Stock Code: 2887

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2016 Shareholders' Annual General Meeting (Common / Preferred)

Meeting Manual (Translation)

Time: 9.00 am, June 16, 2017

Venue: 2F, No. 118, Sec. 4, Ren-ai Rd., Taipei City, Taiwan (Taishin Financial Holding Tower)

Meeting Proceedings -------------------------------------------------------------------------------1

Report items:

I. The company's 2016 business report ----------------------------------------------------------2 II. The Audit Committee' audit of the company's 2016 accounting records-----------------2 III. The distribution of remuneration to directors and employees of 2016.-----------------2 Acknowledgments: I. Acknowledgment of the company's 2016 business report and financial statements------3 II. Acknowledgment of the company's 2016 earnings distribution ---------------------------4 Discussions: I. New issuance of common shares from earnings.----------------------------------------------5 II. Amendment of the "Articles of Incorporation" ----------------------------------------------6 III.Amendment of the "Handling Procedures for Acquisition or Disposal of Assets"-------8 Special motions -------------------------------------------------------------------------------------15

Attachments

(1) The 2016 business report ------------------------------------------------------------------16 (2) The 2016 Audit Committee Report---------------------------------------------------------22 (3) The 2016 Independent auditors’ report and financial statements-----------------------23 (4) The 2016 earnings distribution statement -------------------------------------------------39 (5) The "Articles of Incorporation" -------------------------------------------------------------40 (6) The "Handling Procedures for Acquisition or Disposal of Assets"---------------------55 (7) The "Rules of Procedure for Shareholder Meetings "------------------------------------71 (8) Shareholding of the board of directors -----------------------------------------------------78

Taishin Financial Holding Co., Ltd.

2017 Shareholders' Annual General Meeting (Common / Preferred)

Meeting Proceedings

Time: 9.00 am, June 16, 2017

Venue: 2F, No. 118, Section 4 Ren'ai Road, Taipei City

Taishin Financial Holding Tower

I. Commencement of meeting (announcement of the total number of shares represented in the meeting)
II. Chairman takes his seat
III. Chairman's speech
IV. Report items
V. Acknowledgments
VI. Discussions
VII. Special motions
VIII. Meeting ends
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[ Report items]

I. The company's 2016 business report. Please refer to the business report presented as Attachment 1 (pages 16 ~ 21 of this manual).
II. The Audit Committee' audit of the company's 2016 accounting records. Please refer to The Audit Committee Report presented as Attachment 2 (pages 22 of this manual).

III. The distribution of remuneration to directors and employees of 2016.

According to the amended Article 40 of the “Article of Incorporation” approved by the 22th Meeting of the Sixth Board of Directors on February 23, 2017 and this shareholders meeting.
The Company’s 2016 pre‐tax profit amounted to NT$11,553,407,705, the following are the distribution of remuneration to directors and employees of 2016:
(1) Directors' remuneration:
- 0.95% provision as Directors' remuneration, the amount is NT$109,757,373.
(2) Employees' remuneration:
- 0.01% provision as Employees' remuneration, the amount is NT$1,155,341, and distribute to emplyees of Taishin FHC with cash.
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[ Acknowledgments]

Agenda item #1 Proposed by the board of directors

Summary: Acknowledgment of the company's 2016 business report and financial statements.

Description:

The company's 2016 business report and financial statements have been prepared by the board of directors and reviewed by the Audit Committee. The company-level and consolidated financial statements have also been audited by CPAs Tza Li Gung and Kwan-Chung Lai of Deloitte Taiwan.
Please refer to Attachments 1 to 3 (pages 16 ~ 38 of this manual) for the company's 2016 business report, Audit Committee’s Examination Report, and financial statements.

Resolution:

Agenda item #2 Proposed by the board of directors

Summary: Acknowledgment of the Company's 2016 earnings distribution.

Description:

Distribution of earnings in accordance with Article 40-1 of the Company's Articles of Incorporation.
The 2016 audited net profit after-tax of the Company is NT$11,399,433,835; after adjusting earning distribution reduction, the 2016 distributable earnings is NT$10,830,150,339. The following distributions have been proposed according to the Articles of Incorporation:
(1) NT$1,083,015,034 of 10% legal reserve and NT$37,447,519 of special reserve is allocated according to Article 237 of the Company Act, Paragraph 1, Article 41 of Securities and Exchange Act and Article 40-1 of the Company's Articles of Incorporation;
(2) Next, NT$556,939,892 and NT$12,978,142 cash dividends is allocated to Class D and Class E preferred shareholders, respectively;
(3) And then, NT$9,139,769,752 dividends is allocated to common shareholders (approximately NT$0.95 per share), which consist of cash dividends NT$5,026,873,752 (approximately NT$0.52 per share) and stock dividends NT$4,112,896,000 (approximately NT$0.43 per share). In particular, NT$4,112,896,000 in stock dividends shall be paid with new offering of 411,289,600 common shares with par value of NT$10 each. The rights and obligation of the new shares to be issued will be the same as the existing common shares. Aforementioned issuance of new common shares as stock dividend shall be discussed in a separate agenda item.
The amount of dividends distributed to each common share is based on 9,570,327,370 shares outstanding as at March 31, 2017; and however, the amount per share actually distributed will vary due to any treasury stock transactions, exercise of employee stock options, and conversion of Class D preferred shares that occurs before the ex-dividend/ex-right date, while the total distributed dividends amounts will remain unchanged.
The Board of Directors has authorized the chairman to set the ex-dividend date and the payment date of cash dividends for Class D and Class E preferred shares. Otherwise, the ex-dividend/ex-right date and the payment date of the dividends for common shares will be determined by the Board of Directors.
The 2016 earnings distribution report has been presented in Attachment 4 (page 39 of this manual). Contents and figures are subject to competent authority's approval.

Resolution:

[ Discussions]

Agenda item #1 Proposed by the board of directors

Summary: New issuance of common shares from earnings. Description:

To enhance financial structure, the company has proposed to allocate common shareholders’ dividends NT$ 4,112,896,000 from 2016 distributable earnings to issue 411,289,600 common shares at NT$10 par value. The rights and obligation of the new shares to be issued will be the same as the existing common shares. The new shares issued will be allocated among common shareholders according to their shareholding ratio as of the ex-dividend date. Basically, every one thousand common shares will be entitled with 42.97 new shares; shareholders can compose a complete share from stock dividends less than one share and these combined shares shall be allocated to one of the shareholders. The stock dividends less than one share after composition or forfeited composition by shareholders will be distributed in cash (removing the fractional part) and the shares will be subscribed by a specific person assigned by the Chairman of the Company who will be authorized by the Board of Directors.
The amount of dividends distributed to each common share is based on 9,570,327,370 shares outstanding as at March 31, 2017; and however, the amount per share actually distributed will vary due to any treasury stock transactions, exercise of employee stock options, and conversion of Class D preferred shares that occurs before the ex-right date, while the total distributed dividends amounts will remain unchanged.
Provided that earnings capitalization has been passed during the annual general meeting, the board of directors will determine the ex-right date of stock dividends with approval of competent authority

Resolution:

Agenda item #2

Proposed by the board of directors

Summary: Amendment of the "Articles of Incorporation". Description:

To accommodate the partial redemption of Class D registered preferred shares, and remove reference to remuneration of supervisors, the board has proposed changes to Articles 8-2 and 40 of the Company ＇ s Articles of Incorporation.
Below is a comparison of the amended terms. Please refer to Attachment 5 (pages 40 ~ 54

of this manual) for full context of the unamended "Articles of Incorporation".

Content	After amendment	Existing articles	Description
Article 8-2	The Company has issued 290,054,728Class D registered preferred shares to registered owners. The rights and terms of issues are as follows: ……	The Company has issued 362,568,410Class D registered preferred shares to registered owners. The rights and terms of issues are as follows: ……	Class D registered preferred shares are particially recalled and retired, this Article is therefore amended.
Article 40	0.01% privsion of the Company’s current year profit shall be made as employee bonus, and the board of directors shall decide to distribute the bonus in the form of shares or cash, which can also be distributed to employees of affiliated companies that meet the criteria specified in the Company Act. The Company may also make provision of director remuneration no more than 1% of the aforementioned profit. The Company shall first make up the accumulated deficits, if any, before allocating any profit to employee bonus and director remuneration. Employee bonus and director remuneration proposals shall be presented to the shareholders meeting.	0.01% privsion of the Company’s current year profit shall be made as employee bonus, and the board of directors shall decide to distribute the bonus in the form of shares or cash, which can also be distributed to employees of affiliated companies that meet the criteria specified in the Company Act. The Company may also make provision of director remuneration no more than 1% of the aforementioned profit. The Company shall first make up the accumulated deficits, if any, before allocating any profit to employee bonus and director remuneration. Employee bonus and director remuneration proposals shall be presented to the shareholders meeting.	The Company has established the Audit Committee in the 6th term Board (effective on July 1, 2015) to replace the supervisors. The 4th paragraph regarding supervisor remuneration is therefore removed since it’s only applicable to the Year 2015.

The director remuneration
referred to in the first paragraph
includes supervisor remuneration
until the establishment of the
Audit Committee. The allocation
of supervisor remuneration shall
follow the same rules in the three
preceding paragraphs.

Resolution:

Agenda item #3 Proposed by the board of directors

Summary: Amendment of the “Handling Procedures for Acquisition or Disposal of Assets.” Description:

To proceed according to the latest amendments made to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies, as stipulated in Letter No. Financial-Supervisory-Securities-Development-1060001296 issued by the Financial Supervisory Commission on 2017.2.9.
In response to legislative amendments, the Company proposes to amend Articles 8, 10, 14, 21, and 29 of the Procedures. Key changes are described as follows.
(1) The terminology of government agency and domestic money markets are changed.
(2) An addition is made to waive the requirement of expert opinions when the company merges with or acquires a subsidiary in which it holds, directly or indirectly, 100% of the shares or total capital or when subsidiaries in which the company holds, directly or indirectly, 100% of the shares or total capital merge with or acquire each other as these transactions are classified as restructuring.
(3) The reporting and announcement thresholds are changed for commercial equipment transactions not involving stakeholders.
(4) An addition is made to waive the reporting and announcement procedures for investment specialists making subscriptions to corporate bonds and bank debentures without equity rights in the domestic primary market and for securities dealers undertaking various contracts and acting as recommending securities films, securities to subscribe to securities.
(5) An addition is made to explicitly specify the deadline where any correction or addition to the information is required.
Below is a comparison of the amended terms. Please refer to Attachment 6 (pages 55 to 70 of this manual) for the full text of the unamended “Handling Procedures for Acquisition or Disposal of Assets.”

Content	After amendment	Existing articles	Description
Article 8	When acquiring or disposing of real estate or equipment, the Company shall, prior to the date of occurrence of the event, obtain an appraisal report from a professional appraiser if the transaction amount has reached 20% of the Company’s paid-in capital or NT$300 million or more.This shall not apply,	When acquiring or disposing of real estate or equipment, the Company shall, prior to the date of occurrence of the event, obtain an appraisal report from a professional appraiser if the transaction amount has reached 20% of the Company’s paid-in capital or NT$300 million or more.This shall not apply,	The wording is revised and change "government agency" to "government institution" with the FSC's amendment. Paragraph 1 is revised

	however, when the Company is transacting with a government institution,engaging others to build on its own land or on rented land, or acquiring or disposing of machinery equipment for business use. The Company shall in the meantime observe the following rules: (omitted)	however, when the Company is transacting with a government agency,engaging others to build on its own land or on rented land, or acquiring or disposing of machinery equipment for business use. The Company shall in the meantime observe the following rules: (omitted)	accordingly.
Article 10	When acquiring or disposing of memberships or intangible assets, the responsible unit of the Company shall firstly submit an assessment report on the cost and benefits of the acquisition or disposal to the proper approval authority for decision making. In the event that the amount for the acquisition or disposal of membership or intangible assets has reached 20% of the Company’s paid-in capital or NT$300 million or more, the Company shall additionally engage a CPA prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. The CPA shall handle the case in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF, except in transactions with government institution.	When acquiring or disposing of memberships or intangible assets, the responsible unit of the Company shall firstly submit an assessment report on the cost and benefits of the acquisition or disposal to the proper approval authority for decision making. In the event that the amount for the acquisition or disposal of membership or intangible assets has reached 20% of the Company’s paid-in capital or NT$300 million or more, the Company shall additionally engage a CPA prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. The CPA shall handle the case in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF, except in transactions with government agency.	The reason for amendment is the same as Article 8.
Article 14	With the exception of government bonds, bonds under repurchase/resale agreements, and subscription orrepurchaseof domestic money market funds that are issued by securities investment trust enterprise, when the Company intends to acquire or dispose of any real estate from or to a related party, or if it intends to acquire or dispose of any assets other than real estate fromorto arelated party where	With the exception of government bonds, bonds under repurchase/resale agreements, and subscription orredemptionof domestic money market funds, when the Company intends to acquire or dispose of any real estate from or to a related party, or if it intends to acquire or dispose of any assets other than real estate from or to a related party where the transaction amounthasreached20% of its	Domestic money market funds referred to in Paragraph 1 are explicitly defined as money market funds that, pursuant to the Securities Investment Trust and Consulting Act, have been approved by the

	the transaction amount has reached 20% of its paid-in capital, 10% of its total assets, or NT$300 million or more, the Company shall firstly submit the following information to be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution in advance before signing the contract and making payments. (omitted)	paid-in capital, 10% of its total assets, or NT$300 million or more, the Company shall firstly submit the following information to be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution in advance before signing the contract and making payments. (omitted)	FSC and are issued by institutions that manage securities investment trust business. Then the wording is amended accordingly.
Article 21	When the company that conducts a merger, demerger, acquisition, or transfer of shares, 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 be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution. The aforesaid opinion on the reasonableness of a merger will not be required when the company merges with or acquires	When the company that conducts a merger, demerger, acquisition, or transfer of shares, 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 be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution. The matters for which paragraph 1 requires recognition by the supervisors shall first be approved by more than half 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 33, paragraphs 2 and 3.	Considering that according to the Business Mergers And Acquisitions Act, mergers and acquisitions between a company and a wholly owned subsidiary or between the company's wholly owned subsidiaries are deemed to be essentially restructuring within the same group and likely not involving share exchange ratios or cash or other property to be distributed to shareholders, the law is amended to exempt such mergers and acquisitions from the requirement of an expert's opinion on the reasonableness of share exchange ratio.
	a subsidiary in which it holds, directly or indirectly, 100% of the
	shares or total capital or when subsidiaries in which the company holds, directly or indirectly, 100% of the shares or total capital merge with or acquire
	each other. The matters for which paragraph 1 requires recognition by the supervisors shall first be approved by more than half 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 33, paragraphs2and 3.

