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Chailease Holding Company Limited

06 Board Members 07 Address of Subsidiaries08 I. Letter to Shareholders10 II.Introduction of the Company

(1)Date of establishment(2)History of the Company

12 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 safety protection

CONTENTS

46 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(09)Issuance of corporate bonds(10)Issuance of global depositary

shares(11)Financing plan and

implementation

54 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

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

financial statements from the most recent year

(2)Financial Review

76 VII.Integrated Risk Management Framework & Policy(1)Chailease Risk Management

Organizational Structure(2)Risk management policies

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

Company's articles of association and ROC regulations on shareholder protection

98 Ⅸ .Corporate Social Responsibility

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

6

Position Name Nationality Experience and Education

Executive Chairman

Beacon Hill Co., Ltd.'s representative:Fong-Long Chen

SamoaROC

Master of Science, Sloan School of Management, MIT, USAPresident of Chailease Holding Company Limited Chairman of Chailease Finance Co., Ltd.Chairman of Fina Finance & Trading Co., Ltd.Charman 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 CorporationChairman of Jirong Real Estate Co., Ltd.Chairman of 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 Co., Ltd.Director of Bangkok Grand Pacific Lease Public Co., Ltd.Director of Grand Pacific Holdings Corp.Director of Chailease International Financial Services Co., Ltd.Director of Chailease International Company (UK) LimitedDirector of CL Capital Management Company LimitedDirector of CLJ Investment Partners Company LimitedChairman of Chailease Energy Internation Company Limited

Director Andre J.L. Koo ROCMBA, Leonard N. Stern School of Business, NYU, USAChairman of the Management Committee of Chailease Holding Company LimitedChairman of Chailease Group

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, Ltd; Chip Eng Seng Corporation Ltd, King Wan Corporation Ltd; Stamford Tyres Corporation Ltd and Sin Ghee Huat Corporation Ltd.

DirectorWiedner Co., Ltd.'s representative:Chi-Ching Chen

SamoaROC Master of Business Administration, Sloan School of Management, MIT, USA

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. Program 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, ChinaProfessor, Dep. of Finance, National Taiwan UniversityDirector, Center for the Study of Banking and Finance, National Taiwan UniversityFunding Chairman, Banking Education Association of TaiwanChairman, Turnaround Management Association of TaiwanChairman & Dean, Academy of Promoting Economic LegislationIndependent Director of DBS, TaiwanConsulting Member, Central Deposit Insurance CorporationChairman, Committee of AFMA

Independent Director

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.

Independent Director Chin Fock Hong Singapore Bachelor of Social Science, University of Singapore, Singapore

Board Members

Chailease Holding Com

pany Limited

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Taiwan■Chailease Finance Co., Ltd.

No.362, Ruiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)+886-2-8752-6388www.chailease.com.tw

■Fina Finance & Trading Co., Ltd.3F., No.360, Ruiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)+886-2-8797-6168www.finatrade.com.tw

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

■Chailease Consumer Finance Co., Ltd.6F., No.392, Sec. 1, Neihu Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)+886-2-2798-6488www.ezfund.com.tw

■Apex Credit Solutions Inc.6F., No.420, Fuxing N. Rd., Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.)+886-2-2512-2866www.apex-credit.com

■Chailease Insurance Brokers Co., Ltd.

6F., No.362, Ruiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)+886-2-8752-6388www.chailease.com.tw

China■Chailease International Finance Corporation

Building 1, Lane 631, Jinzhong Rd., Changning District, Shanghai, PRC +86-21-5208-0101www.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 +66-2-679-6226www.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., District 1, Ho Chi Minh City, Vietnam +84-8-7301-6010 www.chailease.com.vn

United States■Grand Pacific Financing Corporation

901 Corporate Center Drive, #300, Monterey Park, CA 91754, U.S.A.+1-323-780-8881http://www.gpusa.com

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

Address of Subsidiaries

8

To the shareholders of Chailease Holding：

Building a Solid Foundation: Poised for a Breakthrough in 2016

As a result of the combined efforts of all employees at Chailease Holding, our consolidated revenue and after-tax net profits for 2015 were NT$36.8 billion and NT$6.9 billion, representing 7% and 1% growth respectively over 2014. Both consolidated revenue and net profit reached record levels in 2015.

TAIWAN

Chailease Holding first commenced its operations in Taiwan, and it was in Taiwan where we developed, tested and launched innovative services such as microenterprise financing, fishery inventory financing, green energy financing and energy management, before we replicated those successes in our overseas markets. Although Chailease Holding has been servicing the Taiwan market for over 38 years, we still achieved double-digit revenue growth of 11% in 2015.

Arising out of our long-term commitment to working with SMEs in Taiwan we have developed the ability to assist customers to identify new requirements and devise innovative solutions to meet their needs. For example, last year we established the Chailease Energy Integration Company that offers technology evaluation, equipment installation and profit-sharing plans from oil/water/electricity, and other energy-saving initiatives. As we create tailored solutions for our customers, we are also playing our part in protecting the environment as a member of the global community.

CHINA

Despite the economic slowdown in 2015, our China business still grew 7% on the previous year. To further expand our market knowledge and risk management capability, we plan to continue to establish three to five branches per year in core regions. Each branch's marketing area will be reduced to a maximum of a two-hour driving distance, which is designed to enhance local risk management. By the end of the first quarter of 2016, we will add four new branches: in North Shanghai, Nantong, Yangzhou and Quanzhou, expanding the total number of branches in China to 34.

In addition to growing our leasing business in terms of both quality and quantity, we established a joint venture company in early 2015 with Mitsubishi UFJ Lease & Finance and Shenzhen Das Intellitech. The joint venture provides energy-saving equipment trading and consulting services to customers in China. In the future, we will look to replicate our successful experience in solar power plant investment, energy management, and green energy financing to our operations in China.

Furthermore, in October 2015, we received regulatory approval to issue a RMB1.2 billion medium-term note, making us the first Taiwanese-invested company to issue corporate debt in China. With the addition of the new funding channel, and the fact that the People's Bank of China has lowered interest rates three times since June 2015, we expect to benefit from lower borrowing costs for our China operation in 2016.

The ASEAN REGION

We will focus on the ASEAN market for future expansion, hoping that it will join Taiwan and China in our top three profit-generating regions.

Vietnam - For the past three years, the State Bank of Vietnam gradually eased restrictions on the growth of financial institutions, setting the stage for our Vietnam operations to grow at a faster pace. Our Vietnam business asset quality is well under control and total asset value is approaching USD100 million. We are looking to grow our operational scale in Vietnam by establishing new branches and expanding service offerings.

I. Letter to Shareholders


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Thailand - Faced with political uncertainty and global economic slowdown, our Thailand operation missed its revenue and net profit targets for 2015. However, in anticipation of business opportunities that are expected to arise from an integrated ASEAN market, our subsidiary in Thailand began establishing branches near the borders as early as 2014. Furthermore, with the assistance of the parent company in Taiwan, we successfully implemented a business system in Thailand that will boost the productivity of the local sales team.

Malaysia - In August 2015, Chailease Holding signed a joint venture agreement with a Malaysian conglomerate. The joint venture commenced operations in November 2015 and will initially offer commercial vehicle hire purchase to customers.

CORPORATE SOCIAL RESPONSIBILITY

Since Chailease Holding became a publicly-traded company in 2011, we have received numerous accolades for our commitment to upholding high standards of corporate governance, complying with information disclosure guidelines, protecting shareholders' interests, and abiding by regulatory requirements. Last year, we enrolled for the first time in CommonWealth magazine's ranking of Excellence in Corporate Social Responsibility and we were placed 23rd overall. We were also chosen as a constituent stock of the MSCI Global Sustainability Indexes. The Taiwan Stock Exchange's (TWSE) first corporate governance evaluation ranked Chailease Holding in the top 5% of all publicly-listed companies in Taiwan, and we were the only foreign-registered company in the group.

In TWSE's 2014 evaluation of information disclosure and transparency, we received the highest mark of "A++", which is a testament to our continued efforts to support transparency and accessibility of material information. This year, TWSE will also add Chailease Holding to the TWSE Corporate Governance 100 Index.

TALENT DEVELOPMENT

Our people are our most important asset. To continue our success, Chailease Holding has developed a steady inflow of highly skilled talent and a sizable talent pool. In 2013, we launched the Management Associate program. This year, we will assign Management Associates to China and other ASEAN offices after they complete the training programs. The addition of these new recruits will contribute to our future effort in implementing our succession plan.

2016 OUTLOOK

The majority of the economic forecasting organizations are cautious about the 2016 global economy. Yet, in Chailease Holding's 38 years of history, we have persevered through many periods of economic uncertainty such as the oil crises, the Asian financial crisis, and global financial crises. We are mindful that a great company not only needs to achieve the unimaginable in favorable economic conditions, it also must commit wholeheartedly to survive and prepare itself in challenging times. So when the storm passes and economic recovery starts taking shape, we will be ready to pull away from the competition and expand our lead.

Fong-Long Chen,

Executive Chairman

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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 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.

II. Introduction of the Company


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■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. In 2014, Chailease Finance acquired 100% of Yun Tang Inc., a subsidiary of General Energy Solutions Co. Ltd. to further expand the solar power plant investment business. Currently, Chailease Finance become one of the top two solar power producers in Taiwan and bring long-term and stable non-interest revenue for the Company given the long-term contract with Taipower Company to provide electricity at stable prices. In 2015, Chailease Energy Integration Co., Ltd. was established for extending the value chain of green energy business. Based on the competitive advantage of leasing and installment sales business, the company aims to assist clients in implementing the energy saving and production projects by exploiting its green energy technology and expertise, and will continue the business of engineering, procurement, construction, operations and maintenance for solar power plants.

■ 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 11 branches and 15 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 with 33 registered branches. 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 Vietnam 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 three business offices in Ho Chi Minh City, Hanoi and Can Tho.

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. It mainly focuses on providing vehicle financing and relevant services in the initial stage and plans to gradually expand to other businesses, such as consumer goods financing and SMEs financing. This joint venture is considered as a significant step for the Company to further develop new markets in ASEAN. The Company will continue expanding the ASEAN market, making it became the third growth engine in the future.

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(1)Organization1.Organizational structure

Shareholders

Board

Chairman

President

Management Committee

Audit CommitteeCompensation Committee

Chief Legal

Officer

Legal Departm

ent

Risk M

anagement

Departm

ent

Hum

an Resource D

epartment

Accounting and Financial D

epartment

Investor Relations &

Public Relations D

epartment

Think Tank Departm

ent

IT Departm

ent

Administration D

epartment

Audit Departm

ent

Chief R

isk O

fficer

Chief H

uman

Resource O

fficer

Chief Financial

Officer

Chief Strategy

Officer

Chief Inform

ation O

fficer

Internal Audit Officer

Chief Secretary

Corporate Governance & Ethical Management

Business Managem

entD

epartment

III. Corporate Governance Report


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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 managers. 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.

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Department Duties

Corporate Governance & Ethical Management Committee

Unless otherwise provided in the applicable laws, articles of association or internal regulations of the Company or the board of directors decide by resolution, the term of reference of the Committee are as follows:

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.

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.


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Department Duties

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 Public 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.


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Department Duties

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."

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. Property and general mattersBe in charge of management, documents, business and commerce, general service,

cleaning, safety and other instructions from the superiors.

18

(2)Information regarding the board of directors and management team:1.Directors and supervisors:

(1) DirectorsMarch 29, 2016 Unit: share

Position

Nam

e

Nationality

Date First Elected

Date Elected

Tenure

Shareholding

when Elected

currently

Shareholding

Spouse & Minor

shareholding

Shares held

under the

name of

others Experience and education

Position(s) held concurrently in the com

pany and/or in any other company

Other managers, directors

and supervisors

with a spouse and

relative within the

second degree of

kinship

Shares

Percentage

Shares

Percentage

Shares

Percentage

Shares

Percentage

Position

Nam

e

Relations

Dire

cto

r

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

ROC 2014/05/30 2014/05/30 3 years 2,249,319 0.23% 2,573,220 0.23% 190,018 0.02% – – ■ Master of Science, Sloan School

of Management, MIT, USANote1

– – – –

Beacon Hill Co., Ltd. Samoa 2011/06/27 2014/05/30 11,000,000 1.10% 12,584,000 1.10% －－ – – – – – – –

Dire

cto

r

Andre J.L. Koo ROC 2010/05/17 2014/05/30 3 years 48,599,593, 4.88% 56,597,934 4.97% 29,813 0.00% – – ■ MBA, Leonard N. Stern School

of Business, NYU, USA Note 2 －－－

Dire

cto

r

Chi-Ching Chen (authorized representative of Wiedner Co., Ltd.)

ROC 2014/05/30 2014/05/30 3 years – – – – – – – –

■ Master of Business Administration, Sloan School of Management, MIT, USA

– – – –

Wiedner Co., Ltd Samoa 2011/06/27 2014/05/30 7,238,875 0.73% 8,281,272 0.73% －－ – – – – – – –

Dire

cto

r

Chee WeeGoh Singapore 2011/03/21 2014/05/30 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 (now National University of Singapore), Singapore

Note 3 – – –

Ind

ep

end

ent D

irecto

r

Steven Jeremy Goodman Australia 2011/03/21 2014/05/30 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

– －－－


pany Limited

19

Position

Nam

e

Nationality

Date First Elected

Date Elected

Tenure

Shareholding

when Elected

currently

Shareholding

Spouse & Minor

shareholding

Shares held

under the

name of

others Experience and education

Position(s) held concurrently in the com

pany and/or in any other company

Other managers, directors

and supervisors

with a spouse and

relative within the

second degree of kinship

Shares

Percentage

Shares

Percentage

Shares

Percentage

Shares

Percentage

Position

Nam

e

Relations

Ind

ep

end

ent D

irecto

r

Dar Yeh Hwang ROC 2011/03/21 2014/05/30 3

years – – – – – – – –

■B.A. in Banking, National Cheng-Chi University

■ M.A. Program in Economics/ political Science, National Taiwan University

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

■ M.S./ Ph.D. Program in Finance, Stern School , New York University

■ MBA./ Ph.D. in Finance, Rutgers University

■ Ph.D. Candidate of School of Journalism & Communication, Peking University; PhD program of Tsinghua University School of Law

■ PhD program of Tsinghua University School of Law

Note 5 －－－

Ind

ep

end

ent D

irecto

r

Chin Fock Hong Singapore 2011/03/21 2014/05/30 3

years – – – – – – – –

■ Bachelor of Social Science, University of Singapore (now National University of Singapore), Singapore

■ Attended an International Tax Program at Harvard Law School

Note 6 －－－

Note 1: The 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 Corp.; 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 Co., Ltd.; Director of Bangkok Grand Pacific Lease Public Co., Ltd.; Director of Grand Pacific Holdings Corp.; Director of Chailease International Financial Services Co., Ltd.; Director of Chailease International Company (UK) Limited; Director of CL Capital Management Company Limited; Director of CLJ Investment Partners Company Limited; Chairman of Chailease Energy Integration Co., Ltd. (He holds positions in 22 companies in total.)

Note 2: Chairman of the Management Committee of Chailease Holding Company Limited; Chairman of Chailease Group (He holds positions in 2 companies in total.)Note 3: Independent director of Beng Kuang Marine Ltd.; Independent director of Chip Eng Seng Corporation 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 5 companies in total.)Note 4: Adjunct Professor of Law at the Law Faculty of Bond University; Solicitor qualified in UK and in Hong Kong (non-practicing); Director and CEO of Teras Group Pte

Ltd.Note 5: Professor at the Department of Finance, National Taiwan University; Director of Center for the Study of Banking and Finance, National Taiwan University; Funding

Chairman of Banking Education Association of Taiwan; Chairman of Turnaround Management Association of Taiwan; Chairman & Dean of Academy of Promoting Economic Legislation; Independent Director of DBS, Taiwan; Consulting Member of Central Deposit Insurance Corporation; Chairman, Committee of AFMA (He holds positions in 8 companies in total.)

Note 6: 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.)

