Stock No: 2812

==> picture [34 x 35] intentionally omitted <==

Taichung Commercial Bank Co., Ltd.

The 2019 Annual Meeting of Shareholders Annual meeting handbook

Time: 9:00 a.m. on June 28, 2019 Address: 10F, No. 87, Minquan Rd., W. District, Taichung City

I. Shareholders Agenda ........................................................................ 2 II. Management Presentation (Company Reports) ............................... .4 III. Proposals ....................................................................................... 28 IV. Discussions ................................................................................... 32 V. Questions and Motions VI. Appendix 1. Independent Auditor’s Report and financial statements .... 132 2. Rules of Procedure for Shareholder Meetings .................... 158 3. Company Corporate Charter (Articles of Incorporation) ... 164 4. Shareholdings of Directors ................................................. 174

Taichung Commercial Bank Co., Ltd.

The 2019 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 2018 Business Reports
(2) Audit Committee’s Review Report on the 2018 Financial Statements
(3) The 2018 distribution of remuneration to employees and directors
(4) The 2018 authorized offering and issuance of perpetual noncumulative subordinated financial debentures
(5) Report on the issuance of new shares of cash capital increase in 2018.
(6) Report on the advocacy for Article 25 of the Bank Act of The Republic of China.
Proposals:
(1) The proposal of the 2018 Business Report and financial statements
(2) The 2018 proposed Earnings Distribution
Discussions:
(1) The issuance of new shares for capitalization for earnings in 2018.
(2) Amendments to partial provisions of Procedure for Handling Acquisition or Disposal of Assets.
(3) Amendments to Company Corporate Charter
(4) Amendments to the Regulations Governing Selection of Directors.
(5) Amendments to the Rules of Procedure for Shareholders Meeting.
Questions and Motions:
Adjournment

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

Management Presentation (Company Reports)

Management Presentation (Company Reports) No. 1 The 2018 Business Reports (Please refer to Page 6~10 of the Annual Meeting Handbook)

The 2018 Business Report

1. 2018 Operation Performance

(1) Domestic and International Financial Environment

In 2018, the US consumer spending and corporate investment were strong, driving the economy to grow and the US dollar to go up. This caused depreciation of major currencies against the US dollar. Although the US economy was up, the economy of Europe and Japan was down due to uncertainties of Brexit and trade conflicts. . In 2018, the global stock markets were down mostly, mainly due to the US-China trade disputes, the US interest rate hikes, and financial turmoil in emerging markets.

According to the data of the Directorate-General of Budget, Accounting and Statistics, Executive Yuan, the annual economic growth rate of Taiwan in 2018 was 2.63% (3.08% in 2017), the GDP per capita was USD25,004 (USD24,408 in 2017), and the annual growth rate of the consumer price index was 1.35% (0.62% in 2017). According to the statistics of the National Development Council, the total score of the economy monitoring indicator in December 2018 was 16 points, flashing a blue light (the total score of the economy monitoring indicator in December 2017 was 22 points, flashing a yellow-blue light). These results showed that the economy of Taiwan in general has slowed down.

(2) Change of Organization

To ensure that loans are released according to the approved credit terms and relevant regulations, and to reduce the risk of crediting operations, the “Credit Business Centralized Loan Release Operation (Division)” was established under the regional center to handle credit business centralized loan release operations.
To implement the “Principle for Financial Service Industries to Treat Clients Fairly” and protect the right and interests of financial consumers, the "Complaint Resolution Team" was established under the Consumer Finance Department to handle customer complaints.
To expand the consumer finance market of Taichung Commercial Bank, the “Taipei District Consumer Finance Business Promotion Center”, the “Taoyuan-Hsinchu District Consumer Finance Business Promotion Center”, the “Central District Consumer Finance Business Promotion Center” and the “Southern District Consumer Finance Business Promotion Center” were established under the Consumer Finance Department. These Centers are responsible for handling the development of consumer finance credit business as well as promoting the steady growth of consumer finance credit business, allowing the operation of consumer finance credit business to be distributed evenly throughout all regions.
In order to meet the updated corporate governance blueprint of the Financial Supervisory Commission and refer to the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, the “Corporate Governance Section” was established under the Board of Directors Office to take charge of corporate governance related affairs.
In order to expand the financial business of customers’ trading chain, the "Trade Receivable Financing Section" under Corporate Finance Department was renamed the "Global Finance Section" to provide customers with diverse and more comprehensive services.
(3) Operational Plan and Business Strategy Implementation Results
In terms of profit, net profit after tax reached NTD4.008 billion (NTD3.633 billion in 2017), ROA was 0.59% (0.56% in 2017), and ROE was 8.79% (8.57% in 2017), all of which grew comparing with those in 2017. In terms of the operational scale, total assets amounted to NTD690.8 billion, an increase of NTD27.8 billion comparing with that in 2017. The overall operation results have grown steadily.

In terms of capital structure, in order to enrich the operation capital of Taichung Commercial Bank in response to business development, capital increased by cash was implemented in 2018 through the issuing of 150 million shares of common stock, reaching a total of NTD1.53 billion, and the issuing of subordinated debenture with value of NTD2.5 billion to effectively increase the capital adequacy ratio. The capital adequacy ratio at the end of 2018 was 13.01%.
With regards to operation quality, the non-performing loans ratio and the NPL coverage ratio of Taichung Commercial Bank was 0.45% and 317.95%, respectively at the end of 2018. The overall capital level and asset quality remained stable.
In order to develop business opportunities in emerging countries in Southeast Asia and go in line the government's New Southbound Policy, the first overseas branch in Malaysia-the Labuan Branch, and the Service Office in Kuala Lumpur were officially opened in October 2018 to provide financial services and related consultations to Taiwan businesses, strengthening the local financial market.
In response to the financial development trends in various regions, Xindian Branch was established in Xindian District of New Taipei City and Zuoying Branch was established in Zuoying District of Kaohsiung City to improve the operational efficiency of channels and strengthen the competitiveness of regional development.
Since December 2018, Taichung Commercial Bank has collaborated with "JKOPAY" to offer account-link payment service, providing diverse, convenient and safe mobile payment services for our customers.
Two financial technology patents, the "Double Verification System for Financial Counter Transaction" and the "Verification System for Bankbook-free Over-the-Counter Transaction", were acquired to continue strengthening the competitive advantage in the field of innovative finance and optimizing consumers’ financial service environment.

8. Awards

(1) Taichung Commercial Bank was awarded the Group B Excellent Bank for “Rewarding Domestic Bank in Implementing Innovative Key Industry Project-Phase I” by the Financial Supervisory Commission.
(2) Taichung Commercial Bank was awarded the "Golden Security Award" (for four consecutive years from 2015 to 2018) for its outstanding performance in implementing credit information security management in 2018 and the "Golden Inquiry Award" for the first time to excellent credit information inquiry institute by the Joint Credit Information Center.
(3) Taichung Commercial Bank was awarded the 2018 wealth management big awards- the "Best Digital Wealth Management" and the "Best Video Marketing" awards, from the Wealth Magazine.
(4) Taichung Commercial Bank won the "Best Service Award" in the 2018 Excellent Banking Survey.
(5) Taichung Commercial Bank won the "Corporate Sustainable Practice Award" at the BSI International Sustainability Standards Management Conference.
(6) Taichung Commercial Bank won the "Silver Award" from the TCSA Taiwan Corporate Sustainability Forum Report Award.
(4) 2018 Budget Performance
The average balance of deposits (including foreign currency) was NTD583.537 billion, and the budget target achievement rate was 100.27%, an increase of NTD22.827 billion or 4.07%

comparing with that in 2017.

The average balance of loan (including foreign currency, excluding guaranteed acceptance and nonaccrual loan) was NTD457.207 billion, and the budget target achievement rate was 100.33%, an increase of NTD25.135 billion or 5.82% comparing with that in 2017.
The average balance of foreign exchange deposit was USD1.736 billion, an increase of USD17 million or 1.02% comparing with that in 2017.
The amount of foreign exchange business was USD18.137 billion, and the budget target achievement rate was 112.65%, an increase of USD27 million or 0.15% comparing with that in 2017.
The wealth management fee income was NTD1.420 billion, and the budget target achievement rate was 130.19%, an increase of NTD90 million or 6.77% comparing with that in 2017.
(5) Financial Income and Expenditure and Profitability Analysis
The net profit before taxation of 2018 was NTD4.76 billion. The net profit after tax was NTD4.008 billion, and the after-tax earnings per share (EPS) were NTD1.18. The EPS remained above NTD1 for seven consecutive years.
Key Performance Indicator (KPI)

Indicators	2018 (consolidated)
Capital adequacy ratio (BIS)	13.01%
Return on Assets (ROA)	0.59%
Return on Equity (ROE)	8.79%
Earnings Per Share (EPS)	NTD1.18
NPL ratio	0.45%
NPL Coverage ratio	317.95%

Most Recent Credit Rating

			Credit rating
Rating agency	Date of rating
		Long-term	Short-term	Outlook
Fitch Rating Taiwan Company Limited Branch in Taiwan	2018.6.5	A-(twn)	F1(twn)	Stable

(6) Status of Research and Development

In response to digital finance development, the "Financial Technology Development Strategy Conference" was organized to propose short-, medium- and long-term strategies for the financial technology development of Taichung Commercial Bank, providing customers with innovative and diversified financial services.

Goal	Strategy
Short-term goal	Offering convenient digital process, providing digitalized over-the- counter operation, strengthening the features of mobile device APP, addingmobilepayment,andprovidingcustomers with new services.
Medium- termplan	O2O real and virtual channel integration to create a digital financial environment.
Long-term development	Innovative customer experience, providing smart and legal- compliance services.

Impact of external competitive environment, regulatory environment and overall business environment
(1) Actively Implement the Financial Supervision Requirements

In response to the changes in domestic and international financial situation and supervision requirements in recent years, the competent authorities plan and promote various measures, including carrying out international cooperation to fight against money laundering and financing of terrorism, and implementing joint reporting, careful review and information exchange mechanism on financial accounts, etc. While actively improving and strengthening risk control, the banking industry also carries out internal organizational and personnel structure adjustment, information system input and update, staff training reinforcement, identification system adjustment for customer information and transaction classification to promote the development of money laundering prevention, legal compliance and information safety, which in turn fulfills the supervision requirements.

(2) To go in line with the development of financial technology, the policy will be based on gradually opening up the establishment of pure online banking.

In recent years, the Financial Supervisory Commission actively promoted the "Building Digital Financial Environment 3.0" Project. With the development of financial technology, the Financial Supervisory Commission in 2018 has proposed policies for guiding the open up of pure online banking in Taiwan. In response to the establishment of pure online banking, the Financial Supervisory Commission also revised the "Standards Governing the Establishment of Commercial Banks" and the "Regulations Governing Investments in Other Enterprises by Commercial Banks". Considering the fact that the difference between pure online banking and traditional banking is the channel for providing services, pure online banking is required to follow the same regulatory and supervisory requirements as in traditional banking. Although no pure online banking has officially entered the market in 2018, it is expected that the introduction of such a new type of banking service will help banks to actively learn new business experiences, improve industrial upgrading, and accelerate the development of financial innovation and popularization, providing customers with better financial services.

3. Future Development Strategies

In the face of rapidly changing markets and fierce competition challenges, Taichung Commercial Bank will continue to implement financial governance to comply with laws and regulations, and improve capital efficiency. At the same time, we will continue to adjust our business structure, increase interest rate spreads, strengthen digital financial competitiveness, and improve operation growth. Moreover, we will improve our wealth management services, and increase our profit to promote our businesses.

4. 2019 Operation Plan Summary

(1) In order to establish a legal compliance system that is in line with international standards, Taichung Commercial Bank actively implements the laws and regulations in business management to improve the internal control system, fully enhancing the money laundering prevention system of Taichung Commercial Bank. We also implement the capital utilization management mechanism, and continue

to include risk reduction efficiency in branch operation performance evaluation, strengthening the capital structure and enhancing the overall return on capital.

(2) Ensuring a stable growth in operation scale, optimizing the quality of credit assets, adjusting the structure of credit industry, monitoring the changes of credit risk, strictly control the non-performing loan ratios, and accelerating the removal of non-performing loans to achieve above the average level of asset quality for domestic banks, becoming the bank with excellent quality.
(3) Combining the advantages of local branch offices, focusing on the value of wealth management customers, strengthening the services of high-asset customers, improving the competitiveness of financial management products; strengthening the services of consumer finance business, forming strategic alliances with other industries, expanding the scale of consumer loan market to increase the scope of business and the depth of profitability.
(4) Expanding the territory of international financial business, increasing foreign exchange deposits, and actively developing trading-based financing business to increase international financial business demand; continue to strengthen the loans for small and medium businesses, making good use of the guarantee mechanism of credit guarantee fund, and adjusting the pricing gain suitable for crediting, to balance both risks and profits.
(5) Enhancing digital financial services, with customer experience as the core, optimizing the features of online banking and mobile online banking; improving financial service efficiency and quality, and promoting operation process simplification based on system upgrade, technology application, process improvement and service integration to achieve the goal of "Convenient Digital Service, Smart Operation Process".
(6) Expected Operational Goals

Scope of business	Objective by the end of 2019
Deposits (including foreign currencies)	As of the end of December: NTD 540.5 billion
Lending (including foreign currencies)	As of the end of December: NTD 444.961 billion
Foreign Exchanges Operations	Annual amount USD17.00 billion

In 2019, the year full of opportunities and challenges, Taichung Commercial Bank will continue to strive for growth in corporate revenue and benefits, and bring the greatest benefits to our shareholders based on our business philosophy of “We Do Our Best For You” and in compliance with laws and regulations, performance management, information safety and risk management. At the same time, we are committed to make our contribution in corporate social responsibility, and give our achievements back to the society, fulfilling the vision of “The Forefront of Taiwan’s Bank, The Most Expected Bank In Society, The Most Trusted Bank By customers”.

Wishing all shareholders to continue enjoying your good health, success and happiness

President Chairman

Management Presentation (Company Reports)

No. 2

Audit Committee’s Review Report on the 2018 Financial Statements (Please refer to Page 12 of the Annual Meeting Handbook)

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

The financial statements of the individual and consolidated financial statements in 2018 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 Business Report and proposal for Earnings Distribution. 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:

2019 Shareholders' annual meeting, Taichung Commercial Bank Co. Ltd.

Chairman of Audit Committee Hsin-Chang Tsai

March 13, 2019

Management Presentation (Company Reports) No. 3 The 2018 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. 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 2018. The earnings in this year amounted to NTD4,742,507,478. The Bank planned to appropriate 0.7% and 1.5% of the aforementioned amount as remuneration to the employees and the Directors, which amounted to NTD33,197,552 and NTD71,137,612, respectively. All payments were effected in cash.

Management Presentation (Company Reports)

No. 4

The 2018 authorized offering and issuance of perpetual noncumulative subordinated financial debentures. (Please refer to Page 15~22 of the Annual Meeting Handbook)

Perpetual Non-Cumulative Unsecured Subordinated Financial Debentures Issued of 2018

1. Reasons for issuance:

(1) To replenish working capital and make sound capital of the Bank, the first noncumulative perpetual subordinate financial bond of 2018 was issued on April 25, 2018 in the amount of NTD1 billion. It is also listed on Taipei Exchange (TPEx). The amount of this issuance was approved by the Financial Supervisory Commission on September 22, 2017 by the approval letter JinGuan-Yin-Piao-Zi No. 10600229120.
(2) On December 18, 2018, the Bank also issued the second non-accumulative perpetual subordinate financial bond of 2018 in the amount of NTD1.5 billion, and is listed on Taipei Exchange (TPEx). The amount of this issuance was approved by the Financial Supervisory Commission on August 23, 2018, by the approval letter Jin-Guan-Yin-Piao-Zi No. 10702156550.

2. Bond Information:

Bond Information:
	2018
Bond issues	1stterm 2018	2ndterm 2018
Bond code	G13019	G13020
Issue Date	2018/4/25	2018/12/18
Duration	No maturitydate
Maturity date	No maturitydate
Placement	Underwriters are not commissioned forpublic offering
Bond listing	OTC
Listing / issuing location	Taiwan R.O.C.
Issuing currency	NTD
Total Issued	NTD 1 billion	NTD 1.5 billion
Listing Date	2018/4/25	2018/12/18
Bond abbreviation	P07Taichung Commercial Bank 1	P07Taichung Commercial Bank2
Coupon rate	Floatingannual rate:4.14%
Interest bearing and payment method	Annual interest is accrued at a simple interest rate and paid once ayear.
The total annual interest payment	NTD41,400thousand	NTD62,100thousand

3. Subscription object:

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

4. Fund utilization efficiency:

The Bank issued the 1[st] to the 2[nd ] terms of perpetual non-cumulative unsecured subordinated financial debentures in 2018 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 tier I capital ratio and common stock equity ratio, which will help to upgrade the capital structure of the Bank substantially.

Taichung Commercial Bank Co., Ltd. Regulations Governing the Offering of 1[st] term of the perpetual non-cumulative unsecured subordinated financial debentures in 2018

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 1[st] term of perpetual non-cumulative unsecured subordinated financial debentures in 2018 (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 have not provided guarantees, collateral or other arrangements to enhance the priority of compensation for the holders of this bond.
(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.
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 Apr. 25, 2018 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.

11. 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 Paragraph 2, 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 net profit after tax as stated in the comprehensive income statement covering the most recent year recognized by the Annual 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, 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 2018

Taichung Commercial Bank (hereinafter referred to as “the Bank”) acted in compliance with FSC Letter JinGuan-Yin-Piao-Zi No. 10702156550 dated August 23, 2018 for the offering of perpetual non-cumulative unsecured subordinated financial debentures specified as follows:

Bond Name:

Taichung Commercial Bank 2[nd] term of perpetual non-cumulative unsecured subordinated financial debentures in 2018 (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: June 5, 2018; 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 have not provided guarantees, collateral or other arrangements to enhance the priority of compensation for the holders of this bond.
(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.
Total Issued:

The debenture was offered at NTD 1.5 billion.

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 18, 2018 with no maturity date.

8. Coupon rate:

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. 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.

11. Early redemption rights:

Definitions
(1) “Ratio of regulatory capital to risk-weighted assets” as referred to in Paragraph 2, 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 net profit after tax as stated in the comprehensive income statement covering the most recent year recognized by the Annual 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

Report on the issuance of new shares of cash capital increase in 2018 (Please refer to Page 24~25 of the Annual Meeting Handbook)

Taichung Commercial Bank Co. Ltd.

Report on the issuance of new shares of cash capital increase in 2018

The Company issued 150,000,000 shares of common stock of cash capital increase in 2018, which was filed to the Financial Supervisory Commission and became effective on September 21, 2018 by the official letter Jin-guan-zheng-fa No. 1070334491.

1. Share allocation:

According to the resolution of the 10th meeting of the 23rd Board of Directors on July 12, 2018, a total of 150,000,000 shares of common stock to be issued for cash capital increase. According to Article 267 of the Company Act, 15% of such shares, namely 22,500,000 shares, is to be reserved for subscription by the employees of the Company; Further according to Article 28-1 of the Securities and Exchange Act, 10% of the such shares, namely 15,000,000 shares, is to be offered to the public for public subscription; the remaining 75% of such shares, namely 112,500,000 shares, is to be offered to the original shareholders according to the shareholding ratio recorded on the shareholders register on the base date for subscription. If the original shareholder holds a proportion of shares that are not adequately recognized as a new share, more than one of such subscriptions may be merged as joint subscriptions or as one subscription of one person. In case of subscription with less than one share and the portion whose priority subscription is waved by the original shareholder and employees, the chairman is authorized to locate specified persons for the subscription.

2. Pricing of new shares:

The pricing of this issue was determined according to the 12th meeting of the 23rd Board of Directors on October 2, 2018, with the issue price per share set at NTD10.2. According to Article 6 (1) of the “Self-Regulatory Rules Governing the Offering and Issuance of Securities for underwriters by Taiwan Securities Association”, the price of the new shares shall not be lower than 70% of the average share price based on the closing price of the common stock of any of the previous 1, 3 or 5 business days. The afore-mentioned closing price shall be calculated with the simple arithmetic mean deducting the bonus share allotment, exrights (or capital reduction, ex-rights) and after ex-dividend. The ex-rights trading date of this case is October 18, 2018, which makes October 11, 2018 the base date for the issue price (5 business days prior to the ex-rights date). According to such regulations, the Bank set the issue price as NTD10.2 per share.

3. Subscription briefing:

The issuance was fully paid on November 30, 2018, and was listed on December 5, 2018.

Funding utilization plan and items, progress and benefits:

(1) Funding utilization plan and items:

This cash capital increase is to replenish the working capital so to support the needs of various loans and to strengthen the financial structure of the Bank and

increase the capital adequacy ratio.

(2) Progress of the use of funds:

The offering was completed at the fourth quarter of 2018 and the funds are to be used to replenish the working capital to meet the needs of various loans.

(3) Benefits of fund utilization:

This cash capital increase was for the purpose of replenishing the working capital and improve the capital soundness, enhance the regulatory capital adequacy ratio, the tier 1 capital ratio and the common equity ratio, and substantially strengthen and enhance the capital structure of the Company.

Management Presentation (Company Reports) No. 6 Report on Propaganda for Article 25 of the Banking Act Descriptions:

In order to effectively implement the enforcement of Article 25 of the Banking Act, and to enhance the propaganda for the relevant laws and regulations to the shareholders, the Financial Supervisory Commission issued an official letter Jin-guan-yin-kung No. 10060005191 on January 31, 2012 to urge the shareholders to pay attention to the relevant regulations.
In the event that bank shareholders hold shares in violation of Paragraph 2, 3 or 5 of Article 25 of the Banking Act and fail to file a report to or obtain approval from the Financial Supervisory Commission to hold the outstanding voting shares issued by a bank, the excess shares held by such shareholders shall have no voting rights and shall be disposed of within the given period prescribed by the Financial Supervisory Commission. And the Financial Supervisory Commission may further impose a fine of NTD2 million or more and less than NTD10 million in accordance with Paragraph 3, Article 128 of the Banking Law.
Articles 25 of the Banking Act (Please refer to Page 27 of the Annual Meeting Handbook)

Articles 25 of the Banking Act

I. The shares issued by a Bank shall be registered shares.

II. The same person or same concerned party who singly, jointly or collectively acquires more than five percent (5%) of a Bank’s outstanding voting shares shall report such fact to the Competent Authority within ten (10) days from the day of acquisition; the preceding provision applies to each cumulative increase or decrease in the shares of the same person or same concerned party by more than one percent (1%) thereafter.

III. The same person or same concerned party who intends to singly, jointly or collectively acquire more than ten percent (10%), twenty-five percent (25%) or fifty percent (50%) of a Bank’s outstanding voting shares shall apply for prior approval of the Competent Authority.

IV. A third party who holds shares of the Bank on behalf of the same person or same concerned party in trust, by mandate or through other types of contract, agreement or authorization shall fall within the purview of a concerned party.

V. The same person or same concerned party who singly, jointly or collectively holds shares of the Bank representing more than five percent (5%) but less than fifteen percent (15%) of a Bank’s outstanding voting shares prior to the implementation of the amendment to the Act on December 9, 2008 shall report such fact to the Competent Authority within six (6) months from the implementation date of the said amendment. Those who report to the Competent Authority within the said prescribed period may maintain their shareholding at the time of reporting. However, those whose original shareholding exceeds ten percent (10%) shall apply for the prior approval of the Competent Authority when they intend to increase their shareholding for the first time thereafter.

VI. The regulations governing the qualifications and requirements for the same person or same concerned party who applies for approval pursuant to Paragraph 3 hereof or the proviso of the preceding paragraph, required documentation, shares to be acquired, purpose of acquisition, sources of funding, and other matters to be complied with shall be prescribed by the Competent Authority.

