chailease holding company limited8 9 i letter to shareholders in 2017, chailease celebrated the 40th...

Chailease Holding Company Limited

06 Board Members

08 Address of Subsidiaries

09 I. Letter to Shareholders

12 II.Introduction of the Company(1)Date of establishment(2)History of the Company

14 III.Corporate Governance Report(1) Organization(2) Information regarding the board of

directors and management team, (3) Corporate governance practices(4) Information regarding the certified

public accountant (5) Information for top 10 shareholders

and related parties as defined under the Statement of Financial Accounting Standards No.6

(6) Continuing educational training of the directors and independent directors

(7) Certification details of employees whose jobs are related to the release of the company's financial information

(8) Working environment and employee

CONTENTS

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safety protection

62 IV.Capital and Shares(1) Capitalization(2) Composition of Shareholders (3) Distribution profile of share

ownership (4) Major shareholders(5) Market price, net worth, earnings,

and dividends per share for the past two years

(6) Dividend policy and distribution of profit

(7) Employee profit sharing and directors' and supervisors' compensation

(8) Buyback of common stock(9) Issuance of corporate bonds(10) Issuance of global depositary

shares(11) Financing plan and

implementation

70 V.Operational Highlights(1) Business Overview (2) Market and Sales Overview(3) Head count, average seniority,

average age and educational background of employees in recent

two years and as of the publication date of the annual report

86 VI.Financial Highlights(1) Audit committee's report on

financial statements from the most recent year

(2) Financial Review

96 VII. Risk Management(1) Integrated Risk Management

Framework & Policy(2) Risk management policies

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100 VIII.Special notes(1) Information about the affiliates(2) Major differences in the

Company's articles of association and ROC regulations on

shareholder protection

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A supporting partner of our customers, a driving force of economic success

Chailease Holding Com

pany Limited

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A supporting partner of our customers, a driving force of economic success

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Position Name Nationality Experience and Education

Executive Chairman

Authorized Representative of Chun An Investment Co., Ltd.:Fong-Long Chen

ROC

Chairman and President of the CompanyChairman of Chailease Finance Co., Ltd.Chairman of Fina Finance & Trading Co., Ltd.Chairman of Chailease Specialty Finance Co., Ltd.Chairman of Chailease Cloud Service Co., Ltd.Chairman of Chailease International Finance CorporationChairman of Chailease International Corp.Chairman of Chailease Finance International Corp.Chairman of Jirong Real Estate Co., Ltd.Chairman of Chailease Finance (B.V.I.) Company Ltd.Director of My Leasing (B.V.I.) Corp.Director of Chailease International (B.V.I.) Corp.Director of Golden Bridge (B.V.I.) Corp.Director of My Leasing(Mauritius) Corp.Director of Asia Sermkij Leasing Public Company LimitedDirector of Bangkok Grand Pacific Lease Public Company LimitedDirector of Grand Pacific Holdings Corp.Director of Chailease International Financial Services Co., Ltd. Director of Chailease International Company (UK) LimitedChairman of Chailease Energy Integration Co., Ltd.Chairman of Innovation Energy Integration Co., Ltd.Chairman of Chailease Credit Services Co., Ltd.Director of CL Capital Management Co., Ltd.Director of CLJ Investment Partners Company Limited

Director

Authorized Representativeof Chun An Investment Co., LtdAndre J.L. Koo

ROC

MBA, Leonard N. Stern School of Business, NYU, USAChairman of Chailease GroupChairman of Chailease Enterprise Company LimitedChairman of Chun An Investment Co., Ltd.Chairman of Chun An Technology Co., Ltd.Chairman of Li Cheng Investment Co., Ltd.Director of R.C. Corp.President Managing Director of Yellowstone Holding AG

Director Chee Wee Goh Singapore

Bachelor of Science ( First Class Honours ), University of SingaporeMaster of Science in Engineering, University of Wisconsin, USADiploma in Business Administration, University of SingaporeIndependent director of Beng Kuang Marine, LtdIndependent director of King Wan Corporation LtdIndependent director of Stamford Tyres Corporation LtdIndependent director of Sin Ghee Huat Corporation Ltd.

Director

Authorized Representative of Chun An Technology Co., Ltd.Hsiu Tze Cheng

ROC

EMBA, National Taiwan UniversityDirector and Chief Human Resources Officer of the CompanyDirector and chief human resource officer of Chailease Finance Co., LTDChief human resource officer of Chailease International Leasing Co., Ltd.Director of Fina Finance & Trading Co., Ltd.Chairman of Chailease Royal Leasing Plc.Chairman of Chailease Berjaya Finance CorporationDirector of Chailease Enterprise Company LimitedChairman of ChaiCo Investment Corp.Chairman of Advance. Renal Care Co., Ltd.

Board Members


pany Limited

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Position Name Nationality Experience and Education

Director

Authorized Representative of Chun An Technology Co., Ltd. ’King Wai Alfred Wong

ROCHong Kong

MBA, Leonard N. Stern School of Business, NYU, USAManaging Director of CL Capital Management Co., Ltd.Director of CL Investment Partners Company LimitedDirector of Philippine Grain International Corporation Director of Chaico Investment Corporation Chairman of Chailease Biofund Company LimitedDirector and President of Chaico Development (HK) Limited

Director

Authorized Representative ofLi Cheng InvestmentCo., LtdChih Yang, Chen

ROC

Master Degree in International Affairs, NCCUDirector of Yellowstone Holding Corp.Chairman of Chailease Construction and Development Corp.Chairman of Bosser Design and Engineering Corp.Director of Chailease Construction Bosser Design(MU) Corp.Director of Paradise Walk Investments (SAMOA) Corp.Executive Director of Zhongyou Investment Management Consultants (Shanghai) Co., Ltd.Representative of Yujia Investment Management Consultants (Shanghai) Co., Ltd.

Independent Director

Dar-Yeh Hwang ROC

B.A., Department of Banking. National Chengchi University, TaiwanM.L. Program in Economics, National Taiwan University, TaiwanMaster in Political Science, National Taiwan University, TaiwanPh.D. Program in Finance Kellogg School, Northwestern University, USAM.S., and Ph.D. Candidate in Finance, Stern School, NYU, USAMBA and Ph.D. in Finance, Rutgers UniversityPh.D. Candidate in Journalism and Communication, Peking UniversityPh.D. Program in Law, Tsinghua University, ChinaHonorary Director, Center for the Study of Banking and Finance,National Taiwan UniversityChairman, Banking Education Association of TaiwanChairman, Turnaround Management Association of TaiwanChairman & Dean, Academy of Promoting Economic LegislationIndependent Director of DBS Bank (Taiwan) Ltd.Independent Director of King Yuan Electronics Co.Chairman of McBorter AFMA Corp.Chairman of Suzhou McBorter AFMA Corp.Professor, Suzhou Campus of Renmin University of China


Steven Jeremy Goodman

Australia

MBA from Nanyang Technological University, SingaporeLaw Degree LLB from Manchester University, EnglandPassed the Solicitors Finals Examinations from the College of Law, Law Society of England and Wales (with Honours)Passed the Overseas Lawyers Qualification Examination, Hong Kong Law SocietyAdjunct Professor of Law at the Law Faculty of Bond University.Solicitor qualified in UK and in Hong Kong (non-practising).Director and CEO of Teras Group Pte Ltd.


Chin Fock Hong Singapore

Bachelor of Social Science, University of Singapore, SingaporeAttended an International Tax Programme at Harvard Law School.Director of Shared Services for Charities Ltd.Director of Binjaitree.Independent director of Riverstone Holdings Limied.Non-Executive Director of Prima Ltd.Independent director of Gigamedia Ltd.

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Address of Subsidiaries

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Taiwan■ Chailease Finance Co., Ltd. No.362, Ruiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.) +886-2-8752-6388 www.chailease.com.tw■ Fina Finance & Trading Co., Ltd. 3F., No.360, Ruiguang Rd., Neihu Dist., Taipei City 114,

Taiwan (R.O.C.) +886-2-8797-6168 www.finatrade.com.tw■ Chailease Auto Rental Co., Ltd. 5F., No.362, Ruiguang Rd., Neihu Dist., Taipei City 114,

Taiwan (R.O.C.) +886-2-8752-6388 www.rentalcar.com.tw■ Chailease Consumer Finance Co., Ltd. 6F., No.392, Sec. 1, Neihu Rd., Neihu Dist., Taipei City 114,

Taiwan (R.O.C.) +886-2-2798-6488 www.ezfund.com.tw■ Apex Credit Solutions Inc. 6F., No.420, Fuxing N. Rd., Zhongshan Dist., Taipei City

104, Taiwan (R.O.C.) +886-2-2512-2866 www.apex-credit.com■ Chailease Insurance Brokers Co., Ltd. 6F., No.362, Ruiguang Rd., Neihu Dist., Taipei City 114,

Taiwan (R.O.C.) +886-2-8752-6388 www.chailease.com.tw■ Chailease Energy Integration Co., Ltd. 5F., No.362, Ruiguang Rd., Neihu Dist., Taipei City 114,

Taiwan (R.O.C.) +886-2-8752-6388 www.chailease.com.tw

China■ Chailease International Finance Corporation Building 1, Lane 631, Jinzhong Rd., Changning District,

Shanghai, PRC +86-21-5208-0101 www.chailease.com.cn

■ Chailease International Corp. Building 1, Lane 631, Jinzhong Rd., Changning District,

Shanghai, PRC +86-21-5208-0101

■ Chailease Finance International Corp. Airport Business Park W13-401, No.76, Huan He North

Road, Airport Industrial Area, Tianjin, PRC +86-22-8486-1168

■ Jirong Real Estate Co., Ltd. Building 1, Lane 631, Jinzhong Rd., Changning District,

Shanghai, PRC +86-21-5208-0101

Thailand■ Asia Sermkij Leasing Public Co., Ltd. 24F., Sathorn City Tower, 175 South Sathorn Road,

Tungmahamek, Sathorn, Bangkok 10120, Thailand +66-2-679-6226 www.ask.co.th

■ Bangkok Grand Pacific Lease Public Co., Ltd. 10/1F., Sathorn City Tower, 175 South Sathorn Road,

Tungmahamek, Sathorn, Bangkok 10120, Thailand +66-2-679-6226 Vietnam■ Chailease International Leasing Co., Limited Suite 2801-04, 28F., Saigon Trade Center, 37 Ton Duc

Thang St., Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam

(+84 28) 7301 6010 www.chailease.com.vn

■ Chailease International Trading Company Limited

Suite 2809, 28F., Saigon Trade Centre, 37 Ton Duc Thang St., Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam

(+84 28) 3910 1518 www.chaileasetrade.com.vn Malaysia■ Chailease Berjaya Credit Sdn. Bhd. A-11-01, Level 11, Block A, PJ8, No.23 Jalan Barat,

Seksyen 8, 46050 Petaling Jaya, Selangor, Malaysia +60-3-7969-1128 www.chailease.com.my Cambodia■ Chailease Royal Leasing Plc. 3F, No.216B, Norodom Blvd(41), Sangkat Tonle Basak,

Khan Chamkar Mon, Phnom Penh, Cambodia +855-23-901-728 www.chaileaseholding.com.kh Philippine■ Chailease Berjaya Finance Corporation 5F, 45 San Miguel Building, San Miguel Ave., Ortigas

Center, Pasig City, Metro Manila, Philippines +63-2723-6388 United States■ Grand Pacific Financing Corporation 901 Corporate Center Drive, #300, Monterey Park, CA

91754, U.S.A. +1-323-780-8881 www.gpusa.com


pany Limited

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Letter to ShareholdersI

In 2017, Chailease celebrated the 40th anniversary of its founding. Over the years, our business footprint has expanded from the Asia-Pacific region to Europe and the United States, and the Company’s international brand value now totals US$242 million. At the end of the year, Chailease boasted a NT$109.48 billion market capitalization, which ranks in the top 50 of TWSE companies for market value and maintains our position as the lease finance industry leader.

Not only did 2017 mark a special anniversary, Chailease’s performance was also worth celebrating. Annual consolidated revenue totaled NT$41.45 billion, a year-on-year increase of 9%, the highest since going public. Consolidated net profit reached NT$9.66 billion, which represents growth of 33% over 2016, and EPS was NT$8.29. Primary profit drivers were the continued growth of interest earning assets, reduced cost and expense ratios, and asset quality improvements.

TaiwanIn 2017, revenue in the Taiwan market grew 8% over 2016 figures to reach NT$19.41 billion and net profit grew by an outstanding 19%. These figures put Chailease at the top of the local leasing and installment lending industry.

In response to government energy policy, Chailease has in recent years actively financed and invested in energy efficiency and solar energy services. On top of our outstanding EPC (engineering, procurement, construction) capabilities, Chailease also possesses the skills to properly manage these projects. Through the end of 2017, our subsidiary Chailease Energy Development Corp. Co. Ltd. has invested in 654 solar power plants with a total generating capacity of 198 megawatts, which make it the largest single investor in solar power generating systems in Taiwan. In March 2018, we launched the FinMart project to give members of the public the opportunity to invest in solar power modules and sell back extra power generated. This win-win situation provides investors with a stable, long-term source of income.

Mainland ChinaIn 2005, Chailease established Chailease International Finance Corp. (CIFC) to compete among 7,000 other lease finance providers in the Mainland Chinese market. Entering its 13th year, CIFC continues its stable growth and has expanded to a total of 41 locations. Our continued commitment to serving SMEs has paid off in outstanding business performance. In 2017, revenue reached NT$18.13 billion, which was a 9% increase over the same period in 2016. With continued asset quality improvements and our geographical expansion plans, we have built a strong foundation in the Mainland Chinese market for future growth.

In recent years, CIFC established six business divisions that encompass supplier marketing, construction and transport finance services, auto rental and insurance brokerage services, fishing industry services, auto leasing services, and medical services, to actively expand its business scope and business scale.

In the pursuit of growth strategy, 2017 was also full of innovation. Newly launched used car financing services brought our successful experience in Taiwan to the Mainland. Cooperating with Chang Cheng Insurance Brokers Co., Ltd., CIFC introduced insurance brokerage services. Business Channel Development Group was established to link up with all kinds of industry platforms and unlock new business opportunities. Embracing new financial technology and internet platforms provides a more agile business model by improving our ability to attract customers online.

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CIFC primarily receives funding through banks and, in 2018, CIFC plans to issue asset-backed securities to provide a wider variety of financing sources and support rapid business expansion.

EuropeAt the end of 2016, Chailease first joined the commercial aircraft engine leasing business when subsidiary, Chailease International Company (UK) Limited, and Mitsubishi UFJ Lease & Finance Co., Ltd. (MUL) subsidiary Engine Lease Finance Corporation (ELFC) entered into a joint venture. The resulting company, C & E Engine Leasing Limited, provides commercial aircraft spare engine procurement, sales, and commercial leasing services.

In June 2017, Chailease signed a cooperation agreement with France’s Airbus Helicopters. Together we provide clients with comprehensive financing services. By the end of the year, we had already successfully developed new customers in the ASEAN market.

ASEANWith stable growth in Taiwan and China, Chailease has set its sights on accelerating development in ASEAN countries. Currently Chailease operates in Thailand, Vietnam, Malaysia, Cambodia, and the Philippines. With Thailand as our operating base, we are expanding throughout the Greater Mekong Subregion. Revenues in ASEAN countries increased 17% year-on-year. Growth over the year came primarily from operations in Vietnam and Malaysia.

Vietnamese subsidiary Chailease International Leasing Co., Ltd. has benefitted from recent State Bank of Vietnam’s loosening of restrictions on financial institution loan portfolio growth. Government actions along with appropriate controls on asset quality enabled Chailease International Leasing to achieve accelerated growth.

Established in Malaysia in the 4th quarter of 2015, Chailease Berjaya Credit Sdn. Bhd. has achieved continued profit growth. Based in the capital Kuala Lumpur in central Malaysia, the company serves as our base of operations. In 2017, a Johor Bahru branch was established in the south of the country, while a 2018 expansion to Penang in the north is also planned.

In 2017, Chailease also expanded to Cambodia and the Philippines. Chailease Royal Leasing PLC was established as a joint venture between Chailease and the Royal Group in Cambodia and officially set up operations and began serving customers in February. In Cambodia, Chailease Royal Leasing provides automobile, equipment, and construction machinery lease finance services. Target industries include handicrafts, travel, real estate, and construction.

In the same year, we again joined with the Berjaya Group of Malaysia to establish Chailease Berjaya Finance Corp. in the Philippines, a country which has achieved an economic growth rate exceeding 6% over the past eight quarters. Chailease is optimistic about business opportunities with local SMEs and initially will focus on vehicle financing. We will develop financing services for local SMEs, find growth opportunities, and increase ASEAN operations as a share of total revenue.

Bangkok, Thailand-based subsidiary Asia Sermkij Leasing PLC. (ASK) has been in business for over 30 years. In 2017, ASK was awarded The Stock Exchange of Thailand’s Best Company Performance Award in recognition of its operating achievements and outstanding corporate governance.


pany Limited

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Fong-Long Chen,

Chairman

Outstanding Achievements in Corporate GovernanceIn addition to outstanding financial achievements, Chailease also received recognition for corporate governance and social responsibility. In the third round of the Taiwan Stock Exchange Corporate Governance Evaluation held in 2017, Chailease was ranked in the top 5% of all participating companies. In addition, in the most recent MSCI ACWI ESG Leaders Indexes review, previously known as the MSCI Global Sustainability Indexes, Chailease was selected as a component stock for the fourth year running. These honors show Chailease as a global environmental, social responsibility, and corporate governance leader in the industry.

OutlookOver the past 40 years, Chailease has pursued growth and proactively searched out new business opportunities to achieve the best performance for our shareholders. Looking to the future, Chailease will continue to grow with stability in the Taiwan market and we will maintain our strong momentum in Mainland China by expanding our location and service portfolio. In ASEAN nations, with the gradual addition of new operating locations, Chailease will build its business in the region to create a new engine of growth and increase shareholder value.

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(1)Date of establishment:Chailease Holding Company Limited (hereinafter referred to as the "Company") was founded on December 24, 2009 under the company act of Cayman Islands. The core business of the Company is to provide diverse financial services to SMEs, including leasing, installment sales, factoring and direct financing. As a professional financial service company, we currently have operations in Taiwan, PRC, Thailand, Vietnam, Malaysia, Cambodia, Philippines, and USA.

(2)History of the Company:The Company commenced operations in Taiwan in 1977 under the name of China Leasing Company Limited ("China Leasing") and initially provided asset-based financing. China Leasing initially provided primarily asset-backed financing to companies in heavy industries to help them acquire manufacturing machinery and equipment and upgrade their manufacturing facilities. In 1980, China Leasing established CITC Co., Ltd. ("CITC") to specialize in installment sales. In 1995, China Leasing merged with CITC and CITC changed its name to Chailease Finance Co. Ltd. ("Chailease Finance") in order to increase the competiveness with international large-sized financial leasing companies abroad and strengthen the ability to raise funds. In 1999, the excellent management team led the Company to begin the project of business process improvement, actively promote various innovation projects and lay a solid foundation for a great leap into becoming a world financial company. The Company has taken the lead in joining international organizations such as the American Leasing Association, Asian Leasing Association, International Finance and Leasing Association and Factors Chain International since its establishment to provide customers with international-quality professional service and continuously absorbs the latest knowledge and technology from financial related business in advanced countries, such as Europe, America and Japan to maintain our professional advantage among competitors. Meanwhile, we founded the Taipei Leasing Association to provide a platform for members to exchange ideas, knowledge, experience and information, all of which will be of mutual benefits to the parties concerned. In 2007, Chailease Finance exchanged 100% of its shares with Financial One Corp. and became the subsidiary of Financial One Corp., which was listed in the Singapore Stock Exchange on July 11, 2007. Financial One Corp. was the first Taiwan-based financial enterprise that was successfully listed on the Singapore Stock Exchange. To integrate the operations in Asia, Chailease Holding Company Limited was incorporated under the laws of the Cayman Islands in 2009 and the project of reorganization was launched. Financial One Corp. was voluntarily delisted from the Singapore Stock Exchange on April 27, 2011 and transferred the shares of the Company to its shareholders on the same day. Upon the completion of the shares transfer, the former shareholders of Financial One Corp. came to hold shares of the Company directly. The Company's shares were traded in the over-the-counter stock market of the ROC since July 11, 2011. On December 13, 2011, the Company was successfully listed on the TWSE.

■ DiversificationUnder the guidance of multi-dimensional strategies, the subsidiaries that specialize in the niche market have been established in Taiwan continuously, including Fina Finance & Trading Co., Ltd., Chailease Consumer Finance Co., Ltd., Apex Credit Solutions Inc., Chailease Auto Rental Co., Ltd., Chailease Insurance Brokers Co., Ltd. and Chailease Cloud Service Co., Ltd. To extend the value chain of green energy business, Chailease Finance acquired 100% of Yun Tang Inc. in 2014, and established General Energy Solutions Co. Ltd., in 2015. Based on the competitive advantage of leasing and installment sales business, we aim to assist clients in implementing energy saving and production projects by exploiting our green energy technology and expertise, and also engage in the investment, EPC, operations & maintenance of solar power plants. Currently, Chailease Finance is one of the top three solar power owners in Taiwan, bringing long-term and stable non-interest revenue to the Company given the long-term contract with Taipower Company to provide electricity at stable prices.

Introduction of the CompanyII


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■ InternationalizationInternationalization has also become the Company's critical strategy for business development.In 1983, Grand Pacific Financing Corp. was formed to provide commercial real estate financing to small and medium sized businesses in United States. In 1989, Bangkok Grand Pacific Lease Public Company Limited ("BGPL") was established in Thailand through a joint venture with the Bangkok Bank to offer leasing and installment sales for the Taiwan business community in Thailand to obtain manufacturing machinery and equipment. In 1992, BGPL acquired Asia Sermkij Leasing Public Company Limited ("ASK"), which specializes in installment sales for automobiles and personal loans. In 2004, the shareholding structure of ASK was reorganized and ASK became the parent company of BGPL. ASK went public in Thailand on August 25, 2005 and currently has 13 branches and 9 outlets. In 2005, the Company received the first approval of foreign-owned leasing license from the PRC government to set up Chailease International Finance Corporation ( "CIFC") in Shanghai. At the beginning of the development, the goal is to provide equipment and manufacturing machinery leasing to SMEs located in the PRC as well as foreign-owned companies. After years of efforts, the business has expanded from the coastal areas to inland regions. The customer base is broadened to include local entities. CIFC continuously invested in specialized subsidiaries, including Chailease International Corporation, Chailease Finance International Corporation and Jirong Real Estate Company Limited. In 2006, we received approval from the State Bank of Vietnam to establish Chailease International Leasing Company Limited ("CILC") in Ho Chi Minh City, an industrial and business center in Vietnam, and commenced operations in January 2007. Its main business is to provide leasing service of machinery equipment and automobiles for both Taiwanese and local companies. At present, CILC has set up four business offices in Ho Chi Minh City, Hanoi, Can Tho and Hai Phong. In 2016, Chailease International Trading Company Limited was established to offer importing and exporting services. In 2015, Chailease International Company (UK) Limited was established in London, United Kingdom, primarily focusing on solar power plant investment, aircraft engine leasing business and market research and consultancy services. We expect that the UK subsidiary will become our hub to extend the network to the European market. In 2015, Chailease Berjaya Credit Sdn. Bhd. was established through a joint venture with Berjaya Group Bhd. in Malaysia. It mainly engages in vehicle financing and relevant services now and plans to gradually expand to other businesses, such as consumer goods financing and SMEs financing. At present, we have set up two branches in Johor Bahru and Penang and three outlets. In 2017, Chailease Agency Sdn. Bhd. was established to provide insurance brokerage services. In 2016, Chailease Royal Leasing Plc. was established through a joint venture with Royal Group in Phnom Penh, Cambodia . It offers finance lease services for vehicles, machinery and equipment. In 2017, considering demographic dividend, GDP growth and booming vehicle sales in Philippines, Chailease Berjaya Finance Corporation was established through a joint venture with Berjaya Group Bhd. in Manila, Philippines, focusing in providing vehicle financing in the initial stage of operations. The Company will continue expanding the ASEAN market, making it became the third growth engine in the future.

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(1)Organization

1. Organizational structure

Corporate Governance ReportIII

Shareholders

Board

Audit Committee

Management CommitteeCSR Committee

Compensation CommitteeChief Secretary

Chairman

President

Internal Audit Offi

cer

Chief Inform

ation O

fficer

Chief Strategy O

fficer

Finance Accounting O

fficer

Investor Relations & Public Relations Departm

ent

IT Department

Administration Departm

ent

Audit Department

Think Tank Department

Business Managem

ent Departm

ent

Chief Risk O

fficer

Chief H

uman Resource

Offi

cer

Chief Legal O

fficer

Accounting and Financial Departm

ent

Risk Managem

ent Departm

ent

Hum

an Resource Departm

ent

Legal Department


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2. Business of departmentsA chairman and president are appointed in the Company and the president supervises the presidents of groups and chief officers. The president executes the resolutions of the Board in accordance with the instructions of the chairman and administers all affairs in the Company. The chief officers assist the president with the corporate business. If the president is unable to fulfill his duties, the one designated by the chairman shall perform the functions of the president.

Department Duties

Audit Comittee

1.Establish or modify the internal control system based on Article 14(1) of Securities and Exchange Act.

2.Audit the effectiveness of the internal control system. 3.Establish or modify the procedures related to acquisition or disposal of assets, financial

derivatives transactions, loans to others, endorsements or guarantees based on Article 36(1) of Securities and Exchange Act.

4.Act on matters bearing on the personal interests of a director.5.Significant transactions of assets and derivatives.6.A material monetary loan, endorsement, or provision of guarantees.7.Conduct collection, issuance and private placements of equity securities.8.Appoint, dismiss or compensate certified public accountants (CPA). 9.Employ and dismiss the financial, accounting and internal audit officers. 10.Annual financial reports and half yearly financial reports. 11.Other matters regulated by the Company and the authorities.

Compensation Committee1.Establish and regularly review the policies, systems, standards and structures for the

performance evaluation and compensation of Directors and managers. 2.Regularly evaluate and determine the compensation of Directors and managers.

Management Comittee

1.Give guidance to the overall operating status, management policies and directions. 2.Give guidance to the future critical management and development of the Company. 3.Give direction to, establish and follow the medium-term and long-term strategic targets.4.Establish the risk management framework and ensure the risk management activities.5.Establish the project team based on immediate needs and offer guidance. 6.Coordinate and direct the related business of departments and follow the implementation. 7.Formulate the high-level policies of integrated business development directions and

strategies. 8.Execute the instructions of the Board.

Corporate Governance & Ethical Management Committee

1. Strengthen corporate governance(1) To review and assess corporate governance framework and propose amendment

thereto from time to time.(2) To plan, implement, review and improve corporate governance.(3) To conduct research on the trend and issue of corporate governance.(4) To implement and improve corporate governance evaluation system.(5) To execute the Articles of incorporation, internal rules, the instructions of the Board and

Chairman.2. Implement ethical corporate management

(1) To assist in incorporating ethics and moral values into this Company's business strategy and adopting appropriate prevention measures against corruption and malfeasance to ensure ethical management in compliance with the requirements of laws and regulations.

(2) To adopt programs to prevent unethical conduct and setting out in each program the standard operating procedures and conduct guidelines with respect to the company's operations and business.

(3) To plan the internal organization, structure, and allocation of responsibilities and setting up check-and-balance mechanisms for mutual supervision of the business activities within the business scope which are possibly at a higher risk for unethical conduct.

(4) To promote and coordinating awareness and educational activities with respect to ethics policy.

(5) To develop a whistle-blowing system and ensuring its operating effectiveness.(6) To assist the chairman and management in auditing and assessing whether the

prevention measures taken for the purpose of implementing ethical management are effectively operating, and preparing reports on the regular assessment of compliance with ethical management in operating procedures.

3. Implement corporate social responsibility (CSR)(1) To formulate the strategy and execution of CSR programs.(2) To formulate annual goal and execution of CSR programs.(3) To review and assess the adequacy of CSR and recommend changes.(4) To disclose sustainability performance and finalize CSR report.

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Department Duties

Think Tank Department

1. Strategy related to corporate development(1) Conduct analyses and research on financial related or potential market and industry,

and on the specific topics designated by the chairman, president or top management as the basis for developing medium-term and long-term strategies.

(2) Assist in establishing and implementing the medium-term and long-term strategic development plans of the Holding Company.

2. Strategy of the capital market(1) Continuously conduct analysis and research on certain capital markets and cooperate

with the financial department to form the best strategy in response to the capital market based on the need of fund raising for the medium-term and long-term development.

(2) Develop the strategy to join the capital market to maximize the benefits of fund raising.3. Mergers and acquisitions

(1) Analyze the possible target for mergers and acquisitions, plan a schedule and organize the responsible departments.

(2) Be responsible for the communication, coordination or supervision of professionals in and outside the Company.

(3) Be responsible for the preparation of the resolutions for Board and shareholder meetings.

4. Other tasks(1) Prepare and arrange Board meetings and functional committee meetings of the Holding

Company.

Business Management Department

1. Assist in planning and integrating the strategies for each subsidiary to improve operational performance.

2. Supervise the performance of subsidiaries of the Holding Company and provide operational suggestions.

3. Follow up on the execution of annual operational plans of the subsidiaries4. Assist the subsidiaries of the Holding company in the improvement of the operating and

management systems. 5. Mediate conflicts among subsidiaries of the Holding Company and coordinate the

distribution of resources. 6. Maintain and update the authorities of subsidiary matters reserved for the Holding

Company.7. Study and establish new overseas subsidiary or conduct the feasibility of new business.8. Organize and conduct the important operational meetings of the Holding Company, and

follow up on the meeting resolutions and management instructions.9. Research, plan and implement projects related to subsidiaries' operation or assigned by

top management.

Investor Relations and Pub-lic Relations Department

1. Establish, update and implement the spokesman system and information disclosure system.

2. Matters related to (irregular, regular and continuous) information disclosure. 3. Maintain media relations.4. Media promotion, planning and execution of advertising strategies and preparation of

marketing materials. 5. Communicate with shareholders. 6. Maintain relations with the authorities and exchanges. 7. Maintain relations with investors, potential investors, analysts and other juridical persons

and arrange meetings. 8. Matters related to Road Show. 9. Maintain the website.10. Compile annual reports.


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Department Duties

Accounting and Financial Department

1. Finance(1) Overall manage, allot and apply the financial resources of the Holding Company. (2) Plan, establish and examine the financial risk management policies of the Holding

Company and effectively supervise the implementation of the subsidiaries.(3) Overall plan and coordinate the transaction limits for the subsidiaries of the Holding

Company with the financial institutions. (4) Assist the subsidiaries in developing multiple ways to raise funds. (5) Examine the financial management of the subsidiaries and offer improvement

suggestions. (6) Regularly convene the capital meetings of the Holding Company. (7) Develop multiple channels to raise funds in response to the capital requirements of the

Holding Company. (8) The financial management and cashier of the Holding Company. (9) Develop and establish the international ratings of the Holding Company.

2. Accounting(1) Establish a unified accounting policy in conformity with the external rules and the

requirements of the authorities and effectively supervise the implementation of the subsidiaries.