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Article 29	Under any of the following circumstances, the Company shall, within 2 days from the date of occurrence of the event, publicly announce and report the relevant information about the acquisition or disposal of assets on the designated website of the Financial Supervisory Commission using the specified format: 1. Acquisition or disposal of real estate from or to a related party, or acquisition or disposal of assets other than real estate from or to a related party where the transaction amount reaches 20% of the Company’s paid-in capital, 10% or more of the Company’s total assets, or NT$300 million or more. This requirement, however, shall not apply to the trading of government bonds or bonds under repurchase or resale agreements, and subscription orrepurchaseof domestic money market funds that are issued by securities investment trust enterprise. 2. Merger, demerger, acquisition, or transfer of shares. 3. Situations where the losses resulting from the derivative transactions has reached the stop-loss limit, including the aggregate limit for all transactions and the limit for individual transactions, as prescribed in article 18, paragraph 1, subparagraph 1, item 3. 4.Where the type of asset acquired or disposed is equipment for business use, the trading counterparty is not a related party, and the transactionamountis more	Under any of the following circumstances, the Company shall, within 2 days from the date of occurrence of the event, publicly announce and report the relevant information about the acquisition or disposal of assets on the designated website of the Financial Supervisory Commission using the specified format: 1. Acquisition or disposal of real estate from or to a related party, or acquisition or disposal of assets other than real estate from or to a related party where the transaction amount reaches 20% of the Company’s paid-in capital, 10% or more of the Company’s total assets, or NT$300 million or more. This requirement, however, shall not apply to the trading of government bonds or bonds under repurchase or resale agreements, and subscription orrepurchaseof domestic money market funds that are issued by securities investment trust enterprise. 2. Merger, demerger, acquisition, or transfer of shares. 3. Situations where the losses resulting from the derivative transactions has reached the stop-loss limit, including the aggregate limit for all transactions and the limit for individual transactions, as prescribed in article 18, paragraph 1, subparagraph 1, item 3. 4.Where the type of asset acquired or disposed is equipment for business use, the trading counterparty is not a related party, and the transactionamountis more	Under any of the following circumstances, the Company shall, within 2 days from the date of occurrence of the event, publicly announce and report the relevant information about the acquisition or disposal of assets on the designated website of the Financial Supervisory Commission using the specified format: 1. Acquisition or disposal of real estate from or to a related party, or acquisition or disposal of assets other than real estate from or to a related party where the transaction amount reaches 20% of the Company’s paid-in capital, 10% or more of the Company’s total assets, or NT$300 million or more. This requirement, however, shall not apply to the trading of government bonds or bonds under repurchase or resale agreements, and subscription orredemptionof domestic money market funds. 2. Merger, demerger, acquisition, or transfer of shares. 3. Situations where the losses resulting from the derivative transactions has reached the stop-loss limit, including the aggregate limit for all transactions and the limit for individual transactions, as prescribed in article 18, paragraph 1, subparagraph 1, item 3. 4.Where an asset transaction other than any of those referred to in the preceding threesubparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China areareaches20 percent	1. Reason for amendment of Paragraph 1, Subparagraph 1 is the same as reason for Article 14. 2. The reporting and announcement thresholds are made less restrictive for larger companies and equipment transactions for business use not involving to a related party. For Public Companies with NT$10 billion or more in paid-in capital, the announcement threshold is raised to NT$1.0 billion. Paragraph 1, Subparagraph 4, Item 4 is amended accordingly and Paragraph 1, Subparagraph 4 removed. 3. Paragraph 1, Subparagraph 4, Item 5 is moved to Paragraph 1, Subparagraph 5, and Paragraph 1, Subparagraph 4 to Paragraph 1, Subparagraph 6. 4. Considering that for investment specialists,
		trust enterprise. Merger, demerger, acquisition, or transfer of shares. Situations where the losses resulting from the derivative transactions has reached the stop-loss limit, including the aggregate limit for all transactions and the limit for individual transactions, as prescribed in article 18, paragraph 1, subparagraph 1, item 3. Where the type of asset acquired or disposed is equipment for business use, the trading counterparty is not a related party, and the transactionamountis more

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	than NT$1.0 billion. 5.Situations where the real estate is acquired by the following methods: 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 amount to be invested by the Company, furthermore, ismorethan NT$500 million. 6. Where an asset transaction other than any of those referred to in the preceding fivesubparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading of government bonds. (2) Securities trading conducted by professional investors through domestic or overseas securities exchangesor through securities firms, securities subscribed in the domesticprimary marketthat are corporate bonds and bank debentures without equity rights, or, when the company is a securities dealer acting as recommending securities films, securities subscribed according to the rules of	than NT$1.0 billion. 5.Situations where the real estate is acquired by the following methods: 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 amount to be invested by the Company, furthermore, ismorethan NT$500 million. 6. Where an asset transaction other than any of those referred to in the preceding fivesubparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading of government bonds. (2) Securities trading conducted by professional investors through domestic or overseas securities exchangesor through securities firms, securities subscribed in the domesticprimary marketthat are corporate bonds and bank debentures without equity rights, or, when the company is a securities dealer acting as recommending securities films, securities subscribed according to the rules of	or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading of government bonds. (2) Securities trading conducted by professional investors through domestic or overseas securities exchanges orthe OTC market or securities subscribed by a securities firm in theprimary market and according to laws. (3) Trading of bonds under repurchase or resale agreements, and subscription or redemption of domestic money market funds. (4)Where the type of asset acquired or disposed is equipment for business use, the trading counterparty is not a related party, and the transaction amount isless than NT$500 million. (5)Situations where the real estate is acquired by the following methods: 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 amount to be invested by the Company, furthermore, is lessthan NT$500 million. The “transaction amount” prescribed in the preceding paragraph shall be determined based on the following definition:	making subscriptions to corporate bonds and bank debentures without equity rights in the domestic primary market would be frequent occurrences. Furthermore, securities dealers, undertaking various contracts and acting as recommending securities firms, will need to subscribe to securities, and should, therefore, be exempted from the reporting and announcement procedures. Paragraph 1, Subparagraph 4, Item 2 is amended accordingly and moved to Paragraph 1, Subparagraph 6, Item 2. 5. The addition is made to explicitly require that where any correction or addition to the information is required, the Company shall
		a securities dealer acting as recommending
		securities films, securities subscribed according to the rules of

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	Taipei Exchange. (3) Trading of bonds under repurchase or resale agreements, and subscription or repurchaseof domestic money market funds that are issued by securities investment trust enterprise. The “transaction amount” prescribed in the preceding paragraph shall be determined based on the following definition: 1. The amount of each individual transaction. 2. The cumulative transaction amount of acquisitions or disposals of the same type of underlying asset with the same trading counterparty within one year. 3. The cumulative transaction amount of real estate acquired or disposed of (to be accumulated separately for acquisitions and disposals) for the same development project within one year. 4. The cumulative transaction amount of the same securities acquired or disposed of (to be accumulated separately for acquisitions and disposals) within one year. “Within one year” as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items which have been announced according to the Procedures may be excluded. The Company shall compile monthly reports on the status of derivative transactions conducted up to the end ofthe preceding	1. The amount of each individual transaction. 2. The cumulative transaction amount of acquisitions or disposals of the same type of underlying asset with the same trading counterparty within one year. 3. The cumulative transaction amount of real estate acquired or disposed of (to be accumulated separately for acquisitions and disposals) for the same development project within one year. 4. The cumulative transaction amount of the same securities acquired or disposed of (to be accumulated separately for acquisitions and disposals) within one year. “Within one year” as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items which have been announced according to the Procedures may be excluded. The Company shall compile monthly reports on the status of derivative transactions conducted up to the end of the preceding month by itself and any of its subsidiaries that are not publicly-listed companies in Taiwan. The information shall be transmitted to the information reporting website specified by the Financial Supervisory Commission before the 10th of each month using the required format. Where any correction or addition to the information is required, the Company shall repeat all reporting and announcement procedures for all the items. When acquiring or disposing of assets, the Company shall retain	repeat all reporting and announcement procedures within two days since becoming aware of the incident. Paragraph 5 is amended accordingly. 6. The wording is amended accordingly.

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	month by itself and any of its subsidiaries that are not publicly-listed companies in Taiwan. The information shall be transmitted to the information reporting website specified by the Financial Supervisory Commission before the 10th of each month using the required format. Where any correction or addition to the information is required, the Company shall,within two days since becoming aware of the incident,repeat all reporting and announcement procedures for all the items. When acquiring or disposing of assets, the Company shall retain a file of the relevant contracts, meeting minutes, logbooks, appraisal reports, opinions from the CPAs, attorneys and securities underwriters for at least five years, unless otherwise provided bylaw.	a file of the relevant contracts, meeting minutes, logbooks, appraisal reports, opinions from the CPAs, attorneys and securities underwriters for at least five years, unless otherwise provided by law.

Resolution:

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[Special motion]

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【 Attachment 1 】

Taishin Financial Holding Co., Ltd. 2016 Business Report

Macroeconomic and Financial Anaylsis

The global economy showed signs of a turnaround in 2016. Economic growth in the first half of 2016 was hampered by slowing international trade and diminishing effects of QE programs in major economies. Fortunately, the global economy showed positive signs in the second half of the year when the U.S. economy recovered, global commodity prices rose, and economic conditions improved in the eurozone. The annual GDP growth was 1.6% in the United States, 1.7% in the eurozone, and 1% in Japan. The annual GDP growth in China was 6.7%. Most countries had underperformed compared to last year.

Recovery is slowly taking place around the world while many challenges remain. Since the U.S. Federal Reserve started raising interest rates in late 2015, there has not been as many rate increases as expected. The market is watching closely to see if the Fed will pick up the pace. Meanwhile, China's gentle push for economic transformation with an emphasis on deleveraging and risk prevention continues with unabated momentum. Furthermore, the United Kingdom's Brexit vote and Trump winning the U.S. presidential election are sending shock waves through the political establishments. International markets reacted with short term shocks but managed to recover. However, everyone is still cautiously waiting to see the impact of rising anti-globalization sentiments and whether Asia exports would continue to grow in the face of China-U.S. trade issues.

Taiwan, also following the ups and downs of the global economy, appeared to be improving from the worst in 2016 with the second half of the year outperforming the first half. As of December 2016, the domestic economy flashed the 6th straight green light, signaling a recovery. The economic growth for the year was 1.5%. The latest in the string of rate cuts by the central bank in an attempt to stimulate the economy took place in June 2016. There had not been more since the effects started to show. The stock market, in response to the economic factors, fell before rising again, and closed at 9,254 at the end of the year, 11% up from 8,338 in the previous year.

Regarding the financial sector in Taiwan, RMB depreciation and penalties imposed by the U.S. government on one of Taiwan's state owned banks led to smaller profits for all overseas branches of domestic banks and OBUs in 2016. The earnings before tax of domestic banks fell to NT$300.1 billion, a decrease of 6% compared to the previous year, while the return on assets (ROA) and the return on equity (ROE) were 0.68% and 9.24%, respectively. While domestic banks kept asset quality at the same level, the overall average nonperforming loan ratio at the end of 2016 was 0.27%, and the coverage ratio was 503%.

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Overall Business Performance

We followed our operating budgets closely in 2016. The core business grew at a steady pace, leading to consistent profit growth. The net profit after tax totaled NT$11.4 billion. This represented an EPS of NT$1.14, an ROE of 9.58%, and net worth per ordinary share of NT$12.21. To build up the working capital and strengthen the capital structure, we raised NT$25.0 billion by issuing Class E preferred shares in December 2016. The capital adequacy ratio was 128.5% and the double leverage ratio 110.9% at the end of 2016, reflecting a healthy capital structure.

In October 2016, we were granted global long- and short-term credit ratings of BBB and F3, respectively, in a report of the international credit rating agency Fitch Ratings. The national long- and short-term credit ratings were A+(twn) and F1(twn), respectively, and the outlook was "Stable". In November 2016, we were granted international long- and short-term ratings of BBB- and A-3, respectively, and domestic long- and short-term ratings of twA and twA-1, respectively, in a report of the credit rating agency Taiwan Ratings. The outlook was also "Stable".

With respect to overseas expansion, the Tokyo Branch in Japan of our subsidiary Taishin Bank celebrated its grand opening in October 2016. It is the first branch in an OECD member country. It is also Taishin Bank's third overseas branch after the Hong Kong Branch and the Singapore Branch. Looking forward, the Brisbane Branch in Australia is expected to open in 2017, and the application for the Long An Branch in Vietnam has been submitted to the local authorities. With respect to local offices, besides the Ho Chi Minh City office in Vietnam, the Yangon office in Myanmar was established in January 2016. Furthermore, we have established financial leasing companies in Nanjing and Tianjin to provide leasing, trade, and insurance agency services across China. In the future, we will continue to expand our overseas presence, offering more comprehensive and higher quality international financial services to customers.

With respect to securities services, our subsidiary Taishin Securities has finalized a contract with Ta Chong Securities. The two parties have announced together their upcoming merger in March 2017. Overall performance of the securities markets in Taiwan has not been favorable to securities dealers in the last few years. In particular, low volume forces brokers to try to increase their market shares in order to achieve economies of scale. While Taishin Securities has increased its market share in brokerage services from 0.02% to 0.5% or higher over the last few years, it is still a long way from becoming a largest securities dealer. Once it completes the acquisition of Ta Chong Securities, Taishin Securities may be able to increase its market share in brokerage services to more than 1% and the net value to more than NT$7.0 billion. The scale will make it a competitive medium sized securities dealer able to provide futures services and sub-brokerage services. The prospect is consistent with Taishin FHC's long term business strategy for securities operations.

Business performance of the bank subsidiary in retail banking and wholesale banking services and operating performance of the securities and investment trust subsidiaries in 2016 are

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described as follows.

I. Retail Banking

As of the end of 2016, the size of Taishin Bank's mortgage portfolio stood at NT$418.7 billion, representing more than 7% in YOY growth; the auto loan balance amounted to NT$37.5 billion, representing a 10% YOY growth, placing it again on top of the financial industry; it had 3.78 million credit cards outstanding, ranking 4th with a 9% market share; lastly, Taishin Bank had 103,000 card accepting merchants nationwide, ranking first with a 21% market share.

In response to the rise of fintech, Taishin Bank had four new utility model patents granted for its innovative services. It was also the first bank to launch a new digital banking brand, Richart, to offer a range of friendly online financial services. The brand held a 60% market share in digital accounts in less than six months since its launch. Meanwhile, internet banking and mobile banking are advancing rapidly. The number of customers is growing at 13% per year given the range of services and the number of promotional campaigns. The transaction volume is also growing every year.

Regarding the investment in mobile payment services, Taishin Bank was first to be approved by the competent authority to support international mobile payment tools such as Apple Pay, Android Pay, and Samsung Pay. It was first to launch the service on March 29, 2017. Customers are now able to make payments with Taishin credit cards and Apple Pay. In addition, Taishin Bank offers SIM credit cards supported by host card emulation (HCE) technology that enable customers to use their mobile phones to quickly pay for their shopping. Taishin Bank has designed an app exclusively for Taishin cardholders. With the new CARDaily app (for credit cards), customers are able to check their credit card accounts in real time. Furthermore, Taishin Bank is going to introduce e-Payments that will offer a payment experience combining social media and payments. In addition to targeting micro or proprietary businesses, it will also team up with large merchants to promote the services. Regarding cross border O2O services, Taishin Bank is teaming up with Alipay of China. It currently has the large number of points of service accepting Alipay in Taiwan.

Taishin Bank's credit card services aim to cater to different customer groups at the same time. It has been introducing new products since 2016. Examples include the @GoGo VISA Signature card for online shoppers, the limited edition crystal encrusted Wealth Visa Infinite card, and the Mercuries Life cobranded card. The @GoGo card offers high cash back, and cash back is credited to a Richart digital banking account. This idea of saving while spending makes the card widely known as the best card for online shopping. Both the number of cards issued and the total card spending have exceeded expectations. The Wealth Visa Infinite card targets top-tier customers. The unprecedented Swarovski crystal encrusted design is more than a token of exclusivity as it is also accompanied by a range of benefits designed specifically for wealth management customers. The Mercuries Life cobranded card offers high cash back on preauthorized premium payments and a zero interest installment plan. It is a welcome addition to Taishin Bank's growing array of cobrand cards.

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The wealth management services received international recognition and many awards in 2016. The list of awards includes Asian Banker's Best Wealth Management Business and Best Customer Relationship Management and Private Banker International's Highly Commended: Outstanding Private Bank, Asia Pacific. Taishin Bank offers a variety of services for different customer segments such as individuals, households, and business owners. The process always starts with understanding customers' needs and proceeds by utilizing its three advantages, which are a team of professional specialists, a diverse range of products, and excellent benefits for top-tier customers. Examples of this approach include the "Safeguarding Assets and Health Campaign", where it became the first bank to offer 5-star physical examinations for customers who had NT$10 million or more in their portfolios with us. Taishin Bank works to develop closer ties with its wealth management customers and reach out to potential customers by offering real benefits and personalized financial planning services.

II. Wholesale Banking

With respect to corporate lending, loan balances owed from state-owned and private institutions totaled NT$210.6 billion at the end of 2016, 15th among the 39 local banks. In support of the government's credit extension policy for small and medium enterprises and as a result of its success in expanding the customer base, Taishin Bank's lending to SMEs grew by 8.3% to NT$107.6 billion by the end of 2016, which exceeded the peer average growth of 5%. With respect to wholesale banking services, Taishin Bank remained in the lead in factoring services, with volume totaling NT$213.0 billion in 2016. Taishin Bank provided share administration services to a total of 189 companies traded on the TWSE/TPEx and the Emerging Stock Market, which ranked it 4th among peers.

With respect to new services, domestic banking units (DBU and OBU) started offering foreign currency negotiable certificates of deposit (NCD) in August 2015 and May 2016 as another investment vehicle for corporations and individuals. As deregulation continues, Taishin Bank will endeavor to satisfy the investment needs of local and international customers.

With respect to system implementation, Taishin Bank's foreign currency systems are built around the "Foreign Currency Import/Export Trading and Loan System" and the "Deposit and Transfer System". Both have been serving the customers and operating with much improved efficiency since launch. In 2016, Taishin Bank received another two international awards, The Asset's Core Banking Project of the Year - Asia Pacific and Asian Banking & Finance's Domestic Technology & Operations Bank of the Year.

Furthermore, the Taishin Wholesale Internet Banking app (mobile version of the Wholesale Internet Banking Services) for wholesale banking clients was launched in August 2016. The app allows wholesale banking clients to link all accounts within the same group, check TWD and foreign currency accounts, look up interest rates and exchange rates, change passwords, and set up push notification. Other features to be supported in the future include payment approval and release and push notification for account related activities. Wholesale banking clients will be able to access banking services on their mobile devices and monitor their

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accounts and cash flows at any time.

III. Securities and Investment Trust Subsidiaries

Securities subsidiary: It will continue working closely with various distributors to provide more comprehensive services to individual and corporate customers. It is also committed to keep refining the ease and convenience of its electronic platforms, in order to satisfy customer demand for easier and quicker e-trades. Taishin Securities handled a total of 17 securities underwriting cases, which accounted for a 10% market share, in 2016. It was able to grow the market share of its brokerage business from 0.36% in the previous year to 0.5% and margin trade balance by 18% over the previous year. Once it completes the acquisition of Ta Chong Securities, Taishin Securities may be able to increase its market share in brokerage services to more than 1%.

