Annual CSR Reports for Eight Consecutive Years, Its Most Recent Report Being Issued in June 2018

2018 corporate Annual social responsibility CSR Report

Scope and boundary The contents of this Report encompass First Financial Holding Company and its seven subsidiaries: First Bank, First Securities, First Securities Investment Trust, First Life Insurance, First Financial Asset Management (hereinafter referred to as "First Financial AMC"), First Consulting, and First Venture Capital. The scope of the environmental performance ISO 14064-1 Greenhouse Gas Inventory includes all operations offices. All related statistics are calculated based on the general international standard indices, and all financial numbers are denominated in New Taiwan Dollars (NTD).

Reporting principles

The Global Reporting Initiative, GRI GRI standards: Core option GRI financial services sector disclosure standards CSR Code of Conduct for TWSE/GTSM Listed Companies. Report Information Taiwan Stock Exchange Corporation The Preparation and Filing of Corporate Social Responsibility Reports by TWSE Listed Companies First Financial Holding Co., Ltd. (hereinafter referred ISO 26000 Social Responsibilities Guidance to as "FFHC" or "the Company") published its first corporate social responsibility (CSR) report in 2012 International Advocacy United Nations Global Compact (for FY2011). To date, the Company has issued Sustainable Development Goals, SDGs annual CSR reports for eight consecutive years, its most recent report being issued in June 2018. In addition, it also began publishing an English External assurance of report language edition of its CSR report in 2015 (for FY2014). The purpose of these reports is to actively Standard Certification Bodies engage and communicate with various classes of SAES No. 1 “Assurance Engagements Other than Audits or Reviews of Historical Deloitte stakeholders in order to relay important information Financial Information” (stipulated with reference to the International Standard concerning FFHC and its numerous subsidiaries ("the on Assurance Engagements ISAE3000) Group"), including our sustainable development AA 1000 Assurance Standard application type 2 moderate level of assurance. British Standards Institution, BSI. strategies, action plans, latest performance and ISO 45001 Safety and Health Management System. British Standards Institution, BSI. achievements, and future plans and objectives. ISO 14064-1 Greenhouse Gas Inventory Reporting Period ISO 50001 Energy Management System The FFHC 2018 Corporate Social Responsibility ISO 14001 Environmental Management System SGS Taiwan. Report (hereinafter referred to as "this Report") ISO 14046 Water Footprint discloses the performance and actions of FFHC with regard to various aspects including economic, social, ISO 14064-1 Other Indirect Emissions Inventory (Indirect greenhouse gas emissions in transportation - Business travel) Verification environmental, and governance for calendar year 2018 (January 1 to December 31, 2018). To better ISO 14064-1 Other Indirect Emissions Inventory (Waste disposal in operations) Verification illustrate our latest advances and demonstrate changes in growth, some of the information contained in this Report goes back to 2015 to 2017. The revised histori- Contact method cal information has been disclosed in the appropriate Corporate Governance Section, Administration Division, First Financial Holdings Co., Ltd. section. Tel: +886-2-23485366 Fax: +886-2-23119691 Address: No. 30, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City Corporate Social Responsibility Reports from E-mail: [email protected] past years Website: http://csr.firstholding.com.tw/en/csr_report.html

2011 2012 2013 2014 2015 2016 2017 02 03 02 Report information 216 Independent assurance opinion statement 06 Chairman’s Message 222 Various Certifications 08 Awards and Acknowledgments 223 Global Reporting Initiative (GRI) Standards Content Index 10 Performance Highlights in 2018 228 GRI Financial Services Sector Supplement 12 CSR Operation 229 United Nations Global Compact Principles 15 Stakeholder Engagement 229 ISO 26000 Index Content Index 34 Sustainable Development Goals CONTENT

Sustainable Governance 10048 Green Finance Happy workplace 192154 Social Harmony 49 Business performance and profitability 101 Climate change risks and opportunities 155 Human rights protection and 193 Implementation of inclusive finance gender equality 56 Corporate governance 116 Responsible investment, due diligence, 198 Charitable activities and performance and supplier management 160 Professional development and evaluation 68 Risk management management reform 126 Low-carbon operations and circular economy 77 Ethical corporate management 170 Talent recruitment and retention 141 Ecological and environmental sustainability 82 Protection of customer rights and interests 180 Occupational Safety and Health and improvement of customer satisfaction rate 148 Digital finance innovation and inclusiveness 91 Information security improvement 94 Prevention of money laundering, financial fraud and terrorism financing FFHC was selected for inclusion as a constituent in the environmental education with a "hydroponic green roof" and Insurance Group. In addition, ratings companies "TWSE Corporate Governance 100 Index" for the fourth and will become a center for green finance environment such as Taiwan Ratings, S&P, and Moody's all issued Chairman’s Message year in a row, and achieved the highest standard by education. We were awarded the “Pastoral City rating reports in 2018 approving the Group's strong ranking in the top 5% in the TWSE Corporate Governance Construction Achievement Competition and Pastoral market competitive advantages, stable corporate gover- Evaluation for listed companies. Experts - Enterprise Award” of the Taipei City Govern- nance, and business value in the financial industry, Since its establishment in 1899, First Financial Group has ment, the first awardee from the financial industry. stating that the Group has distributed client bases, sound been deeply rooted in Taiwan. Now, 120 years later, it We also actively address environmental and social financial structures, good risk management, and premi- continues to adhere to its brand spirit of "a century of issues through our core businesses. We have established FFHC pays great attention on talent training. We comply um asset quality, and recognized the Group as a bench- tradition and innovative service." No matter how the our Green Finance Committee to connect green products with digital finance transformation, develop overseas mark enterprise outstanding both in quality and quantity. external environment changes, the hundred-plus-year-old and services in the areas of green financing, green market policies, implement legal compliance, promote brand motivates us to work with caution and conscien- investment, green review, and green consumer finance. anti-money laundering and internal control, provide For 2019, we will adhere to the target of "strengthening tiousness. We continuously and steadily improve the We support the long-term development of domestic cross-disciplinary talent recruitment and training partnerships" and "deepening integrative synergy,” and sustainable development of corporate governance, renewable energy by coordinating syndicated bank programs. We also strengthen the compensation system continue to integrate sales channels to expand our customer care, employee care, environmental sustain- loans as the lead arranger of largest solar cell manufac- and provide multiple welfare measures to build a friend- business profile geographically. We also focus on the ability, and social welfare. In 2018, all of the core turers in Taiwan, in order for the government to meet its ly and safe working environment. In addition to obtaining core business of each sector, keep in line with interna- businesses operated under the Group enjoyed continued target of 20GW of installed solar photovoltaic capacity the ISO 45001 Occupational Safety and Health Manage- tional trends, and implement the "green finance" growth, in accordance with the "deeper synergistic by 2025. We have implemented inclusive finance, ment System certification, FFHC was chosen for inclusion business philosophy in accordance with UN's 17 Sustain- effects, shared value" strategy. The scale of group assets promoted friendly financial services, and provided a full as a constituent in the "Taiwan High Compensation 100 able Development Goals (SDGs), thereby enhancing the reached NT$2.94 trillion, and the consolidated net range of financial services to all sectors and groups in Index" for the 5th consecutive year and in the “Taiwan integration of corporate social responsibility into core revenue was NT$60.249 billion, which represented an society. We maintained a leading market share among Employment Creation 99 Index” for the 9th consecutive business strategies with sustainable innovation, stimulat- increase of 18.54% from 2017. Net profit after taxes was all national banks for lending to SMEs for the ninth year. ing positive momentum on transforming the economy, NT$17.332 billion. For four consecutive years, net profit consecutive year, and we have promoted digital society and the environment, setting up a model of a has remained above NT$15 billion; the earnings per inclusion to support SMEs and micro-enterprises, which While pursuing business performance, enterprises hundred year’s inheritance and sustainability. share (EPS) for 2018 was NT$1.40. The Company not only won the E-commerce Finance Award - Project for Bank nowadays should also take into account social care and expanded its overseas market through First Bank and Lending to SMEs. In addition, First Life Insurance environmental protection issues to create long-term moved towards its goal of “developing into a regional integrates ESG issues into trust finance and insurance benefits for the enterprise and its stakeholders. FFHC set financial institution in Asia,” but also utilized precision products, and was listed by the competent authority as up its volunteer team in 2011, and invested in activities marketing with big data and AI in order to drive innova- an insurance company with excellent performance in the for cultural creation, environmental protection, athletic tive capabilities and has devoted its efforts to the National Insurance Coverage Improvement Plan for the rising-star training, and caring for the disadvantaged; it development of financial technology (FinTech): the 22nd consecutive time. Whereas its "Max Lifeline Critical also collaborated with National Taiwan University Hospi- company has received 15 invention patents and 39 utility Illness Life Insurance” was awarded the Best Product tal to hold charitable concerts for eight consecutive model patents, which helps the Company provide its Creativity Award of the Faith, Hope & Love Awards of years, provided the First Art Space for free domestic art clients with more convenient and safer financial services. Insurance in 2018. exhibitions, engaged in long-term sponsorships of domestic elementary school and junior high school table In order to enhance the quality and credibility of the First Bank will donate rebates that are a fixed proportion tennis teams, established the First Bank table tennis report, while pursuing financial performance, we contin- of the total value of credit card transactions from custom- men's team to train table tennis players, and won 3 gold ue to strengthen corporate governance, enhance ers with credit cards such as Living Green Card, Leezen medals, 5 silver medals and 9 bronze medals in interna- information transparency, and invite independent co-branded credit card, Yilan Affinity Card and World tional competitions. A total of 165 charitable activities certification bodies to ensure and verify the Company's Master Card, in order to contribute to the environment were held in 2018, and the total of charitable activity 2018 Corporate Social Responsibility Report in and society. Which includes matters such as: 1) Helping costs and donations amounted to more than NT$84.7 accordance with AA1000 TPYE 2, and SAE No.1 “Assur- social welfare groups to replace existing lamps with LED million. ance Engagements Other than Audits or Reviews of light bulbs; 2) Assisting the Tse-Xin Organic Agriculture Historical Financial Information” of the Accounting Foundation (TOAF) and the Bliss and Wisdom Education We adopt comprehensive strategies to fulfill corporate Research and Development Foundation of the Republic Foundation to promote the concept of organic vegeta- social responsibility, and the effectiveness of these of China (with reference to the International Standard on bles, water source protection programs and provide strategies is widely recognized around the globe. Other Assurance Engagements ISAE3000). In order to improve counseling for tribal industries; 3) Donations to the Yilan than being included in the DJSI Emerging Markets Index the effectiveness of the reporting system, the companies County Government for social welfare, tree planting, and for three consecutive years, we were included as a of the group also revise their offense-reporting system by protection. 4) Support student education and nutritious constituent for the first time in the "World Index” and resolution of the board of directors, in which the internal school lunches for economically disadvantaged students received a silver medal in the RobecoSAM Sustainability auditing unit is responsible for handling reporting cases or for families encountering sudden changes by using Yearbook, both in 2018. FFHC is the only bank in Taiwan and assigning the case to units that have independent the “School Education Savings Account” of the Ministry of that is represented on the list of top five banks in the power for investigation. In addition, banks, securities Education. world. In January 2019, we were recognized on the companies, life insurance companies and investment CDP’s Climate Change A List in the UK, and we are the trust subsidiaries have already completed Inherent Risk In order to reduce environmental impact from our only financial institution in Taiwan to have received such Assessment (IRA) reports in response to the increasingly business operations, we established the “Green Building glory, setting a record high for Taiwan's service industry. stringent laws on anti-money laundering and countering Certification Acquisition Project Team” in 2010 with the Moreover, we were included as a constituent in the terrorism financing; it has also revised the FFHC goal of renovating five of our old buildings to obtain FTSE4Good TIP Taiwan ESG Index and BSI Sustainability AML/CFT Plan, as well as the information sharing policy Diamond-class Green Building Certificates from the Excellence Award for two consecutive years. We also and control procedures. First Bank accepted the third Ministry of the Interior. We have so far renovated 22 old received the The Best Cloud-Based Initiative Application round of mutual evaluations by the Asia/Pacific Group on buildings, for which we have received Diamond-class from The Asian Banker, and won the 11th TCSA Taiwan Money Laundering (APG) in 2018, and received positive Green Building Certificates. We have also extended this Corporate Sustainability Awards in the TOP 50 Corporate comments in complying with matters such as anti-money concept overseas: Our London branch in the UK has also Sustainability Awards, the Gold Award in the Finance laundering and countering terrorism financing. In the applied for old building renovation, which has achieved future, the innovative blockchain patent for "cross-chain “Very good” in the BREEM rating benchmarks, and is integration” will be applied to regulatory compliance currently under renovation. Furthermore, in order to gain technology to achieve a balance between risk manage- the awareness of employees and the public society on Chairman, First Financial ment and business operations. Due to the implementa- the importance of environmental conservation, our tion of a well-executed corporate governance system, 06 Wanhua Branch will be made into a classroom for 07 Awards and Acknowledgments

・FFHC ranked in the top 5% of the 5th Corporate Governance Assess- ・First Bank was officially designated as an "2017 Outstanding Green Procurement Organization" by the Environ- 05 ment Program , and also ranked in the top 10% (top four)of the "Finance 09 mental Protection Administration, Executive Yuan and Insurance" category of the listed companies. ・First Securities won the "Best Potential Award" in the "2018 Outstanding Securities Evaluation" from the Excellence magazine ・First Bank received the 2018 "ACH Collection Business Transaction ・FFHC was selected for inclusion as a constituent in the 2018 Dow Jones Sustainability World Index and is the only 2019 03 Volume Growth - Excellence Award" from Taiwan Clearing House one, ranking top 5 in DJSI World Index Banks industry group from 3,504 companies, in Taiwan banking industry. ・First Bank received the "Celebrate 50-Year Anniversary of the Bank First Financial Holding Company was selected for inclusion as a constituent in the of the Lao for Contributions to the Economy and Finance Industry in Dow Jones Sustainability™ Emerging Markets Index for the third consecutive year. Laos - Laos National Government Award" ・First Bank Credit Card Department - Zhongshan Building, Bade Building, and IT ・First Bank received the "SME Credit Guarantee Funds Awards for Building received the "2018 Certified Excellent Breastfeeding Room" from the Taipei the Head Office" for SME credit guarantee businesses for the 11th City Government Department of Health. time and two managers received the "Superior Performance Award for Managers". ・First Bank was awarded the “Pastoral City Construction Achievement Competition and Pastoral Experts - Enterprise Award” of the Taipei City Government, the first awardee from the financial industry. ・First Life Insurance was recognized for excellent performance in the "Increasing National Insurance Coverage Program" of the Financial Supervisory Commission for the 22nd consecutive time 02 First Life Insurance was recognized for excellent performance in the "Increasing National Insurance Coverage ・First Bank won third place in the 2018 Q4 payment collection store expansion contest in the 'Promote ・ "Taiwan Pay QR Code" Incentive Program' organized by Financial Information Service Co., Ltd. 08 Program" of the Financial Supervisory Commission for the 21th time in the row. ・First Life Insurance's two versatile life insurance policies "Rich Life" and "Rich Expert" received recognition as excellent insurance policies from Smart magazine and First ・First Securities won first place in the "Warrants Breakthrough Prize" of OTC Taipei Exchange for the second half of 2018 Life Insurance became the first insurance company with two selected insurance policies 01 FFHC was included as constituent stock in the FTSE4Good Emerging Index for 2 years in a row. ・First Bank Forest Yilan Affinity Card was presented with "2018 Best ・ Affinity Card of the Year" award by MasterCard International ・First Bank won second place in the 2018 Q2 payment collection store expansion contest in the 'Promote ・FFHC became the first Company in Taiwan's financial industry to attain "Taiwan Pay QR Code" Incentive Program' organized by Financial Information Service Co., Ltd. Leadership A List in the 2018 CDP climate change questionnaire ・First Life Insurance "Max Lifeline Critical Illness Life Insurance” was awarded the Best Product Creativity Award ・First Bank received the 2018 "Assistance for Agricultural Food Product of the Faith, Hope & Love Awards of Insurance in 2018. Marketing Corporate Award" from the Agriculture and Food Agency ・First Bank was presented with the "Energy Leadership Awards - Industry and Commerce Division A" high distinction award by the Taipei City Government. ・First Bank received the "Golden Security Award" from the Joint 2018 12 Credit Information Center for the third time. ・FFHC was chosen for inclusion in the "Taiwan Employment Creation Index 99 " for the ninth consecutive year. ・FFHC was chosen for inclusion in the "FTSE4Good TIP Taiwan ESG 07 ・FFHC was selected for inclusion as a constituent in the "TWSE Corporate Governance 100 Index" for the fourth Index" for the second consecutive year. year in a row. First Bank Headquarters Building obtained the ISO 45001:2018 ・・First Bank received second place in the 2017 "Performance Evaluation for Trust of Senior Citizens and Persons Safety and Health Management System certification from the with Disabilities" organized by the Financial Supervisory Commission. British Standards Institution (BSI). First Bank received the "Love Hualien Assistance Award" for providing financing ・First Bank Headquarters Building received an extension of the 2018 ・ Healthy Workplace Certification from the Health Promotion Administration, Ministry of guarantee special loans for the 2018 Hualien earthquake. Health and Welfare. ・First Bank Credit Card Department - Zhongshan Building, Bade Building, and IT Building ・First Financial Holding Company received certification by the British Standards Institution (BSI) received the 2018 "Badge of Accredited Healthy Workplace" from the Health Promotion for the FFHC Corporate Social Responsibility Report for the sixfth consecutive year. Administration, Ministry of Health and Welfare. 06 ・FFHC was chosen for inclusion in the "Taiwan High Compensation 100 Index" for the 5th ・First Bank Headquarters Building obtained the "2018 Dementia consecutive year. Friends" label from Taipei City Government Department of Health. ・First Securities Investment Trust was presented with a certificate of appreciation by the Taipei Blood Center for participation in the "Equal Rights for the Blind and Blood Donation Event" ・First Bank was recognized as Benchmark Private Businesses and 11 Groups in Green Purchasing by the Taipei City Government Depart- ment of Environmental Protection for the fourth consecutive year. ・First Bank sponsored Lingyun Junior High School in participation in the 2018 California Cup International Field Hockey Tournament in the United States and received a ・FFHC was presented with the "Corporate Social Responsibility 05 Award" by the British Standards Institution (BSI) for 2 years in a row. certificate of appreciation from Taoyuan City Government. ・FFHC was presented with the "Top 50 Corporate Sustainability ・First Securities sponsored the Taipei City Autistic Children Social Welfare Foundation and to be awarded the Report Awards – Banking and Insurance Award" at the 11th Taiwan Corporate Sustainability "Enthusiastic Public Welfare Certificates " Awards by the Taiwan Institute for Sustainable Energy. ・First Bank Taoyuan Building received the "Energy Saving Benchmark Award - Silver Award ・First Bank organized the Going to the Campus and Community to Spread Financial Knowledge events and for the Service Sector" from the Ministry of Economic Affairs Bureau of Energy Affairs. 04 received a certificate of appreciation from the Banking Bureau. ・First Bank received the "Best System Stability award - Cross-Border Service" and “Best ・First Bank was presented presented with the " Outstanding Domestic Banks in Strengthening to Make SME Service Innovation Award - Finance Blockchain Certification Services" for e-Money services Loans", "E-Commerce Industry Financing Special Award", Excellent Domestic Bank for Making Loans to Key from Financial Information Service Co., Ltd. Startups”, and " Excellent Bank to Participate in The Exporting Syndicated Loan Platform Program of the ・First Bank won third place in the 2018 Q3 payment collection store expansion contest in the system, the Whole Plant and the Engineering Industry" awarded by The Financial Supervisory Commission. 'Promote "Taiwan Pay QR Code" Incentive Program' organized by Financial Information Service Co., Ltd. ・First Bank was presented with the "Credit Guarantee Partnership Award" for the 10th time and ranked as the 03 number one bank in Taiwan in terms of SME lending market share for 8 years in a row.Three First Bank manag- ・First Bank Taoyuan Building received the "Small and Medium ers were presented with the distinguishing "Superior Performance Award for Managers". 10 Enterprise Electricity Saving Competition - Award of Excellence in First Life Insurance was recognized for excellent performance in the "Increasing National Insurance Coverage Non-Manufacturing Category"from the Taiwan Power Company. ・ Program" of the Financial Supervisory Commission for the 20th consecutive time. ・First Life Insurance received the "Outstanding Performance Award for Senior Insurance Contest" in 2018 for small-sum elderly care insurance. ・First Bank was presented with the " 2018 CSEA Customer Service Award-Best Customer ・First Securities Investment Trust made donations to the Down Syndrome Foundation Service Innovation System Application" awarded by TCCDA. 02 R.O.C. and received a certificate of appreciation. ・First Bank was presented with the " The Best Cloud-Based Initiative, Application or Programme " awarded by The Asian Banker. 01 ・First Bank was rated as the Best Co-brand Card of the year 2017. 08 09 PERFORMANCE With a total of 9,227 employees, Awarded 11 financial technology FFHC was included in the invention patents and 38 utility "Taiwan Employment Creation model patents. Acquire 49 Index 99 " for the ninth invention and utility model patents HIGHLIGHTS years for finance technologies. 9 consecutive year. 49

IN 2018 Wanhua Branch set up a “Ecological hydroponic green rooftop from solar power generation and The London Branch in the The first financial rainwater harvesting systems" which combined United Kingdom applied for institution in Taiwan to First the solar power generation, rainwater harvesting, the certification for old attain CDP Leadership and aquaponic systems and received the Economic Very buildings based on the A List recognition case “Pastoral City Construction Achievement A List Competition and Pastoral Experts - Enterprise Building Research Establishment Award” of the Taipei City Government, the first Good Environmental Assessment awardee from the financial industry. Method (BREEM) and was rated "Very Good". Society Included as a constituent for the first time in the "World Index” and received a Silver medal in the RobecoSAM Sustainability Yearbook. FFHC is the only bank in Taiwan that Provision of competitive The is represented on the list of top five banks in the world. Environment compensation scheme and included in the “Taiwan Only year High Compensation 5 100 Index" for five All domestic and overseas consecutive years. branches fully adopted the "ISO 14064-1 Greenhouse Gas NT$84.7 million was Certification Inventory" and obtained All NT$ invested in environmental certification. 84.7 and social engagement. million Consolidated net profit of NT$17.332 billion NT$17.332 after tax, remaining at NT$15 billion or higher Provided a total of NT$672.3 billion in loans to billion for the fourth consecutive year. SMEs and became the leading lender to SMEs st by market share in the banking industry for the 1 9th consecutive year. External Directors account for 73% of all Coordinated the largest syndicated Directors and female Directors account for bank loan of NT$10.13 billion for 47% (7 seats); the achievement rate of the solar cell manufacturers in Taiwan five main areas in the performance evaluation NT$ as the lead arranger to support seats 10.13 Launched a new lending 7 of the Board of Directors in 2018 was 94% and long-term development funding for billion the assessment results "exceeded standards". the domestic renewable energy service aimed at supporting the MOEA's "5 Plus 2" key industry. NT$ 446.2 development projects, resulting billion in a total of NT$446.2 billion in Paperless business and operations Obtained the "Diamond-class" Green Building Mark for 22 of new loans. reduced carbon emissions by 14,594 the company's existing commercial buildings and reduced 22 tons of CO2e, equivalent to the annual buildings annual carbon emissions by 2,432 tons CO2e. amount of carbon absorption by 37.12 FFHC provides a safe and 37.12 Daan Parks. parks We have supported the development of domestic healthy work environment. sports for 24 consecutive years. We also continued Occupational Headquarters Building to sponsor the table tennis teams of 8 colleges, middle safety introduced "ISO 45001 Safety 3 schools, and elementary schools in 2018. Four players and Health Management gold medals were selected for the national team and they won 3 management System" and obtained certification. gold medals, 5 silver medals, and 9 bronze medals. 10 11 CSR Operation FFHC CSR Committee Functions First Financial Holding CSR Milestones I CSR Organization Structure First Financial Holding (FFHC) has long been committed to monitoring trends in society and fulfilling our corporate social responsibility (CSR), with significant effort invested towards promoting corporate governance, the development of a sustainable environment, and supporting charities. In 2011, the FFHC Board of Directors approved the establishment of 2012 2011 a "CSR Committee" to improve the efficiency of CSR promotion efforts. The chairman of FFHC is also the chairman of the CSR Committee and its members are drawn from the general managers of the First Financial Group. Under the CSR 2012 CSR Report certified by Published first CSR Report (2011) Committee are trans-company working groups on "Corporate Governance", "Customer Care", "Employee Care", an independent certification Revised FFHC CSR Code of Conduct Establish CSR Committee "Environmental Sustainability" and "Social Welfare". A dedicated unit is also assigned by each subsidiary for CSR 2013 body for the first time Set "No. 1 Brand in Green Finance" as the Defined FFHC CSR Code communications, liaison and the provision of related information. The core team consists of 78 people (1 chairman, 8 Received "Financial Excellence sustainable development target of Conduct, Policy and Award" from the Taiwan Presented with "Newcomer Award" in the Taiwan committee members, 2 conveners, 5 executive directors, and 62 people split among the various working groups). The CSR Committee Organic Corporate Sustainability Report Corporate Sustainability Report Awards Regulations CSR Committee is administered by the Corporate Governance Section of the Administration Department, and 5 Awards and the "Creative Received Commonwealth CSR Corporate designated people are responsible for the overall planning and promotion of CSR within the Group. The top-down Communications Role-Model Citizenship Award approach ensures the effective and concrete implementation of each annual CSR objective. Award"

In 2011 the FFHC Board developed a “CSR Policy” and “CSR Code of Conduct” (see the “Corporate Governance” section of the corporate website at http://www.firstholding.com.tw/tw/governance/manageRule.htm). The “CSR Policy” defines our commitment to the fulfillment of our CSR towards customers, employees, shareholders, community participa- 2014 2015 tion, charity, development of a sustainable environment, products and services, and ethical corporate management. The “CSR Code of Conduct” are the overarching guidelines on the economic, environmental and social risks and Revised FFHC CSR Code of Conduct, Policy Published first English version of CSR Report (2014) impacts of our company and our subsidiaries. It is aimed at realizing sustainable development through promotion of and Committee Organic Regulations Revised FFHC CSR Committee Organic Regulations economic, environmental and social advancement. In 2012, 2014 and 2016, the “CSR Code of Conduct” and “CSR Received "Gold Award" and "Climate Received "Gold Award", "Transparency and Integrity Leadership Award" from the Taiwan Award" and "Climate Leadership Award" from the Policy” were revised by the Board in response to international trends and regulatory developments. The revisions Corporate Sustainability Report Awards Taiwan Corporate Sustainability Report Awards require Group companies to treat customers or consumers in a fair and reasonable manner. Resources for CSR 14th Place in the Large Enterprises category 9th Place in the large enterprises category of the fulfillment should also be invested in organizations that solve social or environmental issues on a continuous basis of the Commonwealth Magazine CSR Commonwealth Magazine Corporate Citizenship Awards through a commercial model. These will facilitate the establishment of sustainable development guidelines for the Corporate Citizenship Awards Received Excellence Award in the Environmental environment or society, and ensure that our Group’s CSR policy is in line with international standards. Friendliness Category of the "Global Views Corporate Social Responsibility Awards First Financial Holding Corporate Social Responsibility Organization Chart 2016

Board of Directors Revised FFHC CSR Code of Conduct, Policy and Committee Organic Regulations Named a constituent stock in the “Emerging Market Index”of the Dow Jones Chairman Sustainability Indices (DJSI) upon participating for the first time (Chairman of FFHC) Received "Taiwan Top 50 Corporate Sustainability Report Awards - Finance and Insurance Industry Gold Award" and "Talent Development Award" Received the “Best CSR Award” in the Banking and Finance Best Practice Awards Committee Members from the Taiwan Academy of Banking and Finance (Presidents of FFHC and subsidiaries) Received the “Financial Industry Model” and “Happy Enterprise Role-Model” awards at the Global Views CSR Awards

Revised FFHC CSR Committee Organic Regulations Selected for inclusion as a constituent in the Dow Jones Sustainability™ Emerging Markets Index for 2017 two years in a row Received "Taiwan Top 50 Corporate Sustainability Report Awards - Finance and Insurance Industry Gold Award" and "Talent Development Award" 3rd Place in the large enterprises category of the Commonwealth Magazine Corporate CitizenshipAwards Corporate Environmental Customer Care WG Employee Care WG Social Welfare WG Received the "Financial Industry Model" award at the Global Views CSR Awards Governance WG Sustainability WG Included as constituent stock in the FTSE4Good Emerging Index •Ethical corporate •Product and service •Employee •Environmental •Social care management responsibility compensation sustainability policy •Community •Organizational •Customer data •Employee welfare •Corporate carbon participation strategy protection •Competency reduction •Charitable activities We were included in the DJSI Emerging Markets Index for three consecutive years; we were included •Risk management •Consumer rights management management •Corporate image 2018 as a constituent for the first time in the "World Index” and received a silver medal in the RobecoSAM •Regulatory protection •Employer/employee •Green purchasing Sustainability Yearbook. FFHC is the only bank in Taiwan on the list of top five banks in the world. compliance •Customer relations relations •Environmental We were the first financial institution in Taiwan to be recognized on the CDP’s Climate Change •Protection of shareholder rights management •Education and sustainability Leadership A List in 2018. •Information •Green product training awareness Received "Taiwan Top 50 Corporate Sustainability Report Awards - Finance and Insurance Industry transparency •Employment •Supply chain Platinum Award” •Internal control environment management Included as constituent stock in the FTSE4Good Emerging Index for two consecutive years 12 13 Stakeholder Engagement Evaluate short-term, mid-term, Review implementation plan and long-term CSR targets CSR for each objective I Stakeholder identification and communication Committee The opinions of stakeholders have served as the guiding principle for the development of the FFHC sustainable development strategy since the first CSR Report was published in 2011. The process of compiling the Environmental (E), Track and review Social (S) and Governance (G) issues of concern to stakeholders is used to internalize the issues as the corporate the progress of short-term Review CSR report standard sustainability targets. The themes and aspects of sustainability of concern to stakeholders also form the basis for author- targets and action plans ing this report.

◎ Stakeholder identification ◎ Compile materiality analysis matrix for To promote better stakeholder communica- issues of concern 01 tions, we embraced the spirit of the five 05 The 228 online surveys and 59 printed STEP main areas in the AA1000 Stakeholder STEP surveys were sorted according to degree of Engagement Standards (AA1000 SES) concern to stakeholders and impact on group operations to form the “Materiality II Operation of the CSR team regarding dependency, responsibility, Analysis Matrix” and “List of Communication Every year, each working group of the CSR Committee compiles the E.S.G. Issues of Concern to FFHC stakeholders, then influence, representativeness, and diversity Channels and Issues of Concern.” draws up the short-term, mid-term, and long-term CSR targets, and drafts action plans for the following year. These are by convening the CSR Committee’s Corporate Governance, Customer Care, discussed and revised internally at WG meetings before being submitted to the "CSR Committee" for review. Approved ◎ Response to the issues were then compiled Employee Care, Environmental Sustainabili- proposals are then announced for implementation. Progress on each short-term target and action plan is then tracked in accordance with the materiality analysis ty and Social Welfare working groups for matrix and reviewed on a quarterly basis by CSR Committee WG meetings. For each target not met, each working group must joint discussion and identification of 06 After analyzing the 20 issues of concern propose a concrete improvement plan to the CSR Committee. At the end of the year, CSR performance from the preced- stakeholders. Group stakeholders were STEP using the matrix method, 2 issues of low ing year must be reported to the Board of Directors within four months. The 2018 CSR performance report was submitted then divided into seven categories based stakeholder concern and low impact on group operations were eliminated. The 18 to the Board of Directors in March 2019, for their reference. on the experiences of each business unit and the finance industry as shown as issues of medium-high concern/influence were chosen as issues for response. A total follows: of 29 material aspects (including 4 financial • Employees/Union/Retired employees services sector-specific disclosures) were • Shareholders/Investors/Analysts identified and approved by the "CSR • Customers Committee." • Suppliers 07 06 • Community/Non-profit organiza- ◎ Identifying priorities in connection to UN tions/Non-government organizations/Ac- Sustainable Development Goals Board of Directors CSR Committee ademics and experts To effectively accord with the United Nations 07 Sustainable Development Goals (SDGs), we Report CSR implementation Review execution and evaluate • Government and competent authorities Convene CSR Committee • Media/financial institutions STEP considered social demands and international results for the previous year improvement plan for unfulfilled Working Group Meetings trends related to the core competencies of short-term targets 05 Track and review short-term Collecting the issues of concern financial institutions and took three steps, ◎ specifically "internal discussions and survey on target completion on a To ensure that the practice of CSR is in priorities," "integration of core competencies keeping with international developing quarterly basis 02 for setting objectives and execution plans," STEP trends, CSR Committee working groups and "disclosure and communication" to include collected 20 sustainability issues based on SDGs into the Group's sustainable develop- international sustainability standards, such ment strategy. We also established targets for 04 as the GRI Standards and AA1000, interna- material topics and execution plans to tional initiatives, such as SDGs, CDP, and communicate and disclose information to CSR Committee DJSI, and the Group's corporate Green stakeholders in hopes of contributing to the CSR Committee Working Finance Sustainable Development Strategy. state and society. Group Meeting Evaluate short-term, mid-term, and long-term targets and announce the implementation of action plans Discuss and revise short-term, Reviewing the report to ensure that it covers 03 ◎ 228 online surveys ◎ mid-term, and long-term targets FFHC used online questionnaires on our all material aspects and draft action plans The CSR Report is authored by each CSR 03 corporate website to establish how important 08 Committee WG based on the disclosure STEP sustainability issues are to each stakeholder. STEP indicators and material topics approved by the CSR Committee then collated by the administrative unit before being submitted ◎ 59 printed surveys 02 Apart from online surveys, the members of to the Chairman for review. the CSR Committee (Presidents of FFHC and CSR Committee administration unit 04 Serving as the guiding principle for CSR Committee STEP subsidiaries), WG conveners, executive ◎ Compile the information submitted by directors, and members of each CSR company planning on sustainability Working Groups To ensure that the CSR implementations of each working group Committee WG were then asked to evaluate 09 Compile issues, draw up short-term, FFHC reflect stakeholder expectation, the results 01 each stakeholder's degree of concern on the STEP of the analysis are not only disclosed in the mid-term, and long-term 20 issues and impact on group operations. report but also serve as the guiding principle targets and draft action plans for company planning on sustainability. 14 15 1 Materiality analysis matrix for issues of concern 2 Identifying priorities in connection to UN Sustainable Development Goals The selected 20 issues of concern are scored and then compiled into a materiality analysis with level of stakeholder To effectively accord with the United Nations Sustainable Development Goals (SDGs) and identify their relationship with concern represented on the X-axis and the impact on group operations represented on the Y-axis, as shown below. the Group's various operations, members of administrative units and various Work Groups of the CSR Committee Based on the materiality analysis matrix, the two issues "Anti-competitive behavior" and "Effect of services on raw materi- discussed the essence of the 17 SDGs and detailed objectives and issued a printed survey questionnaire on the connec- al consumption" were eliminated due to their low level of stakeholder concern and low impact on group operations. tion between the Group's core competencies and the 17 SDGs. The 59 surveyed individuals include the Presidents of The 18 issues listed as medium-high level of concern/effect were chosen for response on related management direction the companies of the Group, WG conveners, executive directors and members of each CSR Committee WG. We use and execution and implementation outcomes. the results to assess the connection between the Group's CSR implementation status and the UN SDGs. We eliminated two issues regarding SDG 14 marine ecology and SDG 15 land ecology which are less closely associated with the Group based on the survey results. We then listed 15 SDGs with higher levels of connection as our goals and established corresponding annual CSR goals and implementation plans for review by the CSR Committee. We disclose the achievement status of disclosure to stakeholders in the CSR Report (related SDGs and achievement status are detailed High •Protection of customer rights •Ethical corporate management and interests and improving •Information security improvement in the chapter on Sustainable Development Goals). •Corporate governance satisfaction rate •Business performance and •Digital finance innovation and profitability inclusiveness •Prevention of money laundering, •Responsible investment, due financial fraud and terrorism diligence and credit, and supplier financing 3.2 Disclose progress on relationship management •Risk management target completion in 1.1 Learn about SDGs the CSR Report and SDG targets •Ecological and environmental •Occupational Safety and Health sustainability •Implementation of inclusive •Low-carbon operations and finance circular economy •Charitable activities and

Moderate performance evaluation 3.1 Quarterly Step 3 Step 1 •Climate change risks and Disclosure and Identify priorities opportunities follow-up on target communication of SDGs implementation 1.2 Distribute 59 Level of stakeholder concern status Step 2 printed •Anti-competitive Behavior •Talent recruitment and retention Integrate core surveys •Effect of services on raw •Professional development and competencies and material consumption management reform establish goals and •Human rights protection and action plans gender equality 2.2 Submit plans to the 2.1 Establish annual targets CSR Committee for and announce the review and passage Low Moderate High implementation of Impact on Group operations action plans

16 17 3 List of stakeholder communication channels and issues of concern

Employees/ Shareholder/ Union/ Investor/ Customers Retired employees Analyst

Materiality Materiality Materiality Employees are the company’s most important To protect shareholder equity and to treat all shareholders In keeping with the philosophy of “Customer Service Comes First,” FFHC continues to provide customers asset, and are crucial to the company's equally, a corporate governance system has been set up to with innovative products and quality services. We also ensure the transparency and security of products competitiveness. The support of employees is ensure that shareholders enjoy the right to full information, critical to our sustainable development and the participation, and decision-making on important company matters and service information while treating customers in a fair and reasonable manner to commit ourselves to most important component in our CSR improving customer satisfaction. fulfillment Issue of concern • Business performance and profitability Issue of concern Issue of concern • Corporate governance • Professional development and manage- • Risk management • Protection of customer rights and interests and improving satisfaction rate ment reform • Ethical corporate management • Information security improvement • Occupational Safety and Health • Responsible investment, due diligence, and supplier • Implementation of inclusive finance • Talent recruitment and retention management • Climate change risks and opportunities • Ethical corporate management • Climate change risks and opportunities • Digital finance innovation and inclusiveness • Business performance and profitability • Human rights protection and gender equality • Human rights protection and gender • Responsible investment, due diligence, and supplier management equality Communication channel and frequency • Convening of general shareholder meeting, publication of Communication channel and frequency Communication channel and frequency annual report and CSR report / Yearly • All of our Group subsidiaries have customer complaint channels, including business units, customer • Employee complaint hotline, fax, e-mail / • Business performance report / Monthly and quarterly Permanent • Hosting of investor seminars / Quarterly service hotlines, and e-mail / Permanent • Employee forum on internal website / • Videos of investor seminars are concurrently published on our • The companies' contacts are established on the Group's official website; we publish the telephone Permanent corporate website for viewing by investors / Permanent and number, address, and email of the contact person for customers to provide immediate feedback on • First e-Academy digital learning system / Ad retained for one year hoc issues and maintain smooth and open interactions • Publication of corporate governance, investor seminar presenta- • Conduct customer satisfaction surveys through telephone surveys, e-mail surveys, customer service • Morning/evening business unit meetings / tions, financial information, annual reports, CSR reports, and Ad hoc related investors affairs in both English and Chinese on the hotlines or outside survey firm / Ad hoc • "Whistleblower section," "President's mailbox" corporate website / Ad hoc • Accounts, latest financial information, event information etc. / Permanent and "Ideas mailbox" / Permanent • Telephone and e-mail of the spokesperson and investor • Statement on Protection of Customers' Data / Permanent • Sexual harassment complaint hotline, fax, relations department available from the corporate website's e-mail / Permanent • Planning and investment seminars, industrial park seminars, maintenance of customer relations, sharing investor services section / Permanent of energy conservation & carbon reduction experience, and green industry financial programs / Ad hoc • Employer/employee meeting / Monthly • Stakeholder survey in the corporate website's CSR section / • Employee Welfare Committee, Labor Safety Permanent • Hosting of service role-model competitions to improve the quality of customer service/ Annual and Health Committee, Labor Pension • Participation in the DJSI comparison, climate change question- Oversight Committee / Quarterly naire, water questionnaire, and other international ESH ratings / Communication highlights and accomplishments • Employee Savings and Stock Ownership Once a year • Stewardship Principles Compliance Statement / Signed by subsidiary companies in securities, investment trust, Committee / At least once a year • Attend investor seminars at the invitation of securities brokers to • Revision of collective bargaining agreement communicate with investors / Ad hoc and life insurance, which have disclosed their compliance statement and votes on the Company's website / Every 3 years • Participation in corporate governance-related non-government • Improve customer service quality / Obtained the 2018 CSEA "Best Customer Service Innovation System • Employee Commitment Survey / Annually organizations / Ad hoc Application” Award from the Taiwan Contact Center Development Association Communication highlights and accomplishments • Commitment to providing diverse and innovative financial services / First Bank received the Best Cloud • Provision of competitive compensation Communication highlights and accomplishments Application in Taiwan Award from the Asian Banker • Stable earnings / consolidated net profit of NT$17.332 billion after tax, scheme / Included in the “Taiwan High • Support for SME development / The number one bank in Taiwan in terms of SME lending market share for 9 Compensation 100 Index" for five consecutive remaining at NT$15 billion or higher for the fourth consecutive year years • Established mechanism for shareholder interaction / Institutional years in a row. • Employee Commitment Surveys are held to investors' opinions and issues of concern are reported to the Board • Care for the property safety of the elderly and people with disabilities / First Bank was ranked second provide a channel for all employees to regularly to assist all directors, executives and independent among in the "Asset Trust Evaluation of Trust Businesses for the Senior and the Disabled," and First Life directors with understanding the opinions of shareholders. express their views. An Employee Commit- Insurance received the "Outstanding Performance Award for Senior Insurance Contest" in 2018 for small-sum • Improve the operational efficiency of the Board of Directors / ment Survey was held in 2018, with a result elderly care insurance of 82.39%. Implement annual Board of Directors performance evaluations, the • Persuade outstanding talent to remain in results of which are reported to the Board before the end of Q1 of • Promotion of protection-type insurance products / First Life Insurance was recognized for excellent perfor- Taiwan through tangible action / Chosen for the following year and disclosed on the Company's website mance in the "Increasing National Insurance Coverage Program" of the inclusion in the "Taiwan Employment Creation • The Company was selected as a constituent stock in DJSI Emerging Financial Supervisory Commission for the 22nd consecutive time Index 99 " for the ninth consecutive year Markets for the third consecutive year and was selected as a • Provide high-quality employee training constituent stock in the DJSI "World Index" for the first time; program / More than 1,305 employees have received Leadership A List recognition in the CDP Climate Change obtained the Certified Anti-Money Laundering Questionnaire Specialist (CAMS) certification. • Participation in the Asian Corporate Governance Association • Create a safe and healthy work environment (ACGA) / As a Premium member of the ACGA, the Company / First Bank Headquarters Building obtaining analyzed the latest corporate governance information and reports, of the ISO 45001 2018 Safety and Health participated in annual forums and seminars, and accord with the Management System certification from the latest development trends in corporate governance 18 British Standards Institution (BSI). 19 Community/ Non-profit organization/ Governments/ Media/ Suppliers Non-government organization/ competent authorities Financial institutions Academics and experts Materiality Materiality Materiality Materiality FFHC considers suppliers to be green partners. Communities form the social foundations for the Government policies influence the direction of Media is one of the key channels for communi- The supplier management mechanism is used development of FFHC. We actively participate business operations. FFHC actively cooperates with cation between FFHC and the other six types of to select qualified vendors who conform with in local community activities as part of our government policies, complies with regulatory stakeholders. We disclose E.S.G-related the spirit of corporate sustainable development business operations and pay attention to how laws, and develops a sound business environment information through the media at different our operations affect the local community in as long-term partners in building a green and times order to build community rapport sustainable future together Issue of concern • Ethical corporate management Issue of concern Issue of concern • Corporate governance • Business performance and profitability Issue of concern • Charitable activities and performance • Responsible investment, due diligence, and • Prevention of money laundering, financial • Ethical corporate management evaluation fraud and terrorism financing supplier management • Ecological and environmental sustainability • Information security improvement • Risk management • Ecological and environmental sustainability • Climate change risks and opportunities • Corporate governance • Low-carbon operations and circular economy • Ethical corporate management • Low-carbon operations and circular economy • Digital finance innovation and inclusiveness • Climate change risks and opportunities • Charitable activities and performance • Responsible investment, due diligence, and • Talent recruitment and retention • Information security improvement evaluation supplier management • Charitable activities and performance • Occupational Safety and Health • Low-carbon operations and circular economy evaluation • Implementation of inclusive finance Communication channel and frequency Communication channel and frequency • Hosting of art exhibitions and concerts / Communication channel and frequency Communication channel and frequency • Explicitly require vendors to conform to Regular • Participate in seminars, symposiums, public • Participation in assessments, seminars and international human rights, labor and • Hosting of blood drives, beach clean-up and conferences / Ad hoc other green volunteer events, health seminar, hearings, competitions and evaluations hosted environmental laws and regulations in • Establish a spokesperson and PR depart- and rural charity health clinics / Ad hoc by the competent authorities / Ad hoc purchasing and supply conditions and ment for liaising purposes / Permanent • Sponsorship of tennis, table tennis, • Compliance with the relevant laws and policies contracts / Review before tendering, audit at swimming, road run, baseball and other of the competent authorities and cooperate with • Hosting of press conferences and issuing of and after contract signing sporting activities / Ad hoc their monitoring and inspections / Ad hoc press releases / Ad hoc • Transparency of tender information and • Volunteer activities such as donations, show • Disclose business-related information on the publication on corporate website / Ad hoc of support and environmental/organic Market Observation Post System and corporate Communication highlights and accomplishments • Require companies that sell fund and practices / Ad hoc website / Ad hoc • Improve corporate image / First Securities insurance products through the bank to have • Participation in CSR-related non-government • Participation in Earth Hour, ban disposable and won the "Best Potential Award" in the "2018 compiled CSR reports or issued a CSR organizations / Ad hoc melamine tableware, and the promotion of Outstanding Securities Evaluation" from declaration / Before listing • Hosting of energy-conservation symposiums environmental protection through social media / Excellence magazine; First Life Insurance's • "Whistleblower section" / Permanent and participation in green finance seminars / Permanent two versatile life insurance policies "Rich Life" Ad hoc and "Rich Expert" received recognition as Communication highlights and accomplishments Communication highlights and accomplishments excellent insurance policies from Smart •Green purchasing / Recognition as Bench- Communication highlights and accomplishments • Actively implemented corporate governance / magazine, and First Life Insurance became •Assist students from poor families in their mark Private Businesses and Groups in Implemented "Listed Company corporate the first insurance company with two selected studies / Assisted disadvantaged schoolchil- Green Purchasing by the Taipei City Governance Evaluation" items and won top 5% in dren in Ankeng, Zhongzheng, and Erchong insurance policies Government for the 4th consecutive year, rankings of listed companies and top 4 in Elementary Schools for eight consecutive • Joint media interviews / active interactions finance and insurance companies; Selected as a while green purchasing amounted to years and provided education assistance with the media to implement ESG perfor- constituent stock in the "TWSE Corporate NT$115.13 million programs Sponsored the “Financial Service mance Governance 100 Index" for the 4th consecutive •Establishment of supplier management Industry Education Foundation” with NT$2.5 • Provision of industry information / The FFHC year mechanisms / Established Supplier Manage- million in four consecutive years and helped expert team provides daily updates on • Quarterly reporting of business overview / ment Guidelines as the Company and 1,600 students from poor and disadvantaged market conditions and financial products to Reported business overview to the competent subsidiaries' policy and guidance principles backgrounds complete their studies in 2018 help the public keep track of the financial authorities every quarter to help the government for supplier management; established data First Bank donated 1‰ of payments made market keep track of the overall financial environment on 30 categories of suppliers and completed with the World Card totaling NT$302,657 to • Participate in evaluations by government 1,443 supplier surveys the "School Education Savings Account" platform of the Ministry of Education, which in authorities / Won Taipei City Government's turn helped 237 disadvantaged schoolchil- Excellence Award for "Energy Conservation dren Leadership - Industrial and Commercial •Commitment to promotion of environmental Industries Group B," "Farm City Construction sustainability and social welfare / Donated Results Contest and Farm Expert - Corporate NT$84.7 million to social engagement in Award," "Dementia Friends Organization Label," 2018, and 2,888 people volunteered their and "Health Promotion Label"; included as a services constituent of the "FTSE4Good TIP Taiwan ESG 20 21 4 Materiality Issues and Material Topics

Material Issue Value Chain /Corresponding chapter GRI Material Topics Corresponding Corresponding SDGs and targets Risks and opportunities of key impact in GRI Management SDGs Direct Impact on Indirect Direction impact business relations impact Business performance GRI 201: 8.1: Maintain growth in profitability in accordance with • There are numerous banks in the domestic market, and the market is B,C,D and profitability Economic performance the gross domestic product (GDP). approaching saturation. The level of competition in the overall financial 8.3: Promote development-oriented policies that environment remains high, hindering growth in bank loans and profitability. support productive activities, job creation, entrepre- • Continuous FinTech innovation and artificial intelligence applications will neurship, creativity and innovation, and encourage weaken the role of traditional financial institutions and affect their business formalization and growth of micro-, small- and performance and profits. medium-sized enterprises, including through access to financial services. • Green finance, renovation of unsafe and old buildings, and aging population 8.5: Achieve full and productive employment and issues will increase and spur the development of new sales and business decent work for all women and men, including for models. young people and persons with disabilities, and equal • Investment in digital banking and use of optimal business model will improve pay for work of equal value. business management efficiency.

Corporate GRI 405: 5.5: Ensure women’s full and effective participation and • Violation of corporate governance laws will result in disciplinary action by B,C,D governance Employment diversity equal opportunities for leadership at all levels of competent authorities and damage to the Company's image. and equal opportunity decision-making 12.6: Encourage companies to adopt sustainable • Continuous strengthening of corporate governance can enhance Board practices and to integrate sustainability information operations and performance, build a positive image for the Company in into their reporting cycle sustainable management, elevate the Company's value, and increase 16.7 Ensure responsive, inclusive, participatory and representative decision-making at all levels investors' intention to invest in the Company. 16.b. Promote and enforce non-discriminatory laws and policies for sustainable development

Risk management 102-30: 13.3 Improve education, awareness-raising and human • Violation of internal control regulations (legal compliance, risk management, B,C,D Effectiveness of risk and institutional capacity on climate change mitigation, and internal auditing) results in disciplinary action from the competent management processes adaptation, impact reduction, and early warning. authorities, which damages the company's image. • Changes in the laws of competent authorities, anomalies in the information GRI 419: system, inadequate personal information protection, and extreme weather Social and economic that lead to risks of interruptions of operations or reputation or financial compliance losses. • Implementing risk management and adhering to internal control rules can Set topic / Risk effective lower or prevent operational risks to facilitate sustainable develop- management ment. • We use the innovative blockchain patent for "cross-chain integration" in regulatory compliance technology to achieve a balance between risk management and business operations.

Ethical corporate GRI 205: 16.5: Substantially reduce corruption and bribery in all • Unethical conduct might cause company loss or disciplinary actions by the B,C,D A management Anti-corruption their forms competent authority, which damages the company's image. 16.6: Develop effective, accountable and transparent institutions at all levels •Implement ethical management, avoid corruption and other unethical matters, thus preventing disciplinary actions by the competent authority and establishing the company as an entity that conducts business with integrity.

Protection of GRI 417: 12.6: Encourage companies to adopt sustainable • Violation of financial consumer protection laws will result in disciplinary B,C,D customer rights Marketing and labeling practices and to integrate sustainability information actions from competent authorities and negatively impact the Company's and interests and GRI 418: into their reporting cycle image. • To respond to competition from non-finance industries in the finance sector improving satisfaction Customer privacy 16.6: Develop effective, accountable and transparent GRI 419: institutions at all levels through technology expertise, the traditional finance industry must understand rate customers' needs and provide financial services that help customers in their Socioeconomic Compliance daily lives and intensify connections with customers to maintain competitive advantages. FS4: Procedures for • Failure to securely protect personal information of EU citizens shall constitute improving staff implementation violations of the EU's General Data Protection Regulation (GDPR) and of environmental and social penalties. policies and procedures as applied to business lines • Conduct customer satisfaction surveys to understand customer demands and FS15: Policies for the fair design plan corresponding improvement measures to improve customer satisfaction and sale of financial products and build brand loyalty. • Use big data analysis and diverse applications with personalized marketing and services triggering mechanisms for interactive marketing on digital channels or implement precision marketing in offline physical channels to build stronger relationships with customers. 22 23 Material Issue Value Chain /Corresponding chapter GRI Material Topics Corresponding Corresponding SDGs and targets Risks and opportunities of key impact in GRI Management SDGs Direct Impact on Indirect Direction impact business relations impact Information security GRI 203: 8.2: Achieve higher levels of productivity of economies • Considerable use of FinTech applications (online loan platforms, new B,C,D improvement Indirect economic through diversification, technological upgrading, and payment tools, and complex trading) challenges the company's information security capabilities. impact innovation, including through a focus on high value • Losses of the Company or customers caused by information security issues GRI 418: added and labor-intensive sectors. involving insufficient internal security awareness and hacking attacks. • The development of new technologies makes it more difficult to protect Customer privacy 9.b: Support domestic technology development, personal information, which affects customers' rights such as infringing on research and innovation in developing countries, their privacy or losing their information. Set topic / Information including by ensuring a conducive policy environment • Reinforce information protection to reduce the Company's losses and protect security protection for industrial diversification and value addition to customers' rights, thereby obtaining customer trust and higher customer commodities. satisfaction. • Implement information security protection to effectively protect the Company's internal data, maintain normal operations of core systems, and facilitate sustainable development of the Company

Prevention of GRI 419: 16.4: Significantly reduce illicit financial and arms flows, • If the company fails to comply with operating procedures for the prevention of B,C,D A money laundering, financial fraud, and countering terrorism financing, it will money laundering, Socioeconomic and combat all forms of organized crime suffer major penalties, which will damage the company's image and business financial fraud and Compliance 16.a: Build capacity at all levels to prevent violence development. terrorism financing and combat terrorism and crime. • The implementation of new regulations such as AML and CRS will substantially increase the company's legal costs. • Implementing prevention of money laundering, financial fraud and terrorism financing facilitates international business expansion and sustainable management.

Climate change GRI 203: 可負擔能源 7.a: Promote investment in energy infrastructure and clean • Transaction records are kept to protect customers' rights. The financial service B,C,D risks and Indirect economic impact energy technology sector remains highly dependent on paper-based operations. Due to the 9.1: Develop high-quality, reliable, and sustainable rising awareness toward environmental protection, including sustainable opportunities GRI guidelines and infrastructure with post-disaster recovery to support forests, paper from farmed trees, reduction of air pollution and water financial services economic development and welfare of mankind. Focus on providing affordable and fair channels for all pollution from paper-making, and frequent fierce forest fires and water sector disclosure 9.2: Promote inclusive and sustainable industrialization and shortages caused by climate change, the prices of paper products have risen, standards: Product increase employment rate and GDP of industries causing increases in the operating costs of the company. 9.4: Upgrade infrastructure and retrofit industries to make • Environmental law amendments cause increase in operating cost due to portfolio them sustainable, with increased resource-use efficiency strengthened control over industrial carbon emissions, which increases the and greater adoption of clean and environmentally sound credit risk of banks. technologies and industrial processes • Climate change results in an increase in extreme weather phenomena, which 11.6: Reduce the adverse per capita environmental impact elevates the risks of asset damage or production delays due to flooding or of cities, including by paying special attention to air quality and municipal and other waste management. drought, thus affecting the normal operation of industries and increasing the 12.6: Encourage companies to adopt sustainable practices credit risk of banks. and to integrate sustainability information into their reporting cycle • The finance industry plays an indispensable role in attaining the government's 13.2: Integrate climate change measures into national goal of reaching 20GW in installed capacity of solar power equipment by policies, strategies and planning 2025. We can develop new opportunities for profitability in sustainable 13.3: Improve education, awareness-raising and human and business opportunities in related industries. institutional capacity on climate change mitigation, • After being educated and trained on environmental issues, employees will adaptation, impact reduction, and early warning 17.7: Promote the development, transfer, dissemination and become more sensitive to related risks and opportunities, which enables them diffusion of environmentally sound technologies to develop- to more effectively help the company to avert risks, seize opportunities, or ing countries on favorable terms, including on concessional engage with corporate customers in environmental sustainability and and preferential terms, as mutually agreed combating climate change.

Responsible GRI 308: 9.4: Upgrade infrastructure and retrofit industries to • Loss of customers due to noncompliance with the Green Financing Review A,C E B investment, due Supplier environmental make them sustainable, with increased resource-use Principle or refusal to sign the CSR Declaration. assessment • Loss caused by investment in companies on the Do-Not-Invest List for CSR efficiency and greater adoption of clean and environ- diligence, and GRI 414: Violations. supplier mentally sound technologies and industrial processes • Some suppliers in Taiwan are monopolist or oligopolistic or are only agents Supplier Social and importers. The company cannot audit whether their production processes management Assessment 12.6: Encourage companies to adopt sustainable are environmentally friendly and low-carbon, and it is also difficult to negoti- FS1: Policies with practices and to integrate sustainability information ate with manufacturers. specific environmental • Products that are purchased in large varieties, large quantities, or small and social components into their reporting cycle quantities make it difficult to establish a low-carbon supply chain similar to the applied to business lines 13.2: Integrate climate change measures into national manufacturing industry, thereby affecting Scope 3 greenhouse gas emissions. FS2: Procedures for policies, strategies and planning • Suppliers who do not comply with environmental regulations or use harmful assessing and screening substances in their products may cause discomfort or health hazards to their environmental and social risks peers and customers. in business lines. • Implement responsible investment and due diligence and credit policies to FS3: Processes for monitoring select customers who are willing to sustain their business and implement clients’ implementation of and corporate social responsibility, thus reducing the occurrence of bad debts and compliance with environmental increasing return on investment. and social requirements included • The Company and its suppliers discuss issues related to climate change and in agreements or transactions. environmental sustainability and share economic concepts to encourage supplier transformation and develop business opportunities for sustainability. 24 25 Material Issue Value Chain /Corresponding chapter GRI Material Topics Corresponding Corresponding SDGs and targets Risks and opportunities of key impact in GRI Management SDGs Direct Impact on Indirect Direction impact business relations impact

Low-carbon GRI 302: 6.3: Improve water quality, reduce release of toxic • We predict that electricity prices will rise in the future as the power structure B,C,D operations and Energy substances, and reduce the proportion of untreated changes in Taiwan, resulting in an increase in the operating costs of the circular economy GRI 303: wastewater company. We also predict that the future electricity carbon emission coefficient will increase, which will prevent the Group from attaining carbon Water and effluent 6.4: Increase water-use efficiency across all industries reduction results. GRI 305: and ensure sustainable withdrawals and supply of • The government is predicted to mandate users with a contractual capacity of Emissions freshwater 800 kW or more to use 10% of renewable energy. This type of energy is 7.3: Double the global rate of improvement in energy expensive and in short supply and might incur more operating cost or penalty efficiency risks to the company. • If the government requires users with a contractual capacity of 800 kW or 8.4: Improve progressively global resource efficiency in more to save 1% of electricity every year, the Group may be subject to consumption and production and endeavor to government sanctions since it has already encountered bottlenecks before decouple economic growth from environmental achieving this goal. degradation • Implementing energy conservation and carbon reduction facilitates saving operating costs. • The Company will attract more investments by international investors if we become an internationally recognized E.S.G. company. • The Company purchases eco-friendly products, supports vendors in developing relevant technologies or acquiring environmental protection labels and certification to build a green sustainable society with our vendors.

Ecological and GRI 306: 6.6: Protect water-related ecosystems • Considerable increase in garbage and wastes will increase the operating B,C A,E environmental Effluents and waste 6.b: Support and strengthen the participation of local cost of the company. sustainability GRI 307: communities to improve water and sanitation management • Employees without proper education on the environment will impede the 11.6: Reduce the adverse per capita environmental impact Environmental development of a sustainable environment and hinder the promotion of of cities, including by paying special attention to air quality sustainability policies. Compliance and municipal and other waste management 12.1: Implement sustainable consumption and production 12.2: Achieve the sustainable management and efficient • After employees receive education and training on environmental protection use of natural resources and learn the main causes and consequences of various damage to the 12.4: Achieve the environmentally sound management of environment, they will dedicate themselves to environmental conservation waste and reduce release to air, water, and soil tasks and realize the energy conservation and carbon emissions reduction 12.5: Substantially reduce waste generation through goals set by the Company. prevention, reduction, recycling and reuse • If the company successfully transforms into the best green finance brand for 12.8: Ensure that people everywhere have the relevant customers, this image will positively influence our reputation and image at the information and awareness for sustainable development international level. and lifestyles in harmony with nature 13.3. Improve education, awareness-raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning

Digital finance FS8: Products and 8.2: Achieve higher levels of economic productivity • Integrated digital commerce and payment in online finance have changed B,C,D E innovation and services designed to through diversification, technological upgrading and customers' preferences. The increased cost in R&D expenditures has also inclusiveness deliver environmental innovation impacted traditional financial products and businesses, and it is difficult to control the risks involved in digital operations, such as automatic account benefits 8.10: Strengthen the capacity of domestic financial institutions to encourage and expand access to opening, loan extension, and loan repayment. banking, insurance and financial services for all • The popularity of online and mobile devices has increased customers' 9.5: Upgrade the technological capabilities of industrial acceptance of online banking or use of financial services with smart devices. sectors, encourage innovation, and increase R&D Branches, ATMs, and other traditional channels are no longer the primary expenditures choices for customers' transactions with banks. We must adjust existing 9.b: Support domestic technology development, channels to respond to changes in customers' payment models and compete against non-bank competitors. research and innovation in developing countries, including by ensuring a conducive policy environment • In addition to strengthening employees' digital finance capacity in the digital for, inter alia, industrial diversification and value finance era, we must also provide diverse digital equipment and grasp addition to commodities business opportunities in the e-commerce era. We shall actively initiate cross-sector collaboration and go beyond the over-the-counter service model of traditional banks. • We shall actively keep abreast of financial innovation trends, develop digital, innovative, and inclusive services, expand additional fields of application, optimize digital channels, and increase business opportunities with customer groups that have embraced digitalization. 26 27 Material Issue Value Chain /Corresponding chapter GRI Material Topics Corresponding Corresponding SDGs and targets Risks and opportunities of key impact in GRI Management SDGs Direct Impact on Indirect Direction impact business relations impact Human rights GRI 405: 4.5: Ensure equal access to all levels of education and • If the Company does not create an equal employment environment and B,C,D protection and Diversity and equal vocational training for the vulnerable, including persons with promote communication between labor and management, it may cause labor disabilities, indigenous peoples and children in vulnerable disputes and even standoffs. Failure to protect labor rights and promote gender equality opportunity situations GRI 406: 5.1: End all forms of discrimination against all women and gender equality will affect talent recruitment and retention and it may even Non-discrimination girls everywhere impact the Company's business reputation and brand image and cause the 5.5: Ensure women’s full and effective participation and equal Company to lose business. GRI 407: opportunities for leadership at all levels of decision-making Freedom of association 5.a: Give women equal rights to economic resources, as well • Including human rights protection into the Company's policies will help and collective as access to ownership and control over land and other forms improve the Company's image and retention rate and it will also lower the bargaining of assets and financial services turnover rate of new employees and talent training costs. 5.b: Enhance the use of enabling technology, in particular information and communications technology, to promote the empowerment of women 16.b: Promote and enforce non-discriminatory laws and policies for sustainable development

Professional GRI 401: 4.5: Ensure equal access to all levels of education and • The digital transformation in the finance industry requires the input of more B,C,D development and Employment vocational training for the vulnerable, including persons with cross-sector professional talent as well as the training and transformation of existing employees. Digital financial technologies are developing vigorously. If management reform GRI 402: disabilities, indigenous peoples and children in vulnerable situations the Company does not cultivate FinTech experts and transform its business Labor/Management models in time, its business development and profits will be affected. relations 10.4: Adopt policies, especially fiscal, wage, and social • Severe poaching of compliance officers and information security maintenance protection policies, and progressively achieve greater equality GRI 404: personnel in overseas branches has resulted in loss of middle-level execu- 16.6 Develop effective, accountable and transparent institu- tives, causing talent management crisis in the company. Training and education tions at all levels • The financial industry actively explores user demand and behavioral patterns in the IoT era. It incorporates talent that specialize in managing online communities, Internet, and AI sectors to help develop innovative financial services that meet more customer demand. • The rapid development of FinTech gradually transforms branches into business consulting and financial marketing centers. Employees must learn about innovative services and technology applications to develop key winning strategies amid rapid changes in the industry.

Talent recruitment GRI 401: 4.4: Substantially increase the number of skilled youth and • The rise of the FinTech and virtual banks has exacerbated the movement of B,C,D and retention Employment adults, including technical and vocational skills, for employ- talent in FinTech and increased hiring costs. Demand for talent changes GRI 402: ment, decent jobs and entrepreneurship drastically, and how companies build an environment to attract and retain 4.5: Ensure equal access to all levels of education and talent will affect the sustainability of the Company. Labor / Management vocational training for the vulnerable, including persons with relations disabilities, indigenous peoples and children in vulnerable • Establish comprehensive welfare measures and competitive compensation GRI 404: situations system to attract and retain key talent, reduce the gap in manpower caused Training and education 8.5: Achieve full and productive employment and decent work for all women and men, including for young people and by retirement waves, and build a solid foundation for sustainable develop- persons with disabilities, and equal pay for work of equal ment of the Company. value • Attracting talent from diverse backgrounds helps promote digital business 8.6: Substantially reduce the proportion of youth not in model development and implement corporate sustainable development. employment, education, or training

Occupational GRI 403: 8.8: Protect labor rights and promote safe and secure working • If the Company does not develop an occupational safety and health system B,C,D Safety and Health Occupational environments for all workers, including migrant workers, in by using a top-down approach, the probability of accidents or health hazards health and safety particular women migrants among employees will increase, causing an increase in the Company's personnel costs. • Laws and regulations are becoming increasingly stringent. If the Company fails to comply with laws and regulations, it will be at risk of being punished by competent authorities and a negative impact to the Company's image.

• The Company maintains an occupationally safe and healthy corporate culture, in which employees' safety awareness is raised to pay more attention to health issues. Employees will be less likely to sustain injuries or illness, which decreases the personnel cost of the company and also protects the Compa- ny's intangible asset—its employees. • Implementing management of occupational safety and health in accordance with law can contribute to a friendly working environment, secure the safety and health of employees, and enable employees to work more efficiently. It can also reduce occupational injury rates and reduce related personnel expenses. 28 29 Material Issue Value Chain /Corresponding chapter GRI Material Topics Corresponding Corresponding SDGs and targets Risks and opportunities of key impact in GRI Management SDGs Direct Impact on Indirect Direction impact business relations impact Implementation GRI guidelines and 1.3: Implement appropriate national social protection • Provide inclusive financial products and services such as reverse mortgages. If B,C,D E of inclusive financial services systems and measures for all, including the lower the borrower survives the term of the borrowing period, the bank may not be able to dispose of the collateral to repay the principal and interest due to finance sector disclosure levels of society, and achieve substantial coverage of the poor and the vulnerable factors such as social responsibility. The time required by the heir to process standards the collateral may exceed 3 months. Overdue cases exceeding 3 months FS14: Initiatives to 1.4: Ensure that all men and women, in particular the must be reported as overdue loans, which will affect the overall credit quality poor and the vulnerable, have equal access rights to improve access to of the Bank. economic resources, as well as access to basic • Foreign exchange control or financial policies implemented by least financial services for services, ownership and control over land and other developed countries (LDCs) are unclear, and local network technology service disadvantaged people. forms of property, inheritance, natural resources, projects are limited due to the lack of network infrastructure, thus economies FS15: Policies for the appropriate new technology, and financial services of scale cannot be generated. fair design and sale (including microfinance) of financial products 1.5: Build the resilience of the poor and those in • Taiwan has become an aging society. In response to aging and low population growth, dividend products and wealth management will become and services vulnerable situations and reduce their exposure and mainstream in future market demand, and we will provide seniors with vulnerability to climate-related extreme events and products such as retirement trusts and reverse mortgages "Comfort Loans." other economic, social, and environmental disasters These measures will provide retirees with a source of income and expand 3.c: Substantially increase health financing diverse business opportunities. 8.3: Promote development-oriented policies that • High savings rates of the citizenry ensure that insurance policies remain one support productive activities, job creation, entrepre- of the main tools for investments by citizens. In addition, the conversion of neurship, creativity and innovation, and encourage labor pension to defined benefit plans also helps life insurance companies promote NTD asset products with pension security business opportunities. formalization and growth of micro-, small- and • Use inclusive financial products and services and organize financial seminars medium-sized enterprises to increase lending channels, insurance protection, and financial products for 9.3: Increase the access of small-scale industrial and economically disadvantaged people and people living in remote areas, other enterprises, including affordable credit thereby expanding our customer base and enhancing the Company's image. • The integration of core competencies of the financial industry and fulfillment of corporate social responsibilities will enhance risk control and management and contribute to the development of long-term professional economic and social risk management systems. It will also encourage corporate borrowers to pay attention to environmental protection and corporate social responsibilities, expand the influence in the financial sector, and take the lead in industrial and investment transformation.

