsidiaries as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate Taichung Commercial Bank and its subsidiaries or to create operations, or has no realistic alternative but to do so.

Those in charge of governance (including the Auditing Committee) are responsible for overseeing the reporting process of Taichung Commercial Bank and its subsidiaries.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue and auditor’s report. Reasonable assurance is a high level of assurance, but is not a guarantee that and audit conducted in accordance with the accounting principles generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. If fraud or errors are considered materials, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design, and perform audit procedures responsive risks, and obtain evidence that is sufficient and appropriate to provide a basis of our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control effective in Taichung Commercial Bank and its subsidiaries.
Evaluate the appropriateness of accounting policies used and the reasonability of accounting estimates and related disclosures made by the management.
Conclude the appropriateness of the use of the going concern basis of accounting by the management, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Taichung Commercial Bank and its subsidiaries and its ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosure are inappropriate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause Taichung Commercial Bank and its subsidiaries to cease to continue as a going concern.
Evaluate the overall presentation, structure, and content of the consolidated statements, including the related notes, whether the consolidated statements represent the underlying

transactions and events in a matter that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information or the entities or business activities with Taichung Commercial Bank and its subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the audit of Taichung Commercial Bank and its subsidiaries. We remain solely responsible for our audit opinion.

From the matters communicated with those in charge of governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of Taichung Commercial Bank and subsidiaries of 2017 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communications.

Deloitte & Touche

Kuan-Chung Lai, CPA

Securities and Futures Bureau Approval Document No.

Tai-Cai-Zheng (6) Zi No. 0920123784

Wen-Ya Hsu, CPA

Securities and Futures Bureau Approval Document No.

Tai-Cai-Zheng (6) Zi No. 0920123784

Date：March 14, 2018

Taichung Commercial Bank Co., Ltd. and subsidiaries

Consolidated Balance Sheet

December 31, 2017 and 2016

Unit: NTD thousand

				Unit: NTD	thousand
Code 11000 11500 12000 12500 13000 13200 13500 14000 14500 15000 15100 15500 18500 18700 19000 19300 19500 10000 Code 21000 21500 22000 22500 23000 23200 23500 24000 25500 25600 29300 29500 20000 31101 31500 32001 32003 32011 32500 31000 30000	Assets Cash and cash equivalents Due from Central Bank and lend to Banks Financial assets at fair value through profit and loss Bonds and securities sold under repurchase agreements Receivable – net Current income tax asset Discounts and loans – net Available-for-Sale Financial Assets – net Held to maturity investments – net Investments under the equity method – net Restricted assets – net Other financial assets – net Property, plant, and equipment – net Invest in investment property – net Intangible assets – net Deferred income tax assets Other assets Total assets Liabilities and equity Due to Central Bank and other banks Funds borrowed from Central Bank and other banks Financial liabilities at fair value through profit and loss Bills and bonds sold under repurchase agreements Payables Current Tax Liability Customer deposits and remittances Financial bonds payable Other financial liabilities Liability reserve Deferred tax liabilities Other liabilities Total liabilities Equity of the parent company Common stock capital Capital surplus Retained earnings Legal reserve Special reserve Undistributed earnings Other equity Total shareholder’s equity in the parent company Total equity Total Liabilities and Equity	December 31,2017	% 2 5 5 2 2 - 65 5 13 - - - 1 - - - - 100 1 1 - 1 2 - 85 3 - - - - 93 5 - 1 - 1 - 7 7 100	December 31,2016
		Amount $ 15,001,053 30,121,642 31,210,074 11,283,082 13,658,151 5,701 430,857,960 31,615,817 85,542,095 128,113 249,003 1,067,625 9,387,663 45,250 160,054 681,396 2,009,404 $ 663,024,083 $ 9,518,872 5,120,940 207,225 4,307,810 13,331,722 255,559 566,094,780 17,500,000 1,057,866 1,389,979 111,021 726,369 619,622,143 32,931,789 684,156 5,896,530 73,833 3,630,655 184,977 43,401,940 43,401,940 $ 663,024,083		Amount $ 14,105,611 86,216,971 22,383,134 3,627,189 9,802,310 6,313 425,166,259 37,455,220 14,276,270 130,935 285,234 1,171,178 9,436,524 78,268 166,769 713,301 2,081,215 $ 627,102,701 $ 11,617,728 4,199,858 162,792 4,222,258 9,805,707 60,890 539,809,008 13,000,000 807,967 1,307,838 111,021 615,599 585,720,666 32,381,307 684,156 4,881,792 38,685 3,382,461 13,634 41,382,035 41,382,035 $ 627,102,701	%
					2 14 4 1 2 - 68 6 2 - - - 1 - - - - 100 2 1 - 1 1 - 86 2 - - - - 93 5 - 1 - 1 - 7 7 100

Chairman: Chin-Yuan Lai Manager: Deh-Wei Chia

Chief accountant: Chin-Min Liao

Taichung Commercial Bank Co., Ltd. and subsidiaries

Consolidated Income Statement

January 1 to December 31, 2017 and 2016

Unit: NTD thousands, except Earnings Per Share (NTD)

Code 41000 Interest revenue 51000 Interest expenses 49010 Net interest income Net income (loss) other than interest income 49100 Service Fee, Net 49200 Gains of financial assets and liabilities measured at fair value through profit or loss 49300 Realized gain on available-for- sale financial assets 49600 Exchange loss 49700 Asset impairment reversal gain (loss) 49750 Shareholding in the affiliated companies and joint ventures under the equity method 49863 Net gain from asset trade 58000 Net income other than interest income 4xxxx Net revenue 58200 Bad debt expense and guaranty reserve Operating expenses 58500 Employee benefits expenses 59000 Depreciation and amortization expenses 59500 Business and administrative expenses 58400 Total operating expenses		2017		% 106 34) 72 22 4 - 1 ) - - 3 - 100 10) 29 ) 3 ) 20) 52)		2016		% 106 34) 72 21 6 1 2 ) 1 - - 1 100 7) 31 ) 2 ) 21) 54)	Percentage of Variation (%)
		Amount $ 12,078,007 3,892,000) 8,186,007 2,448,579 490,717 34,743 88,738 ) 50,533 ) 2,875 ) 347,810 29,045 11,394,755 1,124,859) 3,348,251 ) 287,221 ) 2,279,212) 5,914,684)				Amount $ 11,473,495 3,686,021) 7,787,474 2,271,998 662,520 158,432 241,784 ) 106,146 5,540 ) 177 53,213 10,792,636 801,040) 3,361,279 ) 254,192 ) 2,232,062) 5,847,533)
	( ( ( ( ( ( ( ( (		( ( ( ( ( ( (		( ( ( ( ( ( ( (		( ( ( ( ( ( (		5 6 5 8 ( 26 ) ( 78 ) ( 63 ) ( 148 ) ( 48 ) 196,403 ( 45 ) 6 40 - 13 2 1