VII. Where the same person or same concerned party who holds voting shares issued by a Bank without filing a report with the Competent Authority or obtaining approval from the Competent Authority in accordance with the provisions set forth in Paragraphs 2, 3 or 5 hereof, the excess shares held by such same person or same concerned party shall not have voting rights and shall be disposed of within the given period prescribed by the Competent Authority.

VIII. If the total number of a Bank’s shares held by the same person or by the principal, his/her spouse and children under twenty (20) years of age exceeds one percent (1%) of the Bank’s outstanding voting shares, such principal shall notify the Bank thereof.

Proposals

No. 1

Proposal: The 2018 Business Report and Financial Statements are presented for adoption.

Explanation: The Board of Directors of the Bank has passed the Business Report, Financial Statements of individual and consolidated financial statements of the Bank covering 2018 (refer to P.6 ~10 and 132~157 Annual Meeting Handbook).

Resolutions:

Proposals No. 2

Proposal: The 2018 Earnings Distribution Proposal is presented for adoption.

Explanation:

The corporate net profit after tax of the Bank in 2018 amounted to NTD4,008,369,568.56. With the addition of undistributed earnings at the beginning amounting to NTD199,907,627.29.The effect of retrospective application and retrospective restatement is negative at NTD 80,676,006, and the gain or loss on disposal of equity instruments measured at fair value through OCI or losses is negative at NTD 5,350,216.66, and the defined benefit plan reassessed value of negative NTD29,116,472 in 2018, the Bank shall appropriate 30% or NTD1,202,510,871 as legal reserve under law, and 1% of corporate earnings or NTD40,083,696 as special reserve under FSC Letter Jin-Guan-Yin-Fa No. 10510001512. The earnings that could be appropriated for distribution amounted to NTD2,850,539,934.19 and will be distributed as follows:
(I) Shareholder dividends – stock dividends (NTD0.52 per share): NTD1,833,264,400.
(II) Shareholder dividends – cash dividend (NTD0.28 per share): NTD987,142,368.
Taichung Commercial Bank 2018 Earnings Distribution Statement. Please refer to Page 31 of the Annual Meeting Handbook

Resolutions:

Taichung Commercial Bank Co., Ltd.

Earnings Distribution Statement

2018

Unit: NTD

Unappropriated earnings - beginning $ 199,907,627.29 Effect of retrospective application and (80,676,006.00) retrospective restatement Adjusted unappropriated earnings - 119,231,621.29 beginning Disposal of equity instrument investments ( 5,350,216.66 ) measured at fair value through OCI, cumulative gains and losses transferred directly to retained earnings Defined benefit plan remeasurement (29,116,472.00) recognized to retained earnings Adjusted unappropriated earnings 84,764,932.63 Net income 4,008,369,568.56 Legal reserve appropriated (1,202,510,871.00) Special reserve as required by law (40,083,696.00) Current distributable earnings 2,850,539,934.19 Distributions Shareholder dividends – stock 1,833,264,400 (NTD0.52/share) Shareholder dividends – cash 987,142,368 2,820,406,768.00 (NTD0.28/share) Unappropriated earnings - ending $ 30,133,166.19

Discussions

Discussions No. 1

Proposal: Proposing to have new shares issued through capitalization of earnings in 2018, please proceed to discuss.

Explanation:

The Company for business needs plans to appropriate stock dividends of NTD1,833,264,400 from the 2018 distributable earnings with 183,326,440 shares issued at the ratio of 52 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 Annual meeting of shareholders and the approval of the competent authority. Once approved, the Annual 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 Annual 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: Amendments to partial provisions of Procedure for Handling Acquisition or Disposal of Assets. It is submitted for discussion.

Explanation:

The amendments are made to partial provisions of 《Procedure for Handling Acquisition or Disposal of Assets 》� in accordance with the new amendments to the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies "with the official letter Jin-guan-zheng-fa No.10703410725 dated November 26, 2018 by Financial Supervisory Commission, and in accordance with the announcement format required by the official letter Jin-guanzheng-fa No.10703439303 dated December 4, 2018 from FSC.
The main points of the amendment are as follows:
(1) In accordance with the International Financial Reporting Standards No. 16 Lease, to expand the scope of right-of-use assets.
(2) Considering that in conducting derivatives transactions, the bank has applied the provisions of “Regulations Governing Internal Operating Systems and Procedures for Banks Conducting Financial Derivatives Business” following its industry, it is therefore specified that the financial laws and regulations shall prevail.
(3) To define the passive qualifications of external experts.
Table of comparison of amendments to provisions, draft amendments and announcement format are detailed in the -

annex. (Please refer to pages 36 96 in this handbook)

Resolutions:

The “Procedural Rules for Acquisition or Disposal of Assets of Taichung Commercial Bank” amendment before and after

Clauses after the amendment	Clauses after the amendment	Existing clauses	Remark
Article 1	For the management of assets, Taichung Commercial Bank Co., Ltd. (hereinafter referred to as the “Company”) enacted the Procedure for Handling Acquisition or Disposal of Assets (hereinafter referred to as the “Procedure”) in accordance with the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies,” issued by the competent authority.	Article 1 For the management of assets, Taichung Commercial Bank Co., Ltd. (hereinafter referred to as the “Company”) enacted the Procedure for Handling Acquisition or Disposal of Assets (hereinafter referred to as the “Procedure”) in accordance with the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies,” issued by the competent authority.	This article has not been amended.
Article 2	For acquisition or disposal of assets by the Company, it shall be subject to the provisions of the Procedure. However, if there are other provisions of thefinancial related laws and regulations stated otherwise, such provisions shall prevail. For the Company to conduct the business of derivatives or engage in the derivatives trading, it shall by subject to the relevant provisions issued by the competent authority and“Operational Strategy and Procedural Guidelines for Conducting Derivative Financial Commodity”issued by the Competent.	Article 2 For acquisition or disposal of assets by the Company, it shall be subject to the provisions of the Procedure. However, if there areotherlaws and regulations stated otherwise, such provisions shall prevail.	In accordance the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies” issued with the official letter No. Jin-guan-zheng- fa 10703410725 dated November 26, 2018 by the Financial Supervisory Commission, it is specified that the financial laws and regulations shallprevail.
Article 3 1. 2. 3.	The term "assets" as used in these Regulations includes the following: Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. Real property (including land, houses and buildings, investment property) and equipment. Memberships.	Article 3 The term "assets" as used in these Regulations includes the following: 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. 2. Real property (including land, houses and buildings, investment property and~~land use rights~~) and equipment. 3. Memberships	1. To add the right-of-use assets in paragraph 5 and to move the right to use land from paragraph 2 and include in paragraph 5, in accordance with the “Regulations Governing the Acquisition or Disposal of

Clauses after the amendment	Clauses after the amendment		Existing clauses	Remark
4. 5. 6. 7. 8. 9.	Patents, copyrights, trademarks, franchise rights, and other intangible assets. Right-of-use assets. Claims ofTaichungCommercial Bank (including receivables, bills purchased and discounted, loans, and overdue receivables). Derivatives. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law. O`ther`major assets.	4. 5. 6. 7. 8.	Patents, copyrights, trademarks, franchise rights, and other intangible assets. Claims of~~financial institutions~~ (including receivables, bills purchased and discounted, loans, and overdue receivables). Derivatives. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law. Other major assets.	Assets by Public Companies” with the official letter No. Jin-guan- zheng-fa 10703410725 dated November 26, 2018 issued by Financial Supervisory Commission. 2. The numbering of the paragraph is amended accordingly and the partial description of wording in paragraph 6 is amended.
Article 4 1. 2.	The terms used in the Procedure are defined as follows: Derivatives:Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts,whose value isderived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales)contracts. Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business	Article 4 1. 2.	The terms used in the Procedure are defined as follows: Derivatives:Forward contracts, options contracts, futures contracts,	1. In accordance the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies” issued with the official letter Jin-guan- zheng-fa No. 10703410725 dated November 26, 2018 by the Financial Supervisory Commission, to amend the scope of the derivatives under paragraph 1, and the wording accordingly. 2. To amend the
			leverage contracts, or swap contracts,whose value isderived from assets, interest rates, foreign exchange rates, indexes or other interests. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales)contracts. Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions

Clauses after the amendment	Existing clauses	Remark
Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of shares") under Article 156-3of the Company Act. 3. Related party or subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 4. Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment. 5. Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 6. Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.	conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of shares") under Article 156-8of the Company Act. 3. Related party or subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. 4. Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment. 5. Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 6. Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.	cited article of the Procedure in line with the amendments to the numbering of the articles in the Company Act.

Article 5 1. 2. 3.	Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall meet the following requirements: May not have previously received a	Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall meet the following requirements: May not have previously received a	Article 5	Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall not be the related party with the counter party of the transaction.	1. To add subparagraph 1-3 of paragraph1 in order to specify the passive qualifications of external experts. 2. In order to clarify the responsibilities of external experts, paragraph 2 is added to specify the assessment, examination and statement of the appraisal report or opinion issued by the relevant experts.
	final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed
	since completion of service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received. May not be a related party or de facto related party of any party to the transaction. If the company is required to obtain
	appraisal reports from two or more professional appraisers, the different
	professional appraisers or appraisal officers may not be related parties or de facto related parties of each other. When the personnel of the preceding paragraph issues the appraisal report or opinion, it shall be handled in accordance with the following matters: 1. Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience, and independence. 2. When examining a case, they shall appropriately plan and execute adequate working procedures, in order to produce a conclusion and use the conclusion as the basis for
	1. 2.
		professional capabilities, practical experience, and independence. When examining a case, they shall appropriately plan and execute adequate working procedures, in order to produce
		a conclusion and use the conclusion as the basis for

issuing the report or pinion. The related working procedures, data collected, and conclusion shall be fully and accurately specified in the case working papers. 3. They shall undertake an itemby-item evaluation of the comprehensiveness, accuracy, and reasonableness of the sources of data used, the parameters, and the information, as the basis for issuance of the appraisal report or the opinion. 4. They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that they have evaluated and found that the information used is reasonable and accurate, and that they have complied with applicable laws and regulations.

Article 6 1. 2. 3.	The enactment of Procedure for HandlingAcquisition or Disposal of the Company: The enactment or amendment of thisProcedure shall be approved by more than one-half of all members of the Audit Committee and shall be submitted to the Board of Directors for a resolution. If the preceding subparagraph is not approved by more than one-half of all members of the Audit Committee, it may be agreed by more than two-thirds of all directors, and the resolution of the Audit Committee shall be stated in the minutes of the Board of Directors. All members of the Audit Committee referred to in subparagraph 1and all directors referred to in the preceding subparagraph shall be calculated by the actual incumbent.	Article 6 ~~1.~~ ~~2.~~ 3. 4. 5.	Article 6 ~~1.~~ ~~2.~~ 3. 4. 5.	The assessment and operational procedureof acquisition or Disposal of the Company is as follows: ~~The responsible department of the~~ ~~Company shall, in handling~~	1. To adjust accordingly and move paragraph 1, subparagraph 1 and 7 of this Article to Article 7. 2. The Company has established Audit Committee in accordance with the regulations, therefore subparagraph 2 and 3 of paragraph 1 are deleted. 3. `The`numbering of subparagraph is amended accordingly, and the partial wording description of subparagraph 1 is amended.
			~~.~~ ~~2~~
				~~acquisition or disposal of the assets~~ ~~by the Company, submit the~~ ~~f th itdd iiti~~
				~~reasons or e nene acquson~~ ~~or disposal, the subject matter, the~~ ~~tt th tf i th~~
				~~counerpary, e ranser prce, e~~ ~~payment and collection terms and~~ ~~the basis for the price, etc., for~~ ~~approval in accordance with the~~ ~~levels of responsibility chart of the~~ ~~Company.~~ ~~Under the condition that the~~ ~~acquisition or disposal of assets by~~ ~~the Company in accordance with~~ ~~the Procedures or other laws shall~~ ~~be approved by the Board of~~ ~~Directors, if a director expresses~~ ~~objection and has a record or~~ ~~written statement, the Company~~ ~~shall send such objection materials~~ ~~by the Directors to the Audit~~ ~~Committee.~~ ~~Wh bitti th iiti~~
			~~.~~ 3. 4. 5.
				~~en sumng e acquson or~~ ~~disposal of assets transactions to~~ ~~the Board of Directors for~~ ~~discussion in accordance with the~~ ~~provisions of subparagraph 2, the~~ ~~opinion of each of the independent~~ ~~directors shall be fully considered.~~ ~~If the independent director has~~ ~~objections or reservations, such~~ ~~objections or reservations shall be~~ ~~stated in the minutes of the Board~~ ~~of Directors.~~ The enactment or amendment of acquisition or Disposal Assets Procedure shall be approved by more than one-half of all members of the Audit Committee and shall be submitted to the Board of Directors for a resolution. If the preceding subparagraph is not approved by more than one-half of all members of the Audit Committee, it may be agreed by more than two-thirds of all directors,and the resolution of the

			6. ~~7~~	Audit Committee shall be stated in the minutes of the Board of Directors. All members of the Audit Committee referred to in subparagraph 4and all directors referred to in the preceding subparagraph shall be calculated by the actual incumbent. ~~The relevant operations for the~~ ~~acquisition or disposal of assets~~ ~~hll b hdld i d ith~~	Audit Committee shall be stated in the minutes of the Board of Directors. All members of the Audit Committee referred to in subparagraph 4and all directors referred to in the preceding subparagraph shall be calculated by the actual incumbent. ~~The relevant operations for the~~ ~~acquisition or disposal of assets~~ ~~hll b hdld i d ith~~
			~~.~~
				~~sa e ane n accorance w~~ ~~the relevant provisions of the~~ ~~internal control system of the~~ ~~Company. If a major violation is~~ ~~discovered, the relevant personnel~~ ~~shall be disciplined depending on~~ ~~the circumstances surrounding the~~ ~~violation.~~
Article 7 1. 2.	The operating procedure for the acquisition or disposal of assets of the Company include the reference basis, trading term, authorization level and executive unit, etc., shall be handled in accordance with the law, the relevant regulations of the competent authority, the levels of responsibilities chart of the Company, and the related operational specifications: Securities: they shall be subject to the relevant provisions of the Banking Act and the “investment policy” of the Company. Real propertyor its right-of-use assets:they shall comply with the Banking Act, the relevant regulations of the competent authority and the standards of the “Management Rules for Real Estate” of the Company.	Article 7 1. 2.		The decision procedure of the trading term for the acquisition or disposal of assets (including price determination method, reference basis, authorization level and executive unit) by the Company: Securities: they shall be subject to the relevant provisions of the Banking Act and the “investment policy” of the Company~~, and the~~ ~~investment business department of~~ ~~the Company shall take into~~ ~~account the market conditions and~~ ~~set a reasonable price. The~~ ~~itt d t hll~~		1. The original subparagraph 1 and 7, paragraph 1 of the previous article to be included into this Article. 2. To be in line with the International Financial Reporting Standards No. 16 on Lease, the right of use is included in subparagraph 3 and 4 of paragraph 1. 3. Subparagraph 1-3 and 5 are amended to avoid repeating the relevant regulations. 4. Alteration of numbering of the subparagraph.
				~~nvesmen scope an amoun sa~~ ~~be operated within the amount~~ ~~authorized by the Managing~~ ~~Director of the Board or Board of~~ ~~Directors.~~ Real property: subject to the Banking Act and the provisions of the “Rules for Real Property Management",~~it shall be~~ ~~conducted by the General Affairs~~ ~~Department to collect the~~ ~~ifti kt diti t~~
				~~normaon on mare conon, o~~ ~~secure a target~~an~~d to send it to the~~ ~~Ri Dtt f il i~~	~~e conon, o~~ ~~t d it t th~~
				~~evew eparmen or apprasa n~~ ~~accordance with the “Guidelines~~ ~~for Appraisal on Real Estate~~ ~~Collaterals" of the Company, so to~~

3. 4. 5. 6.	Membership card, intangible assets,	3. 4. 5. 6.	~~set up a reference price to be~~ ~~bittd t th Bd f Dit~~
			~~sume o e oar o recors~~ ~~for approval.~~ Equipment: the~~market conditions~~ shall~~be considered to set a~~ ~~reference price~~and the purchasing matter to be conducted subject to the divisions of responsibilities under “Operational Guidelines for Construction and the Purchase, Order of the Custom-made and Sale of Property" of the Company. The acquisition or disposal of the real estate and equipment shall be based on one of the price comparison, negotiation or bidding. Derivatives: it is to be conducted by the derivatives investment trading department of the Company ~~to set a reasonable price based on~~ ~~the market conditions and proceed~~ ~~with the investment trading within~~ ~~the investment scope and amount~~ ~~authorized by the Board of~~ ~~Directors.~~ The acquisition or disposal of other assets shall be subject to the relevant regulations of the Company.
	equipment orits right-of-use assets: the purchase matters shall be handled based on the divisions of responsibilities under the “Operational Rules for Matters of Construction and the Purchase, Order of the Custom-made and Sale of the Property” of the Company. The acquisition or disposal of the real estate and equipment shall be based on one of the price comparison, negotiation or bidding. Derivatives: it is to be conducted by the Derivatives Investment Trading Department of the Companyin accordance with the relevant regulations of the competent authority and the“Management Strategy for Operational Guidelines
	for Conducting Derivative Financial
	Commodity Business”. The acquisition or disposal of other assets shall be subject to the relevant regulations of the Company. The relevant operation regarding the
	acquisition or disposal of assets shall be all subject to the relevant provisions of the internal control system of the Company. I n the event of major violations discovered, the related personnel shall be disciplined depending on the circumstances surrounding the violation.
	violation.
Article 8	The total amount of the real estate not for business useand its right-of- use assetsor the securities acquired by the Company and each of its subsidiaries, and the limits of individual securities shall be subject to the Banking Act and the regulations of the competent authority.	Article 8	The total amount of the real estate not for business use or the securities acquired by the Company and each of its subsidiaries, and the limits of individual securities shall be subject to the Banking Act and the regulations of the competent authority.	To be in line with the International Financial Reporting Standards No. 16 on Lease, the right-of-use is included in the article.
Article 9 1.	The control procedure for the acquisition or disposal of assets by the subsidiary company: The subsidiary company shall, in accordance with the relevant	Article 9 1.	The control procedure for the acquisition or disposal of assets by the subsidiary company: The subsidiary company shall, in accordance with the relevant	The partial wording of subparagraph 3 is slightly amended, and the citing of

2. 3. 4.	regulations and the provisions of the competent authority, enact and implement the procedure for the acquisition or disposition of assets. For the acquisition or disposal of assets by the subsidiary company, it shall be subject to the business competency rules of each subsidiary company. The subsidiary company shall ensure that the procedure for the acquisition or disposal of assets enacted is in compliance with the relevant laws and regulations and check precisely whether the relevant matters are conducted in accordance with the procedure. The internal audit of the Company shall review the audit report or self-inspection report and other related matters of the subsidiary company . The Company shall handle the relevant matters concerning the regulatory filing for the public announcement on behalf of the subsidiary company, in accordance with the provisions of Article31.	2. 3. 4.	regulations and the provisions of the competent authority, enact and implement the procedure for the acquisition or disposition of assets. For the acquisition or disposal of assets by the subsidiary company, it shall be subject to the business competency rules of each subsidiary company. The subsidiary company shall ensure that the procedure for the acquisition or disposal of assets enacted is in compliance with the relevant laws and regulations and check precisely whether the relevant matters are conducted in accordance with the procedure. The internal audit of the Company shall review the audit report or self-inspection report and other related matters of the subsidiary company. The Company shall handle the relevant matters concerning the regulatory filing for the public announcement on behalf of the subsidiary company, in accordance with theprovisions of Article34.	paragraph 4 is adjusted accordingly.
Article 10 In acquiring or disposing of real property, equipment,or right-of-use assets thereof where the transaction amount reaches 20 percent of the Company's paid-in capital or NTD300 million or more, the Company, unless transacting with a domesticgovernment agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipmentor right-of- use assets thereofheld for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply withthe following provisions: 1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors; the same procedure shall also be		Article 10 In acquiring or disposing of real propertyor equipment,or where the transaction amount reaches 20 percent of the Company's paid-in capital or NTD300 million or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment held for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: 1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors; ~~ifthe trading condition in the future~~		1. To be in line with the International Financial Reporting Standard No. 16 on Lease, the right-of- use assets is included in this article, and paragraph 1 is amended. 2. The scope of exemption from transactions with government agencies is defined to be limited to domestic government agencies only. 3. Thepartial
			~~te trang conton n te uture~~

2. 3. 4.	followed whenever there is any subsequentchange to the terms and conditions of the transaction. Where the transaction amount is NTD1 billion or more, appraisals from two or more professional appraisers shall be obtained. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount. (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.	2. 3. 4.	~~changes, it shall also follow the~~ ~~above procedure accordingly.~~ Where the transaction amount is NTD1 billion or more, appraisals from two or more professional appraisers shall be obtained. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount. (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the originalprofessional appraiser.	wording in subparagraph 1 of paragraph 1 is amended.
Article 11 The Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain financial statements of the issuingcompanyfor the most recent		Article 11 The Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain financial statements of the issuingcompanyfor the		The wording is slightly amended.

period, certified or reviewed by a certified public accountant (CPA), for reference in appraising the transaction price, andifthe dollar amount of the transaction is 20 percent of theCompany's paid-in capital or NTD300 million or more, the Company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the Financial Supervisory Commission (FSC).	most recent period, certified or reviewed by a certified public accountant (CPA), for reference in appraising the transaction price, andifthe dollar amount of the transaction is 20 percent of the Company's paid-in capital or NTD300 million or more, the Company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the Financial Supervisory Commission (FSC).
Article 12 Where theCompanyacquires or disposes of intangible assets or right-of-use assets thereof or membershipsand the transaction amount reaches 20 percent or more of paid-in capital or NTD300 million or more, except in transactions with adomestic government agency, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.	Article 12 Where the Company acquires or disposes of memberships and intangible assets transaction amount reaches 20 percent or more of paid-in capital or NTD300 million or more, except in transactions with a government agency, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.	1. To be in line with the International Financial Reporting Standards No. 16 on Lease, the right-of- use assets is included in this article, and some wordings are amended. 2. The scope of exemption from transactions with government agencies is defined to be limited to domestic government agencies only.

Article 13 The calculation of the transaction amounts referred to in the preceding 3 articles shall be done in accordance withArticle 28, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.	Article 12-1 The calculation of the transaction amounts referred to in the preceding 3 articles shall be done in accordance withArticle 31, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.	The numbering of the paragraph is changed and the citing of the paragraph is adjusted accordingly.
Article 14 Where a public company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.	Article 13 Where a public company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.	The numbering of the paragraph is changed.
Article 15 When theCompany engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised,ifthe transaction amount reaches 10 percent or more of theCompany's total assets, theCompany shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of the preceding Section and this Section. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article13herein. When judging whether a transaction counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered.	Article 14 When theCompany engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised,if the transaction amount reaches 10 percent or more of theCompany's total assets, theCompany shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of the preceding Section and this Section. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article12-1 herein. When judging whether a transaction counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered.	1. The numbering of the paragraph is amended and the wording is slightly modified. 2. The citing of `the`article in paragraph 2 is adjusted.