Charitable GRI guidelines and 1.5: Build the resilience of the poor and those in vulnerable • The benefits of charitable activities may be difficult to assess and sharehold- A,B,C,D, E activities and financial services sector situations and reduce their exposure and vulnerability to ers may question the effects of such activities on their interests. climate-related extreme events and other economic, social and performance disclosure standards: • Most charitable activities require long-term continuous investment to reap environmental shocks and disasters benefits. We must learn to implement the most effective deployment of evaluation Local communities 2.1: End hunger and ensure access for all people, in particular resources and integrate them with the core competencies of the finance FS14: Initiatives to the poor and people in vulnerable situations, to safe, nutritious, industry to resolve social or economic issues. We must also conduct careful improve access to and sufficient food all year round assessments. financial services for 2.3: Double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous disadvantaged people. peoples, family farmers, animal husbandry practitioners and • Invest in charitable activities and work with customers in cross-sector alliances. FS16: Initiatives to fishermen, including through secure and equal access to land, Integrate resources of different companies and jointly fulfill corporate social enhance financial other productive resources and inputs, knowledge, financial responsibilities. Integrate core competencies and help resolve social or services, markets and opportunities for value addition and literacy by type of economic issues to improve the Company's image, gain business revenue, non-farm employment beneficiary 2.c: Adopt measures to ensure the proper functioning of food and improve the Company's business performance. commodity markets and their derivatives and facilitate timely access to market information, including that on food reserves, in order to help limit extreme food price volatility 3.5: Strengthen the prevention and treatment of substance abuse, including narcotic drug abuse and harmful use of alcohol 4.5: Ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations 4.7: Ensure that all learners acquire the knowledge and skills needed to promote sustainable development, including through education for sustainable development and sustainable lifestyles, human rights, gender equality, promotion of a culture of peace and non-violence, global citizenship, and appreciation of cultural diversity and of culture's contribution to sustainable development 8.6: Substantially reduce the proportion of youth not in employment, education, or training

30 31 Note:

A. Suppliers B. Front-end financial services for customers (product marketing and sales) C. Financial transactions (loans and investments) D. Back-end financial services for customers (digital financial services and backstage operations) E. Old assets (replaced old machinery and equipment, waste disposal and resource recycling)

5 Explanation of Differences and Adjustments in Material Issues Compared to 2017

2018 Analysis of Explanation of Material Issues Changes in Material Topics Reason for Adjustment

Information Set Topic - The variations of online attacks change rapidly and pose security Information security significant challenges to the Group's information security improvement protection strategies. The Group responds to information security threats and adopts risk-oriented information security protection mechanisms. In addition to setting up dedicated information security units and assigning corresponding levels of dedicated supervisors, we also established multiple standard operating procedures and protection measures and organized information security drills to improve the response and processing capacity for information security incidents.

Risk Set topic - The domestic and foreign financial environment changes management Risk management rapidly. The Group has assigned dedicated risk management units to respond to various emerging risks and appointed external consultants to enhance risk awareness. We shall gradually adjust risk management strategies and establish related risk control mechanisms to improve the Group's overall competitiveness and risk-oriented defense capabilities.

32 33 Sustainable Development Goals

Results and short/medium/long-term goals of sustainability practices of First Financial Holding Co., Ltd. in 2018

Cate- Description gory Material Issue of Materiality 2018 Goals Progress 2019 Goals Medium/Long-Term Goals (2020-2024)

Business Companies should Our pre-tax profit, return on Our pre-tax profit, ROE, ROA cross-selling Our pre-tax profit, return on equity (ROE), return Our expected financial targets are as follows: performance pursue excellent equity (ROE), return on income, and EPS in 2018 increased 14.08%, on assets (ROA), cross-selling income, and ROA≧1% and business performance assets (ROA), cross-selling 6.72%, 3.33%, 20.41%, and 12%, respectively, earnings per share (EPS) all increased ROE≧15% and profitability to income, and earnings per compared to 2017. compared to 2018. Our goal is for annual net profit growth to be no lower than the profitability maintain their operations and share (EPS) all increased three-year average real growth rate of the domestic financial and development, drive compared to 2017. insurance industries. economic growth, and create employment opportunities.

Corporate Corporate Continue to conduct Board The achievement of measurement Continue to conduct Board of Directors Appoint external professional institutions, experts, or scholars to governance governance is the of Directors performance indicators for the five aspects of Board performance evaluations. conduct an advanced Board performance evaluation in 2020, and basis of sustainable evaluations. performance in the 2018 evaluation was Implement the Board diversity policy so that establish remuneration to directors based on performance evaluation corporate develop- Implement the Board 94%, and the result was “Exceeds each gender accounts for at least 1/3 of results. ment and the core diversity policy so that each Standards”, which was reported in the 9th directors and there is at least 1 female Add a provision on director and supervisor gender diversity in the of corporate culture. gender accounts for at least meeting of the 6th-term Board of Directors independent director. Corporate Governance Best Practice Principles before the end of 2020. It improves 1/3 of directors. on February 21, 2019 for future reference. Actual attendance rate of all directors of the The number of seats for independent directors reaches at least 1/3 of companies' Actual attendance rate of Members of the 6th-term Board of Directors board averages above 80% and actual all seats for directors in 2021 to strengthen the independence of the long-term value and all directors of the board have practical experience and expertise in attendance rate of more than half of all Board of Directors. competitiveness. averages above 80%. banking, insurance, securities, law, directors reaches 80% or above. First Life Insurance expects to complete its IFRS 17 policy, assessment The 2018 Corporate Social accounting, finance, taxes, technology, and FFHC, First Bank, First Securities, and First Life basis and assumptions, financial impact analysis, system and actuarial Responsibility Report was risk management. The number of female Insurance have all established a corporate model establishment, and financial statement preparation process verified by an independent directors accounted for 47% (7 directors) of governance supervisor. before the end of 2023. certification body in all directors as of the end of 2018. First Life Insurance conducted IFRS 17 accordance with AA1000 Actual attendance rate of all directors of difference analysis and employee education TPYE 2 and the ISAE3000. the Board averaged 94.76% in 2018. and training. The Company's 2018 Corporate Social Governance Responsibility Report was verified by BSI and Deloitte in accordance with AA1000 TPYE 2 and ISAE3000.

Risk Due to the rapidly Our expected financial Our DLR of 107.59% and Group CAR of Our expected financial targets are as follows: Our expected financial targets are as follows: management changing financial targets are as follows: 131.70% both reached the target for 2018. DLR<120% DLR<120% environment in Double leverage ratio (DLR) First Bank achieved the management Group CAR≧110% Group CAR≧110% Taiwan and < 120% targets of 13.57%, 11.58% and 10.96% set First Bank achieved the management targets of The group completed an inventory of laws and regulations and overseas, Group CAR ≧ 110% for the CAR, Tier 1 and Common Stock 12.75%, 10.75% and 9.5% set for the CAR, Tier 1 compliance risk assessment (CRA) before the end of 2020. implementing risk First Bank achieved the Ratio, respectively at the end of 2018, and and Common Stock Ratio, respectively at the First Bank set the management targets of 13%, 11% and 9.5% for CAR, management and management targets of LCR of 121.47%, NSFR of 131%, and end of 2019, and LCR reached 100% of Basel Tier 1 and Common Stock Ratio, respectively at the end of 2020, and to adhering to internal 12.5%, 10.5% and 9.5% set for leverage ratio of 6.32% reached Basel Ⅲ Ⅲ requirements. establish a risk-oriented internal audit system. control rules can the CAR, Tier 1 and or the competent authority's requirements. In coordination with Basel Ⅲ, First Securities First Securities will change the CAR calculation method from the effective lower and Common Stock Ratio, adjusted the new CAR system for securities firm advanced approach to the Delta-Plus approach before the end of prevent operational respectively at the end of in accordance with regulations of the compe- 2024, and complete system implementation. risks to facilitate 2018, and liquidity coverage tent authority. First Life Insurance will integrate stock trading before the end of 2021, sound operations. ratio (LCR) net stable First Life Insurance controls its equity and and upgrade value-at-risk assessment to the parameter method, funding ratio (NSFR), and foreign exchange position according to risk. It historical simulation method, and Monte Carlo simulation to improve leverage ratio reached optimizes data integration for bond investment the model's predictive ability. Basel Ⅲ or the competent products, and uses DV01 risk assessment to authority's 90%, 100%, and control its position measured at fair value. 3% requirements. 34 35 Cate- Material Description gory Issue of Materiality 2018 Goals Progress 2019 Goals Medium/Long-Term Goals (2020-2024)

Ethical Ethical manage- Establish the “FFHC Code of The Chinese version “FFHC Code of Conduct for A local language version of the “FFHC Code of Conduct for The Company shall comply with related policies of corporate ment is an Conduct for Directors, Supervisors, Directors, Supervisors, Managers, and Employees” Directors, Supervisors, Managers, and Employees” is provided to competent authorities, the United Nations important value Managers, and Employees” with was signed by 100% of employees of domestic management of corporate subsidiaries, and the English version was signed by overseas business locations, and signing rate of local employees is Convention against Corruption (UNCAC) and the culture. signing rate reaching 100%. 100% of overseas employees. 100%. Corporate Bribery Control Act (Draft) and other Companies Implement the ethical management The Group provided a total of 162,264.55 hours of Convene a Ethical Management Committee meeting at least once a anti-corruption and anti-bribery policies to should incorpo- policy and provide education and ethical management related training to all employees year, and revise the FFHC Code of Conduct for Directors, Supervi- implement the Company's ethical management rate ethical worldwide in 2018; the courses had a cumulative management training to 100% of employees. sors, and Managers in coordination with the Declaration of Financial policies and include related systems, such as Convene a Ethical Management 61,549 participants with training rate reaching 100%. into their Convene one Ethical Management Committee Institution Responsible Persons established by the FSC, so as to internal controls and internal audits. operational Committee meeting at least once a meeting, revise the contents and approval level of the manage responsible persons concurrently holding positions at management year and revise the Company's reporting system set forth in the "Code of Conduct for non-financial businesses and implement corporate governance strategy to "Code of Conduct for Ethical Ethical Management”, and the Board of Directors of prevent principles. unethical Management" to strengthen related each company reviews and approves the revision to conduct from regulations on the reporting system. their reporting system. The Group received 17 affecting their external reports and 9 internal reports in 2018, in corporate image which 2 reports were found to be unethical conduct and sustainabili- after investigation. Each company reports improve- ty. ment measures and personnel punishments to the Board of Directors, and also submits a report to the Ethical Management Committee for future reference.

Protection Implement Adjust internal operating regula- Revise the Personal Data Management Policy and Conduct self-evaluations of the "Principles for Fair Treatment of Continue to conduct self-evaluations of the of customer consumer tions in coordination with the "EU establish the Guidelines for the Management of EU Customers in the Financial Services Industry” and report evaluation "Principles for Fair Treatment of Customers in the rights and protection and General Data Protection Regula- Resident Personal Information and Notices for the results to the Board of Directors. Financial Services Industry” and report evaluation tion" (GDPR). Management of EU Resident Personal Information. interests protection of Provide sales-oriented training and education programs to sales results to the Board of Directors to protect customer rights Appoint a data protection officer The Compliance Officer of the London Branch also and (DPO) in response to the GDPR. serves as the DPO. personnel and assistant supervisors on a periodic basis to reinforce customers’ rights and interests. to strengthen improving Prohibit international transmission in Signed the SCC and carried out international knowledge and awareness of sales guidelines and rules for various Continue to organize sales and marketing training satisfaction the connection response to the GDPR principles. transmission under the SCC regulatory framework. with customers products and business areas. programs for various products and courses on rate Establish a personal information Established a personal information violation incident and maintain a leakage reporting mechanism in response, reporting, and prevention mechanisms. Strengthen awareness towards know your customer (KYC) penalties imposed on other banks, the Financial competitive coordination with the GDPR. Companies in the Group organized training related procedures and implement the procedures to prevent inappropriate Consumers Protection Act, Personal Information advantage. Cultivate a corporate culture which to the "Principles for Fair Treatment of Customers in sales. Protection Act, Principles for Fair Treatment of values financial consumer protec- the Financial Services Industry". A total of 7,944 First Life Insurance obtained the new version “BS 10012 - Personal Customers, and KYC operations. The training tion and conduct regular promotion participants completed the training and the training of the "Principles for Fair Treatment rate was 100%; Information Management Systems (PIMS)” certification to strengthen completion rate was 100%. of Customers in the Financial Companies in the Group organized training related personal information protection for customers. First Life Insurance carries out the renewal of the Services Industry" to the staff, and to the "Personal Information Protection Act". A total of Implement prompt processing mechanisms for customer complaints. “BS 10012 - Personal Information Management set the training rate target of 100%. 7,968 participants completed the training and the Each company shall be required to complete customer reconciliation Systems” certification.

Governance Strengthen personal information training rate was 100%. control measures and training First Life Insurance completed the renewal of the “BS and report the handling of customer complaints within the given Improve operation procedure based on customer programs. The target training 10012 - Personal Information Management Systems” deadline. Customer complaints shall also be analyzed by business complaints with the goal to reduce the number of completion rate is 100%. certification. type and customer feedback forwarded to the relevant units as customer complaints compared to the number of First Life Insurance carried out Received a total of 431 complaints in 2018, down 139 reference for further improvements. the previous year. renewal of the "BS 10012 - Personal cases compared to 2017. The number of customer complaints was lower than the target for Information Management Systems” First Bank, First Securities, First Securities Investment certification. Trust, and First Life Insurance all completed their 2018 2018. The number of customer complaints Fair Customer Treatment evaluation, and submitted to be lower than 570. results to their respective Board of Directors. First Conduct self-evaluations of the Securities Investment Trust is not required to submit "Principles for Fair Treatment of evaluation results to the FSC, but the remaining three Customers in the Financial Services subsidiaries all submitted reports to the FSC within the Industry” and report evaluation specified period. results to the Board of Directors of each company. Information Facing new Irregularly conduct vulnerability FFHC, First Bank, First Securities, First Securities Irregularly conduct vulnerability scanning, penetration tests, include Irregularly conduct vulnerability scanning, penetra- security forms of cyber scanning, penetration tests, and Investment Trust, and First Life Insurance have all important websites in the scope of anti-phishing services, commission tion tests, include all websites into the Group's improvement attacks that social engineering exercises for all conducted vulnerability scanning, penetration tests, an RSA to monitor and manage the computer operating environ- scope of anti-phishing services (RSA), conduct appear each day, the only employees, and set the goal for and social engineering exercises for all employees, ment, conduct social engineering exercises for all employees, and social engineering exercises for all employees, way to effective- failure rate of the 4 test items in the and the failure rate of the 4 test items was 0-3.8%, lower the target failure rate. and sequentially lower the target failure rate each ly protect the exercises to be lower than 6-10%. lower than the target of 6-10%. First Bank, First Securities, and First Life Insurance carried out the year. Company and First Bank, First Securities, and First First Bank, First Securities, and First Life Insurance all renewal of ISO27001:2013 certification. First Bank, First Securities, and First Life Insurance customers’ Life Insurance carried out the completed the renewal of the ISO27001 Information An IPS is deployed on the Internet, IDS systems are deployed at continue to carry out the renewal of the ISO27001 interests and renewal of the ISO27001 Informa- Security Management System certification. achieve important server network segments, and external information security Information Security Management System certification Security Management System The 2018 Audit Plan has included network system sustainable service providers are commissioned to provide 24-hour information tion each year. certification. security management, information security defenses, development is security monitoring services. through the Include network system security and emergency response mechanisms of the First Securities complete a firewall for web applications to strengthen constant management, information security Company and its subsidiaries as key audit items, and improvement of defenses, and emergency response audits were completed according to the plan. the security of online transactions. information mechanisms of the Company and security systems and manage- its subsidiaries as key audit items. ment strategies. 36 37 Cate- Material Description gory Issue of Materiality 2018 Goals Progress 2019 Goals Medium/Long-Term Goals (2020-2024)

Prevention The implemen- First Bank, First Securities, First Securities First Bank, First Securities, First Securities First Bank, First Securities, First Securities Investment Trust, and First One hundred percent of all AML personnel at of money tation of new Investment Trust, and First Life Insurance Investment Trust, and First Life Insurance Life Insurance commissioned an accountant to audit their AML/CFT First Bank, First Securities, First Securities commissioned PWC audit their AML/CFT laundering, regulations commissioned an accountant to audit their assurance projects, and gain assurance assurance projects. Investment Trust, and First Life Insurance obtain financial such as AML AML/CFT assurance projects. reports from PWC with the conclusion that it Implemented and launched the AML system for overseas branches of domestic or international certificates before the fraud and and CRS has First Bank, First Securities, First Securities “presents fairly, in all material aspects”. First Bank, and plans were made to commission a third party to carry end of 2020, and continue to expand their terrorism First Bank, First Securities, First Securities substantially Investment Trust, and First Life Insurance are Investment Trust, and First Life Insurance out comprehensive system verification. specialized knowledge. financing increase the required to incorporate the NRA into their IRA have completed comprehensive IRA reports, One hundred percent of all heads and personnel of AML units have First Bank, First Securities, First Securities company's reports, and revise related risk prevention which use the NRA to identify 8 types of obtained domestic or international certificates, and they continue to Investment Trust, and First Life Insurance crimes in Taiwan with very high risk of compliance plans. money laundering. The top three types of expand their specialized knowledge. commission an accountant to audit their costs. The The AML/CFT supervisors, dedicated person- crimes in the STRs of First Bank are fraud, AML/CFT assurance projects every year. implementation nel, and supervisors of business units of First securities fraud, and tax crime, which is of regulations Bank, First Securities, First Securities Investment consistent with the statistics compiled by the competent authority in 2018 on suspicious to prevent Trust, and First Life Insurance are required to transactions. money complete the number of AML/CFT training The AML/CFT supervisors, dedicated laundering, hours required by the law. personnel, and supervisors of business units of First Bank, First Securities, First Securities financial fraud, Planned anti-money laundering and Investment Trust, and First Life Insurance all and terrorism counter-terrorist financing training programs completed the number of AML/CFT training financing will with case studies to improve related capabili- hours required by the law.

Governance FFHC, First Bank, First Securities, First lower opera- ties and implementation effectiveness; training Securities Investment Trust, and First Life tional risk, rate reached 100%. Insurance, and First Financial Assets benefit The Wolfberg AML Questionnaire of First Bank Management offered a total of 939.55 hours of AML/CFT training for their international is disclosed in the Corporate Social Responsi- employees; the training courses had a business bility Report and on First Bank's website to cumulative total of 30,331 participants and expansion, and increase the transparency of AML information. training rate reached 100% in 2018. The Wolfberg AML Questionnaire signed by increase the Establish a high risk customer information heads of overseas business units and scale of sharing mechanism within the group. compliance units is disclosed on First Bank's operations. website, and a link to the questionnaire is provided in the Company’s 2018 CSR Report. A high risk customer information sharing mechanism has been established within the group, including reporting timing, time limit, list update operating procedures, subsequent due diligence, and risk control measures.

Climate Extreme Fill out the CDP questionnaires for climate The first financial institution in Taiwan to be The green energy fund that raises funds and manages the construc- The green energy fund that raises funds and change risks weather is a change and water security. put on the Leadership A List of the CDP. tion of solar power plants will complete the construction of solar manages the construction of solar power and risk to the FFHC shall adopt calculations and evaluations Rated as level B in the CDP questionnaire power plants with installed capacity of 19 MW by the end of 2019, plants will complete the construction of solar for Science Based Targets (SBT), the Task for water security. opportunities global Force on Climate-Related Financial Disclosures which is expected to reduce carbon emission by 1.9 metric tons of power plants with installed capacity of 27MW Total emissions allowed (6,372 metric tons economy, but it (TCFD), scenario simulations and analyses, CO2e. by the end of 2020, which is expected to CO2e, 75% reduction) and emission intensity also brings and education programs. 52,000 Leezen Co-branded Cards in circulation. reduce carbon emission by about 2.7 metric Increased investments in green bonds by allowed (11.38 kg/m2, 83% reduction) in business 32,000 Living Green Cards in circulation. tons of CO2e each year. NT$500 million to help companies make 2050 were calculated using current methods opportunities. green capital expenditures and raise their of Science Based Targets (SBT), and data 60,000 Forest Yilan Affinity Cards in circulation. The number of Leezen Co-branded Cards in Companies awareness of environmental protection. collection, risk carbon matrix, opportunity Approved NT$110 billion in loans to green industries and green circulation reaches 60,000 cards at the end of must incorpo- Approve green financing (including green carbon matrix, and estimates of related enterprises with the balance of loans at NT$60 billion. 2024. rate the risks industries and green companies) in the financial data were completed for general The balance of green consumption loans reaches NT$350 million. The number of Living Green Cards in circula- amount of NT$100 billion to companies with and opportuni- NT$55 billion in balance of loans. indicators and additional indicators of Approved new Industrial Innovation Plan Loans for the seven major tion reaches 50,000 cards at the end of 2024. ties of climate Implement the "green consumption loan" TCFD. industries in the amount of NT$60 billion with NT$410 billion in The number of Forest Yilan Affinity Cards in change into project with an annual loan credit line of Increase investment in green bonds by the balance of loans. circulation reaches 100,000 cards at the end of their business NT$300 million to provide customers with equivalent of about NT$1.925 billion. New urban renewal financing projects and financing projects for the 2024. funding for the purchase of green energy or decisions, The approved green financing included reconstruction of dangerous and old buildings total 6 projects or Cumulative amount of loans to green industries Environment energy-efficient products. NT$108.247 billion in loans with NT$57.908 identify and above. and green enterprises reaches NT$120 billion Cooperate with government policy for billion in balance of loans. manage risks, advancing seven innovative industries Approved NT$550 million in green at the end of 2020 with the balance of loans at including the "Asia Silicon Valley", "smart 全球夥伴 and seize consumption loans. NT$63 billion. opportunities to machinery", "green energy technologies", The balance of green consumption loans "biomedical technologies", "defense", "new Approved new Industrial Innovation Plan achieve agriculture" and "circular economy" by Loans in the amount of NT$62.32 billion with reaches NT$400 million in 2020. successful approving NT$60 billion in preferential loans NT$446.2 billion in balance of loans. The balance of seven major Industrial transformation for key innovative industries with NT$395 As of the end of December 2018, the Innovation Plan Loans reaches NT$430 billion for a sustain- billion in the balance of loans. number of Leezen Cards in circulation was at the end of 2024. 42,800 Leezen Co-branded Cards in circula- 49,581 and Living Green Cards was 29,843. able economy. tion. 20,000 Living Green Cards in circulation. Urban renewal financing projects and New urban renewal financing projects and Six new urban renewal financing projects financing projects for the reconstruction of financing projects for the reconstruction of and two financing projects for the dangerous and old buildings between 2020 reconstruction of dangerous and old dangerous and old buildings total 6 projects and 2024 total 30 projects or above. or above. buildings. 38 39 Cate- Material Description gory Issue of Materiality 2018 Goals Progress 2019 Goals Medium/Long-Term Goals (2020-2024)

Responsible As funding The investigation and review of 100% In 2018, we reviewed 37,565 projects (35,075 Implement the Green Financing Review Principles in the investiga- The Green Financing Review Principles are applied investment, suppliers, corporate loans should adopt the domestic projects and 2,490 overseas projects) tion and review of corporate loans and corporate bonds, focus on in the investigation and review of corporate loans due financial “Green Financing Review Principles” to according to the Green Financing Review customers’ protection of the environment and society in the and corporate bonds to assess the impact of assess and reduce the impact of the Principles; these projects accounted for 100% of diligence, institutions assessment, and guide customers to comprehensively fulfill their corporate customers on environment and social should borrower, loan, and investee on all financing projects. 3,729 projects were and supplier environmental and social sustainability. conditionally approved due to borrowers being CSR; overseas branches completed 3,150 CSR Assessment Forms. sustainability. Overseas branches complete a management integrate its Domestic business units must collect the involved in environmental pollution, threatened At least 35% of the stocks in domestic exchange-traded stock pools cumulative total of 6,400 CSR Assessment Forms by core competen- CSR Declaration of all corporate credit social welfare, violated human rights, or other of First Securities Investment Trust shall have submitted CSR reports. the end of 2024. cies and fulfill customers and guide customers to fully risk issues, and 199 loan applications were First Bank, First Securities, First Securities Investment Trust, and First At least 50% of the stocks in domestic the social implement CSR. rejected. Life Insurance attend 80% of shareholders’ meetings of public exchange-traded stock pools of First Securities responsibility of The "Do-Not-Invest List for CSR Violations” In 2018, domestic business units requested a companies they invested in, so as to urge the companies they invest Investment Trust shall have submitted CSR reports. the financial is reviewed and revised every two CSR Declaration from 16,659 corporate credit in to strengthen corporate governance and fulfill the responsibility of First Bank, First Securities, First Securities Investment industry in the weeks, and is provided through the customers and overseas branches filled out a institutional investors towards corporate governance. Trust, and First Life Insurance attend 90% of 2020 financial supply group's securities investment platform for total of 2,913 CSR Assessment Forms; coverage chain in order reference by FFHC, First Bank, First reached 99.68%. 100% of suppliers sign the "Declaration on Human Rights and shareholders’ meetings of public companies they Securities, First Securities Investment The "Do-Not-Invest List for CSR Violations” is to achieve Environmental Sustainability Clauses,” overseas locations fill out the are invested in, so as to urge the companies they Trust, First Life Insurance and First reviewed and revised every two weeks. As of “Human Rights and Environmental Sustainability Evaluation,” and invest in to strengthen corporate governance and sustainable Investment Consulting. the end of 2018, there were 16 stocks that are 100% of lessees have committed to using 45% of green construction fulfill the responsibility of institutional investors development of At least 32% of the included stocks in the prohibited from investment. First Securities the environ- domestic exchange-traded stock pools Investment Trust excluded investments in 3 materials during renovation. towards corporate governance. ment, economy, managed by First Securities Investment stocks due to this list. Periodically audit suppliers to determine if they violate environmen- 100% of suppliers sign the "Declaration on Human and society. Trust must submit CSR reports. 55.80% of domestic stocks that the 6 domestic tal protection or labor laws, or if an occupational accident occurred. Rights and Environmental Sustainability Clauses,” Establish the supplier management exchange-traded stock funds of First Securities If yes, the supplier is requested to provide an improvement plan, overseas locations fill out the “Human Rights and policy, 100% of suppliers sign the Investment Trust invested in submitted CSR otherwise their contract is terminated and the supplier is added to Environmental Sustainability Evaluation,” and 100% "Declaration on Human Rights and reports. the monitoring list. of lessees have committed to using at least 45% of Environmental Sustainability Clauses,” Established the Supplier Management Guide- overseas locations fill out the “Human lines as the policy and guiding principles for green construction materials during renovation. Rights and Environmental Sustainability companies in the group to manage suppliers; Complete the comprehensive review of the supplier Evaluation,” and 100% of lessees have 100% of suppliers (1,443 companies) signed the database by 2024, and check if suppliers were committed to using 45% of green Declaration on Human Rights and Environmen- involved in environmental pollution, violated labor construction materials during renovation. tal Sustainability Clauses. Overseas locations laws and regulations, or harmed social welfare, in Periodically audit suppliers to determine completed "Human Rights and Environmental which case an explanation is required, or the if they violate environmental protection Sustainability Evaluations" for 522 vendors. 100% or labor laws, or if an occupational of lessees (121) made a commitment to use 45% company is excluded as a potential partner. accident occurred. If yes, the supplier is of green construction materials during renova- requested to provide an improvement tions. plan, otherwise their contract is Visited 5 suppliers in 2018. None of the terminated and the supplier is added to suppliers had any occupational accidents or the monitoring list. violated environmental protection or labor laws. Environment

Low-carbon To keep the The group’s Scope 1 (gasoline, diesel, The group’s Scope 1 (gasoline, diesel, natural Reduce the Group's Scope 1 emission by 1% and Scope 2 emission Reduce the Group's Scope 1 emission by 5% and operations increase in natural gas, gas) and Scope 2 (electrici- gas, gas) and Scope 2 (electricity) emissions by 0.5% compared to 2018. Scope 2 emission by 3% in 2024 compared to and circular average ty) emissions decreased 227 metric tons decreased 405 metric tons compared to 2017. The group’s total water consumption is lower than 202.50 million 2017. temperature to The group’s total water consumption was 194.46 economy compared to 2017. liters. The group’s total water consumption is lower than below 2 The group’s total water consumption is million liters. ℃ The Group refurbished 5 existing commercial Use 50,000 kWh of renewed energy. 202.50 million liters. above lower than 197.44 million liters. pre-industrial buildings and obtained the "Diamond-class" Refurbish a total 26 of the company's existing commercial buildings Use 80,000 kWh of renewable energy in 2024. Obtain Green Building Mark for 5 of the Green Building Mark. The Group has levels, all company's existing commercial and obtain Diamond-class Green Building Mark. Refurbish a cumulative total of 37 of the company's companies refurbished 22 existing buildings and obtained buildings. "Diamond-class" Green Building Mark since Install solar power generation systems on the rooftop of 10 business existing commercial buildings and obtain the have the Install solar power generation systems 2012. locations. Diamond-class Green Building Mark in 2024. obligation to on the rooftops of 2 buildings owned by The Group has installed rooftop solar power Added the item “ISO 14064-1 Other Indirect Emission Inventory”. Install solar power generation systems on the reduce the generation systems on the rooftop of 4 buildings emissions of the Group to use clean energy. 100% of subsidiaries implemented "ISO14001 Environmental rooftop of 20 business locations by 2024. 100% of business locations obtain the owned by the Group and at 8 business greenhouse locations as of the end of 2018. Management System”. 100% of domestic business locations implement the gases and ISO 14064-1 Greenhouse Gas Inventory 100% of business locations implemented the ISO Total carbon emissions from business travels (point to point "ISO 50001 Energy Management System" and "ISO System certification. reduce energy 14064-1 Greenhouse Gas Inventory System and between overseas airports) lower than 500 metric tons CO2e (Note). 14001 Environmental Management System” and Subsidiaries obtain the ISO 14064-1 consumption. obtained certification. obtain certifications. Other Indirect Emissions Inventory First Bank, First Securities, First Securities (Indirect GHG Emissions During Investment Trust, First Life Insurance and First Note: We plan to establish at least 7 new overseas business Further increase items of “ISO 14064-1 Other Transportation - Business Travels) Financial AMC all implemented "ISO14064-1 locations between 2019 and 2024, and therefore set a higher target Indirect Emission Inventory” in 2024. certification. Other Indirect Emissions Inventory (Indirect GHG for total carbon emission from business travels compared to 2018. Total carbon emissions from business travels (point Total carbon emissions from business Emissions During Transportation - Business to point between overseas airports) lower than 550 Travels)" and obtained certification. travels (point to point between overseas metric tons CO2e in 2024 (Note). Total carbon emissions from business travels airports) lower than 420 metric tons (point to point between overseas airports) was Note: We plan to establish at least 7 new overseas CO2e. 418 metric tons CO2e. business locations between 2019 and 2024, and Adopt the "ISO 50001 - Energy Manage- All 188 domestic branches of First Bank therefore set a higher target for total carbon ment System certification" for all First implemented the "ISO 50001 - Energy Manage- emission from business travels compared to 2019. Bank's domestic branches. ment System” and obtained certification. Added the item “ISO 14064-1 Other Added the item “ISO 14064-1 Other Indirect Indirect Emission Inventory”. Emission Inventory (Operational Waste Disposal)” and found that emission was 109 metric tons CO2e. 40 41 Cate- Material Description gory Issue of Materiality 2018 Goals Progress 2019 Goals Medium/Long-Term Goals (2020-2024)

Ecological Technological Implement the "Green Volunteer Sustain- Completed a total of 48 Green Volunteer A total of 40 green volunteer events will be held in 2019. Organize a cumulative total of 175 green volunteer and advancements ability Program", organize 35 green events in 2018. The events had 1,601 Implement controls for domestic waste produced by company events by 2024. volunteer activities, and promote environ- environmental improve the volunteers, benefited 4,635 people, and headquarters. Set a cap of 64.2 tons on the amount of the entire Donate a total of 1,300 recycled personal mental sustainability and ecological purchased 2,220 kg of organic vegetables. sustainability quality of life group. computers and laptop computers by 2024. conservation. The amount of domestic waste produced by but cause Implement controls for domestic waste group company headquarters was 59.9 Promote and compile statistics on the volume of recycled resources. Obtain environmental education site certification. severe produced by company headquarters. Set a The total amount of recycled resources of all company headquar- Include international case studies on the allevia- cap of 64.2 tons on the amount of the metric tons. environmental entire group. The total amount of recycled resources of ters shall exceed 23.18 metric tons. tion, response, and early warning measures for and ecological Promote waste sorting and compile all company headquarters was 42.33 metric A total of 1,100 donated recycled personal computers and laptop climate change into environmental education issues. We can statistics on the volume of recycled tons. computers was achieved. courses, organize environmental education and Donate 141 recycled personal computers only protect the resources. The total amount of recycled Achieve the design and trial implementation of 3 environmental promotion activities for different age groups, and resources of all company headquarters and laptop computers. environment we shall exceed 23.2 metric tons. Completed three sets of environmental education plans and host at least 3 environmental education and achieve the design of 5 environmental education live in by Donate 133 recycled personal computers education teaching plans for adults, 5-6 promotion activities. plans and cultivate employees into experienced uniting the and laptop computers. graders, and parent-children, and Arranged environmental education courses and on average provide environmental education lecturers. powers of all The four employees that were certified as organized 7 promotion events. employees with 2 hours of courses each year. Support eco-friendly cultivation by small farmers environmental educators designed people to fight In 2018, 35 sessions of environmental Assist 1 social welfare institution in replacing lighting equipment and purchase a cumulative total of 12,000 kg of environmental education courses and protection-related training were held and together for a lesson plans in preparation for the with more efficient LED lights to create a sustainable homeland with organic produce by 2024. attended by 9,061 people. Each person on sustainable application for an environmental education low-carbon emissions. Assist 5 social welfare institution in replacing facility. average received 2 hours or more of environment. Arranged environmental education training training. lighting equipment with more efficient LED lights by courses and on average provide employ- Assisted Daan Center for Individuals with 2024 to create a sustainable homeland with ees with 2 hours of training each year. Developmental Disabilities in replacing 265 low-carbon emissions. Assist groups for the underprivileged and LED lights, reducing carbon emission by social welfare institutions in replacing lights 16.62 metric tons of CO2e. to LED lights.

Digital The mobile Encourage customers to use electronic Achieved a utilization rate of 78.07% for The target utilization rate of electronic channels is 80%. Increase utilization rate of electronic channels to finance payment amount channels and achieve a utilization rate of electronic channels. Obtained a total of 45 FinTech patents. 87% before 2024. was NT$14.8 Environment innovation billion in 2017 78% for electronic channels. A total of 49 FinTech patents have been The target number of online loan applications and mortgage Obtained a total of 65 FinTech patents by 2020. and and grew to Actively apply for invention and new utility acquired as of the end of 2018 to expedite applications using e-speed loan is 5,500. The target number of online loan applications and inclusiveness NT$47.8 billion model patents for finance technologies the development of digital finance Set a target for binding mobile payment to 135,000 First Bank credit mortgage applications is 6,000 loans each year by in 2018. The use and acquire 36 patents for finance of digital technologies. cards. 2020. channels for technologies. A total of 6,295 online applications were Application of Big Data analysis technology to establish cluster Application of Big Data analysis technology to financial Continue to optimize system functions, made using e-speed loan in 2018. model and forecast model ,complete 60 precision marketing establish cluster model and forecast services has e-speed loan provides customers with 132,646 credit cards have been bound to projects for target customer groups. model ,complete 90 precision marketing projects become the convenient online loan application mobile payment. Set a target for reaching 120,000 users in "smart customer services". for target customer groups. mainstream, and services, and the goal is for 5,000 online the complete- Complete 17 precision marketing projects applications in a year. ness of the for target customer groups; complete 31 digital financial Set a target for binding mobile payment to system makes 45,000 First Bank credit cards. interactive digital marketing projects. financial Application of Big Data analysis technolo- Users have used the "smart customer services services" 122,986 times. available in gy to establish cluster model and forecast remote areas model ,complete 10 precision marketing and reduce the projects for target customer groups; digital divide. This is an complete 10 interactive digital marketing industrial trend projects. and also the Set a target for reaching 80,000 users in financial "smart customer services". industry's social responsibility.

Human Labor rights 100% of employees receive human rights Employees received human rights protection Plan human rights protection related training courses to promote Organize human rights protection and gender rights and gender protection training. training (both physical and online) 18,730 the Act of Gender Equality in Employment, sexual harassment equality policy related training courses with the person-times for a total of 20,938 hours; protection equality are The goal for salary ratio between male prevention, and labor human rights protection; employee participa- target for 100% of employees to receive training. and female employees is 100%:100%. employee participation in training was 100%. and gender employees' The salary ratio of male to female employees tion in training was 100%. The goal for salary ratio between male and female equality legal rights and 100% of security guards complete the was 100%:96% in 2017, and reached The goal for salary ratio between male and female employees is employees is 100%:100%. Company’s human rights protection the Company's 100%:100% in 2018, reducing the salary gap. 100%:100%. Increase the number of employees who are responsibilities training courses. Security guards completed 12 human rights covered by the collective bargaining agreement More than 83% of employees are a policy training sessions in 2018. Each session Ensure open communications between the employer and employees toward was 0.5 hours on average, and training and periodically convene employer-employee meeting. through their union membership. employees and member of the union. Ensure open communications between the Ensure open communications between the completion reached 100%. Implement the Prevention of Illegal Infringement at Work Plan to society. They Around 84.33% of First Bank employees are employer and employees and periodically

Society employer and employees and periodically ensure the safety and physical and mental health of employees. are the basis covered by the collective bargaining convene employer-employee meeting. convene employer-employee meeting. for sustainable agreement through their union membership, Implement the Prevention of Illegal Infringement at up from the 83% in 2017. social develop- First Bank, First Securities, First Securities Work Plan and sequentially lower the percentage ment. Investment Trust, and First Life Insurance of employees at risk each year. convened 12, 4, 4, and 5 employer-employee meetings, respectively to improve labor relations and promote employer-employee cooperation. 42 43 Cate- Material Description gory Issue of Materiality 2018 Goals Progress 2019 Goals Medium/Long-Term Goals (2020-2024)

Professional Talent is the key to Companies in the Group conduct The overall professionalism score for group Continue to conduct the Employee Commitment Survey with the Continue to conduct the Employee Commitment development winning in the Employee Commitment Survey employees was 82.39%, with male employees goal for a recovery ratio of 91% and overall commitment exceeding Survey with the goal for a recovery ratio of 92% and corporate competi- each year, and the overall achieving a score of 84.76% and female 80%. and overall commitment exceeding 81%. tions. Strengthening management commitment target is 75% or above. employees 80.64%; the questionnaire recovery Enhance employee professionalism and provide employees with Employees on average received 55 hours of training systems to reform Strengthen employee education ratio was 95.14%. an average of 50 hours of training. training or more. cultivate interdisci- and training with a goal of 40 Each employee received an average of 57.89 Organize annual overseas talent selection and training projects One hundred percent of all AML officers obtain plinary talent training hours or more per through innovation employee. hours of training in 2018. and train at least 20 overseas management associates. domestic or international certificates by 2024 and reforms will Organize annual overseas talent Cultivated 26 overseas management associates enhance the selection and training projects and in coordination with global business expansion. competencies of all Establish indicators for Level 1-5 in the training employees and train at least 20 overseas manage- guide the transfor- ment associates. program to assess training effectiveness. mation, growth, and The training assessment project is sustainable established based on the Kirkpat- development of rick Model to determine the companies. effectiveness of training.

Talent Employees are the First Bank on average raises Besides raising salaries by 2.3% through First Bank on average raises salaries by 2% or more through First Bank on average raises salaries by 2% or recruitment core of the financial salaries by 2% or more through promotions, all employees received a raise promotions. more through promotions each year, and annual and service industry. promotions. (about 3%) in 2018. The total salary adjustment in Retention rate of new employees at First Bank reaches 70% and salaries are not lower than P60. retention Establishing Actively retain outstanding talent the past 2 years was 8%, out-performing the above. Retention rate of new employees at First Bank complete welfare and achieve a retention rate of new average market salary adjustment of 6.0% The percentage of employees with disabilities reaches 1% and reaches 70% and above. employees at First Bank of 70% or measures, The retention rate of new employees at First above. The percentage of employees with disabilities above. Bank reached 91.47%. competitive salary The percentage of employees with Continue to be selected as a constituent stock of Taiwan Employ- reaches 1% and above. system, and fair Hired 99 employees with disabilities, accounting ment Creation Index 99 and Taiwan High Compensation 100 Index. Continue to be selected as a constituent stock of disabilities reaches 1% and above. for 1.07% of our workforce, exceeding the and transparent First Bank established an Employee Taiwan Employment Creation Index 99 and Taiwan standard set by the competent authority. promotion channels Savings and Stock Ownership Trust High Compensation 100 Index. First Bank established an Employee Savings and will attract to attract and retain talent through Stock Ownership Trust, and 7,015 employees outstanding talent future benefits. Provide a competitive salary system participated in the trust with employee participa- and reduce talent tion rate reaching 95%. loss. and continue to be selected as a constituent stock of Taiwan FFHC was selected as a constituent stock of Employment Creation Index 99 and Taiwan Employment Creation Index 99 for 9

Society Taiwan High Compensation 100 consecutive years and Taiwan High Compensa- Index. tion 100 Index for 5 consecutive years.

Occupational Creating a safe Implement the "ISO 45001 Safety The head office obtained the "ISO 45001 Safety The target absence rate is lower than 1.25% and target occupation- First Bank will arrange doctors to provide on-site Safety and work environment, and Health Management System" and Health Management System" certification, al injury rate is lower than 1% under our efforts to reduce absence health service at units with 50 or more employees Health strengthening and obtain certification. which covers a total of 1,432 regular employees, due to occupational injury and illness. once a year starting in 2022, and nursing person- employee health Continue to implement the temporary employees, maintenance workers, Continue to implement the "Human-Factor Hazard Prevention Plan” nel will provide on-site health service once a security guards, and janitors. management "Human-Factor Hazard Prevention to increase the number of employees that make improvement and month. According to survey statistics of the Human-Fac- measures, and Plan” to increase the number of tor Hazard Prevention Plan, 66 employees were "Abnormal Workload-Triggered Diseases Prevention Plan" to lower Continue to carry out tasks for "ISO 45001 Safety organizing health employees that make improvement suspected of having human-factor hazards. the number of high, medium, and low risk employees, strengthen- and Health Management System" certification. promotion activities and "Abnormal Workload-Triggered Medical personnel looked into the cause and ing the management of employees' health. Continue to implement the "Human-Factor Hazard will improve Diseases Prevention Plan" to lower provided suitable improvement recommenda- Continue to implement the "Maternal Employee Health Protection Prevention Plan” to increase the number of employee health the number of high, medium, and tions, and 64 employees made improvements, Plan" and "Female Night Shift Rotation Worker Safety Plan". employees that make improvement and "Abnormal and enhance low risk employees, strengthening up 7 employees compared with 2017. The Continue to implement the ISO 45001 Safety and Health Manage- Workload-Triggered Diseases Prevention Plan" to corporate competi- the management of employees' Abnormal Workload-Triggered Diseases ment System to improve occupational safety and health manage- lower the number of high, medium, and low risk Prevention Plan was implemented and identified ment. employees, strengthening the management of tiveness. health. 8 high risk employees and 163 medium and low Continue to implement the risk employees, which were all lower compared employees' health. "Maternal Employee Health to 2017 (10 high risk employees and 213 Continue to implement the "Maternal Employee Protection Plan" and "Female Night medium and low risk employees. Health Protection Plan" and "Female Night Shift Shift Rotation Worker Safety Plan". Of the 145 pregnant employees, 100 participat- Rotation Worker Safety Plan". Expand "low-dose lung CT scan" ed in the Maternal Employee Health Protection examinations to employees below Plan and filled out the Health Risk Assessment 55 years of age. Form for Pregnant Employees; 11 employees returned to their posts after giving birth and Occupational injury rate lower than filled out the Health Risk Assessment Form for 1%. Postpartum Employees. Medical personnel conducted assessments and verified risks and hazards. A total of 3,717 employees were examined in 2017-2018, and 12 employees were diagnosed with lung cancer. Occupational injury rate was 0.9% in 2018. 44 45 Cate- Material Description gory Issue of Materiality 2018 Goals Progress 2019 Goals Medium/Long-Term Goals (2020-2024)

Implementation The integration Provided 100 "Loans for Young Provided 153 "Loans for Young Entrepreneurs and Provided 100 "Loans for Young Entrepreneurs and Start-ups,” “Micro Balance of "Loans for Young Entrepreneurs of inclusive of core Entrepreneurs and Start-ups” and Start-ups” and Loans for Minor Entrepreneurs, and Loans for Female Entrepreneurs” and “Loans for Minor Entrepreneurs,” and Start-ups,” “Micro Loans for Female finance competencies Loans for Minor Entrepreneurs, the Small and Medium Enterprise Credit Guarantee and the Small and Medium Enterprise Credit Guarantee Fund provided Entrepreneurs” and “Loans for Minor and the Small and Medium of the financial Fund provided NT$145.6 billion in loans; ranked NT$110 billion in loans with the balance of loans at NT$75 billion. Entrepreneurs” estimated at NT$500 million; Enterprise Credit Guarantee Fund number one in SME loans for 9 consecutive years. industry provided NT$110 billion in loans. Provide 30 loans guaranteed by the Overseas Credit Guarantee Fund an estimated NT$115 billion in loans with the provides poor Added 20 new financing projects Added 21 new loan projects for medical biotechnol- (Taiwan) and cumulative loan amount reached US$7,000,000. balance of loans at NT$75.5 billion provided and disadvan- for industries related to aging ogy and long-term care industries with a total Added 20 new loan projects for medical biotechnology and long-term by the Small and Medium Enterprise Credit taged groups society and the growing number amount of NT$2.29 billion. care industries. Guarantee Fund. with equal of cancer patients, such as The balance of retirement trusts for the elderly and Provided 22 new “Comfort Loans” (reverse mortgage). Approve at least 120 loans guaranteed by medical biotechnology or disabled people care trusts was NT$4.451 billion, rights to The balance of senior citizens’ retirement trust and disabled people's the Overseas Credit Guarantee Fund long-term care industries. and received second place in the Asset Trust financial care trust reaches NT$5 billion. (Taiwan) with cumulative loan amount The balance of senior citizens’ Evaluation of Trust Businesses for the Senior and the services. It is Provided 150 micro insurance policies for the economically disadvan- reaching US$35,600,000. retirement trust and disabled Disabled. the finance people's care trust reached NT$2 Approved 26 “Comfort Loans” or reverse mortgage taged to gain basic coverage at relatively low premiums. Implement at least 100 loan projects for billion. industry's social loans with a total amount of NT$186 million. Install 10 accessible ATMs each year to provide friendlier services. medical biotechnology and long-term care responsibility to Promoted the reverse mortgage New urban renewal financing projects and financing projects for the industries. Comfort Loan and added 20 new Offered 3 insurance products related to the trends of create a reconstruction of dangerous and old buildings total 6 projects or above. Provide 25 new “Comfort Loans” (reverse loan accounts. aging society and low birth rates, sold 555 effective friendly Offered 3 insurance products policies with an insurance amount of NT$518.6 mortgage) in 2020. environment for related to the trends of aging million. Provide 900 micro-insurance policies. financial society and low birth rates. Installed 18 accessible ATMs and established Install 10 new accessible ATMs each year to consumers. Installed 10 accessible ATMs and accessible website ATM services. Obtained provide friendlier services. added accessible website ATM Conformance Level AA of the Web Content Urban renewal financing projects and services to provide friendly Accessibility Guidelines 2.0 and provide persons with financing projects for the reconstruction of financial services. New urban renewal financing disabilities with basic, equal, reasonable, and dangerous and old buildings between 2020 projects and financing projects for convenient financial services. and 2024 are expected to total 30 projects or the reconstruction of dangerous Added six new urban renewal financing projects and above. and old buildings total 6 projects two financing projects for the reconstruction of or above. dangerous and old buildings in 2018.

Charitable Work with Implement the "First Turnaround Continued to implement the Disadvantaged Students We implemented the Disadvantaged Students Adoption Plan to extend Organize a cumulative total of 375 loving activities and customers in Action School" and "First Cultural Adoption Plan provide 452 underprivileged students the reach of our charitable efforts into schools so that students can volunteer events by 2024, work together with performance cross-sector Education Train”, care for the at Ankeng, Zhongzheng, and Erchong Elementary concentrate on their studies. We also use employees' finance expertise customers and non-profit organizations in

Society evaluation alliances. underprivileged, and organize 50 School with education assistance courses. Sponsored to venture onto campuses or social welfare institutions and organize integrating the group's resources, expand our the “Financial Service Industry Education Foundation” Integrate social loving volunteers activities. NT$2.5 million and helped 1,600 students from poor finance seminars for children, promoting finance and wealth manage- influence in social welfare, provide underprivi- resources, Organize concerts and provide art and disadvantaged backgrounds complete their ment knowledge. We aim to organize 70 loving volunteer events in leged children with remedial teaching, and integrate core space free of charge to support studies. First Bank Cultural and Educational Founda- 2019. help underprivileged children focus on their competencies, domestic art heritage. Organize 3 tion donated the 1‰ reward from domestic We aim to organize 20 green life carnivals, music festivals, and art studies; make donations to a total of 1,400 and jointly large concerts, 6 NTU Hospital consumption amount using First Bank Glory+World exhibitions in 2019. students. resolve social concerts, and 12 art exhibitions in Cards totaling NT$302,657 to the "School Education We aim to organize 4 major sports competitions and table tennis Continue to organize domestic arts and or economic one year. Savings Account" platform of the Ministry of camps in 2019. cultural events and a cumulative total of 40 Education, which in turn helped 237 disadvantaged issues to Continue to organize training students. A total of 66 Loving Volunteer events were concerts to provide new singers and improve the programs for table tennis teams. held in 2018, attracting 1,287 volunteers and musicians with a stage for performance, and Company's Cultivate youth athletes and benefiting 10,811 people. organize a cumulative total of 55 arts and image, gain promote their participation in Thirty-seven large concerts have been held since cultural exhibitions to support domestic art business international competitions to gain 2006. Besides inviting new singers and musicians to talents. revenue, and experience. Organize table tennis perform, organizations for the underprivileged and Support the development of domestic sports, improve the and tennis championships. social welfare were also invited, attracting over organize a cumulative total of 20 sports 103,400 people to attend the events. The first and events, sponsor table tennis teams of 8 Company's second floors of the FFHC headquarters building was business transformed into an art space in 2011. The space schools, and cultivate 5 athletes with performance. allows local artists to exhibit their art for free each excellent potential by 2024. month. A total of 93 art and cultural exhibitions have been held and attracted over 93,000 visitors. Besides training First Bank table tennis team, we sponsored the table tennis teams of 8 colleges, junior high schools, and elementary schools in 2018. Four table tennis players were selected into the national team. First Bank table tennis team won a total of 3 gold, 5 silver, and 9 bronze medals and won NT$2.336 million in prize money in Taiwan and overseas. We have organized nationwide table tennis championships for 10 consecutive years and worked for 9 consecutive years together with Maxxis Group, a business customer, to hold the "First Holding Maxxis Cup National Tennis Team Tourna- ment". 46 47 Business performance and profitability Material Topic GRI 201: Economic performance Management guidelines Policies Complaints mechanism The theme of the group's business strategies is • Hold domestic investor conferences and "deeper synergistic effects, shared value". announce the video file on the Company website for investors to view. Also, communi- Commitment cate with investors at the invitation of securities brokers during their investor conferences. As the growth in global economy rises in the • Telephone and e-mail of the spokesperson horizon, the Group actively grasps opportunities and investor relations department available for expansion in overseas markets and uncovers from the company website's investor services new momentum for growth in terms of business section. units' customer group penetration, cross-border • Hosting of press conferences and issuing of integration, and innovative services. press releases. • Publication of corporate governance, investor Goals conference presentations, financial information, • With regard to the strategy of "deeper and related investors affairs in both English synergistic effects," big data and artificial and Chinese on the company website. SUSTAINABLE intelligence applications are combined for precision marketing, focusing on the core Specific management practices businesses of business entities and product • Implementation of measures related to market penetration, digital applications and innova- penetration, which will further increase the tion, innovative products, and fulfilling corpo- integration value of various channels and rate social responsibilities. facilitate profit sharing. • Implementation of local management ideals • As we build a new engine for the profitability and leverage differences in local markets of of the Group, we integrate core businesses overseas branches to promote unique with CSR for creating value for society, creating businesses for each branch. GOVERNANCE a win-win-win economical, environment, and societal situation. These actions achieve the Assessment mechanisms Group's goal of creating shared value." • Achievement rate and growth of annual earnings budgets and joint marketing target Duties achievement rate and growth rate. We continue to expand the business sectors and • Number of FinTech patents obtained. focus on the development of core businesses, • Implementation of innovative financial products concentrate on the integration of products and and services channels, integrate artificial intelligence for optimized operation efficiency, and include Results performance indicators of all businesses into • In 2018, the Company's consolidated assets evaluations to achieve growth in both the amounted to NT$2.94 trillion with consolidated Group's scale of assets and profitability. net income of NT$60.249 billion, and net earnings after tax of NT$17.332 billion, Resources growing by 18.5% and 12.3% from 2017. The subsidiary First Bank is the Group's main • In 2018, obtained a total of 11 FinTech business entity. Group members include securi- invention patents and 38 utility model patents ties, SITC, life insurance, financial asset manage- with goal attainment reaching 136%. ment, venture capital and consulting, and • The investment trust subsidiary raised the "AI leasing. The financial businesses other than Global Precision Medicine Fund"; the consult- banking satisfy customers' comprehensive ing subsidiary raised the green energy fund, product requirements in their life cycle. and the bank subsidiary issued the "First Bank Forest Yilan Affinity Card" to provide customers with more diverse financial services. • Profits from First Bank overseas branches (including OBU and subsidiaries in the United States) accounted for 45.32% in 2018. 48 49 I Business performance and profitability 1-1 Operating regions and countries The subsidiary First Bank is the Group's main business entity. Group members include securities, SITC, life insurance, FFHC Headquarters is located at No. 30, Sec. 1, Chongqing S. Rd., Taipei City. financial asset management, venture capital and consulting, and leasing. The Group's performance in 2018 was The group has a total of 9,227 employees. Our operations are located across four continents: the Americas, Asia, spectacular in all business sectors and we continue to expand overseas businesses toward our goal of becoming a Europe, and the Oceania. The subsidiary First Bank established 15 operations in Southeast Asia (including the Least "regional financial institution in Asia". We dedicated efforts on developing FinTech, new payment methods, artificial Developed Countries such as Myanmar, Cambodia, and Laos) and it was the first Taiwanese bank to begin operations intelligence, big data research, and other core businesses and used smart services, channel transformation, cross-sec- in Cambodia. In 2019, we plan to add two branches in Houston and the subsidiary in the United States, add the tor collaboration, and digital platforms to develop diverse smart services, improve channel value, innovate FinTech Frankfurt Branch, add the Jakarta Office and two additional branches under the Phnom Penh Branch in Cambodia. We applications, and strengthen infrastructure and the digital operations platform ton continue our transformation of shall respond to economic trends in all regions across the world and disperse overseas operation risks to build a business models. We consolidated our leasing operations in Mainland China in an effort to enhance the operational close-knit global financial service network. and management efficiency of our leasing business and in response to the latest supervisory trends. By integrating resources within the group, we are able to strengthen the risk tolerance and consistency of management goals for our Our Group's overseas presence leasing businesses in Mainland China. Americas Bank: Los Angeles branch, New York branch, Vancouver branch, and Toronto Branch; First Commercial We delivered another year of strong performance with growth across all our businesses, underpinned by the strength Bank (U.S.A.) branch and its 7 sub-branches including the Alhambra Branch, City of Industry Branch, Silicon of our banking operations. The net income from financial products grew by 46.37%, which contributed to the most Valley Branch, Irvine Branch, Arcadia Branch, Fremont Branch and Chino Hills Branch(opened in April spectacular growth in profitability. Profits from First Bank overseas branches (including OBU and subsidiary branches in 2019). 11 the United States) accounted for 45.32% of profits of the Bank and the Bank's SME lending market share ranked first among all banks for 9 years in a row. We ended 2018 with NT$2.94 trillion in total assets. Our consolidated net revenue Asia Bank: Hong Kong Branch, Macao Branch, Shanghai Branch, Shanghai Pilot FTZ Sub-branch, Chengdu increased 18.54% to NT$60.249 billion from the previous year. Our net profits surpassed the NT$15 billion mark for the fourth straight year, reaching NT$17.332 billion, or NT$1.40 per share. China/ Branch, Xiamen Branch 6 Hong Securities: First Worldsec (Hong Kong) 1 As we pursue excellence in all areas of our operations, we are also committed to sustainable development by position- Kong/ Leasing: FCB Lease (Chengdu), FCB International Leasing (Suzhou), FCB Lease (Xiamen) 3 Macao ing ourselves as the “top brand of green finance”. In addition to continuing to promote innovative green finance products and services to provide the funding necessary for green industries to develop and transform and thus support Bank: Singapore Branch, Ho Chi Minh City Branch, Hanoi City Branch, Bangkok Office, Yangon Office, the transition to a low-carbon economy, we have also launched a smart customer service to meet the digital financial Southeast Phnom Penh Branch and its Chorm Chaov Sub-branch, Olympic Sub-branch, Chamkar Mon Sub-branch, Tuol needs of the younger generation. Our efforts to be a responsible corporate citizen have received international recogni- Asia Kouk Sub-Branch, Mean Chey Sub-Branch, Chraoy Chongvar Sub-Branch, Siem Reap Sub-Branch and tion, and our inclusion for many years straight in the DJSI Emerging Markets Index is the best testimony to our achieve- Vientiane Branch (Laos), Manila Branch (Philippines) 15 ments. The British CDP honored us with the pioneered A-grade financial institution for climate change survey in January Northeast 2019, which marked our group as the first ever winner of service sector in Taiwan. Asia Bank: Tokyo Branch 1

Europe Bank: London Branch 1

Oceania Bank: Guam Branch, Brisbane Branch 2

Ethical corporate Market Penetration Digital Transformation New Products management • The Bank continues to • The Bank received the • FSITC raised the "AI • Included as a expand overseas Best Cloud Applica- Global Precision constituent stock in businesses and tion in Taiwan Award Medicine Fund" Dow Jones Sustain- received the FSC's from the Asian Banker • First Consulting raised ability Index (DJSI) authorization for •First Bank's FinTech green energy funds Emerging Markets for setting up branches patents • First Bank issued the the first time and offices in the •Electronic marketing "Forest Yilan Affinity • Included as constitu- United States, Europe, for securities/invest- Card" ent stock in the and Southeast Asia. ment trust/life "FTSE4Good Emerging • Transnational insurance channels Index" on the London platform boosts Stock Exchange synergies from • The only financial domestic and institution in Taiwan to overseas sites attain Leadership A List recognition

Bank x 36 Securities x 1 Leasing x 3 ＝ Total40 sites 50 51 First Bank is the second largest bank in Taiwan by branch count and has 188 business locations and 479 automatic teller machines (ATM) throughout Taiwan.Our operations cover both urban and rural regions. We have established offices and ATM in remote regions such as Nantou, Pingtung, Hualien, Taitung and Penghu that can provide the full Asset management1.08% spectrum of financial services to rural residents at any time. Project financing0.685% Wealth management2.67% For more information on First Bank's domestic and overseas branches, please refer to the Bank's website

First Securities has 23 subsidiaries and 130 securities counters throughout Taiwan. In remote regions such as Penghu, Net revenue by Nantou and Pingtung, we have a total of 6 offices for providing "personalized" investment services to the general public. business category We also provide online, audio, and other diverse securities transaction systems to provide investors with more abundant and diversified transaction environment and services.

First Financial Holding takes reference from the impact on society, human rights and environment according to the risk Wholesale/ graph before setting up operational bases, developing new business types, procuring, planning operational strategies, Retail 47.24% corporate banking/ investment developing human resources, and conducting other business operations. All bases of operations communicate with local communities and we invest resources such as equity investment, business activities, donations, and volunteer charity events for organizations that solve social issues through business models to facilitate sustainable development 48.32% of the communities.

Profit performance trends in the past five years -ROA、ROE、EPS

1-2 Financial performance In 2018, our company's paid-in capital was NT$123.386 billion with consolidated assets of NT$2.94 trillion, consolidated net income of NT$60.249 billion, net profit of NT$17.332 billion, and EPS of NT$1.40. 0.66% 0.69% 8.58% 0.61% 0.60% 9.53% 9.32% 9.10% Unit: Thousands NTD 0.62% Item 2016 2017 2018 8.04% Assets 2,541,156,335 2,634,058,605 2,935,204,419 Total liabilities 2,349,127,413 2,442,007,638 2,729,901,347 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Shareholders’ equity 192,028,922 192,050,967 205,303,072 ROA ROE Net revenue 45,090,598 50,827,112 60,248,746 Profit or loss after tax 17,284,157 15,432,391 Operating 17,332,199 ability Operating expenses 21,778,169 21,347,661 22,906,433 Employee welfare expenses 1.6 (including salary expenses) 14,279,891 13,760,687 14,886,242 1.5 1.40 Average employee welfare expenses 1.55 1,567.84 1,516.33 1,606.54 1.4 1.52 1.45 Return On Assets(%) 0.69 0.60 0.62 1.3 1.2 Return on Ordinary Shareholders' Equity (%) 9.10 8.04 8.58 1.27 1.1 Earnings per share ( NTD ) 1.42 1.25 1.40 0 Profitability Profit ratio (%) 38.33 30.36 28.77 2014 2015 2016 2017 2018 EPS ＊1：Profit or loss after tax includes non-controlling interests. ＊2：Due to the issuing of dividends in 2018, past weighted average for ordinary shares outstanding for earnings per share was revised. ROA and ROE on the above graph are base on the audited after-tax profits;it does not includs EPS ＊3：The financial data and ratios were all prepared in accordance with IFRS. ＊：＊4：Grandson companies not included in the consolidated financial company include First Financial AMC B.V.I., and FCB Leasing B.V.I.

52 53 Share dividend/Tax amount We also promote the establishment of universal values for domestic corporate sustainability/corporate social responsibilities to build a CSR culture. Subsidiary First Bank joined the Business Council for Sustainable Development of Taiwan Item 2016 2017 2018 (BCSD Taiwan) with Chairman serving as the director. This was used to promote and implement CSR concepts, as well Cash dividends per share (NTD) 1.2 0.9 1 as environmental protection and energy management. As there is a clear lack of understanding on sustainability concepts and execution talent among local companies, we sponsored the establishment of the Center for Corporate Dividends per share (NTD) 0.2 0.1 0.1 Sustainability. Chairperson serves an advising director and is actively involved in helping the Center with promoting Income tax paid (Thousand NTD) 2,135,777 2,515,764 4,012,291 corporate sustainability education and hosting international forums. Retained earnings (Thousand NTD) 39,753,479 38,019,583 42,446,725 FFHC and its subsidiaries spent a total of NT$284.52 million on the following industries/corporate sustainability groups and organizations in 2018, and donated NT$231 million to the Small and Medium Enterprise Credit Guarantee Fund of Information on salary of full-time non-supervisory employees Unit: Person; Thousands NTD Taiwan. Item 2017 2018 Percentage of change Company Industry/Corporate sustainability Company Industry/Corporate sustainability Number of people 7,699 7,585 (1.5) Name non-government organization Name non-government organization Average salary 1,114 1,235 10.9 • Bankers Association of the Republic of China • Taiwan Energy Service Association (TESA) First • The Bankers Association of Taipei • International Swap and Derivatives Financial • Center for Corporate Sustainability Association (ISDA) ＊：Calculated in accordance with Article 3, Paragraph 1, Subparagraph 31 of the Taiwan Stock Exchange Corporation Rules Holding • A．SDGs • Digital Transformation Association First Bank Governing Information Filing by Companies with TWSE Listed Securities and Offshore Fund Institutions with TWSE Listed Offshore • Asian Corporate Governance. Association • Taiwan Internet and E-Commerce Association Exchange-Traded Fund. (ACGA) (TiEA) • Taipei Interbank Money Center, Bankers • Bankers Association of the Republic of Association of the Republic of China China • Bankers’ Association for Finance and Trade • Trust Association of R.O.C. (U.S.A) 1-3 Credit rating • Securities Investment Trust and Consulting • Accounting Research and Development According to the credit ratings issued by credit rating agencies such as Taiwan Ratings, S&P and Moody's for 2018, our Association of the R.O.C. Foundation Group enjoys a strong competitive advantage in the financial industry and is a model of sound corporate governance. • Taiwan Securities Association • Electronic Payment Committee, Bankers In the financial market, we have demonstrated very solid corporate values, a distributed customer base along with • R.O.C. Bills Finance Association Association of the Republic of China sound financial structure, risk control and excellent asset quality. The results from the long and short-term credit ratings • The Insurance Agency Association of the • The Institute of Internal Auditors, R.O.C. as well as future outlook are shown below: Republic of China • The Bankers Association of Taipei • The Life Insurance Association of the • Asian Pacific Bankers Council Republic of China First Financial Holding • Asian Bankers Association • Life Office Management Association (LOMA) • ICC Commercial Crime Services • The Actuarial Institute of the Republic of Short-term Long-term Outlook Rating date First Life • European Bank for Reconstruction and Insurance China Taiwan Ratings twA-1+ twAA- Stable 2018.9.26 Development (EBRD) • Taipei Bar Association • Taiwan Russia Association • Sociey of Actuaries S & P A-2 BBB Stable 2018.9.26 • Taiwan India Business Association • American Acadamy of Actuaries • Insurance Anti-Fraud Institute Moody’s - A3 Stable 2019.2.11 First Bank • Taiwan Contact Center Development Association • Taiwan Insurance Institute • Turnaround Management Association • Association of Certified Fraud Examiner ＊：Credit rating definitions can be found at the Moody’s (https://www.moodys.com), S&P (http://www.standardandpoors.com) • Small and Medium Enterprise Guarantee • Information Systems Audit and Control and Taiwan Ratings (http://www.taiwanratings.com) websites. Fund Association (ISACA) • Agricultural Credit Guarantee Fund • The Institute of Internal Auditors, R.O.C. • Chinese National Association of Industry and Commerce, Taiwan • Taiwan Securities Association 1-4 Participation in local and overseas organizations • Joint Credit Information Center First • Chinese National Futures Association • Taiwan Economic Association Securities • Securities Investment Trust and Consulting Our company and subsidiaries have joined the corresponding industry associations for banking, securities, insurance, • Factors Chain International Association of the R.O.C. trusts, investment trusts, investment consulting, venture capital, and leasing to promote the development of the domestic • National Association of Small & Medium financial industry. Chairperson is also the executive director of the Bankers Association of the Republic of China and Enterprises, R.O.C. The Bankers Association of Taipei. Chairperson of subsidiary First Securities, is also a director of Taiwan Securities • FS-ISAC First • Securities Investment Trust and Consulting Association. We are actively engaging in related affairs to promote the healthy development of the overall financial • Financial Planning Association of Taiwan Securities Association of the R.O.C. Investment industry. • Chinese International Economic Cooperation • Pension Fund Association, R.O.C. Association Trust To achieve the goals of corporate sustainable development, the Company responds to the government's strategy of • National Credit Card Center First enhancing corporate sustainable development and follows standards of the international community. We passed the • Overseas Credit Guarantee Fund (Taiwan) • Taiwan Venture Capital Association • Chinese Financial Research Association Venture review of the Asian Corporate Governance Association (ACGA) in 2018 and became a Premium Member of the ACGA. • Business Council for Sustainable Development Capital We obtain new knowledge of international corporate governance development from the research reports, seminars of Taiwan (BCSD-Taiwan) related to governance issues, and annual forum activities organized by ACGA. 54 55 II Corporate governance We adopted the candidate nomination and cumulative voting system in the election of the Company's 6th-term Directors Corporate governance in 2018. We also disclosed in detail the nomination and review standards and operating procedures to ensure the Material Topic transparency of the nomination and election process and implement the board diversity policy. In compliance with the GRI 405: Employment diversity and equal opportunity implementation schedule of the "Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm's-Length Transfer Pricing", we compiled the Company's tax governance report based on the income, profit Management guidelines before tax, and payment of business income tax of our operations across the world in 2017 in response to international development trends for tax governance and increase the transparency of taxation information.

Policies Specific management practices To further improve the operating performance of the Board of Directors and make the results of the performance The Company established the Articles of Incorporation, The TWSE Corporate Governance Evaluation evaluation more objective, the Company appointed an external professional institution to carry out its 2017 Board Corporate Governance Best Practice Principles, Rules of indicators and international development trends will Performance Evaluation. The results were reported during the 33rd meeting of the 5th Board of Directors on February Procedure for Board of Directors Meetings and organiza- also serve as the highest guiding principles for 23, 2018. We also modified the indicators in the Company's "Board Performance Evaluation Questionnaire" based on tional regulations of functional committees to establish a further strengthening the corporate governance the recommendations for improvements and the Corporate Governance Evaluation indicators. We changed the metrics good corporate governance system, an effective system to improve corporate governance standards. corporate governance framework, protect shareholder of the questionnaire from "yes/no" options to tiered options to improve the effectiveness of the Board Performance equity, and strengthen the functions of the Board of Assessment mechanisms Evaluation and the use of the results. The achievement rate of the five main areas in the 2018 Board Performance Directors to incorporate corporate governance into the • TWSE Corporate Governance Evaluation Evaluation was 94% and the board performance is considered "exceeds standards" and results were reported to the corporate culture. • The performance appraisal result of the board of 9th meeting of the 6th-term Board of Directors on February 21, 2019. directors Commitment • Implementation of Board member diversity. In addition to revising the Company's Articles of Incorporation and related regulations in accordance with the amend- • Directors possess the knowledge, skills, and experi- • Compliance of information disclosure with related ments of the Company Act, the Company, First Bank, and First Securities have appointed Corporate Governance ence necessary for performing their duties, are highly laws and regulations. self-disciplined, and exercise their authority in • Implementation of tax governance mechanisms. Officers and adjusted the roles of related departments in accordance with related regulations of the competent authori- accordance with the law, Company regulations, or ty in 2019. First Life Insurance will complete the appointment of the Corporate Governance Officer before the end of decisions of the shareholders' meeting. Results June 2019 to strengthen the corporate governance structure. • We will ensure that shareholders are made fully aware • According to the results of the 5th Corporate of, and can participate in and decide on important Governance Evaluation (2018), the Company was matters of the Company and will treat them fairly. rated as a top 5% listed company and top 10% FFHC Corporate Governance Structure (top 4) in the finance and insurance category. Goals Based on the results of the evaluation, the Establish an effective corporate governance structure; Company shall continue to issue recommenda- Shareholders’ Meeting improve the Board of Directors' efficiency; increase tions to corporate shareholders to adjust the information transparency. composition of the Board of Directors and Ethical Management increase the number of seats for Independent Duties Directors to strengthen the independence of the Audit Committee • Protect shareholder equity, respect stakeholders, Board of Directors. All improvement measures for Board of Directors implement legal compliance, and strengthen internal internal control have been completed for the Remuneration Committee management. penalty imposed by the competent authority for Chairman reporting and disclosure operations in • Establish a tax governance strategy and implement CSR Committee tax governance to fulfill social responsibilities as a accordance with Article 46 of the Financial taxpayer. Holding Company Act. • Selected as a constituent stock in the "TWSE Strategy Development Corporate Governace 100 Index" for the 4th Resources consecutive year. Appoint a senior manager to serve as the Corporate Risk Management • The achievement rate of the five main areas in Governance Officer to take charge of related affairs of the 2018 Board Performance Evaluation was 94% board meetings and shareholders' meetings, produce and the board performance is considered meeting minutes for board meetings and shareholders' Business Decisions "exceeds standards." President Office of the President meetings, assist Directors in taking office and continuing • There are currently 7 female directors (including education, provide data required by Directors to perform IT Development independent directors) and they account for 47% their duties, assist Directors in legal compliance, evaluate of all Board seats. the performance of the Board of Directors, take charge Vice President EVP Chief Auditor • In 2018, We did not receive any penalties for Marketing Integration of Directors' liability insurance, and other corporate Corporate Governance Officer Chief Compliance violating regulations on information reporting, governance affairs as the highest ranking officer. material information, and press conferences of Complaints mechanism listed companies. Division Administration Technology Division Information Division Risk Management Development Division Business Division Strategic Planning Legal Division Compliance and Division Audit • Publication of corporate governance, investor • The 2017 tax management implementation status conference presentations, financial information, and was reported to the Board of Directors." related investors affairs in both English and Chinese on the company website. • Telephone and e-mail of the spokesperson and investor relations department available from the company website's investor services section. • Participate in seminars, symposiums, public hearings, competitions and evaluations. • Compliance with the relevant laws and policies of the competent authorities and cooperate with their Accounting Administration Corporate Business Admi Marketing monitoring and inspections." Section Section Governance Section nistration Section Integration Section 56 57 2-1 Shareholder Structure and Communication The professional backgrounds of the Company's 6th-term Directors are as follows: During the FFHC 2018 Shareholders ' Meeting , we presented shareholders with an overview of our business in 2017 , final accounts , employee Board remuneration , and transfer of shares of First Life Insurance . Voting was also conduct Risk Management ed on the 2017 annual report and consolidated financial report , distribution of profits , issuing of new shares for capita Technology ization of profits , we elected the 6th term Directors and waived non compete clauses for Directors . The discussions Tax and votes were carried out one by one for voting on agenda items. Shareholders questions were answered on the spot . We engaged in proactive shareholder communications through quarterly institutional investor meetings in Taiwan Finance and by attending the institutional investor events held in Singapore by Deutsche Bank as well as the Non deal Accountancy Roadshow (NDR) organized by Macquarie Securities in Hong Kong Legal Securities Our company’s shareholder structure as of April 23 , 2019 is shown in the chart below Insurance Banking Financial institutions 15.47% 0 1 2 3 4 5 6 7 8 9 Government Other institutions fund 3.15% investors 7.66%

Government Board diversity policy institutions 11.49% • Directors who serve concurrently as managerial officers of the Company or subsidiaries shall not exceed one third of the Board of Directors. The board shall have least one female member and Directors of any gender should account for at least one third of the Directors. Individuals Composition Foreign institutions 35.91% • Board members must experience in related industries such as banking, insurance, securities, and and individuals investment as well as professional skills in legal, accountanay, finance, tax, technology, or risk 26.32% management. • Shall not exclude any candidate based on any ground such as race, nationality or sex."