20

(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 director

March 29, 2016

Name of corporate shareholder Main shareholders of the corporate shareholder

Beacon Hill Co., Ltd. First Asia Co., Ltd. (100%)

Wiedner Co., Ltd. Julius (Asia) Co., Ltd. (100%)

(4) Main shareholders of the corporate director as a juridical personMarch 29, 2016

Name of corporate shareholder Main shareholders of corporate shareholder

First Asia Co., Ltd. Claire Chung (100%)Julius (Asia) Co., Ltd. Claire Chung (100%)

(5) Directors'(including independent directors) Professional Knowledge and Independent InformationMarch 29, 2016

Qualifications

Name (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, orotherprofessional ortechnicalspecialist whohas passed anationalexaminationand beenawarded acertificate in aprofessionnecessary forthe business ofthe 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

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

V V V V V V V -

Andre J.L. Koo V V V V V V V V -

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


V V V V V V V V V -

Dar Yeh Hwang V V V V V V V V V V V 1

Steven JeremyGoodman 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 V -


pany Limited

21

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 29, 2016 Unit:share

Position

Name ROC

Position held since

(Note1)

Shares held

Shares currently held

by spouse and underage

children

Shares held

under the

name of others Experience and

education

Position(s) held concurrently in any other com

pany

Managers, directors or supervisors

who are spouse or within 2

degrees of consanguinity to each Other

Employee stock option

certificate acquired

Share Percentage Share Percentage

Share

Percentage

Position

Nam

e

Relations

President Fong-Long Chen ROC 2011/02/11 2,573,220 0.23% 190,018 0.02% – – ■ Master of Science, Sloan School of

Management, MIT, USA Note2 – – – –

Chief financial officer

Chia-Jeang Liu ROC 2011/02/11 634,400 0.06% – – – – ■ Master of Business Administration, Sloan

School of Management, MIT, USA Note3 – – – –

Chief Risk Officer

Jung-Tao Lee ROC 2009/01/01 1,109,007 0.10% 38,270 0.00% – – ■ Bachelor of Statistics, National Cheng

Kung University Note4 – – – –

Chief Human Resource Officer

Hsiu-Tze Cheng ROC 2004/01/01 540,775 0.05% 54,111 0.00% – – ■ EMBA, National Taiwan University Note5 – – – –

Chief Strategy Officer

Ying-Chih Liao ROC 2006/07/03 – – 595,108 0.05% – – ■ Ph.D. Program, Harvard University,

USA Note6 – – – –

Chief Legal Officer

Shi-Ren Shen ROC 2012/01/01 173,316 0.02% – – – – ■ Bachelor of Law, Soochow University Note7 – – – –

ExecutiveVice President Ming-Hung

Hsieh ROC 2016/1/25 76,648 0.01% – – – – ■ MBA, University of Wales, United Kingdom Note8

ExecutiveVice President Hsing-Jen

Liu ROC 2016/3/1 145,263 0.01% – – – – ■ Finance, Insurance and Real Estate, University of Memphis , USA Note9 – – – –

ExecutiveVice President

Chung-Chiang Yang

ROC 2016/3/3 943 0.00% – – – – ■ MBA, University of Kansas,USA Note10

ExecutiveVice President Mei-Fang

Fan ROC 2012/04/09 – – – – – – ■ MBA, University of Washington, USA Note11 – – – –

Senior Vice President

Chih-Ho Wei ROC 2010/04/01 43,020 0.00% – – – – ■ MBA major in International Finance,

City University of New York, USANote 12 – – – –

22

Position

Name ROC

Position held since

(Note1)

Shares held

Shares currently held

by spouse and underage

children

Shares held

under the

name of others Experience and

education

Position(s) held concurrently in any other com

pany

Managers, directors or supervisors

who are spouse or within 2

degrees of consanguinity to each Other

Employee stock option

certificate acquired

Share Percentage Share Percentage

Share

Percentage

Position

Nam

e

Relations


Yu-Ting Weng ROC 2010/03/01 154,352 0.01% – – – – ■ Vice bachelor of National University of

TechnologyNote 13 – – – –


Chin-Tse Liu ROC 2005/09/26 69,108 0.01% – – – – ■ EMBA, National Cheng-Chi University Note

14 – – – –


Shih-Wei Chien ROC 2003/03/01 107,595 0.01% – – – – ■ Vice bachelor of business

administration, AletheiaNote 15 – – – –

Vice President Ching-Ying Sun ROC 2013/01/01 78,020 0.01% 10,674 0.00% – – ■ MBA, The George Washington

University, USANote 16 – – – –

Accounting officer

Yeu-Horng Jeng ROC 2014/09/01 – – – – – – ■ Master of Accounting, Long Island

University, USANote 17 – – – –

Vice President Kun-Huang Chan ROC 2015/01/01 54,111 0.00% – – – – ■ MBA, National Taiwan University of

Science and TechnologyNote 18 – – – –

Note 1: The date that the person held the position in the Company.Note 2: 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 Corp.; 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 Co., Ltd.; Director of Bangkok Grand Pacific Lease Public Co., Ltd.; Director of Grand Pacific Holdings Corp.; Director of Chailease International Financial Services Co., Ltd.; Director of Chailease International Company (UK) Limited; Director of CL Capital Management Company Limited; Director of CLJ Investment Partners Company Limited; Chairman of Chailease Energy Integration Co., Ltd. (He holds positions in 21 companies in total.)

Note 3: Director and Senior Executive Vice President of Chailease Finance Co., Ltd.; Directors of Chailease International Conpany (Malaysia) Limited; Chairman of Chailease Credit Service Co., Ltd.; Chairman of Chailease Insurance Brokers Co., Ltd.; Chairman and President of Chailease Consumer Finance Co.,Ltd.; Chairman of Chailease International Leasing Co., Ltd.; Director of Grand Pacific Holdings Corp.; Director of Finex Co. Ltd. (He holds positions in 8 other companies in total.)

Note4: Director, chief risk officer and chief information officer of Chailease Finance Co., LTD; Director of Fina Finance & Trading Co., Ltd.; Director of Chailease Specialty Finance Co.,Ltd.; Director of Chailease Credit Service Co., Ltd.; Director of Yun Tang Inc.; Supervisors of Chailease Energy Integration Co., Ltd.(He holds positions in 6 other companies in total.)

Note5: Director and chief human resource officer of Chailease Finance Co., LTD; Chief human resource officer of Chailease International Leasing Co., Ltd. Director of Chailease Enterprise Company Limited; Director of Chailiease Corp. (She holds positions in 4 other 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 Chailease Corp.; Director of Chailease International Investment Corp.; Director of Chailease Berjaya Credit Sdn. Bhd. (He holds positions in 9 other companies in total.)

Note7: Director and Executive Vice President of legal Dept. of Chailease Finance Company Limited; Supervisor of Chailease Credit Service Co., Ltd. (He holds positions in 2 other companies in total.)

Note8: Executive Vice President of Planning Dept. of Chailease Finance Company Limited; Director of Chailease International Financial Services Co., Ltd.(H.K.); Director of Chailease Insurance Brokers CO., Ltd. (He holds positions in 2 other companies in total.)

Note9: Executive Vice President of Chailease Finance Co. Ltd.; Supervisor of Chailease Consumer Finance Co. Ltd. (He holds positions in 2 other companies in total.)

Note10: Supervisor and Executive Vice president of Chailease Finance Co. Ltd. (He holds one position in another company.)Note11: Executive Vice President of Chailease Finance Co. Ltd. (She holds one position in another company.)Note12: Senior Vice President of Chailease Finance Company Limited; Director of Apex Credit Solutions Inc.( He holds positions in 2 other companies in

total.)Note13: Senior Vice President of Chailease Finance Company Limited (He holds one position in another company.)Note14: Senior Vice President of Chailease Finance Company Limited; Vice President of Chailease International Finance Corporation.( He holds positions in

2 other companies in total.)Note15: Senior Vice President of Chailease Finance Company Limited; Vice President of Chailease International Finance Corporation.( He holds positions in

2 other companies in total.)Note16: Vice President of Chailease Finance Company Limited (He holds one position in another company.)Note17: Chief Financial Officer of Chailease Finance Company Limited; Committee member of Taipei American School Audit Committee and Director of

Finex Company Limited (She holds positions in 3 other companies in total.)Note18: Vice President of Chailease Finance Company Limited; Vice President of Chailease International Finance Corporation.( He holds positions in 2

other companies.)


pany Limited

23

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

Unit: NT$ thousands

Position

Nam

e

Remuneration to directors

4 items combined to net income

(%)

Employee remuneration

7 items combined to net income

(%)

Rem

uneration of reinvestment business

Honoranium Retirement pay

Earning distribution

Business expenses

Bonus and special

remuneration

Retirement pay

Employee’s bonus of earning

distribution

Number of

employee stock

options

Number of

restricted stock

awards

Chailease H

olding

Co

mp

an

ies in

the

co

nso

lida

ted

fi

na

nc

ial sta

tem

en

ts

Chailease H

olding

Co

mp

an

ies in

the

co

nso

lida

ted

fi

na

nc

ial sta

tem

en

ts

Chailease H

olding

Co

mp

an

ies in

the

co

nso

lida

ted

fi

na

nc

ial sta

tem

en

ts

Chailease H

olding

Co

mp

an

ies in

the

co

nso

lida

ted

fi

na

nc

ial sta

tem

en

ts

Chailease H

olding

Co

mp

an

ies in

the

co

nso

lida

ted

fi

na

nc

ial sta

tem

en

ts

Chailease H

olding

Co

mp

an

ies in

the

co

nso

lida

ted

fi

na

nc

ial sta

tem

en

t

Chailease H

olding

Co

mp

an

ies in

the

co

nso

lida

ted

fi

na

nc

ial sta

tem

en

tsChailease Holding

Companies in the

consolidated financial

statements (Note 8) C

hailease Holding

Com

panies in the consolidated financial statements

Chailease H

olding

Com


Chailease H

olding

Com


Cash

Stock

Cash

Stock

Chairman

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

68,052 70,600 4,214 4,214 642 642 1.06% 1.10% 26,882 32,976 0 108 508 508 1.46% 1.59%

Director Andre J.L. Koo

Director


Director Chee Wee Goh

Independnet director Dar Yeh Hwang

Independnet director

StevenJeremyGoodman

Independnet director Chin Fock Hong

Note:The remuneration to drivers of directors who are also employees totals NT$1,841,000.

24

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

consolidated financial statements

< 2 millionFong-Long Chen, Chi-Ching Chen, Chee Wee Goh

Fong-Long Chen, Chi-Ching Chen, Chee Wee Goh

Chi-Ching Chen, Chee Wee GohChi-Ching Chen, Chee Wee Goh

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.)

10 millions (incl.)~15 million (excl.)


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

50 million (incl.)~100 million (excl.) Andre J.L. Koo Andre J.L. Koo Andre J.L. Koo Andre J.L. Koo

Total 7 people 7 people 7 people 7 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

Nam

e

RemunerationRetirement

payBonus and special

remunerationEmployee's bonus

4 items combined to net income (%)

Number of employee stock

options

Number of restricted stock awards

Rem

uneration of reinvestment business

Chailease H

olding

Com

panies in the consolidated financial statem

ents

Chailease H

olding

Com


ents

Chailease H

olding

Com


ents

Chailease Holding

Companies in the

consolidated financial

statements

Chailease H

olding

Com


ents

Chailease H

olding

Co

mp

an

ies in

the

co

nso

lida

ted

fin

an

cia

l sta

tem

en

ts

Chailease H

olding

Com


entsCash Stock Cash Stock

PresidentFong-Long Chen

12,861 32,771 219 1,446 47,417 63,553 1,024 1,511 0.90% 1.45%

Chief Financial Officer

Chia-Jeang Liu

Chief Audit Officer

Tzu-Ting Yang

Chief Risk Officer

Jung-Tao Lee


Hsiu-Tze Cheng

Chief Strategy Officer

Ying-Chih Liao

Chief Legal Officer

Shi-Ren Shen

Accounting Officer

Yeu-Horng Jeng*

(Note) The remuneration to drivers of managers totals NT$3,246,000.


pany Limited

25

Range of Remuneration

Range of remunerationName of presidents and executive vice presidents

Chailease Holding Companies in the consolidated financial statements

<2 million

2 million (incl.)~5 million (excl.) Yeu-Horng Jeng, Tzu -Ting Yang, Shi-Ren Shen

5 million (incl.)~10 million (excl.)Chia-Jeang Liu, Jung-Tao Lee, Hsiu-Tze Cheng, Ying-Chih Liao

Chia-Jeang Liu, Yeu-Horng Jeng, Tzu -Ting Yang, Jung-Tao Lee, Hsiu-Tze Cheng, Shi-Ren Shen

10 millions (incl.)~15 million (excl.) Ying-Chih Liao

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

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


Total 8 people 8 people

(3) Name of managers and distribution details:

Position Name Stock dividends Cash dividends Total Total to net income (%)

President Fong-Long Chen

1,024 1,024 0.01%

Chief Financial Officer Chia-Jeang Liu

Chief Audit Officer Tzu-Ting Yang

Chief Risk Officer Jung-Tao Lee


Hsiu-Tze Cheng

Chief Strategy Officer Ying-Chih Liao

Chief Legal Officer Shi-Ren Shen

Accounting Officer Yeu-Horng Jeng

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.

26

(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 2014 2015

Item

Amount Percentage of net income Amount Percentage in the net

income

Chailease Holding

Companies

in the

consolidated

financial

statements

Chailease Holding

Companies

in the

consolidated

financial

statements

Chailease Holding

Companies

in the

consolidated

financial

statements

Chailease Holding

Companies

in the

consolidated

financial

statements

Director 102,406 111,203 1.50% 1.63% 100,298 109,048 1.46% 1.59%

President and executive vice president

62,212 94,829 0.91% 1.39% 61,521 99,281 0.90% 1.45%

Total 134,968 170,133 1.98% 2.49% 132,929 173,237 1.94% 2.52%

(2)The correlation between the remuneration payment policy, standard and structure, setting procedure and operational performance as well as future risks.

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.

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 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 practices1.Implementation status of the Board 7 board meetings (A) have been convened in the last year and the attendance of directors is

described as follows:

Position Name Actual attendance Proxy attendance Actual

attendance (%) Remarks

Chairman

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

7 0 100.00%


pany Limited

27



Director Andre J. L. Koo 4 3 57.14%

Director Chee Wee Goh 6 1 85.71%

Director


7 0 100.00%

Independent Director Dar-Yeh Hwang 7 0 100.00%


Steven Jeremy Goodman 6 1 85.71%

Independent Director Chin Fock Hong 7 0 100.00%

Other mentionable items:(1)Any matter listed in Article 14-3 of "Securities and Exchange Act" and any recorded board

resolution for which an independent director has an objection or reservation that should be noted: None.

(2) There were no recusals of Directors due to conflicts of interests in 2015.(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 28 to page 32.

(4) The Financial Officer, Accounting Officer and head of Internal Audit 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.

2.Operations of Audit Committee or supervisors in the board of the Company: 5 audit committee meetings (A) have been convened in the last year and the attendance of

independent directors is described as follows:




Dar-Yeh Hwang5 0 100.00%


Steven Jeremy Goodman 4 1 80.00%


Chin Fock Hong5 0 100.00%

28

Annotations:(1) Any matter listed in Article 14-5 of "Securities and Exchange Act" and any resolution which was

not approved by the Audit Committee but was approved by two thirds or more of all directors in 2015: None.

(2) There were no recusals of Independent Directors due to conflicts of interests in 2015.(3) Descriptions of the communications between the Independent Directors, the internal auditors,

and the independent auditors in 2015 (e.g. the channels, items and/or results of the audits on the corporate finance and/or operations):i. 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 head of Internal Audit will immediately report to the members of the Audit Committee any material matters. During 2015, the head of Internal Audit did not report any such material matters. The communication channel between the Audit Committee and the internal auditors functioned well.

ii.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 2015, the Company's independent auditors did not report any irregularity. The communication channel between the Audit Committee and the independent auditors functioned well.

3.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.Provision and disclosure the 「Corporate Governance Best-Practice Principles」of the company comply with the 「Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies」

V

The Company has provided the 「Corporate Governance Best-Practice Principles」comply with the 「Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies」and disclosed the principles on company's website and MOPS.

No

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

suggestions or complaints(2) The possession of the list of major

shareholders and the list of ultimate owners of these major shareholders

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

(4) Internal regulations to avoid the insider of a public company uses the non-public information to buy or sell stocks or other equity-type securities of the company.

V

V

V

V

(1) The Company particularly creates an e-mail account and arranges persons, responsible for dealing with shareholder's suggestions and complaints.

(2) We have a department and person, responsible for stock affairs to handle the list of major shareholders and the list of ultimate owners of these major shareholders at any time.

(3) The Company has established "Related party Transaction Management" for risk control. The assets and properties are managed independently in each affiliate in accordance with the internal control system of the Company. The risk control and firewall are practically implemented.

(4) The Company has established the "Ethical Conduct Best Practice Principles" and " Operating Procedures for Handing Internal Material Information and preventing Insider trading" to regular the insider person who acquires knowledge of the company's internal material information due to that person's capacity or position, occupation, or controlling relationship be bound by and observe the applicable provisions of this Operational Procedure.

(1)No(2)No(3)No(4)No


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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 the "Rules Governing the Election of Directors and Supervisors" of the Company, the directors shall be elected, based on the seats stipulated in the MAA, among those with capacity to make juridical acts in the shareholders' meeting.

The composition of the Board, whose members has the specific implementation in the field of encompass diverse business and management, science and technology, law, etc. The company is also planning to complete the corresponding revision in the near future to enhance the implementation of the concept of corporate governance in complying with the "oo Limited elective program directors and supervisors," a reference example released by Taiwan Stock Exchange Corp. in January this year.

(2) No.(3) The compensation committee of the Company

review 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 establish a communication channel between Stakeholders and set up Stakeholder Engagement section? Does the Company properly respond to corporate social responsibility Stakeholders issues of concern?

V

The Company values a strong relationship with its stakeholders. Except the establishment of Stakeholder Engagement section, according to the category and materiality of the issues, the Company assigns Audit Department, Human Resource Department, Investor Relations & Public Relations Department, Customer Service Department and General Affairs Department to establish a communication channel between the Company and its stakeholders.In order to properly respond to corporate social responsibility Stakeholders issues of concern, the Company not only obtains the information relating to the stakeholders' issues of concern via online questionnaires, but also discloses the status of implementation of ethical corporate management and the adopted measures. The Company particularly creates an e-mail account for effective communication and dealing with stakeholders’ opinions.

No

v.Appointment the professional Registrar agent as the institution to handle the related affairs of shareholders' meeting V

The Company has 「Capital Securities Corp., Registrar Agency Department」as the institution to handle the related affairs of shareholders’ meeting. No

30


vi.Information Disclosure(1) Establ ishment of a website where

information on financial operations and corporate governance is disclosed

(2) Other information disclosure channels (e.g., creating an English website, appoint ing responsible people to deal with collecting and disclosing i n f o r m a t i o n , i m p l e m e n t i n g t h e spokesperson system, webcasting investors conference).