Article 16 When the Company intends to acquire or dispose of real property or right-of-use assetsthereof from or to a related party, or when it intends to acquire or dispose of assets other than real propertyor right-of-use assetsthereof from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of theCompany's total assets, or NTD300 million or more, except in trading ofdomesticgovernment bonds or bonds and separate and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the board of directors and recognized by the supervisors: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a transaction counterparty. 3. With respect to the acquisition of real propertyor right-of-use assets thereof from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article17 and Article 18. 4. The date and price at which the related party originally acquired the real property, the original transaction counterparty, and that transaction counterparty's relationship to the company and the related party. 5. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the fund utilization.	Article 15 Whenthe Company intends to acquire or dispose of real property thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property thereof from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of theCompany's total assets, or NTD300 million or more, except in trading of government bonds or bonds and separate and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the board of directors and recognized by the supervisors: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a transaction counterparty. 3. With respect to the acquisition of real property thereof from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article16and Article 17. 4. The date and price at which the related party originally acquired the real property, the original transaction counterparty, and that transaction counterparty's relationship to the company and the related party. 5. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the fund utilization.	1. The numbering of the article is amended and the citing of paragraph1, subparagraph 3 and paragraph 2 are adjusted. 2. To be in line with the International Financial Reporting Standard No. 16 on Lease, the right-of- use assets is include ding the provisions of this article, so this article is amended accordingly. 3. In paragraph 1, the government bond is defined as the domestic government bond, which may be exempted from the procedure of being submitted to the board of directors for approval and to the supervisors for recognition. 4. Considering that the provisions regarding to related party transactions have been included in the “Real Estate Management Rules” and “Operational

6. 7.	An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article. Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article28, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the board of directors and recognized by the supervisors need not be counted toward the transaction amount. When a matter is submitted for discussion by the board of directors pursuant to paragraph 1, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. Where an audit committee has been established in accordance with the provisions of the Act, the matters for which paragraph 1 requires recognition by the supervisors shall first be approved by one-half or more of all audit committee members and then submitted to the board of directors for a resolution, and shall be subject to mutatis	6. An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article. 7. Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article31, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the board of directors and recognized by the supervisors need not be counted toward the transaction amount. ~~For the acquisition or disposal of~~ ~~the equipment for business use~~ ~~between the Company and the~~ ~~parent company or among the~~ ~~subsidiaries, the board of directors~~ ~~may authorize the chairman to~~ ~~make a decision within a certain~~ ~~amount according to the third~~ ~~subparagraph of the first paragraph~~ ~~of Article 7, and submit it~~ ~~afterwards to the most recent~~ ~~board of directors for recognition.~~ When a matter is submitted for discussion by the board of directors pursuant to paragraph 1, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. Where an audit committee has been established in accordance with the provisions of the Act, the matters for which paragraph 1 requires recognition by the supervisors shall first be approved by one-half or more of all audit committee members and then submitted to the board of directors for a resolution,and shall be	6. An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article. 7. Restrictive covenants and other important stipulations associated with the transaction. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article31, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the board of directors and recognized by the supervisors need not be counted toward the transaction amount. ~~For the acquisition or disposal of~~ ~~the equipment for business use~~ ~~between the Company and the~~ ~~parent company or among the~~ ~~subsidiaries, the board of directors~~ ~~may authorize the chairman to~~ ~~make a decision within a certain~~ ~~amount according to the third~~ ~~subparagraph of the first paragraph~~ ~~of Article 7, and submit it~~ ~~afterwards to the most recent~~ ~~board of directors for recognition.~~ When a matter is submitted for discussion by the board of directors pursuant to paragraph 1, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. Where an audit committee has been established in accordance with the provisions of the Act, the matters for which paragraph 1 requires recognition by the supervisors shall first be approved by one-half or more of all audit committee members and then submitted to the board of directors for a resolution,and shall be	Rules for Matters of the Purchase, Ordering of the Custom- made, and sale of Property” of the Company, paragraph 3 is therefore deleted to simplify the provisions of administrative procedure for the acquisition or disposal of the equipment for business use among the companies. 5. The numbering of the paragraphs is amended.
			~~susares, e oar o recors~~ ~~may authorize the chairman to~~ ~~make a decision within a certain~~ ~~amount according to the third~~ ~~bh f th fit h~~
			~~suparagrap o e rs paragrap~~ ~~of Article 7, and submit it~~ ~~afterwards to the most recent~~ ~~board of directors for recognition.~~ When a matter is submitted for discussion by the board of directors pursuant to paragraph 1, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. Where an audit committee has been established in accordance with the provisions of the Act, the matters for which paragraph 1 requires recognition by the supervisors shall first be approved by one-half or more of all audit committee members and then submitted to the board of directors for a resolution,and shall be

An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article.
Restrictive covenants and other important stipulations associated with the transaction.

mutandis application of Article 6, paragraphs 1, subparagraphs2and 3.	subject to mutatis mutandis application of Article 6, paragraphs 1, subparagraphs5and 6.
Article 17 The Companyacquires real property or right-of-use assets thereof froma related partyshall evaluate the reasonableness of the transaction costs by the following means: 1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year theCompany purchases the property; provided, it may not be higher than the maximum non- financial industry lending rate announced by the Ministry of Finance. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the transaction counterparties. Where land and structures thereupon are combined as a single property purchasedor leasedin one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. The Company that acquiresreal property or right-of-use assets thereoffrom a related partyand appraises the cost of the real propertyor right-of-use assets thereof in accordance with the preceding two paragraphsshall also engage a CPA to check the	Article 16 The Company'stransaction with the related partyshall evaluate the reasonableness of the transaction costs by the following means: 1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year theCompany purchases the property; provided, it may not be higher than the maximum non- financial industry lending rate announced by the Ministry of Finance. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the transaction counterparties. Where land and structures thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. For the Company totrade with the related partyand to evaluate the cost of real estate in accordance with the provisions ofParagraph 1 and 2,it shall also retain an CPA to review it and provide a substantive opinion.	1. The numbering of the article is amended and the wording is slightly modified. 2. To be in line with the International Financial Reporting Standards, No.16 on Lease, paragraph 1-4 are amended to include in this article the right-of-use assets of the real estate leased from the related party. 3. `Considering` the fact that between the Company and its subsidiaries, and the subsidiaries directly or indirectly 100% held, due to the overall planning of the business, there is a possibility of collective leasing of real estate and sub- lease thereafter, and the risk of significant trading irregularity for the previous transaction is

1. 2. 3. 4.	appraisal and render a specific opinion. Where the Company acquiresreal property or right-of-use assets thereoffrom a related partyand one of the following circumstances exists, the acquisition shall be conducted in accordance withthe preceding article, and the preceding three paragraphs do not apply: The related party acquired the real propertyor right-of-use assets thereof through inheritance or as a gift. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real propertyor right-of-use assets thereof to the signing date for the current transaction. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land. The real property right-of-use assets	1. 2. 3.	Where the Company's with the related party
	for business use are acquired by the
	public company with its parent or subsidiaries, or by its subsidiaries in
	which it directly or indirectly holds 100 percent of the issued shares or authorized capital.

Article 18 When the results of a public company's appraisal conducted in accordance with paragraph 1 and paragraph 2 of the preceding Article are uniformly lower than the transaction price, the matter shall be handled in compliance with Article 19.However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply: 1. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: (1) Where undeveloped land is appraised in accordance with the means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower. (2) Completedtransactionsby unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market saleor leasing practices.	Article 17 When the results of a public company's appraisal conducted in accordance with paragraph 1 and paragraph 2 of the preceding Article are uniformly lower than the transaction price, the matter shall be handled in compliance with Article18.However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply: 1. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: (1) Where undeveloped land is appraised in accordance with the means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower. (2) Completedtransactionsby unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale practices. ~~(3) Completed transactions by~~ ~~unrelated parties within the~~ ~~preceding year involving other~~ ~~floors of the same property, where~~ ~~transaction terms are similar after~~	1. The numbering of the article is amended and the cited article for paragraph 1 is adjusted accordingly. 2. To be in line with the actual operation of real estate leasing, the limit is extended on the acquisition of real estate use-of-right assets from the related party, under which circumstance, the lease transaction between non- related parties in the adjacent area within one year as a reference case for calculating and estimating the reasonableness of the transaction price. The current paragraph1, subparagraph 1, item 3 is consolidated into item 2; and to add that a rental case is also served as a transaction case. Therefore, paragraph 1, subparagraph 1, item 2 and subparagraph 2, and paragraph 2 are amended

2.	Where the Company acquiring real property,or obtaining real property right-of-use assets through leasing, from a related party provides evidence that the terms of the transaction are similar to the terms of completedtransactionsinvolving neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. Completedtransactionsinvolving neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transactions involving similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real propertyor obtainment of the right-of-use assetsthereof.	Where the Company acquiring real property,or obtaining real property right-of-use assets through leasing, from a related party provides evidence that the terms of the transaction are similar to the terms of completedtransactionsinvolving neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. Completedtransactionsinvolving neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transactions involving similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real propertyor obtainment of the right-of-use assetsthereof.	~~calculation of reasonable price~~ ~~discrepancies in floor land prices in~~ ~~accordance with standard property~~ ~~market leasing practices.~~ 2. Where the Company acquiring real property, from a related party provides evidence that the terms of the transaction are similar to the terms of completedtransactions involving neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. Completedtransactionsinvolving neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transactions involving similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property thereof.	~~calculation of reasonable price~~ ~~dii i fl ld i i~~	accordingly.
Article 19 Where the Companyacquires real property or right-of-use assets thereof from a related partyand the results of appraisals conducted in accordance with the preceding two articles are uniformly lower than the transaction price, the following steps shall be taken: 1. Special reserve shall be set aside in accordance with Article 41, paragraph 1 of the Securities and Exchange Act against the difference between the real property or right- of-use assets thereof transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in another		acquires real	Article 18 Where the Company's transaction with related partyand the results of appraisals conducted in accordance with theArticles 16 and 17are uniformly lower than the transaction price, the following steps shall be taken: 1. Special reserve shall be set aside in accordance with Article 41, paragraph 1 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in another company,then the special reserve		1. The numbering of the article is amended and the wording is slightly modified. 2. To be in line with the International Financial Reporting Standards, No. 16 on Lease, the provision for the process required is included when the assessment price of the real estate use-

2. 3.	2. 3.	called for under Article 41, paragraph 1 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company. Audit Committee shall comply with Article 218 of the Company Act. Actions taken pursuant to the subparagraphs 1 and 2shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company, having set aside a special reserve under the preceding paragraph, may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent. For the company'stransaction with the related parties, if there is other evidence indicating that the transaction has abnormal business operations, it shall also be handled in accordance with the preceding two provisions.	of-right assets leased from the related party is lower than the transaction price.
Article 19 ~~The Company engaging in~~ ~~derivatives trading shall pay strict~~ ~~attention to control of the following~~ ~~important risk management and~~ ~~auditing matters, and incorporate~~ ~~them into their Procedures:~~ ~~1.~~ ~~Trading principles and strategies:~~ ~~Shall include the types of~~ ~~derivatives that may be traded,~~ ~~operating or hedging strategies,~~ ~~segregation of duties, essentials of~~ ~~performance evaluation, total~~ ~~amount of derivatives contracts that~~			1. This article is deleted. 2. The “Regulations Governing the Acquisition or Disposal of Assets by Public Companies "issued by the Financial Supervisory
		~~aenon o conro o e oowng~~ ~~important risk management and~~ ~~auditing matters, and incorporate~~ ~~them into their Procedures:~~ ~~Trading principles and strategies:~~ ~~Shall include the types of~~ ~~derivatives that may be traded,~~ ~~operating or hedging strategies,~~ ~~segregation of duties, essentials of~~ ~~performance evaluation, total~~ ~~t f diti tt tht~~
	~~.~~
		~~amoun o ervaves conracs a~~

	~~maybe traded, and the maximum~~	Commission
	~~loss limit on total trading and for~~	with the
	~~individual contracts.~~	official letter
~~2.~~	~~Risk management measures.~~	Jin-guan- zheng-fa No.
~~3.~~	~~Internal audit system.~~	10703410725
4.	~~Regular evaluation methods and~~ ~~the handling of irregular~~ ~~circumstances.~~	dated November 26, 2018, has specified that
		the related
		financial laws
		and
		regulations
		shall prevail.
		In order to
		prevent double
		regulations,
		the article is
		deleted.
Article 20 ~~The Company engaging in~~		1. This article is
	~~derivatives trading shall adopt the~~	deleted.
	~~following risk management~~	2. The
	~~measures:~~	"Regulations
~~1.~~	~~Risk management shall address~~	Governing the
	~~credit, market, liquidity, cash flow,~~	Acquisition or
	~~operational, and legal risks.~~	Disposal of
~~2.~~	~~Personnel engaged in derivatives~~ ~~trading may not serve concurrently~~ ~~in other operations such as~~ ~~confirmation and settlement.~~	Assets by Public Companies "issued by the Financial
~~3.~~	~~Risk measurement, monitoring, and~~	Supervisory
	~~control personnel shall be assigned~~	Commission
	~~to a different department that the~~	with the
	~~personnel in the preceding~~	official letter
	~~subparagraph and shall report to the~~	Jin-guan-
	~~board of directors or senior~~	zheng-fa No.
	~~management personnel with no~~	10703410725
	~~responsibility for trading or~~	dated
	~~position decision-making.~~	November 26,
~~4.~~	~~Derivatives trading positions held~~ ~~shall be evaluated at least once per~~ ~~week; however, positions for hedge~~ ~~trades required by business shall be~~ ~~evaluated at least twice per month.~~ ~~Evaluation reports shall be~~ ~~submitted to senior management~~ ~~personnel authorized by the board~~ ~~of directors.~~	2018, has specified that the related financial laws and regulations shall prevail. In order to prevent double regulations,
5.	~~Other important risk management~~	the article is
	~~measures.~~	deleted.

Article 21 ~~Internal audit of derivatives~~	Article 21 ~~Internal audit of derivatives~~	1. This article is
	~~transactions:~~	deleted.
	~~In addition to the internal audit~~	2. The
	~~conducted by the Company's~~	“Regulations
	~~derivatives trading department~~	Governing the
	~~itself , the internal auditors shall~~	Acquisition or
	~~make an audit report on the~~	Disposal of
	~~suitableness and regulatory~~	Assets by
	~~compliance of the handling~~	Public
	~~procedure of the internal control~~	Companies
	~~over the transactions conducted by~~	"issued by the
	~~the derivatives transactions~~	Financial
	~~department in accordance with the~~	Supervisory
	~~“Internal Audit System~~	Commission
	~~Implementation Measures” of the~~	with the
	~~Bank. If a major violation is~~	official letter
	~~discovered, the audit committee~~	Jin-guan-
	~~shall be notified in writing.~~	zheng-fa No.
		10703410725
		dated
		November 26,
		2018, has
		specified that
		the related
		financial laws
		and
		regulations
		shall prevail.
		In order to
		prevent double
		regulations,
		the article is
		deleted.
Article 22 ~~The principles for the~~		1. This article is
	~~supervision and management of the~~	deleted.
	~~board of directors:~~	2.`The`
~~1.~~	~~Designate senior management~~	“Regulations
	~~personnel to monitor and control~~	Governing the
	~~the risk of derivatives trading.~~	Acquisition or
~~2.~~	~~Periodically evaluate whether~~ ~~derivatives trading performance is~~ ~~consistent with the established~~ ~~operational strategy.~~	Disposal of Assets by Public Companies” i`ssued`by the
~~3.~~	~~Periodically evaluate whether the~~	Financial
	~~risk undertaken is within the~~ ~~Company's permitted scope of~~	Supervisory Commission
	~~tolerance.~~	with the
~~4.~~	~~The D~~esignated senior management personnel shall p~~eriodically~~ ~~evaluate the risk management~~ ~~measures currently employed are~~ ~~appropriate and are faithfully~~ ~~conducted in accordance with the~~	official letter Jin-guan- zheng-fa No. 10703410725 dated November 26,
		2018,has

		~~5~~		specified that the related financial laws and regulations shall prevail. In order to prevent double regulations, this article is deleted.
		~~.~~	~~e esgnae senor managemen~~ ~~personnel shall precisely supervise~~ ~~the trading and profit-loss~~ ~~circumstances. Appropriate~~ ~~measures shall be adopted and a~~ ~~report immediately made to the~~ ~~board of directors if irregular~~ ~~circumstances are found in the~~ ~~course thereof. An independent~~ ~~director shall be present at the~~ ~~meeting and express an opinion.~~ ~~The Company shall report to the~~ ~~soonest meeting of the board of~~ ~~directors after it authorizes the~~ ~~relevant personnel to handle~~ ~~dit tdi i d ith~~
			~~ervaes rang n accorance w~~ ~~its Procedures for Engaging in~~ ~~Derivatives Trading.~~
Article 20 The Company that conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit it to the board of directors for deliberation and passage. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by the Company of a subsidiary in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital.	Article 23 The Company that conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit it to the board of directors for deliberation and passage. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by the Company of a subsidiary in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital.			The numbering of the article is amended.
Article 21 The Company shall prepare a public report to shareholders detailing important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting and include it along with the expert opinion referred to in paragraph 1 of theprecedingArticle when sending	Article 24 The Company shall prepare a public report to shareholders detailing important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting and include it along with the expert opinion referred to in paragraph 1 of theprecedingArticle when			The numbering of the article is amended and the partial wording description in paragraph 2 is modified.

shareholders notification of the shareholders meeting for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply. Where the shareholders meeting ofthe Companyfails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting,the Companyshall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.		sending shareholders notification of the shareholders meeting for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply. For any party's shareholders meeting from the companies participating in a merger, demerger, acquisition,fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting,~~the~~ ~~companies participating in a~~ ~~merger, demerger, acquisition, or~~ ~~transfer of shares~~shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.
Article 22 The Company shall convene a board of directors meeting and shareholders meeting on the day of the transaction to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent. The Companyparticipating in a transfer of shares shall call a board of directors meeting on the day of the transaction, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent. When participating in a merger, demerger, acquisition, or transfer of another company's shares,the Company shall prepare a full written record of the followinginformation	Article 25 The Company shall convene a board of directors meeting and shareholders meeting on the day of the transaction to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent. Participating in a transfer of shares shall call a board of directors meeting on the day of the transaction, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent. Participating in a merger, demerger, acquisition, or transfer of another company's shares, a		The numbering of the article is amended and the partial wordings in paragraph 1-5 are slightly modified.

and retain it for 5 years for reference: 1. Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of another company's shares prior to disclosure of the information. 2. Dates of material events: including the signing of any letter of intent or memorandum of understanding, the hiring of a financial or legal advisor, the execution of a contract, and the convening of a board of directors meeting. 3. Important documents and minutes: Including merger, demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of board of directors' meetings. When participating in a merger, demerger, acquisition, or transfer of another company's shares,the Companyshall, within 2 days counting inclusively from the date of passage of a resolution by the board of directors, report (in the prescribed format and via the Internet-based information system) the information set out in subparagraphs 1 and 2 of the preceding paragraph to the FSC for recordation. Where any of the companies participating in a merger, demerger, acquisition, or transfer of another company's shares is neither listed on an exchange nor has its shares traded on an OTC market, the company(s) so listed or traded shall sign an agreement with such company whereby the latter is required to abide bytheprovisions of the	company that is listed on an exchange or has its shares traded on an OTC market,shall prepare a full written record of the following information and retain it for 5 years for reference: 1. Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of another company's shares prior to disclosure of the information. 2. Dates of material events: including the signing of any letter of intent or memorandum of understanding, the hiring of a financial or legal advisor, the execution of a contract, and the convening of a board of directors meeting. 3. Important documents and minutes: Including merger, demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of board of directors' meetings. Participating in a merger, demerger, acquisition, or transfer of another company's shares, a company that is listed on an exchange or has its shares traded on an OTC marketshall, within 2 days counting inclusively from the date of passage of a resolution by the board of directors, report (in the prescribed format and via the Internet-based information system) the information set out in subparagraphs 1 and 2 of the preceding paragraph to the FSC for recordation. Where any of the companies participating in a merger, demerger, acquisition, or transfer of another company's shares is neither listed on an exchange nor has its shares traded on an OTC market, the company(s) so listed or traded shall sign an agreement with such

preceding 2paragraphs.	company whereby the latter is required to abide by the provisions of the paragraphs 3 and 4.
Article 23 Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition, or transfer of shares.	Article 26 Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition, or transfer of shares.	The numbering of the article is amended.
Article 24 The Company participating in a merger, demerger, acquisition, or transfer of shares may not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares: 1. Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity- based securities. 2. An action, such as a disposal of major assets that affects the company's financial operations. 3. An event, such as a major disaster or major change in technology, that affects shareholder equity or share price. 4. An adjustment where any of the companies participating in the merger, demerger, acquisition, or transfer of shares from another company, buys back treasury stock. 5. An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares.	Article 27 The Company participating in a merger, demerger, acquisition, or transfer of shares may not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares: 1. Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity- based securities. 2. An action, such as a disposal of major assets, that affects the company's financial operations. 3. An event, such as a major disaster or major change in technology, that affects shareholder equity or share price. 4. An adjustment where any of the companies participating in the merger, demerger, acquisition, or transfer of shares from another company, buys back treasury stock. 5. An increase or decrease in the number of entities or companies participating in the merger, demerger,acquisition,or transfer	The numbering of the article is amended and the wording is modified slightly.

6. Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.	of shares. 6. Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.
Article 25 The contract for participation by the Company in a merger, demerger, acquisition, or of shares shall record the rights and obligations of the companies participating in the merger, demerger, acquisition, or transfer of shares, and shall also record the following: 1. Handling of breach of contract. 2. Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged. 3. The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof. 4. The manner of handling changes in the number of participating entities or companies. 5. Preliminary progress schedule for plan execution, and anticipated completion date. 6. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevantprocedures.	Article 28 The contract for participation by the Company in a merger, demerger, acquisition, or of shares shall record the rights and obligations of the companies participating in the merger, demerger, acquisition, or transfer of shares, and shall also record the following: 1. Handling of breach of contract. 2. Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged. 3. The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof. 4. The manner of handling changes in the number of participating entities or companies. 5. Preliminary progress schedule for plan execution, and anticipated completion date. 6. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevantprocedures.	The numbering of the article is amended.
Article 26 After public disclosure of the information, ifthe Company participating in the merger, demerger, acquisition, or share transfer intends further to carry out a merger, demerger, acquisition, or share transfer with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or share transfer; except that where the number ofparticipating	Article 29 After public disclosure of the information, if~~any party of~~the Company participating in the merger, demerger, acquisition, or share transfer intends further to carry out a merger, demerger, acquisition, or share transfer with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or share transfer;except that where the	The numbering of the article is amended and the some wordings are modified slightly.

companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.	companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.	number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.	number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.
Article 27 Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company whereby the latteris required to abide by the provisions of Article 22, Article 23, and the preceding article.		Article 30 Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company whereby the latter,and to be subject to the provisionsof the date to convene a board of directors meeting under Article 25,undertaking of confidentiality prior to public disclosure under Article 26 and changes in the number of participating companies in mergers, demergers, acquisition or transfer of shares under Article 29.		1. The numbering the article is amended. 2. To adjust the cited articles and modified some articles accordingly.
	and the preceding article.
			meeting under Article 25,undertaking of confidentiality prior to public disclosure under Article 26 and changes in the number of participating companies in mergers, demergers, acquisition or transfer of shares under Article 29.
Article 28 Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event: 1. Acquisition or disposal of real propertyor right-of-use assets thereof from or to a related party, or acquisition or disposal of assets other than real property or right-of- use assetsthereof from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of theCompany's total assets, or NTD300 million or more; provided, this shall not apply to trading ofdomesticgovernment bonds or bonds and separate and resale agreements, or subscription		Article 31 ~~The standards for making public~~ ~~announcements and regulatory~~ ~~filing~~ Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event: 1. Acquisition or disposal of real property thereof from or to a related party, or acquisition or disposal of assets other than real property thereof from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of theCompany's total assets, or NTD300 million or more; provided, this shall not apply to trading of government bonds or bonds and separate and resale agreements, or subscription or redemption of moneymarket funds		1. The numbering of the article is amended and the repeated article title is deleted. 2. To specify it is limited to the domestic government bonds in paragraph 1, subparagraph 1 and 6. 3. To be in line with the International Financial Reporting Standards, No. 16 on Lease, the right-of- use assets is included in the provisions of this Article. 4. Considering

	2. 3. 4. 5. 6.	or redemption of money market funds issued by domestic securities investment trust enterprises. Merger, demerger, acquisition, or transfer of shares. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contractsset outin the procedures adopted by the Company. Where equipmentor right-of-use assets thereof for business use are acquired or disposed of, and furthermore the transaction counterparty is not a related party, and the transaction amount meets any of the following criteria: (1) For a public company whose paid-in capital is less than NTD10 billion, the transaction amount reaches NTD500 million or more. (2) For a public company whose paid-in capital is NTD10 billionor more, the transaction amount reaches NTD1 billion or more. Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale,and furthermore the transaction counterparty is not a related party, and the amount theCompany expects to invest in the transaction reaches NTD500 million. Where an asset transaction other than any of those referred to in the preceding 5 subparagraphs, a disposal of receivables bythe Company,or an investment in the mainland China area reaches 20 percent or more of paid-in capital of theCompany or NTD300 million; provided, this shall not apply to the following circumstances: (1) Trading ofdomesticgovernment bonds. (2)The Company's securities	2. 3. 4. 5. 6.	issued by domestic securities investment trust enterprises. Merger, demerger, acquisition, or transfer of shares. Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contractsset outin the procedures adopted by the Company. Where equipment thereof for business use of assets categories are acquired or disposed of, and furthermore the transaction counterparty is not a related party, and the transaction amount meets any of the following criteria: (1) For a public company whose paid-in capital is less than NTD10 billion, the transaction amount reaches NTD500 million or more. (2) For a public company whose paid-in capital is NTD10 billionor more, the transaction amount reaches NTD1 billion or more. Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount theCompany expects to invest in the transaction reaches NTD500 million. Where an asset transaction other than any of those referred to in the preceding 5 subparagraphs, a disposal of receivables byfinancial institution,or an investment in the mainland China area reaches 20 percent or more of paid-in capital of theCompany or NTD300 million; provided, this shall not apply to the following circumstances: (1) Trading ofdomestic government bonds. (2) Taking investment as a profession,the Company's	that the provisions under paragraph 1, subparagraph 1 have specified the requirement for announcement on the related party transactions, subparagraph 5 of the same paragraph is amended to specify its application in the non-related party transactions, in order to facilitate compliance. 5. To be in line with the explanations in the Criteria, paragraph 1, subparagraph 6 is amended： (1) In order to unify the wordings in the provisions of the Criteria, since the target or institutions referred in the Criteria are in principle referring to the ones both domestically and overseas, the wordings of domestic and overseas are deleted. (2) In order to extend the

	trading on securities exchanges or OTC markets, or subscription of ordinary corporate bonds or general bank debentures without equity characteristics(excluding subordinated debt)that are offered and issued in the primary market, or subscription or redemption of securities investment trust funds or futures trust funds, or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange. (3) Trading of bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year. 3. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of real propertyor right-of-use assets thereof within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Regulations need not be	1. 2. 3. 4.	securities trading on securities exchanges or OTC markets in domestic or overseas, or subscription of ordinary corporate bonds or general bank debentures without equity characteristics (excluding subordinated debt)that are offered and issued in the domestic primary market,or subscription or redemption of securities investment trust funds or	limit on the professional investor who trades the securities defined under paragraph 1, subparagraph 6, item 2 to be exempted from the announcemen t requirement. And considering the higher risk of the subordinated debt, it is also specified that the ordinary corporate bonds or general bank debentures without equity characteristic s to be excluded from the subordinate debt. 6. The partial wordings in Paragraph 1, subparagraph 3 and 4, and 6 are modified accordingly to unify the use of wordings.
			futures trust funds, or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange. (3) Trading of bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: The amount of any individual transaction. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of real property thereof within the same development project within the preceding year. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these

counted toward the transaction amount. The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by the Company and any subsidiaries that are not domestic public companies and enter the information in the prescribed format into the information reporting website designated by the FSC by the 10th day of each month. When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission. The Company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company, where they shall be retained for 5 years except where another act provides otherwise.	Regulations need not be counted toward the transaction amount. The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by the Company and any subsidiaries that are not domestic public companies and enter the information in the prescribed format into the information reporting website designated by the FSC by the 10th day of each month. When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission. The Company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company, where they shall be retained for 5 years except where another actprovides otherwise.
Article 29 Formats for public disclosure: 1. For the trading by the Company in the securities of its parent company, subsidiary company or its related enterprise from the domestic or overseas exchange markets or OTCs, the format for items and contents to be publicly disclosed is set out as Appendix 2. 2. Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land,joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, the format for the items and contents to bepubliclydisclosed is set out as	Article 32 Formats for public disclosure: 1. For the trading by the Company in the securities of its parent company, subsidiary company or its related enterprise from the domestic or overseas exchange markets or OTCs, the format for items and contents to be publicly disclosed is set out as Appendix 2. 2. Where land is acquired under an arrangement on engaging others to build on the company's own land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, the format for the items and contents to be publicly disclosed is set out as Appendix 3.	It is modified in accordance with the announced format under the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies" issued by the Financial Supervisory Commission with the official letter Jin-guan-zheng- fa No. 10703439303 dated December 4, 2018.

3. 4. 5. 6. 7. 8.	Appendix 3. For the acquisition or disposal of real property, equipment or its right- of-use assets,and the related party transactions, the format for the public disclosure is set out as Appendix 4. For thetradingin securities, intangible assetsor right-of-use assets thereof or memberships which are neither listed on an exchange nor has its shares traded on an OTC market, and the disposal of right of claim bythe Company,the format for the public disclosure is set out as Appendix 5. For the investment in the mainland China area, the format for public disclosure is set out as Appendix 6. For the derivatives trading,the format for the public disclosure of information within2 days counting inclusivelyfromthe date of occurrence of the event is set out as Appendix 7-1. For the derivatives trading, the format for the public disclosure of informationby the tenth of each month is set out as Appendix 7-2. For the transaction in a merger, demerger, acquisition, or transfer of shares, the announcement format is set out as Appendix 8.	3. 4. 5. 6. 7. 8.	For the acquisition or disposal of real property,other fixed assets, and the related party transactions, the format for the public disclosure is set out as Appendix 4. For thetradingin securities, memberships, intangible assets and
			financial institutionswhich are neither listed on an exchange nor has its shares traded on an OTC market, and the disposal of right of claim bythe Company, the format for the public disclosure is set out as Appendix 5. For the investment in the mainland China area, the format for public disclosure is set out as Appendix 6. For the derivatives trading,the format for the public disclosure within 2 days counting inclusively fromthe date of occurrence of the event is set out as Appendix 7-1. For the derivatives trading, the format for the public disclosureby the tenth of each month is set out as Appendix 7-2. For the transaction in a merger, demerger, acquisition, or transfer of shares, the announcement format is set out as Appendix 8.
Article 30 Where any of the following circumstances occurs with respect to a transaction that a public company has already publicly announced and reported in accordance with Article28,a public report of relevant information shall be made on the information reporting website designated by the FSC within 2 days counting inclusively from the date of occurrence of the event: 1. Change, termination, or rescission of a contract signed in regard to the original transaction. 2. The merger, demerger, acquisition, or transfer of shares is not completed bythe scheduled date set		Article 33 ~~Time limit for notification and~~ declaration Where any of the following circumstances occurs with respect to a transaction that a public company has already publicly announced and reported in accordance with Article31,a public report of relevant information shall be made on the information reporting website designated by the FSC within 2 days counting inclusively from the date of occurrence of the event: 1. Change, termination, or rescission of a contract signed in regard to the original transaction. 2. The merger, demerger, acquisition, or transfer of shares is not		1. The numbering of the article is amended and to adjust the cited article. 2. The title is repeated with the provision and therefore deleted.

forth in the contract. 3. Change to the originally publicly announced and reported information.	forth in the contract. 3. Change to the originally publicly announced and reported information.	completed by the scheduled date set forth in the contract. 3. Change to the originally publicly announced and reported information.
Article 31 Information required be publicly announcing and reporting in accordance with the provisions of Article 28 and Article 30on acquisitions and disposals of assets by a public company's subsidiary that is not itself a public company in Taiwan shall be reported by the Company. The paid-in capital or total assets of the Company shall be the standard applicable to a subsidiary referred to in the preceding paragraph in determining whether, relative to paid-in capital or total assets, it reaches a threshold requiring public announcement and regulatory filing under Article28, paragraph 1.		Article 34 Information required be publicly announcing and reporting in accordance with the provisions of Article 31 and Article 33on acquisitions and disposals of assets by a public company's subsidiary that is not itself a public company in Taiwan shall be reported by the Company. The paid-in capital or total assets of the Company shall be the standard applicable to a subsidiary referred to in the preceding paragraph in determining whether, relative to 20% of paid-in capital or 10% of total assets, it reaches a threshold requiring public announcement and regulatory filing under Article31, paragraph 1.	1. The numbering of the article is amended, and to adjust the cited article and modify some wordings. 2. The subsidiary is subject to the provision under Article 32, Paragraph 1, therefore the partial wording is modified accordingly.
Article 32 For the calculation of 10 percent of total assets under the Procedure, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.			1. This article is added. 2. `To specify` the calculation method regarding total assets.
	Securities Issuers shall be used.
Article 33 Where it is not specified in the Procedure, it shall be subject to the relevant laws and regulations and the competent authorities.		Article 35 Where it is not specified in the Procedure, it shall be subject to the relevant laws and regulations and the competent authorities.	The numbering of the article is amended.
Article 34 After the Procedure is approved by the board of directors, it shall be submitted to the shareholders' meeting for approval. In the event of amendments, the procedure shall apply.		Article 36 After theHandlingProcedure is approved by the board of directors, it shall be submitted to the shareholders' meeting for approval. In the event of amendments, the procedure shall apply.	The numbering of the article is amended and to modify some wordings accordingly.

The “Procedural Rules for Acquisition or Disposal of Assets of Taichung Commercial Bank”(Draft)

Article 1 For the management of assets, Taichung Commercial Bank Co., Ltd. (hereinafter referred to as the “Company”) enacted the Procedure for Handling Acquisition or Disposal of Assets (hereinafter referred to as the “Procedure”) in accordance with the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies,” issued by the competent authority.
Article 2 For acquisition or disposal of assets by the Company, it shall be subject to the provisions of the Procedure. However, if there are other provisions of the financial related laws and regulations stated otherwise, such provisions shall prevail.

For the Company to conduct the business of derivatives or engage in the derivatives trading, it shall by subject to the relevant provisions issued by the competent authority and “Operational Strategy and Procedural Guidelines for Conducting Derivative Financial Commodity” issued by the Competent.

Article 3 The term "assets" as used in these Regulations includes the following:

Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities.
Real property (including land, houses and buildings, investment property) and equipment.
Memberships.
Patents, copyrights, trademarks, franchise rights, and other intangible assets.
Right-of-use assets.
Claims of Taichung Commercial Bank (including receivables, bills purchased and discounted, loans, and overdue receivables).
Derivatives.
Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law.
Other major assets.

Article 4 The terms used in the Procedure are defined as follows:

Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) contracts.
Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other

acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of shares") under Article 156-3 of the Company Act.

Related party or subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.
Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply.
Mainland China area investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.
Article 5 Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall meet the following requirements:
May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed since completion of service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received.
May not be a related party or de facto related party of any party to the transaction.
If the company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other.

When the personnel of the preceding paragraph issues the appraisal report or opinion, it shall be handled in accordance with the following matters:

Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience, and independence.
When examining a case, they shall appropriately plan and execute adequate working procedures, in order to produce a conclusion and use the conclusion as the basis for issuing the report our pinion. The related working procedures, data collected, and conclusion shall be fully and accurately specified in the case working papers.
They shall undertake an item-by-item evaluation of the comprehensiveness, accuracy, and reasonableness of the sources of data used, the parameters, and the information, as the basis for issuance of the appraisal report or the opinion.
They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that they have evaluated and found that the information used is reasonable and accurate, and that they have complied with

applicable laws and regulations.

Article 6 The enactment of Procedure for Handling Acquisition or Disposal of the Company:

The enactment or amendment of this Procedure shall be approved by more than onehalf of all members of the Audit Committee and shall be submitted to the Board of Directors for a resolution.
If the preceding subparagraph is not approved by more than one-half of all members of the Audit Committee, it may be agreed by more than two-thirds of all directors, and the resolution of the Audit Committee shall be stated in the minutes of the Board of Directors.
All members of the Audit Committee referred to in subparagraph 1 and all directors referred to in the preceding subparagraph shall be calculated by the actual incumbent.
Article 7 The operating procedure for the acquisition or disposal of assets of the Company include the reference basis, trading term, authorization level and executive unit, etc., shall be handled in accordance with the law, the relevant regulations of the competent authority, the levels of responsibilities chart of the Company, and the related operational specifications:
Securities: they shall be subject to the relevant provisions of the Banking Act and the “investment policy” of the Company.
Real property or its right-of-use assets: they shall comply with the Banking Act, the relevant regulations of the competent authority and the standards of the “Management Rules for Real Estate” of the Company.
Membership card, intangible assets, equipment or its right-of-use assets: the purchase matters shall be handled based on the divisions of responsibilities under the “Operational Rules for Matters of Construction and the Purchase, Order of the Custom-made and Sale of the Property” of the Company.
The acquisition or disposal of the real estate and equipment shall be based on one of the price comparison, negotiation or bidding.
Derivatives: it is to be conducted by the Derivatives Investment Trading Department of the Company in accordance with the relevant regulations of the competent authority and the “Management Strategy for Operational Guidelines for Conducting Derivative Financial Commodity Business”.
The acquisition or disposal of other assets shall be subject to the relevant regulations of the Company.

The relevant operation regarding the acquisition or disposal of assets shall be all subject to the relevant provisions of the internal control system of the Company. I n the event of major violations discovered, the related personnel shall be disciplined depending on the circumstances surrounding the violation.

Article 8 The total amount of the real estate not for business use and its right-of-use assets or the securities acquired by the Company and each of its subsidiaries, and the limits of individual securities shall be subject to the Banking Act and the regulations of the competent authority.

Article 9 The control procedure for the acquisition or disposal of assets by the subsidiary company:

The subsidiary company shall, in accordance with the relevant regulations and the provisions of the competent authority, enact and implement the procedure for the acquisition or disposition of assets.
For the acquisition or disposal of assets by the subsidiary company, it shall be

subject to the business competency rules of each subsidiary company.

The subsidiary company shall ensure that the procedure for the acquisition or disposal of assets enacted is in compliance with the relevant laws and regulations and check precisely whether the relevant matters are conducted in accordance with the procedure. The internal audit of the Company shall review the audit report or self-inspection report and other related matters of the subsidiary company.
The Company shall handle the relevant matters concerning the regulatory filing for the public announcement on behalf of the subsidiary company, in accordance with the provisions of Article 31.

Article 10 In acquiring or disposing of real property, equipment, or right-of-use assets thereof where the transaction amount reaches 20 percent of the Company's paid-in capital or NTD300 million or more, the Company, unless transacting with a domestic government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment or right-of-use assets thereof held for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions:

Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors; the same procedure shall also be followed whenever there is any subsequent change to the terms and conditions of the transaction.
Where the transaction amount is NTD1 billion or more, appraisals from two or more professional appraisers shall be obtained.
Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:
- (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.
- (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount.
No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.
Article 11 The Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant (CPA), for reference in appraising the transaction price, and if the dollar amount of the transaction is 20 percent of the Company's paid-in capital or NTD300 million or more, the Company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If

the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the Financial Supervisory Commission (FSC).

Article 12 Where the Company acquires or disposes of intangible assets or right-of-use assets thereof or memberships and the transaction amount reaches 20 percent or more of paidin capital or NTD300 million or more, except in transactions with a domestic government agency, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.
Article 13 The calculation of the transaction amounts referred to in the preceding 3 articles shall be done in accordance with Article 28, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.
Article 14 Where a public company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.
Article 15 When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised, if the transaction amount reaches 10 percent or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of the preceding Section and this Section.

The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article 13 herein.

When judging whether a transaction counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered.

Article 16 When the Company intends to acquire or dispose of real property or right-of-use assets thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property or right-of-use assets thereof from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NTD300 million or more, except in trading of domestic government bonds or bonds and separate and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the board of directors and recognized by the supervisors:
The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.
The reason for choosing the related party as a transaction counterparty.
With respect to the acquisition of real property or right-of-use assets thereof from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 17 and Article 18.
The date and price at which the related party originally acquired the real property, the original transaction counterparty, and that transaction counterparty's relationship

to the company and the related party.

Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the fund utilization.
An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article.
Restrictive covenants and other important stipulations associated with the transaction.

The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 28, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the board of directors and recognized by the supervisors need not be counted toward the transaction amount.

When a matter is submitted for discussion by the board of directors pursuant to paragraph 1, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

Where an audit committee has been established in accordance with the provisions of the Act, the matters for which paragraph 1 requires recognition by the supervisors shall first be approved by one-half or more of all audit committee members and then submitted to the board of directors for a resolution, and shall be subject to mutatis mutandis application of Article 6, paragraphs 1, subparagraphs 2 and 3.

Article 17 The Company acquires real property or right-of-use assets thereof from a related party shall evaluate the reasonableness of the transaction costs by the following means:

Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the Company purchases the property; provided, it may not be higher than the maximum nonfinancial industry lending rate announced by the Ministry of Finance.
Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the transaction counterparties.

Where land and structures thereupon are combined as a single property purchased or leased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph.

The Company that acquires real property or right-of-use assets thereof from a related party and appraises the cost of the real property or right-of-use assets thereof in accordance with the preceding two paragraphs shall also engage a CPA to check the appraisal and render a specific opinion.

Where the Company acquires real property or right-of-use assets thereof from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with the preceding article, and the preceding three paragraphs do not apply:

The related party acquired the real property or right-of-use assets thereof through inheritance or as a gift.
More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property or right-of-use assets thereof to the signing date for the current transaction.
The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land.
The real property right-of-use assets for business use are acquired by the public company with its parent or subsidiaries, or by its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital.
Article 18 When the results of a public company's appraisal conducted in accordance with paragraph 1 and paragraph 2 of the preceding Article are uniformly lower than the transaction price, the matter shall be handled in compliance with Article 19. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply:
Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions:
- (1) Where undeveloped land is appraised in accordance with the means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.
- (2) Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale or leasing practices.
Where the Company acquiring real property, or obtaining real property right-of-use assets through leasing, from a related party provides evidence that the terms of the transaction are similar to the terms of completed transactions involving neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

Completed transactions involving neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transactions involving similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property or obtainment of the right-of-use assets thereof.

Article 19 Where the Company acquires real property or right-of-use assets thereof from a related party and the results of appraisals conducted in accordance with the preceding two articles are uniformly lower than the transaction price, the following steps shall be

taken:

Special reserve shall be set aside in accordance with Article 41, paragraph 1 of the Securities and Exchange Act against the difference between the real property or right-of-use assets thereof transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where a public company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, paragraph 1 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company.
Audit Committee shall comply with Article 218 of the Company Act.
Actions taken pursuant to the preceding two subparagraphs shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

The Company, having set aside a special reserve under the preceding paragraph, may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased or leased at a premium, or they have been disposed of, or the leasing contract has been terminated, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent.

For the company's acquisition of the real estate or its right-of-use assets from the related party, if there is other evidence indicating that the transaction has abnormal business operations, it shall also be handled in accordance with the preceding two provisions.

Article 20 The Company that conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit it to the board of directors for deliberation and passage. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by the Company of a subsidiary in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital.
Article 21 The Company shall prepare a public report to shareholders detailing important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting and include it along with the expert opinion referred to in paragraph 1 of the preceding Article when sending shareholders notification of the shareholders meeting for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply.

Where the shareholders meeting of the Company fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the Company shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.

Article 22 The Company shall convene a board of directors meeting and shareholders meeting on

the day of the transaction to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent.

The Company participating in a transfer of shares shall call a board of directors meeting on the day of the transaction, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent.

When participating in a merger, demerger, acquisition, or transfer of another company's shares, the Company shall prepare a full written record of the following information and retain it for 5 years for reference:

Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of another company's shares prior to disclosure of the information.
Dates of material events: including the signing of any letter of intent or memorandum of understanding, the hiring of a financial or legal advisor, the execution of a contract, and the convening of a board of directors meeting.
Important documents and minutes: Including merger, demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of board of directors' meetings.

When participating in a merger, demerger, acquisition, or transfer of another company's shares, the Company shall, within 2 days counting inclusively from the date of passage of a resolution by the board of directors, report (in the prescribed format and via the Internet-based information system) the information set out in subparagraphs 1 and 2 of the preceding paragraph to the FSC for recordation.

Where any of the companies participating in a merger, demerger, acquisition, or transfer of another company's shares is neither listed on an exchange nor has its shares traded on an OTC market, the company(s) so listed or traded shall sign an agreement with such company whereby the latter is required to abide by the provisions of the preceding 2 paragraphs.

Article 23 Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition, or transfer of shares.

Article 24 The Company participating in a merger, demerger, acquisition, or transfer of shares may not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares:

Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity-based securities.
An action, such as a disposal of major assets, that affects the company's financial operations.
An event, such as a major disaster or major change in technology, that affects shareholder equity or share price.

An adjustment where any of the companies participating in the merger, demerger, acquisition, or transfer of shares from another company, buys back treasury stock.
An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares.
Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.
Article 25 The contract for participation by the Company in a merger, demerger, acquisition, or of shares shall record the rights and obligations of the companies participating in the merger, demerger, acquisition, or transfer of shares, and shall also record the following:
Handling of breach of contract.
Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged.
The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof.
The manner of handling changes in the number of participating entities or companies.
Preliminary progress schedule for plan execution, and anticipated completion date.
Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.
Article 26 After public disclosure of the information, if the Company participating in the merger, demerger, acquisition, or share transfer intends further to carry out a merger, demerger, acquisition, or share transfer with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or share transfer; except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.
Article 27 Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company whereby the latter is required to abide by the provisions of Article 22, Article 23, and the preceding article.
Article 28 Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event:
Acquisition or disposal of real property or right-of-use assets thereof from or to a related party, or acquisition or disposal of assets other than real property or right-ofuse assets thereof from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NTD300 million or more; provided, this shall not apply to trading of domestic government bonds or bonds and separate and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.

Merger, demerger, acquisition, or transfer of shares.
Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company.
Where equipment or right-of-use assets thereof for business use are acquired or disposed of, and furthermore the transaction counterparty is not a related party, and the transaction amount meets any of the following criteria:
(1) For a public company whose paid-in capital is less than NTD10 billion, the transaction amount reaches NTD500 million or more.
(2) For a public company whose paid-in capital is NTD10 billion or more, the transaction amount reaches NTD1 billion or more.
Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and furthermore the transaction counterparty is not a related party, and the amount the Company expects to invest in the transaction reaches NTD500 million.
Where an asset transaction other than any of those referred to in the preceding 5 subparagraphs, a disposal of receivables by the Company, or an investment in the mainland China area reaches 20 percent or more of paid-in capital of the Company or NTD300 million; provided, this shall not apply to the following circumstances:
(1) Trading of domestic government bonds.
(2) The Company's securities trading on securities exchanges or OTC markets, or subscription of ordinary corporate bonds or general bank debentures without equity characteristics (excluding subordinated debt) that are offered and issued in the primary market, or subscription or redemption of securities investment trust funds or futures trust funds, or subscription by a securities firm of securities as necessitated by its undertaking business or as an advisory recommending securities firm for an emerging stock company, in accordance with the rules of the Taipei Exchange.
(3) Trading of bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.