(2) Participate in designing the accounting information system of the Holding Company. (3) Tax planning and analyses of the Holding Company. (4) Analyze and review the unified budget of the Holding Company, offer adjustment

suggestions and implement management.(5) Compile the pro forma financial statement of the specific goal for the reference of the

management level in decision-making.(6) Overall plan the audit schedule for the financial report of the Holding Company,

implement the plan and carry out the tasks. (7) Compile the quarterly/ half-yearly/ annually consolidated financial statements of the

Holding Company and submit them to the audit committee and Board for discussion. (8) Examine the compilation of the financial statements of the subsidiaries and provide

improvement suggestions.(9) Supervise and assist in the accounting problems of the subsidiaries. (10) Compile, publish and disclose the financial statements and information such as

monetary loans, endorsements and guarantees of the Holding Company.(11) Compile, control and publish the transactions of the parties of the Holding Company. (12) Deal with routine financial affairs of the Holding Company and its subsidiaries in part

and compile the financial statements. (13) Implement the quarterly/ half-yearly/ annually audits on the Holding Company and its

subsidiaries in part.3. Others

(1) Assist the subsidiaries in financial/ accounting training and offer supporting services. (2) Participate in the investments and merger planning of the Holding Company. (3) Conduct financial, accounting and tax risk evaluation in coordination with the specific

policy.

Human Resources Department

Human Resources Department1. Development of the group human resources

(1) Plan and develop the medium-term and long-term strategies of training and retention for the group.

(2) Supervise the distribution of human resources, the control of labor cost, the productivity of employees and other management indices of the subsidiaries.

(3) Offer consultation of the human resources policies to the subsidiaries.(4) Deal with the human resources submissions of the subsidiaries. (5) Transfer and manage the employees of the subsidiaries.

2. Human resources related to Chailease Holding(1) Carry out the administrative tasks related to human resources of the Holding Company. (2) Implement and manage the policies of the Compensation Committee. 3. Manage the list of Directors and supervisors.

Risk Management Department

1. Manage and supervise the establishment of evaluation, risk assessment and risk management policies for the financial asset quality of the Holding Company.

2. Assist the subsidiaries in the risk assessment system.3. Be in charge of analyzing the risk assessment quality of significant projects of the Holding

Company.4. Regularly provide information about the risk analysis of the asset portfolio. 5. Adjust the normal ratio of allowance for bad debts based on the product quality. 6. Be in charge of the risk management project planning of the Holding Company. 7. Plan the risk management affairs and submit to the executive committee and the Board.8. Promote and implement the decisions on risk management made by the "Management

Committee and the Board."

18 19

Department Duties

Legal Department

1. Legal affairs(1) Plan and execute annual projects.(2) Provide legal consultation to the Holding Company and overseas subsidiaries.(3) Compose, review and revise Chinese and English contracts and documents. (4) Participate in designing and developing new products of the subsidiaries.(5) Attend to and manage the intellectual property rights. (6) Undertake and manage important lawsuits.(7) Assist in the shareholders' meeting.

2. Law abidance(1) Regularly examine and modify the internal and external rules.(2) Regularly notify the law-abiding units on the latest legal information.(3) Confirm that the corporate operations and product design conform to the laws.(4) Plan, implement and check for legal compliance annually. (5) Plan and implement the law compliance training of the middle and high-level managers. (6) Deal with the matters related to the information disclosure of the listed company. (7) Serve as the contact window of Taiwan Stock Exchange (TWSE).

Audit Department

1. Assist the Board in assessing the reliability, adequacy and effectiveness of the internal controls.

2. Examine whether the internal control system can quickly generate accurate transaction records and reliable financial reports and ensure adequate protection of assistance.

3. Check whether the external laws and internal policies are observed.

IT Department

1. Be in charge of establishing the medium term and long-term information development strategies of the Holding Company.

2. Participate in formulating the information safety policies of the Holding Company.3. Be in charge of discussing and assessing the main information investments of the Holding

Company.4. Deal with and offer consultation on information-related business to the subsidiaries. 5. Assist the Holding Company in policymaking of IT applications and supervise the

implementation of improvement engineering. 6. Direct the implementation and promotion of information integration in the Holding

Company.7. Assist the Holding Company in planning the standard operating procedures.8. Supervise the promotion and implementation of information safety in the Holding

Company.

Administrative Department

1. Job related to the Board(1) Be responsible for the administrative matters of the Board in Chailease Holding

Company Limited and subsidiaries. (2) Share affairs of the Holding Company.

2. Be in charge of the business registration of the holding company and subsidiaries.3. Property and general matters Be in charge of management, documents, business and commerce, general service,

cleaning, safety and other instructions from the superiors.


pany Limited

18 19

(2)Information regarding the Board of Directors and management team:

1. Directors and supervisors:(1) Directors

March 26, 2018 Unit: share

Po

sitio

n

Na

me

Ge

nd

er

Na

tion

ality

Da

te F

irst E

lec

ted

Da

te E

lec

ted

Te

nu

re

Shareholding when Elected

currently Shareholding

Spouse & Minor shareholding

Shares held under the name of others

Experience and education

Po

sitio

n(s

) he

ld c

on

cu

rren

tly in

the

co

mp

an

y a

nd

/or in

an

y o

the

r co

mp

an

y

Other managers, directors and

supervisors with a spouse and relative within

the second degree of kinship

Sh

are

s

Pe

rce

nta

ge

Sh

are

s

Pe

rce

nta

ge

Sh

are

s

Pe

rce

nta

ge

Sh

are

s

Pe

rce

nta

ge

Po

sitio

n

Na

me

Re

latio

ns

Dire

cto

r

Fong-Long Chen(Authorized representative of Chun An Investment Co., Ltd.)

Male ROC 2017/05/26 2017/05/26 3 years 2,573,220 0.23% 2,573,220 0.20% 190,018 0.02% －－

■ Master of Science, Sloan School of Management, MIT, USA Note1

– – – –

Chun An Investment Co., Ltd.

ROC 2017/05/26 2017/05/26 3 years 2,000,000 0.18% 30,000,000 2.37% －－－－

–– – – –

Dire

cto

r

Andre J.L. Koo (Authorized representative of Chun An Investment Co., Ltd.)

Male ROC 2017/07/12 2017/07/12 3 years －－－－ 29,813 0.00% 58,706,561 4.64%

■ MBA, Leonard N. Stern School of Business, NYU, USA Note 2 －－－


ROC 2017/05/26 2017/05/26 3 years 2,000,000 0.18% 30,000,000 2.37% －－－－

Dire

cto

r

Chee WeeGoh Male Singapore 2011/03/21 2017/05/26 3

years －－－－－－－－

■ Bachelor of Science (First Class Honours), University of Singapore.

■ Master of Science in Engineering, University of Wisconsin, USA

■ Diploma in Business Administration, University of Singapore

Note 3 – – –

Dire

cto

r

Hsiu Tze Cheng (Authorized Representative of Chun An Technology Co., Ltd.)

Female ROC 2017/08/29 2017/08/29 3 years 540,775 0.05% 540,775 0.04% 54,111 0.00% －－

▓ EMBA, National Taiwan University

Note 4

Chun An Technology Co., Ltd.

ROC 2017/08/29 2017/08/29 3 years 28,606,561 2.51% 28,606,561 2.26% －－－－

Dire

cto

r

King Wai Alfred Wong (Authorized representative of Chun An Technology Co., Ltd.)

Male HK 2017/08/29 2017/08/29 3 years －－－－－－－－

▓ MBA, Leonard N. Stern School of Business, NYU, USA

Note 5 – – –


ROC 2017/08/29 2017/08/29 3 years 28,606,561 2.51% 28,606,561 2.26% －－－－

–– – – –

20 21

Po

sitio

n

Na

me

Ge

nd

er

Na

tion

ality

Da

te F

irst E

lec

ted

Da

te E

lec

ted

Te

nu

re






Po

sitio

n(s

) he

ld c

on

cu

rren

tly in

the

co

mp

an

y a

nd

/or in

an

y o

the

r co

mp

an

y




Sh

are

s

Pe

rce

nta

ge

Sh

are

s

Pe

rce

nta

ge

Sh

are

s

Pe

rce

nta

ge

Sh

are

s

Pe

rce

nta

ge

Po

sitio

n

Na

me

Re

latio

ns

Dire

cto

r

Chih-Yang Chen (authorized Representative of Li Cheng Investment Co., Ltd.)

Male ROC 2017/08/29 2017/08/29 3 years －－－－－－－－

Master Degree in International Affairs, NCCU Note 6

Li Cheng Investment Co., Ltd.)

ROC 2017/08/29 2017/08/29 3 years 100,000 0.01% 100,000 0.01% －－－－

Ind

ep

en

de

nt D

irec

tor

Dar Yeh Hwang Male ROC 2011/03/21 2017/05/26 3 years – – – – – – – –

B.A., Department of Banking. National Chengchi University, Taiwan

M.L. Program in Economics, National Taiwan University, Taiwan

Master in Political Science, National Taiwan University, Taiwan

Ph.D. Program in Finance Kellogg School, Northwestern University, USA

M.S., and Ph.D. Candidate in Finance, Stern School, NYU, USA

MBA and Ph.D. in Finance, Rutgers University

Ph.D. Candidate in Journalism and Communication, Peking University

Ph.D. Program in Law, Tsinghua University, China

Note 7 －－－

Ind

ep

en

de

nt D

irec

tor

Steven Jeremy Goodman Male Australia 2011/03/21 2017/05/26 3

years – – – – – – – –

MBA from Nanyang Technological University, Singapore

Law Degree LLB from Manchester University, England

Passed the Solicitors Finals Examinations from the College of Law, Law Society of England and Wales (with Honours)

Passed the Overseas Lawyers Qualification Examination, Hong Kong Law Society

Note 8 －－－


pany Limited

20 21

Po

sitio

n

Na

me

Ge

nd

er

Na

tion

ality

Da

te F

irst E

lec

ted

Da

te E

lec

ted

Te

nu

re






Po

sitio

n(s

) he

ld c

on

cu

rren

tly in

the

co

mp

an

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nd

/or in

an

y o

the

r co

mp

an

y




Sh

are

s

Pe

rce

nta

ge

Sh

are

s

Pe

rce

nta

ge

Sh

are

s

Pe

rce

nta

ge

Sh

are

s

Pe

rce

nta

ge

Po

sitio

n

Na

me

Re

latio

ns

Ind

ep

en

de

nt D

irec

tor

Chin Fock Hong Male Singapore 2011/03/21 2017/05/26 3 years – – – – – – – –

Bachelor of Social Science, University of Singapore, Singapore

Attended an International Tax Programme at Harvard Law School.

Note 9 －－－

Note1: Chairman and President of Chailease Holding Company Limited; Chairman of Chailease Finance Co., Ltd.; Chairman of Fina Finance & Trading Co., Ltd.; Chairman of Chailease Specialty Finance Co., Ltd.; Chairman of Chailease Cloud Service Co., Ltd.; Chairman of Chailease International Finance ; Corporation Chairman of Chailease International Corp.; Chairman of Chailease Finance International Corp.; Chairman of Jirong Real Estate Co., Ltd.; Chairman of Chailease Finance (B.V.I.) Company Ltd.; Director of My Leasing (B.V.I.) Corp.; Director of Chailease International (B.V.I.) Corp.; Director of Golden Bridge (B.V.I.) Corp.; Director of My Leasing(Mauritius) Corp.; Director of Asia Sermkij Leasing Public Company Limited; Director of Bangkok Grand Pacific Lease Public Company Limited; Director of Grand Pacific Holdings Corp.; Director of Chailease International Financial Services Co., Ltd.; Director of Chailease International Company (UK) Limited; Chairman of Chailease Energy Integration Co., Ltd.; Chairman of Innovation Energy Integration Co., Ltd.; Chairman of Chailease Credit Services Co., Ltd.; Director of CL Capital Management Co., Ltd.; Director of CLJ Investment Partners Company Limited ;Director of CL Capital Management Co.,Ltd; Director of CLJ Investment Partners Company Limited.

Note2: Chairman of Chailease Group; Chairman of Chailease Enterprise Company Limited; Chairman of Chun An Investment Co., Ltd.; Chairman of Chun An Technology Co., Ltd.; Chairman of Li Cheng Investment Co., Ltd.; Director of R.C. Corp.; President Managing Director of Yellowstone Holding AG(He holds positions in 7 companies in total.)

Note3: Independent director of Beng Kuang Marine, Ltd; Independent director of King Wan Corporation Ltd; Independent director of Stamford Tyres Corporation Ltd; Independent director of Sin Ghee Huat Corporation Ltd.(He holds positions in 4 companies in total.)

Note4: Director and Chief Human Resources Officer of the Company; Director and chief human resource officer of Chailease Finance Co., LTD; Chief human resource officer of Chailease International Leasing Co., Ltd.; Director of Fina Finance & Trading Co., Ltd.; Chairman of Chailease Royal Leasing Plc.; Chairman of Chailease Berjaya Finance Corporation; Director of Chailease Enterprise Company Limited; Chairman of ChaiCo Investment Corp.;Chairman of Advance Renal Care Co., Ltd. ;Director of Chailease Enterprise Company Limited; Chairman of Chaico Investment Corp.; Chairman of Advanced Rental Care Co.,Ltd ( she holds positions in 9 companies in total.)

Note5: Director of CL Investment Partners Company Limited; Director of Philippine Grain International Corporation; Director of Chaico Investment Corporation;Chairman of Chailease Biofund Company Limited; Director and President of Chaico Development (HK) Limited(He holds positions in 5 companies in total.)

Note6: Chairman of Chailease Construction and Development Corp.; Chairman of Bosser Design and Engineering Corp.; Director of Chailease Construction Bosser Design(MU) Corp.; Director of Paradise Walk Investments (SAMOA) Corp.; Executive Director of Zhongyou Investment Management Consultants (Shanghai) Co., Ltd.; Representative of Yujia Investment Management Consultants (Shanghai) Co., Ltd. (He holds positions in 6 companies in total.)

Note7: Honorary Director, Center for the Study of Banking and Finance, National Taiwan University; Chairman, Banking Education Association of Taiwan; Chairman, Turnaround Management Association of Taiwan; Chairman & Dean, Academy of Promoting Economic Legislation; Independent Director of DBS Bank (Taiwan) Ltd.; Independent Director of King Yuan Electronics Co.; Chairman of McBorter AFMA Corp.; Chairman of Suzhou McBorter AFMA Corp.; Professor, Suzhou Campus of Renmin University of China (He holds positions in 9 companies or institutions in total.)

Note8: Adjunct Professor of Law at the Law Faculty of Bond University.; Solicitor qualified in UK and in Hong Kong (non-practising).;Director and CEO of Teras Group Pte Ltd.(He holds positions in 3 companies or institutions in total.)

Note9: Director of Shared Services for Charities Ltd.; Director of Binjaitree.; Independent director of Riverstone Holdings Ltd.; Non-Executive Director of Prima Ltd.; Independent director of Gigamedia Ltd.(He holds positions in 5 companies in total.)

22 23

(2) Supervisors: No supervisors are established since because an audit committee is formed by the independent Directors in accordance with the Articles of Association.

(3) Main shareholders of the corporate directorMarch 26, 2018

Name of corporate shareholder Main shareholders of the corporate shareholder

Chun An Investment Co., Ltd. Andre J.L. Koo : 1.61%Chi- Hwa, Koo Chou: 98.39%

Chun An Technology Co., Ltd. Lei Fu Investment Inc. Trust account: 99.798%Andre J.L. Koo : 0.20%Chi- Hwa, Koo Chou: 0.002%

Li Cheng Investment Co., Ltd. Andre J.L. Koo: 1.00%Chi-Hwa, Koo Chou: 99.00%

(4) Main shareholders of the corporate director as a juridical person : Not suitable. (5) Directors'(including independent Directors) Professional Knowledge and Independent

InformationMarch 26, 2018

QualificationsName (Note1)

Professional qualification requirements, together with at least five years work experience Independent Status (Note)

Concurrent post of

independent director in

other public release

company

An instructor or higher in

a department of commerce, law, finance, accounting,

or other academic

department related to

the business needs of the company in a public or

private junior college,

college, or university

A judge, publicprosecutor,

attorney,certified publicaccountant, or

otherprofessional or

technicalspecialist whohas passed a

nationalexamination

and beenawarded a

certificate in aprofession

necessary forthe business of

the company

Work experience

in the area of

commerce, law,

finance, or accounting,

or otherwise necessary

for the business

of the company

1 2 3 4 5 6 7 8 9 10


V V V V V V V -

Andre J.L(Authorized representative of Chun An Investment Co., Ltd.)

V V V V V V V -

Chee Wee Goh V V V V V V V V V V V -

Hsiu Tze Cheng (Authorized representative of Chun An Technology Co., Ltd.)

V V V V V V V

King Wai Alfred Wong(Authorized Representative of Chun An Technology Co., Ltd.)

V V V V V V V V V -

Chih Yang, Chen (Authorized Representative of Li Cheng Investment Co., Ltd.)

V V V V V V V V V -

Dar-Yeh Hwang V V V V V V V V V V V V 2

Steven Jeremy Goodman V V V V V V V V V V V V V -

Chin Fock Hong V V V V V V V V V V V -


pany Limited

22 23

Note: If the director or supervisor meets the qualifications prior to two years before being elected or during the tenure, check the box of the corresponding code.(1) Not an employee of the Company, or any of its affiliates.(2) Not a director, supervisor of the Company, or any of its affiliates, (unless the person is an independent director of the Company, its parent company, or any

subsidiary in which the Company holds, directly or indirectly, more than 50 percent of the voting shares).(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children or held by the person under

another’s names, in an aggregate amount of one percent or more of the total number of issued shares of the company or ranking in the top 10 in holdings.

(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three sub-paragraphs.

(5) Not a director, supervisor or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company or that holds shares ranking in the top five in holdings.

(6) Not a director, supervisor, officer or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the company.

(7) Not a professional individual or an owner, partner, director, supervisor or officer of a sole proprietorship, partnership, company or institution that provides commercial, legal, financial, accounting services or consultation to the company or to any affiliate of the company or a spouse thereof. The member in the compensation committee performs the duties according to the Article 7 of Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is listed on the Stock Exchange or Traded Over the Counter is excluded.

(8) Not a spouse nor within 2 degrees of consanguinity relative to any Directors.(9) Not any of the circumstances in the sub-paragraphs of Article 30 of the Company Act.

(10) Not elected in the capacity of the government, a juridical person or a representative thereof, as provided in Article 27 of the Company Act.

2. Presidents, executive vice presidents, vice presidents and heads of departments and branches:

March 26, 2018 Unit:share

Po

sitio

n

Name Gender ROC Position held since (Note1)

Shares heldShares currently

held by spouse and underage children

Shares held under the name

of others


Po

sitio

n(s

) he

ld c

on

cu

rren

tly in

an

y o

the

r

co

mp

an

y

Managers, Directors or supervisors

who are spouse or within 2 degrees of consanguinity to

each Other

Em

plo

ye

e s

toc

k o

ptio

n c

ertifi

ca

te a

cq

uire

d

Share Percentage Share Percentage

Sh

are

Pe

rce

nta

ge

Po

sitio

n

Na

me

Re

latio

ns

President Fong-Long Chen Male ROC 2011/02/11 2,573,220 0.20% 190,018 0.02% – – ■ Master of Science, Sloan School of Management, MIT,

USA Note2 – – – –

Senior Executive Vice President

kuen-Ming Chen Male ROC 2018/01/15 968,760 0.08% 503,360 0.04% – – ■ bachelor of accountancy, National Chung Hsing

University Note3 – – – –

Senior Executive Vice President Jung-Tao Lee Male ROC 2009/01/01 1,029,007 0.08% 38,270 0.00% – – ■ Bachelor of Statistics, National Cheng Kung University Note4 – – – –

Senior Executive Vice President

Hsiu-Tze Cheng Female ROC 2004/01/01 540,775 0.04% 54,111 0.00% – – ■ EMBA, National Taiwan University Note5 – – – –

Senior Executive Vice President Ying-Chih Liao Male ROC 2006/07/03 ─ ─ 625,108 0.05% – – ■ Ph.D. Program, Harvard University, USA Note6 – – – –

Senior Executive Vice President Shi-Ren Shen Male ROC 2012/01/01 173,316 0.01% ─ ─ – – ■ Bachelor of Law, Soochow University Note7 – – – –

ExecutiveVice Presiden

Ming-Hung Hsieh Male ROC 2016/01/25 76,648 0.01% ─ ─ – – ■ MBA, University of Wales, United Kingdom Note8

ExecutiveVice President Hsing-Jen Liu Male ROC 2016/03/01 145,263 0.01% ─ ─ – – ■ MBA, University of Memphis , USA Note9 – – – –

InternalAudit Officer

Chung-Chiang Yang Male ROC 2016/03/03 943 0.00% ─ ─ – – ■ MBA, Kansas State University, USA Note10

ExecutiveVice President Mei-Fang Fan Female ROC 2012/04/09 ─ ─ ─ ─ – – ■ MBA, University of Washington, USA Note11 – – – –

24 25

Po

sitio

n

Name Gender ROC Position held since (Note1)

Shares heldShares currently

held by spouse and underage children

Shares held under the name

of others


Po

sitio

n(s

) he

ld c

on

cu

rren

tly in

an

y o

the

r

co

mp

an

y

Managers, Directors or supervisors

who are spouse or within 2 degrees of consanguinity to

each Other

Em

plo

ye

e s

toc

k o

ptio

n c

ertifi

ca

te a

cq

uire

d

Share Percentage Share PercentageS

ha

re

Pe

rce

nta

ge

Po

sitio

n

Na

me

Re

latio

ns

ExecutiveVice President Chih-Ho Wei Male ROC 2010/04/01 43,020 0.00% ─ ─ – – ■ MBA major in International Finance, City University of

New York, USA Note 12 – – – –

Senior Vice President Yu-Ting Weng Male ROC 2010/03/01 154,352 0.01% ─ ─ – – ■ Vice bachelor of National University of Technology Note 13 – – – –

Senior Vice President Chin-Tse Liu Male ROC 2005/09/26 69,108 0.01% ─ ─ – – ■ EMBA, National Cheng-Chi University Note 14 – – – –

Senior Vice President

Shih-Wei Chien Male ROC 2003/03/01 94,595 0.01% ─ ─ – – ■ Vice bachelor of business administration, Aletheia Note 15 – – – –

Senior Vice President Jing-Ying Sun Female ROC 2013/01/01 78,020 0.01% 10,674 0.00% – – ■ MBA, The George Washington University, USA Note 16 – – – –

ASEAN Chieffinancial officer

Yeu-Horng Jeng Female ROC 2014/09/01 ─ ─ ─ ─ – – ■ MS Accounting, Long Island University, USA Note 17 – – – –

Senior Vice President

Kun-Huang Chan Male ROC 2015/01/01 54,111 0.00% ─ ─ – – ■ MBA, National Taiwan University of Science and

Technology Note 18 – – – –

Finance and Accounting officer

Wen-Cheng Chen Male ROC 2016/03/05 ─ ─ 104,976 0.01% - - ■ bachelor of Economics, National Chung Hsing

University Note 19 - - - -

Note1: The date that the person held the position in the Company.Note2: Chairman and President of Chailease Holding Company Limited; Chairman of Chailease Finance Co., Ltd.; Chairman of Fina Finance & Trading Co.,

Ltd.; Chairman of Chailease Specialty Finance Co., Ltd.; Chairman of Chailease Cloud Service Co., Ltd.; Chairman of Chailease International Finance Corporation; Chairman of Chailease International Corp.; Chairman of Chailease Finance International Corp.; Chairman of Jirong Real Estate Co., Ltd.; Chairman of Chailease Finance (B.V.I.) Company Ltd.; Director of My Leasing (B.V.I.) Corp.; Director of Chailease International (B.V.I.) Corp.; Director of Golden Bridge (B.V.I.) Corp.; Director of My Leasing(Mauritius) Corp.; Director of Asia Sermkij Leasing Public Company Limited; Director of Bangkok Grand Pacific Lease Public Company Limited; Director of Grand Pacific Holdings Corp.; Director of Chailease International Financial Services Co., Ltd.; Director of Chailease International Company (UK) Limited; Chairman of Chailease Energy Integration Co., Ltd.; Chairman of Innovation Energy Integration Co., Ltd.; Chairman of Chailease Credit Services Co., Ltd.; Director of CL Capital Management Co., Ltd.; Director of CLJ Investment Partners Company Limited (He holds positions in 24 companies in total.)

Note3: Director and General Manager of China Subsidiary of Chailease Finance Co., Ltd.; Director of My Leasing (Mauritius) Corp.; Director and President of Chailease International Finance Corporation; Director and President of Chailease International Corp.; Deputy Director of Chailease Finance International Corp.; Director and President of Jirong Real Estate Co., Ltd. (He holds positions in 6 companies in total.)

Note4: Director and chief risk officer of Chailease Finance Co., Ltd.; Director of Fina Finance & Trading Co., Ltd.; Director of Chailease Specialty Finance Co., Ltd.; Director of Yun Tang Inc.; Supervisor of Chailease Energy Integration Co., Ltd.; Deputy Director of Bangkok Grand Pacific Lease Public Company Limited; Supervisor of Innovation Energy Integration Co., Ltd. (He holds positions in 7 companies in total.)

Note5: Director and Chief Human Resources Officer of the Company; Director and chief human resource officer of Chailease Finance Co., Ltd.; Chief human resource officer of Chailease International Leasing Co., Ltd.; Director of Fina Finance & Trading Co., Ltd.; Chairman of Chailease Royal Leasing Plc.; Chairman of Chailease Berjaya Finance Corporation; Director of Chailease Enterprise Company Limited; Chairman of ChaiCo Investment Corp.; Chairman of Advance Renal Care Co., Ltd. (She holds positions in 9 companies in total.)

Note6: Senior Executive Vice President of Chailease Finance Co., Ltd.; Director of Asia Sermkij Leasing Public Co., Ltd.; Director of Chailease International Company (UK) Limited; Director of Body Organ Biomedical Corp.; Director of CL Capital Management Company Limited; Director of CLJ Investment Partners Company Limited; Director of Chailease Enterprise Company Limited; Director of ChaiCo Investment Corp; Director of Chailease International Investment Corp.; Director of Chailease Berjaya Credit Sdn. Bhd.; Director of Chailease Engine Lease Finance Corp. (He holds positions in 11 companies in total.)

Note7: Director and Senior Executive Vice President of Legal Dept. of Chailease Finance Co., Ltd.; (He holds positions in 1 company in total.)Note8: Executive Vice President of Planning Dept. of Chailease Finance Co., Ltd.; Director of Chailease Insurance Brokers Co., Ltd.; Independent Director of

Chailease Royal Leasing Plc. (He holds positions in 3 companies in total.)Note9: Executive Vice President of Chailease Finance Co., Ltd.; Supervisor of Chailease Consumer Finance Co. Ltd. (He holds positions in 2 companies in total.)

Note10: Supervisor of Chailease Finance Co., Ltd.; Supervisor of Fina Finance & Trading Co., Ltd.; Supervisor of Chailease Specialty Finance Co., Ltd.; Supervisor of Chailease Credit Service Co., Ltd. (He holds positions in 4 companies in total.)


pany Limited

24 25

Note11: Executive Vice President of Chailease Finance Co., Ltd. (She holds position in one company in total.)Note12: Executive Vice President of Chailease Finance Co., Ltd.; Supervisor of Apex Credit Solutions Inc.; Chief Financial Officer of Chailease Royal Leasing Plc.;

Executive Vice President of Finance Dept. of Chailease Berjaya Finance Corporation ( He holds positions in 4 companies in total.)Note13: Senior Vice President of Chailease Finance Co., Ltd. (He holds position in one company in total.)Note14: Senior Vice President of Chailease Finance Co., Ltd.; Senior Vice President of Chailease International Finance Corporation.( He holds positions in 2

companies in total.)Note15: Senior Vice President of Chailease Finance Co., Ltd.; Senior Vice President of Chailease International Finance Corporation. ( He holds positions in 2

companies in total.)Note16: Senior Vice President of Chailease Finance Co., Ltd.; Director of Chailease International Leasing Co. Ltd. (She holds positions in 2 companies in total.)Note17: Chief Financial Officer of Chailease Finance Co., Ltd.; Committee member of Taipei American School Audit Committee; Director of Chailease International

Leasing Co. Ltd. (She holds positions in 3 companies in total.)Note18: Senior Vice President of Chailease Finance Co., Ltd.; Senior Vice President of Chailease International Finance Corporation.( He holds positions in 2

companies in total.)Note19: Senior Executive Vice President of Chailease Finance Co., Ltd.; Senior Executive Vice President of Chailease International Finance Corporation; Director of

Chailease International Corp.; Director of Jirong Real Estate Co., Ltd. ( He holds positions in 4 companies in total.)

3. Directors, presidents and executive vice presidents remuneration in the latest year:(1)Directors (including independent Directors) remuneration

Unit: NT$ thousands

Po

sitio

n

Na

me

Remuneration to Directors 4 items combined

to net income

(%)

Employee remuneration7 items

combined to net income (%)

Re

mu

ne

ratio

n o

f rein

ve

stm

en

t bu

sin

es

s

Honoranium Retirement pay DirectorEarning

Business expenses

Bonus and special

remunerationRetirement pay Employee earning

Ch

aile

as

e H

old

ing

Co

mp

an

ies

in th

e c

on

so

lida

ted

fi

na

nc

ial s

tate

me

nts

Ch

aile

as

e H

old

ing

Co

mp

an

ies

in th

e c

on

so

lida

ted

fi

na

nc

ial s

tate

me

nts

Ch

aile

as

e H

old

ing

Co

mp

an

ies

in th

e c

on

so

lida

ted

fi

na

nc

ial s

tate

me

nts

Ch

aile

as

e H

old

ing

Co

mp

an

ies

in th

e c

on

so

lida

ted

fi

na

nc

ial s

tate

me

nts

Ch

aile

as

e H

old

ing

Co

mp

an

ies

in th

e c

on

so

lida

ted

fi

na

nc

ial s

tate

me

nts

Ch

aile

as

e H

old

ing

Co

mp

an

ies

in th

e c

on

so

lida

ted

fi

na

nc

ial s

tate

me

nt

Ch

aile

as

e H

old

ing

Co

mp

an

ies

in th

e c

on

so

lida

ted

fi

na

nc

ial s

tate

me

nts

Chailease Holding

Companies in the

consolidated financial

statements (Note 8)

Ch

aile

as

e H

old

ing

Co

mp

an

ies

in th

e c

on

so

lida

ted

fi

na

nc

ial s

tate

me

nts

Ca

sh

Sto

ck

Ca

sh

Sto

ck

Chairman


85,739 88,362 0 0 8,113 8,113 641 641 0.98% 1.01% 40,553 52,960 100 386 990 0 990 0 1.41% 1.57%

Director

Andre J.L(Authorized representative of Chun An Investment Co., Ltd.)

Director Chee Wee Goh

Director


Director


Director

Chih-Yang, Chen (Authorized Representative of Li Cheng Investment Co., Ltd.)

Independent director Dar-Yeh Hwang

Independent director

StevenJeremyGoodman

Independent director Chin Fock Hong

Note: The remuneration to dirvers of directors who are also employees is NT$2,076,000 in total.

