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2013 Corporate Social Responsibility Report

If you have any suggestions with regards to this CSR Report or Taishin Financial Holdings’ CSR planning and practices, please contact:

Taishin Financial Holdings, Corporate Communications Dept.http://www.taishinholdings.com.tw/english/Add.: No. 118, Sec. 4, Ren-ai Road, Taipei, TaiwanTel.: +886-2-2326-8888; Fax: +886-2-3707-6680

Reporting Period This is the first CSR report prepared by Taishin Financial Holdings; it presents Taishin FHC's implementation of Economic, Social and Environmental activities in 2013 (from January 1 to December 31, 2013) as well as the data from previous years for explanatory purposes. The company expects to publish the CSR report annually from here onwards.

Information DisclosureAll the financial performance data of Taishin Financial Holdings in the CSR Report are presented in New Taiwan Dollars (NTD) and have been audited by a CPA. Statistics in the report follows the current international standards, and figures in the "Environmental Protection" section are based on information and calculation method released by the government. The CSR Report will be published and made accessible to stakeholders on Taishin Financial Holdings’ website. Please direct all inquiries and suggestions to the company’s contact.

Scope of ReportThe CSR Report covers all business units operated by Taishin Financial Holdings and its subsidiaries, both in Taiwan and abroad. It describes the initiatives undertaken by Taishin FHC and its subsidiaries (namely Taishin Bank, Taishin Securities, Taishin Securities Investment Trust, Taishin Securities Investment Advisory, Taishin Asset Management, Taishin Venture Capital, and Taishin Holdings Insurance Brokers) and the two foundations (namely Taishin Charity Foundation and Taishin Bank Foundation for Arts and Culture) to fulfill their corporate social responsibilities, and the progress of these efforts.

Report AssuranceThe CSR Report was prepared in accordance with Global Reporting Initiative's GRI G3.1 guidelines, and has been assured by the British Standards Institution in the principles of materiality, inclusively, and responsiveness. The contents of the report meet the requirements of GRI G3.1 Application Level A+ according to the AA1000 Assurance Standard by the British Standards Institution (BSI).

Report Summary

Copyright © 2014 Taishin Financial Holding Co., Ltd. All Rights Reserved.Printed in Taiwan 07/2014

Welcome to the 2013 Corporate Social Responsibility Report (the CSR Report) of Taishin Financial Holding Co., Ltd. (Taishin Financial Holdings or Taishin FHC). This CSR Report will disclose Taishin Financial Holdings’ the planning and implementation in corporate social responsibilities and pursuance of sustainable development. The information and data disclosed herein have been prepared with reference to the Global Reporting Initiative (GRI), version 3.1. The reporting period, scope, contact information and other details are summarized below:

Table of Contents

Taishin Financial Holding Co., Ltd.2013 Corporate Social Responsibility Report

Report Summary 1

Message from the Chairman 4

CSR Philosophy 6

Corporate Philosophy and Practices

Commitment to Corporate Social Responsibility

Company Profile 9

Corporate HistoryOrganization ChartService DistributionFinancial HighlightsMembership in AssociationsSupplier Management

Awards and Recognition

Corporate Governance 23

Governance Structure Investor RelationsLegal ComplianceAudit SystemRisk Management

Personal Information Protection

Superior Taishin 31

Implementing the Innovative Projects and Plans

Strengthening the Quality and Efficiency

Stakeholder Engagement 37

Analysis of Significant TopicsCommunication with Stakeholders Statements for the Significant Topic

Employee Care 43

Building Comfortable Work EnvironmentEmployee Relations Recruitment and Staff ManagementMulti-dimensional Talent Training

Customer Commitment 57

Quality of ServiceSatisfaction Management

Social Participation 61

Commitment to Arts and Culture DevelopmentCharity and Welfare

Environmental Protection 71

Energy Conservation, Carbon Reduction,and Resource Optimization

Optimized Use of Resources

Building Green Workspace

Appendix 76

GRI Index and Guidelines

Assurance Statement

Message from the Chairman

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5


Chairman of Taishin Financial Holdings

Ever since Taishin International Bank (TSB) was founded more than 2 decades ago, I acknowledged that the banking industry needs to be a strategic partner for different businesses and people in Taiwan. TSB’s original aspiration was to assist enterprises in obtaining capital for their developments, and to promote Taiwan's long-term economic growth, as well as to fulfill our responsibilities to society. In 2002, Taishin Financial Holdings (Taishin) was established to provide broader services, and is now in its 13th year. During its development period, Taishin always adhered to people-oriented business beliefs. In addition to the corporate talent we employ, Taishin also extends its customer-oriented services and has therefore built a close relationship with the people in Taiwan.

Taishin has dedicated itself to meeting its corporate social responsibilities, especially after the devastating 921 Earthquake in 1999. Taishin carried out its “Caring Taiwan” project to help stricken families develop their local specialties, and to provide skills training for them to be self-sufficient – an act which has led many people in the affected areas out of the shadows. To further drive Taishin's engagement and to contribute more actively to society, Taishin Bank Charity Foundation was established in 2010. The Foundation has since been helping small- and medium-scale charity organizations stay viable through the "Power of Love" campaign.

Besides its charity efforts, Taishin is also committed to fostering artistic and cultural talents. For this purpose, the Taishin Bank Foundation for Arts and Culture was

founded in 2001, and the Taishin Arts Award was launched in 2002 as a fair and objective platform for recognizing artistic creations. For 12 years, the Taishin Arts Award has been one of most respected art awards in Taiwan, rewarding innovative ideas in Taiwan’s cultural creations that align with Taishin's values.

Within the company, Taishin has introduced a series of envi ronmental - f r iendly in i t ia t ives, inc luding: encouraged paperless work environments, remote video conferencing system, Electronic Document (e-Flow) system, green server rooms, etc. Moreover, products and services such as EzRich Paperless Account, e-Financial Assistant Service, eco-funds, and green promotion campaigns, have also been introduced in order to facilitate energy and water conservation, and to decrease carbon emission. Taishin's efforts in environmental protection and its care for the people, the land and the environment have all been realized in its daily operations.

In the future, Taishin will continue expanding the depth and breadth of its social responsibilities. In the meantime, it will also support talent training and innovation, emphasize customer and investor relations, and introduce green services and products as per global trends. With regards to its operations, the company will actively promote its domestic and overseas business to achieve higher earnings for its shareholders. In the social aspect, the company will remain its people-oriented focus as it seeks to become a positive force in Taiwan society.

CSR Philosophy

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essences are considered as an approach to examine the service and performance.

Taishin has long been recognized by the financial industry and society for practicing to its core values. From launching the Rose Credit Card, which was the market’s first credit card dedicated for female customers , to auto loan products in market leadership, Taishin offers full range of financial services, including securities business, domestic/offshore quality funds investment, insurance brokers and agencies, wealth management…etc. Moreover, Taishin continues to meet investor expectations in delivering growth and earnings while maintaining stringent risk management over the course of its business development. In this way, the company weathered the storms from Asian financial crisis in 1997/1998, the cash card/credit card crisis in Taiwan, and the global financial crisis in 2008. Today, Taishin has become one of the leaders in delivering superior earnings performance among its peers in the financial industry in Taiwan.

In the future, Taishin will continue to adhere to practice its core values, nurture more talents and demonstrate them in service innovation, to provide more diversified products and services to meet customers’ demand for financial services.

Corporate philosophy and practices

Customer-Oriented Service Taishin Financial Holdings aimed to provide its customers with high quality financial services through innovation and dedication when it started banking services in 1992. Therefore, customer-oriented products and services innovation, and meeting investors’ expectations are the foundation for Taishin’s development.

Its subsidiary, Taishin Bank has been committed to enhancing its corporate and retail banking business, expanding the range of product offering and improving service quality. Taishin Bank has opened more than one hundred branch offices over the last 20 years. With the founding of Taishin Financial Holding Company, it began to provide its customers with comprehensive financial services through various subsidiaries. In light of the ongoing globalization, Taishin expanded its overseas market to serve customers’ needs. Besides, with the belief that customer service should not be limited by time or place, Taishin has been actively developing Internet and Mobile Banking services to meet customers’ all-time financial demands.

Persistent Corporate Values: The People, the Innovation and the ServiceInnovation and dedication to customer service are the key attributes of Taishin’s employees. With this spirit, Taishin looks for people with passion and consent with the company's core values of "Integrity, Commitment, Innovation, and Collaboration” (ICIC). Furthermore, the 3S “Simple, Sincere, and Superior”

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Commitment to Corporate Social Responsibility

Sustainable Business Practices Taishin Financial Holdings has identified sustainable operations as a strategic goal and the driving force behind its service innovations. The successful sustainable development is from striking the correct balance between the Economics, Environmental, and Social aspects. On the economic aspect, the company implements sound corporate governance, adhere to regulatory compliance and making profit. On the environmental aspect, the company ensures the resources are optimized in good use.And on the Social aspect, customer privacy, labor and human rights are always fully protected and executed by adequate procedures while providing services. Only when these three aspects are given equal consideration does Taishin see itself as having fulfilled its corporate social responsibilities.

Supporting the Disadvantaged for Future SkillsFor Taishin, the significance of giving back to the society in which it operates cannot be overemphasized. This is why Taishin initiated a series of "Caring Taiwan" campaigns after the 921 earthquake of 1999 to help rebuild disaster-struck areas. Besides, the launch of "My One Acre of Farm" campaign was to help farmers achieve better yields, which ultimately improves their real earnings and living standards. In 2010,

Taishin Charity Foundation was set up. The foundation runs annual online charity campaign called "The Power of Love” to promotes public awareness and participation of caring for the socially disadvantaged. With the philosophy of "Teach a man to fish, feed him for a lifetime", the foundation provides its assistance in the form of skill training to help them become self-independent and productive citizens.

Local Focus with a mind for Global ReachGiven the unique resilience and energy of the people in Taiwan, Taishin bel ieves that by sponsoring domestic artists, it not only contributes to Taiwan's arts and culture development, but also gives a voice to different groups on the island, and shows the world the rich and diverse cultures in Taiwan society. For this purpose, Taishin Bank Foundation for Arts and Culture was first founded in 2001, and then the Taishin Arts Award has been held annually since 2002. It is an attempt to highlight domestic creative talent and to promote Taiwan's distinctive cultures amidst ongoing globalization, therefore making our competitive advantages and vigor visible to the world. This attention to both local and global opportunities can also be seen in the products and services that Taishin offers from time to time, as it tends not only to the needs of Taiwanese consumers, but also to those of overseas markets. Connecting to the world, Taishin also demonstrates the outstanding advantages and characters that make it a distinctive, all-round financial leading institution.

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Company Profile

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・Taishin Bank acquired Dah An Commercial Bank Co., Ltd. and established Taishin Financial Holding Co., Ltd. And Taiwan Securities Co., Ltd. and Taishin Bills Finance then became subsidiaries of Taishin FHC

・Taishin Asset Management Co., Ltd. was founded ・Taishin Venture Capital Investment Co., Ltd. was

founded ・Taishin Financial Holdings launched the “Caring

Taiwan” campaign

・ Taishin Bank’s Hong Kong Branch was opened for business

・Taishin Bank Foundation for Arts and Culture held the award ceremony for the 1st “Taishin Arts Award”

Corporate HistoryIn 1989, Taiwan relaxed regulations on the establishment of new banks. Believing that banking institutions could play a key role in supporting the growth of business activities and society as a whole, Chairman Thomas T.L. Wu then decided to take the initiative and found Taishin Bank on March 23, 1992 and it underwent rapid growth over in ten years. Moreover, thinking of providing customers with a more diverse range of financial services as the main objective, Taishin Financial Holding Co., Ltd. then was established in 2002. The Company continued to expand to include a number of subsidiaries in an effort to better serve a growing clientele. In the future, Taishin is aimed for developing an even more diverse range of financial services to further increase its contribution to the society.

Major Events 2002 2003

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Company Profile

・ Taishin Bank took over 12 branches of the Tenth Credit Cooperative of Hsinchu

・Taishin Financial Holdings won the bid for 1.4 billion Class B preferred shares of Chang Hwa Bank

・Taishin Bank enabled internet banking services login by using IC ATM Cards

・Taishin Bank awarded the ISO 9001:2000 certification

・Taishin Bank’s Ho Chi Minh office was opened in Vietnam

Taishin Financial Holding Co., Ltd. is a publicly listed company with eight subsidiaries offering financial services including banking, securities, venture capital, investment trust, investment advisory services and insurance brokerage. The following chart explains the organization of Taishin Financial Holdings:

2004 2005

Organization Chart

Taishin Securities Co., Ltd. Taishin International Bank Co., Ltd.

Taishin Venture Capital Investment Co., Ltd.

Chang Hwa Commercial Bank, Ltd.

Taishin Securities Investment Trust Co., Ltd.

Taishin Securities Investment Advisory Co., Ltd.

Taishin Asset Management Co., Ltd.

Taishin Holdings Insurance Brokers Co., Ltd.

Taishin RealEstate Management Co., Ltd.

Taishin D. A. Finance Co., Ltd.

Taishin Insurance Agency Co., Ltd.

Taishin Insurance Brokers Co., Ltd.

Taishin Financial Leasing(China) Co., Ltd.

Taishin Financial Leasing(Tianjin) Co., Ltd.

CHB Life Insurance Agency Company, Ltd.

CHB Life Insurance Brokerage Company, Ltd.

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・Taishin Bank sponsored the “319 Share The Spirit” event

・The Company launched a “CoolBiz” policy in response to global warming and as part of its corporate social responsibility program

・Taishin Bank launched the first eco-themed credit card “GreenLife Card” in Taiwan

2007 2008

Major Events

Subsidiaries Services

Taishin International Bank Co., Ltd. Wealth management, retail banking, wholesale banking, electronic banking, and trust services

Taishin Securities Co., Ltd. Proprietary securities trading, securities brokerage, securities underwriting, futures introducing broker, and other business activities as approved by the competent authority

Taishin Securities Investment Trust Co., Ltd.

Raising of securities investment trust funds against issuance of beneficial certificates, and investment of funds in securities and other related instruments

Taishin Secur i t ies Investment Advisory Co., Ltd.

Investment research and analysis; Master agent of the Jupiter Fund

Taishin Asset Management Co., Ltd.

Acquisition of monetary debts from financial institutions; debt rating and sales; debt management and overdue accounts management for financial institutions

Taishin Venture Capital Investment Co., Ltd.

Venture Capital Business

Taishin Holdings Insurance Brokers Co., Ltd.

Life insurance and property insurance brokerage

Business Scope

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Company Profile

・Taishin Securities Investment Trust reorganized as a subsidiary of Taishin Financial Holdings

・Taishin Insurance Agency drove a fundraising campaign and successfully raised more than NT$13 million to support the “Children are us Foundation” in setting up a farm for the mentally challenged

2009 2010

・Taishin Financial Holdings acquired Tung Hsing Securities, renaming it Taishin Securities Co., Ltd.

・Taishin Charity Foundation was established, and launched the online campaign “Power of Love”

・Taishin Bank was the first to introduce “Live Chat” services for internet banking customers

・Taishin Securities Investment Trust acquired IBT Securities Investment Trust

・Taishin Bank ATMs offered cash withdrawal services to China UnionPay cardholders

・Taishin Financial Holdings signed a Memorandum of Understanding (MOU) with Nanjin Zijin Investment Co., Ltd.

In addition to these core businesses, Taishin Bank Foundation for Arts and Culture was founded in 2001 and Taishin Charity Foundation in 2010 as a means to contribute to society and support local arts and culture. While dedicated to the provision of financial services, the Company also coordinates resources among its subsidiaries for greater community engagement.

Taishin Charity Foundation Taishin Financial Holdings has long-term devoted attent ion to social topics and is committed to contributing its supporting to society. Since the 921 earthquake in 1999, the Company had aided disaster-struck areas with an approach of “Teaching a man to fish, feeding him for a lifetime.” The founding of Taishin Charity Foundation in 2010 further extends the assistance to the socially disadvantaged and helps them develop financial independence through long-term training.

Taishin Bank Foundation for Arts and Culture The Taishin Bank Foundation for Arts and Culture was founded in 2001 with the mission to “promote cultural lifestyles and support arts development.” The Foundation prides itself in supporting contemporary arts in Taiwan, and is committed to forming a bridge between artistic creation and corporates through regular reviews, grants and awards.

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Los Angeles(CHB Branch)New York(CHB Branch)

London(CHB Branch) Tianjin(TS Financial Leasing)

Nanjing(TS Financial Leasing)

Suzhou(TS Financial Leasing)

Dongguan(TS Financial Leasing)CHB Branch(in preparation)

Shanghai(TS Financial Leasing)

Fuzhou(CHB Branch(in preparation))

Ho Chi Minh City(TS Rep.)

Brisbane(TS Branch(in preparation))

Singapore(CHB Branch)TS Branch(in preparation)

Hong Kong(TS Branch,CHB Branch)

Kunshan(CHB Branch, SUD Branch)Tokyo(CHB Branch)

Taishin Financial Holdings Overseas Network

Taishin Holdings No.118, Sec. 4, Ren-ai Rd., Taipei, Taiwan

Business Units

Taishin Bank 103

including 99 domestic and overseas branches/Trust Department/overseas department/offshore banking units (OBU) and representative's office in Ho Chi Minh City of Vietnam

Chang Hwa Bank 191 branchesincluding domestic and overseas branches

Taishin Securities 3 business unitsincluding Taipei, Taichung, Kaohsiung offices

Taishin Asset Management

1

Taishin Venture Capital Investment

1

Taishin Holdings Insurance Brokers

1

Taishin Securities Investment Trust

3including Taipei, Taichung, Kaohsiung offices

Taishin Securities Investment Advisory

1

・Taishin Financial Holdings acquired Franklin Insurance Brokers Co., Ltd., renaming it “Taishin Holdings Insurance Brokers Co., Ltd.”

