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UBOT AGM Information 2021

Jul 28, 2021

52203_rns_2021-07-28_839e7eaa-fdad-419f-a1cc-60b76f8ba159.pdf

AGM Information

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Union Bank of Taiwan

The Minutes of 2021 Annual Meeting of Shareholders

Date and Time: July 20, 2021 at 9:00 a.m. Location: 6th floor No. 83, Sec. 2, Jhongshan N. Rd., Taipei City (Staff training classroom of Union Bank of Taiwan) Attend: Total outstanding shares: 3,293,368,806shares Total shares represented by shareholders present in person or by proxy : 2,655,316,878shares (Contain to exercise the right to vote number 120,309,079by electronics) Percentage of shares held by shareholders present in person or by proxy: 80.62% Chairman: Director Li Siang Chang

、 Attend as a delegate: General manager& Director: Jeff Lin Independent Director: Li Guo 、 、 、 Chang Managing Director : Chiang Chen Hsiung Director: Lin Si Yong Huang Jui-Chan of Deloitte & Touche 、 LAW OFFICE OF S.S.Lai ATTORNEY AT LAW: Cheng, Tsai-Fang.

  1. Declare the conference ： Attendant shareholder and shareholder agent represents share have already attained the legal quantity. The Chairman called the meeting to order .

  2. 2.Chairman speech : Director Li Siang Chang

3. Reports

  • (1) 2020 Business Report (Please make reference to attach the form) All attendance shareholder talks over with know.

  • (2) 2020Audit Committee Audit Report (Please make reference to attach the form) All attendance shareholder talks over with know.

  • (3) 2020 Report on Employee and Director Remuneration Distribution Status. All attendance shareholder talks over with know.

4. Approvals

Proposal No. 1 (Proposed by Board of Directors)

Subject ： The 2020 business report and financial statements are submitted for approval. Illustration:

  1. The 2020 business report and financial statements of the Bank (including consolidated financial statements) have been audited by accountants Huang Jui-Chan and Yang Cheng-Hsiu Yang of Deloitte & Touche and have, together with the business report, been approved by the 2th meeting of the 20th term of the audit committee and the 10th meeting of the 21th term of the board of directors of the Bank. They are submitted for approval.

  2. Please refer to the above-cited documents in Attachment.

Resolution ： This proposal vote decides the result as follows:

Attend the shareholder right to vote number while deciding (contain the electronics vote) 2,605,909,730shares

vote)2,605,909,730shares
Decide the result Percentage of shares held by total
votes
Approval votes: 2,577,565,273 98.912%
Disapproval votes: 495,872 0.019%
Invalid votes: 0 -
Abstention votes :27,848,585 1.068%

Proposal was approved after voting.

- 1 -

Proposal No. 2 (Proposed by Board of Directors) Subject: The 2020Profit Distribution Proposal is submitted for approval. Illustration:

  1. 2020 distributable profit of NT$3,813,902,087. It is proposed that the distribution be made as shown in Attachment. in accordance with the articles of association of the Bank.

  2. (1) Special dividends (NT$2.4 per share, calculated at a rate of 4.8% per share) total NT$480,000,000.

  3. (2) Dividends on common stocks (NT$0.631 per share) totaling NT$1,951,915,717.

  4. (3) Undistributed profit: NT$1,381,986,370.

  5. After the profit distribution proposal is approved by the general shareholders meeting, the board of managing directors is authorized to determine the record date for dividend distribution and to handle cash distribution related matters.

  6. In accordance with the regulation of the Ministry of Finance Tai-Cao-Shui No. 871941343 date 30 April 1998, in distributing profit, individual identification should be adopted. The 2020 profit should be distributed in priority in this profit distribution.

  7. If the total number of outstanding shares is subsequently changed due to buy-back of the Bank’s shares or the transfer, exchange or cancellation of treasury shares or any other event, resulting in the change of dividend distribution ratio, the shareholders meeting should authorize the board of directors to carry out the change.

Resolution ： This proposal vote decides the result as follows:

Attend the shareholder right to vote number while deciding (contain the electronics vote) 2,605,909,730shares

vote)2,605,909,730shares
Decide the result Percentage of shares held by total
votes
Approval votes: 2,579,648,553 98.992%
Disapproval votes: 575,317 0.022%
Invalid votes: 0 -
Abstention votes : 25,685,860 0.985%

Proposal was approved after voting.

5. Discussions

Proposal No. 1(Proposed by Board of Directors)

Subject: Amending part of the " Rules of Procedure for Shareholders Meetings ". Illustration:

  1. Because the company law was revised and referenced to the "Reference Example of Rules of Procedure for Shareholders' Meetings" revised by the Taiwan Stock Exchange, Revision of the Bank’s Rules of Procedure for Shareholders’ Meetings: Article 3, Article 5, Article 7, Article 8, Article 9, Article 10, Article 13, Article 15, etc.

  2. In this revision, in addition to some provisions based on the reference example, the relevant text is revised, and the remaining key points are as follows: (1). In line with the amendments to Articles 172 and 172-1 of the Company Law, additional items such as capital reduction, application for suspension of public offerings, directors’ competition license, capital increase from surplus, capital

- 2 -

increase from public reserves, etc. should be listed and explained in the reason for the convening. Do not use temporary motions and shareholders to urge the company to promote public interest or fulfill social responsibilities.

(2). Cooperate with the work, revise the scope of the whole process of recording and video recording of the shareholders' meeting, and adopt the procedures of voting on a case-by-case basis and disclosure of results.

  1. Please refer to Attachment. The comparison table before and after the revision of the "Rules of Procedures for Shareholders Meetings" of the Bank.

Resolution ： This proposal vote decides the result as follows:

Attend the shareholder right to vote number while deciding (contain the electronics vote) 2,605,909,730shares

2,605,909,730shares
Decide the result Percentage of shares held by total
votes
Approval votes: 2,579,666,818 98.992%
Disapproval votes: 527,011 0.020%
Invalid votes: 0 -
Abstention votes : 25,715,901 0.986%
Proposal was approved after voting.

Proposal No. 2 (Proposed by the Board of Directors)

Subject: Amending part of the " Procedures for Election of Directors " Illustration:

  1. In accordance with the amendment to Article 192-1 of the Judiciary and the director nomination system, some provisions of the Bank's "Director Election Procedure" have been revised. This amendment is as follows:

  2. (1) Delete the name, education and experience of the director candidates reviewed by the board of directors, and amend the electors to fill in only the names of the electees on the ballots. If the names of director candidates are the same, the difference shall be noted by the board of directors or other convening persons (Articles 5 and Articles 10).

  3. (2) Revise the invalidity of the voting ballot and adjust the text content in accordance with practical operations (Articles 11, Articles 12, and Articles 13).

  4. Please refer to Attachment. The comparison table before and after the revision of the "Rules of Procedures for Shareholders Meetings" of the Bank.

Resolution ： This proposal vote decides the result as follows:

Attend the shareholder right to vote number while deciding (contain the electronics vote) 2,605,909,730shares

2,605,909,730shares
Decide the result Percentage of shares held by total
votes
Approval votes: 2,579,663,098 98.992%
Disapproval votes: 530,613 0.020%
Invalid votes: 0 -
Abstention votes : 25,716,019 0.986%
Proposal was approved after voting.

Proposal No. 3 (Proposed by the Board of Directors)

Subject: Discuss the company's surplus to allocate capital to issue new share. Illustration:

  1. In order to enrich the working capital of the Bank, NT$1,951,915,717 was allocated from the distributable surplus in 2020, and the surplus was transferred to

- 3 -

NT$1,951,915,710 to issue 195,191,571shares of common stock. The remaining NT$ 7 was disbursed by 1 share and was distributed in cash.

  1. After the approval of the shareholders' meeting, the board of directors is authorized to set the base date for the capital increase and share allotment. The stock dividends distributed by the shareholders shall be distributed free of charge according to the proportion of the shares held by the ordinary shareholders listed in the register of ordinary shareholders of the Japanese stocks on the basis of allotment, and 63.1 shares shall be distributed for each thousand shares.

  2. The new shares issued are ordinary shares, and the rights and obligations are the same as ordinary shares, with a denomination of NT$10 per share.

  3. In the event of a change in the shares of the Bank, or the transfer, conversion or cancellation of the treasury shares or other circumstances, affecting the total number of shares outstanding, the share allotment, and the dividend rate, the shareholders' meeting authorizes the board of directors to handle the change.

  4. In the case of the above-mentioned capital increase and issuance of new shares, the shareholders' meeting authorizes the board of directors to deal with changes in the law or when the competent authority approves the amendment.

Resolution ： This proposal vote decides the result as follows:

Attend the shareholder right to vote number while deciding (contain the electronics vote) 2,605,909,730shares

==> picture [372 x 86] intentionally omitted <==

----- Start of picture text -----

Decide the result Percentage of shares held by total
votes
Approval votes: 2,579,513,440 98.987%
Disapproval votes: 721,471 0.027%
Invalid votes: 0 -
Abstention votes : 25,674,819 0.985%
----- End of picture text -----

Proposal was approved after voting.

6 、 Election matters.

Subject: Election of the 11th directors (including independent directors). Please vote. (Proposed by Board of Directors)

Illustration:

  1. According to the Bank’s Articles of Association, the Bank shall have 9 to 15 directors; the number of independent directors shall be at least 3, and shall not be less than one-fifth of the number of directors; the election of directors (including independent directors) adopts a candidate nomination system and the term of office is For 3 years, they may be re-elected.

  2. The tenth term of the Bank’s 10th directors expires on June 8, 2021. This year, 9 directors (including 3 independent directors) are proposed to be elected for the 11th term, and they will take office after the end of the general meeting of shareholders on May 28, 2021. Ends May 27, 2024, the term of office is 3 years.

The term of office of the original directors ends when the directors re-elected by the current shareholders' meeting take office.

  1. The directors (including independent directors) of this election proposal were reviewed and approved by the 22nd Board of Directors of the 10th term of the Bank on April 14, 2021.