26 27

Range of Remunerations

Range of remunerations

Name of Directors

4 items combined 7 items combined

Chailease HoldingCompanies in the

consolidated financial statements

Chailease HoldingCompanies in the consol-

idated financial state-ments

< 2 millionFong-Long Chen, Chee Wee Goh, King Wai Alfred Wong,Hsiu Tze Cheng, Chih Yang, Chen

Fong-Long Chen, Chee Wee Goh, King Wai Alfred Wong,Hsiu Tze Cheng, Chih Yang, Chen

Chee Wee Goh, King Wai Alfred Wong,Chih Yang, Chen

Chee Wee Goh, King Wai Alfred Wong, Chih Yang, Chen

2 million (incl.)~5 million (excl.)Dar-Yeh Hwang, Steven Jeremy Goodman, Chin Fock Hong

Dar Yeh Hwang, Steven Jeremy Goodman, Chin Fock Hong



5 million (incl.)~10 million (excl.) Hsiu Tze Cheng 10 millions (incl.)~15 million (excl.) Hsiu Tze Cheng,15 million (incl.)~30 million (excl.) 30 million (incl.)~50 million (excl.) Fong-Long Chen Fong-Long Chen50 million (incl.)~100 million (excl.) Andre J.L. Koo Andre J.L. Koo Andre J.L. Koo Andre J.L. KooTotal 9 people 9people 9 people 9 people

The remuneration to supervisors: no supervisors are appointed in the company, so no remuneration is paid to supervisors.

(2)Remuneration to presidents and executive vice presidentsUnit: NT$ thousands

Position Name

Remuneration Retirement pay

Bonus and special

remunerationEmployee's bonus

4 items combined to net income

(%)

Rem

un

eration

of rein

vestmen

t bu

siness

Ch

ailease Ho

ldin

g

Co

mp

anies in

the co

nso

lidated

fi

nan

cial statemen

ts

Ch

ailease Ho

ldin

g

Co

mp

anies in

the co

nso

lidated

fi

nan

cial statemen

ts

Ch

ailease Ho

ldin

g

Co

mp

anies in

the co

nso

lidated

fi

nan

cial statemen

ts

Chailease Holding

Companies in the


statements

Ch

ailease Ho

ldin

g

Co

mp

anies in

the co

nso

lidated

fi

nan

cial statemen

ts

Cash Stock Cash Stock

President Fong-Long Chen

15,106 44,274 390 2,158 53,614 83,820 1,450 2,564 0.73% 1.38%

Finance Accounting Officer Chia-Jeang LiuFinance Accounting Officer Wen-Cheng ChenInternal Audit Officer Chung-Chiang YangChief Risk Officer Jung-Tao LeeChief Human Resource Officer Hsiu Tze Cheng

Chief Strategy Officer Ying-Chih LiaoChief Legal Officer Shi-Ren ShenExecutive Vice President Ming-Hung HsiehExecutive Vice President Hsing-Jen LiuExecutive Vice President Mei-Fang FanASEAN Chief Financial Officer Yeu-Horng Jeng

(Note) The remuneration to drivers of managers totals NT$2,510,000.


pany Limited

26 27

Range of Remuneration

Range of remunerationName of presidents and executive vice presidents

Chailease Holding Companies in the consolidated financial statements

2 millionWen-Cheng Chen, Chung-Chiang Yang, Hsing-Jen Liu, Mei-Fang Fan,Ming-Hung Hsieh

2 million (incl.)~5 million (excl.) Shi-Ren Shen, Yeu-Horng Jeng, Hsing-Jen Liu, Ming-Hung Hsieh

5 million (incl.)~10 million (excl.)

Chia-Jeang Liu, Jung-Tao Lee, Hsiu Tze Cheng, Ying-Chih Liao

Wen-Cheng Chen, Chung-Chiang Yang, Yeu-Horng Jeng, Shi-Ren Shen, Mei-Fang Fan

10 millions (incl.)~15 million (excl.) Ying-Chih Liao, Chia-Jeang Liu, Jung-Tao Lee,

Hsiu Tze Cheng


30 million (incl.)~50 million (excl.) Fong-Long Chen Fong-Long Chen


Total 12 people 12 people

(3)Name of managers and distribution details:

Position Name Stock dividends

Cash dividends Total Total to net

income (%)

President Fong-Long Chen

0 1,450 1,450 0.02%

Finance Accounting Officer Chia-Jeang Liu

Finance Accounting Officer Wen-Cheng Chen

Internal Audit Officer Chung-Chiang Yang

Chief Risk Officer Jung-Tao Lee

Chief Human Resource Officer Hsiu Tze Cheng

Chief Strategy Officer Ying-Chih Liao

Chief Legal Officer Shi-Ren Shen

Executive Vice President Ming-Hung Hsieh

Executive Vice President Hsing-Jen Liu

Executive Vice President Mei-Fang Fan

ASEAN Chief Financial Officer Yeu-Horng Jeng

28 29

4. The percentage of remuneration paid by the Company and all companies in the consolidated financial reports to the Directors, supervisors, presidents, and executive vice presidents in the net income for the past 2 years is analyzed. The correlation between the remuneration payment policy, standard and structure, setting procedure and operational performance as well as future risks are described below.(1) The percentage of remuneration paid by the Company and all companies in the

consolidated financial reports to the Directors, supervisors, presidents, and executive vice presidents in the net income for the past 2 years is analyzed.

Unit:NT$ thousand

Year 2016 2017

Item

Amount Percentage of net income Amount Percentage in the net income

Chailease Holding

Companies in the


statements

Chailease Holding

Companies in the


statements

Chailease Holding

Companies in the


statements

Chailease Holding

Companies in the


statements

Director 85,962 95,003 1.19% 1.31% 136,136 151,452 1.41% 1.57%

President and executive vice president 60,366 110,599 0.83% 1.53% 70,560 132,816 0.73% 1.38%

Total 116,956 170,106 1.61% 2.35% 163,015 229,975 1.69% 2.38%

(2) The correlation between the remuneration payment policy, standard and structure, setting procedure and operational performance as well as future risks.The annul remuneration payment to directors is established in accordance with Article 118 of "The Memorandum of Association of Company", not more than 0.1% profit before tax in one fiscal year. Besides, business performance of the company, performance of the Board, market remuneration information and individual director performance which is including but not limited to individual contributions to the company, attendance of board meeting and frequency of speech on board meeting, are also taken into account of measuring individual remuneration level.The remuneration policy of the Company is determined based on the corporate management strategy, personnel policy and payment capability. The remuneration of key managers via the approval of Compensation Committee, and submitted to the Board resolution.The leadership, strategy planning and execution ability of managers play fundamental roles in the delivery of vision, realization of long-term and short-term operational goals and improvement of operational performance. In order to closely link the performance of managers to the corporate profits and interests of shareholders, the Company regularly authorizes a professional management consulting company to conduct research on the compensation of financial competitors and examine the compensation level of the Company based on the survey results to offer competitive compensation. We offer bonuses based on the overall operation and individual performance to practically realize the performance bonus system. In addition, our compensation and bonus policy is established in both company and individual side. Company side includes the business performance and the risk and future trend of the industry; Individual side includes the link of individual effort and individual contribution to the business performance of the company. Every plan of performance evaluation and plan of compensation and benefit is all examining and approved by The Board and Compensation Committee. It’s also been reviewing at any time to pursue the balance of risk management and sustainable development of the company.The company's future risk depends on the asset quality of credit loss situation, the company has set up the Risk Management Department which is in charge of managing and supervising the financial asset's quality and will be adjusted the normal ratio of allowance for bad debts based on the product quality; while the bad debt losses


pany Limited

28 29

increases, the personal performance and remuneration of Directors, presidents and executive vice presidents will be reduced relatively.The Company also offers a retirement superior to the legally regulated one with an expectation that managers can devote their best efforts and strength to the Company. (The retirement plan is applicable to general employees as well).

(3)Corporate governance practices

1. The Evaluation on the Performance of the Board of DirectorsThe Company has implemented a system of evaluation on the performance of the Board of Directors. Moreover, in August 8 of 2016, the Board of Directors approved “the Rules on the Evaluation of the Performance of the Board of Directors,” with a view to enhance the performance of the Board of Directors through setting performance indexes.(1) The Internal Evaluation on the Performance of the Board of Directors:

The 2017 internal evaluation on the performance of the board of directors was carried out by three acting commissioners selected by the Committee on Business Ethics and were responsible for drafting a report, which revealed the performance attained the status of “effective” on the five dimensions of the performance of the Board of Directors as a whole and the six dimensions of the performance of each member of the Board of Directors. The summary of the evaluation report is disclosed in Company webpage (http://www.chaileaseholding.com.tw/EN/ugC_AboutUs02-02.asp)(2) The Outside Evaluation on the Performance of the Board of DirectorsDuring February and March of 2018, the Company retained the Taiwan Corporate Governance Association (“TGCA”) for carrying out the 2018 outside evaluation on the performance of the Board of Directors. The evaluation is conducted through questionnaires and onsite interview with high ranking Company officials, covering 38 indexes comprising the 8 dimensions including the Board’s: (i) composition, (ii) instructions, (iii) delegation of authorities, (iv) oversight, (v) communication, (vi) discipline, (vii) internal control, and (viii) risk management. Out of the 38 indexes, the TGCA determined the Company satisfied the requirements of 33 indexes, leaving 5 indexes for the high-ranking officials to clarify with respect to the questions raised by the evaluators. The Company has disclosed at its webpage (http://www.chaileaseholding.com.tw/EN/ugC_AboutUs02-02.asp ) the conclusions and recommendations of a report produced by the TCGA for this evaluation and the responses of the Company to the recommendations. Below is the conclusions of the report provided by the TCGA:

Conclusions

1. Chailease Holding Company Limited has been in asset leasing and financing services businesses for 40 plus years and the board strives hard to uphold "Value, Growth, Ethics and Discipline" business philosophy in doing business internationally since the inception of the company.

2. The chairperson, directors and executives all emphasize the importance of organizational culture, which is a anifestation that the board and the company as a whole have a high regard for creating such a culture for the benefit of the company.

3. With a clear understanding of the pros and cons of representatives of corporation directors as nature person directors, your company has in-depth considerations for how the composition of the board, including the number of directors, gender combination and specialty, can work best to suit the long-term development of the company.

4. Your company has a clear set of criteria for distinguishing main stakeholders and sets up specific communication mechanisms for each group of stakeholders. As a result, the board keeps in hand quality information of both the internal and external environment to facilitate its decision-making process.

5. The board members of your company take active part in the implementation of corporate operation decisions. Despite the fact that they are based in different countries or territories and have to attend meetings via video conferences, most board members' attendance rate is as high as 100%.

30 31

2. The state of operations of the Board of Directors12 Board meetings were held in 2017. The attendance record of the each Director is as follows:

Position Name Actualattendance

Proxy attendance

Actualattendance (%) Remarks

ChairmanFong-Long Chen (authorized representative of Beacon Hill Co., Ltd.)

4 0 100.00% 5.26 Term expired

ChairmanFong-Long Chen (authorized representative of Chun An Investment Co., Ltd.)

8 0 100.00% 5.26 New office assumed

Director Andre J. L. Koo 6 1 85.71% 7.11 Resigned

DirectorAndre J. L. Koo(authorized representative of Chun An Investment Co., Ltd.)

5 0 100.00%7.12 New director reassigned by thejuristic-person shareholder

Director Chee Wee Goh 12 0 100.00% 5.26 Renewal of office

Director King Wai Alfred Wong (authorized representative of Wiedner Co., Ltd.) 4 0 100.00%

1.1 New director reassigned by thejuristic-person shareholder5.26 Term expired

DirectorKing Wai Alfred Wong (authorized representative of Chun An Investment Co., Ltd.)

3 0 100.00%5.26 New office assumed7.12 Be replaced

DirectorKing Wai Alfred Wong (authorized representative of Chun An Technology Co., Ltd.)

2 0 100.00%8.29 New office assumed

DirectorHsiu Tze Cheng (authorized representative of Chun An Technology Co., Ltd.)


DirectorChih Yang Chen (authorized representative of Li Cheng Investment Co., Ltd.)


Independent Director Dar-Yeh Hwang 12 0 100.00% 5.26 Renewal of

office

Independent Director Steven Jeremy Goodman 12 0 100.00% 5.26 Renewal of

office

Independent Director Chin Fock Hong 12 0 100.00% 5.26 Renewal of

office


pany Limited

30 31

Other matters that require reporting:(1) If any of the following circumstances applies during the operation of the Board of

Directors, the Company shall indicate the date, the period, the contents, the opinions of all Independent Directors, and the responses of the Company to the opinions of the Independent Directors:① Any matters listed in Article 14-3 of "Securities and Exchange Act":

Meeting Date The resolutionsMatters listed in Article 14-3 of

"Securities and Exchange Act"

Independent Director had a dissenting opinion or qualified opinion

February 23rd

(the 1st Meeting of February 2017)

• To consider and approve the issuance of Guarantee for Golden Bridge (B.V.I.) Corp. and Chailease International Company (Malaysia) Limited in favor of Taishin International Bank. That in consideration of the incremental banking facilities of USD 10 million granted to Golden Bridge (B.V.I.) Corp. and Chailease International Company (Malaysia) Limited, wholly owned subsidiaries of the Company, approval be and is hereby given for the Company to furnish two Guarantees for Golden Bridge (B.V.I.) Corp. and Chailease International Company (Malaysia) Limited respectively in favor of Taishin International Bank.

V

• To consider and approve the issuance of Guarantee for Chailease International Finance Corporation in favor of Mizuho Bank (China), Ltd. That in consideration of the incremental banking facilities of RMB 77 million granted to Chailease International Finance Corporation, a wholly owned subsidiary of the Company, approval be and is hereby given for the Company to furnish a Guarantee in favor of Mizuho Bank (China), Ltd.

V

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of Mega International Commercial Bank Co., Ltd. Labuan Branch. That in consideration of the incremental banking facilities of USD 10 million granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of the Company, approval be and is hereby given for the Company to furnish a Guarantee in favor of Mega International Commercial Bank Co., Ltd. Labuan Branch.

V

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of CIMB Bank Berhad. That in consideration of the incremental banking facilities of RM 50 million and foreign exchange contract limit to hedge currency exposure in relation to USD 10 million loan granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of the Company, approval be and is hereby given for the Company to furnish a Guarantee in favor of CIMB Bank Berhad.

V

Opinions from Independent Directors: NoneThe Company’s response to the opinions from Independent Directors: NoneResolution: The Board unanimously approved the proposal.

March 16th

(the 1st Meeting of March 2017)

• To amend the Company’s “Processing Procedure for the Acquisition and Disposal of Assets”.

V

• To consider and approve the issuance of new common shares for cash capital increase in Taiwan or issuance of Global Depositary Receipts (“GDRs”) through the issuance of new common shares by capital increase.

V


April 10th

(the 1st Meeting of April 2017)

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of Sumitomo Mitsui Banking Corporation Malaysia Berhad. That in consideration of the incremental banking facilities of RM 40 million granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of the Company, approval be and is hereby given for the Company to furnish a Guarantee in favor of Sumitomo Mitsui Banking Corporation Malaysia Berhad.

V


32 33




May 11th

(the 1st Meeting of May 2017)

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad. That in consideration of the banking facilities of RM 40 million granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad.

V


August 10th

(the 2nd Meeting of August 2017)

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of Mizuho Bank (Malaysia) Berhad. That in consideration of the incremental banking facilities of RM 60 million granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Mizuho Bank (Malaysia) Berhad.

V

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of Bangkok Bank Berhad. That in consideration of the incremental banking facilities of RM 50 million granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval is hereby given for the Company to furnish a Guarantee in favor of Bangkok Bank Berhad.

V

• To consider and approve the issuance of Guarantee for Chailease Royal Leasing Plc. in favor of Mega International Commercial Bank. That in consideration of the incremental banking facilities of USD 10 million granted to Chailease Royal Leasing Plc., a sixty percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Mega International Commercial Bank.

V

• To consider and approve the issuance of Guarantee for Chailease Royal Leasing Plc. in favor of Mizuho Bank, Ltd., Offshore Banking Unit Taiwan. That in consideration of the incremental banking facilities of USD 10 million granted to Chailease Royal Leasing Plc., a sixty percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Mizuho Bank, Ltd., Offshore Banking Unit Taiwan.

V

• To consider and approve the issuance of Guarantee for Chailease International Leasing Company Limited (Vietnam) in favor of The Bank of Tokyo-Mitsubishi UFJ, Ltd Ho Chi Minh City Branch. That in consideration of the incremental banking facilities of USD 12 million granted to Chailease International Leasing Company Limited (Vietnam), a wholly owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of The Bank of Tokyo-Mitsubishi UFJ, Ltd Ho Chi Minh City Branch.

V

• To consider and approve the issuance of Guarantee for Chailease International Finance Corporation in favor of Arrangers, Australia and New Zealand Banking Group Limited and/or its subsidiaries and affiliates. That in consideration of the incremental syndicated loan of less than USD 250 million granted to Chailease International Finance Corporation, a wholly owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Australia and New Zealand Banking Group Limited and/or its subsidiaries and affiliates(“the Bank”) as the Arrangers

V

• To conduct cash capital increase through new common shares to be offered in the form of overseas depositary receipts (“GDR”).

V



pany Limited

32 33




November 9th (the 1st Meeting of November 2017)

• To report the result of cash capital increase in the form of Global Depositary Receipts (“GDRs”)

V

• To consider and approve the capital injection into Chailease International Financial Services Co., Ltd. in a total amount of USD 45 million.

V

• To consider and approve the issuance of Guarantee for Chailease International Finance Corporation in favor of Bank of Tokyo-Mitsubishi UFJ (China) Ltd. That in consideration of the incremental banking facilities of RMB 130 million granted to Chailease International Finance Corporation, a wholly owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Bank of Tokyo-Mitsubishi UFJ (China) Ltd.

V


V


December 14th (the 1st Meeting of December 2017)

• To consider and appoint the independent CPAs of the Company and evaluate the independence of the CPAs for the financial year of 2018. V

• To consider and approve the audit and professional fee of the independent CPAs for the financial year 2017. V

• To consider and approve the issuance of Guarantee for Chailease Berjaya Finance Corporation in favor of Mega International Commercial Bank Co., Ltd., Manila Branch. That in consideration of the incremental banking facilities of PHP 700 million granted to Chailease Berjaya Finance Corporation, a sixty percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Mega International Commercial Bank Co., Ltd., Manila Branch.

V

• To consider and approve the issuance of Guarantee for Chailease Berjaya Finance Corporation in favor of Mizuho Bank, Ltd., Manila Branch. That in consideration of the incremental banking facilities of PHP 500 million granted to Chailease Berjaya Finance Corporation, a sixty percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Mizuho Bank, Ltd., Manila Branch.

V

• To consider and approve the issuance of Guarantee for Chailease International Leasing Company Limited (Vietnam) in favor of Sumitomo Mitsui Banking Corporation, Ho Chi Minh City Branch. That in consideration of the incremental banking facilities of USD 20 million granted to Chailease International Leasing Company Limited (Vietnam), a wholly owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Sumitomo Mitsui Banking Corporation, Ho Chi Minh City Branch.

V


34 35

② In addition to the aforementioned matters, if there is any written or otherwise recorded resolutions on which an Independent Director has a dissenting opinion or qualified opinion: None.

(2) There were no recusals of Directors due to conflicts of interests in 2017.(3) Measures taken to strengthen the functionality of the Board: The Company’s Board of

Directors has established an Audit Committee and a Compensation Committee to assist the Board in carrying out its various duties. For further information regarding the operations of the Audit Committee and Compensation Committee please refer to page 34 to page 43.

(4) The Financial Officer, Accounting Officer and the Internal Audit Officer have attended the Board meetings, presented the results of financial statements and the findings of all audit reports in the quarterly Board meetings, and maintained functional communication with the Board of Directors.

3. The state of operations of the Audit Committee:9 Audit Committee meetings were held in 2017. The attendance record of each Independent Director is as follows:

Position Name Actual attendance

Proxy attendance

Actual attendance (%) Remarks


Dar-Yeh Hwang 9 0 100.00% 5.26 Renewal of office


Steven Jeremy Goodman 9 0 100.00% 5.26 Renewal of

office


Chin Fock Hong 9 0 100.00% 5.26 Renewal of office


pany Limited

34 35

Other matters that require reporting:(1) If any of the following circumstances applies during the operation of the Audit Committee,

the Company shall indicate the date, the period, the contents, the resolution of the Audit Committee, and the responses of the Company to the resolution of the Audit Committee:① Any matters listed in Article 14-5 of "Securities and Exchange Act".



Any resolution which was

not approved by the Audit

Committee but was approved by two-thirds or more of all

DirectorsFebruary 23rd

(the 1st Meeting of February 2017)

• To consider and approve the issuance of Guarantee for Golden Bridge (B.V.I.) Corp. and Chailease International Company (Malaysia) Limited in favor of Taishin International Bank. That in consideration of the incremental banking facilities of USD 10 million granted to Golden Bridge (B.V.I.) Corp. and Chailease International Company (Malaysia) Limited, wholly owned subsidiaries of the Company, approval be and is hereby given for the Company to furnish two Guarantees for Golden Bridge (B.V.I.) Corp. and Chailease International Company (Malaysia) Limited respectively in favor of Taishin International Bank.

V

• To consider and approve the issuance of Guarantee for Chailease International Finance Corporation in favor of Mizuho Bank (China), Ltd. That in consideration of the incremental banking facilities of RMB 77 million granted to Chailease International Finance Corporation, a wholly owned subsidiary of the Company, approval be and is hereby given for the Company to furnish a Guarantee in favor of Mizuho Bank (China), Ltd.

V

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of Mega International Commercial Bank Co., Ltd. Labuan Branch. That in consideration of the incremental banking facilities of USD 10 million granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of the Company, approval be and is hereby given for the Company to furnish a Guarantee in favor of Mega International Commercial Bank Co., Ltd. Labuan Branch.

V

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of CIMB Bank Berhad. That in consideration of the incremental banking facilities of RM 50 million and foreign exchange contract limit to hedge currency exposure in relation to USD 10 million loan granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of the Company, approval be and is hereby given for the Company to furnish a Guarantee in favor of CIMB Bank Berhad.

V

Resolution of Audit Committee (February 23rd, 2017): The Audit Committee unanimously approved the proposal.The Company’s response to the opinions from Audit Committee: The Board unanimously approved the proposal.

March 16th

(the 1st Meeting of March 2017)

• To discuss the consolidated financial statements prepared by the Company for the financial year ended December 31, 2016.

V

• To consider and approve the Company’s audited consolidated financial statements and the Independent Auditor’s report for the financial year ended December 31, 2016.

V

• To amend the Company’s “Processing Procedure for the Acquisition and Disposal of Assets”.

V

• To consider and approve the Internal Control System Statement of the Company for the year of 2016.

V

• To consider and approve the issuance of new common shares for cash capital increase in Taiwan or issuance of Global Depositary Receipts (“GDRs”) through the issuance of new common shares by capital increase.

V

Resolution of Audit Committee (March 16th, 2017): The Audit Committee unanimously approved the proposal.The Company’s response to the opinions from Audit Committee: The Board unanimously approved the proposal.

36 37






DirectorsApril 10th

(the 1st Meeting of April 2017)

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of Sumitomo Mitsui Banking Corporation Malaysia Berhad. That in consideration of the incremental banking facilities of RM 40 million granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of the Company, approval be and is hereby given for the Company to furnish a Guarantee in favor of Sumitomo Mitsui Banking Corporation Malaysia Berhad.

V

Resolution of Audit Committee (April 10th, 2017): The Audit Committee unanimously approved the proposal.The Company’s response to the opinions from Audit Committee: The Board unanimously approved the proposal.

May 11th

(the 1st Meeting of May 2017)

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad. That in consideration of the banking facilities of RM 40 million granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad.

V

Resolution of Audit Committee (May 11th, 2017): The Audit Committee unanimously approved the proposal.The Company’s response to the opinions from Audit Committee: The Board unanimously approved the proposal.

May 26th

(the 2nd Meeting of May 2017)

• To consider and approve the application of a total banking facilities of USD 30 million for a renewed loan facility of USD 25 million and derivatives of USD 5 million respectively granted by KGI Bank to meet the financing needs

V

Resolution of Audit Committee (May 26th, 2017): The Audit Committee unanimously approved the proposal.The Company’s response to the opinions from Audit Committee: The Board unanimously approved the proposal.


pany Limited

36 37






DirectorsAugust 10th

(the 2nd Meeting of August 2017)

• To note the Company’s consolidated financial statements for the first half year ended June 30, 2017.

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of Mizuho Bank (Malaysia) Berhad. That in consideration of the incremental banking facilities of RM 60 million granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Mizuho Bank (Malaysia) Berhad.

V

• To consider and approve the issuance of Guarantee for Chailease Berjaya Credit Sdn. Bhd. in favor of Bangkok Bank Berhad. That in consideration of the incremental banking facilities of RM 50 million granted to Chailease Berjaya Credit Sdn. Bhd., a seventy percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval is hereby given for the Company to furnish a Guarantee in favor of Bangkok Bank Berhad.

V

• To consider and approve the issuance of Guarantee for Chailease Royal Leasing Plc. in favor of Mega International Commercial Bank. That in consideration of the incremental banking facilities of USD 10 million granted to Chailease Royal Leasing Plc., a sixty percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Mega International Commercial Bank.

V

• To consider and approve the issuance of Guarantee for Chailease Royal Leasing Plc. in favor of Mizuho Bank, Ltd., Offshore Banking Unit Taiwan. That in consideration of the incremental banking facilities of USD 10 million granted to Chailease Royal Leasing Plc., a sixty percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Mizuho Bank, Ltd., Offshore Banking Unit Taiwan.

V


V

• To consider and approve the issuance of Guarantee for Chailease International Finance Corporation in favor of Arrangers, Australia and New Zealand Banking Group Limited and/or its subsidiaries and affiliates. That in consideration of the incremental syndicated loan of less than USD 250 million granted to Chailease International Finance Corporation, a wholly owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Australia and New Zealand Banking Group Limited and/or its subsidiaries and affiliates(“the Bank”) as the Arrangers.

V

• To conduct cash capital increase through new common shares to be offered in the form of overseas depositary receipts (“GDR”).

V

Resolution of Audit Committee (August 10th, 2017): The Audit Committee unanimously approved the proposal.The Company’s response to the opinions from Audit Committee: The Board unanimously approved the proposal.

38 39






DirectorsNovember 9th (the 1st Meeting of November 2017)

• To report the result of cash capital increase in the form of Global Depositary Receipts (“GDRs”)

V

• To consider and approve the capital injection into Chailease International Financial Services Co., Ltd. in a total amount of USD 45 million.

V

• To consider and approve the issuance of Guarantee for Chailease International Finance Corporation in favor of Bank of Tokyo-Mitsubishi UFJ (China) Ltd. That in consideration of the incremental banking facilities of RMB 130 million granted to Chailease International Finance Corporation, a wholly owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Bank of Tokyo-Mitsubishi UFJ (China) Ltd.

V


V

Resolution of Audit Committee (November 9th, 2017): The Audit Committee unanimously approved the proposal.The Company’s response to the opinions from Audit Committee: The Board unanimously approved the proposal.

December 14th (the 1st Meeting of December 2017)

• To consider and appoint the independent CPAs of the Company and evaluate the independence of the CPAs for the financial year of 2018.

V

• To consider and approve the audit and professional fee of the independent CPAs for the financial year 2017.

V

• To consider and approve the issuance of Guarantee for Chailease Berjaya Finance Corporation in favor of Mega International Commercial Bank Co., Ltd., Manila Branch. That in consideration of the incremental banking facilities of PHP 700 million granted to Chailease Berjaya Finance Corporation, a sixty percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Mega International Commercial Bank Co., Ltd., Manila Branch.

V

• To consider and approve the issuance of Guarantee for Chailease Berjaya Finance Corporation in favor of Mizuho Bank, Ltd., Manila Branch. That in consideration of the incremental banking facilities of PHP 500 million granted to Chailease Berjaya Finance Corporation, a sixty percent owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Mizuho Bank, Ltd., Manila Branch.

V

• To consider and approve the issuance of Guarantee for Chailease International Leasing Company Limited (Vietnam) in favor of Sumitomo Mitsui Banking Corporation, Ho Chi Minh City Branch. That in consideration of the incremental banking facilities of USD 20 million granted to Chailease International Leasing Company Limited (Vietnam), a wholly owned subsidiary of Chailease Holding Company Limited (“the Company”), approval be and is hereby given for the Company to furnish a Guarantee in favor of Sumitomo Mitsui Banking Corporation, Ho Chi Minh City Branch.

V

Resolution of Audit Committee (December 14th, 2017): The Audit Committee unanimously approved the proposal.The Company’s response to the opinions from Audit Committee: The Board unanimously approved the proposal.


pany Limited

38 39

② In addition to the aforementioned matters, if there is any resolution which was not approved by the Audit Committee but was approved by two-thirds or more of all Directors: None.

(2) There were no recusals of Independent Directors due to conflicts of interests in 2017.(3) Descriptions of the communications between the Independent Directors, the Internal

Auditors, and the Independent Auditors in 2017 (shall include the channels, major issues and/or results of the audits on the corporate finance and/or operations):① The Internal Auditors have sent the audit reports to the members of the Audit Committee

periodically, and presented the findings of all audit reports in the quarterly meetings of the Audit Committee. The Internal Audit Officer will immediately report to the members of the Audit Committee any material matters. During 2017, the Internal Audit Officer did not report any such material matters. The communication channel between the Audit Committee and the Internal Auditors functioned well.

② The Company's Independent Auditors have attended the Audit Committee meeting periodically and presented the findings of their quarterly review or audits on the Company's financial results. Under applicable laws and regulations, the Independent Auditors are also required to immediately communicate to the Audit Committee any material matters that they have discovered. During 2017, the Company's Independent Auditors did not report any irregularity. The communication channel between the Audit Committee and the Independent Auditors functioned well.

4. Corporate governance in the Company and the difference between its governance and the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies and reasons

Evaluation Item Yes No Status Deficiency and reasons

i. Promulgation and disclosure of “the Best-Practice Principles on Corporate Governance”of the Company to comply with “the Best Practice Principles on Corporate Governance for TWSE/GTSM Listed Companies”

V The Best-Practice Principles on Corporate Governance” of the Company (modeling “the Best-Practice Principles on Corporate Governance for TWSE/GTSM Listed Companies”) has taken effect and been disclosed in the Company's website and the MOPS.

No

ii. Shareholding structure and shareholders’ rights(1) Methods of handling shareholder suggestions

or complaints

(2) Information on controlling shareholders and their finial beneficial owners

(3) Risk management mechanism and “firewall” between the Company and its affiliates

(4) Internal regulations preventing insiders of a public company from using material and non-public information to buy or sell stocks or other equity securities of the company.

V V V

V

(1) The Company maintains an e-mail account and responsible

persons for dealing with shareholder’s suggestions and complaints.

(2) The Company maintains a department and retains a company providing shareholder services to keep track of controlling shareholders and their final beneficial owners.

(3) The Company has promulgated and published “the Rules on the Management of Transactions by Affiliated Persons” to monitor the risk involved. The assets and properties are managed independently by each affiliate of the Company in accordance with the internal control system of the Company. Risk control and firewall are implemented and strictly enforced.

(4) The Company has promulgated and published the " Best-Practice Principles on Business Ethics" and “Procedures for Handling Internal Material Information and Preventing Insider Trading" to regulate Company insiders, who may acquire material and non-public information of the Company in the trading on such information.

(1)No

(2)No

(3)No

(4)No

40 41


iii. Formation and responsibilities of the Board of directors(1) Any diversified policy and execution for the

members of the Board?

(2) Any functional committees set up voluntarily except the audit and compensation committees?

(3) Any evaluation mode set up for board’s performance and made evaluation annually?

