Mega Financial Holding Co., Ltd. and Its Subsidiaries

MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2014 AND 2013

------For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

~1~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (EXPRESSED IN THOUSANDS OF DOLLARS)

June 30, 2014 December 31, 2013 June 30, 2013 January 1, 2013 ASSETS Note Amount % Amount % Amount % Amount % ASSETS Cash and cash equivalents 6(1) $ 174,195,646 6 $ 160,288,195 5 $ 112,139,661 4 $ 93,059,992 4 Due from the Central Bank and call loans to banks 6(2) 289,669,101 9 390,959,236 13 273,215,592 10 365,430,137 13 Financial assets at fair value through profit or loss 6(3)(12) 175,725,721 6 195,800,759 6 195,342,744 7 184,716,442 7 Available-for-sale financial assets, net 6(7) and 12 276,349,200 9 272,943,633 9 260,134,518 10 223,271,043 8 Bills and bonds purchased under resale agreements 5,641,383 - 2,585,345 - 6,925,361 - 2,282,052 - Receivables, net 6(4)(5) 203,644,226 7 184,587,941 6 137,550,048 5 122,685,220 5 Current income tax assets 1,301,418 - 921,969 - 968,475 - 953,192 - Non-current assets held for sale 2,582 - 2,576 - 64 - - - Bills discounted and loans, net 6(5) 1,668,969,079 55 1,654,577,193 53 1,563,463,363 56 1,502,700,861 55 Reinsurance contract assets, net 6(6)(23) 3,481,496 - 3,293,937 - 3,436,521 - 3,301,550 - Held-to-maturity financial assets, net 6(8) and 12 178,963,013 6 184,411,233 6 166,295,479 6 161,253,982 6 Equity investments accounted for by the equity method, 6(9) net 2,679,628 - 2,697,551 - 2,736,614 - 2,966,843 - Other financial assets, net 6(5)(10) and 12 20,699,864 1 23,430,204 1 28,035,197 1 27,629,411 1 Investment property, net 6(11) and 12 2,310,530 - 2,059,428 - 2,209,636 - 2,101,127 - Property and equipment, net 6(12) and 12 22,041,310 1 22,150,245 1 22,214,662 1 22,331,091 1 Intangible assets, net 302,060 - 318,046 - 256,367 - 303,612 - Deferred income tax assets 6(38) 3,758,271 - 3,785,582 - 3,248,716 - 3,098,020 - Other assets, net 6(13) and 12 4,128,228 - 8,810,740 - 8,137,905 - 8,884,722 - TOTAL ASSETS $ 3,033,862,756 100 $ 3,113,623,813 100 $ 2,786,310,923 100 $ 2,726,969,297 100 LIABILITIES AND EQUITY LIABILITIES Due to the Central Bank and financial institutions 6(14) and 11 $ 376,096,025 13 $ 490,935,730 16 $ 345,562,502 12 $ 328,810,493 12 Funds borrowed from the Central Bank and other banks 6(15) 39,510,383 1 32,330,245 1 26,900,005 1 84,826,943 3 Financial liabilities at fair value through profit or loss 6(16) 14,326,707 1 14,856,685 1 15,510,988 2 14,676,886 1 Bills and bonds sold under repurchase agreements 6(17) 233,201,316 8 219,651,334 7 206,809,132 8 187,481,840 7 Commercial paper payable, net 6(18) and 11 7,187,117 - 4,393,653 - 6,258,203 - 1,880,597 - Payables 6(19) 76,253,441 3 66,105,983 2 72,689,166 3 59,583,525 2 Current income tax liabilities 8,295,619 - 5,522,518 - 7,221,337 - 5,993,633 - Deposits and remittances 6(20) and 11 1,915,959,215 63 1,933,722,541 62 1,790,830,585 64 1,717,989,498 63 Bonds payable 6(21) 61,900,000 2 55,898,677 2 55,874,079 2 62,449,668 2 Other loans 6(22) and 12 10,930,120 - 5,509,213 - 5,935,135 - 6,541,000 - Provisions for liabilities 6(23) 21,988,779 1 22,414,786 1 22,000,177 - 22,045,319 1 (Coutinued)

~ 4 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (EXPRESSED IN THOUSANDS OF DOLLARS)

June 30, 2014 December 31, 2013 June 30, 2013 January 1, 2013 LIABILITIES AND EQUITY Note Amount % Amount % Amount % Amount % Other financial liabilities 6(24) 11,946,570 - 10,094,610 - 10,821,043 - 11,728,176 1

Deferred income tax liabilities $ 2,193,326 - $ 2,051,201 - $ 1,693,505 - $ 1,694,706 -

Other liabilities 6(25) 7,849,328 - 8,544,563 - 9,041,334 - 10,786,252 -

Total Liabilities 2,787,637,946 92 2,872,031,739 92 2,577,147,191 92 2,516,488,536 92

Equity Equity attributable to owners of parent

Share capital Common stock 6(26) 124,498,240 4 124,498,240 4 114,498,240 4 114,498,240 4 Capital surplus 6(26) 55,274,279 2 55,271,623 2 43,425,270 2 43,425,270 2 Retained earnings

Legal reserve 6(26) 24,469,127 1 22,220,204 1 22,220,204 1 20,066,890 1

Special reserve 6(26) 2,547,719 - 2,547,719 - 2,569,119 - 2,569,119 -

Inappropriate retained earnings 6(27) 36,834,124 1 36,766,912 1 26,625,101 1 29,461,030 1 Other equity interest 6(28)

Other equity interest 2,418,558 - 100,838 - ( 460,680) - 179,145 -

Non-controlling interest 182,763 - 186,538 - 286,478 - 281,067 - Total Equity 246,224,810 8 241,592,074 8 209,163,732 8 210,480,761 8 TOTAL LIABILITIES AND EQUITY $ 3,033,862,756 100 $ 3,113,623,813 100 $ 2,786,310,923 100 $ 2,726,969,297 100

The accompanying notes are an integral part of these consolidated financial statements.

~ 5 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS)

For the three-month periods ended June 30, For the six-month periods ended June 30, 2014 (2013 2014 2013 Note Amount % Amount % Amount % Amount % 6(29) and 11 Interest income $ 14,117,024 89 $ 11,276,818 85 $ 27,542,199 89 $ 22,171,526 84 6(29) and 11 Less: Interest expense ( 4,902,737) ( 31) ( 3,587,858) ( 27) ( 9,620,927) ( 31) ( 6,893,761) ( 26) Interest income, net 9,214,287 58 7,688,960 58 17,921,272 58 15,277,765 58 Revenues other than interest, net 6(30) Service fee revenue and commissions, net 2,506,999 16 2,295,735 17 5,025,432 16 4,743,582 18 Insurance revenue, net 376,862 2 388,768 3 814,310 3 697,305 3 6(31) and 11 Financial assets and liabilities at fair value through profit or loss 1,831,166 12 316,502 2 2,855,127 9 719,291 3 6(32) Realized gain on available-for-sale financial assets, net 629,974 4 461,402 4 1,012,712 3 1,520,800 6 Foreign exchange gain 508,227 3 886,757 7 1,387,571 4 1,901,120 7 Share of profit of associates and joint ventures accounted for under equity method 20,866 - 33,992 - 47,480 - 60,416 - 6(33) Loss on asset impairment ( 71,982) - ( 194,664) ( 1) ( 85,344) - ( 217,978) ( 1) Other revenue other than interest income 505,739 3 561,469 4 857,133 3 866,618 3 11 Revenue on disposal of non-performing loans 371,108 2 719,184 6 1,196,267 4 864,891 3 Net revenue 15,893,246 100 13,158,105 100 31,031,960 100 26,433,810 100 6(4)(5)(6)(10)(23) Bad debts expense and provisions for insurance reserve ( 521,118) ( 3) ( 618,512) ( 5) ( 662,304) ( 2) ( 1,479,688) ( 6) 6(23) Reversal of (provisions for) insurance reserve 68,660 - 62,979 1 64,846 - 160,922 1 Operating expenses 6(35) Employee benefit expense ( 3,651,979) ( 23) ( 3,309,106) ( 25) ( 7,486,768) ( 24) ( 6,934,601) ( 26) 6(36) Depreciation and amortization ( 178,284) ( 1) ( 184,080) ( 1) ( 358,129) ( 1) ( 377,309) ( 1) 6(37) Other business and administrative expenses ( 1,688,705) ( 11) ( 1,543,932) ( 12) ( 3,246,848) ( 11) ( 3,035,524) ( 12) Income before Income Tax 9,921,820 62 7,565,454 58 19,342,757 62 14,767,610 56 6(38) Income Tax Expense ( 1,838,252) ( 12) ( 1,838,803) ( 14) ( 3,216,728) ( 10) ( 2,853,372) ( 11) Profit for the year 8,083,568 50 5,726,651 44 16,126,029 52 11,914,238 45 6(28) Other comprehensive income Cumulative translation differences of foreign operations ( 545,980) ( 3) ( 516,162) ( 4) 154,685 - 482,094 2 Unrealized gain on valuation of available-for-sale financial assets 1,599,658 10 ( 1,487,077) ( 11) 2,128,518 7 ( 1,065,495) ( 4) Share of other comprehensive income of associates and joint ventures accounted for under equity method 37,641 - ( 47,183) ( 1) 46,931 - ( 43,520) - Total other comprehensive income(after Income Tax) 1,091,319 7 ( 2,050,422) ( 16) 2,330,134 7 ( 626,921) ( 2) Total comprehensive income $ 9,174,887 57 $ 3,676,229 28 $ 18,456,163 59 $ 11,287,317 43 (Continued)

~ 6 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 For the three-month periods ended June 30, For the six-month periods ended June 30, 2014 (2013 2014 (2013 Note Amount % Amount % Amount % Amount %

Profit (loss), attributable to: Owners of parent $ 8,092,860 51 $ 5,725,771 44 $ 16,135,439 52 $ 11,912,191 45 Non-controlling interests ( 9,292) - 880 - ( 9,410) - 2,047 - $ 8,083,568 51 $ 5,726,651 44 $ 16,126,029 52 $ 11,914,238 45 Comprehensive income attributable to: Owners of parent $ 9,182,204 58 $ 3,685,126 28 $ 18,455,159 59 $ 11,272,366 43 Non-controlling interests ( 7,317) - ( 8,897) - 1,004 - 14,951 - $ 9,174,887 58 $ 3,676,229 28 $ 18,456,163 59 $ 11,287,317 43

6(39) Earnings per share Basic earnings per share (in dollars) $ 0.65 $ 0.50 $ 1.30 $ 1.04 Diluted earnings per share (in dollars) $ 0.65 $ 0.50 $ 1.30 $ 1.04

The accompanying notes are an integral part of these consolidated financial statements.

~ 7 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Equity attributable to owners of the parent Capital Retained earnings Other equity interest Cumulative translation Unrealized gain or Unappropriate differences of loss on Share capital – Capital Legal Special retained foreign available-for-sale Non-controlling common stock surplus reserve reserve earnings operations financial assets Total interest Total

For the six-month period ended June 30, 2013

Balance, January 1, 2013 $ 114,498,240 $ 43,425,270 $ 20,066,890 $ 2,569,119 $ 29,461,030 ($ 944,493 ) $ 1,123,638 $ 210,199,694 $ 281,067 $ 210,480,761

Earnings distribution for 2012

Legal reserve - - 2,153,314 - ( 2,153,314 ) - - - - -

Cash dividends - - - - ( 12,594,806 ) - - ( 12,594,806 ) ( 9,540 ) ( 12,604,346 )

Profit for the period - - - - 11,912,191 - - 11,912,191 2,047 11,914,238

Other comprehensive income for the period - - - - - 486,695 ( 1,126,520 ) ( 639,825 ) 12,904 ( 626,921 )

Balance, June 30, 2013 $ 114,498,240 $ 43,425,270 $ 22,220,204 $ 2,569,119 $ 26,625,101 ($ 457,798 ) ($ 2,882 ) $ 208,877,254 $ 286,478 $ 209,163,732

For the six-month period ended June 30, 2014

Balance, January 1, 2014 $ 124,498,240 $ 55,271,623 $ 22,220,204 $ 2,547,719 $ 36,766,912 ($ 901,379 ) $ 1,002,217 $ 241,405,536 $ 186,538 $ 241,592,074

Earnings distribution for 2013

Legal reserve - - 2,248,923 - ( 2,248,923 ) - - - - -

Cash dividends - - - - ( 13,819,304 ) - - ( 13,819,304 ) ( 4,779 ) ( 13,824,083 ) Changes in capital surplus of associates and joint ventures accounted for under equity method - 2,656 - - -- - 2,656 - 2,656

Profit for the period - - - - 16,135,439 - - 16,135,439 ( 9,410 ) 16,126,029

Other comprehensive income for the period - - - - - 156,122 2,161,598 2,317,720 10,414 2,328,134

Balance, June 30, 2014 $ 124,498,240 $ 55,274,279 $ 24,469,127 $ 2,547,719 $ 36,834,124 ($ 745,257 ) $ 3,163,815 $ 246,042,047 $ 182,763 $ 246,224,810

The accompanying notes are an integral part of these consolidated financial statements.

~ 8 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (EXPRESSED IN THOUSANDS OF DOLLARS)

For the six-month periods ended June 30, 2014 2013 Cash Flows from Operating Activities Profit before tax $ 19,342,757 $ 14,767,610 Adjustments to reconcile profit before tax to net cash used in operating activities: Depreciation 341,695 355,063 Amortization 16,434 22,246 Bad debts expense and provisions for guarantee reserve 662,304 1,479,688 Interest expense 9,711,339 7,324,972 Interest income ( 28,513,753 ) ( 23,228,922 ) Dividend income ( 5,598 ) ( 65,032 ) Net change in insurance reserve ( 64,846 ) ( 160,922 ) Loss on financial asset impairment 85,344 217,978 Gain on disposal of investment property 763 141 Loss (gain) on disposal of property and equipment 3,678 ( 28,676 ) Share of profit of associates accounted for under equity method ( 47,480 ) ( 60,416 ) Changes in assets/liabilities relating to operating activities Changes in assets relating to operating activities Decrease in due from Central Bank and call loans to other banks 62,047,008 55,635,745 Decrease (increase) in financial assets at fair value through profit or loss 20,075,038 ( 10,626,302 ) Increase in available-for-sale financial assets ( 1,179,383 ) ( 37,977,091 ) Increase in receivables ( 20,683,508 ) ( 15,893,572 ) Increase in assets held-to-sale ( 6 ) - Increase in bills discounted and loans ( 13,190,235 ) ( 60,762,502 ) Increase in reinsurance contract assets ( 187,559 ) ( 134,971 ) Decrease (increase) in held-to-maturity financial assets 5,448,220 ( 5,041,497 ) Decrease (increase) in other financial assets 2,661,345 ( 623,764 ) Decrease in other assets 4,609,066 792,588 Changes in liabilities relating to operating activities (Decrease) increase in due to the Central Bank and financial institutions ( 114,839,705 ) 16,752,009 (Decrease) increase in financial liabilities at fair value through profit or loss ( 529,978 ) 834,102 Increase in bills and bonds purchased under resale agreements 13,549,982 19,327,292 (Decrease) increase in payables ( 4,258,289 ) 344,600 (Decrease) increase in deposits and remittances ( 17,763,326 ) 72,841,087 Increase (decrease) in other financial liabilities 1,851,960 ( 907,133 ) (Decrease) increase in provisions for liabilities ( 161,836 ) 245,589 Decrease in other liabilities ( 321,180 ) ( 573,742 ) Cash used in operations ( 61,339,749 ) 34,856,168 Interest received 27,988,256 22,656,431 Cash dividend received 27,528 206,587 Interest paid ( 9,129,870 ) ( 7,144,569 ) Income tax paid ( 653,640 ) ( 1,792,848 ) Net cash (used in) provided by operating activities ( 43,107,475 ) 48,781,769 (Continued)

~ 9 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (EXPRESSED IN THOUSANDS OF DOLLARS)

For the six-month periods ended June 30,

2014 2013

Cash Flows from Investing Activities

Proceeds from capital reduction of investments accounted for by the equity

method $ - $ 139,431

Acquisition of property and equipment ( 217,695 ) ( 244,214 )

Proceed of property and equipment 5,164 997

Acquisition of intangible asset - ( 4,777 )

Acquisition of investment property ( 280,000 ) ( 142,015 )

Proceeds from disposal of investment property 21,057 52,271

Net cash used in investing activities ( 471,474 ) ( 198,307 )

Cash Flows from Financing Activities

Increase (decrease) in due to the Central Bank and financial institutions 7,180,138 ( 57,926,938 )

Increase in commercial papers payable 2,795,000 4,378,000

Decrease in bonds payable ( 6,000,000 ) ( 6,600,000 )

Issuance of bank debenture 12,000,000 -

Increase (decrease) in other loans 5,420,907 ( 605,865 )

Decrease in guarantee deposits received ( 251,419 ) ( 1,171,176 )

Net cash provided by (used in) financing activities 21,144,626 ( 61,925,979 )

Effect of exchange rate changes on cash and cash equivalents 154,685 486,695

Net decrease in cash and cash equivalents ( 22,279,638 ) ( 12,855,822 )

Cash and cash equivalents at beginning of the period 311,013,320 217,394,014

Cash and cash equivalents at end of the period $ 288,733,682 $ 204,538,192

Cash and cash equivalents composition :

Cash and cash equivalents as shown in the balance sheet $ 174,195,646 $ 112,139,661

Central Bank and call loans to other banks meeting the definition of cash

and cash equivalents as stated in IAS No. 7 “Cash Flow Statements” 108,896,653 85,473,170

Investments in bills and bonds under resale agreements meeting the

definition of cash and cash equivalents as stated in IAS No. 7 “Cash Flow

Statements” 5,641,383 6,925,361

Cash and cash equivalents at end of the period $ 288,733,682 $ 204,538,192

The accompanying notes are an integral part of these consolidated financial statements. ~ 10 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2014 AND 2013

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE INDICATED)

1. ORGANIZATION AND OPERATIONS

CTB Financial Holding Co., Ltd. was incorporated as a company limited by shares under the provisions of the Company Law of the Republic of China (R.O.C.), and was formed by Chiao Tung Bank Co., Ltd. (“CTB”) and International Securities Co., Ltd. (“IS”) through a share swap on February 4, 2002 pursuant to the Financial Holding Company Act and other related laws. The Company’s shares have been publicly traded on the Taiwan Stock Exchange since February 4, 2002. On August 22, 2002, the Company further acquired Chung Hsing Bills Finance Corporation and Barits Securities Co., Ltd. (“BS”) (which later merged with IS on January 31, 2003, with IS being the surviving entity and was later renamed Barits International Securities Co., Ltd. (“BIS”) as one of the subsidiaries of the Company through a second share swap. On December 31, 2002, the Company also acquired 100% equity stock in both The International Commercial Bank of China (“ICBC”), an investee of the Company originally accounted for by the equity method with a 28% equity interest, and Chung Kuo Insurance Co., Ltd. (“CKI”) through a further share swap and changed its name from CTB Financial Holding Co., Ltd. to Mega Financial Holding Co., Ltd. (the “Company”). During the period from 2003 to 2005, the Company had made investments in Mega Asset Management Co., Ltd. (“MAM”), Mega Investment Trust Co., Ltd. (“MITC”), Mega Life Insurance Agency Co., Ltd. (“MLIAC”) and Mega CTB Venture Capital Co., Ltd. (“Mega CTB Venture Capital”). On May 23, 2006, International Investment Trust Co., Ltd. (“IIT”) was acquired by the Company and ICBC through cash injection of capital.

In order to expand the economic scale of its business operations, two of the Company’s subsidiaries, CTB and ICBC, entered into a merger agreement, effective from August 21, 2006, which is to be implemented by way of “absorption”, with CTB being the dissolving bank and ICBC, later renamed Mega International Commercial Bank Co., Ltd. being the surviving bank. In addition, IIT and MITC entered into a merger agreement, with MITC as the dissolving company and IIT simultaneously renamed Mega International Investment Trust Co., Ltd., being the surviving company, effective from September 17, 2007.

The number of employees of the Company and its subsidiaries (collectively referred herein as the “Group ”) was 8,545 and 8,422 as of June 30, 2014 and 2013, respectively.

The Company is mainly engaged in investment activities approved by the governing authorities and management of the investee companies.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on August 26, 2014.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1)Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) None .

~ 11 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (2)Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group According to Financial-Supervisory-Securities-Auditing No. 1030010325 issued on April 3, 2014,commencing 2015, companies with shares listed on the TWSE or traded on the Taiwan GreTai Securities Market or Emerging Stock Market shall adopt the 2013 version of IFRS (not including IFRS 9, ‘Financial instruments’) as endorsed by the FSC in preparing the consolidated financial statements. The related new standards, interpretations and amendments are listed below: Effective Date by International Accounting New Standards, Interpretations and Amendments Standards Board Limited exemption from comparative IFRS 7 disclosures for July 1, 2010 first-time adopters (amendment to IFRS 1) Severe hyperinflation and removal of fixed dates for first-time July 1, 2011 adopters (amendment to IFRS 1) Disclosures－Transfers of financial assets (amendment to IFRS July 1, 2011 7) Disclosures－Offsetting financial assets and financial liabilities January 1, 2013 (amendment to IFRS 7) IFRS 10, ‘Consolidated financial statements’ January 1, 2013 (Investment entities: January 1, 2014) IFRS 11,‘Joint arrangements’ January 1, 2013 IFRS 12,‘Disclosure of interests in other entities’ January 1, 2013 IFRS 13, ‘Fair value measurement’ January 1, 2013 Presentation of items of other comprehensive income July 1, 2012 (amendment to IAS 1) Deferred tax: recovery of underlying assets (amendment to IAS January 1, 2012 12) IAS 19 (revised), ‘Employee benefits’ January 1, 2013 IAS 27,‘Separate financial statements’ (as amended in 2011) January 1, 2013 IAS 28,‘Investments in associates and joint ventures’(as amended January 1, 2013 in 2011) Offsetting financial assets and financial liabilities (amendment to January 1, 2014 IAS 32) Improvements to IFRSs 2010 January 1, 2011 Improvements to IFRSs 2009－2011 January 1, 2013 Based on the Group’s assessment, the adoption of the 2013 version of IFRS has no significant impact on the consolidated financial statements of the Group, except for the following: A. IAS 19 (revised), ‘Employee benefits’ The revised standard eliminates the corridor approach and requires actuarial gains and losses to be recognized immediately in other comprehensive income. Past service cost will be recognized immediately in the period incurred. Net interest expense or income, calculated by applying the discount rate to the net defined benefit asset or liability, replace the finance charge and expected return on plan assets. The return of plan assets, excluding net interest expense, is recognized in other comprehensive income. An entity is required to recognize termination benefits at the earlier of when the entity can no longer withdraw an offer of those benefits and when it recognizes any related restructuring costs. Additional disclosures are required to present how defined benefit plans may affect the amount, timing

~ 12 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 and uncertainty of the entity’s future cash flows. The Group is assessing the potential impact of the new standards, interpretations and amendments above and has not yet been able to reliably estimate their impact on the consolidated financial statements.

B. IAS 1, ‘Presentation of financial statements’ The amendment requires entities to separate items presented in OCI classified by nature into two groups on the basis of whether they are potentially reclassifiable to profit or loss subsequently when specific conditions are met. If the items are presented before tax then the tax related to each of the two groups of OCI items (those that might be reclassified and those that will not be reclassified) must be shown separately. Accordingly, the Group will adjust its presentation of the statement of comprehensive income. C. Disclosures - Transfers of financial assets (amendment to IFRS 7) The amendment enhances qualitative and quantitative disclosures for all transferred financial assets that are not derecognised and for any continuing involvement in transferred assets, existing at the reporting date. Based on the Group’s assessment, the adoption of the amendment will require the Group to include qualitative and quantitative disclosures for all transferred financial assets. D. IFRS 13, ‘Fair value measurement’ The standard defines fair value, sets out a framework for measuring fair value, and requires disclosures about fair value measurements. Based on the Group’s assessment, the adoption of the standard has no significant impact on its consolidated financial statements, and the Group. E. IFRS 12, ‘Disclosure of interests in other entitles’ The standard integrates the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities. And, the Group will disclose additional information about its interests in consolidated entities and unconsolidated entities accordingly.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the 2013 version of IFRS as endorsed by the FSC:

Effective Date by International Accounting Standards New Standards, Interpretations and Amendments Board IFRS 9, ‘Financial instruments' January 1, 2018 Accounting for acquisition of interests in joint operations January 1, 2016 (amendments to IFRS 11) IFRIC 14, 'Regulatory deferral accounts' January 1, 2016 IFRS 15, ‘Revenue from contracts with customers' January 1, 2017 Clarification of acceptable methods of depreciation and January 1, 2016 amortisation (amendments to IAS 16 and IAS 38) Services related contributions from employees or third parties July 1, 2014 (amendments to IAS 19R) Recoverable amount disclosures for non-financial assets January 1, 2014 (amendments to IAS 36) Novation of derivatives and continuation of hedge accounting January 1, 2014 (amendments to IAS 39) IFRIC 21, ‘Levies’ January 1, 2014 Improvements to IFRSs 2010-2012 July 1, 2014

~ 13 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Effective Date by International Accounting Standards New Standards, Interpretations and Amendments Board Improvements to IFRSs 2011-2013 July 1, 2014

For the above items, the Group is assessing their impact on the consolidated financial statements and will disclose the affected amounts accordingly.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in these consolidated financial statements are set out below. These accounting policies set out below have been consistently applied to all the periods presented in consolidated financial statements, unless otherwise stated.

(1) Compliance statement A. The accompanying consolidated financial statements of the Group are the first consolidated financial statements prepared in conformity with the “Regulations Governing the Preparation of Financial Reports by Financial Holding Companies”, “Regulations Governing the Preparation of Financial Reports by Public Banks”, “Regulations Governing the Preparation of Financial Reports by Publicly Held Bills Finance Companies”, “Regulations Governing the Preparation of Financial Reports by Securities Firms”, “Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants”, “Regulations Governing the Preparation of Financial Reports by Enterprises Engaging in Insurance”, “Regulations Governing the Preparation of Financial Reports by Securities Issuers” , and IAS 34, “Interim Financial Reporting,” as endorsed by the FSC.

(2) Basis for preparation A. The consolidated financial statement consists of the consolidated balance sheet, consolidated statement of comprehensive income (showing components of profit or loss and components of other comprehensive income.), and consolidated statement of changes in equity and consolidated statement of cash flows and the related notes.

B. Except for financial assets and financial liabilities (including derivative instruments) at fair value, defined benefit liabilities recognized based on the net amount of pension fund assets plus unrecognized prior period’s service cost, less present value of defined benefit obligation, recognized actuarial insurance liabilities, reinsurance reserve assets according to the laws and regulations of insurance industry, these consolidated financial statements have been prepared under the historical cost convention.

C. The preparation of financial statements in conformity with the International Financial Reporting Standards, IFRIC Interpretations and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRS”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis for preparation of consolidated financial statements A. The Group prepares the consolidated financial statements by aggregating the Company’s and its subsidiaries’ assets, liabilities, revenues and gains, and expenses and losses accounts, which have been eliminated versus owners’ equity during the consolidation. In ~ 14 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 addition, the Group’s financial statements are prepared in the same reporting period. The accounts on the accompanying consolidated financial statements are not categorized into current and non-current items. The related accounts are properly categorized according to the nature of each accounts, and sequenced by their liquidity. B. The names of the subsidiaries that are included in the consolidated financial statements and the percentage of Company’s ownership in each subsidiary are set forth below: Ownership (%) Investor Subsidiary June 30, 2014 December 31, 2013 June 30, 2013 Remark The Company Mega International Commercial 100.00 100.00 100.00 Note(1) Bank Co., Ltd (“MICB”) The Company Mega Securities Co., Ltd (“MS”) 100.00 100.00 100.00 Note(2) The Company Mega Bills Finance Co., Ltd 100.00 100.00 100.00 Note(3) (“MBF”) The Company Mega International Investment 100.00 100.00 100.00 Note(4) Trust Co., Ltd (“MITC”) The Company Chung Kuo Insurance Co., Ltd 100.00 100.00 100.00 Note(5) (“CKI”) The Company Mega Asset Management Co., Ltd 100.00 100.00 100.00 Note(6) (“MAM”) The Company Mega Venture Capital 100.00 100.00 100.00 Note(7) The Company Mega Life Insurance Agency Co., 100.00 100.00 100.00 Note(8) Ltd. MICB Mega International Commercial 100.00 100.00 100.00 Note(9) Bank (Canada) (“MICB Canada”) MICB Mega International Commercial 100.00 100.00 100.00 Note(10) Bank Public Co., Ltd (“MICBPC”) MS Mega Securities Holding Co., Ltd 100.00 100.00 100.00 Note(11) (“MHL”) MS Mega Futures Co., Ltd (“MF”) 100.00 100.00 100.00 Note(12) MHL Mega International Securities Note(13) Investment consulting Co., Ltd. 100.00 100.00 100.00 MHL Mega Securities (Hong Kong) Co., Note(14) Ltd. 100.00 100.00 100.00 MHL Mega Capital (Asia) Co., Ltd. 100.00 100.00 100.00 Note(15) MHL Mega Global Asset Management 100.00 100.00 100.00 Note(16) Co., Ltd. MICB, MS and Mega I Venture Capital 40.00 40.00 40.00 Note(17) CKI (1) MICB is mainly engaged in extending medium- and long-term loans, equity and venture capital investments, international banking and trust related business. In line with the government’s economic policy and economic development programs, CTB also assists major industries in developing strategies for improving the industrial infrastructure and promotes industrial development of ROC. (2) Principal activities of MS include underwriting, brokerage and proprietary trading of securities, margin trading of securities and bills, issuance of stock warrants, brokerage of overseas securities, and futures dealing business. (3) MBF is mainly engaged in proprietary trading, brokerage and underwriting of short-term notes and bills and financial bonds, provision of guarantees for short-term notes and bills, arrangement of inter-bank call loans, corporate financial consulting and proprietary trading of government bonds and corporate bonds. (4) MITC is primarily engaged in investment trust related businesses. (5) CKI is primarily engaged in general insurance business. (6) MAM is primarily engaged in purchases, evaluations, auctions, and management of financial institutions’ loan assets. (7) Mega CTB Venture Capital is primarily engaged in venture capital investments as well as providing operational, managerial and consulting services. (8) Mega Life Insurance Agency Co., Ltd. is primarily engaged in the business of life insurance agency. (9) MICB Canada is mainly engaged in accepting deposits, extension of credits, negotiation of import/export bills, collections and foreign exchange related businesses. (10) MICBCPC is mainly engaged in accepting deposits, negotiation of import/export bills, collections and exchange of foreign currencies and extension of credits. (11) MHL is mainly involved in asset management and venture capital activities. (12) Mega Futures Co., Ltd. (“MMF is mainly engaged in brokerage of domestic and foreign futures trading, and settlement and consulting services for domestic futures trading. (13) Mega International Securities Investment Consulting Co., Ltd. is 100% owned by MS, and is mainly engaged in investment consulting services. (14) Mega Securities (Hong Kong) Co., Ltd., registered in Hong Kong, is 100% owned by MHL, and is mainly engaged in brokerage of

~ 15 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 marketing securities. (15) Mega Capital (Asia) Co., Ltd., registered in Hong Kong, is 100% owned by the indirect subsidiary, Mega Securities Holdings Co., Ltd., and is mainly engaged in investment consulting services. The Company resolved to reduce capital for covering accumulated deficits amounting to HKD 63,000 thousand through the extraordinary general meeting dated December 18, 2012 with the effective date set on July 30, 2013. The capital reduction resulted in a decrease in shares held by Mega Securities Holdings Co., Ltd. by 63,000 thousand shares. (16) Mega Global Asset Management Limited, registered in British Cayman Islands, is 100% owned by the indirect subsidiary, Mega Securities Holdings Co., Ltd., and is mainly engaged in asset management services. The Company resolved to reduce capital for covering accumulated deficits amounting to US$ 6.4 million through the extraordinary general meeting dated December 18, 2012 with the effective date set on March 8, 2013. The capital reduction resulted in a decrease in shares held by Mega Securities Holdings Co., Ltd. by 6,400 thousand shares. Mega Global Asset Management Limited was liquidated through the stockholders’ meeting dated February 11, 2014. As of June 30, 2014, liquidation process has not been completed. (17) Mega I Venture Capital Co., Ltd. (“Mega I Venture Capital”) (formerly CTB I Venture Capital Co., Ltd.) is 40% owned jointly by MICB, MS and CKI with a total investment amount of $180 million. Mega I Venture Capital is primarily engaged in venture capital activities and it is regarded as a subsidiary in which the Company has control due to the Company’s significant influence over its financial, operational and personnel policies. C. Details of the Company’s subsidiaries that are not included in the consolidated financial statements are set forth below: Ownership (%) June 30, December 31, June 30, Investor Subsidiary 2014 2013 2013 Business Activities MICB Cathay Investment & 100.00 100.00 100.00 International investment and development Development activities Corporation (Bahamas) MICB Mega Management 100.00 100.00 100.00 Management consulting Consulting Corporation MICB Cathay Investment & 100.00 100.00 100.00 Storage and warehousing of imported Warehousing Ltd. commodities MICB Ramlett Finance 100.00 100.00 100.00 Real estate investments Holdings Inc. MICB Yung Shing Industries 99.56 99.56 99.56 Agency services for industrial and mining related Co. businesses, import and export related businesses, services requested by customers MICB China Products Trading 68.27 68.27 68.27 Transportation and storage of farming products Company and by-products, and investments in the related businesses

As the individual total assets or operating revenue amounts of the above subsidiaries are immaterial, the accounts of these subsidiaries are not included in the Company’s consolidated financial statements although the Company holds more than 50% equity interest in these subsidiaries. The investments of certain subsidiaries are accounted for under equity method.

D. Subsidiaries are all entities of which the Company holds directly or indirectly more than 50% of the total voting shares and over which the Company has controlling power and the Company has the power to govern the financial and operating policies where the Company may gain profit from the activities of the subsidiaries. The existence and effect of potential voting rights that are currently exercisable or convertible have been considered when assessing whether the Company controls another entity.

E. Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Company and its subsidiaries are eliminated from the consolidated financial statements, unless there is evidence showing that the values of the assets transferred within the Company and its subsidiaries have been impaired and inter-company unrealized gains or losses have been eliminated.

F. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results

~ 16 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 in the non-controlling interests having a deficit balance.

G. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

H. Transactions and events under similar situation should adopt consistent accounting policies and valuation method in preparing consolidated financial statements. If the accounting policies of the subsidiaries are different from the accounting policies used in the consolidated financial statements, adjustments will be made in relation to the financial statements of the subsidiaries to ensure the consistency between accounting policies of the affiliated entities and those used in the consolidated financial statements.

I. When the Group loses control of a subsidiary, the Group premeasures any investment retained in the former subsidiary at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

(4) Foreign-currency translations

A. Functional and presentation currency

Items included in the financial statements of each of the Company and its subsidiaries’ entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’s functional and the Group’s presentation currency.

B. Transactions and balances

The transactions denominated in foreign currency or to be settled in foreign currency are translated into a functional currency at the spot exchange rate between the functional currency and the underlying foreign currency on the date of the transaction.

Foreign currency monetary items should be reported using the closing rate (market exchange rate) at the date of each balance sheet. When multiple exchange rates are available for use, they should be reported using the rate that would be used to settle the future cash flows of the foreign currency transactions or balances at the measurement date. Foreign currency non-monetary items measured at historical cost should be reported using the exchange rate at the date of the transaction. Foreign currency non-monetary items measured at fair value should be reported at the rate that existed when the fair values were determined.

Exchange differences arising when foreign currency transactions are settled or when monetary items are translated at rates different from those at which they were translated when initially recognized or in previous financial statements are reported in profit or loss in the period, with one exception. The exception is that exchange differences associated

~ 17 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 with the gains or losses of the parts of effective hedges of cash flow hedges or hedges of net investments in foreign operations are recognized in other comprehensive income.

If a gain or loss on a non-monetary item is recognized in other comprehensive income, any foreign exchange component of that gain or loss is also recognized in other comprehensive income. Conversely, if a gain or loss on a non-monetary item is recognized in profit or loss, any foreign exchange component of that gain or loss is also recognized in profit or loss.

C. Entities in consolidated financial statements

The operating results and financial position of all the Company’s and its subsidiaries’ entities in the consolidated financial statements that have a functional currency (which is not the currency of a hyperinflationary economy) different from the presentation currency are translated into the presentation currency as follows:

(A) Assets and liabilities presented are translated at the Company’s and its subsidiaries’ closing exchange rate at the date of that balance sheet;

(B) The profit and loss presented is translated by the average exchange rate in the period (except for the situation that the exchange rate on the trade date shall be adopted when the exchange rate fluctuate rapidly); and

The translation differences arising from above processes are recognized as ‘Cumulative translation differences of foreign operations’ under equity items.

(5) Cash and cash equivalents

“Cash and cash equivalents” in the consolidated balance sheet includes cash on hand, due from other banks, short-term highly liquid investments that are readily convertible to known amount of cash and subject to an insignificant risk of changes in value. In respect of the consolidated statements of cash flows, cash include cash and cash equivalents shown in the consolidated balance sheet, investments in bills and bonds under resale agreements satisfying the definition of cash and cash equivalents in IAS 7 as approved by FSC.

(6) Bills and bonds under repurchase or resale agreements

The transactions of bills and bonds with a condition of repurchase agreement or resell agreement are accounted for under the financing method. The interest expense and interest income are recognized as incurred at the date of sale and purchase and the agreed period of sale and purchase. The repo trade liabilities, bond liabilities, reverse repo trade bills and bond investments are recognized at the date of sale or purchase.

(7) Financial assets or liabilities

The financial assets and liabilities of the Group including derivatives are recognized in the consolidated balance sheet and are properly classified in accordance with IFRSs as endorsed by FSC.

A. Financial assets

The International Financial Reporting Standards as endorsed by the Financial Supervisory

~ 18 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Commission apply to the entire Group’s financial assets, which are classified into four categories: loans and receivables, financial assets at fair value through profit or loss, available-for-sale financial assets and held-to-maturity financial assets.

(A) A regular way purchase or sale

Financial assets that are purchased or sold on a regular way purchase or sale basis should be recognized and derecognized using trade date accounting or settlement date accounting. The uniform accounting principles should be applied in the accounting for purchase and sale of financial assets of the same type. All the Group’s financial assets are accounted for using trade date accounting.

(B) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

There are two types of loans and receivables: one is originated by the Group; the other is not originated by the Group. Loans and receivables originated by the entity refer to the direct provision by the Group of money, merchandise or services to debtors, and loans and receivables not originated by the Group are loans and receivables other than those originated by the Group.

Loans and receivables are initially recognized at fair value, which includes the price of transaction, significant costs of transaction, significant handling fees paid or received, discount and premium, etc., and subsequently measured using the effective interest method. However if the effect of discount is insignificant, following the “Regulations Governing the Preparation of Financial Reports by Financial Holding Companies” and “Regulations Governing the Preparation of Financial Reports by Public Banks”, loans and receivables can be measured at initial amount.

Interest accruing on loans and receivables is recognized as ‘interest revenue’. An impairment loss is recognized when there is an objective evidence of impairment on loans and receivables. Allowance for impairment is a deduction to carrying amount of loans and receivables, which is under the ‘allowance for bad debts and reserve for guarantee liabilities’ account.

Financial assets are classified as financial assets at fair value through profit or loss if they are acquired principally for the purpose of selling or repurchasing or gaining profit in the short-term, or if they are derivative instruments. These financial assets are initially recognized at fair value.

Financial assets that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition:

a. They eliminate or significantly reduce a measurement or recognition inconsistency such as measurement of financial assets or liabilities or recognition of related gain or loss on different bases; or

b. Their performance is evaluated on a fair value basis; or

c. Hybrid (combined) instruments including embedded derivative instruments.

~ 19 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Any changes in fair value of financial assets at fair value through profit or loss and financial assets designated as at fair value through profit or loss on initial recognition are recognized under the ‘gain/loss on financial assets and liabilities at fair value through profit or loss’ account in the consolidated statement of comprehensive income.

(D) Held-to-maturity financial assets

Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturity date that the Group has the positive intention and ability to hold to maturity other than those that meet the definition of loans and receivables, designated as available-for-sale financial assets and those that are designated as at fair value through profit or loss on initial recognition by subsidiaries. Interest accruing on held-to-maturity financial assets is recognized as ‘interest revenue’. An impairment loss is recognized when there is an objective evidence of impairment on financial assets. Impairment loss is a deduction to carrying amount of financial assets, which is recognized under the ‘impairment loss on financial assets’ account.

(E) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are not classified in held-to-maturity financial assets, financial assets at fair value through profit or loss and loans and receivables. Financial assets and liabilities that are attributed to equity and debt investments on initial recognition are assessed at fair value. Transaction costs which are attributable to the acquisition should be capitalized.

An impairment loss is recognized when there is an objective evidence of impairment. If financial assets have not been derecognized, accumulated impairment loss related to the financial assets that was previously recognized in other comprehensive income shall be reclassified to profit or loss. Impairment loss of an investment in an equity instrument recognized in profit or loss shall not be reversed through profit or loss. Any subsequent increases in fair value of an investment in an equity instrument are recognized in other comprehensive income. If the impairment loss of bond investments decreases with objective evidence indicating that an impairment loss has been incurred after the impairment is recognized, the impairment amount is reversed and recognized in current profit and loss.

Equity instruments with no quoted price in an active market are initially recognized at fair value plus acquisition or issuance cost. The fair value can be reasonably estimated when the following criteria are met at the balance sheet date: (a) the variability in the range of reasonable fair value estimate is not significant for that equity instrument; or (b) probabilities of the various estimates within the range can be reasonably assessed and used in estimating fair value.