  2. List of candidates for the 11th board of directors (including independent directors) of the Bank:

- 4 -

No Job Title Name Gender Education Main Experience Number of
shares
（Note）
1 Independ
ent
director		 Li Guo
Chang		 male Dept. of
Economics,
National
Taiwan University		 Taiwan Business
Bank Co., Ltd.
vice president.
Union Bills
Finance
Corporation.
General manager
Union Bills
Finance
Corporation.Cha
irman, Site
Designed By
Laypu Technology
Corp. Chairman
0
2 Independ
ent
director		 Lee
Tzung
Hang		 male Ph.D., Dept. of
Naval
Architecture and
Marine
Engineering,
University of
Michigan, Ann
Arbor, U.S.A.		 Examination
Institute Test
committee,
The University
of Manchester A
visiting scholar
,Department of
Mechanical &
Electro-mechani
cal Engineering,
Tamkang
University
Professor
0
3 Independ
ent
director		 Fan Lin
Yu		 Female MBA, City
University of
Seattle,
Washington,
U.S.A.		 Fuh Hwa
Securities
Investment Trust
Co., Ltd. vice
president,GoldFuh
Hwa Securities
Investment Trust
Co., Ltd.
Executive
Chairman,
UNION INS.
director
GM, Union
Securities

0

- 5 -

==> picture [489 x 707] intentionally omitted <==

----- Start of picture text -----

Investment Trust
Co.
Chuan
Cheng
Investm
Commissioner,
ent Co.,
International
Ltd. National Defense 151,686,
4 director male Rotary Taiwan
represe Medical Center 786
Rotary Club
nted by:
Association
Chiang
Chen
Hsiung
Union
Investm
ent Ltd. Master‘s Degree,
GM, Union Bank of 11,000,0
5 director represe male National Taiwan
Taiwan 00
ntative University
: Lin
Jeff
Bai
Sheng
Investm Director,
ent Co., Hong-Bung
National Taiwan 164,985,
6 director Ltd. male Construction
Normal University 123
represe Enterprise Co.,
nted by: Ltd.
Lin Si
Yong
Yo Bang
Co.,
Ltd. National Taipei Director,Tien
44,779,5
7 director represe Female College of Sheng Investment
43
nted by: Business Co., Ltd.
Cao Su
Fong
Union
Dept. of
Investme
Industrial and Commissioner,Fo
nt Ltd.
Systems rmosa Chemicals 11,000,0
8 director represe male
Engineering,Chun & Fibre 00
nted
g Yuan Christian Corporation
by:Li,W
University
en Ming
Dept. of Business Executive Vice
Tu
9 director male Administration,Colle President, Union 322,522
Herman
ge of Chinese Culture Bank of Taiwan
----- End of picture text -----

- 6 - 

Note: The number of shares held by the director candidates (including special
shares) is the number of shares held by the company as of the closing date
of the shareholders' meeting (March 30, 2021).

Election results:

==> picture [469 x 315] intentionally omitted <==

----- Start of picture text -----

Number of voting rights
NO. Job Title NAME (including electronic
voting rights)
Union Investment Ltd.
1 director 3,061,920,858
representative : Lin Jeff
Chuan Cheng Investment Co., Ltd.
2 director 2,811,753,148
represented by: Chiang Chen Hsiung
Bai Sheng Investment Co., Ltd.
3 director 2,778,181,048
represented by: Lin Si Yong
Yo Bang Co., Ltd.
4 director 2,672,309,288
represented by: Cao Su Fong
Union Investment Ltd.
5 director 2,568,088,188
represented by:Li,Wen Ming
6 director Tu Herman 2,566,637,418
Independent
7 Li Guo Chang 2,215,254,011
director
Independent
8 Lee Tzung Hang 2,214,751,379
director
Independent
9 Fan Lin Yu 2,214,483,164
director
----- End of picture text -----

Supplementary explanation: According to the announcement of the competent authority, "Relevant measures to postpone the shareholders meeting of public offering companies in response to the epidemic", The company’s regular shareholders’ meeting was postponed to July 20, and the term of office for the re-election of new directors is calculated from the actual date of re-election. The term of office is from July 20, 2021 to July 19, 2024.

7、Other matters.

Subject: Lifting the 11th directors’ non-competition restriction. (Proposed by Board of Directors)

Illustration:

  1. According to the first paragraph of Article 209 of the Company Law: "The directors, for themselves or others who are within the business scope of the company, shall explain the important content of their actions and obtain their permission to the shareholders' meeting".

  2. Newly appointed directors of the Bank, or participating in other business operations of companies with the same or similar business scope as the Bank, in accordance with Article 209 of the Company Law, request the shareholders meeting to dismiss the newly appointed directors and their representatives as directors The restrictions on the prohibition of competition during the period are as follows:

- 7 -

Job
title		 NAME Projects that are permitted to
engage in competitive behavior
director Union Investment
Ltd.(representative :
Lin Jeff)
Union Investment Ltd. (Hong Kong)
director Or a company position that
is the same or similar to the
company's business scope
director Tu Herman Union Securities Investment Trust
Co., Ltd. Director,UNION FINANCE &
LEASING (INT'L) CORP. Supervisor,
Or a company position that is the
same or similar to the company's
business scope
director Union Investment
Ltd. (represented
by:Li,Wen Ming)		 Morgan Commonwealth Asset
Management Co., Ltd. Chairman
Qunyi Securities Investment Trust
Co., Ltd. Director, Or a company
position that is the same or similar
to the company's business scope

Summary of shareholders' speeches:

Shareholder Account No. 44070: Because Li,Wen Ming the representative of the Director Federal Investment Co., Ltd., has resigned as a director of Qunyi Securities Investment Trust Co., Ltd. on July 19, 2021, it is recommended that the details of Li,Wen Ming’s lifting of the non-competition prohibition in this case should be revised to: Morgan Chairman of Federal Asset Management Co., Ltd. or a position in a company with the same or similar business scope as the company.

The shareholder account NO. 43932 seconded the speech.

Chairman: In accordance with Article 13 of the Rules of Procedure, I designated shareholders to vote on amendments proposed by shareholders. Shareholders who have exercised their voting rights electronically will be deemed to have abstained from voting on amendments to this proposal.

Resolution ： This proposal vote decides the result as follows:

Attend the shareholder right to vote number while deciding (contain the electronics vote) 2,605,909,730shares

2,605,909,730shares
Decide the result Percentage of shares held bytotal votes
Approval votes: 2,500,761,308 95.96%
Disapproval votes: 0 -
Invalid votes: 0 -
Abstention votes : 105,148,422 4.03%

Proposal was approved after voting.

The shareholders' meeting agreed to lift the restrictions on the prohibition of business competition for newly appointed directors and their representatives while serving as directors of the Bank. The details are as follows:

- 8 -

Job
title		 NAME Projects that are permitted to
engage in competitive behavior
director Union Investment
Ltd.(representative
: Lin Jeff)		 Union Investment Ltd. (Hong Kong)
director Or a company position that
is the same or similar to the
company's business scope
director Tu Herman Union Securities Investment Trust
Co., Ltd. Director,UNION FINANCE &
LEASING (INT'L) CORP. Supervisor,
Or a company position that is the
same or similar to the company's
business scope
director Union Investment
Ltd. (represented
by:Li,Wen Ming)		 Morgan Commonwealth Asset
Management Co., Ltd. Chairman
Or a company position that is the
same or similar to the company's
business scope

8. Motions ： none

9. Adjournment ： July 20, 2021 at 9:55 a.m.

※ The proceedings of the shareholders' meeting are recorded in accordance with Article 183, Item 4 of the Company Law, and the results of the proceedings and the results of the meeting are still subject to the meeting's audio and video records.

Chairman: Li Siang Chang

Record : Chen Ying Ching

- 9 -

Attachment

2020 Business Report

1.Domestic and Overseas Financial Status

In 2020, COVID-19 will have an impact on the global economy, and multinational control will have a serious impact on business operations. The Chinese government has provided various rescue and revitalization measures to help companies tide over the difficulties. Most of the credit risks are guaranteed by the government. Bank loans will be released in 2020. The expansion of business quotas, relief of preferential interest rates and loose market funds have affected the profitability of the banking industry.

Looking forward to 2021, my country's banking industry is expected to gradually recover under the control of COVID-19, domestic and foreign lending businesses will have an expanded niche, the domestic market will continue to expand, and the return of Taiwanese businessmen will bring financing, investment and wealth management business opportunities, and financial technology. The economy is expected to improve in 2021 compared to 2020. The uncertainty of credit risks and low interest spreads brought about by the global epidemic and trade wars will also become a long-term problem for the banking industry.

2. 2020 Operating Results and Main Business Status

With the joint effort by all employees of the Bank in 2020, good performance has been demonstrated in terms of various operational benchmarks. In terms of profitability, the 2020 net profit after tax is NT$3.442 Billion. The earnings per share after tax (EPS) is NT$0.96. Total asset rate of return (ROA is 0.48%. Net value rate of return (ROE) is 6.14%. In terms of asset quality, the overdue lending ratio is 0.14%. Bad debt coverage ratio is 788.94%. Asset quality is maintained at a good level.

For years, the Bank has continuously developed different businesses with stable growth and under an operational strategy of in-depth local efforts. On 18 December 2020, the long-term and short-term credit of the Bank was rated “twA/twA-1” by Taiwan Ratings Corporation. also expects that the Bank should be able to maintain its solid corporate foundation in consumer finance business, satisfactory asset quality, and reasonable funding sources and liquidity structure during the aforementioned period.

Below is a summary report on the operational status of the Bank’s main businesses in 2020:

(1) Deposit

The balance of Taiwan’s foreign currency deposits at the end of 2020 was 613.9 billion yuan, an increase of 74.5 billion yuan from the 539.6 billion yuan at the end of 2019, with a growth rate of 13.81%. In terms of deposit structure, demand deposit balance was 306.2 billion yuan, accounting for

- 10 -

49.88% of the total deposit ratio, and time deposit balance was 307.7 billion yuan, accounting for 50.12% of the total deposit ratio.

  • (2) Lending The balance of loans at the end of 2020 was NT $ 428.7 billion, an increase of RMB38.4 billion from NT $ 390.3billion at the end of 2019, with a growth rate of 9.84%. Among them, guaranteed loans amounted to NT $335 billion, accounting for 78.14% of total loans; unsecured loans amounted to NT $ 93.7 billion, accounting for 21.86% of total loans.

  • (3) Credit Card

  • The marketing strategy focuses on youth, convenience and digitalization. It mainly promotes promotion activities such as online shopping, APP, supermarkets, and supermarkets. In the post-epidemic era, it uses department store strategies to manage high-spending customers, stabilize department store spending, and continue to plan installment ( Such as insurance, APPLE direct store installment, etc.) and Federal Day activities to increase the effective card rate; in 2020 total credit card spending of 98.8 billion yuan, an increase of 8% over 2019. It is one of the four growing companies among the top eight card issuing banks.

  • Continue to promote the point card to strengthen cooperation with transportation tickets and introduce new payment tools, and use LINE POINTS, which is popular among young people, as the main point card for reward activities, to promote the younger generation of card friends, increase brand awareness, and consume The prerequisite is to optimize online card application functions and convenience, and increase the proportion of online card applications, thereby saving input and labor costs. In addition, Breeze Card has reached the goal of 500,000 circulation cards this year, becoming the bank’s largest card issuance category. As of December 2020, the number of credit cards in circulation was 2,243,665 cards, an increase of 4% from 2019.

  • (4) Fortune Management The Bank's 2020 wealth management households grew by 5.11% compared with 2019, and the average monthly balance of total management assets grew by 8.04% compared with 2019. The part of operating income affected by the epidemic decreased by 18.66% compared with last year. The Bank provides more financial products, augments specific money trusts and insurance content, and increases overall financial management revenue.

  • (5) Operating Performance In 2020, the net interest income was NT$ 7.699 billion, the net income other than interest was NT$4.379 billion, and the total net income was NT$12.078 billion. After deducting the net debt provision of NT$267 million and operating expenses of NT$7.961 billion, the net profit

- 11 -

before tax was NT$3.850 billion. The net profit after tax was NT$ 3.442 billion.