• Ability to make operational judgments. • Ability to conduct accounting and financial analysis. ＊：The Company s number of shares of com mon stock outstanding is 12,338,557,223 the Company did not issue any preferred stock ). Overall • Ability to manage business activities (including ability to manage subsidiaries). required • Ability to handle crisis management. abilities for • Knowledge of the industry. the Board of • An understanding of international markets. Directors • Leadership. 2-2 Board Structure and Operation • Ability to make policy decisions. The Company elected the 6th term Directors based on the candidate nomination system in 2018 . Shareholders holding • Risk management knowledge and skills." at least 1% of all outstanding shares nominated candidates that meet qualifications for Directors and Independent Directors and have related professional skills for the Company s operations or experience in the finance industry. We analyzed the requirements for the Company's future development and the Group's emerging risks and nominated Independent Directors with professional knowledge of laws, finance, technology, and risk management to improvement Please refer to the Company's website on the implementation status of the in the quality of decision-making of the Board of Directors and implement the board diversity policy. The shareholders’ diversity of board members meeting elected 15 Directors (12 Directors and 3 Independent Directors). The average term of Directors was 3.16 years and the average age was 58.

over the age of 71 =1 people 41~50 years =1 people 7% Women 7% =7 people 47%

Directors’ Directors' age distribution gender composition 61~70 years Men =4 people 51~60 years =8 people 26% =9 people 60% 53% 58 59 The backgrounds of the directors and independent directors are listed below Baseline date:2019.4.23 Experience in Experience in Initial Current role in financial working with Global Initial Current role in financial working with Global Title Name Appoint- Academic background holding company and Industry Classifica- Title Name Appoint- Academic background holding company and Industry Classifica- ment other companies tion Standard (CIGS) ment other companies tion Standard (CIGS) Chairperson (MOF representative) Tsan-Chang Liao (MOF representative) Sharon Chen Director 2019 MBA, National Chiao Tung University Chairperson of Finance 2018 MBA, CSU-San Bernardino, CA, United States. Director & President of Finance 04/08 Chairman, TCFHC and Taiwan First Commercial 10/22 EVP, Dept. of Investment, Dept. of Overseas Affairs, First Securities; Director Cooperative Bank; Chairman, Taiwan Bank Capital Securities; EVP, Nomura Securities; EVP & of FSA Asia Investment Business Bank. Director of HK Branch, CTBC Securities; EVP, Dept. & First Worldsec of Investment Banking, CTBC Bank. Securities. (MOF representative) Chien-Hao Lin Director and President (MOF representative) Shih-Hao Liu 2018 Bachelor of Laws, National Taiwan University Chairperson of First Finance Director 2019 Ph.D., Laws, University Trier, Germany. None N/A 02/23 Executive Vice President and Head of Strategy Life; Managing Director 02/18 Deputy Minister, Ministry of Labor; Professor of Planning Department, First Financial Holding; of FCB; Director of Dept. of Law, Mingchuan University; Director of Chief Auditor, First Financial Holding; Taiwan Asset Manage- Dept. of Finance and Law, Mingchuan University; G.M. of HK Branch and Shih-Mao Branch, ment Corp; Director of President, Taiwan Labor Law Association. First Bank; SVP and Head of Business Planning & First Education Current as Deputy Minister, Ministry of Labor; Admin. Division. Foundation. Professor of Dept. of Law, Mingchuan University. representative) (Bank of Taiwan Fang Kang Director (MOF representative) Li-Shieu Tsai Director 2019 M.S., Finance, Ming-Chuan University Managing Director & Finance 2018 M.S, Economics, Indiana University. EVP, Bank of Taiwan. Finance 04/08 EVP & General Auditor, Taiwan President of First 07/20 EVP, Bank of Taiwan; CEO, Bank Taiwan Financial Holdings; CSO, Taiwan Commercial Bank. Insurance Brokers; SVP, Wealth Management Financial Holdings; Director, Bank Dept., Bank of Taiwan. Taiwan Life Insurance. representative) (Bank of Taiwan Ming-Ren Yau Director 2019 B.S. Economics, Soochow University. SVP and Head of Credit Finance 04/17 SVP and Head of Credit Assets MGT Dept, Bank Assets MGT Dept, Bank (MOF representative) Doris Wang Director 2008 Ph. D., Accounting, University of Kentucky. Independent Director of Finance, of Taiwan; GM of Hsinchuang & Lungshan Branch, of Taiwan; Director, Central Motions Picture Medical & 9/26 Professor, Dept. of Accounting, National Chung Transcend Information Bank of Taiwan. Co. Hsing University; Dean of Library, Professor, VP, Inc.; Chairperson of Health, National Taipei University; Independent Director Accounting Research and Necessary Consume, representative ) Investment co.,Ltd ( Golden Gate Tien-Yuan Chen of BestCom Co. Development Foundation Director Information 2003 B.A., Foreign Languages and Literature, Tamkang Director of First Educa- Finance, Current as Professor, Dept. of Accounting, and Taipei Trend technology 01/02 University. tion Foundation; Unnecessary National Taipei University. Research Foundation; Chairperson, Taiwan Coca-Cola Co. Chairperson of Golden Consume, Supervisor of Telecom Gate & Golden Garden Necessary Technology Center; Investment Co & Golden Consume Chairperson, The Institute Gate Motor Co. of Internal Auditors. representative) Investment co.,Ltd (Golden An-Fn Chen Director (MOF representative) Shing-Rong Lo Director 2015 B.S., Accounting, National Chunghsing University. None Finance 2009 B.S., Pharmacy, Taipei Medical University. Director of First Life Finance, Medical & 10/26 Deputy Director of National Treasury 5/22 EVP, Transamerica Occidental Life Insurance Co; insurance; Chairperson EVP, TransGlobe Life Insurance Inc., Director, of Global Investment Health, Administration, M.O.F.; Deputy Head Information of Finance Dept., New Taipei City Government. Mintai Fire & Marine Insurance Company. Co., Ltd. technology Current as Director, National Treasury Administration, M.O.F. Rachel J. Huang Independent Director 2018 Ph. D., Finance, National Taiwan University. Independent Director of Finance (MOF representative) Hung-Ju Chen Director Ph.D., Economics, UCLA, United States. Managing Director of Finance 06/26 Associate Professor, Finance Department, Ming First Commercial Bank; Professor of Dept. of Economics, National Taiwan First Commercial Chuan University; Associate Professor, Depart- Board Member of 2018 University; Associate Professor of Dept. of Bank; Member of ment of Finance, Yuan Ze University; Associate Taiwan Risk and 06/26 Economics, National Taiwan University; Editor, International Trade Professor, Graduate Institute of Finance, National Insurance Association. Taiwan Economic Review. Commission, Ministry of Taiwan, University of Science and Technology. Current as Professor of Dept. of Economic, Economic Affairs. Current as Distinguished Professor, Department of National Taiwan Universty. Finance, National Central University. 60 61 Initial Current role in financial Experience in working with Global 2-3 Board Functionality Title Name Appoint- Academic background holding company and Industry Classifica- ment other companies tion Standard (CIGS) To strengthen the professional know-how of the Company's board directors and enhance the effectiveness of corporate

Independent Director Chun-Hung Lin governance, the Company adhered to the "Directions for the Implementation of Continuing Education Directors and 2018 Ph.D., Economics, Iowa State University, United Managing Indepen- Finance Supervisors for TWSE Listed and TPEx Listed Companies" and our company's "Implementation rules for continuing educa- 06/26 States. M.S, dent tion of directors" which required new or returning directors to undertake 12 hours and 6 hours of continuing education Computer Science/Engineering MGT, University of Director of First training each year respectively. Our directors actively took part in external training and seminars on finance, risk Missouri. Associate Professor, Chinese Culture Commercial Bank; management (at least two hours), business, commerce, accounting, law, anti-money laundering, countering terrorism University; Director, EMBA Program, Tamkang Director of Eminent II. financing, corporate social responsibility, internal control system, and financial reporting responsibility. They completed University; Dean, Dept. of Industrial Economics, Venture Capital; 191.8 hours of training in total during 2018 which exceeded the number of hours required by the competent authority. Tamkang University; Director, Taiwan Economics Chairperson of Yu-Gen Association. Inc. Current as Professor, Dept. of Industrial Economics, Tamkang University and Dean of Student Affairs. Please refer to the Company's Annual Report page 214-215 for information on the continuing education in 2018. Independent Director Yen-Liang Chen 2018 Ph.D., Law, University of Mainz, Germany. Independent Director of Finance 06/26 Dean and Associate Professor, Institute of Financial First Commercial Bank; The Company established the "Regulations Governing the Scope of Duties for Independent Directors" in 2009. Three and Economic Law, National Donghwa University; Member of Listing independent directors were elected in the same year during the general shareholders' meeting. The "Remuneration Professor and Dean, Dept. of Law, National Taipei Qualification Committee, Committee" subsequently established in 2011, the "Audit Committee" established in 2012, and the "Ethical Management University; Arbitrator, Chinese Arbitration Association; Taipei Exchange (GreTai Committee" established in 2015 are all functional committees made up of all (3) independent directors. The committees Arbitrator, Labor Disputes Dept., Taipei City Govern- Securities Market); issue decisions on potential conflicts of interest such as remuneration for directors and managers, financial reports and ment. Member of Petitions and ethical management policy. The Corporate Social Responsibility Committee established in 2011 is responsible for Current as Professor, Dept. of Law, National Taipei Appeals Committee, reviewing and supervising the implementation of material economic, environmental, and social issues. University. Hualien County.

Primary responsibilities and operations of each functional committee Operations of functional committees in 2018 Routine meetings of our Company's Board of Directors are convened once every month. Directors are also notified of • All of the Company's independent directors (3) are committee members, Independent the agenda 7 days in advance so issues can be properly discussed and opinions exchanged during the meeting. In Director Shyan-Yuan Lee (2nd term) and Independent Director Richal J. Huang (3rd term) Audit Committee 2018, the Board was convened 13 times and average attendance by all directors reached 94.76% (99.48% if attendance served as conveners by proxy is included).Directors actively participated in the meetings and discussions. Where a conflict of interest exists • A total of 7meeting was convened in 2018 and average attendance was 100%. between the company’s interests and the interests of a director or the legal entity they represent, all directors exercised a high level of self-discipline in excusing themselves from the subsequent discussion and voting. • All of the Company's independent directors (3) are committee members, Independent Remuneration Director Hao-Ming Chu (3rd term) and Independent Director Chun-Hung Lin (4th term) served Committee as conveners • A total of 4 meeting was convened in 2018 and average attendance was 100%. Please refer to the Company's Annual Report page 33-36 for the attendance of the Board of Directors and Directors' recusal from agenda items due to conflicts of interests in 2018 • All of the Company's independent directors (3) are committee members, Independent Ethical Director Ya-Hui Shen (1st term) and Independent Director Yen-Liang Chen (2nd term) served Management as conveners Committee • A total of 1 meeting was convened in 2018 and average attendance was 100%.

• The Company's chairperson serves as the Committee's chairperson, and presidents of the CSR Committee Group's subsidiaries are committee members • A total of 1 meeting was convened in 2018 and average attendance was 100%

Please refer to the Company's website for information on the primary responsibilities of each functional committee

62 63 2-4 Remuneration Policy Compensation for company directors include director's remuneration, monthly payment, health exam costs (reimburse- Evaluation items in annual performance evaluations of the chairperson, president, and Board of Directors not only ment of actual costs up to NTD35,000) and travel costs (reimbursement of actual costs). The Directors' remuneration ratio include financial performance indicators, but also non-financial performance indicators, such as corporate governance, is recommended by the Remuneration Committee based on results of the annual Board performance evaluation and green finance, social care, and sustainable environment. Evaluation results serve as a basis for the Remuneration overall business performance in accordance with the scope specified in Article 34-1 of the Company's Articles of Committee to review remuneration for employees (including the president) and directors. The ratio of fixed salary to Incorporation. The remuneration is issued after the approval of the Board of Directors and it is reported to the general variable salary of the President was approximately 3:1 in 2018. The performance bonus for the President is distributed shareholders' meeting. The Directors' remuneration has been approved in the shareholders' meeting which authorized in April to May each year. Material events that affect the Company's financial or non-financial interests that occur before the Board of Directors to determine the remuneration of each individual Directors within a scope of NT$2,400,000 per the distribution shall be adopted as reference for the distribution of the performance bonus. With the exception of this month. The remuneration of the Chairman shall be 1.25 times that of the remuneration for the President. measure, there are no other mechanisms for reclaiming the remuneration.

Remuneration Standard for the President and Approval Procedure Compensation of Senior Executives In accordance with Standard Approval Procedure Number Floating wages Market value of ＊1 company Total Title Fixed salary remuneration shares held/fixed shares held Bonuses Remuneration salary per capita Fixed salary 3 (A) (A+B+C) Remuneration for the president is approved by the Board of Directors and periodically ＊ (B) C) (A) ＊3 evaluated by the Remuneration Committee. One President ＊1 177,594 4,416 1,383 0 5,799 0.80 Floating wages Proportion of remuneration - 76% 24% 0% 100% - 1. Performance bonus One Vice President and Performance one Chief Auditor 2 286,640 5,387 969 664 7,020 1.06 bonus ratio ＊ 2018 is calculated Proportion of remuneration - 77% 14% 9% 100% - Weight achieve- based on the Indicator Description ment achievement (%) rate status in Total 2018 464,234 9,803 2,352 664 12,819 0.95 Profit Includes the ratio of earnings before tax Proportion of remuneration 77% 18% 5% 100% indicators 70% of the current year to the target number, 107% 66% and growth rate compared with the previous year ＊1：The President Ms. Wu Ying was reassigned to the subsidiary First Bank in February 2018 and her post was filled by Vice President Joint includes the ratio of joint marketing and G.M. of Strategic Planning Division Chien-Hao Lin. income before tax of the current year to Employee Compensation Rules Employee Bonus Rules Employee Salary Rules Articles of Incorporation marketing 15% 120% 16% ＊2：One Vice President and one Chief Auditor. The Vice President and G.M. of Administration Department Ms. Mei-Chu Liao retired the target number, and growth rate in March 2018 and her post was filled by Mr. Chao-Chung Chou who was reassigned to the subsidiary First Bank in August 2018. indicators compared wi th the previous year The post was then filled by Secretary General of the Board of Directors Mr. Frank Y.C Fang. The Chief Auditor was Ms. Yu-Hsiu Hsieh. Expense Operating expenses minus hiring Reviewed and 3：The number company shares held is calculated by the number of shares held by the incumbent, spouse, minor children, and in reduction expenses divided by net income of the approved by the ＊ 15% 100% 13% the name of others. indicators current year or target operating Remuneration expenses, whichever is lower ＊4：The market value of shares held is calculated based on the average price per share of NT$19.97 in the 30 business days prior Committee ＊2 to the end of 2018. Risk Includes asset quality, customer

separately Calculated and Board of 5：The President's total remuneration for 2018 was 4.17 times the average employee salary of NT$1.392 thousand and 4.62 times complaints, regula tory compliance, and ＊ indicators 98% 2% the employees' median salary of NT$1.255 thousand. major incidents of internal control Directors.

Strategic includes corporate governance indicators implementation results, green finance 103% 3% implementation results, corporate image, and credit rating tha t year

Other Includ ing leadership skills , judgment , ethics , and other indicators competency indicator

2. Compensation If the Company was profitable during the year, then no more than 0.02% to 0.15% of the profits may be allocated as employees' compensation after deducting the employee and directors' bonuses from the pre-tax profits. Actual amount is based on the target completion rate that year in terms of pre-tax profits, earnings per share after tax, net yield and return on assets.

＊1：The establishment and revision of salary, bonus, and compensation standards for employees (including the president) must be reviewed and approved by the Remuneration Committee and the Board of Directors. ＊2：The Remuneration Committee is formed by all independent directors, please refer to the Company's website for information on the independence of directors.

64 65 2-5 Tax Governance FFHC established the following tax governance policy to lower tax risks and operating costs: FFHC Tax Information Unit: million NTD, % • Compliance with local tax regulations: Adopting moderate approaches, conducting tax management in accordance with the regulations, and being a socially responsible taxpayer. Item 2017 2018 Calculated average/ratio • Risk control: Monitoring and assessing changes in local and international tax regulations and the different interpreta- Earnings before Tax 18,148 20,703 19,426 tions on tax regulations by the tax authorities, and formulating appropriate responses. • Information trans parency: Regularly and properly disclosing tax related information for enhancement of the transpar- Income tax Income tax in current period 3,453 2,528 2,991 ency of corporate information. expense Adjustment calculation 737 -843 -53 • Tax expertise: Strengthening the skills of tax specialists, actively attending a variety of tax seminars, maintaining Reported Tax Rate (%) 14.97 16.28 15.62 continuous and effective communications with local tax authorities. Cash Taxes Paid 2,516 4,012 3,264 Income, pre-tax profit, and payment of business income tax by the Group in each country in 2018. Cash Tax Rate (%) 13.86 19.38 16.62

＊：1. Net profit before tax, income tax expense, and taxes paid are obtained from the 2018 Consolidated Financial Report of FFHC. 2. Income tax expenses = Income tax in current period + adjustment calculation. United Kingdom Other1% Mainland China, Cambodia Hong Kong, and 1% 1% Japen1% Macau2% Other2% Mainland China, Comparison of FFHC's average tax rate with GIGS's average effective tax rate and cash average tax rate for banking industries: Hong Kong, and Cambodia2% Tax Impact Reason Explanation Macau6% 2017 2018 Australia USA 2% 2017: 1% Pre-tax Profit USA4% • Average effective tax rate of peer industries was 24%, which was higher Income than the FFHC's effective tax rate of 14.97%, primarily due to a lower flat tax rate (17%) in Taiwan where FFHC is based. Canada • The Group's cash tax rate in 2017 was 13.86%, which was higher than Single the 11.70% average cash tax rate other financial institutions. 1% jurisdiction 1,270 1,205 2018: Taiwan92% Taiwan84% tax code • Average effective tax rate of peer industries was 25.82%, which was higher than the FFHC's effective tax rate of 16.28%, primarily due to a lower flat tax rate (20%) in Taiwan where FFHC is based. • The Group's cash tax rate in 2018 was 19.38%, which was lower than the 21.28% average cash tax rate other financial institutions. Other2% Japan3% 2017: Cambodia The Group's actual tax rate was 13.86%, which was lower than the Mainland China, Hong Kong, and Macau 6% statutory tax rate of 17% mainly due to tax-free income from OBU in Timing (deferred) - operating revenue. 17% Deferred income 737 -843 2018: United Kingdom2% tax assets Australia4% The actual taxes paid amounted to NT$4,012 million which was higher Income tax than the taxed amount of NT$3,370 million mainly because the deferred Taiwan41% income tax assets generated income tax benefits as Taiwan's income tax rate for profit-seeking enterprises was increased from 17% to 20% in 2018 USA21% and the Company's higher provisional income tax payment in 2018. Canada4%

66 67 Risk management Material Topic Assessment mechanisms Results 102-30: Effectiveness of risk management procedures • Conduct regular and irregular assessments on • Based on the compliance performance of each GRI 419: Social and economic compliance main business activities, products, services, credit unit evaluated in 2018, the results are submitted Set topic / Risk management loans, or business projects as well as compliance to the president for approval. Compliance risks such as management of material customer deficiencies are used as a reference for person- Management guidelines complaints that may involve violations of nel evaluations. The results of subsidiary perfor- regulations. They shall also establish horizontal mance evaluations are reported to our Board of Policies Complaints mechanism communication mechanisms with other units on Directors and then sent to the board of directors The Company shall establish an internal control • Immediately respond to incidents to reduce the the second line of defense. of each subsidiary as a reference for personnel system and ensure its continuous and effective hazard in accordance with FFHC's "Incident • Include the evaluation opinions of the Compliance evaluations. operations to promote healthy operations. Reporting Guidelines" and "Crisis Response and Legal Division on the compliance implemen- • The Group Chief Compliance Officer Meeting is Principles." tation of the management and heads of various held on a quarterly basis. In addition to reviewing Commitment • The Compliance Division is notified in accordance departments in their performance evaluations. the implementation of compliance plans by The Company plans overall operation strategies, with FFHC's Guidelines for Reporting Regulatory • Report compliance items to the Board of Directors subsidiaries, internal control system deficiencies risk management policies and guidelines, and Compliance Cases. and the Audit Committee at least once every six review meetings, the Group's internal audit drafts operation plans, risk management • Independent directors, the Audit Committee, and months. Propose weaknesses in compliance risk coordination meetings, and self-assessment procedures and implementation guidelines. the competent authority are notified in management as well as plans and schedules for meetings are held semi-annually to ensure the accordance with the "Rules for the Regulatory supervision and improvement based on domestic effective operation of each subsidiary's internal Compliance System" and the "Implementation and international operations. The Board of control system. Goals Rules for the Internal Audit System". Directors shall set suitable reward and punish- • The subsidiary First Bank has filed the 2018 Compliance with the operational benefits and ment mechanisms to establish a culture of Compliance Risk Assessment Report to the efficiency and ensure the reliability, timeliness, compliance. competent authority. transparency and regulatory compliance of Specific management practices • Internal audit units shall report audit items • FFHC, First Bank, First Securities, First Securities reporting. • Establish various business regulations and procedure manuals, establish internal control including the performance of compliance units Investment Trust, and First Life Insurance and the degree of compliance to the Board of organized a total of 142.5 hours of regulatory Duties procedures, and implement regular self-assessments to ensure risks are adequately managed. Directors and the Audit Committee at least once compliance education and training courses in Establish three lines of defense in internal controls • Established dedicated compliance units reporting every six months. 2018. A total of 10,008 people participated in the and clarify the scope of duties of the three lines of to the president and responsible for the planning, • Regularly conduct self-assessments on the internal training. defense to maintain an effective and appropriate management and execution of the regulatory control system and regulatory compliance and • Establish the Group's identification mechanisms internal control system. compliance system at their respective companies. examine the effectiveness of the internal control for emerging risks and establish mitigation Establish procedures, plans, and mechanisms to system. measures. Resources identify, assess, control, measure, and monitor risks • Evaluate the implementation of the regulatory • First Bank achieved the management targets of The first line of defense is responsible for identifying and independent reports on the compliance risks. compliance system by FFHC divisions and 13.57%, 11.58% and 10.96% set for the capital related risks in management and business activities; • Establish independent and effective risk manage- subsidiaries. adequacy ratio (CAR), Tier 1 and Common Stock the second line of defense is responsible for ment mechanisms to assess and monitor the • In accordance with the implementation of Basel III Ratio respectively in December 2018. All targets assisting and supervising the first line of defense in respective risk-bearing capacity and current status regulations as well as our own business develop- were higher than the targets of 12.5%, 10.5% and risk identification and management; the third line of of risks already incurred, and to determine their ment and investment plans, First Bank shall 9.5% established for the end of the year. Leverage defense is responsible for assisting the Board of compliance with the risk response strategies and achieve the management targets of 12.5%, 10.5% ratio was 6.32%, higher than the 3% minimum Directors and senior management review and risk management procedures. and 9.5% set for the CAR, Tier 1 and Common required by the competent authority; net stable evaluate the effectiveness of the internal control • Establish internal audit units under the Board of Stock Ratio respectively by the end of 2018. funding ratio (NSFR) was 131% which was higher system. Directors and establish a chief auditor system to • Organize annual evaluations on the subsidiaries' than the minimum LCR of 100% stipulated by the take charge of evaluating the effectiveness of performance of internal audit operations and Basel regulations. internal controls and risk management systems include measures for improving the knowledge • We continue to monitor our short-term liquidity designed and implemented by the first and and skills of auditors, risk-based auditing, methods recovery ability, and our LCR in January-December second lines of defense, and propose timely for assigning auditors, and other improvement was maintained around 120%, higher than the recommendations. plans into the audit evaluation items. Include the minimum LCR of 90% stipulated by the Basel Company and subsidiaries' establishment of regulations." material emergency incident processing mechanisms and status of reports and handling such incidents into key items in the audits.

68 69 III Risk management 3-2 Second line of defense - Sound compliance and risk management system Our company has established internal controls in accordance with the "Implementation Rules of Internal Audit and The second line of defense includes the Risk Management, Compliance, and other units with related tasks (e.g. financial Internal Control System of Financial Holding Companies and Banking Industries". The system covers all business control, human resources, and legal affairs) which are responsible for formulating overall risk management policies for activities and require joint compliance by the Board of Directors, management, and all employees. The Board of main risks, supervising overall risk-bearing capacity and current status of risks already incurred, and reporting the risk Directors shall be aware of the operational risks faced by the company or business, supervise its operating results and management status to the Board of Directors or senior management. bears the ultimate responsibility for ensuring the establishment and maintenance of appropriate and effective internal control system. 1 .Compliance system FFHC, First Bank, First Securities, First Securities Investment Trust and First Life Insurance have all established dedicated In 2018, the Company failed to accurately report and disclose related information on the total balance of a transaction compliance units reporting to the president in accordance of the law. These units are responsible for the planning, conducted between the Company and a subsidiary and was fined NT$2 million by the FSC. Related improvement management and execution of the regulatory compliance system at their respective companies. FFHC is continuing to measures were as follows: require all subsidiaries to enforce their compliance systems. Related developments are as follow: • Formulation of an annual compliance plan: At the end of each year, an annual compliance plan is to be developed for the following year. This shall be submitted Items for improvements to each company’s board of directors for approval before implementation. The Company's handling of the Financial Holding Company Law Article 46, Item 1 is subject to the reporting and • Regulatory change management: disclosure of the total transaction balances as stipulated in Item 2 of the same article. Due to a lack of correct To stay up-to-date on regulatory changes, each subsidiary collects important regulatory changes that occurred during reporting and disclosure of relevant information, the Financial Supervisory Commission, has fined the Company the week and notifies the regulatory compliance supervisor of the responsible unit by e-mail. A regulatory change NT$2 million. notices is then sent to related units at the beginning of each month, and the regulatory compliance supervisor exam- ines the changes and replies whether if it is necessary to revise related regulations and compliance contents. Improvements Contents of regulatory change are propagated to employees of each unit, and the regulatory compliance unit • In order to avoid any misstatements and delays in the future, the Company has held a discussion meeting on compiles a list of chapters and provisions reported by units as requiring revision in coordination with the law. the “Reporting and disclosure of Article 46 of the Financial Holding Company Law” on December 13, 2017 to • Compliance training and self-assessment operations: re-examine data for reporting and disclosure. The list of Group companies needed to produce the report is Must be held by each subsidiary at least once every 6 months. Each department should also include the execution adjusted. The Company will also strengthen reviews on the correctness of the information disclosed of compliance self-assessment into their internal evaluations. FFHC, First Bank, First Securities, First Securities Invest- • To ensure the timeliness of the reports, the Company will strengthen reviews on the list of corporate group that ment Trust, and First Life Insurance organized regulatory compliance education and training courses, a total of 10,008 subsidiary First Commercial Bank, Ltd. has granted credit to and the data of affiliated companies. The Compa- people received a total of 142.5 hours of training in 2018. ny will also enhance the following items: • Implementation of the regulatory compliance system: A. The Company will enhance management on the total trade exposure of all the Group companies. This item The implementation of the regulatory compliance system by each subsidiary is reported to the Risk Management shall be regularly submitted to the Board for review and shall be reported and disclosed in accordance to Committee bimonthly and to the Board of Directors and the Audit Committee semi-annually. Article 46 of the Financial Holding Company Act. • Unit compliance performance evaluation: B. Supervise subsidiaries to review the consolidation of list for corporate groups and make sure the accounts The compliance performance of each unit is evaluated by FFHC each year. The results are submitted to the president and data of affiliated companies are correct. Enhance monitoring the corporate groups that receiving credits for approval and as a reference for unit evaluations. and their maximum limits with timely update. • Subsidiary supervision: C. Supervise bank subsidiaries to strengthen credit management mechanism of the Group affiliates and to A. To strengthen management of the legal compliance systems of subsidiaries, the Company organizes the “Group effectively control credit concentration risks. Chief Compliance Officers Meeting” every quarter to establish the state of compliance plan implementation at each • To enhance review on Group affiliates, the Company will purchase the survey of group companies list from subsidiary, the cause of major violations, and progress on corrective actions. China Credit Information Service, Ltd starting from 20182Q and make mapping with the list complied internally B. We evaluate the performance of subsidiaries with respect to the regulatory compliance system on an annual basis. The results are reported to the Board then sent to the board of directors at each subsidiary as a reference for person- to ensure the accuracy of in- house list. nel evaluations. C. The Company’s compliance unit visits subsidiaries for on-site inspections each year to ensure the effective implementation of compliance mechanisms, provide recommendations on improvements and improve communications with subsidiaries. To improve the internal control system and strengthen the Company's controls, we established three lines of defense in D. Subsidiaries' legal compliance units shall formulate the compliance execution plan for the following year before internal controls and clarified the roles and scope of duties of the three lines of defense to ensure the organization the end of each year. The plans shall be reported to the Chief Compliance Officer of the Company's head office after structure meets the principles of the three lines of defense and their effective operations. they are approved in the subsidiaries' board meetings. E. Subsidiaries shall report to the Company the improvement status based on opinions proposed by the internal and external audit units on their compliance systems as well as changes in regulations for which the amendment status of regulations shall be tracked. 3-1 First line of defense - Internal inspection by business unit F. Subsidiaries shall conduct the Compliance Risk Assessment (CRA) each year. Business units are responsible for identifying, evaluating, controlling, and reducing risks derived from business activities • Regulatory compliance operations and regulations on reporting major incidents: based on their respective functions and scope of businesses. We established internal control procedures and execute To effectively implement the Group's compliance system, we established the Guidelines for Compliance Operations. risk management procedures to ensure that the execution of business operations meet the business policies and goals. The Guidelines set forth operational standards for the compliance system of each subsidiary, and specify the scope We also organize self-inspection and self-assessments for internal controls and immediately propose improvement of application for major violations of laws or rating lowered by the competent authority of finance. Furthermore, we plans when processes and control procedures prove to be inadequate. In 2018, an assessment of corruption risks was established the “First Financial Group Compliance Notification Guidelines” to immediately learn about violations by conducted by all group subsidiaries and their business locations. For instance, First Bank conducted a systematic review the Company and subsidiaries and follow up on subsequent improvements and potential impact. The Guidelines and strengthened credit extension and management after loans to implement operation risk identification and assess- specify the scope of compliance cases to be reported and established standard operating procedures (SOP) for ment, strengthen asset quality management, and reduce risks of corruption. reports to facilitate compliance by subsidiaries and help the Board of Directors and senior management quickly gain control of warnings, assessments, and response measures for the Group's regulatory compliance risks. 70 71 • Key points of the 2019 compliance plan The subsidiaries First Bank, First Securities, First Securities Investment Trust and First life insurance have all set up a "Risk A. Continue to perform change management for related financial laws and regulations. Management Committee". Dedicated risk management units are also tasked with monitoring and reporting routine B. Compliance implementation: This includes regular reviews of the compliance manual, conducting of compliance business risks. The remaining subsidiaries have also set up risk management teams or dedicated risk managers based self-assessments, bimonthly compliance reports to the Risk Management Committee and semi-annual compliance on the nature of their business and their organizational scale to oversee all matters related to risk management. reports to the Board of Directors and Audit Committee, and evaluating the effectiveness of compliance implementation by units and subsidiaries. C. Organizing compliance training on new regulatory developments every 6 months. First Bank: Board of Directors, Monitors risk Risk Management Committee D. Report material violations of laws by the Company's departments and subsidiaries, credit rating lowered by the Chairman management competent authority of finance, prosecution of the person in charge or employees for crimes conducted in business First Securities: Risk implementation at Management Committee operations, delivery of notices from the competent authority to state opinions, or other penalties imposed by compe- President Risk each subsidiary Management tent authorities, the results, and improvement status to the Risk Management Committee and Board of Directors in a First Securities Investment Trust: Committee Establishment of risk Risk Management Committee timely manner. Risk Management Division management (convened every E. Formulation of the “Subsidiary Management Schedule” to strengthen subsidiary supervision, enhance communica- committees and units First-life insurance: 2 months) based on the type/ Risk Management Committee tions with subsidiaries, and acquire an accurate picture of compliance implementation at subsidiaries. size of each F. Continue to review improvements to compliance functions. subsidiary Other subsidiaries: Risk Management Committee G. Follow up on the subsequent improvement status for audit opinions proposed by internal and external auditors to manage and control improvement progress. H. To strengthen the legal compliance management and supervision structure of the Company and subsidiaries, we appoint professional consultants to provide consulting services for the Compliance Risk Assessment (CRA), assist in the establishment of compliance risk assessment methodology, execute compliance risk assessments, and assist the Subsidiary First Bank capital adequacy ratio Unit: NT$1,000; % Company in formulating the Group Legal Compliance Risk Assessment Report. 2017 2018 Ratio of regulatory capital to risk assets Ordinary share equity ratio 11.25% 10.96% Please refer to the Company's Annual Report page 76-87 for large fines or non-monetary sanctions imposed on the Group for violating economic and social laws and regulations in 2018 Tier 1 capital ratio 11.25% 11.58% Capital adequacy ratio 13.42% 13.57% Tier 1 Capital 2.Risk management system: 172,853,439 190,297,370 (1) Risk management policy and structure Total exposure 2,707,099,168 3,008,925,655 To effectively manage the Group's operating risk, our company and subsidiaries have defined risk management policies and guidelines. Independent "Risk Management Committees" have also been established to regularly Leverage ratio 6.39% 6.32% supervise the different types of risks within the Group, review each risk limit, set risk monitoring indicators and report the results of risk assessments to the Board. This is expected to keep the potential risks from each business within an acceptance range and achieve the ultimate goal of balancing risk vs. return. Please refer to the Company's Annual Report page 159 for key indicators (return on assets, return on equity, capital adequacy ratio, double leverage ratio, overdue ratio and bad debt coverage ratio) of the Group in 2018 Board of Directors, Chairman Credit risk • Risk policy President Risk Market risk (2) Emerging risks Management development Committee • Risk identification Liquidity risk Risk Mgmt. Div. Identification procedures for the Group's emerging risks (convened every • Risk measurement 2 months) Insurance risk • Risk monitoring • Risk reporting Interest rate risk Operating risk Risk identification Risk compilation Response to risks Continuous tracking Companies perform Compile a list of the Establish mitigation Regularly follow up In accordance with the spirit of corporate governance, FFHC actively assists each subsidiary with establishing the neces- emerging risk emerging operation measures for on the implementa- and business risks sary risk management sc hemes. Apart from regular inspection and disclosure of the Group s risk exposure, we also assessment and identified emerging tion status of identified by the risks of the Group to mitigation measures formulate various risk monitoring indicators based on the requirements of the competent authority or changes in the identification companies of the reduce the impact and review the economic environment . These include the establish ment and revision of risk management policies and monitoring Group to establish a list of emerging risks on operations or results indicators, such as revising th e Rules Governing Loans and Transactions between the FFHC and Subsidiaries with for FFHC business Stakeholders and FFHC Risk Taking Limit by a Single Subsidiary for Loans and Inves tments in a Single Individual or Stakeholder 72 73 The Group's emerging risks and formulated mitigation measures are as follows:

Risk factor Impact on operations Mitigation measures

Large-scale Large-scale • To improve information security, we appointed information security compa- cyberattacks cyberattacks may nies to conduct information security assessments, network security monitoring, affect information and support in surveillance as well as anti-phishing and anti-Trojan services. security and cause • We apply for flow cleaning services with ISPs who provide the connections for external online services to strengthen DDoS defense capabilities. We also interruptions of Under the “FFHC Incident Reporting Guidelines”, in the event of a man-made or natural disaster (e.g. adopt cloud-based DDoS protection for important websites as defense operations or against massive DDoS attacks. earthquake, flooding, fire, hurricanes), serious failure of internal controls or a security incident ( e.g. Impacts on reputation or • We organize periodic social engineering exercises and information security the company’s reputation, customer’s interests, or leads to serious loss of property) at a subsidiary, the informa- financial losses. training each year to improve employees' information security awareness. tion should be quickly transmitted, the extent of the disaster established and an effective response mounted to We use related information security systems to intercept malware and maintain the continuity of business operations as well as protect customer interests and employee safety.The ransomware when employees connect to the Internet to reduce the possibili- Company shall adopt regulations on related management items and report the improvement measures for the ty of clicking on the links by mistake. • To ensure the continuity of operations, we organize disaster recovery risk incidents to the Risk Management Committee and the Board of Directors for review to reduce the frequency exercises regularly and established related regulations for employees to of future occurrences and losses. follow. Mass data Mass data fraud or • Strengthen endpoint incident detection and analysis and manage the use fraud theft may cause of remote connection data to reduce data fraud and leaks of personal FFHC Incident Reporting Process leaks or severe information. alteration of • Use advanced and continuous threat protection systems to detect and sensitive customer defend against unknown external threats. information and • Maintain the effectiveness of the anti-virus software and update virus Incident at subsidiary Incident at FFHC lead to reputation database to prevent malware attacks. crises or financial • Continue to use information security assessments, social engineering tests, losses. and training to improve internal protection capabilities and employees' Designated emergency Designated emergency awareness. liaison of subsidiary liaison of FFHC

(3) Establish a corporate risk culture Determine whether this is To strengthen the smooth operations of the Group's risk management mechanisms and establish a corporate risk Grade A incident Yes culture, we organize related training on corporate governance or risk management for the Directors, Supervisors, senior Emergency liaison should NO Emergency liaison should management, and employees of the Group. We also established the employee proposal system to encourage employ- notify FFHC Risk Manage- notify FFHC Risk Management Yes ees to actively identify and report potential risks. We provide employees with related risk management information in Determine whether this is ment Dept. by phone by SMS Dept. by phone by monthly risk management newsletters to promote employees' risk awareness and improve their professional skills. Grade B incident on the same day. Chairman SMS on the same day. and President should also Chairman and President NO be notified as well. should also be notified as (4) Business Continuity Mechanism Grade C well. FFHC's head office has a defense team and SOP for emergency response, and obtained ISO 14001 Certification of • Emergency liaison at Environmental Management System for the 4th consecutive year starting in 2015. To prevent major incidents, disasters, Yes subsidiary should notify Risk Management Dept. epidemics and financial system risks from impacting on company operations, the following response mechanisms have their business manage- determines Upon notification, FFHC Risk been defined: ment unit and the FFHC Management Department Risk Management NO reports incident through Division. formal channels up to the • Emergency liaison for Chairman Disaster Response Mechanism FFHC business manage- Upon notification, FFHC Risk The "Crisis Response Principles" and "Crisis Response Manual" have been drawn up. If a unit is affected by fire, ment unit should report Management Department incident through formal Yes reports incident through formal explosion, hurricane, flooding, earthquake, robbery, bank run, group protest or epidemic, it should immediately channels to the head of channels up to the President. notify the crisis center at the main branch and ask for assistance from the head office's business administration department. FFHC Risk unit. To monitor and respond more effectively to a crisis, SMS is used in addition to telephone contact to notify Management Dept. branch managers in the disaster or affected region to report the damage situation by a given deadline. The should be notified as well. Written report from business information is then collated and submitted to the management and relevant units. management unit

The crisis response system proved its worth during the Hualien Earthquakes in 2018. The bank was able to swiftly Risk Management Dept. collate and report the situation at all business units in nearby areas. Nearby employees were also notified to determines Handle in accordance with stay clear, reducing the risk of injury while maintaining the Company's normal operations. The event also the relevant regulations at NO FFHC or subsidiary showed employees the benefits and importance of regular disaster prevention drills.

Telephone FFHC Risk or SMS First Bank Headquarters Chairman, FFHC President FFHC Management Division crisis center Telephone or SMS First Bank managers Telephone or SMS First Bank or and business units business units 74 75 3-3 Third line of defense - Independent internal audit unit The Company, First Bank, First Securities, First Investment Trust, and First Life Insurance have established internal audit Ethical corporate management units under the Board of Directors. They implement audit operations independently and they audit and evaluate the effectiveness of internal controls and risk management systems designed and implemented by the first and second Material Topic lines of defense. They provide timely advice on improvements, to ensure that the internal control system can continue GRI 205 :Anti-corruption to be implemented in a reasonable manner and to provide a basis for correcting the internal control system. We continue to follow up on review opinions of internal audit units, accountants, and business administration units or deficiencies Management guidelines found during self-audits, and matters requiring improvement listed in the internal control system statement. Improve- ments are submitted in writing to the Board of Directors and Audit Committee and used as an important item for penal- Policies Complaints mechanism ties and rewards and performance evaluations of related units, so as to maintain the effective and appropriate opera- We established the CSR Policy and Code of • We have established whistleblowing systems for Conduct for Ethical Management to realize sound the companies and organizations of the Group tion of the internal control system. management and corporate governance through for internal audit units to take charge of process- solid business operations and an ethical corporate ing reported cases. The Auditing Division of the Board of Directors is the Company's internal audit unit. Its responsibilities include the estab- culture, and also to help the Group achieve • Establish a "Stakeholder Communications" section lishment and execution of the internal audit system, monitoring of audit activities at subsidiaries, auditing and assessing sustainable operation. We also established the on the website to disclose hotlines or e-mails for and documenting the performance of their internal audit system, and providing regular reports to the Board and Audit FFHC Code of Conduct for Directors, Supervisors, contacting employees, investors, and customers. and Managers and FFHC Code of Conduct for Committee. We also plan to introduce a digital audit management system before the end of 2020 to improve the perfor- Employees to help directors, supervisors, managers, Specific management practices mance and efficiency of internal audit operations. and employees understand and abide by the • The Group's subsidiaries and organizations have group's ethical and moral values. an effective accounting system and internal The execution of our company's 2018 internal audit process and the preparation of the 2019 audit plan referred not control system for business activities at higher risk only to the financial inspection guidelines issued by the Financial Supervisory Commission but also internal control Commitment of unethical conduct and each department shall performance ratings and business characteristics of each unit (including subsidiaries). In addition to risk management, We are committed to the business philosophy of analyze their business activities that are at higher integrity, transparency, and accountability, and risk of unethical conduct, and shall establish an the Group's internal control system is used to evaluate our management system and improve the effectiveness of the established policies based on integrity. The policies unethical conduct prevention plan, including Group's internal control system self-evaluation. The subsidiary First Bank plans to apply to the competent authority for are implemented in internal management and operating procedures, code of conduct, and the adoption of a risk-based internal audit system before the end of August 2020 and establish risk-based internal audit external business activities. education and training. assessment methodology and procedures. It shall set the frequency of internal audits based on the results of risk assess- • The Group's subsidiaries and organizations ments to facilitate more efficient deployment of internal auditing resources. Goals actively implement the policy of ethical manage- Enhance the corporate culture of ethical management in internal management and external ment, actively prevent misconduct, establish sound business activities. Implementation of the internal audit system in 2018 is as follows: corporate governance and risk management mechanisms, prevent and detect fraud, and ensure Assessment mechanisms Implementation plan Number of times held the reliability of financial information. • The Committee regularly reports the implementa- Duties tion status of ethical management by companies Self-audit meetings, internal control system self-audit results review, internal control system and organizations of the Group to the Board of 2 times Employees of each subsidiary shall engage in deficiency review meetings, and internal audit coordination meetings within the group Directors and reviews improvement measures. commercial activities in a fair, ethical, and • Status of signatures of the Code of Conduct of transparent manner. Employees may not directly or Directors, Supervisors, managerial officers, and General audits, project audits 8 times indirectly provide, commit to, require, or receive any employees of the Group. improper benefits, and shall avoid having any Derivative trade audit 10 times • Gross violations of ethical conduct by employees dealings with any suppliers and customers having of the Group's companies and organizations shall any record of unethical conduct. Auditing opinions and follow-up 14 times be penalized in accordance with related laws or human resources management regulations; they Resources shall also be included as a deduction in points in • The Ethical Management Committee is comprised the annual performance evaluation. of all Independent Directors and it is responsible Please refer to the Company's Annual Report page 70-75 for the 2018 Internal Control System Statement. for the establishment or amendment of the ethical management policies of the companies and Results • The Group's subsidiaries reported the "integrity organizations of the Group. management status and measures" of 2018 to the • The Group's subsidiaries and organizations Board of Directors. Our "Ethical Management periodically provide employees with ethical Committee" reported the Group's ethical management related education, training, and management status in 2018 to the Board of promotion. Directors, and reviewed improvement measures. • The Directors, Supervisors, managerial officers, • The signature rate of the Code of Conduct by and employees of the Group's companies sign Directors, Supervisors, managerial officers, and the Code of Conduct of Directors, Supervisors, employees of the Group in 2018 was 100%. managerial officers, and employees at the end of • There were 2 violations of ethical conduct after each year or when they are appointed. the reported cases were accepted and investigat- • When entering into a contract with a third party, ed in 2018. In addition to instructing related units the Group's subsidiaries and organizations shall to review improvement measures and report the have a full understanding of the other party's penalties imposed on personnel in violation of the ethical practice and make the following items a regulations to the Ethical Management Committee part of the contract. for reference, the annual performance evaluation bonuses of the personnel in violation of the regulations were also reduced by three to nine percent or canceled. 76 77 Education and training IV Ethical management We established the Code of Conduct for Ethical Management as our ethical management policy, and require compa- The Company promotes ethical management related regulations to subsidiaries through the quarterly meeting of regulatory compliance supervisors from the headquarters of each subsidiary. We urge subsidiaries to organize educa- nies and organizations in the group to comply with this policy. We strengthened our whistleblower system and raised tion, training, and promotion events related to ethical management for employees, and to communicate the group's the level of authorization in June 2018. Companies in the group reviewed and passed revisions to their whistleblower ethical management policy and whistleblower system. In 2018, the group provide all employees worldwide with a total system before the end of October 2018, in which internal audit units with independent authority were designated to of 162,264.55 hours of education and training for 61,549 participants. Counterparts that do business with the Company handle whistleblower cases before the situation becomes more severe. We take caution against small matters to are invited to participate in the activities, so that they fully understand the Company's unethical conduct prevention prevent them from damaging our business reputation, and thereby protect public interests. plans and zero tolerance policy. histleblower System and Process Ethical management related education and training provided by the group to all employees worldwide in 2018 Assistance Platform Total hours Number of people Coverage We set up a Cantact Us section on the website to disclose contact, grievance, and whistleblower channels for First Financial Holding 214 193 100% employees, investors, and customers. We also set up a whistleblower section on our internal website to provide a whistleblower channel to employees. First Bank (Including subsidiaries) 156,561.5 57,043 100% First Securities (Including subsidiaries) 3,845.55 3,328 100% Furthermore, the Whistleblower System Implementation Rules reviewed and passed by the Board of Directors is disclosed in the "Corporate Governance" section on our official website and internal website. Our subsidiaries First Securities Investment Trust 147.5 295 100% all established a whistleblower system that was reviewed and passed by their respective Board of Directors. First Life Insurance 1,228.5 378 100%

Coordination Center First Financial AMC (Including subsidiaries) 219.5 288 100% The internal audit unit/supervisor at the Company and subsidiaries is responsible for handling whistleblower First Consulting/First Venture Capital 48 24 100% cases. Depending on the type of case, an independent unit is designated to conduct th investigation. For cases Total received by the Company and investigated by a subsidiary, the subsidiary is required to report investigation 162,264.55 61,549 100% results to the Company. Ethical Management Education and Training in Recent Years Supervisory Personnel If the person being reported is a director, supervisor, or vice president or higher managerial officer, the investi- Region/ Total number Persons/ Target Year Method of hours Companies Coverage gation report shall be submitted to the Audit Committee or supervisor for review. If a whistleblower case is found 2018 Detailed as above. to be true, the Company and subsidiaries will assign related units to review the internal control system and Global/ operating procedures, propose improvement measures to the Board of Directors, and then submit the report to Employees 2017 Each subsidiary organized at least two ethical 297 31,797 100% the Ethical Management Committee for future reference. Major incidents or violations of the law shall be report- (persons) 2016 management training sessions 124 15,055 100% ed to the Company and relevant authorities in accordance with the FFHC Incident Reporting Guidelines and First Financial Group Compliance Notification Guidelines. Clauses on complying with the Ethical Management 2018 Policy are included in contracts and the Ethical 0.25 256 100% Global/ Management Policy is promoted during contract signing. Reporting hotline Supplier (companies) 2017 Organized the "Corporate Social Responsibility, 3 252 100% The "Contact Us" section on our official website Environmental Protection, and Energy Conservation 2016 Seminar" 3 237 100% 2018 0.4 32 100% Taiwan/ Promoted during the quarterly "Group Chief Subsidiaries 2017 0.5 32 100% (companies) Compliance Officers Meeting" We combined internal and external regulations into the FFHC Code of Conduct for Directors, Supervisors, and Manag- 2016 0.45 33 100% ers and FFHC Code of Conduct for Employees, to help directors, supervisors, managers, and employees understand and abide by the group's ethical and moral values. Contents include preventing conflict of interest, prohibiting employees from concurrently holding positions, preventing employees from benefiting themselves or others, fulfilling their Unethical conduct cases obligation to confidentiality and preventing insider trading, engaging in fair trade and preventing monopolies and We handled 17 external whistleblower cases and 9 internal whistleblower cases in 2018. After investigation, 2 cases were determined to be unethical conduct cases. Related units were assigned to review the internal control system and anti-competitive practices, protecting and appropriately using Company assets, complying with laws and regulations, operating procedures, propose improvement measures, report violators to the Company's Personnel Evaluation encouraging the report of any illegal or unethical conduct, prohibiting bribes and accepting bribes, creating an equal Committee, report the penalty to the Board of Directors, and then submit the report to the Ethical Management Commit- employment environment, and maintaining the health and safety of the workplace environment and personnel. The tee for future reference. The performance bonus of violators was reduced by 3-9% or not distributed in 2018. codes of conduct are signed by directors, supervisors, managers, and employees of all companies in the group at the end of the year and when they assume a new post. As of the end of 2018, the group's signing rate reached 100%. Anonymous 14 External whistleblower cases The Company's “Ethical Management Committee” subordinate to the Board of Directors is the dedicated unit for imple- Named 3 menting ethical management practices. The committee is formed by all independent directors and is responsible for 2 establishing or revising the ethical management policy. To enforce the ethical management policy, the Group's subsid- Cases determined after investigation to be unethical conduct iaries and organizations must regularly report (at least once a year) their "integrity management status and measures" Anonymous 2 to their Board of Directors. The committee will report the Group's integrity management status to the Company's Board Internal whistleblower cases Named 7 of Directors and review improvement measures. Implementation status is as follows: Cases determined after investigation to be unethical conduct 0 78 79 Case contents and audit results Progress and Improvement Measures Case Summary Handling results A bank teller of First Bank applied for a The bank teller engaged in unethical conduct by working mortgage at Branch A using a purchase together with an agent and customer in using a fake purchase agreement with a forged signature of a custom- agreement to apply for a mortgage. The bank teller was found er. After Branch B opened an account, it handed in violation of the HR management rules and was imposed a the passbook and debit card to the bank teller major demerit by the Personnel Evaluation Committee on instead of the customer. The bank teller withdrew December 17, 2018. funds from the passbook from Branch B without Improvement the customer's consent. • The Operation Planning & Administration Division has Investigation Results included regulations on account opening operations into • The copy of the real estate purchase agree- teaching materials related to deposit and remittance, and ment provided by the customer matched the also promoted the regulations during deposit and original, and the signature and seal on the remittance related video conferences. mortgage application form and loan agree- • The Consumer Finance Division revised the "Consumer ment were from the customer, so there was no Finance Real Estate Guarantee Loan Review Work Form" forgery of the customer's signature. and added contents for "Dummy Account Pattern Inspection" • After investigation, the account opening to help business units prevent loans from dummy accounts. application form on Branch B's "Seal and Cases referred from scriveners and real estate agents are Image Management System" does not show monitored and any abnormalities will result in the case any record of the application form being being put on a list of controlled sources. delivered. Hence, there are deficiencies in • The Audit Division has included "remittance of loan principal account opening operations. and interest by bank tellers" as a risk detection indicator. • The seal on the withdrawal slip at Branch B When a similar case is detected, the business unit is asked was found to be the same as the seal on the to look into the matter. If there are still major concerns signature card. regarding the explanation provided by related units, then an investigation is conducted.

Case Summary Handling results First Securities received a notice from the The FSC's punishment notification on November 8, 2018 Financial Supervisory Committee (FSC) on August determined that the former salesperson and former manager 8, 2018 to give a statement. First Securities was have affected the normal operation of the securities business, suspected of violating the Regulations Governing and ordered the salesperson be dismissed and the manager Securities Firms and would potentially be be suspended for 1 month in accordance with the Securities imposed a penalty by the FSC in accordance and Exchange Act. The company was determined to be in with the Securities and Exchange Act. The violation of the Regulations Governing Securities Firms by failing company was requested to give a statement and to implement the internal control system, and was reprimanded provide supporting documents. in accordance with the Securities and Exchange Act. Investigation Results Improvement • A former salesperson at the company's Branch • The internal audit items handled by 13 salespeople at A enticed customers to invest in convertible Branch A each day were tracked for 10 consecutive days corporate bonds, claiming that it provided a starting on November 14, 2018, and a complete audit report 10% yield, and converted the funds into containing audit report forms, audit lists, and audit working personal loans. The former salesperson papers was prepared. engaged in lending with several customers • Salespeople at Branch A were required to conduct self-in- and held their seals and passbooks. spections, and self-inspection personnel conducted inspec- • A former manager at the company's Branch A tions for 10 consecutive days. A performance improvement was aware that the former salesperson record and notice was issued to salespeople that could not converted customers' funds intended for make improvements, and the salespeople were reported to investment into personal loans, and engaged the Personnel Evaluation Committee. in lending with several customers, but the • Company employees were warned to avoid further claimed to be unaware. This is clearly poor violations when handling affairs. The branch's supervisor management and supervision. shouldered the responsibility of management and supervi- • Self-inspection personnel: sor, and enhance internal self-inspection operations. Self-inspection personnel became aware when • Compliance and operations of personnel were promoted customers personally visited a service counter during morning meetings, monthly meetings, and irregular to retrieve their funds, but failed to conduct an business meetings, and employees were required to make investigation and submit a report in accor- improvements. dance with the standards and provisions of • If a violation is discovered, violators were reported to the the internal control system. Personnel Evaluation Committee based on the severity of the violation, and repeat offenders were imposed more severe penalties. 80 81 Specific management practices • Adopt a review system for wealth management • Include the principle of fair customer treatment into products and process the complicated and Protection of customer rights and interests and internal audit items and compliance self-evaluation high-risk products with care. items. • Whether or not the complaints of each company • When the risk of new and current derivative financial were resolved or responded to customers within improving satisfaction rate products increases as a result of structural adjust- the required time limit. ments, or before sales using new offering methods, • Statistics of customer satisfaction surveys and the Material Topic the products must first be reviewed by the New satisfaction improvement program and its GRI 417: Marketing and labeling FS4: Procedures for improving staff implementation of environmental Derivative Financial Products Review Team. implementation. • To prevent salespeople from engaging in inappropri- • Improve the quality of the lectures by learning GRI 418: Customer privacy and social policies and procedures as applied to business lines ate conduct for bonuses, quarterly detection reports customer needs through all types of seminar GRI 419: Socioeconomic Compliance FS15: Policies for the fair design and sale of financial products and are generated to examine customers' investments by surveys. services salespeople, product contents, trading, and customer behavior. Results Management guidelines • Amend or conduct related safety maintenance and • First Bank, First Securities, First Securities • Bonus standards for salespeople not only take into strengthen personal information control measures and Investment Trust, and First life insurance all Policies educational trainings in compliance with the completed audits of the implementation of fair • Continue to provide customers with innovative consideration financial indicators, but also customer or implementation of Personal Information Protection Act. customer treatment in 2018, and reported audit products and high quality services, satisfy customers' consumer rights and interests, as well as non-financial • Self-evaluations of operational risk control for personal results to their respective Board of Directors. First needs and improve customer satisfaction. indicators, such as the risk of conflict of interest and information management are regularly conducted to Securities Investment Trust is not required to • Financial product trading or services are provided to compliance standards. ensure the protection of personal information. submit a report to the FSC, but the remaining 3 customers and related matters are handled based on • Through the implementation of customer satisfaction • The implementation status of personal information subsidiaries all submitted reports to the FSC within the duty to exercise due care as a good administrator improvement programs, optimize business procedure, protection, personal information related deficiencies the specified time period. and fiduciary duty. service quality and customer care activities to improve found by audit units, personal information incident • In 2018, each company promoted operations • Establish a KYP system and provide products or customer satisfaction. reports, handling results, and prevention measures are related to the "Principles for Fair Treatment of services that are suitable for customers based on KYC • Establish a consumer dispute settlement system and reported to the Personal Information Protection and Customers in the Financial Services Industry". A and KYP. complaint channels for customer complaints or Management Committee semi-annually. total of 7,944 participants completed the training • Clearly establish and inform rights and obligations disputes, provide proper handling within the time limit • First Bank established the "Guidelines for the and the training completion rate was 100%; each based on the principles of impartiality and good faith and report back the handling results to the complain- Management of EU Resident Personal Information" company performed related training on the to ensure the information transparency and safety of ing customers or consumers. and "Notices for the Management of EU Resident "Personal Information Protection Act". A total of products and services. Personal Information" to provide a basis for the 7,968 participants completed the training and the Resources management of personal information belonging to EU training completion rate was 100%. Commitment • Financial products, funds and insurance products are residents. • A total of 414 general self-assessments and 552 • We will comply with applicable laws and regulations, all examined by the related product review meetings • First Life Insurance completed the certification of project-based self-assessments of the implementa- including the Financial Consumer Protection Act, before listing and sale. BS10012 Personal Information Management Systems. tion of fair customer treatment were conducted in establish, announce, and abide by our customer rights • Ensure confidentiality of customer information through • Conduct customer satisfaction surveys through 2018. A total of 206 general assessments and 219 policy, establish customer compliant and dispute self-evaluation procedure of internal control system of telephone surveys, e-mail surveys, webpage and project-based assessments of the implementation settlement mechanisms, and properly handle customer the Company and self-checking operation of the customer service, or outside survey firm, review items of fair customer treatment were conducted by complaints and disputes to protect customers' rights Company and its subsidiaries. they are dissatisfied with and ask relevant department audit units in 2018, supervising the implementation and interests. • Deficiencies relating to the principle of fair customer to improve. of related regulations by various units. • We will enter into contracts with customers regarding treatment found by audit units during inspections or • The sale and provision of controversial products and • In 2018, the Group has not sold any prohibited or the provision of products or services based on self-evaluations of compliance must be included in the service are prohibited. controversial product, the information provision impartiality and reason, equality and reciprocity, and designated audit items of monthly self-inspections by • Cultivate a corporate culture which values financial and labeling of our products and service have not good faith. We will fully explain important contents of business units, thereby ensuring the effective consumer protection and conduct regular promotion of violated related laws or self-regulatory rules. products, services, and agreements and disclose implementation of laws. the idea of "Principles for Fair Treatment of Customers • As of the end of December of 2018, a total of 431 related risks. • Collect and understand laws, regulations, and in the Financial Services Industry" to the staff. customer complaint cases were accepted, which international standards related to products and • Post on the website the commitment on customer was 139 cases fewer than the number of cases Goals services that are provided or sold, and continue to service, information security measures, depositors' accepted in 2017. The reduction in complaint • The risk management unit will establish and monitor organize employee education and training to improve rights and interests and standard fee schedules for all cases was due to the establishment ATMs that key risk indicators (KRI), including number of new the customer service experience. types of businesses. prevented long queues for withdrawals, and the products developed, number of severe customer • Integrate products and services across organizations • When publishing or broadcasting advertisements and charges for interbank withdrawal fees. complaints, average time for handling customer to provide customers with comprehensive solutions carrying out solicitation or promotional activities, there • Through wealth management products review complaints, and number of financial customer dispute across businesses, and hold investment and wealth shall be no falsehood, deception, concealment, or system, the First Bank discontinued 57 wealth cases. These KRIs will enable the monitoring of management seminars to provide investment analysis other conducts sufficient to mislead another party, and management products and 9 insurance products; financial derivatives development to reduce the and advice for customers. the truthfulness of the content of advertisements shall First Life Insurance discontinued 21 products to number of customer disputes and implement the • Through means such as expanding Internet and app verified. prevent imposing excessive risks on customers principle of fair customer treatment. services and digitalizing physical business to satisfy and to improve customers' investment perfor- • Establish regulations, code of conduct, and anti-corrup- customers' needs and improve service efficiency. Assessment mechanisms mance and protect customer rights and interests. tion measures for related operations, adopt strict • First Bank, First Securities, First Securities Investment • As of the end of December of 2018, First Bank, confidentiality measures for customers' information, Complaints mechanism Trust, and First life insurance have audited the First Securities, First Securities Investment Trust and and rigorously review products and services for risk • All of our subsidiaries have customer complaint implementation of fair customer treatment and First Life Insurance had all completed customer control. channels, including business units, customer service reported audit results to their respective Board of satisfaction surveys and proposed improvement • Periodically organize education and training to step hotlines, and e-mail. Directors. programs regarding the less satisfied items. up the promotion of related businesses, strengthen the • The companies' contacts are established on the • The target training completion rate of Personal expertise of salespeople, and improve operating Group's official website; we publish the telephone Information Protection Act and Principles for Fair procedures to increase customer satisfaction. number, address, and email of the contact person for Treatment of Customers in the Financial Services customers to provide immediate feedback on issues Industry is 100%. Duties and maintain smooth and open interactions. • The implementation of fair customer treatment is • Abide by laws and regulations relevant to consumer • Conduct customer satisfaction surveys through included in self-inspection and internal audit items. telephone surveys, e-mail surveys, customer service protection and "Principles for Fair Treatment of • Has there been any violation of the laws or self-regula- hotlines or an external market survey company, and tory rules related to information provision and labeling Customers in the Financial Services Industry". use open questions for customers to provide feedback. of products and service? • Materials prepared for advertisements and other • Banks, securities, investment trust, and life insurance • Improve operation procedure based on customer marketing activities must be managed in the internal subsidiary companies have published their service complaints with the goal to reduce the number of control system to ensure there are no inappropriate commitment on the website. customer complaints compared to the number of the contents, misrepresentations that mislead customers, previous year. (There were 570 customer complaints in or violate the related laws. The materials must be the previous year) reviewed by the supervisor of the compliance unit before external use. 82 83 Value customer privacy and information security - We abide by the "Joint Marketing Firewall Policy and Guiding V Protection of customer rights and interests and improving satisfaction rate Principles for FFHC and its Subsidiaries", publish our customer privacy protection policy on the respective websites of the Company and each of our subsidiaries, and have formulated "Management Guidelines for Trade Secrets and 5-1 Implementation of Fair Customer Treatment Intellectual Property", "Rules for Safeguarding Confidential Data" and confidentiality levels for various forms confidential To accommodate the Financial Supervisory Commission's promotion of the "Principles for Fair Treatment of Customers documents (including paper and electronic formats), charts and diagrams, messages, computer software, and other in the Financial Services Industry", in addition to the stipulation of "Code of Conduct for Ethical Management" which media and items. In addition, we provide regular trainings to employees to increase knowledge and awareness of provides that during the research, development, procurement, provision, and sale of products and services of each confidentiality procedures and strictly prevent external disclosure of personal and customer data. In 2018, each compa- company of the Group may not damage the rights and interests of consumers and other stakeholders, FFHC also formu- ny performed "Personal Information Protection Act" related educational trainings, a total of 7,968 participants complet- lated relevant operational procedures, codes of conduct, and held educational training programs. First Bank, First ed the trainings which equaled to a 100% completion rate. Securities, First Securities Investment Trust, and First Life Insurance have all formulated and promulgated a "Principles, Policies, and Strategies for the Equitable Treatment of Customers", and a "Customer Service Commitment" is published For the management of personal information protection, First Life Insurance continues to renew the certification of on the corporate website. In 2018, each company performed promotion of the idea of "Principles for Fair Treatment of BS10012 Personal Information Management Systems every year; First Bank established the Personal Information Protec- Customers in the Financial Services Industry". A total of 7,944 participants completed the training and the training tion and Management Committee, which is chaired by the president and is responsible for supervising operations of completion rate was 100%. The relevant measures included in the "Principles for Fair Treatment of Customers in the the personal information management system, and established the Personal Information Event Response Team to Financial Services Industry" implemented by FFHC are as follows. effectively respond to and handle personal information incidents. Complaints of personal information leakage and handling results in 2018 are as follows: Principle of fair and honest contract - Enter into contracts with customers regarding the provision of products or service based on impartialness and reason, fair and reciprocity, and good faith. Customers are informed of important provisions and given a detailed description of contents before signing and agreement, so as to protect customers' Channel Number of cases Handling results rights and interests. Customer Service Hotline 2 Gained the understanding of Principle of due care and fiduciary duty - When accepting customers' appointment or delegation to provide 2 cases (Through the Financial Filed a complaint with an external unit customers after communication. products or service, it shall be proceeded according to applicable laws or contracts, abiding by due management Ombudsman Institution) 2 cases (Through the Banking guidelines, exercising the due care of a good administrator and fulfilling fiduciary duty. New types of products are File a complaint with the competent authority handled in accordance with the Standard Operating Procedures for New Types of Products. Personnel of the compli- Bureau, FSC) ance unit participate in the planning and design process of new types of products. If it is necessary to submit an application to the competent authority, the Chief Compliance Officer must produce a statement to properly protect Measures taken by First Bank in response to the EU's General Data Protection Regulation (GDPR) are as follows: customer rights and interests. Step Measures Principle of true advertising - We comply with marketing related laws, regulations, and self-regulation, and view the 1. Revised the "Personal Data Management Policy" contents of advertisements as part of agreements. Before publishing or broadcasting advertisements and carrying out 1. Adjust internal regulations in 2. Established the "Guidelines for the Management of EU solicitation or promotional activities, a "self-check list for the legal compliance of the sales business advertisements or coordination with the GDPR Resident Personal Information" and "Notices for the publicity materials of financial products", ensuring there is no falsehood, deception, concealment, or other conducts Management of EU Resident Personal Information”" sufficient to mislead another party, and the truthfulness of the content of advertisements. In 2018, advertisements and 2. Appoint a Data Protection Officer The compliance officer of the London Branch was appointed publicity materials evaluated using the "self-check list for the legal compliance of the sales business advertisements or (Data Protection Officer, DPO) the DPO publicity materials of financial products" reached 100%, and there were no violations of marketing and advertising To ensure that personal information protection for UN residents 3. Commissioned an external consultant related laws, regulations, and self-regulations. comply with the Standard Contractual Clauses (SCC) of the to provide consultation services GDPR, we commissioned an accounting firm to conduct a risk assessment and information security inspection. The accounting Principle of providing suitable products and services -New types of financial instruments are being developed firm's assessment was there are "no risks that require immediate on an almost daily basis resulting in an even wider array of available financial products. However, not all products are improvement, so there is no need for subsequent risk suitable for all customers, and the sales staff of wealth management, fund sale and insurance business at banks, securi- management plans. ties, investment trust, and life insurance subsidiary companies must abide by various interpretative rules and self-regula- 4. Response to the GDPR's restriction on Signed the SCC and carried out international transfer under the tory rules established by respective competent authorities or business associations. A Know Your Customer (KYC) international transfer SCC framework assessment must be done by all customers. In addition, suitable financial products must be offered to customers based 5. Established a personal information leakage Established personal information violation incident response, on their wealth management requirements, investment suitability, and risk profile. reporting mechanism in coordination with the GDPR reporting, and prevention mechanisms

Principle of Notification and Disclosure - When collecting various fees, the items, unit price, and amount of fees are provided on the business premises or company website, and are indicated in an apparent font in the contract; Principles for Selling Products of a Highly Complex or High Risk Nature - Complex high-risk products often important customer rights are interests are indicated in bold characters, and customers' attention is brought to the bold involve highly specialized and complex financial or financial engineering, and the utmost caution must be taken prior characters. Any changes or adjustments to fees, unless they are beneficial to the customer, must be notified or to listing such products for sale in order to shield customers from taking on excessive risk. During the first quarter of announced at least 60 days before they become effective. Product brochures are provided to customers when selling 2016, First Bank completely ceased offering complex high-risk products. Moreover, for structured products, in addition wealth management and investment products (such as NTD forward product brochure, gold passbook agreement, trust to issuing investment risk notices, we also formulate special notices for customers to ensure they fully understand the and wealth management product brochure, application document and derivative financial product brochure), and content of available products. Regarding targets that offshore structured products link to, First Securities makes sure it specify potential risks for future reference. Furthermore, customers are informed of important rights and interests in meets the screening criteria and passes the selection of First Securities Investment Trust before linking. Further, to accordance with the regulations of the competent authority, e.g. gold passbook does not guarantee profits and trust protect consumers' rights and interests, banks, insurance, securities, and investment trust subsidiary companies all products need to pay a channel remuneration fee. Related records are retained and product and service information implement Know Your Product (KYP), setting up review system for investment financial products. In 2018, 172 products are fully disclosed. were reviewed before listing, 87 products were delisted and discontinued to prevent imposing excessive risks on customers and to improve investment performance and protect customer rights and interests. 84 85 Company name Key Tasks in 2018 5-2 Customer satisfaction survey • Twenty six product review meetings were convened; a total of 152 products passed the Customers' ratings and overall level of satisfaction with products and services is very important to us. We conduct review, and 66 products met conditions requiring delisting. annual customer satisfaction surveys over the phone and through e-mail questionnaires, web pages, customer service, First Bank • Two insurance companies have signed the CSR Declaration and 11 prepared CSR Reports. and external market survey firms. Improvement measures are then proposed based on customer opinions and sugges- 42 companies issued a CSR Declaration. tions from the surveys. • 34 companies signed the compliance statement for the "Corporate Investors Stewardship Principles". Customer satisfaction survey of the most recent 4 years • Five financial products and services review meetings were convened; a total of 4 products First passed the review, and no products met conditions requiring delisting. First Bank First Bank (Operation Planning (Credit Card First First Securities First Life Securities • Two companies issued a CSR Declaration. Securities Investment Trust Insurance • Two companies signed the compliance statement for the "Corporate Investors Stewardship & Admin. Division) Division) Principles". Overall service; greeting Telephone On-site Investment Sales person- service; service attitude, etiquette, customer information nel's attitude Risk class/No. of Cases correctness of business planning of satisfaction services and familiarity First All 24 funds were classified Satisfaction handling, business marketing survey at with products Securities RR1／3 RR4／9 participating into different fund risk levels Survey Item handling time, profession- activities, Investment RR2 0 RR5 8 locations and according to regulations. ／／ alism and waiting time for problem investment Trust RR3／4 Total：24 business dealing at the resolution and information counter attitude services Twenty nine insurance product evaluation group meeting were convened, 16 new products First were sent to competent authority for provisional review, 150 products were partially altered 2018 Performance 85.23% 86.01% 84.5% 96% 77.4% Life Insurance and sent to competent authority for provisional review, 21 discontinued products were sent to competent authority for provisional review. 2017 Performance 84.89% (＊1) 80.64% 84% 96% 71.5% (＊3)

2016 Performance 88.90% 81.93% 82.7% 98% 70.8% (＊4)

Principle of equity between remuneration and sales performance - Establish remuneration system for the sale 2015 Performance 89.04% 83.3% 85% (＊2) 94% 81% of financial products (such as bonus of product promotion under the staff bonus, and all types of bonus under the staff Number of samples external bonus). We consider the achievement of financial product or service sales goals, and avoid distributing the full in 2018 (Number of 388,685 5,285 258／ 1,057／ 1,439／ questionnaires / Number amount of bonuses immediately after a transaction is made. Besides referring to the financial indicators of sales perfor- ／2,977,525 ／715,657 32,532 33,538 15,837 mance, non-financial indicators such as customer complaints and customer satisfaction, compliance and deficiencies of active customers) (＊5) audited are all considered before distributing bonuses. Also, a portion of the bonus is deferred to ensure there was no improper sales activity. ＊1： The lowering of scores in 2017 was due to the score intervals in the questionnaire being adjusted from 11 intervals to 5 intervals, which caused the increase of differences between each score interval. Principle of guaranteed complaint resolution - Establish consumer complaints and disputes resolution mechanism. ＊2：In 2015, a customer satisfaction survey was conducted which analyzed how customers perceived our investment In addition to formulating the "Guidelines for Handling Customer Complaints" and procedures for handling various types seminars, overall services, and e-trading system. of business disputes, the "Stakeholder Communications" section of FFHC's official website also includes online customer ＊3、4：Calculated based on the Net Promoter Score. To supplement, the lowering of scores in 2016/2017 was due to the support for the Company and our various subsidiaries, a toll-free 0800 customer hotline, business inquiry hotline, and dissatisfactory performance of the sold investment products in the last 2 years which caused customers to suffer complaint e-mail. First Bank has also set up various real-time communication channels for handling customer requests from investment losses. ＊5：Definition of active customer: A customer who made a transaction within the past year or a new customer registered and complaints, including a 24-hour customer service hotline and customer service e-mail. To properly handle financial within the past six months that has one or more effective accounts. consumer disputes and complaints, First Bank, First Securities, First Securities Investment Trust, and First life insurance report applications for financial ombudsman service each quarter to their respective Board of Directors; the types of financial consumer dispute cases, number of cases, compensation amount, and handling results are also periodically reported to the Board of Directors for future reference. Customer reconciliation and response must be completed within 7-30 days (depending on the subsidiary's regulations) for customer complaints, which are analyzed by business type, and customer feedback forwarded to the relevant units as reference for further improvements. In 2018, a total of 431 customer complaints were received, down 139 compared with 2017.