(F) Other financial assets

Other financial assets include investments in debt instruments without active market, overdue receivables not from lending, bill of exchange negotiated and financial assets measured at cost.

a. Debt investments with no active market

Investments in debt instruments without active market are initially recognized at

~ 20 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 fair value on the trade date plus transaction costs of acquisition or issuance. Disposal gain or loss is recognized when derecognized. Bond investments without active market are measured at amortized cost using the effective interest method.

b. Financial assets carried at cost

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets measured at cost’.

c. Purchase of obligor receivable

Purchase of obligor receivable refers to the cost of acquisition of creditor’s right that is non-performing loan of financial institutions acquired by the Group but not collected yet less total price and other expenses paid for the acquisition. Related gain or loss on obligor receivable is recognized based on relevant regulations. Purchase of claim receivable is measured at amortized cost using effective interest rate based on intention of holding or at fair value through profit or loss.

(G) Margin loans, short sale stock loans and securities borrowed

For handling margin trading of securities business, margin loans extended to stock investors are recorded as “marginal receivables” under (“Receivables, net”) and the stocks purchased by the borrowers are held by the Company as collateral. The collateral is recorded in the memorandum account and is returned to the borrowers when the loans are repaid.

Guarantee deposits received from stock investors on short sales are recorded as “margin deposits on short sales” under (“Payables”). The proceeds from short sales (less the securities transaction tax, consignment trading service charges, and financing commission) are held as guarantee deposits which are recorded as “payables” on proceeds from short sales” under (“Payables”). The stocks lent to the customers are recorded in the memorandum account. When the stocks are returned to the Company, the margin deposits and proceeds from the short sales are returned to the customers accordingly.

Loans borrowed by the Company from other securities lenders when the Company has insufficient fund to conduct margin trading are recorded as “margin loans from other securities lenders” under (“Payables”), and the stocks purchased by the borrowers are held as collateral.

When the Company has insufficient stocks to conduct short selling, the guarantee deposits and collateral paid for the stocks borrowed from other securities lenders are recorded as “deposits paid to other securities lenders” under (“Receivables, net”). The proceeds from short sales are then paid to the securities lenders as additional guarantees and are respectively recorded as “payables on proceeds from short sales” under (“Payables”) and “refinancing guarantees receivable” under (“Receivables, net”). B. Financial liabilities Financial liabilities held by the Group comprise financial liabilities at fair value through profit or loss (including financial liabilities designated as at fair value through profit or loss on initial recognition) and financial liabilities measured at amortized cost.

~ 21 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (A) Financial liabilities at fair value through profit or loss This category includes financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition.

A financial liability shall classify as held for trading, if it is incurred principally for the purpose of repurchasing it in the near term; or on initial recognition is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. A derivative is also classified as held for trading, except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument. Financial liability held for trading also includes the obligations of delivery of financial assets borrowed by the seller. Above financial liability is shown as “financial liability at fair value through profit or loss” in the consolidated balance sheet.

Any changes in fair value of financial liabilities at fair value through profit or loss and financial liabilities designated as at fair value through profit or loss on initial recognition are recognized under the ‘gain/loss on financial assets and liabilities at fair value through profit or loss’ account in the consolidated statement of comprehensive income.

(B) Financial liabilities measured at amortized cost

Liabilities not classified as financial liabilities at fair value through profit or loss and financial guarantee contracts are all included in financial liabilities carried at amortized cost.

C. Determination of fair value

Fair value and level information of financial instruments are provided in Note 7.

D. Derecognition of financial assets

The Group derecognizes a financial asset when one of the following conditions is met:

(A) The contractual rights to receive cash flows from the financial asset expire.

(B) The contractual rights to receive cash flows from the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires.

In case of securities lending or borrowing by the Group or provision of bonds or stocks as security for Repo trading, the Group does not derecognize the financial asset, because substantially all risks and rewards of ownership of the financial asset are still retained in the Group.

(8) Reclassifying financial assets

Reclassification of the non-derivative financial assets is in accordance with IAS 39 as

~ 22 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 endorsed by the FSC.

(9) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when (A) there is a legally enforceable right to offset the recognized amounts and (B) there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(10)Loans and receivables-evaluation, provision and reversal of impairment losses

A. The Group would presume that a financial asset or a group of financial assets is impaired and recognize the impairment losses only if there is objective evidence that a financial asset or a group of financial assets is impaired as a result of a loss event that occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets.

B. The criteria that the Group uses to determine whether there is objective evidence of an impairment loss is as follows: (A)Significant financial difficulty of the issuer or debtor; (B) A breach of contract, such as a default or delinquency in interest or principal payments; (C) The Group, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider; (D)It becomes probable that the borrower will enter bankruptcy or other financial reorganization; (E) The disappearance of an active market for that financial asset because of financial difficulties; (F) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group; (G)Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; (H)A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost. (I) Cases that meet the self-made evaluation items of the Group.

C. The assessment methods of impairment on loans and receivables are based on two categories: individual and collective assessments. Individual assessments are classified as different groups based on whether there is objective evidence of significant impairment of the asset or whether the individual asset has to be specially supervised. If no objective evidence of impairment exists for an individually assessed financial asset, the asset will be classified into a group of financial assets with similar credit risk characteristics for collective assessments.

D. After assessed impairment of loans and receivables, the Group recognizes’ impairment loss measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows of credit enhancement factors discounted at the asset’s

~ 23 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 original effective interest rate. The credit enhancement factors include financial guarantee and net of collateral. If, in a subsequent period, the amount of the impairment loss decreased and such decrease is objectively related to an event occurred after the impairment was recognized, the amount of impairment loss recognized previously shall be reserved by adjusting allowance for doubtful debts. The reversal shall not cause a carrying amount of the financial asset exceeds the amortized cost of the period before recognition of the impairment loss. The amount of the reversal shall be recognized in profit or loss.

E. The above processes of assessment followed the Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/Non-accrual Loans that was adopted by FSC, and MICB applied for specified business for dealing with the credit assets and recognizing the guarantee liabilities were compliant with FSC Letter No. 10110008250.

(11)Derivatives

Derivatives are initially recognized at fair value at the contract date and subsequently measured by fair value. The fair value includes the public quotation in an active market or the latest trade price (e.g., Exchange-traded options), and evaluation techniques such as cash flow discounting model or option pricing model (e.g., Swap contract and foreign exchange contracts). All derivatives are recognized as assets when the fair value is positive and as liabilities when the fair value is negative.

Hybrid contract refers to financial instruments of the embedded derivatives. Economic characteristics and risks of the embedded derivatives and the economic characteristics of the main contract should be examined for the embedded derivatives. If the two are not closely correlated and the main contract is not a financial asset or liability at fair value through profit and loss, the main contract and embedded derivatives should be respectively recognized unless the overall hybrid contract is designated as assets or liabilities at fair value through profit and loss. The embedded derivatives are the financial assets or liabilities at fair value through profit and loss.

(12)Investments accounted for under the equity method

The Group’s investments accounted for under the equity method refer to the investments in associates.

An associate is an entity over which the investor has significant influence, including non-profit organization, but excluding subsidiary and joint venture. Significant influence means the power to participate in the financial and operating policy decisions of the investee but not control them or jointly control them. Accounting policies of associates shall be in agreement with those adopted by the Group for similar transactions and events under similar circumstances.

The operating results and assets and liabilities of associates are included in the consolidated financial statements under the equity method. Investment in an associate is initially recognized at cost. And carrying amount of the investment is changed by the Group’s share of its associate’s post-acquisition profits or losses, which is recognized in the investor’s profit or loss. Receipt of profit distribution from the associate would reduce the carrying amount of the investment. When change in the investee’s other comprehensive income cause movement in the Group’s share of its associates, adjustment shall be made against the carrying amount of the investment.

When the Group’s share of losses in an associate exceeds its interest in the associate, the ~ 24 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Group does not recognize further losses, unless it has incurred statutory obligations or made payments on behalf of the associate. The "interest in an associate" is the carrying amount of the investment in the associate under the equity method together with any long-term interests that, in substance, form part of the investor’s net investment in the associate.

Use of the equity method should cease from the date that the Group loses significant influence over the associate.

(13)Property and equipment

The property and equipment of the Group are recognized on the basis of the historical cost less accumulated depreciation. Historical cost includes all costs directly attributable to the acquisition of the assets. Such assets are subsequently measured using the cost model.

If the future economic benefit generated from subsequent expenses of the asset can be measured reliably and is very likely to flow into the Group, the subsequent expenses of property and equipment may be individually recognized as an asset or included in the carrying amount of the asset. The carrying amount of the replaced part is derecognized.

Land is not affected by depreciation. Depreciation for other assets is provided on a straight-line basis over the estimated useful lives of the assets till residual value. Item Years Buildings and structures 3~60 Equipment 3~20 Leasehold improvements 3~10

(14)Investment property

The properties held by the Group, with an intention to obtain long-term rental profit or capital increase or both and not being used by any other enterprises of the consolidated entities, are classified as investment property. Investment property includes the office building and land leased out in a form of operating lease.

Part of the property may be held by the Group and the remaining will be used to generate rental income or capital appreciation. If the property held by the Group can be sold individually, then the accounting treatment should be made respectively. IAS 16 as endorsed by the FSC applies to the self-use property, and property used to generate rental income or capital appreciation or both is applicable for investment property set out in IAS 40 as endorsed by the FSC. If each part of the property cannot be sold individually and the self-use proportion is not material, then the property is deemed as investment property in its entirety.

When the future economic benefit related to the investment property is highly likely to flow into the Group and the costs can be reliably measured, the investment property shall be recognized as assets. When the future economic benefit generated from subsequent costs is highly likely to flow into the entity and the costs can be reliably measured, the subsequent expenses of the assets shall be capitalized. All maintenance cost are recognized as incurred in the consolidated statement of comprehensive income.

Investment property is subsequently measured using the cost model. Depreciated cost is used to calculate depreciation expense after initial measurement. The depreciation method, remaining useful life and residual value should apply the same rules as applicable for property and equipment.

~ 25 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (15)Foreclosed properties Foreclosed properties are stated at the lower of its carrying amount or fair value less costs to sell at the end of period.

(16)Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

(17)Provisions for liabilities, contingent liabilities and contingent assets

A. When all the following criteria are met, the Group shall recognize a provision: (A) A present obligation (legal or constructive) as a result of a past event; (B) It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

If there are several similar obligations, the outflow of economic benefit as a result of settlement is determined based on the overall obligation. Provisions for liabilities should be recognized when the outflow of economic benefits is probable in order to settle the obligation as a whole even if the outflow of economic benefits from any one of the obligation is remote.

Provisions are measured by the present value of expense which is required for settling the anticipated obligation. The pre-tax discount rate is used with timely adjustment that reflects the current market assessments on the time value of money and the risks specific to the obligation.

B. Contingent liability is a possible obligation that arises from past event, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. Or it could be a present obligation as a result of past event but the payment is not probable or the amount cannot be measured reliably. The Group did not recognize any contingent liabilities but made appropriate disclosure in compliance with relevant regulations.

C. Contingent asset is a possible obligation that arises from past event, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. The Group did not recognize any contingent assets and made appropriate disclosure in compliance with relevant regulations when the economic inflow is probable.

D. Valuation basis for various insurance liabilities

Insurance liabilities of subsidiaries are dealt with following the “Regulations Governing the Setting Aside of Various Reserves by Insurance Enterprises”, “Regulations

~ 26 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Governing Reserve for Compulsory Automobile Liability Insurance and Related Administration”, “Regulations Governing Various Reserves for Nuclear Power Insurance”, “Regulations Governing Risk Dispersing Mechanism for Residential Earthquake Insurance”, “Regulations Governing Reserves for the Members of the Enhance Residential Earthquake Insurance Joint Institute”, “Regulations Governing Various Reserves for Commercial Earthquake Insurance and Typhoon/flood Insurance” and “Regulations Governing Reserve for Natural Disaster by Property Insurance Industry” of regulatory authorities, and shall be certified by actuary authorized by the Financial Supervisory Commission.

Except for the provision of reserves for one-year group life accident insurance which is the higher of actual insurance premium or insurance premium calculated based on the Tai-Cai-Bao Letter No. 852367814, other insurance liabilities are provided based on the following bases:

(A) Unearned premium reserve

Unearned premium reserve is provided based on various risk calculation for effective contracts yet to mature or covered risks yet to terminate in the coverage period, unless otherwise provided by laws or regulations, it is determined by actuary according to various risk characteristics.

(B) Claims reserve

Claims reserves are provided based on claim experience and expenses of various insurance types and are calculated with methods based on actuarial principles. Reserves are provided for Claims Reported but Not Paid and Claims Incurred but Not Reported. For Reported but Not Paid Claims, a reserve has been provided on a per-policy-claim-report basis for each type of insurance.

Special reserves for retained businesses include “Significant Peril Special Reserve” and “Risk Variation Special Reserve”. Except for compulsory automobile liability insurance, nuclear power insurance, residential earthquake insurance and commercial earthquake insurance and typhoon/flood insurance that have another regulations requiring reserves for them to be recognized in ‘liabilities’, the additional special reserve provision for each year calculated less income tax is listed as special reserve under equity. The deficiency less income tax for each year shall be written off or recovered using special reserves under equity.

(D) Deficiency reserve

Potential claims and expenses are estimated for effective contracts yet to mature or covered risks yet to terminate in the coverage period. The estimated amount, including the premium deficiency reserve based on the difference between claim reserves/expenses, and unearned premium reserve and the expected premium income shall be recognized.

(E) Liability adequacy reserve

In accordance with IFRS 4, ‘Insurance Contracts’ and the regulations of The Actuarial Institute Of The Republic Of China, liability adequacy test is performed using the gross premium valuation based on all contracts of the Company as a whole.

~ 27 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 At the end of the reporting period, liability adequacy reserve is provided for all deficiency in net carrying amount and recognized in profit or loss, through comparison between the net carrying amounts of insurance liabilities less deferred acquisition cost and related intangible assets and the present value of estimated future cash flows of insurance contracts.

(F) Unqualified reinsurance reserve

Unqualified reinsurance reserves of received and ceded reinsurance business under ceded reinsurance and other risk assumption mechanism on the ceded date or balance sheet date shall be reserved and disclosed in the notes to the financial statements.

Among the reserves above, except for unearned premium reserve for long-term fire insurance which was calculated and provided based on the coefficient table of unearned premium reserve for long-term fire insurance, the other reserves were not calculated by discounting.

(18)Financial guarantee contracts

A financial guarantee contract is a contract that requires the Group to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

The Group initially recognizes financial guarantee contracts at fair value on the date of issuance. The Group charges a service fee when the contract is signed and therefore the service fee income charged is the fair value at the date that the financial guarantee contract is signed. Service fee received in advance is recognized in deferred accounts and amortized through straight-line method during the contract term.

Subsequently, the Group should measure the financial guarantee contract issued at the higher of:

A. the amount determined in accordance with IAS 37; and

B. The amount initially recognized less, when appropriate, cumulative amortization recognized in accordance with IAS 18, “Revenue”.

The best estimate of the liability amount of a financial guarantee contract requires management to exercise their judgment combined with historical loss data based on the similar transaction experiences.

The increase in liabilities due to financial guarantee contract is recognized in “bad debt expenses and reserve for guarantee liabilities”.

The Group assesses the possible loss on credit assets within and off balance sheets in accordance with “Regulations Governing the Procedures for Bills Finance Companies to Evaluate Assets, Set Aside Loss Reserves, and Handle Non-Performing Credit, Non-Accrual Loans, and Bad Debt”, and provides adequate reserve for guarantee liabilities.

(19)Employee benefits

A. Short-term employee benefits

The Group should recognize the undiscounted amount of the short-term benefits expected

~ 28 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 to be paid in the future as expenses in the period when the employees render service.

B. Employee preferential savings

The Group provides preferential interest rate for employees, including flat referential savings for current employees and flat preferential saving for retired employees and current employees. The difference gap compared to market interest rate is deemed as employee benefits.

According to “Regulation Governing the Preparation of Financial Statements by Public Banks”, the preferential monthly interest paid to current employees is calculated based on accrual basis, and the difference between the preferential interest rate and the market interest rate is recognized under “employee benefit expense”. According to Article 28 of “Regulation Governing the Preparation of Financial Statements by Public Banks”, the excessive interest arising from the interest rate upon retirement agreed with the employees in excess of general market interest rate should be recognized in accordance with IAS 19, Defined Benefit Plan, as endorsed by FSC. Relevant past service costs will be recognized immediately in the period incurred. However, various parameters should be in compliance with the competent authority if indicated otherwise. Any resulting actuarial gains and losses should be recognized in other comprehensive income in the period incurred. Please refer to Note 6 (23) 2 for more information.

C. Termination benefits

Termination benefit is paid to the employees who are eligible for retirement and terminated or voluntarily dismiss in exchange of termination benefit. The Group has made promises in the formal detailed employment termination plan which is irrevocable, and shall recognize liabilities when providing termination benefit to employees who voluntarily resign as a result of encouragement. Termination benefit paid 12 months after the financial reporting date should be discounted.

D. Post-employment benefit

The pension plan of the Group includes both Defined Benefit Plan and Defined Contribution Plan. In addition, defined contribution plan is adopted for employees working overseas according to the local regulations.

(A)Defined contribution plans

The contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid pension assets are recognized to the extent of a cash refund or a reduction in the future payments.

(B) Defined benefit plans a. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognized past service costs. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using market yields at the balance sheet date on high-quality

~ 29 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 corporate bonds with a currency and term consistent with the currency and term of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses market yields on government bonds (at the balance sheet date) instead. b. Actuarial gains and losses arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise.

c. Past service costs are recognized immediately in profit or loss if vested immediately; if not, the past service costs are amortized on a straight-line basis over the vesting period.

d. Pension cost for an interim period is calculated on the basis from the beginning to the end of current period by using the actuarially determined pension cost rate at the end of the prior financial year. If there is any significant market movement, contraction, settlement, or other significant once-off event after the end of the prior financial year, adjustment shall be made accordingly, and related information is disclosed in compliance with above-mentioned policies.

E. Employees’ bonus and directors’ and supervisors’ remuneration

Employees’ bonus and directors’ and supervisors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. However, if the accrued amounts for employees’ bonus and directors’ and supervisors’ remuneration are different from the actual distributed amounts as resolved by the stockholders at their stockholders’ meeting subsequently, the differences should be recognized based on the accounting for changes in estimates.

(20)Revenue and expense

Income and expense of the Group are recognized as incurred. Expense consists of employee benefit expense, depreciation and amortization expense and other business and administration expenses. Dividend revenues are recognized within ‘Revenues other than interest, net’ in the consolidated statement of comprehensive income when the right to receive dividends is assured. A. Other than those classified as financial assets and liabilities at fair value through profit and loss, all the interest income and interest expenses generated from interest-bearing financial assets are calculated by effective interest rate according to relevant regulations and recognized as “interest income” and “interest expense” in the consolidated statement of comprehensive income. B. Service fee income and expense are recognized upon the completion of services of loans or other services; service fee earned from performing significant items shall be recognized upon the completion of the service, such as syndication loan service fee received from sponsor, service fee income and expense of subsequent services of loans are amortized or included in the calculation of effective interest rate of loans and receivables during the service period. When determining whether the agreed rate of interest should be adjusted to effective interest rate for interest-earning loans and receivables, the loans and receivables may be measured by the initial amounts if the effects on discount are insignificant according to the “Regulation Governing the Preparation of Financial Reports by Public Banks” and “Regulations Governing the Preparation of Financial Reports by Financial Holding Companies”.

~ 30 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 C. Income and expense of insurance business

The premiums income derived from underwriting business is recognized in the year when the respective policies are issued. The associated expenses such as commissions, agency cost and service charges are recognized accordingly. Claims of direct coverage are recognized based on claims (including claim expenses) applied and paid during the period. Please refer to Note 4 (23) for related details of provision for liabilities.

(21)Classification of insurance contracts

A. In accordance with IFRS 4, ‘Insurance Contracts’, subsidiaries classify insurance products issued. An insurance contract is a “contract” under which one party (the insurer) accepts significant insurance risk transferred from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. Insurance contract defined above can be applied to original insurance contract and reinsurance contract. For the Group, significant insurance risk refers to that the Group has to pay significantly additional compensation when any insured event occurs.

B. All direct insurance contracts issued or reinsurance contracts taken by subsidiaries during the financial statements period are insurance contracts.

(22)Reinsurance

A. Revenues and expenses of inward and outward reinsurance business are recognized on the date the bills are received. Appropriate methods should be adopted in estimating payments and income arising from unrecognized reinsurance expense, such as revenues and expenses of reinsurance commission, revenues or expenses of reinsurance surcharge fee, and amortized claim and payment of reinsurance, etc., should all be recognized. Other relevant profit and loss of reinsurance are not deferrable.

B. With the classification of reinsurance contract, the Group assesses the agreements under the deposit accounting given that the objective insurance risks of reinsurance agreements are not transferred to the reinsured.

C. The Group evaluates whether privilege of reinsured is impaired or non-collectable on a regular basis and offers specifically the alternatives such as reinsurance reserve assets, reinsurance claims and payment receivables, reinsurance transaction receivables and outward insurance responsibility reserve fund. When objective evidence indicates that such option being exercised after the initial recognition will possibly lead to the Group being unable to collect all receivables on the contract, and the impact of the receivables from reinsured can be reliably measured with regard to the aforementioned event. The provision for accumulated loss will be recognized if the receivables do not exceed reinsurance reserve asset at book value. Recognition should be appropriately made according to the amount for amortizable claim, payment of reinsurance, reinsurance transaction receivables and non-collectable outward reinsurance reserve fund.

(23)Income tax

A. Current income tax

Income tax payable (refundable) is calculated on the basis of the tax laws enacted in the countries where the Group operates and generates taxable income. Except that the transactions or other matters are directly recognized in other comprehensive income or

~ 31 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 equity, and that related income taxes in the period are recognized in other comprehensive income or directly derecognized from equity, all the others should be recognized as income or expense as recorded as gain and loss in the period.

B. Deferred income tax

Deferred income tax assets and liabilities are measured based on the tax rate of the anticipated period that the future assets realization or the liabilities settlement requires, which is based on the effective or existing tax rate at the consolidated balance sheet date. The carrying amount and temporary differences of assets and liabilities included in the consolidated balance sheet are calculated through liability method and recognized as deferred income tax. The temporary difference of the Group mainly occurs due to the setting aside and transferring of depreciation of property and equipment, valuation of certain financial instruments (including derivatives), and reserve for pension and other post-employment benefits. Deductible temporary difference within the scope that is probable to offset taxable income is recognized as deferred income tax.

Temporary difference related to investment in the subsidiaries, branches and affiliated entities are recognized as deferred income tax liabilities. However, when the Group is capable of controlling the time length required to reverse the temporary difference and the temporary difference is unlikely to reverse in the foreseeable future, the temporary difference is not recognized.

The land revaluation appraisal occurring due to the revaluation assessment in line with relevant regulations, deemed as taxable temporary difference, is recognized as deferred income tax liabilities.

If the future taxable income is probable to provide as unused loss carry forwards or deferred income tax credit which can be realized in the future, the proportion of realization is deemed as deferred income tax assets.

C. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when there is a legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

D. Certain transactions of the Group are recognized in other comprehensive income, such as change in unrealized gain and loss of available-for-sale financial assets and hedging transaction of cash flow. The tax effects on these kinds of transactions are also recognized in other comprehensive income.

E. The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

(24)Share capital and dividends

Net of incremental costs directly attributable to the issuance of new shares will be removed from equity after related income tax expenses is eliminated. Dividends on ordinary shares are recognized in equity in the year in which they are approved by the shareholders. Cash

~ 32 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 dividends are recorded as liabilities. Stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance. They are not recognized and only disclosed as subsequent event in the notes if the dividend declaration date is later than the consolidated balance sheet date.

(25)Operating segments

Information of operating segments of the Group is reported in the same method as the internal management report provided to the Chief Operating Decision-Maker (CODM). The CODM is in charge of allocating resources to operating segments and evaluating their performance.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. These judgements affect the results of the financial reporting.

The assumptions and estimates made by the Group are the best assumptions and estimates under the IFRSs. Assumptions and estimates are continually evaluated and adjusted based on historical experience and other factors including projections of the future. Management’s critical judgments in applying the Group’s accounting policies that have significant impact on the consolidated financial statements are outlined below:

A. Financial instruments (including derivative instruments) valuation

If there is no quoted market price available in an active market for financial instruments, a valuation technique will be adopted to measure the fair value. If there are observable data of similar financial instruments in the market, then the fair value of the underlying financial instruments is estimated by reference to the observable data; otherwise, the fair value is estimated using the appropriate pricing models which are commonly used in the market. The assumptions used in the pricing models should refer to the observable data in the market. However, when those data are not observable from the market and/or the assumptions used in the pricing models are more subjective, the fair value of the financial instruments may be estimated based on historical data or other information. The pricing models used by the Group are all evaluated and tested periodically to ensure the outputs may reflect the actual data and market prices. The primary assumptions used in determining the fair values of financial instruments are provided in Note 7. The management believes the pricing models and assumptions used have appropriately determined the fair values of financial instruments.

B. Loan loss impairment

The Group’s impairment evaluations are in compliance with the regulations of regulatory authorities. The Group evaluates cash flows and impairment amounts, through model analysis and individual case assessment, on a monthly basis based on several factors, such as nature of client risk and security coverage. The Group recognizes impairment loss whenever there is observable evidence showing that impairment has occurred. This evidence includes repayment status of debtor, event that would cause delinquency in payments, and any significantly unfavorable changes in national or local economic circumstance. Future cash flows are estimated primarily based on the length of overdue time, the status of debtors, security coverage, guarantee of external institution and historical experiences. The incidence of impairment and subsequent collectability rate used in impairment evaluations are estimated based on the types of products and historical data. The Group reviews the assumptions and inputs used in impairment evaluations periodically to ensure they are all reasonable. ~ 33 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 C. Post-employment benefit

The present value of post-employment benefit obligations are estimated based on several assumptions. Any changes in those assumptions will affect the carrying amounts of post-employment benefit obligations.

The assumptions used to determine net pension cost (revenue) comprise the discount rate. The Group determines the appropriate discount rate at the end of each year, and uses the discount rate in calculating the present value of future cash out of post-employment benefit obligations. The discount rate is chosen by reference to the rate of high-quality corporate bonds where the currency and maturity date of high-quality corporate bonds are in agreement with those of post-employment benefit obligations.

D. Insurance liabilities The critical accounting estimates and assumptions used for subsidiaries’ primary insurance contracts comprise liabilities of reserve for claims and assets of reserve for claims transferred to reinsurer. Reserve for claims is estimated based on the nature and extent of insurance risks, claim development mode, historical data, etc. and using the actuarial method used worldwide. The actuarial method is included in the insurance specification. The reserve for claims that are reported but not paid is estimated by each case and the remaining is the reserve for claims not reported. Among the assets of reserve for claims transferred to reinsurer, the refund of claims that are reported but not paid is estimated based on individual reinsurance terms, and the refund of claims that are not reported is estimated based on the difference between the reserve for unpaid claims for original insurance and reinsurance and the reserve for unpaid claims for retained insurance business. E. Income tax The Group has to pay income taxes in different countries. The estimates of income taxes payable in all these countries include the considerations of many transactions and calculations. The Group may recognize additional income tax liabilities for some tax issues when necessary. Any difference between final income taxes payable and initially recognized income taxes payable will affect the amounts of current income taxes and deferred income taxes.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

June 30, 2014 December 31, 2013 Cash on hand and petty cash $ 13,806,628 $ 14,331,145 Bank deposits 5,975,202 5,930,879 Cash equivalents 1,473,667 1,097,470 Checks for clearance 1,386,385 2,064,396 Due from banks 151,553,764 136,864,305 Total $ 174,195,646 $ 160,288,195

June 30, 2013 January 1, 2013 Cash on hand and petty cash $ 13,260,725 $ 13,459,563 Bank deposits 5,819,868 5,830,025 Cash equivalents 1,624,176 1,842,979 Checks for clearance 757,869 838,854 Due from banks 90,677,023 71,088,571 Total $ 112,139,661 $ 93,059,992

~ 34 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Note: Pursuant to the requirements of the competent authority, deposits of overseas branches with foreign Central Banks were reclassified from due from banks to due from the Central Bank. Thus as of December 31, June 30, and January 1, 2013, due from banks of $344,566,397, $187,851,838, and $291,456,671 were adjusted to $136,864,305, $90,677,023, and $71,088,571, respectively. (2) Due from the Central Bank and call loans to banks

June 30, 2014 December 31, 2013 Reserve for deposits-category A $ 10,524,153 $ 19,192,096 Reserve for deposits-category B 36,958,624 35,270,994 Reserve for deposits- general 5,700,283 5,700,282 Call loans to banks and bank overdrafts 56,697,435 37,456,280 Reserve for deposits- foreign currency 439,225 490,698 Deposits of overseas branches with foreign Central Banks (Note) 86,527,231 207,702,092 Import and export loans from banks 93,087,001 81,916,206 Participate in interbank financing with risk 945,280 3,230,588 Subtotal 290,879,232 390,959,236 Less：allowance for doubtful accounts – import and exportloansfrombanks ( 1,210,131 ) - Total $ 289,669,101 $ 390,959,236

June30,2013 January1,2013 Reserve for deposits-category A $ 16,899,090 $ 20,360,016 Reserve for deposits-category B 34,953,744 31,919,840 Reserve for deposits- general 5,700,284 5,700,275 Call loans to banks and bank overdrafts 41,883,145 48,819,987 Reserve for deposits- foreign currency 397,055 470,583 Deposits of overseas branches with foreign Central Banks (Note) 97,174,815 220,368,100 Import and export loans from banks 69,275,797 13,042,150 Participate in interbank financing with risk 6,931,662 24,749,186 Subtotal 273,215,592 365,430,137 Less：allowance for doubtful accounts – import and export loans from banks - - Total $ 273,215,592 $ 365,430,137 Note: please see Note 6(1) As required by relevant laws, the reserves for deposits are calculated at required reserve ratios based on the monthly average balances of various deposit accounts. Reserve for deposits - category B cannot be used except upon the monthly adjustment of the reserve.

(3) Financial assets at fair value through profit or loss June 30, 2014 December 31, 2013 June 30, 2013 Financial assets held for trading Stocks $ 8,715,539 $ 6,474,129 $ 5,689,522 Commercial papers 93,575,870 99,688,236 94,481,565 Treasury bills 496,693 495,532 4,589,364 Beneficiary certificates 394,968 228,230 - Negotiable certificate of deposit 18,724,524 28,099,561 32,086,635 Bonds 44,399,331 52,101,810 51,042,080 Derivative instruments 5,858,399 4,895,299 4,306,088 Other securities 272,144 643,371 375,366 Subtotal 172,437,468 192,626,168 192,570,620 Financial assets designated as at fair value through profit or loss Convertible corporate bond asset swaps 3,288,253 3,174,591 2,772,124 Total $ 175,725,721 $ 195,800,759 $ 195,342,744

~ 35 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 A. Realized and unrealized gain or loss on financial assets and liabilities held for trading and financial assets and liabilities designated as at fair value through profit or loss amounted to $1,837,166, $316,502, $2,855,126 and $719,291 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

B. Financial instruments were designated as at fair value through profit or loss for the purpose of eliminating recognition inconsistency.

C. Please refer to Note 12 for details of the aforementioned financial assets provided as collaterals as of June 30, 2014, December 31, 2013 and June 30, 2013.

D. As of June 30, 2014, December 31, 2013 and June 30, 2013, the above financial assets used as underlying assets for repurchase agreements held by the Group were $111,091,984, $110,490,803 and $113,503,211, respectively.

(4) Receivables, net

June 30, 2014 December 31, 2013 June 30, 2013 Accounts receivable $ 23,272,165 $ 6,840,860 $ 8,500,343 Factoring receivable 41,806,936 69,336,768 55,600,741 Notes receivable 94,400 84,590 122,083 Accrued income and interest 6,549,758 6,141,851 6,055,127 Acceptances receivable 9,807,138 11,341,730 12,156,327 Insurance receivable 1,227,286 819,361 1,128,765 Margin loans receivable 13,031,050 11,389,103 10,800,779 Recovery of accounts receivable 2,044,030 36,001 186,415 Purchase of obligor receivable for acting as assignee 108,116 46,256 - Purchase of assets for acting as assignee 950,000 950,000 950,000 Credit card receivables 5,595,314 3,995,541 5,266,626 Usance outright receivable 86,572,510 63,149,254 33,535,269 Other receivables 14,703,359 11,524,378 4,603,940 Total 205,762,062 185,655,693 138,906,415 Less: Allowance for bad debts ( 2,117,836 ) ( 1,067,752 ) ( 1,356,367 ) Receivables, net $ 203,644,226 $ 184,587,941 $ 137,550,048

(5) Bills discounted and loans, net

June 30, 2014 December 31, 2013 June 30, 2013 Bills and notes discounted 1,746,458 1,797,601 1,783,145 Overdrafts 730,569,523 698,836,700 667,602,032 Short-term loans 420,640,650 462,928,362 433,487,748 Medium-term loans 513,729,271 489,432,634 458,488,007 Long-term loans 21,218,156 20,543,348 17,607,802 Import/export bills negotiated $ 27,288 $ 18,288 $ 54,557 Loans transferred to non-accrual loans 1,572,676 2,791,291 2,515,493 Total 1,689,504,022 1,676,348,224 1,581,538,784 Less: Allowance for bad debts ( 20,534,943 ) ( 21,771,031 ) ( 18,075,421 ) Loans, net $ 1,668,969,079 $ 1,654,577,193 $ 1,563,463,363

A. As of June 30, 2014 December 31, 2013, and June 30, 2013, the amounts of reclassified non-performing to overdue receivables’ amount included interest receivable $7,126, $12,914 and $15,797. B. Movements in allowance for credit losses Information as to the evaluations of impairment of the Group’s loans and receivables as of June 30, 2014, December 31, 2013 and June 30, 2013 was as follows:

~ 36 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (A)Loans: June 30, 2014 Item Loans Allowance for credit losses With existing objective Individual evidence of individual assessment $ 23,021,966 $ 4,327,240 impairment Group assessment 945,879 153,462 Without existing objective evidence of individual Group impairment assessment 1,665,536,177 16,054,241 December 31, 2013 Item Loans Allowance for credit losses With existing objective Individual evidence of individual assessment $ 32,872,359 $ 4,844,321 impairment Group assessment 753 19 Without existing objective evidence of individual Group impairment assessment 1,643,475,112 16,926,691 June 30, 2013 Item Loans Allowance for credit losses With existing objective Individual evidence of individual assessment $ 31,343,620 $ 5,252,115 impairment Group assessment 462 3 Without existing objective evidence of individual Group impairment assessment 1,550,194,702 12,823,303

(B) Receivables: June 30, 2014 Item Receivables Allowance for credit losses With existing objective Individual evidence of individual assessment $ 217,939 $ 74,642 impairment Group assessment 332,708 37,665 Without existing objective evidence of individual Group impairment assessment 205,211,416 2,005,529

December 31, 2013 Item Receivables Allowance for credit losses With existing objective Individual evidence of individual assessment $ 364,584 $ 41,195 impairment Group assessment 356,994 42,052 Without existing objective evidence of individual Group impairment assessment 184,934,115 984,505 June 30, 2013 Item Loans Allowance for credit losses With existing objective Individual evidence of individual assessment $ 381,848 $ 280,148 impairment Group assessment 384,295 53,273 Without existing objective evidence of individual Group impairment assessment 138,140,272 1,022,946 Before each financial reporting date, the Group considers asset quality in respect of bills discounted and

~ 37 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 loans, accounts receivable, non-accrual loans transferred from other accounts, and remittance acquired in the period in order to set aside appropriate allowance for bad debts. Please refer to Note 8 (3) for detailed policies of credit risk management. For the six-month periods ended June 30, 2014 and 2013, details of recognized allowance for bad debts and relevant movement are as follows:

For the six-month period ended June 30, 2014 Non-accrual loans Accounts Bills discounted transferred from Remittance Import and export receivable and loans other account acquired loans from bank Total Balance, January 1 $ 1,067,752 $ 21,771,031 $ 13,363 $ 449 $ - $ 22,852,595 Provision (Reversal) 1,041,675 ( 1,201,650 )( 1,263 ) ( 319 ) 1,210,131 1,048,574 Write-off-net ( 102,332 ) ( 496,143 ) - - - ( 598,475) Recovery of written-off credits 68,987 979,117 - - - 1,048,104 Effects of exchange rate changes and others 41,754 ( 517,412) - - - ( 475,658) Balance, June 30 $ 2,117,836 $ 20,534,943 $ 12,100 $ 130 $ 1,210,131 $ 23,875,140

For the six-month period ended June 30, 2013 Non-accrual loans Accounts Bills discounted transferred from Remittance Import and export receivable and loans other account acquired loans from bank Total Balance, January 1 $ 2,441,959 $ 16,430,909 $ 181,345 $ 205 $ - $ 19,054,418 Provision (Reversal) ( 942,186 ) 2,589,830 ( 126,436 ) 320 - 1,521,528 Write-off-net ( 90,643 ) ( 2,328,356 ) - - - ( 2,418,999) Recovery of written-off credits 151,319 1,408,241 - - - 1,559,560 Effects of exchange rate changes and others ( 204,082 ) ( 25,203 )( 1,724 ) - - ( 231,009) Balance, June 30 $ 1,356,367 $ 18,075,421 $ 53,185 $ 525 $ - $ 19,485,498

(6) Reinsurance contract assets-net

A.Details are as follows:

June 30, 2014 December 31, 2013 June 30, 2013 Reinsurance claims and payment receivables $ 238,775 $ 335,575 $ 168,924 Reinsurance transaction receivables 140,345 153,899 164,749 Overdue reinsurance transaction receivables 18,442 13,297 18,505 Less: Allowance for bad debts ( 14,110 ) ( 11,490 ) ( 14,080 ) Subtotal 383,452 491,281 338,098 Ceded unearned premium reserve 1,605,643 1,391,562 1,586,734 Ceded claim reserve 1,492,401 1,411,094 1,511,679 Ceded premium deficiency reserve - - 10 Subtotal 3,098,044 2,802,656 3,098,423 Total $ 3,481,496 $ 3,293,937 $ 3,436,521

~ 38 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 B.Changes in allowance for bad debts of reinsurance contract assets are as follows:

2014 2013 Group provision Group provision Balance, January 1 $ 11,490 $ 8,057 Net provision 2,619 6,005 Foreign currency translation adjustments 1 18 Balance, June 30 $ 14,110 $ 14,080

(7) Available-for-sale financial assets, net

June 30, 2014 December 31, 2013 June 30, 2013 Stocks $ 22,201,784 $ 20,892,938 $ 19,203,782 Commercial papers 77,215,679 64,916,633 70,006,562 Bonds 173,051,588 176,209,280 158,772,824 Beneficiary certificates 354,747 7,806,853 10,691,146 Beneficiary securities 816,614 1,111,454 958,675 Certificate of deposit 2,708,788 2,006,475 501,529 Total $ 276,349,200 $ 272,943,633 $ 260,134,518

A.MICB has available-for-sale financial assets which consist of bonds and bills sold under repurchase agreements amounting to $112,756,557, $102,354,653 and $88,258,687 as of June 30, 2014, December 31, 2013 and June 30, 2013, respectively.

B.The Company issued the initial unsecured exchangeable corporate bonds as the underlying exchanges of TBB that was resolved at the Board of Directors’ meeting on May 12, 2011. These bonds were matured on January 13,2013. In addition, the Company entered into a trust agreement with Hua Nan Commercial Bank, Ltd. on April 16, 2013 in which aforesaid stocks will be fully entrusted.

C. Please refer to Note 12 for details of the aforementioned financial assets provided as collateral as of June 30, 2014, December 31, 2013 and June 30, 2013.

(8) Held-to-maturity financial assets, net

June 30, 2014 December 31, 2013 June 30, 2013 Certificate of time deposit by Central Bank $ 157,000,000 $ 161,850,000 $ 144,450,000 Financial bonds 15,203,001 16,291,795 15,018,627 Government bonds 4,379,061 3,861,289 3,916,040 Corporate bonds 2,380,951 2,408,149 2,910,812 Total $ 178,963,013 $ 184,411,233 $ 166,295,479

A.Please refer to Note 12 for details of the aforementioned financial assets pledged as collateral as of June 30, 2014, December 31, 2013 and June 30, 2013.

B. MICB has held-to-maturity financial assets which consist of bonds and bills sold under repurchase agreements amounting to $293,764, $433,486 and $0 as of June 30, 2014, December 31, 2013 and June 30, 2013, respectively.

~ 39 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (9) Investments accounted for under the equity method, net

A. Details of the investments accounted for under the equity method:

June 30, 2014 December 31, 2013 June 30, 2013 Percentage of Percentage of Percentage of Investee Company Amount Shareholding Amount Shareholding Amount Shareholding Cathay Investment & Development Corporation (Bahamas) $ 51,378 100.00 $ 51,202 100.00 $ 51,502 100.00 Mega Management Consulting Corporation 34,713 100.00 65,326 100.00 50,774 100.00 Cathay Investment & Warehousing Ltd. 57,936 100.00 58,691 100.00 60,244 100.00 Ramlett Finance Holdings Inc. 1,444 100.00 805 100.00 - 100.00 Yung Shing Industries Co. 647,096 99.56 639,718 99.56 633,658 99.56 China Products Trading Company 27,587 68.27 27,500 68.27 34,558 68.27 United Venture Corporation (Note) 1,432 25.31 1,444 25.31 1,465 25.31 China Products Trading Company (Thailand) 20,002 25.25 16,395 25.25 18,901 25.25 IP Funds even Limited 86,768 25.00 102,339 25.00 176,273 25.00 An Feng Enterprise Co., Ltd. 12,327 25.00 11,931 25.00 12,256 25.00 Taiwan Bills Finance Corporation 1,505,654 24.55 1,489,482 24.55 1,420,095 24.55 Ever strong Iron & Foundry & Mfg. Corporation 40,876 22.22 41,713 22.22 39,351 22.22 China Real Estate Management Co., Ltd. 192,415 20.00 191,005 20.00 237,537 20.00 Total $ 2,679,628 $ 2,697,551 $ 2,736,614 Note: Since the investee had incurred long-term operating losses, shareholders resolved to dissolve the investee in 2013. At present, the investee is undertaking liquidation procedures. B. The Group’s share of profit of its associates accounted for under the equity method amounted to $20,866, $33,992, $47,480 and $60,416, for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

C. The shares of associates and joint ventures the Group owns have no quoted market price available in an active market. There is no significant restriction on fund transfers from the associates to their shareholders, i.e. distribution of cash dividends, repayment of loans or money advanced.