The amount of transactions above shall be calculated as follows:

The amount of any individual transaction.
The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year.
The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of real property or right-of-use assets thereof within the same development project within the preceding year.
The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year.

"Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Regulations need not be counted toward the transaction amount.

The Company shall compile monthly reports on the status of derivatives trading engaged in up to the end of the preceding month by the Company and any subsidiaries that are not domestic public companies and enter the information in the prescribed format into the information reporting website designated by the FSC by the 10th day of each month.

When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission.

The Company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company, where they shall be retained for 5 years except where another act provides otherwise.

Article 29 Formats for public disclosure:

For the trading by the Company in the securities of its parent company, subsidiary company or its related enterprise from the domestic or overseas exchange markets or OTCs, the format for items and contents to be publicly disclosed is set out as Appendix 2.
Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, the format for the items and contents to be publicly disclosed is set out as Appendix 3.
For the acquisition or disposal of real property, equipment or its right-of-use assets, and the related party transactions, the format for the public disclosure is set out as Appendix 4.
For the trading in securities, intangible assets or right-of-use assets thereof or memberships which are neither listed on an exchange nor has its shares traded on an OTC market, and the disposal of right of claim by the Company, the format for the public disclosure is set out as Appendix 5.
For the investment in the mainland China area, the format for public disclosure is set out as Appendix 6.
For the derivatives trading, the format for the public disclosure of information within 2 days counting inclusively from the date of occurrence of the event is set out as Appendix 7-1.
For the derivatives trading, the format for the public disclosure of information by the tenth of each month is set out as Appendix 7-2.
For the transaction in a merger, demerger, acquisition, or transfer of shares, the announcement format is set out as Appendix 8.
Article 30 Where any of the following circumstances occurs with respect to a transaction that a public company has already publicly announced and reported in accordance with Article 28, a public report of relevant information shall be made on the information reporting website designated by the FSC within 2 days counting inclusively from the date of occurrence of the event:
Change, termination, or rescission of a contract signed in regard to the original transaction.
The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract.
Change to the originally publicly announced and reported information.

Article 31 Information required to be publicly announced and reported in accordance with the provisions of Article 28 and Article 30 on acquisitions and disposals of assets by a public company's subsidiary that is not itself a public company in Taiwan shall be reported by the Company.

The paid-in capital or total assets of the Company shall be the standard applicable to a subsidiary referred to in the preceding paragraph in determining whether, relative to paid-in capital or total assets, it reaches a threshold requiring public announcement and regulatory filing under Article 28, paragraph 1.

Article 32 For the calculation of 10 percent of total assets under the Procedure, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.
Article 33 Where it is not specified in the Procedure, it shall be subject to the relevant laws and regulations and the competent authorities.
Article 34 After the Procedure is approved by the board of directors, it shall be submitted to the shareholders' meeting for approval. In the event of amendments, the procedure shall apply.

These Articles of Incorporation were set up on April 28, 1989.

The 1[st] amendment was implemented on October 29, 1991.
The 2[nd] amendment was implemented on May 27, 1995.
The 3[rd] amendment was implemented on December 28, 1999.
The 4[th] amendment was implemented on April 24, 2003. The 5[th] amendment was implemented on June 15, 2007.
The 6[th] amendment was implemented on June 19, 2009.
The 7[th] amendment was implemented on June 6, 2012.

The 8[th] amendment was implemented on June 19, 2014.

The 9[th] amendment was implemented on June 21, 2016. The 10[th] amendment was implemented on June 7, 2017. The - amendment was implemented on -

APPENDIX 1

The appraisal report shall specify the following items:

The items specified under the technical rules for the appraisal of real estate.
The matters related to the professional appraiser and appraisal officer.
(1) The name, capital amount, organizational structure and personnel composition of the professional appraiser.
(2) The name, age, and educational and career background (with certificates) of the appraiser ; the number of years and duration being engaged in the appraisal work, and the number of cases undertaking the appraisal work.
(3) The relationship between the professional appraiser, appraisal officer and the principal of the appraisal.

(4) The appraisal report shall include a statement attesting to the professional competence and independence of the appraisal personnel who prepared the report or opinion, and that they have evaluated and found that the information used is reasonable and accurate, and that they have complied with applicable laws and regulations, and the matters contained therein shall contain no misrepresentations or nondisclosures.

(5) The date on which the appraisal report is issued.
The basic information on the target surveyed shall include at least the name, nature, location, area and other information of the target.
A comparative example of real estate transactions in the target area.
For the types of the appraisal being limited price, specified price or special price, the limited, specified or special conditions; whether the current situation meets such conditions; the reason and rationality of the difference from the normal price; and whether such limited price, specified price or special price shall be sufficient to serve as the reference for the trading price.
In the case of a contract for joint construction, the reasonable allocation ratio between the two parties shall be stated.
Estimation of land value-added tax.
In the case that appraised value of a real estate at the same appraisal date among appraisers differs and the difference in value is in excess of 20 percent, whether it been handled in accordance with Article 41 of the Real Estate Appraiser Act.
The annex shall include the appraisal details of the target, the ownership registration material, the cadastral map transcript, the urban plan sketch, the location map of the target, the land use zoning certificate, and the current status of the target.

APPENDIX 2

(Applicable for the securities trading in the domestic and overseas centralized securities exchange markets or over-the-counter markets)

Announcement by the x x Co., Ltd.

Date:

The Company hereby announces the relevant information on the securities it acquired or disposed in accordance with the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies” as follows:

Name of the securities:
Date of the transaction: from (day) (month) (year) to (day) (month) (year)
Quantity: ; price per unit: NTD ; total amount: NTD
If the transaction counterparty is a related party, the counterparty of the transaction: (ex. xx Incorporation); the relationship with the company: (ex. the invested company re-invested by the Company holding xx% of its shares), the date that the board of directors passes the resolution: (day) (month) (year) ; the date of the supervisor's recognition: (day) (month) (year)
Gains (or losses) of disposition: NTD
Accumulative quantity of the trading securities held to date (including this transaction): ; amount: NTD ; shareholding ratio: %; rights restricted: (ex. pledge)
Relationship with the target company of the transaction:
Ratio of the portfolio investment (including this transaction) to date accounting for the most recent financial report: total assets % ; total equity % ; the most recent financial report working capital (not applicable for the financial holding company, bank, bills finance and insurance industry) : NTD
Specific purpose for the acquisition or disposition:
Whether or not objected by the director in this transaction:
Other statements:

Notes:

Item 4: If the counterparty of the transaction is a related party, the filing item “date of the supervisor's recognition” shall be the date of approval of the audit committee, if the audit committee has been set up in accordance with the provisions of the Act.
Item 5: not applicable for the securities acquired.
Item 8:
(1) The portfolio investment is the total amount (including this transaction) held by the company to date of its own settlement; the total assets and total equity are the amounts specified in the most recent financial statements of the company.
(2) If the securities are acquired with the working capital being negative, the source of the funds for acquiring the securities and the specific reason for acquiring the securities even under the situation of insufficient funds shall be additionally announced.

APPENDIX 3 (Applicable for the real property acquired where the land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale)

Announcement by the x x Co., Ltd.

Date:

The Company hereby announces the relevant information on the xx assets it intends to acquire with the means of xx in accordance with the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies” as follows:

Type of contract: 2. Date of the occurrence: from (day) (month) (year) to (day) (month) (year) 3. Contract counterparty: ; the relationship with the company: 4. If the transaction counterparty is a related party, the date that the board of directors passes the resolution: (day) (month) (year) ; the date of the supervisor's recognition: (day) (month) (year)
Total contract amount: NTD ; Estimated investment amount: NTD

Duration of the contract: from (day) (month) (year) to (day) (month) (year) Limitation clauses: Other important agreements: 6. Name of firm or company of the professional appraiser: ; appraisal result: NTD

Name of real estate appraiser: ; practicing license No. of the real estate appraiser: If the appraisal result has material difference, the reason for such difference and the accountant's opinion: Name of accounting firm: ; certified public accountant name: ; practicing license No. of the certified public accountant: Whether the appraisal report adopts a limited price, a specified price or special price: Whether the appraisal report has not been obtained: ; reasons for not yet obtaining the appraisal report:

Specific purpose for the acquisition:
Whether or not objected by the director in this transaction: 9. Other statements:

Notes:

Item 2: The date of occurrence means the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of a resolution of the board of directors, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier.
Item 4: If the counterparty of the transaction is a related party, the filing item “date of the supervisor's recognition” shall be the date of approval of the audit committee, if the audit committee has been set up in accordance with the provisions of the Act.
Item 5: Other important agreements shall indicate whether there is a repurchase (reverse) agreement, cancellation of the contract or other uncertain or special terms.
Item 6:
(1) Not applicable for the real property acquired where the land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land; the appraisal result shall indicate the appraiser's assessment opinion on the reasonableness of the cooperation mode of the contract.
(2) When the reference price of the transaction price is based on a limited price, a specified price or a special price, the normal price and the appraisal result of the limited price or

specified price shall be announced separately.

(3) Non-related party transactions: based on the date of occurrence of the current transaction, the transaction amount within the preceding year reaches 20 percent or more of paid-in capital, or NTD300 million or more, a professional appraisal report or a certified public accountant opinion shall be obtained.
(4) Related party transactions: based on the date of occurrence of the current transaction, the transaction amount within the preceding year reaches 20 percent or more of paid-in capital, or NTD300 million or more, or 10 percent or more of the company's total assets, a professional appraisal report or a certified public accountant opinion shall be obtained.
(5) In the case of a company with shares having no par value or a par value other than NTD10, based on the date of occurrence of the current transaction, the transaction amount within the preceding year reaches 10 percent or more of the equity attributed to the shareholders of the parent company, or NTD300 million or more, a professional appraisal report or a CPA opinion shall be obtained.
(6) If the appraisal results of the acquired asset are all higher than the transaction price, or the appraisal results of the disposed assets are all lower than the transaction price, it shall not be necessary to obtain another certified public accountant opinion.

APPENDIX 4 (Applicable for acquisition or disposal of the real estate, equipment or its right-ofuse assets)

use assets)
Announcement by the x x Co., Ltd.
Date:
The Company hereby announces the relevant information on the xx assets it acquired/disposed	in
accordance with the	“
Regulations Governing the Acquisition or Disposal of Assets by Public Companies” as follows:
1. Name and type of the target: (ex. the land located in xx subsection, xx section, northern
district, Taichung City)
2. Date of the occurrence: (day) (month) (year)
3. Quantity of trading units: (ex. xx square meters, equivalent to xx ping); price per unit:
NTD ; total amount: NTD
4. Counterparty of the transaction: (ex. xx Inc.); the relationship with the company: (ex. the
invested company re-invested by the company holding xx% of its shares)
5. If the transaction counterparty being a related party:
(1) Date of adoption by the board of directors: the date that the board of directors passes the
resolution: (day) (month) (year) ; the date of the supervisor's recognition: (day) (month)
(year)
(2) If the real estate or its right of-use assets is acquired from a related party, the appraisal
price in accordance with the provisions of Articles 16 and 17 of the Criteria:
6. Reasons for selecting the related party for the transaction:
Owner of the previous transfer: ; relationship with the company: ;
relationship with the counterparty of the transaction:
Last transfer date: (day) (month) (year) ; amount: NTD
7. The owner within the last 5 years of the transaction target has been the company's related
party:
Date of the acquisition by the related party: (day) (month) (year); acquisition price: NTD	;
relationship with the company at the time of acquisition:
Date of the disposal by the related party: (day) (month) (year); disposition price: NTD ;
relationship with the company at the time of disposition:
8. Estimated gains (or losses) from the disposition: NTD
9. Terms on delivery or payment (including payment period and amount):
Limitation clauses:
Other important agreements:
10. Type of transaction decided: (ex. bidding, price comparison or bargaining)
Reference basis for price decision:
Decision made by:
11. Name of firm or company of the professional appraiser: ; appraisal amount: NTD
Name of professional appraiser: ; practicing certificate No. of the professional
appraiser: ; whenthe appraisal resultshave significant difference, the reason for such
difference and thecertified publicaccountant's opinion:
Name of accounting firm: ;certified publicaccountant name: ;certified public
accountant practicing certificate No.:;
Whether the appraisal report adopts a limited price, a specified price or a special price:
Whether the appraisal report has not yet obtained: ; reasons for not yet
obtaining the appraisal report:
12. Broker:
Brokerage fee: NTD

Specific purpose for the acquisition or disposition:
Whether or not objected by the director in this transaction:
Other statements:

Notes:

Item 2: The date of occurrence means the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of a resolution of the board of directors, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier.
Item 4: If the counterparty of the transaction is a natural person without being a related party of the company, it is exempted to disclose the name.
Item 5: If the counterparty of the transaction is a related party, the filing item “date of the supervisor's recognition” shall be the date of approval of the audit committee, if the audit committee has been set up in accordance with the provisions of the Act.
Item 8: not applicable for the acquisition of assets; if deferred gains (or losses) out of disposition are expected, a list shall be made to explain on the recognition.
Item 9: Other important agreements shall indicate whether there is a repurchase (reverse) agreement, cancellation of the contract or other uncertain or special terms. In the case of the right-of-use asset, the lease term, whether the priority lease or rent exists upon lease expiration, and other important matters regarding the lease shall be indicated.
Item 11:
(1) When the reference price of the transaction price is based on a limited price, a specified price or a special price, the normal price and the appraisal result of the limited price or specified price shall be announced separately.
(2) Non-related party transactions: based on the date of occurrence of the current transaction, the transaction amount within the preceding year reaches 20 percent or more of paid-in capital, or NTD300 million or more, a professional appraisal report or a certified public accountant opinion shall be obtained.
(3) Related party transactions: based on the date of occurrence of the current transaction, the transaction amount within the preceding year reaches 20 percent or more of paid-in capital, or NTD300 million or more, or 10 percent or more of the company's total assets, a professional appraisal report or a certified public accountant opinion shall be obtained.
(4) In the case of a company with shares having no par value or a par value other than NTD10, based on the date of occurrence of the current transaction, the transaction amount within the preceding year reaches 10 percent or more of the equity attributed to the shareholders of the parent company, or NTD300 million or more, a professional appraisal report or a certified public accountant opinion shall be obtained.
(5) If the assets are acquired or disposed of by the court auction procedure, the certificate issued by the court may be used instead of the appraisal report or certified public accountant's opinion.
(6) If the appraisal results of the acquired real estate, equipment or its right-of-use assets are all higher than the transaction price, or the appraisal results of the disposed real estate, equipment or its right-of-use assets are all lower than the transaction price, it shall not be necessary to obtain another certified public accountant opinion.

APPENDIX 5

(Applicable for trading in the securities, intangible assets or its right-of-use assets, membership certificate and the right of claims disposed by the Company not on the centralized securities exchange market or over-the-counter market )

Announcement by the x x Co., Ltd.

Date:

Announcement by the x x Co., Ltd. Date:	Announcement by the x x Co., Ltd. Date:
	The Company hereby announces the relevant information on xx securities (intangible assetsor its right-of-use assets,membership certificate, the right of claims) it acquired or disposed in accordance with the “ Regulations Governing the Acquisition or Disposal of Assets by Public Companies” as follows: 1. Transaction target: (in case of preferred stocks, the terms and conditions of its issuance shall be indicated, such as the dividend yield ratio.) 2. Date of the occurrence: (day) (month) (year) 3. Quantity of trading units: ; price per unit: NTD ; total amount: NTD 4. Counterparty of the transaction: (ex. xx Inc.); the relationship with the company: (ex. the invested company re-invested by the company holding xx% of its shares) 5. If the transaction counterparty being a related party, the date of resolution passed by the board of directors: (day) (month) (year) ; the date of the supervisor's recognition: (day) (month) (year) 6. Reasons for selecting the related party for the transaction: Owner of the previous transfer: ; relationship with the company: ; relationship with the counterparty of the transaction: Last transfer date: (day) (month) (year) ; amount: NTD 7. The owner within the last 5 years of the transaction target has been the company's related party: Date of the acquisition by the related party: (day) (month) (year); acquisition price: NTD ; relationship with the company at the time of acquisition: Date of the disposal by the related party: (day) (month) (year); disposition price: NTD ; relationship with the company at the time of disposition: 8. The relevant matters concerning the disposition of the right of claims: (1) The type of collateral attached to the right of claims disposed: (2) If such disposition is concerning the right of claims toward the related party: Name of the related party: ; Face value of this disposition of the right of claims toward such related party: 9. Gains (or losses) from the disposition: NTD 10. Terms on delivery or payment (including payment period and amount): Limitation clauses of the contract: Other important agreements: 11. Method of transaction decision: ; decision made by: Reference basis for price decision: Net value per share of the target company of the securities acquired or disposed: 12. Whether the certified public accountant issued an opinion that the transaction price is reasonable: Name of accounting firm: ;certified publicaccountant name: ;certified public accountant practicing certificate No.: 13. Accumulative quantity of the trading securities held to date (including this transaction): ; amount: NTD ; shareholding ratio: %; rights restricted: (ex. pledge) 14. Ratio of theportfolio investment(includingthis transaction)to date accountingfor the most

Announcement by the x x Co., Ltd.
Date:

The Company hereby announces the relevant information on xx securities (intangible assetsor its
right-of-use assets,membership certificate, the right of claims) it acquired or disposed in accordance
with the “ Regulations Governing the Acquisition or Disposal of Assets by Public Companies” as
follows:
1. Transaction target: (in case of preferred stocks, the terms and conditions of its issuance shall
be indicated, such as the dividend yield ratio.)
2. Date of the occurrence: (day) (month) (year)
3. Quantity of trading units: ; price per unit: NTD ; total amount: NTD
4. Counterparty of the transaction: (ex. xx Inc.); the relationship with the company: (ex. the
invested company re-invested by the company holding xx% of its shares)
5. If the transaction counterparty being a related party, the date of resolution passed by the board
of directors: (day) (month) (year) ; the date of the supervisor's recognition: (day) (month)
(year)
6. Reasons for selecting the related party for the transaction:
Owner of the previous transfer: ; relationship with the company: ; relationship with
the counterparty of the transaction:
Last transfer date: (day) (month) (year) ; amount: NTD
7. The owner within the last 5 years of the transaction target has been the company's related
party:
Date of the acquisition by the related party: (day) (month) (year); acquisition price: NTD ;
relationship with the company at the time of acquisition:
Date of the disposal by the related party: (day) (month) (year); disposition price: NTD ;
relationship with the company at the time of disposition:
8. The relevant matters concerning the disposition of the right of claims:
(1) The type of collateral attached to the right of claims disposed:
(2) If such disposition is concerning the right of claims toward the related party:
Name of the related party: ;
Face value of this disposition of the right of claims toward such related party:
9. Gains (or losses) from the disposition: NTD
10. Terms on delivery or payment (including payment period and amount):
Limitation clauses of the contract:
Other important agreements:
11. Method of transaction decision: ; decision made by:
Reference basis for price decision:
Net value per share of the target company of the securities acquired or disposed:
12. Whether the certified public accountant issued an opinion that the transaction price is reasonable:
Name of accounting firm: ;certified publicaccountant name: ;certified public
accountant practicing certificate No.:
13. Accumulative
quantity
of
the
trading
securities
held
to
date
(including
this
transaction): ; amount: NTD ; shareholding ratio: %; rights restricted: (ex.
pledge)
14. Ratio of theportfolio investment(includingthis transaction)to date accountingfor the most

recent financial report: total assets % ; total equity % ; the most recent financial report working capital (not applicable for the financial holding company, bank, bills finance and insurance industry) : NTD

Broker: ; brokerage fee: NTD
Specific purpose for the acquisition or disposition:
Whether or not objected by the director in this transaction:
Other statements:

Notes:

Item 2: The date of occurrence means the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of a resolution of the board of directors, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier.
Item 4: If the counterparty of the transaction is a natural person without being a related party of the company, it is exempted to disclose the name.
Item 5: If the counterparty of the transaction is a related party, the filing item “date of the supervisor's recognition” shall be the date of approval of the audit committee, if the audit committee has been set up in accordance with the provisions of the Act.
Item 9: not applicable for the acquisition of assets; if deferred gains (or losses) out of disposition are expected, a list shall be made to explain on the recognition.
Item 10: Other important agreements shall indicate whether there is a repurchase (reverse) agreement, cancellation of the contract or other uncertain or special terms. In the case of the right-of-use asset, the lease term, whether the priority lease or rent exists upon lease expiration, and other important matters regarding the lease shall be indicated.
Item 12:
(1) Non-related party transactions: based on the date of occurrence of the current transaction, the transaction amount within the preceding year reaches 20 percent or more of paid-in capital, or NTD300 million or more, a professional appraisal report or a certified public accountant opinion shall be obtained.
(2) Related party transactions: based on the date of occurrence of the current transaction, the transaction amount within the preceding year reaches 20 percent or more of paid-in capital, or NTD300 million or more, or 10 percent or more of the company's total assets, a professional appraisal report or a certified public accountant opinion shall be obtained.
(3) In the case of a company with shares having no par value or a par value other than NTD10, based on the date of occurrence of the current transaction, the transaction amount within the preceding year reaches 10 percent or more of the equity attributed to the shareholders of the parent company, or NTD300 million or more, a professional appraisal report or a certified public accountant opinion shall be obtained.
(4) If the assets are acquired or disposed of by the court auction procedure, the certificate issued by the court may be used instead of the appraisal report or certified public accountant's opinion.
Item 14:
(1) The portfolio investment is the total amount (including this transaction) held by the company to date of its own settlement; the total assets and total equity are the amounts specified in the most recent financial statements of the company.
(2) If the securities are acquired with the working capital being negative, the source of the funds for acquiring the securities and the specific reason for acquiring the securities even under the situation of insufficient funds shall be additionally announced.

APPENDIX 6 (Applicable for investment in mainland China area)

The Company hereby announces the relevant information on the investment in mainland China are in accordance with the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies” as follows: 1. Increased (decreased) investment portion in this transaction: (1) Date of the occurrence: (day) (month) (year) (2) Investment method: (3) Quantity of trading units: ; price per unit: NTD ; total amount: NTD (4) Information on the invested company in mainland China: (1) Name of the company: (2) Paid-in capital: NTD (3) Intended capital increase in this transaction: NTD (4) Major business items: (5) Financial statements of the most recent year: Type of CPA's opinion: ; total equity: ; profit and loss amount: (6) Actual investment amount to date in the invested company of mainland China of this transaction: (5) Counterparty of the transaction: ; relationship with the company: (6) If the transaction counterparty being a related party, the date of resolution passed by the board of directors: (day) (month) (year) ; the date of the supervisor's recognition: (day) (month) (year) (7) Reasons for selecting the related party for the transaction: Owner of the previous transfer: ; relationship with the company: ; relationship with the counterparty of the transaction: ; last transfer date: (day) (month) (year) ; amount: NTD (8) The owner within the last 5 years of the transaction target has been the company's related party: Date of the acquisition by the related party: (day) (month) (year); acquisition price: NTD ; relationship with the company at the time of acquisition: Date of the disposal by the related party: (day) (month) (year); disposition price: NTD ; relationship with the company at the time of disposition: (9) Gains (or losses) of disposition: (10) Terms on delivery or payment (including payment period and amount): ; limitation clauses of the contract: ; Other important agreements: (11) Method of transaction decision: ; decision made by: ; reference basis for price decision: (12) Whether the certified public accountant issued an opinion that the transaction price is reasonable: Name of accounting firm: ; certified public accountant name: ; certified public accountant practicing certificate No.: (13) Broker: (14) Specific purpose for the acquisition or disposition: (15) Whether or not objected by the director in this transaction: 2. Total investment amount in the mainland China to date: (1) The total amount of investment approved by the Investment Commission (MOEAIC) in the mainland China area (including this investment): NTD Paid-in capital: % accounting for the total assets ratio of the most recent financial statements: % Total equity: %

(2) The actual total amount of investment in the mainland China area: NTD Paid-in capital: %

accounting for the total assets ratio of the most recent financial statements: %

Total equity: %

The amount of gains or losses recognized in the past three years for the investment in mainland China: NTD , NTD , NTD

The amount of profit remitted back in the last three years: NTD , NTD
(3) Other statements:

Notes:

Investing in the mainland China area includes the following investment methods:
(1) Direct investments in the company of the mainland China.
(2) Remittances from the third region to invest the company of the mainland China.
(3) Investments in establishing a company in the third region to reinvest in the company of the mainland China.
(4) Investments in an existing company in the third region to reinvest in the company of the mainland China.
(5) Other methods of investment in the mainland China.
Item 1 (1): The date of occurrence means the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of a resolution of the board of directors, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier.
Item 1 (6): If the counterparty of the transaction is a related party, the filing item “date of the supervisor's recognition” shall be the date of approval of the audit committee, if the audit committee has been set up in accordance with the provisions of the Act.