Principle of professionalism of sales personnel - Salespeople that provide customers with financial products or services are required to have the qualifications specified in the laws and regulations for each industry. If salespeople are required to be registered or receive a certain number of hours of education and training, persons who are not registered or have not completed training may not serve as salespeople.

Emphasis of the Board of Directors and specific measures - Besides establishing the "Policy of Fair Customer Treatment" and "Strategy for Fair Customer Treatment", which were submitted to the Board of Directors of each subsidiary for review and approval, audit opinions of internal audit units related to improvements on deficiencies in consumer protection are included in semi-annual compliance reports to the Board of Directors. The compliance units of First Bank, First Securities, First Securities Investment Trust, and First life insurance all completed audits of the implementation of fair customer treatment in 2018, and reported audit results to their respective Board of Directors. First Securities Invest- ment Trust is not required to submit a report to the FSC, but the remaining 3 subsidiaries all submitted reports to the FSC within the specified time period. 86 87 2018 satisfaction improvement program and its implementation First Bank 5-3 Optimization of Business Processes and Service Quality First Bank First First Securities First Life 1・First Bank's Personal e-Bank electronic certificates, physical OTP, and Citizen Digital (Operation Planning & (Credit Card Division) Securities Investment Trust Insurance Admin. Division) Certificates support multiple browsers; integrates the official website, simple electronic • Include service quality and • Provide differentiat- • Continue to Continue to • It is recommended bank, and simple online ATM; comprehensively upgraded to gain the AA rating of Web customer waiting time as a ed benefits and optimize the provide to increase Content Accessibility Guidelines 2.0; added an insurance section for customers to access supervision item discounts to card electronic investment interactions with • Customer feedback from holders based on trading system information and policy holders and information on effective policies, apply for balance certificates, and access insufficient satisfaction surveys are customers' needs, • Develop an AI increase its provide discounts, balance information on the date of deposit or withdrawal. Improvement program summarized and provided and strengthen stock picking frequency provide policy to related business communication with app through holders with a administration units and card holders electronic birthday gift lucky branches for review and • Develop new types platforms draw, and plan improvement of products in more policy holder • Organize service quality coordination with activities 2・Added functions to the e-mobile app, including " First Bank mobile payment - fee/tax payment, display QR code for audit contests digital mobile trends • IImplement an payment, and phone barcode", "Online AI customer services", "Quick login", "Digital savings account opening/document • Organize selections of the and optimize online insurance best deposit/remittance customer services enrollment process supplement", "Transfer NTD savings deposit to time deposit", and "NTD term deposit cancellation/maturity". service personnel optimization project • Deposit/remittance • Improve the personnel organize specialized ・"e-speed loan" makes it convenient for education and training knowledge of 3 • Organize service quality salespeople on customers to calculate their credit limit online mock exercises insurance products when they are considering applying for a • On-site inspections of and strengthen business units product risk control mortgage, making it convenient for young mechanisms customers to apply for loans. As of the end of December 2018, a total of 2,266 online loan • Regional centers help • Enhanced communi- • Increase the Continue to •Provided exclusive applications with a total loan amount of supervise business units in cation with card flexibility and provide EDM notifications improving service quality, holders through convenience of financial and services to NT$6,755,880,000 were approved on e-speed and notify the last 5 physical and digital the electronic information, policy holders with loan. branches in terms of platforms, such as trading system investment different attributes customer waiting time via official Line account, • Continue to trends, and to increase the e-mail each month to assist EDM, app push optimize the AI analysis of stickiness of policy with tracking improvements notifications, bills, stock picking material market holders 4・First Life Insurance continues to reinforce the functions of "e-Services" app • Business administration and physical app information •Adjusted the website units are responsible for advertising of credit through EDM, structure and mobile service platform. The app's online change functions had been increased describing the implementa- card discounts at Line, Facebook, presentation of web to 10 items, which provided the insured immediate policy search, change and tion status of customer branches and videos of pages, and feedback • Offered Apply Pay, fund managers, optimized the online convenient and practical personalized functions. An insurance product that can • Organized 2 service quality Leezen Card 2.0, allowing insurance be purchased online was also added to the online insurance platform. As of the audit contests Smile Card 2.0, and customers gain enrollment process end of December 2018, there were a total of 911 online insurance cases, Execution • Organized selections of the the Yilan Affinity the latest •Organized 49 best deposit/remittance Card jointly offered investment insurance product increase 24%, which accumulated to an insurance amount of 3821.43 million. service personnel and with Yilan County information and sales training invited the service person- Government, courses for sales The general public can get the most sufficient protection through the easiest nel to share their experi- provided card channel employees and quickest insurance processes. ence holders with travel in 2018. The training • Deposit/remittance promotion plans, courses had a total personnel organize and increased the of 207 hours and education and training stickiness of card 8,285 participants, 5・To establish a highly-motivated service spirit and a warm and humble sessions each quarter holders through and increased the service attitude for the employees, the First Bank holds "the best service • Organized monthly service promotions professional quality mock exercises organized in knowledge and personnel at deposits and remittances counter" selection every year in order • Conducted on-site service coordination with skills of sales to cultivate correct service etiquette of the staff at the counter and improve quality inspections of 188 major department personnel domestic business units stores and online •Stepped up the overall corporate image. A total of 183 staff were selected as "the best through mystery shoppers channels promotion of profit service personnel at deposits and remittances counter" in 2018. taking and stop loss mechanisms to customers to improve their performance management

5-4 Customer Care Events To promote financial knowledge and improve different groups' ability to utilize financial tools and services, we provide information on financial products and services needed by customers in different stages of life through various seminars that tour rural, urban and remote areas. We provide customers with information on different financial products and offer investment analysis and advice to maintain good customer relationships and expand our wealth management business.

88 89 2018 Customer Care Events Schedule Information security improvement Financial Planning Country Road Show We worked together with BNP Paribas Asset Management and First Securities Investment Trust in organizing the Material Topic Financial Planning Country Road Show, helping general consumers gain financial knowledge GRI 203: Indirect economic impact GRI 418: Customer privacy Taipei, Hsinchu, Taichung, Tainan, Kaohsiung 9 sessions in total 1,528 participants Set topic / Information security protection Management guidelines Reaching the Next Pinnacle of Corporate Success - Lecture Series The Reaching the Next Pinnacle of Corporate Success - Lecture Series toured each industrial park, providing the Policies Specific management practices latest financial information and investment advice, promoting green financing review principles and green energy, The "Information Security Management Regulations for • Assessment mechanismsblished an IT Emergency preferential loans for key industries, and sharing energy-saving and carbon reduction measures and results. FFHC and its Subsidiaries" was established to strengthen Response Team to respond to cyber threats. information security management by the Company and • Established the IT Management Guidelines, Taichung City Precision Machinery Innovation Technology Park, its subsidiaries, and ensure the security of information Guidelines for Disaster Recovery Plan, and Tai Yuen Hi-Tech Industrial Park, Kaohsiung Software Park, systems, equipment, network, and data. Guidelines for Reporting Information Security Dapumei Precision Machinery Park, Taichung Harbor Related 8 sessions in total 775 participants Incidents, carried out disaster recovery drills on Industrial Park, Nankang Software Park, Pingtung Agricultural Commitment an annual basis, and handled information security Biotechnology Park, Neihu Technology Park We will strengthen information security management, incidents in a timely manner. and protect and control data, systems, equipment, and • Carried out social engineering rehearsals for all Financial Planning Workshop for Customers network to ensure the security of information systems, employees. equipment, network, and data. • Continued to carry out ISO 27001 Information Promote the correct consumer finance and wealth management concepts through financial product introduction, explanation Security Management System certification. of key topics and promotional offers. Goals • Establish a network security management framework, First Bank business units sessions in total participants Assessment mechanisms 832 19,553 strengthen security mechanisms of information • Social engineering rehearsals within the scope of systems, and strengthen system access control. security monitoring are organized at least once a • Periodically execute information security tests and year for all employees. The failure rate of the four Financial Planning Clinic Seminar patches, and improve security controls during system test items in the rehearsals achieved the goal of development and maintenance. being lower than 6-10%. FC personnel conduct one-on-one review of customers' assets and provide advice. • Ensured the security of information systems, • Organized information security training sessions to equipment, network, and data. raise employees' awareness of information 30 branches throughout northern, central and southern Taiwan sessions in total participants security. 30 552 Duties • Implementation of information security measures. Establish an information security protection mechanism, implement the emergency response plan, and comply Customer care investment checkup seminar in rural communities Results with information security standards set by the trade • FFHC, First Bank, First Securities, First Securities First Securities organized customer care investment checkup seminars in rural communities to provide customers with association. Investment Trust and First Life Insurance all information and recommendations of the latest financial products. organized social engineering rehearsals for all Resources employees in 2018. The failure rate of the four test Taoyuan City, Zhongli District, Hsinchu City, Tainan City, Chiayi City 5 sessions in total 157 participants • Established an IT Development Committee responsible items in the rehearsals was in the range 0-3.8%, for reviewing the group's information security achieving the goal of being lower than 6-10%. regulations, and for tracking and reviewing major IT • In 2018, 32 information security related training Wealth Management Seminar and Celebrity Wealth Management Online Webinars incidents that were reported. sessions were held and attended by 2,682 • Selected independent directors with an expertise in people. First Securities Investment Trust promotes investment and wealth management concepts through face-to-face presentations, technology. Establish a dedicated information security • There were no information security incidents in forums, and webinars, teaching citizens about financial products, while sharing investment information that the market is unit – "Digital Security Division" that is not subordinate 2018. concerned about. to the IT Division, and appointed the former director of • First Bank, First Securities, and First Life Insurance the National Center for Cyber Security Technology and all obtained ISO 27001 certification in 2018. First 34 sessions in Taipei, Taichung, Kaohsiung and First Securities deputy director of the Cybersecurity Technology Bank hired Information Security Service Digital Investment Trust's official website + 12 Online Webinars participants 1,419 Institute as a vice president. United to provide network security surveillance • Establish a business continuity plan and implement services, and also hired RSA Security to provide information security training. support in surveillance as well as anti-phishing Mother's Day/Father's Day Workshop and anti-Trojan services. Complaints mechanism • First Bank, First Securities, First Securities Widely invite customers to jointly promote social welfare under the theme of caring for society. • Announce the "Confidentiality measures for customers' Investment Trust, and First Life Insurance also information." prepared their Declaration on Overall Information Taipei,Taichung,Kaohsiung sessions for Mother's Day/ sessions for Father's Day participants • Report information incidents for immediately response Security in 2018." 3 3 1,006 in accordance with the "Incident Reporting Guide- lines." • Information security incidents are reported in Insurance and Financial Planning Seminars accordance with the "Guidelines for Reporting To help foster greater understanding of insurance and wealth management concepts among our customers, First Life Information Security Incidents" to lower the impact on Insurance and First Bank worked together in holding seminars to provide customers in northern, central, and southern operations and loses and prevent the incident from Taiwan with the latest information on insurance products and recommendations. reoccurring. Taipei,Taichung,Kaohsiung 6 sessions in total 540 participants 90 91 VI Information security improvement 6-2 Information Security Measures To ensure the continuity of operations, an “IT Emergency Response Team” has been set up by FFHC to respond to 6-1 Information Security Management Framework and Strategies network threats. The highest level supervisor (or a designated person) of the information unit serves as the convener, We established an IT Development Committee with the president of FFHC as the chairperson. Committee members and members include the deputy supervisor of the information unit and responsible persons of systems. The IT Manage- include vice presidents, the head of the Information Technology Department, presidents of subsidiaries, and vice ment Guidelines and Guidelines for Disaster Recovery Plan were established to provide a basis for emergency presidents responsible for IT operations (or managers with an expertise in IT). The IT Development Committee is response during a disaster. Disaster recovery drills are carried out semi-annually, and the Guidelines for Reporting Information Security Incidents was established for employees to immediately handle information security incidents. To convened regularly to discuss and review IT development, IT security and management issues at each subsidiary. The build the right concepts of information security among employees, 32 related training sessions were held in 2018 and head of the dedicated information security unit or the highest level supervisor and the chairperson, president, and chief attended by 2,682 people. FFHC, First Bank, First Securities, First Securities Investment Trust and First Life Insurance all auditor of First Bank, First Securities, First Securities Investment Trust, and First Life Insurance jointly issued the 2018 organized social engineering rehearsals within the scope of security monitoring for all employees. The failure rate of Declaration on Overall Information Security of each subsidiary, which was submitted to the Board of Directors of each the four test items in the rehearsals, specifically clicking on links, opening attachments, returning reply slip, and opening subsidiary and then disclosed on the MOPS. mail, was in the range 0-3.8%, achieving the goal of being lower than 6-10%. We strengthened information security education in hopes of preventing malware from infiltrating through social engineering.

Please refer to the MOPS for the Declaration on Overall Information Security of each company. If an information security incident occurs and causes FFHC and subsidiaries to be imposed a severe penalty, their performance score will be deducted in accordance with the Employee Bonus Rules, resulting in a lower performance bonus that year. FFHC and subsidiaries were not imposed penalties by the competent authority due to an information security incident in 2018.

The responsibilities of the IT Emergency Response Team are as follows: • Review the group's IT development strategy • Review and adjustment of the recovery plan and test items. • Review the group's IT structure • Review of emergency response measures and related announcements • Review the group's information security regulations • Plan the group's IT resource integration • Review of the course of events and handling results. Duties • Review the annual IT development and investment plans • Review of other matters. IT Development of subsidiaries and review implementation results First Bank has an independent third party conduct information security evaluations, which examine the completeness Committee • Track and review major IT incidents that were reported and appropriateness of existing control measures for the overall computer system, and discover potential information • Other IT management related matters requiring security threats and vulnerabilities. This provides the basis for implementing control measures in technical and manage- coordination between FFHC and Subsidiaries ment aspects, and improves network and information system security capabilities.

First Bank's information security emergency response plan: Emergency response plans and drill scenarios Time drill was completed Drill results The Board of Directors of FFHC reviewed and passed the Information Management Policy and Guidelines to support the group's overall business development and ensure the effective utilization of IT resources, while giving consideration 1. Response plan for abnormal ATM withdrawal incidents: Simulated emergency response measures for branches being robbed by hackers. 2018/5/17 Met expectations to the security of information systems and operations. The policy and guidelines stipulate that FFHC and subsidiaries must establish information management regulations based on the characteristics of their industry. Furthermore, the IT 2. Response plan for website under DDoS attack: 2018/9/4 Met expectations Management Guidelines was established in coordination with information management related laws and regulations Simulated emergency response measures for branches under DDoS attack by hackers. to strengthen the information systems, network equipment, and data security of FFHC and subsidiaries, and also to 3.Local backup plan for servers: strengthen internal control functions. Provisions on the use and security of IoT equipment were added to the Information Simulated emergency response measures for switching to servers of the Taichung 2018/3/18 Met expectations Security Management Regulations in response to the requirements of the Bankers Association of the Republic of China Center when servers in the Taipei Center malfunction. on IoT equipment. The Internal Control System contains detailed rules and manuals for information security/online 4.Information security defense plan for the website application system: Simulated emergency response measures for when the Bank's website services are 2018/7/5 Met expectations security risks, including application system operations management, hardware and environment management, network embedded with a Trojan horse or malicious link by hackers. management, webpage management, e-mail security management, computer user access rights management, 5.Remote backup plan for servers: disaster recovery procedures, subsidiary supervision and computer file preservation, storage and processing principles. Simulated emergency response measures for switching all information services to 2018/10/6 Met expectations the Taichung Center when the Taipei Center encounters a disaster. First Bank established a dedicated information security unit – "Digital Security Division" that is not subordinate to the IT 6.SWIFT abnormal remittance response plan: Division in 2016, so as to overhaul our digital banking operations and information security management. Pei-wen Liu, Simulated emergency response measures for when hackers hack the SWIFT 2018/10/30 Met expectations the former director of the National Center for Cyber Security Technology and deputy director of the Cybersecurity system and transfer funds. Technology Institute was appointed as a vice president. It is responsible for planning IT strategies, establishing and managing the information security policy, managing system and network security, planning the IT infrastructure, and To ensure the security of network and information systems and provide customers with secure automated services, First implementing and maintaining the information security management system. Bank, First Securities, and First Life Insurance have all obtained the ISO 27001 certification. The subsidiaries periodically commission a certification unit for renewal and triennial re-certifications to maintain the effectiveness of their certificate, so as to provide more secure financial products and trading procedures. First Bank purchased "information system illegal conduct insurance" to prevent sustaining financial losses from computer systems being hacked. First Bank also hired Information Security Service Digital United to provide network security surveillance services, and hired RSA Security to provide support in surveillance as well as anti-phishing and anti-Trojan services. 92 93 Prevention of money laundering, financial fraud and terrorism financing Material Topic GRI 419: Socioeconomic Compliance Management guidelines Specific management practices Assessment mechanisms Policies Duties • We established the "FFHC AML/CFT Policy," • The implementation of AML/CFT by each The "FFHC AML/CFT Policy" is a consistent set of Supervise subsidiaries in periodically conducting "FFHC AML/CFT Plan," and "FFHC AML/CFT subsidiary is reported to the Risk Management anti-money laundering and counter terrorist comprehensive evaluations, establish risk Group Information Sharing Policy and Control Committee bimonthly and to the Board of financing guidelines established to maintain prevention plans, examine internal regulations Procedures," for the effective implementation of Directors and the Audit Committee semi-annual- financial stability, combat criminal and terrorist on AML/CFT and AML operating procedures, AML/CFT. We continue to revise internal ly. financing activities, and prevent facilitating and periodically evaluate information system regulations in coordination with the latest AML • We incorporate important laws and regulations money laundering and terrorist financing functions and parameter thresholds, the appoint- regulations announced by the competent such as the Money Laundering Control Act and activities through the provision of financial ment of dedicated units or supervisors, and the authority. Counter-Terrorism Financing Act into compli- products or services of the company. organization of education and training. • We supervise and review the implementation ance matters of responsible departments. of AML/CFT by subsidiaries to make improve- Compliance self-evaluations are conducted Commitment Resources ments: semi-annually, and written exams or sampling To enhance group's AML/CFT, we made a • Subsidiaries have invested adequate resources 1.During quarterly meetings, subsidiaries give inspections are administered to determine if commitment for subsidiaries to create a culture and manpower to strengthen the AML/CFT reports on the implementation of AML/CFT. personnel understand and comply with laws that attaches importance to AML/CFT, and will mechanism, and hired Deloitte to provide 2.In order to keep the Board of Directors and regulations. allocate sufficient manpower and provide consulting services for optimizing the Group's informed of the Group's AML/CFT plan • Meetings between dedicated AML/CFT sufficient resources for the implementation of money laundering and terrorist financing risk implementation, a semi-annual report is given supervisors of each subsidiary and on-site visits AML/CFT operations, actively enhancing th assessments. on the management of regulatory changes are carried out on a quarterly basis, during group's AML/CFT capabilities. We will raise the • We subsidize Certified Anti-Money Laundering related to AML/CFT; results of audits by which subsidiaries report and exchange their AML/CFT awareness of all employees so that Specialist (CAMS) membership fees, registra- financial inspection agencies, the Company's AML/CFT implementation status. AML/CFT operations are properly carried out. tion fees, and incentives, and provide extra Audit Division, the audit unit of each subsidi- • The effectiveness in controlling financial frauds. credit for passing AML/CFT related certifica- ary, or an independent third party, as well as Goals tions. improvement measures; statistics and Results We will establish the group's joint defense descriptions of comprehensive risk assess- • Subsidies for CAMS membership fees and framework through periodic meetings, on-site Complaints mechanism ment results, the AML/CFT plan, and registration fees and incentives totaled visits, and continual supervision of AML/CFT • Reports on the implementation status of AML/CFT controls; review and improvement NT$73,404,905 in 2018. As of the end of 2018, implementation by subsidiaries, preventing subsidiaries (such as improving deficiencies of the AML/CFT system and operations; a total of 1,305 employees obtained CAMS. financial crime at the Group level. We hope to found in audits, personnel training, and subsidiaries supervising the compliance of • The Company and subsidiaries have estab- thereby comply with international AML standards number of STRs), reports on risk assessment reinvestment enterprises with AML/CFT; lished AML/CFT policies, procedures, and and regulations, protect lawful and reasonable results (prevention plan tracking), and reports assignment and training of AML/CFT control measures in accordance with regula- business activities, maintain the reliability of the on major incidents. personnel; key points of the AML/CFT plan for tions, and continue to review and optimize financial system, and ensure the security and • Group management and high risk customer the next six months; sharing recent cases current AML/CFT related internal regulations order of the financial market. information sharing mechanism. related to AML/CFT. and operating procedures. Current functions • To actively prevent financial frauds in order to and threshold parameters are periodically avoid loss of property for customers. reviewed and adjusted based on risks, and subsidiaries continue to organize training for employees. • In 2018, 939.55 hours of AML/CFT related training sessions were held and attended by 30,331 people. • In 2018, a total of 18 fraud attempts were successfully prevented, resulting in NT$4.23 million in fraudulent funds being blocked.

94 95 VII Prevention of money laundering, financial fraud and terrorism financing 7-2 Implementation of Anti-Money Laundering and Counter Terrorism Financing

7-1 The Group's AML/CFT Management Framework 1. Education and training FFHC continues to strengthen its AML/CFT mechanisms, and has stepped up its supervision and management of To improve the abilities and performance of the group's employees in AML/CFT, categories of AML/CFT education and overseas business locations' compliance with AML/CFT regulations. For example, First Bank began appointing full-time training courses organized by FFHC, First Bank, First Securities, First Securities Investment Trust, and AMC in 2018 are as AML/CFT supervisors at 43 medium to large business locations in January 2018, so that it can meet international follows: standards and control AML/CFT operations. The full-time supervisor may concurrently hold the position of regulatory compliance supervisor and conduct self-audits, but may not be involved in any other operations to ensure the position's Securities Life independence. FFHC Banks Securities Investment AMC Trust Insurance Regular internal training that 41 people 8,980 people 107 people 142 people 62 people uses cases for learning 3.5 hours 220.5 hours 1.5 hours 2 hours 4 hours

Anti-Money Laundering and Counter Terrorism Financing Organization Structure Computer training course 13,410 people 144 people self-evaluation form 2.8 hours 1 hours

The laws/regulations manager is 33 people 3,921 people 32 people responsible for company-wide internal network training 2 hours 8.5 hours 2 hours The laws/regulations unit provides 76 people 255 people 259 people 143 people Board of Directors face-to-face training 7 hours 64.5 hours 17 hours 1 hours 658 people 1,360 people 56 people 92 people 3 people Face-to-face training by external institutions 28 hours 42.25 hours 21.5 hours 32.5 hours 3 hours Effectiveness of the design and 413 people 102 people 16 people 22 people 4 people Mandatory annual training management of 16 hours 104 hours 216 hours 128 hours 11 hours the audit and Chief Compliance Officer Director: 1 testing system Supervisor: 1 Total 30,331 people attended the courses with a total of 939.55 hours (Supervisor/Vice President) Handling FFHC Audit Unit personnel: 3 (1 dedicated FFHC Compliance Department personnel) 2. Incentive measures and activities FFHC, First Bank, First Securities, and First Life Insurance provided subsidies for CAMS membership fees and registration fees and incentives that totaled NT$73,404,905 in 2018. As of the end of 2018, a total of 1,305 employees obtained CAMS. Furthermore, First Bank provides extra credit for CAMS and AML/CFT certifications when considering employees Each subsidiary is First Securities First Life required to identify, First Bank First Securities Investment Trust Insurance for promotions. assess, and control its own ML risk Supervisor: 1 / Supervisor: 1 / Supervisor: 1 / Supervisor: 1 / 3. Non-face-to-face customer due diligence: Personnel: 312 Personnel: 40 Personnel: 11 Personnel: 11 We live in an era where smartphones are banks, which was brought by the trend of digitalization. First Bank encountered the issue of identity verification when new customers open a digital account with the smartphone app. First Bank uses the customer's account, Chinese name, date of birth, and mobile phone number at another bank (there are current- First Commercial First Worldsec First Capital ly 22 domestics banks that accept identity verification), along with dual ID documents uploaded by the customer on the FCB Leasing Bank(USA) Securities Management app for two-factor authentication. After verifying that the account is opened by the customer via a phone call, subse- Securities quent account opening procedures are carried out according to the bank's due diligence procedures.

4. Control measures for high-risk customer We stipulated in the FFHC AML/CFT Plan that PEPs of foreign governments, terrorists/terrorist organizations under economic sanctions or identified or investigated by a foreign government or international AML organization, and individuals, legal persons, and groups designated in accordance with the Counter Terrorism Financing Act shall be directly viewed as high-risk customers. Subsidiaries may specify the types of customers that are directly viewed as high-risk customers based on their business patterns and with consideration to related risk factors. We require subsidiaries to periodically examine whether if they have sufficient information for identifying customers and beneficial owners, and ensure that the information is updated. For high risk customers, the information must be examined at least once a year, and different control measures must be adopted for high-risk customers and customers with specific high risk factors based on the risk prevention policy and procedures, so as to effectively manage and reduce known risks.

96 97 6. Monitoring criminal activity such as ML/TF First Bank Customer Due Diligence (CDD) procedures are as follows First Bank uses the 53 suspicious trading patterns of ML/TF in the appendix of the Model Guidelines for Banks' AML/CTF Policies and Procedures announced by the Bankers Association of the Republic of China for monitoring. First Bank issued 1,359 STRs in 2018, nearly doubling compared with the 716 STRs in 2017, showing its achievement in 1. Check and authenticate System Control measures for Independent customer identity • Connect to high-risk customer third party preventing and monitoring ML/TF. • Request application form World Check • Reject the application to assurance for opening an account database, open an account • The The 8 types of crime with extremely high threat of ML in Taiwan identified in the National Risk Assessment issued by and business dealings search for the Execute the "lending and indepen- • Request the customer's names and deposit watchlist mainte- dent the Anti-Money Laundering Office, Executive Yuan were used for classification. The top three most common types of identification documents determine if they nance transaction" to add auditing crime in STRs of First Bank were fraud, securities fraud, and tax crime. This is consistent with the statistics of transac- are PEPs, on the the customer on the • Establish non-face-to-face function for tions suspected of ML/TF compiled by the competent authorities (such as prosecutors offices, police departments, customer due diligence Specially blocked persons list for the Designated system control: Ministry of Justice Investigation Bureau, and Ministry of Finance National Tax Administration) in 2018, showing the methods for electronic effective- Nationals List for 1. If the customer is under quality of First Bank's STRs. payment and digital terrorist economic sanctions, an ness of the banking financing, and individual, legal entity or AML/CFT terrorists or organization sanctioned by system is Statistics of cases of competent authorities Types of cases in STRs of First Bank specified in 2. Check and identify the terrorist groups the Ministry of Justice in identified or accordance with the the "First Number of cases Ratio (%) Number of cases Ratio (%) beneficial owner being investigat- Terrorism Financing Control Bank • Request the Articles of ed by foreign Act, or is a terrorist/terror- Overall Fraud 3,839 74.76 144 78.26 Incorporation, sharehold- governments or ist group identified or AML/CFT ers list, and identification international investigated by a foreign Plan." Securities fraud 491 9.56 15 8.15 documents of the customer organizations. government or internation- • Indepen- and its institutional • Manual al organization. dent third Tax crime 267 5.20 9 4.89 determination 2. Compile a Suspicious shareholders for identifica- party and comparison. Transaction Report (STR) assurance Corruption tion, and examine if 198 3.86 2 1.09 • Input results into according to regulations results and bearer shares were "customer risk If the customer is on the report were Drugs 132 2.57 8 4.35 issued. rating transac- Specially Designated approved tion," integrate Nationals List, report the Organized crime 105 2.04 0 0 the customer's customer and freeze the by First risk score, customer's assets. Bank's Customers that opened new accounts or engage in business dealings 3. Request information on Gambling 103 2.01 6 3.26 determine the • Allow the customer to Board of senior management Directors. • Request declaration from customer's risk open an account Third party ML 0 0 0 0 senior management and level, and then １.If the customer is a beneficial owner create a domestic PEP, increase the Total financial file for customer's risk score by 5,135 100 184 100 the customer. occupation, and adopt 4. Understand the nature of • Immediately different levels of control the relationship and generate the measures based on the 7. AML-related Information Disclosures purpose for dealing with customer's risk customer's risk level. First Bank discloses AML information and the Wolfberg AML Questionnaire it signed in the customer level 2. If the customer is a foreign • Request the business PEP, list the customer at a the AML section of its website to increase AML information transparency. dealing statement high risk level and raise the review level to senior vice president or manager. Retain the document records above for 5 years Examine whether if there is 7-3 Preventing financial fraud sufficient information for In recent years, there has been a noticeable increase in the number of financial fraud incidents. To better safeguard its identifying customers and beneficial owners at least customers' assets, First Bank has formulated the "Over-the-Counter Caring Checklist" and "Fraud Prevention and once a year, and ensure Large-sum Withdrawal Precautions for Depositors at Business Units". Furthermore, with regard to withdrawals and that the information is updated transfers made by customers, in cases where transfer requests to designated accounts or cash withdrawals made by senior citizens exceed a certain threshold, or in cases where the monetary amount, frequency, or circumstances of a transaction are deemed suspicious or abnormal and thus potentially indicating fraudulent activity, it is the policy of First Bank to make a reasonable inquiry as an expression of concern to protect its customers. When necessary, local police 5. Measures superior than what the law requires precincts are notified to dispatch officers to conduct verification measures or provide a police escort for customers • We commissioned Deloitte to provide AML optimization services to strengthen AML/CFT related regulations of subsid- making large-sum cash withdrawals. First Bank is dedicated to complying with all government policies and regulations iaries and the group's AML/CFT policy, establish consistency between the group's IRA methodology and risk assess- aimed at curbing fraud and abuse and helping to identify and report scammers and frauds to the authorities. In ment, and optimize the AML system, operating procedures, and internal regulations of subsidiaries. Deloitte also addition, we provide our bank tellers with detailed instructions and training on how to handle suspicious incidents in a provided guidance and assistance to subsidiaries First Securities, First Securities Investment Trust, and First Life courteous manner, including analyzing the details of actual cases of fraud provided by local law enforcement and Insurance in establishing more comprehensive AML/CFT control measures. media reports concerning the latest information on scams and other fraud techniques, thereby strengthening our ability to effectively stop these scams from occurring. In 2018, a total of 18 fraud attempts were successfully prevented, • The FSC only requires banks and insurance companies to commission an accountant to audit AML/CFT assurance resulting in NT$4.23 million in fraudulent funds being blocked. projects. However, in order to verify the AML/CFT implementation status of other subsidiaries - First Securities and First Securities Investment Trust, and ensure that they properly conduct ML/TF risk assessments, we commissioned PwC, the accounting firm that audited the AML/CFT project of First Bank and First Life Insurance, to also audit the AML/CFT project of First Securities and First Securities Investment Trust, increasing the strength and depth of audits to ensure the consistency of the group's methodology and assurance project audit standards. The four subsidiaries above all received the conclusion "present fairly, in all material aspects" in PwC's assurance report. 98 99 Climate change risks and opportunities Material Topic GRI 203: Indirect economic impact GRI: guidelines and financial services sector disclosure standards: Product Portfolio Management guidelines Policies Complaints mechanism • To ensure the implementation of our CSR • The “Stakeholder Communications” zone set up on our official Policy, the Company established CSR website discloses communication channels such as the complaints Committee which had "Customer Care" and hotline number or e-mail box, etc. for our employees, investors and "Environmental Sustainability" groups to customers to file their complaints. carry out our business philosophy of "Green • Stakeholder survey in the corporate website's CSR section. Finance". • First Bank set up "Green Finance Commit- Specific management practices tee", supporting the development of "Green • CSR Committee of the Company determines climate change Finance" with four approaches as "Green management policy; senior executives of each business group direct Financing", "Green Consumer Finance", business management units to propose execution strategy, execution "Green Examination" and "Green plan, short, medium and long-term goals and KPI, follow up on the Investment". results and regularly report the execution performance and conduct • The Environmental Sustainability Group of reviews. the CSR Committee is tasked with identifying • Establish defense corps for responding to typhoons, flooding, potential climate change risks and planning earthquakes, bank runs, epidemics, fires, explosions and other sustainable response measures. emergencies to manage climate change risks. • Gather domestic and foreign environmental protection and energy Commitment saving and carbon reduction trend and changes in the environmental GREEN First Bank invests resources in related regulations through news, websites of environmental groups, external green finance industries through equity and consultants, Environmental Protection Administration and environmen- business activities to increase the scope tal protection bureau of local governments, information of the and strength of green finance products and industry and international reports. fulfill social responsibilities. Assessment mechanisms Goals • Add 4 new urban renewal financing cases • Combine core competence to assist in • Extend credit loans to companies and provide green financing industrial transformation and achieve the (including green industries and green companies) with the targets of goal of "No. 1 Brand in Green Finance". NT$100 billion for approved loans and NT$55 billion in balance of • Introduce the Task Force on Climate-re- loans. lated Financial Disclosures (TCFD) • Launch the processing of “Industrial Innovation Plan Loans” with an FINANCE framework to analyze the Group's annual loan approval target of NT$60 billion and an outstanding climate change risks and opportunities loans target of NT$395 billion. and strengthen the Company's climate • Continue to implement the "green consumption loan" project with a change governance. target annual loan credit line of NT$300 million to provide customers with funding for the purchase of green energy or energy-efficient Duties products. • Support the development of green and • Set the target outstanding volume of Living Green Card at 20,000 sustainable industries: Combine core and LEEZEN Co-Branded Card at 42,800 and donate a certain competence to assist in the industrial percentage of credit card consumption amount to the foundation for upgrading of green industries like wind the charitable events promoting environmental sustainability and power, bicycles, biofuel, fuel cells, organic organic agriculture, so the card holders can make contributions to agriculture, electric vehicles, pollution the earth while using the credit cards. remediation and recycling, and provide funding for their operation and develop- Results ment. Provide assistance and develop • Added 6 new urban renewal financing cases investments targeted at green energy • As of the end of December 2018, domestic branches approved a industries. total of NT$108.247 billion in loans and NT$57.908 billion balance of • Provide energy saving products and loans in green financing (including green industries and green services: Make sure business operation, companies). Overseas branches approved a total of US$330 million products and services do not influence in loans with US$210 million in balance of loans. ecological conservation; lower the impacts • As of the end of December 2018, new “Industrial Innovation Plan of products and services to the environ- Loans” loan approval amounted to NT$62.32 billion and credit ment; reduce energy consumption; and balance was NT$446.2 billion. assist the development of clean energy. • As of the end of December 2018, new “green consumption loans” loan approval amounted to NT$550 million. Resources • As of the end of December 2018, the outstanding volume of LEEZEN • Play the role of the finance industry in Co-Branded Card were 49,581 and "Green Credit Card - Living the capital supply chain and create Green Card" were 29,843. Cumulative donations from the two cards sustainable finance. amounted to NT$88.6 million. • Host energy-conservation symposiums, Corporate Gold Workshop, and environmental education to facilitate exchanges with customers, suppliers, and various stakeholders through related promotion events and communicate the Group's green finance 101 100 products, policies, or ideals. Building "the No. 1 Brand in Green Finance" Milestones

2010 2011 2012

Formed the "Green Building Certification Program" team to open the way to green Defined the CSR Policy and Set a sustainable development target of "becoming the number one brand in green finance". finance. Code of Conduct, and also Required the headquarters building to reduce its GHG emissions in 2015 by 12% compared to 2011. Promoted "Urban Renewal Financing" to encourage the renewal of aging communi- established a CSR Committee Launched the "Renewable Energy Creation Loan" to help business owners purchase renewable ties. to set annual environmental energy generation equipment. Launched the "No.1 Promoter in the Energy Industry" financial plan, making First conservation targets and The FFHC headquarters building (opened in 1982) received the Green Building Mark certification Bank the first domestic bank to offer a financing program for the ESCO industry. action plans. (passing grade), making it the first redevelopment project of its kind in Taiwan to comply with the Established the Organic Agriculture Assistance Project and launched the first charity Launched the "Green Energy high standards of the new green building specifications. co-branded card based on the concepts of "going organic to stay healthy" and Industry Loan" to support the Cultivated the concepts of energy conservation and reducing our carbon footprint among employees "environmental conservation". The card enables First Bank to team up with development of the green and reinforced the application and implementation of environmental education principles. customers to help small organic farmers that lack manpower and financing in energy industry. Installed a rainwater recycling system at the headquarters building, thereby order to protect the land of Taiwan. helping to conserve water resources. 2014 2013

Formulated the Green Financing Review Principles based on the Equator Principles, In 2012, a target was set to reduce the headquarters building's GHG emissions by 12% by 2015 compared to 2011, enabling us to better protect the environment and incorporate sustainable principles and the goal was achieved ahead of schedule in 2013. into our core business operations. Signed up for the Carbon Disclosure Project (CDP) Lighting systems at all company locations have been upgraded to only use LED Set electricity, water, fuel and gas conservation targets for each company. The annual reduction target must also be fixtures. no lower than the ratio set for the previous year. Incorporated ISO 50001 Energy Management System guidelines for the IT Building for the first time and received certification. Incorporated ISO 14064-1 Greenhouse Gas Inventory System guidelines for five company locations including the IT building for the first time and received certification.

2015 2016 2017 2018

Defined the tenets of "Green Partners" and Launched the "Preferential Loans for Key Develop- First Bank set up "Green Finance Committee", FFHC received the Climate Change A List rating and Water extended the ideals of the Equator Principles to ment Projects" plan, which is a new lending supporting the development of "Green Finance" with Resources B List rating from the Carbon Disclosure Project banking and insurance products. A "Do-Not-Invest service aimed at meeting the financing needs of four approaches as "Green Financing", "Green (CDP) in 2018 and became the first Company in Taiwan's List for CSR Violations" was also established as a key development projects in the areas of green Consumer Finance", "Green Examination" and financial industry to attain Leadership A List. reference for group companies to use during technology, modern agriculture, and businesses "Green Investment". All First Bank's 188 domestic branches adopted the "ISO investment reviews. involved in the circular economy. First Bank, First Securities, First Securities Investment 50001 - Energy Management System certification". Established the 3-step Supplier Management Established two solar-powered bank branches Trust, First Life Insurance and First Financial AMC all All 192 business locations of First Bank, First Securities, First Procedure to join suppliers in protecting the local and six solar-powered electronic billboards. introduced "ISO14064-1 Other Indirect Emissions Securities Investment Trust, First Life Insurance and First environment. Introduced indoor air quality self-management at Inventory (Indirect greenhouse gas emissions in Financial AMC achieved "ISO 14001 Environmental Manage- Employees obtained "Environmental Educator 189 company locations and established real-time transportation - Business travel) and had been ment System" certification Qualifications" certification, allowing them to plan indoor air quality monitoring systems at 8 tested and verified Yilan Branch green building obtained the only and formulate the content of the Company's company locations. First Bank obtained "ISO 14001 Environmental "Diamond-class" Green Building Mark for historical site in environmental education courses. Purchased electronic scooters for our corporate Management System" verification for 7 operating Taiwan. Arranged for employees to take part in online fleet, enabling us to more effectively reduce our offices First Bank collaborated with Yilan County Government and environmental education courses to ensure all CO2 emissions. The first one in the financial industry of Taiwan that issued the "Forest Yilan Affinity Card". First Bank donated employees have a good understanding of Held a Environmental Protection and Energy obtained the "Counter Service Carbon Footprint PCR 0.3% of regular purchase payments for use in tree planting, environmental protection and sustainability Conservation Competition which resulted in Formulation and Inventory of Environmental tree protection, and social welfare activities. awareness. reducing our energy consumption by 89,000 kWh Protection Administration" verification We coordinated the syndicated bank loan of over NT$10 Implemented the "zero waste bin" policy, which and issuing 18 awards to employees. Set up "Solar Power Generation and Rainwater billion for the largest solar cell manufacturer in Taiwan as maximizes the effect of our recycling efforts by Incorporated PAS 2060 - Carbon Neutrality Recycling Ecological Hydroponic Green Roof" at the lead arranger. using more effective sorting methods. guidelines at four locations including the Wanhua Wanhua branch We raised and managed a green energy fund of NT$330 Completed the introduction of environmental Branch building for the first time and received Charitable event with cross-industry alliance-Green million for investment and construction of solar power plants accounting and reporting procedures at First Bank. certification. Light Love Project with total installed capacity of approximately 27MW. Launched mobile credit cards and debit cards, Incorporated ISO 14046 Water Footprint guide- Rated as level B in both CDP questionnaires for First Bank London Branch applied for the certification for old which use smart phone functionality to reduce lines at the headquarters building for the first time climate change and water security. buildings based on the Building Research Establishment plastic waste and carbon emissions. and received certification. Launched "Green Credit Card - Living Green Card" Environmental Assessment Method (BREEAM) and was rated Incorporated ISO 14001 - Environmental Manage- Incorporated ISO14064-1 Other Indirect Emission Launched projects of "green consumption loan" for "Very Good" for its own office building improvement project. ment System guidelines at the FFHC Headquarters Inventory (Indirect greenhouse gas emissions in purchasing green energy or energy saving products building for the first time and received certification. transportation - Business travel) for the first time The only one in the financial industry of Taiwan that and received certification. extended the "ISO 14064-1 Greenhouse Gas Inventory" to its 33 foreign operating offices 102 103 In response to the potential positive and negative financial impact of extreme weather on FFHC, the Environmental TCFD Indicator Disclosure Framework Sustainability Group of the CSR Committee is tasked to identify potential climate change risks and opportunities and Level Indicator Corresponding CSR Chapter assemble all subsidiaries and each business management department to perform correspondence of indicator match using the TCFD (Task Force on Climate-Related Financial Disclosures) framework, improve the downward differences A. Describe supervision of the Board of Directors on climate related risks and opportunities and check and identify the operation risks and opportunities of the Company due to physical, transformation and other Governance Green Finance P104 aspects. It shall establish a risk and opportunity matrix and use the outcomes of the matrix analysis to establish risk B. Describe management's functions in assessing and management strategy regarding the major risks as the core response action to the climate change, and estimate managing climate related risks and opportunities management cost and financial impact accordingly. The goal is to strengthen the Company's climate change governance, systematically connect assessments and finances, reduce risks, and gain business opportunities. A. Describe the short, medium and long-term climate related risks and opportunities identified by the Group Green Finance B. Describe climate related risks and opportunities that would 1-1 Climate change risks Major steps and risk management process for identifying climate change risk sand opportunities pose major impact on the business, strategies and financial 1-2 Climate change opportunities Strategy planning of the Group

C. Describe the resilience of the Group's strategy, take Green Finance different scenarios of climate change into consideration, 01 02 including situation of 2°C or lower 1-1 Climate change risks A. Describe the Group's process of identifying and assessing Assemble each subsidiary Provide risks and opportunities climate related risks and business management list and discuss the definition of Evaluate the impact department and divide them each risk and opportunity and strength and occurrence Risk B. Describe the Group's process of managing climate related risks Green Finance P104 into groups based on the its relevance to the business of 03 frequency. management natures of business. the Company. C. Describe the Group's process of identifying, assessing and managing climate related risks and how to incorporate it into the overall risk management A. Disclose the indicators used by the Group to assess climate 04 related risks and opportunities in compliance with strategy Sustainable Development Goals P38 P43 Calculate risk or opportunity index. and risk management process ~ Draw significant risk Green Finance Indicators B. Disclose emissions and related risks in Scope 1, 2 and 3 or opportunity matrix. 3-2 Set clear carbon reduction goals and Goals (if applicable) 05 1-1 Climate change risks

C. Describe the Group's targets in managing climate related Sustainable Development Goals risks and opportunities and the performance of those targets 06 07 P38~P43 Adopt risk reduction measure and After performing the risk reduction analyze its the cost corresponds with measure, analyze its possible financial its performance; if it was analyzed impact and evaluate whether or not to to be feasible, then perform the risk transfer the risk, such as purchase reduction measure. relevant insurance, if the financial impact is severe. 09 08 Evaluate the sufficiency of the said reduction After performing the risk reduction and transfer and transfer measures and if there is room measures, assume the risk when it occurs and for improvement. Draw up the standard recover as soon as possible. response process for the next risk.

To avoid the investments and financing risks derived from climate change, our Green Finance Committee-Green Examination Group identified and assessed the environmental risk factors and revised the related policies or principles of credit and investment review to prevent financing risks arising from climate change; also, related policies or principles were included into the climate change management policy of CSR Committee of the Company while senior executives of each business group directed business management units to propose execution strategy, execution plan, short, medium and long-term goals and KPI, follow up on the results and regularly report the execution performance to the Board of Directors and conduct reviews. 104 105 1-1 Climate change risks

FFHC Identify the risks of climate change Type Item Impact on Company Operations Risk Mitigation Management Measures Type Item Impact on Company Operations Risk Mitigation Management Measures

Tropical • Damage to the information appliances due to tropical As tropical cyclones may cause damage Bad When loan customers of the Company involve in When there is bad reputation, we will cyclones. to the information appliances, the reputation environmental pollution which leads to negative investigate the truthfulness of the incident, cyclone • Tropical cyclone caused harm to the staff for the Company appoints professional contrac- confirmation of disaster damage. tors to conduct inspections and mainte- reports of the media, reputation of the Company will collect evidence, evaluate its impact, draw • Tropical cyclone caused the affected households to nance for mechanical and electrical be indirectly affected. up response measures and explain to the be unable to repay loans which led to the loss of equipment and we set up waterproof public by press release. principal to the Company. gates, sandbags, and other flood-preven- Avoid investment in stocks of companies • Work being called off due to tropical cyclone which tion measures. We purchase insurance for investment with disputed performance in environmen- resulted in the disruption of operations. tal conservation, human rights, and social • Tropical cyclone caused decrease in the asset value property held by the Company and all-risk home insurance for credit asset to transfer issues. of the Company's investment real estates. risks and enhance protection of creditor's • Tropical cyclone caused damage to offices or rights. equipment. As to the risks of extreme climates, rising • Tropical cyclone caused bodily injury to the insured of Sustainable • Investors in the stock market may reduce their Implement responsible investment and sea levels and tropical cyclones, the holding of stocks lacking corporate sustainability, if stewardship principles and invest the Company which led to the increase of claim Company pays close attention to droughts, trends of the amount. financial securities underwriting departments and dealing Company's own funds and loans in Physical severe rainfalls and power supply alerts and establish defense corps for respond- industry departments invested using the Company's own sustainable companies. Rising sea level exposes some business units to Rising sea ing to typhoons, flooding, earthquakes, funds continue to underwrite or invest, the Thoroughly execute the ESG review levels flood risk. bank runs, epidemics, fires, explosions and Company's operation may be impacted. policies and adopt the "Green Financing other emergencies to manage climate Extreme • All loan customers of the Company are required to Review Principles" for all investment and precipitation Extreme drought may lead to lack of electricity. change risks. Avoid waterfront low-lying areas when sign the CSR Declaration, which could lead to the financing cases. Evaluate risk factors and and drought choosing the locations and purchasing loss of business. communicate with customers. lands and buildings for the operating The fund and insurance companies that Extreme In recent years, days of high and low temperature increased, the temperature change was severe. Days of offices; If any asset held locates at a climate waterfront low-lying area, we will try to sell products through First Bank's channels high temperature caused substantial increase in electricity Transformation change dispose of it or transfer the risk by have signed the compliance statement for used for air conditioning of the Company, which increased insurance. the "Stewardship Principles" and signed the energy consumption. the "CSR Declaration". Uncertainty • Regulations on renewable energy certificate or In response to possible legislation in the Educate and encourage loan customers to of carbon right certificate transactions being unclear. future that requires any unit with a sign the CSR Declaration for them to regulations • The Company plans to raise and manage green contract capacity of 800 kW or more to understand the importance of ESG values. energy fund for investment in solar power plants in obtain 10% of its electricity from renew- Taiwan, but the risk of regulatory uncertainty persists. Formulate the CSR Report each year to able energy which incur higher costs, the disclose the Company's ESG operations. • The government is expected to mandate users with a Company shall replace existing contractual capacity of 800 kW or more to obtain 10% equipment with more efficient equipment, of its electricity from renewable energy. This type of reduce contract capacity, formulate plans Increase As environmental protection awareness increases, an Pay close attention to the current state of energy is expensive and in short supply and may for power generation and reduce incur more operating cost or penalty risks to the domestic and increasing number of industries and companies have the industries and future trends while company. electricity purchased from external international been identified as companies that pollute the gradually reducing the amount of shares it • Regulatory change regarding renewable energy will sources, and seek cheaper renewable environmental environment. It would reduce the stock price of such holds in companies that may be identified energy. We shall pay close attention to influence power companies the Company reinvests in. protection companies and indirectly affect the returns on the as polluting the environment. information on new technology and • Indoor Air Quality Act presently only regulates awareness Company's investments. business department in head offices of the financial consult suppliers on the availability of industry, such Act may extend to regulates all new equipment with higher efficiency or business departments in the future and thus increases carbon reduction technology. Change in Climate change leads to the change in socioeconom- Pay close attention to change in socioeco- the Company's operating costs. As the "Indoor Air Quality Management socioeconomic ic conditions, including education, illness, welfare nomic conditions due to climate change • If the government requires users with a contractual Act" may be expanded to include all

Other condition system, the gap between the rich and the poor and and properly design differentiated capacity of 800 kW or more to save 1% of electricity business units, the Company shall initiate public construction, which pose a certain degree of products and services. every year, the Group may be subject to government autonomous management of air quality sanctions since it has already reduced carbon for all business units in advance. We shall impact on the financial product and service provision. emissions since 2012 and encountered bottlenecks. inspect and monitor CO2 concentration in The Group may face difficulties in achieving voluntary

Transformation office environments every six months. For carbon emissions reduction goals if no new low-car- business units with CO2 concentration of bon technology is developed. The Group must reach higher than 1,000ppm, we shall send the goals by trading carbon rights or purchasing personnel to the locations to survey and renewable energy certificates. plan improvement measures. International Paris Agreement requires that each country dedicates Gather domestic and foreign environmen- conventions to maintaining temperature rise within 2℃ compared to tal protection and energy saving and or the temperature before Industrial Revolution, which will carbon reduction trend and changes in agreements indirectly affect our Company. the environmental regulations through The Company faces mounting difficulties in achieving news, websites of environmental groups, medium and long-term carbon emissions reduction external consultants, Environmental Voluntary targets (reduce carbon emission in 2050 by 50% less Protection Administration and environmental protection bureau of local agreement from levels in 2005) due to continuous temperature rise in Taiwan and the MOEA's significant increase of the governments, information of the industry emission coefficient for electricity use in recent years. and international reports; also, confer with the consultants and collect domestic When renting rental cars of the subsidiaries, mandatory and foreign cases to draw up response Mandatory declaration of carbon emission in compliance with the environmental policies and regulations of the govern- policies. declaration ment must be made, thus increases the Company's operating costs. 106 107 Climate change risk matrix identified by FFHC 1-2 Climate change opportunities

Climate change opportunity possibility matrix identified by FFHC High • Regulations on renewable energy certificate or carbon right certificate transactions being unclear High • Include green buildings and • Green Finance Committee plans • Medium and long-term carbon energy saving buildings as key green financing and investment • Damage to the information reduction goals of the Company purchasing items in real estate policies and guidelines to improve appliances due to tropical (Carbon emission in 2050 to be investment. the scope and level of our green cyclones 50% less than the emission in 2005) finance products due to continuous temperature rise, • Promote urban renewal financing the difficulty to reach the goal projects, transform old buildings

Impact increases into energy saving, carbon • All loan customers of the Company reducing and Eco friendly

are required to sign the CSR Impact communities Declaration, which could lead to the loss of business • Increase the volume of green • Launch credit cards with green financing and green consumption environmental protection concept • The Company has come to a dead • Tropical cyclone caused decrease loans • Increase the proportion of end regarding the energy saving in the asset value of the Compa- • Help customer issue green bonds investments in green bonds and carbon reduction and will be ny's investment real estates • Raise green energy fund to invest unable to reach the voluntary • International conventions or Medium in solar power plants in Taiwan carbon reduction goals without agreements new low-carbon technology • The Ministry of Economic Affairs • Collaborate with property and • Host environmental protection • Promote electronic account

Medium • Make mandatory declaration for has significantly increased the casualty insurance companies to competitions and present awards opening, electronic trading and rental cars in compliance with the carbon emissions coefficient in package and present natural to outstanding departments and account processing services policies and regulations recent years and the increase had disaster insurance products with employees • Use low-carbon energy and • Increase environmental protection made carbon emissions reduction advantages • Listing products related to topics increase energy efficiency awareness targets more difficult to achieve • Raise new funds to provide like environmental protection, • Obtain government cooperation, investors with ESG product choices climate change and green energy pay attention to latest regulations • Tropical cyclone caused harms to • Tropical cyclone caused damage • Work being called off due to at all times and actively participate the staff end route for the to offices or equipment tropical cyclone which resulted in in energy saving competitions held confirmation of disaster damage • Tropical cyclone caused bodily the disruption of operations by the government • Tropical cyclone caused the injury to the insured of the • Extreme temperature led to the • Set up water saving equipments affected households unable to Company which led to the increase of electricity used and disseminate reduction of water repay loans of the First Bank which increase of claim amount • Regulatory change regarding Low consumption led to the loss of principal • The Company plans to raise green renewable energy will influence • Bad reputation: When loan energy fund to invest in solar electric companies the Company Maybe Likely Very likely customers of the Company involve power plants in Taiwan, but the reinvests in in environmental pollution, risk of regulatory uncertainty Occurrence frequency reputation of the Company will be persists indirectly affected • The government is expected to ＊：Short-term opportunities: Estimated to occur within 1 year (in red); Medium-term opportunities: Estimated to occur within 1 to • Extreme drought may lead to lack mandate users with a contract 6 years (in green); Long-term opportunities: Estimated to occur after 6 years (in black); of electricity capacity of 800kW or more to use • Rising sea level exposes some 10% of renewable energy and it business units to flood risk may incur more operating cost or penalty risks to the Company FFHC combines core functions to facilitate the transformation of the industry and uses the results of opportunity matrix • Impact of Indoor Air Quality Act on analysis to develop and provide energy saving products and services. FFHC also hosts energy-conservation sympo- the operating offices • Change in socioeconomic siums, Corporate Gold Workshop, and environmental education to facilitate exchanges with customers, suppliers, and condition various stakeholders through related promotion events and communicate the Group's green finance products, policies, • Sustainable trends of the financial or ideals. The opinions of stakeholders are used for the development or improvement of related products for green industry financing and inclusive finance. We also developed 4 green public welfare credit cards and donate a certain amount of credit card payments to local government or social welfare group in use of environmental protection and social Low welfare that we could together with our customers develop sustainable finance.

Unlikely Likely Very likely Corporate finance - Related businesses in green finance and inclusive finance (ESG) Occurrence frequency and their respective proportions Unit: NT$100 million/% Item Year 2018 Product content description ＊：Short-term risks: Estimated to occur within 1 year (in red); Medium -term risks: Estimated to occur within 1 to 6 years (in green); ESG special loan balance 7,701 • Energy service company (ESCO) industries, renewable energy Long-term risks: Estimated to occur after 6 years (in black); creation loans, and other preferential green enterprise and green industry loans • Preferential loans for key innovative industries • Preferential loans for financing urban renewal and reconstruction of dangerous and old buildings • Preferential loans for small and medium enterprises and micro loans for small and micro enterprises Corporate loan financing balance 8,469 Percentage 90.93 108 109 Unit: NT$100 million/% Unit: NT$100 million/%

Item Year 2018 Product content description Item Year 2018 Product content description

ESG-based fixed-income product issuance amount 17 Underwriting of green bonds ESG-based project trust asset 166.27 • Retirement care for senior citizens and care for disabled people trust balance Total fixed-income product issuance amount 56 • Urban renewal trust • Employee welfare trust Percentage 30.36 Project trust asset balance 832 Unit: NT$100 million/% Percentage 19.98 Item Year 2018 Product content description ESG infrastructure construction 331.38 • Taiwan HSR loans loan balance • Taoyuan Airport MRT loans • Agricultural biotechnology park special loan • Wan-Da line and San-Yin line MRT loans 1-2-1 Urban renewal Infrastructure construction loan balance 372.12 To fulfill our social responsibility in the financial industry, we make use of our core capabilities to advance the cause of environmental sustainability and provide comprehensive one-stop financial services for urban renewal projects. We are Percentage 89.05 fully committed to supporting the government's urban renewal efforts and helping residents rebuild their homes as well as creating green buildings, especially in terms of providing financing. In addition to offering financing programs for Unit: NT$100 million/% general construction projects, we heavily encourage construction companies to apply for the Green Building mark and Item Year 2018 Product content description seek to provide financing guarantees for green building projects to accommodate the government's goal of achieving an eco-friendly, low carbon footprint city. ESG-based entrepreneurship 7.77 • We cooperated with the government's "Financial Support for investment consulting service Physical Economy - Five Plus Two Key Startup Industries" policy and investment balance invested in green energy, biotech and medicine, and circular After urban renewals, the renewed buildings must meet the greening indicators; lower the emission of waste heat, economy companies that are not listed on the exchange carbon dioxide, methane and waste water as much as possible; transform into communities of energy saving, carbon • We helped small and medium enterprises obtain working capital and regularly follow up on their operations and provide recom- emissions reduction, and eco-friendliness; and establish all-win situation for the environment, residents and the Group. mendations to promote growth of small and medium enterprises First Bank has processed 6 new urban renewal financing cases in 2018 that approval amount totaled NT$8,538 million. Entrepreneurship investment First Bank has completed a total of 38 urban renewal financing cases since 2009 and assisted 31 urban renewal consulting service investment 16.77 projects in obtaining silver green building marks or above. A total of 6,000 households benefited from the projects. In balance the cases of the "Phase 4 and 5 of the Residential Community Self-Help Urban Renewal of Shuiyuan Road, Taipei City" Percentage 46.33 and "Urban Renewal of Four Sub-sections in Yongji Section, Xinyi District, Taipei City", the 7 green indicators including CO2 emissions reduction have improved significantly from periods before the urban renewal. Based on the 60-year life Consumer finance - Related businesses in green finance and inclusive finance (ESG) cycle of the buildings, the total carbon emissions reduction amounts to 16,291 tons CO2e. The "Phase 4 and 5 of the and their respective proportions Unit: NT$100 million/% Residential Community Self-Help Urban Renewal of Shuiyuan Road, Taipei City" was originally a disadvantaged community with living conditions in dire need of improvements. Integration began in 2006 and construction began in July 2015 Item Year 2018 Product content description after nine years. A total of 125 suitable residences with 20 to 30 pings in internal area was planned and the building ESG consumer loan financing 880.23 • 4 types of credit cards including Leezen Cards, Living Green design met requirements for the silver class green building mark. Based on the value of NT$0.5 million/ping for the balance Cards, Yilan Cards, and World Cards renewed housing, FFHC will create a real estate value of NT$15 million for each low-income household. Residents have • Comfort Loan, green consumption loans, First Time Home Buyer Mortgage, e-speed loans begun moving into the new units in early 2019. This not only represents a milestone in Taiwan's push for expanded urban renewal initiatives, but is also an example of a successful state-run project. Consumer loan financing balance 6,109.38 Percentage 14.41 Phase 4 and 5 of the Residential Community Self-Help Urban Renewal of Shuiyuan Road, Taipei City

Unit: NT$100 million/%

Item Year 2018 Product content description Total assets under management 332.71 • 5 sustainability investment funds raised by First Securities (AuM) in sustainable investments Investment Trust: FSITC Global Utilities and Infrastructure Fund, AI Global Precision Medicine Fund, FSITC Innovation Fund, FSITC Global AI Robotics and Smart Auto Fund, and FSITC Global FinTech Fund • First Life Insurance launched insurance products such as health insurance, annuity insurance, and injury insurance

Total assets under management (AuM) 992.28 Percentage 33.53 110 111 Urban Renewal of Four Sub-sections in Yongji Section, Xinyi District, Taipei City Loans for power, ESCO industry water and fuel-saving projects and equipment

Help business owners to purchase Renewable Energy Green renewable energy equipment loan Green Energy Industry transformation and upgrade program

Green industry: Provide 15 industries, including the "solar power Green enterprise generator," "wind power generator," "LED,“ and "bio-fuel" with discounted loans and green industry Green enterprise: Provide all industries with discounted loans for reducing pollution or resources

FFHC supports the "5 Plus 2" key development projects of the government's "Digital Nation & Innovative Economic Devel- opment Program" as the core of next-generation industrial growth in Taiwan. First Bank organized the "Industrial Innova- tion Plan Loan" which helps industries involved in key development projects such as green energy technologies, the Asia Silicon Valley plan, biomedical technology, defense industries, and smart machinery, as well as agricultural moderniza- Year 2015 2016 2017 2018 Item tion, and circular economy obtain financing for business operations. New credit limits totaling NT$62.32 billion was Self-managed urban NT$4.278 NT$4.063 NT$3.433 NT$3.433 approved in 2018. First Bank was awarded Rank A in the "Incentive Policy for Loans from Domestic Banks to Innovative renewal project billion/5 cases billion/5 cases billion/4 cases billion/4 cases Key Industries (Phase 1)" promulgated by the Financial Supervisory Commission, showing our determination to support Developer-consolidated NT$19.995 NT$23.518 NT$32.011 NT$36.135 urban renewal projects billion/19 cases billion/24 cases billion/33 cases billion/34 cases the continual development of the real economy. Landowners benefited 1,137 1,280 1,722 1,913

Applicable to

1-2-2 Green Finance Green Aaia biopharma- Defense Smart Modern Circular First Bank combined the ideal of sustainable environment development with core competencies to help green industry technology Silicon Vallet ceuticals industries machinery agriculture economy operators obtain the funds needed for business development. We have not only launched the "No.1 Promoter in the • PV • Innovation & • Biotech • Aerospace • Integrates • Agriculture, • Integration Energy Industry" financial plans since 2010, supporting the development of Energy Service Companies (or "ESCO • LED R&D in IoT • Pharmaceuti- • Shipbuilding smart-tech Forestry, and supply Industry"), but also used the "Renewable Energy Creation Loan" in line with the "Million Solar Roof" policy by Bureau of • hydrogen industry cals • Information elements Fishery and of energy Energy, Ministry of Economic Affairs (MOEA) and the power purchase guarantee from Taiwan Power Company to energy, fuel • Strengthen- • Medical Security • Robotics its process- resources ing and ing achieve three wins for the equipment user, supplier, and the Bank. To implement Green Renewable Finance policies cells Equipment • IoT industry • energy innovation in • Health • Big data and • Waste and to coordinate with the "Productivity 4.0 Industry Transformation Loan" policy of government, First Bank issued "Loans telecommuni- business Promotion • Virtual-physi- manufactur- recycling and for Green Sustainability-based Industry Transformation", helping Taiwanese corporations transform, and catch up with cations startup • Health & cal ing industries reuse the global market trend of low-carbon production. Furthermore, FFHC organized "Green Finance Committee in March • bio-fuels ecology Welfare integration • Service industry (sensor industry • wind power • Lean 2017," with our President as the chairman. The committee is responsible for setting up policy goals and reviewing the components, • Manufactur- • electric management results. Combining with the green industry financing projects mentioned above, the committee redefined Green Finance internet ing of vehicles transfer, • 3D Printing mechanical into "Green Industries" and "Green Corporations," and expand the applicable scope to overseas branches in order to • Sensors implement conservation of the local environment and assist local enterprises in transformation in 2018. information equipment collection, and leasing application industry in service) • Wholesale

Unit: NT$ million 2016 2017 2018 2018 Target

Approved Credit Approved Credit Approved Credit Approved Credit 2016 2017 2018 2018 Target amount Balance amount Balance amount Balance amount Balance Green Credit Balance NT$396.7 billion NT$428.8 billion NT$446.2 billion NT$ 395 billion loan 33,469 15,220 99,549 51,009 108,247 57,908 100,000 55,000

＊：In 2018, the overseas branch has approved a total of US$330 million in green loans, and the loan balance is US$210 million. 112 113 As a response to the UN's great attention to global warming, in 2017/6/8, First Bank launched the "Green Credit Card To provide domestic renewable energy industries with - Living Green Card" that provides five major benefits including 0 interest rate for repayment for green consumption in long-term development funds, First Bank organized, as the multiple installations and 5% cash rebates for green public transportation to integrate consumption with the green lead arranger, the syndicated bank loan of NT$10.13 billion for United Renewable Energy Co., Ltd. in 2018, the largest low-carbon economy. In the meantime, First Bank reserved 0.2% of the amounts spent with credit card domestically to solar cell manufacturer in Taiwan. United Renewable Energy support activities pursuing environmental sustainability, so that customers can help protect the environment while is a vertical integration manufacturer capable of producing purchasing goods. By the end of December 2018, the number of "Green Credit Card - Living Green Card" issued was solar wafers, cells, modules, and systems. First Bank helps the 29,843, with accumulated amount reserved reaching NT$ 1.21 million. Taiwanese company create a flagship solar company with international competitiveness, meet the government's target of 20GW of solar power installed capacity by 2025, and expand the development of solar systems in the country.