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Code 61001 Income before tax from continuing operations 61003 Income tax expenses 64000 Current year net income after tax Other comprehensive profit or loss Titles not reclassified as profit (loss) accounts: 65201 Reevaluation of determined benefit plan 65207 Other comprehensive profit (loss) of the subsidiary, affiliated company and joint venture under the equity method 65220 Incomes tax related to titles not subject to reclassification 65200 The total of titles not reclassified as profit (loss) accounts (after taxation) Titles that could be reclassified as profits (loss) accounts in the future 65301 Exchange differences from the translation of financial statements of foreign operations 65302 Unrealized valuation gains (losses) of available-for- sale financial assets 65320 Income tax related to items possibly be reclassified 65300 The total of the titles that could be reclassified as profits (loss) accounts in the future (after taxation) 65000 Other comprehensive net income (after tax) 66000 Current period other comprehensive income (after tax) Consolidated earnings per share Business units in continuing operation 67501 Basic 67701 Diluted		2017		% 38 6) 32 - - - - - 1 - 1 1 33		2016		% 39 6) 33 2 ) - - 2) 1 ) 2 ) - 3) 5) 28	Percentage of Variation (%)
		Amount $ 4,355,212 722,670) 3,632,542 3,687 ) 53 626 3,008) 15,324 ) 194,081 7,414) 171,343 168,335 $ 3,800,877 $ 1.10 $ 1.10				Amount $ 4,144,063 629,248) 3,514,815 183,108 ) 137 ) 31,128 152,117) 74,336 ) 260,202 ) 113) 334,651) 486,768) $ 3,028,047 $ 1.07 $ 1.07
	( ( ( ( (		(		( ( ( ( ( ( ( ( (		( ( ( ( ( ( (		5 15 3 ( 98 ) 139 ( 98 ) ( 98 ) ( 79 ) 175 6,461 151 135 26

Chairman: Chin-Yuan Lai

Manager: Deh-Wei Chia

Chief accountant: Chin-Min Liao

Taichung Commercial Bank Co., Ltd. and subsidiaries

Unit: NTD thousand

Consolidated Statements of Changes in Shareholders’ Equity

January 1 to December 31, 2017 and 2016

		Equityof the company	Equityof the company		Other equity Exchange differences from the translation of financial statements of foreign operations Unrealized gain on available-for-sale financial instruments $ 51,153 $ 297,132 - - - - - - - - ( 74,336) ( 260,315) ( 74,336) ( 260,315) ( 23,183 ) 36,817 - - - - - - - - - - ( 15,324) 186,667 ( 15,324) 186,667 ($ 38,507) $ 223,484	Other equity Exchange differences from the translation of financial statements of foreign operations Unrealized gain on available-for-sale financial instruments $ 51,153 $ 297,132 - - - - - - - - ( 74,336) ( 260,315) ( 74,336) ( 260,315) ( 23,183 ) 36,817 - - - - - - - - - - ( 15,324) 186,667 ( 15,324) 186,667 ($ 38,507) $ 223,484	Total equity
Capital stock Common stock $ 31,840,027 - - 541,280 - - - 32,381,307 - - - 550,482 - - - $ 32,931,789	Capital surplus $ 684,156 - - - - - - 684,156 - - - - - - - $ 684,156		Retained earnings	Undistributed earnings $ 3,075,778 ( 922,734 ) ( 1,592,001 ) ( 541,280 ) 3,514,815 ( 152,117) 3,362,698 3,382,461 ( 1,014,738 ) ( 35,148 ) ( 1,780,972 ) ( 550,482 ) 3,632,542 ( 3,008) 3,629,534 $ 3,630,655
					Exchange differences from the translation of financial statements of foreign operations $ 51,153 - - - - ( 74,336) ( 74,336) ( 23,183 ) - - - - - ( 15,324) ( 15,324) ($ 38,507)
		Legal reserve $ 3,959,058 922,734 - - - - - 4,881,792 1,014,738 - - - - - - $ 5,896,530	Special reserve $ 38,685 - - - - - - 38,685 - 35,148 - - - - - $ 73,833
						( (	$ 39,945,989 - ( 1,592,001 ) - 3,514,815 ( 486,768) 3,028,047 41,382,035 - - ( 1,780,972 ) - 3,632,542 168,335 3,800,877 $ 43,401,940

Chairman: Chin-Yuan Lai

Manager: Deh-Wei Chia

Chief accountant: Chin-Min Liao

Taichung Commercial Bank Co., Ltd. and subsidiaries

Consolidated Statements of Cash Flow

January 1 to December 31, 2017 and 2016

Unit: NTD thousand

Code Cash flow from operating activities A10000 Current year net profit before taxation Profits and loss A20100 Depreciation expenses A20200 Amortization expenses A20300 Bad debt expense and reserve for guarantee liability A20400 Gain (loss) on financial assets and liabilities at fair value through profit and loss A22500 Disposal and obsolescence loss (gain) of property and equipment A22700 Capital gain from disposition of investment property A20900 Interest expenses A21200 Interest revenue A21300 Dividend income A21800 Net change in other provisions for liabilities A22300 Loss of the affiliated company under the equity method A23100 Gain on disposal of investments A23600 Financial assets impairment loss (reversal gain) A24100 Unrealized foreign currency exchange loss A24300 Gain on sale of NPL A20010 Total income, expense and loss Changes in operating activities related assets/liabilities A41110 Due from Central Bank and lend to Banks A41120 Financial assets at fair value through profit and loss A41150 Accounts receivable A41160 Discounts and loans A41190 Other financial assets A41990 Other assets A42110 Due to Central Bank and other banks A42120 Financial liabilities at fair value through profit and loss		2017 $ 4,355,212 219,647 67,574 1,124,859 490,717 ) 862 348,672 ) 3,892,000 12,078,007 ) 28,754 ) 26,000 2,875 27,608 ) 50,533 850,927 - 6,738,481) 609,388 ) 7,478,148 ) 3,977,913 ) 6,428,669 ) 35,342 ) 31,149 2,098,856 ) 813,642 )		2016
	( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( (	$ 4,144,063 196,992 57,200 801,040 662,520 ) 177 ) - 3,686,021 11,473,495 ) 24,282 ) 300 5,540 157,149 ) 106,146 ) 224,382 386) 7,452,680) 661,047 10,671,305 3,281,935 ) 34,727,382 ) 16,611 228,825 7,753,624 714,959 )