V

V

(1) We already have an English website and continue to offer information about financial operations and corporate governance.

(2) The company is a foreign-owned company, registered under the laws of Cayman islands and has established an online application system of public information in order to apply for primary listing in Taiwan. We appoint people to deal with the collection and disclosure of information to ensure that any information which may influence the decisions of shareholders and stakeholders is adequately disclosed in a timely manner.

Moreover, we also have a spokesman who speaks with one voice 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, advanced education of directors and supervisors, execution of the risk management policies, risk measurement standards and customer policies as well as the purchase of liability insurance for directors and supervisors):

V

(1) The directors of the Company are well equipped with professional knowledge and continue to advance their knowledge according to the corporate governance principle. The courses they have taken will be published on the Market Observation Post System.

(2) Our website has an "Investor Area" to provide shareholders with the business information about the Company. We expect to offer timely and effective consulting services to shareholders and investors to build a communication bridge between the Company and investors.

(3) The Employee Welfare Committee is founded to take care of employees, foster the harmonious relationship between labor and capital, build teamwork among employees and attend to employees' welfare, such as subsidies of staff club activities, joyful events, death and childbirth, health examinations and group tours to ensure fluent communications and safeguard the right of employees.

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

No

viii. Describe the results and major deficiencies in both evaluation reports if the Company conducts self-evaluation or authorizes a professional institution for the corporate governance evaluation report: none.

V

We continue to strive toward our goal of realizing Best Corporate Governance and to become listed among the top 20% of listed companies in terms of Corporate Governance Evaluation in 2016. Meanwhile, Chailease remains included in TWSE Corporate Governance 100 Index.

No

4.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 April 30, 2014, 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


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Position(Note 1)

Qualification

Name

Professional qualification requirements, together with at least

five years work experienceIndependent status(Note 2)

Concurrent post of m

ember of C

ompensation C

omm

ittee in another public release com

pany

Rem

arks(N

ote 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

Independent director

Steven Jeremy Goodman

V V V V V V V V V V V 0


Chin Fock Hong V V V V V V V V V V 0


Dar Yeh Hwang 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.

(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 30, 2014 to May 29, 2017. 2 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%

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5. 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 in 2015 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 2015. 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. 2015 Annual Report of the Committee was submitted to Board in December 2015.

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) We endeavored to utilize recycled box to reduce the use of plastic bags. It is estimated that up to 40,000 plastic bags will be saved annually. Regarding the use of 4,000,000 paper product in household and toilet paper at the corporate headquarters, we began to use recycled products.

(2) We received ISO 14001 environment management system certification and organized an environment committee. Having this committee can assist us continuously promote the idea of environmental protection and the information on energy saving. In the long run, this committee can help result in reducing the negative effects on environments.

(3) In response to greenhouse effect and climate change, the company launched its energy saving company (ESCO) service and acquired solar power plants to implement energy conservation and carbon reduction projects. In our offices, we continue to collect information regarding energy conservation and carbon reduction. This act can help us examine the impacts on the company's business operations.

No

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


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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.

34

6.The status of implementation of ethical corporate management and the adopted measuresItem Status Deficiency and reasons

I. Formulation of Ethical Corporate Management Best-Practice Policy and Plan

(1)Does the Company specify its policy and action plans governing ethical corporate management and the commitment of its board of directors and management to actively implement the aforesaid policy in its internal regulation and public documents?

(2)Does the Company formulate its action plans in connection with how to prevent unethical conducts? Does the Company specify relevant procedures, guidelines, punishments and grievance systems and fully implement them?

(3)Does the Company take precautionary actions to restrain from engaging in the operating activities involving higher risk of the unethical conducts which are provided in Article 7, Section 2 of Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and other similar operating activities?

(1) Corporate Social Responsibility Report describes the ethical corporate management policy from the viewpoints of the management of the Company 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 ethical corporate management best practice principles. Every staff has signed an undertaking letter, promising to observe the aforesaid action plan accordingly. In addition, the Company formulated Ethical Corporate Management Best Practice Procedures and Code of Conducts (the "Procedures and Code of Conducts") in 2014, specifying all types of unethical conducts and reward and punishment system. The Procedures and Code of Conducts also provides how the employees of the Company are required to engage in business activities, and requires the designated unit in-charge to ensure the compliance and implementation of the Procedures and Code of Conducts.

(3) The Company has formulated a guideline governing the reporting of unethical conducts and violations of the Procedures and Code of Conducts. The guideline provides that any person, either staff or an external person, may report any conduct which is improper, unethical, illegal or violating the Procedures and Code of Conducts. If the suspected violation is proven to be true, the violators shall be punished accordingly. Lastly, the Company has taken appropriate measures to enhance the employees' awareness of the requirement to observe the internal disciplines and work rules of the Company.

The Company has purchased a fidelity guarantee insurance covering the assets and trusted properties of the Company against material loss due to breach of duties and unethical conducts by its employees, especially those staff of legal, finance and marketing departments. Such insurance may shift the operational risk partly to the insurer and reduce the actual loss incurred upon the Company so as to safeguard the benefits of its shareholders.

No


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II. Implementation of Ethical Corporate Management

(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 an ethical corporate management clause in the agreements signed with such counterparties?

(2) Does the Company establish any unit in charge of promoting corporate ethical corporate management under the superintendence of its board of directors? Does the aforesaid unit in-charge report the progress on the implementation of ethical corporate management to the board of directors periodically?

(3) Does the Company formulate any policy to prevent conflict of interests, provide an appropriate reporting system and fully implement the aforesaid policy?

(4) In order to fully implement the commitment of ethical corporate management, has the Company established a well-functioning accounting system and internal control system and conducted periodical check via its internal auditing team or outside accountants?

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

(1) According to the Ethical Corporate Management Best-Practice Procedure and Code of Conduct, the responsible staff shall have full knowledge of the status of ethical corporate management of the counterparties prior to sign any agreement with such counterparties on behalf of the Company. The staff shall ensure that the ethical corporate management clause shall be incorporated into the agreement.

(2) Legal Department was a former unit in charge of handling the matters related to ethical corporate management. To comply with the amendment to the applicable laws and regulations, the Company has amended its Ethical Corporate Management Principles and formulated a new Ethical Corporate Management Best-Practice Procedure and Code of Conduct in 2015, which provide that the Company shall establish Corporate Governance and Ethical Management Committee (the "Committee") in replacement of Legal Department to become new unit in charge of handling ethical corporate management matters. This Committee has broader functional capacity to fully implement ethical corporate management and monitor the status of the implementation thereof. It shall report to the board of directors the progress on the status of implementing ethical corporate management periodically. In order to implement ethical corporate management; the Committee has held 2 conferences in 2015. The related department had provided suggestions, reports and discussions based on the annual plan, training and execution of ethical corporate management, the Committee resolved and executed accordingly. 2015 Ethical Corporate Management Report has been submitted to Board on March 2016, and will be reported in shareholders' meeting on May 2016.

(3) According to the internal regulations of the Company, if any director of the Company and any of its subsidiaries or a juristic person represented by such director is an interested party with respect to any agendum item of the board meeting, such director may not participate in discussion or voting on that agendum item; and further, shall enter recusal during discussion and voting on that item. When managers or employees of the Company find that discharge of their duties may lead to conflict between the interests of the Company and those of their own or the jurisdic persons which they represent, they shall report such conflict of interests to their direct supervisors and the unit-in-charge of the Company.

(4) The auditing unit under the superintendence of the board of directors shall review the internal control system in order to improve the internal management and ensure the well-function of the corporate system. Further, the auditing unit shall formulate auditing principles and require all units to run self checks on internal control system on a periodic basis pursuant to the regulation governing self check on internal control system of the Company in order to fully implement 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

36


III. The Status and Functioning of Internal Reporting System

(1) Does the Company establish a clear and concrete reporting system, reward policy and expedient reporting channels? Does the Company designate appropriate staff to receive reports of suspected violations according the identity and positions of the alleged violators?

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

(3) Does the Company take any action to protect the persons reporting violations from retaliation or improper treatment due to their reports?.

(1) We have formulated Regulation Governing Reporting of Unethical Conducts and Code of Conduct Violations, which provides that any internal staff and external people can report unethical conducts to chief audit executive and the violations of the Procedures and Code of Conducts to chief human resources officer via the hotline, mail and email etc.

(2) According to Regulation Governing Reporting of Unethical Conducts and Code of Conduct Violations, it is required to file a written report form, stating the details of suspected unethical conducts and/or violations and the names of suspected violators, accompanied by the related evidence, for the convenience of receiving such violations reports and initiating investigation. After the reported violations are officially received, the reporting window will determine and designate an appropriate unit in charge of investigation according to the severity of the violations. All personal information such as names, positions and addresses of the persons reporting the violations will be kept confidential for their protection. In addition, we have formulated Regulation Governing Protection of Unethical Conducts Whistleblower and Code of Conduct Violations in 2015, which enhances the protection of Whistleblower's personal information. The identity of Whistleblower shall be represented as a code. The related information shall be kept top secret, and enhances the management of transferring, archiving, accessing and safekeeping of related information.

(3) According to Regulation Governing Reporting of Unethical Conducts and Code of Conduct Violations, all investigators and the persons participating in the investigation shall keep the facts of violations, investigation progress and other related information confidential. Any disclosure without permission is forbidden. Any failure to comply with the confidential obligations causing the disclosure of aforesaid information may lead to disciplinary actions. In addition, we have formulated Regulation Governing Protection of Whistleblower in 2015, which enhances the protection of the whistleblowers' personal information. The whistleblowers will not be imposed with any unfavorable treatment on thier positions, salaries, promotions and other working conditions. Furthermore, we protect the whistleblowers from any violence, duress, and harassment.

No

IV. Enhancement of Information Disclosure

(1) Does the Company disclose its ethical corporate management best-practice principles and implementation progress thereof respectively on its official website and TSEC Market Observation Post System?

(1)The Company has established a Corporate Governance section on our official website, which publicizes the regulation governing ethical corporate management and other related information.

No


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V. If the Company has formulated its ethical corporate management best practice principles according to Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, please specify the discrepancy between its status of implementation and the aforesaid internal principles? No Discrepancy.

VI. Other information material to the understanding of ethical corporate management (e.g. the company's determination and policy to propagate the ethical corporate management to trading counterparts and invitation of the trading counterparts to take part in the education training programs, discussion and amendment to the ethical business best practice principles defined by the company):

1. Corporate Governance section on its official website and uploads any and all updates on the amendment to its internal regulations governing ethical corporate management best practice from time to time.

2. Please refer to the following link for 2013 Chailease Holding Company Limited Corporate Social Responsibility Report: http://www.chaileaseholding.com.tw/ugC_CR-01-05.asp

7.Disclosure of the corporate governace regulations and related rules. The Company established the regulations related to the corporate governance including the

Corporate Governance Best-Practice Principles, Ethical Corporate Management Principles, Corporate Social Responsibility Best Practice Principles and Ethical Conduct Principles in June, 2011, and Ethical Corporate Management Best-Practice Procedure and Code of Conduct in November, 2014. 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.

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

38

9. Execution of Internal Control System:Statement of Internal Controls


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10.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:

Personnel involved Major defects Action

Sales staff in the Micro-Enterprises Financing Department of office of central Taiwan Chailease Finance Co., Ltd.

Charged the client for fee in cash privately, gained unjustifiable enrichment.

1. Dismissed the employees according to the regulations of the Company.

2. Reiterated the importance of conforming to regulations.

Former junior manager of Sales Department of Xiamen office of Chailease Internation Finance Co.

Willfully copied clients' date for personal use without the Company's permission before resignment. The Company found out and stopped him immediately. This behavior violated IT security and IP protection policies.

1. Retroactively dismissed the employee according to the regulation of the Company.

2. The Company may pursue lawsuit in the event that any damages caused by the violation.


Former employees of Exam Department of Chongqiong office of Chailease International Finance Co.

Willfully copied clients' date for personal use without the Company's permission before resignment. The Company found out and stopped him immediately. This behavior violated IT security and IP protection policies.

1. Retroactively dismissed the employee according the the regulation of the Company.

2. The Company may pursue lawsuit in the event that any damages caused by the violation.


Employee of Tainan Beimen Station of Chailease Auto Rental Co. Ltd.

Willfully misappropriated corporate property.

1. Dismissed the employee according to the regulation of the Company.


40

11.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 28, 2015

1. Ratified the proposal regarding the 2014 Business Report and Financial Statements

proposal was approved after votingFor:748,224,916 shares;85.1513% ;Against:23,290 shares;0.0027%;Invalidation:0 shares;0%;Abstention:130,452,076 shares;14.8460%

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

2. Ratified the proposal for distribution of 2014 profits

proposal was approved after votingFor:749,562,046 shares;85.3035%;Against:26,310 shares;0.0030%Invalidation:0 shares;0%Abstention:129,111,926 shares;14.6935%

The record date of the dividend was set on August 3 2015; cash dividend and share dividend were distributed on August 27 2015 and September 2 2015.

3. Resolved the proposal regarding the issuance of new shares via capitalization of retained earnings

proposal was approved after votingFor:749,523,856 shares;85.2949%Against:24,500 shares ;0.0028%Invalidation:0 shares;0%Abstention:129,195,926 shares;14.7023%

Issue new shares of 43,816,538 shares based on the resolution; the new shares were listing on September 2 2015.

4. Resolved the proposal regarding the issuance of new common shares for cash capital increase in Taiwan or issuance of Global Depositary

proposal was approved after votingFor:725,465,036 shares;82.5570%Against:24,082,620 shares ;2.7406%Invalidation:0 shares;0% Abstention:129,196,626 shares;14.7024%

No implementation of this project in 2015.

5. Resolved the amendment to the "Memorandum & Articles of Association"

proposal was approved after votingFor:749,522,043 shares;85.2947%Against:23,293 shares ; 0.0027 %Invalidation:0 shares ; 0 %Abstention:129,198,946 shares;14.7026%

The revised Memorandum & Articles of Association was filed in Cayman Island on June 4 2015 and disclosed on the company's website.


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(2) Major resolutions in the Board meetingsDate The resolutions

2015.3.11Amended the Memorandum & Articles of Association of the Company.Approved the Date, Venue and its close period of Register of Members for the Annual General Meeting of 2015.

2015.3.26

Approved the Company's audited consolidated financial statements and the independent auditor's report for the financial year ended December 31, 2014.Approved the distribution of annual net profits and dividend payment from the operating performance of year 2014.

Approved the proposed capitalization of retained earnings for issuing new shares.

Approved the 2014 Business Report of the Company.

Approved the total compensation of Directors and key managers for year 2014.

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.

Amended the Company's "Ethical Conduct Best Practice Principles".

Amended the Company's "Ethical Corporate Management Best Practice Principles".

Amended the Company's "Procedures for Ethical Management and Guidelines for Conduct".

Approved the revised matters for the Annual General Meeting of 2015.

2015.5.13 Noted the Company's consolidated financial statements and the independent auditor's review report for the first quarter ended March 31, 2015.

2015.6.4

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

Amended the Company's "Corporate Governance Best-Practice Principles".

Amended the Company's "Corporate Social Responsibility Best-Practice Principles".

Amended the Company's "Rules Governing the Election of Directors and Supervisors".

2015.8.12 Noted the Company's consolidated financial statements and the independent auditor's review report for the first half year ended June 30, 2015.

2015.11.12Noted the Company's consolidated financial statements and the independent auditor's review report for the nine months ended September 30, 2015.

Approved the performance evaluation and compensation package of Directors and Key Managers for year 2015.

2015.12.16Approved to appoint Messrs. Chiang, Chung-Yi and Chen, Yi-Chun, the partners of KPMG, Taipei, as the auditors of the Company for the financial year of 2016.

Amended the Company's "Rules and Procedures of Board of Directors Meeting".

2016.3.3

Approved the 2015 Business Report of the Company.

Amended the Memorandum & Articles of Association of the Company.

Amended the "Rules and Procedures of Shareholders Meeting" of the Company.

Approved the change of Internal Audit Officer effective from March 3rd, 2016.

Approved the Date, Venue and its close period of Register of Members for the Annual General Meeting of 2016.

2016.3.17

Approved the Company's audited consolidated financial statements and the independent auditor's report for the financial year ended December 31, 2015.Approved the total compensation of Directors and key managers (including employees' compensation and Directors' compensation) for year 2015.

Established the Company's "Merge and Acquisition Special Committee Charter".

Approved the distribution of annual net profits and dividend payment from the operating performance of year 2015.

Approved the revised matters for the Annual General Meeting of 2016.

42

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

13. 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

Audit Officer Tzu-Ting Yang 2009/01/01 2016/03/03 Reassignment to Affiliates

(4)Information regarding certified public accountant Unit：NTD'000

Accounting Firm Name of CPA Audit fee

Non-Audit FeeWhether the CPA's Audit Period Covers an Entire

Fiscal Year Note

System Design

Company Registration

Human Resource Others Subtotal Yes No Audit Period

KPMG Wan-Wan Lin

Yi-ChunChen 6,530 0 120 0 0 120 V 2015/1/1~

2015/12/31

Note : we did not change the CPA or the accounting firm this year

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: N/A.

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 2016 .