・Taishin Financial Leasing (China) was opened for business in Nanjing, China

・Taishin Financial Holdings became the first financial institution in Taiwan to sponsor the female golfer Yani Tseng

・Taishin Financial Holdings signed a Memorandum of Understanding (MOU) with Peking University Guanghua School of Management to announce the “Peking University Cross-strait Academic Fund”

・Taishin Financial Leasing (Tianjin) was opened for business in Tianjin, China

・Taishin Bank’s 20th anniversary of establishment

2011 2012

Major Events

Service Distribution The establishment of Taishin Financial Holdings was intended not only to offer a greater range of services of a higher quality, but also to maintain a consistent business philosophy across the Company and make more efficient use of resources. Under a unified roof, subsidiaries of Taishin Financial Holdings are able to work closely with each other to provide a better quality of services to customers, while ensuring regulatory compliance.

Business activities of Taishin Financial Holdings include those of a financial holding company, banking, bills financing, credit card services, trust services, insurance, securities, futures, venture

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Company Profile

Los Angeles(CHB Branch)New York(CHB Branch)

London(CHB Branch) Tianjin(TS Financial Leasing)

Nanjing(TS Financial Leasing)

Suzhou(TS Financial Leasing)

Dongguan(TS Financial Leasing)CHB Branch(in preparation)

Shanghai(TS Financial Leasing)

Fuzhou(CHB Branch(in preparation))

Ho Chi Minh City(TS Rep.)

Brisbane(TS Branch(in preparation))

Singapore(CHB Branch)TS Branch(in preparation)

Hong Kong(TS Branch,CHB Branch)

Kunshan(CHB Branch, SUD Branch)Tokyo(CHB Branch)

・Taishin Bank signed a Memorandum of Understanding (MOU) with Shanghai Pudong Development Bank

2013

Strait Service Trade Agreement takes effect, the Company will speed up its branch and subsidiary deployment in China to meet customer needs. At the same time its leasing and financial services will help to develop cross-strait business.

In terms of global distribution, Taishin currently plans to base its operations mainly in China and the Pan Pacific region. In addition to the existing Hong Kong Branch and Vietnam Office, Taishin Bank is also applying to set up branches in Brisbane and Singapore, and will expand its service coverage even further in the years to come.

capital, government approved foreign institutional investment, and other financial activities as approved by the competent authority. Each subsidiary is tasked with serving customers to their satisfaction, and works to achieve common goals under the management of Taishin Financial Holdings.

With regards to cross-strait business development, Taishin Financial Holdings has established one financial leasing company in Nanjing with national licensing and another one in Tianjin to provide financial leasing, installment sales and factoring business with national licensing. When the Cross-

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Taishin Financial Holdings and its subsidiaries have been able to maintain balanced growth and development in its corporate and retail banking businesses for many years. In the future, Taishin will continue to broaden its services to new territories, offering a greater variety of services to a greater number of customers.

Taishin Financial Holdings achieved record-high performance in 2013 with its EPS ranking fourth among the 16 financial holding companies in Taiwan. Consolidated net income after-tax amounted to NT$20.57billion in 2013, of which NT$13.84 billion

was attributable to shareholders of Taishin; this represented growth of 22.0% and 33.2%, respectively, compared to 2012. After-tax EPS came in at NT$1.72, or an ROE of 14.19%; book value per common share stood at NT$12.81. Of its capital structure, Taishin was able to maintain its capital adequacy ratio at a healthy 127.87%, and reduce its debt/equity ratio from 24.2% at the end of 2012 to 23.4% at the end of 2013. Details are accessible from the Market Observation Post System, or from the 2013 Annual Report available on Taishin Financial Holdings’ website.

Financial Performance

Net Income after tax – Consolidated (NT$billion) 20.57 16.87 16.28

Net Income after tax – Attributable to shareholders of Taishin (NT$billion) 13.84 10.39 9.43

Earnings per share (EPS) (NT$) 1.72 1.21 1.07

Return on common shareholders' equity (ROE) 14.19% 11.15% 11.06%

Book value per common share (NT$) 12.81 12.48 11.98

Capital adequacy ratio (CAR) 127.87% 140.74% 129.68%

Debt/equity ratio 23.4% 24.2% 34.1%

Note: Above were prepared in accordance with IFRSs, except for the figures of 2011 and capital adequacy

ratio of 2012, which were based on ROC GAAP.

2013 2012 2011

Financial Highlights

Structure of Shareholders

QuantityGovernment Institutions

Financial Institutions

Other Institutional

Shareholders

Personal Shareholders

Foreign Institutions

and Personal Shareholders

Total

Common shares

Number of Shareholders 13 121 523 203,830 748 205,235

Shares 138,885,797 439,804,013 1,371,501,780 3,099,228,101 2,486,211,700 7,535,631,391

Share of stake (%) 1.84 5.84 18.20 41.13 32.99 100.00

preferred shares D

Number of Shareholders 0 1 15 0 0 16

Shares 0 258,977,435 466,159,385 0 0 725,136,820

Share of stake (%) 0.00 35.71 64.29 0.00 0.00 100.00Base date: April 8, 2014

Structure of Shareholders

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Company Profile

The outstanding financial performance of Taishin Financial Holdings is due to the support of its customers. The Company appreciates the trust and satisfaction of its customers with the Taishin services, and shares the fruits of its efforts with its customers, investors, shareholders, employees, suppliers and all other stakeholders:

Consumer Loans • As of 2013, the size of Taishin Bank’s mortgage portfolio stood at

NT$312.3 billion, representing a 5.3% market share;

• The auto loan balance amounted to NT$24.49 billion, ranking first in the market with a share of 23.5%.

Credit Cards • The bank had 3.45 million credit card in force, ranking

fourth with a 9.6% market share.

• Total credit card purchases amounted to NT$166.2 billion for the year, ranking fifth with an 8.7% market share.

• Taishin Bank acquired credit card transactions for 67,000 merchants nationwide, ranking second with a 20.9% market share.

Wholesale Banking Services • NT$179.2 billion for outstanding corporate loans

• NT$70.5 billion for loans to small and medium enterprises

• Factoring services concluded with the volume size of NT$238.6 billion

• Financial derivatives amounted to US$101.4 billion in terms of notional principal, ranking third among domestic banks

• Taishin Bank provided stock transfer agency services to a total of 189 companies listed on TSEC, GTSM and the Emerging Stock Market

• Taishin Securities took on 19 securities underwriting projects in 2013, ranking third in the market

Trust Services • Collective trust accounts managed a total of NT$4.177 billion in funds,

ranking first in the market with a 47.56% share

• Prepayment trusts managed a total of NT$2.883 billion in funds, ranking second in the market with a 13.56% share

• Securities trusts managed a total of NT$21.594 billion, ranking third in the market with a 7.81% share

3.453.152.96

2011 2012 2013

million

credit card in force

166.2152.7147.6

2011 2012 2013

billiondollar

total purchase amowt(NTD)

2011 2012 2013

189186182 No. ofcompanies

3.453.152.96

2011 2012 2013

million

credit card in force

166.2152.7147.6

2011 2012 2013

billiondollar

total purchase amowt(NTD)

2011 2012 2013

189186182 No. ofcompanies

▇ No. of Credit Card in Force in 2011-2013

▇ Credit Card Purchases in 2011-2013

▇ Stock transfer agency services for TSEC-listed, GTSM-listed, and Emerging Stock Companies in 2011-2013

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Taishin Financial Holdings and its subsidiaries are active members in local and foreign associations related to their business activities. Through these associations, interactions and communications with industry peers are more dynamic, the suggestions are often offered on public policy making and development.

Associations

In its operations and the provision of products and services, Taishin Financial Holdings enjoys close relationships with a range of suppliers. Supplier selection criteria, working policy and evaluation procedures have been designed and implemented across the Group, to facilitate co-operation with the suppliers. Taishin makes the selection of suppliers from

among local companies a priority. In 2013, 97% of supplier payments were in NT dollars. Going forwards, Taishin will continue to enhance supplier management and to evaluate suppliers according to a number of criteria such as respect for human rights, freedom of association, non-use of child labor, and elimination of forced labor.

Taishin Bank

．Bankers Association of the R.O.C. ．Pension Fund Association, R.O.C. ．Trust Association of R.O.C. ．The Institute of Internal Auditors, R.O.C. ．International Swaps and Derivatives Association (ISDA) ．Taiwan Securities Association ．Member of Taiwan Depository & Clearing Corporation Fixed Income Committee ．R.O.C. Bills Finance Association

．Taiwan Securities Association ．Chinese National Futures Association

．Taiwan Venture Capital Association．Taiwan Private Equity Association

．Securities Investment Trust and Consulting Association of the R.O.C.

．Securities Investment Trust and Consulting Association of the R.O.C.

．The Insurance Agency Association of the R. O. C.

．Insurance Brokerage Association of Taiwan

Taishin Securities

Taishin Venture Capital


Taishin Holdings Insurance Brokers


Taishin Insurance Agency

Membership in Associations

Supplier Management

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Company Profile

Taishin’s efforts in improving the scope and quality of its services have won the support of customers as well as domestic/international awards and recognition. It is Taishin’s belief that continuous innovation and developing products and services that meet customer requirements is the key to sustainable operations. The following is a list of major honors that Taishin Financial Holdings has earned over the last three years:

Awards and Recognition

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Major Awards for CSR and Corporate Governance Entity Issuing Organization Awards/Rankings

Taishin Financial Holdings

IAIR Awards Best Company for Leadership- Banking – Asia

The Asset Excellence in Management and Corporate Governance Awards – Titanium

Taipei City Government Taipei Energy Conservation Awards

Business Next Ranked No. 5 in Financial Industry for 2013 Green Brand Award survey

Taipei City Government Office Energy Conservation Excellence Commendation

CommonWealth Ranked top 30 in 2012 "Excellence in Corporate Social Responsibility"

Council for Cultural Affairs Wen Xin Award- Best Cultivation of Talented Persons

Finance Asia Best Managed Company

Taishin Bank

Dept. of Labor, Taipei City Government

2013 Award for Best Companies to work for

Artist MagazineThe 10th Tasihin Arts Award Finalist Exhibition at the Museum of Contemporary Art, Taipei is voted by the public for the Top 10 Excellent Exhibitions in 2012

Taiwan Academy of Banking and Finance

Nominated on Best Human Resources Development Award

The Council of Labor Affairs Bronze Award in "Taiwan TrainQuali System" (TTQS)

National Taxation Bureau 2012 Outstanding Merchants on promoting/using electronic receipts

Artist MagazineThe 9th Taishin Arts Award Finalist Exhibition at the Kaohsiung Museum of Fine Arts is voted by the public for the Top 10 Excellent Exhibitions in 2011

Global Views Monthly Corporate Social Responsibility Awards - Excellent prize in "Promotion of Social Well-being"

CSR and C

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Innov

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Wealth

Man

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Retail B

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Insura

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IT and I

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Mutual

Funds

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Company Profile

Major Awards for Innovation and Services

Entity Issuing Organization Awards/Rankings

Taishin Bank

Next Magazine 10th Service Awards – No. 2 in Banking

Banking & Payment Asia Strategy Excellence in Business Model Innovation

Industrial Development Bureau, Ministry of Economic Affairs

Taiwan Top 20 Most Innovative Companies

The Council of Labor Affairs National HRD InnoPrize

Global Views Monthly Ranked No.1 Best Service Award - Banking Industry

IDC Enterprise Innovation Awards

China Productivity Center (CPC)Customer Loyalty Award (Retail Banking)

Hospitality Award (Retail Banking)

Financial Insights Innovation in Analytics

Major Awards for Wealth Management Taishin Fianancial Holdings

EuromoneyRanked top 5 "Best Trust Services" in private banking in Taiwan

Ranked top 3 "Best Local Bank” in private banking in Taiwan

Taishin Bank

Private Banker International Outstanding Wealth Management Service for the Affluent – Highly Commended

The Banker/PWM“Highly Commended Best Private Bank” in Taiwan

“Highly Commended Best Private Bank in Innovation”

Business Today

2013 Ranked No. 1 "Best Wealth Management Team Award"

2013Ranked No. 3 "Best Product Award"

2012 Ranked No. 1 "Best Performance Award"

2012 Ranked No. 2 "Best Product Award"

2012 Ranked No. 3 "Best Wealth Management Team Award"

2011 Ranked No. 1 "Best Wealth & Asset Protection Award"

2011Ranked No. 3 "Best Services Award"

Euromoney

Ranked No. 1 in Structured Products

Ranked No. 1 in Philanthropy

Ranked No. 1 in Art Banking & Numismatics

Ranked top 3 “Best Private Banking Services Overall” in Taiwan

Manager Today Taiwan Top 100 MVP Managers of 2013

Private Banker International Outstanding Private Bank East Asia – Highly Commended

The Asset Best Private Bank in Taiwan

Major Awards for Retail Banking Services Entity Issuing Organization Awards/Rankings

Taishin Bank Asian Banking & Finance

2013 Domestic Retail Bank of the Year – Taiwan

2012 Domestic Retail Bank of the Year – Taiwan

2011 Taiwan Retail Bank of the Year

IT and I

nterne

t Ban

king S

ervice

s

Mutual

Funds

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Entity Issuing Organization Awards/Rankings

Taishin Bank

Asian Banking & Finance

2013 Credit Card Initiative of the Year - Taiwan

2012 Credit Card Initiative of the Year - Taiwan

2011 Best Direct Marketing Campaign

Global Banking & Finance Review Best Retail Bank in Taiwan

Asian Banker Best Automobile Loan Products in Taiwan

VISA Inc.Visa No. 1 Department Store Co-Brand Program in Taiwan

Visa Infinite Outstanding Product Design Award

Banking & Payment Asia Product Excellence in Credit Cards Special Commendation

JCIC Golden Security Award

Major Awards for IT and Internet Banking Services

Taishin Bank

Global Finance Best in Mobile Banking

Celent2013 IT Model Bank

2012 IT Model Bank

Dept. of Commerce, Ministry of Economic Affairs

Golden Web Awards-Silver Price in "Best Enterprise Web"

The Banker Highly Recommended award in "Innovation in Risk Management Technology"

Asian Banking & Finance Taiwan Domestic Technology & Operations Bank of the Year

Major Awards for Mutual Funds


Smart and Morning Star Nominated for “Smart Fund Award” – Best Equity Fund Research Team

Lipper Lipper Taiwan Fund Awards – Technology Equity Fund 10-year Category – Taishin 2000 High Technology Fund

Taipei Foundation of Finance (TFF)

Nominated for the 15th TFF-Bloomberg Best Fund Award in the “Technology Equity Fund” category – Taiwan Equity Technology 10 years - Taishin 2000 High Technology Fund


Nominated for the 15th TFF-Bloomberg Best Fund Award in the “REITS Fund 3/5 years” - Taishin North America Income Trust Fund


Nominated for the 14th TFF-Bloomberg Best Fund Award in the “REITS Fund 3-year” – Taishin North America Income Trust Fund


Lipper Lipper Taiwan Fund Awards – Global Equity Fund 10-year – Jupiter Global Managed Fund

Smart and Morningstar Smart Taiwan Fund Awards (with technical guidance from Morningstar) – Sector Equity-Ecology and Alternative Energy–Jupiter Ecology Fund

Lipper Lipper Taiwan Fund Awards – Finance Equity Fund 10-year Category – Jupiter Financial Opportunities Fund

Major Awards for Insurance Services Taishin Bank Ministry of Economic Affairs Credit Guarantee Partnership Award

Taishin Insurance Agency

Risk Management, Insurance and Finance Foundation

The 15th FHL Distinguished Profession Award for Insurance Agent, Broker & Intermediary

Taiwan Insurance Institute The 5th Taiwan Insurance Award – “Excellence as an Insurance Agency”

Risk Management, Insurance and Finance Foundation

The 14th FHL Distinguished Profession Award for Insurance Agent, Broker & Intermediary-- Selected Nominee

23

Corporate Governance

24

The corporate governance framework of Taishin Financial Holdings stems from i ts Art ic les of Incorporat ion and embodies key policies for shareholder meetings, directors and supervisors elections, board of directors meetings, and share administration. This framework is regularly reviewed and amended to conform with prevailing regulations, market trends, and the Company’s needs and practices.

Taishin Financial Holdings’ board of directors and committees are established under the authority of the shareholders meeting. Board members are made up of elite talents from the financial sector and academia. Functional committees under the board of directors have been established to aid the board

in its decision-making. However, for further evaluating Taishin’s performance from environmental or social perspectives, the board of directors will plan to take place the evaluations in subsequent years.

At present the Chairman of Taishin Financial Holdings does not concurrently serve as CEO. The Company had 12 directors and supervisors at the end of 2013, including two independent directors. The directors and supervisors are selected by professional capabilities, regardless of gender or age. All directors and supervisors are over 50 years of age; six hold PhD degrees while three hold Master’s degrees; their fields of expertise range from accounting, economics, business

administration, marketing, physics, chemistry, to engineering.