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Code A42140 Bills and bonds sold under repurchase agreements A42150 Payables A42160 Customer deposits and remittances A42170 Other financial liabilities A42180 Employee benefit liabilities reserve A42990 Other liabilities A40000 Total changes in operating activities related assets/liabilities A33000 Cash inflow from operating activities A33100 Interest received A33200 Dividends received A33300 Interest payment A33500 Income tax payment AAAA Net cash inflow from operating activities Cash flow from investing activities B00300 Acquisition of available-for-sale financial assets B00400 Disposition of available-for-sale financial assets B00900 Acquisition of held-to-maturity financial assets B01000 Disposition of held-to-maturity financial assets B01100 Return of capital from held-to-maturity B02700 Acquisition of Property, plant, and equipment B02800 Disposal of Property, plant, and equipment B03700 Decrease (increase) in refundable deposits B04500 Acquisition of Intangible assets B05400 Acquisition of investment property B05500 Disposition of investment property B06300 Receipt of payment from disposal of non- performing loans. BBBB Net cash outflow from investing activities Cash flow from financing activities C00300 Increase in funds borrowed from Central Bank and other banks C00700 Increase in commercial papers payable C01400 Issuance of financial bonds C01500 Repayment of financial bonds C04500 Cash dividend released CCCC Net cash inflow (outflow) from financing activities DDDD Impact of changes in exchange rate on cash and cash equivalents		2017 $ 85,552 3,391,522 26,285,772 30,062 ) 24,423 ) 110,770 8,408,322 6,025,053 12,172,096 28,754 3,757,507 ) 502,272) 13,966,124 1,351,137 ) 7,319,614 748,721,306 ) 258,565 676,269,904 196,583 ) 24,921 46,516 56,197 ) 22,500 ) 403,950 - 66,024,253) 921,082 279,961 6,000,000 1,500,000 ) 1,780,972) 3,920,071 15,324)		2016
	( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( (	$ 3,948,946 4,644,938 34,945,029 73,127 10,963 ) 197,808 24,406,021 21,097,404 11,340,012 24,282 3,706,478 ) 878,126) 27,877,094 23,688,144 ) 9,823,915 10,960,910 ) 150,570 1,632,655 442,499 ) 1,497 294,913 ) 37,684 ) - - 272,897 23,542,616) 1,067,404 455,826 1,500,000 4,400,000 ) 1,592,001) 2,968,771) 74,336)

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Code EEEE Current cash and cash equivalents increase (decrease) E00100 Balance of cash and cash equivalents, beginning of period E00200 Balance of cash and cash equivalent, end of period Ending cash and cash equivalents adjustment Code E00210 Cash and cash equivalents on the balance sheet E00220 The “Due from Central Bank and Banks” in compliance with the definition of cash and cash equivalents under IAS 7 E00230 The “bonds and securities sold under repurchase agreements” that meet the definitions of cash and cash equivalents under IAS 7 E00200 Balance of cash and cash equivalent, end of period

Code
EEEE
Current cash and cash equivalents increase
(decrease)
E00100 Balance of cash and cash equivalents, beginning
of period
E00200 Balance of cash and cash equivalent, end of
period
Ending cash and cash equivalents adjustment
Code

E00210 Cash and cash equivalents on the balance sheet

E00220 The “Due from Central Bank and Banks” in
compliance with the definition of cash and
cash equivalents under IAS 7
E00230 The “bonds and securities sold under repurchase
agreements” that meet the definitions of cash
and cash equivalents under IAS 7
E00200 Balance of cash and cash equivalent, end of
period

Chairman: Chin-Yuan Lai

Manager: Deh-Wei Chia

Chief accountant: Chin-Min Liao

Appendix 2

Taichung Commercial Bank Co., Ltd.

Rules of Procedure for Shareholder Meetings

Resolved in the Annual Meeting of Shareholders on June 20, 1998 Resolved in the Annual Meeting of Shareholders s on June 13, 2013

Article 1 The rules for compliance are stipulated in accordance with Article 5 of the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” for establishing the Company’s excellent meeting of shareholders governance system, substantiating supervisory function, and enhancing management functions.
Article 2 The Rules of Procedure for Shareholder Meetings is processed in accordance with the Rules, unless otherwise provided by law or Company Corporate Charter (Articles of Incorporation).
Article 3 The Company’s meeting of shareholders shall be convened by the Board, unless otherwise provided by law. The Company shall have the Annual Meeting of Shareholders notice, proxy and the proposal and information on admission, discussions and directors and supervisors election and dismissal compiled into electronic files and uploaded to the MOPS 30 days prior to the annual meeting of shareholders or fifteen days prior to the extraordinary meeting of shareholders. Also, the Annual Meeting Handbook and the supplementary information are compiled into electronic files and uploaded to the MOPS 21 days prior to the Annual Meeting of Shareholders or 15 days prior to the extraordinary meeting of shareholders. The Annual Meeting Handbooks and the supplementary information are made available to shareholders 15 days prior to the annual meeting of shareholders; also, on display at the Company’s and its Stock Agent’s and distributed to shareholders at the meeting place.

The reasons for convening the meeting should be stated in the notice and announcement. The notice with the consent of the counterparty can be issued electronically.

The election or dismissal of directors, supervisors, amendments to the Company Corporate Charter (Articles of Incorporation), dissolution, merger, division or the clauses of Paragraph 1, Article 185 of the Company Act, the matters stated in Article 26-1 and Article 43-6 of Securities and Exchange Act shall be stated in the reasons for convening the meeting not in the motion.

Shareholders who have over 1% shareholdings in the Company’s total number of shares issued may propose to the Company in writing to convene the Annual Meeting of Shareholders. But it is limited to one proposal and the additional proposals will not be included in the meeting agenda. In addition, the Board may have the proposals of shareholders that fall under the circumstances stated in Paragraph 4, Article 172-1 of the Company Act excluded from meeting discussions.

The Company shall announce the proposals admitted, the premises and the admission period before the stock stop-transfer date prior to the Annual Meeting of Shareholders is convened; also, the admitting period may not be less than 10 days.

Motion proposed by shareholders is limited to three hundred words. A proposed motion of more than three hundred words will not be included in the proposal. The proposing

shareholders must attend the Annual Meeting of Shareholders in person or by proxy and must participate in the proposal discussion.

The Company shall have the proposing shareholder notified about the proposal results before the date of the meeting notice and must have the proposals in compliance with this provision included in the meeting notice. The Board shall state the reasons for not including the proposal of shareholders in the meeting agenda.

Article 4 Shareholders may attend the meeting of shareholders by proxy that is printed and issued by the Company with the scope of authorization detailed.

It is limited to one proxy per shareholder and one proxy only that should be served to the Company five days prior to the meeting of shareholders. When the proxy is issued in duplicate, whichever is served first shall prevail. The proxy referred to above that was announced to be revoked is not subject to this restriction.

After serving the proxy to the Company, the shareholders who wish to attend the meeting of the shareholders in person or to vote in writing or by electronic means shall notify the Company in writing to revoke the proxy two days prior to the meeting of the shareholders. If the proxy is not revoked before the deadline, the vote by proxy shall prevail.