APPENDIX 7-1 (Applicable for public disclosure of Information on engaging in the derivatives trading within 2 days counting inclusively from the date of occurrence of the event)

Announcement by the x x Co., Ltd.

Date:

The Company hereby announces the relevant information on engaging in the derivatives trading in accordance with the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies” as follows:

Type of contract (Note 1):
Date of the occurrence:
Amount of the contract (Note 2):
Amount of the margin (or premium) paid:
Reasons for engaging in derivatives(Note 3):
Amount of losses assessed at fair value (including realized and unrealized):
Maximum amount of losses for overall or individual contracts under the Handling Procedure: Reasons for losses and impact on the company:
Contract period:
Limitation clauses:
Other important agreements:
Other statements:
Note 1: The type of contract shall indicate the futures contract, the forward contract, the exchange or the option contract.
Note 2: The contract notional amount shall disclose the principal amount, fixed amount, denomination or other similar amount of the contract.
Note 3: The reason for engaging in derivatives transactions; the purpose is for trading or for hedging. For the purpose of hedging, the hedged item, its amount and profit and loss status shall be indicated.
Note 4: The embedded derivatives commodity that are separately recognized from the main contract are derivatives commodity under the provisions of this form.

APPENDIX 7-2 (Applicable for public disclosure of information on engaging in the derivatives trading being reported before 10th of every month)

In accordance with the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies”, the Company hereby announces the relevant information on the accumulated derivatives trading engaged by the Company, its overseas subsidiaries and domestic non-public subsidiaries as of the end of the month of the year as follows: (The announcements shall be made in separate forms with respect to the Company, its overseas subsidiaries and domestic non-public subsidiaries.)

1. Applicable for non-banking & bills financing industry (Unit: NTD thousand)

Contract Type	Contract Type	Contract Type	Contract Type	Individual Options	Individual Options	Portfolio Options	Portfolio Options	Hybrid contract (including
								the mixed product as designated at fair value through profit and loss)
Transaction Information				Put	Call	Put	Call
Holding for trading		Marginpaid
		Premium received(paid)
		Open Contract	Total contract amount
			Fair value
			Recognized as the non-realized gains and losses in the currentyear
		Offset Contract	Total contract amount
			Recognized as the realized gains and losses in the currentyear
Not holding For trading	Does not match Hedging Accounting	Marginpaid
		Premium received(paid)
		Open Contract	Total contract amount
			Fair value
			Recognized as the non-realized gains and losses in the currentyear
		Offset Contract	Total contract amount
			Recognized as the realized gains and losses in the currentyear
	Match Heding Accounting	Total contract amount
		Premium received(paid)
		Open Contract	Total contract amount
			Fair value
			Recognized as the non-realized gains and losses in the currentyear
		Offset Contract	Total contract amount
			Recognized as the realized gains and losses in the currentyear

Note 1: This table shall indicate the announcement of the derivative trading information as of the end of last month, not only the trading situation of one single month.
Note 2: The announcement of the overseas subsidiaries and the domestic non-public subsidiaries shall be made by the public company on their behalf. If they are not engaged in derivatives trading, they shall perform the “No-filing Setting” operation on a monthly basis.
Note 3: For a hybrid contract of which the commodity of its main contract is within the scope of IFRS9 and does not meet the contractual cash flow characteristic test, the overall information of the hybrid contract shall be stated in this form, and additional notes may be made to describe the nature of the contract, the trading conditions and other information in the remark column.
Note 4: For a hybrid contract of which the commodity of its main contract is not within the scope of IFRS9, the transaction content shall be disassembled into its original form, except that the accounting treatment of the embedded derivative instrument is not required to be recognized -
separately from its main contract (non derivatives), and the information of the derivative trading shall be stated in this form. In addition, for the overall hybrid contract “designated as a financial asset or financial liability measured at fair value through profit or loss” by the company, a separate form shall be used for filing subject to the regulations and additional notes may be made to describe the nature of the contract, the trading conditions and other information in the remark column.

2. Applicable for the banking & bills financing industry

for the trading on behalf of customer accounts, some certain parts may not be listed for statistics) Unit: US$1,000

Contract Type
Notional Amount Outstanding	OTC Market	For the Purpose of Trading
		Not for the Purpose of Trading
	Exchange Market	For the Purpose of Trading
		Not for the Purpose of Trading
Fair Value	For the Purpose of Trading	Total Positive Amount
		Total Negative Amount
	Not for the Purpose of Trading	Item Hedged
		HedgingInstrument
Gains and Losses Amount Recognized in the Statements	For the Purpose of	Trading
	Not for the Purpose of Trading	Item Hedged
		HedgingInstrument
The Companymayadditionallydisclose theportion in line with the hedge account which is classified into thepurpose of hedging.

APPENDIX 8 (Applicable for conducting a merger, demerger, acquisition or transfer of shares)

Announcement by the x x Co., Ltd. Date: The Company hereby announces the relevant information on conducting a merger, demerger, acquisition or transfer of shares in accordance with the “Regulations Governing the Acquisition or Disposal of Assets by Public Companies” as follows: 1. Type of merger and acquisition: (ex. merger, demerger, acquisition or transfer of shares) 2. Date of occurrence: 3. Name of the company participating in the merger and acquisition: (ex. the name of the company that merges the other company, is divided into a newly established company, acquires or take assignment of the shares of the target company) 4. The counterparty of the transaction: (the transaction partner that mergers another company, takes over the divide d and assigned company, acquires or take assignment of the shares of the target company ) 5. The relationship between the counterparty and the company: (The invested company reinvested by the Company holding xx% of its shares) Reasons for selecting the related company or related party for acquisition or transfer of shares: Whether it does not impact on the shareholders' equity: 6.Purpose of merger and acquisition: 7. Benefits expected after the merger and acquisition : 8.Impact of the net value per share and earnings per share after the merger and acquisition : 9.Conversion ratio and calculation basis: Whether the certified public accountant, lawyer or securities underwriter has issued an opinion with reasonable assurance: Name of certified public accountant firm, law firm or securities underwriter company: Name of certified public accountant, lawyer: ; practicing certificate No. of certified public accountant or lawyer: 10.Schedule of completion: 11. Relevant matters regarding the rights and obligations of the surviving or newly established company that generally assumes the dissolved (or divided) company: 12. Basic information on the participating companies in the merger and acquisition: 13. Relevant matters regarding division: (1) Assessed value of the business and assets prepared to be transferred to the surviving or the newly established company (2) The total number, type and quantity of shares acquired by the divided company or its shareholders (3) When the capital of the divided company is reduced, the relevant matters regarding the capital reduction 14. Future terms and conditions and restrictions of the transfer of shares acquired:

Other important agreements:
Whether or not objected by the director in this transaction:
Other statements:

Notes:

I. Item 9: Where a public company merges its subsidiary held directly or indirectly 100% of the issued shares or total capital, or the merger between its subsidiaries held directly or indirectly 100% of the issued shares or total capital, it is not necessary to obtain a reasonable opinion from a CPA, attorney or securities underwriter on the share conversion ratio, the purchase price or the allotment on cash or other property to the shareholders.
Item 11: The relevant matters regarding the surviving or newly established company generally assuming the rights and obligations of the dissolved company shall include the principles for handling treasury shares and already-issued equity securities).
Item 12: The basic information of the participating companies in the merger and acquisition include the company name and the main content of its business.

Discussions No. 3

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

In order to implement corporate governance, the election of directors is conducted overall via the nomination system, and the provisions of Article 21 are amended.
The mapping of the Articles of Incorporation before and after the amendment and Draft of Amendment is shown in the table below. (Please refer to Page 98~108 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 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 (including independent directors) of this Bank, the nomination system is adopted to have directors elected from the list of candidates. For the directors, the number of independent directors shall not be less than two seats, and one fifth of the director seats; also, non-independent 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 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.~~Non-independent 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”.	In order to implement corporate governance, the election of directors is conducted overall via the nomination system, and the provisions of Article 21 are amended.

Taichung Commercial Bank Co., Ltd.

Company Corporate Charter (Articles of Incorporation) (Draft)

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 or make reversal 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 annual 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 stocks, 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 stocks 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 stocks 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 stocks.
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 stocks in whole or in part as stated in the conditions of offering at the ratio of 1 preferred share to 1 common stock (conversion ratio is 1:1). After the conversion of preferred shares to common stocks, the rights and obligations shall be the same as common stocks. 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 stocks 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 stocks 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 5[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 5 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 shareholders, 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 stop-transferring 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 (including independent directors) of this Bank, the nomination system is adopted to have directors elected from the list of candidates.

For the directors, the number of independent directors shall not be less than two seats, and one fifth of the director seats; also, non-independent 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 managing 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 managing directors, and shall not constitute less than one fifth of the managing directors. The Vice Chairman and Managing Director will be appointed, if necessary, by a resolution of the Board.

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 managing director to act on his/her behalf. If a representative is not appointed by the chairman, one of the managing 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 managing 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, managing 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, managing director 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 Deputy Executive Vice President 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. 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 or made reversal 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. The 39[th] amendment was implemented on June 5, 2018. The 40[th] amendment was implemented on

Discussions No. 4

Proposal: Amendments to the Regulations Governing Selection of Directors. Please discuss.

Explanation:

In order to implement corporate governance, the nomination system will be adopted starting from next session (24[th] session) of directors' election. Therefore, based on the sample template issued by the Taiwan Stock Exchange Co., Ltd. of "XXX Co., Ltd. Procedures for Election of Directors and Supervisors", the “Guidelines for the Selection Election of Directors of Taichung Commercial Bank Co., Ltd.” is to be amended and its name is to be revised to "Procedures for the Election of Directors of Taichung Commercial Bank Co., Ltd. (Draft)".
The Comparison Chart of the Amended Articles and the Draft Amendments thereof are hereto attached. (Please see pages 110-119 of this handbook)

Resolutions:

The Comparison Chart of the Amended Articles of Procedures for the Election of Directors of Taichung Commercial Bank Co., Ltd.

Clauses after the amendment	Original clause	Remark
Name of the regulation: Procedures for theElectionof Directors of Taichung Commercial Bank Co., Ltd.	Name of the regulation: Procedures for theSelectionof Directors of Taichung Commercial Bank Co., Ltd.	The reference is taken from the sample template issued by the Taiwan Stock Exchange of "XXX Co., Ltd. Procedures for Election of Directors and Supervisors" to modify the name of the regulation.
Article 1 The election of directorsof the Company shall be handled in accordance with the Procedures, unless otherwise provided by laws, regulations, or the Articles of Incorporation.	Article 1 The selection of directors ofTaichung Commercial Bank Co., Ltd. (hereinafter referred to as the Bank)shall beheld by the shareholders'meeting in accordance with the Guidelines Article 10 For the matter not specified in the Guidelines, it shall be handled in accordance with the Company Act, the Articles of Incorporation of the Bank and the relevant regulations.	The numbering of the article is adjusted and some wordings are modified.
Article 2 The composition of the board of directors of the Company shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the Company's business operations, operating dynamics, and development needs. The standards shall include the following 2 dimensions: 1. Basic requirements and values: Gender, age, nationality, and culture, etc. 2. Professional knowledge and		The reference is taken from the Article 3 of “Sample Template for XXX Co., Ltd. Procedures for Election of Directors and Supervisors” issued by the Taiwan Stock Exchange to add this article.
1.
2.

	skills: a professional background (e.g., law, accounting, industry, finance, marketing, technology), professional skills, and industry experience. Each board member shall have the necessary knowledge, skill, and experience to perform their duties; the abilities that must be present in the board as a whole are as follows: 1. The ability to make judgments about operations. 2. Accounting and financial analysis ability. 3. Business management ability. 4. Risk management ability. 5. Crisis management ability. 6. Knowledge of the industry. 7. An international market perspective. 8. Leadership ability. 9. Decision-making ability. More than half of the directors shall be persons who have neither a spousal relationship nor a relationship within the second degree of kinship with any other director. The board of directors of this Company shall consider adjusting its composition based on the results of performance evaluation.
	Article 3 The qualifications and selection for the independent directors of this Company shall comply with the“Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies”and the		The reference is taken from the Article 5 of “Sample Template for XXX Co., Ltd. Procedures for Election of Directors and

	“Corporate Governance Best- Practice Principles		Supervisors” issued by the Taiwan Stock Exchange to add this article.
	Article 4 Elections of both directors and supervisors in this Company shall be conducted in accordance with the candidate nomination system and procedures set out in Article 192-1 of the Company Act. This Corporation shall review the qualifications, education, working experience, background, and the existence of any other matters set forth in Article 30 of the Company Act with respect to nominee directors and supervisors and may not arbitrarily add requirements for documentation of other qualifications. It shall further provide the results of the review to shareholders for their reference, so that qualified directors and supervisors will be elected. When the number of directors falls below five due to the dismissal of a director for any reason, the Company shall hold a by-election to fill the vacancy at its next shareholders meeting. When the number of directors falls short by one third of the total number prescribed in the Company's articles of incorporation, the Company shall call a special shareholders meeting within 60 days from the date of occurrence to hold a by-election to fill the vacancies. When the number of independent directors falls below that required under the proviso of Article 14-2, paragraph 1 of the Securities and Exchange Act, or the related provisions of the Taiwan Stock		The reference is taken from the Article 6 of “Sample Template for XXX Co., Ltd. Procedures for Election of Directors and Supervisors” issued by the Taiwan Stock Exchange to add this article.

Exchange Corporation rules governing the review of listings, a by-election shall be held at the next shareholders meeting to fill the vacancy. When the independent directors are dismissed en masse, an extraordinary shareholders meeting shall be called within 60 days from the date of occurrence to hold a by-election to fill the vacancies.
vacancies.
Article 5 The single-named ballot cumulative votingsystemshall be used for election of the directors of theCompany.Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates.	Article 2 The single-named ballot cumulative voting method shall be used for election of the directors of theBank. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates, and the attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.		The numbering of the article is adjusted and some wordings are modified.
Article 6 The board of directors shall prepare separate ballots for directors and supervisors in numbers corresponding to the directors or supervisors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting.Attendance card numbersprinted on the ballots may be used instead of recording the names of voting shareholders.	Article 5 The election ballotsshall be preparedby the Bankand shall benumbered in accordance withthe attendance card numbersand specified with the number of voting rights associated with each ballot.		The numbering of the article is adjusted and some wordings are modified.
	ballot.
shareholders.
Article 7 The number ofdirectorswill be as specified intheCompany's articles of incorporation and the resolution of the Board of Directors, with voting rights separately calculated for independent and non-	Article 4 The number ofdirectors ~~in accordance~~ ~~with and~~as specified in the articles of incorporation of theBank shall be elected by the shareholders meeting in accordance with Article 198 of the Company Act and other relevant	directors	1.The numbering of the article is adjusted and some wordings are modified. 2. Paragraph 2 is

	independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.		regulations.Those receivingballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified numberof positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance~~but with the~~ ~~same number of votes.~~ The election of the directors for independent and non-independent director positions shall be conducted in one proceeding with voting rights separately calculated.	deleted.
	Article 8 Before the election begins, the chair shall appoint the counting personnel and a number of persons with shareholder status to perform the duties of vote monitoring. The ballot boxes shall be prepared by the board of directors and publicly checked by the v		Article 3 Whenthe election begins, the chair shall appoint the personnelto perform the respective duties of vote monitoring and counting.The ballot boxes shall be prepared by the board of directors and publicly checked by the vote monitoring personnel before voting commences.	The numbering of the article is adjusted, and the wording is slightly modified. And taking reference of Article 10 of the sample template issued by the Taiwan Stock Exchange of "XXX Co., Ltd. Procedures for Election of Directors and Supervisors" to modify the wording.
	Article 9 If acandidateisa shareholder, a voter must enter the candidate's account name and shareholder account number in the "candidate" column of the ballot;for a non- shareholder,the votershall enter the candidate's full name and identity card number.However, when the candidate is a governmental organization or juristic-person shareholder,the		Article 6 If a candidate is a shareholder, a voter must enterthe candidate's accountname and shareholder account numberorthe identification number in the "candidate" column of the ballotand then drop it in the voting box;However, when the candidate is a governmental organization or juristic-person shareholder, the name ofsuch governmental organization or juristic- person shareholder shall be entered in	The numbering of the article is adjusted and some wordings are modified.

name of the governmental organization or juristic-person shareholder shall be entered in the column for the candidate's account name in the ballot paper, or both the name of the governmental organization or juristic-person shareholder and the name of its representative may be entered. When there are multiple representatives, the names of each respective representative shall be entered.	the column for the candidate's account name in the ballot paperin accordance with Paragraph 1, Article 27 of the Company Act,or both the name ofsuch governmental organization or juristic- person shareholder and the name of its representative may be enteredin accordance with Paragraph 2 of the same Act.
Article 10 A ballot is invalid under any of the following circumstances: 1. The ballot was notprepared by the board of directors. 2. A blank ballot is placed in the ballot box. 3. The writing is unclear and indecipherableor has been altered. 4. The candidatewhose name is entered in the ballot is a shareholder,but thecandidate's account name and shareholder account numberdo not conform with those given in the shareholder register, or the candidate whose name is entered in the ballot is a non- shareholder,and a cross-check shows that thecandidate's name and identity card numberdo not match. 5.Other words or marks are entered in addition to the candidate's account nameor shareholder account number (or identity card number)and the number of voting rights allotted. 6. The name of the candidate entered in the ballot is	Article 7 A ballot is invalid under any of the following circumstances: 1. The ballot was not prepared prescribed by the Guidelines. 2. A blank ballot is placed in the ballot box. 3. The writing is unclear and indecipherable or has been altered. 4. The candidatewhose nameis entered in the ballot is a shareholder, but the candidate's account name and shareholder account numberorthe identification number do not conform with those given in the shareholder register. 5. ~~With more than 2 names of the~~ ~~candidates being stated on the same~~ ~~ballot.~~ 6.Other words or marks are entered in addition to the candidate's account nameandshareholder account number (or identification number) and the number of voting rights allotted. 7. For the matter not handled in accordance with Article 6.	The numbering of the article is adjusted, and the wording is slightly modified. And taking reference of Article 12 of the sample template issued by the Taiwan Stock Exchange of "XXX Co., Ltd. Procedures for Election of Directors and Supervisors" to modify the wording.
	6.
	7.
6.


Article 11 The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, including the list of persons elected as directors or supervisors and the numbers of votes with which they were elected, shall be announced by the chair on the site. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.	Article 8 The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation shall be announced by the chairman on- site.	1. The numbering of the article is adjusted and some wordings are modified. 2. The reference is taken from the Article 13 of “Sample Template for XXX Co., Ltd. Procedures for Election of Directors and Supervisors” issued by the Taiwan Stock Exchange to add the paragraph 2.
Article 12 The board of directors ofthe Companyshall issue notifications to the persons elected as directors.	Article 9 The board of directors shall issue notifications to the persons elected as directors.	The numbering of the article is adjusted and some wordings are modified.
Article 13 These Procedures, and any amendmentshereto, shall be implementedafterapproval by a shareholders meeting.	Article 11 The Guidelines and anyamendments hereto, shall bedrawn up by the board of directors of the Bankand implemented after approvalbya shareholders meeting.	The numbering of the article is adjusted and some wordings are modified.

Procedures for Election of Directors of Taichung Commercial Bank Co., Ltd. (Draft)

This regulation was set up in the 6th Extraordinary Meeting of Shareholders on Oct. 20, 1968. The 1st amendment was made in the 11th Extraordinary Meeting of Shareholders on Oct. 26, 1980. The 2nd amendment was made in the 13th Extraordinary Meeting of Shareholders on Oct. 4, 1986. The 3rd amendment was made in the 14th Extraordinary Meeting of Shareholders on Oct. 4, 1989. The 4th amendment was made in the 15th Extraordinary Meeting of Shareholders on Oct. 13, 1992. The 5th amendment was made in the 41th Annual Meeting of Shareholders on Jun. 5, 1993. The 6th amendment was made in the 17th Extraordinary Meeting of Shareholders on Oct. 12, 1998. The 7th amendment was made in the Annual Meeting of Shareholders on May 17, 2002. The 8th amendment was made in the Annual Meeting of Shareholders on Jun. 15, 2007. The 9h amendment was made in the Annual Meeting of Shareholders on Jun. 13, 2013. The 10th amendment was made in an Annual Meeting of Shareholders.

Article 1 The election of directors of the Company shall be handled in accordance with the Guidelines, unless otherwise provided by laws, regulations, or the Articles of Incorporation.
Article 2 The composition of the board of directors of the Company shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the Company's business operations, operating dynamics, and development needs. The standards shall include the following 2 dimensions:
Basic requirements and values: Gender, age, nationality, and culture, etc.
Professional knowledge and skills: a professional background (e.g., law, accounting, industry, finance, marketing, and technology), professional skills, and industry experience.

Each board member shall have the necessary knowledge, skill, and experience to perform their duties; the abilities that must be present in the board as a whole are as follows:

The ability to make judgments about operations.
Accounting and financial analysis ability.
Business management ability.
Risk management ability.
Crisis management ability.
Knowledge of the industry.
An international market perspective.
Leadership ability.
Decision-making ability.

More than half of the directors shall be persons who have neither a spousal relationship nor a relationship within the second degree of kinship with any other director.

The board of directors of this Company shall consider adjusting its composition based on the results of performance evaluation.

Article 3 The qualifications and selection for the independent directors of this Company shall

comply with the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies” and the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies

Article 4 Elections of both directors and supervisors in this Company shall be conducted in accordance with the candidate nomination system and procedures set out in Article 1921 of the Company Act. This Corporation shall review the qualifications, education, working experience, background, and the existence of any other matters set forth in Article 30 of the Company Act with respect to nominee directors and supervisors and may not arbitrarily add requirements for documentation of other qualifications. It shall further provide the results of the review to shareholders for their reference, so that qualified directors and supervisors will be elected.

When the number of directors falls below five due to the dismissal of a director for any reason, the Company shall hold a by-election to fill the vacancy at its next shareholders meeting. When the number of directors falls short by one third of the total number prescribed in the Company's articles of incorporation, the Company shall call a special shareholders meeting within 60 days from the date of occurrence to hold a by-election to fill the vacancies.