(4) Regular evaluation of CPAs’ independence

V

V

V

V

(1) According to Article 20 of the Company’s Principles of Corporate Governance, the composition of the board of directors should take into account its diversity, and there should be a diversified guideline as to its operation and development, including, but not limited to: (1) gender, age, nationality, and culture background; and (2) expertise, skills, and experience.The backgrounds of the Board members manifest their diversity on expertises in business and management, science and technology, and law.With regard to female representation in the Board, the special shareholders meeting in August, 2017 approved two additional directors to the Board, one of whom is a female.Moreover, in accordance with “the Model Rules on the Election of Directors and Supervisors of Limited Stock Company” published by the Taiwan Stock Exchange (TWSE) on January 28 of 2015, the shareholders meeting of the Company passed “the Rules on the Election of Directors” with a view to enhancing corporate governance.

(2) No.

(3) The compensation committee of the Company reviewed the directors and managers’ performance regularly and revised the salary remuneration policies, systems, standards and structure in accordance with evaluation result.We are planning to formulate rules and procedures for board of directors performance assessments. We conduct regularly scheduled performance assessments of the board of directors each year and may engage outside professional institutions to conduct such performance assessments for every three years. The performance assessments will be conducted upon the board of directors and individual directors through self-assessment. The results of performance assessments will be submitted to the board of directors and disclosed in the annual report and corporate website as the case may be appropriate.

(4) We choose a professional and creditable accounting firm whose CPA is not involved in any interest of the Company. The appointment, dismissal and compensation of the CPA should be evaluated by Audit Committee and approved by the Board of Directors.

(1)No

(2)No

(3)No

(4)No

iv. Does the Company appoint a unit or personnel responsible for corporate governance related works, including furnishing materials for carrying out the duties of directors and corporate auditors, overseeing matters relating to conducting the meetings of the board of directors and shareholders, applying for corporate registration and its updates, compiling the minutes of the meetings of the board of directors and shareholders.

V With a view to improve corporate governance and meet its social and corporate ethics responsibilities, the Company established the Corporate Governance and Ethics Committee (“the Committee”)under the helm of the chairman of the board of directors as a committee devoted mainly to the furtherance of corporate governance and buniness ethics. Through the implementation by the Legal Division, the Committee has adopted the following measures:(1) The review and poposal for the corporate governance Structure(2) The panning, performance, examination, and improvement on

corporate governance related matters(3) The research on the trends and issues of corporate governance(4) The performance and improvement on corporate governance

evaluation(5) Other projects implemented according to the Company Charter,

by-laws, and resolutions of the Board of Directors or the chairman of the Board.

The Committee is required to deliver a report on its performance to the Company’s board of directors in March on an annual basis. The most recent report was given to the Board of Directors Meeting in March of 2018, including: (1) the result of the Corporate Governance Evaluation administered by the Taiwan TWSE; (2) the result of the internal and outside evaluations on the performance of the Company’s board of directors; (3) the completed projects relating to corporate ethics in 2017; (4) works on corporate and social responsibilities ; and (5) training and education on business ethics.

No


pany Limited

40 41


v. Delegation of works relating to shareholders meeting to a professioinal shareholder services institution.

V The Company retains Capital Securities Corporation for handling matters relating to shareholder services.

No

vi. Information Disclosure(1) A website where information on financial

operations and corporate governance is disclosed

(2) Other information disclosure channels (e.g., English website, responsible people dealing with collecting and disclosing information, the spokesperson system, or webcasting investor conference).

V V

(1) The Company maintains an English website and continues

to offer informationon on financial operations and corporate governance.

(2) The company is a foreign company, registered according to the laws of the Cayman islands and has established an online corporate information reporting system in order to fulfill the requirements for primary listing with the TWSE. A staff is desginated to deal with the collection and disclosure of information to ensure that any information which may influence investing decisions of shareholders and stakeholders is disclosed in a timely manner.Moreover, the Company maintains a spokeperson who speaks on behalf of the Company.

(1)No

(2)No

vii. Other important information, helpful to understand corporate governance ( such as the employees’ rights and care, relations with investors, suppliers and stakeholders, continuing education of directors, execution of the risk management policies, risk measurement standards and customer policies, and providing liability insurance for directors).

V (1) The directors of the Company are well-qualified with professional knowledge and continue to improve their knowledge in compliance with the requirements of the corporate governance principles. The courses they attended were disclosed in the Market Observation Post System of the TWSE.

(2) The Company’s website maintains an “Investors’ Area,” providing shareholders with corporate information. The Company offers timely and effective consulting services to shareholders and investors and provides a bridge for the communication between the Company and its investors.

(3) The Employee Welfare Commit tee of the Company is established to provide care to the employees, foster amicable labor relationship, build teamwork among employees, and attend to employees’ welfare (such as subsidies for staff club activities, casual events, death and childbirth allowances, health examinations, and group tours) to ensure sound communications and safeguard the right of employees.

(4) The Company has purchased liability insurance for directors.

No

viii. Describe the results (including the defects) of any corporate governance evaluation conducted by the Company or other institution.

V The result of the Third (2017) Corporate Governance Evaluation administered by the Taiwan Stock Exchange (TWSE) shows the Company ranked as one of the companies in the tier of the top fifth percentile.Currently, listed shares of the Company are selected as one of the constituient stocks in the TWSE Corporate Governance 100 Index.

No

ix. Describe the situations after improvement and the measures adopted for improvement concerning the indexes on which the Company was unsuccessful to score in the most recent Corporate Governance Evaluation administered by the Corporate Governance Center of the Taiwan Stock Exchange.

(1) Situations after Improvement:1. Index 3.28 (outside evaluation on the performance of the

board of directors every three years): The Company has formulated the Rules Governing Evaluation of the Performance of the Board of Directors (“The Evaluation Rules”) in 2016.

2. Index 3.31 (internal evaluation on the performance of the board of directors at least once a year and disclosure of the result in the Company’s webpage):According to the Evaluation Rules, the Company shall conduct the evaluation on the performance of the board of directors in November each year. The most recent result has been disclosed in the Company’s webpage (available at:http://www.chaileaseholding.com.tw/ugC_AboutUs02-02.asp).

(2) Measures Adopted for Improvement:1. Index 3.32 (at least one member of the board of directors

should be female): In the special shareholders meeting in August of 2017, a female director (one of the two additional directors) was elected to the Board.

2. Index 3.35 (at least 1/3 of the directors be male or female): The Company wi l l cons ider inc luding addi t iona l female directors in the board of directors, taking into account Company policy and development.

42 43

5.Operations of the Compensation Committee(1)Authority and duties of the Committee:① Determine and regularly review the policies, mechanism, standards, and elements in

respect of the performance and remuneration of Directors and managers.② Regularly assess and determine the remuneration of Directors and managers.

(2) By March 31, 2018, there are 3 members of the Compensation Committee, namely the independent director, Steven Jeremy Goodman, Chin Fock Hong and Dar Yeh Hwang. Refer to our website for Compensation Committee Charter of Chailease Holding Company Limited.

(3) Information on the Compensation Committee members

Position(Note 1)

Qualification

Name

Professional qualification requirements, together with at least five years work experience Independent status(Note 2) C

on

curren

t po

st of m

emb

er of C

om

pen

sation

C

om

mittee in

ano

ther p

ub

lic release com

pan

y

Rem

arks(No

te 3)

An instructor or higher in

a department of commerce, law, finance,

accounting, or other academic

department related to the

business needs of the company

in a public or private

junior college, college, or university

A judge, public prosecutor,

attorney, certified public

accountant, or other

professional or technical

specialist who has passed a national

examination and been awarded a

certificate in a profession

necessary for the business of

the company

Work experience

in the area of commerce,

law, finance, or accounting, or otherwise

necessary for the business of

the company 1 2 3 4 5 6 7 8


Steven Jeremy Goodman V V V V V V V V V V V 0

Independent director Chin Fock Hong V V V V V V V V V 0

Independent director Dar Yeh Hwang V V V V V V V V V V 0

Note 1: The position should be Directors, independent Directors or others.Note 2: If anyone meets the qualifications below two years before being elected or during the tenure, check the box of the corresponding code.

(1) Not an employee of the Company, or any of its affiliates.(2) Not a director, supervisor of the Company or any of its affiliates, (unless the person is an independent director of the Company, its parent company or

any subsidiary in which the Company holds, directly or indirectly, more than 50 percent of the voting shares).(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children or held by the person under

another’s names, in an aggregate amount of one percent or more of the total number of issued shares of the company or ranking in the top 10 in holdings.

(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three sub-paragraphs.

(5) Not a director, supervisor or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company or that holds shares ranking in the top five in holdings.

(6) Not a director, supervisor, officer or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company.

(7) Not a professional individual or an owner, partner, director, supervisor or officer of a sole proprietorship, partnership, company or institution that provides commercial, legal, financial, accounting services or consultation to the company or to any affiliate of the company, or a spouse thereof.

(8) Not any of the circumstances in the sub-paragraphs of Article 30 of the Company Act.Note 3: Explain whether it conforms to Item 5 of Article 6 in “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of

a Company Whose Stock is listed on the Stock Exchange or Traded over the Counter” if the committee member is a director.


pany Limited

42 43

(4) Information about the operations of the Compensation Committee:1. There are 3 members of the Compensation Committee of the Company.2. Tenure of current committee members: May 26, 2017 to May 25, 2020. Two committee

meetings (A) have been convened in the last year and the attendance of committee members is described as follows:

Position Name Actual attendance(B)

Proxy Attendance Actual attendance (%)(B /A)(Note)

Convenor Steven Jeremy Goodman 2 0 100%

Committee member Chin Fock Hong 2 0 100%

Committee member Dar Yeh Hwang 2 0 100%

6. Fulfillment of social responsibility: the system and measures adopted by the Company in environmental protection, community involvement, social contribution, social service, social welfare, rights of customers, human rights, security and heath and other activities and the status of implementation

Item Status Deficiency and reasons

i. Actualizing the promotion of corporate governance(1) The policy and system

of social responsibility established by the Company and examines performance results from the implementation

(2) Operations of the department responsible for the corporate social responsibility

(1) In order to fulfill corporate social responsibility and to strike a balance between economic, social and environmental and sustainable development, the company promulgated this corporate social responsibility best practice principles in 2011 and the corporate governance and ethical corporate management committee memorandum in 2015. The principles will be reviewed each year to ensure that the company will achieve its goal as planned.

(2) To manage the corporate social responsibility initiatives, the company organized the corporate governance and ethical corporate management committee supervised by chairman of business administration committee and chairman of the company. The committee comprised 5 sections. Specifically, 25 employees from eleven different divisions are included in this committee. Corporate Governance and Ethical Management Committee held two (2) meetings in 2016. The related departments provided reports and had discussions relating to the corporate social responsibility issues, which were resolved by the Committee and executed by the related departments accordingly.

No

ii. Development of sustainable environment(1) Endeavors to increase

the utilization efficiency of all resources and use of renewable materials which have a least impact to the environment

(2) Establishment of suitable environmental management system based on the industry characteristics

(3) Attention to the effects of climate change on operation and establishment of the energy-saving, carbon reduction and GHG volume reduction policy

(1) In order to improve the reuse of resources, green brand products made from recycled resources are used in the headquarters of the company. The projects include paper towels and toilet paper. The paper prints are also made of environmentally friendly materials as the first choice.In order to reduce the increase in waste, lunch boxes are required to deliver lunch boxes and only repeatable lunch boxes are used in order to avoid the use of disposable plastic bags. A recycling area is setting up on each floor to encourage employee doing resource classification.

(2) Since the introduction of the ISO14001 environmental management system in 2014 and the revision of the international standard in 2017, it has also introduced the ISO50001 Energy Management System Environment and Energy Promotion Committee in 2016. It has been planned and systematically integrated into daily work and operational processes to promote the concept of environmental protection will raise awareness of energy conservation and carbon reduction, and will continue to promote environmental, energy management, and waste reduction programs for a long period of time.

(3) According to the ISO 50001 energy management system, formulate corporate energy and environmental management policies, carry out annual greenhouse gas surveys, and set a target of using 2015 as a benchmark to achieve a total 20% reduction in the total power consumption for headquarters of the company by 2020. Due to the comprehensive updating of lighting and other equipment, the original target has been reached ahead of schedule, and the target is to continuously reduce the electricity consumption by 1% per annum. The reduction plan will be promoted year by year. It will indeed achieve improvement in efficiency, contribute to the overall environment and reduce the impact on climate change influences.

No

44 45


iii. Reinforce information revelation

The measures of disclosing relevant and reliable information on corporate social responsibility

Please refer to our website for our corporate social responsibility implementation status: http://www.chaileaseholding.com/ugC_CR.asp

No

v. If the company has established corporate social responsibility principles based on "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies", describe any discrepancies between the principles and real execution.

None No

vi. Other important information to facilitate better understanding of the Company's corporate social responsibility practices (e.g., systems and measures that the company has adopted with respect to environmental protection, community participation, contribution to society, service to society, social and public interests, consumer rights and interests, human rights, safety and health, other corporate social responsibilities and activities, and the status of implementation.)

Please refer to our website for our corporate social responsibility report: http://www.chaileaseholding.com/ugC_CR-01-05.asp

vii. If the products or corporate social responsibility reports have received assurance from external institutions. Further clarification shall be provided

The Chailease CSR Report had been externally assured by British Standards Institution (BSI) and based on AA1000 Assurance Standard (2008) consistent with the GRI G4.0 Guidelines.


pany Limited

44 45

7. The status of implementation of business ethics and the adopted measures


I. Promulgation of Corporate Ethics Policy and Plan(1) Does the Company

specify its policy and action plans governing corporate ethics and the commitment of its board of directors and management to vigorously implement such policy through its internal regulation and public documents?

(2) Does the Company promulgate its action plans in connection with how to prevent unethical conducts? Does the Company have in place procedures, guidelines, punishments and grievance-filing systems and fully implement them?

(3) Does the Company take precautionary actions to refrain from engaging in activities involving high risk of the unethical conducts, including those defined at Paragraph 2 of Article 7 of the Principles of Corporate Ethics for TWSE/GTSM Listed Companies?

(1) The Company’s Corporate Social Responsibility Report describes the corporate ethics policy from the viewpoints of the management and what actions have been taken by the Company to implement such policy.

(2) The Company has established a precautionary action plan based on its Principles of Corporate Ethics. According to the action plan, every staff is required to sign on an undertaking letter, promising to observe the action plan. In addition, the Company promulgated the Procedure and Behavior Guidelines of Corporate Ethics (the «Ethics Guidelines») in 2014, defining the types of unethical conducts and establishing the reward and punishment system. The Ethics Guidelines also provides how the employees of the Company are required to engage in business activities, and requires the responsbile unit to ensure the compliance and implementation of the Ethics Guidelines.

(3) The Company has formulated the Rule on the Reporting of Unethical Conducts and Violations of the Ethics Guideliens (the “Reporting Rule”). The Reporting Rule provides that any person, either a staff or an external person, may report any conduct which is improper, unethical, illegal or violates the Ethics Guidelines. If the alleged violation is proven to be true, the violator shall be subject to punishment. Moreover, the Company takes measures to raise the employees’ awareness of the requirement of observing the internal disciplinary and work rules of the Company.The Company purchased a liability insurance covering the material loss of assets and trust properties of the Company due to breach of fiduciary duty and unethical conducts by its employees, especially those at the legal, finance and marketing departments. With the liability insurance, the insurer bears partly the risk of loss esulting form employee infidelity, with a view to safeguard the benefits of the Company's shareholders.

No

46 47


II. Implementation of Corporate Ethics(1) Does the Company

check and evaluate the business records of its counterparties to find out whether they have engaged in any unethical conduct in the past, and incorporate corporate ethics clause in the agreements entering into with such counterparties?

(2) Does the Company establish any unit responsible for promoting corporate ethics under the board of directors? Does the unit responsible for the implementation of corporate ethics report to the board of directors periodically?

(3) Does the Company promulgate any policy to prevent conflict of interests, provide an effective reporting system and fully implement related policies?

(4) In order to fully implement corporate ethics, does the Company establish a well-functioning accounting system and internal control system, and conduct periodical check through its internal audit team or outside accountants?

(5) Does the Company hold internal and external corporate ethics trainings periodically?

(1) According to the Procedure and Behavior Guidelines of Corporate Ethics, the Company must have full knowledge of the status of the corporate ethics of a counterparty prior to entering into any agreement with such counterparty. The Company shall ensure that clauses related to corporate ethics are incorporated into the agreement.

(2) The Legal Department was the unit responsible for matters related to corporate ethics. In order to complying with the amendment to the applicable government laws and regulations, the Company amended its Rules on the Organization of Corporate Governance and Ethics Committee in 2015, providing that the Company must establish the Corporate Governance and Ethics Committee (the "Committee") for handling corporate ethics matters. The Committee is entrusted with broad authority of implementing measures relating to corporate ethics and monitoring the implementation process; and it must report to the board of directors the implementation progress. For such implementation, in July and October of 2017 respectively, the Committee reviewed and confirmed reports submitted by responsble divisions on corporate ethics-related work projects, educational training sessions, the result of the corporate governance evaluation, the internal and external evaluations on the performance of the board of directors, and works on corporate social responsibilities. The 2017 Corporate Governance and Ethics Committee Annual Report was submitted to the board of directors in March 2018 and the shareholders' meeting in May 2018.

(3) According to the internal regulations of the Company, if any director of the Company or its subsidiaries is an interested party with respect to any proposal of the board meeting, such director may not participate in discussion or voting on such proposal, and must refrain from participating in and voting on such proposal. When employees of the Company discover that the carrying-out of their duties may lead to conflict of interests between the Company and them or the entity which they represent, they shall report such conflict of interests to their direct supervisors and the responsible unit of the Company.

(4) The audit unit under the board of directors shall review the internal control system in order to maintain sound internal management and ensure the corporate system functions properly. Furthermore, the audit unit must promulgate audit principles and require all corporate units to run self-assessment on the internal control system on a periodic basis pursuant to the Regulation Governing Self-assessment on Internal Control System of the Company in order to fully implement the self-monitoring system, lower operational risk and prevent unethical conducts.

(5) The Company has arranged the trainings for new employees, including but not limited to, the subjects of corporate ethics and code of conducts.

No


pany Limited

46 47


III. The Operation of the Internal Reporting System(1) Does the Company

establish a clear reporting system, reward policy and convenient reporting channel? Does the Company designate a relevant staff for receiving reporting of alleged violations based on the alleged violators?

(2) Does the Company establish an investigation SOP and related confidential system concerning the receipt of the reporting?

(3) Does the Company take any action to protect persons reporting violations from retaliation or improper treatment related to theirreporting?

(1) The Company promulgated the Regulation Governing Reporting of Unethical Conducts and Code of Conduct Violations, which provides that any Company employee and external person may report unethical conducts to the internal audit officer and the chief human resources officer through the hotline, mail and email etc.

(2) According to the Whistle Blowing Policy, it is required to file a written report, stating the details of the alleged unethical conducts and/or violations and the names of the alleged violators, accompanied by related evidence, for receiving such report by the responsible unit and initiating the investigation. After the report is received, the receiving window will determine and designate an appropriate unit in charge of investigation according to the severity of the violations. All personal information such as the names, positions and addresses of the persons reporting the violations will be kept confidential for their protection. Moreover, in 2015, the Company promulgated the Regulation on Protection of Whistleblower for Reporting Unethical Conducts and Code of Conduct Violations, (the "Whistleblower Regulation") which safeguards the whistleblower’s personal information. The identity of the whistleblower shall be represented by a code. The related information shall be kept strictly confidential, and is highly managed with regard to its transferring, archiving, accessing and safekeeping.

(3) According to the Whistle Blowing Policy, all investigators and the persons participating in the investigation must keep the facts of violations, investigation progress and other related information confidential. Any disclosure without permission is forbidden. Failure to comply with the confidentiality causing the disclosure of the information may lead to disciplinary actions. In addition, the Whistleblower Regulation enhances the protection of a whistle blower's personal information. A whistleblower will not sustain any unfavorable treatment on the position, salary, promotion and other working conditions for the reporting. Furthermore, the Company undertakes to protect a whistleblower from any violence, duress, and harassment.

No

IV. Enhancement of Information Disclosure(1) Does the Company

disclose its Principles of Corporate Ethics and its implementation progress on its webpage and the TSEC Market Observation Post System?

(1) The Company has established a Corporate Governance section on our official website, which publicizes the Principles of Corporate Ethics and other related information.

No

V. If the Company promulgated its Principles of Corporate Ethics according to Principles of Corporate Ethics for TWSE/GTSM Listed Companies, please specify the discrepancy between its status of implementation and the Principles? No Discrepancy.

VI. Other information material to the understanding of corporate ethics (e.g. revisions and amendments to the Company’s Principles of Corporate Ethics ):1. There is a corporate governance section in the Company’s webpage, which is updated from time to time to reflect the

newest revisions and amendments made to rules related to corporate ethics.2. Please refer to the following link for the 2017 Corporate Social Responsibility Report of Chailease Holding Company

at http://www.chaileaseholding.com.tw/CSR/CSR-01-04.asp

48 49

8. Disclosure of the corporate governance regulations and related rules.In June of 2011, the Company established the regulations related corporate governance including the Best-Practice Principles of Corporate Governance, Principles of Corporate Ethics, Best-Practice Principles of Corporate Social Responsibility, and Ethics Principles of Corporate Behaviors. Moreover, in November of 2014, with a view to implement corporate ethics, the Company promulgated the Procedure and Behavior Guidelines of Corporate Ethics. In order to comply with the latest applicable laws and regulations, we have also commenced the amendment to the Ethical Corporate Management Best-Practice Procedure and Code of Conduct, Ethical Corporate Management Principles, Ethical Conduct Principles, Corporate Governance Best-Practice Principles and Corporate Social Responsibility Best Practice Principles in 2015. Ethical Corporate Management Best-Practice Principles and Code of Conduct, Ethical Corporate Management Principles and Ethical Conduct Principles were amended with the resolution of Board which promote and implement the corporate governance of the Company.In addition, the Organic Regulations of the Corporate Governance and Ethical Management Committee was formulated in 2015, specifying that the Corporate Governance and Ethical Management Committee shall be established as the exclusive unit in charge of implementing the ethical corporate management. In addition, we have also formulated Regulation Governing the Protection of Whistleblower, which enhances the protection of the whistleblower›s personal information and working interests.The regulations described above have been promulgated to all employees. The investors may search for these regulations on Corporate Governance section of the website of the Company.Based on the rules and regulations mentioned above, the Company adopted the following measures:(1) Pursuant to the Best Practice Principles of Corporate Governance mentioned above, the

Company Enacted “The Rules on Whistleblower Protection” on January 26, 2016, for the purpose of encouraging report on conducts violating the Company rules or government laws and regulations;

(2) Pursuant to the Best-Practice Principles of Corporate Governance mentioned abvoe, the Company enacted “ The Work Procedure of Chailease Finance Company（a wholly-owned subsidiary of Chailease Holding Company), “ embodying Corporate Ethics in Human Resources Policies and Establishing a Clear and Effective system for Rewards, Penalties and complaints Filing Procedure;

(3) Pursuant to the Best-Practice Principles of Corporate Social Responsibility mentioned above, in the 2016 shareholders' meeting, the Company passed a resolution of amending the Rules and Procedure on the Agenda of Shareholders Meeting, advising the Board of Directors to include a shareholder's proposal in the agenda of the shareholders meeting except that it considers the proposal improper;

(4) Pursuant the Ethics Principles of Corporate Behaviors mentioned above, in December of 2015, the Company Passed a resolution of amending the Rules and Procedure of the Board of Directors' Meeting, adding a clause requiring any exemption of Directors, members of the audit committee, and managerial officers from complying with the ethics principles of the Company shall be approved by a resolution adopted by the Board of Directors;

(5) Pursuant to the Ethics Principles of Corporate Behaviors mentioned above, the Company passed a resolution in December of 2015, of amending the Rules and Procedure of the Board of Directors' Meeting, adding a clause requiring any exemption of Directors, members of the audit committee, and managerial officers from complying with the ethics principles of the Company shall be approved by a resolution adopted by the Board of Directors;


pany Limited

48 49

(6) Pursuant to the Best-Practice Principles of Corporate Governance mentioned above, in September of 2016, the Company published the Rules and Procedure on the Evaluation of the Performance of the Board of Directors, pursuant to which the Board of Directors shall be subject to both an evaluation of its performance on an annual basis through internal evaluation of the Board’s performance and each director’s self–evaluation of his/her performance and outside evaluation once every three years; and

(7) Pursuant to the Procedure and Behavior Guidelines of Corporate Ethics mentioned above, during 2017, the Company has conducted 25 education training sessions relating to corporate ethics given to various divisions and branches of the Company.

9. Other important information to facilitate a better understanding of the Company’s corporate governance shall be disclosed: none.

10. Execution of Internal Control System:

50 51

Statement of Internal Controls


pany Limited

50 51

11. Penalties on the Company or the employees for unlawful practices, penalties imposed by the Company on the employees for breaking internal control regulations and corrective actions taken against major defects in the latest year and before the publication date of the annual report(1) Penalties on the Company or the employees for unlawful practices and corrective actions

in the latest year and before the publication date of the Prospectus: None(2) Penalties imposed by the Company on the employees for breaking the internal control

regulations and corrective actions taken against major defects in the latest year and before the publication date of the Prospectus:Chailease Holding Company and Taiwan Subsidiaries, includeing: (1) Chailease Finance Company (“CFC”); and (2) Chailease Auto Rental Company (“CARC”); and (3) Fina Finance & Trading Co., Ltd.(“FFTC”)

Employees Involved Violations Actions Taken

SupervisorThe Kaohsiung Section, CARC

1. Unauthorized Leaves and Absences2. Falsification of Attendance Records3. Use of Company Vehicle for Personal Purposes4. Fraudulent Overtime Work Application

1. Discharge after Double Delinquencies

2. Notice of Disciplinary and Work Rules to All Employees

Business StaffThe New Taipei City Third Small Business Section, CFC

1. Misappropriation of Customer Information2. First Violation of Rules on the Execution of

Agreement and Guaranty3. Second Violation of Rules on the Execution of

Agreement and Guaranty

1. Discharge2. Notice of Disciplinary and Work

Rules to All Employees

Business StaffThe Taipei Small Business First Section, CFC

1. Authorized Rebates2. Violation of Rules on the Execution of

Agreement and Guaranty



Business StaffThe Third Section of the City East Branch, CFC

Unauthorized Leaves and Absences 1. Discharge2. Notice of Disciplinary and Work


Business StaffThe Second Section of the First Business Division, FFTC

Unauthorized Leaves and Absences 1. Discharge2. Notice of Disciplinary and Work


StaffThe Car Services Section, CARC

Embezzlement 1. Discharge2. Notice of Disciplinary and Work


The Supplier Business Second Division, CFC

Violation of Rules on the Execution of Agreement and Guaranty



StaffThe Strategy Unit of the Chairman’s Office, CFC

Misappropriation of Customer Information 1. Discharge2. Notice of Disciplinary and Work


Business StaffThe Taoyuan Branch, CFC

Improper Advances toward Non-company Females

1. Single Major Delinquency2. Notice of Disciplinary and Work


52 53

Chailease Holding Company Mainland China Subsidiary, Chailease International Finance Company（“CIFC”)

Employees Involved Violations Actions Taken

Business Deputy DirectorNanjing Branch, CIFC

Misappropriation of Customer Information Discharge

Legal Director & Interim Unit LeaderThe Fourth Legal Division, CIFC

1. Embezzlement (False Application for Business Expenditures)

2. Bribery3. Unauthorized Rebates4. Embezzlement (False Application for Telephone,

Transportation, and Meal Expenditures)

Discharge


pany Limited

52 53

12. Major resolution in the meeting of shareholders and the Board in the latest year and before the publication date of the annual report.(1) Major resolution in the regular meeting of shareholders

Date Proposal Resolution Execution status

May 26, 2017 AGM

1. The proposal regarding the 2016 Business Report and Financial Statements

Proposal was approved after voting.For: 719,276,524 shares; 85.38%;Against: 66,859 shares; 0.00% ;Abstained: 123,020,978 shares; 14.60%

The Financial Statements were disclosed on the company's website.

2. The proposal for distribution of 2016 profits (cash dividend per share of NT$3.4)

Proposal was approved after voting.For: 721,182,683 shares; 85.61%;Against: 97,275 shares; 0.01%;Abstained: 121,084,403 shares; 14.37%

T h e r e c o r d d a t e o f t h e dividend was set on August 4 2017; cash dividend were distributed on August 31 2017

3. The Amendment to the “Processing Procedure for the Acquisition and Disposal of Assets”

Proposal was approved after voting.For: 721,206,946 shares;85.61%;Against: 74,166 shares; 0.00%;Abstained: 121,088,885 shares; 14.37%

A m e n d e d “P r o c e s s i n g Procedure for the Acquisition and Disposal of Assets” was disclosed on the company's website.

4. Issuance of new common shares for cash capital increase in Taiwan or issuance of Global Depositary Receipts ( “GDRs” ) through the issuance of new common shares by capital increase.

Proposal was approved after voting.For: 715,772,224 shares; 84.97%%;Against: 3,843,579 shares; 0.45%%;Abstained: 122,754,194 shares; 14.57%

Issuance of 25,000,000 units of Global Depositary Receipts ( “GDRs” ) through the issuance of new common shares on October 17 2017.

5. Directors Election for the 3rd term of the Board (seven Directors).

The list of the 3Rd term of the Board:1. Director Mr. Fong-Long Chen Authorized

Representative of Chun An Investment Co., Ltd.

2. Director Mr. John-Lee Koo 3. Director Mr. Chee Wee Goh4. Director Mr. King Wai Alfred Wong

Authorized Representative of Chun An Investment Co., Ltd.

5. Independent Director Mr. Dar-Yeh Hwang6. Independent Director Mr. Steven Jeremy

Goodman 7. Independent Director Mr. Chin Fock Hong

The new directors list was filed in Cayman Island on June 9 2017.

54 55


May 26, 2017 AGM

6. Proposal of releasing the Non-Competition Restrictions on Directors

Proposal was approved after voting.(1) Releasing the Non-Competition

Restrictions on Director :Mr. John-Lee KooFor: 657,902,243 shares; 83.94%;Against: 1,801,252 shares; 0.22%%;Abstained: 124,060,941 shares; 15.82%

(2) Releasing the Non-Competition Restrictions on Director:Mr. Fong-Long Chen Authorized Representative of Chun An Investment Co., Ltd.For: 713,334,668 shares; 85.14%Against: 401,968 shares; 0.04%Abstained: 124,061,141 votes; 14.80%

(3) Releasing the Non-Competition Restrictions on Director:Mr.King Wai Alfred Wong Authorized Representative of Chun An Investment Co., Ltd.For: 715,904,848 shares; 85.18%Against: 401,968 shares; 0.04%Abstained: 124,064,181; 14.76%

(4) Releasing the Non-Competition Restrictions on Director:Mr. Chee Wee GohFor: 717,904,864 shares; 85.22%Against : 401,968 shares; 0.04%Abstained: 124,064,165 votes; 14.72%

(5) Releasing the Non-Competition Restrictions on Director:Mr. Dar-Yeh HwangFor: 718,065,864 shares; 85.24%Against : 240,968 shares; 0.02%Abstained: 124,064,165 votes;14.72%

(6) Releasing the Non-Competition Restrictions on Director:Mr. Steven Jeremy GoodmanFor: 718,065,736 shares; 85.24%Against: 241,096 shares;0.02%Abstained 124,064,165 votes;14.72%

(7) Releasing the Non-Competition Restrictions on Director:Mr. Chin Fock HongFor: 718,065,848 shares; 85.24%Against: 240,968 shares; 0.02%Abstained: 124,064,181 votes; 14.72%


pany Limited

54 55


August 29 2017EGM

1. Amendment to the “Memorandum & Articles of Association”

Proposal was approved after voting.For: 764,943,144 shares ;81.98 %Against: 338,529 shares ; 0.03%Abstained: 167,785,835 votes ;17.98%

The revised Memorandum & Articles of Association was filed in Cayman Island on August 29 2017 and disclosed on the company's website.

