Deviation and causes of deviation from Corporate Governance Best-Practice Principles for Financial Holding Companies. Actual governance (Note 1)

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1 (I) deviation of the Company s corporate governance practices from the Corporate Governance Best-Practice Assessment criteria 1. Shareholding structure and shareholders' rights within the financial holding company (1) Has the financial holding company implemented a set of internal procedures to handle shareholders' suggestions, queries, disputes and litigations? (1) The Company's spokesperson and acting spokesperson are responsible for handling shareholders' suggestions, disputes and queries. Where the issue concerns share administration or legal affairs, the Company would approach the share administration agency or legal department for assistance. (2) Is the financial holding company constantly informed of the identities of its major shareholders and the ultimate controller? (2) The Company has a concentrated shareholding structure. Corporate shareholders represented in the Board of Directors have accounted for more than 60% of ownership. The Company maintains sound relationship with shareholders and is in constant control of their identity. (3) Has the financial holding company established and implemented risk management and firewalls on companies it is affiliated with? (3) A stakeholders system had been implemented in accordance with the Financial Holding Company Act, the Securities and Exchange Act, and the Banking Act to facilitate real time checks on whether a counterparty is a stakeholder. Transactions with stakeholders will then proceed according to the relevant regulations. Lending and non-lending transactions with the Company's person-in-charge, major shareholders, affiliated companies, and stakeholders are conducted in compliance with Articles 44 and 45 of the Financial

2 2. Assembly and obligations of the board of directors (1) Apart from the Remuneration Committee and Audit Committee, has the financial holding company assembled other functional committees at its own discretion? Holding Company Act. Based on the above regulation, the Company has implemented internal policies including "Jih Sun International Bank Stakeholders Lending Policy," "Jih Sun Financial Holding Mandatory Reporting and Disclosure Guidelines for Article 46 of the Financial Holding Company Act," and "Jih Sun Financial Holding and Subsidiaries Operating Principles for Non-credit Transactions with Stakeholders." (1) During the 2009 annual general meeting, three independent directors were elected according to laws and the Memorandum to assemble the Audit Committee and Remuneration Committee. No other functional committees had been assembled. (2) Does the financial holding company conduct regular assessments regarding the independence of its financial statement auditors? (2) Auditors' independence is reviewed regularly once a year. Financial statement auditors and their teams are required to produce a declaration of independence each year for review by the Company's Audit Committee and Board of Directors before their service agreements can be renewed. The Company has not changed its financial statement auditors for 7 consecutive years. Appointment of 2014 financial statement auditors was discussed as Agenda 1 during the 19th meeting of the 2nd Audit Committee held on , and later passed as Agenda 3 during the 18th meeting of the 5th Board of Directors held on

3 3. Does the financial holding company have any means to communicate with stakeholders? 4. Disclosure of information (1) Has the financial holding company established a website that discloses financial, business, and corporate governance-related information? (2) Has the financial holding company adopted other means to disclose information (e.g. English website, assignment of specific personnel to collect and disclose corporate information, implementation of a spokesperson system, broadcasting of investor conferences via the company website)? 5. Does the financial holding company have other information that enables a better understanding of the company's corporate governance practices (including but not limited to employee rights, employee care, The Company has designated its Administration Division to serve as the point of contact and to maintain data on a regular basis. (1) The Company has established a website for the disclosure of financial performance and corporate governance. (2) Other means of information disclosure: A. The Company has implemented a Spokesperson Policy, an Acting Spokesperson Policy, and "Jih Sun Holding External Communication Policy." B. A system was established for posting public information over the Internet. C. An English website has been established. D. The Company has assigned dedicated personnel for the collection of information relating to the Company, thereby facilitate more transparent and timely disclosure of information. E.The Company has disclosed all information relevant to corporate governance in compliance with the regulations. 1. To enhance supervisory and managerial efficiency of the Board of Directors, "Jih Sun Financial Holding Board of Directors Conference Rules" have been established to serve as a guideline for board meetings. 2. Directors' and supervisors' ongoing education: all of the Company's directors and supervisors had completed the mandatory courses and

4 investor relations, stakeholders' rights, continuing education of directors/supervisors, implementation of risk management policies and risk measurements, implementation of customer policy, insuring against liabilities of company directors and supervisors, and donation to political parties, stakeholders and charity organizations)? training hours in Please see the annual report for details of their training. 3. Risk management policies and risk assessments: please see page168 ~ page182 of the annual report. 4. Customer policies: the Company has implemented and enforced confidentiality measures to protect customers' interests throughout Jih Sun Holding and subsidiaries. All disclosures, transfers, or uses of customers' information are consent in writing by the respective customers. 5. Insurance against directors' and supervisors' liabilities: the Company has insured itself against liabilities of its directors and supervisors in accordance with Articles 39 and 49 of Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies; these insurance policies cover the entire duration of service of the above parties. 6. Rights and care for employees: the Company is especially dedicated to improving employees' work efficiency and loyalty by providing the best welfare and maintaining sound employer/employee relationship through care and protection. 7. Investor relations: to enhance the transparency of financial and business information, the Company has appointed a spokesperson and an acting spokesperson to address the public with accurate and reasonable explanations to investors' queries. Furthermore, the Company makes regular public announcements as required by law and publishes information to the Market Observation Post System and to the Company's own website for easy access.

5 6. Has the financial holding company prepared a corporate governance self-assessment report or commissioned a professional organization to compile a corporate governance assessment report? (If so, please state the board of directors' opinions, the result of the self/external assessment, any major weaknesses or suggestions raised, and improvements made.) (Note 2) 8. Supplier relations: the Company has maintained good relationship with its suppliers and developed mutual trust through sharing of information, which in turn raises satisfaction and loyalty between the two parties and facilitates positive influences to work efficiency. 1. In accordance with the letter issued by the competent authority, for the self-assessment of companies on the evaluation system of the 1 st term corporate governance, the evaluation platform was opened for the companies to register the self-assessment results from 2014/10/01 to 2015/01/31. The Company entered the self-assessment results at the end of Oct, 2014 and completed the self-assessment. 2. The FHC has been affirmed at A++, the highest level of the 11 th Term Information Disclosure System Evaluation of TWSE/TPEx Listed Companies, by the Securities and Futures Institute Note 1: always provide explanations in the summary description column, regardless of whether actual governance is ticked "Yes" or "No." Note 2: The corporate governance self-assessment report mentioned here refers to any assessments relating to corporate governance that are conducted and addressed by the Company itself, including a report on how the Company has enforced its corporate governance. Description: the Company will be changing the list of mandatory disclosures to conform with "Corporate Governance.

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