Data of Board Directors and Supervisors

Title Name Degree and Major Experience Gender

ChairmanBo-Rui Co., Ltd.Representative: Thomas T.L. Wu

• Director, First Bank; Supervisor, Hua Nan Bank• MBA, University of California, LA

M

DirectorTong Shan Investment Co., Ltd.Representative: Jui-Sung Kuo

• Director, International Bank of Taipei; Professor, Department of Information Science, Business School, Soochow University

• Ph.D. in Physics, New Hampshire UniversityM

DirectorTai-Ho Investment Co., Ltd.Representative: Cheng- Ching Wu

• Supervisor, Taishin Financial Holdings, Taishin Bank • Ph.D. in Engineering, Tokyo University

M

DirectorHsiang-Chao Investment Co., Ltd.Representative: Jeffrey T.S. Wu

• Chairman of Taishin Asset Management; Supervisor of TECO Image System Co., Ltd.

• Department of Accounting and Statistics, National Chengchi University

M

DirectorSanto Arden Co., Ltd.Representative: Chu-Chan Wang

• Standing Supervisor, Taishin Financial Holdings, Taishin Bank• Pharmaceutical Department, Kaohsiung Medical College

M

DirectorHsiang-Chao Investment Co., Ltd.Representative: Steve S.F. Shieh

• President, Taishin Financial Holdings, Taishin Bank• Accounting Department, National Cheng Kung University

M

DirectorBo-Rui Co., Ltd.Representative: Thomas K.H. Wu

• President, Taiwan Stock Exchange Corporation; Chairman, Taishin Securities

• MBA, National ChengChi UniversityM

Independent Director

Chih-Kang Wang• Minister of Ministry of Economic Affairs• Ph.D. in Marketing, Texas A&M University

M

Independent Director

Neng-Pai Lin• Chairman, Taiwan Power Co.; Dean, College of Management at

National Taiwan University • Ph.D. in Business, Ohio State University

M

Standing Supervisor

Chishung Co., Ltd.Representative: Jimmy Y.T. Tsay

• Standing Director, Bank of Taiwan; Director, Graduate School of Accounting, National Taiwan University

• Ph.D. in Business Management and Commerce, U. of MarylandM

SupervisorTaishin International Investment & Development Co., Ltd.Representative: Long-Su Lin

• Director, Taishin Financial Holdings, Taishin Bank• Ph.D. in Chemistry, Virginia State University M

SupervisorRoyal International Co., Ltd.Representative: Simon C.C. Cheng

• The Top Consultant of Want Want China Times Group; Chairman of CTiTV

• Master in Economics, National Taiwan UniversityM

Governance Structure

25


Shareholders are entitled to raise suggestions to Taishin or any of its subsidiaries at any time; shareholders with over 1% equity interests may propose agenda items for discussion during annual general meetings, subject to the board’s review. Employees may raise suggestions regarding the Company’s operations through any of the available means (e.g. employee commitment surveys, Taishin Holdings quarterly morning conferences, employee opinions mail box etc.). These suggestions are reviewed by the responsible department and if deemed appropriate may be delivered on for discussion during board meetings. The board of directors meets once a month, but may convene a meeting at any time for business reasons or in case of emergency. Board meetings are required to proceed as scheduled in the meeting advice; changes to the agenda are allowed only if agreed by more than half of the attending directors. Unless otherwise specified in the Securities and Exchange Act, the Company Act or the Articles of Incorporation, all board resolutions shall be adopted in the presence of more than half of the board, and with the agreement of more than half of the attending directors.

If a director, or a corporate entity that the director represents, is considered an interested party in the agenda item, a full disclosure of interests is required. The director shall recuse

himself/herself from all discussions and voting if it is in conflict against the Company’s interests. Any such conflict of interests and recusal from discussions has to be recorded in the meeting minutes.

Taishin Financial Holdings’ remuneration of its directors and supervisors is based on levels of industry peers, the Company’s managerial remuneration and pay raise levels, contribution of and risks undertaken by individual director/supervisor, and any material changes to the Company’s performance. To ensure that remuneration of directors and supervisors complies with the law, a Remuneration Committee has been established under the board of directors, tasked with regular review and setting of remuneration plans for directors, supervisors and managers according to the “Director and Supervisor Remuneration Standards” and the “Managerial Salary Structure Guidelines.” The overall objective is to prevent directors and managers from seeking high returns by taking undue risks.

To further strengthen corporate governance of its subsidiaries, Taishin Financial Holdings also requires subsidiaries to formulate policies and guidelines on the remuneration of directors, supervisors and managers.

Organization Chart of Taishin Financial Holdings

Shareholders' Meeting

Remuneration Committee

Supervisor

Secretariat Division Audit Division

Policy Committee

Asset & Liability Management Committee

CRM Committee

Investor Relationship Committee

Risk Management Committee

Staff Conduct Review & Staff Performance Appraisal Committee

Board of Directors

Chairman

President

Retail Banking Group

Wholesale Banking Group

Chief Information Office

Chief Accounting Office

Chief Risk Office

Chief Finance Office

Chief Strategy Office

Chief Economist Office

Corporate Planning Division

Processing & Service Division

Administaion Division

Humman Resources Division

Legal Division

Corporate Communication Department

26

Responsibilities of Taishin Financial Holdings Committees Committee Committee Responsibilities

Remuneration Committee

The Remuneration Committee shall exercise the care of a prudent manager to fulfill the following duties, and offer recommendations for discussion by the board of directors: 1. To establish and conduct regular review of the policies, systems, standards, and structures for

performance appraisal and remuneration of the Company’s directors, supervisors and managers 2. To conduct regular review and determine the remuneration of directors, supervisors and managers

Policy Committee 1. To conduct regular review of the performance of all business units 2. To discuss operating strategies for all business units

Asset & Liability Management Committee

1. To develop policies for liquidity and interest rate risk management 2. To monitor liquidity and interest rate risks, and determine appropriate strategies 3. To develop contingency funding plan to ensure timely funding allocation during liquidity crisis

CRM Committee 1. To determine strategies and goals for the data warehouse system of the Taishin FHC 2. To develop customer relationship strategies, and to control and co-ordinate their implementation 3. To set targets and track performance on cross-selling within the Company

Investor Relationship Committee

1. To consolidate internal information and coordinate across subsidiaries and departments, to ensure consistency of messages in external communications

2. To keep abreast of the latest market developments and the views of institutional investors 3. To monitor foreign shareholding ratios among industry peers as well as share price movements and

market positions


1. To review Group policies and procedures for risk management 2. To review and approve policies, measures and guidelines regarding market risk, credit risk and

operational risk exposure of subsidiaries 3. To supervise the development of market risk, credit risk and operational risk management systems 4. To review risk management reports of each subsidiary and the Group as a whole 5. To review and approve risk models, risk parameters, risk indicators, and stress test plans 6. A New Product Management Committee has been created under this committee to review the risks

involved in new products and complex trades across subsidiaries 7. To monitor different types of risk exposures, and develop necessary measures to manage large-scale risk

exposures 8. To report on progress of other risk-related projects 9. To execute any risk-related decisions passed by the board of directors

Staff Conduct Review and Staff Performance Appraisal Committee

1. To review employee promotion and discipline cases according to Company regulations 2. To review appeals of employee discipline cases 3. To review cases assigned by the CEO

In order to maintain close interaction with domestic and overseas investors, develop effective communication channels, and ensure consolidated and transparent disclosure of financial and material information, Taishin Financial Holdings initiated an Investor Relations Department, in hopes of providing investors with optimum services and meeting information requirements of stakeholders.

Investors are informed of Taishin performance results through monthly reports, quarterly analyst meetings, annual shareholders meetings, and investment conferences and roadshows both in Taiwan and overseas that discuss the Company’s latest business and financial results. In 2013, the Company organized and participated in eight investment conferences and roadshows in Asia, Europe, America, and the Middle East.

Investor Relations The Company’s website includes an independent investor relations section in both Chinese and English, where investors can access news updates, shareholder services, financial data, analyst meeting information, financial statements, annual reports, corporate governance and other important information. Investors may also contact directly with the Investor Relations Department or its spokesperson for any data inquiries

Taishin Financial Holdings discloses its business performance on a regular and transparent basis. As a result, the ratio of long-term foreign shareholders has steadily increased over the last few years. As of the end of 2013, foreign investors held 35.11% of the Company’s stocks.

27


The financial industry is a major pillar supporting business operations and the economy, and Taiwan has very stringent laws covering the financial industry and the products it offers. Taishin Financial Holdings is well aware of its responsibilities to the economy and society and to this end closely follows industry trends both here and overseas as well as government policies. The Company has followed laws and regulations strictly, and reviewed the relevant internal rules regularly. The Company has adopted stringent internal control and internal

Responsibilities of the Audit Division Responsibilities of the Audit

Division Current Status

Management over subsidiaries

• Subsidiaries’ financial statements and internal audit reports are reviewed on a monthly basis. • An audit managers meeting for parent and subsidiary companies is convened every two months. Subsidiaries

with no audit unit assign a management representative to attend. Representatives from the Compliance Division, Chief Risk Office, and other management department representatives are also invited to share information on the latest regulations, internal policies, and issues that subsidiaries should co-operate on.

• The Audit Division pays quarterly visits to subsidiaries’ audit divisions for the purpose of enhancing audit practices.

• The Audit Division performs a quarterly review of board meeting minutes submitted by each subsidiary, in order to monitor financial and business performance.

• Annual audit plans of subsidiaries are submitted for review by the Audit Division before approval by the respective boards of directors.

Supervision of internal control self-auditing

• The Audit Division organizes training courses for the business units on how to execute internal control self-auditing.

• The Audit Division ensures that each unit within the Company and every subsidiary completes internal control self-auditing and issues a Statement on Internal Control. The Audit Division then arranges to have the Compliance Officer, the Chief Auditor, the President and the Chairman sign off on Taishin’s Statement on Internal Control, and submit it to the Board for approval. This Statement on Internal Control has been filed with the competent authority and disclosed in the Company’s annual report and on the Company’s website.

Performance appraisal of subsidiaries’ internal audits

• The Audit Division conducts appraisals on subsidiaries’ internal audit efforts and reports to the Board of the Company; these results are then sent to the boards of the respective subsidiaries for reference in personnel appraisals.

Co-ordination of inspections by financial supervisory authorities

• During inspection by the competent authority, the Audit Division serves as a contact window to assist in retrieval of information and co-ordinates communication between units under inspection and inspectors.

Tracking and management of discrepancies

• The Audit Division conducts two audits annually over Taishin and its subsidiaries. • The Audit Division tracks any opinions raised by the competent authority during its inspections, and

supervises to ensure that improvements are made. • Each quarter, the Audit Division reports to the Board of Directors on: opinions raised by the authority during

inspection and improvements made in the current period, any high-risk discrepancies identified by Taishin and its subsidiaries in their internal audit reports, effective suggestions and their implementation, any penalties imposed against Group members, and occurrence of major incidents and response actions.

Filing and Reporting

• The Audit Division has completed regular online submission of the Company’s annual audit plans, execution status, auditors list, and internal audit reports, as per applicable regulations.

• Subsidiaries are required to report to the holding company according to the “Taishin Financial Holdings’ Subsidiary Reporting Policy,” and it is the Audit Division’s responsibility to assess the importance of reports made and to decide whether to submit them to the President, independent directors, the Chairman, the Board of Directors or Supervisors.

Consultation on business policies and operation guidelines

• In addition to conducting audits and reviews, the Audit Division also provides opinions to audit units of subsidiaries when they modify their operating procedures, in order to prevent any attendant issues.

Legal Compliance

Audit System

audit system to ensure legal compliance. At the same time, the Company’s employees are kept informed of the latest regulatory developments in the financial sector, such as cases regarding penalties imposed against the financial industry, changes in regulations, clarification of legal queries, and news on personal information protection. The Company also has a stringent review system in place to ensure that advertising and marketing materials are complied with applicable regulations.

Taishin Financial Holdings has a dedicated Audit Division to ensure proper execution and control of all business procedures. Below is a list of audit tasks performed in 2013:

28

Chairman

President Asset &Liability Management Committee

Chief Risk Office

President

Non Performing AssetRecovery Committee

Credit Approval Committee


TPAC

Chief Risk Officer

Retail Banking Credit Division

Bank Risk Management Division

TSSCORisk Management

Department

Taishin Subsidiaries


Due to the extensive range of financial services offered by Taishin Financial Holdings and its subsidiaries, the Company requires a risk management framework robust enough to identify, measure, and consolidate risk impact efficiently and in compliance with the law. The Company implements risk management policies, measures, and controls for every business activity in which it is involved. Taishin Financial Holdings currently has an independent risk management framework in place to oversee the Company’s overall framework. The responsibilities of all units are explained as follows:

Board of Directors

Wholesale Credit Administration Division

Retail Banking Non Performing Asset Recovery Division

Risk Management

Risk Management Framework

29


Risk Management System Taishin’s risk management system is created based on the Risk Management Policy. The risk management system establishes operating procedures for the risk types that the Company is exposed to, including credit risk, market risk, operational risk, assets and liabilities risk etc. The Company is able to effectively identify, measure, monitor and control its risk exposure through the use of risk limits, early warning indicators, and control procedures. The system ensures effective management of major risks as well as timely reporting to the management.

Taishin Financial Holdings has set the risk limits on individual products and total risk limits based on the risk appetite approved by the Board. This risk appetite is subjected to stress-testing from time to time to ensure that it remains appropriate given changes in the overal l economic and business environment. The Risk Management Committee serves as the highest authority for all subsidiaries in risk management affairs. The Risk Management Committee holds regular meetings to ensure sound risk management practices across the Group. The committee also reviews whether existing risk mitigation solutions continue to be appropriate given changes in external conditions.

Board of Directors


Chief Risk Officer

Chief Risk Office

Risk management units of the subsidiaries

1. To approve risk management policies and procedures 2. To approve limits of market risks, credit risks, and operational risks

across the Group

1. To execute board-approved risk management strategies and risk management framework

2. To ensure that the Risk Management Division and risk management functions within each subsidiary implement risk policies properly

3. To ensure effective communication and co-ordinates risk manage-ment across functions

1. To develop and implement the risk management framework 2. To disclose the current status of risk management 3. To produce Group risk analysis reports 4. To co-ordinate risk management units of different subsidiaries 5. To establish an integrated risk management information system 6. To introduce risk management practices of the new Basel Capital

Accord that conform to international standards

Please refer to the Corporate Governance Section for responsibilities of the various committees under Taishin Financial Holdings

1. To provide risk management-related information 2. To execute Group risk management policies

Crisis Management To ensure business continuity, responsiveness to incidents, and real-time disaster recovery, Taishin Financial Holdings has implemented a Business Continuity Policy that defines emergency incidents, c lassi f ies r isk severi ty, assigns responsibilities, and outlines relevant procedures in the event of an incident.

▇ Taishin Financial Holdings Risk Management Responsibilities

30

As personal information protection is an important concern, Taishin Financial Holdings adopted the BS 10012:2009 standard announced in June 2009 by the British Standards Institution (BSI) before the newly amended Personal Information Protection Act came into effect. The Company was certified by the BSI on September 15, 2012, showing its strong commitment to legal compliance. Furthermore, Taishin Financial Holdings has introduced a number of data security measures to strengthen the management of personal information protection. And the company enforces personal information protection via the adequacy of such measures is reviewed regularly through annual drills.

Personal Information Protection

31

Superior Taishin

32

Implementing the Innovative Projects and Plans Continuous Improvement, Innovation, and Business Process Management (BPM) ATM services, fund investment, Internet banking, mortgages and auto loans may seem to be commonplace bank products and services; however, it is often the case that a slight fine-tuning of a service detail can drastically improve customer experience. In order to improve service quality, Taishin constantly explores new ways to innovate and differentiate ourselves from the competition.

In a world of rapid technological advances, customer needs evolve quickly. The only way to stay ahead of the competition is to constantly design innovative products and provide excellent services. The secret to innovation, however, lies in the details, and Taishin is meticulous in its examination of customer feedback to identify opportunities for innovation in the work we do every day. In 2002, the Company launched a “Creativity Proposal System” through which employees are encouraged to submit ideas about how to improve their daily work, or to express creative suggestions or opinions.

Because ideas are only as good as how they are implemented, the Company makes sure that every proposal that passes review undergoes assessment, planning, execution, and performance tracking, and that employees who propose successful ideas are well-rewarded for their efforts.

The system has received more than 25,000 proposals to date; in the last three years, more than 50% of the ideas proposed were put into practice.

Furthermore, the Company launched a process improvement initiative in 2008 that aims to upgrade current work flows. More than 800 projects have been proposed and completed under the initiative over the last six years, creating synergy of more than NT$4 billion.

Taishin’s innovations in the products and services offered have not only been well-received by customers, but have also been recognized by awards such as “2012 Taiwan Top 20 Most Innovative Companies” from Industrial Development Bureau, Ministry of Economic Affairs and the 8th National HRD InnoPrize from Workforce Development Agency, Council of Labor, Executive Yuan. The commitment to service improvement is the driving force behind the Company’s innovative spirit, and it continues to be built based on Taishin’s corporate values.