2. To elect vacancy/ additional Directors (3 Directors).

The List of the vacancy/ additional Directors:1. Director Mr. King Wai Alfred Wong

Authorized Representative of Chun An Technology Co., Ltd.

2. Director Ms. Hsiu- Tze Cheng Authorized Representative of Chun An Technology Co., Ltd.

3. Director Mr. Chih- Yang Chen Authorized Representative of Li Cheng Investment Co., Ltd.

The new directors list was filed in Cayman Island on August 29 2017.

3. Proposal of releasing the Non-Competition Restrictions on Directors.

Proposal was approved after voting.(1) Releasing the Non-Competition

Restrictions on Director:Mr. King Wai Alfred Wong Authorized Representative of Chun An Technology Co., Ltd.For: 729,459,758 shares; 80.65%Against: 230,204 shares; 0.02%Abstained: 174,772,401 votes;19.32%

(2) Releasing the Non-Competition Restrictions on Director:Ms. Hsiu-Tze Cheng Authorized Representative of Chun An Technology Co., Ltd.For: 729,085,183 shares; 80.65%Against: 69,204 shares; 0.00%Abstained: 174,767,201votes; 19.33%

(3) Releasing the Non-Competition Restrictions on Director:Mr. Chih-Yang Chen Authorized Representative of Li Cheng Investment Co., Ltd.For: 757,912,523 shares; 81.23%Against: 289,200 shares; 0.03%Abstained: 174,767,201 votes; 18.73%

56 57

(2) Major resolutions in the Board meetingsDate The resolutions

2017.2.23

Approved the Company's nominated candidates of the 3rd session of the Board of Directors (including Independent Directors).To consider and approve 2016 Business Report of the CompanyApproved the Date, Venue and its close period of Register of Members for the Annual General Meeting of 2017.

2017.3.16

Approved the Company's audited consolidated financial statements and the independent auditor's report for the financial year ended December 31, 2016.Approved the distribution of the annual net profits and dividend payment from the operating performance of the year 2016.Approved to amend the Company's “Processing Procedure for the Acquisition and Disposal of Assets”.Approved the election of the 3rd session of the Board of Directors (7 directors in total including independent directors).Approved to release the non-compete duty of the nominated candidates of the 3rd session of the Board of Directors (including Independent Directors).Approved the total compensation of Directors and Key Managers for year 2016, which includes Employees' Compensation and Directors' Compensation.Approved the issuance of new common shares for cash capital increase in Taiwan or issuance of Global Depositary Receipts (“GDRs”) through the issuance of new common shares by capital increase.Approved the revised matters for the Annual General Meeting of 2017.

2017.5.11 Noted the Company's consolidated financial statements and the independent auditor's review report for the first quarter ended March 31, 2017.

2017.5.26

Approved to elect Mr. Fong-Long (Albert) Chen as Chairman of the 3rd term of the Board.Approved the appointment of Mr. Steven Jeremy Goodman, Mr. Chin Fock Hong and Mr. Dar Yeh Hwang as the members of the 3rd term of the Compensation Committee.Approved the performance evaluation and compensation package of Directors and Key Managers for year 2017.

Approved to authorize the Chairman to determine the ex-dividend record date and the dividend payment date.

2017.7.10

Approved to amend the existing Article 143 of the Memorandum and Articles of Association of the Company.Approved the number of directors increases from seven to nine, starting from the 3rd session of the Board of Directors.Approved the election of one by-election and two additional directors and the nominated candidates of the 3rd session of the Board of Directors.Approved to release the non-compete duty of the nominated candidates of the one by-election and two additional directors of the 3rd session of the Board of Directors.Approved the matters for the Extraordinary General Meeting of 2017.

2017.7.31Approved to change one of the three nominated candidates of the 3rd session of the Board of Directors.Approved to release the non-compete duty of the nominated candidate, Mr. Chih Yang Chen.

2017.8.10

Approved the Company's consolidated financial statements for the first half year ended June 30, 2017.Approved to conduct cash capital increase through new common shares to be offered in the form of overseas depositary receipts ("GDR").

Approved the signing of the Indemnity Agreement and relevant documents with the Directors of the Company.

2017.11.9

Noted the Company's consolidated financial statements and the independent auditor's review report for the nine months ended September 30, 2017.Approved to amend the Company's "Audit Committee Charter".Approved to amend the Company's "Rules and Procedures of Board of Directors Meeting".Approved the capital injection into the Company's subsidiary, Chailease International Financial Services Co., Ltd., in a total amount of USD 45 million.


pany Limited

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Date The resolutions

2017.12.14Noted the Company's Board Performance Evaluation Report of 2017.Approved to appoint Messrs. Lin, Wan-Wan and Hsu, Shu-Min as the auditors of the Company for the financial year of 2018.

2018.3.5

Approved the capital injection of USD 150 million in installments into Chailease International Company (Malaysia) Limited.Approved the capital injection of USD 40 million into Golden Bridge (B.V.I.) Corporation.Approved the 2017 Business Report of the Company.Approved the Date, Venue and its close period of Register of Members for the Annual General Meeting of 2018.Approved the change of Accounting Finance Officer effective from 5th March, 2018.

2018.3.22

Approved the Company's audited consolidated financial statements and the independent auditor's report for the financial year ended December 31, 2017.Approved the distribution of the annual net profits and dividend payment from the operating performance of the year 2017.Approved the capitalization of retained earnings for issuing new shares.Approved the total compensation of Directors and Key Managers for year 2017, which includes employees' compensation and Directors' compensation.Approved the amendments to the Memorandum and Articles of Association of the Company.Approved to release the non-compete duty of Directors (including Independent Directors).

13. Major issues of record or written statements made by any Director or Supervisor dissenting to important resolutions passed by the Board of Directors: None.

58 59

14. Resignation of persons relative to the company's financial statement (including the chairman, presidents, accounting officer and audit officer) in the latest year and before the publication date of the annual report:

Job Title Name Date ofAppointment

Date ofResignation Cause of Resignation

Finance Accounting Officer Chia-Jeang Liu 2011/02/11 2018/03/05 Adjustment of responsibility

(4) Information regarding certified public accountant

Unit：NTD'000

Accounting Firm Name of CPA

Audit fee

System Design

Non-Audit Fee Whether the CPA's Audit Period Covers an Entire Fiscal Year

Note Company

RegistrationHuman

Resource Others Subtotal Yes No Audit Period

KPMG Chung-Yi Chiang

Yi-ChunChen 6,530 0 0 12,076 12,076 V 2017/1/1~

2017/12/31non-audit fee is

service fee for GDP issuance

1. Non-audit fees paid to the certified public accountant, to the accounting firm of the certified public accountant and to any affiliated enterprise of such accounting firm are equivalent to one quarter or more: Audit fee is 6,530. non-audit fee is 12,076. non-audit fee is service fee for GDP issuance.

2. Describe the amount and reason if the accounting firm has been changed and the audit fees paid in the fiscal year when such change took place are lower than those in the previous year: N/A.

3. Describe the amount, percentage and reason if the audit fees paid in the current year are lower than those in the previous fiscal year by 15 percent or more: N/A.

4. Information on the change in CPA: Due to relevant regulatory requirements on rotation, KPMG changed audit partners for the financial statements of 2018.

5. If the chairman, general manager or any manager in charge of finance or accounting matters has held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm in the most recent year, the name, position of the person and tenure shall be disclosed. The CPAs of the certifying CPA's firm own has exceeded 50 percent of the firm shares or acquisitions exceeded half of the Board seats or the entities or institutions are named as affiliates in externally circulated materials of the engagement partner's firm or a network or a network firm. : None.


pany Limited

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(5) Information for top 10 shareholders and related parties as defined under the Statement of

NameShareholding

Spouse & minor

shareholdingShareholding entitled

other name

10 largest shareholders and related parties

as defined under the Statement of Name

Financial Accounting Standards No. 6

Remarks

Share % Share % Share % Position(name) Relations

MITSUBISHI UFJ LEASE & FINANCE COMPANY LIMITED

45,302,400 3.58% 0- 0- 0- 0-

TFO GLOBAL MARKET FUND 44,044,000 3.48% 0- 0- 0- 0-

PACIFIC GROWTH PRIVATE EQUITY FUND 39,596,446 3.13% 0- 0- 0- 0-

LONG TERM STRATEGIC INVESTMENT FUND 37,752,000 2.99% 0- 0- 0- 0-

GRAND PACIFIC INVESTMENT & DEVELOPMENT CO., LTD.

35,307,265 2.79% 0- 0- 0- 0-

CHAIRMAN: PING-CHANG,HUANG

0- 0- 5,296 0.00% 0- 0-

EASTERN DRAGON INVESTMENT FUND 31,692,488 2.51% 0- 0- 0- 0-

LTG CAPITAL PARTNERS FUND 31,460,000 2.49% 0- 0- 0- 0-

MCKALLY GLOBAL INVESTORS FUND 31,460,000 2.49% 0- 0- 0- 0-

Chun An Investment Co., Ltd. 30,000,000 2.37% 0- 0- 0- 0-


Same Chairman

CHAIRMAN: Andre J.L. Koo 0- 0- 29,813 0.00% 58,706,561 4.64%

Chun An Technology Co., Ltd. 28,606,561 2.26% 0- 0- 0- 0-


Same Chairman

CHAIRMAN: Andre J.L. Koo 0- 0- 29,813 0.00% 58,706,561 4.64%

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(6) Continuing educational training of the Directors and independent Directors:

The details of their continuing professional development in 2017 is described as follows:Position Name Organizer Name of the course Hour

ChairmanFong-Long Chen(Authorized representative of Chun An Investment Co., Ltd.)

Taiwan Corporate Governance Association

Introduction and Impact of CFC, PEM and CRS 3.0

TOC-Third Party Payment Systems and other Fin-Tech Regulations 3.0

DirectorAndre J.L. Koo(Authorized representative of Chun An Investment Co., Ltd.)




Director Chee Wee Goh Taiwan Corporate Governance Association



Director


Securities and Futures Institute

Enterprise Corruption Prevention: Perspective of Corporate Governance 3.0

Functions of The Board and Enterprise Fraud Prevention 3.0

Detecting and Preventing Employee Fraud 3.0


Evaluating Boards and Directors, and Fuctions of The Board 3.0

Director

Chih Yang, Chen (Authorized Representative of Li Cheng Investment Co., Ltd.)


Duty of Good Faith and Loyalty of Directors 3.0

Evaluating Boards and Directors, and Fuctions of The Board 3.0

13th Global Corporate Governance Forum 6.0

Director


Taiwan Corporate Governance Association 13th Global Corporate Governance Forum 6.0

Securities and Futures Institute

Advanced Seminar for Directors and Supervisors: Enterprise information management and Insider Trading Prevention

3.0

Advanced Seminar for Directors and Supervisors: M&A :Global Trends and Case Study

3.0

ndependet director Dar-Yeh Hwang Taiwan Corporate

Governance Association



Independet director

Steven Jeremy Goodman




Independet director Chin Fock Hong Taiwan Corporate

Governance Association




pany Limited

60 61

(7) Certification details of employees whose jobs are related to the release of the company's financial information:

The certificate that the financial transparency related personnel received is described as follows: Related personnel Certificate & lisence People

Financial and accounting personnel

Certified Public Accountant in Taiwan 6Certified Public Accountant 2Professional certification of Principal Accounting Officers of Issuers, Securities Firms and Securities Exchanges 3

Certified Internal Auditor 2

Internal auditorCertified Internal Auditor 2Certified Information Systems Security Professional 1Certified Public Accountant 1

(8) Working environment and employee safety protection

The Company provides employees with a safe, healthy and comfortable working environment. Other protection measures regarding the personal safety of employees conform to the regulations of labor as well as the internal measures of employee benefits.

Items Description

Entrances controlling24 hours entrance guard systemSecurity service person set up with regularly patrols in building and parking lot entrances to secure the safety of the office.

Equipment and facilities Maintenance

Professional service agent set up to maintain the equipment and facilities of the office.Regularly building Safety InspectionRegularly fire-fighting exercises.Regularly maintenance to elevator, air conditioner, fire-fighting equipment, office cleaning services and water quality controlling.

Physical/psychological health care

For complying with the government policy, smoking is total banned on in the workplace, and no smoking signs affixed to remind staff not to smoke in the workplace, in order to preserve the quality the work environment.Setting sphygmomanometer, heart defibrillator and providing Health Examination and Medical Coverage.

Employee InsuranceProviding National Health Insurance, Labor Insurance, Group Insurance. If the circumstances of the casualties have occurred to employees, the Human Resource Department will assist with related insurance matters.

Employee Welfare

Founded Employee Welfare Committee, responsible for the welfare of all my colleagues in the job, which include welfare assistance, education grants, community activities and other benefits aids.Annual budget and expenditure were discussed and monitored regularly by the members of the Welfare Committee. The annual budget may have a good effect of emotional stability to employees.Providing maternity welfare grants each year, education grants to employees’ children, hospitalization and other subsidies.Organizing staff traveling to enhance the emotional connection between the employees.

Employee retirementTo reward employees, stable staff working or living after retirement, the company set the management regulations to employee retirement according to the Labor Standards Act and its associated regulations

62 63

(1) CapitalizationUnit: NT$ Thousands

YearMonth Price

Authorized Capital Paid-up capital Remarks

Shares Amount Shares Amount Sources of Capital Non-Cash. Payments Other

2009.12.24 NTD10 per share 10 (shares) NTD100

(dollars) 2 (shares) NTD20 (dollars) Initial issuance of shares No No


(dollars) 2 (shares) NTD20 (dollars)New shares to the shareholder of Financial One Corp.

No No


(dollars) 10 (shares) NTD100 (dollars)

New shares to the shareholder of Financial One Corp.

No No

2009.12.31 Note 1 1,500,000 NTD15,000,000 915,914 NTD9,159,138 Share swap No No

2010.05.31 Note 2 1,500,000 USD450,000 915,914 USD274,774Par value valuation change from NTD to USD

No No

2010.07.01 Note 3 1,500,000 USD450,000 691,068 USD207,321 Cancellation of repurchased shares No No

2010.11.23 Note 4 1,500,000 NTD15,000,000 691,068 NTD6,910,684Par value valuation change from NTD to USD

No No

2011.05.15 Note 5 1,500,000 NTD15,000,000 724,100 NTD7,241,004Issuance of shares for capital increase (for employee subscriptions)

No No

2011.05.31 Note 6 1,500,000 NTD15,000,000 755,300 NTD7,553,004 Issuance of shares for capital increase No No



2013.10.05 NTD10 per share 1,500,000 NTD15,000,000 995,830 NTD9,958,304 capitalization of

retained earnings No No

2014.09.01 NTD10 per share 1,500,000 NTD15,000,000 1,095,413 NTD10,954,134 capitalization of


2015.09.02 NTD10 per share 1,500,000 NTD15,000,000 1,139,230 NTD11,392,300 capitalization of


2017.10.17 Note 9 1,500,000 NTD15,000,000 1,264,230 NTD12,642,300 Issuance of shares for capital increase No No

Note 1: We signed a share transaction agreement with Financial One Corp. on December 31, 2009. A total of 915,914,000 shares were issued by the Company to Financial One Corp. in order to acquire 100% shares of the subsidiaries, Chailease International Company (Malaysia) Limited and Golden Bridge (B.V.I.) Corp.

Note 2: We changed the par value and converted issued shares (with par value of NT$10.0 each) to issue shares (with a par value of US$0.3 each).Note 3: We signed a contract with Financial One Corp. on July 1, 2010. A total of 224,845,000 shares of the Company were repurchased and cancelled.Note 4: We changed the par value and converted the shares (with a par value of NT$10.0 each) to the shares (with a par value of US$0.3 each).Note 5: We issued 33,032,000 new shares for capital increase.Note 6: We issued 31,200,000 new shares for capital increase.Note 7: We issued 30,000,000 new shares for capital increase before going public.Note 8: We issued 120,000,000 new shares of Global Depositary Receipts for capital increase.Note 9: We issued 125,000,000 new shares of Global Depositary Receipts for capital increase.

IV Capital and Shares


pany Limited

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Type of Stock

Authorized Capital

Issued sharesUnissued shares

Total

Listed Non-listed Total

Common stock 1,264,229,994 0 1,264,229,994 235,770,006 1,500,000,000

(2) Composition of Shareholders

(Par value per share: NT$10)March 26, 2018

StructureVoulme

Government agencies

Fianacial institutions

Other legal entities

Domestic individuals

Foreign institutions and individuals

Mainland China institutions and

individualsTotal

Number of shareholders 4 18 277 25,915 1,324 0 27,538

Shareholdings (shares) 20,136,945 24,484,000 139,477,245 142,892,173 937,239,631 0 1,264,229,994

Holdings percentage 1.59% 1.94% 11.03% 11.30% 74.14% 0.00% 100.00%

(3) Distribution profile of share ownership

(Par value per share: NT$10)March 26, 2018

Classof shareholdings Number of shareholders Total shares owned Ownership percentage

1~999 8,953 2,024,482 0.16%

1,000 ~ 5,000 13,146 25,804,330 2.04%

5,001 ~10,000 2,127 15,736,473 1.24%

10,001 ~15,000 856 10,588,165 0.84%

15,001 ~ 20,000 459 8,290,435 0.66%

20,001 ~ 30,000 460 11,446,813 0.91%

30,001 ~ 50,000 407 16,210,898 1.28%

50,001 ~ 100,000 377 26,736,780 2.11%

100,001 ~ 200,000 263 37,866,711 3.00%

200,001 ~ 400,000 185 51,907,120 4.11%

400,001 ~ 600,000 76 37,384,203 2.96%

600,001 ~ 800,000 38 26,503,060 2.10%

800,001 ~1,000,000 27 24,396,009 1.93%

Over 1,000,001 (Classification can be carried out based on the practical situation.)

164 969,334,515 76.67%

Total 27,538 1,264,229,994 100.00%

Note:Preferred stocks: No preferred stocks are issued by the Company.

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(4) Major shareholdersMarch 26, 2018

Shares Major shareholders Total shares owned Ownership percentage

MITSUBISHI UFJ LEASE & FINANCE COMPANY LIMITED 45,302,400 3.58%

TFO GLOBAL MARKET FUND 44,044,000 3.48%

PACIFIC GROWTH PRIVATE EQUITY FUND 39,596,446 3.13%

LONG TERM STRATEGIC INVESTMENT FUND 37,752,000 2.99%

GRAND PACIFIC INVESTMENT & DEVELOPMENT CO., LTD. 35,307,265 2.79%

EASTERN DRAGON INVESTMENT FUND 31,692,488 2.51%

LTG CAPITAL PARTNERS FUND 31,460,000 2.49%

MCKALLY GLOBAL INVESTORS FUND 31,460,000 2.49%

Chun An Investment Co., Ltd. 30,000,000 2.37%

Chun An Technology Co., Ltd. 28,606,561 2.26%

Note: Preferred stocks: No preferred stocks are issued by the Company.

(5) Market price, net worth, earnings, and dividends per share for the past

two yearsYear

Item 2016 2017 At the end of March 31, 2018

Market price per share

Highest (NTD,Note 1) 58.8 90.0 111Lowest (NTD,Note 1) 48.3 54.7 86.2

Average (NTD,Note 1) 53.77 77.05 98.18

Net worth per share

Before distribution (NTD) 34.51 42.45 -After distribution (NTD) 31.11 Note 2 -

Earnings Per Share

Weighted Average Common Shares Outstanding('000 Shares) 1,139,230 1,165,257 -

Earnings Per Share(NTD)

Before adjustment 6.36 8.29 -After adjustment 6.36 Note 2

Dividends per share

Cash dividends(NTD) 3.4 3.8 -

Stock Dividends

Retained Earnings - 0.2 -Capital Surplus - - -

Accumulated unpaid dividends (NTD'000) - - -

Analysis of return on investment

Price/Earnings Ratio (Note 3) 8.45 9.29 -Price/Dividends Ratio (Note 4) 15.81 Note 2 -Cash Dividends Yield Rate (Note 5) 6.32% Note 2 -

Note 1 : The information on the share price comes from TWSE.Note 2 : It has not been approved by the shareholder meeting; therefore, it is not disclosed.Note 3 : Price/Earnings Ratio = Average closing price per share/EPSNote 4 : Price/Dividends Ratio = Average closing price per share /cash dividend per shareNote 5 : Cash Dividends Yield Rate = Cash dividend per share/ Average closing price per share


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(6) Dividend policy and distribution of profit1. Dividend policy in Articles of Association

According to the Articles of Association, which was revised through a resolution approved by the stockholders during their meeting on August 29, 2017, the Company is required to appropriate earnings every accounting year.The proposal will be presented to the shareholder meeting for resolution. Since the Company is an investment and holding company where the invested companies vary in terms of background and development, the Company does not fall within any distinct development stage. Accordingly, the profit distribution of the Company may vary in view of the capital expenditure required by the Company for each financial year. Upon the final settlement of the Company’s annual accounts, if there are profits, the Company shall set aside out of the profits for each financial year: (i) a reserve for payment of tax for the relevant financial year; (ii) an amount to offset losses incurred in previous years; and (iii) a special surplus reserve as required by the applicable securities authority under the Applicable Public Company Rules. If there are profits of each financial year after combining accumulated undistributed earnings in the previous years and setting aside a certain amount of remaining profits of such financial year as a reserve for development purposes as the Directors may from time to time deem proper pursuant to Article 121 (“Annual Profits”), to the extent permitted by the Companies Law, at least 25% of such Annual Profits shall be distributed as dividends, of which at least 30% shall be paid in cash, as proposed by the Board of Directors and subject to approval of the Members by Ordinary Resolution in a general meeting.

2. The resolved appropriation of dividends this yearThe earning appropriation plan of 2017 was approved in the Board meeting on March 22, 2018 to pay the cash dividend of NT$3.8 per share to shareholders(NT$4,804,073,977 in total), and the stock dividend of NT$0.2 per share to shareholders(25,284,599 shares). The proposal will be presented to the shareholder meeting for resolution.

(7) Employee profit sharing and Directors' and supervisors' compensation1. The percentage or coverage of employees' bonuses and remunerations to Directors and

supervisors(1) Employees bonuses:

A. The employees' bonuses should be between 0.01% and 1% of such remaining amount.B. The employees' bonuses may be paid, at the discretion of the Directors, by way of cash

or by way of applying such sum in paying up in full unissued shares for allocation and distribution crediting them as fully paid up shares to employees. When the employees' bonuses are distributed by way of an issue of fully paid shares, the recipients may include qualified employees of the Subsidiaries. No unpaid dividends and bonuses shall bear interest as against the Company.

(2) Remuneration to Directors:The remuneration to the Directors shall be paid in cash only. The amount of such remuneration is authorized to be decided upon by the Board of Directors by reference to the suggestion made by the compensation committee, the standards generally adopted by other enterprises in the same industry, and shall be paid regardless of whether the Company has profits or suffers losses.

(3) Bonus to Directors:The Directors' bonus shall be between 0.01% and 0.1% of such remaining amount.

2. The basis for estimating the amount of employees' bonuses and remunerations of Directors/supervisors, the basis for calculating the distribution of stock dividends and the accounting treatment of the discrepancies, if any, between the actual distributed amount and the estimated amount will follow the principle described below:Pursuant to the Articles of Association, the Company estimates the proposed distribution of employees' bonuses and remunerations for Directors and supervisors. If there are differences between the proposed and the actual distribution, the difference will be estimated and listed in the coming income statement.

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3. The proposal for employee bonus distribution approved by the Board of Directors:(1) If the distributed cash dividends to employees, stock dividends and the remunerations

for Directors and supervisors are different from the estimated amount in the year when the expense should be recognized, the difference, reason and solution should be disclosed. The Board on March 16, 2017 proposed to pay cash dividends to employees of NT$1,086,826 and the remunerations to Directors of NT$5,215,939.

(2) The percentage of the proposed stock dividends to employees in the net profit income and the total of the employee benefits: N/A.

(3) Earnings per share after the proposed distribution of employees' bonuses and remunerations for Directors and supervisors: None. The employees' bonuses and remuneration's to Directors and supervisors are paid in cash.

4. The actual distribution of the employees' bonuses and remunerations to Directors and supervisors (including the distributed shares, amount and price) in the previous year, the difference between the actual amount and recognized amount as well as the reasons and solutions: None.

(8) Buyback of common stock: N/A (9) Issuance of corporate bonds for 2017: N/A (10) Issuance of global depositary shares

Issuance Date Item October 15, 2012 October 17 2017

Issuance and transaction location Bourse de Luxembourg Bourse de Luxembourg

Total Amount US$ 206,160,000 US$ 307,000,000

Issuance price per unit US$ 8.59 per unit US$ 12.28 per unit

Total of units 24,000,000 units 25,000,000 units

Source of securities Common stocks issued for capital increase by cash

Common stocks issued for capital increase by cash

Amount of securities 120,000,000 shares 125,000,000 shares

Right & Obligation of GDR holder Same as the rights and obligations of common shares

Same as the rights and obligations of common shares

Consigner Not Applicable Not Applicable

Depositary Bank JPMorgan Chase and Co. JPMorgan Chase and Co.

Custodian Taipei Branch of JPMorgan Chase and Co. Taipei Branch of JPMorgan Chase and Co.

Remaining sum(March 31, 2018) 863,936 units

Apportionment of expenses during issuance and existence The Company The Company

Important agreement in the deposit contract and custodian agreement

Refer to the deposit contract and custodian agreement for details

Refer to the deposit contract and custodian agreement for details

Market price per unit (US$)

Jan. 1, 2017 to Dec. 31, 2017

Highest 14.81

Lowest 8.491

Average 12.634

Jan. 1, 2018 to Mar. 26, 2018

Highest 18.40

Lowest 14.80

Average 16.563


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(11) Financing plan and implementationCapital increased in October 2017：Project information: To meet our capital requirements in relation to the future development, including but not limited to working capital, long-term investments and repayment of existing debt. On August 10, 2017, the Board of Directors of the Company approved to increase its capital by issuing ordinary shares of Global Depositary Receipts (“GDRs”).Financing sources: The Company issued 25,000,000 GDRs representing 125,000,000 ordinary shares (i.e., 1 GDR representing 5 ordinary shares with a par value of NT$10 per share.) The offering price amounted to US$12.28 per GDR with a total amount of US$307,000,000.Financing purpose: Investing in the Company's subsidiaries in ASEAN to support their operating requirements as well as repaying bank loans of the Company.The record date of capital increase: October 17, 2017.Funding progress: In the first quarter of 2018, the subsidiaries, Chailease Berjaya Credit Sdn. Bhd. and Chailease Royal Leasing Plc., have been invested indirectly by the Company to expand their business. The Company also repaid the bank loans in advance in the fourth quarter of 2017.Benefit analysis: The Company is expected to increase the profitability of its subsidiaries and strengthen the financial structure.The public offering or private placement of securities has not been finished. Either the offerings or placements have been completed in the last three years but the anticipated benefits have not yet been achieved: None.The progress of project implementation or the one which has not achieved its anticipated benefits: None.

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Wholehearted serviceBeing active on the Asian financial stage


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Wholehearted serviceBeing active on the Asian financial stage

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(1) Business Overview

1. Business Scope(1) Core Business

In addition to traditional leasing, installment sales and factoring services, the Company successfully developed new financial products to cope with SMEs' funding needs for their diverse business development, including heavy vehicle and automobile financing, construction equipment financing, fishery inventory financing, micro-enterprises financing, non-performing assets auction, real estate financing, office equipment leasing, medical equipment financing, car rentals, ESCO financing and services, solar power plant financing, investment, EPC and O&M, inventory financing (including cross-border), aircraft and ship financing, gasoline wholesale business, and insurance brokerage. The Company aims to provide professional and a full range of financial solutions to SMEs, achieving the enterprise mission of“Becoming A Supporting Partner of Our Customers; A Driving Force of Economic Success.”

(2) Proportion of BusinessUnit: NT$ (thousand)

Year FY2017 FY2016Item Amount Percentage Amount Percentage

Sales revenue 8,289,471 20% 7,541,644 20%Interest revenue - installment sales 7,610,318 18% 7,281,132 19%Interest revenue - capital leases 9,781,840 24% 8,890,413 23%Rental revenue - operating leases 3,080,320 7% 2,883,217 8%Interest revenue - loans 3,176,652 8% 3,000,990 8%Other interest revenue 3,191,904 8% 2,857,605 8%Other operating revenue 6,324,194 15% 5,552,775 14%Total operating revenue 41,454,699 100% 38,007,776 100%

Operational HighlightsV


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(3) Current products /servicesA. Leasing

The purpose of the leasing service is to support SMEs to acquire the right to use equipment through leasing and thus relieve their burden of purchasing equipment with equity funds, satisfying their needs of operating growth and improving the financial structure.The leasing can be divided into capital leases and operating leases. Generally, any fixed depreciable assets, including domestically purchased or imported, can be the subject matter of leases, including but not limited to machinery, medical equipment, airplanes, boats and office equipment.

B. Installment SalesThe purpose of the installment sales business is to help SMEs' strong working capital needs. The Company purchases the goods or equipment needed on behalf of customers and then customers can purchase them by installment, rather than lump sum payment, to achieve the purpose of optimized funding allocation and financial leverage.The subject matter of "installment sales" includes raw materials, semi-finished and finished products, furniture and fixtures, and production equipment. We deliver the customized services of installment sales to customers across various sectors & industries with flexibility and speed based on the characteristics and needs of each industry.

C. FactoringThe factoring business is a type of debtor finance in which a supplier of goods (seller) assigns its receivables arising from "sales and purchase agreement" to a factor (the Company), who performs the function of financing, account management, collection of receivables and protection against defaults in payment. The purpose of factoring is to assist SMEs to convert long-term receivables into cash to meet their present and immediate funding needs.

D. Loans We provide direct financing services to SMEs, micro-enterprises and large corporations.

E. OthersOther services include life and property insurance brokerage, financing and investments of solar power plant, non-performing assets auction and collection of overdue receivables, and gasoline wholesale business.

(4) New products /services planned for developmentA. Utilize the product expertise in Taiwan and the overseas networks to develop a cross-

border platform which integrates information, transaction, storage and financial services, and thus promote cross-regional collaboration and construct cross-organizational moving strategies.

B. Broaden the scale of solar power plants in Taiwan through deploying ground-mounted and floating PV Systems and developing sites at industrial zones. Extend the value chain to the service of site development, EPC, and O&M.

C. Grasp the market pulse of FinTech to develop digital financial services platforms, such as solar power plant crowdfunding and peer-to-peer lending. Utilize the internet technology to diversify marketing channels and platforms in order to broaden customer base and deal sources.

D. Seek valuable partners and extend value chain of existing products through investment & finance, investment or joint venture to promote diversified products.