Investment trust subsidiary: The value of assets under management by Taishin Securities Investment Trust reached NT$82.1 billion at the end of 2016. In particular, TSIT has NT$71.0 billion in publicly offered funds, which accounts for a 3.3% market share and ranks ninth place among domestic investment trusts. Assets under management will continue to advance toward the NT$100.0 billion mark. Operating performance: In addition to the recognition in the form of a NT$5.0 billion domestic discretionary investment account awarded by the Public Service Pension Fund in 2016, the companies won quite a number of awards for fund performance. These awards included a Best Fund Award for Taishin Hi Div Yield Balanced Fund, an award in the 5-year category for Domestic Bond Stock Balance Fund, the Taiwan Multi-asset Fund Award from Smart Magazine Taiwan Fund Awards, and awards in both the 3-year and 5-year TWD balance fund categories from Lipper Fund Awards Taiwan.

Future Prospects

Following China's structural reform, regional economic integration among the ASEAN countries, and rising popularity of Fintech, the government has responded by launching a campaign to call on the financial sector to support the real economy and by helping financial institutions explore expansion into Southeast Asia and offering financial support for Taiwanese businesses. The government encourages development of Fintech. It has also lowered the bar on investing in financial technology firms and startup industries for financial institutions. Furthermore, for the purpose of encouraging sound business practices and development in the financial sector, the government has included stricter anti-money laundering regulations and compliance on its list of priorities.

Looking forward to 2017, we will urge our subsidiaries to achieve business growth and keep driving the momentum in main lines of business while supporting government policies and complying with applicable regulations and risk management requirements. Consistent growth is expected in certain lines of business, including value-added mortgages, personal loans, corporate loans, SME loans, and wealth management services. Meanwhile, we will continue to expand our overseas network and invest in digital finance. In 2017, in addition to the Brisbane Branch in Australia, which is under preparation and expected to open this year, we

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will focus on developing new features on Richart, the digital banking brand that was launched only last year but has quickly established itself as the industry leader. We will also advance at full speed in mobile payment services. Furthermore, we look forward to the securities subsidiary becoming a competitive medium sized securities dealer through the merger between Taishin Securities and Ta Chong Securities.

With respect to corporate governance and corporate social responsibility, we have been ranked in the top 5% for three consecutive years since TWSE announced the first Corporate Governance Evaluation in 2015. The company is also one of the constituents of the TWSE Corporate Governance 100 Index. In addition, we have received CG6010(2015) Certification - Excellent. We have published the Taishin FHC CSR (Corporate Social Responsibility) Report and become the first financial institution in Taiwan to be certified by both the AA1000 Assurance Standard and the International Standard on Assurance Engagements (ISAE) 3000. We are also the only financial institution to be certified by both institutions for three consecutive years. Moreover, we have the Corporate Sustainability Committee to oversee six functional teams, which are responsible for corporate sustainability, liability products, customer relations, employee relations, green operations, and social inclusion. We and our subsidiaries as well as various affiliated foundations work together toward the same goals as responsible corporate citizens. The Company will continue its commitment to good corporate governance and corporate social responsibility practices in order to fulfill the promise of maintaining sustainable business development.

Taishin employees have long dedicated themselves to delivering the best banking services with "integrity, commitment, innovation and cooperation" in mind. Even in the pursuit of profitability, Taishin has been able to demonstrate the innovation and customer-centric values that have helped shape Taiwan's banking industry as a whole and reflected the corporate social responsibility. Taishin will adhere to the same mission while continuing to deliver comprehensive services and maximizing profits to benefit the shareholders, customers, the community and employees alike.

Chairman: Wu, Tong-Liang President: Joseph Jao CAO: Ann Cheng

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【 Attachment 2 】

Taishin Financial Holding Co., Ltd.

Audit Committee Report

May 4, 2017

The board of directors has prepared the 2016 business report, financial statements and earnings distribution proposal for the Company. The financial statements have been audited and certified by CPA Tza Li Gung and CPA Kwan-Chung Lai of Deloitte Taiwan, who have also expressed an opinion. The above reports and statements compiled by the board of directors have been audited by the Audit Committee and considered in compliance with relevant rules and regulations. Please kindly note that the report hereby presented has been prepared in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

To:

Taishin Financial Holding Co., Ltd. 2017 Annual General Meeting

The convener of Audit Committee

Lin, Neng-Pai

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【 Attachment 3 】

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Taishin Financial Holding Co., Ltd.

Opinion

We have audited the accompanying financial statements of Taishin Financial Holding Co., Ltd. (“Taishin Financial Holding”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2016 and 2015, 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 financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2016 and 2015, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Statements by Financial Holding Companies, Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants, Rules Governing the Audit of Financial Statements of Financial Institutions by Certified Public Accountants, and auditing standards generally accepted in the Republic of China (“ROC”). 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 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.

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, 2016. 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.

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The following were the key audit matters in the audit of the consolidated financial statements of the Group for the year ended December 31, 2016:

Impairments of Loans and Receivables from Defaulted Financial Instruments

The core businesses of the Group are commercial lending and issuing of various financial instruments. Loans and receivables are significant accounts because they accounted for 56% of the Group’s total assets at December 31, 2016. Financial instruments are also significant because they are susceptible to market exchange rate or interest rate volatility and are exposed to counterparty default risk. The Group assesses loans and receivables from defaulted financial instruments for impairment in accordance with IAS 39 “Financial Instruments: Recognition and Measurement”. Please refer to Notes 5, 11 and 12 to the consolidated financial statements for the relevant information. The above mentioned impairment assessment is made by management using judgments and assumptions. Please refer to Note 6 to the consolidated financial statements for additional information. Therefore, we consider impairment of loans and receivables from defaulted financial instruments as a key audit matter.

We tested the design and operating effectiveness of controls and procedures for identifying loans and advances exposed to impairment and for ensuring that provisions against those assets are made. We identified loans and checked from public information to see whether the borrowers were possibly problematic companies, or have already been included in the companies under evaluation for credit limits. We assessed the reasonableness of the effective interest rate used in estimating future cash flows and the value of collaterals to confirm whether the Group has properly evaluated the provision for bad debts of problematic credit loans. We also evaluated whether the assumptions used in the impairment assessment model of the Group were reasonable in view of the current economic condition and actual situation of the loans and based on the occurrence rate and recovery rate of impairment in the past. Simultaneously, we checked the Group’s compliance with regulations on assessment of impairment and we verified consistency of impairment calculation models.

We tested the design and operating effectiveness of the related controls in the Group’s valuation of receivables from defaulted financial instruments. We also reviewed sample data on impairment assessment of receivables from defaulted financial instruments. Moreover, we verified to see whether impairment loss was recognized in accordance with IAS 39 and related regulations and to see whether payments were received after the date of financial statements.

Accuracy of Loans’ Interest Revenue Recognition

For the year ended December 31, 2016, loan interest income was $21,728,258 thousand, representing 60% of net revenue and gains; thus, was considered as a highly significant account in the financial statements and a key audit matter. Please refer to Notes 5 and 32 to the consolidated financial statements for related information.

Loan interest income is mainly calculated by the information system which uses data inputs and system parameters and arithmetic logic. We tested the design and operating effectiveness of the related controls over the system. The audit procedures included tests of accuracy of loan interest income recognized, and tests on whether controls over the authorities of responsible personnel who operate the system are effective. We selected and recalculated one month data from the annual interest income recognized using the information system and confirmed the amount to the carrying amount in the books.

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 Statements by

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Financial Holding Companies, Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and 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 supervisors, 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 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 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.
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Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the 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 audit. We remain solely responsible for our audit opinion.

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 financial statements for the year ended December 31, 2016 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 Tza Li Gung and Kwan-Chung Lai.

Deloitte & Touche Taipei, Taiwan Republic of China

February 24, 2017

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 ROC. 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.

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TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

ASSETS Cash and cash equivalents Due from the Central Bank and call loans to banks Financial assets at fair value through profit or loss Available-for-sale financial assets, net Securities purchased under resell agreements Receivables, net Current tax assets Loans, net Held-to-maturity financial assets, net Investments accounted for using the equity method, net OTHER FINANCIAL ASSETS, NET Financial assets carried at cost, net Other miscellaneous financial assets, net Other financial assets, net Investment property, net Property and equipment, net Intangible assets, net Deferred tax assets Other assets, net TOTAL LIABILITIES AND EQUITY Due to the Central Bank and banks Financial liabilities at fair value through profit or loss Securities sold under repurchase agreements Commercial papers issued, net Payables Current tax liabilities Deposits and remittances Bonds payable Other borrowings Provisions Other financial liabilities Deferred tax liabilities Other liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF PARENT Capital stock Common stock Preferred stock Advance receipts for capital stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Exchange differences on translation of foreign financial statements Unrealized gains (losses) on available-for-sale financial assets Equity attributable to owners of parent NON-CONTROLLING INTERESTS Total equity TOTAL		2016 Amount % $ 20,274,849 1 76,897,693 5 89,814,395 6 302,421,489 19 5,340,360 1 113,258,142 7 534,816 - 877,317,379 56 6,126 - 36,822,426 2 2,756,335 - 11,295,241 1 14,051,576 1 866,065 - 18,514,420 1 2,200,915 - 2,950,676 - 15,714,400 1 $ 1,576,985,727 100 $ 46,966,461 3 35,815,311 2 70,108,624 4 8,537,889 1 30,162,981 2 1,123,810 - 1,104,139,089 70 75,000,000 5 7,485,844 1 1,165,486 - 44,120,749 3 127,762 - 3,356,087 - 1,428,110,093 91 95,130,986 6 8,625,684 - 68,402 - 27,132,585 2 6,755,788 - 465,368 - 10,830,150 1 (168,382 ) - (89,441) - 148,751,140 9 124,494 - 148,875,634 9 $ 1,576,985,727 100		2015
				Amount % $ 22,250,463 2 46,840,901 3 119,742,250 8 290,124,810 19 2,978,852 - 104,718,618 7 389,782 - 834,605,345 55 5,110 - 34,986,174 2 2,711,186 - 8,363,302 1 11,074,488 1 891,781 - 18,234,698 1 2,022,001 - 3,517,778 - 27,847,591 2 $ 1,520,230,642 100 $ 64,689,878 4 49,915,794 3 80,211,187 5 2,672,740 - 21,115,147 2 625,188 - 1,040,466,391 69 75,000,000 5 9,455,210 1 1,020,107 - 47,180,126 3 57,347 - 2,861,598 - 1,395,270,713 92 88,599,429 6 7,251,368 - 4,449 - 10,220,503 1 5,466,453 - 465,368 - 12,893,353 1 117,513 - (188,818) - 124,829,618 8 130,311 - 124,959,929 8 $ 1,520,230,642 100

President : Joseph Jao

Chairman: Wu, Tong-Liang

CAO: Ann Cheng

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TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

INTEREST INCOME INTEREST EXPENSES NET INTEREST INCOME NET INCOME OTHER THAN NET INTEREST INCOME Net service fee and commissions income Gain on financial assets and liabilities at fair value through profit or loss Realized gain on available-for-sale financial assets Foreign exchange gains (losses) Impairment loss on assets Share of profit (loss) of associates and joint ventures accounted for using equity method Net other non-interest income Net other miscellaneous income Net income other than net interest income NET REVENUE AND GAINS (PROVISIONS) REVERSED ALLOWANCE FOR BAD DEBT EXPENSES AND GUARANTEE LIABILITY OPERATING EXPENSES Employee benefits expenses Depreciation and amortization expenses Other general and administrative expenses Total operating expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE NET INCOME		2016 Amount % $ 29,082,391 81 (11,078,256) (31) 18,004,135 50 11,011,010 30 3,261,365 9 287,547 1 25,821 - (23,830) - 2,768,976 8 816,381 2 18,147,270 50 36,151,405 100 (3,350,119) (9) (11,312,362) (31) (1,005,596) (3) (7,513,535) (21) (19,831,493) (55) 12,969,793 36 (1,577,360) (5) 11,392,433 31		2015
				Amount % $ 29,509,687 78 (11,712,867) (31) 17,796,820 47 11,412,017 30 4,513,255 12 393,784 1 (563,632) (1) (22,807) - 2,668,975 7 1,309,415 4 19,711,007 53 37,507,827 100 (2,818,084) (7) (11,394,141) (30) (900,543) (3) (7,498,535) (20) (19,793,219) (53) 14,896,524 40 (1,670,433) (5) 13,226,091 35

(Continued)

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TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME Components of other comprehensive income that will not be reclassified to profit or loss, net of tax Gain (losses) on remeasurements of defined benefit plans Share of other comprehensive loss of associates and joint ventures accounted for using equity method Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss, net of tax Exchange differences on translation of foreign financial statements Unrealized loss on available-for-sale financial assets Share of other comprehensive income of associates and joint ventures accounted for using equity method Income tax related to components of other comprehensive income that will be reclassified to profit or loss Other comprehensive income (loss), net of tax TOTAL COMPREHENSIVE INCOME NET INCOME ATTRIBUTABLE TO: Owners of parent Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of parent Non-controlling interests		2016 Amount % $ (266,193) (1) (46,247) - 45,671 - (116,221) - 114,462 - (198,644) - 13,885 - (453,287) (1) $ 10,939,146 30 $ 11,399,434 31 (7,001) - $ 11,392,433 31 $ 10,944,967 30 (5,821) - $ 10,939,146 30		2015
				Amount % $ (295,148) (1) (84,381) - 51,196 - (29,498) - (517,712) (1) 123,436 - 7,646 - (744,461) (2) $ 12,481,630 33 $ 13,222,544 35 3,547 - $ 13,226,091 35 $ 12,477,225 33 4,405 - $ 12,481,630 33

(Continued)

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TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

EARNINGS PER SHARE (Note 39) Basic Diluted	2016 Amount % $ 1.14 $ 1.14	2015
		Amount % $ 1.30 $ 1.29 (Concluded)

Chairman: Wu, Tong-Liang President: Joseph Jao CAO: Ann Cheng

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TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

		Equity Attributable to Owners of the Parent	Equity Attributable to Owners of the Parent	Equity Attributable to Owners of the Parent
Capital Stock	Advance Receipts for Capital Stock $ 111,339 - - - - - - - - (106,890) 4,449 - - - - - - - - - 63,953 $ 68,402	Capital Surplus	Stock-based Compensation $ 313,619 - - - - - - - - (10,444) 303,175 - - - - - - - - - (22,654) $ 280,521	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 5,315,307 $ 465,368 $ 1,511,461 151,146 - (151,146 ) - - (450,315 ) - - (910,000 ) - - - - - - - - 13,222,544 - - (329,191) - - 12,893,353 - - - 5,466,453 465,368 12,893,353 1,289,335 - (1,289,335 ) - - (4,277,607 ) - - (910,000 ) - - (6,416,411 ) - - 11,399,434 - - (267,949) - - 11,131,485 - - (301,335 ) - - - - - - $ 6,755,788 $ 465,368 $ 10,830,150

Common Stock Preferred Stock $ 88,417,902 $ 7,251,368 - - - - - - - - - - - - - - - - 181,527 - 88,599,429 7,251,368 - - - - - - 6,416,411 - - - - - - - - (3,625,684 ) - 5,000,000 115,146 - $ 95,130,986 $ 8,625,684		Additional Paid-in Capital Treasury Stock in Excess of Par Transactions $ 8,251,746 $ 2,075,475 - - - - - - (435,492 ) - - - - - - - - - 25,599 - 7,841,853 2,075,475 - - - - - - - - - - - - - - (3,072,981 ) - 19,986,431 - 21,286 - $ 24,776,589 $ 2,075,475

Chairman: Wu, Tong-Liang President: Joseph Jao CAO: Ann Cheng

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TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Net income before income tax Adjustments: Adjustments to reconcile profit or loss Depreciation expenses Amortization expenses Provisions (reversed) allowance for bad debts expenses and guarantee liability Net gain on financial assets and liabilities at fair value through profit or loss Interest expenses Interest income Dividends income Share-based payments Share of profit of associates and joint ventures accounted for using equity method Gain on disposal of investments Impairment loss on financial assets Other adjustments Total adjustments Changes in operating assets and liabilities (Increase) decrease in due from the Central Bank Decrease (increase) in financial assets at fair value through profit or loss Increase in available-for-sale financial assets Increase in securities purchased under resell agreements Increase in receivables Increase in loans (Increase) decrease in other financial assets Decrease (increase) in other assets Decrease in due to the Central Bank and banks Decrease in financial liabilities at fair value through profit or loss (Decrease) increase in securities sold under repurchase agreements Increase (decrease) in payables Increase in deposits and remittances Decrease in provisions Decrease in other financial liabilities Increase in other liabilities Cash used in operations Interest received Dividend received Interest paid	2016 $ 12,969,793 814,244 191,352 3,350,119 (3,261,365) 11,078,256 (29,082,391) (77,848) 31,447 (2,768,976) (298,482) 23,830 1,958,161 (18,041,653) (16,449,556) 55,922,327 (13,926,784) (1,023,568) (10,592,636) (44,199,715) (2,714,688) 12,133,044 (1,604,742) (37,299,228) (10,102,563) 9,094,343 63,672,698 (159,422) (3,059,377) 450,030 (4,931,697) 29,653,330 834,058 (11,175,427)	2015 $ 14,896,524 718,204 182,339 2,818,084 (4,513,255) 11,712,867 (29,509,687) (239,299) 831 (2,668,975) (269,612) 22,807 773,580 (20,972,116) 412,984 (5,159,007) (46,911,246) (24,939) (6,962,674) (29,340,363) 979,602 (6,546,702) (1,042,240) (12,332,000) 10,486,695 (1,499,529) 75,137,733 (11,460) (5,564,143) 71,376 (34,381,505) 29,808,728 649,931 (11,684,231)

(Continued)

32 -

TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

Income taxes refund

Income taxes paid

Net cash generated from (used in) operating activities

CASH FLOWS USED IN INVESTING ACTIVITIES
Decrease in debts investment without active market
Acquisition of financial assets at cost
Proceeds from disposal of financial assets at cost
Proceeds from capital reduction of financial assets at cost
Proceeds from disposal of subsidiaries
Acquisition of property and equipment
Proceeds from disposal of property and equipment
Acquisition of intangible assets
Proceeds from disposal of investment property

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in due to the Central Bank and banks

Increase in commercial papers payable
Proceeds from issuing bank debentures
(Decrease) increase in other borrowings
Proceeds from issue of preferred stock E
Cash dividends distributed
Exercise of employee share options
Redemption of preferred stock D

Net cash generated from financing activities

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS

NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR

2016
2015
$ 51,138 $ 99,481
(560,599)

(2,211,784)
13,870,803
(17,719,380)
-
300,000
(135,448)
(185,284)
-
34,211
31,677
33,688
-
74,611
(1,112,032)
(986,318)
39,429
843
(385,444)
(201,737)

27,758

25,814
(1,534,060)

(904,172)
(16,118,675)
9,728,270
5,865,836
2,023,351
-
20,000,000
(1,969,366)
3,219,769
24,986,431
-
(5,187,607)
(1,795,807)
172,421
76,260
(7,000,000)

-
749,040

33,251,843

(116,221)

(29,498)
12,969,562
14,598,793

39,356,997

24,758,204
$ 52,326,559
$ 39,356,997
(Continued)

33 -

TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

Reconciliation of cash and cash equivalents:

Cash and cash equivalents in consolidated balance sheets Call loans to banks qualifying as cash and cash equivalents under the definition of IAS 7 permitted by the Financial Supervisory Commission Securities purchased under resell agreements qualifying as cash and cash equivalents under the definition of IAS 7 permitted by the Financial Supervisory Commission Cash and cash equivalents at the end of the year	2016 $ 20,274,849 27,759,857 4,291,853 $ 52,326,559	2016 $ 22,250,463 14,152,621 2,953,913
		$ 39,356,997

(Concluded)

Chairman: Wu, Tong-Liang President: Joseph Jao CAO: Ann Cheng

34 -

TAISHIN FINANCIAL HOLDING CO., LTD.

BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

ASSETS CASH AND CASH EQUIVALENTS SECURITIES PURCHASED UNDER RESELL AGREEMENTS RECEIVABLES CURRENT TAX ASSETS INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD OTHER FINANCIAL ASSETS Financial assets carried at cost PROPERTY AND EQUIPMENT, NET DEFERRED TAX ASSETS OTHER ASSETS TOTAL	2016 $ 7,876,884 206,736 472,457 361,395 164,995,814 2,200 8,414 - 16,945 $ 173,940,845	2015 LIABILITIES AND EQUITY $ 5,682 LIABILITIES Commercial papers issued 13,273,093 Payables Current tax liabilities 154,707 Bonds payable Other liabilities 377,205 Total liabilities 134,375,729 EQUITY Capital stock 2,200 Common stock Preferred stock 7,433 Advance receipts for capital stock Capital surplus 58,471 Retained earnings Legal reserve 126,195 Special reserve Unappropriated earnings Other equity Exchange differences on translation of foreign financial statements Unrealized gains (losses) on available-for-sale financial assets Total equity $ 148,380,715 TOTAL	2016 $ 1,499,313 824,483 860,939 22,000,000 4,970 25,189,705 95,130,986 8,625,684 68,402 27,132,585 6,755,788 465,368 10,830,150 (168,382) (89,441) 148,751,140 $ 173,940,845	2015 $ - 1,125,680 425,417 22,000,000 - 23,551,097 88,599,429 7,251,368 4,449 10,220,503 5,466,453 465,368 12,893,353 117,513 (188,818) 124,829,618 $ 148,380,715

Chairman: Wu, Tong-Liang President: Joseph Jao CAO: Ann Cheng

35 -

TAISHIN FINANCIAL HOLDING CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

INCOME Share of profit of subsidiaries, associates and joint ventures accounted for using equity method Interest income Other income Total income EXPENSES AND LOSSES Share of loss of subsidiaries, associates and joint ventures accounted for using equity method Operating expenses Interest expenses Total expenses and losses INCOME BEFORE INCOME TAX INCOME TAX BENEFIT NET INCOME OTHER COMPREHENSIVE INCOME Components of other comprehensive income that will not be reclassified to profit or loss Remeasurement of defined benefit plans Share of the other comprehensive income of associates and joint ventures accounted for using equity method Components of other comprehensive income that will be reclassified to profit or loss Share of the other comprehensive income of associates and joint ventures accounted for using equity method Other comprehensive income, net of tax TOTAL COMPREHENSIVE INCOME EARNINGS PER SHARE Basic Diluted	2016 $ 12,451,888 22,689 19,970 12,494,547 (114,918) (472,833) (468,693) (1,056,444) 11,438,103 (38,669) 11,399,434 (5,650) (262,299) (186,518) (454,467) $ 10,944,967 $1.14 $1.14	2015 $ 14,164,832 70,302 254,813 14,489,947 (465,093) (416,337) (469,928) (1,351,358) 13,138,589 83,955 13,222,544 (375) (328,816) (416,128) (745,319) $ 12,477,225 $1.30 $1.29

Chairman: Wu, Tong-Liang President: Joseph Jao CAO: Ann Cheng

36 -

TAISHIN FINANCIAL HOLDING CO., LTD. STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2015 Appropriation of 2014 earnings Legal reserve Cash dividends on common stock Cash dividends on preferred stock Cash dividends from capital surplus Others Net income for the year ended December 31, 2015 Other comprehensive income for the year ended December 31, 2015, net of tax Total comprehensive income for the year ended December 31, 2015 Share-based payments BALANCE AT DECEMBER 31, 2015 Appropriation of 2015 earnings Legal reserve Cash dividends on common stock Cash dividends on preferred stock Stock dividends Net income for the year ended December 31, 2016 Other comprehensive income for the year ended December 31, 2016, net of tax Total comprehensive income for the year ended December 31, 2016 Redemption of preferred stock D Issue of preferred stock E Share-based payments BALANCE AT DECEMBER 31, 2016	Capital Stock Advance Receipts Common Stock Preferred Stock for Capital Stock $ 88,417,902 $ 7,251,368 $ 111,339 - - - - - - - - - - - - - - - - - - - - - - - - 181,527 - (106,890) 88,599,429 7,251,368 4,449 - - - - - - - - - 6,416,411 - - - - - - - - - - - - (3,625,684 ) - - 5,000,000 - 115,146 - 63,953 $ 95,130,986 $ 8,625,684 $ 68,402	Capital Surplus	Stock-based Compensation $ 313,619 - - - - - - - - (10,444) 303,175 - - - - - - - - - (22,654) $ 280,521		Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 5,315,307 $ 465,368 $ 1,511,461 151,146 - (151,146 ) - - (450,315 ) - - (910,000 ) - - - - - - - - 13,222,544 - - (329,191) - - 12,893,353 - - - 5,466,453 465,368 12,893,353 1,289,335 - (1,289,335 ) - - (4,277,607 ) - - (910,000 ) - - (6,416,411 ) - - 11,399,434 - - (267,949) - - 11,131,485 - - (301,335 ) - - - - - - $ 6,755,788 $ 465,368 $ 10,830,150		Other Equity Exchange Differences on Unrealized Gains Translation of (Losses) on Foreign Available- Financial for-sale Statements Financial Assets $ 150,908 $ 193,921 - - - - - - - - - (6 ) - - (33,395) (382,733) (33,395) (382,733) - - 117,513 (188,818 ) - - - - - - - - - - (285,895) 99,377 (285,895) 99,377 - - - - - - $ (168,832) $ (89,441)	Total Equity $ 114,058,414 - (450,315 ) (910,000 ) (435,492 ) (6 ) 13,222,544 (745,319) 12,477,225 89,792 124,829,618 - (4,277,607 ) (910,000 ) - 11,399,434 (454,467) 10,944,967 (7,000,000 ) 24,986,431 177,731 $ 148,751,140

		Additional Paid-in Capital Treasury Stock in Excess of Par Transactions $ 8,251,746 $ 2,075,475 - - - - - - (435,492 ) - - - - - - - - - 25,599 - 7,841,853 2,075,475 - - - - - - - - - - - - - - (3,072,981 ) - 19,986,431 - 21,286 - $ 24,776,589 $ 2,075,475

Chairman: Wu, Tong-Liang President: Joseph Jao CAO: Ann Cheng

37 -

TAISHIN FINANCIAL HOLDING CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Net income before income tax Depreciation expenses Interest expense Interest revenue Dividend revenue Share-based payments Share of profit of subsidiaries, associates and joint ventures accounted for using equity method Changes in operating assets and liabilities Net changes in operating assets Decrease in receivables Decrease in other assets Net changes in operating liabilities Decrease in payables Increase in other liabilities Interest received Dividend received Interest paid Income taxes refund Income taxes paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of investments accounted for using equity method Capital reduction of investments accounted for using equity method Acquisition of property and equipment Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in commercial papers issued Exercise of employee share options Redemption of preferred stock D Issue of preferred stock E Cash dividends distributed Net cash (used in) generated from financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR CASH AND CASH EQUIVALENTS IN BALANCE SHEET SECURITIES PURCHASED UNDER RESELL AGREEMENTS QUALIFYING AS CASH AND CASH EQUIVALENTS UNDER THE DEFINITION OF IAS 7 PERMITTED BY THE FINANCIAL SUPERVISORY COMMISSION	2016 $ 11,438,103 3,219 468,693 (22,689) (86) 4,827 (12,336,970) 146,307 103,600 (342,371) 4,970 23,216 8,755,255 (474,184) 51,138 (2,315) 7,820,713 (28,000,000) 517,087 (4,200) (27,487,113) 1,500,000 172,421 (7,000,000) 24,986,431 (5,187,607) 14,471,245 (5,195,155) 13,278,775 $ 8,083,620 $ 7,876,884 206,736 $ 8,083,620	2015 $ 13,138,589 2,596 469,928 (70,302) (99) 796 (13,699,739) 967,761 160,331 (268,075) - 72,245 9,429,350 (470,979) 98,464 (794,124) 9,036,742 (6,206,000) - (3,268) (6,209,268) - 76,260 - - (1,795,807) (1,719,547) 1,107,927 12,170,848 $ 13,278,775 $ 5,682 13,273,093 $ 13,278,775

Chairman: Wu, Tong-Liang President: Joseph Jao

CAO: Ann Cheng

38 -

【 Attachment 4 】

Taishin Financial Holding Co., Ltd.

Earnings Distribution Plan

For 2016

Unit: NT$

For 2016		Unit: NT$
Beginning unappropriated earnings Subtract: Adjustment of unappropriated earnings due to the first redemption of preferred stock D during 2016 Adjusted Beginning accumulated loss Add: Net income for the current year Subtract: IFRSs‐compliant reductions to undistributed (actuarial gains/losses on pension plans) Distributable earnings Subtract: Provision of legal reserves Provision of special reserves Distributions Class D preferred share dividends Class E preferred share dividends Common share dividends Closing undistributed earnings	$ ( 1,083,015,034) ( 37,447,519) ( 556,939,892) ( 12,978,142) (9,139,769,752)	$ 0) (301,335,217)
		( 301,335,217) 11,399,433,835) ( 267,948,279)
		10,830,150,339)
		$0)

Description:

According to Paragraph 1, Article 41 of Securities and Exchange Act, As at December 31, 2016, the amount of exchange differences on translation of foreign financial statements and unrealized gains and losses on available-for-sale financial assets, presented as other equity items in the balance sheet, totaled -NT$257,823,906, which, less a special reserve of NT$220,376,387 to be set aside at initial IFRSs adoption, requires a special reserve of NT$37,447,519 to be set aside in the current year.
The Company has initiated the first redemption at half of outstanding Class D preferred shares on March 23, 2016. The amount of dividend distribution is based on the ratio of the actual number of outstanding shares to the number of outstanding shares throughout the year in 2016.
The Company issued 500,000,000 Class E preferred shares on December 28, 2016 in accordance with Article 8-4 of the Company's Articles of Incorporation. The terms of issuance were as approved by the 16th meeting of the 6th board of directors on September 22, 2016 and established by the chairman as authorized by the board of directors. The dividend rate for these Class E preferred shares was set at 4.75% p.a. of the issuance price. The calculation of dividends on Class E preferred shares in 2016 is based on the ratio of the actual number of days after issuance to the total number of days in the year.
The common share dividends shall be distributed approximately NT$0.95 per share, which consist of cash dividends approximately NT$0.52 per share and stock dividends approximately NT$0.43 per share. Issuance of new common shares as stock dividend shall be discussed in a separate agenda item.
The amount of dividends distributed to each common share is based on 9,570,327,370 shares outstanding as at March 31, 2017; and however, the amount per share actually distributed will vary due to any treasury stock transactions, exercise of employee stock options, and conversion of Class D preferred shares that occurs before the ex-dividend/ex-right date, while the total distributed dividends amounts will remain unchanged.
The Board of Directors has authorized the chairman to set the ex-dividend date and the payment date of cash dividends for Class D and Class E preferred shares. Otherwise, the ex-dividend/ex-right date and the payment date of the dividends for common shares will be determined by the Board of Directors.
The cash dividends shall be allocated among common shareholders according to their shareholding ratio, and rounded down to the nearest Integer in dollar. The remaining amount will be recognized as company's other income.
Contents and figures are subject to competent authority's approval.

Chairman: Thomas T.L. Wu President: Joseph Jao CAO: Ann Cheng

39 -

【 Attachment 5 】

Taishin Financial Holding Co., Ltd. Articles of Incorporation

Chapter 1 General Provisions

Article1 Taishin Financial Holding Co., Ltd. (hereinafter "the Company") is incorporated pursuant to the Financial Holding Company Act, the Company Act and other laws and regulations.
Article 2 The business objectives of the Company are to derive the economic benefits of financial institutions, to enhance the synergy from financial cross selling, to protect the public interest and to support the financial policies of the country.
Article 3 The Company has its head office in Taipei City. The Company may, set up branches in proper locations in the Republic of China or overseas.
Article 4 Public announcements of the Company shall, except otherwise stipulated by the competent authority in charge of securities and exchange, be posted on the daily newspapers circulating in the municipality/city/county where the Company is located.

Chapter 2 Shares

Article 5 The authorized capital of the Company is NT$200,000,000,000, divided into 20 billion shares at par value of NT$10. The Board of Directors is authorized to issue the shares of capital in installments. 2 billion shares shall be reserved for the Company to issue shares for stock warrants, shares with warrants or corporate bonds with warrants.
Article 5-1 For the purpose of employee motivation, the Company may issue stock warrants or handle stock transfer through the following methods:
Issuing employee stock warrants at a price lower than the closing price of the Company's shares on the issuing date, subject to approval by shareholders’ meeting.
Transfer Company’s shares to employees at a price lower than the average buyback price of the Company's shares, as approved in the most recent shareholders’ meeting.

The issuance of stock warrants or transfer of buyback shares mentioned in the preceding paragraph shall be handled in accordance with relevant laws and regulations. The resolution of such shall be adopted by two-third of the voting rights exercised by the shareholders present at the shareholders’ meeting, who represent a majority of the outstanding shares of the Company.

Article 6 The Company's shares shall be registered, including ordinary shares and preferred shares issued in installment under different terms and conditions. The shares shall be numbered and signed/sealed by at least three directors of the Company, and shall be administered in accordance with the requirements of the competent authority in
40 -

charge of the securities and exchange.

The issued shares of the Company may not be represented by the physical share certificates or may alternatively be represented by a consolidated certificate for the shares issued through several tranches, provided that the new shares or the consolidated certificates shall be registered with, or in the custody of, the centralized securities depository institution.

Article 7 (Deleted).

Article 8 (Deleted).

Article 8-1 (Deleted).

Article 8-2 The Company has issued 362,568,410 Class D registered preferred shares to registered owners. The rights and terms of issues are as follows:
Any earnings concluded in a financial year shall first make up for losses of previous years, right after statutory taxation and accounting adjustments. Any surpluses are subject to provision of legal reserve according to Article 40 of the Articles of Incorporation and other special reserves in accordance with laws and regulations. The remainder is subject to the distribution of Class C preferred share dividend for the current year and any unpaid dividend accumulated from previous years. Any remaining earnings shall be paid to Class D preferred shares as the current year’s dividend.
Class D preferred share dividends are payable at 6.5% per annum on the issue price. Dividends are paid annually in cash in one lump sum. Once the Company’s reports and statements have been acknowledged in the annual general meeting, the board of directors shall be authorized to set the ex-dividend date for the distribution of the Class D preferred share dividend. Dividends that are payable for the year of initial public offerings shall be prorated according to the actual number of days the shares are in circulation since the date of issue, relative to the total number of days of that year. The date of issue is defined as the date the Company receives additional capital.
In years when the Company concludes insufficient or no surplus to fully pay off dividends for Class D preferred shareholders, the unpaid dividend will not be carried forward.
In addition to receiving dividends payable at the fixed rate stated in Paragraph 2 herein and Clause 2 of this paragraph, with approval of the Board of the Directors, Class D preferred shareholders are also entitled to receive dividend distribution of ordinary shares at the ratio of two preferred shares for one ordinary share, on any surplus remaining after Class C preferred shareholders are paid a dividend at the specified rate and after ordinary shareholders are paid an equivalent amount of Class D preferred share dividend. However, the Class D preferred shareholders are not entitled to receive shares that are issued against capitalized reserves.
In the event of liquidation, Class D preferred shareholders shall be given priority to claim on the Company’s remaining assets over ordinary
41 -

shareholders but subordinate to Class C preferred shareholders and no more than offering value of Class D preferred shares.