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

43

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

NameShareholding Spouse & minor

shareholding

Shareholding 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

Andre J.L. Koo 56,597,934 4.97% 29,813 0.00% 0- 0- – – –

MITSUBISHI UFJ LEASE & FINANCE COMPANY LIMITED

45,302,400 3.98% 0- 0- 0- 0- – – –

GRAND PACIFIC INVESTMENT & DEVELOPMENT CO., LTD.

44,821,790 3.93% 0- 0- 0- 0- – – –

TFO GLOBAL MARKET FUND 44,044,000 3.87% 0- 0- 0- 0- – – –

LONG TERM STRATEGIC INVESTMENT FUND

37,752,000 3.31% 0- 0- 0- 0- – – –

PACIFIC GROWTH PRIVATE EQUITY FUND

35,796,446 3.14% 0- 0- 0- 0- – – –

EASTERN DRAGON INVESTMENT FUND 31,692,488 2.78% 0- 0- 0- 0- – – –

LTG CAPITAL PARTNERS FUND 31,460,000 2.76% 0- 0- 0- 0- – – –

MCKALLY GLOBAL INVESTORS FUND 31,460,000 2.76% 0- 0- 0- 0- – – –

STAR INTERNATIONAL PACIFIC LTD

27,997,008 2.46% 0- 0- 0- 0- – – –

44

(6) Continuing educational training of the directors and independent directors: The details of their continuing professional development in 2014 is described as follows:

Position Name Organizer Name of the course Hour

Chairman Andre J.L. KooTaiwan Corporate Governance Association

Banking Risk and Business Working Capital Management/ 6.0

Director

Fong-Long Chen (authorized representative of beacon Hill Co., Ltd.)

Taiwan Corporate Governance Association

Corporate Governance and Planning/Managing Shareholders Meeting 6.0

Director Chee Wee GohTaiwan Corporate Governance Association

Banking Risk and Business Working Capital Management/ 6.0

Director

Chi-Ching Chen (authorized representative of Wiedner Co., Ltd.


Banking Risk and Business Working Capital Management/Corporate Governance and Planning/Managing Shareholders Meeting

6.0

Independet director Steven Jeremy Goodman



6.0

Independet director Dar Yeh Hwang


Banking Risk and Business Working Capital Management 3.0

Securities & Futures Institute Liquidity risk for Bank 3.0

Independet director Chin Fock HongTaiwan Corporate Governance Association


6.0

(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 6

Certified Public Accountant 2

Professional certification of Principal Accounting Officers of Issuers, Securities Firms and Securities Exchanges 1

Certified Internal Auditor 2

Internal auditor

Certified Internal Auditor 4

Certified Information Systems Auditor 1

Certified Information Systems Security Professional 1

Certified Public Accountant 1


pany Limited

45

(8)Working environment and employee safety protectionThe 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 controlling

24 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 faci l i t ies Maintenance

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

Phys ica l /psycho log ica l 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

46

(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


10 (shares)

NTD100 (dollars)

2 (shares)

NTD20 (dollars)

New shares to the shareholder of Financial One Corp.

No No


10 (shares)

NTD100 (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 NTD7,241,004

Issuance 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


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.

Ⅳ . Capital and Shares


pany Limited

47

Type of Stock

Authorized Capital

Issued sharesUnissued shares

Total

Listed Non-listed Total

Common stock 1,139,229,994 0 1,139,229,994 360,770,006 1,500,000,000

(2)Composition of Shareholders(Par value per share: NT$10)

March 29, 2016

StructureVoulme

Government agencies

Fianacial institutions

Other legal entities

Domestic individuals

Foreign institutions

and individuals

Mainland China institutions and

individualsTotal

Number of shareholders 1 43 137 38,832 1,050 0 40,063

Shareholdings (shares) 1,473,449 50,162,305 59,497,974 307,446,539 720,649,727 0 1,139,229,994

Holdings percentage 0.13% 4.40% 5.22% 26.99% 63.26% 0.00% 100.00%

(3)Distribution profile of share ownership(Par value per share: NT$10)

March 29, 2016

Classof shareholdings Number of shareholders Total shares owned Ownership percentage

1~999 8,366 1,914,374 0.17%

1,000 ~ 5,000 21,518 45,014,115 3.95%

5,001 ~10,000 4,641 33,074,665 2.90%

10,001 ~15,000 1,879 22,571,335 1.98%

15,001 ~ 20,000 927 16,337,785 1.44%

20,001 ~ 30,000 947 23,095,049 2.03%

30,001 ~ 50,000 706 27,245,170 2.39%

50,001 ~ 100,000 502 34,963,917 3.07%

100,001 ~ 200,000 264 36,038,185 3.16%

200,001 ~ 400,000 123 35,273,396 3.10%

400,001 ~ 600,000 44 21,198,201 1.86%

600,001 ~ 800,000 29 20,430,133 1.79%

800,001 ~1,000,000 14 12,914,660 1.13%

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

103 809,159,009 71.03%

Total 40,063 1,139,229,994 100.00%

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

48

(4)Major shareholdersMarch 29, 2016

Shares Major shareholders Total shares owned Ownership percentage

Andre J.L. Koo 56,597,934 4.97%

MITSUBISHI UFJ LEASE & FINANCE COMPANY LIMITED 45,302,400 3.98%

GRAND PACIFIC INVESTMENT & DEVELOPMENT CO., LTD. 44,821,790 3.93%

TFO GLOBAL MARKET FUND 44,044,000 3.87%

LONG TERM STRATEGIC INVESTMENT FUND 37,752,000 3.31%

PACIFIC GROWTH PRIVATE EQUITY FUND 35,796,446 3.14%

EASTERN DRAGON INVESTMENT FUND 31,692,488 2.78%

LTG CAPITAL PARTNERS FUND 31,460,000 2.76%

MCKALLY GLOBAL INVESTORS FUND 31,460,000 2.76%

STAR INTERNATIONAL PACIFIC LTD 27,997,008 2.46%

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

YearItem 2014 2015 At the end of

March 31, 2016

Market price per share

Highest (NTD,Note 1) 82.50 86.9 58.80

Lowest (NTD,Note 1) 70.30 44.50 48.60

Average (NTD,Note 1) 75.64 68.14 53.78

Net worth per share

Before distribution (NTD) 31.35 33.25 -

After distribution (NTD) 30.14 Note 2 -

Earnings Per Share

Weighted Average Common Shares Outstanding('000 Shares) 1,095,413 1,139,230 -

Earnings Per Share(NTD)

Before adjustment 6.23 6.02 -

After adjustment 5.99

Dividends per share

Cash dividends(NTD) 2.8 3.1 -

Stock Dividends

Retained Earnings 0.4 - -

Capital Surplus - - -

Accumulated unpaid dividends (NTD'000) - - -

Analysis of return on investment

Price/Earnings Ratio (Note 3) 12.14 11.31 -

Price/Dividends Ratio (Note 4) 27.01 Note 2 -

Cash Dividends Yield Rate (Note 5) 3.70% Noter 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


pany Limited

49

(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 May 30, 2014, the Company is required to appropriate earnings every accounting year. The after tax earnings are initially used to offset cumulative losses, and then a special reserve is appropriated from the remainder. Without necessarily violating the Cayman Islands Companies Law, the Company is able to retain reasonable amount of earnings for Company development. The remaining earnings for each accounting period and the accumulated unappropriated retained earnings are distributed according to the stockholder's approval in compliance with the following order of distribution:a) between 0.01% and 1% of such remaining amount as employees' bonus for each accounting

period;b) between 0.01% and 0.1% of such remaining amount as directors' bonus for each accounting

period; andc) dividends of at least 20% of such remaining amount of which cash dividends shall not be less

than 30% of the total amount of dividends . The Company have amended its Articles of Association which was approved by the board of

directors during their meeting on March 3, 2016. 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 year The 2015 earning appropriation plan was approved in the Board meeting on March 17, 2016

to pay the cash dividend of NT$3.1per share to shareholders (NT$3,531,612,981 in total). The proposal will be presented to the shareholder meeting for resolution.

50

(7)Employee profit sharing and directors' and supervisors' compensation 1. 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.

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 26, 2015 proposed to pay cash dividends to employees of NT$1,023,811 and the remunerations to directors of NT$5,460,327.

(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 2014 :N/A


pany Limited

51

(10)Issuance of global depositary shares Issuance Date

Item October 15, 2012

Issuance and transaction location Bourse de Luxembourg

Total Amount US$ 206,160,000

Issuance price per unit US$ 8.59 per unit

Total of units 24,000,000 units

Source of securities Common stocks issued for capital increase by cash

Amount of securities 120,000,000 shares

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

Consigner Not Applicable

Depositary Bank JPMorgan Chase and Co.

Custodian Taipei Branch of JPMorgan Chase and Co.

Remaining sum (March 31, 2016) 1,365,667 units

Apportionment of expenses during issuance and existence The Company

Important agreement in the deposit contract and custodian agreement Refer to the deposit contract and custodian agreement for details

Market price per unit (US$)

Jan. 1, 2015 to Dec. 31, 2015

Highest 13.543

Lowest 6.952

Average 10.526

Jan. 1, 2016 to Mar. 31, 2016

Highest 8.925

Lowest 7.35

Average 8.128

(11)Financing plan and implementation1. With respect to each uncompleted public issue or private placement of securities and such

issues and placements that were completed in the most recent threeyears but have not yet fully yielded the proposed benefits: None.

2. The implementation process of each plan or the plan which does not yield proposed benefits: None.

Wholehearted serviceBeing active on the Asian financial stage

54

(1)Business Overview1.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, fishery inventory financing, micro-enterprises financing, non-performing assets auction, real estate financing, office equipment leasing, car rentals, ESCO financing and services, Solar power plant financing and investment, inventory financing 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 FY2015 FY2014

Item Amount Percentage Amount Percentage

Sales revenue 8,536,111 23% 8,546,786 25%

Interest revenue - installment sales 6,818,922 19% 6,485,014 19%

Interest revenue – capital leases 8,803,788 24% 7,732,557 22%

Rental revenue – operating leases 2,454,131 7% 1,905,331 6%

Interest revenue – loans 2,629,435 7% 2,122,796 6%

Other interest revenue 2,649,382 7% 1,819,017 5%

Building and land sales revenue 0 0% 750,535 2%

Other operating revenue 4,936,211 13% 5,190,638 15%

Total operating revenue 36,827,980 100% 34,552,674 100%

Source: The consolidated financial statements audited by the CPA

Ⅴ . Operational Highlights


pany Limited

55

(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 Sales The 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. Factoring The 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. Others Other services include life and property insurance brokerage, investments of solar power

plant, non-performing assets auction and collection of overdue receivables.(4) New products /services planned for development

A. Enhance the cooperation with Mitsubishi UFJ to develop oversea markets including aircraft spare engine business in Asia Pacific.

B. Broaden the ESCO financing and services in Taiwan, China and ASEAN. Keep on expanding the scale of solar power plants in Taiwan, while integrating agriculture, leisure & tourism activities to extend the economic benefits of Green Industry.

C. Exploit Chailease's existing advantages of channels, customer base, transaction data and financial patents to develop Fintech in order to improve operation efficiency, develop platform

services, build up marketing channels and enhance credit risk assessment model and techniques.

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

A. The development history of leasing industry Financial 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

56

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 24% and 37% 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 industries According to the World Leasing Yearbook 2016, the global leasing industry maintained

a stable growth trend during 2010 to 2014, which was supported by economic stimulus packages implemented by countries after the global economic crisis. The global leasing volume reached US$944.3 billion in 2014, representing 6.8% growth compared to 2013 since the leasing volume increased by 31.1% in China due to a series of favorable policies announced by both central and local governments to promote the leasing development. With current market penetration of 3.4%, we can expect further dramatic growth for leasing business in the future.

Trend of global leasing volume

In 2014, most of the top 10 countries in term 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.

2010 2011 2012 2013 2014

Global Leasing Volume(US$bn) Annual growth rate

594.5 796.7 868.0 884.0 944.3

6.7%

34.0%

8.9% 1.8% 6.8%


pany Limited

57

Top 10 countries by leasing volume in 2014

Ranking Country Annual volume(US$bn)

%Growth 2013-14

%Market penetration

1 US 336.95 6.0% 22.0%

2 China 114.85 31.1% 3.4%

3 UK 78.16 16.5% 28.6%

4 Germany 68.19 8.4% 16.4%

5 Japan 55.85 -17.0% 8.9%

6 Australia 35.27 0.0% 40.0%

7 France 31.86 3.9% 13.1%

8 Canada 30.89 2.6% 31.0%

9 Sweden 18.94 7.1% 22.7%

10 Italy 17.78 11.4% 11.7%

...

15 Taiwan 9.45 15.0% 8.3%

In 2014, the leasing volume of North America, Europe and Asia was US$368.4 billion, US$327.8 billion and US$195 billion, representing 39%, 34.7% and 20.6% of the global volume respectively. China contributed volume of US$114.85 billion, accounting for 58.9% of the total volume in Asia and taking the second position in the global ranking. The leasing volume in Taiwan reached US$9.45 billion, accounting for 4.8% in Asia and ranked the 15th in terms of global leasing volume.

Leasing volume by region in 2014

Ranking Region Annual volume(US$bn)

%Growth 2013-14 Percentage

1 N. America 368.4 9.9% 39.0%

2 Europe 327.8 -1.7% 34.7%

3 Asia 195.0 10.0% 20.6%

4 Aus/NZ 35.6 185.1% 3.8%

5 S. America 10.7 -40.5% 1.1%

6 Africa 6.8 -10.0% 0.7%

Total 944.3 6.8%

58

C. The market scale of leasing in Taiwan According to the information provided by the Taipei Leasing Association ("TLA"), the total

leasing and installment sales contracts entered into by members of TLA in 2015 was NT$322.3 billion, representing a 10% growth compared to 2014. 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 2015 respectively.

Vehicle/transportation equipment and raw materials were major subject matters for the leasing and installment sales business, accounting for 48% and 26% of the contract amounts respectively. SMEs with share capital less than NT$20 million were the major customers (60%), most of those are engaged in manufacturing, transportation and warehousing, wholesale and retail industries.

D. The market scale of leasing in China According to the World Leasing Yearbook 2016, the total leasing contract volume in 2014

was approximately CNY$705.91 billion, representing growth of 31.1% compared to 2013.(2) The interrelationships between the upstream, midstream and downstream segments of the

industry supply chain Leasing 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 providers Apart 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: lessors The 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.

Capital Provider

Capital Demander

Equipment Provider

Upstream Midstream Downstream

Delivery of equipment+after-sales services

Providing capital

Cash Flow Logistics Flow

Payment for purchase【sales and purchase agreement】

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

Shareholders

Capital Markets

Financial Institutions(e.g.Banks) Lessors Lessees

Vendors


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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, 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 products In 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,

2016, there were 35 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(15)

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., Ta Chong International Finance & Investment Company, Taiwan Business International Leasing Co., Ltd., CTBC Asset Management Co., Ltd., Yuanta International Leasing Co., Ltd., Panhsin International Leasing Co., Ltd., Co-operative Asset Management Corp., and Taishin Dah An Leasing Co., Ltd..

Captive finance company

(8)

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., and Fortune Motor Co., Ltd.

Foreign finance company

(4)

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. and IBM Global Financing.

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Category(No. of members) Characteristics of business

Enterprise group subsidiaries

(8)

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., and Konew Capital International Ltd.

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 9

Far 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 5Taichung Bank Leasing Co., Ltd., Jih Sun International Leasing & Finance Co., Ltd., Hua Nan International Leasing Co., Ltd., Taiwan Business International Leasing Co., Ltd., and Taishin Dah An Leasing Co., Ltd.

0.5~1 billion 6CDC Finance & Leasing Corp., Sunny International Leasing Co., Ltd., Ta Chong International Finance & Investment Company, Yuanta International leasing Co., Ltd., President Tokyo Corporation and Shinshin Credit Corporation.

0.1~0.5 billion 12

Mercedes-Benz Financial Services Taiwan Ltd., Robina Finance & Leasing Corporation, CMI Credit Ltd., ORIX Taiwan Corporation, Cosmos Leasing Corporation, Far Trust International Financial Co., Ltd., Ho-Hsin Car Leasing Co., Ltd., IBM Global Financing, MUL Taiwan Co., Ltd., Panhsin International Leasing Co., Ltd., Mercedes-Benz Leasing Taiwan Ltd., and Konew Capital International Ltd.

Source: Department of Commerce, MOEA and the 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$140.1 billion in 2015 and has been maintaining the leading position in Taiwan lease and installment sales industry.

B. The competition in China According to the World Leasing Yearbook 2016, the total number of various types of financial

leasing companies in China was 2,075 at the end of 2014, marked a growth of 87.1% compared to 2013. Among these financial leasing companies, the numbers of lessors as NBFIs, domestic pilot lessors and foreign invested lessors were 30, 152 and 1,893 respectively.

The aggregate paid-in capital for these financial leasing companies at 2014 year end was CNY$653.7 billion, increasing by 80.4% compared to the previous year. The aggregate paid-in capital of lessors as NBFIs, domestic pilot lessors and foreign invested lessors was CNY$97.2 billion, CNY$83.6 billion and CNY$472.8 billion respectively.

The total assets of all lessors in 2014 was approximately CNY$2,377.8 billion, representing growth of 26.1% compared to 2013. The total assets of lessors as NBFIs, domestic pilot lessors and foreign invested lessors was CNY$1,276.8 billion, CNY$316.6 billion and CNY$784.4 billion respectively.

The total assets of Chailease International Finance Corporation, the subsidiary of the Company in China, amounted to CNY$15.3billion in 2014, representing 1.4% and 2% of total assets of the non-NBFIs and foreign invested lessors respectively.