6471

54

31

2114 18 17 14

17

2004200520062007200820092010201120122013

Average of adoption rate

Year

▇ Adoption rate of Creative Proposals

CreativityProposalSystem

33

Superior Taishin

Service Innovation

“You speak, we type and complete” – counter services that deliver higher customer satisfaction The most time-consuming part of a customer’s bank visit is the need to fill out form after form. In an effort to change how things are done, Taishin has launched a “You speak, we type and complete” project that enables customers to carry out more than 30 different transactions easily through verbal interaction, including deposits, withdrawals, fund transfers, credit card payments, account opening, credit card applications, and mutual fund trading. This innovation not only saves time for customer’s satisfaction, it also saves on operation costs and manpower.

Convenient financial services – ATM interface upgrade Taishin re-designed its ATM interface in 2013 to provide customers with a more intuitive user experience. These changes also included optimized transaction procedures and many user-friendly functions.

▇ ATM Optimization

System Functions

Optimization Details Time Saved

Withdrawals, fund transfers etc.

Customers are able to confirm details of multiple transactions on one screen, instead of checking them one by one

5-20 seconds Deposits

Waiver of password verification for accelerated transactions

Credit card payment and inquiry

Removed some identity checks for greater convenience

Wealth Management Taishin improved wealth management services that conform more closely to different customer segments with delicate customers’ services:

▓ Financial consultants and research teams: investment portfolios and financial services tailored to customer needs.

▓ Open-concept financial product platform: a diverse range of customized investment products for higher returns.

▓ Member privileges: fee discounts, birthday gifts for all wealth management clients; and premium health check-ups and golf sessions with professional golfers for Private Banking Clients.

▓ Professional customer segment management team: differentiated products and services according to customer needs.

▓ Customers are invited to special events and seminars co-organized by boutique brands and the Taishin Bank Foundation for Arts and Culture.

▓ Leader in banking industry for announcing Entrepreneur Reward Program: unlike most financial institutions that manage personal wealth and OBU (Offshore Banking Unit) accounts separately, Taishin Bank offers an integrated entrepreneur package that rewards the overseas business unit and the business owner at the same time.

▓ Wealth management personal accounts have been expanded to include household accounts. Customers are given the option to include spouses and blood relatives under the same family relationship, so that AUM (Asset under Management) can be calculated on an aggregate basis allowing family members to enjoy the privileges such as special offer on transaction fees.

note:Taishin wealth management membership has 4 tiers, namely – Wealth Member(AUM is equivalent or above NT$1 million), Affluent Member(AUM is equivalent or above NT$3 million), Premium Member(AUM is equivalent or above NT$10 million) and Diamond Member(AUM is equivalent or above NT$30 million)

note: Private Banking Clients – Premium Member and Diamond Member

Excellent Loan Services

Loan applications used to be higher costs and time-consuming in the past due to the delivery of printed documents. In order to speed up processing and reduce costs, Taishin Bank has developed an integrated system- IPMS (Image Process Management System) for home loan, auto loan and credit loan products.. The system is able to work with complicated loan product combinations and integrate the processes for application, credit review and allocate funds in one platform. Furthermore, it is very easy and flexible to make changes depending on customers’ need. This not only raises customer satisfaction and saves customers’ time, but also allows our staff to provide customized loan plans for each customer more efficiently.

34

▇ Customer Service Enhancement Projects in 2011-13

IT System Re-engineering A high level of service quality is only possible with the support of robust information technology. Taishin’s continuous investments on IT are driven by customer needs and an overall goal of ensuring service reliability and accessibility. These investments cover hardware (e.g. server rooms, networks, backup systems, and infrastructure) as well as applications for improved service and efficiency. Taishin has won multiple

2011

2012

2013

Project DetailsYear Features

To allow customers to activate new credit cards by scanning QR Codes

When payment is made to a credit card account, the system frees up credit line immediately

To allow customers to set up auto-debit of utility bills via Internet banking

Resolved limitations of batch-process-ing systems

The first card activation service to make use of smart phone functionality

1.Convenient: online application at anytime

2.Environmental friendly: no need to print forms, mail bills, or visit the bank

Innovative Measures for Greater Efficiency Taishin continuously implements e-Business procedures that save time, resources and manpower, and are friendly to the environment. Key steps in this process are as follows:

awards including Celent’s “Model Bank”, Asian Banker’s “IT Implementation Award”, The Banker’s “Highly Recommended Award in Innovation in Risk Management Technology”, Asian Banking & Finance’s “Taiwan Domestic Technology & Operations Bank of the Year”, and Global Finance’s “Best in Mobile Banking” and “Best Consumer Internet Bank”. These awards are a testament to the significant role of IT systems in the Company’s businesses.

E-processing of corporate banking credit assessment and loan approval

• 2003: electronic SOPs implemented for credit assessment and credit approval of corporate clients

• 2004: electronic SOPs implemented for Joint Credit Approval Committee meeting agenda

• 2008: electronic SOPs implemented for Board of Directors meeting agenda

Implementation of ride-sharing system for taxis and company vehicles

• An innovative proposal was submitted in 2007 regarding a taxi sharing scheme. The scheme was subsequently launched in 2008

• Steps were taken to achieve more effective use of company vehicles, thereby reducing CO2 emissions

Strengthening the Quality and Efficiency

35

Superior Taishin

▇ IT Application Projects in Recent Years

Category Project Results

Basic Architecture and System Applications

Customer service system upgrade

• Integrates customer service procedures, and improves reliability and security of the customer service system

LYNC system application • Allows employees to participate in meetings and training without

traveling, saving time and costs • Saves costs on telephone conferencing

Implementation of mobile banking

• Allows customers to carry out transactions, account inquiries and receive information on the latest promotions anytime, anywhere via a mobile device

Implementation of IPMS • Significantly reduces paper costs, and time spent on document delivery and manual operations

Retail Banking

Implementation of Deposit Data Mart

• Reduces manual operation costs • Improves operating efficiency

Implementation of Wealth management data integration

• Integrates front-office, mid-office, and back-office systems for greater efficiency

Implementation of image process system for merchant approval process

• Significantly reduces the processing time for approval from 7 days to less than 2 days

Implementation of credit card approval system

• Significantly reduces the processing time for credit card approval from 7-10 days to 3-5 days

Implementation of card readers storage management system

• Enhances efficiency for card readers storage management • Simplifies manual operations

Implementation of the compliance system • Improves operating efficiency

SMS system improvement • Builds in a checking mechanism for system disruptions • Improves SMS transmission

▇ Hardware Investments in 2011-13 (server, hard drives, network equipment, and infrastructure)

▇ System Investments in 2011-13 (upgrade, replacement, backup, security enhancement etc.)

20122011 2013

NTD millions

Amount

Year

NTD millions

Year

284.3111.0114.7

20122011 2013

5 / 344.6No. of Major projects / Amount

6 / 116.85 / 125.0

20122011 2013

NTD millions

Amount

Year

NTD millions

Year

284.3111.0114.7

20122011 2013

5 / 344.6No. of Major projects / Amount

6 / 116.85 / 125.0

36

Category Project Results

Retail Banking

Implementation of an integrated reward points system (wealth management reward points system)

• Improves operating efficiency, saving one minute of a financial adviser ’s time and 15 seconds of a PM’s time for every redemption request

• Reduces the time for customers to receive promotional gifts from 14-30 days to 7-10 days

• Achieves the objective of zero inventory for promotional gifts

Implementation of a Trust Investment Product System (TIPS)

• Improves processing time and efficiency • Enhances transaction security

Integration of Asset management system

• Enhances real-time monitoring of investment risk • Simplifies manual operations • Improves service accuracy and efficiency

Credit card processing system (CPS) improvement project

• Improves system performance and acquiring functions • Reduces acquirer risks

Implementation of marketing campaign automation system • Integrates marketing procedures for greater efficiency

Wholesale Banking

Implementation of automated STP links for the e-Trading platform

• Reduces manual operation costs • Improves service accuracy and efficiency

Implementation of the UFRMS credit risk management system

• Reduces manual operation costs • Reduces bank lending risks

Enhancing Performance ManagementIn addition to raising process efficiency using information technology, Taishin has also made material improvements to its internal management processes. The balanced scorecard (BSC) system was introduced in 2002 as a means of performance appraisal. A number of other systems, including MIS, budgeting and forecast, activity-based costing/management (ABC/M), and project management system, have subsequently been adopted. These enhancements help to turn strategies into action plans, monitor profitability of the subsidiaries, identify cost reduction and revenue expansion opportunities, and explore more efficient means of deploying manpower.

▇ Performance Management Projects in Recent Years

Project Results

Project Management System • Analysis of projects and investment trends • Management of project progress

Activity-based Costing/ Management (ABC/M)

• Re-deployment of resources and product portfolios for greater productivity and competitiveness

• Improved efficiency of staff deployment

Forecast System • Identification of opportunities for improving cost effectiveness • Reduction in time needed for business performance forecasting

Budgeting System • Better control of Group budgets • Forecasting of Group performance for the next year

Taishin FHC MIS System • Better control of overall Group performance

Balanced Scorecard (BSC) System

• Turning strategies into real action

These systems have been incorporated into Taishin’s three-year strategic plan, which each subsidiary can adapt based on current operations and the external environment. Subsidiaries can also devise action plans using the above tools, and action results are reviewed annually.

Stakeholder Engagement

37

38．Each spot represents the result of assessment for

each topic ．The level (High, Medium, Low) is defined by

relative degree among topics

Eco PreservationEnvironmental Protection and Energy Conservation

Awards Participation

Business Sustainability Strategy

Risk & Opportunity Identification

Product Risk

Service Quality & Customer Satisfaction

Financial PerformancePrivacy & Transaction Security

Corporate GovernanceInformation Transparency

Legal Compliance

Human Rights & Gender Equality

Hiring & Training

Supplier ManagementEmployee-Employer Relationship

Remuneration, Benefits & Employee Care

Occupation Safety and Health

Social Welfare

Innovation of Finance Service

High

High

Low

Medium

Medium

Low

Stakeholder C

oncern Level - External E

valuation

Company Impact Level - Internal Evaluation

▇ The Steps of Stakeholder Identification and Evaluation of Significant Topics

▇ Materiality Matrix Diagram

Listing of stakeholders

Assessment in six major aspects

1 Evaluation on the business impact level

for each significant topic from executive

management

32 Establishment of the significant topics

for stakeholder concerns

Analysis of materiality level for significant topics

Analysis of stakeholder relation level

Survey on concern level of significant topics

Business impact evaluation on significant topics

Analysis of Significant Topics

While fulfilling its corporate social responsibility & sustainability (CSR), Taishin realizes that stakeholders, whether internal or external, play a key role in the company's CSR practices. In response to the CSR topics that stakeholders are concerned about, Taishin analyzed in detail for the significance of stakeholder relationships with Taishin FHC and learned the CSR practices with disclosure level, enabling the company to evaluate the impact level of significant topics on Taishin's operations.

Three steps to evaluate relation level of stakeholders with Taishin and the analysis of significant topics are illustrated in following chart:

In view of the analysis and evaluation, the concern level of stakeholders on significant topics and business impact of

these topics are presented in the following diagram.

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After the analysis of the relation level on different stakeholders, Taishin then conducted a survey to obtain the CSR topics that stakeholders are most concerned about.

A number of economic, environmental and social topics are generated based on the world trends and common concerns in Taiwan. These topics were explored, with interviews and questionnaires, to learn which were of the most concerns to Taishin’s stakeholders.

Concerned topics from stakeholders were then assigned different ratios based on stakeholders' significance to Taishin to derive the relative significance of each significant topic. The results obtained, in descending level of significance, are shown as follows:

Significant Topics


Information Transparency

Privacy & Transaction Security




Product Risk

Legal Compliance


Significant Topics





Analysis of Stakeholder Relation LevelTo facilitate effective communication with stakeholders, Taishin conducted assessment on a number of aspects including responsibilities, impact, closeness, policy and strategic impact, representativeness of the organization/individuals, and dependency. This analysis identified the competent authorities, suppliers, shareholders/investors, employees, customers, local communities, and the media as Taishin's major stakeholders, in descending levels of relevance.

Responsibilities

Impact

Closeness

Policy and Strategic Impact

Representativeness of the Organization/Individuals

Dependency

Competent Authorities

Suppliers

Shareholders/Investors

Employees

Customers

Local Communities

Media

Assessment

Analysis

▇ Topics of Concern to Stakeholders

Survey on concern level of significant topics

Note: The result is considered of all the stakeholder groups’ expectation

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Communication and Feedback The results of the analysis, including significant topics and the impact level, were communicated to Taishin stakeholders via a number of channels to address stakeholders' concerns and assure them on the high level of transparency. The communication channels with stakeholders are summarized below:

Communication with Stakeholders

Stakeholder Main Communication Channels Communication Frequency Topics of Concern

Competent authorities

• Market Observation Post System Monthly

• Corporate Governance • Information

Transparency • Legal Compliance

• Taishin Financial Holdings website Quarterly

• Supervisory and audit activities • Policy meetings or seminars • Telephone • E-mail• Written correspondence

From time to time

Shareholders/Investors

• Market Observation Post System Monthly

• Corporate Governance • Financial Performance • Privacy & Transaction

Security

• Analyst Meetings• Roadshow• IR Conference• Taishin Financial Holdings website

Quarterly

• Shareholders’ meetings Annually

• Telephone • E-mail• Written correspondence • Taishin Financial Holdings IR website

From time to time

Communication with Stakeholders

In response to the concerned top ics fo r stakeholders, Taishin then proceeded to evaluate internally for the impact level of each issue on the company's business operations. Here are the topics with material impact on Taishin:

Significant Topics







Product Risk

Legal Compliance


Significant Topics





▇ High Impact Topics on Taishin

Impact Level Assessment of Significant Topics

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Stakeholder Main Communication Channels Communication Frequency Topics of Concern

Employees

• Taishin University e-newsletter Monthly

• Financial Performance • Recruitment and

Training • Occupation Safety and

Health

• Taishin’s morning meeting and e-newsletter Quarterly

• Employee commitment surveys Every 2-3 years

• Employee opinions mail box • Employee health seminars • Human resources portal • Internal announcements

From time to time

Customers

• VOC, Voice of customer• Branch Service Opinion Forms• 24-hour toll-free hotline (0800) • Fax • Customer service e-mail • Customer satisfaction telephone surveys

Daily

• Privacy & Transaction Security

• Service Quality and Customer Satisfaction

• Information Transparency

• Member publication/ e-newsletter • Taishin monthly magazine • Branch bulletin boards

Monthly

• Branch service telephone surveys Bi-monthly

• Customer satisfaction and loyalty surveys • Focus group seminars • Corporate investment and hedging seminars

Annually

• Taishin Financial Holdings and subsidiaries' websites

• Finance, investment and health seminars • Event promotions • Letter notifications

From time to time

Suppliers

• Supplier satisfaction surveys Monthly • Supplier Management • Business Sustainability

Strategy • Service Quality and

Customer Satisfaction

• Business service seminars • Price negotiation meetings From time to time

Media

• Conversation Daily• Corporate Governance • Financial Performance • Information

Transparency

• Press conference or seminar • Press release • Media gatherings • Spokesperson policy

From time to time

Communities and Social Groups

• Art Talk on Philharmonic Radio Taipei Weekly

• Social Welfare• Business Sustainability

Strategy • Award Participation

• Lunchtime concerts Bi-weekly

• Online marketing platform Monthly

• Taishin Arts Award Exhibition • "Power of Love" campaign

Annually

• Exhibition at the Taishin Tower • ARTalks website • Volunteers • Finance, investment and health seminars • Children's finance camps at nearby schools

From time to time

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Remarks on the Significant TopicThe Chang Hwa Bank Merger topic: On July 22, 2005, Taishin Financial Holdings participated in an open bid for 1.4 billion preferred shares issued by Chang Hwa Bank (CHB) along with the right promised by Ministry of Finance to manage the bank. The bid attracted local corporate entities and foreign institutional investors alike. Taishin Financial Holdings won the bid with a NT$36.5 billion offer, and subsequently acquired a 22.55% equity stake in CHB to become the bank's largest shareholder. Taishin's open bid for CHB preferred shares was a move to contribute to the long-term development of Taiwan's financial markets. As of 2013, Taishin Financial Holdings has been CHB's largest shareholder for more than seven years, but is still unable to complete a successful merger. Therefore, any potential synergies of the two banks and the expectations of shareholders have yet to be realized.

On February 20, 2013, the board of d i rectors announced a resolution in light of recovering economic conditions at the beginning of 2013 and the need for the local banking industry to increase competitiveness and compete for the cross-strait service opportunities brought about by ECFA. The resolution was to "explore the possibilities of making a proposal to the Ministry of Finance, being CHB's second largest shareholder, for a merger between Taishin Bank and CHB, with CHB being the surviving bank and Taishin Bank the dissolved entity. Subsidiary companies of the two

banks will be requested to research matters concerning the proposal."

At the time of the decision, Taishin Financial Holdings was of the opinion that the merger between CHB and Taishin Bank would symbolize the government's commitment to financial reform and set a good example for subsequent mergers, ultimately bringing a positive and profound influence on the financial market. Given the favorable performance results of both banks, the merger of two strong companies would be expected to yield even stronger results, delivering a triple-win outcome for the banking industry, the government, and shareholders.