(10) Other financial assets, net

June 30, 2014 December 31, 2013 June 30, 2013 Remittance purchased $ 16,970 $ 26,477 $ 53,011 Purchase of obligor receivable 415,759 3,526,755 6,800,786 Debt investments with no active market 4,544,503 4,425,893 4,375,687 Equity investments carried at cost 12,567,945 12,656,141 13,767,198 Non-accrual loans transferred from accounts other than loans 22,729 22,545 69,178 Restricted assets 974,458 900,100 900,100 Margin deposits from client 1,505,633 1,534,161 1,992,747 Others 1,886,634 1,720,200 1,578,840 Subtotal 21,934,631 24,812,272 29,537,547 Less: Allowance for bad debts－ Remittance purchased ( 130 ) ( 448 ) ( 525 ) Allowance for bad debts－ Non-accrual loans transferred from accounts other than loans ( 12,100 ) ( 13,364 ) ( 53,185 ) Accumulated impairment－ Equity investments carried at cost ( 1,222,537 ) ( 1,368,256 ) ( 1,448,640 ) Total $ 20,699,864 $ 23,430,204 $ 28,035,197

~ 40 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 A. As unlisted shares the Group owns have no quoted market price available in an active market and cannot be measured reliably, they are measured at cost.

B. The methods and assumptions used to estimate fair value of debt instruments without active market are provided in Note 7(4).

C. As of June 30, 2014, December 31, 2013 and June 30, 2013, for the aforesaid financial assets pledged as collaterals, please refer to Note 12.

(11)Investment property, net Land and land Buildings and January 1, 2014 improvements structures Total Cost $ 1,407,191 $ 813,107 $ 2,220,298 Accumulated depreciation and impairment ( 4,848 ) ( 156,022 ) ( 160,870 ) 1,402,343 657,085 2,059,428 For the six-month period ended June 30, 2014 Additions 280,000 - 280,000 Disposals ( 13,119 ) ( 11,617 ) ( 24,736 ) Reversal of impairment 2,527 1,873 4,400 Depreciation - ( 8,567 ) ( 8,567 ) Foreign exchange differences - 5 5 June 30, 2014 $ 1,671,751 $ 638,779 $ 2,310,530

June 30, 2014 Cost $ 1,674,072 $ 800,688 $ 2,474,760 Accumulated depreciation and impairment ( 2,321 ) ( 161,909 ) ( 164,230 ) $ 1,671,751 $ 638,779 $ 2,310,530

Land and land Buildings and January 1, 2013 improvements structures Total Cost $ 1,437,662 $ 857,684 $ 2,295,346 Accumulated depreciation and impairment ( 27,891 ) ( 166,328 ) ( 194,219 ) 1,409,771 691,356 2,101,127 For the six-month period ended June 30, 2013 Additions 129,840 12,175 142,015 Disposals ( 7,831 ) ( 15,804 ) ( 23,635 ) Reversal of impairment ( 761 ) ( 136 ) ( 897 ) Transfers ( 64 ) - ( 64 ) Depreciation - ( 8,906 ) ( 8,906 ) Foreign exchange differences - ( 4 ) ( 4 ) June 30, 2013 $ 1,530,955 $ 678,681 $ 2,209,636

June 30, 2013 Cost $ 1,559,568 $ 853,815 $ 2,413,383 Accumulated depreciation and impairment ( 28,611 ) ( 175,136 ) ( 203,747 ) $ 1,530,957 $ 678,679 $ 2,209,636 A. The fair value of the investment property held by the Group as of June 30, 2014, December 31, 2013 and June 30, 2013 was $5,079,800, $4,399,928 and $4,083,251, respectively according to the result of valuation by an independent valuation expert using comprehensive consideration of comparison method, income approach, and cost approach. In addition, a portion of investment property was valued according to the result of internal valuation, which was made by choosing investments in neighboring regions shown in the public website of Department of Land Administration, M.O.I. and calculating the average actual transaction price of

~ 41 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 the investments at the end of each financial reporting period last year.

B. Rental income from the lease of the investment property for the three-month and six-month periods ended June 30, 2014 and 2013 was $29,501, $28,963, $49,692 and $52,653, respectively.

C. As of June 30, 2014, December 31, 2013 and June 30, 2013, for the aforesaid investment property pledged as collaterals, please refer to Note 12.

(12)Property and equipment, net A. Details of property and equipment are as follows:

Land and land Leasehold Prepayments January 1, 2014 improvements Building Equipment improvements for equipment Total Cost 15,019,820$ 12,639,591$ 6,264,481$ 257,312$ 32,849$ 34,214,053$ Accumulated depreciation and impairment 505,429)( 6,046,146)( 5,313,692)( 198,541)( - 12,063,808)( Total 14,514,391$ 6,593,445$ 950,789$ 58,771$ 32,849$ 22,150,245$ For the six-month period ended June 30, 2014 AtJanuary1,2014 14,514,391$ 6,593,445$ 950,789$ 58,771$ 32,849$ 22,150,245$ Additions - 36,752 125,342 4,448 51,153 217,695 Disposals - - 5,082)( 846)( - 5,928)( Transfers - 130,182)( 194,717)( 8,229)( - 333,128)( Depreciation 2,158 575 - - - 2,733 Reversalofimpairmentloss - - 26,899 9,443 38,404)( 2,062)( Foreign exchange differences 139 8,316 3,282 18 - 11,755 June 30, 2014 14,516,688$ 6,508,906$ 906,513$ 63,605$ 45,598$ 22,041,310$ June 30, 2014 Cost 15,019,959$ 12,688,834$ 6,301,120$ 265,848$ 45,597$ 34,321,358$ Accumulated depreciation and impairment 503,271)( 6,179,928)( 5,394,606)( 202,243)( - 12,280,048)( 14,516,688$ 6,508,906$ 906,514$ 63,605$ 45,597$ 22,041,310$

Land and land Leasehold Prepayments January 1, 2013 improvements Building Equipment improvements for equipment Total Cost 14,997,800$ 12,993,406$ 6,196,506$ 249,960$ 20,489$ 34,458,161$ Accumulated depreciation and impairment 607,164)( 6,157,620)( 5,175,636)( 186,650)( - 12,127,070)( Total 14,390,636$ 6,835,786$ 1,020,870$ 63,310$ 20,489$ 22,331,091$ For the six-month period ended June 30, 2013 AtJanuary1,2014 14,390,636$ 6,835,786$ 1,020,870$ 63,310$ 20,489$ 22,331,091$ Additions 21,550 17,448 155,876 11,493 37,847 244,214 Disposals - 1,022)( 116)( - - 1,138)( Transfers - 133,718)( 201,455)( 10,984)( - 346,157)( Depreciation 2,070 1,647)( - - - 423 Reversalofimpairmentloss - - 13,035 - 19,823)( 6,788)( Foreign exchange differences 483 1,961 9,587)( 160 - 6,983)( June 30, 2013 14,414,739$ 6,718,808$ 978,623$ 63,979$ 38,513$ 22,214,662$ June 30, 2013 Cost 15,019,833$ 12,673,404$ 6,212,398$ 259,385$ 38,513$ 34,203,533$ Accumulated depreciation and impairment 605,094)( 5,954,593)( 5,233,777)( 195,407)( - 11,988,871)( 14,414,739$ 6,718,811$ 978,621$ 63,978$ 38,513$ 22,214,662$

Please refer to Note 12 for details of the property and equipment pledged as collateral as of June 30, 2014, December 31, 2013 and June 30, 2013.

~ 42 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (13)Other assets, net June 30, 2014 December 31, 2013 June 30, 2013 Prepayments $ 1,990,529 $ 6,019,035 $ 5,645,435 Refundable deposits 627,946 1,010,673 937,293 Guarantee deposits held for operation and funds for security settlements 1,222,368 1,213,682 1,224,110 Temporary payments 219,575 461,564 250,842 Foreclosed properties - 23,602 - Others 67,810 82,184 80,225 Total $ 4,128,228 $ 8,810,740 $ 8,137,905

(14)Due to the Central Bank and financial institutions

June 30, 2014 December 31, 2013 June 30, 2013 Call loans from banks $ 218,880,132 $ 404,334,538 $ 266,952,901 Due to Chunghwa Post 2,751,739 2,912,531 3,940,842 Overdrafts on banks 3,677,998 4,187,454 3,126,949 Due to the financial institutions 35,674,269 59,559,703 52,718,524 Due to the Central Bank 115,111,887 19,941,504 18,823,286 Total $ 376,096,025 $ 490,935,730 $ 345,562,502

(15)Funds borrowed from the Central Bank and other banks

June 30, 2014 December 31, 2013 June 30, 2013 Funds borrowed from the Central Bank $ 7,069,082 $ 7,376,822 $ 7,693,983 Other funds borrowed from the Central Bank 2,029,664 2,024,700 2,038,368 Call loan from other banks 30,411,637 22,928,723 17,167,654 Total $ 39,510,383 $ 32,330,245 $ 26,900,005

(16)Financial liabilities at fair value through profit or loss

June 30, 2014 December 31, 2013 June 30, 2013 Financial liabilities held for trading Derivative instruments $ 7,279,852 $ 8,237,102 $ 7,797,610 Investment in bonds with resale agreements-short sales - - 48,935 Liabilities on sale of borrowed securities 247,596 191,472 87,782 Issuance of call(put) warrants 700,839 281,268 166,479 8,228,287 8,709,842 8,100,806 Financial liabilities designated as at fair value through profit or loss Bonds 6,098,420 6,146,843 7,410,182 Total $ 14,326,707 $ 14,856,685 $ 15,510,988 Financial liability designated at fair value through profit or loss by the Group is for the purpose of eliminating recognition inconsistency.

~ 43 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (17)Bills and bonds sold under repurchase agreements

June 30, 2014 December 31, 2013 June 30, 2013 Short-term bills $ 90,523,960 $ 91,490,697 $ 99,777,186 Bonds 142,261,596 128,110,637 106,386,104 Others 415,760 50,000 645,842 Total $ 233,201,316 $ 219,651,334 $ 206,809,132

(18)Commercial papers payable, net

June 30, 2014 December 31, 2013 June 30, 2013 Domestic commercial papers $ 7,190,000 $ 4,395,000 $ 6,260,000 Less: Unamortized discount ( 2,883 ) ( 1,347 ) ( 1,797 ) Net $ 7,187,117 $ 4,393,653 $ 6,258,203 As of June 30, 2014, December 31, 2013 and June 30, 2013, none of the aforementioned commercial papers payable was provided for guarantees, and the interest rate ranged from 0.58% to 1.01%, 0.62% to 0.98%, and 0.72% to 084%, respectively. (19)Payables June 30, 2014 December 31, 2013 June 30, 2013 Notes and accounts payable $ 12,360,740 $ 11,489,377 $ 11,440,446 Settlement amounts payable 8,890,917 8,776,395 7,981,736 Accrued expenses 2,869,570 5,160,869 2,507,864 Interest payable 3,165,862 2,584,198 2,748,392 Dividends payable 31,363,036 17,573,519 28,901,322 Acceptances 9,827,963 11,551,879 12,243,549 Collections for others 1,679,004 1,293,095 1,626,796 Commissions payable 112,192 130,897 114,924 Due from other insurers 1,375,689 1,025,867 1,383,174 Securities financing refundable deposits 878,120 1,408,056 739,468 Deposits payable for securities financing 1,030,347 1,748,644 881,356 Other payables 2,700,001 3,363,187 2,120,139 Total $ 76,253,441 $ 66,105,983 $ 72,689,166

(20)Deposits and remittances

June 30, 2014 December 31, 2013 June 30, 2013 Checking account deposits $ 29,417,076 $ 30,656,222 $ 29,211,154 Demand deposits 546,637,177 547,102,885 531,071,533 Time deposits 736,831,959 764,188,935 669,357,063 Demand savings deposits 356,598,193 356,183,658 332,918,959 Time savings deposits 235,264,943 226,414,135 218,596,679 Negotiable certificates of deposits 1,976,300 1,830,000 1,394,500 Remittances 9,233,567 7,346,706 8,280,697 Total $ 1,915,959,215 $ 1,933,722,541 $ 1,790,830,585

~ 44 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (21)Bonds payable

June 30, 2014 December 31, 2013 June 30, 2013 Domestic unsecured corporate bonds $ 6,000,000 $ 6,000,000 $ 6,000,000 Unsecured exchangeable corporate bonds - 6,000,000 6,000,000 Less: exchangeable corporate bond discount - ( 1,323 ) ( 25,921 ) Subtotal 6,000,000 11,998,677 11,974,079 Financial bonds, net 55,900,000 43,900,000 43,900,000 Total $ 61,900,000 $ 55,898,677 $ 55,874,079

A. Domestic unsecured corporate bonds were as follows:

The Company: Total issued June 30, December 31, June 30, Name of bond Issuing period Interest rate amount 2014 2013 2013 Second domestic 2008.12.26- 2015.12.26 unsecured corporate bonds-Subordinate (Note) 3.26% 6,000,000 $ 6,000,000 $ 6,000,000 $ 6,000,000

Note: Interest is paid yearly，the principal is repaid at maturity.

MS:

The principal of 1st unsecured corporate bonds issued in 2009 with a par value of $2,500,000 and interest rate of 1.45% was repaid in lump sum at the maturity date of February 14, 2013.

B. Unsecured exchangeable corporate bonds were as follows:

The Company

Issuing Total issued June 30, December 31, June 30, Name of bond period Interest rate amount 2014 2013 2013 First domestic unsecured 2011.07.11- exchangeable corporate bonds 2014.01.11 0% $ 6,000,000 $ - $ 5,998,677 $ 5,974,079 The unsecured exchangeable corporate bonds were expired by January 1,2014, and the principal was totally repaid by cash.

C. Financial bonds issued by MICB were as follows:

Issuing Total issued June 30, December 31, June 30, Name of bond (Note) period Interest rate amount 2014 2013 2013 96-1 2007.09.27- Floating rate $ 5,000,000 $ 5,000,000 $ 5,000,000 $ 5,000,000 Development Financial bond 2014.09.27 96-3 2007.12.28- 300,000 300,000 300,000 300,000 Development Financial bond 2014.12.28 2.99% 96-4 2007.12.28- Floating rate 400,000 400,000 400,000 400,000 Development Financial bond 2014.12.28 97-4 2008.06.26- Development 2015.06.26 Floating rate 6,000,000 6,000,000 6,000,000 6,000,000 Financial bond 97-8 2008.09.29- 1,600,000 1,600,000 1,600,000 Development Financial bond 2015.09.29 3.00% 1,600,000 97-9 2008.12.23- 6,400,000 6,400,000 6,400,000 Development Financial bond 2015.12.23 3.00% 6,400,000 99-1 2010.12.24- Development Financial bond 2017.12.24 1.53% 10,300,000 10,300,000 10,300,000 10,300,000 100-1 2011.04.15- Development Financial bond 2018.04.15 1.65% 4,700,000 4,700,000 4,700,000 4,700,000

~ 45 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Issuing Total issued June 30, December 31, June 30, Name of bond (Note) period Interest rate amount 2014 2013 2013 100-2 2011.11.24- Development Financial bond 2018.11.24 1.62% 7,900,000 7,900,000 7,900,000 7,900,000 101-1 2012.05.28- Development Financial bond 2019.05.18 1.48% 1,300,000 1,300,000 1,300,000 1,300,000 103-1 2014.03.28- Development Financial bond 2021.03.28 1.70% 4,900,000 4,900,000 - - 103-2 2014.06.24- Development Financial bond 2021.06.24 1.65% 7,100,000 7,100,000 - - Total $ 55,900,000 $ 43,900,000 $ 43,900,000 Note: The interests of the bonds were paid yearly, the principals were repaid at maturity.

(22)Other loans

June 30, 2014 December 31, 2013 June 30, 2013 Credit loans $ 10,930,120 $ 5,089,338 $ 4,071,125 Secured loans - 419,875 1,864,010 Total $ 10,930,120 $ 5,509,213 $ 5,935,135

As of June 30, 2014, December 31, 2013 and June 30, 2013, the interest rates ranged from 1.03% to 1.40%, 1.02% to 2.30%, and 1.05% to 1.42%, respectively. Please refer to Note 12 for details of some assets provided as collaterals for the aforementioned loans.

(23)Reserves for liabilities

June 30, 2014 December 31, 2013 June 30, 2013 Insurance liabilities $ 8,454,445 $ 8,157,828 $ 8,636,459 Liabilities reserve for employee benefits 7,179,121 7,734,718 6,831,594 Reserve for guarantee liabilities 6,355,213 6,522,240 6,532,124 Total $ 21,988,779 $ 22,414,786 $ 22,000,177

A. Details of reserves for insurance liabilities as of June 30, 2014, December 31, 2013 and June 30, 2013 are as follows:

June 30, 2014 December 31, 2013 June 30, 2013 Reserve for unearned premiums $ 3,673,732 $ 3,393,575 $ 3,748,838 Reserve for outstanding losses 3,229,981 3,068,474 3,150,194 Reserve for catastrophic losses 1,550,732 1,695,779 1,736,887 Deficiency reserve - - 540 Total $ 8,454,445 $ 8,157,828 $ 8,636,459

~ 46 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (A) Changes in unearned premium reserve and ceded unearned premium reserve are as follows:

For the six-month period ended June 30, 2014 Total Ceded Net Balance, January 1 $ 3,393,575 $ 1,391,562 $ 2,002,013 Provision 3,673,732 1,605,643 2,068,089 Recovery ( 3,393,575 ) ( 1,391,562 ) ( 2,002,013 ) Balance, June 30 $ 3,673,732 $ 1,605,643 $ 2,068,089

For the six-month period ended June 30, 2013 Total Ceded Net Balance, January 1 $ 3,244,159 $ 1,259,026 $ 1,985,133 Provision 3,748,838 1,586,734 2,162,104 Recovery ( 3,244,159 ) ( 1,259,026 ) ( 1,985,133 ) Balance, June 30 $ 3,748,838 $ 1,586,734 $ 2,162,104

(B) Details of claims reserve, as well as changes in claims reserve and ceded claims reserve are as follows:

a. Details of claims reserve:

June 30, 2014 December 31, 2013 June 30, 2013 Claims reported but not paid $ 2,438,776 $ 2,509,847 $ 2,573,183 Claims incurred but not reported 791,205 558,627 577,011 $ 3,229,981 $ 3,068,474 $ 3,150,194 b. Changes in claims reserve and ceded claims reserve are as follows:

For the six-month period ended June 30, 2014 Total Ceded Net Balance, January 1 $ 3,068,474 $ 1,411,094 $ 1,657,380 Provision 3,229,981 1,492,401 1,737,580 Recovery ( 3,068,474 ) ( 1,411,094 ) ( 1,657,380 ) Balance, June 30 $ 3,229,981 $ 1,492,401 $ 1,737,580

For the six-month period ended June 30, 2013 Total Ceded Net Balance, January 1 $ 3,255,179 $ 1,489,132 $ 1,766,047 Provision 3,150,194 1,511,679 1,638,515 Recovery ( 3,255,179 ) ( 1,489,132 ) ( 1,766,047 ) Balance, June 30 $ 3,150,194 $ 1,511,679 $ 1,638,515

2014 2013 Balance, January 1 $ 1,695,779 $ 1,770,277 Provision - 5,446 Recovery ( 145,047 ) ( 38,836 ) Balance, June 30 $ 1,550,732 $ 1,736,887 (D) Changes in ceded premium deficiency reserve and premium deficiency reserve are as follows:

~ 47 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 B. Liabilities reserve for employee benefits are as follows:

June 30, 2014 December 31, 2013 June 30, 2013 Recognized in consolidated balance sheet: - Defined benefit plans $ 4,770,132 $ 5,132,469 $ 4,524,679 - Employee preferential savings plans 2,408,989 2,602,249 2,306,915 Total $ 7,179,121 $ 7,734,718 $ 6,831,594 (A) Defined contribution plans Effective July 1, 2005, the Group has established a funded defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”). Employees have the option to be covered under the New Plan. Under the New Plan, the Group contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The payment of pension benefits is based on the employees’ individual pension fund accounts and the cumulative profit in such accounts, and the employees can choose to receive such pension benefits monthly or in lump sum. The pension costs under the defined contribution pension plan for the three-month and six-month periods ended June 3, 2014 and 2013 were $39,286, $36,958, $78,794, and $73,511, respectively. Pursuant to relevant government regulations in the country where the entity operates, local staff of the Group’s overseas subsidiaries, recognized pension expenses of $4,849, $5,224, $9,687, and $12,172 applying defined contribution plans for the three-month and six-month periods ended June 30, 2014 and 2013, respectively. (B) Defined benefit plans The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 10% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. The pension costs under defined contribution pension plans of the Group for the three-month and six-month periods ended June 30, 2014 and 2013 were $155,067, $108,747, $309,316, and $215,521, respectively. As of June 30, 2014 and 2013, the balance of employee retirement fund account deposited with Bank of Taiwan was $10,613,051 and $10,412,161, respectively. The Group expects to contribute $562,074 for defined benefit plan within a year after the financial period-end. (C)Subsidiary-Mega International Commercial Bank’s payment obligations of fixed-amount preferential savings for retired employees and current employees after retirement are based on the internal policy, “Rules Governing Pension Preferential Savings of Staff of Mega International Commercial Banks”. The excessive interest arising from the preferential savings interest rate upon retirement agreed with the employees in excess of general market interest rate should be recognized in accordance with IAS 19, 'Employee benefits' on employees’ retirement. Subsidiary - Mega International Commercial Bank recognized employee benefit expenses of $78,610, $57,300, $122,358, and $113,770 for the three-month and six-month periods ended June 30, 2014 and 2013, respectively.

(24)Other financial liabilities

June 30, 2014 December 31, 2013 June 30, 2013 Structured instruments $ 8,767,730 $ 6,975,981 $ 7,112,222 Appropriated loan fund 1,679,868 1,599,433 1,722,207 Appropriations for loans - - 1 Futures traders’ equity 1,498,972 1,519,196 1,986,613 Total $ 11,946,570 $ 10,094,610 $ 10,821,043

~ 48 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (25)Other liabilities

June 30, 2014 December 31, 2013 June 30, 2013 Deposits received $ 2,645,080 $ 2,896,564 $ 2,292,948 Advance receipt 2,378,518 2,567,458 2,078,675 Receipts under custody from customers’ security subscription - 241,776 - Temporary receipts and suspense accounts 1,736,485 1,749,052 3,578,078 Others 1,089,245 1,089,713 1,091,633 Total $ 7,849,328 $ 8,544,563 $ 9,041,334

(26)Equity

A. Common stock

(A)As of June 30, 2014, December 31, 2013 and June 30, 2013, the Company’s authorized capital was $140 billion, $140 billion, and $120 billion, respectively. The Company’s issued capital was $124,498,240, $124,498,240, and $114,498,240 and consisting of 12,449,824 thousand shares, 12,449,824 thousand shares and 11,449,824 thousand shares, respectively, with a par value of $10 per share.

(B) In accordance with the resolution adopted by the Board of Directors on August 27, 2013, the Company issued common stock amounting to 1,000,000 thousand shares by cash, at $21.5 (in dollars) per share. Additionally, in accordance with Article 267-1 of the R.O.C. Company Act, the Company should reserve 10% of the issued common stock for employees and specific persons. The Company fully collected the cash infusion of $21,500,000, comprising of $10,000,000 in common stock and $11,500,000 in capital surplus, the effective date of which was December 16, 2013. It was approved and deemed effective by Jin-Guan-Zheng-Fa-Zi Letter No. 1020040445 dated October 14, 2013 and the capital change was approved and deemed effective by the Ministry of Economic Affairs on December 25, 2013.

B. Capital surplus

(A)The capital surplus of the Company consisted of consolidation premium from share exchange and accumulated adjustments on paid-in capital from investments under equity method.

June 30, 2014 December 31, 2013 June 30, 2013 Consolidation surplus arising from share conversion $ 43,047,306 $ 43,047,306 $ 43,047,306 Changes in additional paid-in capital of investees accounted for by the equity method 380,620 377,964 377,964 Capital increase by cash – Additional paid-in capital 11,500,000 11,500,000 - Share-based payment (Note) 346,353 346,353 - $ 55,274,279 $ 55,271,623 $ 43,425,270 (B)As of June 30, 2014, the capital reserve of the Company provided by undistributed earnings of MICB (formerly CTB and ICBC) before conversion has amounted to

~ 49 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 $3,265,237. As of June 30, 2014, the portion was not used for cash dividends, capital increase or any other purposes. (C)Share-based payment : The Company increased cash capital in 2013. Pursuant to Article 267-1 of the R.O.C. Company Act, the Company shall reserve 10% of the total new shares issued for cash capital increase for the Group’s employee preemption. a. As of June 30, 2014, the Group’s share-based payment was as follows:

Grant quantity Type of agreement Grant date ( thousand shares) Vesting conditions The shares from capital increase by cash reserved for employees 2013/11/1 100,000 Vesting immediately b. The capital surplus from share-based payment was $346,353.

C. Legal reserve and special reserve

(A) Legal reserve

The legal reserve is to be used exclusively to offset any deficit or to increase capital by issuing new shares or to distribute cash dividends to original shareholders in proportion to the number of shares being held by each of them and is not to be used for any other purposes. For the legal reserve to be used for issuing new shares or distributing cash dividends, only the portion of the legal reserve exceeding 25% of paid-in capital may be capitalized or released.

(B) Special reserve

Under Article 41-1 of the Securities and Exchange Act, special reserve can be used to recover accumulated deficits and under Article 239 of the R.O.C. Company Act, a company shall not use the capital reserve to recover its capital loss, unless the surplus reserve is insufficient to recover such loss. However, the annual net income after income taxes should first be used to recover accumulated deficits, and the remaining amount should then be set aside as special reserve. The remaining earnings are then distributed to stockholders.

In accordance with Gin-Guan-Zheng-Fa letter No. 1010012865 of FSC dated on April 6, 2012, upon the first-time adoption for IFRSs, equivalent amounts of special reserve with regard to the unrealized revaluation increment under the equity and cumulative translation adjustment (gains) transferred to retained earnings should be set aside. For the said special reserve, reversal of distributed earnings shall be based on the proportion of the original ratio of special reserve provision in the subsequent use, disposal or reclassification for the related assets. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land. If the assets are investment property other than land, the amounts are reversed over the use period and should be reversed by amortized balance upon disposal.

In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

~ 50 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (27)Appropriation of earnings and dividend policy

A. According to the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior year’s operating loss, and the remaining amount should then be set aside as legal reserve and special reserve in accordance with provisions under the applicable laws and regulations. The remaining earnings (including reversible special reserve) are then distributed as follows: (1) 0.02% to 0.16% as bonuses to employees (2) not more than 0.5% as remuneration to Directors, and (3) the remaining earnings plus prior year’s accumulated inappropriate earnings are subject to the Board of Directors’ decision to propose a distribution plan and to be submitted for approval of the stockholders at the stockholders’ meeting. Employee bonus is distributed by cash. For distribution of dividends and bonus, cash dividends shall account for at least 50% of the total dividends distributed and the remaining will be accounted for as stock dividends. Employee bonus distribution follows the regulations authorized by the Board of Directors.

B. The Company’s earning distributions for 2013 and 2012 were resolved at the Board meeting dated April 23, 2013, respectively, and were approved by the stockholders’meetingdated June 24, 2014, and June 21, 2013, respectively. Details of the earnings appropriation for 2013 and 2012 are set forth below:

Appropriated Amount Dividend Per Share (in dollars) 2013 2012 2013 2012 Dividends – cash $ 13,819,304 $ 12,594,806 $ 1.11 $ 1.10

C. Information on the appropriation of the Company’s 2013 earnings as approved by the Board of Directors and during the stockholders’ meeting is posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. The actual appropriation of the Company’s 2013 earnings is the same as described above. Due to changes in ratio of bonus to employees and remuneration to directors and supervisors, the difference of $26,428 between the Company’s 2013 cash bonus to employees and remuneration to directors and supervisors as resolved by the stockholders and the amounts recognized in the 2013 financial statements was recognized in the financial statements in the current period. D.The Group recognized the estimated costs of $151,585, $70,408, $307,769, and $204,581 for employees’ bonuses and remuneration to directors and supervisors for the three-months and six-month ended periods June 30, 2014 and 2013, respectively, which after taking net earnings after tax and legal reserve into account, is based on the ratio stipulated in the Company’s Articles of Incorporation and past experience, and were recognized as operating expense for the three- month periods ended June 30, 2014 and 2013.

~ 51 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (28)Other equity items (owners of the parent)

Exchange differences on translation of Unrealized gain on foreign financial available-for-sale statements financial assets Total At January 1, 2014 ( $ 901,379 ) $ 1,002,217 $ 100,838 Available-for-sale financial assets - 2,126,518 2,126,518 Translation gain and loss on the financial statements of foreign operating entities in the period 154,685 - 154,685 Share of the other comprehensive income of associates accounted for using the equity method in the period 1,437 35,080 36,517 At June 30, 2014, net ( $ 745,257 ) $ 3,163,815 $ 2,418,558

Exchange differences on translation of Unrealized gain on foreign financial available-for-sale statements financial assets Total At January 1, 2013 ( $ 944,493 ) $ 1,123,638 $ 179,145 Available-for-sale financial assets - ( 1,078,399 ) ( 1,078,399 ) Translation gain and loss on the financial statements of foreign operating entities in the period 482,094 - 482,094 Share of the other comprehensive income of associates accounted for using the equity method in the period 4,601 ( 48,121 ) ( 43,520 ) At June 30, 2013, net ( $ 457,798 ) ( $ 2,882 ) ( $ 460,680 )

(29)Interest income, net

For the three-month periods ended June 30, 2014 2013 Interest income Interest income of bills discounted and loans $ 9,345,421 $ 8,102,898 Interest income of deposits and call loans from the other banks 1,721,070 1,090,246 Interest income of securities investment 1,249,348 1,542,275 Interest income of usance outright receivable 483,934 161,924 Credit card interest income 58,254 59,904 Interest income of securities purchased under resale agreements income 4,967 3,083 Other interest income 1,254,030 316,488 Subtotal 14,117,024 11,276,818 Interest expense Interest expense of deposits ( 3,505,572 ) ( 2,587,017 ) Interest expense of interbank overdraft and call loans ( 651,345 ) ( 568,439 ) Interest expense of issuance of bills and bonds ( 282,948 ) ( 274,086 ) Interest expense of bonds payable under repurchaseagreements ( 435,433 ) ( 133,585 ) Other interest expense ( 27,439 ) ( 24,731 ) Subtotal ( 4,902,737 ) ( 3,587,858 ) Total $ 9,214,287 $ 7,688,960

~ 52 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 For the six-month periods ended June 30, 2014 2013 Interest income Interest income of bills discounted and loans $ 18,183,750 $ 15,995,977 Interest income of deposits and call loans from the other banks 4,080,333 1,989,948 Interest income of securities investment 2,546,635 3,068,963 Interest income of usance outright receivable 969,470 273,804 Credit card interest income 118,918 122,746 Interest income of securities purchased under resale agreements income 12,978 14,210 Other interest income 1,630,115 705,878 Subtotal 27,542,199 22,171,526 Interest expense Interest expense of deposits ( 6,920,465 ) ( 5,048,130 ) Interest expense of interbank overdraft and call loans ( 1,261,306 ) ( 960,005 ) Interest expense of issuance of bills and bonds ( 537,305 ) ( 556,321 ) Interest expense of bonds payable under repurchaseagreements ( 849,428 ) ( 278,064 ) Other interest expense ( 52,423 ) ( 51,241 ) Subtotal ( 9,620,927 ) ( 6,893,761 ) Total $ 17,921,272 $ 15,277,765

(30)Service fee and commission income, net

For the three-month periods ended June 30, 2014 2013 Service fee income and commission income Service fee income from export and import business $ 184,958 $ 175,261 T/T service fee income 257,142 252,497 Loans service fee income 406,204 437,111 Guarantee service fee income 349,595 322,599 Brokerage fee income 441,347 337,318 Service fee income of trust and ancillary business 457,219 450,960 Agency service fee income 374,192 203,160 Reinsurance commission income 119,179 95,062 Other commission income 300,370 174,624 Other service fee income 249,601 361,550 Subtotal 3,139,807 2,810,142 Service fee expense and commission expense Insurancecommissionexpense ( 214,876 ) ( 214,125 ) Agency service fee expense ( 138,190 ) ( 129,499 ) Brokeragehandlingfeeexpense ( 36,055 ) ( 26,239 ) Other commission expense ( 93,942 ) ( 41,280 ) Other service fee expense ( 107,145 ) ( 103,264 ) Subtotal ( 590,208 ) ( 514,407 ) Service fee and commission income, net $ 2,549,599 $ 2,295,735

~ 53 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 For the six-month periods ended June 30, 2014 2013 Service fee income and commission income Service fee income from export and import business $ 369,203 $ 347,818 T/T service fee income 505,615 496,009 Loans service fee income 851,271 841,973 Guarantee service fee income 700,472 653,864 Brokerage fee income 836,422 642,061 Service fee income of trust and ancillary business 921,955 1,109,960 Agency service fee income 400,071 439,369 Reinsurance commission income 249,667 224,547 Other commission income 530,359 378,525 Other service fee income 798,936 649,674 Subtotal 6,163,971 5,783,800 Service fee expense and commission expense Insurancecommissionexpense ( 431,260 ) ( 451,886 ) Agency service fee expense ( 274,972 ) ( 250,588 ) Brokeragehandlingfeeexpense ( 66,414 ) ( 50,422 ) Other commission expense ( 118,525 ) ( 85,495 ) Other service fee expense ( 204,768 ) ( 201,827 ) Subtotal ( 1,095,939 ) ( 1,040,218 ) Service fee and commission income, net $ 5,068,032 $ 4,743,582 The Group provides custody, trust, and investment management and consultation service to the third party, and therefore the Group is involved with the exercise of planning, managing and trading decision of financial instruments. In relation to the management and exercise of trust fund and portfolio for brokerage, the Group records and prepares the financial statements independently for internal management purposes, which are not included in the financial statements of the Group. (31)Financial assets or financial liabilities at fair value through profit or loss For the three-month periods ended June 30, 2014 2013 Gain and loss from disposal of financial assets and liabilities at fair value through profit or loss Short-term notes and bills $ 89,558 $ 81,537 Bonds 35,572 5,594 Stocks 333,464 40,070 Derivative instruments 26,128 ( 449,230 ) Beneficiary securities ( 1,449 ) - Beneficiary certificates - 9,765 Negotiable certificate of deposits 1,448 107 Others 279,159 12,888 Subtotal 763,880 ( 299,269 ) Valuation gains and losses on financial assets and liabilities at fair value through profit or loss Short-term notes and bills ( 666 ) ( 1,793 ) Bonds 687,533 ( 134,446 ) Stocks 177,075 ( 90,473 ) Derivative instruments 5,291 ( 42,502 ) Beneficiary certificates 1,389 ( 6,309 ) Negotiable certificate of deposits ( 782 ) ( 4,509 ) Others ( 256,346 ) 565,209 Subtotal 613,494 285,177 Interest income on financial assets at fair value through profit or loss 483,950 539,230 Interest expense on financial liabilities at fair value through profit or loss ( 45,368 ) ( 214,418 ) Dividend and bond from financial assets at fair value through 15,207 profit or loss 5,782 Total $ 1,831,163 $ 316,502

~ 54 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 For the six-month periods ended June 30, 2014 2013 Gain and loss from disposal of financial assets and liabilities at fair value through profit or loss Short-term notes and bills $ 202,451 $ 163,333 Bonds 1,984,337 16,013 Stocks 532,711 222,807 Derivative instruments ( 1,722,688 ) ( 624,909 ) Beneficiary securities 1,540 - Beneficiary certificates - 9,765 Negotiable certificate of deposits 4,247 107 Others 258,060 6,180 Subtotal 1,260,658 ( 206,704 ) Valuation gains and losses on financial assets and liabilities at fair value through profit or loss Short-term notes and bills 13,220 6,242 Bonds ( 1,114,162 ) 916,660 Stocks 288,492 31,776 Derivative instruments 1,681,262 ( 768,901 ) Beneficiary certificates ( 796 ) ( 6,309 ) Negotiable certificate of deposits 463 ( 4,509 ) Others ( 170,360 ) 119,069 Subtotal 698,119 294,028 Interest income on financial assets at fair value through profit or loss 971,554 1,057,396 Interest expense on financial liabilities at fair value through profit or loss ( 90,412 ) ( 431,211 ) Dividend and bond from financial assets at fair value through profit or loss 15,207 5,782 Total $ 2,855,126 $ 719,291 (32)Realized gain on available-for-sale financial assets, net For the three-month periods ended June 30, 2014 2013 Income from dividend and bonus $ 73,373 $ - Bonds 15,987 8,100 Stocks 528,980 407,947 Others 11,634 45,355 Total $ 629,974 $ 461,402

For the six-month periods ended June 30, 2014 2013 Income from dividend and bonus $ 73,620 $ 46,130 Bonds 24,204 160,292 Stocks 889,972 1,280,453 Others 24,916 33,925 Total $ 1,012,712 $ 1,520,800

~ 55 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (33)Impairment of assets For the three-month periods ended June 30, 2014 2013 Impairment loss on financial assets measured at cost $ 75,101 $ 197,556 Revesal loss on property and equipment ( 2,733 ) ( 423 ) Impairment loss (reversal gain) on investment property ( 386 ) 897 Reversal loss on available-for sale financial - ( 3,366 ) Total $ 71,982 $ 194,664

For the six-month periods ended June 30, 2014 2013 Impairment loss on financial assets measured at cost $ 88,463 $ 220,870 Revesal loss on property and equipment ( 2,733 ) ( 423 ) Impairment loss (reversal gain) on investment property ( 386 ) 897 Reversal loss on available-for sale financial - ( 3,366 ) Total $ 85,344 $ 217,978 (34)Revenues other than interest, net For the three-month periods ended June 30, 2014 2013 Gains on financial assets measured at cost $ 189,970 $ 258,631 Gain on real estate investment 72,913 63,151 Advisory income 130,919 86,133 Gain on sales of property 752 ( 3,690 ) Others 68,585 157,243 Total $ 463,139 $ 561,468

For the six-month periods ended June 30, 2014 2013 Gains on financial assets measured at cost $ 191,763 $ 260,926 Gain on real estate investment 77,726 77,982 Advisory income 246,047 195,547 Gain on sales of property 662 921 Others 298,336 331,242 Total $ 814,534 $ 866,618 (35)Employee benefit expense For the three-month periods ended June 30, 2014 2013 Wages and salaries $ 2,867,608 $ 2,703,362 Labor and health insurance fees 263,988 255,580 Pensions costs(includes preferential savings) 277,812 208,229 Other personnel expenses 242,571 141,935 Total $ 3,651,979 $ 3,309,106

For the six-month periods ended June 30, 2014 2013 Wages and salaries $ 5,949,661 $ 5,495,469 Labor and health insurance fees 470,328 466,503 Pensions costs(includes preferential savings) 520,155 414,974 Other personnel expenses 546,624 557,655 Total $ 7,486,768 $ 6,934,601

~ 56 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (36)Depreciation and amortization For the three-month periods ended June 30, 2014 2013 Depreciation $ 169,802 $ 176,052 Amortization 8,482 8,028 Total $ 178,284 $ 184,080

For the six-month periods ended June 30, 2014 2013 Depreciation $ 341,695 $ 355,063 Amortization 16,434 22,246 Total $ 358,129 $ 377,309

(37)Other business and administrative expenses

For the three-month periods ended June 30, 2014 2013 Research and development expense $ 197 $ 159 Staff training expense 13,536 13,435 Taxes and official fees 499,511 424,458 Office supplies and printing expenses 842,781 810,269 Other operating expenses 332,680 295,611 Total $ 1,688,705 $ 1,543,932

For the six-month periods ended June 30, 2014 2013 Research and development expense $ 582 $ 594 Staff training expense 23,180 20,917 Taxes and official fees 913,081 772,867 Office supplies and printing expenses 1,711,839 1,625,526 Other operating expenses 598,166 615,620 Total $ 3,246,848 $ 3,035,524

(38)Income taxes

A.The income taxes comprise the following: For the six-month periods ended June 30, 2014 2013 Current tax Current tax on profits for the period $ 2,396,315 $ 2,069,998 Income tax of adjustments for over provisions of prior years’ income tax expense 102,089 190,164 Separate income tax 27 186 Addition 10% tax payment levied on distributed earnings 596,595 678,502 Total current tax 3,095,026 2,938,850 Deferred income tax: Origination and reversal of temporary differences 121,702 ( 85,478 ) Income tax expense $ 3,216,728 $ 2,853,372

B. Imputation tax credit June 30, 2014 December 31, 2013 June 30, 2013 Balance of imputation tax credit $ 4,884,331 $ 2,489,548 $ 4,835,240

~ 57 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 2013 2012 Actual tax credit rate for individual stockholders 13.01% 16.03% The abovementioned balance of imputation on tax credit and tax credit rate for individual stockholders are from the Company’s information. The tax credit rate for individual stockholders in 2013 was an estimate.

C. Unappropriated retained earnings: June 30, 2014 December 31, 2013 June 30, 2013 Earnings generated in and after 1998 $ 36,834,124 $ 36,766,912 $ 26,625,101

D.Assessment of income tax returns (a) The Company’s profit-seeking enterprise income tax return through 2008 was assessed by the Tax Authority. The Company disagreed with the 2002 to 2005 and 2007 results and has filed for administrative remedy. The re-examination for 2003 has been rejected by the Tax Authority and is in the process of administrative petition. Re-examinations for 2004, 2005 and 2007 have been filed. Based on conservatism principle, the above tax amount had been included in the consolidated financial statements. (b) As of June 30, 2014, MICB’s income tax returns through 2008 was assessed by the NTA. Mega Bank did not agree with the assessment of 2004 to 2005 and the Company filed an appeal for reinvestigation of 2004 and 2005 income tax returns on behalf of MICB. For conservatism purposes, the Company had recognized the income tax expense relating to the additional income tax payable. (c) MS’s income tax returns through 2008 was assessed by the Tax Authority. With respect to the income tax returns of MS for the fiscal years from 2003 to 2005 and 2007, MS did not agree with the Tax Authority’s assessment and had filed for a tax appeal for the income tax returns for 2003 and re-examinations for the income tax returns for 2004, 2005, and 2007. For conservatism purposes, the Company had recognized the income tax expense relating to the additional income tax payable. (d) As of June 30, 2014, MBF, CKI , MAM, Mega Life Insurance Agency Co., Ltd., Mega Venture Capital And MITCs’ income tax returns through 2008 have been examined by the NTA.