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The statistics of lessors in China under different administrations(by the end of 2014)

Unit: CNY$bn

Category Regulatory system Number of lessors Paid-in capital Total assets

Lessors as NBFIs CBRC 30 97.2 1,276.8

Domestic pilot lessors MOFCOM and SAT 152 83.6 316.6

Foreign invested lessors MOFCOM 1,893 472.8 784.4

Total in aggregate 2,075 653.7 2,377.8

Source: World Leasing Yearbook

According to China Financial Leasing Industry Development Report (2013) released by the Department of Circulation Industry Development, the top 20 companies in terms of registered capital and total assets constituted 18.86% and 37.16% of the total leasing companies.

Chailease International Finance Corporation, the subsidiary of the Company in China, ranked No. 10 and No. 9 in the industry in terms of the registered capital and total assets.

Registered capital and total assets of the lessors in China(by the end of 2013)

Unit: CNY$

Registered Capital Number of lessors

Over 2 billion 12

0.5~2 billion 116

0.17~0.5billion 425

Below 0.17 billion 533

Total Assets Number of lessors

Over 10 billion 12

2~10 billion 58

0.5~2 billion 145

Below 0.5 billion 871

Source: China Financial Leasing Industry Development Report (2013) released by the Department of Circulation Industry Development

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

report. The manpower participating in the new products /or markets development, from the stage of

project kick-off to cross-functional evaluation and cooperation, is at least 40 persons every year. Such manpower accounts for 5% of our back office staff.

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

of our clients, a breakthrough for SMEs financing.B. PV-ESCO and investments of solar power plants: in addition to financing services provided to

solar power manufacturers, the Company has also engaged in the investments of solar power plant business, a technically advanced new product, and ranked as the second power plants operator in Taiwan. Besides, the Company is preparing to enter into the ESCO financing and services market in China through the joint venture with Chinese and Japanese partnership.

C. Private jet financing: the Company collaborates with Bombardier, the leader in Canada's navigation industry, to facilitate the trading and financing activities of corporate and private jet markets in Asia Pacific.

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 35 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 is Taiwan-based and our success is built on providing

SMEs finance services. We follow the trend of overseas investment to gain footholds in the US, Thailand, China, Vietnam, and Malaysia and now are studying on and planning the expansion to Japan, ASEAN and European markets.

■Development of niche markets: the Company gradually enlarged the customer base from SMEs to consumer financing, truck and automobile financing, fishery inventory financing, micro-enterprises financing, non-performing assets auction, real estate finance, office equipment leasing, car rentals, ESCO financing and services, solar power plant financing and investment,, inventory financing, 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. Create cross-selling synergies by taking advantage of Chailease brand value, branch networks and SME customer base; pursue diversified revenues by implementing customer segmentation, developing niche markets, searching overseas business opportunities, continuing the strategies of extending value chain and seeking valuable partners, and planning new products and new business. Moreover, exploit internet technology to integrate resources and further develop marketing channels and platforms in order to broaden customer base and deal sources.


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C. Implement the organization integration, streamline the internal regulations and operation process via electronization and mobility to improve the productivity and efficiency.

D. Improve the collection methods and the professional competence of staff to enhance the collection performance and lower down the loss.

E. Strengthen the long-term and stable fund-raising capacity, and diversify funding sources to reduce the cost.

F. Recruit potential and capable employees and cultivate talents through Management Associate program and on-job-training programs to support the Company's overseas expansion.

G. Speed up the development progress of IT system to facilitate the business growth.H. Comply with laws and regulations of listed companies through internal propagation and

training programs; maintain proper information security, personal information and trade secrets protection and implement corporate governance.

I. Continuously promote ISO14001 environmental management system to implement energy saving and fulfill the social responsibility.

(2) Long-term business development plansA. Continue to promote the transformation into a finance company in Taiwan.B. Continue the strategy of our three main growth engines- Taiwan, China and ASEAN, promote

the cooperation and replication of cross-border products and businesses, and exploit the leading-edge technologies and stimulate value revolution for existing products and business models in order to deal with the changing environment and pave the way for long-term development.

C. Continue with our medium and long-term strategies for overseas market development, including setting up 3~5 branches in China annually and actively seeking local partners or merger and acquisition opportunities to develop new markets in ASEAN.

D. Develop new business and products through strategic alliances, investments and acquisition etc. to build the competitive advantage, accelerate the growth and create multiple sources of profit.

(2)Market and sales overview1.Market analysis

(1)Services provided in each geographic areaArea Services Subsidiaries

Taiwan ■ Finance lease■Operating lease■ Installment sales■ Factoring■Direct lending■ Life and property insurance broker■Overdue receivables management■ Energy saving services■ Engineering, 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 Finance (B.V.I.) Company Ltd.■Chailease International Financial Services Co., Ltd.■Chailease International Financial Services (Liberia) Corp.

China ■ Finance lease■Operating lease■ Importing and exporting■ Factoring■ Leasing of self-owned buildings■ Property management

■Chailease International Finance Corporation■Chailease International Corp.■Chailease Finance International Corp.■ Jirong Real Estate Co., Ltd.

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Area Services Subsidiaries

Thailand ■ Installment sales on vehicles■ Finance lease■ Factoring

■ Asia Sermkij Leasing Public Company Limited■ Bangkok Grand Pacific Lease Public Company Limited

Vietnam ■ Finance lease ■ Chailease International Leasing Company Limited

United States ■Commercial real estate finance ■Grand Pacific Financing Corporation

United Kingdom

■ Investment■Market survey and consultancy services

■Chailease international Company (UK) Limited

Malaysia ■Hire Purchase of vehicles and consumer goods

■Chailiease Berjaya Credit Sdn. Bhd.

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

Year FY2015 FY2014

Area Revenue from external customers1

Percentage Revenue from external customers1

Percentage

Taiwan 15,997,140 43.4% 14,474,324 41.9%

China 17,505,907 47.5% 16,679,819 48.3%

Thailand 2,533,347 6.9% 2,517,284 7.3%

Others2 791,586 2.2% 881,247 2.5%

Total 36,827,980 100.0% 34,552,674 100.0%

Note 1: The information comes from the consolidated financial statements audited by the CPA.

Note 2: Others include the subsidiaries in Vietnam, Malaysia 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$140.1 billion in 2015 and has been maintaining the leading position in Taiwan lease and installment sales industry.

B. Market share in China As China has a vast territory, the census report for market share is unavailable. According

to the World Leasing Yearbook, the total assets of lessors approached CNY$2,377.8 billion in 2014, while the total assets of Chailease International Finance Corporation, the China subsidiary of the Company, amounted to CNY$15.3 billion, representing 1.4% and 2% of total assets of the non-NBFIs and foreign invested lessors respectively. In addition, Chailease International Finance Corporation, also ranked No. 10 and No. 9 in terms of the registered capital and total assets respectively in 2013.

(4) Future outlook of supply and demand as well as growth potentialA. The expected economic growth in 2016 is 1.47% in Taiwan. As a consequence of gradual recovery of global economy, the Taiwan economy is expected

to improve progressively in 2016 with a better economic growth rate than the rate in 2015. The Taiwan Institute of Economic Research (TIER) and Directorate-General of Budget, Accounting and Statics, Executive Yuan projected a GDP growth rate of 1.27% and 1.47% in 2016 respectively.


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B. The fixed investment in Taiwan is estimated to increase by 3.13% in 2016. Regarding the fixed capital formation, the growth of private investment in 2016 is forecasted

to be 2.33%, 0.66% higher than that in 2015. TIER forecasted the growth rate for fixed investment in 2016 will be around 3.13%.

C. The expected economic growth in 2016 is 6.4% in emerging and developing Asia. International Monetary Fund (IMF) estimated a GDP growth rate of 6.4% and 6.5% for

emerging and developing Asia and China in 2016, respectively. D. The penetration rates of leasing in China and Taiwan are comparatively low. According to the statistics from World Leasing Yearbook 2016, 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 3.4% and 8.3%, comparatively lower than mature markets such as the United States and UK whose penetration rates are 22.0% and 28.6% respectively, implying that there is still huge growth potential in the Taiwan and China leasing markets.

(5) Competitive niche 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. A leader in the Taiwan lease and installment sales business With more than 35 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$140.1 billion in 2015 and has been maintaining the leading position in Taiwan lease and installment sales industry.

B. Diverse product line and high value-added financing services In 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, fishery inventory financing, micro-enterprises financing, non-performing assets auction, real estate finance, office equipment leasing, car rentals, ESCO financing and services, solar power plant financing and investment, inventory financing 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 management The subsidiaries of the Company in Taiwan, Chailease Finance Co., Ltd. and Fina Finance and

Trading Co., Ltd. have obtained the long-term A (twn) and A-(twn) ratings respectively from Fitch Ratings, and 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 ability The 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 personnels so as to increase the collection performance.

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

Area Positive factors: Negative factors:

Taiwan 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.

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.(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. The government highly supports the development of leasing industry.

b. The leasing market in China has great potential to develop.

c. Supports of management techniques and professional personnel would be provided by the parent company.

a. There is uncertainty in the government policies and taxation regulations. → Responsive strategy:

(a) Strengthen interaction with the commercial and taxation institutions in China to understand the trends in policies and regulations in a timely manner.

(b) Provide suggestions on China relevant policies, laws and regulations to favor the development of leasing industry.

b. Due to the limitation of equity funds, the main funding source for business development is still provided by banks.

→ Responsive strategy: (a)Increase the weight of syndicated loans and medium and long-term

funding in order to provide the capital for stable business development.(b)Diversify funding sources by obtaining the credit rating to facilitate the

fundraising in the capital market directly.(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 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 products

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, 2016

Year 2014 2015 On March 31,2016

Number of employeesChinaThailand

Management personnel 416 451 490

Non-Management personnel 3,170 3478 3554

Total 3,586 3929 4044

Average age 33.1 32.6 32.5

Average senority 5.3 4.7 5.0

Educational background

PhD 0.03% 0.03% 0.02%

Master's degree 18.82% 17.61% 17.66%

Bachelor's degree 76.46% 78.01% 78.19%

High school graduate 4.57% 4.28% 4.06%

Below high school 0.11% 0.08% 0.07%

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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(1)Audit committee's report on financial statements from the most recent year

Chailease Holding Company LimitedAudit Committee's Report

The Board of Directors has prepared the Company’s 2015 Business Report, Financial Statements, and proposal for allocation of profits. The CPAs of KPMG, Ms. Wan Wan, Lin 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.


Chairman of the Audit Committee: Dar-Yeh Hwang

March 17, 2016

Ⅵ . Financial Highlights


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(2)Financial review

Independent Auditors' Report

The Board of Directors of Chailease Holding Company Limited：

We have audited the accompanying consolidated balance sheets of Chailease Holding Company Limited and its subsidiaries (the Group) as of December 31, 2015 and 2014, and the consolidated statements of comprehensive income, changes in equity, and cash flows for the years then ended. The Company’s management is responsible for the preparation and presentation of the consolidated financial statements. Our responsibility is to issue a report on these consolidated financial statements based on our audits.We conducted our audits in accordance with the “Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants” and auditing standards generally accepted in the Republic of China. Those regulations and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, based on our audits, the consolidated financial statements referred to in the first paragraph present fairly, in all material respects, the consolidated financial position of Chailease Holding Company Limited and its subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for the years then ended, in conformity with the related financial accounting standards of the Guidelines Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), IFRIC Interpretations and SIC Interpretations which are endorsed by Financial Supervisory Commission R.O.C.

KPMG CPA： Wan Wan, Lin Yi Chun, Chen Taipei, Taiwan, R.O.C. March 17, 2016

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CHAILEASE HOLDING COMPANY LIMITED AND ITS SUBSIDIARIESConsolidated Balance Sheets December 31, 2015 and 2014,(Amounts Expressed in Thousands of New Taiwan Dollars)

2015.12.31 2014.12.31

　Assets Amount % Amount %

Current assets：

1100 　Cash and cash equivalents (Notes (6)(a) and (7)) $ 11,097,812 4 8,338,117 4

1110 　Current financial assets at fair value through profit or loss (Note (6)(b)) 235,545 - 205,992 -

1130 　Current held to maturity financial assets (Note (6)(b)) 7,658,388 3 6,723,295 3

1135 　Current derivative financial assets for hedging (Notes (6)(b)) 163,416 - 37,759 -

1170 　Accounts receivable, net (Notes (6)(d),(7)and(8)) 185,606,083 69 164,933,842 69

1320 　Inventories 207 - 207 -

1476 　Other current financial assets (Notes (7) and (8)) 3,513,245 1 3,587,175 2

1479 　Other current assets － others (Notes (6)(e) and (7)) 2,720,371 1 3,259,333 1

　　 210,995,067 78 187,085,720 79

Non current assets：

1510 　Non current financial assets at fair value through profit or loss (Notes (6)(b) and (6)(c)) 693,713 - 710,059 -

1523 　Non current available for sale financial assets (Note (6)(b) and (8)) 1,704,727 1 1,569,885 1

1528 　Non current held to maturity financial assets (Note (6)(b)) 2,317,394 1 2,408,525 1

1550 　Investments accounted under equity method (Notes (6)(f) and (8)) 365,278 - 183,215 -

1600 　Property, plant and equipment (Notes (6)(h) and (8)) 9,932,658 4 8,997,856 4

1780 　Intangible assets (Note (6)(i)) 45,507 - 35,591 -

1840 　Deferred tax assets (Note (6)(n)) 2,949,052 1 2,334,571 1

1930 　Long term accounts receivable, net (Notes (6)(d) , (7)and(8)) 37,073,556 14 33,539,103 14

1995 　Other non current assets – others　(Notes (7) and (8)) 1,492,870 1 1,072,032 -

56,574,755 22 50,850,837 21

TOTAL ASSETS $ 267,569,822 100 237,936,557 100


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2015.12.31 2014.12.31

　LIABILITIES AND EQUITY Amount % Amount %

Current Liabilities：

2100 　Short term borrowings (Notes (6)(j) , (7)and(8)) $ 78,844,180 29 66,974,084 28

2120 　Current financial liabilities at fair value through profit or loss (Note (6)(b)) - - 769 -

2125 　Current financial liabilities at fair value through profit or loss (Note (6)(b)) - - 2,820 -

2150 　Accounts and notes payable 3,235,819 1 2,344,572 1

2230 　Current tax liabilities 1,295,601 - 1,381,461 1

2305 　Other current financial liabilities (Note (7)) 26,274,248 10 23,243,396 10

2320 　Long term liabilities – current portion (Notes (6)(j), (6)(k), (7) and (8)) 74,456,126 28 59,244,773 25

2399 　Other current liabilities – others 1,017,178 - 902,357 -

　　 185,123,152 68 154,094,232 65

Non current Liabilities：

2530 　Bonds payable (Notes (6)(k) and (7)) 9,440,820 4 9,299,257 4

2540 　Long term borrowings (Note (6)(j),(7)and(8)) 28,891,972 11 34,252,478 14

2570 　Deferred tax liabilities (Note6(n)) 1,771,018 1 1,574,717 1

2600 　Other non current liabilities (Note (6)(m)) 2,312,321 1 2,286,792 1

42,416,131 17 47,413,244 20

　　Total Liabilities 227,539,283 85 201,507,476 85

Equity attributable to owners of parent：(Note (6)(o))

3100 　Share capital 11,392,300 4 10,954,134 4

3200 　Capital surplus 9,407,395 4 9,407,459 4

3350 　Unappropriated retained earnings 15,497,081 6 12,132,818 5

3400 　Other equity items 1,590,265 - 1,844,301 1

　　Total equity attributable to owners of parent 37,887,041 14 34,338,712 14

36XX 　Non controlling interests 2,143,498 1 2,090,369 1

　　Total equity 40,030,539 15 36,429,081 15

TOTAL LIABILITIES AND EQUITY $ 267,569,822 100 237,936,557 100

72

CHAILEASE HOLDING COMPANY LIMITED AND ITS SUBSIDIARIESConsolidated Statements of Comprehensive IncomeFor the Years Ended December 31, 2015 and 2014(Amounts Expressed in Thousands of New Taiwan Dollars)

2015 2014Amount ％ Amount ％

Operating revenue：(Note (7))4111 Sales revenue $ 8,536,111 23 8,546,786 25 4810 Interest revenue installment sales 6,818,922 19 6,485,014 19 4820 Interest revenue capital leases 8,803,788 24 7,732,557 22 4300 Rental revenue operating leases 2,454,131 7 1,905,331 6 4230 Interest revenue loans 2,629,435 7 2,122,796 6 4240 Other interest revenue 2,649,382 7 1,819,017 5 4830 Building and land sales revenue - - 750,535 2 4800 Other operating revenue 4,936,211 13 5,190,638 15 　 36,827,980 100 34,552,674 100 Operating costs：(Note (7))5111 Cost of sales 7,526,825 20 7,445,911 21 5240 Interest expense 4,777,085 13 4,357,416 13 5300 Cost of rental revenue 1,752,057 5 1,354,572 4 5800 Other operating costs 826,628 2 1,320,394 4 14,882,595 40 14,478,293 42 Gross profit from operation 21,945,385 60 20,074,381 58 6000 Operating expenses(Note(7)) 13,181,740 36 11,508,104 33 6500 Net other income and expenses (Note (6)(r)) 115,758 - 190,463 - Operating profit 8,879,403 24 8,756,740 25 Non operating income and expenses：7100 Interest income 84,281 - 89,186 - 7130 Dividend revenue 69,116 - 33,691 - 7020 Other gains and losses (Notes (6)(s)) 573,701 2 808,174 3 7060 Share of profit (loss) of associates and joint ventures accounted for using equity

method(Note6 (f)) 28,309 - (11,077 ) -

755,407 2 919,974 3 7900 Profit before income tax 9,634,810 26 9,676,714 28 7950 Less:Income tax expense (Note (6)(n)) 2,440,877 6 2,521,945 7 Profit for the year 7,193,933 20 7,154,769 21