  • (6) Corporate Image

  • To implement the brand spirit of "Believe in Happiness. Have the courage to undertake", we continued to actively invest in various social welfare actions in the 2020 year, including cooperating with the "Federal Culture and Education Foundation" to launch the "Let's Make Happiness" love donation platform, and fundraising donations to "Pingtung "Hope Children's Choir Training and Education Funding, Yunlin Community Elderly Care, and Nantou Rural Elderly and Weak Food Delivery Service" and other social welfare organizations with limited resources; In the summer, organize "children's financial management camps" in the northern, central and southern regions of the country to promote children's financial knowledge and nurturing education; long-term adoption of Taiwanese conservation animals "stone tigers and ring-necked pheasants" to care about ecological conservation; sponsor "Pingtung County Books" Cultural and educational promotion activities such as the National Museum, the basketball team of Taitung Middle Mountain High School, Taitung Hot Air Balloon Carnival and Kaohsiung Spring Art Festival Concerts"; Organize the "Children's Charity Drawing Competition", and cooperate with the "Federal Culture and Education Foundation" to organize the "Federal Art Competition and Art Tour Exhibition" to support domestic art promotion and talent cultivation; in addition, in the face of the new crown pneumonia, the bank specially produced " The "Taiwanese Badge" was presented to the public, and the "Federal Support Medical Care Project" was launched to call on the Chinese people to unite, work together to protect their homes, and give back to the medical staff who worked hard on the front line.

  • 2021 Operational Plan and Development Guidelines by Business

  • (1)Actively expand the scale of business based on the competitive innovative services; in terms of business purposes, adhere to the spirit of service by persistence; establish a long-term relationship with the customers; and create a win-win value:

1. Deposits: 

  - (1).Evaluate the establishment of new off-bank ATMs, expand service

     - bases, and enhance the expansion of deposit business.

  - (2).Continue to expand the deposit solicitation and salary transfer business with the bank's vendors.

  - (3).Business marketing plan (acceptance (subsidy) project of special

- 12 -

credit card stores, Anyang trust business) to develop new customer

sources and deposits.

  • (4).Strengthen various deposit preferential interest rate projects, solicit customer deposits, and increase the scale of deposits.

  • (5)In response to the development trend of digital finance, the Bank added LINE Pay Money payment channel for its agency collection and payment service business, hoping to deepen its old customers and open up new customers.

2. Enterprise and foreign exchange business: 

  - (1). Actively expand loans for industrial and commercial enterprises, give priority to factory loans (MIT) and self-repayable loans, and strengthen the protection of claims by obtaining high-quality collateral and credit insurance fund guarantees.

  - (2). Use the promotion of marketing projects (such as: big data model, cross-business marketing) to find potential customers and strengthen the expansion of SME lending.

  - (3). Strengthen the undertaking of high-quality stock loans.

  - (4). Construction financing cases are undertaken based on the selection of high-performance customers, construction areas and locations with good locations.

  - (5). Under risk control, strive to increase profitability, and through credit business transactions, strive for cash flow and various business transactions to increase overall profitability.

  - (6). In response to complex transactions, high operating costs, or Bridge Loan credit cases, moderately increase the fee income.

  - (7).In response to the revision of the BASEL `Ⅲ` capital provision method by the competent authority, the loan-to-lending ratio method (LTV) will be adopted for the real estate risk insurance sector in 2021. In the future, real estate will be provided as a guarantee for credit, and the amount of loans will be controlled and controlled. For higher risks, For weighted cases, a higher interest rate is adopted for pricing.

  - (8). Develop customer sources for foreign exchange business, expand import and export and exchange business to increase the Bank's foreign exchange niche and market share.

  - (9).Actively participate in high-quality leading enterprises and international co-loan projects guaranteed by the state or

- 13 -

government agencies, and establish professional and experience in hosting international co-loan management banks.

  • (10).Strengthen foreign exchange credit cases and increase credit protection through overseas credit insurance funds.

3. Consumer Finance:

  • (1).Through the establishment and execution of big data models, it analyzes customer groups, and launches project marketing based on data mining potential customer groups, increases new business opportunities, and establishes diversified business channels and complete services.

  • (2)Continue to focus and cultivate high-quality customers, grasp customer demand trends, and consolidate existing customers; provide customized projects for different ethnic groups to open up new customer groups.

  • (3). Actively recruit new or self-trained credit AO personnel to increase business volume.

  • (4). Stabilize the new car loan business, increase the amount of used car purchase loans and original car loans, and continue to expand the business scale.

  • (5).Increase the digital channel loan service, increase the young and digital customer base, and optimize the physical channel (branch and center) loan service to achieve the full promotion of the virtual and real channel. And link project loan programs for specific ethnic groups and specific seasons.

  • (6).Increase cross-industry alliances and provide digital loans through

life scenarios.

4. Credit Card:

  • (1).Continue to invest in the promotion of point-of-sale card issuance business, create a basis for cross-selling operations, and invest in micro-credit income, insurance income, etc.

  • (2).Committed to electronic services, such as automated services such as mobile billing, LINE BC binding, online card issuance business promotion, etc., to improve customer online services and save related costs.

  • (3).Continue to promote mobile payment loading, optimize self-owned GateWay to expand the online special store acquiring business, and promote the diversified new payment methods of special stores, such as QR code scanning transactions and LINE PAY acquiring, to enhance the competitiveness of the acquiring business.

  • (4). In response to the post-epidemic era, grasp the market's

- 14 -

consumption momentum and key channels, and hold promotion activities for channels (such as department stores, supermarkets, supermarkets, online, etc.) or consumption categories (such as domestic travel, insurance installment, mobile payment, etc.) to increase visas The amount of the account.

5. Wealth management, insurance agency and trust business:

  • (1). Integrate trust services to expand trust 2.0 business, strengthen

    • core customer relationships and develop second-generation

    • ustomers.

  • (2). Expand the scope of Anyang Trust's services, develop cross-industry alliances, integrate relevant channels for the elderly, and meet all their needs.

  • (3). Promote action science specialization, provide a friendly financial environment, and improve operating efficiency.

  • (4). Expanded domestic late-collection funds were put on the shelves.

  • (5). Increase the proportion of ETF and foreign debt business.

  • (6). The derivative financial product business was launched.

  • (7). Leverage the sales advantages of existing branches to continue to 

     - promote related insurance products such as protection, investment

and pension planning, and at the same time actively introduce diversified insurance products that combine death, accident, health, medical and care, etc., to satisfy customers All-round human financial planning.

6. Digital financial business:

  • (1)Personal e-banking services

    • Continue to optimize the user interface and transaction process of personal online banking and mobile banking, strengthen the system architecture and system usage efficiency, and enrich various online financial services to enhance the competitiveness of electronic banking services.

  • (2)Corporate Internet Banking Services Provide a more convenient corporate gold flow trading platform to facilitate corporate customers to effectively grasp the company's internal capital in and out and various transaction information, and actively promote the autonomy of corporate customer online financial transaction management to improve operational efficiency and create competitive

- 15 -

advantages.

  • (3)New New Bank Digital banking services

  • A. Accelerate the expansion of service functions, including linking to diversified online financial services such as online loans, credit card application, securities account opening, and fund investment, to meet the needs of customers for fund management and management.

  • B. Integrate marketing resources across the bank, strengthen business cooperation with strategic partners such as supermarkets, LINE Pay Money, and campus payment, expand service channels and actively develop target customer groups, effectively increasing the market share of digital accounts.

  • (4)Strengthen the marketing application of the community and various

information platforms

Strengthen community management, and enhance the integrated application of various information platforms such as LINE BC, SMS, eDM, etc., combined with new functions including LINE API, and strengthen marketing promotion effectiveness.

  • (5)New types of digital financial service integration and pplication

    • A. Comprehensive application has developed a big data model to improve the effect of business promotion through precise marketing.

    • B. Combined with the bank's customer service system, intelligent customer service was introduced to improve service efficiency and quality.

    • C. With video, new-style ID cards, and digital account opening permissions are standardized, we continue to optimize online account opening and identity verification processes.

    • D. Establish various cross-system services (such as mobile phone number transfer, personalization of My Data digital services, Open Banking, Open Banking API services, etc.) in accordance with the policies of the competent authority

7. Securities Business:

  • (1). Establish online securities account opening applications to promote online business.

  • (2). Actively promote the electronic ordering business and increase the proportion of electronic transactions.

  • (3).Deeply cultivate the development and operation of the securities legal person client group, with the goal of increasing the amount of performance.

- 16 -

8. Others: 

  - (1). In terms of investment business, it actively cultivates financial transaction talents, carefully selects investment targets, implements

     - the disciplinary requirements for risk control related to capital operations, and uses the Bank's surplus to be credited.

  - (2).Improve the profitability of various assets, strengthen risk management, and maintain good asset quality.

  • (2)Channel Development

  • The Bank has a total of 90 domestic business locations, and continues to actively expand overseas business territory and expand operations. Currently, the Hanoi office has been approved by the Central Bank of Vietnam and opened in April 2020 to provide customers with international financial services.

  • In order to provide customers with more convenient services, the bank has actively expanded out-of-bank ATMs in recent years, hoping to enhance the bank's brand image and popularity through the extension of channels. In 2020, the bank has installed a total of 874 ATMs.

  • (3)The Bank’s 2021 Estimated Operational Targets

==> picture [434 x 107] intentionally omitted <==

----- Start of picture text -----

Type of Business 2020Target
Deposit (including foreign Average balance of NT$650.9 Billion at
currencies) the end of the year
Lending (excluding credit Average balance of NT$484.4 Billion at
card) the end of the year
Foreign Exchange Annual transaction of US$7.929 Billion
----- End of picture text -----

  1. Improvement of operating performance related benchmarks: Including the over-capital ratio below the industry average and maintaining the capital level in accordance with the BASL regulations to meet capital ratio standards, and maintaining a stable source of funds and high-quality liquid assets to meet the net stable capital ratio (NSFR) and liquidity Coverage ratio (LCR) standard.

With the supervision of all shareholders and the effort of all employees, we hope to achieve all operating targets and create even more outstanding performance to answer to the expectations of the shareholders and the society. We hope that all shareholders will continue to encourage and guide the Bank.

Chairman: Li Sian Chang Manager: Lin Jeff Accounting Head: Yang Ju Chang

- 17 -

Union Bank of Taiwan Audit Committee Audit Report

The Bank’s 2020 consolidated financial report is prepared in accordance with the standards for the preparation of financial reports for publicly issued banks, the standards for the preparation of financial reports for securities firms, and the international financial reporting standards, international accounting standards, interpretations and interpretation announcements approved and promulgated by the Financial Regulatory Commission. 2020 The annual individual financial report is prepared in accordance with the financial report preparation standards of publicly issued banks and the financial report preparation standards of securities firms, and has been checked by Deloitte & Touche Huang Jui-Chan and Yang Cheng-Hsiu accountants After the review by the Audit Committee, After review by the Audit Committee, it is deemed that there is no discrepancy. In accordance with the provisions of Articles 14-4 and 36 of the Securities and Exchange Act, a report is prepared, please check .

To

Union Bank of Taiwan 2021 General Shareholder Meeting

Union Bank of Taiwan

Chairman of Audit Committee: Li Guo Chang

10 March 2021

- 18 -

INDEPENDENT AUDITORS’ REPORT The Board of Directors and Stockholders Union Bank of Taiwan

Opinion

We have audited the accompanying financial statements of Union Bank of Taiwan (the “Bank”), which comprise the balance sheets as of December 31, 2020 and 2019, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the 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 Bank as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks and Regulations Governing the Preparation of Financial Reports by Securities Firms.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters of the Bank’s financial statements for the year ended December 31, 2020 are described as follows:

Assessment of the Impairment of Discounts and Loans

As of December 31, 2020, the net amount of discounts and loans of the Bank was represented approximately 57% of total assets, and was considered material to the financial statements as a whole. Refer to Note 14 to the financial statements. The Bank’s management performs loan impairment assessment by making critical judgements on accounting estimates and assumptions; therefore, we determined allowance for possible losses on discounts and loans as a key audit matter for the year ended December 31, 2020.