Any premium received on the issue of Class D preferred shares shall be treated as capital surplus and should not be capitalized into paid-in capital during the circulation period of Class D preferred shares.
Class D preferred shareholders are not entitled to any voting rights or election in shareholders’ meeting. However, they have the right to be elected as directors and may vote in Class D preferred shareholders’ meetings and in general shareholders’ meetings with regards to agenda items concerning rights of Class D preferred shareholders.
When the Company issues new shares for capital raising, Class D preferred shareholders shall be entitled equivalent preemptive rights on the new shares to Class C preferred shareholders and ordinary shareholders.
Three years after the issue date, one Class D preferred shares may be converted into one ordinary share. Ten years after the issue date, the Company may repurchase a portion or all of outstanding Class D preferred shares at any time at the issue price. In the event that the Company decides to repurchase Class D preferred shares, dividend payable for the current year shall be prorated according to the number of days the shares are in circulation, relative to the total number of days in that year, and paid on the repurchase day.
- In the event that both ordinary and preferred shareholders’ equity are decreased proportionally due to a reduction of share capital against cumulative losses, Class D preferred shareholders’ equity shall be adjusted/made up for the amount decreased so that Class D preferred shareholder’ interest is maintained at the same level as when the shares were initially issued.
Article 8-3 When the number of the Company's outstanding Class D preferred shares have exceeded 200 million (inclusive), the following activities which would influence the rights and interests of Class D preferred shareholders and should be approved by Class D preferred shareholders’ meeting in advance.
Issuing new shares for cash at a price which is lower than the fair market value prescribed by law or at any other consideration, or issuing equity-related securities for the purpose of merger or similar transactions. The issuance of new shares for the capitalization of employee bonus is not included.
Issuing securities which are convertible to equities or warrants for subscription at a price lower than the fair market value; or converting/subscribing such securities at a price lower than the fair market value.
Distributing dividends or issuing bonus shares which dilutes the Class D preferred shareholders’ interests. The issuance of new shares for the capitalization of employee bonus according to the Articles of Incorporation is not included.
Other activities involving the distribution or allocation of securities which may have a similar effect as the activities prescribed in the above subparagraphs.
42 -

Article 8-4 The Company issues 3,500,000,000 Class E registered preferred shares ("Class E preferred shares"), which may be issued in installment. The rights, obligations and other important terms of issues associated with Class E preferred shares are as follows:

The dividend rate for Class E preferred shares should not exceed 8.00% p.a. of the issue price. In years when the Company concludes insufficient or no surplus to fully pay off dividends for Class E preferred shareholders, the unpaid dividend will not be carried forward to years with earnings.
The Company has sole discretion on the distribution of Class E preferred share dividends. Earnings distribution proposals will be devised by the board of directors in accordance with Article 40-1 of the Articles of Incorporation and then submitted to the annual general meeting of shareholders for acknowledgment. Earnings available for distribution to preferred shares and ordinary shares under an acknowledged earnings distribution proposal will be distributed firstly to Class D preferred shares and then to Class E preferred shares, if any. Any remaining balance shall be distributed according to the Articles of Incorporation.
Dividends on Class E preferred shares will be paid in cash. Once the Company's financial statements have been acknowledged and earnings distribution approved during the annual general meeting of shareholders, the board of directors shall be authorized to set the ex-dividend date for the distribution of the Class E preferred share dividend. Dividends that are payable for the year of issuance shall be prorated according to the actual number of days the shares are in circulation since the date of issue, relative to the total number of days of that year. In the year of redemption, the distribution of the payable dividends shall be calculated based on the actual number of days the preferred shares remained outstanding in that year.
Except for the dividends prescribed in the three preceding subparagraphs herein, Class E preferred shareholders are not entitled to participate in the distribution of cash or stock dividends with regard of the ordinary shares and other preferred shares derived from earnings or capital reserves.
In the event of liquidation, Class E preferred shareholders shall be given priority to claim on the Company's remaining assets over ordinary shareholders, but subordinate to Class D preferred shareholders, and no more than issuance amount of outstanding Class E preferred shares.
Any premium received on the issue of Class E preferred shares shall be treated as capital surplus and should not be capitalized into paid-in capital during the circulation period of Class E preferred shares.
Class E preferred shareholders are not entitled to any voting rights or election rights in shareholders’ meeting. However, they may vote in Class E preferred shareholder meetings and in general shareholder meetings with regard to agenda items concerning rights and obligations of Class E preferred shareholders.
When the Company issues new shares for capital raising, Class E preferred shareholders shall be entitled equivalent preemptive rights on the new shares
43 -

to ordinary shareholders and Class D preferred shareholders.

Seven years after the issue date, the Company may, subject to the competent authority's approval, recall a portion or all of outstanding Class E preferred shares at any time at the issue price. The rights and obligations associated with any remaining outstanding Class E preferred shares shall continue as specified herein.
Matters regarding issuance of Class E preferred shares not specified herein shall be governed by the applicable laws and regulations, the Articles of Incorporation and the competent authority's rules. If the competent authority deems it necessary to modify the terms of issuance for Class E preferred shares, the board of directors is authorized to proceed accordingly.
When Class E preferred shares are issued in installment within the limit described under the first paragraph, the board of directors is authorized to decide the actual number of shares, issue price, and dividend rate for each issuance according to the Company's capital plans and market conditions at the time of issuance and the terms of issuance under the preceding subparagraphs. Details of issuance by private placement or involving an increased percentage of public offering shall be submitted to the shareholders’ meeting for approval.
Article 8-5 The Company issues 4,000,000,000 Class F registered convertible preferred shares ("Class F preferred shares"), which may be issued in installment. The rights, obligations and other important terms of issuance associated with Class F preferred shares are as follows:
The dividend rate for Class F preferred shares should not exceed 7.00% p.a. of the issue price. In years when the Company concludes insufficient or no surplus to fully pay off dividends for Class F preferred shareholders, the unpaid dividend will not be carried forward to years with earnings.
The Company has sole discretion on the distribution of Class F preferred share dividends. Earnings distribution proposals will be devised by the board of directors in accordance with Article 40-1 of the Articles of Incorporation and then submitted to the annual general meeting of shareholders for acknowledgment. Earnings available for distribution to preferred shares and ordinary shares under an acknowledged earnings distribution proposal will be distributed firstly to Class D and Class E preferred shares and then to Class F preferred shares, if any. Any remaining balance shall be distributed according to the Articles of Incorporation.
Dividends on Class F preferred shares will be paid in cash. Once the Company's financial statements have been acknowledged and earnings distribution approved during the annual general meeting of shareholders, the board of directors shall be authorized to set the ex-dividend date for the distribution of the Class F preferred share dividend. Dividends that are payable for the year of issuance shall be prorated according to the actual number of days the shares are in circulation since the date of issue, relative to the total number of days of that year. In the year of redemption, the
44 -

distribution of the payable dividends shall be calculated based on the actual number of days the preferred shares remained outstanding in that year.

Except for dividends prescribed in the three preceding subparagraphs herein, Class F preferred shareholders are not entitled to participate in the distribution of cash or stock dividends with regard of the ordinary shares and other preferred shares derived from earnings or capital reserves.
In the event of liquidation, Class F preferred shareholders shall be given priority to claim on the Company’s remaining assets over ordinary shareholders, but subordinate to Class D and Class E preferred shareholders and no more than the issuance amount of outstanding Class F preferred shares.
Any premium received on the issue of Class F preferred shares shall be treated as capital surplus and should not be capitalized into paid-in capital during the circulation period of Class F preferred shares.
Class F preferred shareholders are not entitled to any voting rights or election rights in shareholders’ meeting. However, they may vote in Class F preferred shareholder meetings and in general shareholders’ meeting with regard to agenda items concerning rights and obligations of Class F preferred shareholders.
When the Company issues new shares for capital raising, Class F preferred shareholders shall be entitled equivalent preemptive rights on the new shares to ordinary sharholderes and Class D and Class E preferred shareholders.
The conversion lockout period for Class F preferred shares may not be shorter than three years after the issue date. One Class F preferred share will be able to be converted into one ordinary share after the lockout period.
Ten years after the issue date, the Company may, subject to the competent authority's approval, recall a portion or all of outstanding Class F preferred shares at any time at the issue price. The rights and obligations associated with any remaining outstanding Class F preferred shares shall continue as specified herein.
Matters regarding issuance of Class F preferred shares not specified herein shall be governed by the applicable laws and regulations, the Articles of Incorporation and the competent authority's rules. If the competent authority deems it necessary to modify the terms of issuance for Class F preferred shares, the board of directors is authorized to proceed accordingly.

When Class F preferred shares are issued in installment within the limit described under the first paragraph, the board of directors is authorized to decide the actual number of shares,issue price, dividend rate, and conversion lockout period for each issuance according to the Company's capital plans and market conditions at the time of issuance and the terms of issuance under the preceding subparagraphs. Details of issuance by private placement or involving an increased percentage of public offering shall be submitted to the shareholders’

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meeting for approval.

Article 8-6 Unless otherwise prescribed by law or stipulated in the Articles of Incorporation, the Company shall ensure that all shareholders are granted the same rights to participate in the distribution in the event that the Company wishes to return capital by means of capital allocation or reduction; or to make exceptional cash payments for reasons other than earnings distribution.
Article 9 No change shall be made to the shareholders' roster within 60 days prior to an annual general meeting; or within 30 days prior to an extraordinary shareholders’ meeting, or within 5 days prior to the record date determined for the distribution of dividends, bonus or other benefits.

The period prescribed in the preceding paragraph shall be calculated from the meeting day or the record date.

Article 10 The share related matters shall be handled in accordance with the Company Act, the guidelines announced by the competent authority in charge of the securities industry and other relevant laws and regulations.

Chapter 3 Business

Article 11 The Company is engaged in the financial holding business. (Code H801011) Article 12 The Company's scope of business is as follows:

The Company may invest in the business stipulated in the Financial Holding Company Act.
Management of invested businesses.
Investment in the business other than as specified in subparagraph 1 above, subject to approval of the competent authority, but may not involve in the operation and management of such business.
Other related business approved by the competent authority.
Article 13 The total amount of investment shall not be limited to the 40% of paid-in capital set forth in the first paragraph of Article 13 of the Company Act.

Article 14 (Deleted).

Chapter 4 Shareholders’ meeting

Article 15 The company holds two types of shareholders’ meetings: annual general meetings and extraordinary shareholders’ meetings. The annual general meeting is convened at least once a year and no later than six months after the end of the financial year. Extraordinary shareholders’ meetings may be held whenever necessary, subject to compliance with the Company Act.
Unless otherwise specified in the Company Act or other relevant laws, all shareholders’ meetings are to be called by the board of directors.
Article 16 A notice of the time, venue and the proposal of the meeting shall be given to each shareholder 30 days in advance of convening an annual general meeting, or 15 days in advance of convening an extraordinary shareholders’ meeting and shall be
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publicly announced. Subject to agreement by the receiving party, meeting notices may also be delivered electronically.

For shareholders holding less than one thousand shares, the aforementioned meeting notices may be communicated by way of public announcement instead.
Article 17 Shareholders may appoint proxies to attend shareholders’ meetings by completing the company's proxy forms for each meeting, specifying the scope of delegation. With regard to the number of shares and voting rights to be represented by each proxy, the Company shall follow the relevant regulations. Each shareholder may issue one proxy form and delegate one proxy only. All proxy forms must arrive at the company at least five days before the shareholders’ meeting. In the event that more than one proxy forms are issued, the proxy form that arrives first shall prevail. However, exception shall be granted if the shareholder issues a proper declaration to revoke the previous proxy arrangement.
Should the shareholder decide to attend a shareholders’ meeting personally or exercise voting rights in writing or through electronic means after a proxy form has been delivered to the company, a written notice should be sent to the company no later than two days before the meeting commences to revoke the proxy arrangement. If the revocation is made after the prescribed period, then the voting decision exercised by the proxy shall prevail.
The proxy for the shareholders’ meeting shall be considered invalid if the submitted form is not printed by the Company.
Article 18 Unless otherwise prescribed in the Company Act or in the Articles of Incorporation, each share is entitled to one voting right.
When electing Directors in the shareholders’ meeting, each share shall have votes equivalent to the number of elected Directors to be elected. Such votes may be cast for one single director or may be allocated among the number of the directors to be voted for. Those receiving ballots representing the larger number of votes shall be elected as the directors.

Article 19 Matters to be resolved and executed by the Shareholders’ meeting are:

Establishment and amendment of the Articles of Incorporation for the Company.
Election of directors.
Examination and ratification of the reports and statements prepared by the board of directors, as well as the Audit Committee's reports.
Resolutions on the issuance of new shares due to capitalization of earnings and reserves.
Resolutions on the distribution of earnings and make-up of deficits.
Resolutions on remuneration for directors.
Resolutions on the liquidation, merger or divestment of the Company.
Resolutions on significant changes in business policies.
Other matters to be resolved in the shareholders’ meeting for statutory reasons.

Article 20 If the shareholders’ meeting is convened by the board of directors, the chairman of

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the board shall preside over the meeting. If the Chairman is unable to perform his duties due to leave of absence or for any other reason, the Vice Chairman shall act on the Chairman's behalf. If there is no vice chairman or if the vice chairman is on leave or unable to perform his duties, the Chairman shall appoint a director to act on his behalf. If the Chairman does not appoint anyone to act on his behalf, a representative shall be elected from among the directors. If the meeting is convened by an authorized party other than the board of directors, the meeting shall be chaired by the authorized convener. If there are two or more conveners, one of them shall be elected to chair the meeting.

Article 21 Unless otherwise prescribed in the Financial Holding Company Act, Company Act or other regulations, resolutions in the shareholders’ meeting shall be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares.
Article 22 Representative of the institutional shareholders is not limited to one person, but the number of votes of such institutional shareholder shall be determined by the aggregate number of the shares held by such institutional shareholders.
When an institutional shareholder has two or more representatives, the voting right of such institutional shareholder shall be jointly exercised by the representatives.
Article 23 The minutes of the shareholders’ meetings shall be prepared, duly signed or chop sealed by the Chairman of the shareholders’ meeting, distributed to the shareholders within 20 days after shareholders’ meetings.
The meeting minutes prescribed in the preceding paragraph may be distributed by means of public announcement.
Article 24 The rules stipulated in the Chapter shall also apply to the preferred shareholders’ meeting of the Company.

Chapter 5 Directors

Article 25 The company shall have a board of directors that comprises seven to nine members; and the board of directors set the number to be elected within the above range; The company adopts nomination system for independent director elections. The election of non-independent directors shall adopt nomination system starting July 1[st] , 2015. The directors and independent directors shall be elected among shareholders from the candidate list in annual general meeting in accordance with the Financial Holding Company Act, Company Act and relevant laws and regulations, unless otherwise specified by other laws and regulations.
All of the company's directors shall maintain share ownership within the levels stipulated by the securities authority.

The credential of the Company’s directors shall meet the criteria set forth in the guidelines set by the competent authority.

The company may remunerate directors for their services, no matter whether the

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company has generated profits. The board of directors is authorized to determine the level of remuneration for the above parties based on their individual participation and contribution to the company's operations, and in reference to industry peers.

Article 25-1 Among the number of directors of the board prescribed in the preceding article, the number of independent directors of the Company shall be no less than three or no less than one fifth of the total number of directors, whichever is higher. With respect to professional qualifications, shareholdings, restrictions on holding concurrent posts, nomination, election/appointment and other compliance-related requirements for independent directors, the Company shall follow the relevant laws and regulations announced by the competent authority in charge of the securities and exchange.
Article 25-2 The Board of the Company shall set up the Audit Committee to replace the role of supervisors, which shall consist of the entire independent directors. It shall be no less than three in number, one of whom shall serve as the convener, and at least one of whom shall have accounting or finance expertise. Exercise of powers and other compliance mattes of the Audit Committee shall be handled in accordance with relevant laws and regulations or provisions of the Articles of Incorporations of the Company.

Article 26 Directors shall serve a term of three years and may be reelected.