Other comprehensive income (loss):8310 Items that will not be reclassified subsequently to profit or loss8311 Remeasurement from defined benefit plans 7,635 - 17,181 - 8349 Less: Income tax expense related to items that will not be reclassified

subsequently (1,298 ) - (2,921 ) -

　Total items that will not be reclassified subsequently to profit or loss 6,337 - 14,260 - 8360 Items that may be reclassified subsequently to profit or loss8361 Exchange differences on translation of foreign financial statements (302,151 ) (1 ) 1,228,190 3 8362 Unrealized losses on available for sale financial assets (32,055 ) - (147,405 ) - 8363 Gains of effective portion of cash flow hedges 128,477 - 74,858 - 8364 Losses of effective portion of hedges of net investment in foreign operations (77,281 ) - (163,818 ) - 8391 Other comprehensive income (loss) other - - 49,141 - 8399 Income tax relating to items that are or may be reclassified subsequently to profit

or loss (27,992 ) - (60,239 ) -

　Total other comprehensive income (311,002 ) (1 ) 980,727 3 Other comprehensive income for the year, net of tax (304,665 ) (1 ) 994,987 3

8500 Total comprehensive income for the year $ 6,889,268 19 8,149,756 24 Profit attributable to：

8610 Owners of parent $ 6,863,272 19 6,825,408 20 8620 Non controlling interests 330,661 1 329,361 1 $ 7,193,933 20 7,154,769 21

Comprehensive income attributable to：8710 　Owners of parent $ 6,615,550 18 7,710,169 23 8720 　Non controlling interests 273,718 1 439,587 1 $ 6,889,268 19 8,149,756 24 9750 Basic earnings per share (NT dollars) $ 6.02 5.99


pany Limited

73

CH

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come

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-

-

-

6,82

5,40

8

-

-

-

-

-

6,82

5,40

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329,

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154,

769

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r

-

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14,2

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5 )

74,8

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(16

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49,1

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4,76

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comp

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-

-

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6,

839,

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74,8

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49,1

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7,

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43

9,58

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8,14

9,75

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ppro

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divid

ends

to or

dinary

share

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rs

-

-

-

(1,99

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-

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-

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(1,99

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1 )

-

(1,99

1,66

1 )

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ock d

ivide

nds o

f ord

inary

share

holde

rs

995,

830

-

-

(99

5,83

0 )

-

-

-

-

-

-

-

-

　Re

versa

l of s

pecia

l rese

rve

-

-

(64,8

65 )

64

,865

-

-

-

-

-

-

-

-

Chan

ges i

n own

ership

inter

ests

in su

bsidi

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-

(4,

239 )

-

-

-

-

-

-

-

(4,

239 )

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(4,

239)

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contr

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-

-

-

-

-

-

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-

(16

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-

-

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6,86

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-

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39

74

CHAILEASE HOLDING COMPANY LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2015 and 2014 (Amounts Expressed in Thousands of New Taiwan Dollars)

2015 2014

Cash flows from operating activities：

　Profit before income tax $ 9,634,810 9,676,714

Adjustments： Adjustments to reconcile profit before income tax to net cash provided by operating activities：

　　　Depreciation expense 1,611,411 1,325,494

　　　Amortization expense 142,602 72,513 　　　Loss on financial assets and liabilities at fair value through profit

or loss 39,057 60,735

　　　Interest expense 4,777,085 4,357,416

　　　Interest income (20,985,808 ) (18,248,570 )

　　　Dividend income (69,116 ) (33,691 ) Share of (profit) loss of associates and joint ventures accounted for using equity method

(28,309 ) 11,077

　　　Gain on disposal of property, plant and equipment (4,535 ) (107,378 )

　　　Loss (gain) on disposal of foreclosed assets 80,258 (70,648 )

　　　Gain on disposal of investments (123,081 ) (67,388 )

　　　Impairment loss on financial assets 4,947,876 3,972,869

　　　Impairment loss on non-financial assets 269,495 297,167

　　　Total adjustments to reconcile (profit) loss (9,343,065 ) (8,430,404 )

　　Change in operating assets and liabilities：

　　　Change in operating assets：

　　　　(Increase) Decrease in financial assets held for trading (53,527 ) 107,633 Decrease in non-current financial assets at fair value through profit or loss

- 895,104

　　　　Increase in accounts receivable (30,986,582 ) (45,103,441 )

　　　　Proceeds from financial assets securitization - 4,737,057

　　　　Decrease in other current financial assets 131,770 2,603,487

　　　　Decrease in inventories - 567,545

　　　　Decrease in other current assets 597,886 50,113

　　　　Proceeds from sales of operating lease assets 693,188 1,002,597

　　　　Purchase of operating lease assets (3,385,906 ) (4,079,846 )

　　　　Increase in other non-current assets – others (559,926 ) (318,576 )

　　　　　Total changes in operating assets (33,563,097 ) (39,538,327 )

　　　Changes in operating liabilities：

　　　　Increase (decrease) in accounts payable 928,119 (641,650 )

　　　　Increase in long term and short-term debts 156,767,451 165,765,553

　　　　Repayment of long-term and short-term debts (133,755,334 ) (134,027,158 )

　　　　Increase in other current financial liabilities 3,378,672 3,412,617

　　　　Increase in accrued pension liabilities 17,027 2,864

　　　　Increase in other current liabilities-others 116,464 454,183

　　　　Increase in non current liabilities-others 12,407 32,843

　　　　Total changes in operating liabilities 27,464,806 34,999,252

　　　　　Total changes in operating assets and liabilities (6,098,291 ) (4,539,075 )

　　　Total adjustments (15,441,356 ) (12,969,479 )


pany Limited

75

2015 2014

　　Cash outflow generated from operation (5,806,546 ) (3,292,765 )

　　Interest received 20,978,162 17,887,100

　　Dividend received 69,216 33,791

　　Interest paid (4,966,118 ) (4,277,275 )

　　Income taxes paid (2,998,161 ) (2,288,378 )

　　　Net cash provided by operating activities 7,276,553 8,062,473

Cash flows from investing activities：

　Acquisition of available-for-sale financial assets (193,928 ) -

　Proceeds from disposal of available-for-sale financial assets 151,669 56,491

　Proceeds from return of capital by available for sale financial assets - 2,062

　Acquisition of held-to-maturity financial assets (5,662,910 ) (6,894,322 )

　Disposal of held-to-maturity financial assets 4,758,138 2,982,157

　Acquisition of investments accounted for using equity method - (168,745 )

　Net cash flow from acquisition of subsidiaries(Notes (6)(g)) - (407,979 )

　Acquisition of property, plant and equipment (143,316 ) (162,770 )

　Disposal of property, plant and equipment 2,650 20,057

　Acquisition of intangible assets (11,941 ) (4,863 )

　　Net cash used in investing activities (1,099,638 ) (4,577,912 )

Cash flows from financing activities：

　Distribution of cash dividend (3,067,157 ) (1,991,661 )

　Changes in non-controlling interests (220,653 ) (165,968 )

　　Net cash used in financing activities (3,287,810 ) (2,157,629 )

Effect of exchange rate changes on cash and cash equivalents (126,045 ) (498,865 )

Net increase in cash and cash equivalents 2,763,060 828,067

Cash and cash equivalents, net of bank overdraft, beginning of year 8,330,204 7,502,137 Cash and cash equivalents, net of bank overdraft, end of year (Notes (6)(a))

$ 11,093,264 8,330,204

76

(1) Integrated Risk Management Framework & Policy1.Chailease Risk Management Organizational Structure

Chailease'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.

Credit Services Division

Chairman

Board

President

Chief Risk officer

Subsidiaries

Corporate Planning Division

Risk Management and Planning Department

Credit Services of Departments and Branches

Risk Management Committee

Management Committee

Risk Management Department

VII. Integrated Risk ManagementFramework & Policy


pany Limited

77

Organizations with Risk Management Responsibilities

Organization 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, measuring, 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's risk management report and reporting any major incidents to the Board.

Risk Management Department 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 entire company; 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 of Departments 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.

78

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 riskChailease 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

79

(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.

80

(1)Information about the affiliates:1.Organizational chart of affiliate As of December 31, 2015

Note 1: The initial equity capital has not been injected.Note 2: [Chailease Finance Securitization Trust 2014],

which is consolidated in Chailease Holding consol idated f inancial statements, is not included in the organization chart.

｛

｛

｛

｛

｛

｛


Chailease International Company (Malaysia) Limited (100%)

Grand Pacific Holdings Corp.

Fina Finance & Trading Co., Ltd.

(99.55%)

Chailease Consumer

Finance Co., Ltd.(100%)

Chailease Insurance Brokers Co., Ltd.

(100%)

Chailease Specialty Finance Co., Ltd.

(100%)

My Leasing (Mauritius) Corp.

(100%)

Chailease International Corp.

(100%)

Chailease Finance International Corp.

Jirong Real Estate Co., Ltd. (100%)

Chailease International Finance

Corporation(100%)

My Leasing (B.V.I.) Corp.

(100%)

Apex Credit Solutions Inc.

(100%)

Chailease Cloud Service Co., Ltd.

(100%)

Yun Tang Inc.(100%)

Chailease Energy Integration Co., Ltd.

(100%)

Grand Pacific Warehouse Funding

Corp. (100%)

Grand Pacific Financing Corp.

(100%)

Grand Pacific Warehouse Funding

LLC. (100%)

Grand Pacific Main Street Development

Inc. (100%)

Asia Sermkij Leasing Public Company

Limited

Chailease International

(B.V.I.) Corp. (100%)

Golden Bridge (B.V.I.) Corp.

(100%)

Grand Pacific Business Loan LLC

2005-1

Bangkok Grand Pacific Lease Public Company Limited

(99.99%)


Financial Services Co., Ltd. (100%)


Financial Services (Liberia) Corp.

(100%)


Financial Services(Hong Kong)

Company Limited (100%) (Note 1)

Chailease International Leasing

Company Ltd. (100%)

Chailease Berjaya Credit Sdn. Bhd.

(70%)

Chailease Finance Co., Ltd. (100%)


Company (UK) Limited (100%)

Grand Pacific Business Loan trust

2005-1

Chailease International Investment Corp. (100%) (Note 1)

11.57%51.00%

49.00% 36.61%

25.00%75.00%

USA

Thailand

Vietnam

Malaysia

Taiwan

PRC

Chailease Credit Services Co., Ltd.

(100%)

Chailease Finance (B.V.I.) Company

Ltd. (100%)

Vlll. Special notes

Chailease Auto Rental Co., Ltd.(100%)


pany Limited

81

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

20091103Tiara Labuan, Jalan Tanjung Batu, 87000 F.T. Labuan, Malaysia

USD 342,299 Investment

Chailease Finance Co., Ltd.

198006238-12F., No.362, Ruiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)

NTD 10,189,890Installment sales, leases and factoring


198703135F., No.362, Ruiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)

NTD 2,960,857 Installment sales, import and export and factoring

Chailease Consumer Finance Co., Ltd.

200006036F., No.392, Sec. 1, Neihu Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)

NTD 711,400Leases, installment sales and factoring

China Leasing Co., Ltd. 199101238F., No.362, Ruiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)

NTD 2,015,607 Installment sales

Apex Credit Solutions Inc. 200109256F., 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.

19950508Palm 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.

200602206F., No.420, Fuxing N. Rd., Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.)

NTD 650,000 Leases

Chailease Credit Services Co., Ltd.


NTD 10,000 Installment sales, leases, and third-party payment



NTD 8,000 Personal insurance broker and property insurance broker



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

VND200,000,000 Lease

82


products

My Leasing (B.V.I.) Corp. 20040401Plam Grove House P.O. Box 438, Road Town, Tortola, British Virgin Islands


Asia Sermkij Leasing Public Company Limited

19840817

24th Fl., Sathorn City Tower, 175 South Sathorn Road, Tungmahamek, Bangkok 10120, Thailand

THB 1,759,478 Installment on minibus

Bangkok Grand Pacific Lease Public Company Limited

19890615

10/1th Fl., Sathorn City Tower, 175 South Sathorn Road, Tungmahamek, Bangkok 10120, Thailand

THB 438,500 Leases and financial consultation


19870925901 Corporate Center Drive, #300, Monterey Park, CA 91754, U.S.A.

USD 7,701 Commercial real estate finance

Grand Pacific Financing Corporation


USD 4,750 Commercial real estate finance

Grand Pacific Main Street Development Inc.


USD 0.5 Commercial real estate finance

Grand Pacific Warehouse Funding Corp.


USD - Commercial real estate finance

Grand Pacific Business Loan LLC. 2005-1



Grand Pacific Business Loan Trust 2005-1



Grand Pacific Warehouse Funding LLC.




2004060310th Floor, Raffles Tower, 19 Cybercity, Ebene, Mauritius


Chailease International Finance Corporation

20050412Hongqiao Shanghai Building B, 2683-15 unit, No.100, Zunyi Road, Changning District, Shanghai, PRC

USD 310,000 Leases


20080717Room 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


20110127Airport Business Park W13-4, No.76, Huan He North Road, Airport Industrial Area, Tianjin, PRC

USD 40,000 Leases and factoring


pany Limited

83


products

Jirong Real Estate Co., Ltd.

20121112Building 1, Lane 631, Jinzhong Rd., Changning District, Shanghai, PRC

CNY 170,000 Leasing of self-owned buildings and property management


20080409Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin Islands


Chailease International (B.V.I.) Corp.

20071224Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin Islands


Chailease International Financial Services Co., Ltd.

20130402P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands

USD 5,000

Installment sales, overseas financing and financial consultation

Chailease International Financial Services (Hong Kong) Company Limited

2013112236/F Tower Two Times Square 1 Matheson ST Causeway Bay Hong Kong

USD - Investment

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. 201203288F., No.362, Ruiguang Rd., Neihu Dist., Taipei City 114, Taiwan (R.O.C.)

NTD 430,000Energy Services Company industry

Chailease Energy Integration Co.,Ltd.


NTD 50,000

Energy saving services, engineering, procurement, construction, operations and maintenance on solar power plants

Chailease International Investment Corp.

20150430P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands

USD - Investment

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.

84

5. Information on the director, supervisor and president of affiliatesDecember 31, 2015 Unit:

1000 shares (%)

Name of the company Position Name RepresentingShares held

Shares Percentage


Director Chia-Jeang Liu928,497 100.00%


Director Fong-Long Chen5,000 100.00%

Chailease Finance Co., LTD.Chairman Fong-Long Chen


1,018,989 100.00%

President/Director

Ming-Ching HouChailease International Company (Malaysia) Limited

Director Chia-Jeang LiuChailease International Company (Malaysia) Limited

Director Kun-Ming ChenChailease International Company (Malaysia) Limited

Director Jung-Tao LeeChailease International Company (Malaysia) Limited

Director Hsiu-Tze ChengChailease International Company (Malaysia) Limited

Director Shi- Ren ShenChailease International Company (Malaysia) Limited

Supervisor Tzu-Ting YangChailease International Company (Malaysia) Limited

Supervisor Shin-Yi LinChailease International Company (Malaysia) Limited


Chairman Fong-Long Chen Chailease Finance Co., Ltd. 294,754 99.55%

President Ming-Ching Hou

Director Jung-Tao Lee Chailease Finance Co., Ltd.

DirectorKuo-Chiang Tseng


Director Shi-Cha Lai Chailease Finance Co., Ltd.

Director Kai-Ming Lee Chailease Finance Co., Ltd.

Supervisor Tze-Ting Yang


pany Limited

85


Shares Percentage


Chairman/President

Chia-Jeang Liu Fina Finance & Trading Co.71,140 100.00%

Director Chen-Yuan Liu Fina Finance & Trading Co.

DirectorMing-Tsung Chang

Fina Finance & Trading Co.

Supervisor Hsing-Jen Liu Fina Finance & Trading Co.

China Leasing Co., Ltd. Chairman Fong-Long Chen Chailease Finance Co., Ltd. 201,561 100.00%

President/Director

Ming-Ching Hou Chailease Finance Co., Ltd.


Supervisor Kuo-Teng Qiu Chailease Finance Co., Ltd.

Apex Credit Solutions Inc. Chairman/President

Chia-Jeang Liu Chailease Finance Co., Ltd.10,000 100.00%

Director Tian-Fu Yu Chailease Finance Co., Ltd.

Director Chih-Ho Wei Chailease Finance Co., Ltd.

SupervisorChung-Chiang Yang


Chailease Finance (B.V.I) Company Ltd.

Chairman Fong-Long Chen Chailease Finance Co., Ltd.40,910 100.00%

Chailease Auto Rental Co., Ltd.

Chairman/President

Chia-Jeang Liu Chailease Finance Co., Ltd.65,000 100.00%

Director Guang-Shian Dai Chailease Finance Co., Ltd.

Director Shih-Ku Huang Chailease Finance Co., Ltd.

SupervisorMing-Tsung Chang


Chailease Credit Services Co.,Ltd.

Chairman Chia-Jeang Liu Chailease Finance Co., Ltd. 1,000 100.00%

DirectorMing-Tsung Chang



Supervisor Shi- Ren Shen Chailease Finance Co., Ltd.