When the number of independent directors falls below that required under the proviso of Article 14-2, paragraph 1 of the Securities and Exchange Act, or the related provisions of the Taiwan Stock Exchange Corporation rules governing the review of listings, a by-election shall be held at the next shareholders meeting to fill the vacancy. When the independent directors are dismissed en masse, an extraordinary shareholders meeting shall be called within 60 days from the date of occurrence to hold a by-election to fill the vacancies.

Article 5 The single-named ballot cumulative voting system shall be used for election of the directors of the Company. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates.
Article 6 The board of directors shall prepare separate ballots for directors and supervisors in numbers corresponding to the directors or supervisors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.
Article 7 The number of directors will be as specified of the Company's articles of incorporation, with voting rights separately calculated for independent and non-independent director positions. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.
Article 8 Before the election begins, the chair shall appoint the counting personnel and a number of persons with shareholder status to perform the duties of vote monitoring. The ballot boxes shall be prepared by the board of directors and publicly checked by the v
Article 9 If a candidate is a shareholder, a voter must enter the candidate's account name and

shareholder account number in the "candidate" column of the ballot; for a nonshareholder, the voter shall enter the candidate's full name and identity card number. However, when the candidate is a governmental organization or juristic-person shareholder, the name of the governmental organization or juristic-person shareholder shall be entered in the column for the candidate's account name in the ballot paper, or both the name of the governmental organization or juristic-person shareholder and the name of its representative may be entered. When there are multiple representatives, the names of each representative shall be entered.

Article 10 A ballot is invalid under any of the following circumstances:

The ballot was not prepared by the board of directors.
A blank ballot is placed in the ballot box.
The writing is unclear and indecipherable or has been altered.
The candidate whose name is entered in the ballot is a shareholder, but the candidate's account name and shareholder account number do not conform with those given in the shareholder register, or the candidate whose name is entered in the ballot is a non-shareholder, and a cross-check shows that the candidate's name and identity card number do not match.
Other words or marks are entered in addition to the candidate's account name or shareholder account number (or identity card number) and the number of voting rights allotted.
The name of the candidate entered in the ballot is identical to that of another shareholder, but no shareholder account number or identity card number is provided in the ballot to identify such individual.
Article 11 The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, including the list of persons elected as directors or supervisors and the numbers of votes with which they were elected, shall be announced by the chair on the site.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article 12 The board of directors of the Company shall issue notifications to the persons elected as directors.
Article13 These Procedures, and any amendments hereto, shall be implemented after approval by a shareholders meeting.

Discussions No. 5

Proposal: Amendments to the Rules of Procedure for Shareholders Meeting. Please discuss.

Explanation:

The amendments are explained as follows:
(1) The addition of Article 172 of the Amended Company Act promulgated by Order Hua-tsungyi-jing No. 10700083291 on August 1, 2018, specifies the matters that shall be listed in the notice to convene a shareholders' meeting, and such matters shall not be put forth as extemporary motions.
(2) According to the “Sample Template for xxx Co. Ltd. Rules of Procedure for Shareholders' Meeting” as amended on November 12, 2015 by the Financial Supervisory Commission with Order Jin-guan-zheng-fa No. 1040044352, Article 56-1 and Article 60-2 of the Regulations Governing the Offering and Issuance of Securities Issuer are added to specify the matters that shall be listed in the notice to convene a shareholders' meeting, and shall not be set forth as extemporary motion.
(3) To delete the relevant wording of a supervisor, and to modify the rest of the wording.
The Comparison Chart of the Amended Articles and the Draft Amendments thereof are hereto attached. (Please see pages 121-129 of this handbook)

Resolutions:

Taichung Commercial Bank Co., Ltd. Rules of Procedure for Shareholder Meetings

	Clauses after the amendment		Original clause	Remark
	Article 3 (Paragraph 1-obmitted) 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 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. (Paragraph 3-obmitted) Election or dismissal of directors, amendments to the articles of incorporation,reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by		Article 3 (Paragraph 1-obmitted) 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. (Paragraph 3-obmitted) 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	1.The Bank set up an audit committee to replace the supervisor in June, 2014. Thus, in paragraph 2 and 4, the wording of supervisor shall be deleted. 2.The addition of Article 172 of the Amended Company Act promulgated by Order No. 10700083291 on August 1, 2018, specifies the matters that shall be listed in the notice to convene a shareholders' meeting, and such matters shall not be put forth as extemporary motions; The major content thereof may be posted on the website of the competent securities authority or the website designated by the Company, and such website address shall be stated in the notice. 3.According to the “Sample Template for xxx Co. Ltd. Rules of Procedure for Shareholders' Meeting” as amended by the Financial Supervisory

	Clauses after the amendment	Original clause	Remark
	directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares,the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1 of the Company Act, Articles 26-1 and 43-6 of the Securities and Exchange Act,or Articles 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out in the notice of the reasons for convening the shareholders meeting,and the essential contents shall be explained. None of the above matters may be raised by an extraordinary motion.The essential contents may be posted on the website designated by the competent authority in charge of securities affairs or the company, and such website shall be indicated in the above notice. Shareholder holding 1 percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda.Unless anyof the circumstancesunder Article 172- 1, paragraph 4 of the Company Act is satisfied, the board of directors of the Companyshall include the proposal submitted by a shareholder in the list of proposals to be discussed at a meeting of shareholders: (Paragraph 6-8-obmitted)	Article 43-6 of Securities and Exchange Act shall be stated in the reasons for convening the meeting not in the motion. Shareholder holding 1 percent or more of the total number of issued shares may submit to the Company a written proposal for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda. In addition, when the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda. (Paragraph 6-8 omitted)	Commission dated Nov. 12, 2015 with Order No. 1040044352, Article 56-1 and Article 60- 2 of the Regulations Governing the Offering and Issuance of Securities Issuer are added to specify the matters that shall be listed in the notice to convene a shareholders' meeting, and shall not be set forth as extemporary motion. 4. The wording of Paragraph 5 is modified in accordance with Article 172 of the Company Act.

Clauses after the amendment

Article 6

(Paragraph 1-obmitted)

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, if applicable.

(Paragraph 3-4 omitted)

Article 14

The election of directors 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.

(Paragraph 2 omitted)

Original clause Remark Article 6 The Bank set up an audit committee to (Paragraph 1-obmitted) replace the supervisor The Company should have the annual in June, 2014. Thus, in meeting handbook, annual reports, paragraph 2, the attendance pass, speech slip, voting wording of supervisor ballots, and other meeting materials shall be deleted. delivered to the attending shareholders; also, the electoral ballots should be distributed for the election of directors ~~and supervisors,~~ if applicable. (Paragraph 3-4 omitted) Article 14 The Bank set up an audit committee to The election of directors and replace the supervisor ~~supervisors~~ held at the meeting of in June, 2014. Thus, in shareholders should be arranged in paragraph 1, the accordance with the Company’s wording of supervisor election specifications and with the shall be deleted.

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.

(Paragraph 2 omitted)

Rules of Procedure for Shareholder Meetings (Draft)

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

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 Company’s procedures for shareholders meeting shall follow these Procedures, unless otherwise provided by law or the Company’s Articles of Incorporation.
Article 3 The Company’s meeting of shareholders shall be convened by the Board, unless otherwise provided by law.
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 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.

Election or dismissal of directors, amendments to the articles of incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1 of the Company Act, Articles 26-1 and 43-6 of the Securities and Exchange Act, or Articles 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out in the notice of the reasons for convening the shareholders meeting, and the essential contents shall be explained. None of the above matters may be raised by an extraordinary motion. The essential contents may be posted on the website designated by the competent authority in charge of securities affairs or the company, and such website shall be indicated in the above notice.

Shareholder holding 1 percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion at a regular shareholders meeting. Such

proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda. Unless any of the circumstances under Article 172-1, paragraph 4 of the Company Act is satisfied, the board of directors of the Company shall include the proposal submitted by a shareholder in the list of proposals to be discussed at a regular meeting of shareholders:

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.

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 managing directors to chair the meeting. If a managing 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 managing 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 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.

Questions and Motions

Appendix

==> picture [200 x 85] intentionally omitted <==

INDEPENDENT AUDITORS’ REPORT

==> picture [180 x 130] intentionally omitted <==

Appendix 1

The Board of Directors and Shareholders Taichung Commercial Bank Co., Ltd.

Opinion

We have audited the accompanying parent company only financial statements of Taichung Commercial Bank Co., Ltd. (the “Bank”), which comprise the balance sheets as of December 31, 2018 and 2017, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Bank as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements of Financial Institutions by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Bank in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note 3 of the parent company only financial statements, which describes Taichung Commercial Bank Co., Ltd. initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Public Banks, the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRIC (IFRIC), and Interpretations of SIC (SIC) endorsed and issued into effect by the FSC starting from 2018. The Bank elects not to restate prior reporting periods when applying the abovementioned standards, interpretations and interpretations endorsed and issued. Our opinion is not modified in respect of this matter.

Key Audit Matters

- - 132

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The following are the descriptions of the key audit matters in the audit of the parent company only financial statements of the Bank for the year ended December 31, 2018:

Expected Credit Losses of Notes Discounted and Loans, Net

As described in Notes 13 and 30 to the parent company only financial statements, notes discounted and loans amounted to $451,728,578 thousand which accounted for 66% of total assets at December 31, 2018 and the expected credit losses of the notes discounted and loans and receivables amounted to $487,296 thousand which accounted for 5% of total net revenue for the year ended December 31, 2018. Due to the large amount, the account has a significant influence on the Bank. As discussed in Note 5, the measurement of expected credit losses of notes discounted and loans involves various financial factors, such as probability of default and loss given default. Therefore, the expected credit losses of notes discounted and loans were identified as one of the key audit matters.

The relevant accounting policies, estimations, assumptions and other information are referred to in Notes 4, 5, 13 and 30 to the parent company only financial statements.

The audit procedures performed for the expected credit losses of notes discounted and loans were as follows:

 We understood and tested the internal controls for the expected credit losses of notes discounted and loans of Taichung Commercial Bank Co., Ltd.

 We selected samples from schedule of expected credit losses of the notes discounted and loans assessed by Taichung Commercial Bank Co., Ltd., and evaluated collateral’s value and feasibility of the expected credit losses.

 We understood and tested the key parameters for the expected credit losses of notes discounted and loans (such as probability of default and loss given default) assessed by Taichung Commercial Bank Co., Ltd. in assessing whether the expected credit losses were reasonable and met the current experience and the economic situation in Taiwan.

Interest Revenue Recognition on Notes Discounted and Loans

As described in Note 33 to the parent company only financial statements, interest revenue on notes discounted and loans of Taichung Commercial Bank Co., Ltd. amounted to $10,725,813 thousand which accounted for 100% of total net revenue for the year ended December 31, 2018, which was the

- - 133

main revenue for Taichung Commercial Bank Co., Ltd. The establishment of loans of Taichung Commercial Bank Co., Ltd. must be verified and reviewed by the supervisors who have been authorized. The input data done by person in-charge have to be reviewed by the division supervisors before loans are being disbursed. Taichung Commercial Bank Co., Ltd. use IT systems to compute monthly interest revenue on notes discounted and loans automatically. The computation of interest revenue on notes discounted and loans of Taichung Commercial Bank Co., Ltd. is highly dependent on the IT systems. The input data of loans and the operation logic are very important for the accuracy of the computation of interest revenue on notes discounted and loans. Therefore, interest revenue recognition on notes discounted and loans was identified as one of the key audit matters.

The relevant accounting policies, estimations and other information are referred to in Notes 4 and 30 to the parent company only financial statements.

The audit procedures performed for interest revenue recognition on notes discounted and loans were as follows:

We understood and tested the internal controls for accuracy of interest revenue of notes discounted and loans, included the understanding and testing of internal controls for IT system.
We selected samples of interest revenue computed by IT system and cross-checked whether the samples agreed with the contracts. Subsequently, we recomputed interest revenue and verified that the amounts did not differ significantly from the reported amounts.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Bank’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only

- - 134

financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for 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 Bank’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Bank to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information ofentities or business activities within the Bank to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

- - 135

We communicate with those charged with 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 charged with 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 charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ 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 communication.

The engagement partners on the audit resulting in this independent auditors’ report are Wen-Yea Shyu and Kwan-Chung Lai.

Deloitte & Touche Taipei, Taiwan Republic of China March 14, 2019

Notice to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying parent company only financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and parent company only financial statements shall prevail.

- - 136

TAICHUNG COMMERCIAL BANK CO., LTD.

BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

ASSETS CASH AND CASH EQUIVALENTS DUE FROM THE CENTRAL BANK AND CALL LOANS TO OTHER BANKS FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME INVESTMENTS IN DEBT INSTRUMENTS AT AMORTIZED COST SECURITIES PURCHASED UNDER RESELL AGREEMENTS RECEIVABLES, NET NOTES DISCOUNTED AND LOANS, NET AVAILABLE-FOR-SALE FINANCIAL ASSETS, NET HELD-TO-MATURITY FINANCIAL ASSETS, NET INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD, NET OTHER FINANCIAL ASSETS, NET PROPERTIES AND EQUIPMENT, NET INVESTMENT PROPERTIES, NET INTANGIBLE ASSETS, NET DEFERRED TAX ASSETS OTHER ASSETS TOTAL LIABILITIES AND EQUITY DUE TO THE CENTRAL BANK AND OTHER BANKS FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS SECURITIES SOLD UNDER REPURCHASE AGREEMENTS PAYABLES CURRENT TAX LIABILITIES DEPOSITS AND REMITTANCES BANK DEBENTURES OTHER FINANCIAL LIABILITIES PROVISIONS DEFERRED TAX LIABILITIES OTHER LIABILITIES Total liabilities EQUITY Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Total equity TOTAL		2018 Amount % $ 14,971,054 2 31,768,897 5 26,136,939 4 28,197,495 4 100,462,761 15 9,094,151 1 5,028,141 1 451,728,578 66 - - - - 5,224,701 1 1,111 - 9,368,329 1 22,660 - 125,025 - 732,826 - 1,295,939 - $ 684,158,607 100 $ 3,378,752 1 162,127 - 9,904,467 1 11,342,864 2 296,788 - 589,242,889 86 20,000,000 3 2,127 - 1,421,814 - 111,021 - 472,105 - 636,334,954 93 35,255,084 5 726,981 - 6,985,726 1 110,159 - 4,093,133 1 652,570 - 47,823,653 7 $ 684,158,607 100		2017
				Amount % $ 13,944,328 2 30,121,642 5 30,965,512 5 - - - - 11,283,082 2 6,329,074 1 429,656,232 65 31,192,871 5 85,542,095 13 4,735,107 1 1,067,625 - 9,296,259 1 22,750 - 115,605 - 635,955 - 1,581,823 - $ 656,489,960 100 $ 9,518,872 1 207,225 - 4,307,810 1 12,195,742 2 223,235 - 567,255,591 86 17,500,000 3 43,434 - 1,389,979 - 111,021 - 335,111 - 613,088,020 93 32,931,789 5 684,156 - 5,896,530 1 73,833 - 3,630,655 1 184,977 - 43,401,940 7 $ 656,489,960 100

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 14, 2019)

- - 137

TAICHUNG COMMERCIAL BANK CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

INTEREST REVENUE INTEREST EXPENSE NET INTEREST NET INCOME AND LOSS OTHER THAN INTEREST Service fee income, net Gains on financial assets and liabilities at fair value through profit or loss Realized gains on available-for-sale financial assets Realized gains on financial assets at fair value through other comprehensive income Foreign exchange gains (losses), net Impairment losses on assets Share of profit of associates and joint venture for using the equity method Net (loss) gain on disposal of property Other non-interest (losses) gains, net TOTAL NET REVENUE BAD-DEBT EXPENSES AND PROVISION FOR LOSSES ON COMMITMENTS AND GUARANTEES		2018 Amount % $ 12,453,151 117 (4,462,015) (42) 7,991,136 75 1,792,954 17 146,351 1 - - 54,017 1 254,894 2 (17,488) - 435,743 4 (2,689) - 20,105 - 10,675,023 100 (410,947) (4)		2017 Amount % $ 11,591,419 112 (3,768,078) (36) 7,823,341 76 1,553,501 15 472,898 5 27,608 - - - (91,229) (1) (50,533) - 252,540 2 348,277 3 11,676 - 10,348,079 100 (946,897) (9)	Percentage Increase (Decrease)
					% 7 18 2 15 (69) (100) - 379 (65) 73 (101) 72 3 (57) (Continued)

- - 138

TAICHUNG COMMERCIAL BANK CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING EXPENSES Employee benefits Depreciation and amortization Other selling and administrative expenses Total operating expenses PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS INCOME TAX EXPENSE NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gains on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income of associates and joint venture accounted for using the equity method Income tax relating to items that will not be reclassified subsequently to profit or loss Items that will not be reclassified subsequently to profit or loss, net of income tax		2018 Amount % $ (3,343,879) (31) (235,924) (2) (2,046,101) (19) (5,625,904) (52) 4,638,172 44 (629,803) (6) 4,008,369 38 (69,552) (1) 50,761 1 36,287 - 29,425 - 46,921 -		2017 Amount % $ (3,001,210) (29) (258,431) (3) (1,871,903) (18) (5,131,544) (50) 4,269,638 41 (637,096) (6) 3,632,542 35 (3,687) - - - 53 - 626 - (3,008) -	Percentage Increase (Decrease)
					% 11 (9) 9 10 9 (1) 10 1,786 - 68,366 4,600 1,660 (Continued)

- - 139

TAICHUNG COMMERCIAL BANK CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss: Exchange differences on the translation of financial statements of foreign operations Unrealized gains on available-for- sale financial assets Share of the other comprehensive loss of associates accounted and joint venture for using the equity method Unrealized losses on investments in debt instruments designated as at fair value through other comprehensive income Income tax relating to items that may be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss, net of income tax Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE Basic Diluted		2018 Amount % $ 13,818 - - - (13,638) - (13,948) - - - (13,768) - 33,153 - $ 4,041,522 38 $1.18 $1.18		2017 Amount % $ (2,856) - 196,642 2 (15,029) - - - (7,414) - 171,343 2 168,335 2 $ 3,800,877 37 $1.08 $1.08	Percentage Increase (Decrease)
					% 584 (100) (9) - 100 (108) (80) 6

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 14, 2019)

(Concluded)

- - 140

TAICHUNG COMMERCIAL BANK CO., LTD.

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Ordinary Shares Capital Surplus BALANCE AT JANUARY 1, 2017 $ 32,381,307 $ 684,156 Appropriation of 2016 earnings Legal reserve - - Special reserve - - Cash dividends - - Share dividends 550,482 - Net profit for the year ended December 31, 2017 - - Other comprehensive (loss) income for the year ended December 31, 2017, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2017 - - BALANCE AT DECEMBER 31, 2017 32,931,789 684,156 Effect of retrospective application and retrospective restatement (Notes 3) - - BALANCE AT JANUARY 1, 2018 AS RETROSPECTIVE 32,931,789 684,156 Appropriation of 2017 earnings Legal reserve - - Special reserve - - Cash dividends - - Share dividends 823,295 - Net profit for the year ended December 31, 2018 - - Other comprehensive (loss) income for the year ended December 31, 2018, net of income tax - - Total comprehensive income for the year ended December 31, 2018 - - Issuance of ordinary shares for cash 1,500,000 30,000 Compensation costs of employee share options - 12,825 Disposals of investments in equity instruments designated as at fair value through other comprehensive income - - BALANCE AT DECEMBER 31, 2018 $ 35,255,084 $ 726,981	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 4,881,792 $ 38,685 $ 3,382,461 1,014,738 - (1,014,738) - 35,148 (35,148) - - (1,780,972) - - (550,482) - - 3,632,542 - - (3,008) - - 3,629,534 5,896,530 73,833 3,630,655 - - (80,676) 5,896,530 73,833 3,549,979 1,089,196 - (1,089,196) - 36,326 (36,326) - - (1,481,931) - - (823,295) - - 4,008,369 - - (29,117) - - 3,979,252 - - - - - - - - (5,350) $ 6,985,726 $ 110,159 $ 4,093,133	Other Equity Exchange Differences on the Translation of Financial Unrealized Gain on Financial Assets at Fair Value Through Other Unrealized Gain on Statements of Comprehensive Available-for-sale Foreign Operations Income Financial Assets $ (23,183) $ - $ 36,817 - - - - - - - - - - - - - - - (15,324) - 186,667 (15,324) - 186,667 (38,507) - 223,484 - 623,457 (223,484) (38,507) 623,457 - - - - - - - - - - - - - - - - 180 62,090 - 180 62,090 - - - - - - - - 5,350 - $ (38,327) $ 690,897 $ -	Total Equity $ 41,382,035 - - (1,780,972) - 3,632,542 168,335 3,800,877 43,401,940 319,297 43,721,237 - - (1,481,931) - 4,008,369 33,153 4,041,522 1,530,000 12,825 - $ 47,823,653

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 14, 2019)

- - 141

TAICHUNG COMMERCIAL BANK CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit losses/bad-debt expenses Gains on financial assets and liabilities at fair value through profit or loss Losses on disposal of properties and equipment Gains on disposal of investment properties Interest expense Interest revenue Dividend income Provision for losses on others Compensation costs of employee share options Share of profit of associates Gains on disposal of investments Impairment loss on financial assets Unrealized (gain) loss on foreign currency exchange Total adjustment Net changes in operating assets and liabilities Due from the central bank and call loans to other banks Financial assets at fair value through profit or loss Receivables Notes discounted and loans Other financial assets Other assets Due to the central Bank and other banks Financial liabilities at fair value through profit or loss Securities sold under repurchase agreements Payables Deposits and remittances Other financial liabilities Provision for employee benefits Other liabilities Changes in operating assets and liabilities Cash generated from operations Interest received Dividend received Interest paid Income tax paid Net cash generated from operating activities	2018 $ 4,638,172 189,733 46,191 410,947 (146,351) 2,689 - 4,462,015 (12,453,151) (27,230) (2,437) 12,825 (435,743) (26,787) 17,488 (356,756) (8,306,567) (746,918) 5,834,931 1,491,373 (22,586,332) 38,085 (24,203) (6,140,120) (4,770) 5,596,657 (954,873) 21,987,298 (41,307) (45,369) 136,994 4,541,446 873,051 12,515,028 28,096 (4,360,020) (623,696) 8,432,459	2017 $ 4,269,638 197,125 61,306 946,897 (472,898) 395 (348,672) 3,768,078 (11,591,419) (21,619) 26,000 - (252,540) (27,608) 50,533 850,912 (6,813,510) (609,388) (7,418,639) (2,189,611) (6,492,597) (35,342) 8,780 (2,098,856) (813,642) 85,552 2,939,543 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 (Continued)

- - 142

TAICHUNG COMMERCIAL BANK CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Proceeds from repayments sale of financial assets at amortized cost Purchase of available-for-sale financial assets Proceeds from sale of available-for-sale financial assets Purchase of held-to-maturity financial assets Proceeds from sale of held-to-maturity financial assets Proceeds from repayments sale of held-to-maturity financial assets Payments for properties and equipment Proceeds from disposal of properties and equipment Decrease in refundable deposits Payments for intangible assets Proceeds from disposal of investment properties Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of bank debentures Repayments of bank debentures Cash dividends paid to owners of the Bank Proceeds from issuance of ordinary shares Net cash generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT THE END OF YEAR	2018 $ 4,297,417 (761,952,805) 45,650 746,586,250 - - - - - (265,369) 967 87,287 (55,611) - (11,256,214) 2,500,000 - (1,481,931) 1,530,000 2,548,069 13,818 (261,868) 38,811,338 $ 38,549,470	2017 - - - - (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 (Continued)

- - 143

TAICHUNG COMMERCIAL BANK CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

RECONCILIATIONS OF THE AMOUNTS IN THE STATEMENTS OF CASH FLOWS WITH THE EQUIVALENT ITEMS REPORTED IN THE BALANCE SHEETS AT DECEMBER 31, 2018 AND 2017 Cash and cash equivalents in the balance sheets Due from the central bank and call loans to other banks in accordance with cash and cash equivalents under IAS 7 “Statement of Cash Flows” Securities purchased under resell agreements in accordance with cash and cash equivalents under IAS 7 “Statement of Cash Flows” Cash and cash equivalents at the end of the year The notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated March 14, 2019)		December 31	December 31
		2018 $ 14,971,054 14,484,265 9,094,151 $ 38,549,470	2017 $ 13,944,328 13,583,928 11,283,082 $ 38,811,338 (Concluded)

144-

==> picture [172 x 77] intentionally omitted <==

Auditor’s Report

==> picture [180 x 130] intentionally omitted <==

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Taichung Commercial Bank Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Taichung Commercial Bank Co., Ltd. (the “Bank”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into by the Financial Supervisory Commission (FSC) of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements of Financial Institutions by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note 3 of the consolidated financial statements, which describes Taichung Commercial Bank Co., Ltd. and its subsidiaries initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRIC (IFRIC), and Interpretations of SIC (SIC) endorsed and issued into effect by the FSC starting from 2018. The Group elects not to restate prior reporting periods when applying the above-mentioned standards, interpretations and interpretations endorsed and issued. Our opinion is not modified in respect of this matter.