(39)Earnings per share (EPS) A.Basic earnings per share Basic earnings per share was calculated by dividing the profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the period. For the three-month periods ended June 30, 2014 2013 Weighted-average number of shares outstanding (In thousands of shares) 12,449,824 11,449,824 Profit attributable to ordinary shareholders of the Company $ 8,092,860 $ 5,725,771 Basic earnings per share (In dollars) $ 0.65 $ 0.50

~ 58 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 For the six-month periods ended June 30, 2014 2013 Weighted-average number of shares outstanding (In thousands of shares) 12,449,824 11,449,824 Profit attributable to ordinary shareholders of the Company $ 16,135,439 $ 11,912,191 Basic earnings per share (In dollars) $ 1.30 $ 1.04

B.Diluted earnings per share Diluted earnings per share is calculated by adjusting the profit attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

For the three-month periods ended June 30, 2014 2013 Weighted-average number of shares outstanding (In thousands of shares) 12,450,031 11,450,050 Profit attributable to ordinary shareholders of the Company $ 8,092,860 $ 5,725,771 Basic earnings per share (In dollars) $ 0.65 $ 0.50

For the six-month periods ended June 30, 2014 2013 Weighted-average number of shares outstanding (In thousands of shares) 12,450,031 11,450,050 Profit attributable to ordinary shareholders of the Company $ 16,135,439 $ 11,912,191 Basic earnings per share (In dollars) $ 1.30 $ 1.04

7. Fair value and level information of financial instruments

(1) Overview

Fair value is the amount for which an asset could be exchanged or a liability can be settled between parties in an arm’s length transaction. Financial instruments are initially recognized by fair value, which is transaction price in most cases. Subsequent recognitions are measured by fair value except that certain financial instruments are recognized by amortized cost or cost. If the quoted market price of a financial instrument is available in an active market, the quoted price is the fair value. If the market in which financial instruments traded is not active, the Group then adopts valuation technique or takes reference to Bloomberg or the fair value of financial instrument from counterparties.

(2) Fair value information of financial instruments

Except for those listed in the table below, the carrying amount of some of the Group’s financial instruments (e.g. cash and cash equivalents, due from Central Bank and call loans to other banks, receivables, loans discounted, refundable deposits, deposits from the Central Bank and banks, due to Central Bank and other banks, bills and bonds under repurchase agreements, payables, deposits and remittances, bonds payable, other financial liabilities and guarantee deposits) is approximate to their fair value (please refer to Note 7 (4)). The fair value information of financial instruments measured at fair value is provided in Note 7(5).

~ 59 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2014 Carrying Value Fair Value Held-to-maturity financial assets, net $ 178,963,013 $ 179,034,851 Other financial assets - debts investment without active market $ 4,544,503 $ 4,544,186

December 31, 2013 Carrying Value Fair Value Held-to-maturity financial assets, net $ 184,411,233 $ 184,476,945 Other financial assets - debts investment without active market $ 4,425,893 $ 4,250,633

June 30, 2013 Carrying Value Fair Value Held-to-maturity financial assets, net $ 166,295,479 $ 166,324,299 Other financial assets - debts investment without active market $ 4,375,687 $ 4,200,277

(3) Financial instruments at fair value through profit or loss If the market quotation from Stock Exchange Corporation, brokers, underwriters, Industrial Trade Unions, pricing service agencies or competent authorities can be frequently obtained on time, and the price represents the actual and frequent transactions at arm’s length, then a financial instrument is deemed to have an active market. If financial instruments do not satisfy the criteria above, they are regarded as not having active market. In general, significant price variance between the purchase price and selling price, significantly increasing price variance or extremely low trading volume are all indicators of an inactive market.

If the quoted market price of a financial instrument is available in an active market, the quoted price is the fair value, usually the fair value is measured using the market price, interest rate, foreign exchange central parity rate shown in Reuters quotation system, partially using the quoted prices from Bloomberg, OTC, or counterparties, and the basis for valuation is maintained consistently. If there is no quoted market price for reference, a valuation technique or quoted price offer by the counterparties will be adopted to measure the fair value. Fair value measured by a valuation technique is usually estimated by reference to the fair values of other financial instruments with similar terms and characteristics, or by using cash flows discounting method, or using model calculation based on the market information (such as yield rate curves from OTC, average interest rate of commercial papers from Reuters) available on the balance sheet date.

When assessing non-standardized financial instruments with lower complexity, derivative financial instruments such as debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts, options, the Group uses valuation techniques and models which are extensively used by the market to estimate their fair value. The parameters used in the valuation model for these kinds of financial instruments usually use the observable information as the input.

For more complicated financial instruments, such as debt instruments with embedded derivative instruments or securitization products, the Group develops its own valuation models to estimate fair value by reference to the valuation techniques and methods which are extensively used by the same trade. Parts of parameters used in these valuation models are not observable from the market; they must be estimated by using some assumptions.

~ 60 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 The Group uses its own credit spread to measure the fair value of derivative financial liabilities and financial liabilities designated at fair value through profit or loss. When the Group’s credit spread increases and value of liabilities declines, gain is recognized; when the Group’s credit spread declines and value of liabilities increases, loss is recognized.

A. NTD Central Government Bond: the yield rates across different contract length and one-hundred price bulletined by Over-The-Counter (hereinafter OTC) are used.

B. NTD corporate bonds, financial debentures, government bonds, bond-type beneficiary securities and designated financial debentures issued by the Group: the present value of future estimated cash flows is calculated by using the yield rate curve from OTC.

C. NTD short-term bills and NTD bill-type beneficiary securities: the present value of future estimated cash flows of NTD and USD short-term bills is calculated by using average interest rate of commercial papers and TAIFX3 central parity rate from Reuters, respectively.

D. Foreign securities: quoted prices from Bloomberg or counterparties are adopted.

E. Listed stock：The closing price being listed in TSE is adopted.

F. Unlisted stock and domestic/foreign partnership-type fund: If the objective recently has representative trading, its trading price might be the best estimate of its fair value. If the objective has comparable listed trades, its fair value can be estimated by using appropriate market method, such as P/E method, P/B method, EV/EBIT method or EBITDA×EV method, taking into account the operation condition of the comparable listed companies, most recent one month trading information and its liquidity. And if the objective has no comparable instruments or its fair value cannot be estimated using market method, other valuation technique, such as net assets method or income approach, is used to estimate its fair value.

G. Funds：Net fund value is adopted.

H. Derivative financial instruments:

(A) Foreign exchange forward contract, currency swaps, forward rate agreement, interest rate swaps and cross currency swaps: the discounting future cash flow is adopted.

(B) Options: Black-Scholes model is mainly adopted for valuation.

(D) Some foreign-currency derivatives are valued by using the quoted prices from Bloomberg or counterparties.

(4) Fair value of financial instruments not measured at fair value through profit or loss

A. In relation to cash and cash equivalents, investments in bills and bonds under resale agreements, due from the Central Bank and call loans to banks, receivables, restricted assets, refundable deposits, due to the Central Bank and financial institutions, funds borrowed from the Central Bank and other banks, bills and bonds payable under repurchase agreements, payables and stock deposits, the book value of the financial instruments which have a short maturity period will be considered as their fair value. While the maturities are quite close or the future payment or receipt is close to the carrying

~ 61 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 amount, the carrying amount at the consolidated balance sheet date is used to estimate the fair value.

B. Interest rates of subsidiaries’ bills discounted and loans (including non-performing loans) are generally based on the benchmark interest rate plus or minus certain adjustment to reflect the market interest rate. Thus, their fair values are based on the book value after adjustments of estimated recoverability. Fair values for long-term loans with fixed interest rates shall be estimated using their discounted values of expected future cash flows. However, as such loans account for only a small portion of all loans, book value was used to estimate the fair value.

C. When there is a quoted market price available in an active market, the fair value is determined using the market price. If there is no quoted market price for reference, a valuation technique or quoted price offer by the counterparties will be adopted to measure the fair value.

D. The fair values of deposits and remittances are represented by their book values.

E. The coupon rate of convertible bonds and bank debentures issued by the Group is equivalent to market interest rate; therefore, fair value estimated based on the present value of future cash flows is equivalent to book value.

F. For other financial assets - other investments in debt instruments without active market: If information about quoted market price from transaction or market maker is available, recent transaction price and quoted market price will be a basis to estimate the fair value. If no quoted market price is available for reference, valuation technique will be adopted. The fair value shall be estimated using discounted value of cash flows based on the assumptions and estimates used in the assessment.

(5) Level information of financial instruments at fair value

A. Three definitions of the Group’s financial instruments at fair value

(A)Level 1

If the market for the financial instrument is active, the fair value of the financial instrument is represented by the quoted prices of the same instruments. An active market refers to a market that meets all of the following conditions:(A) the goods traded in the market are homogeneous; (B) willing sellers and buyers can be found at the same time; (C) the price information is available to the public. The Group’s investment in listed stock, DTR, beneficiary certificates, popular Taiwan government bonds and the derivatives with a quoted price in an active market, are deemed as Level 1.

(B)Level 2

Observable prices other than the quoted prices in an active market comprise direct (e.g. prices) or indirect (e.g. introduced by prices) observable inputs obtained from an active market. The Group’s investments in non-popular government bonds, corporate bonds, bank debentures, convertible bonds and most derivative instruments and corporate bonds issued by the Group belong to this category.

(C)Level 3

The inputs adopted to measure fair value at this level are not based on available data

~ 62 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 from the markets (non-observable inputs, e.g. option pricing model using history volatility rate, because history volatility rate cannot represent the expectation value of market participants for future volatility rate). The Group’s investments in some derivative instruments and equity instruments without active market belong to this category.

~ 63 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 B. Information of fair value hierarchy of financial instruments

June 30, 2014 Non-derivative financial instruments Total Level 1 Level 2 Level 3 Assets Financial assets held for trading Investment in bills $ 112,797,087 $ - $ 112,797,087 $ - Investment in stocks 8,715,539 8,639,085 54,053 22,401 Investmentinbonds 44,399,331 4,389,763 40,009,568 - Others 667,112 667,112 - - Financial assets designated as at fair value through profit or loss 3,288,253 4,813 3,283,440 - Available-for-sale financial assets Investment in bills 79,924,467 1,399,353 78,525,114 - Investment in stocks 22,201,784 20,648,382 1,553,402 - Investmentinbonds 173,051,588 20,069,366 152,982,222 - Others 1,171,361 354,747 816,614 - Liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trading ( 948,434) ( 948,434) - - Financial liabilities designated as at fair value through profit or loss ( 6,098,420) - ( 6,098,420) - Derivative financial instruments Assets Financial assets at fair value through profit or loss 5,858,399 117,432 5,208,090 532,877 Liabilities Financial liabilities at fair value through profit or loss ( 7,279,853) - ( 6,102,677) ( 1,177,176) Total $ 437,748,214 $ 55,341,619 $ 383,028,493 ($ 621,898)

~ 64 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 December 31, 2013 Non-derivative financial instruments Total Level 1 Level 2 Level 3 Assets Financial assets held for trading Investment in bills $ 128,283,329 $ - $ 128,283,329 $ - Investment in stocks 6,474,129 6,343,978 104,026 26,125 Investmentinbonds 52,101,810 6,623,067 45,478,743 - Others 871,601 871,601 - - Financial assets designated as at fair value through profit or loss 3,174,591 - 3,174,591 - Available-for-sale financial assets Investment in bills 66,923,108 4,034,285 62,888,823 Investment in stocks 20,892,938 19,435,659 1,457,279 - Investmentinbonds 176,209,280 17,906,274 158,303,006 - Others 8,918,307 7,806,854 1,111,453 - Liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trading ( 472,740) ( 472,740) - - Financial liabilities designated as at fair value through profit or loss ( 6,146,843) - ( 6,146,843) - Derivative financial instruments Assets Financial assets at fair value through profit or loss 4,895,299 128,341 4,066,233 700,725 Liabilities Financial liabilities at fair value through profit or loss ( 8,237,102) - ( 7,070,880) ( 1,166,222) Total $ 453,887,707 $ 62,677,319 $ 391,649,760 ($ 439,372)

~ 65 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2013 Non-derivative financial instruments Total Level 1 Level 2 Level 3 Assets Financial assets held for trading Investment in bills $ 131,157,564 $ - $ 131,157,564 $ - Investment in stocks 5,689,522 5,569,997 80,971 38,554 Investmentinbonds 51,042,080 6,641,211 44,400,869 - Others 375,366 375,366 - - Assets designated as at fair value through profit or loss 2,772,124 - 2,772,124 - Available-for-sale financial assets Investment in bills 19,203,782 16,436,039 2,767,743 - Investment in stocks 158,772,824 18,968,384 139,804,440 - Investmentinbonds 70,508,091 4,847,101 65,660,990 Others 11,649,821 10,690,350 959,471 - Liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trading ( 303,196) ( 303,196) - - Financial liabilities designated as at fair value through profit or loss ( 7,410,182) - ( 7,410,182) - Derivative financial instruments Assets Financial assets at fair value through profit or loss 4,306,088 126,749 3,516,860 662,479 Liabilities Financial liabilities at fair value through profit or loss ( 7,797,610) ( 184) ( 6,539,895) ( 1,257,531) Total $ 439,966,274 $ 63,351,817 $ 377,170,955 ($ 556,498)

~ 66 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 C. Movements of financial assets and liabilities classified into Level 3 of fair value are as follows:

(A) Movements of financial assets classified into Level 3 of fair value are as follows:

For the six-month period ended June 30, 2014

Valuation gain or loss Addition Reduction Recognized as Recognized as other Purchased or Transferred to Sold, disposed or Transferred from January 1, 2014 gain (loss) comprehensive income issued Level 3 settled Level 3 June 30, 2014 Non-derivative financial instruments Financial assets at fair value through profit or loss Financial assets held for trading $ 26,125 $ 3,249 $ - $ 111,351 $ 20,158 ($ 88,271 ) ( $ 50,211 ) $ 22,401 Derivative financial instruments Financial assets at fair value through profit or loss 700,725 ( 167,986) - 6,274 - ( 6,136 ) - 532,877 Total $ 726,850 ($ 164,737) $ - $ 117,625 $ 20,158 ( $ 94,407 ) ( $ 50,211 ) $ 555,278

For the six-month period ended June 30, 2013

Valuation gain or loss Addition Reduction Recognized as Recognized as other Purchased or Transferred to Sold, disposed or Transferred from January 1, 2013 gain comprehensive income issued Level 3 settled Level 3 June 30, 2013 Non-derivative financial instruments Financial assets at fair value through profit or loss Financial assets held for trading $ 21,538 $ 2,726 $ - $ 18,444 $ 22,247 ($ 16,801) ( $ 9,600 ) $ 38,554 Derivative financial instruments Financial assets at fair value through profit or loss 629,323 33,002 - 5,701 - ( 5,547) - 662,479 Total $ 650,861 $ 35,728 $ - $ 24,145 $ 22,247 ($ 22,348) ( $ 9,600 ) $ 701,033

~ 67 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (B) Movements of financial liabilities classified into Level 3 of fair value are as follows:

For the six-month period ended June 30, 2014

Valuation gain or loss Addition Reduction Recognized as other Recognized as comprehensive Purchased or Transferred to Sold, disposed or Transferred from January 1, 2014 gain or loss income issued Level 3 settled Level 3 June 30, 2014 Liabilities Financial liabilities at fair value through profit or loss ($ 1,166,222) $ 165,761 $ - ($ 416,269) $ - $ 239,554 $ - ($ 1,177,176)

For the six-month period ended June 30, 2013

Valuation gain or loss Addition Reduction Recognized as other Recognized as comprehensive Purchased or Transferred to Sold, disposed or Transferred from January 1, 2013 gain or loss income issued Level 3 settled Level 3 June 30, 2013 Liabilities Financial liabilities at fair value through profit or loss ($ 924,363) $ 100,960 $ - ($ 764,590) $ - $ 330,462 $ - ($ 1,257,531)

(C)The transfer between Level 1 and Level 2:

With regard to the financial instruments held by the Group, no transfers between Level 1 and Level 2 occurred during the period.

~ 68 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (D) The measure of fair value for Level 3, the sensitivity analysis for the reasonable alternative hypothesis of the fair value

The Group’s measure of the fair value of financial instruments was reasonable, if valuating by different model or parameters, it would obtain another result. For Level 3, if the parameters of valuation varied up or down by 10%, the effect on profit would be shown as follows:

Changing in the fair value recognized in the current profit or loss June 30, 2014 Favorable changes Unfavorable changes The level 3 of financial instruments $ 13,565 ($ 13,566)

Changing in the fair value recognized in the current profit or loss December 31, 2013 Favorable changes Unfavorable changes The level 3 of financial instruments $ 12,093 ($ 12,093)

Changing in the fair value recognized in the current profit or loss June 30, 2013 Favorable changes Unfavorable changes The level 3 of financial instruments $ 6,025 ($ 3,949) The favorable changes and unfavorable changes meant the fluctuation of fair value, and the fair value was calculated by the unobservable parameters in different levels, if the fair value of financial instrument was affected by one of the above parameters, the favorable changes and unfavorable changes would not consider the correlation and variability in the table.

~ 69 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 8. The management objectives and policies of financial risks

(1) Overview

The Group earns profits mainly from lending, financial instruments trading, investments, brokerage, financial planning, assets management and insurance businesses. The Group is supposed to bear and manage any risks from these business activities. These risks include credit risk, market risk, operating risk and liquidity risk. Among those risks, credit risk, market risk and liquidity risk have greatest impact.

The Group regards any potential factors that might negatively affect earnings and reputation as risks. To maintain steady profits and good reputation and avoid losses from incidental events, the Group’s risk management policies focus on prevention and reduction of anticipated business risks and increase of capital in response to future anticipated risks. In order to meet the solid operating requirements by the competent authorities, depositors and other stakeholders for management objectives for risks, business risks are controlled within the tolerable scope.

(2) The organization framework of risk management

The Company has established risk management policies and guidelines and whole risk tolerance of the Group. Subsidiaries therefore follow the Company’s instructions in setting risk management organization, policies, objectives, regulations, internal control procedures, risk monitor mechanism and risk limits, and report to the Company on risk management issues. Therefore, overall risk management structure and reporting systems of the Group is completely established.

The Board of Directors is the highest decision-making unit of the Group’s risk management and is responsible for establishment and effective operation of the risk management system. The system includes risk management policies, standards and guidelines, organization structure, risk preference, internal control system and management of significant business cases. Under the Board of Directors, the risk management committee is established. The risk management committee is responsible for examination and monitor of risk management. The Company and significant subsidiaries all have risk management unit, being a part of the risk management committee and responsible for supervising the establishment of risk management mechanism, risk limits allocation, risk monitor and reporting.

Under the management, several committees and other administrative units are established. They are responsible for risk review and control of credits, investments, trading and assets/liabilities management businesses.

Administrative unit of each subsidiary is responsible for identifying the possible risks of businesses, establishing internal control procedures and regulations, measuring risk degrees regularly and adopting responding measures for any negative effects.

Business units follow operating guidance and report to the management units directly. Risk management unit is responsible for monitoring of overall risk positions and concentration, and summarizing relevant details before reporting to the management or Board of Directors.

Auditing office examines the operations of business and administration units regularly or irregularly to ensure the three risk management defense lines operate normally.

The Company has assigned personnel to sit on the Board of Directors of each subsidiary to monitor the governance of each subsidiary.

~ 70 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (3) Credit risk

A. The source and definition of credit risk

Credit risk pertains to the risk of loss that the borrowers, issuers or counterparties might default on contracts due to deterioration in their financial position or other factors.

The Group is exposed to credit risk mainly on businesses of corporate and individual loans, guarantees, trade financing, interbank deposits and call loans and securities investments.

Credit risk is the primary risk of the Group’s capital charge.

B. Credit risk management policies

The objectives of the Group’s credit risk management are to maintain stable assets allocation strategy, careful lending policy and excellent assets quality to secure assets and earnings. The Group’s risk management department is responsible for supervision of the Group’s credit risk and regularly submits summary report to the Board of Directors and the management.

The management mechanism of subsidiaries for credit risk includes:

The establishment of assets/liabilities, risk management, lending and investment committees which adopt responding measures to market environment, changes in industry, and capital limits, and review relevant regulations and cases of significant lending and investments.

Setting careful prior review procedures for lending and criteria of handling subsequent matters, regular post-lending follow-up, understanding of clients’ operation and capital outflows, and increase in the frequency of review on clients with higher risk.

Classifying credit ratings based on clients’ probability of default or behavior scoring with management put in practice.

Controlling concentration of credit risk by setting credit limits for individuals, corporate groups, industries, areas, and different types of collaterals.

Setting credit risk limits by reference to external ratings and prospects with attention to changes in market credit spread and risk concentration of counterparties.

Establishing the pre-warning list of credit and reporting system.

Assessing assets quality regularly and setting aside sufficient reserve for losses.

Setting the management unit and the audit committee of the creditor’s right for accelerating collection of non-performing loans.

The procedures for credit risk management of the Group and related measurement approaches are outlined below:

(A) Credit extensions

Classification of credit assets and internal risk ratings are as follows:

~ 71 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 a. Classification of credit assets

Corporate credit risk is measured by using the borrower’s default probability model with logistic regression analysis in which financial and non-financial factors are incorporated, which predicts the default probability of borrower within the next year. Besides, the extent of risk is measured by using credit rating table and taking into account the characteristics and scale of business. Lending examination and post management are dealt with based on clients’ credit rating. Individual borrowers are grouped into different risk levels and managed by using application scoring and behavior scoring cards. Back-testing is conducted on internal models regularly; those models are subject to adjustments when necessary. Clients’ credit ratings are reviewed annually and subject to adjustments when there is significant change in their credit ratings.

b. Internal risk rating:

The internal rating for lending is classified as excellent, satisfactory, fair and weaker, which corresponds to the Standard & Poor rating as follows: Internal risk rating Excellent Satisfactory Fair Weaker No rating

Corresponding to S&P AAA~BBB- BB+~ BB- B+ B and below NA

(B) Interbank deposits and call loans

Before trading with other banks, the Group assesses their credit by reference to their ratings offered by external rating agencies, their assets and scales of owners’ equity and their country risks, and therefore set credit risk limits for each of them. The Group monitors changes in market prices of the financial instruments issued by those banks and CDS quoted prices daily to keep attention to their risk.

The limits of bonds purchased by the Group are set by considering the credit rating of bond issuers or guarantors (ex. S&P, Moody’s, Fitch, Taiwan ratings or Fitch Taiwan), which needs to meet the minimum rating set by the Board of Directors, and country risk at the application, share price of issuers, changes in CDS quoted prices, earnings, market condition, and capital utilization status of the applying unit.

Subsidiaries have set trading units and overall total risk limit for non-hedging derivative instruments, and use positive trading contract evaluation as the basis for calculating credit risk and add the limit to the total credit risk limit for monitoring.

(D) Asset quality

The Group has set the minimum requirements and examination procedures for the quality of financial assets of each type, and controls risk concentration of assets portfolios of each type based on the risk limit of each type. The Group also monitors the changes in assets quality regularly during the duration of the assets and takes measures to maintain their quality. According to the policies and regulations, reserve for losses is provided adequately for those assets to actually reflect and safeguard the value of owners’ equity.

~ 72 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (E) Impairment of financial assets and provision for reserves

a. Impairment policy:

Each subsidiary assesses at each balance sheet date whether a financial asset is impaired. If there is objective evidence that an event that occurred after the initial recognition of the asset has an impact on the future cash flows of the financial asset, the impairment loss on the financial asset should be recognized.

b. The objective evidence of an impairment loss is as follows:

(a)Significant financial difficulty of the issuer or debtor;

(b)The issuer or debtor has breached the contract;

(c)The Group, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession;

(d)It becomes probable that the borrower will enter bankruptcy or other financial reorganization;

(e)The disappearance of an active market for that financial asset because of financial difficulties; or observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the Group, including:

I. Adverse changes in the payment status of borrowers in the Group; or

II. Adverse changes in national or local economic conditions that correlate with defaults on the assets in the Group.

Financial assets that are not impaired are included in the Group of financial assets sharing similar credit risk characteristics for group assessment. Financial assets that are assessed individually with impairment recognized need not be included in the Group assessment.

The amount of the impairment loss is the difference between the financial assets’ book value and the estimated future cash flow discounted using the original effective interest rate. The present value of estimated future cash flows must reflect the cash flows that might be generated from collaterals less acquisition or selling cost regarding the collateral.

Financial assets through group assessment are grouped based on similar credit risk characteristics, such as types of assets, industry and collaterals. Such credit risk characteristics represent the ability of the debtors to pay all the amounts at maturities according to the contract term, which is related to future cash flows of group of financial assets. The future cash flows of group of financial assets for group assessment are estimated based on historical impairment experience, reflecting the change in observable data for each period, and the estimation of the future cash flows should move in the same direction. The Group reviews the assumptions and methods for estimation of the future cash flows regularly.

~ 73 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 c.Policies of loan loss provision and guarantee reserve

For loan loss provision and guarantee reserve, the subsidiaries have established the regulations for assets assessment and loss reserve. According to the regulations of the Financial Supervisory Commission for banks, bills companies and insurance companies, all assets in balance sheets and off balance sheets are classified as five categories. For credit assets on balance sheets and off balance sheets, in addition to normal credit assets which shall be classified as "Category One", the remaining unsound credit assets that required special attention shall be evaluated based on the status of the creditor’s right, loan collaterals and the length of time overdue, and classified as "Category Two". Assets that are substandard shall be classified as "Category Three". Assets that are doubtful shall be classified as "Category Four", and assets for which there is loss shall be classified as "Category Five”. "Category Two" to "Category Five” shall be assessed individually for possible loss and set aside sufficient loss provision. And loss provision shall be also set aside for "Category One" proportionately in accordance with regulations by competent authorities.

C. Policies of hedging and mitigation of credit risk

To reduce credit risk, the Group adopts the following policies:

(A) Obtaining collaterals and guarantors

Subsidiaries have established regulations on collateral management, mortgage loan line setting, scope of collaterals, collateral valuation, collateral management and disposal. Besides, protection of creditor’s right, collateral terms and offsetting terms are all addressed in the credit extension contract in case of any occurrence of credit event, of which the amount may be deductible, loan repayment schedule may be shortened or deemed as matured, or the debtor’s deposits can be used to offset its liabilities to mitigate credit risks.

(B) Loan limit control

To avoid extreme credit risk concentration, subsidiaries established policies for control of credit risk concentration and set up credit extension limit for a single individual, a single group, a single industry, a single area/country, and single collateral.

The Group has net settlement agreements with some counterparties. If the counterparty defaults, all transactions with the counterparty will be terminated and be settled by net amount to further reduce credit risk.

D. The maximum exposure to credit risk

The maximum exposure to credit risk of financial asset was presented by book amount in the balance sheet, and the guarantee and letters of credit and irrevocable commitments off balance sheet calculated the maximum exposure to credit risk by the credit limit.

~ 74 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit：thousands of dollars June 30, 2014 December 31, 2013 June 30, 2013 Off-balance-sheet guarantees and commitments Government organization $ 85,676,557 $ 85,210,737 $ 86,789,211 Finance, investment and insurance 65,230,461 51,519,949 50,065,582 Corporate and commercial 404,867,277 401,552,308 409,869,807 Personal 54,456,405 53,187,580 50,230,910 Others 1,882,682 1,766,266 1,645,650 Total $ 612,113,381 $ 593,236,840 $ 598,601,160

E. Credit risk concentration

Extreme credit risk concentration will enhance risk degree, such as large amount of risk exposure concentrated on one credit product, one client, or minor clients, or a group of clients in same industry or with similar business or in same area or with same risk characteristics. When adverse economic changes occur, a financial institution may incur a significant loss.

To avoid extreme credit risk concentration, the Group has regulated credit limit and management rules for single client, single business group and large amount of risk exposure. Subsidiaries have to monitor and control the credit risk concentration within the limit. Status of credit risk concentration must be shown in the regular risk report by industry, area/country, collateral and other forms.

Except for overdue receivables, the property insurance subsidiary’s reinsurance contracts assets that are neither past due nor impaired all have credit ratings ranged between twAA ~ twBBB-, so it expects that the probability of counterparty default is remote. The Group’s maximum exposure to credit risk at the end of the reporting period is the carrying amount of all reinsurance contracts assets.

~ 75 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (A) Loans and credit commitments of the Group are shown below by industry:

Unit: In thousands of NT Dollars Loans and credit commitments June30,2014 December31,2013 June30,2013 Amount Percentage (%) Amount Percentage (%) Amount Percentage (%) Individuals Individuals $ 426,027,347 18.51% $ 404,268,675 17.81% $ 360,548,630 16.54% Government institution 94,067,198 4.09% 93,992,450 4.14% 95,957,368 4.40% Financial institution, investment and incurrence 209,246,499 9.09% 195,389,073 8.61% 197,420,401 9.06% Enterprise and commerce 1,558,038,759 67.69% 1,562,318,289 68.84% 1,509,058,767 69.22% - Manufacturing 624,171,942 27.12% 659,323,999 29.05% 641,197,928 29.41% -Electricity and gas supply 133,439,655 5.80% 131,204,121 5.78% 140,797,987 6.46% Corporation - Wholesale and retail 209,416,110 9.10% 196,828,622 8.67% 175,724,499 8.06% -Transportation and storage 167,195,166 7.26% 164,556,964 7.25% 170,148,740 7.80% - Real estate 269,570,756 11.71% 266,498,231 11.74% 240,395,903 11.03% - Others 154,245,130 6.70% 143,906,352 6.34% 140,793,709 6.46% Others 14,237,600 0.62% 13,616,577 0.60% 17,154,778 0.78% Total $ 2,301,617,403 100.00% $ 2,269,585,064 100.00% $ 2,180,139,944 100.00%

(B) Loans and credit commitments of the Group are shown below by location:

Unit: In thousands of NT Dollars Loans and credit commitments June30,2014 December31,2013 June30,2013 Amount Percentage (%) Amount Percentage (%) Amount Percentage (%) ROC $ 1,789,957,424 77.77% $ 1,803,450,346 79.46% $ 1,737,473,397 79.70% Asia 316,986,693 13.77% 289,949,694 12.78% 267,324,967 12.26% North America 73,535,952 3.19% 59,188,578 2.61% 57,735,108 2.65% Others 121,137,334 5.26% 116,996,446 5.15% 117,606,472 5.39% Total $ 2,301,617,403 100.00% $ 2,269,585,064 100.00% $ 2,180,139,944 100.00%

~ 76 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (C) Loans and credit commitments of the Group are shown below by collaterals:

Unit: In thousands of NT Dollars Loans and credit commitments June30,2014 December31,2013 June30,2013 Amount Percentage (%) Amount Percentage (%) Amount Percentage (%) Unsecured $ 971,999,757 42.23% $ 950,992,516 41.90% $ 884,463,737 40.57% Secured - Secured by stocks 156,226,480 6.79% 155,008,882 6.83% 150,254,712 6.89% - Secured by bonds 118,147,695 5.13% 118,890,191 5.24% 112,644,429 5.17% - Secured by real estate 763,556,913 33.17% 730,890,356 32.20% 665,464,612 30.52% - Others 291,686,558 12.68% 313,803,119 13.83% 367,312,454 16.85% Total $ 2,301,617,403 100.00% $ 2,269,585,064 100.00% $ 2,180,139,944 100.00%

~ 77 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 F.Financial assets credit quality and analysis of past due and impairment

(A)The Group’s financial assets credit quality and analysis of past due and impairment

Unit: In thousands of NT Dollars

Neither past due nor impaired Past due but not impaired Reserve for June 30, 2014 Excellent Satisfactory Fair Weaker No rating Subtotal Excellent Satisfac-tory Fair Weaker No rating Subtotal Impaired losses Net amount Credit risk exposure of financial assets in balance sheet: Cash and cash equivalents $ 171,781,846 $ 2,132,225 $ - $ 16,429 $ 266,538 $ 174,197,038 $ - $ - $ - $ - $ - $ - $ - $ 1,392 $ 174,195,646 Due from Central Bank and call loans to banks 286,664,848 300,000 - 596,960 3,317,424 290,879,232 ------1,210,131 289,669,101 Financial assets at fair value through profit or loss - Debt instruments 98,376,887 42,305,935 12,577,600 2,517,405 4,706,843 160,484,670 ------160,484,670 - Derivative instruments 4,028,717 5,778 - - 1,823,904 5,858,399 - - - 5,858,399 Available-for-sale financial assets -Debt instruments 248,603,731 4,311,621 - 401,543 475,774 253,792,669 ------253,792,669 Bills and bonds purchased under resale agreements 4,340,013 900,000 - - 401,370 5,641,383 ------5,641,383 Receivables 93,772,508 22,963,901 4,060,215 541,141 84,203,852 205,541,617 211 1,212 513 954 19,481 22,371 198,074 2,117,836 203,644,226 Bills discounted and loans 411,239,976 454,733,474 168,010,228 56,668,536 571,554,592 1,662,206,806 90,995 815,166 260,980 279,184 1,883,046 3,329,371 23,967,845 20,534,943 1,668,969,079 Available-for-sale financial assets-Debt instruments 2,540,006 - - - 937,158 3,477,164 ------18,442 14,110 3,481,496 Held-to-maturity financial assets-Debt instruments 177,513,271 651,958 50,000 - 747,784 178,963,013 ------178,963,013 Other assets 4,150,064 4,395,785 - - 4,858,381 13,404,230 ------22,785 12,287 13,414,728 Total $ 1,503,011,867 $ 532,700,677 $ 184,698,043 $ 60,742,014 $ 673,293,620 $ 2,954,446,221 $ 91,206 $ 816,378 $ 261,493 $ 280,138 $ 1,902,527 $ 3,351,742 $ 24,207,146 $ 23,890,699 $ 2,958,114,410

~ 78 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit: In thousands of NT Dollars

Neither past due nor impaired Past due but not impaired Satisfac-tor Reserve for December 31, 2013 Excellent Satisfactory Fair Weaker No rating Subtotal Excellent y Fair Weaker No rating Subtotal Impaired losses Net amount Credit risk exposure of financial assets in balance sheet: Cash and cash equivalents $ 157,990,855 $ 1,088,137 $ 553,216 $ 31,444 $ 625,863 $ 160,289,515 $ - $ - $ - $ - $ - $ - $ - $ 1,320 $ 160,288,195 Due from Central Bank and call loans to banks 387,645,487 930,540 - - 2,383,209 390,959,236 ------390,959,236 Financial assets at fair value through profit or loss - Debt instruments 116,964,475 46,347,059 13,265,190 3,557,590 3,919,155 184,053,469 ------184,053,469 - Derivative instruments 3,023,226 63 - - 1,872,010 4,895,299 ------4,895,299 Available-for-sale financial assets -Debt instruments 237,666,385 4,509,822 - 322,719 1,762,008 244,260,934 ------244,260,934 Bills and bonds purchased under resale agreements 2,585,345 - - - - 2,585,345 ------2,585,345 Receivables 60,784,397 16,538,015 7,194,123 1,106,169 99,205,961 184,828,665 546 846 215 1,724 23,531 26,862 800,165 1,067,751 184,587,941 Bills discounted and loans 417,144,165 437,938,137 184,501,573 71,441,301 530,325,111 1,641,350,287 135,561 464,282 94,320 572,502 858,161 2,124,826 32,873,111 21,771,031 1,654,577,193 Available-for-sale financial assets-Debt instruments 3,292,129 - - - - 3,292,129 - - - - - 13,297 11,489 3,293,937 Held-to-maturity financial assets-Debt instruments 182,954,478 657,951 50,000 - 748,804 184,411,233 ------184,411,233 Other assets 4,366,602 4,680,558 - - 11,564,166 20,611,326 ------265,990 13,887 20,863,429 Total $ 1,574,417,544 $ 512,690,282 $ 205,564,102 $ 76,459,223 $ 652,406,287 $ 3,021,537,438 $ 136,107 $ 465,128 $ 94,535 $ 574,226 $ 881,692 $ 2,151,688 $ 33,952,563 $ 22,865,478 $ 3,034,776,211

~ 79 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit: In thousands of NT Dollars

Neither past due nor impaired Past due but not impaired Satisfac-tor Reserve for June 30, 2013 Excellent Satisfactory Fair Weaker No rating Subtotal Excellent y Fair Weaker No rating Subtotal Impaired losses Net amount Credit risk exposure of financial assets in balance sheet: Cash and cash equivalents $ 108,876,128 $ 1,518,215 $ - $ 45,889 $ 1,700,711 $ 112,140,943 $ - $ - $ - $ - $ - $ - $ - $ 1,282 $ 112,139,661 Due from Central Bank and call loans to banks 264,339,848 545,220 - - 8,330,524 273,215,592 ------273,215,592 Financial assets at fair value through profit or loss - Debt instruments 124,453,026 43,089,510 11,479,026 2,919,450 3,030,756 184,971,769 ------184,971,769 - Derivative instruments 2,412,331 547 - - 1,893,209 4,306,087 ------4,306,087 Available-for-sale financial assets -Debt instruments 222,655,156 5,889,386 - 167,719 1,415,265 230,127,526 ------230,127,526 Bills and bonds purchased under resale agreements 6,526,437 398,924 - - - 6,925,361 ------6,925,361 Receivables 20,816,095 14,843,877 6,544,898 786,666 95,087,462 138,078,998 884 1,339 374 1,447 22,318 26,362 801,055 1,356,367 137,550,048 Bills discounted and loans 382,327,976 403,499,017 155,912,257 61,525,559 544,369,396 1,547,634,205 274,612 927,332 155,296 437,179 766,078 2,560,497 31,344,082 18,075,421 1,563,463,363 Available-for-sale financial assets-Debt instruments 3,432,096 - - - - 3,432,096 ------18,505 14,080 3,436,521 Held-to-maturity financial assets-Debt instruments 164,996,729 666,203 50,000 - 582,547 166,295,479 ------166,295,479 Other assets 3,973,570 4,643,969 180 - 14,858,499 23,476,218 ------367,233 68,407 23,775,044 Total $ 1,304,809,393 $ 475,094,868 $ 173,986,361 $ 65,445,283 $ 671,268,369 $ 2,690,604,274 $ 275,496 $ 928,671 $ 155,670 $ 438,626 $ 788,396 $ 2,586,859 $ 32,530,875 $ 19,515,557 $ 2,706,206,451

~ 80 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (B)The Group’s ageing analysis of financial assets that were past due but not impaired

Financial assets might be past due but not impaired due to borrower’s processing delay or other administrative reasons. According to subsidiaries’ internal management rules for assets assessment, financial assets which are past due within 90 days are not regarded as impaired unless there is objective evidence that the financial assets are impaired. There are very few conditions where financial assets are past due over 90 days but not impaired.

June 30, 2014 Overdue for less Overdue for Overdue for Overdue for more than 1 month 1~3 months 3~6 months than 6 months Total Margin deposits from clients $ 17,118 $ 5,241 $ - $ 12 $ 22,371 Bills discounted and loans - Enterprise and commerce $ 1,711,975 $ - $ - $ - $ 1,711,975 -Individuals 1,613,271 4,125 - - 1,617,396 Total $ 3,325,246 $ 4,125 $ - $ - $ 3,329,371

December 31, 2013 Overdue for less Overdue for Overdue for Overdue for more than 1 month 1~3 months 3~6 months than 6 months Total Margin deposits from clients $ 17,991 $ 8,763 $ 66 $ 42 $ 26,862 Bills discounted and loans -Government $ 57,850$ -$ - $ - $ 57,850 - Enterprise and commerce 297,585 - - - 297,585 -Individuals 1,765,183 4,208 - - 1,769,391 Total $ 2,120,618 $ 4,208 $ - $ - $ 2,124,826

June 30, 2013 Overdue for less Overdue for Overdue for Overdue for more than 1 month 1~3 months 3~6 months than 6 months Total Margin deposits from clients $ 18,605 $ 7,312 $ 14 $ 431 $ 26,362 Bills discounted and loans -Government $ 59,952$ -$ - $ - $ 59,952 - Enterprise and commerce 546,477 10,920 3,020 560,417 -Individuals 1,937,647 2,481 - - 1,940,128 Total $ 2,544,076 $ 13,401 $ 3,020 $ - $ 2,560,497

~ 81 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (C) The Group’s provisions for doubtful accounts analysis of impaired loans

Unit: In thousands of NT Dollars

June 30, 2014 Loans Provisions for doubtful accounts Not impaired Impaired Provisions for Individual Group Individual Group Individual Group Loans net doubtful accounts/ assessment assessment assessment assessment Total assessment assessment Total amount impaired loans % ROC $ - $ 1,206,335,871 $ 19,744,874 $ 863,268 $ 1,226,944,013 $ 3,711,633 $ 11,684,128 $ 15,395,761 $ 1,211,548,252 74.71 Asia - 292,721,937 1,254,216 76,649 294,052,803 248,846 2,893,725 3,142,571 290,910,231 236.13 North America - 54,805,846 967,042 963 55,773,851 175,699 548,072 723,771 55,050,081 74.77 Others - 111,672,523 1,055,834 4,999 112,733,356 191,062 1,081,778 1,272,840 111,460,516 119.98 Total $ - $ 1,665,536,177 $ 23,021,966 $ 945,879 $ 1,689,504,022 $ 4,327,240 $ 16,207,703 $ 20,534,943 $ 1,668,969,079 85.68

December 31, 2013 Loans Provisions for doubtful accounts Not impaired Impaired Provisions for Individual Group Individual Group Individual Group Loans net doubtful accounts/ assessment assessment assessment assessment Total assessment assessment Total amount impaired loans % ROC $ - $ 1,207,325,930 $ 27,595,395 $ 753 $1,235,286,078 $ 4,075,358 $ 12,365,334 $ 16,440,692 $ 1,218,845,386 58.80 Asia - 274,460,468 1,342,424 - 275,802,892 243,437 2,880,004 3,123,441 272,679,451 232.67 North America - 54,195,793 1,236,913 - 55,432,706 185,377 579,742 765,119 54,667,587 61.86 Others - 107,492,921 2,333,627 - 109,826,548 340,149 1,101,630 1,441,779 108,384,769 61.78 Total $ - $ 1,643,475,112 $ 32,872,359 $ 753 $1,676,348,224 $4,844,321 $ 16,926,710 $ 21,771,031 $ 1,654,577,193 66.23

~ 82 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit: In thousands of NT Dollars

June 30, 2013 Loans Provisions for doubtful accounts Not impaired Impaired Provisions for Individual Individual Group Individual Group doubtful accounts/ assessment Group assessment assessment assessment Total assessment assessment Total Loans net amount impaired Loans % ROC $ - $ 1,137,685,612 $ 26,025,021 $ 462 $ 1,163,711,095 $ 4,298,900 $ 9,308,239 $ 13,607,139 $ 1,150,103,956 52.28 Asia - 251,942,170 1,194,795 - 253,136,965 243,543 2,165,261 2,408,804 250,728,161 201.61 North America - 54,213,261 516,497 - 54,729,758 89,042 480,021 569,063 54,160,695 110.18 Others - 106,353,659 3,607,307 - 109,960,966 620,630 869,785 1,490,415 108,470,551 41.32 Total $ - $ 1,550,194,702 $ 31,343,620 $ 462 $ 1,581,538,784 $ 5,252,115 $ 12,823,306 $ 18,075,421 $ 1,563,463,363 57.67

G.Foreclosed properties management policy

As of June 30, 2014, December 31, 2013 and June 30, 2013, other assets in the consolidated balance sheet include foreclosed properties’ book value of MICB totaling $0, $23,602 and $0, respectively. Foreclosed properties are both land and buildings. To lower the amount of creditors’ rights, foreclosed properties will be sold. According to the regulations of competent authorities, foreclosed properties of the bank shall be sold within two years.