First Bank issued the "Yilan Affinity Card" in collaboration with Yilan County Govern- ment in November 2018 and allocates 0.3% of regular consumption payments to Yilan County Government for use in social welfare, tree planting, and tree protection The Renewable Energy Creation Loan balance was NT$914 million in 2018. It provided 59,283.62kwp in solar PV activities in the County to provide care for disadvantaged groups in the County. As equipment which generated 66.39 million kWh of electricity, reduced energy consumption by approximately of the end of 2018, a total of NT$85,000 was donated and First Bank received the 575,062.14GJ, and reduced carbon emissions by approximately 36,780 tons CO2e, which is equivalent to the carbon "2018 Best Affinity Card of the Year" award from MasterCard International. absorption rate of 94.55 Da'an Forest Parks in one year.

Note: The conversion of the energy consumption (GJ) coefficient is mainly based on the parameters compiled by the Bureau of Energy, Ministry of Economic Affairs in the Energy Audit Annual Report for Productive Industries 2012

1-2-4 Sustainability Investment 1-2-3 Green Consumer Finance FFHC is committed to the implementation of a sustainable development philosophy. In addition to promoting various To implement the ideal of "green finance," First Bank launched "green consumption loan" project, to provide customers green finance and inclusive finance projects, FFHC also uses long-term equity investment, stocks, and bonds to continue with funding for the purchase of green energy or energy-efficient products, such as green buildings, HEVs, electric to invest in industries and small and medium enterprises related to environmental protection, green energy, aging vehicles, energy-efficient appliances, etc. Increasing customers' incentive to purchase green energy or energy-efficient population, and low-birth rate. We seek to help the development of related industries and help customers issue green products by offering fundings with discounted interest rate, First Bank has approved 46 cases since end of December, bonds to obtain the funding required for transformation. In addition, First Consulting raised and managed a green 2018, which amounts for 550 million dollars. energy fund of NT$330 million for investment and construction of solar power plants with total installed capacity of approximately 27MW. First Venture Capital also invested NT$150 million (with 45% shareholding ratio). Once the power FFHC founded the "Organic Agriculture Assistance Project" and launched the first charity co-branded card combining plants are completed, they are expected to reduce 27,000 tons CO2e each year. the concepts "organic and health" and "land & environmental protection." Out of the amounts spent with Leezen cards, 6‰ will be reserved for charitable purposes, and donated to the Tze-Xin Organic Agriculture Foundation and the Bliss and Wisdom Foundation of Culture and Education in order to promote the idea of organic, pesticide-free vegetables, assist organic agriculture, and restore land. For example, the donation was used to promote the "6-star organic agriculture upgrade" project, the "clean source" project, which encourages organic farming to clean up Reservoirs in water supply regions. Other actions financed by the donation included assisting organic farming in National Parks, tree planting in Taisi Coast, promoting tree planting in campus, and coast forestation, etc. Furthermore, the fund is used to promote projects in different aspects, such as promoting the "Green Conservation" mark and assisting tribal economic development. Through the card, First Bank partners with customers to help small organic farmers that lack manpower and money in order to protect the land of Taiwan.

Number of Leezen cards in circulation and donation amount Unit: NT$1,000

Item Year 2016 2017 2018 Number of cards in circulation 40,383 41,332 49,581 Accumulated donation amount 62,939 75,371 87,387 114 115 Responsible investment, credit due diligence and

supplier management Specific management practices • We set a target to have the eight fund companies • The “Green Financing Review Principles” shall be that have been listed in First Bank sign a compliance Material Topic adopted for credit investigation and review for statement for the "Corporate Investors Stewardship GRI 308: Supplier environmental assessment corporate credit extension and investments to assess Principles". We encourage the insurance companies GRI 414: Supplier Social Assessment the impact of the borrower and investee on environ- that sell their products in First Bank's channels to sign mental and social sustainability. Domestic business units such statement to protect the rights and interests of FS1: Policies with specific environmental and social components applied to business lines shall obtain the “CSR Declaration” issued by borrowers customers and beneficiaries. FS2: Procedures for assessing and screening environmental and social risks in business lines. in credit extension cases. With the exception of • The Group aims to fulfill responsibilities as an asset FS3: Processes for monitoring clients’ implementation of and compliance with environmental and social requirements participation in a syndicated loan, our overseas owner or administrator and increase long-term value branches are required to fill in a "CSR Assessment for the Group and fund providers. Subsidiaries should included in agreements or transactions. Form" to assess the environmental and social risks and sign the compliance statement for the "Stewardship guide customers to the full implementation of CSR. In Principles" and shall disclose their performance of due Management guidelines addition, the relevant contents of the International Bill of diligence in order to implement responsible Human Rights are included in the “CSR Assessment investment. We also encourage subsidiaries to attend Form", and the relevant contents of the compliance with shareholders' meetings of listed investee companies. Policies Duties the International Bill of Human Rights are incorporated • Suppliers shall sign a "Declaration on Human Rights • First Securities Investment Consulting prepares a "List of • First Bank shall adopt the "Green Financing Review into the “CSR Declaration and “CSR Assessment Form” and Environmental Sustainability Clauses" and we non-investees that violate social responsibility" every Principles" to check and review its corporate credit in order to strengthen the implementation of human shall audit suppliers for any violations of environmen- two weeks for the review reference of the six compa- cases and investments to assess the impact of the rights protection required by the UN sustainable tal and human rights regulations. nies of the FFHC, First Bank, First Securities, First borrower on environmental and social sustainability, development goals. Securities Investment Trust, First Life Insurance and First and to avoid providing funds for the borrower to • We included the disclosure of whether the corporate Investment Consulting through the Group's securities engage in business harmful to the environment or social Results borrower has engaged in the green industry develop- • In 2018, we reviewed 37,565 financing projects investment platform. welfare, so that First Bank may reduce the environmen- ment or environmental or social protection practices in according to the Green Financing Review Principles; • The “Green Financing Review Principles” shall be tal and social risks caused by its credit loans. the Credit Report and the Credit Application Letter as a these projects accounted for 100% of the corporation's adopted for credit investigation and review for • First Securities Investment Trust will not make any matter of consideration for preferred credit conditions financing projects. 34,538 projects passed the review corporate credit extension and investments to assess investment in the companies indicated in the "List of and interest rates. process. In terms of cases in which a borrower was the impact of the borrower and investee on environ- non-investees that violate social responsibility" for the • We will not make any investment in the companies implicated in environmental pollution, harm to society, mental and social sustainability. equity funds (including domestic equity, foreign equity, indicated in the "List of non-investees that violate social human rights violations, disparity between profit and • The insurance or fund company that will list their and balanced types) under its flag, so as to implement responsibility" for our equity funds (including domestic risk, or other factors, a total of 3,729 cases passed the products in the channels of our subsidiaries shall and promote the responsible investment. equity, foreign equity and balanced types), and we will review process with qualifications and 199 cases prepare a CSR Report or sign a CSR Declaration. • All the insurance companies that sell insurance products inspect the domestic equity fund investment on a resulted in loan rejections. • FFHC established the "Supplier Management Guide- in First Bank's channels or all the fund companies which quarterly basis to verify that at least 32% of the investee • As of the end of December 2018, 55.8% of the lines" as the policy and guiding principles for the handle new fund custody or are selected to be listed companies have prepared and filed their CSR reports. domestic stocks invested by First Securities Investment management of suppliers of the Group. We require are required to issue CSR Declarations or prepare their • We require all insurance companies with products Trust through six equity funds had prepared and filed suppliers to abide by the International Bill of Human CSR Reports in accordance with the regulations of the listed in our bank's channels to fulfill their CSR and issue their CSR Reports; based on the “List of non-investees Rights, laws, universally-recognized labor rights competent authority. the CSR Declarations or prepare their CSR Reports in that violate social responsibility", three individual principles, related environmental protection regulations, • Before bidding or purchasing, we shall ensure that all accordance with the regulations of the Competent stocks had been excluded for any investment. occupational safety and health, ethical corporate the suppliers are aware of and have not made a Authority and issue a compliance statement for the • As of the end of December 2018, there were a total of management, corporate social responsibilities, and breach of law and regulations related to the human "Stewardship Principles". 13 insurance companies selling products in First other international initiatives. rights and environmental protection; when signing a • All of our suppliers shall sign the "Declaration on Human Bank's channels, of which two had signed the CSR contract, they are required to sign the “Declaration on Rights and Environmental Sustainability Clauses", and Declaration, and the remaining 11 had prepared and Human Rights and Environmental Sustainability Commitment we will introduce them to our CSR policy and share with filed their CSR Reports. Additionally, four insurance Clauses”, and we shall regularly audit them for any • Fulfill the social responsibility of the financial industry in them our electronic version of CSR Report. companies had signed the compliance statement for violations of law and regulations related to environ- the financial supply chain. • We regularly inquire whether the suppliers whose the "Corporate Investors Stewardship Principles". mental protection, occupational safety, labor, etc., and • Use the environmental, labor practices, human rights, partnerships are still in existence have been punished • As of the end of December 2018, there were 42 trust include qualified suppliers in the database for the and social impact guidelines to screen main suppliers. due to violations of laws and regulations related to fund companies that sell products through First Bank's reference of procurement colleagues in all units. Work with suppliers to jointly implement corporate environmental protection and labor. The supplier who channels and have all signed the "CSR Declara- • We shall introduce the suppliers to our CSR policy, and social responsibilities and avoid transactions with has been punished shall submit an improvement plan tion".Additionally, 34 fund companies had signed the require suppliers to commit to abiding by law and suppliers that cause significant impact on the environ- and its result; otherwise, the supplier shall not be compliance statement for the "Corporate Investors regulations relevant to environmental protection, labor, ment and society. eligible for business transactions with the Group. Stewardship Principles" as of the end of December and human rights, properly protect the natural • Suppliers in areas near business locations shall be 2018. The two fund companies that sell products environment, emphasize international human rights, prioritized for procurement to reduce carbon emissions through First Securities' channels have signed the and protect the rights of laborers. Assessment mechanisms in the transportation process and create local job • We implement the "Green Financing Review Principles" compliance statement for the "Corporate Investors opportunities. for all the credit investigation and review of all Stewardship Principles" and signed the "CSR Resources corporate credit application and investment cases. Declaration". Goals • Utilize and play properly the role of a fund provider • We examine domestic exchange-traded stock pools • Subsidiaries including First Bank, First Securities, First • Adopt the "Green Financing Review Principles" for all and financial product channel to influence customers or each quarter and at least 32% of the included stocks Securities Investment Trust and First Life Insurance corporate credit investigation and review for corporate partners to fulfill CSR. have submitted CSR reports. have signed the compliance statement for the credit extension and investments. • Our CSR Committee's group meeting is held each • We use the "List of non-investees that violate CSR" to "Stewardship Principles". Attendance rate of each • Establish a "Do-Not-Invest List for CSR Violations". The quarter to track and review the implementations of screen out the do-not-invest individual stocks based on subsidiaries in shareholders' meetings of listed list involves screening current and potential investments relevant objectives. the following standards: non-conformity with product investee companies in 2018 are as follows: First Bank based on numerous criteria, including product sustainability, non-conformity with human rights, 62.2%, First Securities 100%, First Securities Investment sustainability, human rights, environmental protection, Complaints mechanism non-conformity with environmental protection, major Trust 99.1% and First Life Insurance 94.4%. controversial social issues, and recent investigations • For transparency of tender information, we publish such social controversy, and recent investigation by • As of the end of 2018, the Group and suppliers have involving prosecutorial agencies, and any company information, if any, on our website. prosecutors. signed 1,443 "Declaration on Human Rights and that is found to have engaged in conduct which is not • We regularly hold meetings for suppliers sharing, so • We require all the insurance companies with listed Environmental Sustainability Clauses". Overseas offices in the spirit of corporate social responsibility is added that they and we may jointly pay attention to environ- products and all the fund companies which handle new have conducted 522 reviews on local suppliers in to the do-not-invest list. mental, labor and human rights issues and learn from fund custody or are selected to be listed to fulfill their accordance with the Declaration on Human Rights • Implement and promote responsible investment and benchmarking and sharing. CSR and issue CSR Declarations, or prepare CSR and Environmental Sustainability Clauses as of the guide customers to fully implement CSR. • We set up the "Stakeholder Communications" section Reports in accordance with the regulations of the end of December 2018. • All suppliers shall sign the "Declaration on Human on the official website to disclose complaint or competent authority. Rights and Environmental Sustainability Clauses" and whistleblowing channels and set up the "whistleblowing we shall regularly audit them for any violations of section" on the company website to process reports. 116 commitments. 117 In order to best fulfill the social responsibility of the financial industry in the financial supply chain, we applied the In 2018, we reviewed 37,565 financing cases (2,490 cases were overseas cases) according to the "Green Financing finance industry's ability to direct cash flow to safeguarding the environment. First Bank adopted the "Green Financing Review Principles"; these cases accounted for 100% of the corporation's financing cases. 34,538 cases (2,257 cases Review Principles" to all corporate loans and bond investments. We carefully execute the customer due diligence (CDD) were overseas cases) passed the review process. In terms of cases in which a borrower was implicated in environmen- and know your customer (KYC) procedures and include involvement in environmental pollution in the past, threat to tal pollution, prejudicing social welfare, infringement of human rights, inequivalence between gains and risks, or other public interests, infringement of human rights, and involvement in risk issues. Through three phases consisting of assessment and review of credit limit applications, commitment prior to the draw-down of credit limit and post-loan manage- factors, a total of 3,729 cases were passed with conditions and 199 cases resulted in loan rejections. Classified as the ment, First Bank guides customers to fully perform the responsibility of environmental protection and social sustainability. table below: With regard to equity investment in listed companies, we review whether the investee based on screening criteria such as product sustainability, human rights, environmental protection, controversial social issues, and recent investigations Unit: Case involving prosecutorial agencies. Investments shall not proceed if any violation is found. In terms of supplier manage- Review results Conditional pass Refusal of credit loans ment, we supervise suppliers' compliance to basic labor rights, corporate social responsibilities, environmental protec- Factors of (including reduced approval (including tabled or Total tion, ethical corporate management, and occupational safety and health regulations. Companies of the Group use controversial issues and restrictive terms) withdrawn applications) onsite visits and audits to encourage suppliers to implement the guidelines and guide customers, investees, and suppli- Involvement in environmental pollution ers to jointly implement environmental protection and social sustainability responsibilities. (including air pollution, water pollution, 840 71 911 waste, and toxic substances) in the past Threats to social welfare (including food 2-1 Credit due diligence safety, product accountability, and public 0 0 0 First Bank also adhered to the spirit of the Equator Principles, incorporated environmental risk assessment and welfare benefits) industries that are generally excluded (industries ranging from sex, tobacco, alcohol, weapon to gambling), and includ- Infringement of human rights (including ed whether the corporate credit loan borrowers and investees have fulfilled the environmental protection, corporate violations of gender equality, overwork, 45 2 47 ethical management and social responsibilities into the essence of financing evaluation. In addition, it also included and failure to pay overtime pay) high pollution/energy consumption industries (electricity supply industry, steal and alumina/cooper refining, petrochemi- Risk issues of concern (including ethical cal industry (including man-made fiber), cement, paper making, semi-conductor and LCD panels, printing and dying, corporate management, protection of 2,844 126 2,970 leather, metal second-processing, printed circuit board and battery manufacturing) into industries under watch, thereby customer rights and interests, and serving as a basis and reference of risk management by industries. First Bank adopts the "Green Financing Review information security risks) Principles" for all corporate loans and bond investments. The procedures are as follows: Total 3,729 199 3,928

Business unit files a credit limit application We use the credit investigation report to execute the customer due diligence (CDD) and know your customer (KYC) proce- Credit approver makes an assessment of cases. dures and include ESG factors into the assessment to Involved in environmental realistically understand and Threats to social welfare pollution in the past disclose incidents where a Confirm whether the industry Once company verifies that the borrower or investee was and purpose of funds of the corporate bond investment 23% corporate loan borrower is does not involve environmental involved in environmental 0% attributed to the realm of pollution, threats to social pollution or prejudicing social green finance and the benefits welfare, infringement of human welfare, or risks that may result derived from the business rights, or risk issues of concern, in hazard to the society or activities thereof on environ- the investment shall be environmental pollution over mental protection. approved. the course of production and after the sales of final Types of cases Attributed to the realm Not attributed to the realm of products, as well as the that involved of green finance green finance correction status or plan. Factors that have been communication Approve credit terms by included into assessment granting prime interest rates Approve credit terms by with customers granting interest rates include: Risk Issues

Assessment and review of credit limit applications designated for projects, such as designated for • Involved in environmental the "Preferential Loans for Key pollution in the past Infringement of human rights Innovative Projects" (green general credit 76% technology, businesses involved oan cases. • Threats to social welfare in the circular economy and • Infringement of human rights 1% modern agriculture) and • Risk issues of concern "Project of Preferential Loans for Green Enterprise." Divide different credit loan review authorizations based on different credit limits, Approval of credit limit including the Board of The review process includes an assessment of the customers' operations and financial status as well as related ESG Managing Directors, President, factors. If a customer has polluted the environment, threatened social welfare, or infringed human rights, we shall Credit Approval Division at the Commitment prior to the draw-down of credit limit (such as signing head office, regional center or communicate with the customer and specify the improvement status or improvement plans during the credit limit Commitment prior to the draw-down of credit limit the "Corporate Social Responsibility Agreement" and other business unit managers, etc. application. The credit review unit shall approve or reduce the credit limit or add restrictive conditions for passage agreements. based on the severity of the violations. Where a dispute cannot be removed or improved, the loan shall be declined to fulfill corporate social responsibilities. Make arrangements in accordance with the standards in relation to post-loan management; for instance, the correction status or plan that shall be followed up in the event where a credit loan involves

Post-loan management the realm of green finance. 118 119 Among credit loans that have been rejected, the following are the top three borrowers that have been involved in 2-2 Responsible investment controversial issues in the past, such as environmental pollution, prejudicing social welfare and infringement of human Since 2015, First Capital Management has worked to ensure that all FFHC subsidiaries undertake responsible invest- rights based on the amount: ment solutions by carefully inspecting our "Do-Not-Invest List for CSR Violations" twice each month and making revisions when necessary. The list is created by screening current and potential investments using numerous criteria, including Unit: NTD thousands product sustainability, human rights, environmental protection, and controversial social issues. Any company that is found to have engaged in conduct which is not in the spirit of corporate social responsibility is added to the do-not-in- Name of borrower Assessment factor involved Amount of credit loans rejected vest list. In addition, in the fourth quarter of 2016, we fine-tuned our screening guidelines to better safeguard human XXX rights based on the content and spirit of the "Universal Declaration of Human Rights," with particular emphasis on 1,900,000 Communications, Co., Ltd. Articles 6, 7, and 8 of the "International Covenant on Economic, Social and Cultural Rights." The number of companies Involved in environmental pollution- included in the do-not-invest list from 2016 to 2018 were 26, 31, and 16 companies, respectively. The list was provided Pollution source as announced by the XXX R&D Co., Ltd. 1,000,000 to First Financial Holding, First Bank, First Securities, First Securities Investment Trust, First Life Insurance, and First Venture Environmental Protection Administration, Capital for reference purposes. Thus, the six domestic funds (Small Capital, Innovation, Great China, High-Tech, OTC Executive Yuan - Waste and Greater China Balanced) of FSITC excluded three individual stocks from the investment pool based on this list in XXX Construction Co., Ltd. 600,000 2018. 55.8% of the individual stocks that the said six funds have invested in have formulated and filed CSR reports.

Total No. of individual stocks excluded from the 3,500,000 Screening Main Basis investment pool in the past three years Standards 2016 2017 2018 Screening criteria Excluding enterprises involving animal welfare, climate change, ozone layer In 2015 FFHC extended the scope of "Green Financing Review Principles" to First Bank's overseas sites, FCB Leasing, for product destruction, betting games, genetic engineering, nuclear energy, the sex 5 6 7 sustainability industry, tobacco, and weapons systems. First Financial Leasing (Chengdu), and fund managers and insurance companies which offer products through the bank channels. Except for syndicated loans, for business loans overseas branches must now explicitly state in the "CSR Screening • It is determined whether a major labor dispute, employee strike, or other similar Criteria for incident has occurred and whether union negotiations have not yet been concluded. Evaluation Form for Overseas Branches" the basic scope of their review and assessment. The loan documents must also Human Rights • The company has laid off employees without warning. • Screening guidelines for safeguarding human rights were adjusted based on the 2 0 0 be annotated with text to the effect that "the borrower has been asked to comply with local laws and to conduct self-in- content and spirit of the "Universal Declaration of Human Rights," with particular spection on whether their products and processes fulfill their environmental protection and corporate social responsibili- emphasis on Articles 6, 7, and 8 of the "International Covenant on Economic, Social and Cultural Rights." ties." In this way, FFHC partnered with the borrowers on protecting the local environment. Of which, First Bank succeed- • List of Sanctioned Entities announced by the Environmental Protection Adminis- ed in soliciting the CSR commitment from 99.68% of its borrowers. Screening tration, Executive Yuan (Environmental Protection Administration, Executive Yuan Criteria for / Public Administrative Announcements / List of Entities Sanctioned by the EPA); Environmental sanctioned entities which have not made improvements. 2 0 1 Protection • Those which have legal actions taken against them by the prosecutor are entered on the watchlist. CSR commitment signed by domestic and foreign borrowers over recent three years Controversial Social Incidents involving corporate embezzlement, food safety violations, accounting Issues/Entities Having Been Investigated fraud and market manipulation, and other controversial social issues in the most Item Year 2016 2017 2018 by the Law recent six months, leading to being investigated by the law enforcement agency. 17 25 8 Enforcement Agency CSR Declaration(No. of borrowers signing the declaration) 16,615 16,525 16,659 Recently. Total CSR Evaluation Form for Overseas Branches(No. of borrowers signing 26 31 16 the Evaluation Form) 1,430 2,133 2,913

The Group aims to fulfill responsibilities as an asset owner or administrator and increase long-term value for the Group and fund providers. First Bank, First Securities, First Securities Investment Trust and First Life Insurance subsidiaries have signed the compliance statement for the "Stewardship Principles" and shall disclose their performance of due diligence In correspondence with the promotion of green finance in 2017, First Bank added the remark columns of "whether the governance on their company websites. borrower engages in planning and category of green industry" and "whether the case complies with the purpose and Percentage of ESG engagement with investee companies category of green funds" to the credit loan system and added mandatory fields, such as "disclosure of items related to Attendance rate in shareholders' meetings of listed green industry" and "purpose of green funds" respectively to the "Credit Investigation Report" and "Credit Loan Applica- investee companies in 2018 tion" of domestic corporate borrowers. Credit investigation personnel must disclose whether the borrower engages in [Number of (attendance in person + electronic voting) 100% planning of green industry; if it does, credit investigation personnel shall further disclose information such as the catego- / number of attendances expected] ry of industry it belongs to or the weight of green products to its total revenue. Meanwhile, First Bank also announced First Bank 62.2% the implementation of the "Project of Preferential Loans for Green Enterprise" through letter and requested business First Securities 100% units to increase in the credit loan application the descriptions on the environmental benefits or effectiveness of energy conservation derived from the borrower's business activities, as well as the practices of environmental or social protec- First Securities Investment Trust 99.1% tion, which serve as a reference of credit approvers in granting credit terms and preferential interest rates. First Bank First Life Insurance 94.4% 11% 11% also communicated and explained ideas and relevant information of green finance to credit approvers at risk control business review meetings in order to carry out the group's idea of assisting in green enterprise development. Environment(E) Society(S) Governance(G)

Currently 42 fund managers that sell products through First Bank's channels have all signed the "CSR Commitment," 34 of which have completed the signing of the statement of compliance with the "Institutional Investor Stewardship Code"; 13 out of the 11 insurance companies have provided their CSR reports, 2 have signed the "CSR Commitment," and 4 have completed the signing of the statement of compliance with the "Institutional Investor Stewardship Code." First Bank teamed up with its partners to make efforts to develop sustainable environment and safeguard customers' rights and interests. 120 121 2-3 Establish the Supplier Management Guidelines and the 3-Step Supply Chain Management 3-step Supply Chain Management Process Process - Preliminary screening, concurrent declaration, post hoc management Management Strategy Tangible Actions Taken Implementation Results FFHC established the "Supplier Management Guidelines" as the policy and guiding principles for the management of suppliers of the Group. We require suppliers to comply with the Guidelines when signing contracts and we require • Active Inquiries: Before a vendor may participate in the • Completed 1,443 vendor inquiries. bidding process, we first check to determine whether they suppliers to sign the "Human Rights and Environmental Sustainability Clauses". We also require subsidiaries to use site have been implicated in any infractions relating to (accounting for 100% of all vendors) FFHC's overseas locations completed visits and audits to encourage suppliers to implement the Guidelines. The contents include basic labor rights for suppli- environmental pollution, contravention of labor laws and regulations, or societal harm, in which case an explana- "Human Rights and Environmental ers, corporate social responsibilities, environmental protection, sustainable management, and occupational safety and Preliminary tion is required, or the company is excluded as a potential • Sustainability Evaluations" for partner. 522 health regulations. With regard to compliance with basic labor rights, we require suppliers to comply with the Interna- Screening • Overseas locations: Before a procurement is made, the vendors. tional Bill of Human Rights, universally-recognized labor rights principles, and related labor regulations. Suppliers shall "Human Rights and Environmental Sustainability Evalua- • 1,489 vendors made an effort to observe tion" must be completed to check whether the vendor has the Company's CSR policy. implement zero discrimination in their human resources policies and they may not deprive laborers of their freedom of been implicated in any infractions relating to environmen- association and right to collective bargaining. They shall also eliminate all forms of forced labor and may not hire child tal pollution, damages to labor or human rights protections, or harm to society. labor under the age of 16. In addition, they also may not cause laborers less than 18 years of age to perform danger- • Providing guidance to vendors: The Company's CSR ous work items as recognized in laws. In addition, they shall protect the right to work and employment of people with report is provided in electronic format and vendors are asked to observe the Company's CSR policies. disabilities. With regard to environmental protection, we require suppliers to follow relevant environmental laws and regulations and international standards and establish concrete environmental protection and energy conservation • Education and Compliance Declaration: When entering • "Declaration on Human Rights and management systems. They should avoid polluting water, air, and land in their operations and adopt the most feasible into an agreement, we request vendors to sign a Environmental Sustainability Clauses" "Declaration on Human Rights and Environmental pollution prevention measures. With regard to occupational safety and health, we require suppliers to abide by related Sustainability Clauses." We advocate to suppliers and was signed with 1,443 vendors, and we occupational safety and health regulations and identify potential hazardous factors in the work environment before request them to pledge to comply with fundamental labor have advocated ideas of human rights and human rights protections stipulated in the Universal protection and implementation of conducting engineering operations in business locations to prevent occupational hazards from affecting laborers. They Concurrent Declaration of Human Rights, promise to implement environmental sustainability to them. shall also implement maternity health protection measures and adopt risk assessment, control, and classification human resources policies which are fair and equitable, declaration protect the environment, and seek to achieve environmen- • 100% of new vendors signed the management measures for work that may endanger maternal health. tal sustainability. declaration. • Declaration to Use Green Materials: When entering into • tenants pledged to use green a real estate agreement, the prospective tenant must sign 100% FFHC set up a 3-step supply chain management process in 2013 and identified potential risks to the environment, a declaration to use green building materials. building materials. • Negotiated Procurement: During negotiated procurement • pieces of high-energy consumption occupational safety and health, child labor and forced labor in the supply chain. Supplier management is used to select 22 with vendors of equipment requiring large amounts of equipment were purchased with high vendors that satisfy the spirit of sustainable development as long-term partners, including: purchasing of energy-saving electricity, energy efficiency (using Chinese National Standards as a standard reference for compliance) is coefficient of performance (COP) A/C equipment, purchasing and maintenance of IT equipment, construction and interior design, purchasing of business-relat- listed as a required criterion. systems. ed OA equipment and consumables, and building maintenance. As a principle, the main procurement regions include suppliers of the place country of operations and those close to business locations. In 2018, 99% of all purchasing came • Employee Qualifications: FFHC has certain qualifications • Held 1 sessions of energy management in place for third-party maintenance personnel involved in awareness training to train a total of 20 from local (Note) suppliers to ensure the stability and localization of the supply chain as well as reduce carbon the operation, maintenance, repair, or management of employees. emissions in the transportation process and create local job opportunities. facilities, equipment, or systems involving high electricity • Spot checks are conducted every quarter consumption, and we also provide energy management and records are kept; in addition, each awareness training. year we make a random selection to Post hoc • Regular Audits: Audits of qualified suppliers are regularly conduct an on-site inspection. As of the end of 2018, FFHC has evaluated 425 suppliers with negative impact on the environment. They include conducted to check for environmental issues, occupational management FFHC conducted onsite inspections on 5 printing, cleaning, maintenance, repairs, HVAC, and other industries with more significant impact on the environment. hazards, and labor rights violations. In the event that a suppliers in 2018 and found no violations compliance violation is identified, the supplier is requested Among the Company's past suppliers, a total of 11 suppliers were penalized due to violations of environmental protec- to provide an improvement plan, otherwise their contract of environmental protection or labor tion regulations before the contract is signed or during the cooperation projects. Nine suppliers proposed improve- is terminated and the supplier is added to the monitoring regulations. list. • Established 30 categories of information ments and the effects thereof and they accounted for 2.11% (9 suppliers/425 suppliers) of the suppliers with negative • Database Creation and Inquiry: Established a database for qualified vendors; revise the list on a impact on the environment. Two suppliers did not propose explanation of improvement measures and the Company of qualified vendors which is provided to our business units regular basis including making additions for conducting inquiries and selecting preferred vendors. or subtractions as needed. has terminated transactions with these companies. They accounted for 0.47% (2 suppliers/425 suppliers).

Note: Local suppliers are suppliers in the country where FFHC conducts operations. Assessed whether vendors have violated issues related to human rights and percentage of mitigation measures that have been implemented. Item Year 2016 2017 2018 (a) Percentage of no. of current vendors based on assessments over past three years (%) 100 100 100 Please refer to the Company's website for the Company's Supplier Management Guidelines (b) Ratio of identified risks to items (a) that have been assessed over past three years (%) 31＊1 45＊2 42＊2 (c) Ratio of mitigation procedures that have been implemented to items with identified 100 100 100 risks among (b) (%)

＊1: In the 2016 statistics based on the classification of vendors, 9 out of 29 categories were identified as risks in violation of human rights. ＊2: In the 2017 statistics based on the no. of vendors, 278 out of 618 suppliers were identified as risks in violation of human rights;In the 2018 statistics based on the no. of vendors, 247 out of 593 suppliers were identified as risks in violation of human rights. ＊3: There were no cases where suppliers of the Company received penalties for violation of labor laws before signing contracts or within the contract duration and failed to make improvements. Therefore, there were no records of termination of partnerships with suppliers. 122 123 FFHC Purchasing Policy for Vendors Item Specifications

• Desktop computers, display devices, and laptops shall conform to Energy Star (U.S.A.) specifications, and such products and the processes used to produce them may not contain or involve the use of banned toxic chemicals as announced by the Environmental Protection Administration, Executive Yuan or any substances controlled under the Montreal Protocol. • Toner cartridges, including final products and the processes used to produce them, may not contain or involve the use of banned toxic chemicals as announced by the Environmental Protection Administration, IT Equipment and consumables Executive Yuan or any substances controlled under the Montreal Protocol.

• Environmental agents must be approved for use by the Environmental Protection Administration, Executive Yuan and may not contain any banned toxic chemicals announced by the Environmental Protection Administration, Executive Yuan. • Cleaning agents may not contain optical brightening agents (OBAs), chlorine-based bleaches, formaldehyde (HCHO), triclosan (5-Chloro-2-(2,4-dichlorophenoxy)phenol), or chlorine additives (excluding sodium chloride). • Skincare cleaning products may not contain optical brightening agents (OBAs), butylated hydroxytoluene Environmental and cleaning products (BHT), butylated hydroxyanisole (BHA), formaldehyde (HCHO), triclosan(5-Chloro-2-(2,4-dichlorophenoxy)phenol), chlorine additives (excluding sodium chloride), benzophenone UV absorber, or microplastics.

• The coefficient of performance (COP) or energy efficiency ratio (EER) for the energy efficiency of chillers used in HVAC systems may not be less than 4. • The specifications of wall-mounted AC units shall conform to certain Chinese National Standards (CNS) including CNS 3615 and CNS 14464, and the energy efficiency of such units shall conform to the regulations stipulated by the Bureau of Energy, MOEA in the "Energy Efficiency Standards and Labeling Methods for Non-Ducted Air Conditioners", and the energy efficiency ratio (EER) may not be less than 2.6. • The energy efficiency of refrigerators shall conform to the regulations stipulated by the Bureau of Energy, MOEA in the "Energy Efficiency Standards and Labeling Methods for Refrigerators", and paint coatings must be free of cadmium, lead, hexavalent chromium, or mercury. • Refrigerants may not contain any substances controlled under the Montreal Protocol. • Electrical transformers shall conform to CNS 598 specifications, and such products and the processes used

Air conditioning and other electronic appliances to produce them may not contain or involve the use of banned toxic chemicals as announced by the Environmental Protection Administration, Executive Yuan or any substances controlled under the Montreal Protocol. • Hot and cold water dispensers shall conform to CNS 13516 specifications.

Paper products Thermal paper used for take-a-number ticket dispensers and ATM receipts may not contain Bisphenol A (BPA).

Lighting LED light bulbs shall conform to CNS 15630 specifications and regulations stipulated by the Bureau of Energy, MOEA in the "Efficiency Standards and Labeling Requirements for LED Light Bulbs".

• Building materials may not contain asbestos. • Green building materials shall conform to MOI Architecture & Building Research Institute (ABRI) specifications and include Green Building mark certification. • Fire prevention devices, tools, peripherals, and equipment shall by licensed and approved for use by the Chinese Fire Protection Safety Center (CFPSC) or the Taiwan Fire Technology Foundation (TFTF), including issuance of relevant permit labels, and may not contain halon. • All carpets, window curtains, curtain fabrics, and other similar items must be certified to have been made from fire-retardant materials.

Remodeling Materials • Electric wires and cables shall have passed inspection by Ministry of Economic Affairs Bureau of Standards.

• The energy efficiency of small passenger vehicles shall comply with the regulations stipulated by the Ministry of Economic Affairs Bureau of Energy Affairs in the "Efficiency Standards and Labeling Require- ments for the Vehicle Energy Conservation Mark". The motor vehicle air conditioner (MVAC) of such vehicles shall utilize Ozone Depletion Prevention (ODP) shall be 0, and such products and the processes used to produce them may not contain or involve the use of banned toxic chemicals as announced by the Environmental Protection Administration, Executive Yuan or any substances controlled under the Montreal Protocol, and paint coatings must be free of contain cadmium, lead, hexavalent chromium, mercury, arsenic, antimony, triphenyltin compounds, and tributyltin (TBT). • Electric scooters shall conform to CNS 14386 specifications, and electric scooters, charging systems, lithium Corporate fleet ion battery packs, and other relevant functions and safety requirements shall conform to CNS and Ministry of Economic Affairs specifications for electric scooter functionality and safety.

124 125 Low-carbon operations and circular economy Material Topic GRI 302: Energy Assessment mechanisms • A reduction in the Group’s overall carbon emissions from electricity, water, fuel and gas consumption in 2018 GRI 303: Water and effluent compared to 2017 including carbon reductions from paperless operations. The target is to match the annual carbon GRI 305: Emissions absorption of 30 Da'an Forest Parks. • FFHC chose 5 of the company's existing commercial buildings to obtain Green Building Mark. • FFHC responded to the green procurement policies of government authorities and prioritize the purchase of Management guidelines products with green mark, energy label, or water conservation mark and green building materials. • FFHC built 2 solar power generating systems, installed solar-powered digital billboards and green roof combining Policies Resources solar power with rain collector to generate and use renewable energy. To ensure the sustainability of the environment, the • FFHC cooperates with domestic and foreign • FFHC formulated the "Guidelines for Incentivizing Employee Proposals" to encourage employees to submit proposals Group upholds its responsibility for the sustainable stakeholders and business units and strives to concerning environmental protection and energy conservation and hold Environmental Protection and Energy development of the environment and cooperates reduce all GHG emissions in daily operations. Conservation Competition to meet annual carbon emissions reduction goals. with all low-carbon operation initiatives to reduce • FFHC upgrades IT equipment and actively • FFHC continues to implement certification for different ISO Environmental or Energy Management Systems. greenhouse gas emissions and reduce waste. The introduces digital paperless services in sectors • FFHC aims to reduce total carbon emissions from business travel (point-to-point journeys to and from foreign Group is fully committed to developing a sustain- such as "marketing", "transactions", "payment", airports) to 420 tons CO2e. able, renewable, and circular homeland. and "account services" to reduce the carbon • FFHC shall add one "ISO 14064-1Other Indirect Emission Inventory" item. footprint in operations. Commitment Results • FFHC is committed to reducing greenhouse gas Complaints mechanism • In 2018, savings in fuel, electricity and gas reduced carbon emissions by 405 tons of CO2e from levels in 2017. emissions and emissions intensity. It formulates FFHC published environmental management policies Paperless operations reduced carbon emissions by 14,035 tons of CO2e. Total carbon reductions therefore operation strategies, sets carbon emissions on the company website and set up free phone line amounted to 14,440 tons of CO2e, equal to the annual amount of carbon absorption by 37.12 Da'an Parks. reduction targets, and implements measures to for environmental pollution report: 0800-031-111#6. • FFHC obtained the "Diamond-class" Green Building Mark for 5 of the company's existing commercial buildings in improve energy efficiency to achieve the goal of 2018. By the end of 2018, we refurbished a total 22 of the company's existing commercial buildings and obtained reducing greenhouse gas emissions. Specific management practices Diamond-class Green Building Mark. • Green and environmentally-friendly building • FFHC formed the "Green Building Certification • In 2018, NT$115.13 million was spent on green purchasing in response to government appeals and led to recogni- materials with minimum negative impact on the Program" team to transform old buildings into tion for "Excellence in green Procurement" from the Taipei City Government for 4 consecutive years. environment and health are prioritized for the green buildings and obtain Green Building Mark. • FFCH installed 4 rooftop solar power generation systems. The Group has installed rooftop solar power generation construction or refurbishment of office buildings or • FFHC continues to construct ecological hydroponic systems at 8 business locations as of the end of 2018. the annual carbon emissions reduction is 44.41 tons CO2e. work areas. green rooftop from solar power generation, • In 2018, 57 environmental protection and energy conservation proposals were submitted by employees, 19 of which • FFHC introduces high-performance electrical rainwater harvesting systems, intermediary water were approved as a reference for following environmental protection and energy conservation practices and the equipment, power generation systems, ISO recycling systems, and other circular economy employees received NT$6,500 as reward. We also selected 11 of the most outstanding units for their achievements verification guidelines, and products that adopt facilities. in environmental protection and energy conservation and provided 17 commendations. the cradle-to-cradle design to integrate opera- • New buildings are designed following Green • Environment Management or Energy Management inventories and certification obtained by FFHC by the end of tions with the circular economy and reduce Building standard. Business Units are required to 2018 energy resource consumption. select products with Green Mark while replacing equipment. Goals • Employees working in company locations perform Item Incorporated at Company Locations in 2018 • Reduce the Group's carbon emissions in 2030 by regular checks before leaving to make sure that 20% from emissions in 2005. all office equipment is turned off. ISO 14064-1 Greenhouse Gas Inventory All domestic and foreign company locations • Reduce the Group's carbon emissions in 2050 by • Carpooling or public transportation are adopted ISO 50001 Energy Management System 188 50% from emissions in 2005. for business travel. FFHC also purchased Gogoro • Improve energy efficiency and obtain Green electric scooters for employees to visit customers ISO 14001 Environmental Management System 192 Building Mark for 5 of the company's existing and deliver official documents. commercial buildings. • FFHC implements paperless training, paperless ISO 14046 Water Footprint 8 • Adopt different ISO Environmental or Energy meetings, paperless administrative affairs, Management Systems and obtain certification. paperless services, and paperless credit checks. ISO 14064-1 Other Indirect Emissions Inventory (Indirect Greenhouse Bank, Securities, Securities Investment • Set up at least 2 rooftop solar power generation • FFHC organizes environmental protection and Gas Emissions in Transportation - Business Travel) Verification Trust, Life Insurance, AMC systems to increase the use of renewable energy. energy conservation contests for all company locations. Four scores including compliance for ISO 14064-1 Other Indirect Emissions Inventory (Waste disposal Headquarters building and IT building Duties environmental protection and energy conservation, in operations) Verification • Assist branch offices to replace old, energy-con- promotion of environmental protection and energy suming equipment and introduce system conservation tasks, promotion of environmental equipment with circular economy and low-carbon protection and energy conservation education, operations. Improve energy efficiency in real and green finance innovation are used to select • Total carbon emissions from business travel (point-to-point journeys to and from foreign airports) was 418 tons CO2e. estates owned by the FFHC and apply for Green units with outstanding performance in environmen- • We added "ISO 14064-1 Indirect greenhouse gas emissions from other sources - Inventory of waste disposal in Building Marks. tal protection and energy conservation. FFHC operations" in 2018. The inventory volume was 109 tons CO2e. • Check for abnormal energy usage of company encourages employees in all company locations locations, offer repairs or assistance for improve- to participate in the events and fulfill environmen- ment. tal sustainability policies. • Hold Environmental Protection and Energy • FFHC performs annual ISO 14064-1 Greenhouse Conservation Competition in company locations Gas Inventory and sets carbon-reduction goals for FFHC set up the first action year 2005 as the base year. By means of different projects, the long-term goal is to reduce subsidiaries. to encourage employees to save energy in daily 50% of the carbon emission in 2050 compared to the year 2005. FFHC has embraced a policy of environmental sustain- operations. • FFHC continues to adopt systems such as ISO • Promote energy saving, waste reduction, plastic 50001 Energy Management System and ISO ability. In 2018, savings in fuel, electricity and gas reduced carbon emissions by 405 tons of CO2e. Paperless operations 14001 Environmental Management System. and waste reduction, organize training programs, reduced carbon emissions by 14,035 tons of CO2e. Total carbon reductions therefore amounted to 14,440 tons of CO2e, • FFHC continues to promote green procurement and assist units to adopt different ISO Environ- equal to the annual amount of carbon absorption by 37.12 Daan Parks ( ). Related measures and outcomes are mental or Energy Management Systems and policy in numerous ways, including giving priority ＊ obtain certification. to environmentally-friendly products when described below: selecting office paper, IT equipment and consumables, A/C and other electronic appliances, lighting fixtures, and eco-friendly cleaning ＊: According to the standard rate released by Bureau of Energy in 2011, MOEA, Daan Park can absorb 389 tons of CO2 per year. products which feature government-approved environmental labels such as the Green Mark, 126 Energy Label, and Water Conservation Mark. 127 Green Carbon reduction result 3-1 Reduce GHG emissions Unit Building Carbon reduction area The FFHC headquarters building was completed in 1982, which means it is over 35 years old. To alleviate the heat Mark grade Total (kWh/yr)＊1 tons CO2e in total ＊2 island effect of office buildings, the "Green Building Certification Program" team was formed in 2010 to begin converting the 74 old buildings owned by FFHC into green buildings. As of 2018, 22 existing buildings have been certified by the • Replacement with more efficient inverter Ministry of Interior as Diamond-class green buildings. We established a goal for obtaining the Diamond-class green Diamond air-conditioning unit building certificate for 37 buildings by the end of 2024. In 2017 the company had all of the company locations in and -class 173,186 96 • Replacement of T8 with LED lamps out of the country be regulated "ISO 14064-1 GHG Inventory" in order to handle the carbon emission of the company • Implement self-management in electricity locations in the Group, dedicated to achieve the goal of reduction of GHG emissions. usage Zhongxiao Road Branch building FFHC’s Steps to reduce carbon emissions • Replacement with more efficient inverter Diamond air-conditioning unit Continue to -class 55,307 31 • Replacement of T8 with LED lamps Transactions reduce GHG • Implement self-management in electricity Systematize usage various energy- reduction Guangfu Branch building Expand saving practices inventory • Replacement with more efficient multi-split Solar- scope inverter air-conditioning Diamond powered • Replacement of T8 with LED lamps Energy- -class 39,221 branches 22 • Implement self-management in electricity Establish saving buildings usage energy Wanhua Branch building Organization- management process wide • Replacement with more efficient inverter Inventory Diamond air-conditioning unit -class 45,749 25 • Replacement of T8 with LED lamps • Implement self-management in electricity Gangshan Branch usage building ISO 14064-1 ISO 50001 Green Install solar ISO 14064-1 ISO 14001 Purchase renewable Building systems on Scopes 1, 2, energy certificates • Replacement with more efficient inverter Mark the roof of and 3 Diamond air-conditioning unit branch -class 43,685 • Replacement of T8 with LED lamps buildings 24 • Implement self-management in electricity usage Luodong Branch building

FFHC GHG Reduction Steps Carbon Reduction Results in 22 Green Building Company Locations • Replacement with more efficient inverter Green Carbon reduction result air-conditioning unit Building Unit Carbon reduction area Diamond • Replacement with more efficient chilled water Mark grade Total (kWh/yr)＊1 tons CO2e in total ＊2 -class 529,675 293 and cooling water pumps • Enthalpy control • Replacement of T8 with LED lamps • Replacement with more efficient chilled water • Implement self-management in electricity and cooling water pumps usage • Addition of variable speed drive to chilled Taichung Branch building Diamond water pump • Addition of variable speed drive to air -class 1,274,553 706 conditioning unit • Replacement with more efficient multi-split • Addition of variable speed drive to cooling Diamond inverter air-conditioning tower • Replacement of T8 with LED lamps • Replacement of T8 with LED lamps -class 33,568 19 • Implement self-management in electricity • Implement self-management in electricity Headquarters building usage usage Daxi Branch building • Addition of variable-flow system to cooling water pump • Replacement with more efficient inverter • Addition of variable-flow system to regional air-conditioning unit • Replacement with more efficient chilled water Diamond pump • Addition of variable-flow system to discharging Diamond and cooling water pumps -class 470,196 260 pump and heat exchange chilled water pump -class 91,175 51 • Replacement of T8 with LED lamps • Replacement of T8 with LED lamps • Implement self-management in electricity • Implement self-management in electricity usage IT building usage Changtai Branch building 128 129 Green Carbon reduction result Green Carbon reduction result Unit Building Carbon reduction area Unit Building Carbon reduction area Mark grade Total (kWh/yr)＊1 tons CO2e in total ＊2 Mark grade Total (kWh/yr)＊1 tons CO2e in total ＊2 • Replacement with more efficient multi-split • Replacement with more efficient multi-split inverter air-conditioning inverter air-conditioning Diamond Diamond • Implement total heat exchanger system • Replacement of T8 with LED lamps -class 42,293 23 -class 56,383 31 • Replacement of T8 with LED lamps • Implement self-management in electricity • Implement self-management in electricity usage Longtan Branch building Xinyhua Branch Building usage

• Replacement with more efficient inverter • Replacement with more efficient inverter air-conditioning unit air-conditioning unit • Replacement of chilled and cooling water • Replacement of chilled and cooling water pump and addition of variable speed drive pump and addition of variable speed drive Diamond • Installation of additional air-conditioning units • Replacement of Closed Loop Water Pump and and small ventilators -class 455,080 addition of variable speed drive Diamond 252 -class • Replacement of cooling water tower and • Replacement of T8 with LED lamps 200,250 111 addition of variable speed drive • Implement Energy Management System • Implement total heat exchanger system • Implement self-management in electricity • Replacement of T8 with LED lamps First Financial Office usage Building • Installation of additional solar power generating systems • Implement self-management in electricity • Replacement with more efficient inverter Luzhu Branch Building usage air-conditioning unit Diamond • Replacement with more efficient chilled water • Replacement with more efficient multi-split -class 84,230 47 and cooling water pumps inverter air-conditioning • Replacement of T8 with LED lamps Diamond • Implement total heat exchanger system • Implement self-management in electricity -class 45,168 25 Donggang Branch usage • Replacement of T8 with LED lamps building • Implement self-management in electricity Yilan Branch building usage • Replacement with more efficient inverter air-conditioning unit • Replacement with more efficient multi-split • Replacement with more efficient chilled water Diamond inverter air-conditioning and cooling water pumps Diamond -class 57,162 32 • Implement total heat exchanger system • Implement total heat exchanger system -class 29,644 16 • Replacement of T8 with LED lamps • Replacement of T8 with LED lamps • Implement self-management in electricity • Implement self-management in electricity Zhunan Branch building usage Douliu Branch building usage

• Replacement with more efficient inverter • Replacement with more efficient multi-split air-conditioning unit inverter air-conditioning Diamond • Replacement with more efficient chilled water • Implement total heat exchanger system -class 85,902 48 Diamond and cooling water pumps • Installation of additional air-conditioning units • Replacement of T8 with LED lamps -class 147,072 • Implement self-management in electricity 82 and small ventilators • Implement total heat exchanger system Zhuxi Branch building usage • Replacement of T8 with LED lamps • Implement self-management in electricity • Replacement with more efficient inverter Hsinchu Branch Building usage air-conditioning unit • Replacement of chilled and cooling water pump and addition of variable speed drive Total 4,390,346 2,432 15,805 GJ (1kWh=0.0036GJ) Diamond • Replacement of cooling water tower and -class 384,979 addition of variable speed drive 213 ＊1: The difference in performance between improved air-conditioning and lighting equipment and the usage time are used as • Implement total heat exchanger system main factors to estimate the carbon emissions reduction. • Implement Energy Management System ＊2: An "electricity emission factor" of 0.554 as published in 2018 was used. • Replacement of T8 with LED lamps • Implement self-management in electricity Taoyuan Branch building usage

• Replacement with more efficient multi-split Diamond inverter air-conditioning -class • Implement total heat exchanger system 45,868 25 • Replacement of T8 with LED lamps • Implement self-governance in electricity usage Lugang Branch building 130 131 Environment Management certifications received by FFHC Total Carbon Reduction Result and Goal for FFHC Group Item Certified sites in 2018 2018 2018 Carbon Reduction Goal Total carbon reductions 2019 Goals "Diamond-class" Green Building 22 Scope 1 Carbon reduction volume 26 tons of CO2e 284 tons of CO2e 24 tons of CO2e ISO 14064-1 Greenhouse Gas Inventory All domestic and foreign company locations Scope 2 Carbon reduction volume 201 tons of CO2e 121 tons of CO2e 104 tons of CO2e ISO 50001 Energy Management System 188 Total tons of tons of tons of /39,657(MWh)( 3) ISO 14001 Environmental Management System 192 227 CO2e 405 CO2e 128 CO2e ＊ ISO 14046 Water Footprint 8 FFHC Overall Carbon Emissions Air Quality Self-Management 188 2015 2016 2017 2018 2018 2018 compared Office CO2 level measurement 235 Goals＊5 to 2017 (%) Self-Reported Carbon 221 - - - - - Implement Real-time Indoor Air Quality Monitoring System 35 Scope 1 Emissions Emissions Carbon Emissions Under ISO 14064-1Other Indirect Emission Inventory (Indirect greenhouse Bank, Securities, Securities Investment Trust, ISO -14064 Inventory 1,243 2,725 2,670 2,386 2,644 -11 gas emissions in transportation - Business travel) Verification Life Insurance, AMC (tons CO2e) ＊1 Sub-Total ISO 14064-1 Other Indirect Emissions Inventory (Waste disposal 1,464 2,725 2,670 2,386 2,644 -11 in operations) Verification Headquarters building and IT building Self-Reported Carbon Scope 2 Emissions 4,102 - - - - - Environmental educator certification. 4 people Emissions Carbon Emissions Under (tons CO2e) ISO -14064 Inventory 13,585 22,812 20,978 20,857 20,777 -1 ＊1 Sub-Total 17,687 22,812 20,978 20,857＊6 20,777 -1 3-2 Set Clear Carbon Reduction Targets Total Emissions (Scope 1 + Scope 2) (tons CO2e) In 2012, FFHC set a target to reduce the headquarters building's GHG emissions by 12% by 2015 compared to 2011, 19,151 25,537 23,648 23,243 23,421 -2 and the goal was achieved ahead of schedule in 2013. We did not rest on our laurels, however, and began setting Scope 1 and Scope 2 inventory Ratio of business locations (%) 39 96 100 100 - - annual electricity, water, petrol, and natural gas reduction targets for each FFHC subsidiary in 2013. In 2016, in ISO 14064-1 Indirect greenhouse gas response to the implementation of the "Greenhouse Gas Reduction and Management Act ", reduction targets for emissions in transportation 418 347 318 418 420 31 Other Indirect - Business travel electricity, water, petrol, and natural gas consumption were converted into carbon emissions, allowing us to formulate Emission explicit annual carbon reduction targets and gain a clearer insight into the quantity of carbon emissions produced by Inventory Waste disposal in operations - - - 109 - - each of our subsidiaries. In 2017, to encourage paper-saving, we increase the carbon consumption target of the (tons CO2e) Group's electricity, water, oil and gas in 2018 compared to 2017, FFHC also incorporated the results of the paperless Total energy consumption 313,926 399,331 366,471 345,508 362,953 -6 policy aspect of our carbon reduction targets into our management. To this end, we have set a group-wide manage- (GJ)＊2 ment policy and paperless carbon reduction target of reducing the company's total carbon emissions by the equivalent Total energy consumption 36,238.85 46,084.76 42,289.52 39,869.80 41,883.54 -6 of the annual carbon sequestration of 30 Da'an Forest Parks. Comply with the national voluntary carbon emissions (MWh)＊3 reduction commitment and set goals to reduce the Group's carbon emissions in 2030 by 20% from emissions in 2005 Energy Consumption Per Capita 37.54 47.78 40.68 37.45 - -8 and reduce the Group's carbon emissions in 2050 by 50% from emissions in 2005. (GJ/person)＊4 Energy intensity (GJ/Net Profit in million NTD) 7.69 8.86 7.21 5.73 - -21 FFHC is taking the impact of climate change seriously and boosting Greenhouse gas (GHG) our risk awareness. We signed on with the Carbon Disclosure Project emissions intensity 0.47 0.57 0.47 0.39 - -17 (CDP) in 2013 and was among the first group of finance companies (Tons CO2e/Net Profit in million NTD) in Taiwan to express their support for the CDP. FFHC also received ＊1：Scope 1 emissions consist mainly of fuel used by company cars, generator diesel and natural gas. Scope 2 emissions consist the Climate Change A List rating and Water Resources B List rating mainly of electricity consumption, The emission factors used are based on the EPA's published greenhouse gas emission from the Carbon Disclosure Project (CDP) in 2018 and became the coefficient management table version 6.0.3; this inventory refers to the GWP adopted by the EPA's national login platform, using first Company in Taiwan's financial industry to attain Leadership A In the 2018 CDP evaluations, FFHC became the first the 2007 IPCC 4th assessment report. If the IPCC 4th assessment report in 2007 did not have a reference number, it refers to the Company in Taiwan's financial industry to attain warming potential of the IPCC 5th assessment report in 2013; the method used to consolidate greenhouse gas volume is Operat- List. Leadership A List. ed Control Method; the inventory standard is based on ISO 14064-1. ＊2：The scope of total energy consumption (GJ) mainly includes diesel used for the generators, gas, natural gas, diesel used for official vehicles,gasoline used for official vehicles, and electricity. The statistics are filed by each unit in accordance with related The energy conservation and carbon reduction performance of FFHC Group companies in 2018: Unit: % forms, compiled by the Sustainable Environment Work Group of the CSR Committee, and verified by SGS. The conversion of the energy consumption (GJ) coefficient is mainly based on the parameters in the Heat Content of Energy Products in the Energy First Securities First Financial Statistics Handbook 2013 and Energy Audit Annual Report for Productive Industries 2012 compiled by the Bureau of Energy, Company First Bank First Securities Investment Trust First Life Insurance Assets Management Ministry of Economic Affairs. ＊3：MWh (Megawatt Hour) ＊4：The number of employees investigated was 8,362 in 2015, 8,357 in 2016, 9,008 in 2017 and 9,227 in 2018. ＊5：First Bank shall set goals for reducing carbon emissions in Scope 1, Scope 2, GJ, and MWh in 2018 by 1% from 2017 while First Securities, First Securities Investment Trust, First Life Insurance, First Financial Asset Management, and First Financial AMC shall reduce emissions by 0.5%. The weighted average shall be 0.96%. ＊6：FFHC did not reach its target for carbon emissions reduction in Scope 2 mainly because the Ministry of Economic Affairs significantly increased the electricity carbon emission factor of 0.530 in 2017 to 0.554 in 2018. Based on the 2017 electricity carbon emission factor, Scope 2 carbon emissions would total approximately 19,953 tons CO2e, which would be a reduction of

Compared to 2017 reduction target Actual Results Effectiveness Compared to 2017 reduction target Actual Results Effectiveness Compared to 2017 reduction target Actual Results Effectiveness Compared to 2017 reduction target Actual Results Effectiveness Compared to 2017 reduction target Actual Results Effectiveness 1,025 tons CO2e from 2017. The reduction would be 4.9% and it would exceed the carbon emissions reduction target of 201 tons CO2e set for 2018. Carbon ＊7：In 2018 we received no complaints over environmental impact or penalties for environmental violations. reduction 1 0.24 0.5 15,31 0.5 0.08 0.5 -3.73 0.5 16.91 ＊8：New and replacement air-conditioning systems all used the new eco-friendly R134a or R410a refrigerant. There was no use of Ozone Depleting Substances (ODS) 132 133 2018 Greenhouse gas emissions 3-4 Green Procurement: Selecting Eco-Friendly Products to Save Energy Total The FFHC is continuing to promote our green procurement policy in numerous ways, including giving priority to environ- Greenhouse Gas CO2 CH4 N2O HFCs PFCs SF6 NF3 emissions of 7 Greenhouse gas ment-friendly products when selecting office paper, bathroom tissue, IT equipment and consumables, A/C and other electronic appliances, lighting fixtures, and environmental cleaning products which feature government-approved Emissions(t-CO2e/year) 22,385 347 48 463 0 0 0 23,243 environmental labels such as the Green Mark, Energy Label, and Water Conservation Mark. In addition, when carrying out installations, maintenance, and renovations at company locations, green building materials must account for at least Proportion of total emissions 96.31% 1.49% 0.21% 1.99% 0% 0% 0% 100% 45% of procured materials, and we also take the initiative to procure products that have been certified by the EPA for recycling, recycled materials, low-pollution or energy-saving in order to help achieve environmental sustainability. In Note: The Company does not emit NOx, SOx, and other significant air emissions addition, we cooperated with Fuji Xerox Taiwan Corporation in 2016 to consolidate and reduce the quantity of office equipment in our headquarters building by replacing copiers and fax machines with multipurpose energy-saving devices which reduce our energy consumption and result in a smaller carbon footprint. In 2018, NT$115.13 million was spent on green purchasing in response to government appeals, which made possible for us to receive the award of 3-3 Green transportation "Benchmark Private Businesses and Groups in Green Purchasing" from the Taipei City Government for four years solid. To help reduce the FFHC's carbon emissions caused by business travel, we have taken steps to gradually replace old or outdated vehicles in our company fleet. As a principle, official vehicles shall 48% be used for carpooling. FFHC replaced 83 traditional gasoline scooters which were set for retirement with environmentally friendly Gogoro electric scooters to make employees' visits to customers and delivery of official documents more convenient while protecting the Pie chart of 2% environment and saving energy in 2018. In addition, a system for green purchasing sharing company-issued EasyCards is in place to encourage employees to utilize mass transportation when traveling on business. FFHC replaced 83 traditional gasoline scooters with Purchasing of energy-saving equipment When company cars needs replacement, we will evaluate the environmentally friendly Gogoro electric scooters. Purchasing of certified eco-friendly possibility of change for electric vehicles, hybrid vehicles or vehicles products (including green paper) with high energy conversion efficiency. In addition, we have set up 13 employees dormitories at company sites located in high population density areas as well as rural regions, such as Taipei City, New Taipei City, Hsinchu City, Taichung 50% Purchasing of green building materials City, Tainan City, Kaohsiung City, Yilan County, Hualien County, Pingtung County, Taitung County, and Penghu County, which help reduce carbon emissions of employees commuting to and from work. In addition, in order to understand employees’ carbon emissions from business travel by plane, First Bank, First Securities, First Securities Investment Trust, Green Procurement Standards First Life Insurance, and First Financial AMC all obtained ISO 14064-1 certification on the other indirect emissions • Priority is given to the procurement of eco-friendly products which feature government-approved environmen- inventory (Indirect greenhouse gas emissions in transportation - Business travel) from 2017. So,our overseas travels in tal labels including the Green Mark, Energy Label, Water Conservation Mark, and Green Building Material 2018 were verified to total 4,452,649 kilometers, total energy consumption was 3,907GJ (＊)，which emitted a total of Label. 418 metric tons of CO2e. • When making purchases, we actively seek out EPA-approved products made from recycled materials which are recyclable, generate low amounts of pollution, and offer energy savings benefits. ＊：According to the National Chiao Tung University thesis titled "Aircraft Fuel Consumption analysis and Fuel Saving Strategy" (2013), • When making purchases, we do not select products which have excessive packaging, cause environmental flights consume 4,112 kilograms (assume an average density of 0.701g/ml for jet fuel, totaling approximately 5,866 liters) of fuel for a damage, or are non-biodegradable, and we do not purchase machinery which consumes large quantities of 1,074-km flight. The conversion of the energy consumption (GJ) coefficient is mainly based on the parameters in the Heat Content of energy. Energy Products in the Energy Statistics Handbook 2013 compiled by the Bureau of Energy, Ministry of Economic Affairs and the assumption that a flight carries on average 250 passengers. • Our purchasing policy emphasizes cross-compatibility, ensuring that items procured for remodeling company locations, such as mechanical equipment and other products, can be re-used alongside existing hardware.

The distance of business travels and CO2e Emissions made by the FFHC in the past years 2018 Item Year 2015 2016 2017 2019 Goals Actual number Goals Total distance of business travels Less than (point-to-point journeys to and from 5,416,418 3,873,960 5,399,652 4,452,649 4,474,000 foreign airports) (Unit:Km) 6,500,000 3-5 Use of Renewed Energy

ISO 14064-1 Other indirect emission A.Installation of Rooftop Solar Power Generation Systems inventory (Indirect greenhouse gas Less than To respond to the green energy policy, the FFHC has used the renewable energy. In 2018, it reduced 47.54 metric tons emissions in transportation 418 347 318 418 420 - Business travel) (Unit:ton CO2e) 500＊2 of CO2e. It has bought a total of 1.2 million kWh of green power for solid four years from 2015 to 2018. In addition, after assessing the sunshine conditions of the operating sites, rooftop solar power generation systems were built from 2016. FFHC added solar power generation systems for Zhuxi, Madou, Luzhu, and Taoyuan Branches in 2018. As of the end of Percentage of coverage (%) 99 100 100 100 100 - 2018, 8 rooftop solar generation systems have been completed and the total annual carbon reduction amounted to 44.41 metric tons CO2e. FFHC set goals for producing and using 50 MWh of renewable energy for 2019 and will contin- ＊1：The lower mileage in 2016 was mainly due to the punishment by local authorities in our overseas branches during the same ue to increase the proportion of the Group's use of renewable energy, so that we may implement environmental sustain- year. As a result, our overseas colleagues stayed most of the time in offices to strengthen legal compliance operations, which ability policies. lead to a decrease in the total business travel mileage. ＊2：As FFHC plans to add at least 7 overseas operations from 2019 to 2024, the total carbon emissions goals set for business travel are higher than levels in 2018. 134 135 Renewable energy consumption & carbon reduction Carbon Emissions Reduction of Rooftop Solar Power Generation Systems 2018 Item Year 2017 2018 Item Year 2015 2016 2017 2019 Goals Actual Result Goal Energy consumed (MWh) 17.46 80.16 Energy consumed (MWh) 4.99 4.99 22.76 85.81 45 50 Emission factor from the use of power (＊) 0.530 0.554 Emission factor from the use of power ＊1 0.521 0.525 0.530 0.554 - - Carbon reduction result (MT of CO2e) 9.25 44.41 Total energy consumption (GJ) ＊2 43.18 43.18 197.08 743.20 - - ＊：The "Emission factor from the use of power" is announced every year by Bureau of Energy, MOEA. Carbon reduction result (MT of CO2e) 2.60 2.62 12.06 47.54 - -

B.Installation of decorative solar-powered billboards 1 The "Emission factor from the use of power" is announced every year by Bureau of Energy, MOEA. ＊： In light of the fact that solar-powered digital billboards are able to store additional energy on sunny days which allows ＊2：The conversion of the energy consumption (GJ) coefficient is mainly based on the number of kWh used in the electricity meters and the parameters compiled by the Bureau of Energy, Ministry of Economic Affairs in the Energy Audit Annual Report for Produc- them to operate at night, they offer the benefit of providing advertisements while simultaneously reducing both energy tive Industries 2012. use and carbon emissions. The FFHC has installed these solar-powered digital billboards at six operating sites located in central and southern Taiwan, resulting in annual decrease of the external power purchase of 4,987 kWh or annual reduction of 2.76 MT of CO2e. Green power purchases in the past four years 2018 Benefits Data of Installing Solar-powered Digital Billboards at 6 Locations to Reduce Carbon Emissions Item Year 2015 2016 2017 2019 Goals Actual Result Goal Clean fuel type Annual substitution Purpose Benefits kWh purchased 10,000 160,000 240,000 790,000＊3 300,000 • Annual external power purchase reduction of 400,000 To replace external 4,987 kWh Solar power 4,987 (kWh) power purchase Emission factor from the use of power＊1 0.521 0.528 0.529 0.554 - - • Annual reduction of 2.76MT of CO2e emissions

Carbon reduction result (MT of CO2e) 5.21 84.48 126.96 437.66 - - Photos of Caotun Branch's Solar-powered Digital Billboard

＊1：The "Emission factor from the use of power" is announced every year by Bureau of Energy, MOEA. ＊2：The number of kWh purchased from 2015 to 2017 refers to green electricity purchased from Taiwan Power Company. ＊3：In 2018, FFHC purchased 440 tons of carbon right certificates which equals approximately 790,000 kWh of renewable energy.

8 Rooftop Solar Power Generation Systems in Taiwan In the daytime In the nighttime

C.Ecological hydroponic green rooftop from solar power generation and rainwater harvesting systems In order to achieve a low-carbon urban vision, the FFHC is committed to promoting the greening policy for buildings. In Madou Branch Taoyuan Branch 2017, our Wanhua Branch set up a “Ecological hydroponic green rooftop from solar power generation and rainwater harvesting systems" which combined the solar power generation, rainwater harvesting, and aquaponic systems. The rainwater harvesting system is to complement water supply for the aquaponic system. We use solar panels to generate electricity for use in the systemic circulation to decontaminate, filter and purify the water. The aquaponic system grows vegetables on the water and raise fish in the water. Fish excrement is used as a nutrient source for plants to form a self-sufficient circular mode, which creates a “zero-carbon farm”. FFHC was awarded the “Pastoral City Construction Zhuxi Branch Sanmin Branch Achievement Competition and Pastoral Experts (Enterprise Category) Award” of the Taipei City Government in 2018, the only awardee from the financial industry. In 2018, the solar power system in Wanhua Branch generated 662 kWh of electricity and reduced 0.37 MT of CO2e.

Ecological hydroponic green rooftop from solar power generation and rainwater harvesting systems Xinxing Branch Luzhu Branch

Hengchun Branch Donggang Branch The "ecological hydroponic green rooftop from solar power generation and rainwater harvesting systems" received the “Pastoral City Construction Achievement Competition and Pastoral Experts (Enterprise Category) Award” of the Taipei City Government in 2018. 136 137 3-6 Reducing Water Use and Conserving Water Resources 3-7 Upgrading IT Equipment: Paperless Operations In 2012, the FFHC installed a 1.3 million liters rainwater reclamation tank in the basement of the Headquarters building Through the building of a green data center, the FFHC upgraded its information equipment, replaced the old servers, to supply water for watering the gardens and toilets. In 2018, the Group's total water consumption was 220.69 million and implemented paperless teaching, meetings, services, and administration. The core business system development liters. Tap water therefore made up 88.12% of the water consumption and 11.88% came from the Headquarters building has also been oriented towards the concept of energy saving and carbon reduction. Since 2008, the review system has basement's overflow and rainwater. FFHC investigated water consumption at each company including operating sites. been continuously optimized, and the credit checking/giving operation process has been changed from manual/paper operations to full implementation on the system. And the automatic import of the data from Joint Credit Information As of the end of 2018, the FFHC had the "ISO 14046 Water Footprint Inventory" introduced to eight of its operating sites, Center, the group-based operations for accounts of groups at home and abroad, etc. have been introduced one after which obtained the relevant certification. another, thereby saving much paper printing. Furthermore, FFHC upgrades IT equipment and actively incorporates digital services in "marketing", "transactions", "payment", and "account services" and it has encouraged customers to use Water consumption at each operating site was regularly investigated to see if there was any leakage in the piping and online banking, electronic ordering, and mobile payment services, and also issued the billing and statements by e-mail, facilities. Speedy repair was a must in case of leakage. Certified green water-saving devices such as water-saving tap which have replaced the use of traditional paper bills and mailing. fittings, 2-stage flushing toilets, and sensor-controlled urinals were also installed to reduce water usage.In addition, to protect water resource, we have installed an oil trap in the headquarters' on-site kitchen, utilized eco-friendly cleaning Paperless Services agents, and used warm water to clean dishes, which will reduce the quantity of cleaning agents used. In addition, we Paperless learning The process of providing have engaged contractors to carry out septic tank pumping on a regular basis and conducted wastewater testing to The development of the "First services, including "marketing", e-Academy" online learning "transaction", "payment" and determine the directional flow of contaminants, thereby improving overall water quality and reducing pollution. system, collaborative system "accounting", is introduced into cloud and data cloud have digital services to reduce paper effectively reduced electricity usage. consumption.