- - 145

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context 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 these matters.

The following are the descriptions of the key audit matters in the audit of the consolidated financial statements of the Group for the year ended December 31, 2018:

Expected Credit Losses of Notes Discounted and Loans, Net

As described in Notes 13 and 33 to the consolidated financial statements, notes discounted and loans amounted to $452,594,552 thousand which accounted for 66% of total assets at December 31, 2018 and the expected credit losses of the notes discounted and loans amounted to $487,333 thousand which accounted for 4% of total net revenue for the year ended December 31, 2018. Due to the large amount, the account has a significant influence on the Group. As discussed in Note 5, the measurement of expected credit losses of notes discounted and loans involves various financial factors, such as probability of default and loss given default. Therefore, the expected credit losses of notes discounted and loans were identified as one of the key audit matters.

The relevant accounting policies, estimations, assumptions and other information are referred to in Notes 4, 5, 13 and 33 to the consolidated financial statements.

The audit procedures performed for the expected credit losses of notes discounted and loans were as follows:

We understood and tested the internal controls for the expected credit losses of notes discounted and loans of Taichung Commercial Bank Co., Ltd. and its subsidiaries.
We selected samples from schedule of expected credit losses of the notes discounted and loans assessed by Taichung Commercial Bank Co., Ltd. and its subsidiaries, and evaluated collateral’s value and feasibility of the expected credit losses.
We understood and tested the key parameters for the expected credit losses of notes discounted and loans (such as probability of default and loss given default) assessed by Taichung Commercial Bank Co., Ltd. and its subsidiaries in assessing whether the expected credit losses were reasonable and met the current experience and the economic situation in Taiwan.

Interest Revenue Recognition on Notes Discounted and Loans

As described in Note 33 to the consolidated financial statements, interest revenue on notes discounted and loans of Taichung Commercial Bank Co., Ltd. and its subsidiaries amounted to $10,785,290 thousand which accounted for 92% of total net revenue for the year ended December 31, 2018, which was the main revenue for Taichung Commercial Bank Co., Ltd. and its subsidiaries. The establishment of loans of Taichung Commercial Bank Co., Ltd. and its subsidiaries must be verified and reviewed by the supervisors who have been authorized. The input data done by person in-charge have to be reviewed by the division supervisors before loans are being disbursed. Taichung Commercial Bank Co., Ltd. and its subsidiaries use IT systems to compute monthly interest revenue on notes discounted and loans automatically. The computation of interest revenue on notes discounted and loans of Taichung Commercial Bank Co., Ltd. and its subsidiaries is highly dependent on the IT systems. The input data of loans and the operation logic are very important for the accuracy of the computation of interest revenue on notes discounted and loans. Therefore, interest revenue recognition on notes discounted and loans was identified as one

- 146 -

of the key audit matters.

The relevant accounting policies, estimations and other information are referred to in Notes 4 and 33 to the consolidated financial statements.

The audit procedures performed for interest revenue recognition on notes discounted and loans were as follows:

We understood and tested the internal controls for accuracy of interest revenue of notes discounted and loans, included the understanding and testing of internal controls for IT system.
We selected samples of interest revenue computed by IT system and cross-checked whether the samples agreed with the contracts. Subsequently, we recomputed interest revenue and verified that the amounts did not differ significantly from the reported amounts.

Other Matter

We have also audited the parent company only financial statements of Taichung Commercial Bank Co., Ltd. as of and for the years ended December 31, 2018 and 2017 on which we have issued an unmodified opinion with emphasis of matter and unmodified opinion, respectively.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ 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 an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, 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.

- - 147

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 to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ 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 communication.

- - 148

The engagement partners on the audit resulting in this independent auditors’ report are Wen-Yea Shyu and Kwan-Chung Lai.

Deloitte & Touche Taipei, Taiwan Republic of China

March 14, 2019

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

- - 149

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

ASSETS CASH AND CASH EQUIVALENTS DUE FROM THE CENTRAL BANK AND CALL LOANS TO OTHER BANKS FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME INVESTMENTS IN DEBT INSTRUMENTS AT AMORTIZED COST SECURITIES PURCHASED UNDER RESELL AGREEMENTS RECEIVABLES, NET CURRENT TAX ASSETS NOTES DISCOUNTED AND LOANS, NET AVAILABLE-FOR-SALE FINANCIAL ASSETS, NET HELD-TO-MATURITY FINANCIAL ASSETS, NET INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD, NET RESTRICTED ASSETS, NET OTHER FINANCIAL ASSETS, NET PROPERTIES AND EQUIPMENT, NET INVESTMENT PROPERTIES, NET INTANGIBLE ASSETS, NET DEFERRED TAX ASSETS OTHER ASSETS TOTAL LIABILITIES AND EQUITY DUE TO THE CENTRAL BANK AND OTHER BANKS FUNDS BORROWED FROM CENTRAL BANK AND OTHER BANKS FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS SECURITIES SOLD UNDER REPURCHASE AGREEMENTS PAYABLES CURRENT TAX LIABILITIES DEPOSITS AND REMITTANCES BANK DEBENTURES OTHER FINANCIAL LIABILITIES PROVISIONS DEFERRED TAX LIABILITIES OTHER LIABILITIES Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE BANK Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Total equity attributable to owners of the Bank Total equity TOTAL		2018 Amount % $ 15,874,631 2 31,768,897 5 26,336,500 4 28,933,152 4 100,462,761 15 9,294,168 1 12,780,910 2 35 - 452,594,552 66 - - - - 153,423 - 447,036 - 1,111 - 9,446,769 1 108,950 - 163,172 - 781,879 - 1,684,157 - $ 690,832,103 100 $ 3,378,752 1 5,495,519 1 165,360 - 9,904,467 1 12,254,764 2 380,869 - 587,967,658 85 20,000,000 3 1,000,807 - 1,421,814 - 111,021 - 927,419 - 643,008,450 93 35,255,084 5 726,981 - 6,985,726 1 110,159 - 4,093,133 1 652,570 - 47,823,653 7 47,823,653 7 $ 690,832,103 100		2017
				Amount % $ 15,001,053 2 30,121,642 5 31,210,074 5 - - - - 11,283,082 2 13,658,151 2 5,701 - 430,857,960 65 31,615,817 5 85,542,095 13 128,113 - 249,003 - 1,067,625 - 9,387,663 1 45,250 - 160,054 - 681,396 - 2,009,404 - $ 663,024,083 100 $ 9,518,872 1 5,120,940 1 207,225 - 4,307,810 1 13,331,722 2 255,559 - 566,094,780 85 17,500,000 3 1,057,866 - 1,389,979 - 111,021 - 726,369 - 619,622,143 93 32,931,789 5 684,156 - 5,896,530 1 73,833 - 3,630,655 1 184,977 - 43,401,940 7 43,401,940 7 $ 663,024,083 100

The accompanying notes are an integral part of the consolidated financial statements.

(With Deloitte & Touche auditors’ report dated March 14, 2019)

- - 150

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

INTEREST REVENUE INTEREST EXPENSE NET INTEREST NET INCOME AND LOSS OTHER THAN INTEREST Service fee income, net Gains on financial assets and liabilities at fair value through profit or loss Realized gains on available-for-sale financial assets Realized gains on financial assets at fair value through other comprehensive income Foreign exchange gains (losses), net Impairment losses on assets Share of loss of associates and joint venture for using the equity method Net (loss) gain on disposal of property Other non-interest gains, net TOTAL NET REVENUE BAD-DEBT EXPENSES AND PROVISION FOR LOSSES ON COMMITMENTS AND GUARANTEES		2018 Amount % $ 13,060,733 112 (4,626,523) (40) 8,434,210 72 2,846,174 24 117,134 1 - - 77,048 1 232,895 2 (17,488) - (6,716) - (2,437) - 8,604 - 11,689,424 100 (472,772) (4)		2017 Amount % $ 12,078,007 106 (3,892,000) (34) 8,186,007 72 2,448,579 22 490,717 4 34,743 - - - (88,738) (1) (50,533) - (2,875) - 347,810 3 29,045 - 11,394,755 100 (1,124,859) (10)	Percentage Increase (Decrease)
					% 8 19 3 16 (76) (100) - 362 (65) 134 (101) (70) 3 (58) (Continued)

- 151 -

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING EXPENSES Employee benefits Depreciation and amortization Other selling and administrative expenses Total operating expenses PROFIT BEFORE INCOME TAX FROM CONTINUING OPERATIONS INCOME TAX EXPENSE NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gains on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive (loss) income of associates and joint venture accounted for using the equity method Income tax relating to items that will not be reclassified subsequently to profit or loss Items that will not be reclassified subsequently to profit or (loss), net of income tax		2018 Amount % $ (3,723,758) (32) (273,401) (2) (2,459,610) (21) (6,456,769) (55) 4,759,883 41 (751,514) (6) 4,008,369 35 (69,552) (1) 87,452 1 (404) - 29,425 - 46,921 -		2017 Amount % $ (3,348,251) (29) (287,221) (3) (2,279,212) (20) (5,914,684) (52) 4,355,212 38 (722,670) (6) 3,632,542 32 (3,687) - - - 53 - 626 - (3,008) -	Percentage Increase (Decrease)
					% 11 (5) 8 9 9 4 10 1,786 - (862) 4,600 1,660 (Continued)

- - 152

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss: Exchange differences on the translation of financial statements of foreign operations Unrealized gains on available-for- sale financial assets Unrealized losses on investments in debt instruments designated as at fair value through other comprehensive income Income tax relating to items that may be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or (loss), net of income tax Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE Basic Diluted		2018 Amount % $ 180 - - - (13,948) - - - (13,768) - 33,153 - $ 4,041,522 35 $1.18 $1.18		2017 Amount % $ (15,324) - 194,081 1 - - (7,414) - 171,343 1 168,335 1 $ 3,800,877 33 $1.08 $1.08	Percentage Increase (Decrease)
					% 101 (100) - 100 (108) (80) 6

The accompanying notes are an integral part of the consolidated financial statements.

(With Deloitte & Touche auditors’ report dated March 14, 2019)

(Concluded)

- 153 -

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Common Stock Capital Surplus BALANCE AT JANUARY 1, 2017 $ 32,381,307 $ 684,156 Appropriation of 2016 earnings Legal reserve - - Special reserve - - Cash dividends - - Share dividends 550,482 - Net profit for the year ended December 31, 2017 - - Other comprehensive (loss) income for the year ended December 31, 2017, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2017 - - BALANCE AT DECEMBER 31, 2017 32,931,789 684,156 Effect of retrospective application and retrospective restatement - - BALANCE AT JANUARY 1, 2018 AS RETROSPECTIVE 32,931,789 684,156 Appropriation of 2017 earnings Legal reserve - - Special reserve - - Cash dividends - - Share dividends 823,295 - Net profit for the year ended December 31, 2018 - - Other comprehensive (loss) income for the year ended December 31, 2018, net of income tax - - Total comprehensive income for the year ended December 31, 2018 - - Issuance of ordinary shares for cash 1,500,000 30,000 Compensation costs of employee share options - 12,825 Disposals of investments in equity instruments designated as at fair value through other comprehensive income - - BALANCE AT DECEMBER 31, 2018 $ 35,255,084 $ 726,981	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 4,881,792 $ 38,685 $ 3,382,461 1,014,738 - (1,014,738) - 35,148 (35,148) - - (1,780,972) - - (550,482) - - 3,632,542 - - (3,008) - - 3,629,534 5,896,530 73,833 3,630,655 - - (80,676) 5,896,530 73,833 3,549,979 1,089,196 - (1,089,196) - 36,326 (36,326) - - (1,481,931) - - (823,295) - - 4,008,369 - - (29,117) - - 3,979,252 - - - - - - - - (5,350) $ 6,985,726 $ 110,159 $ 4,093,133	Other Equity Exchange Differences on the Translation of Financial Unrealized Gain on Financial Assets at Fair Value Through Other Unrealized Gain on Statements of Comprehensive Available-for-sale Foreign Operations Income Financial Assets $ (23,183) $ - $ 36,817 - - - - - - - - - - - - - - - (15,324) - 186,667 (15,324) - 186,667 (38,507) - 223,484 - 623,457 (223,484) (38,507) 623,457 - - - - - - - - - - - - - - - - 180 62,090 - 180 62,090 - - - - - - - - 5,350 - $ (38,327) $ 690,897 $ -	Total Equity $ 41,382,035 - - (1,780,972) - 3,632,542 168,335 3,800,877 43,401,940 319,297 43,721,237 - - (1,481,931) - 4,008,369 33,153 4,041,522 1,530,000 12,825 - $ 47,823,653

The accompanying notes are an integral part of the consolidated financial statements.

(With Deloitte & Touche auditors’ report dated March 14, 2019)

- 1 54 -

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit losses/bad-debt expenses Gains on financial assets and liabilities at fair value through profit or loss Losses on disposal of properties and equipment Gains on disposal of investment properties Interest expense Interest revenue Dividend income Provision for losses on others Compensation costs of employee share options Share of loss of associates Gains on disposal of investments Impairment loss on financial assets Unrealized (gain) loss on foreign currency exchange Total adjustment Net changes in operating assets and liabilities Due from the central bank and call loans to other banks Financial assets at fair value through profit or loss Receivables Notes discounted and loans Other financial assets Other assets Due to the central Bank and other banks Financial liabilities at fair value through profit or loss Securities sold under repurchase agreements Payables Deposits and remittances Other financial liabilities Provision for employee benefits Other liabilities Changes in operating assets and liabilities Cash generated from operations Interest received Dividend received Interest paid Income tax paid Net cash generated from operating activities	2018 $ 4,759,883 220,234 53,167 472,772 (117,134) 2,437 - 4,626,523 (13,060,733) (50,261) (2,437) 12,825 6,716 (26,787) 17,488 (429,099) (8,274,289) (746,918) 6,738,946 1,079,969 (22,250,976) 38,085 (214,693) (6,140,120) (889,768) 5,596,657 (1,190,405) 21,872,878 (41,307) (45,369) 34,502 3,841,481 327,075 13,120,974 50,261 (4,513,076) (691,596) 8,293,638	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) 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 (Continued)

- 1 55 -

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Proceeds from repayments sale of financial assets at amortized cost Purchase of available-for-sale financial assets Proceeds from sale of available-for-sale financial assets Purchase of held-to-maturity financial assets Proceeds from sale of held-to-maturity financial assets Proceeds from repayments sale of held-to-maturity financial assets Payments for properties and equipment Proceeds from disposal of properties and equipment Decrease in refundable deposits Payments for intangible assets Payments for investment properties Proceeds from disposal of investment properties Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from funds borrowed from central bank and other banks (Repayments of ) proceeds from commercial papers issued Proceeds from issue of bank debentures Repayments of bank debentures Proceeds from guarantee deposits received Cash dividends paid to owners of the Bank Proceeds from issuance of ordinary shares Net cash generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT THE END OF YEAR	2018 $ (276,021) 4,297,417 (761,952,805) 45,650 746,586,250 - - - - - (282,743) 1,930 117,963 (56,112) (63,790) - (11,582,261) 374,579 (15,752) 2,500,000 - 166,548 (1,481,931) 1,530,000 3,073,444 180 (214,999) 39,868,063 $ 39,653,064	2017 $ - - - - - (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) (48,153,382) 88,021,445 $ 39,868,063 (Continued)

156 -

TAICHUNG COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

RECONCILIATIONS OF THE AMOUNTS IN THE CONSOLIDATED STATEMENTS OF CASH FLOWS WITH THE EQUIVALENT ITEMS REPORTED IN THE CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 2018 AND 2017 Cash and cash equivalents in the consolidated balance sheets Due from the central bank and call loans to other banks in accordance with cash and cash equivalents under IAS 7 “Statement of Cash Flows” Securities purchased under resell agreements in accordance with cash and cash equivalents under IAS 7 “Statement of Cash Flows” Cash and cash equivalents at the end of the year		December 31	December 31
		2018 $ 15,874,631 14,484,265 9,294,168 $ 39,653,064	2017 $ 15,001,053 13,583,928 11,283,082 $ 39,868,063

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated March 14, 2019) (Concluded)

- - 1 57

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 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 261 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.

- 1 58 -

must participate in the proposal discussion.

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.

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.

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 managing directors to chair the meeting. If a managing 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 managing 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.

- - 1 59

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.

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.

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.

- - 1 60

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.

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.

When there is an amendment or alternative for the same motion, the Chairman shall

- - 1 61

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.

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.

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.

Article 17 The staff responsible for organizing the meeting of shareholders shall wear identification badges or armbands.

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.

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

- - 1 62

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.

- 1 63 -

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 or make reversal 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 annual 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 stocks, 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

1 64

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 stocks 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 stocks 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 stocks.
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 stocks in whole or in part as stated in the conditions of offering at the ratio of 1 preferred share to 1 common stock (conversion ratio is 1:1). After the conversion of preferred shares to common stocks, the rights and obligations shall be the same as common stocks. 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 stocks 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 stocks 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 5[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 5 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

165

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.

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 shareholders, 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.

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.

166

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

167

convened within one month.

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.

Article 22 The Board shall have 3~5 managing 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 managing directors, and shall not constitute less than one fifth of the managing directors. The Vice Chairman and Managing Director will be appointed, if necessary, by a resolution of the Board.

Chairman, Vice Chairman and Managing Director will be elected among the managing 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

168

exercise his/her powers for certain reasons, the chairman is to appoint one managing director to act on his/her behalf. If a representative is not appointed by the chairman, one of the managing directors is elected to chair the meeting.

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.

169

Article 27-1 The Board of Directors is authorized to have the remuneration to the chairman, vice chairman, managing 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, managing director 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 Deputy Executive Vice President 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.

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

170

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. 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 or made reversal 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.

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.

171

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.

172

The 37[th] amendment was implemented on June 21, 2016. The 38[th] amendment was implemented on June 7, 2017. The 39[th] amendment was implemented on June 5, 2018.

173

Appendix 4

Shareholdings of Directors

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

Title	Shareholdings	Shareholdings registered in the registry of shareholders	Remarks
Director	84,612,202 Shares	299,637,522 Shares

Note: The stop transfer date is scheduled on April 29, 2019.

Directors shareholding list

Title	Name	Shareholdings registered in the registry of shareholders
Chairman	Hsu Tian Investment Co., Ltd., Representative: Kuei-FongWang	95,880,803
Managing Director	Hsu Tian Investment Co., Ltd., Representative: Ming-HsiungHuang	95,880,803
Independent managing director	Li-WoonLim	0
Independent director	Jin-Yi Lee	0
Independent director	Hsin-Chang Tsai	0
Director	Hsu Tian Investment Co., Ltd., Representative: Te-Wei Chia	95,880,803
Director	Hsu Tian Investment Co., Ltd., Representative: Hsin-ChingChang	95,880,803
Director	Hsu Tian Investment Co., Ltd., Representative: Wei-LiangLin	95,880,803
Director	Hsu Tian Investment Co., Ltd., Representative: Lai-HsingTsai	95,880,803
Director	Pan Asia Chemical Corporation: Ming- Shan Chuang	201,963,956
Director	Ho Yang Management Consultant Co., Ltd.,Representative: Chien-Hui Huang	1,792,763

174

AI assistant

T.C.C.B. — AGM Information 2019

52197_rns_2019-07-16_bd62cfe5-a12a-47c7-aa10-b703a350e9d9.pdf

Taichung Commercial Bank Co., Ltd.

The 2019 Annual Meeting of Shareholders Annual meeting handbook

Contents

Taichung Commercial Bank Co., Ltd.

Management Presentation (Company Reports)

The 2018 Business Report

1. 2018 Operation Performance

(1) Domestic and International Financial Environment

(2) Change of Organization

8. Awards

(6) Status of Research and Development

3. Future Development Strategies

4. 2019 Operation Plan Summary

Management Presentation (Company Reports)

No. 2

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

Management Presentation (Company Reports)

No. 4

Perpetual Non-Cumulative Unsecured Subordinated Financial Debentures Issued of 2018

1. Reasons for issuance:

2. Bond Information:

3. Subscription object:

4. Fund utilization efficiency:

Taichung Commercial Bank Co., Ltd. Regulations Governing the Offering of 1[st] term of the perpetual non-cumulative unsecured subordinated financial debentures in 2018

11. Early redemption rights:

Taichung Commercial Bank Co., Ltd. Regulations Governing the Offering of 2[nd] term of the perpetual non-cumulative unsecured subordinated financial debentures in 2018

8. Coupon rate:

11. Early redemption rights:

Management Presentation (Company Reports) No. 5

Taichung Commercial Bank Co. Ltd.

Report on the issuance of new shares of cash capital increase in 2018

1. Share allocation:

2. Pricing of new shares:

3. Subscription briefing:

(1) Funding utilization plan and items:

Management Presentation (Company Reports) No. 6 Report on Propaganda for Article 25 of the Banking Act Descriptions:

Articles 25 of the Banking Act

Proposals

Proposals

No. 1

Proposals No. 2

Taichung Commercial Bank Co., Ltd.

Earnings Distribution Statement

2018

Discussions

Discussions No. 1

Discussions No. 2

The “Procedural Rules for Acquisition or Disposal of Assets of Taichung Commercial Bank” amendment before and after

The “Procedural Rules for Acquisition or Disposal of Assets of Taichung Commercial Bank”(Draft)

taken:

APPENDIX 1

APPENDIX 2

Notes:

APPENDIX 5

Notes:

APPENDIX 6 (Applicable for investment in mainland China area)

Notes:

1. Applicable for non-banking & bills financing industry (Unit: NTD thousand)

2. Applicable for the banking & bills financing industry

Discussions No. 3

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

Resolutions:

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

Taichung Commercial Bank Co., Ltd.

Company Corporate Charter (Articles of Incorporation) (Draft)

Chapter 1 General rules

Chapter 2 Stock

Chapter 3 Business operation

Chapter 5 Directors and the Board of Directors

Chapter 6 Audit Committee

Chapter 7 Manager

Chapter 8 Accounting

Chapter 9 Appendix

Discussions No. 4

Resolutions:

The Comparison Chart of the Amended Articles of Procedures for the Election of Directors of Taichung Commercial Bank Co., Ltd.

Procedures for Election of Directors of Taichung Commercial Bank Co., Ltd. (Draft)

T.C.C.B. AGM Information 2019