~ 83 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (H) Supplementary information in accordance with “Regulations Governing the Preparation of Financial Reports by Public Banks”

a. MICB’s asset quality of non-performing loans and overdue accounts

Unit: In thousands of NT Dollars, % June 30, 2014 Amount of non-performing Non-performing loan Allowance for Coverage ratio Gross loans loans (Note 1) ratio (Note 2) doubtful accounts (Note 3) Corporate Secured loans 757,424 612,700,766 0.12% 7,743,870 1022.40% Banking Unsecured loans 606,324 705,232,314 0.09% 9,087,842 1498.84% Residential mortgage loans (Note 4) 270,455 278,072,107 0.10% 2,785,557 1029.95% Cashcardservices - - - - - Consumer Small amount of credit loans banking (Note 5) 1,834 11,400,583 0.02% 112,158 6115.49% Others Secured loans 61,570 81,736,636 0.08% 801,369 1301.56% (Note 6) Unsecured loans - 361,616 - 4,147 - Gross loan business 1,697,607 1,689,504,022 0.10% 20,534,943 1209.64% Amount of overdue Balance of accounts Allowance for Overdue account ratio Coverage ratio accounts receivable doubtful accounts Credit card services 6,058 5,574,769 0.11% 74,676 1232.68% Without recourse factoring (Note 7) - 40,806,936 - 626,866 -

~ 84 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit: In thousands of NT Dollars, % June 30, 2013 Amount of non-performing Non-performing loan Allowance for Coverage ratio Gross loans loans (Note 1) ratio (Note 2) doubtful accounts (Note 3) Corporate Secured loans 1,833,832 603,362,438 0.30% 8,132,080 443.45% Banking Unsecured loans 870,727 667,826,646 0.13% 7,203,715 827.32% Residential mortgage loans (Note 4) 394,189 223,423,297 0.18% 1,991,585 505.24% Cashcardservices - - - - - Consumer Small amount of credit loans banking (Note 5) 3,014 10,405,045 0.03% 91,265 3028.04% Others Secured loans 16,730 76,051,033 0.02% 649,976 3885.09% (Note 6) Unsecured loans 21,946 470,325 4.67% 6,800 30.99% Gross loan business 3,140,438 1,581,538,784 0.20% 18,075,421 575.57% Amount of overdue Balance of accounts Allowance for Overdue account ratio Coverage ratio accounts receivable doubtful accounts Credit card services 13,477 5,229,880 0.26% 94,074 698.03% Without recourse factoring (Note 7) - 55,600,741 - 617,729 - Note 1: The amount recognized as non-performing loans is in accordance with the “Regulation Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/Non-accrual Loans”. The amount included in overdue accounts for credit cards is in accordance with the Banking Bureau (4) Letter No.0944000378 dated July 6, 2005. Note 2: Non-performing loan ratio=non-performing loans/gross loans. Overdue account ratio for credit cards=overdue accounts/balance of accounts receivable. Note 3: Coverage ratio for loans=allowance for doubtful accounts of loans/non-performing loans. Coverage ratio for accounts receivable of credit cards=allowance for doubtful accounts for accounts receivable of credit cards/overdue accounts. Note 4: For residential mortgage loans, the borrower provides his/her (or spouses) house as collateral in full and mortgages it to the financial institution for the purpose of obtaining funds to purchase or add improvements to a house. Note 5: Small amount of credit loans apply to the norms of the Banking Bureau (4) Letter No. 09440010950 dated December 19, 2005, excluding credit card and cash card services. Note 6: Other consumer banking is specified as secured or unsecured consumer loans other than residential mortgage loan, cash card services and small amount of credit loans, and excluding credit card services. Note 7: Pursuant to the Banking Bureau (5) Letter No. 094000494 dated July 19, 2005, the amount of without recourse factoring will be recognized as overdue accounts within three months after the factor or insurance company resolves not to compensate the loss.

~ 85 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 b. Total amount of non-performing loans or overdue receivables exempted from reporting to the competent authority of MICB

Unit: In thousands of NT Dollars June 30, 2014 Total amount of Total amount of non-performing loans overdue receivables exempted from reporting exempted from to the competent reporting to the authority competent authority Performing amounts exempted from reporting to the $ 58 $ - competent authority as debt negotiation (Note 1) Performing amounts in accordance with debt liquidation 508 4,276 program and restructuring program (Note 2) Total $ 566 $ 4,276

June 30, 2013 Total amount of Total amount of non-performing loans overdue receivables exempted from reporting exempted from to the competent reporting to the authority competent authority Performing amounts exempted from reporting to the $ 86 $ - competent authority as debt negotiation (Note 1) Performing amounts in accordance with debt liquidation 550 4,441 program and restructuring program (Note 2) Total $ 636 $ 4,441

Note 1: The Bank disclosed the total amount of non- performing loans and overdue receivables exempted from reporting to the competent authority as debt negotiation in accordance with the Explanatory Letter Jin-Guan-Yin (1) No. 09510001270 of the FSC dated April 25, 2006.

Note 2: The Bank disclosed the total amount of non- performing loans and overdue receivables exempted from reporting to the competent authority as debt liquidation program and restructuring program in accordance with the Explanatory Letter Jin-Guan-Yin (1) No. 09700318940 of the FSC dated September 15, 2008.

~ 86 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 c. Contract amounts of significant credit risk concentration of MICB

Unit: In thousands of NT Dollars, % Year June 30, 2014 Total outstanding Total outstanding Ranking Name of Enterprise Group loan amount / net loan amount (Note 1) (Note 2) worth of the current (Note 3) period (%) 1 A Corporation– Railway Transportation 65,873,814 31.99% 2 B Group –Petrochemical Manufacturing 47,124,716 22.89% 3 C Group –General and Other Merchandise Retailing 21,575,555 10.48% 4 D Group –LED Panels and Spare Parts Manufacturing 20,568,658 9.99% 5 E Group –other financial intermediation not classified 20,146,602 9.98% 6 F Group –Steel and smelting 20,087,256 9.76% 7 G Group –Sea Transportation 16,194,128 7.87% 8 H Group –Iron Rolling and Extruding 14,951,127 7.26% 9 I Group –Property leasing 13,944,208 6.77% 10 J Group –other financial intermediation not classified 12,953,880 6.29%

Unit: In thousands of NT Dollars, % Year June 30, 2013 Total outstanding Total outstanding Ranking Name of Enterprise Group loan amount / net loan amount (Note 1) (Note 2) worth of the current (Note 3) period (%) 1 A Corporation– Railway Transportation 66,345,029 37.54% 2 B Group – Sea Transportation 58,689,089 33.21% 3 C Group –LED Panels and Spare Parts Manufacturing 25,679,521 14.53% 4 D Group –Steel and smelting 23,796,857 13.47% 5 E Group –General and Other Merchandise Retailing 22,316,571 12.63% 6 F Group –Investment consultation 19,319,035 10.93% 7 G Group –LED Panels and Spare Parts Manufacturing 17,799,504 10.07% 8 H Group –Property leasing 15,200,697 8.60% 9 I Group –-Tire manufacturing 13,991,133 7.92% 10 J Group –Iron Rolling and Extruding 13,943,790 7.89%

Note：

(a) Ranking the top ten enterprise groups other than government and government enterprise according to their total amounts of outstanding loans. If an outstanding loan belongs to an enterprise group, the outstanding loan of the enterprise group should be categorized and listed in total, and disclosed by “code” plus “industry type” (for example, company (or group) A – Liquid Crystal Panel and Components Manufacturing). If it is an enterprise group, industry type of maximum exposure of the enterprise group would be disclosed. Industry type should be filled in accordance with “Standard Industrial Classification System” of Directorate-General of Budget, Accounting and Statistics, Executive Yuan.

~ 87 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (b) Definition of enterprise group is based on Article 6 of Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings.

(c) Total outstanding loan amount is the sum of balances of all types of loans (including import negotiation, export negotiation, bills discounted, overdraft, short-term loan, short-term secured loan, margin loans receivable, medium-term unsecured loan, medium-term secured loan, long-term unsecured loan, long-term secured loan and overdue loan), bills purchased, without recourse factoring, acceptance receivable and guarantees. d. Supplementary information in accordance with the “Regulations Governing the Procedures for Bills Finance Companies.”

(a) The quality of assets

Item June30,2014 June30,2013 Guarantees in arrear and guaranteed credits overdue for longer than three months $ - $ - Overdue credits (non-accrual loans are inclusive) (Note) - - Loans under surveillance - 357,000 Overdue receivables - - Ratio of overdue credits (%) (Note ) - - Ratio of overdue credits plus ratio of loans under surveillance (%) - 0.25 Provision for bad debts and guarantees as required by regulations 2,405,583 2,792,240 Provision for bad debts and guarantees actually reserved 2,566,892 2,961,160

Note : Items follow ”Regulations Governing the Procedures for Bills Finance Companies to Evaluate Assets, Set Aside Loss Reserves, and Handle Non-Performing Credit, Non-Accrual Loans, and Bad Debt”.

(b) Overview of main business

Item June30,2014 June30,2013 Total guarantees and endorsement for short-term bills $ 140,669,000 $ 140,480,300 Guarantees and endorsement for short-term bills / Net amount 4.75 4.68 (after deducting final accounts allotment) (Note) Total bills and bonds sold under repurchase agreements 166,320,184 165,304,698 Bills and bonds sold under repurchase agreements / Net amount 5.61 5.50 (after deducting final accounts allotment) (Note)

(c) Credit risk concentration Item June30,2014 June30,2013 Amount of credit extensions to interested parties $ 515,000 $ 545,000 Ratio of credit extensions to 0.37 0.39 interested parties (%)(Note 1) Ratio of credit extensions secured by 20.48 19.31 stocks (%)(Note 2) Industry concentration (%) Industry Ratio (%) Industry Ratio (%) (Top 3 industries with highest ratio of Financial & Financial & 30.73 30.31 credit extension amount) (Note 3) Insurance Insurance Manufacturing 26.89 Manufacturing 28.31 Real estate 22.62 Real estate 19.71

~ 88 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Note 1: The ratio of credit extensions to interested parties = the amount of credit extensions to interested parties / the total amount of all credit extensions.

Note 2: The ratio of credit extensions secured by stocks = the amount of credit extensions secured by stocks / the total amounts of all credit extensions.

Note 3: Total amount of credit extensions include loans, bills discounted, acceptances receivable, guarantees receivable, and advance accounts for factoring receivable.

(4) Liquidity risk

A. Definition and sources of liquidity risk

The Group defines liquidity risk as the risk of financial loss to the Group arising from default by any companies of financial instruments on the payment obligations. For example, the companies are default on payment obligations, such as withdrawals paid to depositors and loans repayment. Or, the company is unable to obtain funds within a certain period at reasonable cost in response to increased demand for assets.

B. Procedures for liquidity risk management and measurement of liquidity risk

The Group is mainly engaged in industry related to finance. Therefore, the management for capital liquidity is very important to the Group. The objectives for liquidity risk management are to maintain reasonable liquidity based on business development plans, ensure capability of daily payment obligations and meet business growth requirements with adequate high-liquid assets and capability of raising funds from others in case of emergency.

The financial department of the Group is responsible for daily capital liquidity management. According to the limits authorized by the Board of Directors, the Group monitors the indexes of liquidity risk, executes capital procurement trading and reports the conditions of capital liquidity to the management. The Group also reports the liquidity risk control to the capital review committee, assets/liabilities and risk management committee and Board of Directors regularly, and performs regular liquidity stress-testing to ensure sufficient capital to meet the funding requirements for increase in assets and payment obligations.

The Group daily performs intensive control over capital sources and the period for fund gaps and liquidity risk management. Future cash flows are estimated based on the financial liability contracts due date and expected cash collection date of financial assets. The Group also takes into account the extent of practical utilization of capital in contingent liabilities such as use of loan limits, guarantees and commitments. The period for fund gaps management includes one day, one week and one month.

Assets to be used to pay obligations and loan commitments include cash, due from Central Bank and call loans to other banks, bank deposits, and collection of loans. The Group can also use repo trade and sale of bonds and bills in response of unexpected cash outflows. The liquidity management policies of the Group include: (A) Maintain the ability to perform all payment obligations immediately.

(B) Maintain solid assets/liabilities structure to ensure medium and long-term liquidity safety.

~ 89 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (C) Diversify capital sources and absorb stable core depositors to avoid depending on certain large-sum depositors or minor borrowers.

(D) Avoid potential unknown loss risk which will increase capital cost and capital procurement pressure.

(E) Conduct due date management to ensure that cash inflow is greater than cash outflow in short term.

(F) Keep liquidity ratio regulated by the supervision authority.

(G) Keep legal ratio for high-quality, high-liquidity assets.

(H) Aware of the liquidity, safety and diversity of financial instruments.

(I) The Group has capital emergency plans, which are reviewed regularly.

(J) The overseas branches of the Group must obey the regulations of ROC and the local supervisory authorities. They will be punished for violation of these regulations.

C. Financial assets and financial liabilities held for liquidity risk management maturity analysis

The table below lists analysis for cash inflow and outflow of the non-derivative and derivative financial assets and liabilities held by the Group for liquidity risk management of primary currency based on the remaining period at the financial reporting date to the contractual maturity date.

~ 90 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (A) The Group’s mature analysis for non-derivative liabilities Unit：In thousands of NT Dollars June 30, 2014 1-30 days 31-90 days 91-180 days 181 days-1 year 1 year-5 years Over 5 years Total Primary funds inflow upon maturity Cashandcashequivalents $ 74,529,074 $ 71,966,978 $ 18,989,322 $ 11,046,141 $ - $ - $ 176,531,515 Due from the Central Bank and call loans to banks 190,657,920 87,873,943 7,300,257 3,354,082 2,835,560 - 292,021,762 Financial assets at fair value through profit or loss 74,005,269 44,059,305 5,441,337 5,175,392 35,480,008 5,140,566 169,301,877 Available-for-sale financial assets 72,082,967 24,303,407 15,049,017 30,098,777 122,647,679 22,425,724 286,607,571 Bills and bonds purchased under resale agreements 3,267,915 1,905,854 477,021 - - - 5,650,790 Receivables 46,569,379 40,181,145 26,958,092 70,135,440 11,149,305 181,962 195,175,323 Bills discounted and loans 132,174,972 139,744,379 215,562,502 179,446,239 694,759,728 438,556,433 1,800,244,253 Reinsurance contracts assets 39,756 159,025 159,025 39,756 - - 397,562 Held-to-maturity financial assets 148,315,556 11,870,541 6,931,943 3,599,155 8,266,024 287,914 179,271,133 Other financial assets 4,313,813 6,141 255,456 292,449 1,007,978 112,238 5,988,075 Other capital inflow upon maturity 9,091 - - - - - 9,091 Total 745,965,711 422,070,718 297,123,971 303,187,429 876,146,282 466,704,837 3,111,198,952 Primary funds outflow upon maturity Due to the Central Bank and financial institutions $ 324,971,802 $ 15,729,720 $ 2,241,436 $ 6,639,873 $ 26,321,785 $ 560,038 $ 376,464,654 Funds borrowed from the Central Bank and other banks 33,972,400 5,411,713 254,157 - 283,163 - 39,921,433 Financial liabilities at fair value through profit or loss 249,595 1,687 2,265,780 3,919,875 24,375 21,563 6,482,875 Bills and bonds sold under repurchased agreements 204,065,455 27,182,771 2,041,850 85,476 - - 233,375,552 Commercial paper payable 6,170,000 1,020,000 - - - - 7,190,000 Payables 25,309,734 18,839,111 2,644,109 6,912,302 1,000,876 17,677,773 72,383,905 Deposits and remittances 384,709,861 272,286,159 234,759,596 312,128,327 708,434,627 14,687,952 1,927,006,522 Bonds payable - - 5,686,630 7,091,964 40,536,100 12,400,900 65,715,594 Other loans 9,572,557 606,732 1,986 762,229 - - 10,943,504 Other financial liabilities 8,737,296 1,818,871 338,450 473,936 193,896 400,365 11,962,814 Other funds outflow upon maturity 587,852 405,708 428,278 1,465,950 19,075 7,701 2,914,564 Total 998,346,552 343,302,472 250,662,272 339,479,932 776,813,897 45,756,292 2,754,361,417 Gap ($ 252,380,841) $ 78,768,246 $ 46,461,699 ($ 36,292,503) $ 99,332,385 $ 420,948,545 $ 356,837,531 Off-balance sheet commitments and guarantees $ 181,368,161 $ 115,092,421 $ 123,318,761 $ 65,393,401 $ 49,323,699 $ 77,616,938 $ 612,113,381

~ 91 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit：In thousands of NT Dollars December 31, 2013 1-30 days 31-90 days 91-180 days 181 days-1 year 1 year-5 years Over 5 years Total Primary funds inflow upon maturity Cashandcashequivalents $ 84,322,617 $ 54,798,444 $ 16,478,798 $ 6,208,462 $ - $ - $ 161,808,321 Due from the Central Bank and call loans to banks 312,838,282 66,805,007 6,615,101 4,101,490 1,637,625 - 391,997,505 Financial assets at fair value through profit or loss 75,247,499 57,263,701 11,233,961 3,693,568 36,064,075 4,968,296 188,471,100 Available-for-sale financial assets 69,197,987 28,795,094 9,434,169 17,629,380 130,222,512 30,677,713 285,956,855 Bills and bonds purchased under resale agreements 1,662,643 926,760 - - - - 2,589,403 Receivables 46,742,040 47,096,860 19,621,282 54,504,455 7,414,547 206,918 175,586,102 Bills discounted and loans 129,482,014 161,631,000 239,115,000 201,847,000 648,569,000 398,049,000 1,778,693,014 Reinsurance contracts assets 50,277 201,108 201,108 50,277 - - 502,770 Held-to-maturity financial assets 138,205,500 10,768,944 4,246,462 21,990,982 9,063,747 501,063 184,776,698 Other financial assets 3,858,309 218,962 12,611 4,109,717 1,024,892 60,220 9,284,711 Total 861,607,168 428,505,880 306,958,492 314,135,331 833,996,398 434,463,210 3,179,666,479 Primary funds outflow upon maturity Due to the Central Bank and financial institutions $ 434,262,692 $ 17,074,529 $ 2,733,913 $ 6,197,951 $ 30,217,901 $ 642,934 $ 491,129,920 Funds borrowed from the Central Bank and other banks 29,720,911 2,406,860 - - 203,555 - 32,331,326 Financial liabilities at fair value through profit or loss 294,712 55,017 128,199 2,360,034 3,966,371 23,562 6,827,895 Bills and bonds sold under repurchased agreements 195,552,896 22,517,309 1,495,304 238,397 - - 219,803,906 Commercial paper payable 3,715,698 680,000 - - - - 4,395,698 Payables 29,168,609 7,290,578 1,914,188 5,524,093 1,526,110 17,702,830 63,126,408 Deposits and remittances 427,650,048 296,796,000 179,937,000 318,015,000 701,907,000 14,587,103 1,938,892,151 Bondspayable 5,998,677 - 178,756 6,303,616 44,590,954 1,319,240 58,391,243 Other loans 3,702,022 4,694 836,848 977,650 - - 5,521,214 Other financial liabilities 6,489,436 2,344,036 401,071 54,265 397,490 422,112 10,108,410 Other funds outflow upon maturity 882,946 461,966 476,966 1,630,596 19,871 7,706 3,480,051 Total 1,137,438,647 349,630,989 188,102,245 341,301,602 782,829,252 34,705,487 2,834,008,222 Gap ($ 275,831,479) $ 78,874,891 $ 118,856,247 ($ 27,166,271) $ 51,167,146 $ 399,757,723 $ 345,658,257 Off-balance sheet commitments and guarantees $ 164,036,513 $ 96,830,838 $ 112,516,168 $ 110,111,317 $ 31,841,147 $ 77,900,857 $ 593,236,840

~ 92 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit：In thousands of NT Dollars June 30, 2013 1-30 days 31-90 days 91-180 days 181 days-1 year 1 year-5 years Over 5 years Total Primary funds inflow upon maturity Cash and cash equivalents $ 44,227,298 $ 30,677,233 $ 20,293,184 $ 17,345,855 $ 99,300 $ - $ 112,642,870 Due from the Central Bank and call loans to banks 174,060,685 61,145,825 18,300,121 9,122,290 2,278,176 - 264,907,097 Financial assets at fair value through profit or loss 67,840,822 55,048,568 18,778,327 5,026,994 33,359,571 8,584,280 188,638,562 Available-for-sale financial assets 51,513,952 19,338,853 17,766,177 20,162,553 132,877,703 33,223,547 274,882,785 Bills and bonds purchased under resale agreements 6,732,757 200,217 - - - - 6,932,974 Receivables 33,469,803 40,465,180 16,069,596 35,613,821 505,095 238,730 126,362,225 Bills discounted and loans 137,283,503 162,980,845 199,705,125 198,569,380 603,349,150 378,015,700 1,679,903,703 Reinsurance contracts assets - 25,438 147,583 - - - 173,021 Held-to-maturity financial assets 127,691,961 13,713,459 5,645,713 8,567,281 9,419,375 44,868 165,082,657 Other financial assets 3,609,147 29,895 506,044 464,665 9,238,103 50,663 13,898,517 Other capital inflow upon maturity 343,856 1,374,609 1,374,608 343,652 - - 3,436,725 Total 646,773,784 385,000,122 298,586,478 295,216,491 791,126,473 420,157,788 2,836,861,136 Primary funds outflow upon maturity Due to the Central Bank and financial institutions $ 302,071,224 $ 12,867,072 $ 2,640,251 $ 6,921,854 $ 21,925,242 $ 466,494 $ 346,892,137 Funds borrowed from the Central Bank and other banks 24,033,569 2,731,939 15,052 - 335,355 100,000 27,215,915 Financial liabilities at fair value through profit or loss 303,379 - 1,282,880 116,000 6,182,223 330,840 8,215,322 Bills and bonds sold under repurchased agreements 187,374,895 17,712,289 1,608,800 242,409 - 860,879 207,799,272 Commercial paper payable 6,260,067 - - - 16,806 - 6,276,873 Payables 26,487,242 16,215,534 2,265,062 5,807,424 819,634 16,423,456 68,018,352 Deposits and remittances 389,961,231 240,939,919 194,147,742 281,522,571 682,394,046 14,048,273 1,803,013,782 Bonds payable 4,287,831 3,250,591 3,662,914 2,104,621 38,232,594 11,116,292 62,654,843 Other loans 4,185,746 3,781 8,004 613,013 1,168,424 - 5,978,968 Other financial liabilities 8,503,378 940,566 133,095 584,971 521,293 150,978 10,834,281 Other funds outflow upon maturity 447,172 362,969 383,134 1,298,623 18,008 3,754 2,513,660 Total 953,915,734 295,024,660 206,146,934 299,211,486 751,613,625 43,500,966 2,549,413,405 Gap ($ 307,141,950) $ 89,975,462 $ 92,439,544 ($ 3,994,995) $ 39,512,848 $ 376,656,822 $ 287,447,731 Off-balance sheet commitments and guarantees $ 180,480,734 $ 110,422,182 $ 128,948,125 $ 70,852,395 $ 28,703,918 $ 79,193,806 $ 598,601,160

~ 93 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (B) Structure analysis for maturity of derivative financial assets and liabilities (Settled by gross amount) Unit：In thousands of NT Dollars June 30, 2014 1-30 days 31-90 days 91-180 days 181 days-1 year 1 year-5 years Over 5 years Total Foreign exchange derivative instruments Inflow $ 26,454,019 $ 16,011,930 $ 32,037,254 $ 9,297,030 $ 637,003 $ - $ 84,437,236 Outflow 26,347,111 15,920,367 31,897,407 9,275,714 630,746 - 84,071,345 Interest rate derivative instruments Inflow 396,865,558 69,748,893 40,288,986 46,945,475 36,692 9,099,638 562,985,242 Outflow 396,608,975 69,600,657 40,078,377 46,600,820 32,833 9,371,028 562,292,690 Total inflows $ 423,319,577 $ 85,760,823 $ 72,326,240 $ 56,242,505 $ 673,695 $ 9,099,638 $ 647,422,478 Total outflows $ 422,956,086 $ 85,521,024 $ 71,975,784 $ 55,876,534 $ 663,579 $ 9,371,028 $ 646,364,035

Unit：In thousands of NT Dollars December 31, 2013 1-30 days 31-90 days 91-180 days 181 days-1 year 1 year-5 years Over 5 years Total Foreign exchange derivative instruments Inflow $ 26,738,844 $ 18,082,138 $ 12,547,486 $ 25,544,515 $ 1,697,559 $ - $ 84,610,542 Outflow 26,700,768 18,216,839 12,521,759 25,479,841 1,704,842 - 84,624,049 Interest rate derivative instruments Inflow 478,050,000 60,603,183 35,242,525 26,881,284 515,692 27,454,452 628,747,136 Outflow 477,545,000 60,041,703 35,081,391 26,746,401 389,386 27,769,346 627,573,227 Total inflows $ 504,788,844 $ 78,685,321 $ 47,790,011 $ 52,425,799 $ 2,213,251 $ 27,454,452 $ 713,357,678 Total outflows $ 504,245,768 $ 78,258,542 $ 47,603,150 $ 52,226,242 $ 2,094,228 $ 27,769,346 $ 712,197,276

Unit：In thousands of NT Dollars June 30, 2013 1-30 days 31-90 days 91-180 days 181 days-1 year 1 year-5 years Over 5 years Total Foreign exchange derivative instruments Inflow $ 25,667,412 $ 18,637,388 $ 13,248,370 $ 5,444,066 $ 2,023,732 $ - $ 65,020,968 Outflow 25,833,574 18,858,205 13,323,832 5,590,423 2,029,379 - 65,635,413 Interest rate derivative instruments Inflow 413,210,145 80,536,175 42,293,954 26,976,700 551,701 25,470,327 589,039,002 Outflow 412,263,936 79,798,856 41,598,754 26,524,299 567,821 25,709,175 586,462,841 Total inflows $ 438,877,557 $ 99,173,563 $ 55,542,324 $ 32,420,766 $ 2,575,433 $ 25,470,327 $ 654,059,970 Total outflows $ 438,097,510 $ 98,657,061 $ 54,922,586 $ 32,114,722 $ 2,597,200 $ 25,709,175 $ 652,098,254

~ 94 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (C) Structure Analysis for maturity of derivative financial assets and liabilities-NTD

Unit：In thousands of NT Dollars June 30, 2014 1-30 days 31-90 days 91-180 days 181 days-1 year 1 year-5 years Over 5 years Total Foreign exchange derivative instruments Inflow $ 2,251,622 $ 11,088 $ 20,198 $ 18,947 $ 4,738 $ - $ 2,306,593 Outflow 2,237,628 8,879 15,934 16,355 4,141 - 2,282,937 Interest rate derivative instruments Inflow 32,931 224,901 326,796 268,271 1,113,534 1,052,260 3,018,693 Outflow 2,290,054 191,382 231,253 339,036 1,302,170 655,128 5,009,023 Credit derivative instruments Inflow - 56,945 55,127 110,255 578,134 - 800,461 Outflow ------Equity derivative instruments Inflow 276,783 - - - - - 276,783 Outflow 701,073 - - - - - 701,073 Total inflows $ 2,561,336 $ 292,934 $ 402,121 $ 397,473 $ 1,696,406 $ 1,052,260 $ 6,402,530 Total outflows $ 5,228,755 $ 200,261 $ 247,187 $ 355,391 $ 1,306,311 $ 655,128 $ 7,993,033

Unit：In thousands of NT Dollars December 31, 2013 1-30 days 31-90 days 91-180 days 181 days-1 year 1 year-5 years Over 5 years Total Foreign exchange derivative instruments Inflow $ 583,273 $ 28,430 $ 32,606 $ 54,948 $ - $ - $ 699,257 Outflow 562,259 28,921 35,968 49,532 1,245 - 677,925 Interest rate derivative instruments Inflow 91,373 309,536 181,189 849,796 2,012,924 1,302,401 4,747,219 Outflow 3,956,561 263,937 117,772 583,352 1,577,517 745,911 7,245,050 Credit derivative instruments Inflow - 51,640 52,787 106,148 637,464 - 848,039 Outflow ------Equity derivative instruments Inflow 155,858 - - - - - 155,858 Outflow 281,471 - - - - - 281,471 Total inflows $ 830,504 $ 389,606 $ 266,582 $ 1,010,892 $ 2,650,388 $ 1,302,401 $ 6,450,373 Total outflows $ 4,800,291 $ 292,858 $ 153,740 $ 632,884 $ 1,578,762 $ 745,911 $ 8,204,446

~ 95 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit：In thousands of NT Dollars June 30, 2013 1-30 days 31-90 days 91-180 days 181 days-1 year 1 year-5 years Over 5 years Total Foreign exchange derivative instruments Inflow $ 264,599 $ 26,440 $ 37,318 $ 63,818 $ 9,701 $ - $ 401,876 Outflow 245,690 22,544 33,635 57,763 7,784 - 367,416 Interest rate derivative instruments Inflow 168,516 502,430 278,375 919,389 2,725,625 1,029,468 5,623,803 Outflow 3,145,794 39,201 44,861 246,315 1,776,851 452,853 5,705,875 Equity derivative instruments Inflow 245,540 - - - - - 245,540 Outflow 166,295 548 404 975 1,827 - 170,049 Total inflows $ 678,655 $ 528,870 $ 315,693 $ 983,207 $ 2,735,326 $ 1,029,468 $ 6,271,219 Total outflows $ 3,557,779 $ 62,293 $ 78,900 $ 305,053 $ 1,786,462 $ 452,853 $ 6,243,340

~ 96 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (D) Analysis for maturity leasing contractual commitments Unit：In thousands of NT Dollars June 30, 2014 Not later than one year 1 year-5 years Over 5 years Total Leasing contractual commitments Non-cancellableaggregateminimumleasepayments $ 588,828 $ 824,122 $ 62,634 $ 1,475,584 Non-cancellable aggregate minimum lease income 349,119 424,841 55,016 828,976

Unit：In thousands of NT Dollars December 31, 2013 Not later than one year 1 year-5 years Over 5 years Total Leasing contractual commitments Non-cancellableaggregateminimumleasepayments $ 574,597 $ 903,169 $ 75,120 $ 1,552,886 Non-cancellable aggregate minimum lease income 379,070 504,069 74,173 957,312

Unit：In thousands of NT Dollars June 30, 2013 Not later than one year 1 year-5 years Over 5 years Total Leasing contractual commitments Non-cancellableaggregateminimumleasepayments $ 538,866 $ 862,789 $ 57,616 $ 1,459,271 Non-cancellable aggregate minimum lease income 337,634 513,984 84,601 936,219

~ 97 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 D. Disclosure requirements in the “Regulations Governing the Preparation of Financial Reports by Public Banks” (A) Maturity analysis of NTD of subsidiary-Mega International Commercial Bank Unit：In thousands of NT Dollars June 30, 2014 Total 1-30days 31-90days 91-180days 181days-1year Over 1 year Primary funds inflow 1,669,497,567 519,869,096 93,544,447 102,408,564 157,316,381 796,359,079 upon maturity Primary funds outflow 2,417,225,048 341,633,620 270,294,504 227,460,404 349,638,515 1,228,198,005 upon maturity Gap (747,727,481) 178,235,476 (176,750,057) (125,051,840) (192,322,134) (431,838,926)

June 30, 2013 Total 1-30days 31-90days 91-180days 181days-1year Over 1 year Primary funds inflow 1,600,412,305 518,892,816 99,651,314 87,981,143 150,086,161 743,800,871 upon maturity Primary funds outflow 1,757,077,354 334,646,255 241,408,854 159,097,638 191,668,604 830,256,003 upon maturity Gap (156,665,049) 184,246,561 (141,757,540) (71,116,495) (41,582,443) (86,455,132)

(B) Maturity analysis of USD of subsidiary-Mega International Commercial Bank Unit：In thousands of US Dollars June 30, 2014 Total 1-30days 31-90days 91-180days 181days-1year Over 1 year Primary funds inflow 31,105,210 7,899,996 5,645,760 3,135,535 5,059,501 9,364,418 upon maturity Primary funds outflow upon 49,011,705 18,843,860 6,755,566 7,716,639 8,792,499 6,903,141 maturity Gap (17,906,495) (10,943,864) (1,109,806) (4,581,104) (3,732,998) 2,461,277

June 30, 2013 Total 1-30days 31-90days 91-180days 181days-1year Over 1 year Primary funds inflow 40,907,125 12,919,414 7,477,134 3,657,053 5,260,433 11,593,091 upon maturity Primary funds outflow upon 44,082,996 24,403,734 4,337,497 3,770,880 1,875,883 9,695,002 maturity Gap (3,175,871) (11,484,320) 3,139,637 (113,827) 3,384,550 1,898,089

(C)Maturity analysis of USD of subsidiary-overseas branches Unit：In thousands of US Dollars June 30, 2014 Total 1-30days 31-90days 91-180days 181days-1year Over 1 year Primary funds inflow 13,129,318 5,491,909 1,799,601 1,116,659 758,746 3,962,403 upon maturity Primary funds outflow upon 15,282,607 7,893,175 1,471,804 1,563,685 376,152 3,977,791 maturity Gap (2,153,289) (2,401,266) 327,797 (447,026) 382,594 (15,388)

~ 98 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2013 Total 1-30days 31-90days 91-180days 181days-1year Over 1 year Primary funds inflow 12,268,460 5,214,585 2,047,985 836,727 804,935 3,364,228 upon maturity Primary funds outflow upon 14,735,976 7,644,308 1,603,939 2,011,511 406,506 3,069,712 maturity Gap (2,467,516) (2,429,723) 444,046 (1,174,784) 398,429 294,516

E. Disclosure requirements in the “Regulations Governing the Procedures for Bills Finance Companies.” Utilization and Sources of Capital June 30, 2014 Unit: In Millions of NT dollars Gap 181 days to 1-30days 31-90days 91-180 days Over 1 year Item 1 year Bills 64,750 43,093 4,142 792 - Bonds 518 6,728 1,302 10,424 66,830 Bank deposits 1,028 190 200 200 - Utilization Loans extended - - - - - of Capital Bills and bonds purchased under resaleagreements 2,702 1,901 476 - - Total 68,998 51,912 6,120 11,416 66,830 Loansborrowed 10,023 - - - - Bills and bonds sold Sources of under repurchased Capital agreements 144,363 19,849 2,023 85 - Own capital - - - - 31,842 Total 154,386 19,849 2,023 85 31,842 Net Flow of Capital (85,388) 32,063 4,097 11,331 34,988 Accumulated Net Flow of Capital (85,388) (53,325) (49,228) (37,897) (2,909)

Utilization and Sources of Capital June 30, 2013 Unit: In Millions of NT dollars Gap 181 days to 1-30days 31-90days 91-180 days Over 1 year Item 1 year Bills 62,106 54,063 15,065 495 - Bonds 150 710 2,189 3,778 68,376 Bank deposits 1,036 - 200 200 - Utilization Loans extended - - - - - of Capital Bills and bonds purchased under resaleagreements 2,240 200 - - - Total 65,532 54,973 17,454 4,473 68,376 Loansborrowed 17,425 - - - - Bills and bonds sold Sources of under repurchased Capital agreements 146,482 16,976 1,605 242 - Own capital - - - - 31,482 Total 163,907 16,976 1,605 242 31,482 Net Flow of Capital (98,375) 37,997 15,849 4,231 36,894 Accumulated Net Flow of Capital (98,375) (60,378) (44,529) (40,298) (3,404)

~ 99 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (5) Market risk

A. Definition of market risk

The Group has market risk on changes in fair value and estimated cash flows of financial instruments arising from fluctuations in interest rate, foreign exchange rate, credit spread, stock price, bond price and financial product price. Trading book and non-trading book both generate market risk.

The Group’s trading book operation is mainly for the requirement of its own trading or for supporting clients’ investment and hedge, which are accounted for interest rate, foreign exchange rate, equity and credit instruments, including positions of derivative and non-derivative instruments. Non-trading book operation is mainly for assets/liabilities management requirement, such as stock, bond and bill investments.

B. Objective of market risk management

The objective of the Group’s market risk management is to confine the risks to the tolerable scopes to avoid the impact of fluctuations of interest rate, foreign exchange rate and financial instrument price on values of future profit and assets/liabilities.

C. Market risk management policies and procedures

The Board of Directors decided the risk tolerant limits and then allocates position limits, Value-at-Risk limits, sensitivity limits, loss limits to each business unit and product line based on budgets and utilization of capital. Market risk management comprises trading book control and non-trading book control. Trading book operation mainly pertains to the positions held by bills and securities firms due to market making. Policies for financial instrument trading of bank are based on back-to-back operation principle. Non-trading book is based on held-to-maturity principle and adopts hedging measures.

D. Procedures for market risk management

Each entity of the Group manages finance independently. Each subsidiary has set organization structure and rules on market risk management based on the Company’s guiding principle and each subsidiary’s own business nature. The Board of Directors is the highest decision unit for market risk tolerant limits and authorizes certain committee/management to be in charge of obeying the policies and put into operation. The certain committee/management sets trading strategies within total risk limits, trading scopes and limits of money market, capital market, foreign exchange market and derivatives and sets business goals based on business policies, domestic and foreign economic situations, future market interest rates, foreign exchange rates and prices trends. The management monitors the positions of bills and bonds, stocks and derivatives, VaR, sensitivity limits and loss limits, performs sensitivity analysis and valuation test, gives reports to the Risk Management Committee and Board of Directors regularly about the risk management operations and daily reports the financial positions to the Finance Control Department. The Risk Management Department of the Company reviews market risk management operations of subsidiaries regularly.

~ 100 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 E. Methods of risk measurement (market risk valuation technique)

Each business unit is responsible for identifying the risk factors of each product and the Risk Management Department is responsible for verification of those factors. The Group adopts sensitivity analysis (PV01、Delta、Vega、Gamma) and VaR method to measure market risk and conducts stress test monthly.

Bank, securities, bills and property insurance subsidiaries adopt VaR models to assess the risk of investment portfolios (including financial assets and liabilities designated at fair value through profit or loss) and assess the market risk of holding positions based on the assumptions of several changes in market conditions and maximum expected loss.

Value at risk estimates possible losses of the existing positions resulted from the unfavorable market changes based on statistical method. Subsidiaries calculate their tolerable “Maximum potential loss” by using 99% confidence interval; therefore, there is still 1% probability that actual loss might be greater than VaR estimation. Assuming the least holding duration is ten day, they assess the VaR of their own positions through historical simulation method and based on the fluctuations in foreign exchange rates, interest rates, prices or indexes for the past one year. The actual calculation results are used to monitor and test regularly the accuracy of parameters and assumptions used in the calculation. The evaluation method above cannot prevent the losses caused by excessive market fluctuations.

The Group currently monitors market risk using sensitivity analysis.

F. Policies and procedures of trading-book risk management

Subsidiaries daily monitor trading-book positions, changes in risk exposures, and various risk limits, including trading rooms, traders and product line risk limits.

If trading-book financial instruments have market price, the valuation of those instruments is conducted at least one time daily using the independent source and available information. If using model valuation, the assumptions and parameters used in the model are reviewed regularly.

Risk measurement methods include VaR and sensitivity analysis.

The Group conducts stress test on the positions of its interest rate, stock and foreign exchange rate products on the assumptions of the monthly change in interest rate, securities market index and foreign exchange rate by 1%, 15% and 3%, respectively, and reports to the risk control meeting.

G. Trading-book interest rate risk management

Trading-book interest rate risk refers to the financial loss of the decline in values of interest rate products held due to unfavorable changes in interest rates, including securities and derivatives with interest.

The trading group screens the credits and financial positions of issuers and selects investment objectives by judging interest rate trend and a variety of country risks and based on the authorized minimum investment criteria. Subsidiaries set trading-book trading limits and stop-loss limits (including trading rooms, traders, trading products, and counterparties, daily and

~ 101 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 overnight limits) based on business strategies and market conditions, and measure monthly the extent of impact of interest rate risk on investment portfolios using PV01 value.

H. Non-trading-book interest rate risk management

Non-trading book interest rate risk mainly comes from the unmatched maturity dates of assets and liabilities or price resetting dates, and inconsistent changes in base interest rates for assets and liabilities. The Group’s interest rate risk mainly comes from the unmatched periods of interest-rate sensitive assets and liabilities of bank and bills subsidiaries.