Taishin Financial Holdings' proposal on February 20, 2013, to execute a merger between CHB as surviving bank and Taishin Bank as dissolved bank, has yet to receive any positive response from the Ministry of Finance, itself a major shareholder of CHB. It was not until July 31, 2013, when Mr. Ming-Chung Tseng came on board as the Chairman of the Financial Supervisory Commission (FSC) in the midst of an expectation for the government to push for financial consolidation, that Taishin Financial Holdings finally determined to slow down the merger and await the government's further plans. Nevertheless, it is still Taishin's hope to see this merger completed through fair and open regulatory procedures, bringing about the above-mentioned triple-win outcome.

Employee Care

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15,700

2,111

No. of users

No. of users

Stress Relief Area

Library

Building Comfortable Work Environment

Taishin believes that happy employees are the key to customer satisfaction, and that better customer service is only possible through having good staff in the company. The management and development of talent for employees is a top priority for Taishin Financial Holdings, and the company is devoted to building a respectful and caring working environment with comfortable atmosphere, and providing a comprehensive benefit program. These efforts were recognized by Taishin's winning a 2013 "Best Companies to Work for" Award. Taishin continues to train and motivate its employees through innovative ways, in the hope that they may in turn help the company grow.

Smoke-free Workplace Taishin has long been an advocate of smoke-free workplaces. In 2008, the Taishin Tower obtained the Healthy Work Environment Independent Certification - tobacco control issued by the Taipei City Government. Smoking by employees or business partners is prohibited anywhere within office building premises, the company's smoke-free policy and the implications of the Tobacco Hazards Prevention Act are also communicated during employee safety and health training held once every three years.

Office and Recreational Spaces Taishin has committed substantial resources to the creation of a comfortable work environment as a reward for employees' hard work. The Taishin Tower was designed by the globally renowned I. M. Pei architect firm as the headquarters of Taishin Financial Holdings, and has become one of the most prominent landmarks in Taipei City. Massage services by vision impaired masseurs have been introduced in stress relief area in the Taishin Tower as well as at Neihu and Jianbei offices. This helps employees not only to enjoy massages to reduce work stress but to deliver their love to the disadvantages. In Taishin Tower, a library has been set up to encourage good reading habits and it features a collection of 1221 titles in different genres from finance, literature to recreation. The library has received more than 6700 visitors after its launch in 2010. In an

effort to promote the concept of "art for life", Taishin organizes regular exhibitions in the lobby of the Taishin Tower, featuring the works of award-nominated artists, and giving customers, employees and local residents a chance to admire art up close. A total of six installation art and conceptual art exhibitions were held in 2013. For the convenience of female employees, a breast-feeding room has been provided. These recreational spaces and facilities are made available to bring positivity and happiness into employees' work and life.

Use of Stress Relief Parlors and Library

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Employee Care

Employee Safety and Health In 2002, Taishin Bank convened an Employee Safety and Health Committee comprised of division representatives from the Administration & Service, Retail & Wealth Management Channel, Human Resources, Internal Audit, Segmentation, and Wholesale Banking Adminis t rat ion. One- th i rd of committee members were employee representatives, giving employees fully expression of their views in the decision-making of the committee. The bank's Employee Safety and Health Work Regulations were acknowledged by the Taipei City Government's Department of Labor, a testament to how the company values its employees' safety and health, and the importance placed on preventing occupational hazards. In order to raise employee awareness of occupational safety and health, there is a special section on Taishin Bank’s intranet that communicates occupational safety and health information and regulations. In 2013, the bank held 64 employee safety and health training sessions and trained a total of 3604 staff.

▇ Employee Safety and Health Training Sessions

Year 2013 2012 2011

No. of Training Sessions 64 36 38

No. of Employees 3,604 1,318 1,502

Taishin employees are protected by internal police officers, security guards, and a security system. All internal police and security guards undergo regular training according to the Security Industry Act. These courses cover a broad range of issues from service etiquette, emergency response, crisis management, crime prevention, to occupational safety and health, to ensure the best protection for employees and customers. The Employee Code of Conduct also outlines the company's goal of building a safe working environment free

▇ Occupational Injuries


Injuries from Occupational

Accidents

Deaths from Occupational

AccidentsWork Days Lost Injury Rate Absence Rate Percentage of

Days Lost

Female 3 0 25 0.07 728.8 0.56

Male 3 0 81 0.1 217.7 2.77

Total 6 0 106 0.081 946.5 1.438

Note: injury rate = total injuries/total work hours x 200,000; total work hours = total employees x work hours per day x number of working days per year; absence rate = total days absent/total working days x 200,000 (including sick leave and occupational injury leave)

from discrimination and harassment.

Disability-friendly facilities such as wheelchair ramps and low elevator buttons are being implemented in offices and buildings to ensure the safety, convenience, and equal work rights of disabled employees. The Taishin Tower and Neihu Building conduct regular fire drills as part of employees' crisis response training. Because of these efforts in promoting occupational safety and health, there were no cases of occupational death or illness in 2013.

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Employee Leisure Activities Taishin Financial Holdings and its subsidiaries have established many sporting and music groups for the employees to refresh including badminton, golf, yoga, ukulele, and choir singing. In 2013, Taishin Securities introduced Tai Chi courses to encourage employees to look after their health. Annual

celebrations, sports games, hiking events, sports tournaments, birthday celebrations, tours, and art events are organized and family members are invited to participate. These activities help employees achieve a healthy work-life balance and enrich their lives accordingly.

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Employee Care

Personnel Management Policy Based on business core values of "Integrity, Commitment, Innovation and Collaboration," Taishin has organized a number of trainings to advocate the company's ethics policy and the importance of anti-money laundering, anti-corruption, and prevention of improper monopoly competition. Every employee is instructed to fully understand and sign the Employee Code of Conduct during orientation and in regulatory compliance courses, which serve as a basis for their moral conduct during employment. The company ensures that its terms and conditions of employment and employee rights comply with the Labor Standards Act. Use of child labor is prohibited, and necessary measures are taken to eliminate all forms of forced labor, discrimination, and any violation of employees' basic rights, as well as protect employee rights of association. No cases of discrimination or human rights violations were reported in 2013. Taishin Financial Holdings complies with all human rights and labor-related laws in Taiwan. There is no record of any penalties being imposed by the labor authorities. If there is a need for job rotation, whether for business requirements or to facilitate career development, the company ensures that it complies with the five principles of job transfer imposed by the Ministry of the Interior. Where job transfers involve any situation described in Articles 11, 13, or 16 of the Labor Standards Act, advance notice will be issued accordingly.

Taishin announced its Sexual Harassment Prevention, Complaint, and Disciplinary Policy in November 2003, with two amendments in 2004 and 2013. This was followed

by a Declaration of Prohibition against Workplace Sexual Harassment, creation of a sexual harassment prevention section on the company's website in March 2008, and the inclusion of the Sexual Harassment Prevention, Complaint, and Disciplinary Policy as part of new hire orientation starting from the second half of 2014. All new hires will be educated on this topic to ensure employees are adequately protected against discrimination and harassment.

▇ Anti-corruption and Anti-competition Training

Course Name Sessions Held

Persons Trained

Orientation training on financial regulations and Code of Conduct (anti-corruption)

31 1231

Orientation (anti-competition) 24 1016

Regulatory compliance courses (anti-competition) 73 4835

Recruitment Guidelines Taishin hires personnel in compliance with the Labor Standards Act and applicable laws. Its recruitment procedures are fair, open, and free from discrimination against gender, religion, race, social status, political party association, nationality, or disability. Local employees are hired as a priority.

Employee Relations

Recruitment and Staff Management

Taishin values employees' needs and opinions, because their physical and mental health is a major responsibility of the company. In order to better understand employees' opinions, and offer assistance when needed, Taishin has implemented a variety of channels through which employees may express their concerns, including:

1.Employee commitment surveys: surveys are conducted from time to time as a formal communication platform between the company and its employees.

2.Taishin Holdings quarterly morning conferences: The meetings are hosted quarterly by the Chairman, and the video-audio newsletters are circulated to all employees after the meetings.

3.Employee opinions mailbox: all employees are welcome to offer suggestions regarding the company's development, products or services through email or by letter.

To care for employees' health and well-being, Taishin has collaborated with the Teacher Chang Foundation to set up an employee assistance program (EAP). The EAP offers employees the professional counseling in a confidential environment on issues such as family, marriage, and personal relationships, so that they may attain a better work-life balance.

Employee Commitment Surveys

Taishin Holdings Quarterly Morning Conferences

Employee Opinions Mailbox

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Remuneration and Performance Management Taishin Financial Holdings implements a fair, reasonable and competitive remuneration system that takes employees' responsibilities and work experience into consideration. This system ensures that employees are not discriminated against on the basis of gender, age, or race. Regarding gender difference, average salary for male managers in 2013 was 5% more than that of female managers. Male staff on average earned 1% more than female staff did. There was no significant difference in salary levels between the sexes. All job roles offer a starting salary higher than the basic salary stipulated under the Labor Standards Act. The company participates in annual market-wide salary surveys and adjusts salary levels accordingly to remain competitive in the employment marketplace. Department performance is measured using a balanced scorecard (BSC), in which Taishin strategies and goals are broken down into quantifiable benchmarks that employees can act upon. Personal performance is measured using a Management-by-Objective (MBO) approach, whereby employees are required to undergo interim and year-end assessment, regardless of gender or rank. The audit ratio of

males and females subject to annual performance review is 1:1.

Remuneration Comparison by Gender

Remuneration Structure

Relative percentage

100 ％ 100 ％

105 ％ 101 ％

Female

Male

Managerialroles

Non-managerialroles

Employee Benefits From building a sound work environment to maintaining a robust corporate culture, Taishin strives to give its employees the best workplace, and tends to their wel l -being by providing all-round life care. In addition to satisfying the basic requirements of the Labor Standards Act, the company has in place a superior system to help its employees enjoy work and maintain a balanced lifestyle.

Employee Benefits

Benefit Item Benefit Details

Basic benefits

• Labor/national health/group insurance, medical/accident insurance for parents, festive bonuses, meal allowances, and special leave of absence above what the law requires (e.g. leave for children's marriage, self-arranged paternity leave within a seven-day period)

• Group insurance plan

Subsidies

• Marriage and funeral subsidies • Children's education subsidies • Long service bonus system • Compassionate measures • Education subsidies

Seminars and courses

• Stress relief and health seminars • Arts courses • Movie appreciation

Health check-up

• Regular health check-up subsidies superior to the requirements of the Labor Health Protection Regulations

Financial products discounts

• Low interest mortgages for bank staff, retail loans, preferential exchange rates and fee waivers, and merchant discounts.

General staff Sales staff

Year-end bonus Performance bonus

Chinese New Year bonus

Basic salary - 12 months

Basic salary - 12 months

Chinese New Year bonus

Total personal remuneration

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Employee Care

12.7

87.3●Managerial●Non-managerial

40.6 59.4 ●Male●Female

%

%

Role

Gender

Human Resources Structure With the growing of business activities, Taishin has expanding its workforce year on year. At the end of 2013, Taishin Financial Holdings and its subsidiaries employed 7260 full-time staff, 250 part-time staff, and 78 contract staff, totaling 7,588 people. Taishin strictly complies with the Labor Standards Act and prohibits the hiring of child labor of 16 or below. The average age of the company's employees is 36.3. To cater for employment of the socially disadvantaged, Taishin policies ensure job opportunities for persons with disabilities, and create an accessible environment where they are respected. Furthermore, the Taishin Stress Relief Area were started in

2010, hiring 11 vision impaired masseurs and masseuses. The company has also complied with the Indigenous Peoples Employment Rights Protection Act in the hiring of indigenous persons. As of the end of 2013, the company had five male and five female indigenous employees. Average turnover rate was 13.2%. The following tables and figures show 2013 employee-related statistics:

Employee Structure - by Employment Type

Employment Type Full-time Part-time Contract Total

Female 4,310 224 22 4,556

Male 2,950 26 56 3,032

Total 7,260 250 78 7,588

Employee Structure - Distribution by Region, Gender and Role Gender Role

Total PercentageFemale Male Managerial Non-managerial

Taiwan 4,181 2,754 894 6,041 6,935 95.5%

Overseas 129 196 27 298 325 4.5%

Total 4,310 2,950 921 6,339 7,260 100%

Percentage 59.4% 40.6% 12.7% 87.3% 100% 100%

Full-time Employee Distribution by Role

Full-time Employee Distribution by Gender

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●30 and below 23.8%●31-40 52.6%●41-50 20.3% ●51and above 3.3%

Age

Degree

●High school and below 6.6%●University 75.7%●Master 17.6%●Doctorate 0.1%

Employee Structure ─ Full time employee distribution by age, degree and gender

Gender RoleTotal Percentage

Female Male Managerial Non-managerial

30 and below 1,046 684 9 1,721 1,730 23.8%

31-40 2,421 1,399 308 3,512 3,820 52.6%

41-50 768 702 491 979 1,470 20.3%

51and above 75 165 113 127 240 3.3%

High school and below

328 150 37 441 478 6.6%

University 3,372 2,127 621 4,878 5,499 75.7%

Master 607 668 260 1,015 1,275 17.6%

Doctorate 3 5 3 5 8 0.1%

Total 4,310 2,950 921 6,339 7,260 100%

New Hire of Full-time Employee Gender Age

Total PercentageFemale Male

30 and Below

31-40 41-5051and Above

Taiwan 790 639 778 524 117 10 1,429 87.6%

Overseas 81 122 150 39 13 1 203 12.4%

Total 871 761 928 563 130 11 1,632 100.0%

Percentage 53.4% 46.6% 56.8% 34.5% 8% 0.7% 100.0%

Age

Degree

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Employee Care

Turnover of New Full-time Employees

Gender AgeTotal Percentage

Female Male 30 and Below

Age 31-40 Age 41-5051 and Above

Taiwan 147 98 157 75 13 0 245 95.0%

Overseas 4 9 9 3 1 0 13 5.0%

Total 151 107 166 78 14 0 258 100.0%

Percentage 58.5% 41.5% 64.4% 30.2% 5.4% 0.00% 100.0%

Note: turnover rate of new hires = number of new hires resigning in the current year/total number of new hires in the current year = 15.8%

Number of Resigned Full-time Employees

Gender Age

Total PercentageFemale Male

Age 30 and Below

31-40 41-5051 and Above

Taiwan 447 350 382 338 73 4 797 95.8%

Overseas 13 22 18 12 4 1 35 4.2%

Total 460 372 400 350 77 5 832 100.0%

Percentage 55.3% 44.7% 48.1% 42.1% 9.2% 0.6% 100.0%

Note: turnover rate = number of people resigning in the current year/average number of employees in the current year

Number of Full-time Employees on Child Care Leave and Retention Rate

Category

2013 2012

No. of Applicants

( A )

No. of Returning

Employees ( B )

Percentage Reinstated

(B)/(A)

No. of Applicants

( A )

No. of Returning

Employees ( B )

Percentage Reinstated

(B)/(A)

No. of People

Retained After

1-year Leave ( C )

Retention Rate

(C)/(B)

Female 88 22 25.0% 106 68 64.2% 62 91.2%

Male 14 2 14.3% 12 5 41.7% 3 60.0%

Total 102 24 23.5% 118 73 61.9% 65 89.0%

Note 1: This data only explains the number of people who have applied for, been reinstated to, and stayed after taking child care leave. It does not include data of maternity leave.

Note 2: The number of reinstated employees was calculated on December 31, 2013. Some of the employees have been back to work for less than a year; therefore the percentage reinstated does not fully represent the status of employees returning from leave.

Employee Retirement Taishin Financial Holdings organizes farewell parties to thank retiring employees for their contribution and to wish them well for their retirement. A retirement gift is presented as a token of gratitude. For current employees, the company makes contributions to employees' pension funds in accordance with the Labor Standards Act and the Labor Pension Act.

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Training ProgramsIn order to continuously improve customer service, Taishin is fully committed to the quality and development of its talent training. The company offers a broad variety of training programs to satisfy employee needs. Employees are required to develop their own Individual Development Programs, and are given a Career Roadmap which they can use to identify the skills, certification, and training needed to succeed in their future careers. Employees can also accommodate their career planning by taking part in job rotation initiatives.

In 2001, Taishin launched a talent pool program to ensure a systematic development of managerial talent that matches the corporate culture. Multiple-tiered training systems are in place -- from programs for the Management Associate (MA), Advanced Management Associate (AMA), Taishin Star Program (TSP), to those for the Reserved Branch Manager and the Reserved Line Manager -- to develop the skills needed by Taishin management teams.

Multi-dimensional Talent Training

Talent Training Programs

・Steady Training Program

To develop the skills needed for future roles, the program establishes an MA system through structured training and development.

・Mentor

With senior executives acting as mentors, employees are given personalized coaching and guidance.

・Individual Development Plan

Every MA has a tailored IDP that outlines a career roadmap.

・Planned Rotation

Through planned job rotations, employees can broaden their field of experience and then pursue specialized training.

・Strategy Conference

Employees are invited to join executive meetings and witness how decisions are made.

Executive

Department Head

Managerial Role

Specialized Role MA

AMA

TSP

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Employee Care

Employee Training Program

Employee Training Taishin offers an innovative and broad variety of means through which employees can learn and be inspired to grow. New hires are required to attend a 3-day orientation in general courses, and a digital learning module that takes 3.5 hours to complete. This provides new hires with basic knowledge of the company. In 2013, 1248 new hires underwent a total of 79,014 training hours, an average of 63.3 hours per person.