Paperless meeting Paperless administration • Printed materials no longer • Employees' pay slip are in provided at most meetings. They Paperless credit review electronic form, and both sides • Implemented the "New Enterprise of a paper are used where are instead compiled into e-Loan System" and "Consumer possible. electronic files and transmitted e-Loan System" for credit checks • Internal documents are now in to the meeting server. and reviews, resulting in a electronic form. Recycled A gray water reclamation system was installed and a 1.3million liters, rainwater reclamation tank was built in the • All business announcements, computerized system that envelopes are used for sending and sales reviews are conduct- headquarters basement to supply water for landscaping and toilets. In 2018, the gray water reclamation system reduces paper consumption. printed documents. ed through video conferencing • Joint credit information are now • Use of Internet bulletin board for helped conserve 26.23 million liters of tap water, accounting for 11.88% of the FFHC's total water consumption. where possible to reduce fuel automatically imported. Borrow- announcements. consumption and carbon er/policy-holder credit informa- • Reduced the use of paper cups emissions from business travel. tion can be queried online and meal boxes. This improved administrative making printed paperwork • Recycled paper packaging for unnecessary. bills; eco-friendly ink used for The FFHC's Consumption of Municipal Water Supplies Unit: million liters efficiency and reduced carbon emissions. • Implemented an account-keeping printing envelopes and annual 2018 database for the group to reports. Item Year 2015 2016 2017 2019 Goals automatically import domestic Actual Results Goals and overseas group data. Total water consumption 201.14 193.50 199.35 194.46 197.44 202.5 Percentage of coverage (%) 99 99 99 99 - - Carbon reduction at FFHC from paperless initiative Growth in 2018 Year compared Item 2015 2016 2017 2018 with 2017 in Note: FFHC's water consumption statistics are mainly filed by each unit in accordance with water bills and compiled by the carbon reduction(%) Sustainable Environment Work Group of the CSR Committee. Number of official 130,489 143,108 288,101 278,257 documents issued -2 electronically/carbon /10,009 MT CO2e /11,067 MT CO2e /11,738 MT CO2e /11,474.72MT CO2e quantity reduced Number of electronic 149,840,717 152,618,012 209,614,034 244,623,499 bills and DM/carbon 17 quantity reduced /1,348.57 MT CO2e /1,373.56 MT CO2e /1,886.53 MT CO2e /2,201.61 MT CO2e

Hours of online 299,118 hours 330,031 hours 244,676 hours 505,480 hours teaching/carbon 107 quantity reduced /33.50 MT CO2e /36.96 MT CO2e /27.40 MT CO2e /56.61 MT CO2e

Number of electronic 48,149,462 47,050,208 50,248,204 53,998,931 automated transactions 7 /carbon quantity reduced /269.64 MT CO2e /263.48 MT CO2e /281.39 MT CO2e /302.39 MT CO2e Total carbon reductions from paperless initiative 11,661 MT CO2e 12,741 MT CO2e 13,933 MT CO2e 14,035.33 MT CO2e 1

Note: The carbon quantity reduced from electronic billing and DM was calculated based on the Taiwan Products Footprints Information Network on the official website of EPA, Executive Yuan: one sheet of B4-sized paper meant 0.009 kg of CO2e emissions; the carbon quantity reduced from electronic automated transactions was based on the same source: one sheet of A4-sized paper meant 0.0056 kg of CO2e emission. 138 139 Carbon quantity reduced from official documents issued electronically in 2018 No. of Carbon reduction result Company Quantity Utilized Users Calculation Method: (Unit: MT of CO2e) Ecological and environmental sustainability First Bank 265,024 7,708 265,024*7,708*0.0056/1,000 11,439.71 Material Topic GRI 306: Effluents and Waste First Securities 6,545 740 6,545*740*0.0056/1,000 27.12 GRI 307: Environmental Compliance First Securities Investment Trust 3,710 155 3,710*155*0.0056/1,000 3.22 First Life Insurance 2,729 299 2,729*299*0.0056/1,000 4.57 Management guidelines First Financial AMC 249 72 249*72*0.0056/1,000 0.10 Policies Specific management practices Use energy-saving and green products, reduce the use • Green Volunteers participated in beach clean-up activities at Total of disposable products, properly dispose of wastes, Zhunan Qiding Beach and picked up a total of 5,000kg of 278,257 8,974 11,474.72 regularly organize internal/external environmental fishery waste and general waste, using actions to demon- courses and activities, and promote and implement strate their resolve for protecting the environment. The carbon quantity reduced from electronic official documents was calculated based on the Taiwan Products Footprints Informa- ecological and environmental sustainability ideals. • FFHC organized the "Love FUN First Green Living Carnival" to ＊： encourage people to protect the earth in their daily lives and tion Network on the official website of EPA, Executive Yuan: one sheet of A4-sized paper meant 0.0056 kg of CO2e emission. Commitment contribute to environmental sustainability. • Endeavor to protect the natural environment through • We invited financial industry peers to discuss and develop Carbon quantity reduced from online teaching in 2018 volunteering services and charitable activities to product category rules (PCR) for Counter Service Carbon achieve the goal of environmental sustainability. Footprint Calculation. These rules have been reviewed and Carbon reduction result • Select and use green-label or recyclable materials approved by the EPA and are provided to financial industry Company Hours of online teaching Calculation Method (Unit: MT of CO2e) in operating activities and commit to resource peers as standards for calculating counter service carbon recycling and domestic waste reduction. footprint. First Bank 473,151 473,151*20*0.0056/1,000 52.99 • Since 2014, our company locations located throughout Taiwan Goals have shut off their lights for one hour on the evenings of Earth First Securities 27,939 27,939*20*0.0056/1,000 3.13 • Promote ecological and environmental sustainability Hour and Earth Day, demonstrating our joint commitment to through comprehensive range of environmental doing our part for energy conservation and reducing carbon First Securities Investment Trust 1,207 1,207*20*0.0056/1,000 0.14 conservation and green volunteer activities. emissions. • Continue to cooperate with external units such as • FFHC implemented the zero waste basket policy in the office First Life Insurance 2,209 2,209*20*0.0056/1,000 0.25 government agencies, non-profit organizations, to raise employees' awareness on waste classification and First Financial AMC 974 974*20*0.0056/1,000 0.11 suppliers, and customers to promote ideals for achieve the goals of domestic waste reduction. energy conservation and carbon emissions • We raised employees' awareness on plastic and waste Total reduction and expand our influence. reduction, encouraged employees to bring their own lunch 505,480 56.62 boxes, eating utensils, stainless steel straw, and reusable Duties grocery bags. Let's assume that one hour of online teaching saves 20 sheets of paper. • Raise the awareness of employees and the general ＊： public on the importance of ecological and Assessment mechanisms environmental conservation. • We continued the "Green Volunteer Sustainability Program" to • Encourage employees to obtain certification on support organic farms, protect coastlines, plant trees for carbon environmental education, take charge of the reduction, adopt contract growers, implement the Green Light Assessment Criteria for the FFHC Environmental planning and execution of environmental education Sustainability Program and other Green Volunteer activities. 3-8 Held the Environmental Protection Protection and Energy Conservation Competition classes within the Company as well as the compila- • We organized environmental education courses and employees tion of course content, and serve as instructors for participated in an average of 2 hours of courses each year. Competition and Presented Awards to Item Area Assessed Points Assigned environmental education courses. • We implemented controls for domestic waste produced by Outstanding Departments and Employees No. • Raise the awareness of employees on waste and company headquarters and set a cap of 64.2 tons on the Environmental protection and Since 2015, the FFHC has held an annual Environmental 1 24 points plastic reduction, and introduce reusable eating amount of the entire Group. energy conservation compliance utensils and office suppliers. • We sent personnel for environmental educator training and Protection and Energy Conservation Competition for all Promotion of environmental protection design education materials to promote environmental educa- 2 and energy conservation measures 56 points operating sites, which encourages employees to actively tion. Promotion of environmental Resources participate in the implementation of our environmental 3 education and awareness 14 points • A total of 48 Green Volunteer events were held in • We donated 133 recycled personal computers and laptop 2018, attracting 1,601 volunteers. The total computers to remote areas or disadvantaged groups, thereby sustainability development policies to meet annual energy 4 Green finance innovation 6 points investment was NT$1,678,604. helping to bridge the urban–rural gap. conservation and carbon reduction targets. "Green finance • FFHC collaborated with NGOs such as "Taiwan • We implemented waste control and resource recycling at the innovation" was added as an assessment item in 2018 to Total points Indigo Dye Association" to strengthen environmental company headquarters and the IT building and set a cap of 100 education and life exploration for young students. 23.18 tons on the amount of the entire Group. encourage employees to innovate and achieve annual • FFHC introduced a new procurement platform for energy conservation and carbon emissions reduction targets. In 2018, we selected 11 of the most outstanding units for purchasing green products and social enterprise Results their achievements in environmental protection and energy conservation and provided 17 commendations. merchandise. In 2018, employees purchased • A total of 48 Green Volunteer events were held in 2018, eco-friendly products, organic vegetables, and other attracting 1,601 volunteers and benefiting 4,635 people. items amounting to a total of NT$372,890 in • In 2018, 35 sessions of environmental protection-related spending. training were held by the companies and attended by 9,061 • We continued the Green Light Sustainability people. Each person on average received at least 2 hours of Program, joining forces with our customers and training. 3-9 Established an Employees Proposal System for Energy Conservation Measures suppliers to realize cross-industry charitable events • The total amount of domestic waste of all company headquar- such as assisting disadvantaged groups with ters and the IT building was 59.9 metric tons, attaining the Benchmarks installing LED lights to build a low-carbon sustain- reduction target. To heighten awareness of the topics of environmental protection, energy conservation, and reducing carbon emissions, able homeland. • Four employees received certification as environmental we formulated the "Guidelines for Incentivizing Employees Proposals" in 2014 to encourage employees to submit educators and they have completed three lesson plans and proposals concerning environmental protection and energy conservation. If an employee proposal demonstrates Complaints mechanism organized seven sessions of environmental education • The “Stakeholder Communications” zone set up on promotion activities for external parties. positive results and has a wide impact, the proposal will be reviewed by related business units and bonuses are issued our official website discloses communication • We donated 141 recycled personal computers and laptop to the employee. In 2018, a total of 57 proposals related to environmental protection and energy conservation were channels such as the complaints hotline number or computers to social welfare groups in remote areas, hence submitted, wherein 19 were approved for implementation. A reward of NT$6,500 was provided as a way to inspire the e-mail box, etc. for our employees, investors and enriching the educational resources for students living in rural customers to file their complaints. areas. advancement of environmental protection and energy conservation measures. • We have used online questionnaires on our official • The total amount of recycled resources of all company website to establish the sustainability issues of headquarters and the IT building was 42.33 metric 140 concern to each kind of stakeholders. tons, attaining the reduction target. 141 4-1 Recycled Wastes 4-2 Earth Hour – Turning Off Lights to Save Energy To maximize resource recycling, annual recycling targets have been set by FFHC for all group companies to implement Since 2014, FFHC has ramped up our efforts to further conserve energy, reduce carbon waste sorting practices. A zero waste basket policy is also rigorously enforced with no personal waste baskets placed emissions, and adopt policies that help protect our planet. In this vein, we coordinated with in the office. This policy encourages employees to take their trash to the recycling bins to be sorted. In 2018, the amount 235 of our company locations located throughout Taiwan to shut off the lights for one hour of waste recycled was 20% higher than 2017. In 2018, we established the target for maintaining domestic waste volume on the evenings of Earth Hour (which was held worldwide on 3/24 in 2018, but normally falls produced by First Bank, First Securities, First Securities Investment Trust, First Life Insurance, and AMC HQ buildings to on the last Saturday of March each year) and Earth Day (4/22). Through both events, we less than 64.2 tons. The domestic waste produced by the head offices of the subsidiaries totaled 59.9 tons in 2018. We reduced 0.334 metric tonnes CO2e, demonstrating our joint commitment to doing our part for also organized the "ISO 14064-1 Indirect greenhouse gas emissions from other sources - Inventory of waste processing energy conservation and reducing carbon emissions. from operations" to inventory the CO2 emissions of the Company's headquarters building and IT building. The inventory volume was 109 tons CO2e.

4-3 First Financial Green Living Fun — Advocating Green Living FFHC held the First Financial Green Living Fun carnival event in the Da'an Forest Park in an effort to deliver messages regarding environmental sustainability and caring for our land. FFHC invited the popular new-generation female vocalist Kimberley Chen, "iron-lung" Jess Lee, "soulful singing queen" Jia Jia, and popular singer William Wei to perform and encourage people to protect the earth in their daily lives and contribute to environmental sustainability. We organized the first FFHC recycles all kitchen scraps and leftovers after each meal and promotes numerous recycling programs. "First Bank creative Coser Contest" to let young people use their imagination and Recycling bins are placed on each floor level — all waste must go through the recycling process. We also design unique coser styles with comic book and environmental protection commission qualified refuse collection companies to provide regular trash removal services and collect data elements. We also organized the "renewable DIY" activities and invited handicraft records, allowing us to keep tabs on how much garbage is produced and where it ends up. There were no instructors to teach the people how to produce leather keyrings from environmen- breaches of contracts by trash removal contractors in 2018. tally friendly materials, print on environmentally friendly bags, produce, natural mosquito repellents, and paint wooden chairs.

We also used our core competencies and organized the digital finance experience and fun environmental protection Comparison of Trash and Recycling Amounts of Subsidiary HQ Buildings and First Bank IT Building in 2018 Unit: kg games which attracted more than ten thousand participants. We use the three approaches including life, community, Magnitude of change and technology to implement a green life through actual operations. Item Year 2015 2016 2017 2018 from previous year (%) Paper and paper containers 20,195 25,003 29,228 32,485 11 Plastic and PET bottles 935 1,515 2,535 2,940 16 Aluminum, other metals, glass 1,972 1,864 2,580 2,085 -19

Batteries and electronic devices 1,176 788 58 4,073＊ 6,922＊ Cooking oils 547 900 774 743 -4 Total 24,825 30,070 35,175 42,326 20

＊：First Bank IT building replaced multiple servers and various electronic equipment in 2018 and contributed to a significant increase of the recycled resource volume from 2017. 4-4 Outward Environmental Education Total Waste, Recycled Waste, and Domestic Waste Amount of Subsidiary HQ Buildings and First Bank IT Building in 2018 Unit: Tons Item Year 2015 2016 2017 2018 2018 Goals 2019 Goals Internal FFHC has introduced environmental education at the grassroots level in keeping with the philosophy that "education is Total waste (a) 61.30 66.18 95.86 102.22 - - crucial to fostering a better environment." Apart from arranging a new employee training class to be included in morning community service events to strengthen and implement environmental conservation concepts, general adminis- Recycled waste(b) ＊1 24.83 30.07 35.16 42.33 - - tration personnel have been designated as the energy-saving and carbon reduction promotion cadre as each unit. At Domestic waste (a-b) 2 36.47 36.11 60.70 59.89 Less than 64.20 Less than 64.20 ＊ the end of each working day, they must fill out the energy-saving assessment forms to ensure that energy-saving and Percentage of coverage (%) 60 60 80 80 - - carbon reduction measures are being followed. The cadre also changes over time as they rotate through different positions. Using this system, every employee is rotated through the energy-saving and carbon reduction promotion role. The Company also continued to review environment-related laws and regulations and communicate environmental 1 The scope of coverage includes the subsidiaries' HQ buildings and First Bank IT Building. ＊： information through internal systems, thereby ensuring compliance with environmental laws and regulations. ＊2：Statistics for 2015–2016 included First Bank HQ Building and First Bank IT Building, and apart from these buildings, First Securities, First Securities Investment Trust, First Life Insurance, and AMC HQ Building were also included in the statistics for 2017-2018. 142 143 FFHC believes that a better environment starts with education, which is why we arrange for personnel to attend profes- FFHC Wanhua Branch organized the first "Green Finance Camp" which provided three major courses including "environ- sional environmental education training courses. 4 employees have obtained certification and qualifications as environmental protection organic DIY activities", "environmental education", and "financial primary schools". To provide care for mental educators. Such personnel are now responsible for the planning and compiling the content of FFHC's environ- local disadvantaged schoolchildren, FFHC opened the courses to schoolchildren from 3rd to 6th grade and invited mental education courses. In 2015, we began organizing online environmental education courses for employees to children of the Nanjichang Association in Zhongzheng District, Taipei City to participate in the events. We used educa- enhance their understanding of environmental sustainability. In 2018, 35 sessions of environmental protection-related tional games and interactions to establish wealth management and savings habits and teach the children to start training were held by the companies and attended by 9,061 people. Employees in each company on average received protecting the environment from an early age. at least 2 hours of training.

No. Course Content Course Duration

1 ISO14001 Certification of Environmental Management System 70 minutes 2 ISO 50001 Energy Management System 51 minutes Total 2hours and1minute

FFHC launched the low-carbon vegetarian "1 Movement" in 2013, where employees are asked to not eat red meat one day a week. Red meat is not served at the employee cafeteria on this day. As of 2017, the number of red meat-free days was increased to two days a week. This movement purports to promote the eco-friendly concept of "eat more 4-5 Green Volunteering and Environmental Sustainability As a strong proponent of environmental sustainability and ecological conservation, FFHC launched the "Green vegetables for health and consume less red meat" thereby achieving the benefit of promoting healthy eating while Volunteer Recruiting Program" in 2018 to support organic farms, protect coastlines, plant trees for carbon reduction, simultaneously reducing carbon emissions. adopt contract growers, Local Care for Green Light to Spread Love and Green Finance Camp. We have held 48 green volunteering events involving 1,601 volunteers, 4,635 beneficiaries, and a total NT$1,678,604 in investments. FFHC introduced a new procurement platform for purchasing green products and social enterprise merchandise. In 2018, employees purchased eco-friendly cleaning products, re-usable table ware, and other items amounting to a total First Fresh of NT$59,150 in spending. A total of NT$313,740 was spent on the purchase of 11,205 packages of organic vegetables Organic agriculture requires a significant amount of manpower and financial resources in order to sustain its business. and 2,800 kg of organic produce. The employee cafeteria also serves organic vegetables every week which are For this end, FFHC has located organic farms throughout Taiwan currently undergoing the organic certification process sourced by personnel who visit the organic farms in person to verify farming practices. Each piece of produce can be or with an urgent need for additional labor. Numerous farms, including the Linkou Journey to the West Organic Farm in traced back to its source, giving employees greater peace of mind. To promote the concept of environmental sustain- Taipei, LadyBird Organic Farm in Taichung, Tenha Organic Farm in Rende, Tainan, and Kaohsiung An Hsin Home ability, the annual mountain hike for First Bank employees was combined with environmental awareness activities. Organic Education Farm were chosen to receive assistance for planting, picking, harvesting, packaging, and other Employees are encouraged to bring their own water bottle and donate batteries and compact discs. These efforts not related activities from employees who were asked to act as Green Volunteers and work with children from disadvan- only received positive feedback but also reduced the use of mineral water bottles, thus reducing plastic use. Moreover, taged families to protect the land. In 2018, 2,220 kg of organic produce was sold using our mobile payment system, 150.5kg of batteries and 17 kg of optical disks were also recycled. These activities enabled employees and their thereby laying down stronger foundation for organic practices. families to take concrete actions in protecting the environment.

1,388 volunteers

Environmental protection booths were set up on the anniversary of First Bank to encourage employees to bring their 2,220 4,164 Kg Outcomes of beneficiaries own water bottles, donate waste batteries or CD-ROM. Employees actively participated in the event. First Fresh

External FFHC invited employees to serve as seed instructors for wetland education in 2018 to allow the concept of environmen- Protect the Coastlines tal sustainability to take root at a young age. They shared the importance of the conservation of wetlands with 251 To implement environmental sustainability, Green Volun- students of Erchong Elementary School in New Taipei City. FFHC also cooperated with "Taiwan Indigo Dye Association" teers participated in beach clean-up activities at Zhunan in introducing the beauty of national parks in Taiwan to 250 students of Zhongzheng Elementary School to strengthen Qiding Beach and picked up a total of 5,000kg of fishery environmental education and life exploration for young students. waste, general waste, and drift wood, using actions to

demonstrate their resolve for protecting the environment. In addition, Wanhua Branch was renovated to meet the criteria of an environmental education facility, and academic institutions were invited to assist with evaluations for certifying environmental education facilities and venues. External consulting companies were appointed to assist in training talents for drafting environmental education programs for adults, students in 5th to 6th grade in elementary school, and parents and children. We also organized 7 sessions of promotion activities. picked up a total of 5,000 kg of fishery waste 144 145 Planting Trees to Curb Carbon Emissions Financial Institutions To rekindle people's environmental protection awareness for the forests and recovery of green lands, FFHC organized FFHC has launched and invited industry peers to discuss and establish the "Counter Service Carbon Footprint Calcula- three sessions of "Planting Tree for Love" events in 2018 and planted 2,600 trees in "Zhuzaikeng Ecological Park, tion" product category rules (PCR), which were approved by the Environmental Protection Administration in June 2017 Taichung City", "Oil Field Ecological Farm and Fishery Park, Baoshan Township", and "Heping Section, Gangshan District, and announced on the Carbon Footprint Labeling website, providing financial industry peers with a set of regulations Kaohsiung City". We planted a total of 5,385 trees from 2016 to 2018, which equaled a reduction of approximately 53.85 for calculating counter service carbon footprint. In July 2017 we obtained the SGS-certified Carbon Footprint Verification metric tons of CO2e each year. Statement and received the EPA Service Carbon Footprint Label Certificate in September 2017. According to our research, the First Bank HQ Sales Department and Wanhua Branch produce 2 kg and 800 g of CO2e when providing counter service to a single person. In 2018, the Company's counter service carbon footprint continues to be disclosed on the Carbon Footprint Label website of the Environmental Protection Administration. The disclosed information is used as the standards for calculating counter service carbon footprint for financial institutions and it allows us to monitor the carbon emissions in the service process to establish effective carbon emissions reduction measures.

Note:According to estimates of the Forestry Bureau, the CO2 fixation of each tree is approximately 5-10kg. The Forestry Research FFHC invited industry peers to discuss and establish the "Counter Institute estimates that each tree can absorb 11-18kg of CO2 each year. FFHC based calculations on 10kg. Service Carbon Footprint Calculation". First Bank Headquarters and Wanhua Branch obtained EPA Service Carbon Footprint Label Certifi- Teaming Up with Farmers through Community Supported Agriculture cates. To facilitate farmers' transition into organic farming, FFHC has adopted organic sweet potato farms for the third consecutive year since 2016 as part of its Family Day activity and cooperated with local small farmers to harvest almost 9,60 kg of the TNG66 organic sweet potatoes and support their use of environmentally friendly farming methods. All of the harvests are donated to the Genesis Social Welfare Foundation to help single mothers to become self-sufficient and Suppliers and Customers advocate a virtuous cycle that embraces charity philosophies. Over 30 families had benefited from these donations. As the number one brand in green finance, FFHC is fully aware that disadvantaged groups typically use affordable lighting instruments which are energy-consuming and cause glares. Considering these problems, FFHC 4-6 Green Cooperation joined forces with its supplier and customer Energyled Corporation and Central Technology Engineering Corporation to implement cross-industry To promote the concept of energy conservation and reducing carbon emissions among our various stakeholders, FFHC charitable programs such as the continuation of the "Local Care for Green is continuing to work with external groups including government agencies, non-profit organizations, suppliers, and Light to Spread Love" in 2018, assisting the Dann Center for Individuals with customers to promote green living and increase the impact of our efforts. Developmental Disabilities in Nantou County replace their old lighting system with 265 sets of LED lighting equipment to build a brighter living Government Units space. We took actions to realize environmental sustainability. The Company has promoted the EPA “Green Point" event through the electronic media to inform the public that they Based on calculations for using the lighting equipment 8 hours a day, these actions are expected to save roughly 30,000 can earn green points by traveling on public transport, buying kWh of electricity per year, cut electricity bills by approximately NT$120,000, and simultaneously reduce 16.62 metric green products and participating in environmental charity tons of CO2e. We have reduced 80.1tons of CO2e emissions from 2017 to 2018 and we aim to build a low-carbon events. The green points earned can be redeemed to receive sustainable homeland, thereby achieving the three long-term benefits of "improved lighting, lower electricity bills, and discounts or green products or enjoy special offers and carbon reduction". promotions offered by green service sectors, recreational areas, and environmental education facilities. First Bank launched the Green Point rebate program for binding EasyCard or iPASS to First Bank Living Green Card in 2018. As at the end of 2018, the Company has assisted and recommended 3,799 people to become Green Point members. We partnered with a supplier in 2018 to replace 83 official gasoline scooters with electric scooters and Non-Profit Organizations We leased vacant land to suppliers to set up battery leased vacant land to suppliers to set up battery To teach the general public about organic green life, FFHC partnered with the small farmers of the “Tze-Xin Organic exchange stations to jointly promote low-pollution exchange stations to jointly promote low-pollution Agriculture Foundation” in the "Organic Farmers' Market" to promote organic and healthy local foods to employees. scooters and help protect urban air quality. scooters and help protect urban air quality. Sales totaled approximately NT$112,000 over three days and we helped support organic farmers. Social Welfare Organizations Over the past eight years, FFHC has worked to ensure that reusable items are distributed more efficiently by calling on volunteers to gather up old PCs and laptops which are still in good working order to be donated to rural communities and disadvantaged groups. In 2018, a total of 141 computers were donated to social welfare organizations including Christian Methodism Church, Taipei City Bethany Children’s Home, National Tsing Hua University International Volunteers Group, and Chi Hsiang Chen Social Welfare Foundation. Accumulated donations totaled 1,054 units. Our efforts enable disadvantaged schoolchildren to participate in distance learning programs, thereby broadening their access to educational resources and helping to bridge the urban–rural gap. 146 147 Digital finance innovation and inclusiveness In response to global FinTech development trends, FFHC spared no efforts in cultivating digital finance. We introduced Material Topic improvements to procedures with digital technologies and strengthened applications in virtual channels including FS8: Products and services designed to deliver environmental benefits "optimization of online banking service procedures", "establishment of digital accounts", "mobile payment services", "smart customer services", and "FinTech patent applications". First Bank replaced hardware equipment and greeting Management guidelines systems in 136 branches in 2018 and introduced the "pre-filled out form and reservation tickets", "customer identification and greeting separation", and "precision beacon marketing applications" functions to integrate physical channels, Policies Specific management practices In response to development trends in digital finance • Encourage customers to use electronic channels through improve service efficiency, and create more valuable smart financial service models and momentum for growth. In FFHC shall continue to deploy integrated virtual and electronic marketing and advertising. addition, First Bank has created 20 “digital branches” and set up “digital banking experience areas” at 49 branches actual technologies and use the transformation of the • Launch the "iLEO Digital Account" which allows customers core information system to strengthen product to download the app and complete four online account throughout Taiwan. First Bank also set up the "walking sales business platform" to effectively reduce paper use and modularization and synergy across organizations, opening procedures to obtain a comprehensive transaction provide customized wealth management services. improve internal management performance, and refine account with deposit, foreign exchange, and trust functions. customized smart services. • Continue to optimize the "e-speed loan" system functions and provide customers with convenient and safe online Commitment consumer loan application services. FFHC shall actively integrate virtual and actual • Launch the "Micro Enterprise e-Services" online loan channels and enter the new payment, digital experi- application website for micro enterprises to provide online ence, FinTech, big data analytics, and other applica- credit calculation and immediate loan application service 5-1 Optimizing Online Banking Services tion sectors to create smart customer services and to simplify the loan application procedures of small and Since 2016, First Bank has been continually working on developing the next generation of an online banking system for improve the convenience of mobile and network micro enterprises. corporate customers which will provide an authorization center, receipts and payments for NTD and foreign currencies, financial services. • Optimize the smart customer service system to provide 24-hour responses to customers' questions and provide import/export trade services, overseas online banking, and global asset management. First Bank also integrated online Goals other financial services. credit extension, securities transactions, and corporate credit card services. In addition, based on the type of organiza- Use "smart services, channel transformation, cross-sec- • Through the customer satisfaction survey, we have tor collaboration, and digital platforms" to develop understood our customers' demand for digital financial tion of the customer and their use requirements, we provided diverse and easier ways to make secure account transac- diverse smart services, improve channel value, technology, and improved the development of related tions. Meanwhile, we have also expanded compatibility to support a more diverse range of operating systems and innovate FinTech applications, and strengthen applications. The "pre-filled out form and reservation infrastructure to improve the digital operations tickets", "customer identification and greeting separation", browsers including the latest versions of Microsoft Edge, Google Chrome and Firefox. As of the end of 2018, the first platform. and "precision beacon marketing applications" are batch of online operations have been completed and they included adjustments to the "branch end" function menu in included in the greeting system to optimize our overall domestic and foreign branches and the update of the structure of the database that supports "customer end" authoriza- Duties service quality. • ntegrate big data applications, focus on managing • First Bank has provided account affairs inquiries and fund tion and management functions. First Bank shall arrange customer transfer schedule based on prior operations. new and old customer groups, satisfy all customer transfers on Internet banking of the Phnom Penh Branch in requirements, introduce improvements to procedures Cambodia, thereby providing diverse and convenient with digital technologies, strengthen applications in Fintech services. virtual channels, integrate physical channels to improve service performance, and create more Assessment mechanisms valuable smart finance service models and momen- • Encourage customers to use electronic channels and tum for growth. achieve a utilization rate of 78% for electronic channels. • Make use of the influence of the finance services • Set a target for reaching 80,000 users in "smart customer industry and help least developed countries launch services". high-tech banks and improve their use of Internet • Actively apply for invention and new utility model patents technologies. for finance technologies and set a goal for acquiring 36 patents. Resources • Complete 10 precision marketing projects for target • Use the big data analytics system to create a big customer groups; complete 10 interactive digital marketing data platform and collect information from projects. customers' clicks and interactions on the official • Accumulate 5,000 applications for "e-speed loan"; Set a website. Integrate and analyze customers' prefer- target for binding mobile payment to 45,000 First Bank FTSI Golden, the online order placement system, provides customers with flexible functions and tab notifications, ences and applicability for personalized marketing credit cards. advertisements. allowing them to grasp the latest topics and market movements from time to time. To enhance the prevalence and • Introduce beacon technologies and incorporate the Results accessibility of financial services, First Life Insurance constantly promotes the internet insurance application business. As core ideas of new retail to integrate online and • As of the end of 2018, the use rate of electronic channels of late 2018, it has released the Easy Go Travel Insurance and E-Rate Interest Sensitive Annuity Insurance online, offline services. reached 78.07% and resulted in a 7.82% growth over in the • Launch 24-hour "smart customer services" in last 5 years. allowing the public to obtain sufficient protection through the simplest and fastest insurance application procedures. separate phases on the company website, online • As of the end of 2018, users have used the "smart customer bank, mobile app, and LINE accounts. services" 122,986 times. • Actively pursue FinTech patents, commit to improv- • As of the end of 2018, FFHC has acquired 49 patents for ing the efficiency of information services, and finance technologies. strengthen information operation security to achieve • FFHC executed 17 precision marketing projects for target balance between risk management and business customer groups in 2018. FFHC also established personal- operations. ized marketing triggering mechanisms for digital channels and used digital channels for interactive marketing. A total Complaints mechanism of 31 digital interaction marketing projects were executed. • According to the "Customer Complaint and Dispute • As of the end of 2018, 6,295 applications for "e-speed loan" Resolution System", customers can communicate have been filed online. 132,646 credit cards have been with FFHC companies through business units, bound to mobile payment. customer service hotlines, customer complaint • First Bank received the Best Cloud Application in Taiwan mailboxes, and other complaint channels. Award from the Asian Banker • The “Stakeholder Communications” section set up on our official website discloses communication channels such as the complaints hotline number or e-mail box, etc. for our employees, investors and 148 customers to file their complaints. 149 FFHC strives to work with our customers to protect the environment. 5-4 Big Data Analytics Customers are also encouraged and educated to use the electronic channels in order to reduce the need for over-the-counter A.Taking a Customer-Oriented Approach: transactions. Exceptional progress has been made after 5 years: In order to better understand the needs of our customers, help customers solve problems more quickly, and interact with customers more frequently, First Bank used a big data analytics system and completed the establishment of a big data platform. By collecting data on the click behavior of customers on our official websites and conducting integrated data analysis, the platform allows us to offer personalized push notifications, demonstrating our smart approach to customer Utilization of e-channels has grown by 7.82% 78.07% relationship management and making effective use of different channels. In turn, this enables us to explore all potential in the last five years points of contact with customers and provide customers with a better overall service experience, which translates to higher customer satisfaction and more sales opportunities in the future. 2018 B.Precision marketing: Big data analytics is used to create models including a clustering model and forecast model which are used to produce 72.41% a list of marketing activities to perform more precise marketing, thereby resulting in a significant increase in our customer response rate and portfolio size. In 2018, we executed 17 marketing schemes. The response rate of marketing 2014 activities grew at least twofold as compared with that before the application of models, and the total annual portfolio size was about NT$20.86 billion. In addition, potential new corporate customers are identified through the use of big data analytics, allowing business units to conduct subsequent solicitation activities. Moreover, data gathered through sales promotions are continuously employed to further calibrate internal models, resulting in greater efficiency of such models. We are also making use of big data to interact with customers in real-time.

C.Digital Interactive Marketing: 5-2 Digital Accounts Big data applications are used to establish personalized marketing triggering mechanisms in digital channels to use First Bank launched the "iLEO Digital Account" which allows customers digital channels for interactive marketing and real-time interactions with customers. When the customer browses through to open accounts without going to the counter. They are only required corporate platforms they will receive product recommendations tailored to their personal preferences and compatibility to download the app and complete four online account opening to improve the quality of services and marketing power. A total of 31 interactive marketing projects were executed in procedures to obtain a comprehensive transaction account with depos- 2018 and they resulted in 1,489,717 exposures over digital channels. it, foreign exchange, and trust functions. They are also provided with 120 times of interbank remittances and 60 interbank withdrawals free D.Smart Applications: of service charge each year as well as a 1.2% high interest deposit FFHC responds to demands from new applications and continues to introduce new technologies and sources of data account for deposits within NT$120,000. Customers may invest in funds to improve big data models such as deep learning (DL), geographic information system (GIS), social network analysis with minimum payments of NT$1,000 and it greatly reduced the (SNA), and natural language processing (NLP) technologies. AI applications were used in the following financial requirements for young people's wealth management. products and services in 2018:

• We First Bank used AI appraisal models on the "e-speed loan" website to calculate the value of the building used as collateral and calculate the credit limit for the collateral. As of the end of 2018, 6,295 applications have been filed 5-3 Smart Customer Services online. In response to the digital transformation in the traditional finance industry, First Bank began launching "smart customer • First Bank used AI appraisal models on the "Micro Enterprise e-Services" website to provide small and medium services", smart customer service clerks, and smart robot "tiny-e" in separate phases on the company website, online enterprises with online loan limit calculations. bank, mobile app, and LINE accounts in January 2017 to jointly provide 24-hour services with customer service person- • First Securities continued to optimize the smart stock selection system in the app to improve the flexibility and conve- nel. nience of the trading system. "Smart customer service" uses natural language processing and machine learning technologies to integrate bank business knowledge with artificial intelligence platforms. More than 3,000 knowledge points have been created in the smart knowledge database and customers can use the computer or mobile devices to interact directly with smart robot "tiny-e" through text or audio inputs. If customers have questions regarding responses from "tiny-e", they can immediately switch to services provided by people. As of the end of 2018, users have used the "smart customer services" 122,986 times and the accuracy rate of responses was 94.5%.

150 151 5-5 Digital Money Transfers 5-6 FinTech Innovation First Bank's leading position in corporate banking as well as comprehensive overseas network have been used to set FFHC is committed to research, development, and innovation of up the First Bank International e-Banking (including "Financing e-Bank App - Overseas Branch Internet Banking" and " FinTech. It uses the "cross-chain integration" in blockchain patents Financing e-Bank App - Global e-Banking Service"), international business cash flow (e.g. Supply chain financing, sales along with the customers' identification applications (AI KYC) to plan chain financing), international consumer cash flow (e.g. international third-party payment) and international clearing the integration of virtual and physical channels for "physical and system. digital identification information". The integration mitigates risks of fraudulent use or altercation of transaction information in the process A.The Least Developed Countries of uploading identity certification documents from the customers' In order to assist the least developed countries in launching internet mobile phones. It also helps mitigate information security risks and banking and boosting the prevalence of internet technology, First Bank has improve business procedures. provided account affairs inquiries and fund transfers on the internet banking of the Phnom Penh Branch in Cambodia. It has also planned for adding a variety of internet banking functions that support and optimize multiple operating systems, multiple browsers, and multiple languages, thereby providing diverse and convenient Fintech services. 5-7 Social Media Social network management (e.g. Facebook, LINE) is constantly used to increase the channels for customer communication. It is used to provide customers with information about promotions and daily life and to gage customer identification B.Bar-code scanning payment: with First Bank and their service requirements. Apart from customer relations management, it can also be used to reach First Bank has fully introduced the shared QR Code service of “Taiwan out to younger customers. The First Bank fan page on Facebook, "First Bank Fan Page," now has more than 650,000 Pay.” Both its "First e-Mobility" or "Taiwan Pay t wallet +" facilitate mobile fans, making it the third most popular social media fan page managed by a domestic financial institution. payment, shopping, payment, fund transfer, and tax payment through scanning QR codes, thereby infinitely extending the convenience of smart First Bank also launched the official LINE account to life. provide personalized services for credit card use and changes in account affairs. The account has accumulated 3.58 million fans and the Facebook fan page C.Credit Card Mobile Payments has accumulated 255 marketing projects that reached To provide credit card customers with convenient payment tools, First Bank credit cards can be used in TSM, HCE, 3.38 million people. The official LINE account has Google pay, and Apple Pay. Apple Pay was launched in April 2018 and it supports JCB credit cards which expanded issued a total of 61 business promotion posts which the channels available for mobile payment functions. As of the end of 2018, 132,646 First Bank credit cards have been were read 33.83 million times. bound to mobile payment.

To deeply expand the presence of First Securities Investment Trust, it launched social media (Line official account and Facebook fanpage) to reach more users, as well as communicated with fans by providing market movements, fund information, new technology, activity information and English financial news. The contents are interesting and well received. Currently as many as 21,000 users clicked thumb-up on First Securities Investment Trust's Facebook fanpage.

D. Payment Facilitated by Pre-arranged Deposit Account Link: First Bank teamed up with "JKOS" to expand mobile payment applications for deposit accounts. Customers can bind deposit accounts to the electronic wallet app "JKOPAY" and complete payment in four major convenience stores, restau- rants, supermarkets, commercial centers and other places where daily spending takes place. First Bank also provides real-time withdrawal from JKOS accounts to improve the convenience of account connections.

First Bank continues to cooperate with electronic payment operators including O'Pay, Gama Pay, and ezPay to satisfy customers' demands for day-to-day payments.

152 153 Human rights protection and gender equality Material Topic GRI 405: Employment diversity and equal opportunity GRI 406: Non-discrimination GRI 407: Freedom of association and collective bargaining Management guidelines Policies Complaints mechanism We adhere to and ensure that employees enjoy • To facilitate the reporting and handling of sexual harassment internationally accepted labor rights including the cases, “Sexual harassment prevention complaints and "International Labour Organization Core Labour disciplinary regulations” have been formulated and issued at Standards", "The Ten Principles of the United each company along with the telephone, fax and e-mail for Nations Global Compact", "ISO 26000 Guidance filing sexual harassment complaints. on Social Responsibility", "Convention on the • Telephone, fax and e-mail for whistle blower complaints are Elimination of All Forms of Discrimination against published on the corporate website and dedicated personnel Women", and the "International Covenant on are assigned to process any complaints. Economic, Social and Cultural Rights". We also • The telephone number and e-mail for employee complaints are publish the contents internally. All business sites posted under the “Stakeholder Communications” section of our follow local laws and regulations on human rights. corporate website. The workplace and remuneration policies shall be • The “CSR - CSR Report” section also features a stakeholder legal, just, fair, and reasonable. There is no opinion survey that can also be used as a channel for discrimination on the rights enjoyed by employees employee communication. on the basis of race, gender, employment type, • To ensure open communications between the employer and promotion or other situations. All have the right to employees, employee suggestions from each department are equal pay for equal work, freedom from sexual tabled for discussion and communication during the “Employ- HAPPY harassment, and job security for female employee er-Employee Meeting” and monthly meetings. during pregnancy. Specific management practices Commitment • Establish the Human Rights Policy and organize related human Provide a fair, reasonable, and competitive workplace rights training for all employees every year. and remuneration policies, protect employees' rights to • Establish the "HR Management Rules", "Work Rules", "Sexual participate in union activities, ensure smooth communi- Harassment Prevention Complaints and Disciplinary Regula- cation channels for employees and employers, and tions", and other human rights regulations and systems to follow the principle of ethical negotiation in collective protect employees' rights and interests at work and provide a bargaining agreements. workplace environment free of sexual harassment. • Regularly refer to the report on the market rates for compensa- Goals tion and benefits and provide equal remuneration plans for W0RK PLACE • Ensure open communications between the both genders accordingly. employer and employees for a more efficient • Hold regular Employer-Employee Meetings to discuss labor labor-management operation. management issues such as improvements to working • Employee Compensation is based on the conditions and benefits that promote labor-management principles of fairness and rationality, with no cooperation. discrimination due to gender or other factors. • Implement the "Hazard identification and risk assessment form • Provide an excellent and fair working environ- for prevention of illegal infringement in the workplace" and the ment, maintaining good relations with employees "Prevention of Illegal Infringement at Work Plan" to protect and the union, with no forced labor and discrimi- employees' safety at work and their physical and mental health. nation. • The "Sexual Harassment Complaints Committee" objectively and fairly processes and investigates sexual harassment Duties complaints. • Hold labor relation meetings periodically to improve labor-management relations and Assessment mechanisms promote labor-management cooperation. • Salary ratio for male and female employees. • The human resource department of each • Percentage of employees trained on human rights issues. subsidiary provides a full description of the • Number of employees who are covered by the collective human rights system on work rules, HR manage- bargaining agreement through their union membership. ment rules, employee compensation and benefits during new employee training courses. Union Results personnel are also invited to speak about • In 2018, our employees attended human rights protection employee rights relating to the Occupational training (both real-world and online) 18,730 times for a total of Safety and Health Act. 20,938 hours of human rights-related training. The employee • Continue to implement the "Prevention of Illegal participation rate was 100%. Infringement at Work Plan" and establish • Approximately 84.33% of First Bank employees are covered by complaint case investigation teams to protect the collective bargaining agreement through their union employees' rights and interests. membership. The Ministry of Labor has recognized First Bank for excellence in collective bargaining. Resources • In terms of annual salary ratio between male and female Review and amend applicable regulations with employees, the ratio of male to female employees in manage- reference to the latest laws and international human rial positions was 100% : 100% in 2017 and it became 100% : rights development trend. Use the "Sexual Harass- 105% in 2018. For general roles, the salary ratio of male and ment Complaints Committee", human rights female employees in 2017 was 100%: 96% and it became 100%: protection training, "Employer-Employee Meetings", 100% in 2018. The gap between salaries for male and female and "collective bargaining agreements" implement employees has been gradually reduced. human rights policies and promote labor-manage- 154 ment cooperation. 155 1-1 Human Rights Policy 1-4 Compensation Structure with Equal Pay for Equal Work At all group subsidiaries, there is no discrimination employees during recruitment, selection, hiring, assignment, career We follow the principle of fair and reasonable compensation in employee compensation at FFHC and all of our subsid- development, remuneration and benefits, promotions, education & training, and retirement plans on the basis of race, iaries. There is no difference based on gender or other factors. The ratio between the starting salary for men and class, language, thought, religious, political affiliation, ancestry, place of birth, gender, sexual preference, age, marital women is 1: 1 so there is equal pay for equal work. The ratio between the starting salary and the local minimum wage status, appearance, facial features, physical and mental handicap, or union membership. Article 18 of the FFHC CSR is 1.88: 1; we also take into account remuneration surveys (including overseas units) conducted by management consult- Code of Conduct stipulates that subsidiary companies shall abide by the internationally recognized human rights of ing firms. The remuneration statistics are analyzed and used as a reference for adjusting the remuneration system and labor, including the freedom of association, the right of collective bargaining, caring for vulnerable groups, prohibiting make it more fair, reasonable and competitive. the use of child labor, eliminating all forms of forced labor, eliminating recruitment and employment discrimination to create an equal opportunity workplace. There were no human rights violations, infringement of indigenous rights, or Taiwan is the main business location for our company and subsidiaries. For the compensation ratio of men and women incidents of discrimination in 2018. None of the subsidiaries were involved in mergers, acquisitions or major investment in managerial and general roles in 2018, if men's compensation was 100%, then women's compensation would be agreements. The hiring of those under the age of 16 as regular or atypical employees (including temporary workers 105%; For general roles, the salary ratio of male and female employees was 100%. and security staff) is explicitly banned in our HR regulations. We also adhere to the Labor Standards Act to prevent forced labor through violence, threats, imprisonment or other illegal methods, The coverage is the supervisors and employees of our group (including overseas operation offices), covering 100% of the operation offices, and we will also Remuneration at FFHC in the past three years implement human rights inspections in the future. 2016 2017 2018 To maintain human dignity and basic human rights, we have set economic, social and environmental balance as well as sustainability as our targets. Our company and our vendors are all committed to following international recognized labor rights such protecting the legal rights of employees, enforcing a non-discriminatory hiring policy, ban on child Managerial Role 100% 95% 100% 100% 100% 105% labor and eliminating all forms of forced labor. Except in the case of business demand or personnel training, the General roles 100% 98% 100% 96% 100% 100% rotation of personnel between roles and units are based on FFHC employee willingness and the five transfer principles defined by the competent labor authority. We not only give employees a full understanding of company operations but also give preference to employees with high performance and potential. This forms a part of our critical personnel career management and successor cultivation plan; employees in central and southern Taiwan are encouraged to work in the north in order to learn about the various core businesses, enrich their business experience, accelerate talent cultivation and enhance the quality of our personnel.

1-2 Gender equality and human rights commitment We adhere to and ensure that employees enjoy internationally accepted labor rights, and related information is openly available internally. All business sites follow local laws and regulations on human rights. There is to be no discrimination against employees on the basis of race, gender or other circumstances. All employees have the right to equal pay for equal work, freedom from sexual harassment, and protected employment for female employees during pregnancy. Apart from regular training on sexual harassment prevention, new employee training also explains in full the human rights system on work rules, HR management rules, employee compensation and benefits. Union personnel are also invited to speak about employee rights relating to the Occupational Safety and Health Act. We strive to protect maternal rights and build a work system and environment friendly to employees of both genders. We have set up breastfeeding rooms, provided maternity leave, prohibited related tasks that pose potential risks for the pregnant employee and the baby, and ensuring equal pay for employees reinstated from maternity leave in accordance with the "Act of Gender Equality in Employment" to protect the rights of female employees. In 2018, managers and employees of domestic and overseas operations attended human rights protection training (both real-world and online) 18,730 times for a total of 20,938 hours of human rights-related training. The training participation rate was 100%. Our company policy on human rights has also been communicated to the security company to ensure that they understand and incorporate our human rights policy into their pre- and on-the-job training for security personnel. The proportion of security personnel who have completed training is 100% and on average, we organize 12 training sessions every year each lasting 0.5 hours.

1-3 Prevention of Illegal Infringement at Work Plan The senior management signed and issued the "Written Statement for Preventing Illegal Infringement in the Workplace" and established the "Illegal Infringement Complaint Investigation Team". All units fill out the "Hazard identification and risk assessment form for prevention of illegal infringement in the workplace" to implement the project.

2016 2017 2018 Ratio of employees identified as at risk 7.9% 9.8% 9.3%

156 157 1-5 Sexual Harassment Prevention 1-6 Freedom of Association To foster a friendly workplace where employees are safe from sexual harassment, we have announced and implement- All companies of Group protect employees' freedom of association in all domestic and foreign business locations. The ed the "Regulations on sexual harassment prevention, complaints and investigation". Random inspections of posters on Employer-Employee Meeting at the First Bank consists of an equal number of labor and management representatives. sexual harassment prevention and laws were conducted in northern, central and southern Taiwan as well. The company The conference is held every month to discuss employer-employee issues such as improvements to working conditions website now contains information on sexual harassment prevention, along with a sexual harassment telephone hotline, and benefits. All effort is made to find a mutually beneficial outcome in order to enhance employer-employee relations fax and e-mail. Complaints are handled by dedicated staff. All FFHC companies have also incorporated sexual harass- and cooperation. ment prevention and handling procedures into orientation and compliance training. Sexual harassment prevention and handling knowledge is also regularly emphasized during management training classes. To improve their professional Statistics on Employer-Employee Meetings knowledge and investigative skills, personnel responsible for dealing with sexual harassment complaints are regularly Year 2016 2017 2018 dispatched to attend related seminars and external training. A "Sexual Harassment Complaints Committee" with 9 Item committee members has also been established and more than half of the members are female. The committee No. of meetings 11 12 12 members serve for 2 years and their terms may be extended. The members of the committee must possess actual Proposals 30 27 50 experience with handling sexual harassment, as well as a background in law, social sciences and human resources. An investigation must be launched within 7 days of a complaint being received and a report submitted to the committee for review. The case must be finalized within 2 months. To promote employer-employee harmony as well as support business development and employee welfare, First Bank signed the 3rd collective bargaining agreement with the First Bank Union on August 27, 2015. The terms of the agree- The Company and subsidiary companies received 2 sexual harassment complaints in 2018 and the "Sexual Harassment ment covered the general principles, union activity, employment/transfer/dismissal, working hours, routine leave, leave Complaints Committee" was convened in accordance with the "Regulations on sexual harassment prevention, applications and holidays, compensation, benefits, safety and health, compensation for occupational injury, retirement complaints and investigation". We have initiated investigation procedures through without disclosing information in and death benefits, Employer-Employee Meetings, collective bargaining, labor disputes, and appendix. The collective accordance with the Regulations. We also protected the parties' privacy and personal legal interests. With regard to bargaining agreement also specifies that in the event of a merger, reorganization, transfer, demerger, or other material the names of the parties or other information that can be used to identify the parties, except where it is necessary for changes to operations, the process shall be transparent and material decisions must be provided to the union and investigations or public security, we have requested the members of the Sexual Harassment Complaints Committee and employees immediately after the Employer-Employee Meeting. Where necessary, employees shall be given severance related personnel to bear confidentiality obligations. To reiterate the importance of the confidentiality obligations, the pay and provided with favorable compensation. Employee attendance and breast-feeding time regulations were updat- Chairman of the Committee recites related provisions before each meeting to inform all personnel in attendance. The ed to reflect amendments to the Gender Equality in Employment Act as well. Employees are now entitled to maternity Committee resolved to take immediate and effective corrective and remedial measures for the 2 sexual harassment leave and breast-feeding breaks that exceed legal requirements. Fifteen articles (28.3%) pertained to employee health complaints. Related procedures are described as follows: and safety. On April 26, 2016, the Ministry of Labor recognized First Bank for excellence in collective bargaining. Around 84.33% of First Bank employees are covered by the collective bargaining agreement through their union membership. Case 1 (Final results: The sexual harassment case was not substantiated): The employees and employer of First Securities and First Financial AMC completed the signature of the collective 1. Related surveillance video footage was kept to facilitate future investigations. bargaining agreements in April 2019 and they were commended by the Ministry of Labor for promoting cooperation 2.The complainant was asked if an adjustment of the workplace is required but the complainant in this case was unwill- between employees and the employer and mutual prosperity. ing to change the service location. 3.We strengthened sexual harassment prevention education and training to improve managers and employees' aware- Statistical table on number of employees who are members of the union ness of gender equality. Item Year 2016 2017 2018 Case 2: (Final results: The sexual harassment case was substantiated): No. of employees who are members of the union 6,334 6,300 6,500 1.Arrangements were made for the victim to attend sales training courses at the head office during the investigations Percentage of employees who are members of the union (%) 85 83 84.33 to prevent contact with the perpetrator. 2.Arrangements were made for the victim to receive consultation and assistance at a contracted psychological counseling clinic. 3.We adjusted the victim's service unit based on the victim's preferences. 4.We implemented suitable punishments including administrative penalties and demotion to the perpetrator based on the recommendations of the Committee and informed the individual of the results.

Statistical table on related human right complaints in the past three years 2016 2017 2018 Sexual harassment (number of people) 0 0 2 Labor disputes (number of people) 0 0 0

158 159 Professional development and management reform Material Topic 2-1 Human Resource Management Risk Map GRI 401: Employment First Financial Holding takes reference from the impact on society, human rights and the environment according to the GRI 402: Labor/Management relations annual risk graph before setting up operational bases, developing new business types, investing in trust funds, procur- GRI 404: Training and education ing, planning operational strategies and developing human resources. The human resource management risk graph Management guidelines drawn up based on the 20 selected evaluated factors, with the vertical axis as incidence probability and horizontal axis as the impact on company operations, is as follows. The 17 factors designated as medium to high probability incidence Policies • A range of transparent, equal and convenient complaints were categorized as those requiring risk management. We provide comprehensive training and educa- channels have been established including the “President’s tion in accordance with the Company's develop- Mailbox”, “Ideas Mailbox”, “Employee Support Hotline”, and ment goals to train employees on all levels in “Chief Auditor's Mailbox” on the company intranet, as well as making full use of their talents and accepting public forums on a diverse range of topics to ensure that regular performance and career development complaints are handled properly. 2018 FFHC Human Resource Management Risk Map reviews to effectively improve the professional • We ask employees to fill out the course satisfaction survey functions of all employees. after training, and encouraging them to suggest improvements to the course. Commitment • We encourage employees to suggest procedural improve- Adhering to our philosophy of "employees are the ments through the case proposal system or theme competition. company’s most valuable asset," we accelerate • We conduct employee commitment surveys as channels for them to express opinions which are used as references for High talent development and continue to cultivate • Talent gap policy making. • Freedom of Association employees to ensure that they have access to • High turnover among education on all levels and receive professional • Aging Society new employees training. Employees are also encouraged to Specific management practices • Low Birth Rate realize their full potential and create value. • We established the "Digital Banking Talent Transformation • Foreign competitors Program", "Overseas Trainee Program", "Securities Salesperson compete for professional Goals Transformation Program", and "Insurance Professional Talent talents • Carry out personnel competency and talent Training Program". evaluations, in order to strengthen career • Each year, we establish "employee training programs" each planning for employees. year to divide training into "basic training", "professional Probability • Violation of Statutory • Optimize education and training programs to training", "management training", and "internship" and • Gender Equality implement actual training courses for employees of all levels. Work Hours improve employee competency. • Vulnerable Groups • The system provides employees with the • Personnel with high performance and high potential are • Maternity Protection • Regulatory Change opportunity to fully familiarize themselves with selected on the basis of the employee competency reports • Cultivation of Digital and evaluations for related training courses and business

each position. They can then accumulate Medium Finance Talent practical experience and strengthen their rotation. professional know-how. • We produced digital learning programs for various businesses • Privacy Protection • Provide employee with career development to provide employees with access to courses at all times to roadmaps and assistance mechanisms to build improve their digital learning and professional know-how. a healthy succession team. • Indigenous People • Compulsory Labor • Corruption, Bribery • Closely monitor employees' work performance Assessment mechanisms to strengthen career planning for employees. • Use the Kirkpatrick Model to evaluate various training • New Immigrants • Occupational Safety • Provide all employees with unlimited access to programs and review the effectiveness of training. • Child Labor and Health learning resources and train them to use the • Follow up on certification and licensing status. • Economic Crime digital learning platform as tools for learning in • Number of training hours, number of trainees, and training order to strengthen their professional skills in expenditures. core businesses and improve their professional • Organize annual employee commitment surveys. Overall know-how. commitment target exceeded 75%. Low Medium High Duties Impact The human resources department of each Results company is responsible for employee recruitment, • As of the end of February 2019, 1,939 employees received the training, and employment. They organize various “Proficiency Test for Digital Banking Processes" and 1,431 training courses and actively arranges employees employees obtained the Certified Anti-Money Laundering Specialist (CAMS) certificate. to participate in training to facilitate talent Conduct due diligence checks on material issues identified as those with higher risks and impact such as "talent gap", transformation and provide them with an • Total real-world and online training hours amounted to an environment suitable for their talents. average of 57.89 hours per person in 2018. Total employee "high turnover among new employees", and "foreign competitors compete for professional talents" to reduce negative training expenses amounted to NT$126.96 million for an impact on the Group and implement improvement plans for material issues such as providing new employees with Resources average of NT$13,760 per person, a massive 85% growth from We provide employees with diverse learning 2017. equal benefits and opportunities for learning, establishing goals for a 70% retention rate of new employees, and channels. In addition to providing business • A total of 143 employee recommendations were proposed in organizing foreign talent selection, cultivation courses, and overseas business seminars each year to expedite the 2018 including improving existing businesses, work environ- management personnel with internal training and cultivation of local hires. With regard to the talent gap caused by the retirement wave, we provide managers with online courses as instructors, we also assign them ment, operation methodology and automated services, to participate in courses provided by external improving advertisement effectiveness, building corporate professional and core competency training to improve their management skills and expertise and mitigate related risks. professional training institutions. image, and reducing work procedures. All recommendations were studied closely by the relevant departments. 56 of them were eventually accepted and total bonuses amounted to Complaints mechanism NT$18,200. • The telephone number and e-mail for employee • The overall professionalism score for group employees in 2018 complaints are posted under the “Stakeholder was 82.39%, with male employees achieving a score of 84.76% Communications” section of our corporate and female employees 80.64%. website. The “CSR - CSR Report” section also features a stakeholder opinion survey that can also be used as a channel for employee 160 communication and complaints. 161 2-2 Employee composition and diversity Employees form the core of the financial service industry. FFHC has not only established a brand image of sound management in the minds of the general public but is also working actively to build a "happy workplace." We have long adhered to our philosophy of "employees are the company’s most valuable asset." We are committed to creating an 1,486 1,167 63 598 ethical, transparent, caring and cooperative working environment for employees. Employees are also encouraged to 50 and above Less than 30 30-39 40-50 Female: 37 Female: 233 realize their full potential and create value. At the end of 2018, our Group had 9,227 regular employees including 480 Female: 748 Female: 790 Male: 26 4% Male: 365 foreign nationals. FFHC has 5,506 female employees and 3,721 male employees. The ratio of female to male employ- Male: 738 20% 15% Male: 377 ees is 6:4. Employees in management roles account for 18% in which female managers account for 53%. There are more women than men in management and general positions, demonstrating gender equality and equal opportunity in our 36% workplace. In 2018, FFHC employed a total of 315 senior executives (based on definition of "managerial officers" estab- Age distribution Age distribution lished in Tai-Cai-Zheng-3 No. 920001301 letter dated March 27, 2003), 100% from Taiwan. Female senior executives of non-management of management account for 48.6% and female employees for 47.4% of employees in revenue generating positions. personnel in personnel in 2018 2018 Data of Female Executives and Employees 29% 36% Item Year 2016 2017 2018 Percentage of female employees (%) 59 59 60 2,222 2,689 1,002 60% 40-50 30-39 50 and above Percentage of female executives (%) (Note 1) 53 53 53 Female: 1384 Female: 1698 Female: 616 Male: 838 Male: 991 Male: 386 Percentage of junior female executives (%) 54.2 53.6 53.6 (number of junior female executives/total number of junior executives) (Note 2) Percentage of senior female executives (%) 36.5 41.7 48.6 Unit: person Percentage of female employees in management roles that have the potential for salary increase (e.g. sales; excluding supporting departments such as human 50.2 49.3 47.4 resources, IT, and legal affairs) (Note 3) United Kingdom,12 Note 1: Definition of executive: Employees who assume managerial roles and administrative duties Canada,18 Note 2: Definition of junior executive: Managers outside the scope of "managerial officers" specified in Tai-Cai-Zheng-3 No. 920001301 letter dated March 27, 2003 Australia,8 Number of female executives in positions with Note 3: The statistical sample is based on the following ratios of potential for salary increase USA, female employees in management roles in the Group that 118 Total number of executives in positions with China (including Hong have the potential for salary increase: potential for salary increase Regional Kong and Macao),111 Japan, distribution of foreign Our Group employed 462 atypical employees (including temporary workers and security personnel), or 5% of our total 9 employees in workforce. Atypical employees that perform well are offered the opportunity to become regular employees when Thailand, Myanmar, 2018 Cambodia,100 openings become available. In 2018, a total of 2 atypical employees became regular employees. Philippines, Laos,27

Vietnam, Total number of employees in 2018 - By role Singapore, 55 Junior High School or below 22 64 4,673 Doctoral Degree7 High School (Vocational High School) Statistics on the number of atypical employees appointed in 2018 Master's 751 2,970 Degree Gender Duty Administration Security Driver 1,778 2018 139 0 0 employee 65 204 54 demographics - education 680 Sub-Total 204 204 54 589 Junior 162 153 Total College College 462 1,780 4,847 Note: The labor contract region is Taiwan

Total senior Total junior executives executives Unit: person Total employees 162 163 2-3 Complete development system 2-4 Talent Training Programs New employees immediately enter our training system upon reporting for work. Comprehensive training plans are FFHC attaches a high level of importance to the cultivation of people with great potential. Apart from recruiting outside available from basic, advanced professional, deputy managers, and managers. For employee professional competen- talent, we also use the performance evaluation matrix to identify employees with high performance or potential then cy development, employees are encouraged to actively participate in training courses, acquire related certificates tailor "Individual Development Plans" (IDP) to their professional background, language skills, and competency analysis. necessary for their businesses, and propose innovative work plans. Employees receive credit for acquiring related Overseas talent is also a key component of our global expansion. To enhance both the “quality” and “quantity” of talent professional certification during annual performance evaluations, and are given bonuses for innovative proposals. at overseas branch organizations, the Sales Personnel for China Program was added since 2009 after the Overseas Between 2016 and 2018, a total of 142 employee proposals were adopted and NT$51,200 in bonuses issued. Apart Management Personnel Program was activated in 2006. Outstanding employees interested in working at overseas from solid on-the-job training as well as practical experience gained through job rotation, we also organize a variety of branches are selected for management associate training every year. Supplementary specialist training is also conduct- professional training, online training, internships, language training, internal certification testing and management ed based on their individual sales experience and background, including: overseas compliance, internal control and competency training. To acquire new financial knowledge and the latest industry developments, personnel are frequent- auditing, risk management, overseas IT system, international etiquette, trans-cultural communications, and national ly sent to attend training courses and overseas development programs organized by professional training bodies. politico-economic situations. English training is also organized for continuous improvements to foreign communication and coordination skills. Secondary foreign language courses such as Vietnamese and Burmese are also offered. The cultivation of language, business knowledge and multi-cultural management ability is emphasized. Before employees New employee training Help new employees quickly familiarize Covers corporate knowledge, basic are assigned to overseas units, a learning program and rotation between headquarters and branches are organized themselves with the corporate organization- operational skills, financial law education, based on their individual experience. These efforts are expected to accelerate the cultivation of essential business skills al structure and culture team-building activities, safety and health in overseas talent. As of the end of 2018, 347 overseas management associates have been cultivated. course Key FFHC Training Programs Specialized training Basic training Advanced training Internship Proportion of full-time •Enhance employees' •Enhance employees' Go directly to the relevant Solution Goals Benefits knowledge and skills of advanced specialized skills unit and follow a senior employees (%) basic operations •Industry analysis, case internal instructor around to Refine employees' competency As of the end of 2018, we organized 131 sessions with •Introduce important discussion, sharing of learn and observe the regulations, processes, experience by top in digital finance and elevate 52,269 total training hours and an average of 7.3 hours internal controls and sales workflow and key points of for each employee. We acquired 50 patents on Fintech marketers each business process their expertise in digital finance techniques for each task products and marketing inventions and new models and 1,747 employees capability. passed the "digital finance knowledge certification". Transaction fee earnings and interest income in 2018 100 Other training Management training Language training External training also increased 3.6% from 2017 due to enhancement of •Enhance the manage- •Strengthen the foreign Send to external financial the smart customer service system, digital welcome ment skills of managers language skills and system and new functions in the mobile sales platform promote a institutions to learn about

•Management issues such Digital Banking Talent Transformation Program app. as better communication, language-learning business-related competen- motivating subordinates, atmosphere for employees cy The overseas management As of the end of 2018, we have built a pool of 347 building team rapport associate program was launched overseas management associates who not only serve and leadership •Provide subsidies to in 2006, providing various employees attending professional training in accor- as a pool of talent for overseas business operations, foreign language courses but also provide a diverse range of career paths that at language centers dance the different sales experi- •Set up English courses on ence and background, such as: fulfill employees' career plans. The execution of the compliance of overseas law, program has helped boost the profitability of overseas online e-learning platform internal control, risk management, 3.8 •Open foreign language overseas information system, branches. In 2016, 2017 and 2018, gross profits of courses for Vietnamese, international protocol, cross-cultur- overseas branches reached US$168,779,000, Cambodian and Burmese al communication, economics and US$205,493,000 and US$250,027,000 respectively. politics of the respective countries as well as other courses, in order On-the-job training Mentoring scheme Job role deputy training Job rotation Professional certification Overseas Trainee Program to accelerate the professional counseling training of overseas talent.

Strengthen the role of the We organized training for obtaining licenses for foreign securities salesperson and currency payments and receipts for non-investment Bonuses awarded for innovative employee proposals within the last 3 years respond to requirements for digital linked insurance products, investment insurance development, help salespersons products, and personal insurance account managers for Employee proposals 2016 2017 2018 Total evolve into an all-rounded a total of 677 participants totaling 2,550 training hours. financial management advisor, A total of 357 securities salespersons acquired 31 Total proposals 115 106 143 364 and provide them with insurance insurance-related certificates in 2018 and increased license plans, incentives, and their income from insurance commission by 315% from No. of awarded training. 2017. 42 cases/NTD17,000 44 cases/NTD16,000 56 cases/NTD18,200 Securities Salesperson Transformation Program proposals and bonuses 142 cases/NTD51,200 Strengthen the employees' To improve the knowledge in insurance products of professional skills in insurance and employees of First Life Insurance, each employee To accelerate talent development, cultivate all-rounders and build a solid team for the future, First Bank conducts two strengthen channels and employ- received an average of 2.85 hours of training in 2018, competency assessments every year. Evaluations and review opinions are also compiled at different times. Personnel ees' professional knowledge of with a total of 10,169 training hours for 3,567 people. insurance products to improve with high performance and high potential are selected on the basis of the competency reports and evaluations for We organized 49 insurance wealth management 67.56 insurance marketing capabilities. product training sessions for sales channels in 2018 related training courses and business rotation. A total of 9,434 training groups and 56,123 training hours have been totaling 207 training hours for 8,285 participants. After accumulated as of 2018. Domestic business units have also implemented a rotation system where processing personnel improving the professional insurance knowledge of stay up to 3 years in a single position, assistant supervisors stay for up to 4 years. The system provides employees with channels and employees, net income from insurance the opportunity to familiarize themselves with each position. They can then accumulate practical experience and businesses in 2018 increased by NT$6.603 billion from Professional Insurance Talent Training Program strengthen their professional know-how. 2017 with a growth rate of 128.72%. 164 165 To ensure that the training plan equips employees with the relevant knowhow, the Company adopts the Kirkpatrick 2-5 Employee Training and Development framework to evaluate and control training effectiveness, as well as to verify learning results. Employees' professional competency is what keeps the company running. FFHC has designed different training courses and learning paths for personnel in each grade. These effectively boost employees' professional competency, marketing skills and enthusiasm for their work. In response to rapid advancements in FinTech, we actively implement compre- Evaluation Evaluation Description hensive FinTech training and arrange external FinTech training courses and seminars for employees. As of the end of level method 2018, we had organized 14,768 hours of internal FinTech courses for a total of 9,635 participants. In addition, the Response level Questionnaire Arranging students to fill out the course satisfaction survey after training, and “Proficiency Test for Digital Banking Processes” certificate has been included as an employee promotion credit certifica- (Level 1) encouraging them to suggest improvements to the course tion since 2017 and its weight in scores has also been increased. A total of 1,939 people received the “Proficiency Test for Digital Banking Processes” certificate as of the end of February 2019. After course Arranging a test immediately after the course to evaluate learning results evaluation Professional certificates / licenses and number of licensed FFHC employees (Unit: person) Learning level (Level 2) Mock exercise Conduct of scenario play, enhancing effectiveness through simulation practice Please refer to page 85 of the Company's Annual Report Project Arranging students to conduct presentation and analysis of actual cases to presentation enhance their application capabilities To enhance the digital learning effectiveness of employees, 82 online learning courses were added in 2018. English 360-degree Evaluate whether a new employee has applied his knowledge in daily work online learning courses have also been launched to create a comprehensive learning database. The amount of time Behavior level evaluation through daily work performance, manager's review, as well as feedback of and energy spent by employees on commuting can also be greatly reduced. In 2018, management personnel (Note) (Level 3) colleagues and customers. attended real-world training 15,929 times, or an average of 53.73 hours of training per person; online training was used Practical 24,975 times, or an average of 29.28 hours per person. Non-management personnel attended real-world training Evaluation of student's work quality and professional knowhow Assessment 43,136 times, or an average of 25.04 hours of training per person; online training was used 99,065 times, or an average of 27.34 hours per person. Total real-world and online training hours amounted to an average of 57.89 hours per Results level Effectiveness Evaluating training effectiveness through operating performance growth. person. Total employee training expenses amounted to NT$126.96 million for an average of NT$13,760 per person, a evaluation (Level 4) massive 85% growth from 2017. We improved employees' related knowledge and skills in response to increasingly Returns level Return on Use the return on investment (ROI) to evaluate the results of training rigorous domestic and foreign laws and regulations on anti-money laundering and countering terrorism financing. We (Level 5) investment *ROI: Financial benefits - training cost / training cost provided subsidies for the membership, test fees, and incentives to a total amount of NT$73.4 million for the "Certified evaluation Anti-Money Laundering Specialist" (CAMS) in 2018 which increased total training fees of employees by 88.1% from 2017.

2018 statistics on employees' real-world training Effectiveness of training based on implementation of the Kirkpatrick Model Total number of people Total hours Average hours per person Gender Manager Non-managerial Manager Non-managerial Manager Non-managerial Digital Banking Talent Transformation Program 2015 2016 2017 2018 role role role Number of questionnaire submissions (L1) 13,730 21,201 11,039 10,241 8,670 28,146 48,790 116,094 55.07 25.13 Number of employees who passed the test (L2) 2,797 10,066 3,844 3,608 7,259 14,990 40,555 73,280 52.19 24.89 Retention rate of new employees (L3) 85.84% 84.29% 92.82% 91.47% Total 15,929 43,136 89,345 189,374 53.73 25.04 Digital channel utilization rate (L4) 74.2% 74.48% 76.04% 78.07% Note: Managers refer to employees who assume managerial roles and administrative duties. Return on investment (ROI) evaluation (L5) 698.7 567.2 627.2 467.6 2018 statistics on employees' online training Total number of people Total hours Average hours per person Professional Insurance Talent Training Program 2015 2016 2017 2018 Gender Non-managerial Non-managerial Non-managerial Manager role Manager role Manager role After-course satisfaction questionnaire recovery rate (L1) 95.08% 90.70% 91.40% 88.96% 13,574 61,251 25,734 129,540 29.05 28.04 After-course evaluation rate (L2) 25.09% 41.28% 32.82% 36.08% 11,401 37,814 22,957 77,232 29.55 26.23 Customer satisfaction survey (L3) 81% 70.8% 71.5% 77.4% Total Growth rate of net revenues from insurance (L4) -101.85% 1016.92% 279.71% 128.72% 24,975 99,065 48,691 206,772 29.28 27.34

Return on investment (ROI) evaluation (L5) 49.68 772.42 2069.56 4819.70 Note: Managers refer to employees who assume managerial roles and administrative duties.