As the Group has interest-rate sensitive gaps, market interest rate fluctuations have good or bad impacts on the Group’s earnings and cash flows.

The Group manages non-trading book interest rate risk by using reprising gap analysis. The interest-rate reprising gap analysis is to estimate the difference between the assets and liabilities with interest bearing that are to be due near or reprised within a certain period and measure the impact of interest rate change on net interest revenue. The analysis assumes assets and liabilities structure remain unchanged and there are parallel movements of interest rate curves, and excludes the customer behavior, basis risk, option characteristics of early repayment of bonds. The Group calculates the change in net interest revenue for this year and also monitors the percentage of change in net interest revenue to the projection of net interest revenue for this year.

The Group monthly analyzes and monitors interest rate risk positions limits and various interest rate risk management indexes. If any risk management index exceeds limit, the Group will adopt responding measures and report the analysis and monitoring results to the Risk Management Committee.

I. Foreign exchange risk management

Foreign exchange risk refers to the losses caused by the exchange of two different currencies at different times. The Group’s foreign exchange risk mainly comes from its derivative instruments business such as spot foreign exchange, forward foreign exchange and foreign exchange options. The foreign exchange trading of the bank subsidiaries is mainly for offsetting customers’ positions on the same day; therefore, foreign exchange risk is relatively low.

To control trading-book foreign exchange risk, subsidiaries have set trading limits and stop-loss limits for trading rooms and traders and also set the annual maximum loss limits to control the losses within the tolerable scopes.

~ 102 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 J. The Group’s foreign exchange risk gaps Unit：In thousands of NT Dollars, % June 30, 2014 USD AUD RMB Assets Cashandcashequivalents $ 54,610,321 $ 569,188 $ 97,122,748 Due from the Central Bank and call loans to banks 203,044,571 1,622,550 19,572,127 Financial assets at fair value through profit or loss 29,551,382 962,551 1,616,881 Available-for-sale financial assets 26,752,025 35,698,768 10,498,780 Receivables 126,477,053 4,809,167 20,376,575 Assets held for sale 2,582 - - Bills discounted and loans 499,905,468 48,293,621 5,094,089 Reinsurancecontractasset 116,952 - - Held-to-maturity financial assets 12,781,280 801,652 3,647,311 Equity investments accounted for by the equity method 110,758 - - Other financial assets 549,356 238 56,887 Property and equipment 265,053 39,281 1,832 Intangible assets 475 523 4,037 Deferred income tax assets 251,702 - 3,511 Other assets 181,901 4,897 12,832 Total assets $ 954,600,879 $ 92,802,436 $ 158,007,610

Liabilities Due to the Central Bank and financial institutions $ 274,711,957 $ 2,286,477 $ 28,214,219 Funds borrowed from the Central Bank and other banks 38,432,207 - - Financial liabilities at fair value through profit or loss 5,763,272 25,544 4,756 Bills and bonds sold under repurchased agreements 23,119,380 33,014,153 1,008,702 Payables 11,654,189 205,301 952,234 Current income tax liabilities 56,955 60,918 - Deposits and remittances 573,405,001 33,905,783 115,802,936 Other borrowings 125,120 - - Provisions for liabilities 466,600 8,584 - Other financial liabilities 4,442,748 990,426 1,525,897 Defered income tax liabilities 15,408 - 3,878 Other liabilities 3,170,814 123,886 997,317 Total liabilities $ 935,363,651 $ 70,621,072 $ 148,509,939 On-balance sheet foreign exchange gap $ 19,237,228 $ 22,181,364 $ 9,497,671 Off-balance sheet commitments $ 81,243,672 $ 1,248,197 $ 458,362 Exchange rates between NTD and foreign currency 29.8480 28.1108 4.8041

~ 103 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit：In thousands of NT Dollars, %

December 31, 2013 USD AUD RMB Assets Cashandcashequivalents $ 73,026,199 $450,040 $ 64,965,732 Due from the Central Bank and call loans to banks 294,888,052 1,090,940 18,589,400 Financial assets at fair value through profit or loss 35,264,571 203,401 1,075,688 Available-for-sale financial assets 30,465,920 32,522,068 18,987,380 Receivables 131,254,004 1,153,669 13,139,174 Assets held for sale 2,576 - - Bills discounted and loans 506,763,584 38,970,850 6,330,993 Reinsurancecontractasset 150,466 - - Held-to-maturity financial assets 14,656,422 623,875 2,991,539 Equity investments accounted for by the equity method 110,697 - - Other financial assets 559,292 217 60,504 Property and equipment 276,942 40,197 2,259 Intangible assets 497 898 1,270 Deferred income tax assets 316,458 - 5,591 Other assets 4,011,478 4,432 9,954 Total assets $ 1,091,747,158 $ 75,060,587 $ 126,159,484 Liabilities Due to the Central Bank and financial institutions $ 373,206,503 $ 5,829,257 $ 21,524,316 Funds borrowed from the Central Bank and other banks 30,491,932 - - Financial liabilities at fair value through profit or loss 6,259,382 34,592 12,030 Bills and bonds sold under repurchased agreements 24,183,186 21,927,708 6,490 Payables 12,382,394 200,404 742,256 Current income tax liabilities 152,695 85,743 29,876 Deposits and remittances 589,644,035 28,037,823 99,937,827 Other borrowings 409,213 - - Provisions for liabilities 458,930 7,291 - Other financial liabilities 3,180,514 1,368,167 1,085,971 Deferred income tax liabilities 12,461 - - Other liabilities ( 4,503,619) 81,465 315,376 Total liabilities $ 1,035,877,626 $ 57,572,450 $ 123,654,142 On-balance sheet foreign exchange gap $ 55,869,532 $ 17,488,137 $ 2,505,342 Off-balance sheet commitments $ 63,308,625 $ 1,259,923 $ 57,566 Exchange rates between NTD and foreign currency 29.7750 26.5801 4.9122

~ 104 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit：In thousands of NT Dollars, %

June 30, 2013 USD AUD RMB Assets Cashandcashequivalents $ 48,738,649 $ 1,289,192 $ 40,746,380 Due from the Central Bank and call loans to banks 180,683,815 1,163,310 18,721,067 Financial assets at fair value through profit or loss 36,459,460 493,074 439,549 Available-for-sale financial assets 32,680,708 30,147,593 5,378,423 Receivables 250,360 - - Assets held for sale 91,049,334 642,198 7,367,110 Bills discounted and loans 490,122,223 43,042,334 4,868,937 Reinsurancecontractasset 155,204 - - Held-to-maturity financial assets 13,167,833 651,432 3,112,043 Equity investments accounted for by the equity method 111,632 - - Other financial assets 793,109 14 69,172 Property and equipment 287,258 42,444 2,528 Intangible assets 225 1,728 1,585 Deferred income tax assets 321,866 - 5,554 Other assets 3,061,088 2,610 6,497 Total assets $ 897,882,764 $ 77,475,929 $ 80,718,845

Liabilities Due to the Central Bank and financial institutions $ 233,750,236 $ 10,431,490 $ 21,134,428 Funds borrowed from the Central Bank and other banks 22,750,540 - - Financial liabilities at fair value through profit or loss 5,518,457 51,081 875 Bills and bonds sold under repurchased agreements 17,704,862 14,944,483 303 Payables 12,961,500 334,963 323,904 Current income tax liabilities 39,352 89,416 119 Deposits and remittances 547,359,174 28,233,225 54,621,156 Other borrowings 460,135 - - Provisions for liabilities 483,594 6,868 - Other financial liabilities 1,168,528 2,143,169 1,212,430 Deferred income tax liabilities 7,256 - - Other liabilities 817,379 353,327 665,813 Total liabilities $ 843,021,013 $ 56,588,022 $ 77,959,028 On-balance sheet foreign exchange gap $ 54,861,751 $ 20,887,907 $ 2,759,817 Off-balance sheet commitments $ 67,281,730 $ 1,539,995 $ 184,645 Exchange rates between NTD and foreign currency 29.9760 27.7188 4.8793

~ 105 ~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 K. Equity securities risk management (A) The Company’s equity securities market risk comprises the risk of individual equity security coming from the security’s market price changes and the general market risk coming from overall equity securities market price changes. (B) For equity securities risk management, the Company has set trading strategies for three categories of positions: (a) positions held for selling and earning capital gain in short-term; (b) positions held for earning dividends; and (c) positions held for earning capital gains reflecting stock price for good prospect industry or long-term good profitability, and set annual loss limits to the tolerable scopes. (C) Related control measures include: daily market price valuation to control loss limits, monthly stress-testing to calculate possible losses on the Group’s investment portfolios, measurement of the extent of the impact of systematic risk on investment portfolios using β value, and reporting to the Risk Management Committee quarterly. L. Sensitivity Analysis Sensitivity analysis of the Group’s financial instruments (including trading book and non-trading book): June 30, 2014 Unit：In thousands of NT Dollars Effect on Effect on Risks Extent of Variation Profit or Loss Equity Foreign exchange risk Exchange rate of NTD to USD, to JPY, to EUR and to ($ 56,743) $ - each of other currencies appreciated by 3%. Foreign exchange risk Exchange rate of NTD to USD, to JPY, to EUR and to 56,743 - each of other currencies depreciated by 3% Interest rate risk Major increases in interest rates 25BPS ( 47,161) ( 198,872) Interest rate risk Major decline in interest rates 25BPS 47,161 198,872 Equity securities risk TAIEX declined by 2%. ( 10,387) ( 29,882) Equity securities risk TAIEX increased by 2% 10,387 29,882 December 31, 2013 Effect on Effect on Risks Extent of Variation Profit or Loss Equity Foreign exchange risk Exchange rate of NTD to USD, to JPY, to EUR and to ($ 60,157) $ - each of other currencies appreciated by 3%. Foreign exchange risk Exchange rate of NTD to USD, to JPY, to EUR and to 60,157 - each of other currencies depreciated by 3% Interest rate risk Major increases in interest rates 25BPS ( 43,431) ( 198,590) Interest rate risk Major decline in interest rates 25BPS 43,431 198,590 Equity securities risk TAIEX declined by 2%. ( 10,881) ( 29,614) Equity securities risk TAIEX increased by 2% 10,881 29,614 June 30, 2013 Effect on Effect on Risks Extent of Variation Profit or Loss Equity Foreign exchange risk Exchange rate of NTD to USD, to JPY, to EUR and to ($ 38,247) $ - each of other currencies appreciated by 3%. Foreign exchange risk Exchange rate of NTD to USD, to JPY, to EUR and to 38,247 - each of other currencies depreciated by 3%. Interest rate risk Major increases in interest rates 25BPS ( 34,042) ( 175,486) Interest rate risk Major decline in interest rates 25BPS 34,042 175,486 Equity securities risk TAIEX declined by 2%. ( 10,777) ( 26,734) Equity securities risk TAIEX increased by 2% 10,777 26,734

~106~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 M. Disclosure requirements in the “Regulations Governing the Preparation of Financial Reports by Public Banks” Interest rate sensitivity analysis on assets and liabilities (NT Dollars) June 30, 2014 Unit：In thousands of NT Dollars, % 1-90days 91-180days 181daysto1year Over 1 year Total Interest rate sensitive assets 516,577,914 774,936,340 16,877,728 21,520,649 1,329,912,631 Interest rate sensitive liabilities 529,214,704 565,051,397 35,613,667 48,670,149 1,178,549,917 Interest rate sensitive gap (12,636,790) 209,884,943 (18,735,939) (27,149,500) 151,362,714 Net worth 205,892,811 Ratio of interest rate sensitive assets to interest rate sensitive liabilities 112.84% Ratio of interest rate sensitivity gap to net worth 73.52%

Interest rate sensitivity analysis on assets and liabilities (NT Dollars) June 30, 2013 Unit：In thousands of NT Dollars, % 1-90days 91-180days 181daysto1year Over 1 year Total Interest rate sensitive assets 486,782,233 695,686,124 14,628,795 22,700,312 1,219,797,464 Interest rate sensitive liabilities 513,812,361 549,325,058 30,760,818 44,609,965 1,138,508,202 Interest rate sensitive gap (27,030,128) 146,361,066 (16,132,023) (21,909,653) 81,289,262 Net worth 176,709,232 Ratio of interest rate sensitive assets to interest rate sensitive liabilities 107.14% Ratio of interest rate sensitivity gap to net worth 46.00% Notes： 1.The above amounts included only New Taiwan dollar amounts by the onshore branches of the Company (i.e. excluding foreign currency). 2.Interest rate sensitive assets and liabilities refer to the interest-earning assets and interest-bearing liabilities of which the income or costs are affected by the fluctuations in interest rates. 3.Interest rate sensitivity gap = Interest rate sensitive assets – Interest rate sensitive liabilities 4.Ratio of interest rate sensitive assets to interest rate sensitive liabilities = Interest rate sensitive assets ÷ Interest rate sensitive liabilities (referring to the current interest rate sensitive assets and liabilities denominated in New Taiwan dollars)

~107~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Interest rate sensitivity analysis on assets and liabilities (US Dollars) June 30, 2014 Unit：In thousands of US Dollars, % 1-90days 91-180days 181daysto1year Over 1 year Total Interest rate sensitive assets 24,873,113 1,885,510 586,666 562,461 27,907,750 Interest rate sensitive liabilities 27,614,437 1,415,406 861,048 10,300 29,901,191 Interest rate sensitive gap (2,741,324) 470,104 (274,382) 552,161 (1,993,441) Net worth 6,898,044 Ratio of interest rate sensitive assets to interest rate sensitive liabilities 93.33% Ratio of interest rate sensitivity gap to net worth -28.90%

Interest rate sensitivity analysis on assets and liabilities (US Dollars) June 30, 2013 Unit：In thousands of US Dollars, % 1-90days 91-180days 181daysto1year Over 1 year Total Interest rate sensitive assets 25,953,915 1,206,750 865,449 602,699 28,628,813 Interest rate sensitive liabilities 24,886,334 1,121,147 759,324 300 26,767,105 Interest rate sensitive gap 1,067,581 85,603 106,125 602,399 1,861,708 Net worth 5,895,024 Ratio of interest rate sensitive assets to interest rate sensitive liabilities 106.96% Ratio of interest rate sensitivity gap to net worth 31.58%

Note： 1.The above amounts included only US dollars denominated assets and liabilities of head office, domestic and foreign branches, and the OBU branch, contingent assets and liabilities are excluded. 2.Interest rate sensitivity gap = Interest rate sensitive assets – Interest rate sensitive liabilities. 3.Ratio of interest rate sensitive assets to interest rate sensitive liabilities = Interest rate sensitive assets ÷ Interest rate sensitive liabilities (referring to the current interest rate sensitive assets and liabilities denominated in US dollars).

~108~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 N. Disclosure requirements in the “Regulations Governing the Preparation of Financial Reports by Publicly Held Bills Finance Companies” (A)The information of interest rate sensitivity Interest rate sensitivity analysis on assets and liabilities of MBF June 30, 2014 Unit: In thousands of NT Dollars, % Items 1-90days 91-180days 181daysto1year Over 1 year Total Interest rate sensitivity assets 120,909,975 6,120,172 11,416,337 66,829,785 205,276,269 Interest rate sensitivity liabilities 174,234,409 2,023,152 85,265 - 176,342,826 Interest-rate sensitivity gap ( 53,324,434) 4,097,020 11,331,072 66,829,785 28,933,443 Net worth 31,842,477 Interest rate sensitivity assets and liabilities ratio 116.41 Interest rate sensitivity gap and net value ratio 90.86

June 30, 2013 Unit: In thousands of NT Dollars, % Items 1-90days 91-180days 181daysto1year Over 1 year Total Interest rate sensitivity assets 120,504,556 17,454,564 4,473,380 68,375,634 210,808,134 Interest rate sensitivity liabilities 180,883,303 1,604,804 241,591 - 182,729,698 Interest-rate sensitivity gap ( 60,378,747) 15,849,760 4,231,789 68,375,634 28,078,436 Net worth 31,482,279 Interest rate sensitivity assets and liabilities ratio 115.37 Interest rate sensitivity gap and net value ratio 89.19 Note 1: Interest rate sensitive assets and liabilities refer to the interest-earning assets and interest-bearing liabilities of which the income or costs are affected by the fluctuations in interest rates. Note 2: Ratio of interest rate sensitive assets to interest rate sensitive liabilities = Interest rate sensitive assets ÷ Interest rate sensitive liabilities。 Note 3: Interest rate sensitivity gap = Interest rate sensitive assets – Interest rate sensitive liabilities

~109~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (B) Average amount and average interest rates of interest-earning assets and interest-bearing liabilities of MBF For the six-month period ended June 30, 2014 Average amount (NT$) Average interest rate (%) Assets Cash and cash equivalents (Note) $ 1,607,809 0.49 Financial assets at fair value through profit or loss 121,734,626 1.06 Purchasedunderresaleagreementandbonds 3,183,929 0.58 Available-for-sale financial assets 78,665,161 1.88 Held-to-maturity financial assets 500,000 2.03 Liabilities Interbank call loans and overdrafts 18,034,082 0.48 Bondsandbillssoldunderrepurchaseagreements 158,770,122 0.56

For the six-month period ended June 30, 2013 Average amount (NT$) Average interest rate (%) Assets Cash and cash equivalents (Note) $ 1,368,576 0.53 Financial assets at fair value through profit or loss 126,680,902 1.07 Purchasedunderresaleagreementandbonds 1,486,564 0.66 Available-for-sale financial assets 73,016,780 2.05 Held-to-maturity financial assets 500,000 2.04 Liabilities Interbank call loans and overdrafts 18,926,249 0.48 Bondsandbillssoldunderrepurchaseagreements 155,864,326 0.64 Note: Cash and cash equivalents comprise restricted assets-Certificate of Deposit.

9. Insurance risk management

In order to effectively recognize, measure and monitor the risks the subsidiary is exposed to and ensure that the risks are within a coverable range, to balance risks and rewards reasonably, to maximize the value of equity and to maintain the adequacy of self-owned capital and repayment ability to secure the company’s operation, the subsidiary established a risk management committee under the Board of Directors and a risk control department independent from business units as well as risk control policy and procedures. Insurance risks and financial risks will be explained below. (1) Insurance risk, measurement and corresponding risk management Insurance risks are the risks to overpay expected claims due to insufficient estimate of the frequency, degree of impact and uncertainty of time of the insured incidents, and such uncertain elements including natural disaster, catastrophe risks, legal changes and litigation, which might occur randomly. The subsidiary primarily covers automobile insurance, fire insurance, accident insurance and flood insurance, and the risk management methods are stated as follows:

A. Automobile insurance

The automobile insurance mainly covers automobile insurance businesses, and the risks primarily resulting from accident losses due to the behavior of the insured; therefore, the subsidiary selects clients of good quality through careful underwriting standards and practice, the amount of each policy is small and covered insurance is spread all over the country; the insurance is not concentrated on a specific location or on people of certain age group or occupation. However, the accumulative risks as a whole are still large, the subsidiary signs reinsurance contracts for automobile insurance when claims of various insurance exceed retention amount.

~110~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 B. Fire insurance

The fire insurance mainly covers commercial fire insurance businesses, and the targets include manufacturing factories, losses due to machines and operation interruption. The insurance primarily covers fire or explosion resulting from machine abandonment, machine damage or human behavior, and risks concentrate on industrial parks, and petrochemical or heavy industries. Also, the insurance additionally covers typhoon, flood and earthquake, which elevates the overall degree of risks covered; therefore, the subsidiary excludes high risk clients through strict underwriting policy. The subsidiary disperses risks through fire reinsurance contract, over-insurance per risk unit reinsurance contract, over-insurance for catastrophe losses reinsurance contract or coinsurance. Also, the subsidiary assesses the relation between the scope of insurance cases and premium consideration; those with lower risks are self-retained, and facultative reinsurance arrangement will be adopted for the rest.

C. Accident insurance

The accident insurance mainly covers engineering insurance businesses, targeting non-renewal contracts, including contractor’s all risk insurance, installation all risk insurance and carrying forward various all risk insurance, including risks resulting from typhoons (due to Taiwan’s geographic location), floods and earthquakes. The subsidiary disperses risks through reinsurance contract and coinsurance with the Engineering Insurance Association; if the subsidiary is unable to disperse risks through the abovementioned methods, the relations between actual risk and premium consideration is considered, and those with lower risks are self-retained, while facultative reinsurance arrangement are adopted for the rest. Also, the subsidiary examines business performance and accumulated value of natural disasters; observes if there is any abnormal situation from loss rates and performance results for the insurer as reference. The maximum self-retention amount is revised each year after assessing market situation, business characteristics and previous year’s performance result. For large and concentrated losses from natural disasters such as typhoons or earthquakes, foreign department will transfer self-retained risk above certain amount to be covered by reinsurers, and control risk through setting claim limit of self-retained risks.

D. Marine insurance

Marine insurance includes cargo transportation, hull insurance and fishing vessel insurance, primarily covering risks resulting from hull or cargo damage from accidents, which does not generate risk concentration problems. However, the accumulative risks as a whole are still large, the subsidiary selects quality businesses through strict underwriting policy and makes facultative reinsurance arrangement when claims of various insurance exceed retention amount based on insurance types and targets, e.g. hull insurance contracts. For cargo transportation insurance, the subsidiary disperses risks through surplus reinsurance contract and quota share reinsurance. When there are businesses that cannot be covered by reinsurance contracts or special risks, facultative reinsurance arrangement or coinsurance are adopted.

~111~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (2) Insurance risk concentration

The subsidiary covering fire insurance and engineering insurance will result in a higher risk concentration in location and in industry; risks are dispersed through reinsurance ceding. As of June 30, 2014 and 2013, through the premium income and self-retained premium of fire insurance and engineering insurance premium income (fire insurance and engineering insurance), insurance risk concentration situation are as follows:

For the six-month period ended For the six-month period ended June 30, 2014 June 30, 2013 Type Premium Income Self-retained Premium Premium Income Self-retained Premium Fire insurance $ 396,362 $ 137,174 $ 474,223 $ 146,676 Engineering insurance 306,137 148,103 264,853 132,794

(3) Sensitivity analysis of insurance risk

The subsidiary assesses claim reserves through loss development model and estimated loss rate for various insurance types. Due to some uncertainties including changes in external environment (e.g. changes in regulations or legal ruling), trends or payment methods, which changes loss development model and estimated loss rate that could affect the estimation of claim reserves. The subsidiary performs sensitivity test on estimated loss rate as of June 30, 2014 and 2013. The results are as follows:

June 30, 2014 Final loss rate increases 5% Final loss rate decreases 5% Total increase of Total increase of Total increase of Total increase of Type claim reserves held claim reserves held claim reserves held claim reserves held before reinsurance after reinsurance before reinsurance after reinsurance Fire Insurance $ 53,571 $ 14,260 $ 53,571 $ 14,260 Marine Insurance 38,387 10,743 38,387 10,743 Automobile Insurance 128,255 101,666 128,225 101,666 AccidentInsurance 101,036 38,353 101,036 38,353 Injury Insurance 21,953 17,231 21,953 17,231 Offshore Branches 6,250 6,187 6,250 6,187

The sensitivity test adopts self-retained maturity premium as basis from July 1, 2013 to June 30, 2014 and calculates the effects of 5% increase or decrease of final loss rate to the subsidiary’s income and losses.

June 30, 2013 Final loss rate increases 5% Final loss rate decreases 5% Total increase of Total increase of Total increase of Total increase of Type claim reserves held claim reserves held claim reserves held claim reserves held before reinsurance after reinsurance before reinsurance after reinsurance Fire Insurance $ 53,828 $ 17,767 $ 53,828 $ 17,767 Marine Insurance 36,497 10,747 36,497 10,747 Automobile Insurance 117,715 92,488 117,715 92,488 Accident Insurance 104,543 37,029 104,543 37,029 Injury Insurance 16,672 13,893 16,672 13,893 OffshoreBranches 7,141 7,132 7,141 7,132 The sensitivity test adopts self-retained maturity premium as basis from July 1, 2012 to June 30, 2013 and calculates the effects of 5% increase or decrease of final loss rate to the subsidiary’s income and losses.

~112~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (4) As of June 30, 2014, December 31, 2013 and June 30, 2013, the subsidiary’s claim development trend is as follows:

A. Accumulative claim amounts (Before reinsurance ceding)

(Unit: In thousands of NT Dollars)

June 30, 2014 Day of evaluation Amount Estimated Accumulative Year of Accumulative Adjustments recognized in accumulative present unpaid Accident 2009.12.31 2010.12.31 2011.12.31 2012.12.31 2013.12.31 2014.6.30 claim amounts (Note) the balance claim amounts amount sheet 2009 and 16,995,559 16,922,138 16,945,220 16,872,422 16,779,521 16,702,292 16,702,292 16,322,947 379,345 before 2010 3,609,724 3,515,512 3,347,358 3,324,839 3,334,664 3,334,664 3,214,106 120,558 2011 1,824,491 2,069,938 2,051,558 2,042,623 2,042,623 1,893,154 149,469 2012 2,281,266 2,591,799 2,541,836 2,541,836 2,081,610 460,226 2013 1,973,722 2,295,394 2,295,394 1,787,987 507,407 2014 993,279 993,279 451,637 541,642 (1/1-6/30) Total 27,910,088 25,751,441 2,158,647 1,071,334 3,229,981

December 31, 2013 Day of evaluation Amount Estimated Accumulative Year of Accumulative Adjustments recognized in accumulative present unpaid Accident 2009.12.31 2010.12.31 2011.12.31 2012.12.31 2013.12.31 claim amounts (Note) the balance claim amounts amount sheet 2009 and 16,995,559 16,922,138 16,945,220 16,872,422 16,779,521 16,779,521 16,316,303 463,218 before 2010 3,609,724 3,515,512 3,347,358 3,324,839 3,324,839 3,189,121 135,718 2011 1,824,491 2,069,938 2,051,385 2,051,385 1,881,723 169,662 2012 2,281,266 2,591,177 2,591,177 2,020,604 570,573 2013 1,973,722 1,973,722 1,183,135 790,587 Total 26,720,644 24,590,886 2,129,758 938,716 3,068,474

~113~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Unit: In thousands of NT Dollars) June 30, 2013 Day of evaluation Estimated Accumulative Amount Year of Accumulative Adjustments accumulative present unpaid recognized in the Accident 2009.12.31 2010.12.31 2011.12.31 2012.12.31 2013.06.30 claim amounts (Note) claim amounts amount balance sheet 2009 and 16,995,559 16,922,138 16,945,220 16,872,422 16,816,988 16,816,988 16,292,699 524,289 before 2010 3,609,724 3,515,512 3,347,358 3,321,785 3,321,785 3,163,253 158,532 2011 1,824,491 2,069,938 2,091,029 2,091,029 1,842,348 248,681 2012 2,281,266 2,558,376 2,558,376 1,736,171 822,205 2013 714,454 714,454 320,550 393,904 (1/1-6/30) Total 25,502,632 23,355,021 2,147,611 1,002,583 3,150,194 Note: Claim reserves for compulsory private automobile liability insurance, compulsory commercial automobile liability insurance, compulsory motorcycle liability insurance, credit insurance, nuclear energy insurance, government sponsored earthquake insurance and health insurance are provided in accordance with related regulations; therefore, the loss development triangle of direct businesses does not include the abovementioned insurance types. Claim reserves on account are estimated based on current available data; however, the final result might differ from initial estimation value due to subsequent developments. B. Accumulative claim amounts (After reinsurance ceding)

(Unit: In thousands of NT Dollars) June 30, 2014 Day of evaluation Estimated Accumulative Amount Year of Accumulative Adjustments accumulative present unpaid recognized in the Accident 2009.12.31 2010.12.31 2011.12.31 2012.12.31 2013.12.31 2014.6.30 claim amounts (Note) claim amounts amount balance sheet 2009 and 11,128,997 11,313,365 11,316,457 11,323,314 11,279,527 11,210,325 11,210,325 11,059,065 151,260 before 2010 1,397,312 1,626,786 1,678,008 1,665,535 1,681,985 1,681,985 1,629,264 52,721 2011 1,114,786 1,466,969 1,526,450 1,505,701 1,505,701 1,413,131 92,570 2012 1,346,822 1,664,766 1,681,310 1,681,310 1,481,813 199,497 2013 1,322,491 1,581,219 1,581,219 1,262,746 318,473 2014 609,509 609,509 300,587 308,922 (1/1-6/30) Total 18,270,049 17,146,606 1,123,443 614,137 1,737,580

~114~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Unit: In thousands of NT Dollars) December 31, 2013 Day of evaluation Amount Estimated Accumulative Year of Accumulative Adjustments recognized in accumulative present unpaid Accident 2009.12.31 2010.12.31 2011.12.31 2012.12.31 2013.12.31 claim amounts (Note) the balance claim amounts amount sheet 2009 and before 11,128,997 11,313,365 11,316,457 11,323,314 11,279,527 11,279,527 11,052,369 227,158 2010 1,397,312 1,626,786 1,678,008 1,665,535 1,665,535 1,610,402 55,133 2011 1,114,786 1,466,969 1,526,450 1,526,450 1,387,624 138,826 2012 1,346,822 1,664,766 1,664,766 1,405,463 259,303 2013 1,322,491 1,322,491 853,793 468,698 Total 17,458,769 16,309,651 1,149,118 508,262 1,657,380

(Unit: In thousands of NT Dollars) June 30, 2013 Day of evaluation Estimated Accumulative Amount Year of Accumulative Adjustments accumulative present unpaid recognized in the Accident 2009.12.31 2010.12.31 2011.12.31 2012.12.31 2013.06.30 claim amounts (Note) claim amounts amount balance sheet 2009 and 11,128,997 11,313,365 11,316,457 11,323,314 11,300,306 11,300,306 11,039,027 261,279 before 2010 1,397,312 1,626,786 1,678,008 1,660,674 1,660,674 1,590,981 69,693 2011 1,114,786 1,466,969 1,518,931 1,518,931 1,336,092 182,839 2012 1,346,822 1,597,567 1,597,567 1,234,963 362,604 2013 492,159 492,159 249,773 242,386 (1/1-6/30) Total 16,569,637 15,450,836 1,118,801 519,714 1,638,515

Note: Claim reserves for compulsory private automobile liability insurance, compulsory commercial automobile liability insurance, compulsory motorcycle liability insurance, credit insurance, nuclear energy insurance, government sponsored earthquake insurance and health insurance are provided in accordance with related regulations; therefore, the loss development triangle of direct businesses does not include the abovementioned insurance types. Claim reserves on account are estimated based on current available data; however, the final result might differ from initial estimation value due to subsequent developments.

~115~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (5) Credit risk, liquidity risk and market risk of insurance contracts

A. Credit risk

Credit risk mainly comes from the condition when the reinsurers of the Group’s reinsurance business fail to fulfill their obligations and thus premiums, claims or other expenses may not be recovered from reinsurers. To control this risk, subsidiaries would consider diversifying reinsurers to eliminate credit risk concentration and would carefully select reinsurers according to the Group’s reinsurance risk management policy. The reinsurance contracts would require using net payment way to pay reinsurance premiums, which have excluded receivables or recoverable amounts, to mitigate credit risk.

After the reinsurance business was classified, subsidiaries review the credit rating of reinsurers regularly according to the reinsurance risk management policy. If the credit rating of reinsurer is downgraded and this reinsurance has met the criteria of not qualifying for reinsurance as specified in the “Regulations Governing Insurance Enterprises Engaging in Operating Reinsurance and Other Risk Spreading Mechanisms”, subsidiaries shall disclose the amount of reserve for unqualified reinsurance according to relevant regulations.

B. Liquidity risk

Liquidity risk of insurance contract occurs when the Group is unable to realize assets immediately or acquires adequate capital and thus it fails to fulfill payment obligations for insurance. To control this risk, subsidiaries conduct maturity analysis of insurance contracts regularly and examine the matching of assets and liabilities. Future actual payment amounts will differ by the difference between actual experience and expected experience.

(Unit: In thousands of NT Dollars)

June 30, 2014 Book value Below 1 year From 1 year to 5 years Indemnity $ 3,229,981 $ 2,965,351 $ 264,630

December 31, 2013 Book value Below 1 year From 1 year to 5 years Indemnity $ 3,068,474 $ 2,440,355 $ 628,119

June 30, 2013 Book value Below 1 year From 1 year to 5 years Indemnity $ 3,150,194 $ 2,544,908 $ 605,286

C. Market risk

Subsidiaries provide reserve for each type of insurance liability in accordance with “Regulations Governing the Setting Aside of Various Reserves by Insurance Enterprises” and relevant laws. Except for the reserve for unearned premiums for long-term fire insurance that is provided based on the insurance reserve provision coefficient table published by the competent authority, other reserves are provided without discounting, which are therefore not affected by market interest rate fluctuations.

~116~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (6) Disclosures in “Regulations Governing the Preparation of Financial Reports by Insurance Enterprises”

A. Details of calculation of gross premiums are as follows:

For the three-month period ended June 30, 2014 Reinsurance Retained insurance Premium income Reinsurance premium premiums ceded premiums Type (1) (2) (3) (4)=(1)+(2)-(3) Compulsoryinsurance 100,363$ 24,918$ 27,878$ 97,403$ Non-compulsoryinsurance 1,630,755 113,178 933,780 810,153 Total 1,731,118$ 138,096$ 961,658$ 907,556$

For the three-month period ended June 30, 2014 Provision of reserve for Reserve released for Unearned premiums Unearnedpremiums Gross premiums Type (5) (6) (7)=(4)-(5)+(6) Compulsoryinsurance 2,304)($ -$ 99,707$ Non-compulsory insurance 15,410)( - 825,563 Total 17,714)($ -$ 925,270$

For the three-month period ended June 30, 2013 Reinsurance Retained insurance Premium income Reinsurance premium premiums ceded premiums Type (1) (2) (3) (4)=(1)+(2)-(3) Compulsoryinsurance 104,530$ 25,233$ 29,471$ 100,292$ Non-compulsoryinsurance 1,697,365 128,769 945,081 881,053 Total 1,801,895$ 154,002$ 974,552$ 981,345$

For the three-month period ended June 30, 2013 Provision of reserve for Reserve released for Unearned premiums Unearnedpremiums Gross premiums Type (5) (6) (7)=(4)-(5)+(6) Compulsoryinsurance 840)($ -$ 101,132$ Non-compulsoryinsurance 20,187 - 860,866 Total 19,347$ -$ 961,998$

For the six-month period ended June 30, 2014 Reinsurance Retained insurance Premium income Reinsurance premium premiums ceded premiums Type (1) (2) (3) (4)=(1)+(2)-(3) Compulsoryinsurance 202,106$ 50,641$ 56,130$ 196,617$ Non-compulsoryinsurance 3,311,142 227,681 1,770,441 1,768,382 Total 3,513,248$ 278,322$ 1,826,571$ 1,964,999$

~117~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 For the six-month period endedJune 30, 2014 Provision of reserve for Reserve released for Unearned premiums Unearnedpremiums Gross premiums Type (5) (6) (7)=(4)-(5)+(6) Compulsoryinsurance 156,323$ 160,081$ 200,375$ Non-compulsoryinsurance 1,911,766 1,841,932 1,698,548 Total 2,068,089$ 2,002,013$ 1,898,923$

For the six-month period ended June 30, 2013 Reinsurance Retained insurance Premium income Reinsurance premium premiums ceded premiums Type (1) (2) (3) (4)=(1)+(2)-(3) Compulsoryinsurance 211,007$ 50,326$ 59,176$ 202,157$ Non-compulsoryinsurance 3,300,933 295,692 1,786,411 1,810,214 Total 3,511,940$ 346,018$ 1,845,587$ 2,012,371$

For the six-month period endedJune 30, 2013 Provision of reserve for Reserve released for Unearned premiums Unearnedpremiums Gross premiums Type (5) (6) (7)=(4)-(5)+(6) Compulsoryinsurance 163,289$ 164,110$ 202,978$ Non-compulsoryinsurance 1,998,815 1,821,023 1,632,422

The subsidiaries had no premium income from compulsory insurance in Guam and $173,244, $169,413, $350,385 and $350,274 from non-compulsory insurance for the three-month and the six-month periods ended June 30, 2014 and 2013, respectively.

~118~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 B. Details of calculation of net claims are as follows:

For the three-month period ended June 30, 2014 Reinsurance Claims recovered Claims incurred Claims incurred Fromreinsurers Net claims Type (1) (2) (3) (4)=(1)+(2)-(3) Compulsoryinsurance 74,262$ 26,430$ 29,314$ 71,378$ Non-compulsoryinsurance 642,371 76,910 255,782 463,499 Total 716,633$ 103,340$ 285,096$ 534,877$

For the three-month period ended June 30, 2013 Reinsurance Claims recovered Claims incurred Claims incurred Fromreinsurers Net claims Type (1) (2) (3) (4)=(1)+(2)-(3) Compulsoryinsurance 90,078$ 26,031$ 35,797$ 80,312$ Non-compulsoryinsurance 548,194 91,817 170,002 470,009 Total 638,272$ 117,848$ 205,799$ 550,321$

For the six-month period ended June 30, 2014 Reinsurance Claims recovered Claims incurred Claims incurred Fromreinsurers Net claims Type (1) (2) (3) (4)=(1)+(2)-(3) Compulsoryinsurance 168,796$ 57,060$ 65,256$ 160,600$ Non-compulsoryinsurance 1,153,829 159,462 435,051 878,240 Total 1,322,625$ 216,522$ 500,307$ 1,038,840$

For the six-month period ended June 30, 2013 Reinsurance Claims recovered Claims incurred Claims incurred Fromreinsurers Net claims Type (1) (2) (3) (4)=(1)+(2)-(3) Compulsoryinsurance 162,047$ 56,675$ 63,543$ 155,179$ Non-compulsoryinsurance 1,078,506 184,676 333,153 930,029 Total 1,240,553$ 241,351$ 396,696$ 1,085,208$

~119~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 C. Details of balance, provisions and reserve released for unearned premiums are as follows: For the six-month period ended June 30, 2014 Compulsory automobile Provision of reserve for Reserve released for liability insurance for car Beginning balance unearned premiums unearned premiums Ending balance Reserveforunearnedpremiums $ 147,375 $ 145,313 ($ 147,375) $ 145,313 Reserve for catastrophic losses ( 1,093) - ( 117,055) ( 118,148) Reserve for outstanding losses (Note) 149,902 275,320 ( 149,902) 275,320 Total $ 296,184 $ 420,633 ($ 414,332) $ 302,485

Compulsory automobile liability Provision of reserve for Reserve released for insurance for motorcycle Beginning balance unearned premiums unearned premiums Ending balance Reserveforunearnedpremiums $ 77,935 $ 74,042 ($ 77,934) $ 74,043 Reserve for catastrophic losses 362,750 - ( 23,640) 339,110 Reserve for outstanding losses (Note) 22,756 61,940 ( 22,756) 61,940 Total $ 463,441 $ 135,982 ($ 124,330) $ 475,093

For the six-month period ended June 30, 2013 Compulsory automobile Provision of reserve for Reserve released for liability insurance for car Beginning balance unearned premiums unearned premiums Ending balance Reserve for unearned premiums $ 143,837 $ 148,613 ($ 143,837) $ 148,613 Reserve for catastrophic losses 80,002 - ( 34,475) 45,527 Reserve for outstanding losses (Note) 131,376 155,972 ( 131,376) 155,972 Total $ 355,215 $ 304,585 ($ 309,688) $ 350,112

Compulsory automobile liability Provision of reserve for Reserve released for insurance for motorcycle Beginning balance unearned premiums unearned premiums Ending balance Reserve for unearned premiums $ 88,438 $ 82,117 ($ 88,438) $ 82,117 Reserve for catastrophic losses 347,450 5,446 - 352,896 Reserve for outstanding losses (Note) 21,415 23,772 ( 21,415) 23,772 Total $ 457,303 $ 111,335 ($ 109,853) $ 458,785

Note: Including claims on reported but not paid and incurred but not reported.