In the event the tenure of Directors is due and there is not enough time for the Company to elect the new Directors, his/her tenure shall continue until the new Directors is elected; provided that the competent authority may, by exercising its power, order the Company to elect the new Directors in a prescribed period, Should the new Directors is not elected in the prescribed period, the tenure of Directors shall be automatically ceased.
Article 27 The Company shall have one Chairman of the Board of Directors to be elected from among the directors by a majority vote at a board meeting at which more than two-thirds of the directors are present. The Company may have one vice chairman to be elected in the same procedure as above.
The Chairman shall chair the shareholders’ meeting and the meeting of the Board of Directors, and shall represent the Company.
Article 28 The Company shall convene regular meeting for the board of directors on a quarterly basis. Ad hoc meetings may be arranged whenever it is considered necessary or urgent. Unless otherwise prescribed by laws and regulations board of directors' meetings shall be convened by the chairman.
The meeting notice should specify reasons for convening the meeting and sent to the Directors by mail, e-mail, fax or hand delivery at least 7 days prior to the meeting. The notice of convening an ad hoc board meeting may also be delivered in the same way as above.
Unless otherwise provide by the Financial Holding Company Act, Company Act or other laws and regulations, a board of directors meeting at which a resolution
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is adopted shall be attended by a majority of the Directors and at which meeting a majority of those who present vote in favor of such a resolution.

Article 29 If the Chairman is unable to perform his duties due to leave of absence or any other reason, the vice chairman shall act on the Chairman's behalf. If the vice chairman is also on leave or unable to perform his duties, the Chairman shall appoint one of the directors to act on his behalf. If the Chairman does not appoint a deputy, the remaining directors shall appoint an acting chairperson from among themselves.
Article 30 Directors shall attend board of directors' meetings in person. If a Director is unable to attend a meeting, he/she may appoint a proxy to attend the meeting by completing the company's proxy forms for each meeting, specifying the scope of delegation. A director may act as the proxy for only one other Director. .

Article 31 The functions and responsibilities of the board of directors:

Review and approval of business policies and plans.
Review and approval of the budget and final accounts.
Review or approval on the establishment and amendment of important policies and regulations.
Resolutions on the issuance of new shares.
Determining proposals on the distribution of earnings or make-up of deficits.
Resolutions on the issuance of corporate bonds.
Resolutions on plans for redeeming shares of the Company.
Review or approval on investments, as well as the acquisition, disposal and lease of assets or dian rights.
Review or approval on important contracts.
Appointment, dismissal and determination on the remuneration of managers, chief auditor and other employees of equal job level.
Convening the shareholders’ meetings and submitting the agenda and reports for the meeting.
Executing the resolutions of the shareholder's meeting.
Matters requiring resolution in the board of directors' meeting pursuant to the "Guidelines Governing the Division of Job Responsibilities" of the Company.
Appointment, dismissal and approval of remuneration for the Company's CPA.
Appointment of directors and supervisors of subsidiaries.
Review of matters assigned by the Chairman or proposed by the president.
Resolution of other important matters commissioned.
Other matters to be executed by the board of directors as required by law or authorized by the shareholders’ meeting.
Article 31-1 The board of directors may, pursuant to the relevant laws and regulations, purchase liability insurance contracts for the Company's directors and key employees to cover the respective compensation liabilities involved when
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performing their duties.

Article 31-2 The board of directors may authorize the chairman or relevant managers/departments to review and approve various issues during recess of the board, including the approval of internal policies, appointment (reappointment) of directors and supervisors of subsidiaries, making and amendment of the "Guidelines Governing the Authority and Responsibility ", etc. This, however, shall not apply to matters which are required to be resolved in the board of directors meeting for statutory reasons or according to the “Guidelines Governing the Authority and Responsibility".
Article 31-3 In order to derive overall economic benefit of its operations, the Company may, where permitted by law, authorize the board of directors to integrate the resources of the Company and its subsidiaries and among subsidiaries, thereby enhancing cross-sector performance. The Company shall also establish a suitable and reasonable cost allocation system through communication and negotiation, based on the degree of resource-sharing and profit contribution of the Company and its subsidiaries and among subsidiaries.
Article 31-4 The Company may establish functional committees of different types. The organizational rules for functional committees shall include number of committee members, qualification requirements, term of office, job authorities and meeting procedures, etc. The organizational rules shall be submitted to the board of directors for approval.

Article 32 (Deleted).

Article 33 (Deleted).

Article 34 Directors of the Company may concurrently act as directors or supervisors of the Company’s subsidiaries.

Chapter 6 Managers

Article 35 The Company shall have one president, one chief auditor and managers. The appointment, dismissal and remunerations of such managerial personnel shall be decided in the board of directors' meeting, subject to compliance with the Company Act and relevant laws and regulations.
The appointment and dismissal of the president and chief auditor mentioned in the preceding paragraph shall be proposed by the Chairman and agreed upon by the Board of Directors. The appointment and dismissal of managers shall be proposed by the president and agreed upon by the Board of Directors in accordance the preceding paragraph.
Article 36 Except for the authority granted to the shareholders’ meeting and Board of Directors by laws and regulations and the Articles of Incorporation of the Company, the Board of Directors is authorized to establish rules regarding authority and responsibility for the Board of Directors, the Chairman, president, managers and various departments.
Article 37 The credential of the Company’s president, chief auditor and managers shall
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comply with the qualification standards established by the competent authority. Article 38 (Deleted)

Chapter 7 Accounting

Article 39 The fiscal year of the Company shall be from January 1 to December 31. At the end of each fiscal year, the Board of Directors shall compile and submit the following reports and statements to the shareholders’ meeting for acknowledgment, pursuant to the legal procedures.
Business reports.
Financial statements.
Proposals for distribution of earnings or make-up of deficit.
The compilation, audit, reporting and record keeping of the reports, statements, annual reports and other items required by the competent authority prescribed in the preceding paragraph shall be made in accordance with the Company Act, Securities and Exchange Act, Financial Holding Company Act and other relevant laws and regulations.
Article 40 0.01% privsion of the Company’s current year profit shall be made as employee bonus, and the board of directors shall decide to distribute the bonus in the form of shares or cash, which can also be distributed to employees of affiliated companies that meet the criteria specified in the Company Act. The Company may also make provision of director remuneration no more than 1% of the aforementioned profit.

The Company shall first make up the accumulated deficits, if any, before allocating any profit to employee bonus and director remuneration.

Employee bonus and director remuneration proposals shall be presented to the shareholders meeting.
The director remuneration referred to in the first paragraph includes supervisor remuneration until the establishment of the Audit Committee. The allocation of supervisor remuneration shall follow the same rules in the three preceding paragraphs.
Article 40-1 Any earnings concluded in a financial year shall first make up for loss of previous years, right after statutory taxation and accounting adjustments. Any surplus is subject to provision of a 10% legal reserve and special reserve according to law. The remainder shall be available for distribution of Class D preferred share dividend according to the priority specified by Article 8-2 in the Article of Incorporation. The remaining balance, if any, will be combined with reversal of special reserves and initial cumulative undistributed earnings available for dividend distribution into the amount available for distribution on ordinary shares and every Class preferred shares. Cash dividends shall be no less than 10% of the total amount of dividend distribution in the same year. Earnings distribution proposals will be devised by the board of directors and submitted to
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the annual general meeting of shareholders for acknowledgment.

The rights and obligations and the priority, amount and method of distribution associated with every Class preferred shares shall be governed in accordance with the Articles of Incorporation.
Article 41 The Company shall adopt a residual dividend policy in the event that the dividend distribution for ordinary shares causes dilution of the equity of Class D preferred shares during the period when the number of outstanding Class D special shares exceeds 200 million (inclusive). The purpose of this policy is to ensure continuous business development and profit growth, while taking into account working capital management and capital adequacy level required by the competent authority and the international standards.
With regard to dividend distribution, the Company shall, in principle, distribute a stock dividend while considering business needs, capital plans, fund for reinvestment or acquisitions, and major regulatory changes, etc. The remainder shall be distributed as cash dividend.

Chapter 8 Addendum

Article 42 The organization guidelines, detailed operational procedures and management policies shall be prescribed by the Board of Directors.
Article 43 For matters not covered herein, the provisions of the Company Act, Securities and Exchange Act, Financial Holding Company Act and other relevant laws and regulations shall govern.
Article 44 These Articles of Incorporation were adopted on Dec. 7, 2001, in the Founders' Meeting.

Note:

2001/12/07 Adopted in the Founders' Meeting.

2003/06/06 The 1st revision was resolved in the 2003 general shareholders’ meeting to amend articles 5, 6, 18, 27, 29, 40, 41, and 44; to cancel article 7 and to add article 8-1.
2004/06/11 The 2nd revision was resolved in the 2004 general shareholders’ meeting to amend articles 8, 8-1, 35 and 44.
2005/06/10 The 3rd revision was resolved in the 2005 general shareholders’ meeting to cancel article 14 and amend articles 17, 25, 27, 37, 41 and 44.
2005/12/28 The 4th revision was resolved in the 2005 extraordinary shareholders’ meeting to amend articles 5, 8-1, 25 and 40 and add article 8-2.
2006/06/09 The 5th revision was resolved in the 2006 general shareholders’ meeting to amend articles 8-1, 16, 17, 23, 25, 35, 39 and 41 and add articles 8-3, 8-4, 25-1 and 31-1.
2007/06/15 The 6th revision was resolved in the 2007 general shareholders’ meeting to amend article 13 and add article 31-2.
2008/06/13 The 7th revision was resolved in the 2008 general shareholders’ meeting to add article 5-1; cancel article 8 and amend articles 8-1, 8-2, 25, 31-2 and 40.
2009/06/26 The 8th revision was resolved in the 2009 general shareholders’ meeting to amend articles 8-1 and 8-2.
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2010/06/18 The 9th revision was resolved in the 2010 general shareholders’ meeting to amend articles 28, 31 and 35 and add articles 31-3 and 31-4.
2011/06/24 The 10th revision was resolved in the 2011 general shareholders’ meeting on June 24, 2011 to amend articles 8-1, 8-2, 35, 36, 37 and 40 and cancel article 38.
2012/06/22 The 11th revision was resolved in the 2012 general shareholders’ meeting on June 22, 2012 to amend articles 8-1, 8-2, 16, 17, 23, 40 and 41. (According to the letter reply from the Financial Supervisory Commission dated April 11, 2013 under reference Jin-Guan-Yin-Kong-Tze-10260001260, the implementation of articles 8-1 and 8-2 shall be postponed).
2014/06/06 The 12th revision was resolved in the 2014 general shareholders’ meeting on June 06, 2014 to amend articles 8-1, 8-2, 15, 25 and 40.
2015/06/12 The 13th revision was resolved in the 2015 general shareholders’ meeting on June 12, 2015 to amend articles 8-2,18,19, Chapter 5,25,25-1,25-2,26,27,28, 31-1,32, 33,34,39,40. (According to the letter reply from the Financial Supervisory Commission dated September 12, 2016 under reference Jin-Guan-Yin-Kong-Tze-10500206640, further elaboration shall be provided when specific issuance plan under article 8-5 is available.)
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【 Attachment 6 】

Taishin Financial Holding Co., Ltd. Handling Procedures for Acquisition or Disposal of Assets

Chapter 1 General Principles

Article 1

The procedures are established according to the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” (“the Regulations”) established by the Financial Supervisory Commission (“the FSC”) as authorized by Article 36-1 of the Securities and Exchange Act.

Article 2

Unless otherwise prescribed by law, Taishin Financial Holding Co., Ltd. (hereinafter referred to as “the Company”) shall follow the Procedures when engaged in the acquisition or disposal of assets. If there is any issue not covered in these Procedures, other relevant regulations of the Company shall govern.

Article 3

These procedures apply to the following asset categories:

Investments in stocks, government bonds, corporate bonds, financial bonds, securities that represent fund entitlements, depository receipts, call (put) warrants, beneficial securities, and asset-backed securities.
Real estate (including land, buildings, land use rights etc.) and equipment.
Memberships.
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 legally acquired or disposed of through mergers, demergers, acquisitions or transfer of shares.
Other major assets.

Article 4

Terms used in the Procedures are defined as follows:

Derivatives: Refer to forward contracts, options contracts, futures, leverage contracts, swap contracts etc., and any combination of the above, whose value is derived from assets, interest rates, foreign exchange rates, indices, or other benefits. The term “forward contracts” does not include insurance contracts, performance contracts, after-sale service contracts, long-term leasing contracts, and long-term purchase (sales) contracts.
Assets legally acquired or disposed through mergers, demergers, acquisitions or transfer of shares exchange: Refers to assets acquired or disposed of 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 through an
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arrangement whereby new shares are issued in exchange for another company’s shares (hereinafter “transfer of shares” ) under Article 156, Paragraph 8 of the Company Act.

Related Party and subsidiary: To be defined according to the FSC’s financial reporting standards.
Total assets: Refers to the amount of total assets shown in the latest company-level financial statement prepared in accordance with the FSC’s financial reporting standards.
Professional appraiser: Refers to a real estate appraiser or anyone who is permitted by law to perform valuation of real estate and equipment.
Date of Occurrence: Refers to, the earliest of, the signing date, payment date, deal date, date of ownership transfer, the board of directors’ resolution date or any other dates when the transaction counterparty and the amount can be verified with certainty. For investments that require the approval of the competent authority, the date of occurrence shall be determined as the earlier between the above dates and the date approved by the competent authority.
Investment in the Mainland China Area: Refers to investments in the Mainland China area conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area approved by the Investment Commission of the Ministry of Economic Affairs.
Limited Price, Specified Price or Special Price: The terms shall be defined according to the definition provided in the “Regulations on Real Estate Appraisal” announced by the Ministry of the Interior.

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 a related party of any party to the transaction.

Article 6

If any director expresses dissent and it is contained in the minutes or a written statement when the Procedures are being discussed in the board of directors meeting and such objections have been recorded or made in writing, the Company shall the director’s dissenting opinion to audit committee. The Company shall, in the meantime, 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.

Any transaction involving major assets or derivatives shall be approved by more than half 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 33, paragraphs 2 and 3.

Any transaction involving major assets or derivatives referred to company’s transaction involving assets or derivatives is subject to the approval of the board of directors under the company’s procedures or other laws or regulations.

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Chapter 2 Administrative Procedures

Section 1 Acquisition or Disposal of Assets

Article 7

Before the acquisition or disposal of real estate by the Company, the responsible unit should first study the relevant market reports and appraisal reports and submit a written assessment report to the proper approval authority for decision making.

Before the acquisition or disposal of equipment by the Company, the responsible unit shall conduct in advance a cost-benefit analysis to compare the forecast and actual results of the transaction. The proposal shall be submitted to the proper approval authority for decision-making after the procurement, contracting or sales procedures.

When investing in real estate, the Company shall observe the provisions stipulated in the Financial Holding Company Act with regard to the restrictions on the usage of such real estate.

Article 8

When acquiring or disposing of real estate or equipment, the Company shall, prior to the date of occurrence of the event, obtain an appraisal report from a professional appraiser if the transaction amount has reached 20% of the Company’s paid-in capital or NT$300 million or more. This shall not apply, however, when the Company is transacting with a government agency, engaging others to build on its own land or on rented land, or acquiring or disposing of machinery equipment for business use. The Company shall in the meantime observe the following rules:

Where due to special circumstances it is necessary to use a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution in advance. The same procedure shall be followed for any future changes to the terms and conditions of the transaction.
Where the transaction amount is NT$1 billion or above, appraisals from two or more professional appraisers shall be obtained.
If the following situation occurs with regard to the professional appraisal report, the Company shall engage a CPA to handle the case in accordance with the provisions of the 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. This is not required, however, if all the appraised results for the assets to be acquired are higher than the transaction amount, or if all the appraised results for the assets to be disposed of are lower than the transaction amount.
(1) The discrepancy between the appraisal result and the transaction amount is 20% or more of the transaction amount.
(2) The discrepancy between the appraisal results of two or more professional appraisers is 10% or more of the transaction amount.
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The time between the contract date and the date of the report issued by the professional appraiser shall not be more than three months. The Company, however, may still adopt opinions of the original professional appraiser in the event that the transaction is applicable to the announced current value for the same period and less than six months have passed.

The matters for which paragraph 1, subparagraph 1 requires shall first be approved by more than half 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 33, paragraphs 2 and 3.

Article 9

Before the acquisition or disposal of short-term securities, the Company shall first request its investment analysts to collect the relevant information, evaluate and discuss the results and report to the proper approval authority for decision-making.

With respect to investment projects in long-term equities, the Company shall first request the responsible units to conduct a feasibility study. A proposal shall be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution in advance if the case is considered feasible. Only when the case has been resolved in the board of directors meeting shall the Company submit the application to the competent authority for approval and proceed with the relevant contract-signing procedures.

The company acquisition or disposal of securities, shall, prior to the date of occurrence of the event, obtain the financial statements of the issuing company for the most recent period which have been certified or reviewed by a certified public accountant. Such financial statements shall be used as a reference for appraising the transaction price. If the transaction amount has reached 20% of the company’s paid-in capital or NT$300 million or more, the Company shall, prior to the date of occurrence of the event, additionally engage a CPA to provide an opinion regarding the reasonableness of the transaction price. If the CPA requires the evidence of an expert report, 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 securities with publicly quoted prices from an active market, or if it has been otherwise provided by the regulations of the Financial Supervisory Commission (FSC).

With regard to the scope, limits and application procedures for investment in securities, the Company shall follow the relevant regulations stipulated in Articles 36, 37 and 39 of the Financial Holding Company Act.