Average employee training hours and training expenses for the past three years Item Year 2016 2017 2018 Average employee training hours 64.85 hours 54.95 hours 57.89 hours Average employee training cost NTD 8,138 NTD 7,437 NTD 13,760 Total training expenses NT$74.13 million NT$67.49 million NT$126.96 million

*Average employee training hours =(278,718+255,462)/9,227=57.89 166 167 2-6 Employee Communication and Commitment FFHC subsidiaries provide multiple channels for employee communications and whistle blowing. A positive interactive relationship is maintained and whistle blowers are protected against improper treatment. Apart from personal To protect employee rights, important work changes must be notified as soon as possible. Our work rules and HR meetings between managers and employees, the employee mailbox and complaints hotline, video conferencing, management regulations explicitly state in accordance with the Labor Standards Act that the establishment of new intranet pages, the bi-weekly publication and monthly publication all enable employees to keep track of company business units or the re-assignment of personnel due to business requirements must be notified in writing one week in developments. Employees can also communicate and report problems to corporate governance executives through a advance. For overseas assignments, employees must first be assigned to the relevant domestic units for training and range of communication channels such as the “President’s Mailbox”, “Ideas Mailbox”, “Employee Support Hotline” on given reasonable time to learn about the regulations, culture and lifestyle of the destination country. This will shorten the company intranet. The employee communication and whistle blower channels are as follow: the amount of preparation time, simplify handover and reduce operating risks. Employment may be terminated in the event of business shut down, transfer of ownership, losses, reduced business, change in nature of business or where the employee is clearly unfit for their job. Advance notice must be given in accordance with the following rules: Communication Channels

1. 10 days' notice for employees with more than 3 months and less than 1 year of continuous service. • To strengthen the complaint and communication mechanisms of employees and external entities, the Compa- 2. 20 days' notice for employees with 1 – 3 years of continuous service. ny and subsidiary companies have established reporting procedures reviewed and passed by the compa- 3. 30 days for employees who have continuously served for three years or more. nies' Board of Directors. We also set up hotlines, fax, emails, and other complaint channels and publish them on company websites. The internal audit unit/branch audit manager accept complaints and assign cases to The Group's various companies have conducted anonymous employee commitment surveys since 2017 to understand units that have independent power for investigation based on the nature of the cases to effectively process complaints. employees' perception and views of the Company. The results from the 2018 surveys are as follow:

• The telephone number and e-mail for employee complaints are posted under the “Stakeholder Communica- Item Year 2017 2018 tions” section of our corporate website. The “CSR - CSR Report” section also features a stakeholder opinion survey that can also be used as a channel for employee communication and complaints. Number of questionnaires 8,275 8,504 Number of returned questionnaires 7,506 (Male: 2,989/ Female: 4,517) 8,091 (Male: 3,372/ Female: 4,719) • The compliance system at each company requires “the compliance officer should provide improvement suggestions for violations of the law or regulations. Where the improvement suggestion is not accepted by Recovery rate (%) 90.71 95.14 the management and leads to major losses for the company, a report should be prepared and submitted at Overall commitment (%) 79.77 82.39 once, the supervisors/independent directors and Audit Committee notified, and the competent authority Level of commitment of male employees (%) 82.56 84.76 informed as well.” Employees who discover such matters may notify the compliance officer of their unit or headquarters directly. The compliance unit will investigate and deal with the matter accompanied by the risk Level of commitment of female employees (%) 78.07 80.64 management and internal audit units. •Company policy and culture • A range of transparent, equal and convenient complaints channels have been established including the •Work and healthy lifestyle “President’s Mailbox”, “Ideas Mailbox”, “Employee Support Hotline”, and “Chief Auditor's Mailbox” on the •Training and development Main aspects of company intranet, as well as public forums on a diverse range of topics to ensure that complaints are •Compensation and benefits the questionnaire handled properly. •Leadership and management •Relationship with colleagues • To facilitate the reporting and handling of sexual harassment cases, “Sexual Harassment Prevention Complaints and Disciplinary Regulations” have been formulated and issued at each company along with the •Implement mechanisms for job rotation •Improve education and training for professional competencies telephone, fax and e-mail for filing sexual harassment complaints. The above information is posted promi- nently on the corporate website and in the workplace. All employees also undergo training on sexual harass- Improvement •Measures to provide tangible benefits ment prevention every 6 months. mechanisms •Expand recruitment of new employees and accelerate efforts for filling up the manpower gap caused by the retirement wave •Training to improve communication competency of managers • A proposal system and themed competitions are used to encourage employee to make suggestions on process improvements. A total of 143 employee recommendations were proposed in 2018 including improv- •As of the end of 2018, 14 of 73 depository and exchange personnel aged 45 and below and ranked ing existing businesses, work environment, operation methodology and automated services, improving adver- level 10 and below with medium high performance and medium high potential based on the tisement effectiveness, building corporate image, and reducing work procedures. All recommendations were results of competency assessments have been reassigned to core businesses. studied closely by the relevant departments and 56 of them were eventually accepted. •Personnel with high performance and high potential are assigned to related training courses. Effectiveness A total of 9,434 training groups and 56,123 training hours have been accumulated as of the of improvements end of 2018. • To ensure open communications between the employer and employees, employee suggestions from each •The Group's employee welfare expenditures amounted to approximately NT$1,518,000,000, department are proposed for discussion and communication during the regular “Employer-Employee an increase of 6.1% from 2017. Meeting” and monthly meetings. •The Group recruited a total of 989 people in 2017, an increase of 22.4% from 2017. •In 2018, managers attended 138,036 hours of training, an increase of 11% from 2017. • Surveys on employee commitment, office environment (hardware facilities) and quality of service (software services) are conducted to provide employees with channels for expressing their opinions and references for decision-making.

168 169 Talent recruitment and retention Material Topic 3-1 Human Capital and Recruitment GRI 401: Employment The annual recruitment drives at FFHC all strive for innovations and breakthroughs. Apart from having top executives GRI 402: Labor/Management relations take an active role in "Campus Recruitment Events" and describe the corporate vision of FFHC, outstanding alumni who GRI 404: Training and education are now management associates also share their experience to boost interactions with students, and stimulate interest from students of all academic backgrounds in the finance industry. The year 2018 marked the 14th year of the MA Management guidelines program. To catalyze the development of innovative financial products and services and inspire more FinTech applications, we recruit top professionals with a background in business management, information science, law or psychology, Policies Specific management practices focusing specifically on top students who have participated in digital banking studies or innovative industry–academia Employees are the core of the financial service industry. • Regularly refer to the report on the market rates From recruiting, cultivation, retention through to for compensation and, accordingly, provide cooperation projects, as well as finance specialists with experience in digital finance. Those with outstanding language protection, we are committed to building up a compre- competitive remuneration plans. skills were also invited to join the management team to sustain our strategy of cultivating diversified talent. hensive compensation system and welfare measures to • Respond to the aging population and low birth retain quality talent and reduce loss of key talent. rate and protect the interest and benefits of employees on unpaid parental leave. In view of the developing trend of digital finance, the Group has, since 2015, engaged external professional headhunt- • First Bank processes Employee Savings and Stock Commitment ers and used cloud based social platforms in conjunction with traditional avenues to recruit middle to senior level Ownership Trust to retain quality talent and managers, in addition to professional talents in Big Data Analysis, Internet Management, Information Safety Manage- By creating a positive work environment, we are encourage employees to start saving for committed to assisting employees to maintain work–life retirement. ment, Fintech Research and Development as well as Digital Banking Business Planning recruited through internal and balance, providing competitive compensation system • Provide a work–life balance for employees by external processes. This allows for enhancing employee competency and competitiveness, adapting to the evolutions and useful benefits, realizing employee care, optimizing organizing family gatherings while raising in digital finance and responding to human resource requirements in information safety. human resource management mechanism, and actively environmental and health awareness, organizing attracting and retaining quality talent. physical and arts activities as well as forming employee clubs such as sports-related or FFHC embraces tolerance and multiculturalism in our recruiting policy every year. There are no restrictions based on Goals recreational clubs. school, major, age, background or gender. We have also taken a long-term interest in the welfare of minority groups • Adopt a fair and just recruitment process to recruit • Establish incentive schemes to encourage talented people with diverse background. employees to focus on performance. such as the handicapped and indigenous peoples. In 2018, we employed 99 employees with disabilities and 4 indige- • Provide a complete diversified welfare system and nous employees on the same remuneration and benefits as regular employees. The "National e-Job Network" of Taipei create a friendly workplace. City Employment Services office publishes job openings for handicapped people. Handicapped employees made up • Promote interpersonal interactions for employees, to Assessment mechanisms • New recruitment rate and resignation rate of 1.07% of our workforce in 2018 and exceeded the government quota. FFHC hired 41 summer interns in response to achieve a balance between work and life. • Retention rate of new employees • Refine remuneration system to raise our competitive- the Ministry of Education - Youth Development Council's "Internship Plan for Youth from Economically Disadvantaged • Rate of reinstatement and retention after ness and incentives. maternal/parental leave Families", and provided 10 internship opportunities in conjunction with the 2018 summer "University Students' Banking • No. of employees receiving and amount of Internship" activity organized by the China Youth Corps, so as to provide opportunities for financial education, reducing Duties subsidies for marriage and parenting the number of youths that are unemployed and without access to education or training. We provide fair and open recruitment channels and • Retention rate of new employees at First Bank selection processes, regularly examine changes in the reaches 70% and above. financial market and amendments to labor laws, create • Percentage of employees with disabilities Investing in, nurturing and employing local talent is one of the principles of First Financial Holding in its overseas opera- an environment in which employees can develop the tions. As of 2018 year end, First Financial Holding has employed 480 local employees and continued to localize its practical skills and mindset needed for their work, and Results operations. In addition, employees with outstanding performances are promoted annually, with some holding manage- build a friendly, healthy, and happy workplace. • First Bank’s total salary adjustment in the past 2 rial positions, emphasizing the diversity and inclusiveness of the Group while benefiting business expansion. years was 8%, out-performing the average market Resources salary adjustment of 6.0%. We provide a wide range of employee health manage- • A total of 989 employees were recruited in 2018. ment mechanisms and benefits, a fair and reasonable We were chosen for inclusion in the "Taiwan evaluation system with clear avenues of promotion, and Employment Creation Index 99 " for the ninth career development road maps and counseling. consecutive year. • In 2018, 115 employees applied for unpaid maternity leave and the reinstatement rate Complaints mechanism reached 93.62%; the retention rate one year after • The telephone number and e-mail for employee reinstatement for employees who went on unpaid complaints are posted under the “Stakeholder child care leave was 93.27%. Communications” section of our corporate website. • To encourage employees to have children, child The “CSR - CSR Report” section also features a birth subsidy of NT$14.815 million was disbursed stakeholder opinion survey that can also be used as in 2018, contributing to the birth of 521 babies. A a channel for employee communications. total of 4.185 million in marriage subsidy was • A range of transparent, equal and convenient provided to 137 applicants. complaints channels have been established including • Chosen for inclusion in the "Taiwan High the “President’s Mailbox”, “Ideas Mailbox”, “Employ- Compensation 100 Index" for the fourth consecu- ee Support Hotline”, and “Chief Auditor Mailbox” on tive year. the company intranet, as well as public forums on a • In 2018, the retention rate of new employees at diverse range of topics to ensure that complaints are First Bank reached 91.47%. handled properly. • Handicapped employees make up 1.07% of our • To ensure open communications between the workforce and satisfied the government quota. employer and employees, employee suggestions from each department are tabled for discussion and communication during the “Employer-Employee Conference” and monthly meetings. 170 171 FFHC has 15 operating locations in Southeast Asia. To identify students with high potential in Southeast Asia, First Bank 3-2 Employee Turnover began planning the "Southeast Asia Talent Industry–Academia Cooperation" programs, with the hope of fostering We are working to create a happy workplace environment with diversified benefits and comprehensive compensation/- talented Southeast Asian students into overseas professionals. We also reached out to current students or pending bonus scheme to reduce our turnover rate. The higher turnover rate among women in recent years was due to the high graduates interested in the banking industry to join our summer internship program, add them to our overseas local proportion of tellers and financial planning personnel. Female employees tend to leave the workplace due to marriage recruitment database and refer them to overseas units for consideration. Such experience camps and internship and childbirth. The main reason new employees resign was a change in career. However, factors such as the labor programs will continue to be held in the future to discover more talented people in Southeast Asia. A total of 989 new market demand in the financial industry as well as changes in the number of retirees resulted in a group turnover rate employees were recruited in 2018 with a women:men ratio of 58: 42. All of our offices also give preference to local of 9.81% at the end of 2018. If those applying for retirement at the age of 65 in accordance with the Labor Standards Act are excluded then the turnover rate was 7.82%. residents to ensure their employment opportunities. A total of 142 new foreign employees were recruited in 2018. In recent years, First Financial Holding has repeatedly increased the starting salary of new employees with an increment percentage of 7.3%, an above average increment when compared to industry peers. This is in addition to a Overview of employee diversity for the past 3 years Unit: Persons fair and transparent promotion mechanism and performance evaluation method in order to prevent seniority being the Persons with physical and main consideration for promotion, as well as a differentiated bonus system. Together, this provides for a fair, transpar- Year Item Indigenous People No. of Nationalities mental disabilities ent and hopeful future for the younger generation. In order to build an excellent workplace environment and create 2016 90 5 14 work life balance for employees, we provide several benefits and leave regulations that exceed the minimum benchmark set by the labor law, in the hope of retaining our younger employees as well as providing support for them and 2017 99 5 14 their families. Pension for retired employees is provided in accordance with the Employee Pension Rules and severance 2018 99 4 14 pay and pay in lieu of notice are paid in accordance with work rules, so as to cover employees’ living costs after retirement or while they seek employment.

Employee Resignations Statistics of new recruits and total number of employees Total no. Total Total End of End of Total no. of of 2018 Less 30–39 40–49 50–64 Retirement Less 30–39 40–49 50–64 Retirement Less 30–39 40–49 50 and Less 30–39 40–49 50 and employees 2018 employees than 30 years old years years at 65 years than 30 years old years years at 65 years than 30 years old years above than 30 years old years above No. of No. of Employees in 8,747 77 76 113 68 76 57 103 67 40 100 410 367 Employees in 8,747 254 106 80 15 202 132 51 7 455 392 Taiwan Taiwan Percentage (%) 94.8 0.83 0.82 1.22 0.74 0.82 0.62 1.12 0.73 0.44 1.08 4.44 3.98 Percentage (%) 94.8 2.75 1.15 0.87 0.16 2.19 1.43 0.55 0.08 4.93 4.25 No. of No. of Employees 480 44 26 6 11 6 19 13 0 2 1 93 35 Employees 480 72 23 13 7 17 7 0 3 115 27 Overseas Overseas Percentage (%) 5.2 0.48 0.28 0.07 0.12 0.07 0.20 0.14 0.00 0.01 0.01 1.01 0.38 Percentage (%) 5.2 0.78 0.25 0.14 0.08 0.18 0.08 0.00 0.03 1.25 0.29 Total 9,227 121 102 119 79 82 76 116 67 42 101 503 402 Total 9,227 326 129 93 22 219 139 51 10 570 419 Percentage (%) 100 1.31 1.10 1.29 0.86 0.89 0.82 1.26 0.73 0.45 1.09 5.45 4.36 Percentage (%) 100 3.53 1.4 1.01 0.24 2.37 1.51 0.55 0.11 6.18 4.54

Employee resignation rates in the last four years 5.65 New employee ratios in the last four years 5.45 4.85 4.59 4.75 4.36 3.82 3.69 6.51 6.21 6.18 5.35 4.26 4.54 3.68 3.55

2015 2016 2017 2018

2015 2016 2017 2018 Overview of employee separation rate and recruitment cost over the past 4 years Item Year 2015 2016 2017 2018 Resignation rate (%) 8.67 10.24 8.44 9.81 Resignation rate (%)–Excluding retirees 7.84 8.78 6.79 7.82 Voluntary separation rate (%) 7.09 6.98 6.62 7.54 Average recruitment cost (NT$) 24,742 30,811 36,838 35,486 Total no. of employees 9,201 9,108 9,075 9,227 172 173 3-3 Refined Compensation System To fulfill our care of duty to employees, we have defined retirement rules in accordance with the "Labor Standards Act" First Financial Investment Trust has implemented a long term incentive plan for fund managers that exceeds 1 year. In and "Labor Pension Act". Apart from making mandatory pension contributions we also refer regularly to salary surveys accordance to the "Investment Researcher's Compensation and Penalty Plan", long term performance bonuses would conducted by professional organizations. Our annual salary is in the P65 range of the market (P65 means our standard be awarded after 2 to 3 years of fund management. The bonus would be given in stages to prevent any loss on the of compensation is superior to 65% of our competitors). By providing employees with competitive remuneration plans company's end after the award of bonuses. and comprehensive benefits packages, we build up employee loyalty and maximize their potential. This translates into shareholder returns and a mutually beneficial outcome for customers, employer and employees. To enhance employee loyalty, attract and retain quality talents by offering benefits, and encourage employees to start saving for their retirement, First Bank processes Employee Savings and Stock Ownership Trust and sets up an Employee First Financial Holding achieved record profits in 2018, and raised salaries at 2.3% in order to share the company's Savings and Stock Ownership Trust Committee. Full-time employees who have worked for the company for more than 6 excellent results with employees. The company raised salaries by 3% as of January 1, 2018. The combined salary months are free to choose either the Employee Savings Trust plan or the Employee Stock Ownership Trust plan. When increase of 8% is higher than the market benchmark of 6%. Total employee welfare costs in 2018 amounted to they resign, employees could withdraw the entire amount invested in their voluntary pension account; whereas the NT$14.886 billion, up 8.2% from 2017. amount that can be withdrawn from the mandatory pension account is dependent on employees’ number of years in the trust plan: For employee compensation at overseas units, we take into account the remuneration survey results of international management consultants as well as local economic data, compensation trend forecasts and information exchanged with local competitors. The pay grade principle was used to gradually adjust the remuneration standards of local Number of years in trust plan Percentage (%) of amount that can be withdrawn from the mandatory employees overseas. We are also focusing on global human resources issues to better look after the livelihoods of local pension account employees and compliance with labor laws. On living subsidies and accommodation for expatriate First Bank person- < 3 years 0 nel, we not only routinely adjust subsidies based on local cost of living and rents, but also regularly send staff overseas to check on local economic conditions and the needs of expatriate personnel. This ensures our employees are properly 3–6 years 50 (Plus cumulative profit or loss from this) looked after. 6 years or more 100 (Plus cumulative profit or loss from this)

We have established clear avenues of promotion and incentive schemes to encourage employees to focus on perfor- 3-4 Performance Evaluation and Career Development mance. The selection, evaluation, training and promotion of future management associates and overseas management FFHC provides employees with career development road maps and counseling. Apart from a transparent and fair personnel are held at regular intervals as well. Employee attributes, experience and specialties are compiled into a evaluation system, regular performance and career development assessment is conducted on all employees. Evalua- tions in the first and second halves of the year are used as a way for managers to communicate performance targets database then analyzed to provide a reference for planning the employee's career development. Apart from new and provide employees with the necessary assistance at appropriate times. This builds up employee consensus on employees who are recruited as replacements for dismissed and resigned employees, experts and management individual targets set by the company. At the end of the year, results of mid-year evaluations are used to summarize the professionals are cultivated internally. However, the recent trends in digital banking have prompted us to expedite the overall performance of the employee for the year. digital transformation by outsourcing digital banking experts, which caused a reduction in the internal training ratio of non-managerial personnel. At the same time, we encourage employees to attend external courses in their spare time. First Financial Holding emphasizes the long-term performance of employees and implements the "Employees Stock Subsidies are provided based on their grade and the course. Employees studying finance-related graduate or higher Options Purchase Plan” in order to boost morale and reward employees who contributed significantly to the company. degrees in Taiwan and overseas may also apply for up to 3 years of unpaid leave. We endeavor to enhance corporate During application for capital increase, employees can purchase their respective amount of stock options at a favorable sustainability by promoting lifelong employability among employees. price based on their position, seniority and performance. The amount of stock options issued is higher than the market standard to effectively enhance employee loyalty. Analysis of internally fostered talent in the past 3 years To incentivize employees to raise their performances, First Financial Holding set the "Retention and Promotion of Category Year 2016 2017 2018 Employees" regulation, which stipulates that employees above grade 5, upon accumulating 3 years of seniority, would Positions available for internal candidates (%) 83.92 72.16 79.62 be promoted according to number of years in service, performances, sales capability, management capability, leadership qualities and business requirements. In addition, employees' salaries and bonuses are highly correlated to annual Positions available for internal candidates: Management (%) 99.07 99.28 98.93 evaluations and promotion levels, directly impacting their bonuses and salaries for that year, as well as salary Positions available for internal candidates: Non-management (%) 37.14 40.17 33.33 increment percentage and promotion likelihood for the next year; promoted employees, other than receiving a higher pay rise for the year of promotion, would also enjoy higher pay, bonus and compensation increments as of the next year; in particular, award of the special incentive bonus is based on the employee's long term performance and special Remarks:Positions available at the Company for internal candidates include management openings, overseas positions, and non-man- contribution, accounting for 35% of employees’ annual bonus. agement openings, which however do not include new recruits that serve as replacement for dismissed and resigned employees.

The calculation of employees' compensation is based on weightage on evaluation as well as seniority and position. Promotion of employees takes into consideration the current position, as well as evaluation scores for the last 1–9 years; the selection of assistant supervisor associates take into account their evaluation scores at the current grade for the past 1–5 years as well. Each weightage is correlated to the employees’ long term performance, that is, employees’ long term service performance will influence the position they assume; as a means to persuade employees to stay for the long run and improve workforce stability at the company, employees' number of years in service are tied to their Prefer- ential Saving Deposits post retirement.

174 175 3-5 Friendly, Healthy, Happy Workplace Support for Retirement To realize the goal of becoming a happiness enterprise, create a positive work environment, maintain the physical and 1・Our Group's companies have each defined their own retirement regulations based on the "Labor Standards Act" mental well-being of employees as well as build up the loyalty of employees and their dependents, FFHC provides a and "Labor Pension Act". Appropriate retirement programs have also been drawn up. wide range of employee health management mechanisms and benefits: Remarks: Employees refer to full-time employees. 2・Defined contribution plans (new labor pension system) Since 1st July 2005, the Group has complied with the "Labor Pension Regulations" and formulated a clear retirement scheme. Employees who choose the new "Labor Pension Regulations" would receive a monthly pension payment (6% • Heal thexam for employees of their monthly salary) into their personal pension account. Employees aged 60 can choose to retrieve their pension in and their families one lump sum including principal and interest, or apply for monthly retrieval. The Group paid out a total of • 14 days of paid special leave • Health workshops and nutrition and 30 days of paid sick leave management NT$218,426,000 in pension funds for 2017, and NT$247,787,000 for 2018. (except for employees on the • Medical clinics and full-time • Marriage, childbirth irfirst year) nutritionist 3・Defined Benefit Plans (Old Pension System) subsidies • Number of leave days for wedding, • Abnormal Workload-triggered • Subsidy for continuing funeral, and miscarriage exceeds Diseases Prevention Plan Pension payment for employees who opt for the old pension system and who are eligible to retire is be based on their education at university statutory requirement • Human-factor Hazard work tenure and average salary for six months before retirement. With respect to work tenure within 15 years or less, • Subsidy for learning foreign Prevention Plan two points are given for each full year of employment served, and for work tenure that exceeds 15 years, one point is language • Materna lEmployee Health • Subsidy for professional Leave given for each full year served. The maximum limit is 45 points. The Group's various companies, based upon the old regulations Protection Plan exam entrance fees that surpass • Tobacco-free Workplace, Air scheme of 2%–10% of total employee salaries, pay out monthly pension funds and deposit them at the Bank Of Taiwan's • Subsidy for birthday the legal Health Quality Testingand Maintenance Trust Fund Department under the respective companies' labor pension fund supervisory committee account. In addition, celebrations, annual parties requirement • Weight loss class management the pension reserve fund balance of employees will be computed before the end of each financial year. In the event and holiday travel • Flu vaccinations and cancer • Subsidy for funerals screening that, for employees that meet retirement criteria, the balance is insufficient for retirement according to the aforemen- • Subsidy for recreational • Low-dose lung CT scan tioned computation method, the company will make up the balance in one lump sum before the end of March of the courses and events Various • Subsidy for hire of subsidies Happy following year The cost to the Group for 2017 and 2018 pertaining to the aforementioned pension funds is sporting venues Employee NT$377,978,000 and NT$357,919,000 respectively, both recognized as employee welfare expenses. The amount for Work Place dormitories and guest • Employee guest houses in 2017 and 2018 deposited in the Bank Of Taiwan's Pension Reserve Fund is NT$7,065,736,000 and NT$7,530,178,000 houses Beitou, Penghu and Hualien • Employee dormitories in respectively. Establishment Taipei City, New Taipei City, • Subsidies for employee of Employee Consolation Hsinchu, Taichung, Tainan, 4・Overseas employees are subject to the local governmental laws and regulations. Their pension is recognized as self-improvement trips and Welfare payments Kaohsiung and Hengchun distribution of gift boxes onthe Committee pension expense for the current period in accordance with retirement regulations for defined contributions. The pension three major holidays expense for the current period was NT$16.175 million in 2017 and NT$15.969 million in 2018. • Employee birthdays • Souvenirs for retired personnel • Compensation for hospitalization of • Consolation payment for serious illness or injury family members and funerals • Consolation payment for major disasters FFHC Pension Contribution Plans Unit: NT$1,000 • Scholarships for employees' children • Consolation payment on the three major holidays for retired employees Category Year 2017 2018 • Consolation payment for the family of employees New Pension System 218,426 247,787 who passed away Old Pension System 377,978 357,919 Overseas 16,175 15,969

FFHC offers a comprehensive and wide-ranging benefits scheme in response to the trend of aging population and low birth rate. Apart from protecting the promotion prospects, performance evaluation and benefits of employees on 5・To thank our personnel for their years of contributions, the Company presents each retiree with a commemorative unpaid leave, we also offer diversified care and support for employees who need pregnancy leave, family leave, or furthering their education locally or overseas. In 2018, a total of 324 people applied for unpaid maternity leave and the medal and a pure gold bank ID badge and organizes a range of activities that cater to the living needs of retired reinstatement rate reached 93.62%; the retention rate one year after reinstatement in 2018 for employees who went on personnel. Retirees are also invited to take part in sports and recreational activities as well as arts and craft classes unpaid child care leave was 93.27%. organized by the bank. The annual retiree New Year banquet was held on Friday, February 23, 2018 and attended by 518 retiring personnel. A total of 1,682 retired personnel and their spouses living in Taiwan participated in the annual 2017 No. of 2018 2018 2018 No. of 2017 No. of mountain hike on Saturday, December 08, 2018. Consolation and care payments for the three major holidays to the 2018 No. of employees who Reinstate- Retention Total no. of applicants No. of actual actual returned from value of NT$7,150,000 were paid in 2018, and monthly bank newsletters are posted to retirees. Retired personnel are returning returning returning unpaid child care ment rate (%) employees on for unpaid leave and stayed rate (%) parental leave child employees employees employees (D/C) also entitled to benefits of using guest houses and group insurances at the same discounted rate as that of in-house care leave expected (A) (B) (C) for at least 1 year (B/A) (D) employees. Total 196 105 83 79 93 87 95.18 93.55

Total 128 10 11 9 11 10 81.82 90.91 Grand Total 324 115 94 88 104 97 93.62 93.27 176 177 3-6 Balance between Work and Life 5・The Bank implemented the "Extended Consecutive Leave" scheme, which allows employees who take 7 days of Workers of the new generation emphasize the importance of striking a balance between work and life, whereas we leave to receive NT$3,000 in travel subsidy, NT$6,000 if they take 10 days off, and NT$9,600 if they take 14 days off. A focus on ensuring a workplace that makes employees feel happy and energized. For the purpose of helping employees total of NT$37.29 million in subsidies were provided in 2018. to achieve a balance between work and family, FFHC implements a friendly family policy that provides the following care and support for employees and their families: 6・First Bank has implemented the "Guidelines for Unpaid Leave to Care for Sick or Injured Employee Dependents" to provide employee care and help employees to fulfill their responsibilities at work and home. 1・emale employees may apply for paid menstrual leave. In 2018 this was applied for by 166 people and average duration was 6.1 hours. If a pregnant employee feels unwell and is diagnosed by a doctor as requiring rest, the employ- 7・Various employee clubs have been established including sports-related clubs for golf, yoga, and marathon running. ee may apply for up to 44 days of sick, special or extended sick leave. This type of leave was applied for by 334 There are also recreational clubs such as bridge, Go and photography. Subsidies were also provided for employees employees in 2018, with each person applying for 4.78 days of leave on average. for the hire of local basketball, badminton, softball and table tennis venues. A total of NT$8,327,000 was subsidized in 2018. 2・FFHC Headquarters building's breastfeeding room was certified for excellence by the Taipei City Department of Health. In 2018, the breastfeeding room was used on average 473 times a month. First Bank IT building, Credit Card 8・Various sports and recreation activities (including table tennis tournament, singing competition, badminton/softball Division Zhongshan building, and Bade building have also set up breastfeeding rooms in June 2018, which were also competition, mountain-climbing and hiking, family days) were organized for employees and their dependents to certified for excellence by the Taipei City Department of Health in September. promote a healthy, motivated and optimistic workforce. Up to 15,743 people took part in these events in 2018.

9・In 2018, NT$126.81 million were spent on employee self-improvement trips and NT$20.82 million in subsidies were provided for annual year-end parties.

Headquarters building’s breastfeeding room

Table tennis tournament for employees Annual year-end parties Singing competition and their dependents

Singing competition Softball competition

IT building’s breastfeeding room

3・If an employee must take care of a family member personally due to vaccination, serious illness or other major events, they may apply for paid family care leave. This is limited to 7 days per year. In 2018 this type of leave was applied for by 995 employees, averaged 5.08 hours per person.

4・In light of the declining birth rate, FFHC has raised the child birth subsidy and offers NT$50,000 for the first child, NT$80,000 for the second child, and NT$100,000 for the third child and every child thereafter. Child birth subsidy of NT$14.815 million was disbursed in 2018, contributing to the birth of 521 babies. We also offer an employee marriage subsidy to the value of NT$30,000. In 2018, a total of NT$4.185 million in subsidies was provided for marriage to 137 applicants. FFHC has signed an agreement with a well-known national chain to provide all employees in Taiwan with discounted daycare service. Education subsidies are also provided for employees' children. A total of NT$15.48 million was disbursed in 2018. Hiking 178 179 Occupational Safety and Health Material Topic GRI 403: Occupational safety and health Management guidelines

Policies Resources Complaints mechanism Results We prevent occupational injuries, ensure the safety • Each company provides regular medical • Make safety and hygiene recommendations • 3,717 employees received low-dose lung CT scan and health of employees, comply with laws and check-ups better than required by law for through the "occupational safety and hygiene examinations, and 12 employees were diagnosed regulations, engage in consultation and communica- employees aged 65 and below. Managers committee". as having lung cancer and received treatment tion, and implement risk control to enhance our receive two days of official leave each year to • Conduct Employee Commitment Survey, include immediately. performance in occupational safety and health. undergo medical check-ups at the hospital. health risk issues in the survey, and use survey • Implemented the Maternal Employee Health Employees stationed overseas below the grade results as basis for implementation planning. Protection Plan. In 2018, 145 pregnant employees Commitment of assistant manager have one day of official • Implement a mechanism for psychological participated in the Maternal Employee Health We are committed to creating a healthy workplace, leave each year to undergo medical check-ups counseling and care for major illnesses and Protection Plan; 100 pregnant employees promoting physical and mental health in the locally or back in Taiwan. A total of injuries, form the "Care for Families Fellowship", completed the Health Risk Assessment Form for workplace, and improve the health of our NT$21,010,000 in medical check-up subsidy was encourage employees who are ill to provide Pregnant Employees and 11 who were returned to workforce. provided to 6,689 people in 2018. mutual support and share their medical treatment work after child birth completed the Health Risk • The bank has established a serious illness or experiences, and provide professional medical Assessment Form for Postpartum Employees. The Goals injury support and counseling mechanism. In and health information to the employee through completed forms were provided to health health professionals. professionals who then made phone calls to • Every year, recognize health risk issues based on 2018, 42 people applied for consolation award. assess and confirm the identified risks. the Occupational Safety Management Risk Map, In addition to NT$10,000 as consolation for • Received the Healthy Workplace Certification by review the various risk prevention plans each serious illness or injuries, support and counseling Specific management practices the Health Promotion Administration, Ministry of year, and implement risk mitigation measures. service was also provided for seriously ill or • Established Safety and Health Work Rules to Health and Welfare in 2018; specifically, our Continue to encourage occupational safety and injured employees and employees who work improve employees' awareness of safety and headquarters building received the Health health practice to implement a culture of night shifts. health and to forge an accident-free workplace. Promotion mark and the Credit Card Division occupational safety and health management. • Keep abreast of safety and health concerns at • Incorporated ISO 45001 - Safety and Health Zhongshan building, Bade building and IT • Introduce the ISO 45001 Safety and Health home and abroad, and comply with domestic Management System guidelines at the FFHC building received the Health Initiation mark. Management System to create a safe and and foreign safety and health laws and standard. Headquarters building and received certification. • Completed indoor air quality self-management for healthy workplace for employees and reduce the • Target high risk health issues and implement • Continued implementing the "Human Factor 188 branches. occurrence of occupational safety and health measures such as health education, hygiene Hazard Prevention Plan" and "Abnormal • Implemented the "Abnormal Workload-Triggered hazards. guide, safeguarding and promotion of physical Workload-Triggered Diseases Prevention Plan". and mental health in order to reduce the risk of Compile statistics on employees suspected of Diseases Prevention Plan". Workers exposed to illness. high, medium and low risks, based on their Duties health risks through the "Self Musculoskeletal • Collaborate with or employ doctors and nurses symptoms" questionnaire and provide them with medical check-up results, self assessment and Continue to improve the workplace, strengthen (hereafter referred to as health professionals) to appropriate recommendations to track and overall OT hours, were provided with counseling employee health management measures and offer on-site health service. improve their health status, from health professionals to explore changes in health-promoting activities, and enhance the quality • Form the "Occupational Safety and Hygiene • Implement the "Maternal Employee Health their working style and provide health counseling. of on-site health service. Committee" to review and manage various health Protection Plan" and "Night Shift Safety Plan for • In 2018, 42 people applied for 883.75 days of issues, illness prevention and health promotion Female Employees" to ensure a safe working occupational injury leave. The occupational injury matters. environment for female employees. rate was 0.90% and there were no fatalities due to • Assign an Occupational Safety and Hygiene • Organize walking competitions and weight loss occupational injury in 2018. Manager, Emergency Rescue and Fire Hazard class to encourage employees to control their Safety Personnel in order to ensure employees' weight by exercising regularly. occupational safety and hygiene and to build a safe workplace environment. Assessment mechanisms • Occupational injury rate • Disabling injury frequency rate • Severity of disabling injuries • Monitoring and management of environmental indicators at each business location

180 181 Health Mitigation/ Effectiveness 4-1 Occupational Safety Risk FFHC 2018 Health Issue Risk Map risk Prevention Measures Management Map A total of 3,717 employees completed the examination in 2017 and 2018, 12 of The Company identifies common health Promoted the High • Obesity "Low-dose Radiation whom were diagnosed as having lung cancer. Hospital health examination risks according to job type, working • Cardiovascular Tomography Lung center was asked to contact employees whose examination results revealed • Vision • Gastrointestinal disease environment, age, and gender. Regular disease Scan" to provide early lung nodules or anomalies to return for further check-ups. detection and treatment

health examinations are provided, and Respiratory disease • Cancer for lung cancer.

periodic risk assessment of various risk Probability • Maternity • Infectious • Respiratory Protection disease prevention plans is performed to Medium disease Organized weight loss One session was conducted in 2018, with 41 participants and shredding a total compile a risk map of health issues for classes and health walk weight of 32.5 kg. Health walk competition was participated by 942 people,

2018 as follows. • Overwork Obesit competition with each person walking 7,396 steps on average per day. • Food Safety • Physical fitness • Mental stress

Low Medium High Organized workplace Impact on Company Operations health talks Health lectures on healthy eating were attended by a total of 108 people. Gastrointestinal disease

Recognize high, medium and low health risks based on selected health matters, their probability of incidence and Issued e-newsletter to In 2018, e-newsletters were issued to deliver health information on the preven- impact on company operations. Plan for and review the health risks with medium to high probability of incidence or provide health care tion and treatment of infectious diseases such as herpes zoster and hepatitis information degree of impact. the 2018 Risk Prevention Plan is as follow: and on seasonal infectious diseases such as influenza and flu-like illnesses. On-site service by Based on the health examination results, if the workplace has employees who 1・Health Check: General employees undergo medical check-ups once every two years; nighttime shift employees, nursing personnel contracted infectious disease, dedicated nursing professionals were invited to staff members of employee canteens, employees stationed overseas, and department heads once a year. The Examine provide disease health education at the workplace to improve employees’ Health System is used to manage employee health. understanding of the disease and prevention methods. 2・Abnormal Workload-triggered Diseases Prevention Plan: Evaluation is performed once a month by complet- Infectious disease ing the table of abnormal workload risk identification and evaluation. Provided free flu The Taipei City Zhongzheng District and Datong District Health Centers were vaccinations invited to provide a free flu vaccinations on company premises. A total of 106 3・Human-factor Hazard Prevention Plan: Conduct an annual assessment for employees suspected of musculo- employees received flu vaccinations in 2018. skeletal symptoms and draw up a tracking table. 4・Maternal Employee Health Protection Plan: Employees, upon learning of their pregnancy, will jointly fill out the "Maternal Health Risk Assessment Form" with their manager to assess any impact on maternal health due to work.

Risk mitigation measures for health risks with medium to high probability of incidence or degree of impact and effectiveness of these measures in 2018:

Health Mitigation/ Effectiveness risk Prevention Measures 4-2 Workplace Safety Individual guidance A total of 215 employees were diagnosed with a >15% risk of contracting We continue to promote the following workplace improvement and safety protection initiatives in an effort to provide by health cardiovascular disease within 10 years according to health screening results. employees and clients with a safe and healthy environment: professionals Phone interviews with health professionals were provided, in addition to health measures and tracking such as regular medical counseling through email. The company has also set up a health page on its website to provide health care 1・Implementation of OSH-related Activities and Training information. To prevent occupational injuries as well as protect the safety and health of employees, the Company has established an "Occupational Safety and Health Committee" (OSH Committee) in accordance with the "Occupational Safety and Installation of We continued to install automated external defibrillator (AED). By the end of Health Act", "Enforcement Rules of the Occupational Safety and Health Act", and the "Management Guidelines for automated external 2018, a total of 29 AED devices have been installed in the Headquarters Occupational Safety and Health". The committee will have 7 members comprising of the employer, labor representative Cardiovascular disease defibrillator (AED) buildings and business units. and department manager, with 3 members, or 43% coming from the labor union. Conduct quarterly meetings to review various health related issues, prevention of illness and health promotion matters, occupational hazards reports and Organized workplace Health lectures on the prevention of high blood pressure, cholesterol, and others. Pay attention to employee health and workplace safety issues, in addition to the regular tracking of the progress health talks blood sugar levels were attended by a total of 118 people. of implementing items agreed upon in the meeting such as: safeguarding public safety in the workplace, tracking and Provided regular Phone calls were made by health professionals as needed to check up on management of employee health, supervision of safety and hygiene, and other measures beneficial to improving medical check-ups seriously ill or injured employees; 560 expressions of support were conducted workplace safety and hygiene management. superior to those during 2018. Health information based on the disease conditions of individual required by the law for employees was also provided. employees of all age Statistics on Occupational Safety and Health Committee meetings in the past 3 years groups, and notified Year 2016 2017 2018 personnel with anomalies Item Cancer to receive further check-ups. No. of meetings 4 4 4 Organized workplace Health lectures on breast cancer prevention were attended by a total of Proposals 8 10 15 health talks 43 people.

182 183 All business units have appointed an OSH supervisor, first-aid personnel and fire-prevention manager to protect the 2・Introducing ISO 45001 Safety and Health Management System safety and health of business units. Certified personnel are also dispatched to receive on-the-job training every 2 to 3 To ensure the safety and health of employees, First Bank has established the Occupational Safety and Health Manage- years to keep their OSH knowledge up to date. A continuous workplace safety and health inspection plan is also ment Plan, which contains OSH policies, goals, and specific safety and health management practices. A set of Safety practiced to build an accident-free workplace. and Health Work Rules has been established and approved by competent authority. Employees are required to comply with these rules in order to prevent accidents. In 2018, we incorporated ISO 45001 - Safety and Health Management Statistical Compilations of Occupational Safety and Hygiene Related Training for the last 4 years System guidelines at the FFHC Headquarters building and followed the PDCA principles to strengthen management measures. BSI certification was also received in November 2018. The Bank’s Occupational safety and Health Manage- Item Year 2015 2016 2017 2018 ment System applies to all employees who work in the headquarters building, including 1,313 full-time employees, 8 Number of Trainees part-time employees, 70 maintenance workers, 41 and Training Hours 241 144 714 71 for Workplace Safety 5,781 hours 5,040 hours 8,315 hours 2,405 hours security guards and janitors, excluding OBU employees, and Hygiene Managers for a total of 1,432 employees (100%). (Total number of Number of Trainees employees at headquarters building minus number of and Training Hours for 153 150 650 69 OBU employees at the end of December 2018) Fire Hazard Prevention 1,836 hours 1,800 hours 3,930 hours 828 hours Management

Number of Trainees 46 556 31 41 and Training Hours for Emergency Rescue 828 hours 2,268 hours 558 hours 738 hours

Number of Trainees and - - - 99 Training Hours for 706.5 hours ISO 54001 Management Systems FFHC received the Healthy Workplace Certification by the Health Promotion Administration, Ministry of Health and Welfare in 2018; specifically, our headquarters building 2018 received the Health Promotion mark and the Credit Card General employee 3 hours of OSH in-service training over 3 years Division Zhongshan building, Bade building and IT building received the Health Initiation mark.

Health Lecture • A total of 61 • The "Health and • The Health Lecture • Health lectures on people attended Tobacco, Air on "Intestinal Care breast cancer the Health Lecture Pollution", "Care and Health, prevention, on "Threats to for Your Heart" Proper Eating, Tips prevention of high Health - The 3 Health Lectures on Reducing blood pressure, Highs of Chronic were attended by Cholesterol and cholesterol, and Diseases" a total of 219 Protecting your blood sugar • The "DIY Stress people. Liver" was levels, and healthy Relief and • The "Self Check attended by a eating were Enhanced and Prevention of total of 295 attended by a Immunity", "Who Liver and Kidney people. total of 269 Robbed us of Our Disease", "Lung • The Health people. Health? Prevention Gland Cancer and Lectures on "Link • Health lectures on and Care of Dementia" Health between Stress eye care and Common Illness- Lectures were and Diseases", common lung es!" Health attended by a "Link between the diseases were Lectures were total of 893 Food Safety Crisis attended by a attended by a people. and Cancer" and total of 782 total of 371 "The Threat of people. 3・Safety Protection people. Environmental Hormones" were In accordance with the "Safety Maintenance Enforcement Rules" issued by the competent authority and the internal attended by 826 "Enforcement Rules fop Employee Self-Defense Organization", each First Bank business unit is required to conduct an people. employee self-defense organization drill once every 6 months. These are divided into a demonstration and a self-re- hearsal. Twenty-two business units were chosen by region to conduct the demonstration drill so that other units can send representatives to learn from their example and conduct assessments. After the demonstration drill, each business unit Weight loss class 2 sessions of weight 1 session of weight 2 sessions of weight 1 session of weight loss class were with control class was control class was control class was then selects a date and time within one month for conducting a drill. They may also perform the drill in their assigned a total of 65 conducted with a conducted with a conducted with a month according to the annual plan. At the end of the year, the top 6 designated demonstration units with the best participants, total of 43 partici- total of 66 partici- total of 41 partici- ratings are singled out for rewards. shredding a total of pants, shredding a pants, shredding a pants, shredding a 49.6kg total of 35.8 kg total of 66.1 kg total of 32.5 kg

184 185 The FFHC Headquarters building has a defense corps and emergency SOP in place. A vice president serves as the 5・Provision of Health Service by Medical Specialists corps commander while the heads of the Human Resource Division and General Administration serve as deputy Medical specialists are retained to provide health service for employees at the company every Monday or Wednesday. commanders. There is also one chief director and one director, who oversee the Control Center (1 control officer, 8 In 2018, 82 on-site clinic sessions were provided. Employees were allowed to seek professional medical advice during controllers) and five teams, these being the Engineering Team, Protection Team, Supply Team, Medical Team and office hours to learn about their health and alerts. The results of the 2018 employee health exam were analyzed, Firefighting Team. Each team has a team captain, a deputy captain and several team members (assigned as neces- identifying 215 employees (135 less compared to 2017) with more than 15% risk of contracting cardiovascular disease sary). In the event of an emergency, they can take the necessary response measures at any time to protect the safety within 10 years, 9 with cancer and 632 with serious anomalies (175 less compared to 2017). The doctors then contacted of employees and property in the FFHC headquarters building. these employees by phone for follow-up and to provide medical guidance and other health improvement measures. The Headquarters buildings and business units began installing automated external defibrillator (AED) in 2013. By the end of 2018 a total of 29 AED devices have been installed at 28 units.

Defense Mission Task Force Command System Table

Commander, Management of all civil Deputy Commander defense corps affairs

Executive Director, Coordination of all civil Director defense corps affairs

6・In-House Nurses A health section has been set up on the Bank intranet and there are full-time nursing personnel on staff. For employees with serious illnesses and the top 10 anomalies detected during health exams, we organize health information and health consultations on an ad hoc basis. A professional clinic and blood pressure monitors are available to provide employees with a place for emergency medical treatment and rest. When the (executive) Board meetings are Control Center Firefight team Engineering team Defense team Supply team Medical team convened, a nurse is on-hand to provide blood pressure measurements and remind the top management to look after their personal health. Alarm trigger- Fire prevention Emergency Security and Supply Bandaging, ing, coordina- and emergen- repairs to support for materials, transportation, tion of mission cy rescue buildings and fire, medical equipment and first-aid and teams equipment and engineer- drinking water evacuation of ing teams as well as injured people during disaster provide response emergency assistance

7・Weight Management and Health Talks 4・Medical Check-ups In 2018, we organized Weight Control Class to educate employees on healthy eating, correct exercise knowledge, and Each company provides regular medical check-ups better than required by law for employees aged 65 and below. healthy aerobic exercise. Forty-one people attended the class, shredding a total of 32.5 kg. Health walk competition Managers receive two days of official leave each year to undergo medical check-ups at the hospital. Employees was participated by 942 people, with each person walking 7,396 steps on average per day. Health lectures on breast stationed overseas below the grade of assistant manager have one day of official leave each year to undergo medical cancer prevention, prevention of high blood pressure, cholesterol, and blood sugar levels, and healthy eating were check-ups locally or back in Taiwan. Catering and night shift personnel receive one health exam every year. For all other attended by a total of 269 people. To keep our employees healthy and protect them against flu virus, the Taipei City personnel, partner hospitals visit each unit to conduct a health exam every two years. Personnel with anomalies are Zhongzheng and Datong District Health Centers were invited to provide free cancer screening and flu vaccination also notified for further check-ups. Employee dependents may also participate at their own expense. Dependents enjoy service at the company. the discounted group pricing and the same check-up items. A total of NT$21,010,000 in health exam subsidy was provided to 6,689 people in 2018.

Number of employees who received flu vaccinations: Unit Vaccination Date Number of People Headquarters building 2018/10/25 82 IT building 2018/10/29 24 186 187 8・Nutrition Management 11・Human-factor Hazard Prevention Plan Our Company operates an employee cafeteria with professional nutritionists retained to design a menu low in salt and The Human-factor Hazard Prevention Plan involves emailing the “Employee Musculoskeletal Symptom Self-Assessment” fat. We also have arrangements with organic vegetable farmers to supply fresh and healthy cuisine. The main dish plus questionnaire survey for employees to complete. In 2018, a total of 66 employees with suspected health risks were three side-dishes cost only NT$40. Each dish is also labeled with its calorie count and the total calorie count of each identified, and a list of employees who require follow-ups was compiled. Health professionals were then asked to meal is kept between 600–800 Kcal so employees can choose what they want based on their personal preferences contact these employees by phone to determine the cause of their symptoms and recommend improvement plans. As and physical condition. The scheme has proved very popular with employees. In addition, all of the vegetables used of the end of 2018, improvements were observed in 64 people and follow-ups are conducted on 2 employees to track by the cafeteria are supplied by contract growers and every vegetable can be traced to its supplier to ensure the health their improvement status and outcomes. of employee catering. In 2018 the cafeteria was used by an average of 1,265 people a day. 12・"Maternal Employee Health Protection Plan" and "Female Night Shift Rotation Worker Safety Plan" We implemented the Maternal Employee Health Protection Plan. In 2018, 145 pregnant employees participated in the Maternal Employee Health Protection Plan; 100 pregnant employees completed the Health Risk Assessment Form for Pregnant Employees and 11 who were returned to work after child birth completed the Health Risk Assessment Form for Postpartum Employees. The completed forms were provided to health professionals who then made phone calls to assess and confirm the identified risks. Every month, each unit provides a list of pregnant employees. Telephone calls to these employees are made by nurses to express support, provide health education and precautions during pregnancy and after birth, and simultaneously them about childbirth subsidies and related information. In 2018, 209 telephone calls were made in accordance with the Maternal Employee Health Protection Plan, and one on-site visit was conducted by an Occupational Safety and Hygiene Manager and nurse.

Night Shift Rotation Safety Plan for Female Employees was implemented. For female employees who need to work night shifts, the Human Resource Department oversees that each implementing unit complies with regulations and ensures 9・Tobacco-free Workplace, Air Quality Testing and Maintenance that department heads regularly conduct self-inspection by using the checklist. The Human Resource Department Air pollution has become an increasingly serious problem in Taiwan over the past conducts at least one onsite inspection and produces inspection report. Non-conforming units are asked to make correc- few years. PM 2.5 (fine particulates suspended in the air) levels have frequently tions, and punishment is imposed for serious violations. exceeded safe limits. These fine particulates are able to pass through the lung and enter the blood stream via the respiratory system, causing cardiovascular disease, 13・Support and Counseling for Seriously Ill or Injured Employees autonomic imbalance, lung cancer, stroke and senility. Smoking is banned on the The bank has established a serious illness or injury support and counseling mechanism. In addition to giving employees business premises of financial institutions under the Tobacco Hazard Prevention and NT$10,000 as consolation for serious illness or injuries (42 applicants in 2018), we have also set up a "Family Associa- Control Act. The EPA has also included “Bank Headquarters” in the second group of tion" and distributed the book "From Critically Ill to Running Marathons" as gifts to employees. These efforts are aimed proscribed venues under the “Indoor Air Quality Management Act.” at encouraging employees to support and share their healthcare experiences with each other. Phone calls were made by health professionals as needed to check up on seriously ill or injured employees; 287 expressions of support were To protect the health of employees and customers, all FFHC units are required to enforce the rule of “displaying conducted during 2018. Health information based on the disease conditions of individual employees was also provid- no-smoking signs at all entrances.” Voluntary management of indoor air quality was also implemented at 188 branches ed. Support and counseling service was also provided for seriously ill or injured employees and employees who work by the government deadline; 35 business locations have installed an indoor air quality real-time monitoring system. In night shifts to maintain their physical and mental health. Four employees received counseling service in 2018. accordance with the Occupational Safety and Health Act, the "Industrial Safety and Health Association of the R.O.C. (ISHA)" is contracted to measure the CO2 concentration and illumination at 235 offices every 6 months. To prevent "Sick Building Syndrome", every unit regularly cleans their air-conditioners, water towers, air vents, ventilation shafts, filters, as well as the evaporator or condenser inside their air-conditioners. Drinking water from the headquarters building is submitted to the Taipei City Government Environmental Protection Bureau every 3 months for water quality testing. The test results all complied with regulations.

10・Abnormal Workload-triggered Diseases Prevention Plan FFHC has implemented the "Prevention Plan for Illness due to Abnormal Workload" since November 2015 to prevent high risk workers from falling ill due to night shift rotation and long working hours. Workers exposed to high, medium and low risks, based on their self assessment and overall OT hours, were provided with counseling from health professionals to explore changes in their working style. Measures or activities related to health education, hygiene guidance, 14・Comprehensive Insurance Plan mental and physical health protection and promotion are implemented every year in order to mitigate the risk of In addition to labor insurance and national health insurance as required by law, the Bank also provides group policy disease development. at discounted rates to employees for accident, injury, hospital stay and cancer. The insurance plan is open to employees, their dependents and retired personnel. A total of 14,550 people were enrolled in 2018; First Securities, First Life Number of high, medium, low risk employees from 2016–2018 as per below: Insurance, First Financial AMC, and First Securities Investment Trust also provide group insurance for employees. A total of 1,219 employees were insured at a cost of NT$ 4,420,000. Category Year 2016 2017 2018 High Risk 9 10 8 First Bank personnel stationed overseas are not only covered by local group medical insurance but can also enroll in the International SOS for emergency medical assistance. Half of the cost is borne by the company to meet emergency Medium, Low Risk 178 213 163 medical needs.

188 189 15・Occupational Injuries For employees injured at work, the Company gives occupational injury leave as required by law and in accordance with the actual situation. Employees receive assistance on Labor Insurance claims so they can receive the help they need as soon as possible to minimize the harm done. The number of employees who applied for injury leave was 42 in 2018, compared to 43 employees in 2017. The disabling injury frequency rate of 2.30% was lower than 2017 (2.39%), mainly due to the lower incidence of disabling injury. The number of deaths due to injury at work and number of employees who fell ill due to work related causes in 2018 were both 0. The number of employees who were injured on the job was 7, 4 of whom fell and 3 were struck by or against an object/equipment. The occupational injury statistics for employees in Taiwan in 2018 are shown in the table below:

Number of Number of Disabling Severity of Number of people on days of Occupational Lost day rate injury disabling days absent Absenteeism Gender injury rate rate occupational occupational (Note 2) frequency rate injuries (excluding injury leave injury leave (Note 1) (FR, Note 3) (SR, Note 4) leave) (Note 5)

26.00 523.75 0.47% 5.74 1.42 28 11,109.31 0.82%

16.00 360.00 0.43% 3.94 0.88 20 2,764.62 0.30% Total 42.00 883.75 0.90% 9.68 2.30 48 13,873.93 0.61%

Reason for higher absenteeism rate in 2018 compared to 2017: • There were 230 new recruits in 2018. According to the Labor Standard Act, employees must work for more than six months to get three days of leave. New employees were not well enough to work and most of them therefore applied for sick leave. • To support the government’s receive policy for encouraging child birth, we implemented the child birth subsidy scheme and significantly raised the marriage and child birth subsidies. We allow pregnant employees to apply for up to 44 days of sick or special sick leave. In 2018, 14 employees became pregnant, causing a slight increase in the number of applications for special sick leave. • We provided "low-dose lung CT scan" and medical check-ups examinations. In 2018, there were 42 seriously ill or injured employees. • All in all, 630 days of sick leave and 1,357 days of extended sick leave were granted in 2018, resulting in higher absenteeism rate in 2018 compared to 2017.

Note: 1. Occupational injury rate: Number of people on occupational injury leave 2. Lost day rate: Days of occupational injury leave/ Work hours * 200,000 3. Disabling Injury Frequency Rate (FR): Based on the total number of disabling injuries during the period in question. Disabling Injury Frequency Rate is calculated as the total number of disabling injuries for every million work hours (to two decimal places). The formula is as follows:

Frequency of disabling injuries (persons) x 106 Disabling Injury Frequency Rate (FR) = Total hours

4. Disabling Injury Severity Rate (SR): Based on the total number of days lost due to disabling injuries during the period in question. Disabling Injury Severity Rate is calculated as on the total number of days lost due to disabling injury for every million work hours (to nearest integer). The formula is as follows:

Total number of days lost x 106 Disabling Injury Severity Rate (SR) = Total hours worked

5. Absence Rate Days of leave (Occupational injury + sick leave and menstrual leave)/Total work days 6. Atypical employees (including temporary workers and security staff) are excluded because the nature of their work is different from that of full-time employees.

190 191 Implementation of inclusive finance Material Topic GRI: guidelines and financial services sector disclosure standards FS14: Initiatives to improve access to financial services for disadvantaged people FS15: Policies for the fair design and sale of financial products and services Management guidelines Policies Specific management practices To provide financial friendly services to • To continue promoting the diversified financial managements and all social strata and groups to alleviate easy-care products for the elderly, providing funds and channels for the lack of financial services in rural SME operations, and youth's and women's start-ups, and launching areas, and at the same time help protective products for aging population with fewer children, small-sum people establish the correct concepts lifetime insurance products, and other various financial friendly of consumption and financial manage- services. ment and fulfill the corporate social • To respond to government policies for promoting preferential financing responsibility of promoting inclusive loans for "dangerous and old buildings" to expedite the refurbishing and rebuilding of dangerous and old buildings. finance. • To organize "natural disaster relief funds", "loans for assisting refurbishment of residences in disaster-struck areas", and "Comfort Commitment Loan” reverse mortgage loans and provide loans for visually impaired To invest resources such as equity and hearing-impaired people and those subject to assistance investment and business activities in declarations to establish related friendly finance measures. organizations that solve social issues • To assist debtors in resolving debt issues and restore regular life. through business models, so as to • To actively prevent financial frauds in order to avoid loss of property facilitate sustainable social development. for customers. • To promote the micro-insurance assistance program by letting the First Goals Bank Culture & Education Foundation fully subsidize eligible disadvan- SOCIAL To increase the quality of life and taged people for their insurance premiums and providing basic expand the diversified business insurance coverage at lower premiums for disadvantaged groups so opportunities with the aid of inclusive as to fill gaps in the government's social insurance or social assistance financial products and services by mechanism. increasing for the disadvantaged Assessment mechanisms people in remote areas the financing • The promotions of the elderly care and support. channels, insurance protection, etc. • The assistance for small and medium enterprises in obtaining operation and development funding. Duties • The achievements in various financial friendly services. To combine the core functions of the • The implementation status of loans for refurbishing dangerous and financial industry to provide financially old buildings. HARMONY disadvantaged groups with equal • Setting up new wheelchair-accessible ATMs. access to financial services is a financial institution’s due responsibility. Results • In 2018, a total of 526 cases of care trust for elderly retirement and Resources care and the disabled were concluded in the amount of NT$1,664.11 • To cooperate with social welfare million with the trust asset balance of NT$4.451 billion. Strengthened groups or government agencies to the promotion of related industries such as medical biotechnology or hold lectures on trusts for senior long-term care loans in response to the aging society and the citizens and disabled people in order growing number of cancer patients. Added 21 new loan accounts and approved NT$2.29 billion in loans. to assist them in planning their elderly • First Bank provided a total of NT$672.3 billion in loans to SMEs in retirement for living without economic 2018. First Bank was the leading lender to SMEs by market share in worries. the banking industry for the 9th consecutive year. • To combine core functions such as • Processed 85 accounts of “Comfort Loan” or reverse mortgage loan low-interest rate bank loans to and the approved amount was NT$685 million. provide funding for smaller corporate • As of the end of 2018, First Bank approved 4 loans for refurbishing clients. To provide small-sum dangerous and old building totaling NT$1.386 billion. insurance products for disadvantaged • First Bank Culture & Education Foundation provided basic coverage groups. for specific risks of economically disadvantaged individuals and fully subsidized 214 cases of micro-insurance premiums, with a total insurance amount of NT$106.7 million. Complaints mechanism • Provided companies struck by the Hualien earthquake with funding According to the "Customer Complaint required for operations and organized natural disaster relief loans. and Dispute Resolution System", Nine companies applied for the loans and were granted NT$85.3 customers can communicate and file million. We also assisted households struck by the Hualien complaints to all companies of First earthquake with low-interest rate loans to rebuild their family or Financial Holding Group through extend their original debts. The debts of two customers were given business units, customer service extensions and the amount was NT$16.54 million. • Setting up 18 new wheelchair-accessible ATMs. We have already set hotlines, and other complaint channels. up 415 wheelchair-accessible ATMs throughout Taiwan, offer 6 voice-operated ATMs for visually-impaired customers in 2018. 192 193 1-1 Watch & care for senior citizens 1-2 Friendly service In response to the rapid aging population in Taiwan, it has become a pressing task to provide senior citizens with watch In order to cooperate with the United Nations to promote inclusive finance, and provide disadvantaged groups and and care services. In order to provide diversified financial managements and introduction of easy-care product service to people in remote areas with convenient financial services, the FFHC has adopted inclusive financial facilities with senior citizens, the FFHC, hosted seminars on trusts for seniors and the handicapped with social welfare groups and effectiveness as follows: government agencies (e.g. Zhonghe District Beishan Community Development Association, Luzhou Farmers' Association, etc.). Through sharing of the practical cases concluded, the lectures aimed to promote easy-care trusts or any trust products that suited senior citizens or disabled people, so as to assist them in planning for an old-age retired life. Assisting in urban renewal and rebuilding dangerous and old residences To provide full support for the government's implementation of Trust lectures for senior citizens and disabled people held in 2018 urban renewal and rebuilding dangerous and old residences, we Activity name/venue launched the "preferential financing loans for accelerating the reconstruction of dangerous and old buildings" in 2017. Old 2018.5.3 "Elderly Property Planning and Trust System" seminar of New Taipei City Songnian University organized in collaboration with the Trust Association and New Taipei City Government (Zhonghe District Beishan buildings that meet the criteria in the "Statute for Expediting Community Development Association) Reconstruction of Urban Unsafe and Old Buildings" or "New 2018.11.14 "Elderly Property Planning and Trust System" seminar of New Taipei City Songnian University organized in Taipei City Simple Urban Renewal or Disaster Prevention Renew- collaboration with the Trust Association and New Taipei City Government (Luzhou Farmers' Association) al" are eligible for loan applications with business units of First Bank. Applicants may receive full loans for the reconstruction and The FFHC attached importance to the property safety of senior citizens and disabled people, and launched the related fees with a maximum period of five years to help the "Easy-care Trust to Treasure a Retired Life" by dedicating the trust funds to the needs of the silver-haired people for people reduce their burden and rebuild old residences. As of the end of 2018, First Bank approved 4 loans totaling living, medicine, and easy care. The "Guardian Angel Trust" is to strengthen the protection of trust funds and to earmark NT$1.386 billion. special funds for special payments, so that the they may reserve funds for future dementia or long-term care, and prevent the risk of misappropriation of their assets caused by dementia-induced cognitive deterioration. In 2018, a total of 526 cases of senior citizens' retired easy-care trust were concluded in a total amount of NT$1,664.11 million with trust Providing assistance to SMEs, and youth's & women's start-ups asset balance of $4.451 billion. FFHC received second place in the "Asset Trust Evaluation of Trust Businesses for the The FFHC has achieved synergy of its CSR and financial business by incorporating the concepts of environmental Senior and the Disabled". Unit: No. of cases/NT$ Million protection, giving back to the community, and promoting charitable endeavors into its core operations. In terms of how FFHC is helping to boost financing for business development of the emerging industries and SMEs, which tend to lack Type Year 2016 2017 2018 the scale or steady revenue needed to qualify for loans, First Bank has reflected its commitment to financing local No. of senior citizens' retired easy-care trust concluded 2,632 3,560 526 industries by extensively working with the Small and Medium Enterprise Credit Guarantee Fund of Taiwan (SMEG) to expand its loan services to domestic SMEs, thereby helping them grow and expand. These actions also stimulate Amount of senior citizens' retired easy-care trust 1,842.77 2,435.18 1,664.11 domestic economic growth and spur job creation. We also provided assistance and funding for youth and female entrepreneurs for starting a business. We accepted 153 applications for the "Loans for Young Entrepreneurs and Furthermore, in response to the increasing need for long-term care among elderly citizens in Taiwan, First Bank teamed Start-ups" and "Loans for Minor Entrepreneurs" in 2018 that the loan amount totaled NT$243.79 million. We provided the up with First Life Insurance to launch the "Long Term Care Life Insurance". In the event of a sudden medical emergency "Micro Loans for Female Entrepreneurs" and provided NT$27.24 million in 40 cases for female entrepreneurs to start or burdensome healthcare expenditures, this long-term policy ensures that elderly customers and their families can their businesses. Our "Small and Medium Enterprise Credit Guarantee Fund" services processed NT$145.6 billion in continue to maintain a stable and comfortable lifestyle. There were 363 valid contracts with an insurance coverage of NT$9.63 million in 2018. First Life Insurance launched the "Loving Small-sum Lifetime Insurance" and processed 4,411 loans and we received our 10th "SME Credit Guarantee Funds Awards" from the Ministry of Economic Affairs. First Bank effective contracts as of the end of 2018 with NT$1,262.14 million in insurance amount to help customers respond to has remained the number one bank in Taiwan in terms of SME lending market share for 9 years in a row. We also emergencies through insurance mechanisms and stabilize their family life. In addition, in 2018, 3 pieces of products related to the trend of aging and declining children were introduced. The number of valid contracts was 555, and the integrated gender equality awareness and core business- amount of insurance was $500 million 1,860. es and actively assisted female entrepreneurs start Unit: No. of cases/NT$ Million businesses or obtain loans. Forty percent of female Type Year 2016 2017 2018 applicants obtained personal loans in 2018 and the loan award rate for credit cards reached 55.46%. First Bank has No. of Loving Small-sum Lifetime Insurance effective contracts N/A 3,377 4,411 become the first choice as a partner for domestic SMEs, Cumulative amount of Loving Small-sum Lifetime Insurance N/A 967.4 1262.14 youths, and female entrepreneurs.