~120~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 D. Details of assets and liabilities for compulsory automobile liability insurance are as follows:

Assets June 30, 2014 December 31, 2013 June 30, 2013 Cash and bank deposits $ 564,490 $ 565,258 $ 615,189 Premiums receivable 37,250 39,580 42,805 Claims recoverable from Reinsurers 18,482 35,936 26,212 Due from Reinsurers and Ceding Companies 16,768 16,691 16,642 Ceded unearned premium reserve 63,032 65,228 67,442 Ceded claims reserve 98,083 54,626 56,982 Temporary payments 290 249 3,075 Total $ 798,395 $ 777,568 $ 828,347 Liabilities Due to Reinsurers and Ceding Companies $ 18,841 $ 17,583 $ 18,490 Unearned premium reserve 219,356 225,310 230,730 Reserve for Outstanding Losses 337,260 172,658 179,743 Reserve for Catastrophic Losses 220,962 361,657 398,424 Temporary receipts 1,976 360 960 Total $ 798,395 $ 777,568 $ 828,347

~121~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 E. Details of costs and revenues relating to compulsory automobile liability insurance:

For the three-month eriods ended June 30, 2014 2013 Operating revenues Direct written premiums $ 69,696 $ 73,680 Reinsurance premiums 24,918 25,233 Less: Reinsurance premiums ceded ( 27,878 ) ( 29,471 ) Net change in reserve for unearned premiums 2,304 840 Net premiums written 69,040 70,282 Interest income 1,225 1,448 Total $ 70,265 $ 71,730 Operating costs Claims incurred $ 100,692 $ 116,110 Less: Claims recovered from reinsurers ( 29,314 ) ( 35,797 ) Net claims 71,378 80,313 Net change in reserve for claims ( 4,786 ) 8,607 Net change in special reserve 3,673 ( 17,190 ) Total $ 70,265 $ 71,730

For the six-month eriods ended June 30, 2014 2013 Operating revenues Direct written premiums $ 140,330 $ 147,942 Reinsurance premiums 50,641 50,326 Less: Reinsurance premiums ceded ( 56,130 ) ( 59,176 ) Net change in reserve for unearned premiums 3,758 821 Net premiums written 138,599 139,913 Interest income 2,450 2,896 Total $ 141,049 $ 142,809 Operating costs Claims incurred $ 225,856 $ 218,722 Less: Claims recovered from reinsurers ( 65,256 ) ( 63,543 ) Net claims 160,600 155,179 Net change in reserve for claims 121,144 16,658 Net change in special reserve ( 140,695 ) ( 29,028 ) Total $ 141,049 $ 142,809

~122~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 F. Net premiums

For the six-month periods ended June 30, 2014 and 2013, net premiums of the respective insurances are as follows:

Unit: In thousands of NTD For the six-month periods ended June 30, Items 2014 2013 General fire insurance $ 1,200,000 $ 1,100,000 Fire & allied perils insurance 1,200,000 1,100,000 Marine cargo insurance 200,000 200,000 Marine hull insurance 200,000 200,000 Fishing vessel insurance 50,000 50,000 Aviation insurance USD 10,000,000 USD 10,000,000 Engineering insurance 1,200,000 1,000,000 Money insurance 500,000 400,000 Motor physical damage insurance 10,000 6,500 Motor third party liability insurance 100,000 75,000 Motor passengers liability insurance 100,000 75,000 Compulsory automobile liability insurance for motorcycle 3,000 2,200 Car driver injury insurance 30,000 30,000 Driver injury insurance 3,000 2,200 Liability insurance 200,000 200,000 Fidelity bond insurance 50,000 50,000 Engineering bond insurance 200,000 200,000 Bankers’ bond insurance 500,000 500,000 Other insurance 200,000 200,000 Other credit and bond insurance 120,000 120,000 Nuclear energy insurance 300,000 300,000 Group accident insurance 20,000 20,000 Personal accident insurance 20,000 20,000 Travel accident insurance 20,000 20,000 G. Unqualified reinsurance reserve (A) The summarized content in respect of ineligible reinsurance contract and related explanation for each insurance type are as follows: The subsidiary entered into outward reinsurance contracts with Sun Bright Ins. Pte. Ltd. and Walsun Insurance. The scope of the reinsurance contracts is the same as the reinsurance contracts of the subsidiary. Insurance company/ insurance agent Type of outward reinsurance contract Walsun Insurance Construction insurance Aon Taiwan Ltd. Fire & allied perils insurance Marsh Ltd. Taiwan Branch Fire & allied perils insurance Howden Insurance Brokers Ltd. Taiwan Branch Fire & allied perils insurance Century International Insurance Broker Co., Ltd. Fire & allied perils insurance Elite Risk Services Ltd. Fire & allied perils insurance Formosa Marine & Insurance Service., Inc Fire & allied perils insurance Willson Re Hull insurance Asian Re Bangkok Marine hull and cargo insurance Best Re (L) Limited Engineering insurance, cargo insurance, hull insurance, injury insurance, liability insurance, and fire insurance

~123~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (B) The unqualified reinsurance expense was $70,909 and $99,054 for the three-month periods ended June 30, 2014 and 2013, respectively.

(C) As of June 30, 2014, December 31, 2013 and June 30, 2013, the unqualified reinsurance reserves are unearned premium reserve. Details are set forth as below:

June 30, 2014 December 31, 2013 June 30, 2013 Unearned premium reserve $ 35,455 $ 53,534 $ 49,527 Reported but not paid ceded reserve 11,735 21,905 4,269 Claims recoverable from reinsurers 5,780 2,077 -

10.Capital management

(1) Objective of capital management

A. The Group’s qualifying self-owned capital should meet the regulatory requirements and meet the minimum regulated capital adequacy ratio. This is the basic objective of capital management of the Group. The calculation and provision of qualifying self-owned capital and regulated capital shall follow the regulations of the competent authority. B. In order to have adequate capital to take various risks, the Group shall assesses the required capital with consideration of the risk portfolio it faces and the risk characteristics, and manages risk through capital allocation to realize optimum utilization of capital allocation.

(2) Capital management procedures

A. Following the “Regulations Governing the Consolidated Capital Adequacy of Financial Holding Companies” of the Financial Supervisory Commission, the Group calculates capital adequacy ratio on a consolidated basis and reports this information regularly. B. The calculation of capital adequacy ratio of subsidiaries shall follow the regulations of regulatory authorities; if without regulations, capital adequacy ratio is computed as net of qualifying self-own capital divided by regulated capital.

~124~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (3) Capital adequacy ratio

A. Capital adequacy ratio of the Company and its subsidiaries

Mega Financial Holding Co., Ltd. And Its Subsidiaries Capital Adequacy Ratio June 30, 2014 Ownership percentage held by the Company Eligible capital Minimum capital The Company 100.00% $ 247,228,444 $ 269,137,530 MICB 100.00% 239,258,916 161,111,012 MS 100.00% 12,004,670 3,686,015 MBF 100.00% 28,596,200 17,205,922 CKI 100.00% 6,058,277 1,987,006 MITC 100.00% 791,851 404,857 MAM 100.00% 2,675,531 5,445,246 Mega Life Insurance Agency 100.00% 150,209 113,394 Mega Venture Capital 100.00% 895,243 449,815 Deduction item ( 277,203,612) ( 261,915,375) Subtotal (A) $ 260,455,729 (B) $ 197,625,422 Capital adequacy ratio of the Consolidated Company (C)=(A)÷(B) (C) 131.79%

June 30, 2013

Ownership percentage held by the Company Eligible capital Minimum capital The Company 100.00% $ 211,264,574 $ 238,870,886 MICB 100.00% 202,469,780 152,810,760 MS 100.00% 11,173,218 2,856,264 MBF 100.00% 27,766,828 16,630,325 CKI 100.00% 5,827,590 2,099,330 MITC 100.00% 793,933 402,541 MAM 100.00% 2,787,577 4,842,220 Mega Life Insurance Agency 100.00% 123,263 84,644 Mega Venture Capital 100.00% 731,063 367,900 Deduction item ( 244,853,075) ( 230,737,901) Subtotal (A) $ 218,084,751 (B) $ 188,226,969 Capital adequacy ratio of the Consolidated Company (C)=(A)÷(B) (C) 115.86%

~125~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 B. As of June 30, 2014 and 2013, the financial holding's net eligible capital

Mega Financial Holding Co., Ltd. And Its Subsidiaries Financial Holding’s Net Eligible Capital

Item June 30, 2014 June 30, 2013 Common stocks $ 124,498,240 $ 114,498,240 Unaccumulated preferred stocks which meet tier 1 capital requirement and unaccumulated - - subordinated debts with no maturity date Other preferred stocks and subordinated debts 1,200,000 2,400,000 Capital collected in advance - - Additional paid-in capital 55,274,279 43,425,270 Legal reserve 24,469,127 22,220,204 Special reserve 2,547,719 2,569,119 Accumulated earnings 36,834,124 26,625,101 Equity adjustment number 2,418,558 ( 460,680) Less: goodwill 4,807 4,943 deferred assets 8,796 7,737 treasury stocks - - Total net eligible capital $ 247,228,444 $ 211,264,574

11. RELATED PARTY TRANSACTIONS (1) Names of the related parties and their relationship with the Company Names of related parties Relationship with the Company Chunghwa Post Co., Ltd. (Chunghwa Post) Supervisor of the Company Bank of Taiwan (BOT) Supervisor of the Company Yung Shing Industries Co. Indirect subsidiary of the Company Win Card Co., Ltd. (Win Card) Indirect subsidiary of the Company Taiwan Bills Finance Corporation (TFC) MICB is the director of TFC Taiwan Integrated Shareholder Service Taiwan Integrated Shareholder’s chairman is also the Company chairman of MS(Note 1) (Taiwan Integrated Shareholder) International Bills Finance Corporation The Company’s subsidiary is the supervisor of IBF’s (IBF) parent (Waterland Financial Holdings)(Note2) Other related parties The Company’s and subsidiary’s directors, supervisors, managers, their relatives, associated companies and related parties in substance

Note 1:The former chairman of the board of MS, OO Chien, abdicated from the chairmanship on April 30, 2014.

Note 2: MICB abdicated from supervisorship on June 20, 2014. MICB is not IBF’s related parties any more.

(2) Significant transactions and balances with related parties A. Deposits Details of the related parties’ deposits placed with MICB and recorded under “deposits and remittances” are as follows: June 30, 2014 December 31, 2013 June 30, 2013 Others (individual amounts accounting for less than 10% of the total amount) $ 15,609,312 $ 7,713,290 $ 14,686,168

~126~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 B. Loans

Details of the credits extended to the related parties by MICB and recorded under “bills, discounts and loans” are as follows: June 30, 2014 December 31, 2013 June 30, 2013 Others (individual amounts accounting for less than 10% of the total amount) $ 192,093 $ 160,428 $ 131,910

C. Bank deposits

June 30, 2014 December 31, 2013 June 30, 2013 Chunghwa Post $ 9,774 $ 8477 $ 7,620 BOT 194,427 190,198 252,002 Total $ 204,201 $ 198,675 $ 259,622

D. Refundable deposits

Collaterals June 30, 2014 December 31, 2013 June 30, 2013 BOT Available-for-sale financial assets - governmentbonds $ 93,533 $ 96,051 $ 98,250

E. Purchases of securities and bonds

For the three-month periods ended June 30, 2014 2013 Chunghwa Post $ - $ -

For the six-month periods ended June 30, 2014 2013 Chunghwa Post $ - $ 49,991

F. Sales of securities and bonds

For the three-month periods ended June 30, 2014 2013 BOT $ 1,397,888$ 4,947,540 ChunghwaPost 25,589,696 28,627,558 Total $ 26,987,584 $ 33,575,098

For the six-month periods ended June 30, 2014 2013 BOT $ 1,996,091$ 7,556,101 ChunghwaPost 63,383,863 79,244,362 Total $ 65,379,954 $ 86,800,463

Terms and conditions on the above transactions are not materially different from those with non-related parties. G. Securities and bonds with repurchase/ resale agreement

June 30, 2014 December 31, 2013 June 30, 2013 BOT $ - $ 509,568 $ 1,498,750 Others 10,000 10,000 13,001 Total $ 10,000 $ 519,568 $ 1,511,751

~127~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 H. Transactions with other financial institutions

(A) Due from banks/call loans to banks

June 30, 2014 December 31, 2013 June 30, 2013 IBFC $ 313,404$ 720,000$ - BOT 9,887,263 151,174 22,236 Total $ 10,200,667 $ 871,174 $ 22,236

(B) Overdraft on banks

June 30, 2014 December 31, 2013 June 30, 2013 Chunghwa Post $ 3,751,739 $ 2,792,531 $ 6,240,842 BOT 10,301,107 4,973,660 3,425,000 Total $ 14,052,846 $ 7,766,191 $ 9,665,842

I. Commercial paper payable

Institutions of guarantee or acceptance June 30, 2014 December 31, 2013 June 30, 2013 BOT $ 500,000$ 500,000$ - IBFC - 100,000 480,000 Total $ 500,000 $ 600,000 $ 480,000

J. Collaterals

Collaterals June 30, 2014 December 31, 2013 June 30, 2013 BOT Financial assets at fair value through profit or loss - negotiable certificate of deposits $ 701,175 $ 700,855 $ 801,496 Available-for-sale financial assets–bonds 2,009,846 2,022,441 2,013,050 Total $ 2,711,021 $ 2,723,296 $ 2,814,546

K. Loans

June 30, 2014

Number of Whether terms and conditions Default status accounts or of the related party transactions names of Highest Ending Normal Overdue are different from those of Types related party balance balance loans accounts Collateral transactions with third parties. Consumer loans 18 $ 11,832 $ 9,872 V None None for employees Home mortgage 72 554,406 486,326 V Real estate None loans Otherloans 2 127,722 116,637 V Real estate None

~128~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 December 31, 2013

Number of Whether terms and conditions Default status accounts or of the related party transactions names of Highest Ending Normal Overdue are different from those of Types related party balance balance loans accounts Collateral transactions with third parties. Consumer loans 16 $ 10,576 $ 9,947 V None None for employees Home mortgage 68 535,447 511,057 V Real estate None loans Otherloans 2 271,511 121,511 V Real estate None

June 30, 2013

Number of Whether terms and conditions Default status accounts or of the related party transactions names of Highest Ending Normal Overdue are different from those of Types related party balance balance loans accounts Collateral transactions with third parties. Consumer loans 15 $ 9,009 $ 8,511 V None None for employees Home mortgage 69 515,767 473,769 V Real estate None loans Other loans 2 220,052 48,052 V Real estate None

L. Interest revenue:

For the three-month periods ended June 30, 2014 2013 % of the % of the NT$ Account NT$ Account BOT $ 652 - $ 489 0.01 IBF 565 - 248 - Total $ 1,217 - $ 737 0.01

For the six-month periods ended June 30, 2014 2013 % of the % of the NT$ Account NT$ Account BOT $ 1,307 - $ 1,386 0.01 IBF 1,754 0.01 853 - Total $ 3,061 0.01 $ 2,239 0.01

M. Interest expense:

For the three-month periods ended June 30, 2014 2013 % of the % of the NT$ Account NT$ Account BOT $ 3,106 0.06 $ 5,308 0.15 ChunghwaPost 7,211 0.15 16,258 0.45 Total $ 10,317 0.21 $ 21,566 0.60

~129~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 For the six-month periods ended June 30, 2014 2013 % of the % of the NT$ Account NT$ Account BOT $ 5,900 0.06 $ 9,534 0.14 ChunghwaPost 22,917 0.24 37,405 0.54 Total $ 28,817 0.30 $ 46,939 0.68

N. Income and losses of financial assets and liabilities measured at fair value through profit or loss

For the three-month periods ended June 30, 2014 2013 % of the % of the NT$ Account NT$ Account BOT $ 83 - $ 958 0.30 ChunghwaPost 4,743 0.26 6,541 2.07 Total $ 4,826 0.26 $ 7,499 2.37

For the six-month periods ended June 30, 2014 2013 % of the % of the NT$ Account NT$ Account BOT $ 62 - $ 1,563 0.22 ChunghwaPost 16,724 0.59 18,494 2.57 Total $ 16,786 0.59 $ 20,057 2.79

O. Information on remunerations to the Company’s key management:

For the three-month periods ended June 30, 2014 2013 Salaries and other short-term employee benefits $ 97,968 $ 83,604 Post-employment benefits 17,125 2,192 Termination benefits 217 - Total $ 115,093 $ 85,796

For the six-month periods ended June 30, 2014 2013 Salaries and other short-term employee benefits $ 190,689 $ 136,315 Post-employment benefits 19,692 4,284 Termination benefits 217 - Total $ 210,598 $ 140,599

P. Guarantees: None.

Q. Disposal of non-performing loans

MICB hold an auction on June 19, 2013 for the non-performing loans ,and signed a contract amounting to $58,592 with Mega Asset on July 15 ,2013.As of December 31 ,2013 the following table shows the detail of non-performing loans:

~130~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Allocation of sale Loan component Loan amount Carrying amount price Secured $ 326,967 $ - $ 58,159 Corporate Unsecured 40,000 - 433 Mortgage loan - - - Secured Auto loan - - - Others - - - Credit card - - - Individual Cash card - - - Unsecured Micro credit loan - - - Others - - - Total $ 366,967 $ - $ 58,592 R. Others

(A) MICB has been outsourcing its credit card operations to Win Card since 2001. The operational costs incurred for the three-month and six-month periods ended June 30, 2014 and 2013, were $41,110, $39,423, $82,227 and $78,957, respectively.

(B) CKI paid the commission and agent fee to BOT and TBB for the three-month and six-month periods ended June 30, 2014 and 2013 that were , respectively. As of June 30, 2014, December 31, 2013 and June 30, 2013, the commission payables were ($5), ($4), and $90, respectively.

(C) The Group’s operations of printing, document packaging and labor outsourcing have been outsourced to Yung-Shing Industries Co. for the three-month and six-month June 30, 2014 and 2013, expenditure on operations and labor outsourcing expected to be paid to Yung-Shing Industries Co. in accordance with arrangement are $27,581, $28,070, $56,132 and $58,684, respectively.

12. PLEDGED ASSETS

Carrying amount Asset June 30, 2014 December 31, 2013 June 30, 2013 Financial assets at fair value through profit or loss $ 15,124,435$ 13,037,071$ 15,854,340 Available-for-sale financial assets 63,518,437 58,553,370 41,936,724 Held-to-maturity financial assets 15,589,400 15,567,800 15,607,000 Other financial assets 980,189 1,013,469 1,093,634 Real estate and equipment 2,515,126 2,446,080 2,526,486 Investment property 439,368 1,677,541 445,569 Other assets 465,979 471,106 505,464 $ 98,632,934 $ 92,766,437 $ 77,969,217

13. COMMITMENTS AND CONTINGENT LIABILITIES

(1) The subsidiaries-MICB As of June 30, 2014, December 31, 2013 and June 30, 2013, MICB and its subsidiaries’ commitments and contingent liabilities were as follows: June 30, 2014 December 31, 2013 June 30, 2013 Irrevocable arranged financing limit $ 114,624,728 $ 90,635,382 $ 89,531,872 Securities sold under repurchase agreement 57,990,424 46,596,837 33,213,902 Securities purchased under resale agreement 4,376,289 5,453,309 8,756,185 Credit card line commitments 52,800,452 51,643,171 48,552,073 Guarantees issued 232,929,956 240,137,712 244,049,123 Accrued guarantees issued 5,850 - 12,200

~131~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2014 December 31, 2013 June 30, 2013 Letters of credit 70,261,245 65,867,775 70,891,093 Customers’ securities under custody 178,285,566 161,168,597 161,359,449 Propertiesundercustody 3,378,860 3,652,655 3,632,166 Guarantee received 88,523,815 98,579,573 90,748,789 Collections for customers 115,362,359 114,979,754 122,219,124 Agency loans payable 1,891,221 2,137,668 2,461,829 Travelers’ checks consigned-in 1,924,828 1,925,922 2,011,024 Gold coins consigned-in 453 455 455 Payables on consignments-in 2,639 2,697 2,781 Agentforgovernmentbonds 137,119,500 113,285,000 106,519,400 Short-dated securities under custody 66,507,659 74,463,314 61,567,597 Investmentsforcustomers 179,661 179,661 265,016 Trust liability 515,194,795 482,057,232 492,397,480 Certified notes paid 7,405,114 7,497,880 8,002,279 Exposures 3,734,811 3,525,614 3,931,247

(2) The subsidiaries-MBF As of June 30, 2014, December 31, 2013 and June 30, 2013, the Company’s commitments and contingent liabilities arising from its normal course of business were as follows: June 30, 2014 December 31, 2013 June 30, 2013 Bills and bonds bought under repurchase agreements $ 5,078,717 $ 1,966,157 $ 2,440,150 Bills and bonds sold under repurchase agreements 166,320,184 163,869,633 165,304,698 Guarantees for commercial papers 140,669,000 142,710,000 140,480,300 Buy fixed rate financial paper 6,726,000 4,406,000 4,406,000 Sell fixed rate financial paper 600,000 600,000 600,000 Buy index rate financial paper 28,060,000 27,660,000 24,160,000 Sell index rate financial paper 1,150,000 1,150,000 650,000 (3) The subsidiaries-MS MS has entered into proxy delivery agreements with several securities firms. If MS is unable to fulfill its obligations to the Taiwan Stock Exchange, the proxies must act upon the said obligations. MS has reciprocated by agreeing to act as the proxy for the securities firms. (4) The subsidiaries-CKI A. Contingencies

As of June 30, 2014, except that reserve for claims had been provided, CKI still had several lawsuits regarding insurance claims. CKI had appointed attorneys to deal with the lawsuits. As of the financial reporting date, the final results of the lawsuits had not been determined. The possible compensation could not be reliably estimated.

B. Contingencies

As of June 30, 2014, December 31, 2013 and June 30, 2013, the letters of credit that had been issued by CKI for reinsurance business but had not been used all amounted to US$19 thousand dollar, US$28 thousand dollar and US$68 thousand dollar, respectively.

(5) The subsidiaries- Mega Venture Capital Mega Management Consulting Corporation acts as an agent to deal with management, investment, assignment and re-investment of all assets on behalf of Mega Venture Capital and conduct enterprise operation, management and consultation service for Mega Venture Capital’s investee companies. In accordance with the contract, Mega Venture Capital should pay 1.7% per annum of the total issued capital as management fee which is payable quarterly to Mega Management Consulting Corporation. At the end of every fiscal year, 20% of net income calculated based on the terms of contracts are paid as performance-based bonus which is payable within 15 days of the

~132~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 completion of general shareholders’ meeting.

(6) The subsidiaries- Mega I Venture Mega Management Consulting Corporation acts as an agent to deal with management, investment, assignment and re-investment of all assets on behalf of Mega I Venture and conduct enterprise operation, management and consultation service for Mega I Venture’s investee companies. In accordance with the contract, Mega I Venture should pay 1.7% per annum of average of beginning year and ending year of the total issued capital stock as management fee which is payable quarterly to Mega Management Consulting Corporation. At the end of every fiscal year, 20% of net income calculated based on the terms of contracts are paid as performance-based bonus which is payable within 15 days of the completion of general shareholders’ meeting.

14. SIGNIFICANT DISASTER LOSS

None.

15. SIGNIFICANT SUBSEQUENT EVENTS

None.

16. OTHERS

(1) According to Article 46 of Financial Holding Company Act, disclosures of the sum of amounts of endorsements and guarantees provided by all subsidiaries of Financial Holding Company to the same natural person, same related natural person, or same related company for loans or other transactions:

June 30, 2014 Unit: In millions of NT dollars Total of business credit, Percentage of net endorsements, or other value of the Name transactions Company (%)(Note) 1. Same natural or juridical person Central Bank of the Republic of China (Taiwan) $ 175,610 71.35 Taiwan Power Company 115,276 46.84 Taiwan High Speed Rail Corporation 69,876 28.39 CPC Corporation, Taiwan 58,072 23.59 Ministry of Finance, R.O.C 55,143 22.40 Hou-Tai Estate Management Co., Ltd 11,942 4.85 YFG SHOPPING CENTRES P/L ATF THE FU F/T & TRONDAGE ENTERPRISES PTY LTD. 11,607 4.72 Formosa Petrochemical Corporation 11,138 4.53 INNOLUX CORPORATION 10,199 4.14 China Airlines, Ltd. 9,588 3.90 China Steel Corporation 9,285 3.77 Dragon Steel Corporation 9,209 3.74 AU Optronics Corp. 7,753 3.15 Yuanlih Development Co., Ltd. 7,622 3.10 Linyuan Investment Co., Ltd. 6,880 2.80 Taiwan Semiconductor Manufacturing Co.,Ltd 6,564 2.67 CHAILEASE FINANCE CO., LTD 6,381 2.59 INTEPLAST GROUP INC. 6,190 2.52 Highwealth Construction Corp 6,117 2.49 Far Eastern Department Stores Ltd. 6,044 2.46 Ri Quan Investment Co., Ltd. 6,000 2.44 Formosa Chemicals & Fiber Corp. 5,860 2.38 Formosa Plastics Corporation 5,708 2.32 MORGAN STANLEY FORMOSA HOLDINGS 5,653 2.30 (CAYMAN)

~133~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2014 Unit: In millions of NT dollars Total of business credit, Percentage of net endorsements, or other value of the Name transactions Company (%)(Note) Wistron Corporation $ 5,556 2.26 RUEN HUA DYEING & WEAVING CO., LTD. 5,475 2.22 Wan Bao Development Co., Ltd. 5,439 2.21 EVA AIRWAYS CORPORATION 5,366 2.18 Nan Ya Plastics Corporation 5,338 2.17 Radium Life Tech Co. 5,255 2.13 Central Investment Co., Ltd. 5,216 2.12 Sunrider Taiwan,Inc 5,181 2.10 CTCI Corporation 5,044 2.05 EASY GAIN INTERNATIONAL L.L.C. 4,976 2.02 E.Sun Financial Holding Company,Ltd. 4,803 1.95 KOFU INTERNATIONAL LTD. 4,776 1.94 Yieh United Steel Corp. 4,613 1.87 Yang Sheng Entertainment Co., Ltd. 4,594 1.87 United Microelectronics 4,551 1.85 Runlong Construction Corp. 4,171 1.69 WHARF FINANCE LTD. 4,149 1.69 EVERGREEN MARINE (UK) LTD. 4,129 1.68 Hung Ching Development & Construction Co. Ltd. 4,106 1.67 GOLDMAN SACHS BANK USA 4,085 1.66 Jade Yachts Co., Ltd 4,037 1.64 GOVERNMENT OF AUSTRALIA 4,035 1.64 Cheng Shin Rubber Ind., Co., Ltd. 3,959 1.61 Huaku Development Co., Ltd. 3,717 1.51 FORMOSA PLASTICS CORPORATION U. S. A. 3,656 1.49 Pxmart Co., Ltd 3,650 1.48 Ruen Cheng Investment Holdings Co., Ltd. 3,648 1.48 Advanced Semiconductor Engineering,Inc. 3,590 1.46 Fubon Land Co., Ltd. 3,549 1.44 Bnp Paribas Bank Taipei Branch 3,527 1.43 MAXBASE HOLDINGS LTD. 3,498 1.42 YFY Packaging Inc. 3,445 1.40 Chang Chun PetroChemical Co., Ltd. 3,412 1.39 Prince Housing & Development Corp. 3,389 1.38 WINSON OIL INTERNATIONAL (HK) LTD. 3,361 1.37 Tatung Co., Ltd. 3,328 1.35 Ta Chong Bank Co., Ltd. 3,304 1.34 GOVERNMENT OF JAPAN 3,277 1.33 J-M MFG. CO. INC. & PW EAGLE INC. 3,248 1.32 Farglory Land Development Co., Ltd 3,200 1.30 Evergreen Marine Corp. (Taiwan) Ltd. 3,143 1.28 Shin Kong Investment Co., Ltd 3,080 1.25 Chimei Corporation 3,047 1.24 (Note) The amount is calculated with the unaudited net value on June 30, 2014.

2.Principal, his /her spouse, blood relatives within the second degree and enterprises in which the principal or his/her spouse is the responsible person Mr./Ms. Lin $ 74,647 30.33 Mr./Ms.Li 18,514 7.52 Mr./Ms. Lin 13,415 5.45 Mr./Ms.Yi 12,445 5.06 Mr./Ms. Duan 10,247 4.16 Mr./Ms. Hsu 8,713 3.54 Mr./Ms. Lin 8,571 3.48 Mr./Ms.Chen 7,444 3.02

~134~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2014 Unit: In millions of NT dollars Total of business credit, Percentage of net endorsements, or other value of the Name transactions Company (%)(Note) Mr./Ms.Zheng $ 7,122 2.89 Mr./Ms.Huang 7,118 2.89 Mr./Ms.Feng 7,003 2.85 Mr./Ms.Wu 6,944 2.82 Mr./Ms.Chen 6,704 2.72 Mr./Ms. Lin 6,257 2.54 Mr./Ms.Wang 6,144 2.50 Mr./Ms. Xie 5,795 2.35 Mr./Ms.Huang 5,749 2.34 Mr./Ms. Wei 5,599 2.27 Mr./Ms. Sun 5,570 2.26 Mr./Ms. Wei 5,507 2.24 Mr./Ms. Lin 5,219 2.12 Mr./Ms. Zhao 5,099 2.07 Mr./Ms. Hsu 5,060 2.06 Mr./Ms. Hsu 5,040 2.05 Mr./Ms.Lan 4,995 2.03 Mr./Ms.Wu 4,870 1.98 Mr./Ms. Han 4,709 1.91 Mr./Ms. Miao 4,688 1.90 Mr./Ms.Wu 4,486 1.82 Mr./Ms. Zhan 4,451 1.81 Mr./Ms. Zhan 4,434 1.80 Mr./Ms. Zhan 4,421 1.80 Mr./Ms. Zhan 4,246 1.73 Mr./Ms.Huang 4,229 1.72 Mr./Ms.Chen 4,111 1.67 Mr./Ms. Chou 4,043 1.64 Mr./Ms.Huang 4,024 1.63 Mr./Ms. Guo 3,894 1.58 Mr./Ms. Zhuang 3,700 1.50 Mr./Ms. Xie 3,608 1.47 Mr./Ms.Wu 3,607 1.47 Mr./Ms. Zhan 3,507 1.42 Mr./Ms. Yeh 3,461 1.41 Mr./Ms. Wei 3,143 1.28 Mr./Ms.Wu 3,118 1.27 (Note) The amount is calculated with the unaudited net value on June 30, 2014. 3. Same affiliated enterprises CPC Corporation, Taiwan $ 58,177 23.64 China Steel Corporation 32,263 13.11 Formosa Petrochemical Corporation 21,269 8.64 Ya Li Precast Prestressed Concrete Industries Corp 19,133 7.77 Dragon Steel Corporation 18,494 7.51 HUEI HONG INVESTMENT CO., LTD. 14,327 5.82 Changchun Investment Co., Ltd. 14,095 5.73 Formosa Chemicals & Fiber Corp. 13,833 5.62 Mai Liao Industry Park 13,037 5.30 Oriental Securities Corp. 12,812 5.21 Linyuan Investment Co., Ltd. 12,318 5.01 Lien Huei Development Co., Ltd. 12,183 4.95 Pxmart Co., Ltd 11,912 4.84 FORMOSA SYNTHETIC RUBBER (NINGBO) CO. 11,768 4.78 LTD. C.S. Aluminium Corporation 11,596 4.71

~135~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2014 Unit: In millions of NT dollars Total of business credit, Percentage of net endorsements, or other value of the Name transactions Company (%)(Note) Highwealth Construction Corp. $ 11,172 4.54 United Steel Engineering & Construction Corp. 11,103 4.51 INNOLUX CORPORATION 11,095 4.51 Asia Cement Corporation 10,927 4.44 Taiwan Cement Corp. 10,880 4.42 China Airlines, Ltd. 10,600 4.31 Uni-President Enterprises Corp. 10,594 4.30 Formosa Plastics Corp. 10,575 4.30 Taiwan Airport Service Co., Ltd. 10,555 4.29 Qisda Corporation 10,492 4.26 Cheng Shin Rubber Ind., Co., Ltd. 10,390 4.22 CHINA STEEL SUMIKIN VIETNAM JOINT STOCK 10,347 4.20 Runlong Construction Corp. 10,288 4.18 Far EasTone Telecommunications Co., Ltd. 10,210 4.15 China Ecotek Corp. 10,142 4.12 Ruen Cheng Investment Holdings Co., Ltd. 10,127 4.11 Nan Ya Plastics Corporation 10,110 4.11 Chang Chun PetroChemical Co., Ltd. 10,055 4.09 Daxin Materials Corp. 10,053 4.08 Pacific SOGO Co., Ltd. 9,849 4.00 Evergreen Marine Corp. (Taiwan) Ltd. 9,765 3.97 CHINA STEEL CORPORATION INDIA PRIVATE 9,763 3.97 LTD. Raydium Semi-conductor Corporation 9,754 3.96 Yieh Hsing Enterprise Co., Ltd. 9,731 3.95 CSGT METALS VIETNAM JSC 9,700 3.94 UNI AIRWAYS CORPORATION 9,687 3.94 CHAILEASE HOLDING COMPANY LTD. 9,679 3.93 CHINA ECOTEK VN CO. LTD. 9,673 3.93 Mandarin Airlines Ltd. 9,658 3.92 Topcell Solar International Co., Ltd. 9,644 3.92 China Steel Global Trading Corporation 9,604 3.90 Kaohsiung Rapid Transit Corporation 9,519 3.87 CTCI Corporation 9,513 3.87 CHC Resources Corporation 9,453 3.84 RUEN HUA DYEING & WEAVING CO., LTD. 9,409 3.82 White Biotech Corp. 9,287 3.77 Nanya Technology Corporation 9,267 3.77 Central Investment Co., Ltd. 9,260 3.76 Eliter International Corp. 9,214 3.74 Hsing Kuang Hwa Co., Ltd 9,185 3.73 Prince Housing & Development Corp. 9,129 3.71 CHAILEASE FINANCE (B.V.I) CO. LTD 9,072 3.69 Fina Finance & Trading Co., Ltd. 8,974 3.65 Far Eastern Department Stores Ltd. 8,907 3.62 GOLDEN BRIDGE (B.V.I.) CORP. 8,526 3.46 CHAILEASE FINANCE CO., LTD 8,524 3.46 AFPD PTE.LTD. 8,506 3.46 CENTRAL INVESTMENT HOLDING (BVI) CO.LTD 8,399 3.41 Ruentex Corporation 8,358 3.40 MAI-LIAO POWER CORPORATION 8,320 3.38 AU Optronics Corp. 8,020 3.26 TRANSFORMER MARITIME S.A.PANAMA 7,956 3.23 FORMOSA TAFFETA CO., LTD 7,928 3.22 Lih Pao Construction Co., Ltd 7,739 3.14

~136~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2014 Unit: In millions of NT dollars Total of business credit, Percentage of net endorsements, or other value of the Name transactions Company (%)(Note) Hung Ching Development & Construction Co. Ltd. $ 7,737 3.14 Chailease Consumer Finance Co., Ltd. 7,660 3.11 CHANG CHUN CHEMICAL (JIANGSU) CO. LTD. 7,624 3.10 Formosa Advanced Technologies Co., Ltd. 7,471 3.04 TCC INTERNATIONAL LTD 7,356 2.99 Yieh United Steel Corp. 7,305 2.97 WISDOM MARINE LINES S.A. 7,275 2.96 EVERGREEN MARINE (UK) LTD. 7,272 2.95 TAIWAN GLASS IND. CORP. 7,247 2.94 ORGANICSHOP CO., LTD 7,219 2.93 ASIAZONE CO. LIMITED 7,168 2.91 Chiloo Industries Inc. 7,146 2.90 ASIA SERMKIJ LEASING PCL 7,077 2.88 JURONG TCC CEMENT CO. LTD. 7,058 2.87 E&C Engineering Corporation 7,054 2.87 Yuan Ding Investment Corp. 7,007 2.85 Qi Yu Construction Co., Ltd. 7,001 2.84 Weblink International Inc. 6,970 2.83 Bai Ding Investment Co., Ltd. 6,944 2.82 GRAND PACIFIC FINANCING CORP 6,922 2.81 TCC YINGDE CEMENT CO. LTD. 6,908 2.81 Dairen Chemical Corp. 6,856 2.79 Acer Incorporated 6,806 2.77 Pegatron Corporation 6,765 2.75 YIEH MAU CORPORATION 6,719 2.73 Taiwan Semiconductor Manufacturing Co.,Ltd 6,645 2.70 GUIZHOU KONG ON CEMENT COMPANY LTD. 6,610 2.69 Chailease Resources Technology Corp. 6,604 2.68 Leading Energy Corp. 6,583 2.67 FORMOSA PHENOL (NINGBO) LIMITED CO. 6,582 2.67 Yuyuan Investment Co., Ltd. 6,540 2.66 Pan-International Industrial Corp. 6,537 2.66 CHANG CHUN DAIREN CHEMICAL (PANJIN) CO. 6,524 2.65 Advancetek Enterprise Co., Ltd. 6,512 2.65 Chailease Auto Lease Co., Ltd. 6,501 2.64 TAIWAN TRADE DEVELOPMENT CO. LTD. 6,499 2.64 Evergreen Aviation Technologies Corp. 6,431 2.61 FORMOSA INDUSTRIES CORP. 6,428 2.61 Yu Tai Development Industrial Co., Ltd. 6,365 2.59 CTCI OVERSEAS CORPORATION LTD. 6,291 2.56 Advanced Control & System Inc. 6,275 2.55 FORMOSA INDUSTRIES (NINGBO) CO. LTD. 6,219 2.53 Radium Life Tech Co. 6,216 2.53 CHANG CHUN CHEMICAL (PANJIN) CO. LTD. 6,200 2.52 China Synthetic Rubber Corporation 6,174 2.51 Hong Jing Environment Company 6,162 2.50 CTCI(THAILAND) COMPANY LTD. 6,149 2.50 PFG Fiber Glass Corp. 6,143 2.50 Sinopac Financial Holdings Company Ltd. 6,141 2.50 FORMOSA POLYETHYLENE (NINGBO) CO. LTD. 6,135 2.49 CTCI Machinery Corporation 6,123 2.49 Chimei Corporation 6,116 2.48 Fortune Energy Corporation 6,052 2.46 United Microelectronics Corporation 6,018 2.45 INTEPLAST GROUP LTD. 6,006 2.44

~137~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2014 Unit: In millions of NT dollars Total of business credit, Percentage of net endorsements, or other value of the Name transactions Company (%)(Note) Formosa Sumco Technology Corp. $ 5,982 2.43 PFG FIBER GLASS (KUNSHAN) CO. LTD. 5,965 2.42 FEDERAL PESCADORES S.A.PANAMA 5,931 2.41 FORMOSA ACRYLIC ESTERS (NINGBO) CO. LTD. 5,930 2.41 Topcell Solar International Co., Ltd. 5,906 2.40 Resource Engineering Services Inc 5,892 2.39 KOFU INTERNATIONAL LTD. 5,883 2.39 FORMOSA HA TINH STEEL CORP. 5,874 2.39 WISTRON INFOCOMM (TAIZHOU) CO. LTD. 5,854 2.38 MORGAN STANLEY FORMOSA HOLDINGS 5,839 2.37 (CAYMAN) Jin-Zhou Technology CO.,LTD. 5,818 2.36 Wistron NeWeb Corp. 5,782 2.35 Ri Ding Water Supplies Industry Inc 5,738 2.33 Wistron Corporation 5,735 2.33 Wan Da Tong Co., Ltd. 5,732 2.33 AMBLEGREEN COMPANY LTD. 5,705 2.32 VIGOR PESCADORES S.A. PANAMA 5,693 2.31 Oriental Union Chemical Corporation 5,690 2.31 Ren Ying Industries Inc. 5,675 2.31 CTCI Chemicals Corporation 5,661 2.30 Mitac Corporation 5,634 2.29 Yu Ding Resoure Technology Co., Ltd 5,621 2.28 Chang Chun Plastic Co., Ltd. 5,603 2.28 NAN YA PLASTICS (NINGBO) CO. LTD. 5,577 2.27 Ying Jia Investment Co., Ltd. 5,575 2.27 Yieh Corp. 5,563 2.26 Hsing Li Development Ltd. 5,520 2.24 EVERGREEN MARINE PTE LTD. 5,468 2.22 GREENCOMPASS MARINE S.A. 5,465 2.22 Yuen Foong Yu Investment Holding Inc 5,430 2.21 Yieh Phui Enterprise Co.,Ltd. 5,429 2.21 NAN YA PRINTED CIRCUIT BOARD (KUNSHAN) 5,420 2.20 CO. Pan Asia Corp. 5,400 2.19 SinoPac Leasing Co. 5,362 2.18 ASIA CEMENT (CHINA) HOLDINGS CORP. 5,361 2.18 Nexcom International Co., Ltd. 5,354 2.18 Kinsus Interconnect Technology Corp 5,322 2.16 WHARF FINANCE LTD. 5,320 2.16 Tong- Lian Inc. 5,300 2.15 China Daily News Co., Ltd. 5,291 2.15 Far Eastern Construction Co., Ltd. 5,286 2.15 Tatung Co., Ltd. 5,274 2.14 SINO Environmental Services Corporation 5,204 2.11 Yuchia Motor Co., Ltd. 5,201 2.11 ORIENTAL INDUSTRIES (SUZHOU) LTD. 5,186 2.11 U-MING MARINE TRANSPORT CORP. 5,105 2.07 FUJIAN LIAN DE ENTERPRISE CO. LTD. 5,060 2.06 Farglory Land Development Co., Ltd. 5,039 2.05 Sunrise Construction Corp. 4,991 2.03 YFY Packaging Inc. 4,980 2.02 AMIS WISDOM S.A. 4,959 2.01 Dau Ying Co. 4,949 2.01 NexPower Technology Corp. 4,928 2.00

~138~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2014 Unit: In millions of NT dollars Total of business credit, Percentage of net endorsements, or other value of the Name transactions Company (%)(Note) Yi-Ta Investment CO., LTD. $ 4,885 1.98 PUBLIC ZONE CO. LTD. 4,851 1.97 Wei Chuan Corp. 4,792 1.95 WIN TREND TRANSPORTATION LTD. 4,782 1.94 Chi Mei Materials Technology Corp. 4,772 1.94 VALLEYFIELD LTD. 4,732 1.92 LIEN HWA INDUSTRIAL CORPORATION 4,700 1.91 Chinese Maritime Transport Ltd. 4,640 1.89 TCC INTERNATIONAL HOLDINGS LTD. 4,617 1.88 U-MING MARINE TRANSPORT(SINGAPORE) 4,603 1.87 PRIVA Jong Shyn Shipbuilding Co., Ltd 4,566 1.86 Waltop Corp. 4,551 1.85 Ding Shuai Development Co., Ltd. 4,535 1.84 YFY INTERNATIONAL BVI CORP. 4,513 1.83 Guang Chun Cheng Construction Co., Ltd. 4,498 1.83 Asia Investment Co., Ltd. 4,471 1.82 Te Chin Investments Ltd. 4,471 1.82 PIOTEK COMPUTER (SUZHOU) CO. LTD. 4,469 1.82 Sincere Navigation Corporation 4,408 1.79 E Ink Holdings Inc. 4,397 1.79 YFY CAYMAN CO. LTD. 4,344 1.76 Farglory FTZ Holding Co., Ltd. 4,301 1.75 L & K Engineering Co., Ltd. 4,295 1.75 Shan Mei De Co., Ltd. 4,290 1.74 Chi Lin Technology Co., Ltd 4,288 1.74 President International Development Corp. 4,249 1.73 Chunghwa Picture Tubes, Co., Ltd. 4,248 1.73 ZHENJIANG CHIMEI CHEMICAL CO. LTD. 4,241 1.72 Farglory Dome Co., Ltd. 4,213 1.71 Jade Yachts Co., Ltd 4,186 1.70 WINSON OIL INTERNATIONAL (HK) LTD. 4,149 1.69 Pegavision Corp. 4,068 1.65 Green Energy Technology Inc. 4,060 1.65 Advanced Semiconductor Engineering,Inc. 4,027 1.64 Synnex Technology International Corp. 4,024 1.63 BOCLH INDUSTRIAL GASES Co., Ltd. 3,999 1.62 TCC (GUIGANG)CEMENT LTD. 3,933 1.60 UMC Petroleum Corp. 3,875 1.57 ASE (KUNSHAN) INC. 3,806 1.55 ASE ASSEMBLY & TEST (SHANGHAI) LTD. 3,769 1.53 Chiao Thai Hsing Enterprise Co., Ltd. 3,767 1.53 Yuen Foong Yu Capital Co., Ltd. 3,745 1.52 Yuen Foong Yu Construction Investment Co., Ltd. 3,720 1.51 SIMOSA SHIPPING(TAIWAN) CO., LTD. 3,716 1.51 GRAND CAPITAL INTERNATIONAL LTD. 3,714 1.51 RUENTEX MATERIALS CO., LTD. 3,705 1.51 Yang Ming Marine Transport Corp. 3,691 1.50 Far Eastern Construction Co. 3,687 1.50 Shih Wei Navigation Co., Ltd. 3,656 1.49 Pernas Enterprise Co., Ltd. 3,604 1.46 Yuen Foong Yu Consumer Product Inc. 3,595 1.46 Universal Scientific Industrial Co., Ltd, 3,592 1.46 Forward Electronics Co., Ltd. 3,587 1.46 Xian-Jin Food CO., LTD. 3,561 1.45

~139~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2014 Unit: In millions of NT dollars Total of business credit, Percentage of net endorsements, or other value of the Name transactions Company (%)(Note) SIMOSA INTERNATIONAL COMPANY LTD. $ 3,557 1.45 RI TENG COMPUTER ACCESSORY (SHANGHAI) 3,549 1.44 CO. BoardTek Electronics Corp. 3,540 1.44 TPK Touch Solutions Inc. 3,539 1.44 Nanlien International Corp. 3,534 1.44 Fong-Yi Construction Corp. 3,525 1.43 Kuender Co., Ltd. 3,519 1.43 TCSC Inc. 3,514 1.43 TATUNG COMPANY OF AMERICA INC. 3,506 1.42 President Chain Store Corporation 3,497 1.42 San Ying Enterprises Co., Ltd. 3,473 1.41 Hoping Industrial Port Corp. 3,461 1.41 Ding Ji Development Co., Ltd. 3,430 1.39 China Petrochemical Development Corp. 3,429 1.39 Cheng Loong Corp. 3,427 1.39 De Chan Motor Co., Ltd. 3,399 1.38 New Century InfoComm Tech Co., Ltd. 3,378 1.37 Tatung Fine Chemicals Co.,Ltd. 3,368 1.37 Shang Zhi Assets Development Co., Ltd. 3,348 1.36 Dream-Mall Co., Ltd. 3,347 1.36 Jie Shun Trsport Co., Ltd. 3,347 1.36 TG XIANYANG GLASS CO. LTD. 3,340 1.36 Taiwan Telecommunication Industry Co., Ltd. 3,329 1.35 Lih Yuan Construction Co., Ltd. 3,319 1.35 COLON CONTAINER TERMINAL. S.A. 3,314 1.35 Chi Lin Optoelectronics Co., Ltd 3,200 1.30 G-TECH Optoelectronics Corp. 3,193 1.30 Retail Support International Co., Ltd. 3,189 1.30 Chia Hui Power Co., Ltd. 3,178 1.29 CHINA TRADE SHIPPING LTD. 3,173 1.29 Wan Hai Lines Ltd. 3,148 1.28 Ho-Ping Power Co., Ltd. 3,147 1.28 Hon Hai Precision Ind. Co., Ltd. 3,118 1.27 CHINA TRIUMPH SHIPPING LTD. 3,105 1.26 CAYMAN PRESIDENT HOLDINGS LTD. 3,100 1.26 KOREA FINANCE CORP. 3,089 1.26 Onyx Ta-Ho Environmental Service Co., Ltd. 3,089 1.26 CHUNG LOONG PAPER HOLDINGS LTD. 3,062 1.24 TG WUHAN ARCHITECTURAL GLASS CO. LTD. 3,042 1.24 MaxChip Electronics Corp. 3,030 1.23 King Yi Development Co., Ltd. 3,020 1.23 Inotera Memories, Inc. 3,019 1.23 Kai Yung International Investment Co., Ltd. 3,013 1.22 EMMT Systems Corp. 3,004 1.22

(2) Significant impact arising from changes in government laws and regulations:

None.