- 19 -

The Bank’s management periodically performs loan impairment assessment through making judgements to measure the loss allowance at an amount equal to 12-month expected credit losses or the lifetime expected credit losses. Also, the allowance provision should comply with the classification of credit assets required by the relevant regulations on making provision issued by the authorities. For the accounting policies and relevant information on loan impairment assessment, refer to Notes 4, 5 and 14 to the financial statements.

The main audit procedures we performed in response to certain aspects of the key audit matter described above were as follows:

  1. We obtained an understanding of the relevant internal controls in respect of the Bank’s loan impairment assessment and tested the operating effectiveness of such controls.

  2. We tested the classification of credit assets in accordance with relevant regulations issued by management and authorities. In addition, we evaluated the reasonableness of the adjustments to the classification.

  3. We assessed the reasonableness and consistency of the methodology applied by management in the calculation of expected credit losses; we tested the completeness of the loans and the accuracy of the calculation of expected credit losses for selected loans.

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

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

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

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

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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.

- 20 -

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:

  1. Identify and assess the risks of material misstatement of the 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.

  2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank’s internal control.

  3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Bank to cease to continue as a going concern.

  5. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

  7. 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.

  8. 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,

- 21 -

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, 2020 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 audits resulting in this independent auditors’ report are Jui-Chan Huang and Chen-Hsiu Yang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 29, 2021

- 22 -

UNION BANK OF TAIWAN

BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS
CASH AND CASH EQUIVALENTS
DUE FROM THE CENTRAL BANK AND CALL LOANS TO OTHER BANKS
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
INVESTMENTS IN DEBT INSTRUMENTS AT AMORTIZED COST
SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL
RECEIVABLES, NET
CURRENT TAX ASSETS
DISCOUNTS AND LOANS, NET
INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD, NET
OTHER FINANCIAL ASSETS, NET
PROPERTY AND EQUIPMENT, NET
RIGHT-OF-USE ASSETS
INTANGIBLE ASSETS
Goodwill
Computer software
Total intangible assets
DEFERRED TAX ASSETS
OTHER ASSETS, NET
TOTAL
LIABILITIES AND EQUITY
DEPOSITS FROM THE CENTRAL BANK AND OTHER BANKS
DUE TO THE CENTRAL BANK AND OTHER BANKS
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
PAYABLES
CURRENT TAX LIABILITIES
DEPOSITS AND REMITTANCES
BANK DEBENTURES
OTHER FINANCIAL LIABILITIES
PROVISIONS
LEASE LIABILITIES
DEFERRED TAX LIABILITIES
OTHER LIABILITIES
Total liabilities
EQUITY
Share capital
Ordinary shares
Preference shares
Total share capital
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Total retained earnings
Other equity
Total equity
TOTAL		 2020
Amount
%
$ 8,141,334
1
24,325,798
3
33,967,730
5
52,807,395
7
90,697,662
12
63,872,973
9
22,703,290
3
44,382
-
424,304,969
57
5,863,071
1
4,471,836
1
7,892,451
1
1,639,260
-
1,985,307
-

170,823

-
2,156,130
-
636,906
-

2,751,600

-
$ 746,276,787
100
$ 11,942,863
2
3,786,720
1
206,002
-
44,428,176
6
5,430,396
1
106,676
-
608,269,514
81
7,200,000
1
115,361
-
244,939
-
1,621,207
-
1,635,842
-

1,098,256

-
686,085,952

92
30,933,688
4

2,000,000

-

32,933,688

4

8,040,035

1
7,883,630
1
627,440
-

4,854,972

1

13,366,042

2

5,851,070

1

60,190,835

8
$ 746,276,787
100		 2019

































Amount
%
$ 10,937,284
2
17,344,886
3
30,599,774
4
40,962,420
6
104,170,149
15
51,360,225
8
20,432,902
3
49,185
-
386,383,784
56
5,375,020
1
3,520,128
1
7,945,393
1
1,361,636
-
1,985,307
-

142,872

-
2,128,179
-
540,779
-

3,267,302

-
$ 686,379,046
100
$ 11,300,923
2
-
-
650,981
-
65,377,436
10
4,519,286
1
364,806
-
533,655,963
78
10,200,000
1
111
-
249,967
-
1,338,560
-
1,569,639
-

903,073

-
630,130,745

92
28,844,553
4

2,000,000

-

30,844,553

4

8,035,484

1
6,875,793
1
627,440
-

5,180,139

1

12,683,372

2

4,684,892

1

56,248,301

8
$ 686,379,046
100

.

.

- 23 -

UNION BANK OF TAIWAN

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET INTEREST
Interest revenue
Interest expense
Net interest
NET REVENUE OTHER THAN
INTEREST
Commissions and fee revenue, net
Gain on financial assets and
liabilities at fair value through
profit or loss
Realized gain on financial assets at
fair value through other
comprehensive income
Share of profit of subsidiaries and
associates
Foreign exchange gain (loss), net
Reversal of impairment loss
(impairment loss) on assets
Securities brokerage fee revenue,
net
Loss on disposal of properties and
equipment, net
Other noninterest gain, net
TOTAL NET REVENUE
PROVISIONS
Provision of allowance for doubtful
accounts and provision for losses
on commitments and guarantees
OPERATING EXPENSES
Employee benefit expense
Depreciation and amortization
Others		 2020
Amount
%
$ 11,858,192
98
4,158,730
34
7,699,462
64
2,869,110
24
1,710,809
14
407,220
3
25,788
-
(946,549)
(8)
128,860
1
171,805
2
(7,119)
-
19,109

-
12,078,495
100
267,216

2
3,695,508
31
753,311
6
3,512,000
29		 Percentage
Increase
2019
(Decrease)
Amount
%
%
$ 12,023,379
103
(1)
5,459,519
47

(24)
6,563,860
56

17
2,777,365
24
3
1,411,067
12
21
336,640
3
21
105,216
1
(75)
363,269
3
(361)
(42,921)
-
400
98,868
1
74
(3,427)
-
108
50,419

-

(62)
11,660,356
100

4
235,584

2

13
3,588,081
31
3
809,417
7
(7)
3,052,907
26

15
(Continued)		 Percentage
Increase
(Decrease)












- 24 -

UNION BANK OF TAIWAN

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Total operating expenses
INCOME BEFORE INCOME TAX
INCOME TAX EXPENSE
NET INCOME
OTHER COMPREHENSIVE
INCOME
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of defined
benefit plans
Unrealized gain on investments
in equity instrument at fair
value through other
comprehensive income
Share of the other comprehensive
income (loss) of subsidiaries
and associates accounted for
using the equity method
Income tax relating to items that
will not be reclassified
subsequently to profit or loss
Items that will not be
reclassified subsequently to
profit or loss, net of income
tax
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on
translation of the financial
statements of foreign
operations		 2020
Amount
%
7,960,819
66
3,850,460
32
408,751

4
3,441,709
28
11,842
-
812,340
7
(39,030)
-
(109,493)
(1)
675,659

6
(625,885)
(5)		 Percentage
Increase
2019
(Decrease)
Amount
%
%
7,450,405
64

7
3,974,367
34
(3)
614,910

5

(34)
3,359,457
29

2
172,852
2
(93)
2,247,568
19
(64)
1,000
-
(4,003)
(334,744)
(3)

(67)
2,086,676
18

(68)
(227,061)
(2)
176
(Continued)		 Percentage
Increase
(Decrease)








- 25 -

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

UNION BANK OF TAIWAN

Share of other comprehensive
income (loss) of subsidiaries
and associates accounted for
using the equity method
Unrealized gain (loss) on
investments in debt
instruments at fair value
through other comprehensive
income
Income tax relating to items that
may be reclassified
subsequently to profit or loss
Items that may be reclassified
subsequently to profit or
loss, net of income tax
Other comprehensive income
for the year, net of income
tax
TOTAL COMPREHENSIVE
INCOME
EARNINGS PER SHARE (NEW
TAIWAN DOLLARS)
Basic
Diluted		 2020
Amount
%
14,117
-
1,005,636
8
125,177

1
519,045

4
1,194,704
10
$ 4,636,413
38
$0.96
$0.96		 2019
Amount
%
(9,459)
-
1,604,564
14
45,412

-
1,413,456
12
3,500,132
30
$ 6,859,589
59
$0.93
$0.93		 Percentage
Increase
(Decrease)		 Percentage
Increase
(Decrease)








%
249
(37)
176
(63)
(66)
(32)

- 26 -

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

UNION BANK OF TAIWAN

BALANCE AT JANUARY 1, 2019
Appropriation of the 2018 earnings
Legal reserve
Special reserve
Stock dividends on common shares
Cash dividends on preference shares
Net income for the year ended December 31, 2019
Other comprehensive income for the year ended December 31,
2019
Acquisition of interest in subsidiary
Share-based payment
Disposal of investments in equity instruments designated as at fair
value through other comprehensive income
BALANCE AT DECEMBER 31, 2019
Appropriation of the 2019 earnings
Legal reserve
Cash dividends on common shares
Stock dividends on common shares
Cash dividends on preference shares
Net income for the year ended December 31, 2020
Other comprehensive income for the year ended December 31,
2020
Share-based payment
Disposal of investments in equity instruments designated as at fair
value through other comprehensive income
BALANCE AT DECEMBER 31, 2020		 Share Capital Total
Capital Surplus
$ 28,900,129
$ 8,032,413
-
-
-
-
1,883,009
-
-
-
-
-
-
-
-
-
61,415
3,071

-

-
30,844,553
8,035,484
-
-
-
-
2,019,119
-
-
-
-
-
-
-
70,016
4,551

-

-
$ 32,933,688
$ 8,040,035		 Retained Earnings Retained Earnings Total
$ 11,220,664
-
-
(1,883,009)
(480,000)
3,359,457
139,435
(6,698)
-

333,523
12,683,372
-
(288,446)
(2,019,119)
(480,000)
3,441,709
6,144
-

22,382
$ 13,366,042		 Other Equity Total
$ 1,659,823

-
-
-
-
-
3,360,697
(2,105)
-

(333,523)

4,684,892

-
-
-
-
-
1,188,560
-

(22,382)

$ 5,851,070
 Total Equity
$ 49,813,029
-
-
-
(480,000)
3,359,457
3,500,132
(8,803)
64,486

-
56,248,301
-
(288,446)
-
(480,000)
3,441,709
1,194,704
74,567

-
$ 60,190,835
Exchange
Differences on
Translaton of the
Financial
Statements of
Unrealized Gain
(Loss) on
Financial Assets
at Fair Value
Through Other
Foreign
Operations
Comprehensive
Income
$ (413,524)
$ 2,073,347

-
-
-
-
-
-
-
-
-
-
(191,108)
3,551,805
-
(2,105)
-
-

-

(333,523)

(604,632)
5,289,524
-
-
-
-
-
-
-
-
-
-
(486,591)
1,675,151
-
-

-

(22,382)

$ (1,091,223)
$ 6,942,293
Ordinary Shares
$ 26,900,129

-
-
1,883,009
-
-
-
-
61,415

-

28,844,553
-
-
2,019,119
-
-
-
70,016

-

$ 30,933,688
 Preference
Shares
$ 2,000,000

-
-
-
-
-
-
-
-

-

2,000,000

-
-
-
-
-
-
-

-

$ 2,000,000


Legal Reserve
Special Reserve
$ 5,988,776
$ 612,656

887,017
-
-
14,784
-
-

-
-
-
-
-
-
-
-
-
-

-

-

6,875,793
627,440
1,007,837
-

-
-
-
-
-
-
-
-
-
-
-
-

-

-

$ 7,883,630
$ 627,440
 Unappropri-
ated Earnings
$ 4,619,232

(887,017)
(14,784)
(1,883,009)

(480,000)
3,359,457
139,435
(6,698)
-

333,523

5,180,139

(1,007,837)
(288,446)
(2,019,119)
(480,000)
3,441,709
6,144
-

22,382

$ 4,854,972

.