Article 5 The place of meeting of shareholders should be at the Company’s or any suitable location or for shareholders to attend the meeting conveniently; also, the meeting of shareholders shall not be started before 9:00 or after 15:00.
Article 6 The Company should have the attendance registry ready for the signature of the attending shareholders or the shareholder’s representative (hereinafter referred to as the Shareholders), or the attending shareholders may have the signature card submitted as an alternative to the signature.

The Company should have the annual meeting handbook, annual reports, attendance pass, speech slip, voting ballots, and other meeting materials delivered to the attending shareholders; also, the electoral ballots should be distributed for the election of directors and supervisors, if applicable.

Shareholders should attend the meeting of shareholders with the presentation of the attendance pass, attendance card or other attendance documents. Proxy solicitors should have identity documents with them for examination.

When the government or juridical person is a shareholder, the shareholder attending the meeting by proxy is not limited to one representative. The juridical person that has attended the meeting of shareholder by proxy can authorize only one representative to attend the meeting.

Article 7 If the meeting of shareholders is convened by the Board, the Chairman of the Board is to chair the meeting. If the Chairman is on leave or is unable to exercise his powers for certain reasons, the Vice Chairman is to chair the meeting. If a Vice Chairman is not appointed or the Vice Chairman is also on leave or is unable to perform his duties for certain reasons, the Chairman is to appoint one of the general directors to chair the meeting. If a general director is not appointed, one of the directors is appointed to chair the meeting. If a representative is not appointed by the Chairman, one of the general directors or directors should be elected among the board members to chair the meeting.

The Company may assign the appointed attorney, CPA, or responsible personnel to attend the meeting of the shareholders.

Article 8 The Company should have the entire meeting of shareholders taped in audio or video recording and stored for at least one year.

However, for the litigation filed by the shareholders in accordance with Article 189 of the Company Act, it should be reserved until the end of the proceedings.

Article 9 Attendance of the meeting of shareholders should be calculated in accordance with the shareholdings. The shareholding attendance is based on the attendance registry or the signature cards submitted, plus the votes exercised in writing or by electronic means.

The Chairman shall call the meeting to order at the meeting time. If the shareholding of the attending shareholders is not more than half of the total number of shares issued, the Chairman may announce the meeting postponed, which is limited to two postponements and for less than one-hour in total. If the shareholding of the attending shareholders remaining do not constitute more than one third of the total number of shares issued after the two postponements, the Chairman may announce to have the meeting aborted.

If the shareholdings of the attending shareholders are not more than half of the total number of shares issued after two postponements but more than one third of the total number of shares issued, a pseudo-resolution can be resolved in accordance with Paragraph 1, Article 175 of the Company Act; also, shareholders should be informed regarding the pseudo-resolution with another meeting of shareholders to be convened within one month.

If the shareholdings of the attending shareholders are more than one half of the total number of shares issued before the end of the meeting, the Chairman may have the pseudo-resolution presented again in the next meeting of the shareholders for resolution in accordance with Article 174 of the Company Act.

Article 10 If the meeting of shareholders is convened by the Board, the agenda is scheduled by the Board; also, the meeting should be conducted in accordance with the agenda scheduled and it may not be amended without the resolution reached in the meeting of shareholders.

If the meeting of shareholders is convened by an authorized person other than the Board, the provision referred to above is applicable.

The Chairman may not have the meeting adjourned at his discretion before the proposals (including motions) resolved in the two agendas referred to above. If the Chairman has the meeting adjourned in violation of the Rules of Procedure for Shareholder Meetings, the other Board members shall promptly assist the attending shareholders in accordance with the legal procedures to have one shareholder elected as the Chairman with the majority votes of the attending shareholders to continuously chair the meeting.

A Chairman who believes that the proposal under discussion is ready for voting may at his discretion stop the discussion and call for a vote.

Article 11 Attending shareholders before speaking on the subject must fill out the speech slip, shareholder account number, and account name (or attendance pass number) in detail, and then the Chairman is to determine the order of speakers.

Attending shareholders who have speech slips submitted but not speak shall be deemed as silent shareholders. If there is a discrepancy found between the text of the speech and the speech slip submitted, the contents of the speech shall prevail.

Each shareholder may not speak more than twice on the same motion for 5 minutes each time without the consent of the Chairman. However, the Chairman may have the speaking shareholders who violate the rules or speak beyond the scope of those issues silenced.

Attending shareholders may not interfere with the speaking shareholders without the consent of the Chairman and the speaking shareholders. The Chairman will have the violating shareholders stopped.

If the juridical person shareholder has more than two representatives assigned to attend the meeting of shareholders, only one of the two representatives may speak on the same proposal.

The Chairman may reply to the speaking shareholders personally or by the designated personnel.

Article 12 Resolutions of the meeting of shareholders should be based on their shareholdings.

For the resolutions in the meeting of shareholders, the shares of the shareholders without votes are not included in the calculation of outstanding shares. Shareholders who have a conflict of interest with the proposals that are detrimental to the Company’s interests shall not vote, and cannot vote by proxy on behalf of the other shareholders. The shares without votes referred to above are not included in the calculation of the attending shareholders’ votes. Except for Trust agencies or stock agencies approved by the securities regulatory authorities, the votes of the representative delegated by two or more shareholders shall not exceed 3% of the total votes representing the total number of shares issued; also, the votes exceeding the threshold shall not be counted.

Article 13 Shareholders are entitled to one vote per share; except for those subject to restrictions or the non-voting matters illustrated in Paragraph 2, Article 179 of the Company Act.

The Company’s meeting of shareholders can be convened with the votes cast in writing or by electronic means. When the vote is cast in writing or by electronic means, the election method should be stated in the notice of meeting of shareholders. Shareholders who have their votes cast in writing or by electronic means are deemed as attending the meeting in person. However, with respect to motions and original proposal amendments of the meeting of shareholders, it is deemed as a waiver.

For the votes exercised in writing or by electronic means referred to above, the intention should be delivered to the Company two days prior to the meeting of shareholders. For the intention expressed in duplicate, whichever is delivered first shall prevail. The intention referred to above that was announced to be revoked is not subject to this restriction.

Shareholders after exercising their votes in writing or by electronic means wish to attend the meeting of shareholders in person shall have the intension of exercising votes in writing or by electronic means revoked the same way of exercising their votes two days prior to the meeting commencement date. For overdue revocations, the votes exercised in writing or by electronic means shall prevail. If the vote is exercised in writing or by electronic means and a representative is to attend the meeting of shareholders by proxy, the votes exercised by the representative in person shall prevail.

For the resolution of proposals, unless otherwise provided in the Company Act and the Company Corporate Charter (Articles of Incorporation), the consent of a majority vote of the attending shareholders shall prevail. The motion resolved by the Chairman’s consulting the attending shareholders without dissent is deemed as passed and with the same effect as voting.

When there is an amendment or alternative for the same motion, the Chairman shall have the order of vote, including the original proposal, determined accordingly. If one of the motions has been passed, the other motions shall be deemed as rejected without the need for further resolution.