2WEEKSOrientation

3MONTHS

2YEARS

Specialized Training

Soft Power

Development

Training

Understanding the organization of a financial holding company, financial regulations, and learning basic workplace skills

Develop specialist financial knowledge and provide a foundation for all-round talent development

Develop soft power and enhance employee potential

On-the-job Training (OJT)

Mentor

Individual Development Program (IDP)

Evaluation

Planned Rotation

Online Training Courses Offered through Taishin University

Course Type Course Name Persons Trained

Management Training Mandatory training for managerial staff (pre-course reading) 855

Elective training for managerial staff (How to motivate your team) 115

Orientation General training for new hires 16,812

Specialized Training

Specialized training for new hires 7,908

Training for different specializations 917

Certification training 38,295

General College Regulatory compliance training 32,000

Self-growth training 8,319

Through the platform of “Taishin University”, the company provides employees with organized learning resources similar to those offered in universities. Internal and external resources are consolidated to help boost employees' capabilities in their areas of expertise and beyond. Since the system went online in 2011, it has received more than 150,000 visits. Below are the 2013 statistics:

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List of Internal Training Courses


Management training Management trainer training 935

Talent pool training 2,446

Orientation General training for new hires 14,772

Specialized training

On-the-job training (OJT) 68,346

Specialized training for new hires 13,801

Training for different specializations 10,660

Certification training 939

General knowledge trainingRegulatory compliance training 8,964

Self-growth training 4,352

List of External Training Courses


Specialized training Training for different specializations 755

Certification training 1,954

General knowledge trainingRegulatory compliance training 178

Self-development training 148

In 2013, the company organized 238,742 hours of class training with 146,774 admissions, and 113,731 hours of digital courses with 102,485 admissions in total. Each employee received 49.7 hours of training on average.

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Employee Care

Average Employee Training Hours - by Course Type, Job Roles and Gender

Average Training Hours per Employee Female Male Average Hours

Course type Class 34.5 32.5 33.7

Digital 18 13.2 16

Role Managerial 59.4 48.4 53.7

Non-managerial 51.7 45.1 49.1

Average hours 52.5 45.7 49.7

In addition to internal learning resources, Taishin also encourages employees to participate in courses organized outside the company, and offers subsidies for continuing professional education as well as professional skills certification. To underscore the importance and necessity of self-guided learning, Taishin has introduced a "Learning Account" system where each employee is given 10,000 training points per year which they may use at their discretion to develop language, computer or other secondary skills, or to apply for full subsidy on financial certification exams. More than 1600 people used their Learning Accounts in 2013.

Child Guidance and Cooperative Education Apart from employee training, Taishin is also devoted to raising public knowledge of the financial sector. To this end, a series of Young Banker Officer (YBO) events have been organized where customers' children and children from disadvantaged families are invited to learn correct financial values. In 2013, a total of five YBO sessions were organized that featured a number of activities from drawing and golf, to financial courses. Approximately 3,000 children participated in these events.

Taishin Bank YBO (Young Banker Officer) Activities

Activity Description

The first YBO children's drawing competition

A drawing competition in collaboration with the Taishin Charity Foundation held on-site at the Social Welfare Organization.

Children's golf camps Organized in collaboration with the Linkou International Golf & Country Club, Wang Yueh-Lan Charity Foundation and several young golfers to promote healthy recreational activities.

Children's finance camps An event organized in collaboration with the Taishin Charity Foundation to promote sound financial knowledge among children living in remote areas.

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As young talent today will be future leaders of society, Taishin has joined with its subsidiaries in providing academic resources on campus and offering internship opportunities in Taishin:

Cross-strait academic exchangesTaishin Financia l Hold ings s igned a memorandum of understanding (MOU) with Peking University's Guanghua School of Management in 2012 to establish a "Peking University Cross-strait Academic Fund." In addition to providing scholarships and subsidies to Peking University staff and students, the fund has also enabled several academic and professional exchanges between the two entities.

Early-win programTaishin has been offering an annual "Early-win" program since 2011, in which senior students are invited to take up internships during their graduating year. Students who perform well during the internship have the chance to make their employment permanent.

Scholarships and internshipsTaishin has established an "NTU-Taishin Finance Scholarship" and "National Chengchi University-Taishin Financial Holdings Scholarship," while Taishin Insurance Agency has engaged Chungyu Institute of Technology in a cooperative project to offer internships, part time work, and experience sharing. Taking advantage of these opportunities, students may gain a head start in their careers.

Academia-industry cooperationBeginning in September 2012, Taishin offers the "Practical Innovations and Improvements in the Financial Industry" course at NTU, in which company managers give instruction in the first semester of each year. This course aims to inspire innovation in the financial industry, and to share with students life and work experience so that they can have a clear idea of what to expect in their future careers. More than 16 company managers from Taishin have served as instructors, scoring highly in end-of-semester student surveys during the first year.

Scholarships and internships

National Chengchi University-Taishin Financial Holdings Scholarship Early-win program

Peking University Cross-strait Academic Fund

Customer Commitment

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Taishin demonstrates its commitment to service quality with consistent and solid execution. Taishin Bank passed ISO 9001 certification in 2005, making it the first bank in Taiwan to earn this honor. Taishin is fully aware that customer responses and opinions are the best source for improvement. In 2009, Taishin established a VOC (Voice of the Customer) database platform to collect all our customers’ comments and suggestions, so as to bring possible solutions of improving operating procedures and raising service standards. In recent years, survey forms have been placed throughout bank branches to collect customer feedback and further identify opportunities for improvements.

Quality of Service

Being in a "people-oriented" business, Taishin has long been committed to meeting customer expectations, sharing the fruits of its efforts with employees, and bringing above-average returns for shareholders, so as to achieve sustainable growth. The key to accomplishing these goals is to optimize service quality from the inside out.

From investing in information technology to adopting new management practices, the company places great emphasis on improving operating efficiency and upgrading its procedures. By incorporating innovative technologies and corporate values, the

company impresses customers with its 3S service philosophy; "Simple, Sincere, Superior".

In order to improve accessibility of its financial services, Taishin ATMs have been installed in convenience stores nationwide, and branches established in remote areas of Taiwan such as Hualien. All branches are equipped with facilities for the disabled. Currently a total of 266 barrier-free ATMs are in place nationwide.

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Customer Commitment

Service Enhancement Initiatives in the Last Three Years

Year Project Overall Result

2013

The warmest staff in branch

• Raise employee passion and overall service quality • Improve customer satisfaction • Adopts QR codes to create a stronger impression of

the company's marketing efforts

3S RACE competition for outstanding service

QR Code program

2012You speak, we type and complete

Light up service passion

2011

Three reminders for branch services: (1)Energetic guest greeting for embracing a beautiful

beginning of the day(2)Offering consistent and superior service so customers

leave with happy smiles(3)We provide superior service and you speak up

In order to encourage outstanding behavior, and at the same time to inspire and set good examples for Taishin employees, the company shares inspirational stories on a monthly basis. Winners of the "Taishin Service Model Award" competition are recognized at the annual ceremony and receive commendation from the Chairman and Executive Management.

• I have faith in your vigilance, Taishin BankOne day, one of Taishin's card transaction approvers received a phone call from a department store, reporting that a man had tried to use what was suspected to be a woman's credit card. Noticing the oddity of the transaction, the sales staff called the bank's transaction authorization hotline immediately. The circumstances pointed to an apparent credit card fraud, and the Bank called Ms. Wang (the cardholder) immediately to inform her of the situation without alerting the offender. Ms. Wang did not realize that her purse had been stolen until then.

Panicked as she did, the bank staff calmed Ms. Wang down and obtained her consent to have Taishin Bank file a police report on her behalf. At the end of the call, Ms. Wang was reminded to contact other banks and suspend any other card accounts she had to prevent further losses. Meanwhile, the bank called the department store to seek assistance from floor security in collaborating with the police, leading to the successful apprehension of the suspect. In the end, Ms. Wang was able to recover her stolen credit card along with other important items.

Ms. Wang was deeply impressed with how the bank handled the situation, protecting her from any losses. She thus had a memorable experience of Taishin Bank's services and vigilance in risk control.

-Retail Banking Consumer Credit Division

• Your prompt intervention helped to protect my assetsA financial adviser at the Zhonghe Branch received an urgent call from a Mr. Yu that he needed help to complete a remittance before 3.30 p.m. that afternoon. As the deadline approached, Mr. Yu walked into Zhonghe Branch looking anxious and worried. The financial adviser quickly walked him to the 2nd floor VIP room, calming him down and checking the remittance details along the way. These steps were not only a simple customer service but also part of Taishin's asset protection measures to ensure that transactions are completed properly. While checking the details of the transaction, the financial adviser noticed something unusual and informed Mr. Yu that, as a precaution, the bank needed to verify the payee's account name with the receiving bank.

As contact was made with the receiving bank, the adviser discovered that local criminal investigators had also been making inquiries relating to the payee account holder. The financial adviser then asked one of the branch staff to dial the 165 anti-fraud hotline, and learned that the payee account had already been reported for suspected fraud, but not yet confirmed as a fraud account. Based on this finding, the financial adviser suspected that Mr. Yu may have fallen victim to a scam. The adviser then explained to Mr. Yu about the results of the above investigations, and advised Mr. Yu not to make the payment. Mr. Yu later confirmed personally with the payee and learned that the transaction was indeed a scam. Afterwards, Mr. Yu wrote to thank and commend the financial adviser's decisiveness and persistence which prevented him from falling victim to financial fraud.

-Retail &Wealth Management Channel Division

Inspirational Stories of Exceptional Service

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Satisfaction Management

• My dream is to fulfill your dreamOne day, one of Taishin's telemarketers, Ms. Chen, called a customer to promote a loan package offered by the Bank. The customer was uninterested at first, but eventually opened up and told his story to Ms. Chen....

"My wife has always been interested in baking cakes. She used to sell them online, but had no idea of how to promote her business with no shop front and so was unable to grow her business. As my wife continued baking, she told me time and time again that she dreamed of having her own bakery, and it was then I decided that I had to make her dream come true!" The customer's speech was filled with love for his wife, and he continued: "So I took out a loan then started looking for a suitable location to open her bakery; and you can't imagine how happy she was when I told her of this plan. However, the situation was more complicated than we had imagined. The renovations cost more than I planned, and we had to put everything on hold halfway through the carpentry work...."

Ms. Chen, having learned the customer's story, comforted him and said: "I understand how much you want to help your wife. Let's see how much money you need to complete your wife's dream."

Eventually, Ms. Chen invited the customer to file a loan application. After passing the preliminary review, the customer grew concerned about the due diligence process. Ms. Chen explained that: "Since you have a good credit record with

us, you will not be required to complete face-to-face due diligence. If you are still concerned I can give you my employee ID, extension and cell phone number and you can call the customer service hotline to verify them."

To assure the customer even further, Ms. Chen said: "I will explain the contract article by article, and you can raise any issues you have." Ms. Chen then answered in detail, again and again, the customer's queries. Persuaded by Ms. Chen's detailed explanations and attentive service, the customer finally agreed to drawdown the loan. Afterwards, the customer sent Ms. Chen a letter to thank her sincerely for her efforts.

-Consumer Finance Division

invited to focus group workshops to identify improvements and product features that they would like to see. A total of 16 focus groups have been held in northern, central and southern Taiwan over the last three years, providing the Bank with valuable insight into how to improve its services. This dedication to customer services has allowed Taishin to maintain a customer satisfaction rating of above 82% every year, with 2013 showing improvement over 2012. The most significant improvement of all in 2013 was in credit card officers, with the satisfaction rating increasing from 83.3% to 88.9%.

The continuous improvement of service quality has not only won customers' satisfaction and trust, but has also received the recognition of The Banker magazine's "Bank of the Year in Taiwan", Global Views Monthly’s "Best Service Award – No. 1 in Banking Industry", Euromoney's "Best Private Banking Services Overall" in Taiwan, Private Banker International's (PBI) "Outstanding Wealth Management Service for the Affluent – Highly Commended" and "Best in Mobile Banking" from Global Finance. Going forward Taishin will continue to offer its customers unparalleled service excellence.

"Mystery shoppers" are sent from Taishin’s headquarters every month to evaluate the service quality at various branches. The company also engages professional market surveyors to conduct customer opinion surveys every two months and annually. Based on the results of the surveys, customers are

Social Participation

61

62

Taishin's commitment toward fulfilling its corporate social responsibilities focuses on the interests of stakeholders, including the government, customers, investors, employees, and suppliers, as well as on contributing and care to society in a sustainable way. Taishin believes that the most direct and effective approach is through innovation and active participation in culture, arts, and charity.

The Taishin Bank Foundation for Arts and Culture was established in 2001 under Chairman Thomas T.L. Wu's long-standing support for local art activities. Unlike other foundations that merely sponsor arts and culture events, Taishin Bank Foundation for Arts and Culture is dedicated to discovering new talent and collaborating with Taiwan’s various art organizations to build a supportive environment for Taiwanese artists to flourish and present their works. The founding of the Taishin Bank Foundation for Arts and Culture also gave birth to the Taishin Arts Award, which, after more than 10 years of development, has become one of the most prestigious and anticipated arts awards in Taiwan.

Taishin has always taken the "teach a man to fish, feed him for a lifetime" approach when engaging itself in charity activities. By utilizing its corporate resources and influence, Taishin has been able to mobilize volunteers into helping individuals, organizations and even an entire town in need. Starting with the 921 earthquake in 1999, Taishin initiated a series of "Caring Taiwan" campaigns to help rebuild disaster-struck areas, including "My acre of land" that encouraged the plantation of quality rice, and therefore helped farmers to create brands of their own. The company then established the Taishin Charity Foundation in 2010 and launched the "Power of Love" campaign that introduced an unprecedented form of enterprise charity. Furthermore, it motivated volunteers to help small- and medium-sized charity groups improve their financial viability and in turn bring greater good to the world.

Lunchtime Concerts

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Commitment to Arts and Culture Development

Year initiated: 2002; a total of 12 editions have been held as of 2013

Review system:

Nomination Committee and Review Committee:

T h i s p a n e l c o m p r i s e s o f a c t i v e a r t professionals who have long been observing arts and culture activit ies in Taiwan, and is responsible for nominating noteworthy exhibitions and productions in the current year.

Final Selection Jury: In addi t ion to local ar t profess ionals ,

international curators and presenters are also invited to join the jury.

Awards: •From the first to the 11th edition: "Performing Arts Award," "Visual Arts Award," and "Jury’s Special Award".

•From the 12th edition onwards, awards are no longer categorized but reviewed on an overall basis. Each year, an Annual Grand Prize is given to one winner while short list awards are given to the four short listed artists.

Rewards and incentives: •Annual Grand Prize: NT$1.5 million plus trophy and commendation.

•Short List Award: NT$500,000 plus trophy and commendation.

Website: http://www.taishinart.org.tw/

2011

TIFA－

NSO歌劇音樂會-希臘悲劇《艾蕾克特拉》

!201

1吳珮菁木琴獨奏會

!201

1臺北藝術節《風云》

!京典舞台劇《

百年戲樓》!「開房間」戲劇節!「

傳

奇·Legendes！

」十方樂集與里昂鍵盤打擊樂團

!賊變

!歌仔新調

-安平追想曲

!鄭宗龍作品《在路上》 !《繼承者I、II、III》 !

Art creation is a path through exhibiting its distinctive life force and culture of its society. Taishin is particularly devoted to arts and culture, and encourages innovation within Taiwan with the support of corporate resources through a fair and independent platform. This social concern is the core value of the Taishin Bank Foundation for Arts and Culture. The Foundation has been established with the mission to "improve the quality of cultural life and build a nourishing environment for artistic development." It has positioned itself as a professional organization to support the arts, and a bridge connecting artistic creation to corporate collaboration.

Taishin Arts Award

After the establishment of the Foundation in May 2001, the first Taishin Arts Award was held in 2002 that invited art critics and professionals as nominators to make in-depth observation and select the winning works. With long-standing support for contemporary arts, the Foundation also encourages local artists to connect with the international art circle. The Taishin Arts Award has grown to become one of the most prominent arts awards in Taiwan today, and is known for its rigorous and professional review mechanism.

The winner of the 11th Visual Arts Award: "Art as Environment - A Cultural Action at the Plum Tree Creek," is a project that prompts people to rethink how economic development has polluted the nature and how social changes have affected our culture and lifestyle. The finalist exhibition for the Taishin Arts Award has received more than 150,000 visitors over 11 years.

Taishin Arts Award

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Public Arts and Culture Events

Taishin provides its public space as a venue for artists to interact with the public and the audiences. Since 2006, Taishin Financial Holdings has been inviting musicians to give "lunchtime concerts" on the second floor of the Taishin Tower - headquarter of the Taishin Financial Holdings. Apart from

the performances, exhibitions are regularly held, much to the public's delight. Many local residents frequently visit the Taishin Tower to enjoy the music and artworks, a testament to how deeply Taishin is engaged in community life.