- 27 -

UNION BANK OF TAIWAN STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax

Adjustments for:
Depreciation expense
Amortization expense
Expected credit losses/provision of allowance for doubtful accounts
Gain on disposal of financial assets at fair value through profit
or loss

Interest expense
Interest revenue

Dividend income
Share of profit of subsidiaries and associates
Loss on disposal of properties and equipment
Gain on disposal of investments
Impairment loss (reversed) recognized on financial assets
Reversal of impairment losses on nonfinancial asset
Gain on disposal of collaterals
Changes in operating assets and liabilities
Due from the Central Bank and call loans to banks

Financial assets at fair value through profit or loss

Financial assets at fair value through other comprehensive income

Investments in debt instruments at amortized cost

Receivables

Discounts and loans

Other financial assets
Deposits from the Central Bank and other banks
Financial liabilities at fair value through profit or loss
Securities sold under repurchase agreements

Payables
Deposits and remittances

Other financial liabilities
Provision for employee benefits
Other liabilities

Cash generated from (used in) operations
Interest received

Dividend received
Interest paid

Income tax paid

Net cash generated from (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of associates
Payments for properties and equipment
Proceeds from disposal of properties and equipment		 2020
2019
$ 3,850,460
$ 3,974,367
677,907
726,896
75,404
82,521
267,216
235,584
(1,656,347)
(1,375,876)
4,158,730
5,459,519
(11,858,192)
(12,023,379)
(446,311)
(347,509)
(25,788)
(105,216)
7,119
3,427
(15,371)
(24,322)
(122,109)
63,106
(6,751)
(20,185)
(256)
(43,640)
(7,457,990)
6,069,171
(1,372,342)
8,381,253
(9,992,508)
(3,985,154)
13,628,315
(10,706,007)
(2,391,120)
(2,575,866)
(38,232,449)
(59,783,147)
(977,008)
(506,469)
641,940
(88,918)
(784,246)
(906,274)
(20,949,260)
21,043,048
1,319,242
(2,391,267)
74,613,551
19,269,163
115,250
(11,714)
9,474
154,120
100

1,800
3,076,660
(29,430,968)
12,008,785
11,888,433
451,540
348,864
(4,492,295)
(5,397,067)
(673,949)

(104,519)
10,370,741
(22,695,257)
(500,000)
(564,394)
(250,161)
(286,869)
20
48
(Continued)

28

UNION BANK OF TAIWAN

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Decrease in settlement fund
Increase in refundable deposits
Decrease in refundable deposits
Payments for intangible assets
Proceeds from disposal of collaterals
Payments for right-of-use assets
Increase in other assets
Decrease in other assets

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in due to Central Bank and other banks
Proceeds from issue of bank debentures
Repayments of bank debentures

Proceeds from guarantee deposits received
Repayment of the principal portion of lease liabilities
Increase in other liabilities
Dividends paid

Net cash used in financing activities

EFFECTS OF EXCHANGE RATE CHANGES ON THE
BALANCE OF CASH HELD IN FOREIGN CURRENCIES

NET INCREASE (DECREASE) 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
 2020
2019
616
448
-
(449,180)
299,631
-
(34,797)
(44,804)
7,007
63,825
-
(974)
-
(355,463)
179,962

-
(297,722)
(1,637,363)
3,786,720
-
-
2,000,000
(3,000,000)
(1,500,000)
11,412
7,390
(409,986)
(412,491)
170,189
248,855
(768,446)

(480,000)
(210,111)

(136,246)
(623,188)

(227,286)
9,239,720
(24,696,152)
62,774,587
87,470,739
$ 72,014,307
$ 62,774,587
(Continued)

29

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

UNION BANK OF TAIWAN

Reconciliation of the amounts in the statements of cash flows with the equivalent items reported in the balance sheets as of December 31, 2020 and 2019:

Cash and cash equivalents in balance sheets
Due from the Central Bank and call loans to banks that meet the
definition of cash and cash equivalents in IAS 7 “Cash Flow
Statements”
Securities purchased under agreements to resell that meet the
definition of cash and cash equivalents in IAS 7
Cash and cash equivalents in statements of cash flows		 December 31 December 31


2020
$ 8,141,334

-
63,872,973

$ 72,014,307
 2019
$ 10,937,284
477,078
51,360,225
$ 62,774,587

(Concluded)

30

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Union Bank of Taiwan

Opinion

We have audited the accompanying consolidated financial statements of Union Bank of Taiwan (the “Bank”) and its subsidiaries (collectively, the “Company”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company 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, 2020. 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.

31

The key audit matters of the Company’s consolidated financial statements for the year ended December 31, 2020 are described as follows: Assessment of the Impairment of Discounts and Loans

As of December 31, 2020, the net amount of discounts and loans of the Company was represented approximately 56% of total consolidated assets, and was considered material to the financial statements as a whole. Refer to Note 14 to the consolidated financial statements. The Company’s management performs loan impairment assessment by making critical judgements on accounting estimates and assumptions; therefore, we determined allowance for possible losses on discounts and loans a key audit matter for the year ended December 31, 2020.

The Company’s management periodically performs loan impairment assessment through making judgements to measure the loss allowance at an amount equal to 12-month expected credit losses or the lifetime expected credit losses. Also, the allowance provision should comply with the classification of credit assets required by the regulations on making provision issued by the authorities.

For the accounting policies and relevant information on loan impairment assessment, refer to Notes 4, 5 and 14 to the consolidated financial statements.

The main audit procedures we performed in response to certain aspects of the key audit matter described above were as follows:

  1. We obtained an understanding of the relevant internal controls in respect of the Bank’s loan impairment assessment and tested the operating effectiveness of such controls.

  2. We tested the classification of credit assets in accordance with relevant regulations issued by management and authorities. In addition, we evaluated the reasonableness of the adjustments to the classification.

  3. We assessed the reasonableness and consistency of the methodology applied by management in the calculation of expected credit losses; we tested the completeness of the loans and the accuracy of the calculation of expected credit losses for selected loans.

Other Matter

We have also audited the separate financial statements of Union Bank of Taiwan as of and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion.

Responsibilities of Management and Those Charged with Governance for the

Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, and IFRS, IAS, IFRIC, and 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

32

assessing the Company’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 Company or to cease operations, or has no realistic alternative but to do so.

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

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

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:

  1. 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.

  2. 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 Company’s internal control.

  3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  4. 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 Company’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 Company to cease to continue as a going concern.

  5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner

33

that achieves fair presentation.

  1. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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 consolidated financial statements for the year ended December 31, 2020 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 audits resulting in this independent auditors’ report are Jui-Chan Huang and Chen-Hsiu Yang.

Deloitte & Touche Taipei, Taiwan Republic of China March 29, 2021

34

UNION BANK OF TAIWAN AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS
CASH AND CASH EQUIVALENTS
DUE FROM THE CENTRAL BANK AND CALL LOANS TO OTHER BANKS
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
INVESTMENTS IN DEBT INSTRUMENTS AT AMORTIZED COST
SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL
RECEIVABLES, NET
CURRENT TAX ASSETS
DISCOUNTS AND LOANS, NET
INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD, NET
OTHER FINANCIAL ASSETS, NET
PROPERTY AND EQUIPMENT, NET
RIGHT-OF-USE ASSETS
INVESTMENT PROPERTIES, NET
INTANGIBLE ASSETS
Goodwill
Computer software
Total intangible assets
DEFERRED TAX ASSETS
OTHER ASSETS, NET
TOTAL
LIABILITIES AND EQUITY
DEPOSITS FROM THE CENTRAL BANK AND OTHER BANKS
DUE TO THE CENTRAL BANK AND OTHER BANKS
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
PAYABLES
CURRENT TAX LIABILITIES
DEPOSITS AND REMITTANCES
BANK DEBENTURES
PREFERRED STOCK LIABILITY
BONDS PAYABLE
OTHER FINANCIAL LIABILITIES
PROVISIONS
LEASE LIABILITIES
DEFERRED TAX LIABILITIES
OTHER LIABILITIES
Total liabilities
EQUITY ATTRIBUTABLE TO OWNERS OF THE BANK
Share capital
Ordinary shares
Preference shares
Total share capital
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Total retained earnings
Other equity
Total equity attributable to owners of the Bank
NON-CONTROLLING INTERESTS
Total equity
TOTAL		 2020
Amount
%
$ 8,961,438
1
24,325,798
3
34,881,848
5
53,403,733
7
90,697,662
12
63,911,473
9
24,936,576
3
50,085
-
422,845,363
56
1,536,989
-
4,549,698
1
7,925,277
1
1,741,760
-
5,288,112
1
1,985,307
-

181,030

-
2,166,337
-
792,478
-

9,543,375

1
$ 757,558,002
100
$ 12,481,114
2
3,786,720
1
206,002
-
44,428,176
6
5,594,014
1
121,567
-
606,860,499
80
7,200,000
1
524,000
-
1,464,796
-
7,420,161
1
268,774
-
1,723,121
-
1,696,935
-

3,589,711

-

697,365,590

92
30,933,688
4

2,000,000

-

32,933,688

4

8,040,035

1
7,883,630
1
627,440
-

4,854,972

1

13,366,042

2

5,851,070

1
60,190,835
8

1,577

-

60,192,412

8
$ 757,558,002
100		 2019






























Amount
%
$ 12,382,445
2
17,344,886
3
30,917,254
5
41,236,965
6
104,170,149
15
51,417,825
7
21,177,107
3
58,716
-
384,649,673
55
1,587,482
-
3,632,648
1
7,969,302
1
1,439,735
-
5,369,780
1
1,985,307
-

152,150

-
2,137,457
-
698,921
-

8,970,842

1
$ 695,161,187
100
$ 11,860,732
2
-
-
650,981
-
65,377,436
9
4,615,289
1
369,729
-
532,899,100
77
10,200,000
1
-
-
1,473,858
-
4,887,786
1
258,535
-
1,415,180
-
1,617,201
-