Chairman is to appoint the scrutineers and counting officers who must be shareholders.

Ballot counting should be held at the meeting place with the ballot counting result announced immediately and records kept.

Article 14 The election of directors and supervisors held at the meeting of shareholders should be arranged in accordance with the Company’s election specifications and with the election results announced immediately at the meeting place.

Electoral ballots referred to above shall be sealed and signed by the scrutineers and reserved for at least one year. However, for the litigation filed by the shareholders in accordance with Article 189 of the Company Act, it should be reserved until the end of the proceedings.

Article 15 The resolutions reached in the meeting of shareholders should be documented in the minutes of meeting and signed or sealed by the Chairman; also, it should be uploaded to the MOPS within 20 days after the meeting adjournment.

The minutes of meeting should be prepared in accordance with the year, month, date, place, name of the Chairman, the resolution method, meeting procedure and the results, and shall be permanently reserved throughout the duration of the Company.

Article 16 The Company shall have the statistical report for the number of shares solicited by the solicitor and the number of shares by proxy prepared in the specific format during the meeting of the shareholders commencement date and disclosed in the meeting.
For the resolutions reached in the meeting of shareholders that involved laws and regulations or the material information defined by the Taiwan Stock Exchange Corporation, the Company shall, within the specified time, have the information uploaded to MOPS.
Article 17 The staff responsible for organizing the meeting of shareholders shall wear identification badges or armbands.
The Chairman may direct disciplinary personnel or security personnel to help keep the meeting place in order. The disciplinary personnel or security personnel that help keep the meeting place in order should wear an armband with “Marshal” affixed or an identification card.

When the meeting place is equipped with amplifying equipment, the Chairman may stop shareholders who do not use the speaking device provided by the Company from speaking.

The Chairman may instruct the disciplinary personnel or security personnel to have shareholders who violate the Rules of Procedure for Shareholder Meetings, disobey the instructions of the Chairman, intervene in the meeting proceedings and fail to comply with the disciplinary act escrowed to leave the meeting place.

Article 18 The Chairman may announce the meeting in recess. The Chairman may rule to have the meeting suspended temporarily under unruly circumstance and have the meeting resume depending on the situation.

If the meeting place cannot be used continuously before the proposals (including motions) resolved in the agendas scheduled, it can be resolved to be continued in the meeting of shareholders to find another venue for the meeting. The meeting of shareholders may, in accordance with Article 182 of the Company Act, resolve to have the meeting postponed or resumed in five days.

Article 19 The Rules of Procedure for Shareholder Meetings is implemented after the resolution reached in the meeting of shareholders, so is the amendment and revocation.

Appendix 3

Taichung Commercial Bank Co., Ltd. Company Corporate Charter (Articles of Incorporation)

Chapter 1 General rules

Article 1 The Bank was organized and incorporated in accordance with The Banking Act of The Republic of China and the Company Corporate Charter (Articles of Incorporation), known as “Taichung Commercial Bank” (hereinafter referred to as “Taichung Bank”)
Article 2 The Bank is dedicated to support the national policy in finance and banking, and provide viable financial service and advocate industrial and economic development.
Article 3 The Bank’s head office is in Taichung City and with appropriate branches set-up domestically and internationally depending on its business operations. The incorporation, revocation, or amendment of branch offices are reported to the competent authorities for approval and are registered with the Ministry of Economic Affairs in accordance with the resolutions of the Board.
Article 4 The Bank has announcements made by publishing it in the local daily newspaper where the head office of the Bank is located or by the instructions of the competent authorities.

Chapter 2 Stock

Article 5 The Bank’s authorized capital amounted to NTD43.2 billion with 4.32 billion shares issued at NTD10 par, in which, the Board is authorized to have the unissued shares issued by installments.
Preferred shares may be offered within the total amount of shares as mentioned in the previous paragraph.
Article 5-1 The rights and obligations of the preferred shares of the Bank and other important conditions for issuance are shown below:
If the Bank has earnings after account settlement, it shall appropriate the payment of applicable taxes and for write-off loss carried forward from previous periods. If there is still a balance, appropriate it for the legal reserve and special reserve as required by law. The remainder shall be distributed as the stock dividend of the year at the first priority.
Dividends for preferred shares shall be set at no more than 8% per annum.
Dividends for preferred shares shall be calculated on the offering price per share and will be paid in cash once a year. After the ratification of the financial statements by the General Meeting of shareholders, the Board shall set the dividend day for the distribution of dividends of the previous fiscal year. The distribution of dividends in the year of offering and the year of redemption shall be based on the quantity of the issuing day.
The Bank is discretionary in payment of stock dividend for preferred shares. If the Bank has no earnings in particular year and there is no payment of stock dividend for common shares, or the earnings are insufficient for dividend payment, or the payment of dividend of preferred shares makes the capital adequacy ratio of the Bank fall below the minimum requirements under law or the competent authority, the Bank may resolve not to pay dividend for preferred shares. Holders of preferred shares shall not have any objection of such decision.

If the preferred shares so issued are the non-accumulative type, the dividends not being distributed or inadequate amount of dividends shall not be accumulated to deferred payments with subsequent years in which the Bank has earnings.

Further to the entitlement of dividend stated in Subparagraph 3, if the preferred shares offered are non-participating, the holders of preferred shares are not entitled to cash dividend or stock dividend for common shares through for cash payment or capitalization of retained earnings and capital reserve.
Holders of preferred shares issued by the Bank have the priority to distribution of residual assets over the holders of common shares up to the amount of cash in the offering. In case the competent authority ordered for a takeover of the Bank, discontinuation of operation for clearing, and liquidation, the priority of the holders of preferred shares is the same as the holders of common shares.
Holders of preferred shares are not entitled to vote and taking part in the election but could be elected as Directors, and are entitled to vote only in the Shareholders’ Meeting of preferred shares and session of the Shareholders’ Meeting related to the rights and obligations of the holders of preferred shares.
No conversion of the convertible preferred shares issued by the Bank within 1 year from the day of offering. The timing for conversion shall be determined by the Board as an integral part of the condition of offering under authorization. Holders of convertible preferred shares may apply for conversion of preferred shares in their holding to common shares in whole or in part as stated in the conditions of offering at the ratio of 1 preferred share to 1 common share (conversion ratio is 1:1). After the conversion of preferred shares to common shares, the rights and obligations shall be the same as common shares. The payment of dividend in the year of conversion of preferred shares shall be based on the exact number of outstanding days of the shares in proportion to the number of days in the year in the calculation. However, preferred shares converted to common shares prior to the ex-right (dividend) day are not entitled to the payment of dividend for preferred shares in the year of payment and payment in subsequent years, but are entitled to the payment of dividend of common shares from earnings and capital reserve.
There is no maturity date for preferred shares issued by the Bank and the holders of preferred shares are not entitled to claim for the redemption of the shares. The Bank may redeem the outstanding preferred shares in whole or in part from the day after the 7[th] anniversary of the offering of preferred shares under law or at the permission of the competent authority. Redemption will be made at the offering price. The preferred shares not being redeemed still be granted the rights and obligations as mentioned in preceding paragraphs. Where the Bank may determine to pay stock dividend in particular year, the payable dividend to the deadline of redemption shall be calculated on the exact number of outstanding days.
If the preferred shares issued by the Bank have a maturity date, it shall be no less than 7 years. Holders of preferred shares are not entitled to request the Bank for redemption of the shares before maturity. At maturity or the day after the 5[th] anniversary of the issuance day and as permitted by applicable laws and the competent authority, the Bank may redeem the shares at the offering price and under related regulations of issuance, issue new shares for compulsory conversation with the preferred shares (in the ratio of 1:1), or redeem by another means as permitted by law. If the Bank cannot redeem the preferred shares in whole or in part at maturity under objective factors or force majeure, the rights