The matters for which paragraph 2 requires recognition by the supervisors shall first be approved by more than half 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 33, paragraphs 2 and 3.

Article 10

When acquiring or disposing of memberships or intangible assets, the responsible unit of the Company shall firstly submit an assessment report on the cost and benefits of the acquisition or disposal to the proper approval authority for decision making.

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In the event that the amount for the acquisition or disposal of membership or intangible assets has reached 20% of the Company’s paid-in capital or NT$300 million or more, the Company shall additionally engage a CPA prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. The CPA shall handle the case in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF, except in transactions with government agency.

Article 11

The calculation of the transaction amounts referred to in the preceding three articles shall be conducted in accordance with Article 29, paragraph 2 herein. In the meantime, “within one year” as used herein refers to the year proceeding to 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

Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be used as a substitute for the appraisal report or CPA opinion.

Section 2 Related Party Transactions

Article 13

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 11-1 herein.

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

Article 14

With the exception of government bonds, bonds under repurchase/resale agreements, and subscription or redemption of domestic money market funds, when the Company intends to acquire or dispose of any real estate from or to a related party, or if it intends to acquire or dispose of any assets other than real estate from or to a related party where the transaction amount has reached 20% of its paid-in capital, 10% of its total assets, or NT$300 million or more, the Company shall firstly submit the following information to be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution in advance before signing the contract and making payments:

The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.
The reason for choosing the specific related party as the transaction counterparty.
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The information relating to the assessment of reasonableness on the planned acquisition of real estate from the related party under Articles 15 and 16.
The date and price at which the related party originally acquired the asset, the original trading counterparty, as well as the relationship between the original trading counterparty and the Company/the Company’s related parties.
Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, as well as evaluation reports on the necessity of the transaction and reasonableness of the funds 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 transaction amount prescribed in the preceding paragraph shall be calculated in accordance with the provisions stipulated in Article 29, paragraph 2 herein. In the meantime, “within one year” as used herein refers to the year preceding the date of occurrence of the current transaction. Transactions which have been approved by audit committee and the board of directors, however, may not be included.

When proposed for discussion by the board of directors, independent directors’ opinions must also be fully taken into consideration. Any objections or reservations made by independent directors must be detailed in board meeting minutes.

The matters for which paragraph 1 requires recognition by the supervisors shall first be approved by more than half 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 33, paragraphs 2 and 3.

Transactions with related parties of the company shall comply with the Financial Holding Company Act.

Article 15

On acquiring real estate from a related party, the Company shall evaluate the following methods to assess the reasonableness of the transaction costs:

Based on the price of transaction with the related party, adding the required interest on funding and other costs to be borne by the buyer by law. The required interest on funding shall be calculated based on the weighted average of the interest rate for borrowing during the year the company purchases the property. It shall not, however, exceed the maximum lending rate for non-financial industries announced by the Ministry of Finance.
In the event that the property has been mortgaged for loan, the Company shall adopt the total appraised value by the financial institution for the specific lending. However, the actual lending amount shall not be less than 70% of the total appraised value and the loan period should be more than one year. However, this shall not apply if the financial institution is a related party of one of the trading counterparties.

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

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When acquiring real estate from a related party, the Company shall appraise the cost of the real estate in accordance with paragraph 1 and paragraph 2 above, in the meantime engaging a CPA to review the appraisal and render an opinion.

Under the following circumstances, the Company shall follow the rules specified in Article 14 herein for acquiring real estate from a related party. The provisions in the above three paragraphs shall not apply:

The related party has acquired the real estate through inheritance or as a gift.
More than five years have elapsed since the acquisition of the real estate by the related party till the contract-signing date for this transaction.
The real estate is acquired through sign 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.

Article 16

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 17. 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 practices.
(3) Completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, where the transaction terms are similar after calculation of reasonable price discrepancies among floors in accordance with standard property leasing market practices.
Where the company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.
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Completed transactions for 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; transaction for 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.

Article 17

Where the company acquires real property from a related party and the results of appraisals conducted in accordance with Article 15 and Article 16 are uniformly lower than the transaction price, the following steps shall be taken:

A special reserve shall be set aside in accordance with Article 41, paragraph 1 of the 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 called for under Article 41, paragraph of the Act shall be set aside pro rata in a proportion consistent with the share of public company’s equity stake in the other company.
Each independent director of the audit committee shall comply with Article 14-4, paragraphs 2 of the Securities and Exchange act mutatis mutandis application of Article 218, paragraphs 1 and 2 of the Company Act.
Actions taken pursuant to subparagraph 1 and subparagraph 2 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 that has 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.

When the Company obtains real property from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm’s length transaction.

Section 3 Engaging in Derivatives Transactions

Article 18

When engaged in derivatives transactions, the Company shall ensure control over such transactions based on the following risk management and audit principles:

Transaction Principles and Guidelines
(1) The types of derivative transactions to be conducted by the Company shall include, mainly, forward exchange, options, interest and currency swaps, etc. for hedging purposes.
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(2) When engaged in derivatives transactions, the Company shall give equal attention to the safety and liquidity of products.
(3) In principle, all derivative transactions shall be conducted for hedging purposes. The Company shall obtain approval from the board of directors on all relevant limits, including the limits on aggregated contract value, the stop-loss limit for all transactions and individual contracts, as well as other market risk limits.
(4) The Company shall handle its derivative financial instruments according to the following procedures:
A. Proper authorization shall be obtained with regard to the types and limits of the derivative transactions to be conducted. Only authorized employees may conduct derivative transactions.
B. The trader shall complete a deal slip once a deal is concluded.
C. Operations personnel shall be responsible for deal confirmation and settlement procedures.
D. The Company shall, on a regular basis, conduct a review of positions held and evaluate gains and losses.
Risk Management Measures
(1) The relevant rules of the Taishin Financial Holding - Risk Management Policy shall be followed when managing derivative financial instruments risks, including control of credit, market price, liquidity, cash flow, operational and legal risks; as well as the scope of risk management, risk measurement, identification and control procedures.
(2) The risk management unit is responsible for checking the effectiveness of hedges for all transactions that involve derivative financial instruments, including the amount and particulars of the transaction.
(3) Personnel engaged in derivatives trading may not serve concurrently in other operations such as confirmation and settlement.
(4) Personnel responsible for risk measurement, monitoring and control shall be assigned to a department separate from the individuals specified in the preceding subparagraph, and shall report to the board of directors or other senior managers who are not engaged in decision making on transactions or trading positions.
Internal Audit System
(1) The internal auditors of the Company shall audit derivative transactions on a regular or ad hoc basis and ensure that they comply with these Procedures and relevant rules.
(2) The auditors shall, on a regular basis, check the adequacy of the company’s internal control system for derivatives transactions. They shall conduct monthly audits on the trading department to ensure compliance with the Procedures for Derivatives Trading. Audit reports shall be produced. The auditors are required to advise the audit committee in writing if any significant violations are found. The auditors should follow up on the status of defects identified during the audit process where necessary.
The Company shall conduct regular assessment on gains and losses, and plan in advance for emergency situations.
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(1) The Company shall assess its derivative trading positions at least once a week. Hedging transactions conducted to meet business requirements shall be assessed at least twice a month. Assessment reports shall be submitted to the senior management level authorized by the chairman.
(2) The assessment reports prescribed in the preceding paragraph shall be submitted to the head of the risk management unit for review. In case of unexpected situations such as bankruptcy of a counterparty or high volatility in the market which may have a significant and negative impact on the Company, the situation shall be reported to the Risk Management Committee for any necessary actions.

Article 19

Where the company engaging in derivatives trading, its board of directors shall faithfully supervise and manage such trading in accordance with the following principles:

Designate senior management personnel to pay continuous attention to monitoring and controlling derivatives trading risk.
Periodically evaluate whether derivatives trading performance is consistent with established operational strategy and whether the risk undertaken is within the company’s permitted scope of tolerance.

Senior management personnel authorized by the board of directors shall manage derivatives trading in accordance with the following principles:

Periodically evaluate the risk management measures currently employed are appropriate and are faithfully conducted in accordance with these Regulations and the procedures for engaging in derivatives trading formulated by the company.
When irregular circumstances are found in the course of supervising trading and profit-loss circumstances, appropriate measures shall be adopted and a report immediately made to the board of directors; where a company has independent directors, 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 derivatives trading in accordance with its Procedures for Engaging in Derivatives Trading.

Article 20

The Company engaging in derivatives trading shall establish a log book in which details of the types and amounts of derivatives trading engaged in, board of directors approval dates, and the matters required to be carefully evaluated under paragraph1, subparagraph 4 of Article 18 and subparagraph 2 of paragraph 1, and subparagraph 1 of paragraph 2, of Article 19 shall be recorded in detail in the log book.

Section 4 Mergers, Demerger, Acquisitions and Transfer of Shares

Article 21

When the company that conducts a merger, demerger, acquisition, or transfer of shares, 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

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shareholders, and submit it to be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution.

Article 22

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 any one of the companies 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 the merger, demerger or acquisition shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.

Article 23

Unless otherwise provided by law or agreed in advance by the Financial Supervisory Commission for special reasons, all participating companies in any merger, demerger or acquisition project are required to convene a board of directors meeting and shareholders’ meeting on the same day to resolve related matters.

Unless otherwise provided by law or agreed in advance by the Financial Supervisory Commission for special reasons, the companies participating in a transfer of shares are required to convene a board of directors meeting on the same day.

When engaged in merger, demerger, acquisition or transfer of another company’s shares, the Company shall keep a complete written record including the following information, which shall be retained for five years for review and audit purposes:

Basic Personnel Information: Including the job title, name and ID number (or passport number in the case of foreign nationals) of all personnel involved in the planning or implementation of the merger, demergers, acquisition, or transfer of another company’s shares prior to public disclosure of the information.
Dates of Important Events: Including the dates of signing a letter of intent or memorandum of understanding, commissioning a financial or legal advisor, signing contracts or holding board of directors meetings.
Important Documents and Meeting Minutes: Including the plans for merger, demergers, acquisition or share transfer plans, letter of intent or memorandum of understanding, important contracts and minutes of the board of directors meetings.
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When participating in merger, demerger, acquisition, or transfer of another company’s shares, the Company shall, within 2 days from the date of passage of the board resolution, submit to the Financial Supervisory Commission for recordation the information required in subparagraphs 1 and 2 of the preceding paragraph. The information shall be compiled according to the specified format and transmitted via the Internet.

If any of the participating companies in the merger, demerger, acquisition, or transfer of another company’s shares is not a listed company or a company having its shares traded on an OTC market, the Company shall sign an agreement with such participating companies, while abiding by the provisions of paragraphs 3 and 4 herein.

Article 24

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 25

The companies 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 26

When participating in the merger, demerger, acquisition, or transfer of shares, the Company 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.
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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 27

After public disclosure of the information, if the company 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 28

When the company participates in the merger, demerger, acquisition, or transfer of shares, if any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the public company(s) shall sign an agreement with the non-public company whereby the latter is required to abide by the provisions of Article 23, Article 24, and Article 27.

Chapter 3 Public Disclosure of Information

Article 29

Under any of the following circumstances, the Company shall, within 2 days from the date of occurrence of the event, publicly announce and report the relevant information about the acquisition or disposal of assets on the designated website of the Financial Supervisory Commission using the specified format:

Acquisition or disposal of real estate from or to a related party, or acquisition or disposal of assets other than real estate from or to a related party where the transaction amount reaches 20% of the Company’s paid-in capital, 10% or more of the Company’s total assets, or NT$300 million or more. This requirement, however, shall not apply to the trading of government bonds or bonds under repurchase or resale agreements, and subscription or redemption of domestic money market funds.
Merger, demerger, acquisition, or transfer of shares.
Situations where the losses resulting from the derivative transactions has reached the stop-loss limit, including the aggregate limit for all transactions and the limit for individual transactions, as prescribed in article 18, paragraph 1, subparagraph 1, item 3.
Where an asset transaction other than any of those referred to in the preceding three subparagraphs, a disposal of receivables by a financial institution, or an investment in the
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mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances:

(1) Trading of government bonds.
(2) Securities trading conducted by professional investors through domestic or overseas securities exchanges or the OTC market or securities subscribed by a securities firm in the primary market and according to laws.
(3) Trading of bonds under repurchase or resale agreements, and subscription or redemption of domestic money market funds.
(4) Where the type of asset acquired or disposed is equipment for business use, the trading counterparty is not a related party, and the transaction amount is less than NT$500 million.
(5) Situations where the real estate is acquired by the following methods: 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 amount to be invested by the Company, furthermore, is less than NT$500 million.

The “transaction amount” prescribed in the preceding paragraph shall be determined based on the following definition:

The amount of each individual transaction.
The cumulative transaction amount of acquisitions or disposals of the same type of underlying asset with the same trading counterparty within one year.
The cumulative transaction amount of real estate acquired or disposed of (to be accumulated separately for acquisitions and disposals) for the same development project within one year.
The cumulative transaction amount of the same securities acquired or disposed of (to be accumulated separately for acquisitions and disposals) within one year.

“Within one year” as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items which have been announced according to the Procedures may be excluded.

The Company shall compile monthly reports on the status of derivative transactions conducted up to the end of the preceding month by itself and any of its subsidiaries that are not publicly-listed companies in Taiwan. The information shall be transmitted to the information reporting website specified by the Financial Supervisory Commission before the 10th of each month using the required format.

Where any correction or addition to the information is required, the Company shall repeat all reporting and announcement procedures for all the items.

When acquiring or disposing of assets, the Company shall retain a file of the relevant contracts, meeting minutes, logbooks, appraisal reports, opinions from the CPAs, attorneys and securities underwriters for at least five years, unless otherwise provided by law.

Article 30

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Where any of the following circumstances occurs with respect to a transaction that the company has already publicly announced and reported in accordance with the preceding article, a public report of relevant information shall be made on the information reporting website designated by the FSC within 2 days commencing immediately 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.

Chapter 4 Additional Provisions

Article 31

The Company shall supervise its subsidiaries with regard to the procedures for asset acquisition or disposal:

The subsidiaries of the Company shall establish their own Asset Acquisition or Disposal Procedures based on these Procedures, which shall be sent to the Company for recordation after approval in the shareholders’ meeting. The same procedures shall be followed for the revision of the procedures.
In the event that the amount of any transaction conducted by the subsidiary for the acquisition or disposal of assets has reached 20% of its paid-in capital, 10% of its total assets or NT$300 million or more, the subsidiary shall inform the responsible units of the Company before execution of the transaction.
If the subsidiary has conducted self-inspection of its Asset Acquisition or Disposal Procedures, the subsidiary shall submit the relevant inspection reports to the audit department of the Company for review.
In the event that the subsidiary is not a publicly listed company, the Company shall, on behalf of the subsidiary, carry out relevant information announcement and reporting as stipulated in Chapter 3 herein, if necessary. With regard to the threshold for announcement or reporting by subsidiaries prescribed in Article 29, paragraph 1 herein (i.e., 20% of paid-in capital or 10% of total assets), the calculation basis for the threshold shall be the paid-in capital or total assets of the Company.
If the subsidiary of the Company issues shares that do not carry a face value or have a face value other than NT$10, the Company shall apply “10% of equity” as an alternative threshold for “20% of paid-in capital” as specified in these procedures, attributable to owners of the parent company.

Article 32

Any employee of the Company who violates these Procedures when handling the acquisition or disposal of assets shall be subject to disciplinary actions based on the severity of the violation and in accordance with the relevant human resources management policies of the Company.

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Article 33

These Procedures shall be approved by more than half of all audit committee members and then submitted to the board of directors for a resolution and then to the shareholders’ meeting for approval. They shall take effect after approval in the shareholders’ meeting. The same applies when the procedures are amended.

If approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting.

The terms “all audit committee members” in paragraph 2 and “all directors” in the preceding paragraph shall be counted as the actual number of persons currently holding those positions.

Notes:

2012/06/22 These Procedures were established in the 2012 general shareholders’ meeting. (The “Handling Procedures for Acquisition or Disposal of Assets” amended and resolved in the June 15, 2007 by Shareholders’ Annual General Meeting were abolished at the same time).
2014/06/06 The First Amendment in the 2014 general shareholders’ meeting to amend articles 1,3,4,7,8,10,14,15,18,19,23,29 and 31.
2015/06/12 The Second Amendment in the 2015 general shareholders’ meeting to amend articles 6,8,9,14,17,18,21,33,and these changes will come into effect July 1, 2015.
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【 Attachment 7 】

Taishin Financial Holding Co., Ltd. Rules of Procedure for Shareholder Meetings

(The basis)

Article 1 Rules of Procedure for Shareholder Meetings (the Rules) are established in accordance with Article 11 of the Corporate Governance Best-Practice Principles for Financial Holding Companies to provide sound governance over the Company's shareholder meetings, thereby enhancing the supervisory function of shareholders.

(Applicable laws)

Article 2 Unless otherwise specified by laws and regulations or the Articles of Incorporation, shareholder meetings of the Company shall be conducted in accordance with the Rules.