3,285,481

1

638,911,308

92
28,844,553
4

2,000,000

-

30,844,553

4

8,035,484

1
6,875,793
1
627,440
-

5,180,139

1

12,683,372

2

4,684,892

1
56,248,301
8

1,578

-

56,249,879

8
$ 695,161,187
100

35

UNION BANK OF TAIWAN AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET INTEREST
Interest revenue
Interest expense
Net interest
NET REVENUE OTHER THAN
INTEREST
Commissions and fee revenue, net
Gain on financial assets and
liabilities at fair value through
profit or loss
Realized gain on financial assets at
fair value through other
comprehensive income
Share of loss of associates
Foreign exchange gain (loss)
Reversal of impairment loss
(impairment loss) on assets
Securities brokerage fee revenue,
net
Rental revenue
Other noninterest gain, net
TOTAL NET REVENUE
PROVISIONS
Provision of allowance for doubtful
accounts and provision for losses
on commitments and guarantees
OPERATING EXPENSES
Employee benefit expense
Depreciation and amortization
Others		 2020
Amount
%
$ 11,923,484
83
4,282,424
30
7,641,060
53
2,820,473
19
1,771,015
12
418,748
3
(50,493)
-
(1,006,456)
(7)
128,860
1
320,764
2
2,278,320
16
108,071

1
14,430,362
100
290,540

2
3,965,882
28
2,492,408
17
3,739,857
26		 2019
Amount
%
$ 12,003,109
87
5,525,647
40
6,477,462
47
2,716,846
19
1,485,872
11
346,202
2
(35,980)
-
369,470
3
(42,921)
-
235,895
2
2,236,624
16
76,712

-
13,866,182
100
240,675

2
3,831,242
27
2,483,882
18
3,282,927
24		 Percentage
Increase
(Decrease)











%
(1)
(22)
18
4
19
21
40
(372)
400
36
2
41
4
21
4
-
14

(Continued)

36

UNION BANK OF TAIWAN AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Total operating expenses
INCOME BEFORE INCOME TAX
INCOME TAX EXPENSE
CONSOLIDATED NET INCOME
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of defined
benefit plans
Unrealized gain on investments
in equity instruments at fair
value through other
comprehensive income
Income tax relating to items that
will not be reclassified
subsequently to profit or loss
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on
translation of the financial
statements of foreign
operations
Unrealized gain (loss) on
investments in debt instruments at fair
value through other comprehensive
income
Income tax relating to items that
may be reclassified subsequently to
profit or loss
Other comprehensive income
for the year, net of income tax
TOTAL COMPREHENSIVE INCOME
NET INCOME ATTRIBUTABLE TO:		 2020
Amount
%
10,198,147
71
3,941,675
27
500,170

3
3,441,505
24
7,682
-
776,641
6
(108,661)
(1)
(608,239)
(5)
1,005,636
7
121,648

1
1,194,707

8
$ 4,636,212
32		 2019
Amount
%
9,598,051
69
4,027,456
29
655,978

4
3,371,478
25
174,293
1
2,247,353
16
(335,033)
(2)
(238,885)
(2)
1,604,564
12
47,777

-
3,500,069
25
$ 6,871,547
50		 Percentage
Increase
(Decrease)










%
6
(2)
(24)
2
(96)
(65)
(68)
155
(37)
155
(66)
(33)

(Continued)

37

UNION BANK OF TAIWAN AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Owners of the Bank
Non-controlling interests
TOTAL COMPREHENSIVE
INCOME ATTRIBUTABLE TO:
Owners of the Bank
Non-controlling interests
EARNINGS PER SHARE (NEW
TAIWAN DOLLARS)
Basic
Diluted		 2020
Amount
%
$ 3,441,709
24
(204)

-
$ 3,441,505
24
$ 4,636,413
32
(201)

-
$ 4,636,212
32
$0.96
$0.96		 2019
Amount
%
$ 3,359,457
24
12,021

-
$ 3,371,478
24
$ 6,859,589
50
11,958

-
$ 6,871,547
50
$0.93
$0.93		 Percentage
Increase
(Decrease)










%
2
(102)
2
(32)
(102)
(33)

(Concluded)

38

UNION BANK OF TAIWAN AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2019
Appropriation of the 2018 earnings
Legal reserve
Special reserve
Stock dividends on common shares
Cash dividends on preference shares
Net income for the year ended December
31, 2019
Other comprehensive income for the year
ended December 31, 2019
Acquisition of interest in subsidiary
Share-based payment
Disposal of investments in equity
instruments designated as at fair value
through other comprehensive income
BALANCE AT DECEMBER 31, 2019
Appropriation of the 2019 earnings
Legal reserve
Cash dividends on common shares
Stock dividends on common shares
Cash dividends on preference shares
Net income for the year ended December
31, 2020
Other comprehensive income for the year
ended December 31, 2020
Non-controlling interests
Share-based payment
Disposal of investments in equity
instruments designated as at fair value
through other comprehensive income
BALANCE AT DECEMBER 31, 2020		 EquityAttributable Owners of the Company EquityAttributable Owners of the Company EquityAttributable Owners of the Company Total
$ 49,813,029

-
-
-
(480,000 )
3,359,457
3,500,132
(8,803 )
64,486

-

56,248,301
-
(288,446 )
-
(480,000 )
3,441,709
1,194,704
-
74,567

-

$ 60,190,835
 Non-controlling
Interests
$ 245,726

-
-
-
-
12,021
(63 )
(256,106 )
-

-

1,578
-
-
-
-
(204 )
3
200
-

-

$ 1,577
 Total Equity
$ 50,058,755
-
-
-
(480,000 )
3,371,478
3,500,069
(264,909 )
64,486

-
56,249,879
-
(288,446 )
-
(480,000 )
3,441,505
1,194,707
200
74,567

-
$ 60,192,412
Share Capital Total
Capital Surplus (
$ 28,900,129
$ 8,032,413
-
-
-
-
1,883,009
-
-
-
-
-
-
-
-
-
61,415
3,071

-

-
30,844,553
8,035,484
-
-
-
-
2,019,119
-
-
-
-
-
-
-
-
-
70,016
4,551

-

-
$ 32,933,688
$ 8,040,035		 Retained Earnings Total
$ 11,220,664
-
-
(1,883,009 )
(480,000 )
3,359,457
139,435
(6,698 )
-

333,523
12,683,372
-
(288,446 )
(2,019,119 )
(480,000 )
3,441,709
6,144
-
-

22,382
$ 13,366,042		 Other Equity Total
$ 1,659,823

-
-
-
-
-
3,360,697
(2,105 )
-

(333,523)

4,684,892
-
-
-
-
-
1,188,560
-
-

(22,382)

$ 5,851,070
Exchange
Differences on
Translation of the
Financial
Statements of
Unrealized
Valuation Gains
(Loss) on
Financial Assets
at Fair Value
Through Other
Foreign
Operations
Comprehensive
Income
$ (413,524 )
$ 2,073,347

-
-
-
-
-
-
-
-
-
-
(191,108 )
3,551,805
-
(2,105 )
-
-

-

(333,523)

(604,632 )
5,289,524
-
-
-
-
-
-
-
-
-
-
(486,591 )
1,675,151
-
-
-
-

-

(22,382)

$ (1,091,223 )
$ 6,942,293
Ordinary Shares
Preference Shares
$ 26,900,129
$ 2,000,000

-
-
-
-
1,883,009
-
-
-
-
-
-
-
-
-
61,415
-

-

-

28,844,553
2,000,000
-
-
-
-
2,019,119
-
-
-
-
-
-
-
-
-
70,016
-

-

-

$ 30,933,688
$ 2,000,000


Legal Reserve
$ 5,988,776

887,017
-
-
-
-
-
-
-

-

6,875,793
1,007,837
-
-
-
-
-
-
-

-

$ 7,883,630
 Special Reserve
$ 612,656

-
14,784
-
-
-
-
-
-

-

627,440
-
-
-
-
-
-
-
-

-

$ 627,440
 Unappropriated
Earnings
$ 4,619,232

(887,017 )
(14,784 )
(1,883,009 )
(480,000 )
3,359,457
139,435
(6,698 )
-

333,523

5,180,139
(1,007,837 )
(288,446 )
(2,019,119 )
(480,000 )
3,441,709
6,144
-
-

22,382

$ 4,854,972

39

U UNION BANK OF TAIWAN AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax

Adjustments for:
Depreciation expense
Amortization expense
Expected credit losses/Provision of allowance for doubtful accounts
Gain on disposal of financial assets at fair value through profit or loss

Interest expense
Interest revenue

Dividend income
Share of loss of associates
Gain on disposal of properties and equipment
Gain on disposal of investments
Reversal of impairment loss on financial assets
Impairment loss on financial assets
Reversal of impairment loss on nonfinancial assets
Gain on disposal of collaterals
Changes in operating assets and liabilities
Due from the Central Bank and call loans to banks

Financial assets at fair value through profit or loss

Financial assets at fair value through other comprehensive income

Investments in debt instruments at amortized cost

Receivables

Discounts and loans

Other financial assets
Deposits from the Central Bank and other banks
Financial liabilities at fair value through profit or loss
Securities sold under repurchase agreements

Payables
Deposits and remittances

Other financial liabilities
Provision for employee benefits
Other liabilities

Cash generated from (used in) operations
Interest received

Dividends received
Interest paid

Income tax paid

Net cash generated from (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Payments for properties and equipment
Proceeds from disposal of properties and equipment		 2020
2019
$ 3,941,675
$ 4,027,456
2,411,311
2,395,478
81,097
88,404
290,540
240,675
(1,716,214)
(1,449,848)
4,282,424
5,525,647
(11,923,484)
(12,003,109)
(458,178)
(357,904)
50,493
35,980
(43,194)
(18,089)
(15,371)
(24,322)
(122,109)
-
-
63,106
(6,751)
(20,185)
(256)
(43,640)
(7,457,990)
6,069,171
(1,909,113)
8,491,975
(10,349,999)
(3,984,881)
13,628,315
(10,706,007)
(3,915,983)
(3,061,438)
(38,507,082)
(59,871,253)
(942,350)
(522,300)
620,382
(251,163)
(784,246)
(906,274)
(20,949,260)
21,043,048
1,388,354
(2,393,463)
73,961,399
18,981,025
115,251
(11,714)
11,878
154,596
11,171

1,800
1,692,710
(28,507,229)
12,072,954
11,865,208
458,178
357,904
(4,603,904)
(5,465,831)
(740,537)

(152,161)
8,879,401
(21,902,109)
(227,557)
(298,983)
20
48
(Continued)

40

UNION BANK OF TAIWAN AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Payments for investment properties
Decrease in settlement fund
Increase in refundable deposits
Decrease in refundable deposits
Payments for intangible assets
Proceeds from disposal of collaterals
Payments for right-of-use assets
Increase in other assets

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in due to Central Bank and other banks
Increase in commercial paper
Repayment of bonds payable
Proceeds from issue of bank debentures
Repayments of bank debentures

Proceeds from issuance of preferred stock liability
Proceeds from guarantee deposits received
Repayment of the principal portion of lease liabilities
Increase in other liabilities
Changes in non-controlling interests
Dividends paid

Net cash generated from financing activities

EFFECTS OF EXCHANGE RATE CHANGES ON THE
BALANCE OF CASH HELD IN FOREIGN CURRENCIES

NET INCREASE (DECREASE) 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
 2020
2019
(13,668)
(30,174)
616
448
-
(456,918)
299,958
-
(41,419)
(46,425)
7,007
63,825
-
(974)
(2,503,824)
(2,050,024)
(2,478,867)
(2,819,177)
3,786,720
-
2,417,124
810,036
(3,041)
-
-
2,000,000
(3,000,000)
(1,500,000)
524,000
-
100,940
23,990
(438,309)
(436,833)
189,708
261,228
-
(264,909)
(768,446)