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2. Industry overview(1) Current status and development of the industry

A. The development history of leasing industryFinancial leasing emerged in the 1950s from the USA, officially providing customers with a financial channel besides banks to obtain production funds. This new type of economic activity expanded to Germany and Japan and thrived in the 1960s. In the early 1970s, the business started to develop in Taiwan, followed by China in 1980s.The leasing industry is a part of financial auxiliary industry which aims to complement the deficiency of capital markets and banks. The capital markets and banks primarily obtain funds from the investments and deposits of the general public; therefore, the financing risk is limited in order to pursue the financial and economic stability. As a result, the enterprises which can obtain funds from the capital markets and banks tend to be large-sized and have financial integrity. In terms of Taiwan and China, where SMEs constitute the backbone of the economy (i.e. SMEs account for over 97% of total enterprises), most SMEs have a relatively short history and weaker guarantee ability, and they are smaller in size; consequently, they cannot enter the capital market and have difficulties in obtaining bank loans. According to the statistics, the SMEs financing obtained from Taiwan and China banking institutions accounts for 25% and 15% of total financing respectively. Since the current service cannot satisfy SMEs and the financial auxiliary companies operate using their own funds which is less legally restricted, they can bear higher risks to provide SMEs with flexible financing to complement the deficiency of the capital markets and banks. That is the main reason why the financial auxiliary industry developed vigorously in the US, Europe and Japan, and has played a critical role in their financial system.

B. The market scale of global leasing industriesAccording to the World Leasing Yearbook 2018, the global leasing industry maintained a stable growth trend during 2012 to 2016, after the global economic crisis. The global leasing volume reached US$1,099.8 billion in 2016, representing 9.4% growth compared to 2015 mainly due to the continuous growth of US and China - the top two countries on global leasing volume ranking. The US decelerated growth rate of new business volume from 11.1% in 2015 to 2.5% in 2016 reflects an increased general degree of cautiousness in ongoing investments in the US. The leasing volume of China rapidly increased by 62.0% mainly due to leasing considered as one of the important financing options in the domestic economy as well as the soaring growth of auto leasing market.

Trend of global leasing volume

2012 2013 2014 2015 2016

Global Leasing Volume (US$bn) Annual growth rate

868.0 884.0 944.3 1,005.3 1,099.8

8.9%

1.8%6.8% 6.5%

9.4%


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In 2016, most of the top 10 countries in terms of leasing volume were developed countries with mature capital markets and well-established financial systems. This indicates that the leasing business can provide complementary financial services and further promote SMEs' strong growth.

Top 10 countries by leasing volume in 2016

Ranking Country Annual volume(US$bn) YoY Growth % Market penetration %

1 US 383.9 2.5% 21.5%

2 China 206.7 62.0% 6.0%

3 UK 81.8 9.0% 33.7%

4 Germany 64.3 3.4% 17.0%

5 Japan 59.4 -1.3% 8.4%

6 France 38.9 11.2% 15.3%

7 Australia 28.4 0.8% 40.0%

8 Canada 25.9 -8.5% 32.0%

9 Italy 25.3 17.0% 14.1%

10 Sweden 20.1 15.2% 26.0%

...

16 Taiwan 10.0 0.9% 9.1%

In 2016, the leasing volume of North America, Europe and Asia was US$416.8 billion, US$346.3 billion and US$289.9 billion, representing 37.9%, 31.5% and 26.4% of the global volume respectively. China contributed volume of US$206.7 billion, accounting for 71.3% of the total volume in Asia and taking the second position in the global ranking. The leasing volume in Taiwan reached US$10.03 billion, accounting for 3.5% in Asia and ranked the 16th in terms of global leasing volume.

Leasing volume by region in 2016

Ranking Region Annual volume(US$bn) YoY Growth % Percentage

1 N. America 416.8 2.2% 37.9%

2 Europe 346.3 7.3% 31.5%

3 Asia 289.9 30.0% 26.4%

4 Aus/NZ 28.4 -8.9% 2.6%

5 S. America 12.9 -6.8% 1.2%

6 Africa 5.4 -19.5% 0.5%

Total 1099.8 9.4%

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C. The market scale of leasing in TaiwanAccording to the information provided by the Taipei Leasing Association ("TLA"), the total leasing and installment sales contracts by members of TLA in 2017 was NT$351.4 billion, representing a 8% growth compared to 2016. Leasing and installment sales are two major products offered by leasing companies in Taiwan, which accounted for 19% and 81% of the total contract value in 2017 respectively.Vehicle/transportation equipment and raw materials were major subject matters for the leasing and installment sales business, accounting for 52% and 23% of the contract amounts respectively. SMEs with share capital less than NT$20 million were the major customers (60%) and most of those are engaged in manufacturing, transportation and warehousing, wholesale and retail industries.

D. The market scale of leasing in ChinaAccording to the World Leasing Yearbook 2018, the total leasing contract volume in 2016 was approximately CNY$1,435.5 billion, representing a growth of 62.0% compared to 2015.

(2) The interrelationships between the upstream, midstream and downstream segments of the industry supply chainLeasing is an assets-based financing. Lessors purchase the equipment from vendors and then grant the lessee the right to use equipment via leasing agreement. Lessee can pay the rental by installment, instead of lump sum payment, during the lease term. Generally, the upstream, midstream and downstream segments of the leasing industry can be illustrated in the following chart:

A.Upstream players: capital and equipment providersApart from the equity fund of shareholders, the capital source of the lessors mostly comes from bank loans or issuances of commercial papers and corporate bonds. A large-sized company with a healthy financial structure has its assets securitized or plans to go public in order to directly raise funds in the capital market. Overall, the leasing industry mainly obtains funds from financial institutions.Equipment vendors are the other players, from whom the lessors purchase the designated equipment on behalf of the lessees and rent such equipment to the lessees for their business operation.

B. Midstream players: lessorsThe leasing company provides assets-based financing services, and can be categorized by the structure of shareholders or managers. More details can be referred to the section of competition in this chapter.

C. Downstream players: capital demander (lessees)The leasing company provides assets-based financing services to capital demanders, e.g. individuals, micro-enterprises, SMEs and even large corporations, meaning that customers of leasing companies and financial institutions somewhat overlap. However,

Capital Provider

Capital Demander

Equipment Provider

Upstream Midstream Downstream

Delivery of equipment+after-sales services

Providing capital

Payment for purchase【sales and purchase

agreement】

Rental payment+buy back (when expired)【leasing agreement】

Shareholders

Capital Markets

Financial Institutions(e.g.Banks) Lessees

Vendors

Cash FlowLogistics Flow

Lessors


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the leasing company specializes in different markets and mainly serves SMEs in a flexible way to provide customers underserved by banks with key capital in a timely manner and assist them in operational growth. Therefore, the relationship between the leasing companies and financial institutions is a kind of "coopetition" - competitive and cooperative in terms of the industrial structure.

(3) Development trend of productsIn the early stages of development, the Taiwan leasing industry was relatively restricted and only provided the machinery and equipment for production, transportation, utilities, sanitation, education and public administration sectors. As the economy developed and regulations changed, diverse new products have been offered to solve the capital shortage of SMEs, including the installment sales of raw materials, semi-finished, finished products and inventories, chattel secured transactions of automobiles and construction machinery and equipment, factoring, and leases of aircrafts, boats and automobiles.Future prospects: Taiwan currently promotes the legislation on finance companies to transform the leasing company which provides leasing services and installment sales to a finance company which is allowed to offer guarantees business in addition to offering loans, discounted notes, notes and valuable securities. The finance company act will be helpful in promoting the diversification of the financing business and providing enterprises and the public with an alternative source to obtain funds.

(4) CompetitionA. The competition in Taiwan

According to the information provided by the Taipei Leasing Association ("TLA"), as of March, 2018, there were 38 members in TLA, which can be divided into four different categories in terms of the structure of shareholders or managers:

Category(No. of members) Characteristics of business

Bank affiliate(14)

Sufficient funding source supported by the parent company. Heavily rely on the customer list for marketing provided by the banking parent companies and often focus on large-scale equipment leasing.Members:FCB Leasing Co., Ltd., Hua Nan International Leasing Co., Ltd., SinoPac Leasing Corp., CDC Finance & Leasing Corp., IBT Leasing Co., Ltd., Waterland Financial Holding Co., Ltd., Taichung Bank Leasing Co., Ltd., Sunny International Leasing Co., Ltd., Taiwan Business International Leasing Co., Ltd., CTBC Asset Management Co., Ltd., Panhsin International Leasing Co., Ltd , Co-operative Asset Management Corp., Taishin Dah An Leasing Co., Ltd., and TLG Capital Co., Ltd.

Captive finance company(9)

Mainly established by automobile manufacturers. Provides financing services via the expertise of leasing assets, but the customer base is also constrained.Members:Taiwan Acceptance Corporation, Hotai Finance Corporation, CMI Credit Ltd, Shinshin Credit Corporation, Mercedes-Benz Financial Services Taiwan Ltd., Ho-Hsin Car Leasing Co., Ltd. , Mercedes-Benz Leasing Taiwan Ltd., Fortune Motor Co., Ltd., and Volkswagen Financial Services Taiwan Limited.

Foreign finance company(5)

Mainly established by foreign equipment vendors or leasing companies to develop the Taiwan market.Members:ORIX Taiwan Corporation, President Tokyo Corporation, MUL Taiwan Co., Ltd. IBM Global Financing, and Scania Credit Taiwan Ltd.

Enterprise group subsidiaries(10)

Independent business operation. Provide diverse and customized products with flexibility and efficiency.Members:Chailease Finance Co., Ltd., Robina Finance & Leasing Corporation, Fina Finance and Trading Co., Ltd., Far Trust International Financial Co., Ltd., Cosmos Leasing Corporation, Jih Sun International Leasing & Finance Co., Ltd., Far Eastern International Leasing Corp., Konew Capital International Ltd., Hsieh-Shin Motors Co., Ltd., and Yu Rich Financial Services Co., Ltd.

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In terms of the capital structure of TLA members, the capital of each member is shown as follows:

Unit :NT$

Paid-in capital Number of members Member list

Over 5 billion 3 Chailease Finance Co., Ltd., Waterland Financial Holding Co., Ltd., and CTBC Asset Management Co., Ltd.

2~5 billion 9Far Eastern International Leasing Corp., SinoPac Leasing Corp., Taiwan Acceptance Corporation, FCB Leasing Co., Ltd., Hotai Finance Corporation, IBT Leasing Co., Ltd., Co-operative Asset Management Corp., Fina Finance and Trading Co., Ltd., and Fortune Motor Co., Ltd.

1~2 billion 6Taichung Bank Leasing Co., Ltd., Jih Sun International Leasing & Finance Co., Ltd., Hua Nan International Leasing Co., Ltd., Taiwan Business International Leasing Co., Ltd., Sunny International Leasing Co., Ltd., and Shinshin Credit Corporation,

0.5~1 billion 9CDC Finance & Leasing Corp., President Tokyo Corporation, ,Taishin Dah An Leasing Co., Ltd., TLG Capital Co., Ltd., Hsieh-Shin Motors Co., Ltd., Yu Rich Financial Services Co., Ltd., Mercedes-Benz Financial Services Taiwan Ltd., Robina Finance & Leasing Corporation, and Far Trust International Financial Co., Ltd.

Less than 0.5 billion 11

CMI Credit Ltd., ORIX Taiwan Corporation, Cosmos Leasing Corporation, Ho-Hsin Car Leasing Co., Ltd., IBM Global Financing, MUL Taiwan Co., Ltd., Panhsin International Leasing Co., Ltd., Mercedes-Benz Leasing Taiwan Ltd., Konew Capital International Ltd., Scania Credit Taiwan Ltd., and Volkswagen Financial Services Taiwan Limited.

Source: Department of Commerce, MOEA and Taipei Leasing Association

In summary, the members of TLA are large-sized companies in Taiwan. Chailease Finance Co., Ltd., the subsidiary of the Company, delivered the new contract amount of NT$157.8 billion in 2017 and has been maintaining the leading position in Taiwan lease and installment sales industry.

B. The competition in ChinaAccording to the China Financial Leasing Industry Development Overview 2017, the total number of various types of financial leasing companies in China was 9,090 at the end of 2017, marked a growth of 27.4% compared to 2016. Among these financial leasing companies, the numbers of lessors as NBFIs, domestic pilot lessors and foreign invested lessors were 69, 276 and 8,745 respectively.The registered capital for these financial leasing companies at 2017 year end was CNY$3,203.1 billion, increasing by 25.3% compared to the previous year. The registered capital of lessors as NBFIs, domestic pilot lessors and foreign invested lessors was CNY$197.4 billion, CNY$205.7 billion and CNY$2,800 billion respectively.The total contract balance of all lessors in 2017 was approximately CNY$6,060 billion, representing growth of 13.7% compared to 2016. The total contract balance of lessors as NBFIs, domestic pilot lessors and foreign invested lessors was CNY$2,280 billion, CNY$1,880 billion and CNY$1,900 billion respectively.The total contract balance of Chailease International Finance Corporation, the subsidiary of the Company in China, amounted to CNY$18.9 billion in 2017, representing 0.5% and 1% of total contract balance of the non-NBFIs and foreign invested lessors respectively.

The statistics of lessors in China under different administrations in 2017

Category Regulatorysystem Number of lessors Registered capital

(CNY$bn)Contract Balance

(CNY$bn)

Lessors as NBFIs CBRC 69 197.4 2,280

Lessors as Non-NBFIs

Domestic pilot lessorsMOFCOM and SAT 276 205.7 1,880

Foreign invested lessorsMOFCOM 8,745 2,800 1,900

Total in aggregate 9,090 3,203.1 6,060Source: China Financial Leasing Industry Development Overview 2017


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According to China Financial Leasing Industry Development Overview 2017, the statistics of registered capital of top 50 lessors in China is stated in the table below. The registered capital of the top 20 leasing companies constituted 7.6% of the total.The registered capital of Chailease International Finance Corporation, the subsidiary of the Company in China, amounted to CNY$2.03 billion in 2017, representing 0.1% of registered capital of the foreign invested lessors.

Registered Capital Number of lessors

Over 10 billion 105~10 billion 30

2.5~5 billion 55Source: China Financial Leasing Industry Development Overview 2017

Lessors' allocation of Top 5 administrative areas in China in 2017

Unit: number

Ranking Administrative area Lessors as NBFIs Domestic pilot lessor

Foreign invested lessors

Ratio of total in aggregate

1 Shanghai 10 20 2,121 23.7%2 Guangdong 6 18 3,124 34.6%3 Tianjin 11 79 1,484 17.3%4 Beijing 3 27 205 2.6%5 Jiangsu 5 15 259 3.1%

Source: China Financial Leasing Industry Development Overview 2017

By the end of 2017, financial leasing companies are located in 31 Administrative areas in China, among which most are based in the Southeast coast. And 93% of the total financial leasing companies are located in Shanghai, Tianjin, Guangdong, Beijing, Fujian, Jiangsu, Zhejiang, and Shandong.Chailease International Finance Corporation, the subsidiary of the Company in China, is located in Changning District, Shanghai, where is a highly competitive area for financial leasing business.

3. Research and development(1) R&D expenditures during the most recent fiscal year or up to the date of printing the

annual reportPlanning department in the Company is responsible for new products /or market planning and development through support and collaboration with relevant departments if required, to provide total solution to clients. The Company's R&D expenditure was NT 137 million in 2017 and is expected to reach NT 159 million in 2018.

(2) Technique or products successfully developed during the most recent fiscal year or up to the date of printing the annual reportA. Cross-border inventory financing: this product is provided to meet the offshore funding

need of our clients, a breakthrough for SMEs financing.B. ESCO and PV-ESCO business: in addition to ESCO financing and financing services

provided to solar power manufacturers, the Company has also engaged in the investment, EPC and O&M of solar power plant business, a technically advanced new product, and ranked as the top three solar power plant owner in Taiwan. Besides, the Company launches a solar power crowdfunding platform which allows individuals to invest in solar power plants online, reaching the goal of promoting renewable energy and sharing profits of electricity generated with the public.

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C. Aircraft financing: the Company collaborates with Bombardier, the leader in Canada's navigation industry, and Airbus Helicopter, the helicopter manufacturing division of Airbus, to facilitate the trading and financing activities of corporate and private jet markets in Asia Pacific. The Company has entered into a new joint venture with ELFC (a group company of the Mitsubishi UFJ Lease & Finance Company Limited group (“MUL”)), providing spare engine support packages under operating lease to penetrate the engine leasing business in Asia.

D. Research and development on patents: the Company has been devoted in the credit risk management and successfully developed credit risk assessment model and techniques based on the credit information of SMEs accumulated over 40 years in Taiwan. Accordingly, we have obtained 2 business method patents related to credit risk assessment from Intellectual Property Office in the past few years. Besides, the Company has been promoting the innovation of new financial products and digital financial services by exploiting the leading-edge technologies, and has obtained 5 financial product patents. In 2015, we further obtained from Intellectual Property Office in Taiwan the patent of “Loan Management Method Implemented with Mobile Telecommunication System” which can be applied to mobile-device related financial products.

4. Long-term and short-term business development planThe Company has been devoted to the development of the SMEs credit business, established the risk assessment mechanism for SMEs, avoided the price-oriented large corporations, established the professional, efficient and flexible pricing differentiation strategy based on different risk coefficients of customers and chose SMEs which have higher risks but are willing to pay higher risk premiums as the main niche market based on the reasonable risk-taking ability. Therefore, our management strategy centers on the unique SMEs finance model as core competitiveness, and focuses on the expansion of regional markets, the development of niche markets and diversification of funding sources.■ Regional market expansion: The Company originated from Taiwan and succeeded in

providing SME's financing services, and later gradually expanded its footprints to the US, Thailand, China, Vietnam, Malaysia, and Cambodia, following the trend of overseas investments. We will continue to accelerate our overseas market development, especially the ASEAN.

■ Development of niche markets: the Company gradually enlarged the customer base from SMEs to consumer financing, truck and automobile financing, construction equipment financing, fishery inventory financing, micro-enterprises financing, non-performing assets auction, real estate finance, office equipment leasing, medical equipment financing, car rentals, ESCO financing and services, solar power plant financing, investment, EPC and O&M, inventory financing (including cross-border), aircraft and ship financing, gasoline wholesale business, and insurance brokerage.

■ Diversification of funding sources: with respect to the capital strategy, we purely relied on bank loans initially; however, the source of capital has become more in tune with the development of business, including asset securitization, corporate bonds and fund-raising in the capital market.

Long-term and short-term business development plans of the Company are as follows:(1) Short-term business development plans

A. Market: continuously explore new market segments, new industries and new products to seize business opportunities; integrate physical and visual channels to acquire online and offline customers; accelerate e-commerce business expansion and digital financial product development; continue developing knowledge-based marketing platform to provide customized value-added services; cultivate niche markets and develop overseas and cross-border transaction models; improve sales activity management to increase employee productivity and eventually enlarge business scale and market share.


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B. Process: enhance the capability of developing information systems and improve productivity; advance mobile device technology and user experience; accelerate the application of digital technology to streamline process and improve efficiency; continuously develop, integrate and optimize mobile applications to promote mobile office and management efficiency.

C. Risks: integrate internal and external credit techniques to enhance credit risk assessment for local and overseas markets and products; develop credit analysis capability through digitized data and processes; pursue the optimization of business growth and asset quality.

D. Legal & Collection: enhance collection management and accelerate debt recovery to control asset quality; ensure the legitimacy of deal structure to cope with the changes of market as well as laws and regulations.

E. Funding: continuously cultivate long-term and stable fundraising capability and diversify funding sources to reduce funding cost; expand the scale of crowdfunding and plan asset securitization of solar business to mitigate interest and liquidity risks.

F. HR: strengthen brand image of Chailease, enhance talent recruitment, training and retention, concrete mid and long-term talent development strategy, nurture global and professional talent, and improve employee productivity.

(2) Long-term business development plansA. Continue to cultivate domestic markets and expand overseas markets to pursue sales

growth without compromising asset quality, develop new products and business, and aim to become an outstanding finance company in Asia Pacific.

B. To expand products and business scopes, and accelerate the profit growth, we continue the strategies of extending value chain of existing products through investment and joint venture, exploiting internet technology to develop products, and further developing diversified marketing channels and platforms to broaden customer base and deal sources.

C. Continue the strategy of our three main growth engines- Taiwan, China and ASEAN, to promote the cooperation of cross-border products and businesses. Leverage the talent, product expertise and funding advantage of Taiwan operations as well as our overseas networks to seize business opportunities and reach group synergies. Apply internet technology to streamline workflow, eliminate obstacles of time and distance, and enhance productivity and organizational efficiency.

D. Continue with the medium and long-term strategies of overseas market development, including setting up 3 to 5 branches in China annually to implement the strategy of cultivating local markets and actively seeking local partners for business collaboration, joint venture or merger and acquisition opportunities to accelerate market expansion in ASEAN.

(2) Market and sales overview1. Market analysis

(1) Services provided in each geographic areaArea Services Subsidiaries

Taiwan Finance leaseOperating leaseInstallment salesFactoringDirect lendingLife and property insurance brokerOverdue receivables managementEnergy saving servicesEngineering, procurement, construction ,operations and maintenance on solar power plants

■ Chailease Finance Co., Ltd.■ Fina Finance & Trading Co., Ltd.■ Chailease Consumer Finance Co., Ltd.■ Apex Credit Solutions Inc.■ China Leasing Co., Ltd.■ Chailease Auto Rental Co., Ltd.■ Chailease Insurance Brokers Co., Ltd.■ Yun Tang Inc.■ Chailease Energy Integration Co.,Ltd.■ Chailease Power Technology Co., Ltd.■ Chuang Ju Limited Partnership■ Sing Chuang Limited Partnership■ Chailease Finance (B.V.I.) Company Ltd.■ Chailease International Financial Services Co., Ltd.■ Chailease International Financial Services (Liberia)

Corp.■ Chailease International Financial Services (Labuan)

Corp.

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Area Services SubsidiariesChina Finance lease

Operating leaseImporting and exportingFactoringLeasing of self-owned buildingsProperty management

Chailease International Finance CorporationChailease International Corp.Chailease Finance International Corp.Jirong Real Estate Co., Ltd.

Thailand Installment sales of vehiclesFinance leaseFactoring Non-Life insurance broker

Asia Sermkij Leasing Public Company LimitedBangkok Grand Pacific Lease Public Company LimitedSK Insurance Broker Co.,

Vietnam Finance lease Importing and exporting

Chailease International Leasing Company LimitedChailease International Trading Company Limited

Malaysia Hire purchase of vehiclesProperty Insurance agency

Chailease Berjaya Credit Sdn. Bhd.Chailease Agency Sdn. Bhd.

Cambodia Finance lease of vehicle and machinery Chailease Royal Leasing Plc.Philippines Vehicle Financing Chailease Berjaya Finance CorporationUnited States Commercial real estate finance Grand Pacific Financing CorporationUnited Kingdom

InvestmentMarket survey and consultancy services Chailease International Company (UK) Limited

(2) Sales /or services contribution in each geographic areaUnit: NT$ (thousand)

Year FY2017 FY2016

Area Revenue fromexternal customers1 Percentage Revenue from

external customers1 Percentage

Taiwan 19,411,071 47% 18,027,403 47%China 18,134,092 44% 16,602,299 44%Thailand 2,644,869 6% 2,585,032 7%Others2 1,264,667 3% 793,042 2%Total 41,454,699 100% 38,007,776 100%Note 1: The information comes from the consolidated financial statements audited by the CPA.Note 2: Others include the subsidiaries in Vietnam, Malaysia, Combodia, Philippines and USA.

(3) Market shareA. Market share in Taiwan

According to the statistics from TLA, the overall new contract amount of Chailease Finance Co., Ltd., the Company's subsidiary, reached NT$157.8 billion in 2017 and has been maintaining the leading position in Taiwan lease and installment sales industry.

B. Market share in ChinaAs China has a vast territory, the census report for market share is unavailable. According to China Financial Leasing Industry Development Overview 2017, the total contract balance of lessors approached CNY$6,060 billion in 2017, among which CNY$2,280 billion was contributed by NBFIs, CNY$1,880 billion by domestic pilot lessors and CNY$1,900 billion by foreign invested lessors. The total contract balance of Chailease International Finance Corporation, the China subsidiary of the Company, amounted to CNY$18.9 billion, representing 0.5% and 1% of total contract balance of the non-NBFIs and foreign invested lessors respectively.

(4) Future outlook of supply and demand as well as growth potentialA. The expected economic growth in 2018 is 2.42% in Taiwan.

Due to stable recovery of global economy, the continuous trend of innovative applications, and the rising of global oil and raw material price, the Taiwan economy is expected to improve by increasing domestic demand in 2018 with a better economic growth rate than the rate in 2017. The Taiwan Institute of Economic Research (TIER) and Directorate-General of Budget, Accounting and Statics, Executive Yuan projected a GDP growth rate of 2.34% and 2.42% in 2018 respectively.

B. The fixed investment in Taiwan is estimated to increase by 3.3% in 2018.Regarding the fixed capital formation, the growth of private investment in 2018 is forecasted to be 2.3%, 1.70% higher than that in 2017. TIER forecasted the growth rate


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for fixed investment in 2018 will be around 3.3%.C. The expected economic growth in 2018 is 5.8% in emerging and developing Asia.

Asian Development Bank (ADB) estimated a GDP growth rate of 5.8% and 6.4% for both emerging and developing Asia and China in 2018 respectively.

D. The penetration rates of leasing in China and Taiwan are comparatively low.According to the statistics from World Leasing Yearbook 2018, the penetration rate of leasing (i.e. the leasing as a proportion of all fixed investment in plant and equipment) in China and Taiwan are 6.0% and 9.1%, comparatively lower than mature markets such as the United States and UK whose penetration rates are 21.5% and 33.7% respectively, implying that there is still huge growth potential in the Taiwan and China leasing markets.

(5) Competitive nicheA. The Company has been in the leading position in the Taiwan leasing industry and

its success can be attributed to the unique financing model for SMEs and core competitiveness to ensure the long-term high and stable profits of the Company.A leader in the Taiwan lease and installment sales businessWith more than 40 years' experiences in serving SMEs, the Company has accumulated a huge customer database and built an interlaced network in the industry, taking a leading position in the SMEs finance market in Taiwan. The statistics from TLA indicates that the Company's subsidiary, Chailease Finance Co., Ltd. delivered the new contract amount of NT$157.8 billion in 2017 and has been maintaining the leading position in Taiwan lease and installment sales industry.

B. Diverse product line and high value-added financing servicesIn comparison with other leasing companies, in addition to the traditional leasing, installments and factoring services, the Company introduced new products in truck and automobile financing, construction equipment financing, fishery inventory financing, micro-enterprises financing, non-performing assets auction, real estate finance, office equipment leasing, medical equipment financing, car rentals, ESCO financing and services, solar power plant financing, investment, EPC and O&M, inventory financing (including cross-border), aircraft and ship financing, gasoline wholesale business, and insurance brokerage in response to the diverse needs of SMEs' corporate development. To provide high value-added financing services, the Company can also customize the deal structure and payment terms based on the clients' operational plans and cash flows.

C. Advanced credit risk assessment model and outstanding credit risk management system:The Company has exerted great efforts to strengthen the core capability of risk management and established the credit assessment operation for different products, risk models and credit decision-making mechanism. We successfully developed the "Credit Risk Assessment Model" in 2003 to efficiently improve the credit quality and control the risk costs.

D. The diversified client base in different industries can efficiently lower the risks of market change.E. Outstanding financial risk managementThe subsidiaries of the Company in Taiwan, Chailease Finance Co., Ltd., Fina Finance and Trading Co., Ltd. and Chailease Consumer Finance Co., Ltd. have obtained the long-term A(twn) ratings from Fitch Ratings. This is the first time for Chailease Consumer Finance Co., Ltd. to obtain the credit rating from rating agency. In addition, the subsidiary in Thailand, Asia Sermkij Leasing Public Company Limited has also been granted the BBB+ rating from TRIS Rating. With such credit ratings, these subsidiaries are able to issue unsecured corporate bonds. Accordingly, multiple sources of capital can meet the needs for future business growth.

F. Highly efficient collection abilityThe Company has devoted itself to developing the most appropriate collection model for each product and continued to improve the professional ability and collection efficiency of legal personnel so as to increase the collection performance.

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(6) Positive and negative factors for future development and responses to such factors

Taiwan

(A) Positive factors:a. The clear sign of economic recovery and continuous growth of investments in equipment will be beneficial to

the continuing development of the whole business.b. The financial service for domestic micro-enterprises is still insufficient and has huge room for business

development.c. More diverse products would be provided to satisfy customers if finance company is allowed to be

incorporated.(B) Negative factors:

a. As banks and leasing companies aggressively enter the SMEs financing market, the competition becomes more severe.

Responsive strategy:(a) Expand certain niche industries to ensure the growth of overall business volume and profits.(b) Adopt the pricing differentiation strategy to increase competitiveness.(c) Continue to research and develop new products and create new business models.

b. The demand for talent cultivation and recruitment rises faster due to new product development and market expansion.

Responsive strategy:(a) Continue to promote the succession plan of critical positions and incubate high potential critical talents.

(eg. Chailease Talent Development Program)(b) Continue to implement cultivation program for expatriates (eg. Chailease Asia MA Program) in response

to new market/region expansion.(c) Recruit outstanding and capable employees at different levels to support the Company's rapid

development.

China

(A) Positive factors:a. The government highly supports the development of leasing industry.b. The leasing market in China has great potential to develop.c. Continue to grow with sound business operation and management.d. Supports of management techniques and professional personnel would be provided by the parent company.e. Continue to set up new branches nationwidef. Ability to rapidly recruit and train local talents.

(B) Negative factors:a. There is uncertainty derived from the adjustment of China economic structure and industry transformation.

Responsive strategy:(a) Strengthen interaction with the government institutions in China to understand the trends in policies and

regulations in a timely manner. (b) Enhance industry control and review, and adjust marketing direction periodically.

b. Due to the limitation of equity funds, the main funding source for business development is still provided by banks.Responsive strategy:(a) Maintain the strategy of medium and long-term funding as the major to provide the capital for stable

business development, and collaborate with strategic alliance banks to achieve a "win-win" synergy.(b) Diversify funding sources by searching for other financial instruments in the capital market, after issuance

of a mid-term note in 2015.(c) Take advantage of foreign-debt quota to deploy the offshore funding at an appropriate level in order to

lower down the funding cost and reduce the risk of short supply of domestic capital.c. Quick response to talent recruitment and cultivation to support the Company's rapid market development.

Responsive strategy:(a) Build up unique corporate culture and competitive reward policy to attract local outstanding employees.(b) Establish good relationship with local schools, and provide scholarship and internship opportunity,

business site visit, and strategic cooperation with campus to secure the source of talents from schools.(c) Design a structured training program to cultivate talents in a faster way.(d) Motivate local outstanding talents with better promotion system and management skill training program.(e) Offer expatriate opportunities to facilitate employees' careers.


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2. Usage and manufacturing process of main products(1) Usage of main products

The Company provides asset-based financing services to SMEs, offering critical financial support for their business development.

(2) Manufacturing process of main products3. Supply situation of major raw materialsThere are no major raw materials as the Company engages in the non-production business.

3. Supply situation of major raw materialsThere are no major raw materials as the Company engages in the non-production business.

4. Major suppliers and clientsA. Suppliers accounting for at least 10% of annual order volume in the 2 most recent fiscal

years:Not applicable as the Company doesn›t engage in the production business.

B. Clients accounting for at least 10% of annual total revenues in the last two fiscal years:None.

5. Production volume for the most recent two fiscal years: Not applicable.6. Volume of units sold for the most recent two fiscal years: Not applicable.