▇ Major Arts Events/Activities in Recent Years by Taishin Bank Foundation for Arts and Culture (not including Taishin Arts Award)

Event Years Statistics

Lunchtime Concerts 2006~nowAudiences over the last three years total approximately 15,000 visits (held on Friday bi-weekly)

ARTalks 2013~now 98,338 visits in 2013

We will Fly No Matter What 2009~2012 Including 37,200 elementary students’ participation in Taiwan

Close to You - International Puppet Festival

2011~nowApproximately 3,375 visitors over the last three years, including 18 local groups and 9 foreign groups

65


In addition to sponsoring arts and culture development, Taishin has also been supporting activities such as sports, environmental protection, concerts, and academic forums s ince 2003. In return, Taishin hopes to demonstrate greater participation from society and expand the influence of its efforts.

Interaction and Communica-

tion

Free Participation

Taishin places strong emphasis on people's voluntary participation in the activities it sponsors. Whether it is musical shows, exhibitions or other events, the audience is given the opportunity to have a better understanding of the arts as well as appreciate them through workshops and discussions.

In addition to free-entry exhibitions, Taishin takes the initiative in engaging various charity groups to bring them the arts closely.

Taishin believes that art is for everyone, and has therefore sponsored a number of free-entry exhibitions and performances for the public.

In order to approach arts more closely for the public, Taishin has long incorporated arts and culture elements into product promotion, bringing a touch of artistic taste.

Taishin's Sponsorship Assessment Concepts

Seats for the Charity Groups

Promotion of Arts and Culture: a

win-win approach for the company

and customers

Sponsorship of other Arts and Culture Activities

To bring broader vision for people in Taiwan, Taishin has long been sponsoring a wide range of activities. These activities came into contact accumulation with more than 4 million visits. Taishin has always focused its efforts to maximize social benefits, and the following are the key considerations when evaluating arts and culture events:

66

▇ Sponsorship of arts and other activities in the past three years

Year Name of Activity Category Total Participants

2013

The Color Run Sports

Nearly 1.45 million

Paperwindmill Troupe - "First mile Kid's smile" Arts

La Belle et la Bête - A Contemporary Retelling Arts

2012

Screening tour of documentary - "Haga Paris" Culture

Mariinsky Ballet and Orchestra of the Mariinsky Theater - "The Nutcracker"

Arts

Transformers EXPO Taipei Exhibition

2011

PICASSO - Masterpieces from the Musee National Picasso-Paris Arts

Celebration by Marc Chagall Arts

Irina Kolesnikova & St. Petersburg Ballet Theatre - Swan Lake Arts

Dream Exhibition of Mr. Candle, Huang Ming-Cheng Photography

The Second Cross-Strait Chinese Character Art Festival Arts

Berliner Philharmoniker Music

Sports SponsorshipTaishin also pays more attention on sports sponsorship and promotion. For this reason, Taishin has sponsored the training of karate talents in Guoxing Township, Nantou County, since 2005 as part of its "Caring Taiwan" series; from 2011 onwards, Taishin became the first financial institution in Taiwan to take concrete actions on sponsoring Taiwan’s world-known female golfer Yani Tseng, and has since been calling employees and customers to write supporting notes, online cheer-up messages, and mobilizing them to attend

LPGA events in Taiwan. Taishin always respects the athletes embracing the challenges with the spirit of persistence. Therefore, the company decided in 2013 to cont inue sponsoring Yani, and in the meantime, also adding more talented golfers like Babe Liu, Pei-Yun Chien, Szu-Han Chen, Huei-Ju Shih, Hsin-Yun Chuang, Ruby Pan, and Pei-Ying Tsai into the sponsoring list. And hope the move can bring more corporate’s source to the sports industry. In addition, Taishin FHC sponsored the first ever 5 km "The Color Run" in Taiwan in 2013, which makes jogging no longer a trial of endurance and patience, but a refreshing, colorful, and fun experience that reflects Taishin's values of innovation.

67


Taishin has always been active in charity activities. Other than the charity funds, Taishin is also exploring more creative and effective solutions to provide substantial support to those in need, and provide them with necessary skills to ensure their viability. This is the "Teach a man to fish, feed him for a lifetime" philosophy behind Taishin's charity efforts, because only when the socially disadvantaged become self-sufficient they can lead a fulfilling life and become a positive force in society.

Charity and Welfare

Caring Taiwan The 921 earthquake in 1999 was the most devastating natural disaster Taiwan had suffered in decades. Chairman Thomas T.L. Wu felt the challenges and helplessness local residents faced. He decided to offer financial assistance immediately, but he also realized that donations alone would not be adequate to help residents rebuild their lives. Out of a strong love for Taiwan and its people, and a great sense of corporate social responsibilities, Taishin Financial Holdings collaborated with popular online shopping website PayEasy.com to launch a series of "Caring Taiwan" campaigns since 2002 that aimed to

help residents of different townships rebuild their lives one town at a time. These campaigns helped towns and villages identify their local features and products, and then find new economic opportunities for them with the support of corporate resources. Free marketing displays were offered at the shopping website to promote locally produced agricultural products, while Taishin Bank encouraged donations via credit cards along with promotion of local souvenirs and tourism as part of its credit card campaigns. These activities contributed to the rebuilding of disaster-struck areas.

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Caring Taiwan Campaigns

Year Campaign Campaign Summary

2008~now

My Acre of Land

"My acre of land" was a sponsorship program to promote plantation of quality rice, which helped improve food safety and bring more income to farmers. Between 2011 and 2013, the Taishin Group has sponsored more than 40 units, totaling 20 hectares of rice fields, and purchased more than 20,000 gift boxes of rice. More than 10,000 customers and Taishin employees have consumed over 70,000 kilograms of top quality rice grown in Taiwan.

2006Field trip Educational Plan

For the purpose of raising public awareness of education needs in remote areas, Taishin has organized ecological trips that highlight the values of remote schools.

2005~now

Guoxing Township, Nantou County

Taishin helped the Nantou County Youth Karate Association raise funds for their training, giving disaster-struck children the chance to rebuild their self-esteem through karate training.Through dedicated websites, news coverage and fund raising assistance, the campaign has so far supported at least 100 karate team members to enter colleges and universities, including seven winners of the Presidential Award for academic achievements.Between 2011 and 2013, the Nantou karate team won a total of 382 medals (140 gold, 111 silver, and 131 bronze) in local as well as international competitions.

2004Yuchi Township, Nantou County

Taishin combined web resources with real marketing efforts to successfully promote the black tea produced from Yuchi Township, Nantou County.

2003Zhongliao Township, Nantou County

The company helped Zhongliao residents rediscover natural resources to develop featured industries, which gave them a chance to get back on their feet and rebuild their homes.

2002Xinyi Township, Nantou County

Taishin's "Caring Taiwan" campaign originated from its intent to assist "Chen Xuan Mei" plum sales in the hardest hit area through an online sales platform, and helped the business developing product lines that could be marketed over the Internet.

※Taishin continues to work with Nantou’s townships in "Caring Taiwan" campaigns.

69


In addition to helping local businesses via the "Caring Taiwan" campaigns, Taishin has also extended its concerns to charity groups. In 2009, Taishin Insurance Agency participate in a fundraising campaign and successfully raised to support the Children Are Us Foundation in setting up a farm for the intellectually disabled. Popular bloggers were invited to write stories about the farm, which were forwarded to more than 1

million readers. In addition, a drawing competition and a series of seminars were organized to underline the significance of the farm. Taishin also invited charity organizations and intellectually disabled children to enjoy its lunch-hour concerts, giving the children an opportunity to experience music. This event has so far raised more than NT$13 million in donations.

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Records of the "Power of Love" Campaign

YearProposals

(No. of Groups)Winners

(No. of Groups)Number of Voters

(in 10,000)Vote Count (in

10,000)Charity Funds (NT$10,000)

2013 221 83 21 61 1,670

2012 282 72 22 71 1,470

2011 307 64 30 64 1,305

2010 204 31 8 17 430

Total 1,014 250 81 213 4,875

In 2010, Taishin Charity Foundation was founded as a non-profit organization with the goal of helping charity groups to develop financial independence.

With the establishment of the Foundation, Taishin members became engaged in finding new ways to incorporate technology with group resources to maximize its community outreach. In 2010, Taishin launched Taiwan's first ever and innovative online charity event called "Power of Love ". This campaign features the use of cloud technology to create a platform that matches people in need of help with people willing to help.

Taishin also encourages employees within and beyond the group to get involved in volunteer work and offer further assistance other than funds. With the "Power of Love" campaign, Taishin hopes to help many struggling charity organizations back on their feet and continue in their work. By rallying charity partners and volunteers, Taishin has been able to muster the forces of good to care for the socially

disadvantaged. This is what Taishin is envisioned as "Taishin Charity Cloud."

The "Power of Love" campaign is entering its fourth year in 2013. Over the last four years, more than 800,000 people have participated and cast more than 2.1 million votes by over 1,000 applicants. More than NT$50 million has been raised to benefit 253 charity groups. Taishin encourages its employees to volunteer in various events. Taishin also encourages its employees to join charity volunteers, the company decides to reward the employees for “volunteer honor holiday” for serving every 6 hours. Taishin engaged 300 employees in volunteer work in 2013 and organized more than 50 voluntary events a year. Group resources have been allocated to charity services such as collection of goods, promotion, marketing assistance, art and culture exhibitions.

Taishin Charity Foundation – the “Power of Love”

Environmental Protection

71

72

Energy Conservation, Carbon Reduction, and Resource Optimization

Believing in actions speak louder than words, Taishin strives to realize a sustainable achievement by actively devoting to environmental protection even financial sector is a low-polluting industry. With implementing a number of energy-saving projects, and optimizing the resource utilization, Taishin continuously introduces green concept services. In 2008, Taiwan's first ever "Green Life" credit card was launched towards carbon reduction and tree planting. In the same year, Taishin Securities Investment Advisory introduced the Jupiter Ecology Fund that focuses on environmental protection and social responsibility. These are all the Taishin's respect for the environment and the earth. Furthermore, the company sponsors the planting of Poinciana flame trees at Asia's second largest roundabout on Renai Road to add more natural color to the city. These efforts have won Taishin the 2013 Green Brand Award as well as the support of the online community.

Energy Conservation

Taishin takes each business activity into consideration for the effect on society and the environment, apart from the company's financial and operation concerns. The concepts of environmental protection, as well as energy and resource conservation are cascaded across the company to build a more comfortable work environment.One major subsidiary Taishin Bank adopted paperless processes as early as 2003 with the implementation of the Electronic Document (e-Flow) system. In 2008, a new "Image Process Management System" (IPMS) was activated and subsequently extended to less paper usage, internal energy-saving mechanisms, such as the ride-sharing of taxis and the company vehicles, summer dress codes (CoolBiz) were exercised successfully; then Taishin continued to develop a green concept product “EzRich Paperless Account” for its

customers. Taishin Financial Holdings presents the respect and care to mother nature from saving energy waste in every aspect of its business and reducing the carbon emissions to the environment. In 2013, Taishin replaced some fixed-frequency air conditioners to inverter air conditioners to improve the effectiveness of energy utilization. Moreover, 7 branches also replaced new split-type air conditioners. The movement helped to reduce electricity consumption for 2,203 degrees each month and save 26,436 degrees in total. With the effective efforts, Taishin has been rewarded for the 2012 Office Energy Conservation Excellence Commendation, and a certificate of excellence was issued from the 2013 Taipei Energy Conservation Awards.

73


Energy Conservation Projects

Nature of Project Project Details

Energy Conservation

• Installation of VoIP phones • Use of eco-friendly, renewable

materials • Publishing environmental protection

e-newsletters • Sharing tips on energy-saving from

supervisors of all levels • Training sessions on environmental

protection • Purchase office equipment with

eco-friendly certification

Paperless Environment

• Implementation of e-Flow (correspondence) system

• Implementation of Image Process Management System (IPMS)

• Consolidated monthly account statements

• Use of digital billing statements/invoices

• EzRich Membership • Promotion of reusable mugs and

flasks

Shared Transportation

• Encouraging use of public transportation

• Implementation of a corporate vehicle dispatch system

• Implementation of a taxi sharing system

Reducing Power Consumption

• Electricity billing method changed from two-stage to three-stage

• Regular review of contract capacity • Adjusted power circuit layouts in

offices • Installation of small-capacity central

air conditioning to operate in place of the main unit during off-peak hours

• Operating hours of air-conditioning chiller units adjusted for summer and non-summer times

• Draw in outdoor fresh air in winter and minimize exchange of heat in summer to reduce workload of air conditioners.

• Short-term suspension of air conditioning

• Temperature control of water dispensed from chiller units

• Air-conditioning in offices set at 26-28°C

• Installation of LED lighting in underground parking and fire escapes

• T-BARs removed off unless the main lighting areas

• Turned off lighting over file cabinets • Switch parking lot lighting on and

off for peak and off-peak hours • Shut down redundant circuitry

reserved for lighting in lift lobbies • Use of T5 energy-saving lighting • Variable frequency drives installed

in cooling tank motors • Shut down unnecessary equipment

after office hours • Managed and controlled elevator

waiting time and frequency of use • Light dress code during summer

(CoolBiz)

Energy ManagementWith the low-polluting nature of the financial industry, electricity and petrol are the two main sources of energy used by Taishin over the course of providing its services. Committed to environmental protection and energy saving, the company has been able to continuously reduce power usage and CO2 emissions efficiently in 2013 within Taishin Tower through a series of energy management efforts.

▇ Petrol Consumption by Corporate Vehicles

Petrol

Total Consumption (liters) 19,630.55

CO2 emissions (Tons of Carbon Equivalent)

44.42

Note: CO2 emissions are calculated based on the Green House Gas Coefficient Table (Version 6.0) published by the Environmental Protection Administration; according to which, one liter of petrol produces 2.263 kilograms of CO2 while one liter of diesel produces 2.606 kilograms of CO2.

Shared Transportation

Energy Conservation

Paperless Environment

Reducing Power Consumption

Energy Conservation Projects

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With regards to the resources utilization, Taishin collects bottles, cans, paper and used batteries and engages professional cleaning companies to recycle them. Current resource management measures include:

1. Waste sorting: bottles and cans (aluminum cans, iron cans, plastic containers, PET bottles), paper (food boxes and general paper waste), and used batteries are recycled. Currently, there is no quantitative data on recycling efforts, but Taishin has plans to implement a record system to maintain statistics.

2. Others: placement of stationery recycling boxes at various buildings and promoting double-sided printing for more effective use of resources.

3. Purchase of Stationery and Paper Supplies

Taishin has also implemented several measures to reduce water usage, achieving significant results every year since 2011. Water conservation mechanisms include:

1.Pipe maintenance: toi let bowls, water tanks, pools, hoses, in-wall and underground pipes are inspected and maintained on a quarterly basis to ensure that every drop of water is put to the best use.

2.Adjusting water tap dispensing volumes: water taps in tearooms and washrooms are inspected from time to time to ensure that they dispense water at the appropriate volume.

Water supply for Taishin FHC and subsidiaries is provided by Taiwan Water Corporation, and has no significant impact on headwaters. Water supplied to office buildings and branches is for general domestic use; all waste water is disposed into

rivers and sea through underground drainage.

Optimized Use of Resources

Total Power/Water Usage and Average Power/Water Usage per Person in Taishin Tower

Year 2013 2012 2011

Staff in Taishin Tower building 1,296 1,240 1,218

Total power consumption (KWH) 5,674,638 6,017,700 6,475,600

CO2 emissions (equivalent tonnage) 3,018.91 3,201.42 3,445.02

Percentage of Power Saved 5.70% 7.07% N/A

Power consumption per person 4,378.58 4,852.98 5,316.58

Total water consumption (cubic meters) 24,562 26,081 26,447

Percentage of water saved 5.82% 1.38% N/A

Average water consumption per person 18.95 21.03 21.71

Note: CO2 emissions were calculated using the CO2 coefficient of 0.532 published by the Bureau of Energy

2,120,249

4,810,206

Stationery

Paper

Purchase category Purchase amount (NTD)

▇ Purchase Amount of Stationary and Paper Supplies

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2011

2012

2013

6,203,280

2,200,000

3,363,695Purchase amount(NTD)

Taishin strives to fulfill its social responsibilities in creating a green workplace. From employees to clients and suppliers, the company advocates the be l ie f in env i ronmenta l protection. Taishin business operates in urban or rural areas, where none of the business units are located on reserve land or in protected areas. Dedicating itself to environmental protection, Taishin is cautious about its business activities, products and services having no impact on natural habitats.

Purchase of eco-certified products- including all lighting equipment within Taishin Tower, the Neihu building, and branches; central air conditioning for Taishin Tower and standalone air conditioners for server rooms; and variable-frequency drive air conditioners for branch offices.

Building Green Workspace

Del ivery of f inancial serv ices through the internet and mobile devices - including 2,200 ATMs placed in convenience stores nationwide.

Use of green construction materials - the facade of Taishin Tower features low-E glass curtain walls, whereas the Neihu building uses reflective glass curtain walls. Both solutions reduce the workload of the air-conditioning system. Taishin and its subsidiaries have used eco-friendly materials for renovation, such as water-based paint, low-formaldehyde and fire-resistant building materials, low-polluting mineral fiber ceilings, eco-friendly adhesives etc. In 2013, 15 office locations were renovated by using green building material.

Green server rooms - High-performance, expandable UPS units are used to reduce energy wastage. For improving energy efficiency, the server rooms built with a separate channel design, whereas air-conditioning chiller units use inverter motors and hosts. Air conditioners have inverter fan motors, and the server room exterior is insulated against heat and built with ventilation controls. Meanwhile, physical servers have been successively replaced with virtual servers. Fire extinguishers are adopted eco-friendly gas to prevent damage to the ozone layer. These installations are expected to be completed by 2014, and hope to reach the power usage effectiveness and green standard.