(480,000)
2,808,696

413,512
(613,667)

(236,029)
8,595,563
(24,543,803)
64,277,348
88,821,151
$ 72,872,911
$ 64,277,348
(Continued)

41

UNION BANK OF TAIWAN AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Reconciliation of the cash and cash equivalents reported in the consolidated statements of cash flows with those reported in the consolidated balance sheets as of December 31, 2020 and 2019:

Cash and cash equivalents in the consolidated balance sheets
Due from the Central Bank and call loans to banks that meet the
definition of cash and cash equivalents in IAS 7 “Cash Flow
Statements”
Securities purchased under agreements to resell that meet the
definition of cash and cash equivalents in IAS 7
Cash and cash equivalents in consolidated statements of cash flows
.
(Concluded)		 December 31 December 31


2020
$ 8,961,438

-
63,911,473

$ 72,872,911
 2019
$ 12,382,445
477,078
51,417,825
$ 64,277,348

42

Union Bank of Taiwan

2020 Profit Distribution Table Unit: NT$

==> picture [510 x 269] intentionally omitted <==

----- Start of picture text -----

Item Amount
Beginning Undistributed Profit 1,384,738,083
Surplus after tax for the current period 3,441,709,193
Determine the remeasurement amount of the
welfare plan and recognize it in the retained 6,143,731
surplus
Disposal of equity instruments at fair value
22,381,367
through other comprehensive income
Provide the statutory surplus reserve for the
(1,041,070,287)
year
Current surplus available for distribution 3,813,902,087
Assign items
Special stock dividend (annual rate 4.8%) (480,000,000)
Common stock dividend (NT$0.631per share) (1,951,915,717) (2,431,915,717)
Undistributed profit 1,381,986,370
----- End of picture text -----

Notes:

According to the Ministry of Finance's 1998.04.30 fiscal and taxation No. 871941343, when the surplus is distributed, it should be identified by individual identification. This surplus distribution will give priority to the surplus of 2020.

Chairman: Li Sian Chang Manager: Lin Jeff Accounting Head: Yang Ju Chang

43

" Rules of Procedure for Shareholders Meetings " Table of Comparison Clauses Before and After Amendment

==> picture [511 x 18] intentionally omitted <==

----- Start of picture text -----

Clause after Amendment Clause before Amendment Remarks
----- End of picture text -----

" Rules of Procedure for Shareholders Meetings "
Table of Comparison Clauses Before and After Amendment		 " Rules of Procedure for Shareholders Meetings "
Table of Comparison Clauses Before and After Amendment		 " Rules of Procedure for Shareholders Meetings "
Table of Comparison Clauses Before and After Amendment
Clause after Amendment
Clause before Amendment
Remarks
3.
Unless otherwise provided by laws
and regulations, the shareholders'
meeting of the Bank shall be convened
by the board of directors.
(The second item is omitted)
The notice and announcement shall
specify the reason for the convening; if
the notice is approved by the
counterparty, it can be done
electronically.
Appointment or dismissal of directors,
change of articles of association,
capital reduction, application for
suspension of public offerings,
directors’ competition license, capital
increase from surplus, capital increase
from public reserves, company
dissolution, merger, division, or the
first paragraph of Article 185 of the
Company Law , Securities and
Exchange Act Article 26-1, Article
43-6, Issuer’s Raising and Issuing of
Securities Handling Guidelines Article
56-1 and Article 60-2 Matters shall be
included in the reason for convening
Enumerate and explain its main
contents, and shall not be proposed as
a temporary motion; its main contents
may be placed on the website
designated by the securities authority
or the Bank, and its website shall be
stated in the notice.
The reasons for the convening of the
shareholders meeting have been
stated for the full re-election of
directors and the date of appointment.
After the re-election of the
shareholders meeting is completed,
the same meeting shall not change the
date of appointment by ad hoc motion
or other means.
Shareholders who hold more than 1%
of the total issued shares may submit a
written proposal to the Bank's regular		 3.
Unless otherwise provided by laws and
regulations, the shareholders' meeting
of the Bank shall be convened by the
board of directors.
(The second item is omitted)
The notice and announcement shall
specify the reason for the convening; if
the notice is approved by the
counterparty, it may be done
electronically.
Election or dismissal of directors,
change of articles of association,
company dissolution, merger, division,
or each of the first paragraphs of
Article 185 of the Company Law,
Article 26-1 of the Securities Exchange
Law, Article 43-6, issuer The matters
in Article 56-1 and Article 60-2 of the
Guidelines for the Handling of the
Raising and Issuing of Negotiable
Securities shall be listed in the reason
for the convening and shall not be
proposed as a temporary motion.
Shareholders who hold more than 1%
of the total issued shares may submit a
written proposal to the Bank's regular
shareholders meeting. However, it is
limited to one item, and any proposal
with more than one item will not be
included in the proposal. The Bank
shall announce the acceptance of
shareholders’ proposals, the place of
acceptance, and the acceptance period
before the stock transfer suspension
day before the general meeting of
shareholders is convened; the
acceptance period shall not be less
than ten days.
(The seventh and eighth items are
omitted)		 1. In line with
the amendment
of Article 172 of
the Company
Law, the main
content of the
matter should be
listed and
explained in the
reason for the
convening, and
the items that
should not be
proposed in the
provisional
motion.
2. In accordance
with the "Rules
of Procedures of
Shareholders'
Meetings"
published by the
Taiwan Stock
Exchange, the
additional text
that
shareholders'
proposals may
be included in
the relevant
provisions of the
proposal and the
way in which the
proposal is
accepted has
been added.

44

Clause after Amendment Clause before Amendment Remarks
shareholders meeting. However, it is
limited to one item, and any proposal
with more than one item will not be
included in the proposal. In addition,
the shareholder’s proposal is subject
to one of the conditions in Article
172-1, Item 4 of the Company Law,
and the board of directors may not be
included as a proposal.
A shareholder proposal is a proposal
to urge the Bank to promote public
interest or fulfill its social
responsibilities, and the board of
directors may still include it in the
proposal.
The Bank shall announce the
acceptance of shareholder proposals,
acceptance methods, acceptance
locations, and acceptance period
before the stock transfer suspension
date before the general meeting of
shareholders is held; the acceptance
period shall not be less than ten days.
(The ninth and tenth items are
omitted)
5.
The location of the shareholders’
meeting shall be at the place of the
Bank or at a place convenient for
shareholders’ attendance and suitable
for the shareholders’ meeting. The
meeting shall not start earlier than
9:00 am or later than 3:00 pm. The
location and time of the meeting shall
be fully considered. Opinions of
independent directors.		 5.
The meeting place of shareholders
shall be at the place of the Bank or at a
place convenient for shareholders to
attend and suitable for the meeting of
shareholders. The start time of the
meeting shall not be earlier than 9:00
am or later than 3:00 pm.		 According to the
reference
example of the
"Rules of
Procedure of
Shareholders'
Meeting"
announced by
the Taiwan Stock
Exchange, the
relevant text will
be revised as
appropriate.
7.
If the shareholders’meeting is
convened by the board of directors,
the chairman shall be the chairman.
When the chairman asks for leave or is
unable to exercise his powers for some
reason, it shall be represented by the
vice chairman. If there is no vice
chairman or vice chairman, he also
asks for leave or cannot exercise his
powers for some reason. At that time,		 7.
If the shareholders’ meeting is
convened by the board of directors, the
chairman shall be the chairman of the
board of directors, and the chairman
shall ask for leave or be unable to
exercise his office
The deputy chairman of the board of
directors will act as the deputy of the
chairman of the board of directors, and
when there is no deputy chairman or		 According to the
reference
example of the
"Rules of
Procedure of
Shareholders'
Meeting"
announced by
the Taiwan Stock
Exchange, the
relevant text will

45

Clause after Amendment Clause before Amendment Remarks
the chairman of the board shall
appoint one executive director to act
as the agent; if it does not have a
executive director, one director shall
be appointed to act as the agent; if the
chairman does not appoint an agent,
the executive director or the directors
shall mutually recommend one person
to act as the agent.
The chairman of the preceding
paragraph shall be a standing director
or director’s agent, who shall serve as
a standing director or director who
has served for more than six months
and understands the company’s
financial and business conditions. The
same applies if the chairman is the
representative of a corporate director.
The chairman of the board of directors
should personally preside at the
shareholders meeting convened by the
board of directors, and more than half
of the directors of the board of
directors and at least one
representative of various functional
committee members should attend,
and the attendance should be
recorded in the minutes of the
shareholders meeting. (The fourth and
fifth items are omitted)		 deputy chairman of the board of
directors, they also ask for leave or are
unable to exercise their powers for
some reason.
The chairman of the board shall
designate one executive director to act
as the agent; if it does not have a
standing director, one director shall be
appointed to act as the agent; if the
chairman does not appoint an agent,
the executive director or the other
directors shall choose one person to
act as the agent.
The chairman of the preceding
paragraph shall be a standing director
or director’s agent, who shall serve as
a standing director or director who has
served for more than six months and
understands the company’s financial
and business conditions. The same
applies if the chairman is the
representative of a corporate director.
The shareholders meeting convened
by the board of directors should be
attended by at least one representative
of more than half of the directors of the
board of directors and various
functional committee members, and
the attendance shall be recorded in the
minutes of the shareholders meeting.
(The fourth and fifth items are
omitted)		 be revised as
appropriate.
8.
The Bank shall record and record the
shareholder registration process, the
meeting process, and the vote
counting process continuously and
uninterruptedly from the time of
accepting the registration of
shareholders.
The audio-visual materials mentioned
in the preceding paragraph shall be
kept for at least one year. However, if a
shareholder initiates a lawsuit in
accordance with Article 189 of the
Company Law, it shall be kept until the
end of the lawsuit.		 8.
The Bank shall keep the audio and
video recordings of the entire
shareholder process for at least one
year. However, by shareholders in
accordance with Article 189 of the
Company Act
Article The person who initiates a
lawsuit shall be kept until the end of
the lawsuit.		 According to the
reference
example of the
"Rules of
Procedure of
Shareholders'
Meeting"
announced by
the Taiwan Stock
Exchange, the
relevant text will
be revised as
appropriate.