(3) Head count, average seniority, average age and educational background

of employees in the recent two years and as of the publication date of the annual report

March 31, 2018

Year 2016 2017 On March 31,2018

Number of employees

Management personnel 471 535 635

Non-Management personnel 3,768 4,193 4,218

Total 4,239 4,728 4,853

Average age 32.9 32.8 32.6

Average senority 5.2 5.18 5.22

Educational background

PhD 0.05% 0.02% 0.02%

Master's degree 16.94% 16.15% 15.75%

Bachelor's degree 78.86% 79.66% 79.70%

High school graduate 4.13% 4.15% 4.53%

Below high school 0.02% 0.02% 0%

Note : The information for the current year before the publishing date of the annual report should be filled in.Management personnel: Title manager (or above)Non- Management personnel: Others staff.

Business promotion Contract signing

Credit evaluation Loan disbursement Financial institutions

Loan application acceptance

Loan document verification Equity capital

Customermanagement

Money and capital markets

．Credit review．Make site visit．Reference checking from buyers, suppliers．Prepare credit report．Credit scoring and rating

Capital

Loan approval

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Value, GrowthHonesty and Discipline


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Value, GrowthHonesty and Discipline

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Financial Highlights

(1) Audit committee's report on financial statements from the most recent year

Chailease Holding Company Limited

Audit Committee's Report

The Board of Directors has prepared the Company's 2017 Business Report, Financial Statements, and proposal for allocation of profits. The CPAs of KPMG, Mr. Chung Yi, Chiang and Ms.Yi Chun, Chen were retained to audit Chailease Holding Company Limited's Financial Statements and have issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and profit allocation proposal have been reviewed and determined to be correct and accurate by the Audit committee members of Chailease Holding Company Limited.According to Article 14-4 of the Securities and Exchange Act, we hereby submit this report.

Chailease Holding Company Limited Chairman of the Audit Committee: Dar-Yeh HwangMarch 22, 2018

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(2) Financial review

Independent Auditors' Report

To the Board of Directors of Chailease Holding Company Limited:OpinionWe have audited the consolidated financial statements of Chailease Holding Company Limited and its subsidiaries (“ the Group” ), which comprise the consolidated balance sheets as of December 31, 2017 and 2016, and the related consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for the years ended December 31, 2017 and 2016, and notes to the consolidated financial statements, including a summary of significant accounting policies.In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2017 and 2016, and its consolidated financial performance and its consolidated cash flows for the years ended December 31, 2017 and 2016 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“ IFRSs” ), International Accounting Standards (“ IASs” ), interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China.Basis for OpinionWe conducted our audit in accordance with the “ Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants” and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor' s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.Key Audit MattersKey audit matters are those matters that, in our professional judgment, were significant in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements taken as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters individually. Based on our judgment, the key audit matters that should be disclosed in this audit report are as follows:1. Impairment assessment of accounts receivable

Refer to Note (4) (g) “ Financial instruments” and Note (5) “ Significant accounting assumptions and judgments, and major sources of estimation uncertainty” and Note (6) (d) “accounts receivable, net” to the consolidated financial statements for the details of the information about impairment assessment on accounts receivable.Description of key audit matter:The Group is engaged primarily in providing various services of leasing and financing, in which accounts receivable is a significant account of the Group. Impairment allowances are provided on accounts receivable based on management' s best estimate of the potential losses in the accounts receivable portfolios at the balance sheet date. Management exercise judgment in making assumptions and estimations when calculating for impairment allowances on both individually and collectively assessed accounts receivables.How the matter was addressed in our audit:In relation to the key audit matter above, we have performed certain key audit procedures that included evaluating the adequacy of the Group's impairment policy on financial assets; testing to check compliance with the internal control on the process of evaluating impairment losses on loans and receivable; evaluating the assumptions and data used in the calculation; recalculating impairment allowances and rechecking it with the assumptions and data used by management; and evaluating the adequacy of the Group's disclosure for Impairment allowances on loans and receivables.

2. Impairment of operating lease assetsRefer to Note (4) (m) “Impairment of non financial assets” and Note (5) “Significant accounting assumptions and judgments, and major sources of estimation uncertainty” and Note (6) (g) “Property, plant and equipment” to the consolidated financial statements for the details of the information about impairment of operating lease assets.

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Description of key audit matter:The Group is engaged primarily in providing various services of leasing and financial instruments, in which impairment of operating lease assets is another a significant account of the Group.At each reporting date, the Group performs impairment test of the assets particularly those used for operating leases to determine any indication of impairment. Such test considers the value in use to evaluate the asset's recoverable amount. The value in use is calculated on the present value of future rental revenue and value of disposal of operating lease assets less overheads and duties. The capital cost rate on reporting date is used as the discounting rate.Impairment of operating lease assets is one of the key audit matters for our audit, as it requires management to make estimates and assumptions that can materially affect the financial statements.How the matter was addressed in our audit:In relation to the key audit matter above, we have performed certain key audit procedures that included evaluating the reasonableness of the discount rate used by the Group to estimate the recoverable amount and the residual value of the leased asset; testing compliance with the policy of appraising leased asset is consistent with the Group's policy; recalculating impairment losses based on the assumptions and data used by management; and evaluating the adequacy of the Group's disclosure on impairment of operating lease assets.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial StatementsManagement is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Group's financial reporting process.Auditor's Responsibilities for the Audit of the Consolidated Financial StatementsOur objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or

error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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


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

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

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters significant in our audit of the consolidated financial statements for the year ended December 31, 2017 and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partners on the audit resulting in this independent auditors' report are Chung-Yi Chiang and Yi-Chun Chen.

KPMGCPA： Chung Yi, Chiang Yi Chun, ChenTaipei, Taiwan (Republic of China)March 22, 2018

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CHAILEASE HOLDING COMPANY LIMITEDAND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL POSITIONDecember 31, 2017 and 2016(Amounts Expressed in Thousands of New Taiwan Dollars)

2017.12.31 2016.12.31　Assets Amount % Amount %

Current assets： 1100 　Cash and cash equivalents (Notes (6)(a) and (7)) $ 19,030,593 6 12,936,615 5 1110 　Current financial assets at fair value through profit or loss (Note (6)(b)) 49,572 - 113,057 - 1130 　Current held-to-maturity financial assets (Note (6)(b)) 6,442,807 2 5,824,814 2 1170 　Accounts receivable, net (Notes (6)(d), (7) and (8)) 217,964,861 67 194,395,682 68 1476 　Other current financial assets (Notes (7) and (8)) 3,666,543 1 3,315,724 1 1479 　Other current assets-others (Notes (6)(e) and (7)) 4,367,771 1 3,654,131 1

　　 251,522,147 77 220,240,023 77 Non-current assets： 1523 　Non-current available-for-sale financial assets (Note (6)(b)) 1,077,941 - 1,815,310 1 1528 　Non-current held-to-maturity financial assets (Note (6)(b)) 1,393,640 1 997,270 - 1550 　Investments accounted for using equity method (Notes (6)(f) and (8)) 1,146,881 - 889,608 - 1600 　Property, plant and equipment (Notes (6)(g) and (8)) 10,059,227 3 10,336,214 4 1780 　Intangible assets (Note (6)(h)) 63,860 - 77,901 - 1840 　Deferred tax assets (Note (6)(m)) 3,697,787 1 3,755,363 1 1930 　Long-term notes and accounts receivable, net (Notes (6)(d) , (7) and (8)) 57,682,774 18 46,786,877 16 1995 　Other non-current assets-others (Notes (7) and (8)) 932,428 - 1,184,892 1

76,054,538 23 65,843,435 23

TOTAL ASSETS $ 327,576,685 100 286,083,458 100


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2017.12.31 2016.12.31

LIABILITIES AND EQUITY Amount % Amount %

Current Liabilities：

2100 　Short-term borrowings (Notes (6)(i), (7) and (8)) $ 92,227,725 28 79,283,044 28

2125 　Current derivative financial liabilities for hedging (Note (6)(b)) 2,108 - - -

2150 　Account and notes payable 3,959,867 1 3,205,667 1

2230 　Current tax liabilities 1,660,227 1 1,860,322 1

2305 　Other current financial liabilities (Note (7)) 30,085,814 9 26,620,973 9

2320 　Long-term liabilities, current portion (Notes (6)(i), (6)(j), (7) and (8)) 83,886,873 26 77,542,923 27

2399 　Other current liabilities-others 1,122,476 - 1,299,666 -

　　 212,945,090 65 189,812,595 66

Non-current Liabilities：

2530 　Bonds payable (Notes (6)(j) and (7)) 15,192,493 5 9,701,649 3

2540 　Long-term borrowings (Notes (6)(i), (7) and (8)) 36,640,756 11 39,363,927 14

2570 　Deferred tax liabilities (Note 6(m)) 1,836,902 1 1,632,086 1

2600 　Other non-current liabilities (Note (6)(l)) 4,797,623 1 4,064,973 1

58,467,774 18 54,762,635 19

　　Total Liabilities 271,412,864 83 244,575,230 85

Equity attributable to owners of the Company：(Note (6)(n))

3100 　Share Capital 12,642,300 4 11,392,300 4

3200 　Capital surplus 17,367,796 5 9,391,481 3

3220 　Special reserve 674,779 - - -

3350 　Unappropriated retained earnings 24,374,823 7 19,201,441 7

3400 　Other equity items (1,397,823 ) - (674,779 ) -

　　Total equity attributable to owners of the Company 53,661,875 16 39,310,443 14

36XX 　Non-controlling interests 2,501,946 1 2,197,785 1

　　Total equity 56,163,821 17 41,508,228 15

TOTAL LIABILITIES AND EQUITY $ 327,576,685 100 286,083,458 100

92 93

CHAILEASE HOLDING COMPANY LIMITEDAND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF PROFIT OR LOSSAND OTHER COMPREHENSIVE INCOMEFor the Years Ended December 31, 2017 and 2016(Amounts Expressed in Thousands of New Taiwan Dollars)

For the years ended December 31, 2017 2016

Amount % Amount % Operating revenues: (Note (7))4111 　Sales revenue $ 8,289,471 20 7,541,644 20 4810 　Interest revenue - installment sales 7,610,318 18 7,281,132 19 4820 　Interest revenue - capital leases 9,781,840 24 8,890,413 23 4300 　Rental revenue - operating leases 3,080,320 7 2,883,217 8 4230 　Interest revenue - loans 3,176,652 8 3,000,990 8 4240 　Other interest revenue 3,191,904 8 2,857,605 8 4881 　Other operating revenue 6,324,194 15 5,552,775 14 41,454,699 100 38,007,776 100 Operating costs: (Note (7))5111 Cost of sales 7,288,287 17 6,603,726 17 5240 Interest expense 4,935,249 12 4,646,899 12 5300 Cost of rental revenue 2,409,064 6 2,042,567 5 5800 Other operating costs 1,112,689 3 1,038,805 3 15,745,289 38 14,331,997 37 Gross profit from operation 25,709,410 62 23,675,779 63 6000 Operating expenses (Note (7)) 13,003,258 31 14,989,235 39 6500 Net other income and expenses (Note (6)(q)) 151,151 - 147,953 - Operating profit 12,857,303 31 8,834,497 24 Non-operating income and expenses:7100 Interest income 81,761 - 62,690 - 7130 Dividend revenue 81,548 - 90,112 - 7020 Other gains and losses (Note (6)(r)) 529,050 2 1,071,102 3 7060 Share of (loss) profit of associates and joint ventures accounted for using equity

method(Note (6)(f)) 3,750 - (1,747 ) -

696,109 2 1,222,157 3 7900 Profit before income tax 13,553,412 33 10,056,654 27 7950 Less: Income tax expense (Note (6)(m)) 3,550,027 9 2,472,335 7 Profit for the year 10,003,385 24 7,584,319 20 8300 Other comprehensive income (loss): 8310 Items that will not be reclassified subsequently to profit or loss 8311 Remeasurement of defined benefit liabilities 78,348 - 37,458 - 8349 Related tax (13,319 ) - (6,349 ) -

Total items that will not be reclassified subsequently to profit or loss 65,029 - 31,109 - 8360 Items that may be reclassified subsequently to profit or loss8361 Exchange differences on translation of foreign financial statements (786,678 ) (2 ) (2,267,947 ) (6 )8362 Unrealized (losses) gains on available-for-sale financial assets (256,776 ) - 43,120 - 8363 Losses of effective portion of cash flow hedges (205 ) - (163,416 ) - 8364 Gains of effective portion of hedges of net investment in foreign operations 397,071 1 28,123 - 8370 Share of other comprehensive income of associates and joint ventures

accounted for using equity method that will be reclassified to profit or loss - - (4,727 ) -

8399 Related tax 104,748 - 43,510 - Total other items that maybe reclassified subsequently to profit or loss (541,840 ) (1 ) (2,321,337 ) (6 )

8300 Other comprehensive income (loss) for the year, net of tax (476,811 ) (1 ) (2,290,228 ) (6 )8500 Total comprehensive income for the year $ 9,526,574 23 5,294,091 14

Profit attributable to:8610 Owners of the Company $ 9,656,514 23 7,243,268 19 8620 Non-controlling interests 346,871 1 341,051 1 $ 10,003,385 24 7,584,319 20

Comprehensive income attributable to:8710 Owners of the Company $ 8,998,499 22 5,009,587 13 8720 Non-controlling interests 528,075 1 284,504 1 $ 9,526,574 23 5,294,091 14 9750 Basic earnings per share (NT dollars) (Note (6)(o)) $ 8.29 6.36


pany Limited

92 93

CH

AILE

ASE

HO

LDIN

G C

OM

PAN

Y LI

MIT

EDAN

D IT

S SU

BSID

IARI

ESC

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DAT

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TS O

F C

HAN

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IN E

QU

ITY

For t

he Y

ears

End

ed D

ecem

ber 3

1, 2

017

and

2016

(Am

ount

s Ex

pres

sed

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hous

ands

of N

ew T

aiw

an D

olla

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Equit

y Attr

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tal eq

uity

Capit

al

surp

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ms

Total

equit

y att

ributa

ble

to ow

ners

of the

Com

pany

Stoc

kRe

taine

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ings

Exch

ange

diffe

rence

s on

tran

slatio

n of

foreig

n fin

ancia

l sta

temen

ts

Unrea

lized

ga

ins (l

osse

s) on

avail

able-

for-sa

le fin

ancia

l ass

ets

Gains

(loss

es)

of eff

ectiv

e po

rtion

of ca

sh

flow

hedg

es

Gains

(loss

es) o

f eff

ectiv

e por

tion

of he

dges

of ne

t inv

estm

ents

in for

eign

opera

tions

Share

capit

alSp

ecial

res

erve

Unap

prop

riated

re

taine

d ea

rning

sBa

lance

as of

Janu

ary 1,

2016

$

11,39

2,300

9,4

07,39

5

-

15,49

7,081

1,5

45,06

3

120,2

70

163,4

16

(238,4

84)

37

,887,0

41

2,143

,498

40

,030,5

39

Profit

for th

e yea

r

-

-

-

7,243

,268

-

-

-

-

7,2

43,26

8

341,0

51

7,584

,319

Othe

r com

prehe

nsive

inco

me (lo

ss) fo

r the y

ear

-

-

-

31

,363

(2,

172,8

71 )

43,12

0

(163,4

16 )

28,12

3

(2,23

3,681

) (56

,547 )

(2,

290,2

28 )

Total

comp

rehen

sive i

ncom

e (los

s) for

the y

ear

-

-

-

7,2

74,63

1

(2,17

2,871

) 43

,120

(16

3,416

) 28

,123

5,0

09,58

7

284,5

04

5,294

,091

Earni

ngs d

istrib

ution

and a

pprop

riatio

n: Ca

sh di

viden

ds to

ordin

ary sh

areho

lders

-

-

-

(3,

531,6

13 )

-

-

-

-

(3,53

1,613

) -

(3,

531,6

13 )

Othe

r cha

nges

in ca

pital

surpl

us:

Ch

ange

s in e

quity

of as

socia

tes an

d join

t ve

ntures

acco

unted

for u

sing e

quity

meth

od

-

4,012

-

-

-

-

-

-

4,0

12

-

4,012

Chan

ges i

n own

ership

in su

bsidi

aries

-

(19

,926 )

-

(38

,658 )

-

-

-

-

(58

,584 )

-

(58

,584 )

Chan

ges i

n non

-contr

olling

inter

ests

-

-

-

-

-

-

-

-

-

(23

0,217

) (23

0,217

)Ba

lance

as of

Dec

embe

r 31,

2016

11

,392,3

00

9,391

,481

-

19

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41

(627,8

08 )

163,3

90

-

(210,3

61 )

39

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43

2,197

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41

,508,2

28

Profit

for th

e yea

r

-

-

-

9,656

,514

-

-

-

-

9,6

56,51

4

346,8

71

10,00

3,385

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her c

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ive in

come

(loss

) for th

e yea

r

-

-

-

65,02

9

(863,1

94 )

(256,7

76 )

(145 )

39

7,071

(658,0

15 )

181,2

04

(476,8

11 )

Total

comp

rehen

sive i

ncom

e (los

s) for

the y

ear

-

-

-

9,7

21,54

3

(863,1

94 )

(256,7

76 )

(145 )

39

7,071

8,998

,499

52

8,075

9,5

26,57

4 Ea

rning

s dist

ributi

on an

d app

ropria

tion:

Spec

ial re

serve

appro

priate

d

-

-

674,7

79

(674,7

79 )

-

-

-

-

-

-

- Ca

sh di

viden

ds to

ordin

ary sh

areho

lders

-

-

-

(3,

873,3

82 )

-

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-

-

(3,87

3,382

) -

(3,

873,3

82 )

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al inc

rease

in ca

sh

1,250

,000

7,9

76,31

5

-

-

-

-

-

-

9,226

,315

-

9,2

26,31

5 Ch

ange

s in n

on-co

ntroll

ing in

teres

ts

-

-

-

-

-

-

-

-

-

(223,9

14 )

(223,9

14 )

Balan

ce as

of D

ecem

ber 3

1, 20

17$

12,64

2,300

17

,367,7

96

674,7

79

24,37

4,823

(1,

491,0

02 )

(93,38

6 )

(145 )

18

6,710

53,66

1,875

2,5

01,94

6

56,16

3,821

94 95

CHAILEASE HOLDING COMPANY LIMITEDAND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2017 and 2016 (Amounts Expressed in Thousands of New Taiwan Dollars)


Cash flows from operating activities: 　Profit before income tax $ 13,553,412 10,056,654 　Adjustments: 　　Adjustments to reconcile profit before income tax to net cash provided by operating activities: 　　　Depreciation expense 2,075,955 1,866,849 　　　Amortization expense 147,656 170,664 　　　Gain on financial assets and liabilities at fair value through profit or loss (7,513 ) (48,300 )　　　Interest expense 4,935,249 4,646,899 　　　Interest income (23,842,475 ) (22,092,830 )　　　Dividend income (81,548 ) (90,112 )　　　Share of (profit) loss of associates and joint ventures accounted for using equity method (3,750 ) 1,747 　　　Gain on disposal of property, plant and equipment (26,215 ) (30,328 )　　　Loss on disposal of foreclosed assets 99,416 67,679 　　　Gain on disposal of investments (178,835 ) (17,245 )　　　Impairment loss on financial assets 4,188,577 6,214,612 　　　Impairment loss on non-financial assets 510,442 339,987 　　　　Total adjustments to reconcile profit (12,183,041 ) (8,970,378 )　　Change in operating assets and liabilities: 　　　Change in operating assets: 　　　　Decrease in financial assets held for trading 71,126 120,484 　　　　Decrease in non-current financial assets at fair value through profit or loss - 721,807 　　　　Increase in accounts receivable (41,158,894 ) (31,310,488 )　　　　Increase in other current financial assets (893,342 ) (1,059,708 )　　　　(Increase) decrease in other current assets (265,628 ) 105,106 　　　　Proceeds from sales of operating lease assets 1,132,735 1,062,488 　　　　Purchase of operating lease assets (3,606,243 ) (3,732,549 )　　　　Decrease in other non current assets – others 103,998 67,224 　　　　　Total changes in operating assets (44,616,248 ) (34,025,636 )　　　Changes in operating liabilities: 　　　　Increase in accounts and notes payable 768,003 1,250,440 　　　　Increase in long-term and shortterm debts 263,237,580 170,632,503 　　　　Repayment of longterm and shortterm debts (239,346,357 ) (152,292,373 )　　　　Increase in other current financial liabilities 3,702,627 1,765,386 　　　　(Decrease) increase in accrued pension liabilities (42,959 ) 9,863 　　　　(Decrease) increase in other current liabilities others (158,609 ) 308,597 　　　　Increase in other non-current liabilities 844,773 711,587 　　　　Total changes in operating liabilities 29,005,058 22,386,003 　　　　　Total changes in operating assets and liabilities (15,611,190 ) (11,639,633 )　　　Total adjustments (27,794,231 ) (20,610,011 )


pany Limited

94 95


　　Cash outflow from operation (14,240,819 ) (10,553,357)　　Interest received 23,747,993 22,082,181 　　Dividend received 81,648 90,212 　　Interest paid (4,811,585 ) (4,629,050)　　Income taxes paid (3,474,381 ) (2,916,301)　　Net cash provided by operating activities 1,302,856 4,073,685 Cash flows from investing activities: 　Acquisition of availableforsale financial assets (27,611 ) (111,617)　Proceeds from disposal of available-for-sale financial assets 661,698 56,074 　Proceeds from capital reduction of available-for-sale financial assets 18,380 3,233 　Acquisition of heldtomaturity financial assets (5,502,979 ) (4,813,750 )　Disposal of heldtomaturity financial assets 4,483,533 7,963,949 　Acquisition of investments accounted for using equity method (406,428 ) (587,374 )　Proceeds from capital reduction of investments accounted for using equity method 81,872 37,301 　Acquisition of property, plant and equipment (97,326 ) (96,211 )　Disposal of property, plant and equipment 224,367 2,294 　Acquisition of intangible assets (1,066 ) (38,324 )　　Net cash (used in) provided by investing activities (565,560 ) 2,415,575 Cash flows from financing activities: 　Increase capital in cash 9,226,315 - 　Distribution of cash dividend (3,873,382 ) (3,531,613 )　Changes in noncontrolling interests (223,914 ) (230,217 )　　Net cash provided by (used in) financing activities 5,129,019 (3,761,830 )Effect of exchange rate changes on cash and cash equivalents 228,936 (885,352 )Net increase in cash and cash equivalents 6,095,251 1,842,078 Cash and cash equivalents, net of bank overdraft, beginning of year 12,935,342 11,093,264 Cash and cash equivalents, net of bank overdraft, end of year (Note (6)(a)) $ 19,030,593 12,935,342

96 97

(1) Integrated Risk Management Framework & Policy

1. Chailease Risk Management Organizational StructureChailease's Risk Management Committee is responsible for the company's risk management structure and ensuring the implementation of risk management activities. Subsidiaries also have internal risk management planning departments, credit services division, and credit services departments and branches responsible for implementing and overseeing risk management mechanisms.

Risk Management

Board

President

Chairman

Chief Risk officer

Subsidiaries

Corporate Planning Division Credit Services Division

Risk Management Committee

Management Committee


Risk Management and Planning Department

Credit Services of Departments and Branches

VII


pany Limited

96 97

2. Organizations with Risk Management ResponsibilitiesOrganization Functions

Board

Understanding the activities and risks of Chailease operations and activities and carefully and effectively appraising systems and structures pertaining to risk control.Ensuring that top executives establishes sound identification, analysis, evaluation, treatment and risk oversight reporting systems, including quarterly assessments to determine whether the organization is capable of managing major risks adequately (e.g., credit risk, market risk, liquidity risk, currency rate fluctuations, and operational risks.); reviewing the suitability of risk management policies and procedures as well as the effectiveness of implementation.

Risk Management Committee

Responsible for setting up a risk management structure approved by the management committee;setting up a risk management system, applying risk management policies and procedures to deal with any major risks that the company could potentially encounter;reviewing each year the soundness and suitability of holding company risk management policies, procedures, and processes; reviewing each quarter the holding company'srisk management report and reporting any major incidents to the Board.


Formulating review and approval methods, risk assessment system, and risk management policies used to oversee the quality of the Group's financial operating assets;providing information related to risk analysis on asset portfolios on a regular basis and making sound adjustments to reserves for uncollectable accounts based on asset quality;responsible for planning the Group's risk management projects;responsible for quality analysis for the risk assessment of the major delinquent cases of Group.

Risk Management and Planning Department

Formulating the credit risk management strategies, guidelines, and procedures for the company within the Group;designing and integrating credit risk report mechanism and ensuring the report is correct;establishing performance assessment and management mechanisms for departments as well as credit risk education and training programs;reporting on credit risk issues, including major credit risk exposure and losses as well as improvements to management or processes, on a regular basis.

Subsidiaries

Identifying major risks to business activities, the reasons risk form, and different types of risk factors;regularly assessing risk factors that could adversely impact and the degree of the potential impact, so as to monitor the risk management mechanism and evaluate whether it takes all negative risk factors into consideration;submitting a risk management report every quarter.

Credit Services ofDepartments and Branches

Responsible for managing and supervising credit risk identification and measurement work;implementing credit risk identification, measurement, and management procedures as well as taking part in the review thereof;training credit risk identification, measurement, and management personnel to meet the needs of the company.

98 99

(2) Risk management policiesTo avoid any negative impact arising from risk factors, Chailease has drawn up risk management policies and implements them thoroughly to ensure that the company can realize the objectives that it has set for itself. Risk management policies are employed in all holding company and subsidiary departments and other offices, branch affiliates, and organization members to ensure that Chailease can effectively manage potential risks in all of its operations.(1) Credit risk

Chailease defines “credit risks” as risks, including those stemming from inappropriate or incorrect actions taken internally in the areas of operations, finances, systems, or personnel, as well as from external changes related to customers, the economy, the law, and so forth, that make it impossible for customers to carry out their responsibility to pay back loans, resulting in losses to Chailease. Credit risk policies are formulated based on risk management policies to effectively advance operations, enhance asset quality, and ensure asset security. The use of consistent policies to bolster credit risk assessment and management mechanisms allows Chailease to avoid and reduce credit risk and losses. It regularly reviews the effectiveness of its credit risk management, offering suitable feedback for the management process.The credit risk management process includes operational strategies and planning, marketing and promotion, performance evaluation, risk disclosure, and risk monitoring. The area of systems includes:Implementation of operations, credit services division of labor allows the risk assessment work to be independent of business operations to effectively balance performance and credit risk management.Approval procedures employ level-skipping approval method and implements detailed rules based on review management guidelines, so that upper management and lower level management are all responsible for the quality of and following up on risk assessment cases.Credit limits. Credit limit caps are to be limited to the maximum amounts of guaranteed credit limits and are not to exceed amounts stipulated for uncovered loans.The rating and grade model stresses employing some quantitative technologies to mitigate differences in understanding between operation and review personnel regarding risk management operations by measuring the company's overall credit and operation risk levels.Collateral is guaranteed to reduce the risks of unexpected changes or uncertain factors with value being determined using a collateral assessment process.Collection policies divide collection activities into different method types and manage and implement them to increase the amount of loan money that customers in arrears pay back.Reserves for bad debts. Procedures for setting aside reserves for uncollectable accounts are set up by employing an appropriate mechanism, so that they meet with financial and tax regulations.


pany Limited

98 99

(2) Financial riskThe objective of Chailease's financial risk management, primarily by managing liquidity, interest rate, and currency rate risks, is to control losses and the goal of each risk management area is to realize that objective. The Board, which has the highest level of authority, authorizes the Risk Management Committee to draw up risk management strategies, while the Financial Department is responsible for implementing financial risk management in accordance with decisions made by the Risk Management Committee.The Board and Risk Management Committee are to oversee and manage financial risk in accordance with such principles as obtaining quarterly financial risk assessment reports (balance sheets) compiled by the Financial Department, determining whether current risks lie within set risk limits, evaluating the suitability of risk management tools being employed on a regular basis, submitting appropriate measures whenever necessary to counter risks arising from substantial changes, whether internal or external, and regularly reviewing hedging efficacy and making timely adjustments when needed.

100 101

Special notes

(1) Information about the affiliates:

1. Organizational chart of affiliateAs of December 31, 2017

Note 1: The initial equity capital has not been injected.Note 2: 【Chailease Finance Securitization Trust 2014】

and【Chailease Finance Securitization Trust 2016】 ,which are consolidated in Chailease Holding consolidated financial statements, are not included in the organization chart.

My Leasing (Mauritius) Corp.

(100%)

Chailease International Corp.

(100%)

Chailease Finance International Corp.

Jirong Real Estate Co., Ltd. (100%)

Chailease International Finance Corporation

(100%)

Fina Finance & Trading Co., Ltd.

(100%)

Chailease Insurance Brokers Co., Ltd.

(100%)

Chailease Specialty Finance Co., Ltd.

(100%)

Apex Credit Solutions Inc.

(100%)

Chailease Cloud Service Co., Ltd.

(100%)

Chailease Finance (B.V.I.) Company

Ltd. (100%)

Chailease Auto Rental Co., Ltd.

(100%)

Chailease Credit Services Co., Ltd.

(100%)Chuang Ju Limited

Partnership

Sing Chuang Limited Partnership

Chailease Consumer

Finance Co., Ltd.(100%)

My Leasing (B.V.I.) Corp. (100%)

Yun Tang Inc.(100%)

Innovation Energy Integration Co., Ltd.

(100%)

Chailease Energy Integration Co., Ltd.

(100%)

Chailease International Investment Corp.

(100%) (註 1)

Chailease International (B.V.I.) Corp.

(100%)

Chailease Royal

Leasing Plc. (60%)

Chailease Berjaya Finance

Corp. (60%)

Golden Bridge (B.V.I.) Corp.

(100%)

Chailease International

Financial Services Co., Ltd. (100%)


Financial Services (Liberia) Corp.

(100%)


Financial Services (Labuan) Co., Ltd.

(100%)

11.57%51%

49% 36.61%

25%75%

Asia Sermkij Leasing Public Company

Limited

Bangkok Grand Pacific Lease Public

Company Limited (99.99%)

SK Insurance Broker Co., Ltd.

(100%)

Chailease International Leasing

Company Ltd. (100%)

Chailease International Trading Company Limited.

(100%)

Chailease Berjaya Credit Sdn. Bhd.

(70%)

Chailease Agency Sdn. Bhd.

(100%)｛｛

Grand Pacific Main Street

Development Inc. (100%)

Grand Pacific Holdings Corp.

Grand Pacific Financing Corp.