Note: 2011 procurement included full-scale replacement of all light

tubes used, and a new air-conditioning unit for Taishin Tower

Green Purchase Amount in 2011-2013

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GRI Index and GuidelinesThis Report has released the content disclosure in accordance with Global Reporting Initiative's GRI G3.1 guidelines, please see the below table for details:Note: Complete disclosure (“not-applicable” is also regarded as complete disclosure).

GRI G3.1 Content Index Related CSR Report SectionExtent of

ReportingPage Explanatory Notes

1.Strategy and Analysis

1.1 Statement from the most senior decision-maker of the organization about the relevance of sustainability to the organization and its strategy

Message from the ChairmanCSR Philosophy ○ 5

7-8

1.2 Description of key impacts, risks, and opportunities CSR PhilosophyCorporate Governance ○ 7-8

28-30

2. Organizational Profile

2.1 Name of the organization Company Profile ○ 10-11

2.2 Primary brands, products, and/or services Company Profile ○ 10-13

2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures Company Profile ○ 10-13

2.4 Location of organization's headquarters Company Profile ○ 14

2.5Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report

Company Profile ○ 14-15

2.6 Nature of ownership and legal form Company Profile ○ 10、16

2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries) Company Profile ○ 14-15

2.8 Scale of the reporting organization Company ProfileEmployee Care ○ 16

49

2.9 Significant changes during the reporting period regarding size, structure, or ownership

Company ProfileEmployee Care ○ 15-17

49

2.10 Awards received in the reporting period Company Profile ○ 20-22

3. Report Parameters　

3.1 Reporting period (e.g., fiscal/calendar year) for information provided Report Summary ○ 1

3.2 Date of most recent previous report (if any) Report Summary ○ 1

3.3 Reporting cycle (annual, biennial, etc.) Report Summary ○ 1

3.4 Contact point for questions regarding the report or its contents Report Summary ○ 1

3.5Process for defining report content including: Determining materiality; Prioritizing topics within the report; and Identifying stakeholders the organization expects to use the report

Stakeholder Engagement ○ 38-42

3.6Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers). See GRI Boundary Protocol for further guidance.

Report Summary ○ 1

3.7 State any specific limitations on the scope or boundary of the report (see completeness principle for explanation of scope). Report Summary ○ 1

3.8Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.

Company Overview ○ 11-15

3.9Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report.


3.10Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g. mergers/acquisit ions, change of base years/periods, nature of business, measurement methods).


3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report Report Summary ○ 1

3.12 Table identifying the location of the Standard Disclosures in the report Appendix ○ 76

3.13 Policy and current practice with regard to seeking external assurance for the report Report Summary ○ 1

4. Governance, Commitments, and Engagement

4.1Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight

Corporate Governance ○ 24-26 None of the directors and supervisors were of minority ethnic groups

4.2 Indicate whether the Chair of the highest governance body is also an executive officer Corporate Governance ○ 24

4.3For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members

Corporate Governance ○ 24

4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body Corporate Governance ○ 25

47

Appendix

77

Appendix



4.5Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization's performance (including social and environmental performance).


4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided Corporate Governance ○ 25

4.7Process for determining the composition, qualifications, and expertise of the members of the highest governance body and its committees, including any consideration of gender and other indicators of diversity


4.8Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation

CSR PhilosophyCorporate Governance ○ 7-8

25

4.9

Procedures of the highest governance body for overseeing the organization's identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles

CSR PhilosophyCorporate Governance ○ 7-8

25

4.10Processes for evaluating the highest governance body's own performance, particularly with respect to economic, environmental, and social performance

Corporate Governance ○ 25、27-30

4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization Corporate Governance ○ 29、30

4.12Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses

Company Profile ○ 18Taishin has not signed any charters on corporate responsibilities, but plans to do so in the future

4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organizations in which the organization Company Profile ○ 18

4.14 List of stakeholder groups engaged by the organization Stakeholder Engagement ○ 40-41

4.15 Basis for identification and selection of stakeholders with whom to engage Stakeholder Engagement ○ 38-41

4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group Stakeholder Engagement ○ 40-41

4.17Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting

Stakeholder Engagement ○ 40-42

Economic Management Approach and Performance Indicators

DMA Disclosure on Management Approach EC Company Profile ○ 10、14-17

EC1Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments

Company ProfileSocial Participation ○ 16、69-70

EC2 Financial implications and other r isks and opportunit ies for the organization's activities due to climate change. Corporate Governance ○ 29

EC3 Coverage of the organization's defined benefit plan obligations. Employee Care ○ 48

EC4 Significant financial assistance received from government ○ - No government subsidy was received

EC5 Range of ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation Employee Care ○ 48

EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation Company Profile ○ 18

EC7 Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation

Corporate GovernanceEmployee Care ○ 24

49-50

EC8Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement

Company Profile Social Participation ○ 16

61-70

EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts

Company ProfileSocial Participation ○ 14-17

61-70

Environmental Management Approach and Performance Indicators

DMA Disclosure on Management Approach EN Environmental Protection ○ 72

EN1 Materials used by weight or volume ○ Not applicable

EN2 Percentage of materials used that are recycled input materials ○ Not applicable

EN3 Direct energy consumption by primary energy source Environmental Protection ○ 72-74

EN4 Indirect energy consumption by primary source Environmental Protection ○ 72-74

EN5 Energy saved due to conservation and efficiency improvements Environmental Protection ○ 72-74

78



EN6Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives

Environmental Protection ○ 72-74 No products or services were offered by using renewable energy

EN7 Initiatives to reduce indirect energy consumption and reductions achieved Environmental Protection ○ 72-74

EN8 Total water withdrawal by source Environmental Protection ○ 74

EN9 Water sources significantly affected by withdrawal of water Environmental Protection ○ 74

EN10 Percentage and total volume of water recycled and reused Environmental Protection ○ 74 The company has no recycled water for reuse

EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas Environmental Protection ○ 75

EN12Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

Environmental Protection ○ 75

EN13 Habitats protected or restored Environmental Protection ○ 75

EN14 Strategies, current actions, and future plans for managing impacts on biodiversity ○ No policies or plans of such kind have been

made

EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk ○

There were no endangered species described in IUCN red list or national protected species in any of the office buildings and branches

EN16 Total direct and indirect greenhouse gas emissions by weight Environmental Protection ○ 72-74Taishin Tower uses an environmental friendly refrigerant, R-134A, with a charged mass of 2kg, which produces greenhouse gases totaling 77.6 metric tonnes of CO2 equivalent

EN17 Other relevant indirect greenhouse gas emissions by weight ○ 72-74Greenhouse gases resulted from employees' commute and business trips were not quantified; plans will be made to maintain this statistics

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved Environmental Protection ○ 72-74

EN19 Emissions of ozone-depleting substances by weight ○ 72-74 The company did not use or emit any ozone-depleting substances

EN20 NOx, SOx, and other significant air emissions by type and weight ○ The company did not emit any air pollutants

EN21 Total water discharge by quality and destination Environmental Protection ○ 74

EN22 Total weight of waste by type and disposal method Environmental Protection ○ 74

EN23 Total number and volume of significant spills ○ none

EN24Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally

○ Not applicable

EN25Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization's discharges of water and runoff

○ Not applicable

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation Environmental Protection ○ 72-75

EN27 Percentage of products sold and their packaging materials that are reclaimed by category. ○ Not applicable

EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations ○

The company received no fines or penalties for violations of environmental laws and regulations

EN29Significant environmental impacts of transporting products and other goods and materials used for the organization's operations, and transporting members of the workforce

○There have been no significant environmental impacts due to transportation of Taishin products, materials or personnel

EN30 Total environmental protection expenditures and investments by type Environmental Protection ○ 75

Social Management Approach and Performance Indicators – Labor Practices and Decent Work

DMA Disclosure on Management Approach LA Employee Care ○ 44-55

LA1 Total workforce by employment type, employment contract, and region broken down by gender Employee Care ○ 49

LA2 Total number and rate of new employee hires and employee turnover by age group, gender, and region Employee Care ○ 50-51

LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation Employee Care ○ 48

Appendix

79

Appendix



LA4 Percentage of employees covered by collective bargaining agreements ○All employees are required to read and sign the Employee Code of Conduct; 100% of the employees have been protected by collective bargaining agreements

LA5 Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements Employee Care ○ 47

LA6Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs

Employee Care ○ 45、47

LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region and by gender Employee Care ○ 45

LA8Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases

○ 45 Employees are being trained on learning major diseases on a regular basis

LA9 Health and safety topics covered in formal agreements with trade unions Employee Care ○ 45

LA10 Average hours of training per year per employee by gender and by employee category Employee Care ○ 53-55

LA11Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

Employee Care ○ 47、52-55

LA12 Percentage of employees receiving regular performance and career development reviews by gender Employee Care ○ 48

LA13Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity

Employee Care ○ 49

LA14 Ratio of basic salary of women to men by employee category, by significant locations of operation Employee Care ○ 48

LA15 Return to work and retention rates after parental leave, by gender Employee Care ○ 51

Social Management Approach and Performance Indicators – Human Rights

DMA Disclosure on Management Approach HRCompany ProfileEmployee Care ○ 18

47

HR1Percentage and total number of significant investment agreements and contracts that include clauses incorporating human rights concerns or that have undergone human rights screening

○ None

HR2 Percentage of significant suppliers, contractors and other business partners that have undergone screening on human rights and actions taken Company Profile ○ 18

HR3Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

Employee Care ○ 47

HR4 Total number of incidents of discrimination and corrective actions taken ○ None

HR5Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights

Company ProfileEmployee Care ○ 18

47

HR6Operations and significant suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor

Company Profile ○ 1847

HR7Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor

Company Overview ○ 1847

HR8Percentage of security personnel trained in the organization's policies or procedures concerning aspects of human rights that are relevant to operations

Employee Care ○ 45 100% of the security personnel have been trained on human rights issues

HR9 Total number of incidents of violations involving rights of indigenous people and actions taken Employee Care ○ 47

HR10 Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments ○

All operations are subject to thorough review and assessment, and have been carried out in compliance with local human rights regulations

HR11 Number of grievances related to human rights filed, addressed, and resolved through formal grievance mechanisms ○ None

Social Management Approach and Performance Indicators – Society

DMA Disclosure on Management Approach SO Company Profile ○ 10

SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs ○ Local community engagement reached

100%

SO2 Percentage and total number of business units analyzed for risks related to corruption Corporate Governance ○ 27-29

The company has an employee rotation policy in place. Any personnel who handle financial properties, cash, securities, collaterals, and negotiable instruments are doing regular rotation every two years. Furthermore, employee accounts are monitored for any abnormal transactions under the "Abnormal Transaction Management System". There had been no occurrence of fraud, corruption or similar violations within the company in 2013

80



SO3 Percentage of employees trained in organization's anti-corruption policies and procedures Employee Care ○ 47 1231 employees trained/7260 of total =

16.96%

SO4 Actions taken in response to incidents of corruption ○ There had been no incident of corruption

SO5 Public policy positions and participation in public policy development and lobbying Company Profile ○ 18

SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country ○

The company is politically neutral, and makes no donations to any political party, individual, or government agency

SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes Employee Care ○ 47 There had been no conducts for anti-

competitive, anti-trust, or monopoly

SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations ○ None

SO9 Operations with significant potential or actual negative impacts on local communities ○ None of the office buildings or branches had

any negative impacts on local communities

SO10 Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities ○

The company's operations had no potential or actual negative impacts on local communities, and hence no prevention or mitigation measures had been taken

Social Management Approach and Performance Indicators – Product Responsibility

DMA Disclosure on Management Approach PR Customer Commitment ○ 58

PR1Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures

○ Not applicable

PR2Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes

○ Not applicable

PR3Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements

○ 100% of the products and services offered have been subject to information disclosure

PR4Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes

○ None

PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction Customer Commitment ○ 60

PR6Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship


PR7Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes

○ None

PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data ○ None

PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services ○ None

GRI Financial Services Sector SupplementRelated CSR Report

Section

Extent of

ReportingPage(s) Explanatory Notes

Product Portfolio

FS1 Policies with specific environmental and social components applied to business lines CSR Philosophy ○

FS2 Procedures for assessing and screening environmental and social risks in business lines Corporate Governance ○ 7-8、29

FS3 Processes for monitoring clients’ implementation of and compliance with environmental and social requirements included in agreements or transactions ○ No such practice currently exists

FS4 Process(es) for improving staff competency to implement the environmental and social policies and procedures as applied to business lines

Social ParticipationEnvironmental Protection ○ 61-75

FS5 Interactions with clients/investees/business partners regarding environmental and social risks and opportunities Stakeholder Engagement ○ 40-41

FS6 Percentage of the portfolio for business lines by specific region, size (e.g. micro/SME/large) and by sector Company Profile ○ 16-17

FS7 Monetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose Social Participation ○ 61-70

FS8 Monetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose Environmental Protection ○ 71-75

Appendix

81

Appendix

GRI Financial Services Sector SupplementRelated CSR Report

Section

Extent of

ReportingPage(s) Explanatory Notes

Audit

FS9 Coverage and frequency of audits to assess implementation of environmental and social policies and risk assessment procedures Corporate Governance ○ 27-29

Active Ownership

FS10 Percentage and number of companies held in the institution’s portfolio with which the reporting organization has interacted on environmental or social issues ○

Taishin Financial Holdings and its subsidiaries are actively involved in environmental protection and social engagement as part of the corporate social responsibilities.

FS11 Percentage of assets subject to positive and negative environmental or social screening Environmental Protection ○ 72-75

FS12 Voting polic(ies) applied to environmental or social issues for shares over which the reporting organization holds the right to vote shares or advises on voting ○ No such policy currently exists

Community

FS13 Access points in low-populated or economically disadvantaged areas by type Customer Commitment ○ 58

FS14 Initiatives to improve access to financial services for disadvantaged people Employee CareSocial Participation ○ 55-56

58

Product and Service Labeling

FS15 Policies for the fair design and sale of financial products and services Corporate Governance ○ 28-29

FS16 Initiatives to enhance financial literacy by type of beneficiary Employee Care ○ 55-56

United Nations Global Compact Comparison TableCategory 10 Principles Related CSR Report Section Page(s)

Human RightsPrinciple 1 Businesses should support and respect the protection of internationally proclaimed human

rights; Company ProfileEmployee Care 18、47

Principle 2 make sure that they are not complicit in human rights abuses. Company ProfileEmployee Care 18、47

Labor

Principle 3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

Company ProfileEmployee Care 18、47

Principle 4 the elimination of all forms of forced and compulsory labour; Company ProfileEmployee Care 18、47

Principle 5 the effective abolition of child labour; Company ProfileEmployee Care 18、47

Principle 6 the elimination of discrimination in respect of employment and occupation. Company ProfileEmployee Care 18、47

Environment

Principle 7 Businesses should support a precautionary approach to environmental challenges; Environmental Protection 71-75

Principle 8 undertake initiatives to promote greater environmental responsibility; Environmental Protection 71-75

Principle 9 encourage the development and diffusion of environmentally friendly technologies. Environmental Protection 71-75

Anti-Corruption Principle 10 Businesses should work against corruption in all its forms, including extortion and bribery. Corporate Governance 23-30

82

ISO 26000 IndexCategory Core Subjects and Issues Related CSR Report Section Page(s)

Organizational governance Decision-making processes and structures Corporate Governance 23-30

Human rights

Due diligence Corporate Governance 23-30

Human rights risk situations Employee Care 1847

Avoidance of complicity Corporate Governance 23-30

Resolving grievances Employee Care 47

Discrimination and vulnerable groups Employee Care 47-49

Civil and political rights Employee Care 47-49

Economic, social and cultural rights Employee Care 47-49

Fundamental principles and rights at work Employee Care 47-49

Labor practices

Employment and employment relationships Employee Care 47-51

Conditions of work and social protection Employee Care 44-49

Social dialogue Employee Care 47

Health and safety at work Employee Care 45

Human development and training in the workplace Employee Care 47-56

The environment

Prevention of pollution Environmental Protection 72-75

Sustainable resource use Environmental Protection 74

Climate change mitigation and adaptation Environmental Protection 72-75

Protection of the environment, biodiversity and restoration of natural habitats Environmental Protection 75

Fair operating practices

Anti-corruption Corporate Governance 24-29

Responsible political involvement Corporate Governance 24-29

Fair competition Corporate Governance 24-29

Promoting social responsibility in the value chain CSR Philosophy 7-8

Respect for property rights Corporate Governance 24-29

Consumer issues

Fair marketing, factual and unbiased information and fair contractual practices Corporate Governance 24-29

Protecting consumers' Health and safety Customer Commitment 58-60

Sustainable consumption Customer Commitment 58-60

Consumer service, support, and complaint and dispute resolution Customer Commitment 58-60

Consumer data protection and privacy Customer Commitment 3058-60

Access to essential services Customer Commitment 58-60

Education and awareness Employee Care 52-56

Community involvement and development

Community involvement Social Participation 61-70

Education and culture Social Participation 61-70

Employment creation and skills development Social Participation 61-70

Technology development and access Social Participation 61-70

Wealth and income creation Social Participation 61-70

Health Social Participation 61-70

Social investment Social Participation 61-70

Appendix

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Appendix

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