Chairman Chia-Jeang Liu Chailease Finance Co., Ltd. 800 100.00%

Director De-Long Sheng Chailease Finance Co., Ltd.

DirectorMing-Hung Hsieh


Supervisor Yu-Hua Bai Chailease Finance Co., Ltd.

86


Shares Percentage

Chailease International Leasing Company Limited (Vietnam).

Chairman Chia-Jeang Liu - 100.00%

Director/President

Chi-Chang Wu

Director Lai-Wang Tang

Director Huei-Yeu Yang

Director Yi-Cheng Chen

Chairman of Control Committee

Huei-Jung Chao

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%

Asia Sermkij Leasing Public Co., Ltd.

Chairman/President

Chun-Lang Lu 　170,873 48.56%

DirectorMr. Amnuay Viravan

　

Director Che-Chih Chen 　

Director Fong-Long Chen 　

Director Ying-Chih Liao 　

Director Ying-Hui Shen 　

DirectorMr. Tientavee Saraton

　

DirectorMs. Patima Chavalit

　


Mr. Pradit Sawattananond

　


Mr. Anant Savattananon

　


Dr. Supriya Kuandachakupt

　


Mr. Kasem Akanesuwan

　


pany Limited

87


Shares Percentage

Bangkok Grand Pacific Lease Public Co., Ltd.

Chairman/President

Chun-Lang Lu 43,846 99.99%

DirectorMr. Amnuay Viravan

Director Fong-Long Chen

Director Jui-Tsung Hung

Director Yuan-I Li

Director Lai-Wang Tang

DirectorMr. Tientavee Saraton

DirectorMs. Patima Chavalit

Grand Pacific Holdings Corp. Chairman Che-Chih Chen 　7,700 100.00%

Director Fong-Long Chen 　

Director Chia-Jeang Liu 　

Director Richard Tao 　

Director Christina Wang 　

Grand Pacific Financing Corp. Chairman Che-Chih Chen 4,750 100.00%

Director Christina Wang

Director Richard Tao

GP Main St. Development Corp., Inc

Chairman Che-Chih Chen - 100.00%


Director Anni Lee

GP Warehouse Funding Corp.Chairman Che-Chih Chen

- 100.00%



Director Anni Lee

Director Michael Tang

88


Shares Percentage


Chairman Che-Chih Chen - -



Director Anni Lee



Chairman Che-Chih Chen - -



Director Anni Lee


GP Warehouse Funding LLC. Chairman Che-Chih Chen - 100.00%



Director Anni Lee


My Leasing (Mauritius) Corp. Director Fong-Long Chen 　 89,655 100.00%

Director Ming-Ching Hou 　

Director Kuen-Ming Chen 　


Chairman Fong-Long Chen 　 - 100.00%

Director/President

Kuen-Ming Chen 　

Director Kuo-Teng Qiu 　

Supervisor Ming-Ching Hou 　

Chailease International Corp. Chairman Fong-Long Chen 　 - 100.00%

Director/President

Kuen-Ming Chen 　

DirectorWen-Cheng Chen

　



pany Limited

89


Shares Percentage

Chailease Finance International Corp

Chairman Fong-Long Chen 　 - 100.00%

Director/President

Dao-Ming Wang

Vice Chairman

Kuen-Ming Chen 　


Jirong Real Estate Co., Ltd. Chairman Fong-Long Chen 　 - 100.00%

Director/President

Kuen-Ming Chen 　

DirectorWen-Cheng Chen

　


Golden Bridge (B.V.I.) Corp. Director Fong-Long Chen 　 337,150 100.00%


Director Fong-Long Chen7,800 100.00%

Chailease Cloud Service Co., Ltd. Chairman Fong-Long Chen

Chailease Finance Co. , Ltd.

1,000 100.00%

Director/President

Ming-Ching Hou Chailease Finance Co. , Ltd.

Director Guo-Ruei ZengChailease Finance Co. , Ltd.

Supervisor Shi-Min SunChailease Finance Co. , Ltd.


Director Ming-Ching Hou

- 100.00%

Yong Tang Limited Company Chairman Ming-Ching Hou Chailease Finance Co., Ltd.

- 100.00%


Director Chi-Jung Chen Chailease Finance Co., Ltd.

90


Shares Percentage

Chailease Energy Integration Co., Ltd.

Chairman Fong-Long Chen Chailease Finance Co., Ltd. 5,000 100.00%

Director/President

Ming-Ching Hou Chailease Finance Co., Ltd.

Director Chi-Jung Chen Chailease Finance Co., Ltd.

Supervisor Jung-Tao Lee Chailease Finance Co., Ltd.

Chailease International Company (UK) Limited.

Director Fong-Long Chen 1 100.00%

Director Ming-Ching Hou

Director Ying-Chih Liao

Chailease Berjaya Credit Sdn. Bhd. Chairman Ming-Ching Hou


- 70.00%

Director/President

Lai-Wang TangChailease International Company (Malaysia) Limited

Director Ying-Chih LiaoChailease International Company (Malaysia) Limited

Director Lee Kok Chuan Berjaya Group

Director Vivienne Cheng Berjaya Group

6.Operational statuses of affiliates

Name of affiliates

Paid-in capital

Total assets

Total liabilities Net value Operating

revenuesOperating

income

Net income or loss

(after tax)

EPS(after tax)

(NT$)


684,598 22,238,327 1,029,812 21,208,515 - (20,214) 3,856,642 4.15


10,189,890 95,183,760 73,931,112 21,252,648 10,072,222 3,015,570 4,435,146 4.50


2,960,857 33,191,199 26,417,191 6,774,008 2,859,487 997,996 959,367 3.24


711,400 5,457,303 4,450,825 1,006,479 474,484 101,197 113,085 1.59

China Leasing Co.,Ltd.

2,015,607 5,789,017 687,022 5,101,994 101,366 71,463 63,112 0.31


pany Limited

91

Name of affiliates

Paid-in capital

Total assets


revenuesOperating

income

Net income or loss

(after tax)

EPS(after tax)

(NT$)

Apex Credit Solutions Inc.

100,000 206,649 62,172 144,477 200,511 30,872 30,418 3.04

Bangkok Grand Pacific Lease Plc.

401,052 3,890,510 3,293,339 597,171 386,436 134,448 107,107 2.44

Chailease Finance (B.V.I) Company Ltd.

1,342,871 9,094,439 4,343,466 4,750,973 414,021 194,070 193,946 4.74

Asia Sermkij Leasing Public Company Ltd.

1,609,219 25,621,264 21,645,510 3,975,754 2,288,520 748,116 620,596 1.76


252,769 1,551,183 356,740 1,194,443 37,581 103,359 174,887 36.82

Grand Pacific Financing Corp.

159,919 2,889,764 1,746,192 1,143,572 259,702 49,571 44,840 5.82

GP Main St. Development Inc

16 141,189 191 140,998 5,430 5,430 5,372 10,744

GP Warehouse Funding Corp.

0 7,335 511 6,824 - - (355) 0

My Leasing (B.V.I.) Corp.

558,025 1,865,523 76 1,865,447 32,345 (6,663) (6,661) (0.39)


2,942,920 22,024,408 2,501,301 19,523,107 207,941 (12,004) 2,168,852 24.19


0 357,046 198,372 158,674 51,018 58,860 56,962 SPT


10,175,750 72,163,390 53,007,896 19,155,494 9,058,641 2,029,643 2,218,973 Note

Chailease International Leasing Company Ltd.

281,000 3,075,493 2,561,943 513,550 298,335 101,782 81,308 Note


11,066,949 22,693,982 5,361,981 17,332,001 334,209 117,647 2,273,330 6.74


256,035 344,284 2,954 341,330 0 (97) 29,048 3.72


999,000 8,795,854 6,585,360 2,210,494 7,778,653 252,391 235,627 Note

92

Name of affiliates

Paid-in capital

Total assets


revenuesOperating

income

Net income or loss

(after tax)

EPS(after tax)

(NT$)

Chailease Auto Rental Co.,Ltd.

650,000 2,891,718 2,239,230 652,488 753,463 9,143 13,680 0.21

Chailease Credit Services Co.,Ltd.

10,000 11,805 2,336 9,470 294 (122) (59) (0.06)


8,000 37,095 3,242 33,852 58,704 26,720 22,411 28.01


0 0 0 0 0 0 0 SPT

GP Warehouse Funding LLC.

0 0 0 0 0 0 0 SPT


1,313,000 5,975,959 3,762,068 2,213,891 677,927 263,420 267,540 Note

Jirong Real Estate Co., Ltd.

849,150 1,507,412 636,463 870,949 94,340 2,173 2,951 Note


10,000 6,420 174 6,246 248 (1,576) (1,929) (1.93)


164,125 20,420,050 19,217,625 1,202,425 1,076,987 661,079 720,143 144.03

Chailease International Financial Services (Hong Kong) Co. Ltd.

0 0 0 0 0 0 0 0


328 1,218,682 1,158,300 60,382 236,636 57,296 57,356 114,712

Yun Tang Inc. 430,000 1,543,386 1,127,502 415,883 182,072 66,140 (2,151) Note

Chailease International Investment Corp.

0 0 0 0 0 0 0 0

Chailease International Company (UK) Limited

49 9,935 6,632 3,303 4,855 4,058 3,246 3,246

Chailease Berjaya Credit Sdn. Bhd.

183,575 182,245 5,520 176,725 39 (8,185) (7,293) Note


pany Limited

93

Name of affiliates

Paid-in capital

Total assets


revenuesOperating

income

Net income or loss

(after tax)

EPS(after tax)

(NT$)

Chailease Energy Integration Co., Ltd

50,000 49,947 40 49,907 0 (106) (93) (0.02)

Note : It is a limited company without issuing stocks.

(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.

94


of shareholders

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 the company 2. Alteration of the Articles of Corporation of the company3. Any modifications or alterations in the Articles of Incorporation prejudicial to the privileges of special shareholders shall also be adopted by a meeting of special shareholders 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 company5. Resolution of dissolution, merger and split-up6. 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 of Association should have limited influence on the rights of shareholders.


pany Limited

95


of shareholders

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.

96


of shareholders

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.


pany Limited

97


of shareholders

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 Information The 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.

100

The mission of Chailease Holding is to strive for excellence as a financial holdings company in the Asia-Pacific

region. Since it was established 39 years ago, it has worked diligently toward this goal and has made unremitting

efforts to move forward. It has also spared no effort in its commitment to successful customer partnerships,

promoting economic development, and implementing and practicing social responsibility.

In 2013, in accordance with Global Reporting Initiative (GRI) Guidelines, version G3.1, Chailease Holding’s

first Corporate Social Responsibility Report was published, which detailed the Company’s economic,

environmental and social impacts. This was followed by the G4 version in 2014, which outlined how the Company

continued to achieve its goals and practice improvement. In 2015, the third report builds on the foundation of

G4 version, demonstrating an increase in more diverse and innovative products and services, a deeper and more

comprehensive community service commitment, and more transparent and user-friendly company information.

In today’s world, implementing corporate social responsibility practices has become the norm. Chailease

Holding has taken its combined core competencies as the starting point, including leasing, installment plans,

financing, and cross-border businesses. However, it has also branched out into the solar energy, green energy,

and other new areas completely outside the limitations and imagination of the financial leasing industry. For

Chailease Holding, in addition to strengthening its own competitiveness, this will also lead customers and suppliers

to advance to a whole new level, where the positive cascading impact will improve the overall effectiveness and

efficiency of social resources development to the upmost.

We are facing serious challenges caused by extreme weather anomalies. As part of the global village, after

deep reflection and consideration, we think we can do better, be broader, go further. In 2010, Chailease Holding,

launched energy-efficiency financing services in strategic cooperation with Energy Service Company (ESCO), a

professional energy technology services company to provide SME customers energy-efficient equipment and

energy-efficient performance assurance projects. By reducing water and electricity expenditures, and without the

need for further investment, incentives to encourage participation are formed, which results in more advanced

profit-sharing, constant improvement, and enhanced efficiency.

In 2014, Chailease Holding noticed the empty roofs of its SME customers’ factories and farm outbuildings

and saw an opportunity. The Company leased these spaces and installed solar panels to develop solar power

plants, thereby supplying power to Taiwan Power Company and generating a new form of stable income. At the

end of 2015, Chailease Holding had accumulated 180 solar power plants by building its own and through mergers

and acquisitions. In total, these are moving toward the goals of generating 150 million megawatts and of plant

assets amounting to NT$10 billion.

Moreover, using Chailease Finance leasing services as a foundation, we combined energy services, energy

development, other green energy technologies, plus our ability to develop the green energy equipment sales agent

market to found Energy Development Corporation in 2015. This company provides energy-saving and energy-

creating plans to a variety of customers, including businesses, factories, offices, hospitals, department stores,

schools, and other energy-intensive sites.

A Message from the Chairman


pany Limited

101

A Message from the Chairman

In 2016, Chailease is continuing its contributions to green energy. To support the development of renewable

energy sources, Chailease participated in the Ministry of Economic Affairs Bureau of Energy’s voluntary green-

pricing system. By pledging to purchase one million green power kWh, with each kWh costing an additional

NT$1.06, it can use alternative energy to lower carbon dioxide emissions, thereby reducing the impact on the

environment and helping us move towards a cleaner future.

In addition, Chailease will also actively promote solar power plants on farmland to develop high-value crops

through quality agriculture. Non-toxic agriculture nourishes the land, activates the soil ecology, and offers support

to rural areas by promoting industrial innovation and attracting young people to return, which revives farming

communities.

Overall, Chailease is making efforts to contribute by reducing carbon emissions, connecting resources,

encouraging rural development and youth employment, and much more. We are starting from our core

competencies to broaden our horizons, to do things better, to allow the power of business to cultivate this land, in

order to propel virtuous cycles.

With respect to community care, the Chailease Foundation, established over a decade ago, continues to

offer career counseling and assistance services for the disadvantaged. This year it has also enhanced its sports

activities by creating Chailease Badminton Team to provide a good career pipeline for young students and to

cultivate excellent athletes for the country. Simultaneously, in order to increase staff motivation and willingness

to participate in community service projects, the Company provides two days of paid community service leave

annually. It has also created a community service volunteer club and established a comprehensive reward system in

the hopes of motivating employees and enterprises to join hands and contribute to society.

With regard to the Company's overall outstanding business achievement awards, it was awarded Taiwan’s

Ministry of Economic Affairs Branding Taiwan Award (13th place) and received CommonWealth magazine's

Corporate Citizenship Award (23rd place). As for corporate governance, Taiwan Stock Exchange (TWSE) ranked

the Company in the top 5% of listed stocks in its Corporate Governance Evaluation, included it in the TWSE

Corporate Governance 100 Index, as well as giving it an A++ rating in the TWSE Information Disclosure and

Transparency Ranking System. Concerning employee care, the Company was recognized by both the Ministry

of Health and Welfare’s Health Promotion Administration and the Taipei City Government Department of

Health as an Outstanding Healthy Workplace. In addition, Chailease International Finance Corporation, the

Company’s Mainland Chinese subsidiary, received the 2015 China's Best Employer Award, which was sponsored

by the Chinese Human Resource Management Association and the China Employer Branding Forum. Regarding

environmental protection, the Company was honored with the British Standards Institution (BSI) Environmental

Governance Practice Award.

Not only do these awards highlight Chailease Holding’s accomplishments, they will also form the basis for

future ones. This year, we will continue to tread carefully as we face the future, to lead employees steadily and

surely as we forge ahead, and to be open and transparent in our practices and responses to interested parties,

including investors and customers.

Chairman

102

Performance

Branding Taiwan

Award (13th place)British Standards

Institution (BSI)

Environmental

Governance

Practice Award

China's Best

Employer Award

CommonWealth

magazine's

CSR Corporate

Citizenship Award

(23th place)

National Healthy

Workplace Award

TWSE

Corporate

Governance

Evaluation (top 5%)


pany Limited

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2012-2015 Financial data compiled in accordance with international accounting standards

Finances

Revenue

36,827,980,00034,552,674,000

30,411,680,00021,412,595,000

16,769,550,000

2015 2014 2013 2012 2011

Return on Assets

4.74

5.63 5.63 5,29

4,84

2015 2014 2013 2012 2011

Unit：NTD

After-tax Net Profits

6,863,272,0006,825,408,000

5,883,044,000

3,786,160,0002,447,690,000

2015 2014 2013 2012 2011

Unit：NTD

Stockholders' Equity

37,887,041,00034,338,712,000

28,624,443,000

23,268,280,00016,078,867,000

2015 2014 2013 2012 2011

Unit：NTD

EPS

6.02 5,99

5,16

3,712.66

2015 2014 2013 2012 2011

Unit：NTD

Unit：%

Performance

104

Environment

Amount Invested in Energy and Environment

4,150,000

613,705150,000 150,000

2015 2014 2013 2012

Unit：NTD

ESCO Financing for Energy Efficiency

17

9,26

40,71

2015 2014 2013 2012

Unit：Megawatt

Solar power plants for energy production capacity

53,14

31,69

4,1

2015 2014 2013

Unit：Megawatt

Reduction of Forest REsource Comsumption

4,047,000

Unit：sheet

Product and Service Carbon Emissions Reduction

48,538

21,0425,663

2015 2014 2013

Unit：Co2


pany Limited

105

Society

Number of Employees

1588

2341

1470

2116

1234

1896

2015 2014 2013

Unit：NTDCharitable Donations

35,166,00025,100,88926,591,897

2015 2014 2013

Employee Training Hours

70,155 62,924

41,776

2015 2014 2013

Unit：Hours

Employee Benefits　

4,507.087,000 4,118,308,000 3,723,271,000

2015 2014 2013

Unit：NTD

Charity Service Person-Times

4,5075,042

3,299

2015 2014 2013

Male

Female

106

Interested parties

Chailease Holding, in addition to posting its annual report and corporate social

responsibility report on the official company website, also regularly makes public its

operating performance, environmental governance, community service, and other

information in order to promote information accessibility, transparency, interactivity

and completeness. The wide-ranging feedback gained from this is then used as the

basis for continuous improvement. After considering enterprise benchmarking, industry

experience, and by following the AA1000SES stakeholder engagement standard, and

according to dependence, accountability, impact, diverse viewpoints, concerns and

other characteristics, Chailease Holding has identified the key stakeholders as investors,

customers, employees, government agencies, and community members.