First Bank strengthened loan projects for related industries in response to the aging population. To help elderly citizens utilize real estate in their possession, First Bank created a reverse mortgage loan product "Comfort Loan" in March 2016 which enables retirees to receive fixed monthly income from the Bank to cover their daily living expenses. As of the end Unit: NT$100 million of 2018, a total of 85 Comfort Loans were made to seniors amounting to a cumulative total of NT$658 million. We Type Year 2016 2017 2018 strengthened the promotion of related industries such as medical biotechnology or long-term care loans in response to the aging society and the growing number of cancer patients and added 21 new loan accounts and approved NT$2.29 New Loans through SMEG 1,253 1,356 1,456 billion in loans. SMEG Loan Amount 659 643 648 Unit: No. of cases/NT$ Million SME Loan Amount 6,478 6,578 6,723 Type Year 2016 2017 2018 No. of Comfort Loan being processed 34 25 26 Comfort Loan approval amount 181 317 187 194 195 Unit: NT$ Million Type Objects and approaches Year Number of cases concluded Amount Item Year 2016 2017 2018

Female: Launched "Micro Loans for Female 2016 42 32.18 The number of senior citizens' branches 0 6 6 Entrepreneurs" to provide funds needed for women to 2017 26.08 The number of wheelchair-accessible ATMs start their business and help them with start-up 43 303 361 415 Micro operation 2018 40 27.24 The number of branches that offer wheelchair-accessible counters 34 37 37 Loans Youth: Launched "Loans for Young Entrepreneurs and 2016 283 373.32 The number of branches with friendly design＊ 189 188 188 Start-ups" and "Loans for Minor Entrepreneurs" to 2017 249.87 provide funds needed for youth to start their business 202 ＊：The reduction in the number of friendlily designed units was due to the abolition of business units by First Bank. and help them with business growth and development 2018 153 243.79

To assist micro and small enterprises with smaller operations obtain funding and encourage youths to work hard and To provide disabled people with basic, equal, reasonable and convenient financial services, First Bank has constructed develop innovative businesses to accumulate their first pot of gold, First Bank launched the "Micro Enterprise e-Services" an accessible website (https://freebank.firstbank.com.tw/ANB/index.jsp) to provide links to friendly financial service online loan application website for micro enterprises in September 2018. The website provides online credit calculation networks in the "List of Accessible Service Facilities (Measures) in First Bank Branches". To strengthen the implementa- and immediate loan application service to simplify the loan application procedures of small and micro enterprises. tion of First Bank's inclusive finance policy, accessible online bank, eATM, and official portal websites, we obtained the "AA" rating for [Web Content Accessibility Guidelines 2.0] in 2018. First Securities has also set up a "Friendly Financial Services Section", providing such accessible investment services as online orders and mobile winner APP platforms, and Providing basic insurance protection for disadvantaged groups continuing to offer phone voice quotations and transactions so that people with hearing and mobility problems can also To provide a basic level of personal insurance protection for the economically disadvantaged people to fill gaps in the participate in investment transactions by Internet access. Meanwhile, First Securities Investment Trust has created a government’s social insurance or social assistance mechanism, First Life Insurance has introduced to them and people dedicated page on its website to provide customers with information concerning its friendly financial services. In with specific status a convenient, physical checkup-free micro-insurance product with a generalized premium regardless addition, it offers text-to-speech functionality for transactions, and the Mutual e-Bank mobile application, allowing of occupation category, gender, or age. It has also cooperated with First Bank Culture & Education Foundation to customers to complete mutual fund subscriptions or redemptions online using a PC or mobile phone. provide all those who meet the Foundation's criteria for assistance with micro-insurance with premiums fully subsidized by the Foundation. In the end of 2018, a total of 214 cases of such insurance were concluded with the insurance amount First Bank provides 7x24 uninterrupted access to its accessible web bank services for hearing-impaired or disadvan- totaling NT$106.7 million. taged people. The features include: the financial information inquiry function, account overview function, transaction Unit: No. of cases/NT$ Million details function, agreed transfer function, user code/password change, SSL password change, website navigation Type Year 2016 2017 2018 function, and information announcement function. No. of micro-insurance effective contracts N/A 89 214 First Bank's depositors who provide proof or identification confirming their disabilities may submit an application at any Cumulative amount of micro-insurance N/A 44.2 106.7 of its business units to receive a service fee waiver for interbank ATM withdrawals. Applications may be filed via mail, over the counter, or through the Bank's friendly financial service network. They are limited to one account for one person; once approved, the customer may have up to 3 service fees waived per month. Assisting reconstruction after disasters A severe earthquake shook Hualien on February 6, 2018. First Bank's Hualien Branch actively provided companies struck by the Hualien earthquake with funding required for operations. It organized "natural disaster relief loans" to help 1-3 Assisting debtors in resolving debts companies obtain loan interest subsidies provided by competent authorities and the local government so that they can For debtors applying for preliminary negotiation/arbitration/rehabilitation under the Statute for Consumer Debt Reform, recover as quickly as possible with the full support of the government and banks. Nine companies applied for the loans or individual customers who applied for debt negotiation, the Bank conducts a comprehensive evaluation of their and were granted NT$85.3 million. We also assisted households struck by the Hualien earthquake with extensions of properties, income, and capacity for work and encourage them to actively resolve their debts to regain a normal life their original debts. The debts of two customers were given extensions and the amount was NT$16.54 million. First Bank and for the Bank to recover creditor rights. First Bank approved 635 accounts in preliminary negotiation in 2018 and received the "Love Hualien Assistance Award" for providing financing guarantee special loans for the 2018 Hualien accumulated NT$41,933 thousand in total contracts signed. The Bank waived NT$61,624 thousand in debts. We estab- earthquake. lished 84 preliminary mediation accounts. The Bank settled NT$12,377 thousand in debts and waived NT$5,210 thousand in debts. We established 125 rehabilitation accounts and the total rehabilitation debts amounted to Creating a friendly financial environment NT$46,477 thousand while NT$35,092 thousand was waived. In response to aging society, First Bank has built six “Senior Citizens' Experience Branches” by 2018. They provide related old-age friendly facilities and services such as optical magnifiers, reading magnifiers, courtesy glasses, audio amplifiers, AEDs, health measurement stations and vehicle hailing. Moreover, to better accommodate the needs of Unit: No. of cases/NT$ Million disabled people, we have already set up 415 wheelchair-accessible ATMs throughout Taiwan. At present, we also offer Type Year 2016 2017 2018 six voice-operated ATMs for visually-impaired customers and have upcoming plans to retrofit more ATMs with this functionality soon. In the future, upon establishing new bank branches or moving or remodeling existing branches, we No. of preliminary negotiation approval accounts 712 652 635 will prioritize the installation of equipment and ATMs which meet the needs of disabled people in order to provide more Amount of preliminary negotiation contracts signed 46 40 42 friendly and considerate services. Furthermore, in Taipei, New Taipei, Taoyuan, Taichung, Kaohsiung, Yilan and Hualien, we have established wheelchair-accessible service counters to provide friendly financial services for disabled people (including the elderly, the infirm, pregnant women and customers with children). Each of First Bank's 188 business units has set up loving service bells and wheelchair ramps. They have also dispatched service specialists to the business halls, helping the disabled people to deal with various financial services. Such people at the counter will be fully informed of the data required, and be helped with the filling out of relevant application documents. And the exchange rate board has been set up and the latest version of charging standards has been updated on the bulletin board. 196 197 Charitable activities and performance evaluation 2-1 Charitable strategy Social care Social benefits (2018) Material Topic • First Bank donated 0.1% of domestic payments GRI guidelines and financial services sector disclosure standards: Local communities made with the World Card to the First Bank FS14: Initiatives to improve access to financial services for disadvantaged people Culture & Education Foundation. As of the end of 2018, we have donated approximately FS16: Initiatives to enhance financial literacy by type of beneficiary NT$1,109,300 and NT$302,600 was allocated to For information regarding dangerous and old buildings, the "School Education Savings Account" platform Management guidelines please refer to the Social Harmony - "Implementation of of the Ministry of Education, which in turn helped inclusive finance" chapter 237 disadvantaged schoolchildren with education • In addition to the purpose of making profits, the and school lunches. Policies • The two financing loans provided for "dangerous To actively integrate corporate resources and focus on company has to adopt measures to promote public Resolved social and environmental issues the children, disadvantaged groups, elderly, and welfare. Shareholders may propose to the sharehold- • The wealth gap between urban and rural areas and old buildings" are expected to generate people with disabilities. Adopt the four major charita- ers' meeting to urge us to promote public interest or makes it difficult for disadvantaged groups to obtain NT$21,944 thousand for each homeowner. ble strategies of the "Green Care", "Social Care", fulfill social responsibilities. education resources • We promoted the long-term "Disadvantaged "Sports Competition" and "Artistic Cultural Creation" to • Climate change causes unstable food production and Students Adoption Plan" and assisted a total of invest in social care activities and encourage employ- Specific management practices severe price fluctuations and they severely affect the 452 disadvantaged schoolchildren in Ankeng, ees to participate in volunteer activities. • Art to the Countryside, First Dream Stage, Protecting lives and income of farmers Zhongzheng, and Erchong Elementary Schools. Disadvantaged School Children, Wealth Manage- • Paperless unified invoices make it increasingly difficult We also used our "Financial Service Industry ment and Retirement Trust Seminars, Financiers on for social welfare organizations to raise funds Education Scholarship/Financial Aid" to distribute Commitment • Youth drug abuse and drug issues have become NT$10 million in cumulative scholarship donations To uphold the spirit of "Local Cares for Local Campus, Volunteer Services, Children's Safety increasingly severe Businesses", we are committed to environmental Education Series, Campus Anti-Drug Education, to support more than 7,000 students from • Taiwan's aging society has made the lack of sustainability, social care, and expand our influence. Cooperation with Small Farmers, Tennis and Table economically-challenged families. Tennis Players Training & Competitions, Unified resources for long-term care of the elderly increasing- • We organized 69 financial seminars on campus Invoice Cup for Road Running, Free Clinics in Outlying ly severe and in remote areas and provided accurate and Goals Villages, Music Fests, and art to cultivate promising comprehensive consumer finance and wealth • Green care: To create environmental education talent, and art space exhibitions. management information for a total of 6,036 venues in the Group, commit to promoting environ- Solution • To reach out to communities and outlying villages, participants. mental education-related knowledge, assist • We continued to conduct the “Easy Schooling Relief seek out any corner in Taiwan that needs our care, • We provided 9 social welfare groups with disadvantaged groups and social welfare Program”, and sponsor the "Financial Service Industry and direct resources to areas they are needed to Education Scholarship/Financial Aid" and "Disadvan- advertisement on First Bank eDM, credit card institutions in switching to LED lighting, work fulfill corporate social responsibilities. together to support small farmers-friendly farming, taged Students Adoption Plan" in order to assist websites, or credit card bills to help them raise and integrate multilateral forces to jointly invest in disadvantaged schoolchildren. donations. We helped charity organizations save environmental sustainability. Assessment mechanisms • We allocated and donated 0.1% of the general approximately NT$5,423,940 in advertising fees • Social care: To focus on the impact of social The community investment assessment model of London payments made with Glory+ World Cards to assist and total donations amounted to NT$433 million. changes and actively create a friendlier living Benchmarking Group (LBG) is adopted for projects in such easy schooling items as education, school • We organized 66 loving volunteers activities. In environment for disadvantaged schoolchildren and the four major charitable strategies to analyze the cost lunches, classes after school, etc. for schoolchildren in addition to donating supplies and assistance in the elderly, organize various wealth management of cash, volunteer manpower, resource donations, and outlying villages. cleaning the environment, we also accompanied and health seminars to provide the elderly with a management costs as well as the direct benefits on the • We held the "Loving Care Concert to Light up Life on old people who live alone and disadvantaged healthy life in retirement, assist schoolchildren and business and social levels and indirect impact. the First Dream Stage", "First Bank Free Clinics to groups. We also organized 136 public welfare families that suffer from changes in their lives, and Spread Love", "Red Strawberries Say No to Drugs year-end parties in which we invited disadvan- use children's safety education and campus Results Campus Tour Events", "Slow-flying Angels Care taged groups to perform and purchased gifts anti-drug education to protect the health and safety • Three schools were adopted to help 452 disadvan- Events", "Equal Rights & Blood Donation to Disabled with public welfare and environmentally friendly of the next generation. taged children to attend school. People", "Children's Safety Education Series", etc. to philosophy. The total amount of performance fees • Sports competition: To organize tournaments of • First Bank allocated and donated 0.1% of the general provide care for the public. and purchase of gifts was NT$1,377,595. tennis and table tennis, continue the table tennis payments made with the World Card to assist 237 • Our employees formed the "Volunteer Service Teams" • We donated NT$750,000 to Andrew Food Bank to team training program, support the development of disadvantaged schoolchildren in their education, to provide care in children's homes and old folks' help 375 disadvantaged families in Taitung and domestic sports activities, implement long-term school lunches, classes after school, etc. homes throughout Taiwan, and upgrade the quality of Keelung purchase Lunar New Year's dishes. programs to train elite players/teams, and • We organized 69 events in schools and communities life for disadvantaged people through inclusive • To help reduce the pressure of falling prices on encourage citizens' participation in healthy sports. including elementary schools, junior high schools, financial products and services. farmers' overproduction of agricultural products, • Artistic Cultural Creation: To commit to cultural colleges, social welfare groups, women's groups, and • We held charitable lunar year-end dinner parties in First Bank purchased 100 tons of cabbage, 36 heritage preservation and passage, organize correctional institutions to spread financial knowledge which we organized performances by disadvantaged tons of bananas, and 0.6 tons of pineapples large-scale concerts which provide new musicians to a total of 6,036 participants. groups and bought social welfare institutions' while First Life Insurance purchased 1.81 tons of with a stage to perform, organize diverse art • We organized six Dream Come True concerts in NTU products as year-end dishes or gifts. pitayas as gifts for customers and employees. exhibitions which provide domestic artists with Hospital and three major concerts in Northern, The total procurement amount was NT$2,606,120. creative publishing platforms, invite artists to spread Central, and Southern Taiwan. The events attracted • We headed to Laos with NT$88,000 worth of artistic and cultural creation as well as knowledge approximately 10,000 people. Commercial benefits (2018) • There were 2,126 GLORY+World Cards in circulation supplies to distribute them to homes for people to rural areas to give back to communities, and • There were 12 Art & Culture Exhibitions for a total of with mental disabilities and elementary schools improve cultural qualities in the society. 12,000 visitors. and the proceeds amounted to approximately NT$17.67 million. and remote areas. We helped them grow • We have supported the development of domestic vegetables and provided health education to sports for 24 consecutive years. In addition to • The senior citizens' easy-care trust and disabled Duties more than 200 disadvantaged schoolchildren. establishing a table tennis team, we also sponsored people's care trust were contracted to a total amount To respond to the United Nations' 17 "Sustainable • We organized the "Red Strawberries Say No to the table tennis teams of 8 colleges, middle schools, of NT$1.664 billion and related proceeds amounted Development Goals" (SDGs), integrate core strategies to approximately NT$372,000. Drugs" campus tour events with the Grace Hsiao to fulfill "green finance" business ideals, execute social and elementary schools in 2018. Four players were selected for the national team and they won 3 gold • Two financing loans were provided for "dangerous Dance Troupe to teach youths to say no to drugs. care activities, and transform them into positive forces and old buildings" in 2018 and related proceeds Approximately 1,044 students participated in the for the society and the environment. medals, 5 silver medals, and 9 bronze medals. • We organized large-scale national tennis matches amounted to approximately NT$137 million. events. and table tennis championships. Approximately 1,085 • We processed NT$685 million in the reverse • First Life Insurance assisted Jing Chuan Child Resources players participated in the national tennis tourna- mortgage "Comfort Loan” as of the end of 2018 and Safety Foundation in the "Traffic Safety Awareness Group subsidiaries, First Bank Culture & Education ments while approximately 833 players from 105 related income amounted to approximately - Crossing the Road Together" event and Foundation and First Bank Volunteer Service Team. teams participated in the table tennis championships. NT$835,000. executed the "Little Yellow Cap Project". We • We organized the "Unified Invoice Cup for Road • Loans for small and medium enterprises in 2018 raised NT$170,000 for the Foundation for use in Complaints mechanism Running (Taitung)" and received 350,897 unified amounted to NT$672.3 billion and related income research and development of transportation • Please refer to the "CSR" on the FFHC's official invoices. The total reward money of NT$362,800 was was approximately NT$12.4 billion. safety education programs and assist the website for the contact mailbox http: //csr.firsthold- donated to 5 social welfare organizations in Taitung. • Premium income from micro insurance products in promotion of children safety education. ing.com.tw/c/csr_report_contact.php • NT$84.7 million was invested in social and enriron- 2018 was approximately NT$50,000. • For details, please refer to the official website of First mental participation in 2018. Bank Culture & Education Foundation https: //www.- 198 firstbank.com.tw/servlet/fbweb/CultrEduFoundation 199 • The loan balance of green financing loans Sports competition Artistic Cultural Creation Green care provided in 2018 was approximately NT$57.9 billion while related proceeds amounted to approximately NT$1.04 billion. • We cooperated with the government's "Financial Support for Physical Economy - Five Plus Two Please refer to the "Climate change risks and opportuni- Industries" policy (green energy technologies, Resolved social and environmental issues Resolved social and environmental issues ties" and "Ecological and environmental sustainability" Asia Silicon Valley, biomedical technologies, Athletes face difficulties in finding jobs and Taiwan lacks New singers, musicians, and disadvantaged groups chapters for related contents. defense, smart machinery, new agriculture, and large-scale sporting events to support them. Athletes lack a platform for performance. The small scale of circular economy) and approved NT$62.32 billion often suffer from insufficient funding and cannot the domestic video entertainment industry also Resolved social and environmental issues in loans in 2018. Related proceeds amounted to accumulate experience in international competitions. makes resources difficult to obtain. • Forests land has decreased significantly and they are approximately NT$1.12 billion. These deficiencies have affected citizens' performance transferred to growing vegetables or crops for food. • The loan balance of Renewable Energy Creation Loans amounted to NT$914 million as of the end in the international sports world and their participation Solution In addition, concentrated industrial and commercial activities emit large quantities of greenhouse gases of 2018 while related proceeds amounted to in sports. We have organized events such as “Northern-Cen- and increased the frequency of extreme weather that approximately NT$16.448 million. tral-Southern Charitable Concerts” and “First Art threaten the lives and properties of humans. Solution Spaces” to create music and arts performance • The reserves of natural resources such as crude oil Social benefits (2018) We held care loving events such as Table Tennis stages, processed loans for cultural creative and natural gas are limited and humans will face • We have planted a total of 5,385 trees, which Championships, Table Tennis Summer Camps, First industries, and sponsored Taiwan Lantern Festival to energy depletion and insufficient sustainable energy equal a reduction of 40 metric tons of CO2e each Holding Maxxis Tennis Tournaments, and MOF's Unified help support the development of local arts and sources in the future. year, to create a sustainable environment. Invoice Cup for Road Running, as well as nurtured the culture in Taiwan. • Green industrial investment risks are high and it takes • We donated 0.6% from regular domestic players of the First Bank Men's Table Tennis Team to be a longer time to recover the cost and leads to transactions paid using the Leezen Card, new star athletes. Commercial benefits (2018) financing difficulties. equaling NT$12.02 million, to the “Tze-Xin • The general public lack knowledge of environmental Organic Agriculture Foundation” and the “Bliss The loan balance of cultural creative industries in protection and conservation and environmental and Wisdom Foundation of Culture and Educa- Commercial benefits (2018) 2018 reached NT$20.927 billion, and related education sites. Overall environmental education in tion". We have accumulated NT$87.387 million in We hired 8 table tennis and weightlifting athletes as income was approximately NT$377 million. Taiwan requires additional improvement. donations to support the foundations’ efforts to official employees to provide them with fixed income provide guidance on organic certification of and allow them to focus on their training. The 8 Social benefits (2018) Solution agricultural products, promotion of organic employees have contributed to NT$17.95 million in the • We sponsored two lantern festivals including the • We organized the "Love FUN First Green Living vegetarian school meals, and cleansing of water Bank's profits in 2018. Chiayi Lantern Festival and Taipei Lantern Carnival" resources. Festival which attracted 13.568 million visitors. • We promoted the “Living Green Card”, “Leezen • First Bank Educational Foundation allocated 0.2% of transactions with the Living Green Card Economic benefits created by First Bank Card”, "Yilan Card", and “Small Contracted Organic Social benefits (2018) Farming for Sweet Potatoes” to support environmen- totaling NT$370,000 to assist the Dann Center for amounted to approximately NT$258 million. • We have supported the development of domestic tal sustainability and the development of organic Individuals with Developmental Disabilities in sports for 24 consecutive years. We sponsor the First • We provided free platforms for the artists to agriculture. Nantou County replace their old lighting system Bank Men's Table Tennis Team in collaboration publish their works. We helped 11 domestic • We carried out the “Local Care for Green Light to with 265 sets of LED lighting equipment. We projects with 8 schools. Four players were selected artists save approximately NT$7.56 million in Spread Love" program to assist social welfare estimate that the replacement would reduce for the national team and they won 3 gold medals, 5 exhibition venue lease fees in 2018 and the total institutions in installing energy-saving lamps for 30,000kWh of electricity, reduce electricity costs silver medals, and 9 bronze medals. Our investment value of art works sold amounted to NT$6.265 replacement. by approximately NT$120,000, and reduce 16.62 • We implemented the policy of "One-stop Service for metric tons CO2e each year. in training fees amounted to NT$10.58 million in 2018 million in 2018. • We organized 6 loving care concerts which Urban Renewal" to help old residential buildings to • First Bank donated 0.3% of regular purchase and First Bank Table Tennis won a total of NT$2.336 payments from Yilan Card totaling NT$85,000 to provided 6 groups of disadvantaged performers be renewed or rebuilt into green buildings. million in rewards in domestic and foreign contests. • We launched special financing loans to support the Yilan County Government for use in social with a stage for performance. Performers earned • We organized the tennis championship for 1,085 green energy industry obtain funding required for welfare, tree planting, and tree protection players and table tennis championship for 833 NT$122,000 in the performances and attracted business operations and support the development of activities. players in 105 teams from around the country. We approximately 1,200 visitors. We organized three the energy technology service industry. • Solar PV equipment built with "Renewable Energy invested approximately NT$2.005 million in the large-scale concerts to provide indigenous • We organized multiple green financing projects to Creation Loan" generate 66.39 million kWh of events. singers and visually impaired pianists with a respond to the government's five plus two industrial electricity and reduced 36,780 MT of CO2e this • We organized the "Unified Invoice Cup for Road stage to perform. We also invited social welfare development strategy. In addition to traditional year. • We organized 48 Green Volunteer activities with Running (Taitung)" in collaboration with the Ministry of groups and the events were attended by "green energy technologies", we also provide special financing plans for "organic agriculture", "circular 1,601 volunteers and 4,635 beneficiaries. Finance and received 350,897 unified invoices. The approximately 8,800 visitors. • We invited the artist Yu-Hui Lu to teach 60 economy", and other industries with sustainable • Employees purchased 11,205 packs of vegetables total reward money of NT$362,800 was donated to 5 form organic farms in 2018 and the procurement disadvantaged schoolchildren in Zhongzheng environment ideals. charity and social welfare organizations in Taitung. • Green volunteers helped organic farms harvest amount totaled NT$3.137 million. Green Elementary School in Xindian District to add • We provided NT$200,000 in sponsorship and 18 vegetables and regular purchases to provide strong Volunteers went to organic farms to assist in the brand new uniforms for the "Taoyuan Lingyun Junior colors to their creation on environmentally support for the development of organic agriculture. harvest and they effectively reduced the farms' High School Hockey team" and helped the team friendly bags and learn environmentally friendly • We refurbished Wanhua Branch as an environmental expenditures on manpower. compete in the United States and win 5th place. craftsmanship with aesthetics qualities. education site and trained environmental education • We completed three sets of environmental program talents and environmental education education programs for the general public, lecturers to promote environmental education. students in 5th to 6th grade in elementary school, and parents and children. We also organized 7 Commercial benefits (2018) sessions of promotion activities. We organized • A total of 102,553 "Leezen Cards", "Yilan Cards", and the "Green Finance Camp" and courses on "Living Green Cards" are in circulation and proceeds "environmental education" and "financial primary amounted to NT$48.68 million. schools" and invited 54 elementary school • Thirty-eight urban renewal financing cases have been students and disadvantaged schoolchildren from processed and the approved line of credit was Nanjichang in Zhongzheng District, Taipei City to NT$39.568 billion. In 2018, the income from interest, participate in the events. trust fees, and construction management fees was approximately NT$290 million. 200 201 2-2 Benefit evaluation 2-3 Volunteering FFHC upholds the spirit of "Local Cares for Local Businesses" and we actively participate in social welfare through FFHC established a volunteer service team in 2011 and it has actively participated in social and charitable events in multiple methods. We continued the four major charitable strategies of "Green Care", "Social Care", "Sports Competi- multiple methods to actively engage communities and play the role of a good neighbor. We integrated resources of tion" and "Artistic Cultural Creation" in 2018 and integrated subsidiaries of the Group, First Bank Culture & Education subsidiary companies and the First Bank Culture & Education Foundation to expand our care across the country and Foundation and First Bank Volunteer Service Team to use our core financial competencies and environmental sustain- beyond borders. Employees have also participated in volunteering through charitable events and helped fill the society ability philosophy to expand our influence and give back to society. with love cycles and positive energy. There were no business activities with significant or potential negative impact on local communities in 2018. To verify whether the charity projects of the four major charitable strategies are provided with the most effective alloca- tion of resources, FFHC adopted the community investment assessment model of London Benchmarking Group (LBG) to record in detail the expenditures in terms of cash, volunteer manpower, resource donations, and management costs and analyze the direct benefits on the business and social levels and indirect impact. We hope that every ounce of corporate resources we invest in can be used to maximize social impact.

The community investment assessment model of London Benchmarking Group (LBG) is adopted for assessment :

The proportion of investment in the four major charitable strategies of the Group in 2018 The FFHC's volunteer team members are spread all over Taiwan. We divide the volunteer service into two major teams including the "Green Volunteers" who promote environmental sustainability and the “Loving Volunteers” who care for the disadvantaged people. Green volunteers visit organic farms to provide assistance in farming, picking vegetables, 2,877 31.55％ packing, etc., protect the coast by cleaning the beach, reduce carbon emissions by planting trees, conduct contractual farming by adoption, organize green finance camps, and assist disadvantaged groups in changing for LED lamps. 4,287 50.61％ 4,195 54.80％ Loving volunteers' services include anti-drug education, accompanying the elderly, bringing artists to the countryside, Unit: NT$10,000 3,362 36,85％ organizing financial primary schools on campus or social welfare institutions, inviting disadvantaged children to table Commercial initiatives tennis summer camps, and providing medical care in remote areas. We use a multitude of diverse charitable activities 3,459 40.84％ 2,870 37.50％ Investment in community to accompany children, the elderly, and disadvantaged groups. A total of 165 volunteer activities were conducted in 2,881 31.60％ 2018 including 66 volunteer activities (64 in Taiwan and 2 in Laos), 48 green volunteer activities, and 51 campus and 595 ％ 724 ％ 7.70 8.55 Charitable events community financial knowledge activities, covering 2,888 volunteers, 15,446 beneficiaries, and 11,749 hours of service. 2016 2017 2018 From 2011 to 2018, the number of our group's volunteer services reached 17,797, totaling more than 58,984 beneficia- ＊：The donations from Leezen Card in 2016 and 2017 were added and the donations and total investments in 2016 and 2017 ries, and the number of their total service period reached 73,001 hours. The services allowed colleagues to learn and were adjusted grow from the services and consolidated their coherence and vibrancy. The employees also found a sense of belonging in the activities and happily devoted themselves to charitable events.

Service Hours Rendered by the Green Volunteers and the Loving Volunteers in Recent Years Hours Participants Beneficiaries 749 8.84％ 3.81％ January 2011 – December 2011 2,140 hours 535 people 1,148 people 14.80％ 323 1,584 20.37％ 1,134 203 2.40％ 4.60％ January 2012 – December 2012 2,484 hours 621 people 2,001 people 4.56％ 353 354 2.60％ 428 5.50％ 195 Unit: NT$10,000 January 2013 – December 2013 6,804 hours 1,701 people 4,073 people Management cost January 2014 – December 2014 11,464 hours 2,866 people 6,556 people 7,195 84.95％ 5,978 78.00％ Volunteer manpower January 2015 – December 2015 12,024 hours 3,006 people 6,774 people 5,410 69.57％ Supplies donation January 2016 – December 2016 12,896 hours 3,052 people 10,565 people Cash donation January 2017 – December 2017 13,440 hours 3,128 people 12,421 people 2016 2017 2018 January 2018 – December 2018 11,749 hours 2,888 people 15,446 people ＊：The donations from Leezen Card in 2016 and 2017 were added and the donations and total investments in 2016 and 2017 were adjusted Cumulative total 73,001 hours 17,797 people 58,984 people

202 203 Loving Volunteers : 35 events •The elderly of Shunde Village in Northern Social Care Sanchong District Region •Taipei City Trend Education Foundation Taoyuan- •Yu-Cheng Social Welfare Foundation - 2-4 Support Disadvantaged Groups at Year-End Charitable banquet Love Education Center Hsinchu-Miaoli FFHC pays close attention to social welfare and never •Bitou Elementary School, New Taipei City 84 Region forgets to provide love in the year-end parties for employ- •Yilan County Private Catholic Hondao Senior Citizen's Home Loving Volunteers : 6 events ees. We organized charity year-end parties in more than •Table Tennis Summer Camp - Reindeer •Holy Family for Special Education, 136 business locations across Taiwan in 2018 and Children's Home, White Children's Home Miaoli County 20 purchased desserts made by social welfare institutions as •Zhongzheng Elementary School, Xindian •Shih-Guang Juvenile Center District, New Taipei City •People aged 80 and above and low-income snacks or gifts. We also provided people with disabilities •Bali Happy Mount Home households living in Jianshi Township with a stage to perform and invited multiple groups such as •St. Anne's Home, Taipei City Financial education activities in •Yu An Children's Home •Bethany Children's Home schools : 23 sessions •Baseball team of Fuji Elementary School, Miaoli the Color Sound Band (visually impaired), "Winged Angel •Papid's House •Hockey team of Lingyun Junior High School, (physically disabled)", "Woodpeckers Music Band (visually impaired)", and "Real-Life Fighters - Bollywood Goddess •Autism Society of Taiwan Green Volunteers : events 26 Taoyuan •Jen Ji Shiang Social Service •Linkou Journey to the West Organic (physically disabled) to perform. The total amount of performance fees and purchases of gifts for the disadvantaged Institute Farm (20 sessions) groups was NT$1,377,595, which gave them solid help. •Eden Foundation •Organic Farmers' Market (3 sessions) Financial education activities in •Datong Children's Home, •Green Finance Camp schools : 12 sessions MustardSeed Home •Keelung River Clean-up Green Volunteers : events •Ti-Hwei Children's Home •Helping small farmers to harvest 2 •Yuemei Elementary School, 960 kg of sweet potatoes •Zhunan Qiding beach clean-up Keelung City •Oil Field Ecological Farm and •Investment primary school Fishery Park, Baoshan Township 2-5 Food Bank Subsidy Program for Poor Children to Enjoy Lunar New Year's Dishes •NTU Dream Come True Concerts (6 sessions) First Bank extended its loving trains to remote rural areas and donated NT$750,000 to the Andrew Food Bank Subsidy •Andrew Food Bank Program for Poor Children to Enjoy Lunar New Year's Dishes to purchase food packages including chicken soup, cured •Children safety education •Slow-flying Angels Caring activities (2 sessions) meat, and sausages to 375 disadvantaged families in Taitung and Keelung and help them enjoy a happy Lunar New Year •Rural health clinics in Hualien and Penghu with a great meal. FFHC volunteers also helped package food at Andrew Food Bank. Employees worked closely and (3 sessions) •Campus financier internship completed the packaging of 360 food boxes very efficiently while maintaining high quality. We also organized a donation •Warm-motion mobilization (3 sessions) Kaohsiung- event and raised approximately NT$100,000 within a short period of two weeks to donate to the Andrew Food Bank. PingtungRegion Taichung- Loving Volunteers : 8 events Changhua- •Bankers on Campus (2 sessions) 23 •Sweet Home Nantou Region Loving Volunteers : 8 events •Maria Social Welfare •Tse-De Children's Home, Kaohsiung City Foundation - Wufeng Home •Baseball team of Jintan Elementary School •Central Region Children's 19 •Volleyball team of SaiJia Elementary Home, Ministry of Health and Welfare School, Pingtung •Enhuei Children and Juvenile Center, Changhua County •Tzu-Hui Academy •Cisheng Home for the Elderly Foundation, •Chi Hsiang Chen Social Welfare Foundation Changhua County •House of the Little Angels 2-6 Spreading love across a thousand miles - Spreading warmth to remote areas in Laos to •Concern with Financial education activities in •Taiwu Indigenous Tribe Service Station, Love GWG Social Charity Foundation provide health education Organization, schools : 4 sessions •Table Tennis Summer Camp - As First Bank expanded overseas, First Bank's charitable activities also extended from Taiwan to overseas areas. The Disadvantaged Schoolchildren of Nantou County Green Volunteers : 7 events volunteer team flew more than 2,000km and organized the first overseas charitable activities in Laos for the first time in •Ladybug Organic Farm (5 sessions) Tzu-Hui Academy •Dann Center for Individuals with 2018. We visited Intellectual Disable Union, a local home for people with mental disabilities, and the Xaysomboun Developmental Disabilities (Green Financial education activities in Elementary School which was located in a remote area to distribute charity supplies. We helped institutions for disad- Light for Spreading Love) vantaged people grow vegetables to earn income for improving their lives and taught children to use paint and screen •Planting trees in Zhuzaikeng schools : 8 sessions Ecological Park Green Volunteers : 7 events printing to experience the fun of handicrafts. We also provided basic health education such as brushing their teeth and •Kaohsiung An Hsin Home Organic washing their hands to more than 200 disadvantaged schoolchildren. Education Farm (6 sessions) Yunlin- •I Plant for Life Association, Kaohsiung Loving Volunteers : 7 events Chiayi- •Anren Home, Chiayi County Tainan Region •Mindao Home, Chiayi County •Zhongpu Private Institutional Care Center •Elderly living alone in and low-income 17 families in Shangding Village, Yongkang District, Tainan •Tainan City Privately Established Wujia Loving nteers: 66 events Education and Nursing Institute (include Overseas - 2 charity events in Vientiane, Laos) •Xinyi Children's Home, Yunlin County Financial education activities in Green Volunteers: events •Yi-Xin Children's 48 Home schools : 4 sessions Green Volunteers : 6 events Financial education activities in schools: 51 sessions •Tenha Organic Farm, Tainan (6 sessions) Total of 165 Charitable Activities 204 205 2-7 Accompanying Slow-flying Angels for autistic children to gain self-affirmation a total of 5,373 participants. In addition, we also worked with volunteer service teams and used holiday time to visit First Securities has supported the Taipei Autism Children Social Welfare Foundation for four consecutive years since Children's Homes, rural schools, or other social welfare institutions in Taipei, Keelung, Miaoli, Yunlin, and Changhua to 2015 to promote equitable work rights to people with physical disabilities. To help autistic children with improve coordi- promote financial education and help disadvantaged people enjoy financial basic rights. In 2018, a total of 14 events nation of their hands and eyes and strengthen interactions with the external world, we worked with the Foundation to were held to enhance the financial literacy of rural and disadvantaged groups. First Securities also worked with Nation- organize an eight-week "Autistic Children Physical Fitness Class" to encourage them to interact with the external world al Changhua University of Education on a special lecture on the “Bond and Warrant Market in Taiwan" and "Financial and improve their capacity for taking care of themselves in 2018. We also held a “Singing Contest for Shining Stars” at Operations Forum - Understanding the Basic Concepts of the Securities Investment Industry" for 256 participants. We Plaza 12 of the Taipei Underground Street by inviting the Foundation to facilitate the participation of family members also invited 26 college students who were excellent in finance subjects from National Taiwan University, Soochow and encourage autistic children to affirm themselves by singing. University, National Changhua University of Education, Ming Chuan University, and Fu Jen Catholic University to attend financial practice seminars and internship courses held in First Securities. We also organized the "Investment Primary School - Wealth Management Number One" charity event in August. We invited Taipei Family Helper Center and TCWC Children Home to facilitate the participation of 29 schoolchildren and parents. We visited the Stock Museum and used board games to provide education with fun and promote equal access to finance. In response to the FSC's "Incentive

Plan for Securities Investment Trust Enterprises", FSITC also collaborated with National Taiwan University of Science and Technology to train asset management talents and enhance investment and research capabilities. 2-8 Protecting disadvantaged schoolchildren - Bringing art to the countryside to enrich life The First Bank Culture & Education Foundation and Planet Technology Corp. have jointly promoted programs for disad- Going to campus and communities to spread financial knowledge in the recent three years vantaged schoolchildren for 8 consecutive years, and adopted such schoolchildren in New Taipei City Ankeng Elemen- 2016 2017 2018 tary School, Zhongzheng Elementary School, and Erchong Elementary School by providing financial aid for them and integrating such cross-industry resources as those schools' hardware facilities, teaching manpower, social educators, Sessions 48 39 51 community volunteers and corporate volunteers to provide children with remedial teaching. We also invited the artist Participants 7,084 4,422 5,373 Yu-Hui Lu to teach 60 disadvantaged schoolchildren in Zhongzheng Elementary School in Xindian District to add colors to their creation on environmentally friendly bags. Schoolchildren were taught to print plants from materials found on campus and learn about the simple aesthetics in life. The social welfare institutions where our group's volunteers provided financial education in the recent three years 2016 2017 2018 Number of children's homes and social welfare institutions 4 6 14

2-11 Promoting anti-drug education on campus The First Bank Culture & Education Foundation also promoted the “First Cultural Education Train” by inviting physically In response to the severe drug problems of youths, First Bank organized the "Red Strawberries Say No to Drugs" campus disabled persons to share with schoolchildren how to face life optimistically. By experiencing the inconvenience of life tour events with the Grace Hsiao Dance Troupe in 2018. The Dance Troupe gave the "Red Strawberry" anti-drug perfor- encountered by people with physical disabilities, the schoolchildren would cherish themselves and be inspired to help mances in Ming Chuan and Jian De Junior High School in Keelung City. By addressing issues such as drugs, dropouts, others in need. Together with the environmental protection pioneers and other relevant courses, the Train helped gangs, and campus bullying in the show, it used the artistic performance to teach youth to say no to the temptation of children establish the concept of caring for the earth. We organized 5 life education seminars in 2018 and drugs and enhance their self-protection awareness. We also arranged professional instructors from First Bank to join the performance and organized the "financial primary schools on campus" to make use of our core competencies and approximately1,131children took part in such events. help youths establish correct financial consumption and wealth management concept. 2-9 Financial aid to needy students for schooling Approximately1,044 students participated in the events. First Bank Culture & Education Foundation donated 0.1% of payments made with the First Bank World Card to the "School Education Savings Account" platform of the Ministry of Education. The platform sponsors education, school lunches, and after-school classes for disadvantaged schoolchildren in remote areas to help their schooling. We helped 237 economically disadvantaged schoolchildren and those suffering from drastic changes in their families in their education. In addition, we also sponsored the “Financial Service Industry Education Foundation Scholarship” with NT$2.5 million to provide actual assistance to students from poor and disadvantaged families. Approximately 1,600 students benefited from the program in 2018. We have donated NT$10 million over four years and

assisted7,032 students from needy families. 2-12 Children's safety education promotion series To promote children’s safety education and awaken the public to the importance of early prevention, First Life Insurance 2-10 Bankers on Campus has worked with Jing Chuan Child Safety Foundation in conducting child safety education campaigns since 2007. We In order to establish the correct concept of consumption and financial management for the people and students, First participated in the "Traffic Safety Awareness - Crossing the Road Together" organized by the Foundation in October Bank went to the campus, the rural area and the social welfare organization to hold a total of 69 financial promotion 2018 and explained to parents and children the importance of establishing road safety concepts early in life as we activities, with a total of 6,036 participants. First Commercial Bank responded to the FSC's policy by conducting 51 joined forces in promoting children's safety education. In addition, First Life Insurance assisted Jing Chuan Child Safety sessions of “Going to the Campus and Community to Spread Financial Knowledge” at schools in Taipei, New Taipei, Foundation in the execution of the "Little Yellow Cap Project" and organized an internal donation campaign. We raised Keelung, Taoyuan, Hsinchu, Taichung, Tainan, Kaohsiung and Pingtung. First Bank has received from the FSC the "Enthu- NT$170,000 for the Jing Chuan Children Safety Foundation for use in research and development of transportation safety siastic Participation Award for Going to the Campus and Community to Spread Financial Knowledge" for 8 consecutive education programs, preparing education courses, and training transportation safety seed instructors. We assisted in years. Through financial education taking root, we were striving to popularize the financial knowledge, which attracted the implementation of children safety education to ensure healthy growth of children in a safe and secure environment. 206 207 2-13 Health lectures & free clinics in remote areas 2-14 Charitable donations First Bank Culture & Education Foundation has held Medical Care & Health Lectures since 2006 to take care of the On February 6, an earthquake rated 6.0 on the Richter magnitude scale struck Hualien in the middle of a cold night just physical and mental health of customers and employees. We organized 3 "Lohas Life - Healthy Spine for Healthy Life" before Chinese New Year. It caused causalities and the collapse of multiple houses. FFHC donated NT$3.5 million to wealth management and health seminars in Taipei, Taichung, and Kaohsiung in 2018. We invited Mr. Yun-Lung Cheng, the reconstruction in the wake of the Hualien earthquake to provide care and resources that help victims rebuild their an expert on spinal health, Chairman I-Kuang Chen of First Capital Management, and Assistant Vice President Tzu-Yin homes as quickly as possible. Extreme climate conditions in recent years have led to disasters such as the tropical Tang of FSITC to share how they remained healthy as well as investment and wealth management tips. The events depression that struck southern Taiwan on August 23. The sudden torrential rain caused massive floods in Yunlin, Chiayi, attracted the participation of approximately 1,000 customers and employees. In addition, First Bank and First Life Tainan, Kaohsiung, and Pingtung, devastated agricultural, fishery, and animal produce, and damaged people's homes. Insurance also joined forces with Franklin Templeton Investments and organized three "Type C Life - Full Health Cover- We embraced the spirit of solidarity among people and FFHC and subsidiaries jointly donated NT$3.5 million to age" wealth management and health seminar in Taipei, Taichung, and Kaohsiung. In addition to sharing our methods southern Taiwan to help with the reconstruction. for investment, we also arranged the physical therapist Dr. Wen-Jen Chien of Cathay General Hospital to explain the key points to health. The seminar drew the participation of

more than people. 2-15 Four procurement projects for supporting domestic agriculture 400 FFHC has supported domestic agricultural development for a long time and we completed four procurement projects for domestic vegetables and fruits to help resolve the imbalance of supply and sales. Domestic pineapples faced overproduction issues in May and First Bank purchased 600kg of toxic-free pineapples from the social welfare association "Tzu-Hui Academy" in Pingtung for employees. We also assigned volunteers to help with the packaging and helped raise funds for the schoolchildren's tuition fund. During the banana harvest season in June, First Bank purchased 36 tons of bananas from the banana farmers in Qishan and Meinong, Kaohsiung for customers and employees. We also organized the "Support Banana Farmers Together" press conference and offered 12 creative dishes with bananas to call to the people to consume more bananas.

We also work with large-scale hospitals in remote areas. We worked with Mennonite Christian Hospital and Taipei Medical University Hospital Feng Hsin Medical Youth Service Group to organize three free clinics in Wanrong Township in Hualien and Huxi Township in Penghu in 2018. The clinics provided liver disease screening, dentistry, ophthalmology, and physiotherapy services and provided correct health education concepts. The free clinics in Hualien were also provided with household refurbishment and repairs services in which volunteers from the Bank and professional repairs teams jointly helped the elderly that live alone recreate a bright and comfortable living environment. We added family visits for the free clinics in Penghu and went into the homes of locals to care for their life and drug habits. In addition to sponsoring three free clinics in 2018, we also sponsored the medical expenses for the 20 free clinics provided by Mennonite Christian Hospital and 27 free clinics provided by Taipei Medical University Hospital Feng Hsin Medical Youth Service Group. Free clinics were provided to1,200 people.

During pitaya harvest season in August, First Life Insurance purchased 1,800kg of pitayas from fruit farmers through the "Taiwan Agricultural Industry Association" to help fruit farmers resolve the pressures of overproduction and obtain reasonable income. During the cabbage harvest season in December, First Bank purchased 100 tons of cabbage through the "Fruits & Vegetables Marketing Cooperatives" to help resolve the oversupply on the market In addition to supporting farmers, we donated the cabbage to 72 social welfare units across the country and we also gifted fresh vegetables to customers and employees to use actions to support domestic agriculture.

Overview of the 2018 free clinics in outlying villages We invested NT$2,606,120 in procurement of domestic agricultural products in Taiwan in 2018. Month Region Description of Programs and Events Working with Mennonite Conducted blood tests, liver cancer screening, abdominal ultrasonic screening, 5 Christian Hospital etc. to strengthen education on liver cancer prevention and liver disease Organizing free clinics in screening, help the local elderly people who live alone refurbish and repair 7 Wanrong, Hualien to their houses, and jointly care for the health of people living in remote mountain spread love areas.

Working with Taipei Services included the eye examination, dental treatment, physiotherapy, and Medical University Western and traditional Chinese medical clinics. We also teamed up with the 8 Providing Free Clinics in well-known chain salons to provide free hair-cutting services, and conducted Huxi, Penghu to spread home visits, caring for residents' lives and needs, and passing on the correct love concept of health education. 208 209 Sports competition 2-18 Unified Invoice Cup for Road Running To respond to the Ministry of Finance's promotion of a national sports climate and help the social welfare groups by 2-16 Table tennis training collecting unified invoices, since 2011 the FFHC has co-organized the "Ministry of Finance Unified Invoice Cup for Road To support the development of sports in Taiwan and train Running" across Taiwan with the regional National Taxation Bureaus every year. The road running train returned to national athletes, First Bank established a table tennis team Taitung in 2018 and it seems to have become one of the most anticipated road running activities in Taiwan. In addition and provided long-term sponsorship for table tennis teams in to initiating invoices donation within our group, we have also asked the customers and road runners to jointly respond colleges, middle school, and elementary schools. We provide to the movement of “Donating Invoices out of Love". We donated the 350,897 invoices (the winning amount is $362,800) instructors with national athlete qualifications and arranged we collected to five social welfare groups in Taitung County including the "Taitung Autism Association", "Association for for players to conduct remote training in foreign countries or Parents with Intellectually Disabled Children, Taitung County", "Taitung Dementia Association", "Taitung Spinal Cord participate in domestic and foreign competitions. The table Injury Association", and "Taitung Sunflower Support Association" to encourage the people to support public welfare with tennis player Cheng-Ting Liao performed well and won the love and make people happier and healthier. bronze medal for both the men's doubles, mixed doubles, and team award in the "2017 Summer Universiade in Taipei as well as the bronze medal for the men's team in the "2018 Asia Games" in Jakarta in August 2018.

He later won the championship in the Swedish Open in November and gained fame in the international table tennis world. In 2018, First Bank continued to cooperate with the eight schools including Xiude Elementary School in Sanzhong District of New Taipei City, Nancheng Elementary School in Fengshan District of Kaohsiung City, Kaohsiung Municipal Fu Cheng Senior High School, New Taipei Municipal Hai-Shan High School, National Taiwan Sport University, Taoyuan Municipal Junior High School and Taoyuan Zhongpu Elementary School, and National Taiwan University of Sport. Approx- imately 345 athletes benefited from the sponsorships and we provided approximately 10.58 million in training fees.

In addition to holding national table tennis championships for ten consecutive years, First Bank has long supported the table tennis sport with systematic and continuous plans in separate phases. Since 2016, it has held the “First Bank Table Tennis Summer Camp” for three consecutive years in Kaohsiung to train young table tennis players. The Bank added a Summer Camp in Taoyuan in 2018 and provided 320 children who love table tennis with opportunities for playing against each other, scouting more new promising stars, and contributing to more outstanding performance of the table tennis sport in Taiwan.

2-19 2018 World Cup Final Night To increase the people's knowledge of football and promote sports activities, First Bank participated in the "2018 World Cup Final Night" on the Ketagalan Boulevard. A 450-inch giant screen was set up onsite to broadcast the exciting Final game. It sparked the people's passion for sports activities and attracted more than 5,000 people to the event. It was also the first large-scale international sports broadcast event ever held on Ketagalan Boulevard.

2-20 Support sports in outlying villages - Hockey team of Lingyun Junior High School More than half of the players of the "Taoyuan Lingyun 2-17 The First Holding Maxxis Tennis Tournament Junior High School Hockey team" were from indigenous To nurture and encourage the participation of all citizens in tennis sport, the FFHC has worked together with its customer families or mid to low-income households. Due to the lack Cheng Shin Group to organize the “First Holding Maxxis Cup National Tennis Team Tournament” for nine consecutive of sufficient funds for training, players often use equipment years. It has become the largest and most indicative tennis competition in Taiwan with the highest total amount of discarded by other schools and the effectiveness of their prizes. Over a thousand tennis players gathered together. We also invited Yu-Hsiu Hsu, a young athlete from Changhua training remained restricted. First Bank provided who won the championship for the Grand Slam Boys' Doubles for the third time in 2018, as the spokesperson to expand NT$200,000 in sponsorship and 18 brand new uniforms to the popularity of the event. The contestants have crossed various age groups, including elementary schoolchildren help them participate in games abroad and do their best group, college students group B, open group, and the prime-aged group, etc. By the competition platform, we have to win glory for the country and won the 5th place. The helped contestants to make friends and learn from ball playing, and have tapped more new promising tennis players. sponsorship allowed children in remote areas to fully dedicate themselves to training and competitions and pass on the prowess in sports to extend the cycle of love.

210 211 Artistic Cultural Creation 2-23 Light up Life on the First Dream Stage First Bank Culture & Education Foundation has organized the Loving Care Concerts in cooperation with the National 2-21 Care for cultural creative industries Taiwan University Hospital since 2011 to create a “Light up Life on the First Dream Stage” to let talented people with In order to assist the development of the domestic cultural creative industries, First Bank has actively processed loans disabilities display their talents and confidence and make their performing dreams come true. We have organized 47 for the said industries. The total credit balance at the end of 2018 reached NT$20.927 billion, wherein there were 66 concerts over the past 8 years and invited 51 groups of people with visual impairment, hearing impairment, mental companies in the film and television related industries and their credit balance amounted to NT$4.017 billion, account- disabilities, and children from remote regions to bring diverse performances such as songs, dances, percussion music, ing for 19.2% of the total credit loan balance for the cultural creative industries. First Bank has taken practical actions to jazz music, cheerleading, and lion dances. More than 9,400 attendees enjoyed the performances and we used the lively support the film and television industry and provided funds required by the said industry. In contrast to the circumstances and relaxing music festival to pay tribute to the hard-working medical staff and encourage patients and family members involved in issuing regular loans, First Bank has developed specialized financing plans tailored to the creative industry to face life with a positive and active attitude. and consults with knowledgeable insiders in the film industry in order to review and approve loans for the creation of domestic films. This includes closely analyzing the content of the project plan and taking into consideration the genre More than attendees. of the film, cast, selection of available directors, production studios, and other factors in order to determine the final 9,400 conditions for making the loan. This stringent process is further backed by a 60% to 80% credit guarantee by the SMEG, Date Activity name Performer and interest rates generally fall between 2.5% to 3.5%, thereby presenting the domestic film industry with favorable "Happy Year of the Dog - Welcoming Bird and Water Dance Ensemble (physically disabled or financing solutions and rates which allow necessary funds to be raised in order to smoothly complete the film produc- 2/8 spring with the Bird and Water Dance visually impaired) tion process. We also supported the production of TV dramas in DaAi TV, Tzu Chi Communication, Ministry of Culture’s "Beautiful Voice of Fushan - Indigenous Atayal Traditional Choir, Fushan Elementary School, Mobile Broadband Drama, Public TV Life Story, Hakka TV, SET Taiwan and other television drama series, and strove to 3/28 Tribal Children's Songs" Wulai, New Taipei City support the development of Taiwan’s cultural creative enterprises. "Winged Angel Dances - Starlit Winged Angel Performance Troupe (physically disabled 6/13 Dragonboat Festival" or hearing impaired)

"PowerAngel Gratitude - Boundless PowerAngel (physically disabled) 8/8 Energy and Unlimited Love" 2-22 Music festivals nurture new domestic talents "Mid-Autumn Festival with the Blind - Blind Orchestra (visually impaired) First Bank Culture & Education Foundation has long supported local arts and cultural activities. In 2018, it held three 9/19 The Light through the Music Notes" large-scale concerts in Taipei, Taichung, and Kaohsiung, providing stages for promising singers, well-known musicians, "Warm Christmas Carols - Reindeer Li-Cheng Chang, Yi-Ting Liao, Ya-En Chang (visually impaired) and visually-impaired pianists to perform on. In association with Evergreen Symphony Orchestra, the performances 12/19 Music and Joyful Dance" were a combination of symphonies, Taiwanese folk songs, classical music, and modern music, and well acclaimed by our customers and employees. We also invited disadvantaged groups and disabled people from social welfare institutions to each concert to enjoy the music festival together with the other attendees. Thirty-seven such concerts have been held since 2006, attracting more than 100,000 visitors.

Name Location Performers Groups invited

Golden Era Taipei International Yi-Chih Lu, Shennio Lin, Taiwan Foundation for the Blind, Symphony - Conference Center Johnny Yin Sunshine Social Welfare Foundation Songs of Evergreen Symphon Orchestra Taipei Parents' Association for the Spring Visually Impaired Golden Era Hui-Sun Auditorium, Visually-impaired pianists Huei Ming School and Home for Blind Symphony - National Chung Hsing Yen-Cheng Chang and Children, Tsu-Hsin Children's Home Song of University Chia Chia Children and Youth Homes of the 2-24 2018 Dance in Metro To promote street dance events much loved by the youth, First Bank Culture & Education Foundation organized the "2018 Summer Johnny Yin, Evergreen Ministry of Health and Welfare, Joyce's Symphony Orchestra Home for Disabled Children Dance in Metro" carnival in Taipei Arena to provide people that love street dancing with a stage to perform. We invited famous artists, international world-class street dance troupes, famous domestic dance troupes, schools, and champion Golden Era Visually-impaired pianist Kaohsiung City Visual Impairment Care teams from the 2018 Metro Street Dance Competition to perform in Taipei Arena and experience the charms of street Symphony - E-DA - Royal Theatre Che-Cheng Hsu, Wanfang and Development Association Songs Shih-Hsien Wang, Evergreen Kaohsiung City Cerebral Palsy dance. The event was of Winter Symphony Orchestra Association attended by approximately 8,500 people.

To support exchanges between domestic and Japanese musicians, First Bank sponsored the "Yomiuri Nippon Symphony Orchestra - Tchaikovsky Violin's Night" to inject new vigor into the music world in Taiwan. In addition, First Bank Culture & Education Foundation sponsored the "Supporting the Depressed Charity Concert" organized by the Taipei Kuanyin Line Psychological and Social Service Association to help people suffering from spiritual fatigue and depression reduce their physical and mental pressure and make the society more harmonious. 212 213 2-25 Supporting local art and cultural traditions 2-26 Sponsoring lantern festival events - promote tourism development First Bank Culture & Education Foundation designed and built the 1st and 2nd floors of the headquarters building into First Bank sponsored the "2018 Taiwan Lantern Festival" organized by Chiayi County Government and the "2018 Taipei the “First Art Space” in 2011. Ever since, it has provided a free platform for domestic artists to create and publish on a City Lantern Festival" organized by Taipei City Government. The Taiwan Lantern Festival incorporated local characteris- monthly basis. By the end of 2018, 93 art exhibitions had been held there, attracting more than 93,000 viewers In 2018, tics, history, and culture of Chiayi, attracting 10.068 million tourists, the over all economic benefit was $14.58 billion, a total of 12 art exhibitions were held. In addition to the staff photography exhibition, a total of 11 artists' exhibition while Taipei Lantern Festival included lighting and parade events, which successfully attracted about 3.5 million people space was provided. The total sales amount. and created a tourism benefit of about $ 5.07 billion. The events not only passed down the heritage of traditional folk art but also attracted domestic and foreign tourists with the bustling Chinese New Year festivities. of the works was about NT$6.265 million. Overview of exhibitions in 2018 Economic benefits totaled NT$258 million. Exhibition date Exhibition theme 1/3-1/24 Exploring Shapes and Colors - Exhibition of Creative Works by A-Shui Chan 2/6-2/27 Master Artist Chen Yang-Chun and the Hwa-Yang Award - Exhibition of award-winning works 3/7-3/28 Graceful Culture in Paintings - Exhibition of Creative Works by Kai Wang 4/3-4/30 Tsay's Painting Masterpiece by Sheve-Jen Tsay 5/8-5/29 Journey Across Time in Ink - Exhibition of Color Ink Paintings by Hung-Hsueh Cheng 6/5-6/26 Love of Taiwan - Personal Exhibition Works by Nian-Fa Yang 7/3-7/24 Dazzling Colors - Exhibition of Abstract Art by Wen-Xiong Tsai 8/7-8/29 Relaxing at Peace - Exhibition of Creative Works by Yu-Hui Lu 9/4-9/25 Art of Strength and Simplicity - Exhibition of Creative Works by Chu Hsu 10/2-10/23 Way to the Heart Drawn by Water Colors - Chronological Exhibition on Water Colors Created by Nai-Chieh Fan 11/6-11/27 First Bank's 120th Anniversary" - First Bank Employees' Photography Exhibition 12/4-12/25 The Ease of Light - Mu-Chen Su's Water Color Exhibition

2-27 Spring Couplet Giveaway To usher in the Lunar New Year, First Bank coordinated with the First Bank Culture & Education Foundation in the "Year of the Dog Spring Couplet Calligraphy Event" by inviting 11 famous calligraphers and painters such as Guo Xiangling, Gong Zhaoyang, Luo Shunlong, Song Liangming (Chairman of the Taoyuan Calligraphy Association), etc. to nine of our branches in Taiwan to brush-write on-site the spring couplets as gifts to the people present. First Bank also distributed red envelopes and "mother money" which has been blessed in Jinshan Temple of Wealth Gods.

The events attracted1,350 people.

Green Care ※For green care, please refer to the section on Green Finance - " Climate change risks and opportunities" and "Ecologi- cal and environmental sustainability"

214 215 216 217 218 219 220 221 2018 Global Reporting Initiative( GRI) Standards Content Index ＊：The disclosed indicators have been verified by external third parties as indicated in the statement.

GRI 102: General Disclosures 2016 Chapter/ Page Various Certifications Disclosure Description Description 102-1 Name of the organization P51 102-2 Activities, brands, products, and services P50 102-3 Location of headquarters Sustainable P51 Governance 102-4 Location of operations P51 102-5 Ownership and legal form P58 102-6 Markets served P51 Sustainable Governance P51 102-7 Scale of the organization Happy Workplace P162~163

102-8 Information on employees and other workers Happy Workplace P162~163 102-9 Supply chain Green Finance P122~124 Sustainable Governance P50 51 102-10 Significant changes to the organization and its supply chain ~ Green Finance P122~123 102-11 Precautionary Principle or approach P70~76 Sustainable 102-12 External initiatives P54~55 Governance 102-13 Membership of associations P54~55 102-14 Statement from senior decision-maker Letter to Shareholders P6~7 Stakeholder Engagement P22 32 102-15 Key impacts, risks, and opportunities ~ Green Finance P104~115 102-16 Values, principles, standards, and norms of behavior P78~79 Sustainable 102-17 Mechanisms for advice and concerns about ethics Governance P78~80 102-18 Governance structure P57 102-19 Delegating authority P12、P14 CSR Operation Executive-level responsibility for economic, environmental, and 102-20 P12、P14 social topics

Stakeholder 102-21 Consulting stakeholders on economic, environmental, and social topics P16 Engagement

Sustainable 102-22 Composition of the highest governance body and its committees P58 63 Governance ~ Our corporate Chairman 102-23 Chair of the highest governance body is Mr. Tsan-Chang,Liao/ - President is Mr. Chien-Hao Lin

102-24 Nominating and selecting the highest governance body Sustainable P58~59 102-25 Conflicts of interest Governance P62

Role of highest governance body in setting purpose, 102-26 CSR Operation P12 values, and strategy

102-27 Collective knowledge of highest governance body Sustainable P63 102-28 Evaluating the highest governance body’s performance Governance P57

102-29 Identifying and managing economic, environmental, Stakeholder Engagement P15~31 and social impacts Sustainable Governance P58~62

222 223 GRI 102: General Disclosures 2016 Chapter/ Specific Standard Disclosures Description Page Disclosure Description GRI 200: Economic Series 2016 Chapter/ 102-30 Effectiveness of risk management processes CSR Operation P14 P72 73 Page 、 ~ Series Description 102-31 Review of economic, environmental, and social topics Sustainable Governance P62~63 GRI 201：Economic Performance 102-32 Highest governance body’s role in sustainability reporting Stakeholder P15 Sustainable Governance P52~54、P66~67 Engagement 201-1 Direct economic value generated and distributed 102-33 Communicating critical concerns P15 Social Harmony P199~201 102-35 Remuneration policies P64 Financial implications and other risks and opportunities due Sustainable 201-2 Green Finance P104 115 to climate change. ~ 102-36 Process for determining remuneration Governance P64 201-3 Defined benefit plan obligations and other retirement plans Happy Workplace P176 177 Stakeholder ~ 102-40 List of stakeholder groups P18 21 Engagement ~ 201-4 Financial assistance received from government None - 102-41 Collective bargaining agreements Happy Workplace P159 GRI 202：Market Presence 102-42 Identifying and selecting stakeholders P15 Ratios of standard entry level wage by gender compared to 202-1 P157 Stakeholder local minimum wage Happy 102-43 Approach to stakeholder engagement P18 21 Engagement ~ Workplace 202-2 Proportion of senior management hired from the local community P157、P162~163 102-44 Key topics and concerns raised P22~32 GRI 203：Indirect Economic Impacts Sustainable 102-45 Entities included in the consolidated financial statements P52~53、P66~67 Governance 203-1 Infrastructure investments and services supported Green Finance P109~115 102-46 Defining report content and topic Boundaries P15 17 Green Finance/ P109 115 P145 Stakeholder ~ 203-2 Significant indirect economic impacts ~ 、 Social Harmony P195~196 102-47 List of material topics Engagement P22 32 ~ impacts GRI 204：Procurement Practices 102-48 Restatements of information Report Information P202 204-1 Proportion of spending on local suppliers Green Finance P122 102-49 Changes in reporting Stakeholder Engagement P32 GRI 205 Anti-corruption 102-50 Reporting period P2 ： 205-1 Operations assessed for risks related to corruption P70~78 102-51 Date of most recent report P2 Sustainable 205-2 Communication and training about anti-corruption policies and procedures P63 P79 102-52 Reporting cycle P2 Governance 、 Report 205-3 Confirmed incidents of corruption and actions taken P79~80 102-53 Contact point for questions regarding the report information P3 GRI 300: Environmental Series 2016 102-54 Claims of reporting in accordance with the GRI Standards P3 (With the exception of GRI 303 which is the 2018 version, the other GRI standards are based on the 2016 version) 102-55 GRI content index P223~230 GRI 302：Energy 102-56 External assurance P3 302-1 Energy consumption within the organization P133 GRI 103: Management Approach 2016 302-2 Energy consumption outside of the organization P134 Stakeholder 103-1 Explanation of the material topic and its Boundary P22 31 302-3 Energy intensity Green Finance P133 Engagement ~ 302-4 Reduction of energy consumption P128~132、P134~137 P49、P56、 P114 P139 140 103-2 The management approach and its components P68~69、P77 302-5 Reductions in energy requirements of products and services 、 ~ Sustainable P82~83、P91 GRI 303：Water and Effluents Governance P94~95、 Green Finance P101 303-3 Water withdawal P138 103-3 Evaluation of the management approach 、 Green Finance Happy Workplace P116 117 ~ 、 303-5 Water consumption P138 Social Harmony P126~127、 P141、P148、 GRI 305：Emissions P155 P160 、、 305-1 Direct (Scope 1) GHG emissions P133 P170、 P180~181、 305-2 Energy indirect (Scope 2) GHG emissions P133 P193、P198 305-3 Other indirect (Scope 3) GHG emissions P133 Green Finance 305-4 GHG emissions intensity P133~134 305-5 Reduction of GHG emissions P133~134 305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other P134 significant air emissions 224 225 Chapter/ Chapter/ Description Page Description Page

GRI 306：Eﬄuents and Waste GRI 407：Freedom of Association and Collective Bargaining 306-2 Waste by type and disposal method Green Finance P142 Operations and suppliers in which the right to freedom of P122 123 407-1 Happy Workplace ~ 、 association and collective bargaining may be at risk P159 GRI 307：Environmental Compliance GRI 408：Child Labor 307-1 Non-compliance with environmental laws and regulations Green Finance P133 408-1 Operations and suppliers at significant risk for incidents of child labor Happy Workplace P122 123 P156 GRI 308：Supplier Environmental Assessment ~ 、 GRI 409：Forced or Compulsory Labor 308-1 New suppliers that were screened using environmental criteria P122~123 Green Finance Operations and suppliers at significant risk for incidents of P122 123 308-2 Negative environmental impacts in the supply chain and actions taken P122 123 409-1 Happy Workplace ~ 、 ~ forced or compulsory labor P161 GRI 400: Social Series 2016 (With the exception of GRI 403 which is the 2018 version, the other GRI standards are based on the 2016 version) GRI 410：Security Practices 410-1 Security personnel trained in human rights policies or procedures Happy Workplace P156 GRI 401：Employment GRI 411：Rights of Indigenous Peoples 401-1 New employee hires and employee turnover Happy P172~173 Benefits provided to full-time employees that are not provided to Workplace 411-1 Incidents of violations involving rights of indigenous peoples Happy Workplace P156 401-2 P176~177 temporary or part-time employees GRI 412：Human Rights Assessment Happy Workplace Operations that have been subject to human rights reviews 401-3 Parental leave (Restatements of information for P176 412-1 P156 157 2017 have been explained or impact assessments Happy ~ in related chapters) 412-2 Employee training on human rights policies or procedures Workplace P156 GRI 402：Labor/ Management Relations Significant investment agreements and contracts that include human 402-1 Minimum notice periods regarding operational changes Happy Workplace P168 412-3 P122 123 rights clauses or that underwent human rights screening Green Finance ~ GRI 403：Occupational Health and Safety GRI 413：Local Communities 403-1 Occupational health and safety management system P185 Operations with local community engagement, impact 413-1 P52 403-2 Hazard identification, risk assessment, and incident investigation P182 assessments, and development programs Sustainable 403-3 Occupational health services P186 189 Operations with significant actual and potential negative Governance ~ 413-2 P52 impacts on local communities Worker participation, consultation, and communication on Happy 403-4 P182 183 occupational health and safety Workplace ~ GRI 414：Supplier Social Assessment

403-5 Worker training on occupational health and safety P183~184 414-1 New suppliers that were screened using social criteria Green P122~123 Finance 403-6 Promotion of worker health P186~189 414-2 Negative social impacts in the supply chain and actions taken P122~123 Prevention and mitigation of occupational health and safety impacts GRI 415：Public Policy 403-7 Green Finance P122 123 directly linked by business relationships ~ 415-1 Political contributions None - P185 0 403-8 Workers covered by an occupational health and safety management system ： Happy GRI 417 Marketing and Labeling 403-9 Work-related injuries P190 Workplace 417-1 Requirements for product and service information and labeling P84~86 403-10 Work-related ill health P182 183 ~ Incidents of non-compliance concerning product and service Sustainable 417-2 P84 86 GRI 404：Training and Education information and labeling Governance ~

404-1 Average hours of training per year per employee Happy P167 417-3 Incidents of non-compliance concerning marketing communications P84~86 404-2 Programs for upgrading employee skills and transition assistance programs Workplace P173 GRI 418：Customer Privacy Percentage of employees receiving regular performance and Substantiated complaints concerning breaches of customer 404-3 Sustainable Governance P64 418-1 Sustainable Governance P85 career development reviews privacy and losses of customer data

GRI 405：Diversity and Equal Opportunity GRI 419：Socioeconomic Compliance

Sustainable Governance P58~59 Non-compliance with laws and regulations in the social Sustainable 405-1 Diversity of governance bodies and employees 419-1 P70、P72 Happy Workplace P171~172 and economic area Governance 405-2 Ratio of basic salary and remuneration of women to men Happy Workplace P157 GRI 406：Non-discrimination

406-1 Incidents of discrimination and corrective actions taken Happy Workplace P156、P158 226 227 GRI Financial Services Sector Supplement United Nations Global Compact Principles Chapter/ Classifi- Disclo- Index Description Description Page The Ten Principles Chapter Page cation sure Aspect: Product Portfolio Principle 1: Businesses should support and respect the protection Happy Workplace of internationally proclaimed human rights. P156 Policies with specific environmental and social components P118、P122、P124 FS1/DMA Human applied to business lines. 、P156、P199~201 Principle 2: Make sure that they are not complicit in human rights abuses. Green Finance P118 123 Rights ~ Procedures for assessing and screening environmental Green Finance P104、 Principle 3: Businesses should uphold the freedom of association FS2/DMA Happy Workplace P159 and social risks in business lines. Social Harmony P108~109 and the effective recognition of the right to collective bargaining. Processes for monitoring clients’ implementation of and compliance Principle 4: The elimination of all forms of forced and compulsory labor P156 with environmental and social requirements included in agreements P118 120 FS3/DMA ~ Happy P156 or transactions. Labor Principle 5: The effective abolition of child labor Workplace Principle 6: The elimination of discrimination in respect of P156 157 P162 163 Process(es) for improving staff competency to implement the Green Finance P140、 employment and occupation ~ 、 ~ FS4/DMA environmental and social policies and procedures as applied to Social Harmony P156 P158 、、 Principle 7: Businesses should support a precautionary approach business lines. Happy Workplace P199 204 ~ to environmental challenges. P126~140 Monetary value of products and services designed to deliver a P89~90、 Environ- Principle 8: Undertake initiatives to promote greater Green P118 123 specific social benefit for each business line broken down Sustainable Governance ~ 、 FS7 P194 197、 environmental responsibility. Finance P126 140 by purpose. Social Harmony ~ ment ~ P199~215 Principle 9: Encourage the development and diffusion of P109~115、 Monetary value of products and services designed to deliver a environmentally friendly technologies. P148~153 FS8 specific environmental benefit for each business line broken Green Finance P109~115 Anti- down by purpose. Principle 10: Businesses should work against corruption in all its Sustainable Corrup- P78~80 tion forms, including extortion and bribery. Governance Aspect: Active Ownership Percentage of assets subject to positive and negative P135 FS11 environmental or social screening. Green Finance Aspect: Local Communities FS14 Initiatives to improve access to financial services for Social Harmony P194 197 ISO 26000 Index Content Index disadvantaged people. ~ Disclo- FS15/DMA Policies for the fair design and sale of financial products and services. P84 86 Chapter Page Sustainable ~ Issue sure Governance FS16/DMA Initiatives to enhance financial literacy by type of beneficiary P89~90、P194 Organizational Decision-making process and structures CSR Corporation P14 governance

Due diligence for preventing human rights risk Happy P156、P158 Human rights risk situations Workplace P156 The Company's Set Topic Avoidance of complicity Sustainable Governance P78~79 Resolving grievances P168~169 Index Description Chapter/ Page Human Description rights Discrimination and vulnerable groups P156、158 Aspect: Corporate Sustainable Development Requirements Happy Civil and political rights P156 157 Workplace ~ Information Enhance information security measures for the finance industry P91 93 P173 179 security and improve response and processing capabilities for ~ Economic, social and cultural rights ~ 、 P199~215 improvement information security attacks Sustainable Fundamental principles and rights at work P155 P159 Governance 、 Risk Strengthen risk awareness and assessment capacity and P68 76 Employment and employment relationships P162 163 management maintain appropriate and effective internal control ~ ~ P155~159、 P168 169 Working environment and social protection ~ 、 P176~179、 P180 190 Labor Happy ~ Practices Social communication Workplace P155~159、 P168~169 Health and safety at work P180~190

Human development and training in the workplace P162~167

228 229 Disclo- Chapter Page Issue sure Prevention of pollution P126~140 First Financial Holding Corporate Social Responsibility Report 2018 Sustainable resource use P135~138 Publish Institution : First Financial Holding Co., Ltd. Environment Climate change mitigation and adaptation Green Finance P126~140 ADD : No. 30, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City Protection of the environment, biodiversity and restoration P145 146 TEL : +886-2-2311-1111 of natural habitats ~ FAX : +886-2-2311-9691 Anti-corruption P78 Sustainable Website : https://www.firstholding.com.tw/sites/firstholding/en/home Responsible political involvement P78 Governance Publish Date : 2019.7 Fair Operating Fair competition P78 Practices Stakeholder Promoting social responsibility in the value chain P15 21 Contact Information Engagement ~ Administration Management Dept., First Financial Holding Co., Ltd. Respect for property rights Sustainable Governance P78 Corporate Governance Section Fair marketing, factual and unbiased information and fair Sustainable Governance P84 86 Tel : +886-2-2348-5366 contractual practices ~ Fax : +886-2-2311-9691 Protecting consumers’ Health and safety Social Harmony P208 Address : No. 30, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City Sustainable consumption Green Finance P114 Consumer E-mail : [email protected] Consumer service, support, and complaint and dispute resolution Sustainable P87~88 Issues Governance Consumer data protection and privacy P84~86 This Report was printed using recycled paper and ecologically friendly toner. Sustainable Governance P84~86、P89~93、 Access to essential services Green Finance P148~153、 Social Harmony P194~197 Educational and awareness Sustainable Governance P89~90 Community involvement Sustainable Governance P89~90、 Social Harmony P194~197、P203~215 Education and culture Social Harmony P203~215

Community Employment creation and skills development Happy Workplace P171~175 Involvement Technology development and access Green Finance P148 153 and ~ Sustainable Governance P89 90 Development Wealth and income creation ~ 、 Social Harmony P195~196 Happy Workplace P176 189 Health ~ 、 Social Harmony P208、P210~211 Social investment Social Harmony P198~215

Taiwan Stock Exchange Corporation "Rules Governing the Preparation and Filing of Corporate Social Responsibility Reports by TWSE Listed Companies" Chapter/ Index Description Description Page Financial Finance and insurance companies shall disclose their management Green Finance P101~124、 Institutions approaches, disclosure items, and reporting requirements. The Social Harmony P139~140、 reports shall include at least products and services designed to P148~153、 deliver a specific social benefit for each business line P193~197 Public Public companies shall disclose the number of full-time Sustainable Companie non-management employees, the average and median salary of Governance P54 full-time non-management employees, and the difference of the three statistics compared to the previous year. 230 231 First Financial Holding Co.,Ltd.

ADD : 18F,No. 30, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City This report uses eco-friendly paper that does not contain heavy metals and TEL : +886-2-2311-1111 environmentally friendly inks that improve FAX : +886-2-2311-9691 the earth's ecological environment. https://www.firstholding.com.tw/sites/firstholding/en/home Publish Date：2019.7 http://csr.firstholding.com.tw/en/ Printed in Taiwan 2018