inherent to the preferred shares shall prevail under the same conditions for issuance provided under related regulations for issuance until the whole issue was redeemed by the Bank.

The Board shall be authorized to assign the title, issuing date and the terms and conditions for the offering of preferred shares at the time of offering pending on the situation of the capital market and the willingness of the investors and in accordance with the Articles of Incorporation of the Bank and other applicable legal rules.
Article 6 The Bank’s shares are ordered with the signature or seal of at least three directors affixed for lawful issuance.
The Bank may have new shares issued by a book-entry in accordance with the Company Act.
Article 7 The Bank’s dividend distribution is proposed by the Board for resolution in the meeting of stockholders, but the Bank may not propose to have the capital distributed as dividends when there are no earnings.
Article 8 The Company’s stock is processed in accordance with the “Regulations Governing the Administration of Shareholder Services of Public Companies” published by the competent authorities and other relevant laws and regulations.
Article 9 The Bank’s stock shares cannot be transferred within 60 days prior to the Annual Meeting of Shareholders, 30 days prior to the extraordinary meeting of shareholders, or 5 days prior to the record date of the bank’s distributing dividends, bonus or other benefits.
Article 10 The Bank’s elected directors shall report the shareholding at the time of election to the competent authorities. A director in office who has stock shares transferred for over one half of the shareholding at the time of election will be discharged automatically.
A director in office shall report to the competent authorities and announce any increase or decrease of shareholdings.
The director who is reelected prior to the tenure expired and has shares transferred before inauguration for over one half of the shareholding at the time of election, or has shares transferred for over one half of the shareholding during the stoptransferring period before the meeting of shareholders convened will be disqualified.

Chapter 3 Business operation

Article 11 The Bank’s business operation is as follows:
H101021 Commercial banking
H301011 Securities firms
H408011 Futures introducing brokers
It is limited to the businesses authorized by the competent authorities referred to above.
Article 12 The Bank may operate other businesses authorized by the competent authorities.

Chapter 4 Meeting of shareholders

Article 13 The meeting of shareholders includes the annual meeting of shareholders and extraordinary meeting of shareholders. The annual meeting of shareholders is held once a year and it is to be convened by the Board within 6 months after the fiscal year. The extraordinary meeting of shareholders is to be convened by the Board or the Auditing Committee when it is necessary. Shareholders who have over 3% shareholding for more than 1 year may request the Board to convene an

extraordinary meeting of shareholders by filing a written proposal with the matters and reasons detailed.

Where necessary, the meeting of the holders of preferred shares may be convened under the applicable legal rules.

Article 14 Shareholders should be informed of the meeting date, place and subject 30 days in advance for the Annual Meeting of Shareholders and 15 days in advance for the extraordinary meeting of shareholders.
Article 15 Shareholders who are unable to attend the meeting of shareholders may issue the Bank’s proxy with the scope of authorization detailed and signed or sealed to commission the representative attending the meeting, but a shareholder is limited to issuing one proxy and assigning one representative only. Proxy shall be served to the Bank 5 days prior to the meeting of shareholders. When the proxy is issued in duplicate, whichever is served first shall prevail. The proxy referred to above that was announced to be revoked is not subject to this restriction.

Other pending matters are to be processed in accordance with the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meeting of Public Companies” published by the competent authorities.

Article 16 The resolutions reached in the meeting of shareholders and the executions are as follows:
Regulating and amending the Bank’s Company Corporate Charter (Articles of Incorporation).
Resolutions reached on capital increase or decrease;
The election or dismissal of directors.
Audit the financial statements prepared by the Board and the Auditing Committee’s Report. The reviewers for auditing the financial statements and reports are to be appointed at the meeting of shareholders.
Resolutions reached on the distribution of earnings and shareholder bonus;
Resolutions reached on the other important matters;
Article 17 The resolutions reached in the meeting of shareholders, unless otherwise provided in the Company Act, must be with the majority votes of the attending shareholders and the shareholdings of the attending shareholders is over one half of the total number of shares issued.
Article 18 If the shareholdings of the attending shareholders are not more than 50% but one third of the total number of shares issued, a pseudo-resolution can be reached with the majority votes of the attending shareholders. The shareholders should be informed regarding the pseudo-resolution reached and another meeting of shareholders will be convened within one month.

The pseudo-resolution reached in the meeting of shareholders referred to above with the attendance of shareholders representing over one third of the shareholdings and resolved with the majority votes is deemed as a resolution reached.

Article 19 Shareholders are entitled to one vote per share, unless otherwise provided by law.
Article 20 The minutes of the meeting of shareholders shall include the meeting time and date and place, the name of the Chairman and the method of the resolutions, the essentials of procedure and results, and the signature or seal of the Chairman. It should be permanently reserved throughout the duration of the Company. The attendance registry for the signature of the attending shareholders or the proxy of the representative should be reserved for at least one year. However, for the litigation filed by the shareholders in accordance with Article 189 of the Company Act, it should be reserved until the end of the proceedings.

Chapter 5 Directors and the Board of Directors

Article 21 The Bank’s Board is composed of 9~15 directors elected among the competent individuals in the meeting of shareholders for a 3-year tenure and can be reelected in accordance with Article 198 of the Company Act. The total ordered stock shares of all directors shall comply with the requirements of the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.”
For the directors referred to above, the number of independent directors shall not be less than two seats, and one fifth of the director seats; also, the nomination system is adopted to have independent directors elected from the list of candidates. Nonindependent directors and independent directors should be elected together for the respective number of seats with the candidates receiving the higher electoral votes elected.

The professional qualifications, shareholding and part-time job restrictions, definition of independence, nomination method, proxy and other compliance matters of the independent directors shall be handled in accordance with the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies”.