Interested parties

Topic Communication method (frequency) 2015 Performance

Investors

‧Corporate Governance‧Operating

Performance‧Information

Disclosure ‧Shareholder

equity‧Risk

management

‧Corporate and investor briefings (quarterly)‧General Meetings of Shareholders (annually)‧English website information disclosures (at

least twice per month)‧A contact window and email communication (instant)

‧held 9 corporate briefings and 11 communication meetings at home and abroad

Clients

‧Service quality‧Personal

information management‧Green Products

‧A special area for clients on the company website and a search platform (instant)‧SME forum (annually)‧Free customer service hotline (real time)‧Customer satisfaction survey (annually)

‧Customer satisfaction survey averaged 80%‧held 6 SME forums

Employees

‧Compensation and Benefits‧Training and

Development‧Labor rights‧Environmental safety

‧Employee Welfare Committee meetings (annually)‧Education and training‧Communication meetings and employee

feedback webpage (unscheduled)‧Monthly internal newsletter (monthly)‧A written complaint mechanism (instant)

‧Chailease won the National Healthy Workplace Award.‧Chailease International

Finance Corporation won the China's Best Employer Award.

Government agencies

‧Regulatory compliance‧Energy management

‧Attend regulatory briefings (unscheduled)‧Coordinate with the competent supervisory

authorities (unscheduled)‧Market Observation Post System (MOPS)

company information disclosure (instant)

‧TWSE Corporate Governance Evaluation (top 5%); received an A++ rating in the Twelfth Information Disclosure Evaluation.

Community members

Concern for the disadvantaged

‧Charitable donations and community service club grant (annually)‧Youth Camp (annually)‧Career talks and workshops (annually)‧Internships and company visits (annually)

‧investment amount totaled NT$35,166,000, accounting for 0.95% of revenue.‧4507 person.

107

Suppliers

Chailease Holding exerted greater influence on the supply chain by choosing

local manufacturers as partners in all of its procurement cases. In 2014, we developed

the Supplier CSR Guidelines, which specify the ethical standards for each supplier, and

provide norms for respecting labor rights and maintaining sustainable development.

In 2015, a new Supplier Code of Conduct was created, which added a breach of trust

covenant requiring major suppliers in Taiwan with annual expenses in excess of NT$1

million to jointly promote corporate social responsibility to fulfill our common goals of

achieving high moral standards, respect for human and labor rights, and promoting

environmental sustainability.

Supplier CSR Guidelines - Key concepts:1. Protect human rights: prohibiting child labor, safeguarding working hours and

salaries, providing a harassment- and discrimination-free workplace, complying with

occupational health and safety regulations, establishing an emergency response

system, and improving the occupational hazards and illnesses health care system.

2. Protect the environment: establish an environmental management system,

implement a pollution prevention system, and take energy-efficiency measures.

3. Protect customers: no unlawful profits, comply with intellectual property laws

and regulations, provide security mechanisms to protect customer business,

technological, and other related information.

Design &

printing companies

Stationery companies

Food companies

Interested parties

108

Economic development

Information disclosure

Since 2011 when the Chailease Holding was publicly listed on the Taiwan Stock

Exchange, it has participated in the TWSE Information Disclosure Evaluation. After three

years of effort, the Company has reached the highest rating, A ++. During the process,

it improved basic regulatory compliance, voluntarily disclosed information, and increased

transparency. This year, it participated in the Corporate Governance Evaluation, which

was conducted by the Taiwan Stock Exchange and the Taipei Exchange. Of the 1,393

listed companies that participated, Chailease Holding ranked in the top 5% and was

included as a corporate governance constituent stock.

Ethical Corporate ManagementAccording to Ethical Corporate Management Principles, and with integrity serving

as the basis for policies, a prevention program was created and all employees signed

an undertaking agreeing to comply with company rules. Moreover, in 2014, Ethical

Corporate Management Best-Practice Procedure and Code of Conduct was issued.

Acts of bad faith, benefits, and a reward system were specified in order to standardize

employee business practices and to assign special units responsible for maintaining and

implementing integrity management.

The Ethical Corporate Management Principles helps ensure that employees

perform their duties according to the law and to ethical codes of conduct, it aims to

prevent conflicts of interest, and it shows our commitment to the pursuit of high ethical

standards. New hires are also required to attend courses, including ones on corporate

ethics and the Company Code of Conduct. With proper training and a clear stance on

company discipline, and with employees’ strict adherence to the Code, we assure that

this attitude persists.

Info

rmat

ion co

ntent Inform

ation channels

Information equality


pany Limited

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Regulatory complianceWhen Chailease Holding went public in 2011, it voluntarily raised its regulatory compliance standards. Just

like financial institutions, it established special business units to develop regulatory compliance management

practices. Other major subsidiaries, including Chailease Finance Co., Ltd.,and Chailease International Finance

Corporation, also developed regulatory compliance management practices. They regularly hold regulatory

compliance training and awareness programs to ensure their operations and products comply with internal and

external regulations. In addition, they conduct annual internal regulatory compliance inspections and report the

results to the Board of Directors.

The company appointed a regulatory compliance director and created the Legal Advisory Unit to manage

the regulatory compliance system. This unit is responsible for planning, implementation, management, and

assessment. Its main duties include clear and appropriate conveyance of compliance information, consultation,

coordination and communication, verification that operation and management policies comply with current laws

and regulations. Thanks to self-regulating compliance inspections, evaluation of the content and procedures, the

supervision of each unit, and proper staff compliance training.

Risk controlWhen facing the overall economic environment, we will always uphold the concept of risk management in

order to take advantage of industry developments and future prospects. By adopting a decentralized customer

base, by decentralizing industries, and through geographic dispersion, we effectively reduce the risk of loss due

to market changes. The company created a Risk Management Unit in order to maintain sound and efficient risk

management mechanisms and develop risk management policies. The Board of Directors Internal Audit Unit

is responsible for review and assessment of the internal control system to ensure its sustained and effective

implementation.

Products and servicesChailease Holding applies the concept of Service with Passion to continue cultivating the Taiwan market, in

addition to actively expanding overseas markets. With enthusiasm as our foundation, we hope to continuously

improve service quality and efficiency to make our services more aligned to customer needs. Chailease Holding

is a better company because of our customers. In the future, we will promote “A successful partnership with

customers drives economic development" business philosophy, as we work toward the goal of becoming one of

the best finance companies in the Asia-Pacific region. We hope to be a positive and uplifting force in the financial

leasing industry, protecting customers, society, and shareholders, while simultaneously creating sustainable value

for all.

We provide leasing, installment sales, direct financing, factoring, and other services for our products, while

equipment leasing and installment plans comprise our core business. We continue to develop new products,

including Energy Service Company (ESCO), green energy services, inventory financing, and insurance brokerage

services.

Economic development

110

Widespread locations

Web platformsMoblie services

Diverse products

Interactive platform Customer

service hotline

Service optimizationIn 2015, approximately 3,300 corporate customers took the Customer Satisfaction Index Survey, which asked

about service attitude, industry understanding, product descriptions, operational accuracy, service efficiency, after-

sales service, overall performance, future interactions, and recommendations to others. The customer satisfaction

indicators were then quantified and converted into a score. After the results were calculated, a qualitative

approach was also used to gain more information about special cases. These results became an important topic

in management committee meetings. It is hoped that by establishing multiple communication channels, we will

be able to hear more customer voices, understand customers' real needs, and propose the most appropriate

improvement methods to achieve our goal of providing customers with the best possible service.

Chailease Holding values a variety of different perspectives. In addition to actively collecting customer

feedback, we have also created a staff proposal system. By offering incentives to staff to think up innovative ideas,

we hope to always be one step ahead of the customer in anticipating their needs.


pany Limited

111

Personal information protection is carried out by IT personnel according to security and operational risk

levels. Where necessary, personal information is masked. Only certain employees are granted access to the

information, depending on the scope of the work being performed. Internal customer data transfers also follow

strictly-controlled protocols and are regularly reviewed by the Internal Audit Unit. All of these measures are taken

in order to enhance the company's employee and customer data protection and to abide by the law.

PlanningUnit

IT UnitLegal

AdvisoryUnit

AuditUnit

Personal Information

Protection Team

Chailease Holding Personal Information Protection Team Structure

Personal information securityThe Company has a mechanism to protect personal information, including an information classification

management method, personal information protection, an information security policy, information security

management, and other specifications that clearly define procedures and authorizations for using, storing,

managing and deleting personal information. These steps ensure that personal information is handled in

accordance with the Personal Information Protection Act.

112

Value chainWe are delving into the green market with our services and products. By promoting

green energy-saving products and by spreading our green philosophy, we make our

company even more competitive in the green energy market. Since 2010, Chailease

Holding has promoted energy-saving services and financing. In 2011, we created

an Energy-Efficiency Financing Unit to provide green energy financing and energy

management consultancy services. In 2014, we won the Ministry of Economic Affairs

Bureau of Energy bid to build solar power plants for the purposes of generating and

selling electricity. In 2015, Chailease's Energy Development Corporation was established,

providing customers with energy-saving services and helping companies fulfill their social

responsibility commitments to environmental protection.

Environmental protection

Green productsESCO financing services

Green energy investment services

Solar power plants

Energy developmentcompanies

Business managementIntroduce environmental management systems

Improve energy efficiency

self-directed employee environmental protection

Carbon management strategy

Carbon emissions reduced by 48,538 t

＝ 126 Daan Forest Parks


pany Limited

113

Environmental protection

In 2010, Chailease launched ESCO Energy-Efficiency Financing Services which, in conjunction with Energy

Service Company (ESCO) cooperated to assist SMEs with energy-efficient and carbon reduction projects. According

to proposals made by energy-saving business owners or by ESCO either (1) an energy-saving performance

guarantee plan or project or (2) a plan to improve an energy-saving project was chosen. Then flexible leasing

or installments plans were designed to meet the financing needs of different energy-saving projects. In 2015,

the total energy production capacity of solar power equipment approved for loans was 17 MW. This represents

approximately an 84% growth rate compared to 2014 and it reduced carbon emissions by 11,640 t. In addition,

we held SME energy-efficiency forums to discuss in-depth energy-efficiency financing issues, to share information

regarding new trends in the green industry, to enhance SMEs' awareness of environmental protection, and to

jointly implement energy efficiency and carbon reduction.

Energy Development Corporation

Purchasing green electricity

Energy-efficiencyfinancing services

Credit policySolar power

plantsAgricultural

economy

Green Energy Value Chain

114

Chailease Finance Co., Ltd., a subsidiary, leases and installs solar panels on the roofs of SME chicken coops

and compositing sites. In 2015, the Company built or acquired 107 solar power plants, and now owns a total of

180, making it Taiwan's third largest producer of solar power. The power plants boasted a total energy production

capacity of 53.14 MW, about 2.3 times more than that of 2014, and are expected to reduce carbon emissions

by 36,376 t annually. In the future, we will be even more active in the energy-production and energy-efficiency

industries. By focusing on solar power plants and achieving economies of scale, we expect a total generating

capacity of 150 MW by 2018, with power plant assets amounting to NT$10 billion. The development of energy-

saving heat pumps and air conditioning, LED lighting and other environmentally-friendly products also aids in the

implementation of a variety of energy-saving ESCO cooperation projects.

20120.72

4.12013

20142015

8.5

17


pany Limited

115

‧Energy Development Corporation establishedFounded at the end of 2015, the foundation of Chailease Energy Development Corporation leasing

installments. This, combined with energy-efficiency services, energy development, and other green energy

technology, provides customers in factories, offices, hospitals, department stores, schools, and other energy-

intensive sites, energy-efficient and energy-producing plans to help them join the ranks of green energy

companies. The very first energy-efficiency project tailor-made for the Company headquarters building in

Neihu. High energy-efficiency equipment was first installed and then secondary energy-saving measures were

implemented, such as using lighting and air-conditioning systems less frequently. This is expected to improve

energy efficiency by 55%, save an average of NT$3.5 million annually in energy costs, and reduce carbon

emissions by as much as a park 0.65 the size of Taipei’s Daan Forest Park would. As of 2016, Chailease Holding

has officially subscribed to Taipower's voluntary green-pricing system. The Company has committed to purchasing

one million green power kWh, equivalent to 522 t of carbon adsorption, to support the development of renewable

energy.

At the same time, in response to changing trends of future energy use, Chailease Energy Development

Corporation also assists customers by promoting new energy creation, energy transfer, and energy storage

technologies. The skilled application of energy planning includes smart power grids, electric vehicles, charging

stations, and the application of energy monitoring and management systems. In addition to continuing to

promote energy efficiency and carbon reduction, the Company is further committed to helping enterprises

establish comprehensive and innovative energy management strategies in order to integrate them with future

industry trends.

In the future, Chailease Holding will continue to gradually expand related business development through

its energy-efficient and green-energy value chain. By replicating Taiwan's energy-efficient model, we will develop

other overseas markets in order to make a contribution to protecting Earth's resources.

‧Agricultural DevelopmentTo promote agricultural economic development and food security, in 2015, Chailease Holding began to

develop its agricultural business in cooperation with local farmers. By utilizing local cultural characteristics to

develop specialty agricultural products, we are working together to refine agricultural development. In addition to

providing local employment opportunities, this also helps solve the problem of rural migration, which leads to an

aging rural population. Moreover, it increases farmers' incomes and promotes rural economic development. In the

future, we plan to develop solar power plant greenhouses to assist farmers who previously produced crops and

livestock to start producing power. In this way, we will actively develop renewable energy sources.

‧Credit policyWhile Chailease Holding is dedicated to ensuring a reasonable return on shareholder equity with its credit

business, it is also committed to adhering to the World Bank's Equator Principles by implementing and assisting

with carbon reduction, renewable energy, and other aspects of the green energy industry. Green companies

tend to have a more robust corporate body, so in addition to giving them positive credit evaluations, we also

actively encourage our employees to promote them. Moreover, in the future, we will standardize credit evaluation

procedures by launching a feasibility plan that incorporates a company's environmental and social indicators into

the evaluation.

116

Social responsibility

The Chailease FoundationUnder the leadership of Chairman Andre Koo Jr., the Chailease Foundation has

made its Adaptive Career Development Program, which promotes sports activities,

one of its main focuses. In July 2015, Chailease started its own badminton team, hired

professional consultants and coaches, selected potential high school players, gave them

training and guidance, after which they won many competitions. However, players still

need to cultivate systematic training plans and habits. To help them do this and to provide

an athletics venue and lodging, the Chailease Sunshine Vitality Building will be built.

In September 2004, under the leadership of Chairman Andre Koo and co-financed

by affiliates, Chailease formally established the Chailease Foundation. The Foundation

allows businesses to give back to the community and it includes career development,

career growth, volunteering and donating to the disadvantaged. To date, the Foundation

has organized Career Experts Forums, career seminars, campus lectures and other

activities, it has support the disadvantaged through scholarships, community service club

allowances, holding disadvantaged youth vocational camps, disadvantaged teenagers

career growth workshops and much more.

117

Career development and growthSocial responsibility

Chailease Holding’s combined professional background in finance and leasing

helps us provide youth with opportunities to understand these industries. In order to

cultivate future professionals, in Taiwan, Chailease Financing held the Be a Chailease

Employee For a Day activity, the One-Day Company Experience Camp, and organized

company internships. In China, Chailease International Finance Corporation organized

Emerging Financial Industry Research and the Youth Financiers Summer Internship

Camp.

We organize lectures and workshops to allow successful people and experts in

their fields to share knowledge and experience and to train young people to think

positively, thereby giving them the courage to overcome difficulties and the ability to

realize their dreams.

118

Volunteer service

The Company has set aside two days per year for paid community service leave

to encourage employees to volunteer. The club also encourages employees to take

initiative by discovering hidden volunteer opportunities in every corner of society and

then submitting volunteer proposals in order to spread our collective good in more

diverse ways. Each year, the employee with the most outstanding annual volunteer

community service record becomes our new Charity Ambassador and personally receives

a recognition award from upper management. The goal is to enhance employee

enthusiasm for and involvement in community service.

CharityAmbassador

Charityproposal

Charity leave

119

Volunteer service Helping the disadvantaged

One of the Chailease Foundation’s long-term plans has been to invest resources

in Taoyuan County’s Fuxing Township to assist indigenous Atayal schoolchildren with

multicultural development.

Our subsidiaries, Asia Sermkij Leasing Public Company Limited provide 20

scholarships or totally Baht 100,000 to students of the Mahamek Home for boys in

Thailand.

The Chailease Foundation also provides resources and offers donations during

disasters and crises, such as the Baxian Water Park explosion in June 2015.

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