46

Clause after Amendment Clause before Amendment Remarks
9.
The attendance of the shareholders
meeting shall be calculated on the
basis of shares. The number of
attending shares is based on the
signature book or the handed sign-in
card, plus
Calculate the number of shares
exercising voting rights in writing or
electronically.
When the meeting time has expired,
the chairman shall immediately
announce the meeting and announce
the relevant information such as the
number of non-voting rights and the
number of shares present. However,
when shareholders who do not
represent more than half of the total
issued shares are present, the
chairman may announce the
postponement of the meeting. The
number of postponements is limited to
two times, and the total delay time shall
not exceed one hour. When there are
insufficient shareholders representing
more than one-third of the total issued
shares after the second delay, the
chairman shall announce the meeting.
(The third and fourth items are
omitted)		 9.
The attendance of the shareholders
meeting shall be calculated on the basis
of shares. The number of attending
shares is based on the signature book
or the handed sign-in card, plus
Calculate the number of shares
exercising voting rights in writing or
electronically.
When the meeting time has expired,
the chairman shall announce the
meeting immediately. However, when
no shareholder representing more than
half of the total issued shares is
present, the chairman may announce
the postponement of the meeting. The
number of postponements is limited to
two, and the total postponement time
shall not exceed one. hour. When there
are insufficient shareholders
representing more than one-third of
the total issued shares after the second
delay, the chairman shall announce the
meeting.
(The third and fourth items are
omitted)		 According to the
reference
example of the
"Rules of
Procedure of
Shareholders'
Meeting"
announced by
the Taiwan Stock
Exchange, the
relevant text will
be revised as
appropriate.
10.
If the shareholders’meeting is
convened by the board of directors,
the agenda shall be set by the board of
directors, and relevant proposals
(including provisional motions and
original
Proposal amendments) shall be voted
on a case-by-case basis, and the
meeting shall be conducted according
to the scheduled agenda, and shall not
be changed without a shareholder
resolution.
(The second and third items are
omitted)
The chairman shall give full
explanations and opportunities to
discuss the proposals and amendments
or interim motions proposed by		 10.
If the shareholders' meeting is
convened by the board of directors, the
agenda shall be set by the board of
directors. The meeting shall be
conducted in accordance with the
scheduled agenda, and shall not be
changed without a resolution of the
shareholders' meeting.
(The second and third items are
omitted)
The chairman shall give full
explanations and opportunities to
discuss the proposals and the
amendments or interim motions
proposed by shareholders. When he
believes that the voting has been
reached, he may announce the
suspension of discussion and put		 In order to
implement the
case-by-case
voting, and to
refer to the
"Rules of
Procedures for
Shareholders'
Meetings"
published by the
Taiwan Stock
Exchange, the
relevant texts of
items 1 and 4
have been
revised.

47

==> picture [510 x 88] intentionally omitted <==

----- Start of picture text -----

Clause after Amendment Clause before Amendment Remarks
shareholders. When he considers that forward the voting.
the voting has been reached, he may
announce the cessation of discussion,
put forward the voting, and arrange
adequate voting time.
----- End of picture text -----

Clause after Amendment
Clause before Amendment
Remarks		 Clause after Amendment
Clause before Amendment
Remarks		 Clause after Amendment
Clause before Amendment
Remarks
shareholders. When he considers that
the voting has been reached, he may
announce the cessation of discussion,
put forward the voting, and arrange
adequate voting time.
forward the voting.
13.
Shareholders have one voting right per
share; however, those who have
restricted or no voting rights do not
have this limit.
(The second and third items are
omitted)
After shareholders have exercised their
voting rights in writing or
electronically, if they wish to attend the
shareholders meeting in person, they
shall revoke the expression of their
intention to exercise the voting rights
in the preceding paragraph two days
before the meeting of the shareholders
meeting in the same manner as when
exercising their voting rights; for
overdue revocation, they shall exercise
it in writing or electronically The
voting rights shall prevail. If voting
rights are exercised in writing or
electronically and an agent is entrusted
to attend the shareholders meeting
with a proxy, the voting rights
exercised by the entrusted agent shall
prevail. The voting of the proposal
shall be passed with the approval of a
majority of the voting rights of the
shareholders present, unless otherwise
stipulated in the Company Law and the
Articles of Association of the Bank.
When voting, the chairman or his
designated person shall announce the
total number of voting rights of the
shareholders present on a case-by-case
basis, and then the shareholders shall
vote on a case-by-case basis. On the
day after the shareholders meeting, the
results of shareholders' approval,
opposition and abstention shall be
entered into the public information
observatory.
(The fifth, sixth and seventh items are
omitted)		 13.
Shareholders have one voting right per
share; however, those who have
restricted or no voting rights do not
have this limit.
(The second and third items are
omitted)
After shareholders have exercised their
voting rights in writing or electronically,
if they wish to attend the shareholders
meeting in person, they shall revoke
the expression of their intention to
exercise the voting rights in the
preceding paragraph two days before
the meeting of the shareholders
meeting in the same manner as when
exercising their voting rights; for
overdue revocation, they shall exercise
it in writing or electronically The voting
rights shall prevail. If voting rights are
exercised in writing or electronically
and an agent is entrusted to attend the
shareholders meeting with a proxy, the
voting rights exercised by the entrusted
agent shall prevail. The voting of the
proposal shall be passed with the
approval of a majority of the voting
rights of the shareholders present,
unless otherwise stipulated in the
Company Law and the Articles of
Association of the Bank. When voting,
the chairman or his designated person
shall announce the total number of
voting rights of the shareholders
present on a case-by-case basis, and
then the shareholders shall vote on a
case-by-case basis, and on the day the
shareholders' meeting is held, the
results of shareholders' approval and
opposition to abstention shall be
entered into the public information
observatory.
(The fifth, sixth and seventh items are
omitted)		 Cooperate with
practice to make
discretionary
text.

48

==> picture [510 x 17] intentionally omitted <==

----- Start of picture text -----

Clause after Amendment Clause before Amendment Remarks
----- End of picture text -----

Clause after Amendment
Clause before Amendment
Remarks		 Clause after Amendment
Clause before Amendment
Remarks		 Clause after Amendment
Clause before Amendment
Remarks
15.
The resolutions of the shareholders'
meeting shall be recorded in the
minutes, which shall be signed or
stamped by the chairman, and the
minutes shall be distributed to all
shareholders within 20 days after the
meeting. The production of the
proceedings can be done electronically.
The distribution of the minutes of the
preceding paragraph can be entered
into the public information
observatory's announcement method.
The minutes of the proceedings should
be based on the meeting’s year, month,
day, venue, chairman’s name,
resolution method,
As recorded, when there is an election
of directors, the number of votes for
each candidate shall be disclosed. It
shall be kept forever during the
existence of the Bank.		 15.
The resolutions of the shareholders'
meeting shall be recorded in the
minutes, which shall be signed or
sealed by the chairman, and the
minutes shall be distributed to all
shareholders within 20 days after the
meeting. The production of the
proceedings can be done electronically.
The distribution of the minutes of the
preceding paragraph can be entered
into the public information
observatory's announcement method.
The minutes of the proceedings should
be recorded in accordance with the
current provisions and results of the
meeting’s year, month, day, venue,
chairman’s name, resolution method,
and procedures of the proceedings, and
should be kept forever during the
bank’s existence.		 Cooperate with
practice to make
discretionary
text.
Attached table: revision history Attached table: revision history
1 Established on December 10, 1991 Passed by the Founding meeting
2 Amended on April 20, 1998 Passed by the shareholders meeting
3 Amended on April 23,2010 Passed bythe shareholders meeting
4 Amended onJune 22,2012 Passed bythe shareholders meeting
5 Amended on June 26, 2015 Passed by the shareholders meeting
6 Amended on July 20, 2021 Passed by the shareholders meeting

49

Attachment

" Procedures for Election of Directors " Table of Comparison Clauses Before and After Amendment

==> picture [465 x 678] intentionally omitted <==

----- Start of picture text -----

Clause after Amendment Clause before mendment Remarks
Article 5 Article 5
The election of the company’s The election of the company’s In accordance with
directors shall be conducted in directors shall be conducted in Article 192-1 of the
accordance with the procedures accordance with the procedures Company Law and
of the candidate nomination for the candidate nomination the Ministry of
system stipulated in Article system stipulated in Article Economic Affairs'
192-1 of the Company Law. 192-1 of the Company Law. 2018.12.21
When the number of directors Review the qualifications of Jingshangzi No.
is dismissed and there are less director candidates, academic 10702229010, the
than 5 directors, they shall be backgrounds, and the existence board of directors
elected at the latest of various matters listed in has deleted the
shareholders meeting. However, Article 30 of the Company Law. words such as the
when the vacancy of directors No other qualification qualifications for
reaches one-third of the documents shall be added the director
number of seats, a by-election arbitrarily, and the results of the candidates to be
shall be held within 60 days review shall be provided to reviewed. For the
from the date of the fact. shareholders for reference, and list of director
(Item 3 is omitted) suitable directors shall be candidates
selected . proposed by
When the number of directors is nominating
dismissed and there are fewer shareholders, the
than 5 directors, the by-election board of directors
shall be held at the latest only has No. 192 -1
shareholders meeting. However, Article 5,
when the vacancy of directors paragraphs 1 to 4,
reaches one-third of the number shall be formalized.
of seats specified in the articles
of association, a by-election shall
be held within 60 days from the
date of occurrence of the fact.
(The third item is omitted)
Article 10 Article 10
The elector shall fill in the The electe is a shareholder, and The company
names of the electees according the elector must fill in the adopts a candidate
to the announced list of director electe’s account name and nomination system,
candidates. If the names of the shareholder account number in and complies with
director candidates are the the electee column of the ballot; the amendment of
same, the difference shall be if it is not a shareholder, fill in Article 192-1 of the
noted by the board of directors the electe’s name and Company Law and
or other convening persons. identification document number. cooperates with
When a government or legal practical operations
person shareholder is an elected to modify the text
person, the name of the content.
government or legal person
should be entered in the account
of the electee in the ballot, as
well as the name of the
----- End of picture text -----

50

==> picture [465 x 693] intentionally omitted <==

----- Start of picture text -----

Clause after Amendment Clause before mendment Remarks
government or legal person and
its representative; if there are
more than one representative, it
should be Fill in the name of the
representative respectively.
Article 11 Article 11 The company
Election ballots are invalid if one Election ballots are invalid if one adopts a candidate
of the following circumstances: of the following circumstances nomination system,
1. No ballot prepared by a occurs: and complies with
person with the right to 1. Those who do not require votes the amendment of
convene. prepared by the board of Article 192-1 of the
2. Those who put blank ballots directors. Company Law and
into the ballot box. 2. Those who put blank ballots cooperates with
3. The handwriting is blurred into the ballot box. practical operations
and unrecognizable or has been 3. The handwriting is blurred and to modify the text
altered. unrecognizable or has been content.
4. The filled-in name of the altered.
electee does not match the 4. If the filled-in electe is a
announced list of candidates. shareholder, the account name
5. The total number of voting and shareholder account number
rights allocated by the electees are not consistent with the
filled in exceeds the total shareholder register; if the
number of voting rights in the filled-in electe is not a shareholder,
cumulative voting system. the name and identification
6. In addition to filling in the document number of the filled-in
name of the electee and the electee does not match after
number of voting rights verification.
allocated, write other words. 5. Excluding the electees Account
(name) or shareholder account
number (identity certificate
Part number) and Allocate voting
rights and write other text outside
the folder.
Article 12 Article 12
After the voting is completed, The ballot will be opened on the Revise the method
the ballot will be opened on the spot after the voting, and the of invoicing results
spot, and the result of the ballot result of the ballot shall be to increase the
shall be announced by the announced on the spot by the flexibility of
chairman or a person chairman. Contain The list of conference
designated by him on the spot, directors elected and the operations.
and the number of elected number of their elected powers.
rights shall be disclosed. (Item 2 is omitted)
(Item 2 is omitted)
Article 13 Article 13
The elected directors will be The elected directors are Cooperate with
notified separately by the determined by the board of practical operations
company's board of directors. directors Issue a notice of and modify the text
election. content.
----- End of picture text -----

51

Attached table: revision history Attached table: revision history
1 18th Board of Directors Approval on March 18, 2015 Passed by the
shareholders
meeting
2 Amended on July 20, 2021 Passed by the
shareholders
meeting

52

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