Article 22 The Board shall have 3~5 general directors elected by voting with the consent of the majority attending directors and the attendance of two thirds of the directors. According to the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Pubic Companies,” there must be at least one independent director among the general directors, and shall not constitute less than one fifth of the general directors. The Vice Chairman and Managing General Director will be appointed, if necessary, by a resolution of the Board.
Chairman, Vice Chairman and Managing General Director will be elected among the general directors in accordance with the methods described in the preceding paragraph. The chairman chairs the meeting of shareholders, the Board and the General Board internally, and represents the Bank externally. When the Chairman is on leave or unable to exercise his powers for certain reasons, the vice chairman is to act on the Chairman’s behalf. When the vice chairman is on leave or is unable to exercise his/her powers for certain reasons, the chairman is to appoint one general director to act on his/her behalf. If a representative is not appointed by the chairman, one of the general directors is elected to chair the meeting.

If the credibility of the Bank or the person in charge is damaged by the spreading rumors or fraud, the chairman of the Bank should immediately file a lawsuit to the prosecution office according to law.

When the Board meeting is in recess, the general directors shall comply with the law and regulations, the resolutions of the meeting of shareholders and the resolution of the Board to execute banking business by convention convened by the chairman at any time and resolved with the consent of the majority votes of the majority attending general shareholders.

Article 23 The Board of Directors exercises the following authorities:

Review and approval of bylaws;
The review and approval of important business and plans, and the decision on business plan;
Review and approval of important contracts;

Review and approval of budget;
The proposed earnings distribution;
The proposed capital increase or decrease;
The establishment, revocation or amendment of the Bank’s branches;
The property trade and investment decisions;
Auditing management and execution;
The appointment and dismissal of the managers;
The other powers entrusted in accordance with the law and regulations and in the meeting of shareholders;
Article 24 The Board is to convene a meeting quarterly. An extraordinary meeting can be convened for urgent matters or upon the request of a majority of the directors, unless otherwise provided by the Company Act; it is to be convened by the Chairman. To strengthen the management functions, the Board may set up functional committees for various types of functionalities with the terms of powers regulated by the Board separately.
Article 25 Directors shall attend the Board meeting in person. The directors who are unable to attend the meeting for reasons may appoint another director to attend the meeting by proxy each time and with the scope of authorization detailed.

The proxy referred to above is limited to one representative only.

Article 26 The resolutions of the Board, unless otherwise provided by the Company Act, must be with the attendance of the majority of the directors and the consent of the majority of the attending directors. The minutes of meeting should be signed or sealed by the Chairman.
Article 27 When the number of the director discharged is over one third of the elected seats, the Board shall convene a meeting of shareholders for a lawful election. The newly reelected directors are to serve the remaining tenure of the former directors.
Article 27-1 The Board of Directors is authorized to have the remuneration to the chairman, vice chairman, acting director, and independent directors determined and paid by referring to the general payment standard of the industry.
Independent Directors are not eligible for our bank’s earnings distribution. Our bank may pay for liability insurance policies that cover the liabilities for damages as defined by statutes or court ruling within the scope of the business of Directors.
Article 28 The President and Vice President may be invited to attend the Board meetings, General Board and responsible personnel meeting for consultation.

Chapter 6 Audit Committee

Article 29 The Auditing Committee of the Bank is consisted of all the independent directors. The term of office is identical with the term of office for the independent directors and the committee shall contain at least three members of whom at least one shall be expertise in accounting or finance.
The performance of the duties and exercise of rights by the Auditing Committee, the meeting procedure and other rules to comply shall be based on the “Regulations Governing the Exercise of Powers by the Audit Committees of Public Companies” and the “Organizational Code of the Auditing Committee” of the Bank.
Article 29-1 (Deleted)

Article 30 (Deleted)

Article 31 (Deleted)

Chapter 7 Manager

Article 32 The Bank has one President appointed to manage business fully adhering to the resolutions of the Board of Directors, and with one Vice President and several Junior Vice Presidents appointed to help the President in business operations whose appointment is with the consent of a majority of the Board of Directors. In addition, several managers at all levels are appointed by the President who are proposed to the Board of Directors for appointment and dismissal with the consent of a majority of the Board of Directors.

The Bank has one Chief Auditor appointed, a position equivalent to the Vice President, with the consent of a majority of the Audit Committee and two thirds of the Board of Directors; also, the appointment, dismissal, and transfer of the Chief Auditor should be reported to the competent authorities for approval in advance.

If the said appointment of the Chief Auditor in the preceding paragraph is without the consent of a majority of the Audit Committee, the resolution of the Audit Committee should be stated in the minutes of the Board meeting.

Chapter 8 Accounting

Article 33 The Bank has the business operations settled at the end of each month and the final settlement scheduled on December 31.
Article 34 The Bank shall have the following books and statements prepared after the annual settlement for the review of the Board and the audit of the Audit Committee; also, submitted to the meeting of shareholders for admission and reported to the competent authorities and the Central Bank for filing within 15 days, respectively.
Business report
Financial statements
Earnings distribution or deficit compensation proposal;
Article 35 If there is a profit, the Bank shall appropriate 0.5% to 3% as remuneration to the employees. The Board shall determine if stock or cash shall be released for such purpose. In addition, the Bank may allocate no more than 1.5% of the aforementioned amount as remuneration to the Directors and Supervisors. The distribution of remuneration to employees and directors should be reported in the shareholders’ meeting. If the Bank has accumulated deficit, an equivalent amount should be reserved for making up such loss, then the remuneration to employees and directors can be appropriated in accordance with the ratio stated in the preceding paragraph thereafter.
Article 36 If the Bank has earnings after account settlement, appropriate for payment of applicable taxes as required by law and for write-off loss carried forward, followed by the appropriation of 30% as legal reserve. No further appropriation is necessary if the amount of legal reserve is equivalent to the paid-in capital of the Bank. The remainder shall be appropriated for special reserve, followed by the distribution of dividends of preferred shares. If there is still a balance, pool up with accumulated undistributed earnings and the amount of reversal of special reserve as required by law for the distribution of dividends and bonuses to the shareholders at the proposal of the Board and ratification of the General Meeting.

For the earnings distribution proposed to the Board of Directors in the shareholders’ meeting for resolution in the preceding paragraph, a working capital should be reserved first according to the changes in the operating environment, business operation, and investment, the ratio of cash and stock dividends should be proposed,

of which, cash dividends should not be less than 10% of the total dividend amount.

If the capital adequacy ratio fails to reach the legal ratio, the earnings shall be allocated in accordance with the Banking Act of The Republic of China and the competent authority’s requirements.

Chapter 9 Appendix

Article 37 The organization code of the Bank shall be instituted separately.
Article 38 The matters that are not regulated in the Company Corporate Charter (Articles of Incorporation) should be processed in accordance with the Company Act, the Banking Act of The Republic of China and related laws and regulations.