(Convention and notice of shareholders’ meetings)

Article 3 Unless otherwise specified by laws and regulations or the Articles of Incorporation, shareholders’ meetings are convened by the Board of Directors.
The Company shall prepare an electronic file which contains the meeting notice, a
proxy form, agenda (items for acknowledgement, approval, election and dismissal of directors) and remarks and post it onto the Market Observation Post System (MOPS) 30 days prior to an annual general meeting, or 15 days prior to an extraordinary shareholders’ meeting. An electronic copy of the shareholders’ meeting manual and supplementary information shall be posted onto MOPS 21 days before an annual general meeting, or 15 days before an extraordinary shareholders’ meeting. Hard copies of the shareholders’ meeting manual and supplementary information shall be provided and made available 15 days prior to the meeting and distribute to shareholders at the meeting venue on the day of meeting.

The meeting notice and public announcement shall specify agenda items. The meeting notices may be delivered electronically upon agreement by the specific shareholder(s). For shareholders holding less than one thousand shares, meeting notices may be communicated by way of public announcement.

Agenda items involving election or dismissal of directors, amendment of this Company’s Articles of Incorporation , liquidation, merger, or spin-off of the Company, or any matters set forth in Article 185, Paragraph 1 of the Company Act, Article 26-1 or Article 43-6 of the Securities and Exchange Act or Article 56-1 and 60-2 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be specified in the notices of the meeting, and may not be proposed as special motions.

Shareholders who own more than 1% of the Company's total issued shares may propose in writing one item to be included in the agenda of the annual general meetings. Each shareholder may only propose one agenda item; additional item will not be accepted. The Board of Directors may disregard shareholders' proposals if the

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proposed agenda item involve any of the circumstances listed in Article 172-1, Paragraph 4 of the Company Act.

The Company shall announce the places and time period in which shareholders' proposals are accepted before the book closure date. The period of acceptance shall be no shorter than ten days.

Contents of each agenda item proposed by shareholders may not exceed 300 Chinese characters or shall not be accepted. Shareholders who have successfully proposed agenda items shall attend the annual general meeting in person or through proxy attendance and participate in the discussion.

The Company shall notify the proposing shareholders of the acceptance or rejection to their proposal before the date the meeting notice is sent. Meanwhile, accepted agenda items shall be included into the meeting notice. The Board of Directors shall give explanations to rejected proposals in the meeting.

(Proxy and authorization)

Article 4 Shareholders may appoint proxies to attend shareholders’ meetings by completing the Company's proxy form and specifying the scope of delegated authority.

Each shareholder may issue one proxy form and delegate one proxy only. All proxy forms must arrive at the company at least five days before the shareholders’ meeting. In the event that multiple proxy forms are issued, the proxy form that arrives first shall prevail. However, exception shall be granted if the shareholder issues a declaration to revoke the previous proxy arrangement.

Should the shareholder decide to attend shareholders’ meeting personally or exercise voting rights in writing or through electronic means after a proxy form has been submitted to the company, a written notice must be sent to the company no later than two days before the meeting commences to revoke the proxy arrangement. If the revocation is made after the prescribed period, then the voting decision exercised by the proxy shall prevail.

(Venue and time of shareholders’ meetings)

Article 5 Shareholders’ meetings shall be held at locations that are suitable and convenient for shareholders to attend. Meetings shall not begin earlier than 9.00 a.m. or later than 3.00 p.m.

(Preparation of Documents)

Article 6 The company shall provide an attendance book to record attendance of shareholders or proxies thereof (collectively referred to as shareholders below) to sign in; alternatively, attendance cards may be presented instead of signing in on the attendance book.

Shareholders who attend the meeting shall be given a copy of the meeting manual, annual report, attendance certificate, speech note, ballots and other information relevant to the meeting. Shareholders shall also be given election ballots when there is an election of directors or supervisors.

Shareholders must present an attendance certificate, an attendance card or other proof of attendance to attend a shareholders’ meeting. The Company should not require

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additional identification documents for shareholders’ attendance. Proxy solicitor must present proof of identity for verification.

Government agency shareholder or institutional shareholder may appoint more than one representative to attend the shareholders’ meetings. An institution acting as the proxy may appoint one (and only one) representative to attend the meeting.

(Chairperson and other attendance)

Article 7 If the shareholders’ meeting is convened by the board of directors, the Chairman of the board shall preside over the meeting. If the Chairman is unable to perform such duties due to leave of absence or for any other reason, the Vice Chairman shall act on the Chairman's behalf. If there is no Vice Chairman or if Vice Chairman is on leave or unable to perform his duties, the Chairman may appoint one of the directors to act on the Chairman's behalf. If the Chairman does not appoint anyone act on his behalf, one shall be elected from among the directors to act on the Chairman's behalf.
Shareholders’ meetings that are convened by the board of directors should have more than half of the board members attending the meeting.
If the shareholders’ meeting is convened by an authorized party other than the board of directors, the convener will act as the meeting chairperson. If there are two or more conveners at the same time, one shall be appointed from among them to chair the meeting.
The Company may appoint legal counsels, certified public accountants, and/or other relevant personnel to attend the shareholders’ meeting.

(Video- and tape-recording during shareholders’ meetings)

Article 8 The whole proceeding of the shareholder meetings shall be video- or tape-recorded and such recordings shall be kept for at least one year or up to the conclusion of the shareholder action (if any) initiated under Article 189 of the Company Act.

(Number of attendance and meeting commencement)

Article 9 The quorum of the shareholders’ meeting shall be determined by the number of shares represented at the meeting. The number of shares represented at the meeting is calculated based on the total amount registered in the attendance book or the attendance cards collected, plus the number of shares where voting rights are exercised in writing or through electronic means.

The chairperson shall call the meeting to order as schedule. However, if the total number of shares represented at the meeting counts for less than half of the Company's total issued shares, the chairperson may announce to postpone the meeting for a maximum of two times with a total duration no more than one hour. The chairperson shall dismiss the meeting if there is no quorum after the aforementioned postponement(s).

If there is no quorum after the aforementioned postponement(s) but the number of shares represented at the meeting exceeds one-third of the total issued shares of the Company, tentative resolutions may be adopted in accordance to Article 175, Paragraph 1 of the Company Act. This tentative resolution shall be disclosed to all

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shareholders and another shareholders’ meeting shall be reconvened within one month.

If the number of shares represented in the meeting reaches 50% or more of all issued shares before the meeting ends, the chairperson may re-propose the tentative resolution to the meeting for voting according to Article 174 of the Company Act.

(Meeting process)

Article 10 If the shareholders’ meeting is convened by the board of directors, the board of directors shall determine the meeting proceedings. The proceedings shall not be changed unless resolved in the shareholders’ meeting.

The above provision also applies if the shareholders’ meeting is convened by any authorized party other than the board of directors.

In either of the two arrangements described above, the Chairman cannot dismiss the meeting while an agenda item (including special motions) is still in progress. If the Chairman violates the meeting policy by dismissing the meeting when it is not allowed to do so, other members of the board shall immediately assist the attending shareholders to elect another Chairman with the support of more than half of voting rights represented and continue the meeting.

The chairperson shall allow adequate time to explain and discuss the each agenda item, amendments or special motions proposed in the meeting. The chairperson may announce to conclude the discussion as he/she sees fit and submit the proposals to vote for resolution.

(Shareholders' speech)

Article 11 When a shareholder wish to speak in the meeting, a speech note shall be filled out

with summary of the speech, and the shareholder's account number (or the attendance ID serial number). The sequence of shareholders' comments shall be determined by the chairperson.

Any shareholder submits a speech note without speaking, no speech shall be deemed to have been made by such shareholder.. In case the contents of the speech of a shareholder are inconsistent with the contents of the speech note, the contents of the actual speech shall prevail.

Each shareholder shall not speak for more than two times, five minutes at most for each speech, on the same agenda item unless otherwise agreed by the chairperson. The chairperson may stop shareholders’ speech if they violate the Rules or speak outside the scope of the agenda item under discussion.

No shareholder shall interrupt the speech of other shareholders unless agreed by the chairperson and the shareholder in speaking. Any violators shall be restrained by the chairperson.

Where an institutional shareholder has appointed two or more representatives to attend the shareholders’ meeting, only one representative may speak per agenda item.

After the shareholder has finished speech, the chairperson may answer to the shareholder's queries personally or appoint any relevant personnel to respond.

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(Voting right and conflict of interest)

Article 12 The count of votes in a shareholders’ meeting is bade on the number of shares represented at the meeting.

Shares that do not carry voting rights are excluded from the calculation of outstanding shares when voting for the final resolution.

A shareholder shall abstain from and shall not be a proxy of others for a voting on certain agenda items that he/she has a conflict of interest against the Company at the shareholders meeting

The aforementioned abstained shall be excluded from the total voting rights represented in the meeting.

A person who is proxy of 2 or more shareholders shall cast a vote with a maximum of 3% of total number of voting shares and the excessive voting shares, if any, shall be invalid. The restriction does not apply to trust business or regulator-approved-stock agencies.

(Voting, ballot examination and ballot count)

Article 13 Every one share held by a shareholder has one voting right, subject to the provisions of Paragraph 2 in Article 179 of the Company Act.

Voting rights can be exercised in writing or by way of electronic transmission, if the method for exercising votes has been described in the notice of shareholder meeting Shareholders who have voted in writing or by way of electronic transmission are considered to have attended such shareholders’ meeting in person, but shall be deemed to have waived their rights in respective of any special motions or amendments to the original agenda items in such shareholders’ meeting.

Instructions to exercise votes in writing or by way of electronic transmission shall be delivered to the Company two days prior to the shareholders’ meeting. In the event where there are duplicate submissions are delivered to the Company, the first submission shall prevail; unless an explicit statement to revoke the previous instruction is made in the instruction which comes later.

If the shareholder decides to attend the shareholders’ meeting in person after submitting a voting instruction in writing or by way of electronic transmission, he shall, at least two days prior to the meeting date. Serves a separate declaration of intention to rescind his previous voting instruction. In absence of a timely rescission of the previous voting instruction, the votes exercised in writing or by way of electronic transmission shall prevail. In the event that a shareholder has exercised his votes in writing or by way of electronic transmission, and at the same time appointed a proxy to attend the shareholders meeting, then the voting decision exercised by the proxy shall prevail.

Unless otherwise specified by the Company Act or the Articles of Incorporation, a resolution is adopted by a majority of the votes represented by the shareholders present at the meeting. The chairperson or his/her designate shall announce the total number of voting shares during the voting. The shareholders shall cast their votes on each item to be voted.

A resolution may be passed by a unanimously approval by attending shareholders with the same effect as by a voting. If any objections are raised, the agenda item

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shall be voted on according to the rules outlined above. Shareholders who wish to propose additional agenda items or changes to existing agenda items must have their proposals seconded by another shareholder.

In cases where there are several amendments or alternative resolutions to a certain agenda item, the chairperson shall determine the order in which the new and original proposals are voted on. If any resolution is passed, all other proposals shall be deemed rejected and no further voting is necessary.

The chairperson will appoint ballot examiners and ballot counters; the ballot examiners must be a shareholder.

The counting process shall be performed publicly at the meeting venue and the result of the vote shall be reported and recorded accordingly.

(Election)

Article 14 The election of directors shall be conducted in accordance with the Company’s relevant guidelines to the election and the result of the election shall be announced at the meeting.

All ballots used in the election shall be sealed and signed by the ballot examiners, and properly kept for at least one year or up to the conclusion of any legal action initiated by shareholders under Article 189 of the Company Act.

(Meeting minutes and acknowledgment)

Article 15 The minutes of shareholders’ meeting shall be prepared, duly signed or chop sealed

by the chairperson of the shareholders’ meeting, distributed to the shareholders within 20 days after the meeting. Preparation and distribution of meeting minutes can be made in electronic form.

The Company may distribute meeting minutes by posting details onto MOPS. The minutes shall detail the date and venue of the meeting, the chairperson's name, the method of resolution, and the proceeding and results of various meeting agenda items. These minutes should be kept for the life of the Company.

Any resolutions that are passed with a unanimously approval by the attending shareholders shall be remarked as "the item is unanimously approved by the shareholders after inquiry made by the chairperson at the meeting.” If there is objection from the attending shareholders, the resolution must specify the voting method adopted and the number and percentage of rights voted in favor.

(Disclosure)

Article 16 The Company shall publish information regarding the number of shares acquired by solicitors and the number of shares represented by proxy agents using the prescribed format.

The Company shall post resolutions that are classified as material information as defined by laws and regulations published by the Taiwan Stock Exchange Corporation, via the MOPS within the regulated deadline.

(Meeting order)

Article 17 Personnel working at the shareholders’ meeting must wear identification cards or

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badges.

The chairperson may conduct the disciplinary officers or the security staff to help maintain order in the meeting. Such disciplinary officers or security staff must wear badges marked “Disciplinary Officers” or identification cards.

The shareholder making oral presentation at the meeting shall use the equipment provided by the Company, or the chairperson may stop the presentation.

The chairperson may instruct disciplinary officers or security staff to remove shareholders who violate the meeting rules and refuse to obey the instructions given by the chairperson.

(Intermission)

Article 18 The chairperson may, at his discretion, set time for intermission. In case of incident of majeure events, the chairperson may suspend the meeting temporarily and announce, depending the situation, when the meeting will resume.
The shareholders meeting may resolve to move the meeting to other venue to continue when the availability of the meeting venue is expired and the meeting is not completed.
Shareholders may also resolve to postpone or resume the meeting within the next five days, according to Article 182 of the Company Act.

(Level of approval authority)

Article 19 The Rules shall take effect once approved in the shareholders’ meeting. The same applies to all subsequent changes.

Note:

2011/06/24 Passed and adopted in the 2011 annual general meeting. The Rules previously established by the company's founders on 2001.12.07 and later amended on 2003.06.06 were abolished at the same time.

2012/06/22 The 1nd revision was resolved in the 2012 general shareholders’ meeting on June 22, 2012 to amend articles 3, 4, 13, and 15.

2015/06/12 The 2nd revision was resolved in the 2015 general shareholders’ meeting on June 12, 2015 to amend articles 3, 6 and 14.
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【 Attachment 8 】

Taishin Financial Holding Co., Ltd. Minimum Shareholding Requirement, Individual and Aggregate Shareholding of Directors

I. Minimum shareholding requirement and shareholding positions of directors as of the book closure date for this shareholders’ meeting (2017.04.18):

Title	Minimum shareholding requirement	Shareholding as of 2016.04.18
All directors	160,000,000	203,124,164

II. Details of directors' shareholding:

Title	Name	Representative	Shareholding
Chairman	Hsiang-Chao Co., Ltd.	Wu, Tong-Liang	8,531,368
Director	Tong Shan Investment Co., Ltd.	Kuo, Jui-Sung	122,326,952
Director	Tai-Ho Investment Co., Ltd.	Wu, Cheng-Ching	50,573,118
Director	Chia Hao Co.,Ltd.	Wu, Tong-Shung	16,695,973
Director	Chia Hao Co.,Ltd.	Lin, Long-Su	16,695,973
Director	Santo Arden Co., Ltd.	Wang, Chu-Chan	4,996,753
Independent Director	Lin, Neng-Pai		0
Independent Director	Lin, Yi-Fu		0
Independent Director	Wang, Por-Yuan		0
Total directors' shareholding			203,124,164

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AI assistant

TS Holdings — AGM Information 2017

52218_rns_2017-07-03_23759380-d9f5-466c-9c5c-47fc54d66f7b.pdf

2016 Shareholders' Annual General Meeting (Common / Preferred)

Meeting Manual (Translation)

Table of Contents

Report items:

Attachments

Taishin Financial Holding Co., Ltd.

2017 Shareholders' Annual General Meeting (Common / Preferred)

Meeting Proceedings

[ Report items]

III. The distribution of remuneration to directors and employees of 2016.

[ Acknowledgments]

Summary: Acknowledgment of the company's 2016 business report and financial statements.

Summary: Acknowledgment of the Company's 2016 earnings distribution.

[ Discussions]

Proposed by the board of directors

[Special motion]

【 Attachment 1 】

Taishin Financial Holding Co., Ltd. 2016 Business Report

Macroeconomic and Financial Anaylsis

Overall Business Performance

I. Retail Banking

II. Wholesale Banking

III. Securities and Investment Trust Subsidiaries

Future Prospects

【 Attachment 2 】

Taishin Financial Holding Co., Ltd.

To:

【 Attachment 3 】

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Impairments of Loans and Receivables from Defaulted Financial Instruments

Accuracy of Loans’ Interest Revenue Recognition

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

TAISHIN FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

TAISHIN FINANCIAL HOLDING CO., LTD.

BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

TAISHIN FINANCIAL HOLDING CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

TAISHIN FINANCIAL HOLDING CO., LTD.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

【 Attachment 4 】

Taishin Financial Holding Co., Ltd.

Earnings Distribution Plan

For 2016

【 Attachment 5 】

Taishin Financial Holding Co., Ltd. Articles of Incorporation

Chapter 1 General Provisions

Chapter 2 Shares

Chapter 3 Business

Chapter 4 Shareholders’ meeting

Chapter 5 Directors

Chapter 6 Managers

Chapter 7 Accounting

Chapter 8 Addendum

【 Attachment 6 】

Taishin Financial Holding Co., Ltd. Handling Procedures for Acquisition or Disposal of Assets

Chapter 1 General Principles

Article 1

TS Holdings AGM Information 2017