(100%)

Grand Pacific Business Loan Trust 2005-1

(100%)

Chailease Holding Company Limited中租控股股份有限公司

Chailease International Company (Malaysia) Limited (100%)

Chailease International Company (UK) Limited (100%)

Chailease Finance Co., Ltd.(100%)

Philippines Cambodia

｛Malaysia

｛PRC

｛Taiwan

｛Vietnam

｛Thailand

｛USA

0.0012%

0.0007%

99.9988%

99.9993%

VIII


pany Limited

100 101

2. Basic information about the affiliates

Unit: Thousand

Name of the company

Establishment date Address Paid-in capital Major business or

products

Chailease International Company (Malaysia) Limited

20091103 Tiara Labuan, Jalan Tanjung Batu, 87000 F.T. Labuan, Malaysia USD 417,299 Investment

Chailease Finance Co., Ltd. 19800623 No.362, Ruiguang Rd., Neihu Dist.,

Taipei City 114, Taiwan (R.O.C.) NTD 13,695,000Installment sales, leases and factoring

Fina Finance & Trading Co., Ltd. 19870313 5F., No.362, Ruiguang Rd., Neihu Dist.,

Taipei City 114, Taiwan (R.O.C.) NTD 4,315,276 Installment sales, import and export and factoring

Chailease Consumer Finance Co., Ltd. 20000603 6F., No.392, Sec. 1, Neihu Rd., Neihu

Dist., Taipei City 114, Taiwan (R.O.C.) NTD 1,471,000 Leases, installment sales and factoring

China Specialty Finance Co., Ltd. 19910123 8F., No.362, Ruiguang Rd., Neihu Dist.,

Taipei City 114, Taiwan (R.O.C.) NTD 2,015,607 Installment sales

Apex Credit Solutions Inc. 20010925 6F., No.420, Fuxing N. Rd., Zhongshan

Dist., Taipei City 104, Taiwan (R.O.C.) NTD 100,000

Overdue accounts receivable management, Acquisition and appraisal of NPLs and Telemarketing Services

Chailease Finance (B.V.I.)Company Ltd. 19950508 Palm Grove House P.O. Box 438, Road

Town, Tortola, British Virgin Islands USD 40,910 Installment sales, overseas financing and financial consultation

Chailease Auto Rental Co., Ltd. 20060220 6F., No.420, Fuxing N. Rd., Zhongshan

Dist., Taipei City 104, Taiwan (R.O.C.) NTD 950,000 Leases

Chailease Credit Services Co., Ltd. 20080526 8F., No.362, Ruiguang Rd., Neihu Dist.,

Taipei City 114, Taiwan (R.O.C.) NTD 10,000 Installment sales, leases, and third-party payment

Chailease Insurance Brokers Co., Ltd. 20110623 8F., No.362, Ruiguang Rd., Neihu Dist.,

Taipei City 114, Taiwan (R.O.C.) NTD 8,000 Personal insurance broker and property insurance broker

Chailease Cloud Service Co., Ltd. 20130129 8F., No.362, Ruiguang Rd., Neihu Dist.,

Taipei City 114, Taiwan (R.O.C.) NTD 10,000Lease of cloud software and hardware

Chailease International Leasing Company Limited

2006100928th Floor, Saigon Trade Centre, 37 Ton Duc Thang St., Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam

VND 580,697,313 Lease

My Leasing (B.V.I.) Corp. 20040401 Plam Grove House P.O. Box 438, Road

Town, Tortola, British Virgin Islands USD 17,000 Investment

Asia Sermkij Leasing Public Company Limited

1984081724th Fl., Sathorn City Tower, 175 South Sathorn Road, Tungmahamek,Sathorn, Bangkok 10120, Thailand

THB 1,759,478 Installment sales of vehicles

Bangkok Grand Pacific Lease Public Company Limited

1989061510/1th Fl., Sathorn City Tower, 175 South Sathorn Road, Tungmahamek, Sathorn, Bangkok 10120, Thailand

THB 438,500 Leases and financial consultation

SK Insurance Broker Co., Ltd. 20170412

25/1F., Sathorn City Tower, 175 South Sathorn Road, Tungmahamek, Sathorn, Bangkok 10120, Thailand

THB 10,000 Non-Life insurance broker

102 103

Name of the company


products

Grand Pacific Holdings Corp. 19870925 901 Corporate Center Drive, #300,

Monterey Park, CA 91754, U.S.A. USD 7,701 Commercial real estate finance

Grand Pacific Financing Corporation

19830824 901 Corporate Center Drive, #300, Monterey Park, CA 91754, U.S.A. USD 4,750 Commercial real

estate finance

Grand Pacific Main Street Development Inc.

19900307 901 Corporate Center Drive, #300, Monterey Park, CA 91754, U.S.A. USD 0.5 Commercial real

estate finance


20050627 901 Corporate Center Drive, #300, Monterey Park, CA 91754, U.S.A. USD - Commercial real

estate finance

My Leasing (Mauritius) Corp. 20040603 10th Floor, Raffles Tower, 19 Cybercity,

Ebene, Mauritius USD 89,655 Investment


20050412Hongqiao Shanghai Building B, 2683-15 unit, No.100, Zunyi Road, Changning District, Shanghai, PRC

USD 310,000 Leases

Chailease International Corp. 20080717 Room 408, No.228, Jiangchang third

road, Zhabei District, Shanghai, PRC CNY 200,000

Wholesale of construction materials, chemical materials and products, mechanical machinery and automobile parts

Chailease Finance International Corp. 20110127

Airport Business Park W13-4, No.76, Huan He North Road, Airport Industrial Area, Tianjin, PRC

USD 40,000 Leases and factoring

Jirong Real Estate Co., Ltd. 20121112 Building 1, Lane 631, Jinzhong Rd.,

Changning District, Shanghai, PRC CNY 170,000Leasing of self-owned buildings and property management

Golden Bridge (B.V.I.) Corp. 20080409 Palm Grove House, P.O. Box 438, Road

Town, Tortola, British Virgin Islands USD 337,150 Investment


20071224 Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin Islands USD 22,550 Investment

Chailease International Financial Services Co., Ltd.

20130402Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands

USD 37,000 Installment sales, overseas financing and financial consultation

Chailease International Financial Services (Liberia) Corp.

2014112480 Broad Street, City of Monrovia, County of Montserrado, Republic of Liberia

USD 10 Ship leasing business

Yun Tang Inc. 20120328 8F., No.362, Ruiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.) NTD 430,000 Energy Services

Company industry

Chailease Energy Integration Co.,Ltd. 20151104 8F., No.362, Ruiguang Rd., Neihu Dist.,

Taipei City 114, Taiwan (R.O.C.) NTD 50,000

Energy saving services, engineering, procurement, construction, operations and maintenance on solar power plants


pany Limited

102 103

Name of the company


products

Innovation Energy Integration Co., Ltd. 20160629 8F., No.362, Ruiguang Rd., Neihu Dist.,

Taipei City 114, Taiwan (R.O.C.) NTD 250,000Trading and development on solar power plants

Chuang Ju Limited Partnership 20170628 8F., No.362, Ruiguang Rd., Neihu Dist.,

Taipei City 114, Taiwan (R.O.C.) NTD 800,010 Installment sales

Sing Chuang Limited Partnership 20170628 8F., No.362, Ruiguang Rd., Neihu Dist.,

Taipei City 114, Taiwan (R.O.C.) NTD 1,500,010 Hire purchase

Chailease International Investment Corp.

20150430Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands

USD 1 Investment

Chailease International Company (UK) Limited.

20150326 36 Whitefriars London, United Kingdom, EC4Y 8BQ GBP 5,295

Investment, market survey and consultancy services

Chailease Berjaya Credit Sdn. Bhd. 20150909

Lot 6.08, 6th floor, Plaza First Nationwide, No. 161, Jalan Tun H.S. Lee, 50000 Kuala Lumper

MYR 25,000Hire purchase of vehicles and consumer goods

Chailease Agency Sdn. Bhd. 20170127

Lot 6.08, 6th floor, Plaza First Nationwide, No. 161, Jalan Tun H.S. Lee, 50000 Kuala Lumper

MYR 100 Property insurance agency

Chailease International Trading Company Limited

2016070628th Floor, Saigon Trade Centre, No.37 Ton Duc Thang, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam

VND 110,000,000 Import and export

Chailease International Financial Services (Labuan) Corp.

20160119 Tiara Labuan, Jalan Tanjung Batu, 87000 F.T. Labuan, Malaysia USD 30 Aircraft leasing

Chailease Royal Leasing Plc. 20170310

3F, No.216B, Norodom Blvd(41), Sangkat Tonle Basak, Khan Chamkar Mon, Phnom Penh, Cambodia

USD 2,000Finance lease of vehicle and machinery

Chailease Berjaya Finance Corporation 20170929

5F, 45 San Miguel Building, San Miguel Ave., Ortigas Center, Pasig City, Metro Manila, Philippines

PHP 250,000 Financing services of vehicles

3. Shareholders representing both the holding company and affiliates: None.4. The industry covered in the operation of affiliates: Please refer to the above section of “Basic

information about the affiliates” for details.

104 105

5. Information on the director, supervisor and president of affiliatesDecember 31, 2017 Unit:

1,000 shares (%)

Name of the company Position Name RepresentingShares held

Shares Percentage


Director Chia-Jeang Liu1,022,247 100.00%


Director Fong-Long Chen82,000 100.00%

Chailease Finance Co., LTD.

Chairman Fong-Long Chen Chailease International Company (UK) Limited

1,369,500 100.00%

President/Director Ming-Ching Hou Chailease International Company (UK) Limited

Director Chia-Jeang Liu Chailease International Company (UK) Limited

Director Kun-Ming Chen Chailease International Company (UK) Limited

Director Jung-Tao Lee Chailease International Company (UK) Limited

Director Hsiu Tze Cheng Chailease International Company (UK) Limited

Director Shi-Ren Shen Chailease International Company (UK) Limited

Supervisor Chung-Chiang Yang Chailease International Company (UK) Limited

Supervisor Shin-Yi Lin Chailease International Company (UK) Limited


Chairman Fong-Long Chen Chailease Finance Co., Ltd.

431,528 100%

Director Ming-Ching Hou Chailease Finance Co., Ltd.

Director Jung-Tao Lee Chailease Finance Co., Ltd.

Director Hsiu Tze Cheng Chailease Finance Co., Ltd.

Director Shi-Cha Lai Chailease Finance Co., Ltd.

Supervisor Tze-Ting Yang Chailease Finance Co., Ltd.

Supervisor Chung-Chiang Yang Chailease Finance Co., Ltd.

Chailease Consumer Finance Co., Ltd.

Chairman/President Chia-Jeang Liu Fina Finance & Trading Co.

147,100 100.00%Director Chen-Yuan Liu Fina Finance & Trading Co.

Director Ming-Tsung Chang Fina Finance & Trading Co.

Supervisor Hsing-Jen Liu Fina Finance & Trading Co.

Chailease Specialty Finance Co.,Ltd


201,561 100.00%President/Director Ming-Ching Hou Chailease Finance Co., Ltd.




pany Limited

104 105


Shares Percentage


Chairman/President Tze-Ting Yang Chailease Finance Co., Ltd.

10,000 100.00%Director Tian-Fu Yu Chailease Finance Co., Ltd.

Director Yuan-Tai Hung Chailease Finance Co., Ltd.

Supervisor Chih-Ho Wei Chailease Finance Co., Ltd.

Chailease Finance (B.V.I) Company Ltd.

Chairman Fong-Long Chen Chailease Finance Co., Ltd. 40,910 100.00%

Chailease Auto Service Co.,Ltd.

Chairman/President Tze-Ting Yang Chailease Finance Co., Ltd.

95,000 100.00%Director Kai-Ming Li Chailease Finance Co., Ltd.

Director Shih-Ming Sun Chailease Finance Co., Ltd.

Supervisor Wen-Hui Lin Chailease Finance Co., Ltd.

Chailease Credit Services Co.,Ltd.


1,000 100.00%Director Chia-Jeang Liu Chailease Finance Co., Ltd.




Chairman/President Chia-Jeang Liu Chailease Finance Co., Ltd.

800 100.00%

Director De-Long Sheng Chailease Finance Co., Ltd.

Director Ming-Hung Hsieh Chailease Finance Co., Ltd.

Director Ming-Cong Chang Chailease Finance Co., Ltd.


Supervisor Yu-Hua Bai Chailease Finance Co., Ltd.

Chailease International Leasing Company Limited (Vietnam).

Chairman Chia-Jeang Liu

- 100.00%

Director/President Chi-Chang Wu

Director Yeu-Horng Jeng

Director Ching-Ying Sun

Director Huei-Yeu Yang

Chairman of Control Committee

Ming-Hui Lin

Member of Control Committee

Nguyen Hoang Tan

Member of Control Committee

Quach Ngoc My

My Leasing (B.V.I.) Corp.

Director Fong-Long Chen Chailease Finance Co., Ltd. 17,000 100.00%

106 107


Shares Percentage

Asia Sermkij Leasing Public Company Limited

Chairman/President Chun-Lang Lu 　

169,535 48.18%

Honorary Chairman Dr . Amnuay Viravan 　

Director Che-Chih Chen 　

Director Fong-Long Chen 　

Director Ying-Chih Liao 　

Director Yuan-I Li 　

Director Mr . Tientavee Saraton 　

Director Ms . Patima Chavalit 　


Mr . Pradit Sawattananond

　


Mr . Anant Savattananon

　


Dr . Supriya Kuandachakupt

　


Mr . Kasem Akanesuwan

　

Bangkok Grand Pacific Lease Public Company Limited

Chairman/President Chun-Lang Lu

21,127 48.18%

Honorary Chairman Dr . Amnuay Viravan

Director Fong-Long Chen

Deputy Chairman Jung-Tao Lee

Director Yuan-I Li

Director Lai-Wang Tang

Director Mr . Tientavee Saraton

Director Ms . Patima Chavalit


Chairman Che-Chih Chen 　

7,700 100.00%

Director Fong-Long Chen 　

Director Chia-Jeang Liu 　

Director Richard Tao 　

Director Christina Wang 　


Chairman Che-Chih Chen

4,750 100.00%Director Christina Wang

Director Richard Tao

GP Main St. Development Corp., Inc


- 100.00%Director Christina Wang

Director Anni Lee


pany Limited

106 107


Shares Percentage

GP Warehouse Funding Corp.


- 100.00%

Director Christina Wang


Director Anni Lee

Director Michael Tang

Grand Pacific Business Loan LLC. 2005-1


- -



Director Anni Lee




- -



Director Anni Lee


GP Warehouse Funding LLC.


- 100.00%



Director Anni Lee



Director Fong-Long Chen Golden Bridge(B.V.I.)Corp

89,655 100.00%Director Ming-Ching Hou Golden Bridge(B.V.I.)Corp

Director Kuen-Ming Chen Golden Bridge(B.V.I.)Corp


Chairman Fong-Long Chen 　

- 100.00%Director/President Kuen-Ming Chen 　

Director Kuo-Teng Qiu 　

Supervisor Ming-Ching Hou 　



- 100.00%Director/President Kuen-Ming Chen 　

Director Wen-Cheng Chen 　




- 100.00%Director/President Dao-Ming Wang

Deputy Chairman Kuen-Ming Chen 　


108 109


Shares Percentage

Jirong Real Estate Co., Ltd.

Chairman Fong-Long Chen Chailease International Finance Corporation

- 100.00%

Director/President Kuen-Ming Chen Chailease International Finance Corporation

Director Wen-Cheng Chen Chailease International Finance Corporation

Supervisor Ming-Ching Hou Chailease International Finance Corporation


Director Fong-Long Chen 　 337,150 100.00%


Director Fong-Long Chen 22,550 100.00%


Chairman Fong-Long Chen Chailease Finance Co. , Ltd.

1,000 100.00%Director/President Ming-Ching Hou Chailease Finance Co. , Ltd.

Director Guo-Ruei Zeng Chailease Finance Co. , Ltd.

Supervisor Shi-Min Sun Chailease Finance Co. , Ltd.


Director Ming-Ching Hou Chailease International Financial Services Co., Ltd. - 100.00%

Yun Tang Inc. Chairman Ming-Ching Hou Chailease Finance Co., Ltd. - 100.00%


Director Rui-Xing Chen Chailease Finance Co., Ltd.

Chailease Energy Integration Co., Ltd.


5,000 100.00%Director/President Ming-Ching Hou Chailease Finance Co., Ltd.


Supervisor Jung-Tao Lee Chailease Finance Co., Ltd.

Chailease International Company (UK) Limited.

Director Fong-Long Chen

346,567 100.00%Director Ming-Ching Hou

Director Ying-Chih Liao


Chairman Ming-Ching Hou Chailease International Company (Malaysia) Limited

- 70.00%

Director/President Lai-Wang Tang Chailease International Company (Malaysia) Limited

Director Ying-Chih Liao Chailease International Company (Malaysia) Limited

Director Lee Kok Chuan Berjaya Group

Director Vivienne Cheng Berjaya GroupChailease International Financial Services (Labuan) Co., Ltd.

Director Ming-Ching Hou Chailease Holding Company Limited30 100%


pany Limited

108 109


Shares PercentageInnovation Energy Integration Co., Ltd.


25,000 100.00%Director/President Ming-Ching Hou Chailease Finance Co., Ltd.


Supervisor Jung-Tao Lee Chailease Finance Co., Ltd. Chailease International Trading Company Limited.

Director/President Chia-Jeang Liu Chailease Finance Co., Ltd.

- 100%Director Chi-Chang Wu Chailease Finance Co., Ltd.

Director Xi-Yuan Huang Chailease Finance Co., Ltd. Chailease Agency Sdn. Bhd.

Chairman Ming-Ching Hou70 70.00%

Director/President Tang, Lai-WangChailease Royal Leasing Plc.

Chairman Hsiu Tze Cheng Chailease Holding Company Limited

- 60.00%

Director/President Cheng, Yi-Chen Chailease Holding Company Limited


Ming-Hung Hsieh

Director Neak Okhna Kith Meng

Royal Group

Director William Mark Hanne Royal GroupSK Insurance Broker Co., Ltd.

Director Pratheep Jusuwan482 48.18%Director Nucharee

Pholadejvisai Sing Chung Limited Executive

representativeTien-fu Yu - 100.00%

ChuangJu Limited

Executive representative

Shih-Cha Lai - 100.00%

Chailease Berjaya Finance Corporation

Chaiman Hsiu Tze Cheng Chailease Holding Company Limited

15,000 60.00%

Director/President Kung Hisen Tai Chailease Holding Company Limited


Ms.Alicia Ang Ley Sarte

Director Tan Eng Hwa Bermaz Auto Philippines Inc.


Jaime Y. Ladao

110 111

6. Operational statuses of affiliates

Name of affiliates Paid-incapital

Total assets

Totalliabilities Net value Operating

revenuesOperating

incomeNet income

or loss (after tax)

EPS(after tax)

(NT$)


12,414,650 30,196,899 1,094,458 29,102,441 44,835 2,061 5,017,217 5.03

Chailease Finance Co., Ltd.

13,695,000 110,224,044 83,650,430 26,573,614 9,309,504 2,881,519 4,778,449 4.27


4,315,276 47,909,892 37,936,778 9,973,114 4,646,743 1,568,894 1,475,205 3.63

Chailease Consumer Finance Co., Ltd.

1,471,000 8,520,567 6,087,599 2,432,968 633,373 188,742 204,709 1.39

China Specialty Finance Co., Ltd.

2,015,607 5,335,814 100,911 5,234,903 243,680 200,356 171,162 0.85


100,000 173,854 22,479 151,375 203,471 37,429 31,347 3.13

Bangkok Grand Pacific Lease Plc.

402,368 4,263,547 3,670,758 592,789 381,385 94,815 88,088 2.01

Chailease Finance (B.V.I) Company Ltd.

1,217,482 5,514,881 970,452 4,544,429 172,172 162,366 163,079 1.34

Asia Sermkij Leasing Public Company Ltd.

1,614,497 28,967,338 24,733,322 4,234,016 2,333,624 762,191 618,347 3.65


229,167 312,375 16,155 296,220 8,002 8,863 8,781 1.14


141,360 3,039,966 1,717,284 1,322,682 414,247 239,083 233,532 49.16

GP Main St. Development Inc

- - - - 4,013 - - -

My Leasing (B.V.I.) Corp.

505,920 1,676,874 69 1,676,805 44,580 44,447 44,447 0.88


2,668,128 22,917,469 426,692 22,490,777 2,480 2,338 4,005,119 44.67


- - - - - - - SPT


9,282,628 86,575,184 64,463,019 22,112,165 9,582,850 3,801,111 4,191,603 Note1

Chailease International Leasing Company Ltd.

702,644 5,837,826 4,768,777 1,069,049 506,787 170,641 139,005 Note1


10,033,584 22,593,711 2,291,413 20,302,298 - (104,675) 3,900,503 11.57


671,088 689,838 - 689,838 123 (77) (1,778) (0.08)


913,000 8,743,372 5,881,347 2,862,025 7,691,509 799,258 639,614 Note1

Chailease Auto Rental Co.,Ltd.

950,000 4,682,874 3,742,057 940,817 1,669,396 (9,627) (5,131) (0.05)

Chailease Credit Services Co.,Ltd.

10,000 21,595 12,000 9,595 5,693 (35) 41 0.04


pany Limited

110 111

Name of affiliates Paid-incapital

Total assets

Totalliabilities Net value Operating

revenuesOperating

incomeNet income

or loss (after tax)

EPS(after tax)

(NT$)


8,000 54,257 7,055 47,202 81,416 37,180 30,950 38.69


1,166,023 6,914,417 4,228,028 2,686,389 859,733 532,787 412,044 Note1

Jirong Real Estate Co., Ltd.

776,050 1,304,114 492,534 811,580 76,094 8,948 7,047 Note1


10,000 11,115 5,343 5,772 (193) (345) (345) (0.35)


2,440,320 24,619,718 20,380,941 4,238,777 1,574,676 926,508 961,410 11.72


298 851,169 737,842 113,327 31,252 30,431 30,596 3,059.60

Yun Tang Inc. 430,000 1,429,141 945,896 483,245 113,868 80,853 46,693 Note1

Chailease International Investment Corp. 0 0 0 0 0 0 0 Note2

Chailease International Company (UK) Limited

13,900,790 28,033,266 1,569,101 26,464,165 26,920 1,209 4,953,163 16.85


353,600 2,557,096 2,171,647 385,449 280,133 41,189 34,476 Note1

Chailease Energy Integration Co., Ltd

50,000 1,051,870 555,823 496,047 596,546 515,353 425,823 85.16

Innovation Energy Integration Co., Ltd

250,000 249,862 55 249,807 - (234) (118) (0.01)

Chailease International Trading Company Limited

134,673 150,193 9,010 141,183 48,156 (229) 5,370 Note1

Chailease International Financial Services (Labuan) Corp.

893 571,465 564,565 6,900 3,897 3,194 3,040 101.33

Sing Chuang Limited Partnership

1,500,010 1,557,779 53,668 1,504,111 8,815 4,043 4,101 Note3

Chuang Ju Limited Partnership

800,010 812,700 8,863 803,837 14,696 4,230 3,828 Note3

Chailease Agency Sdn. Bhd.

707 5,315 2,377 2,938 4,427 2,285 2,145 21.45

Chailease Royal Leasing Plc.

59,520 368,827 275,828 92,999 32,530 (13,635) (11,372) Note1

SK Insurance Broker Co., Ltd.

9,176 144,008 117,964 26,044 48,637 20,705 16,584 16.58

Chailease Berjaya Finance Corp.

147,300 161,086 31,051 130,035 313 (18,262) (18,161) (0.12)

Note 1: It is a limited company without issuing stocks.Note 2: The inital equity capital has not been in jected.Note 3 : It is a limited partnership without issuing stocks.

112 113

(2) Major differences in the Company's articles of association and R.O.C. regulations on shareholders protection

The rights of shareholders Articles of Association Reasons

Influence on the rights of shareholders

1. Convention procedure and the method of adopting resolutions for the shareholders' meeting

1. The general meetings shall be held in Taiwan. For general meetings to be held outside Taiwan, the shareholders shall propose it for resolution in the Board meeting or report to TWSE for approval 2 days after the shareholders obtain an approval of convention from the authorities.

2. Any or plural number of shareholder(s) of a company who has (have) continuously held three percent (3%) or more of the total number of outstanding shares of the company for a period of one year or longer may, by filing a written proposal setting forth therein the subjects for discussion and the reasons, request the Board of Directors to convene a special shareholders' meeting. If the Board of Directors fails to give a notice for convening a special shareholders' meeting within fifteen (15) days after the filing of the request under the preceding paragraph, the proposing shareholder(s) may, after obtaining an approval from the competent authority, convene a special shareholders' meeting on his/their own.

Article 43 in the Articles of Association was revised according to the rights of shareholders except that it is not necessary to obtain an approval from the competent authorities before the shareholders convene a special shareholder's meeting on his/their own as stated in the left column.

With respect to convening a special shareholder's meeting on his/their own, it is not necessary to obtain an approval from the competent authorities under the Company Law of Cayman Islands; therefore, the article is not amended to "after obtaining an approval from the competent authority.

According to the description 2.(3) in Letter Tai-ZhengShang -Zi No. 0991701319 filed on April 13, 2010 by TWSE, the rights for the minority of shareholder to request for convening the special shareholders' meeting shall be established in the Articles of Association for foreign-owned published companies on the condition of no violation of local regulations on the registered place. The part of the approval for convention from the authorities shall be deleted. Therefore, the part of Articles has limited influence of the rights of shareholders.


pany Limited

112 113



If the proposal involves significant interest of shareholders as below, in the case of a company limited by shares: a resolution adopted, at a shareholders' meeting, by a majority of the shareholders present who represent two-thirds or more of the total number of its outstanding shares. If the total number of shares represented by the shareholders present at shareholders' meeting is not sufficient to meet the criteria specified in the preceding paragraph, the resolution to be made thereto may be adopted by two-thirds or more of the attending shareholders who represent a majority of the totalnumber of its outstanding shares :1. Enter into, amending, or terminating

any contract for lease of the company's business in whole, or for entrusted business, or for regular joint operation with others. Transferring the whole or any essential part of its business or assets. Accepting the transfer of another's whole business or assets, which has great bearingon the business operation of thecompany

2. Alteration of the Articles of Corporation of the company

3. Any modifications or alterations in the Articles of Incorporation prejudicial to the privileges of special shareholders shall also be adopted by a meeting of specialshareholders

4. Having the whole or a part of the surplus profit distributable as dividends and bonuses distributed in the form of new shares to be issued by the company

5. Resolution of dissolution, merger and split-up

6. Private placement of valuable securities

Article 64 and 66(b) in the Articles of Association with respect to the alternation of Articles of Association and the resolution threshold adopts the special resolution of Cayman Islands.

1. As to the method of adopting resolutions in the shareholders' meeting, the special resolution (special resolution for the Laws of Cayman Islands hereinafter) is established in Article 1 of the Articles of Association in addition to the ordinary resolutions and special(supermajority) resolutions under the Laws of R.O.C. The Company Laws under Cayman Islands define that the special resolution refers to the adoption of a resolution by at least two thirds of the votes of the shareholders present at a meeting of shareholders (including both personal attendance and proxy attendance, if allowed) if the meeting notice has clear notes that the special resolution will be adopted to make resolutions. However, the higher percentage of attendance can be designated according to the Articles of Association and the listed matters applicable to special resolutions can be passed at different percentages of attendance(but not lower than two thirds). The difference between the Articles of Association and the Rights of Shareholders is that the matters of special (supermajority) resolutions in the Rights of Shareholders shall be regulated by the special (supermajority) resolution and the special resolution under the Laws of Cayman Islands.

Since the difference is generated from the laws of Cayman Islands and the “Special Resolution” in rights of shareholders has been listed in the “Special Resolution for Cayman Laws “or “Special Resolutions”, the Articles ofAssociation should have limited influence on the rights of shareholders.

114 115



2. Under the Laws of Cayman Islands, (1) alternation of the Articles of Association shall be implemented in accordance with the special resolution in the Laws of Cayman Islands. Therefore, the resolution threshold for alternation of Articles of Association is not amended to the special (supermajority) resolution in the Laws of R.O.C. in accordance with the "Rights of Shareholders". Moreover, according to Article 16 in the Articles of Association, any modification or alternation in the Articles of Incorporation prejudicial to the privilege of special shareholders, it shall be adopted by the meeting of special shareholders under the Laws of Cayman Islands. (2) Dissolution shall be implemented in compliance with the Laws of Cayman Islands. According to the Laws of Cayman, the Company shall pass an Ordinary Resolution, if the Company resolves that it be wound up voluntarily because it is unable to pay its debts as they fall due. The Company shall abide by the special resolution under Laws of Cayman Islands, if the Company resolves that it be wound up voluntarily for reasons other than the reason stated above. Therefore, the resolution threshold of voluntary dissolution for the reason of unable to pay its debts has altered to supermajority resolution in the Laws of R.O.C. in accordance with the "Rights of Shareholders" in Article 66(a). As to the Article 66(b), the resolution threshold of voluntary dissolution for reasons other than the reason stated above, it shall abide by the special resolution under the Laws of Cayman Islands.


pany Limited

114 115



2. The rights and responsibilities of supervisors

1. Supervisors of a company shall be elected by the meeting of shareholders, among them at least one supervisor shall have a domicile within the territory of the Republic of China.

2. The term of office of a supervisor shall not exceed three years, but he may be eligible for re-election.

3. In case all supervisors of a company are discharged, the Board of Directors shall, within 30 days, convene a special meeting of shareholders to elect new supervisors.

4. Supervisors shall supervise the execution of business operations of the company and may at any time or from time to time investigate the business and financial conditions of the company, examine the accounting books and documents, and request the Board of Directors or managerial personnel to make reports thereon.

5. Supervisors shall audit the various statements and records prepared for submission to the shareholders' meeting by the Board of Directors, and shall make a report of their findings and opinions at the meeting of shareholders.

6. The supervisors may appoint, on behalf of the company, a practicing lawyer and a certified public accountant to conduct the examination.

7. Supervisors of a company may attend the meeting of the Board of Directors to their opinions. In case the Board of Directors or any director commits any act, in carrying out the business operations of the company, in a manner in violation of the laws, regulations, the Articles of Incorporation or the resolutions of the shareholders' meeting, the supervisors shall forthwith advise, by a notice, to the Board of Directors or the director, as the case may be, to cease such act.

8. Supervisor may each exercise the supervision power individually.

9. A supervisor shall not be concurrently a director, a managerial officer or other staff/employee of the company.

There is no regulation related to supervisors in the Articles of Association.

Since there is no definition and regulation of supervisors under the Laws of Cayman Islands, the Articles of Association does not have regulations related to supervisors.

The rights of shareholders regulates that a company that has issued stock shall establish either an audit committee or a supervisor. Under the Article 131 of Articles of Association, the Audit Committee which is composed of all independent Directors is established and has equivalent authorities and functions to supervisors; as a result, there should be limited influence on the rights of shareholders.

116



3. Discharge of Directors

In case any director has transferred, during the term of office as a director, more than one half of the Company's shares being held by such director at the time of being elected, the director shall, ipso facto, be discharged from the office of director. If any director of the Company, after having been elected and before the inauguration of the office of director, has transferred more than one half of the total number of shares of the Company such director holds at the time of the election as such; or had transferred more than one half of the total number of shares such director held within the share transfer prohibition period fixed prior to the convention of a shareholders' meeting, then the election of the aforesaid director shall become invalid.

There is no regulation related to supervisors in the Articles of Association.

Since there is no identical or similar provisions regarding the discharge of Directors under the Laws of Cayman Islands, the Articles of Association does not have such rules.

Due to the discrepancy between the Laws of Cayman Islands and the Company Act of R.O.C., the Articles of Association of the Company is amended to include the provision specifying that any director transferring more than one half of the Company's shares shall be either discharged ipso facto or removed from the office as director of the Company retroactively since the election of such director in order to enhance the protection of the shareholders' benefits. This amendment is to be discussed and approved by the shareholders' meeting convened in 2015.

2. Statement of Company Operating Procedures for Handling Internal Material InformationThe Company formulated "Guidelines Governing the Handling of Internal Material Information and Prevention against Insider Trading" in March, 2011, in order to establish solid mechanisms relating to the handling and disclosure of internal material information by the Company so as to prevent improper disclosure of information, ensure the consistency and accuracy of information released by the Company to the public, and enhance the prevention against insider trading.This Guideline has been promulgated to all employees, officers, and Directors. The relevant divisions in charge shall provide training to Directors, officers or other newly-appointed insiders.

chailease holding company limited8 9 i letter to shareholders in 2017, chailease celebrated the 40th...

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