Article 39 The Company Corporate Charter (Articles of Incorporation) is implemented after the resolution reached in the meeting of shareholders, so is the amendment. The Company Corporate Charter (Articles of Incorporation) was established on October 22, 1977 and implemented on January 1, 1978.

The 1[st] amendment was implemented on March 4, 1979.
The 2[nd] amendment was implemented on March 9, 1980. The 3[rd] amendment was implemented on March 1, 1981. The 4[th] amendment was implemented on March 7, 1982. The 5[th] amendment was implemented on March 5, 1983. The 6[th] amendment was implemented on March 7, 1985. The 7[th] amendment was implemented on March 22, 1986. The 8[th] amendment was implemented on March 19, 1987. The 9[th] amendment was implemented on March 23, 1988. The 10[th] amendment was implemented on March 23, 1989. The 11[th] amendment was implemented on October 5, 1989. The 12[th] amendment was implemented on March 23, 1990. The 13[th] amendment was implemented on June 28, 1991. The 14[th] amendment was implemented on October 13, 1992. The 15[th] amendment was implemented on June 5, 1993. The 16[th] amendment was implemented on April 23, 1994. The 17[th] amendment was implemented on June 10, 1995. The 18[th] amendment was implemented on October 18, 1995. The 19[th] amendment was implemented on March 28, 1996. The 20[th] amendment was implemented on May 8, 1997. The 21[st] amendment was implemented on June 20, 1998. The 22[nd] amendment was implemented on October 12, 1998. The 23[rd] amendment was implemented on May 18, 1999. The 24[th] amendment was implemented on June 15, 2000. The 25[th] amendment was implemented on May 17, 2002. The 26[th] amendment was implemented on June 25, 2003. The 27[th] amendment was implemented on June 9, 2006. The 28[th] amendment was implemented on December 7, 2006. The 29[th] amendment was implemented on June 15, 2007.

The 30[th] amendment was implemented on June 13, 2008. The 31[st] amendment was implemented on June 19, 2009. The 32[nd] amendment was implemented on June 15, 2010. The 33[rd] amendment was implemented on June 22, 2011 The 34[th] amendment was implemented on June 13, 2013. The 35[th] amendment was implemented on June 19, 2014. The 36[th] amendment was implemented on June 2, 2015. The 37[th] amendment was implemented on June 21, 2016. The 38[th] amendment was implemented on June 7, 2017.

Appendix 4

Shareholdings of Directors

All directors minimum shareholding and the shareholdings listed in the registry of shareholders

hareholders
Title	Shareholdings	Shareholdings registered in the registry of shareholders	Remarks
Director	79,036,295 Shares	236,222,024 Shares

Note: The stop transfer date is scheduled on April 7, 2018.

Directors shareholding list

Title	Name	Shareholdings registered in the registry of shareholders
Chairman	Representative of Hsu Tian Investment Co., Ltd.: Chin-Yuan Lai	43,790,115
Vice Chairman	Representative of Hsu Tian Investment Co., Ltd.: Kuei-Fong Wang	43,790,115
Managing Director	Representative of Hsu Tian Investment Co., Ltd.: Ming-Hsiung Huang	43,790,115
Independent Managing Director	Li-Wen Lin	0
Independent director	Jin-Yi Lee	0
Independent director	Hsin-Chang Tsai	0
Director	Representative of Hsu Tian Investment Co., Ltd.: Deh-Wei Chia	43,790,115
Director	Representative of Hsu Tian Investment Co., Ltd.: Hsin-Ching Chang	43,790,115
Director	Representative of Hsu Tian Investment Co., Ltd.: Wei-Liang Lin	43,790,115
Director	Representative of Hsu Tian Investment Co., Ltd.: Ching-Tai Huang	43,790,115
Director	Representative of Pan Asia Chemical Corporation: Ming-Shan Chuang	190,682,871
Director	Representative of Ho Yang Management Consultant Co., Ltd.: Chien-Hui Huang	1,749,038

AI assistant

T.C.C.B. — AGM Information 2018

52197_rns_2018-06-14_9335aeaa-25ca-4a80-908b-6b85c1dfa807.pdf

Taichung Commercial Bank Co., Ltd.

The 2018 Annual Meeting of Shareholders Annual meeting handbook

Index

Taichung Commercial Bank Co., Ltd.

Management Presentation (Company Reports)

Management Presentation (Company Reports)

No. 1

The 2017 Business Report

I. Business result in 2017

(I) Domestic and foreign financial environment

(II) Changes in organization

(III) Operating result of business plans and strategies

(VI) R&D

III. Future development strategies

IV. Summary of business plan 2018

Management Presentation (Company Reports)

No. 2

Taichung Commercial Bank Co., Ltd. Audit Committee’ Review Report

Management Presentation (Company Reports) No. 3

Management Presentation (Company Reports)

No. 4

Perpetual Non-Cumulative Unsecured Subordinated Financial Debentures Issued of 2017

I. Reasons for issuance:

II. Bond Information:

III. Subscription object:

Taichung Commercial Bank Co., Ltd.

Taichung Commercial Bank Co., Ltd.

Taichung Commercial Bank Co., Ltd.

Taichung Commercial Bank Co., Ltd.

Management Presentation (Company Reports)

No. 5

The “Procedural Rules for Board of Directors Meetings of Taichung Commercial Bank” amendment before and after

Management Presentation (Company Reports)

Code of Conduct for the Bank Directors and Managers

(III) Confidentiality

(IV) Fair Trade

(VIII) Penalty:

Article 3: The Waiver Procedure

Proposals

Proposals No. 1

Proposals No. 2

Taichung Commercial Bank Co., Ltd.

Earnings Distribution Statement

2017

Discussions

Discussions No. 1

Discussions No. 2

Proposal: The Company Corporate Charter (Articles of Incorporation) amendment is submitted for discussion. Explanation:

“Taichung Commercial Bank’s Corporate Charter” (Articles of Incorporation) amended before and after

Appendices

Auditor’s Report

Audit opinions

The basis for opinions

Key audit matter

Evaluate the impairment of discounts and loans to customers

Notes to key audit matters

Discount and loan interest income

Notes to key audit matters

Audit response

Responsibilities of Management and Those in Charge with Governance of the Individual Financial Statements

Auditor’s Responsibilities for the Audit of the Individual Financial Statements

Taichung Commercial Bank Co., Ltd. Individual Balance Sheet

Unit: NTD thousand

Taichung Commercial Bank Co., Ltd.

Taichung Commercial Bank Co., Ltd.

Individual Statements of Changes in Shareholders’ Equity

January 1 to December 31, 2017 and 2016

Unit: NTD thousand

Taichung Commercial Bank Co., Ltd.

Individual Statements of Cash Flow

(Continued from previous page)

Ending cash and cash equivalents adjustment

Auditor’s Report

Audit opinions

The basis for opinions

Key audit matter

Evaluate the impairment of discounts and loans to customers

T.C.C.B. AGM Information 2018