(3) Information with respect to the subsidiary holding shares in parent company:

None.

~140~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (4) Research and development plans sponsored by others

None.

(5) Information for discontinued operations:

None.

(6) Major operating assets or liabilities transferred from (or to) other financial institutions:

None.

(7) Information on the apportionment of the revenues, costs, expenses, gains and losses arising from business activities, transactions, joint promotion for businesses development, information sharing, and operating facilities or premises sharing between the Company and its subsidiaries.

A. Transactions between the Company and its subsidiaries

Please refer to Note 11 for details of transactions with related parties.

B. Joint promotion of businesses

In order to create economic synergy throughout the various subsidiaries and provide customers financial services in all aspects, the subsidiaries have continuously established specialized counters for other subsidiaries in different businesses (including counters of banking services, securities trading services, and insurance services) in the business locations of its subsidiaries and simultaneously promoted service business in banking, securities and insurance areas.

C. Information sharing

Under the Financial Holding Company Act, Computer-Process Personal Data Protection Law and the related regulations stipulated by the Ministry of Finance, when customers’ information of a financial holding company’s subsidiary is disclosed to the other subsidiaries under the Company and its subsidiaries or exchanged between the subsidiaries for the purpose of cross-selling of products, the subsidiaries receiving, utilizing, managing or maintaining the information are bound to use the information for the specified purposes only. In addition, the Company is required to publish its “Measures for Protection of Customers’ Information” at its website. Customers also reserve the right to have their information withdrawn from the information sharing mechanism.

D. Operating facilities or premises sharing

To provide one-stop-shopping services, MICB set up a securities counter and an insurance counter within its financial consulting center on April 2, 2003, which is engaged in the cross-selling of MS and CKI’s products, respectively. In addition, the Company had obtained the authorization to set up specialized counters for other subsidiaries in different businesses in its business locations, and the setup had been gradually taking place in the Company’s subsidiaries.

E. Apportionment of revenues, costs, expenses, gains and losses

For the sixnth period ended June 30, 2014:

The promotion bonus paid to other subsidiaries by MITC and MICB amounted to $12,440 and $1,910, respectively. As a result ofcross-selling by other subsidiaries, the insurance premium income increased by $308,400 for CKI; $860 for MICB; $57,620 for MITC; and $1,630 for MBF.

~141~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 For the six-month period ended June 30, 2013

The promotion bonus paid to other subsidiaries by MITC and MICB amounted to $14,690 and $1,940, respectively. As a result of cross-selling by other subsidiaries, the insurance premium income increased by $318,600 for CKI; $7,780 for MICB; $80,670 for MITC; and $1,420 for MBF.

(8) Information for private placement securities:

None.

~142~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (9) Financial information by business segments

Financial information by business segments For the three-month period ended June 30, 2014 (Expressed in Thousands of NT Dollars) Bank Insurance Bills Securities Total other Items division division division division divisions Consolidation Interest income, net $8,876,133 $22,632 $142,482 $215,846 ($42,806) $9,214,287 Revenues other than interest, net 4,175,119 247,143 705,510 790,681 760,506 6,678,959 Net revenue 13,051,252 269,775 847,992 1,006,527 717,700 15,893,246 Baddebtexpenseandprovisionsforguaranteereserve (637,580) - 116,462 - - (521,118) Provisions for insurance the reserve - 68,660 - - - 68,660 Operating expenses (4,145,242) (209,000) (185,591) (679,568) (299,567) (5,518,968) IncomebeforeIncomeTaxfromContinuingOperations 8,268,430 129,435 778,863 326,959 418,133 9,921,820 Incometaxexpense (1,188,602) (64,107) (79,972) (42,090) (463,481) (1,838,252) Consolidated Net Income from Continuing Operations $7,079,828 $65,328 $698,891 $284,869 ($45,348) $8,083,568

Financial information by business segments For the three-month period ended June 30, 2013 (Expressed in Thousands of NT Dollars) Bank Insurance Bills Securities Total other Consolidation Items division division division division divisions Interest income, net $7,285,188 $24,051 $251,219 $184,532 ($56,030) $7,688,960 Revenues other than interest, net 3,278,224 269,318 521,685 414,375 985,543 5,469,145 Net revenue 10,563,412 293,369 772,904 598,907 929,513 13,158,105 Baddebtexpenseandprovisionsforguaranteereserve (662,796) 9,613 34,671 - - (618,512) Provisions for insurance the reserve - 62,979 - - - 62,979 Operating expenses (3,914,605) (237,006) (195,458) (536,852) (153,197) (5,037,118) IncomebeforeIncomeTaxfromContinuingOperations 5,986,011 128,955 612,117 62,055 776,316 7,565,454 Incometaxexpense (928,358) (68,954) (82,604) (13,767) (745,120) (1,838,803) Consolidated Net Income from Continuing Operations $5,057,653 $60,001 $529,513 $48,288 $31,196 $5,726,651 Note: The amounts were eliminated in the consolidated financial statements among the Company and its subsidiaries.

~143~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Financial information by business segments For the six-month period ended June 30, 2014 (Expressed in Thousands of NT Dollars) Bank Insurance Bills Securities Total other Items division division division division divisions Consolidation Interest income, net $17,245,933 $47,641 $277,050 $426,202 ($75,554) $17,921,272 Revenues other than interest, net 8,316,424 613,983 1,477,429 1,422,228 1,280,624 13,110,688 Net revenue 25,562,357 661,624 1,754,479 1,848,430 1,205,070 31,031,960 Baddebtexpenseandprovisionsforguaranteereserve (1,144,040) - 481,736 - - (662,304) Provisions for insurance the reserve - 64,846 - - - 64,846 Operating expenses (8,484,626) (464,604) (358,685) (1,281,095) (502,735) (11,091,745) Income before IncomeTax fromContinuing Operations 15,933,691 261,866 1,877,530 567,335 702,335 19,342,757 Incometaxexpense (2,291,063) (93,660) (253,066) (71,142) (507,797) (3,216,728) Consolidated Net Income from Continuing Operations $13,642,628 $168,206 $1,624,464 $496,193 $194,538 $16,126,029

Financial information by business segments For the six-month period ended June 30, 2013 (Expressed in Thousands of NT Dollars) Bank Insurance Bills Securities Total other Consolidation Items division division division division divisions Interest income, net $14,458,565 $44,729 $549,524 $354,603 ($129,656) $15,277,765 Revenues other than interest, net 6,892,484 482,638 1,407,182 923,472 1,450,269 11,156,045 Net revenue 21,351,049 527,367 1,956,706 1,278,075 1,320,613 26,433,810 Baddebtexpenseandprovisionsforguaranteereserve (1,611,796) - 132,108 - - (1,479,688) Provisions for insurance the reserve - 160,922 - - - 160,922 Operating expenses (8,122,846) (474,316) (345,108) (1,063,482) (341,682) (10,347,434) Income before IncomeTax fromContinuing Operations 11,616,407 213,973 1,743,706 214,593 978,931 14,767,610 Incometaxexpense (1,743,546) (89,680) (208,132) (27,957) (784,057) (2,853,372) Consolidated Net Income from Continuing Operations $9,872,861 $124,293 $1,535,574 $186,636 $194,874 $11,914,238 Note: The amounts were eliminated in the consolidated financial statements among the Company and its subsidiaries.

~144~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (10) Financial statements of the Company and condensed financial statements of its subsidiaries:

MEGA FINANCIAL HOLDING CO., LTD. BALANCE SHEETS JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS)

ASSETS 2014 2013 % LIABILITIES AND EQUITY 2014 2013 % Assets Liabilities Cashandcashequivalents $ 9,472,358 $ 7,596,282 24.70 Payables $ 25,838,003 $ 23,467,590 10.10 Receivable net 311 - - Current income tax liabilities 1,317,369 2,726,083 ( 51.68) Current income tax assets 630,319 1,961,869 ( 67.87 ) Bondspayable 6,000,000 11,974,079 ( 49.89) Available-for-sale financial assets 5,697,735 5,260,860 8.30 Provisions for liabilities 53,102 58,351 ( 9.00) Ivestments accounted for by the Deferred tax liabilities 261,915,375 13.51 2,168 111.31 equity method 230,737,901 1,026 Other financial assets 758,293 758,293 - Other liabilities 1,121 5,784 ( 80.62) Property and equipment 763,834 778,850 ( 1.93 ) Total Liabilities 33,211,763 38,232,913 ( 13.13) Deferred tax assets 7,737 7,737 - Equity Other assets 7,848 8,375 ( 6.29 ) Commonstock 124,498,240 114,498,240 8.73 Capitalsurplus 55,274,279 43,425,270 27.29 Retained earnings Legalreserve 24,469,127 22,220,204 10.12 Specialreserve 2,547,719 2,569,119 ( 0.83) Unappropriated retained earnings 36,834,124 26,625,101 38.34 Other equity interest 2,418,558 ( 460,680) - Total equity 246,042,047 208,877,254 17.79 TOTALASSETS $ 279,253,810 $ 247,110,167 13.01 TOTALLIABILITIESANDEQUITY $ 279,253,810 $ 247,110,167 13.01

~145~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS)

2014 2013 Revenues Interest revenue $ 230 $ 950 Financial assets and liabilities at fair value through profit or loss - 1,200 Foreign exchange gain 1 - Share of profit of associates and joint ventures accounted for under equity method 16,829,750 12,874,418 Other revenue except for interest income 1,066 1,260 Total revenue 16,831,047 12,877,828

Interest expense ( 111,368) ( 155,077) Foreign exchange loss - ( 3) Employeebenefitexpense ( 146,779) ( 106,069) Depreciation and amortization expense ( 8,868) ( 10,151) Other business and administrative expenses ( 33,863) ( 30,029) Total expenses and losses ( 300,878) ( 301,329) IncomebeforeIncomeTaxfromContinuingOperations 16,530,169 12,576,499 Incometaxexpense ( 394,730) ( 664,308) Net Income 16,135,439 11,912,191

Other comprehensive income Unrealized gain on valuation of available-for-sale financial assets 146,880 117,693 Income tax relating to the components of other comprehensive income 2,170,840 ( 757,518) Other comprehensive loss for the period, after income tax 2,317,720 ( 639,825) Total comprehensive income for the period $ 18,453,159 $ 11,272,366

Earnings Per Share (in dollars) Basic Earnings Per Share (in dollars) $ 1.30 $ 1.04 Diluted Earnings Per Share (in dollars) $ 1.30 $ 1.04

~146~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. STATEMENTS OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS)

Retained earnings Other equity interest Exchange differences on Unrealized gain on Unappropriated translation of foreign available-for-sale Common stock Capital surplus Legal reserve Special reserve retained earnings financial statement financial assets Total 2013 Balance, January 1, 2013 $ 114,498,240 $ 43,425,270 $ 20,066,890 $ 2,569,119 $ 29,461,030 ($ 944,493) $ 1,123,638 $ 210,199,694 Earnings distribution for 2012 Legal reserve - - 2,153,314 - ( 2,153,314) - -- Cash dividends - -- - ( 12,594,806) - - ( 12,594,806) Profit for the period - -- - 11,912,191 - - 11,912,191 Other comprehensive income for the period - - - - - 486,695 ( 1,126,520) ( 639,825) Balance, June 30, 2013 $ 114,498,240 $ 43,425,270 $ 22,220,204 $ 2,569,119 $ 26,625,101 ($ 457,798) ($ 2,882) $ 208,877,254 2014 Balance, January 1, 2014 $ 124,498,240 $ 55,271,623 $ 22,220,204 $ 2,547,719 $ 36,766,912 ($ 901,379) $ 1,002,217 $ 241,405,536 Earnings distribution for 2013 Legal reserve - - 2,248,923 - ( 2,248,923) - -- Cash dividends - -- - ( 13,819,304) - - ( 13,819,304) Changes in capital plus-investment accounted for by the equity method, net - 2,656 - -- - - 2,656 Profit for the period - -- - 16,135,439 - - 16,135,439 Other comprehensive income for the period - - - - - 156,122 2,161,598 2,317,720 Balance, June 30, 2014 $ 124,498,240 $ 55,274,279 $ 24,469,127 $ 2,547,719 $ 36,834,124 ($ 745,257) $ 3,163,815 $ 246,042,047

~147~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA FINANCIAL HOLDING CO., LTD. STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS)

2014 2013 Cash Flows from Operating Activities Profit before tax $ 16,530,169 $ 12,576,499 Adjustments to reconcile profit before tax to net cash provided by operating activities: Income and expenses having no effect on cash flows Depreciation 7,608 5,069 Amortization 1,260 2,329 Interest expense 111,368 155,077 Interest Revenue ( 230) ( 950) Share of profit of associates accounted for under equity method ( 16,829,750) ( 12,874,418) Changes in assets/liabilities relating to operating activities Changes in assets relating to operating activities: (Increase) decrease in receivables ( 311) 158 Increaseinotherassets ( 601) ( 2,692) Changes in liabilities relating to operating activities: Decrease in financial liabilities at fair value through profit or loss -( 1,200) (Decrease) increase in payables ( 53,624) 15,576 Increase in provisions for liabilities 671 1,841 (Decrease) increase in other liabilities ( 964) 3,527 Cash flow generated from operations ( 234,404) ( 119,184) Interest receiving 230 950 Cashdividendreceived 13,873,907 13,152,612 Interest paid ( 13,049) ( 116,073) Income tax receiving 801,341 ( 419,315) Netcashprovidedby(usedin)operations 14,428,025 12,498,990 Cash Flows from Financing Activities Decrease in commercial papers payable - ( 880,000) Decrease in bonds payable ( 6,000,000) ( 4,100,000) Net cash used in financing activities ( 6,000,000) ( 4,980,000) Netincreaseincashandcashequivalents 8,428,025 7,518,990 Cash and cash equivalents at beginning of period 1,044,333 77,292 Cashandcashequivalentsatendofperiod $ 9,472,358 $ 7,596,282

~148~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD. CONDENSED BALANCE SHEETS JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS)

Assets 2014 2013 Liabilities 2014 2013 Cash and cash equivalents $ 164,841,675 $ 102,840,616 Due to the Central Bank and financial institutions $ 365,631,627 $ 326,968,338 Due from the Central Bank and call loans to banks 292,759,360 273,477,274 Funds borrowed from the Central Bank and other banks 39,227,219 26,765,508 Financial assets at fair value through profit or loss, net 38,404,000 46,802,725 Financial liabilities at fair value through profit or loss 11,191,967 15,058,358 Bills and bonds purchased under resale agreements 4,374,641 8,753,485 Bills and bonds sold under repurchase agreements 57,903,943 33,174,869 Receivables, net 170,149,105 113,627,615 Payables 36,081,562 36,413,632 Current income tax asset 310,776 - Current income tax liabilities 6,656,261 5,510,479 Bills discounted and loans, net 1,649,574,855 1,544,739,481 Deposits and remittances 1,914,851,068 1,786,478,941 Available-for-sale financial assets, net 183,209,019 177,541,467 Financial bonds payable 55,900,000 43,900,000 Held-to-maturity financial assets, net 176,409,718 163,785,899 Other financial liabilities 10,348,113 8,769,240 Investments accounted for under equity Provisions for liabilities 10,235,513 9,615,715 method, net 8,620,311 8,899,139 Deferred tax liabilities 2,167,216 1,682,681 Other financial assets, net 13,374,308 14,273,188 Other liabilities 7,164,254 8,369,795 Property and equipment, net 14,362,971 14,558,513 Total Liabilities 2,517,358,743 2,302,707,556 Investment property, net 672,533 780,130 Equity Deferred tax assets 3,372,016 2,940,281 Capital stock 77,000,000 71,000,000 Other assets, net 2,816,266 6,396,975 Capital surplus 46,502,087 37,261,028 Retained earnings 80,402,747 69,446,261 Other equity interest 1,987,977 ( 998,057) TotalEquity 205,892,811 176,709,232

TOTAL ASSETS $ 2,723,251,554 $ 2,479,416,788 TOTAL LIABILITIES AND EQUITY $ 2,723,251,554 $ 2,479,416,788

~149~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA SECURITIES CO., LTD. CONDENSED BALANCE SHEETS JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS)

Assets 2014 2013 Liabilities 2014 2013 Current assets $ 45,834,924 $ 36,594,781 Current liabilities $ 36,884,483 $ 28,442,198 Financial assets measured at cost - non-current 339,157 365,789 Provisions for liabilities –non-current 77,588 83,739 Investments accounted for under equity method 911,062 971,119 Deferred tax liabilities 17,695 4,862 Property and equipment 2,629,440 2,631,873 Other liabilities-non-current 8,926 5,947 Investment property 516,346 496,029 Total Liabilities 36,988,692 28,536,746 Intangible assets 28,468 28,815 Deferred tax assets 52,539 52,596 Equity Other assets-non-current 1,168,509 1,170,854 Capital stock 11,600,000 11,600,000 Capital surplus 971,161 906,255 Retained earnings 1,923,184 1,306,534 Other equity interest ( 2,592 ) ( 37,679 ) Total Equity 14,491,753 13,775,110 TOTAL ASSETS $ 51,480,445 $ 42,311,856 TOTAL LIABILITIES AND EQUITY $ 51,480,445 $ 42,311,856

~150~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA BILLS FINANCE CO., LTD. CONDENSED BALANCE SHEETS JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS)

Assets 2014 2013 Liabilities 2014 2013 Cash and cash equivalents $ 718,963 $ 536,864 Interbank overdraft and call loans $ 10,022,642 $ 17,425,000 Financial assets at fair value Financial liabilities at fair value through profit or loss 116,223,494 134,642,956 through profit or loss 432 1,256 Available-for-sale financial assets, net 84,282,259 74,197,981 Bills and bonds sold under Bills and bonds purchased under repurchase agreements 166,320,184 165,304,698 resale agreements 5,078,717 2,440,150 Payables 904,317 705,658 Receivables, net 1,104,880 1,714,538 Current income tax liabilities 114,089 65,270 Held-to-maturity financial assets, net 500,000 500,000 Provisions for liabilities 2,886,455 3,350,173 Other financial assets, net 1,318,658 1,326,187 Deferred tax liabilities 937 31 Property and equipment, net 369,869 349,818 Other liabilities 176,349 76,324 Investment property, net 2,555,083 2,565,748 Total Liabilities 180,425,405 186,928,410 Intangible assets, net 3,536 4,026 Equity Deferred tax assets, net 88,328 100,680 Capital stock 13,114,411 13,114,411 Other assets, net 24,095 31,741 Capital surplus 320,929 312,823 Retained earnings 17,332,889 16,251,974 Other equity interest 1,074,248 1,803,071 Total Equity 31,842,477 31,482,279 TOTAL ASSETS $ 212,267,882 $ 218,410,689 TOTAL LIABILITIES AND EQUITY $ 212,267,882 $ 218,410,689

~151~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 CHUNG KUO INSURANCE CO., LTD CONDENSED BALANCE SHEETS JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS)

Assets 2014 2013 Liabilities 2014 2013 Cash and cash equivalents $ 6,279,028 $ 6,006,136 Payables $ 1,626,483 $ 1,645,106 Receivables, net 1,379,965 1,361,325 Current income tax liabilities 55,856 42,907 Current income tax assets 201,715 173,021 Financial liabilities at fair value through Assets held for sale 2,582 - profit or loss 2,516 3,754 Available-for-sale financial assets 1,517,199 1,701,161 Insurance liabilities 8,454,445 8,636,459 Financial assets measured at cost 100,000 100,000 Provisions for liabilities 259,569 232,760 Investment in bonds without active markets 98,006 98,749 Deferred tax liabilities 3,387 4,557 Held-to-maturity financial assets, net 906,339 864,768 Other liabilities 136,231 121,171 Investments accounted for under equity method 15,230 23,873 Total Liabilities 10,538,487 10,686,714 Investment property 326,062 330,840 Equity Reinsurance contracts assets 3,481,496 3,436,521 Capital stock $ 3,000,000 $ 3,000,000 Property and equipment 849,133 860,879 Capital surplus 1,084,811 1,057,329 Intangible assets 21,577 16,806 Retained earnings 1,389,945 1,093,289 Deferred tax assets 51,800 44,227 Other equity interest ( 145,132) ( 180,952 ) Other assets 637,979 638,074 Total Equity 5,329,624 4,969,666 TOTAL ASSETS $ 15,868,111 $ 15,656,380 TOTAL LIABILITIES AND EQUITY $ 15,868,111 $ 15,656,380

~152~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA INTERNATIONAL INVESTMENT TRUST CO., LTD. CONDENSED BALANCE SHEETS JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS) (UNAUDITED AND UNREVIEWED) Assets 2014 2013 Liabilities 2014 2013 Current assets $ 458,073 $ 333,251 Current liabilities $ 34,371 $ 38,738 Available-for-sale financial assets, net 173,515 - Liabilities-non-current 15,908 16,216 Property and equipment 3,598 2,726 Total Liabilities 50,279 54,954 Investment property 112,932 113,596 Equity Intangible assets 207 308 Capital stock 527,000 527,000 Deferred tax assets 62,974 83,977 Capital surplus 3,675 336 Other assets-non-current 30,832 315,029 Retained earnings 256,649 266,680 Other equity interest 4,528 ( 83 ) Total Equity 791,852 793,933 TOTAL ASSETS $ 842,131 $ 848,887 TOTAL LIABILITIES AND EQUITY $ 842,131 $ 848,887

~153~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA ASSET MANAGEMENT CO., LTD. CONDENSED BALANCE SHEETS JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS) (UNAUDITED AND UNREVIEWED) Assets 2014 2013 Liabilities 2014 2013 Current assets $ 9,659,213 $ 8,499,615 Current liabilities $ 8,062,928 $ 5,687,535 Property and equipment 287 415 Other liabilities-non-current 151,251 1,209,327 Investment property 1,147,910 922,662 Total Liabilities 8,214,179 6,896,862 Intangible assets 2,312 1,332 Deferred tax assets 76,672 2,439 Equity Other assets-non-current 3,316 257,976 Capital stock 2,000,000 2,000,000 Capital surplus 1,261 - Retained earnings 674,270 787,577 Total Equity 2,675,531 2,787,577 TOTAL ASSETS $ 10,889,710 $ 9,684,439 TOTAL LIABILITIES AND EQUITY $ 10,889,710 $ 9,684,439

~154~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA INSURANCE AGENCY CO., LTD. CONDENSED BALANCE SHEETS JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS) (UNAUDITED AND UNREVIEWED) Assets 2014 2013 Liabilities 2014 2013 Current assets $ 221,962 $ 165,074 Current liabilities $ 76,611 $ 46,159 Property and equipment 593 546 Other non-current liabilities 111 - Intangible assets 742 499 Total Liabilities 76,722 46,159 Other assets-non-current 3,634 3,303 Equity Capital stock 20,000 20,000 Capital surplus 803 - Retained earnings 129,406 103,263 Total Equity 150,209 123,263 TOTAL ASSETS $ 226,931 $ 169,422 TOTAL LIABILITIES AND EQUITY $ 226,931 $ 169,422

~155~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA VENTURE CAPITAL CO., LTD. CONDENSED BALANCE SHEETS JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS) (UNAUDITED AND UNREVIEWED) Assets 2014 2013 Liabilities 2014 2013 Current assets $ 71,776 $ 178,273 Current liabilities $ 4,390 $ 2,219 Available-for-sale financial assets 534,398 253,517 Other liabilities - 2,519 Other assets-non-current 293,459 304,011 Total Liabilities 4,390 4,738 Equity Capital stock 1,000,000 1,000,000 Accumulated deficit 14,842 ( 39,703 ) Other equity interest ( 119,599) ( 229,234 ) Total Equity 895,243 731,063 TOTAL ASSETS $ 899,633 $ 735,801 TOTAL LIABILITIES AND EQUITY $ 899,633 $ 735,801

~156~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS)

2014 2013 Interest income $ 25,842,863 $ 20,518,249 Less: Interest expense ( 8,865,234 ) ( 6,334,838 ) Interest income, net 16,977,629 14,183,411 Revenues other than interest income, net 8,680,284 7,243,662 Net revenue 25,657,913 21,427,073 Bad debts expense and provisions for guarantee reserve ( 1,134,596 ) ( 1,599,228 ) Operating Expenses ( 8,408,783 ) ( 8,052,649 ) Income before Income Tax from Continuing Operations 16,114,534 11,775,196 Income tax expense ( 2,256,048 ) ( 1,706,851 ) Net Income 13,858,486 10,068,345 Other comprehensive income 2,327,544 7,780 Total comprehensive income for the periods $ 16,186,030 $ 10,076,125

Earnings Per Share Basic Earnings Per Share ( After Taxes ) $ 1.80 $ 1.42

MEGA SECURITIES CO., LTD. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS)

2014 2013 Revenues $ 1,878,926 $ 1,282,990 Service fee revenue expenditure ( 143,940 ) ( 112,433 ) Employee benefit expense ( 769,566 ) ( 641,640 ) Operational expenses ( 443,482 ) ( 360,505 ) Other gains and losses 65,283 57,928 Share of loss of associates and joint ventures accounted for under equity method ( 16,255 ) ( 14,940 ) Income before Income Tax from Continuing Operations 570,966 211,400 Income tax expense ( 68,855 ) ( 26,371 ) Net Income 502,111 185,029 Other comprehensive income 20,165 ( 652 ) Total comprehensive income for the period $ 522,276 $ 184,377 Earnings Per Share Basic Earnings Per Share ( After Taxes ) $ 0.43 $ 0.16

~157~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA BILLS FINANCE CO., LTD. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS)

2014 2013 Interest income $ 1,403,533 $ 1,427,976 Less: Interest expense ( 485,105 ) ( 541,434 ) Interest income, net 918,428 886,542 Revenues other than interest income, net 931,385 1,103,956 Net revenue 1,849,813 1,990,498 Provisions 481,736 132,108 Operating expenses ( 380,154 ) ( 366,517 ) Income before Income Tax from Continuing Operations 1,951,395 1,756,089 Income tax expense ( 253,066 ) ( 208,131 ) Net Income 1,698,329 1,547,958 Other comprehensive loss ( 221,279 ) ( 764,742 ) Total comprehensive income for the period $ 1,477,050 $ 783,216

Earnings Per Share Basic Earnings Per Share ( After Taxes ) $ 1.30 $ 1.18

CHUNG KUO INSURANCE CO., LTD. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS)

2014 2013 Operating revenue $ 2,242,045 $ 2,178,249 Operating costs ( 1,484,449 ) ( 1,453,516 ) Operating expenses ( 457,011 ) ( 465,912 ) Operating income 300,585 258,821 Non-operating income and expenses 1,492 2,024 Income before Income Tax from Continuing Operations 302,077 260,845 Income tax expense ( 93,660 ) ( 89,680 ) Net Income 208,417 171,165 Other comprehensive loss ( 25,399 ) ( 36,258 ) Total comprehensive income for the period $ 183,018 $ 134,907

Earnings Per Share Basic Earnings Per Share ( After Taxes ) $ 0.69 $ 0.57

~158~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA INTERNATIONAL INVESTMENT TRUST CO., LTD. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS) (UNAUDITED AND UNREVIEWED) 2014 2013 Operating revenue $ 148,771 $ 172,519 Operating expenses ( 111,830 ) ( 125,096 ) Operating income 36,941 47,423 Non-operating income and expenses 35,565 33,010 Income before Income Tax from Continuing Operations 72,506 80,433 Income tax expense ( 12,326 ) 1,786 Net Income 60,180 82,219 Other comprehensive gain (loss) 3,103 ( 3,149 ) Total comprehensive income for the period $ 63,283 $ 79,070

Earnings Per Share Basic Earnings Per Share ( After Taxes ) $ 1.14 $ 1.56

MEGA ASSET MANAGEMENT CO., LTD. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS) (UNAUDITED AND UNREVIEWED) 2014 2013 Operating revenue $ 614,033 $ 692,269 Operating costs ( 4,623 ) ( 4,868 ) Operating expenses ( 185,712 ) ( 78,107 ) Operating income 423,698 609,294 Non-operating income and expenses 26,950 36,385 Income before Income Tax from Continuing Operations 450,648 645,679 Income tax expense ( 76,714 ) ( 106,842 ) Net Income 373,934 538,837 Other comprehensive income - - Total comprehensive income for the period $ 373,934 $ 538,837

Earnings Per Share Basic Earnings Per Share ( After Taxes ) $ 1.87 $ 2.69

~159~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 MEGA INSURANCE AGENCY CO., LTD. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS) (UNAUDITED AND UNREVIEWED) 2014 2013 Operating revenue $ 530,359 $ 378,525 Operating Expenses ( 440,542 ) ( 307,403 ) Operating income 89,817 71,122 Non-operating income and expenses 18,113 5,421 Income before Income Tax from Continuing Operations 107,930 76,543 Income tax expense ( 18,348 ) ( 13,012 ) Net Income $ 89,582 $ 63,531

Earnings Per Share Basic Earnings Per Share (After Taxes) $ 44.79 $ 31.77

MEGA VENTURE CAPITAL CO., LTD. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX-MONTH PERIODS ENDED JUNE 30, (EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS) (UNAUDITED AND UNREVIEWED) 2014 2013 Operating revenue $ 213,910 $ 164,158 Operating costs ( 161,750 ) ( 127,633 ) Operating expenses ( 8,607 ) ( 8,581 ) Non-operating income and expenses 43,553 27,944 Income tax expense ( 5,679 ) ( 1,553 ) Net Income 37,874 26,391 Other comprehensive income 66,704 39,502 Total comprehensive income for the period $ 104,578 $ 65,893

Earnings Per Share Basic Earnings Per Share (After Taxes) $ 0.38 $ 0.26

~160~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (11) Profitability of the Company and its subsidiaries:

A. Profitability (a) The Company Unit：% MEGA FINANCIAL HOLDING CO., LTD Items For the six-month period ended For the six-month period ended June 30, 2014 June 30, 2013 Return on Pre-tax 6.07 5.17 assets After-tax 5.92 4.90 Return on Pre-tax 6.78 6.00 equity After-tax 6.62 5.68 Net profit margin 95.87 92.51

Unit：% MEGA FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES Items For the six-month period ended For the six-month period ended June 30, 2014 June 30, 2013 Return on Pre-tax 0.63 0.54 assets After-tax 0.52 0.43 Return on Pre-tax 7.93 7.04 equity After-tax 6.61 5.68 Net profit margin 51.97 45.07

(b) The subsidiary Unit：% MICB Items For the six-month period ended For the six-month period ended June 30, 2014 June 30, 2013 Return on Pre-tax 0.58 0.48 assets After-tax 0.50 0.41 Return on Pre-tax 7.94 6.66 equity After-tax 6.81 5.69 Net profit margin 53.55 46.50

Unit：% MS Items For the six-month period ended For the six-month period ended June 30, 2014 June 30, 2013 Return on Pre-tax 1.16 0.48 assets After-tax 1.02 0.42 Return on Pre-tax 3.98 1.51 equity After-tax 3.50 1.32 Net profit margin 26.72 14.42

~161~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Unit：% MBF Items For the six-month period ended For the six-month period ended June 30, 2014 June 30, 2013 Return on Pre-tax 0.90 0.81 assets After-tax 0.78 0.71 Return on Pre-tax 6.10 5.47 equity After-tax 5.31 4.82 Net profit margin 91.81 77.77

Unit：% CKI Items For the six-month period ended For the six-month period ended June 30, 2014 June 30, 2013 Return on Pre-tax 1.95 1.71 assets After-tax 1.34 1.12 Return on Pre-tax 5.77 5.32 equity After-tax 3.98 3.49 Net profit margin 9.30 7.86

Note 1: Return on assets ＝ Income (loss) before income tax ÷ Average total assets Note 2: Return on equity ＝ Income (loss) before income tax ÷ Average equity Note 3: Net profit margin ＝ Net income (loss) after income tax ÷ Net revenues Note 4: Net income (loss) pre-tax / after-tax refers to the income (loss) for the six-month periods ended June 30, 2014 and 2013.

~162~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (12) In accordance with Article 17 of the Trust Enterprise Law, the disclosures of the trust balance sheet, trust income statement and schedule of investment for trust business would be shown every semi-year:

A. Trust Balance Sheets Trust Assets June 30, 2014 June 30, 2013 Bank deposits $ 31,249,542 $ 36,030,647 Short-term investments Mutual funds 131,847,147 118,954,945 Bonds 37,930,249 33,714,543 Stocks 47,879,167 49,142,095 Real estate 121,040,685 106,019,095 Properties 13,847 13,818 Customers’ securities under custody 145,206,453 144,352,509 Receivables 3,713 5,346 Other assets 23,992 4,164,482 Total trust assets $ 515,194,795 $ 492,397,480

Trust Liabilities June 30, 2014 June 30, 2013 Capital borrowed $ 4,500,525 $ 4,550,525 Payables 17,349 17,440 Account collected in advance 42,724 42,043 Taxes payable 32,609 34,405 Accounts withholding 887 1,010 Other liabilities 1,166,641 911,243 Trust capital 364,227,607 342,488,305 Customers’ securities under custody 145,206,453 144,352,509 Total trust liabilities $ 515,194,795 $ 492,397,480 B. Trust income statements For the six-month periods ended June 30, Trust income: 2014 2013 Interest income $ 6,479 $ 6,935 Rental income 663,156 659,882 Exchange gain 14,208 15,083 Total trust income 683,843 681,900 Trust expense: Management expenses ( 31,626 ) ( 30,200 ) Duty expenses ( 9,114 ) ( 8,573 ) Exchange loss ( 187,943 ) ( 190,324 ) Total trust expenses ( 228,683 ) ( 229,097 ) Net income before income tax 455,160 452,803 Income tax expense ( 77 ) ( 75 ) Net income (loss) after income tax $ 455,083 $ 452,728

~163~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 C. Schedule of investment for trust business June 30, 2014 June 30, 2013 Bank deposits $ 31,249,542 $ 36,030,647 Short-term investments: Mutual funds 131,847,147 118,954,945 Bonds 37,930,249 33,714,543 Stock 47,879,167 49,142,095 Real estate 121,040,685 106,019,095 Properties 13,847 13,818 Customers’ securities under custody 145,206,453 144,352,509 Receivables 3,713 5,346 Other assets 23,992 4,164,482 Total $ 515,194,795 $ 492,397,480

Note:as of June 30, 2014 and 2013, it was included $29,872,846 and $23,565,256, of the foreign securities business of the specific trust of money investment of MICB’s OBU in the above financial statements.

~164~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 17. ADDITIONAL DISCLOSURES

The transactions between and among subsidiaries have been eliminated during the consolidation. The disclosed information below is for reference purposes only. (1) Significant transaction information: A. Marketable securities acquired or disposed of, at costs or prices of at least $300 million or 10% of the issued capital:

UNIT: In thousands of NT Dollars Balance as at January 1, 2014 Addition Disposal Balance as at June 30, 2014 Number of Number of Number of Number of Marketable General shares shares shares Gain shares Investor Securities Ledger account Counterparty Relationship (in thousands) Amount (in thousands) Amount (in thousands) Amount on disposal (in thousands) Amount MICB St. Shine Optical Financial assets at fair value - - 59 $47,024 209 $158,761 268 $188,309 ($17,476) - $ - Co., Ltd through profit or loss, net MICB TSEC Taiwan 50 Financial assets at fair value - - 5,440 293,004 4,030 230,765 3,320 200,875 17,424 6,150 340,318 index through profit or loss, net MICB ASE. Inc. Financial assets at fair value ---- 7,010 230,851 3,240 108,170 10,405 3,770 133,086 through profit or loss, net MICB Falcon Financial assets at fair value - - 1,440 112,259 3,585 315,275 1,005 84,351 2,316 4,020 345,499 Technology Group through profit or loss, net MICB SIPIN Financial assets at fair value ---- 4,060 178,405 2,740 122,842 9,364 1,320 64,927 TECHNOLOGY CO., LTD. through profit or loss, net MICB Taiwan Financial assets at fair value - - 8,318 843,875 4,970 566,059 5,070 591,540 66,995 8,218 885,389 Semiconductor Manufacturing through profit or loss, net Company MICB ASUSTeK Financial assets at fair value ---- 585 169,494 455 137,298 5,795 130 37,991 Computer Inc. through profit or loss, net MICB NOVATEK Financial assets at fair value - - 60 6,784 1,110 150,289 1,100 153,493 6,442 70 10,022 Tech. Co., Ltd. through profit or loss, net MICB Kinsus Financial assets at fair value ---- 1,570 183,493 1,140 136,380 9,019 430 56,132 Interconnect Technology Corp through profit or loss, net MICB VIVOTEK INC. Financial assets at fair value ---- 996 178,567 996 170,932 (7,635) - - through profit or loss, net MICB TongHsing Financial assets at fair value ---- 1,369 215,723 1,299 206,487 1,965 70 11,201 Electronic Industries, Ltd. through profit or loss, net

~165~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 B. Acquisition or disposal of individual real estate, at costs or prices of at least $300 million or 10% of the issued capital: None.

C. Disposal of individual real estate, at costs or prices of at least $300 million or 10% of the issued capital: None.

D. Allowance for service fees to related parties amounting to at least $5 million: None.

E. Receivables from related parties amounting to at least $300 million or 10% of the issued capital: None.

F. Information on selling non-performing loans of subsidiaries:

(1)Summary of selling non-performing loans: Information on selling non-performing loans of subsidiaries (MICB) for the six-month period ended June 30, 2014 was as follows: UNIT: In thousands of NT Dollars Contents of right Gain or loss from Attached Relationship with the Transaction date Counterparty Carrying value Sale price Note of claim disposal conditions Company MACQUARIE BANK 2013.12.23 Corporate lending $ 1,098,563 $ 1,098,563$ - None None Note 1 LIMITED JPMORGAN CHASE BANK 2014.01.29 Corporate lending $ 150,651 $ 846,532$ 695,881 None None Note 2 NATIONAL ASSOCIATION SC LOWY PRIMARY 2014.01.03 Corporate lending $ 75,148 $ 82,652$ 7,504 None None Note 3 INVESTMENTS LTD Note 1: The carrying amount and the sale price of the debt of both were USD 36,400 thousand dollars. Based on the exchange rate of 30.3533 New Taiwan dollars per USD at June 30, 2014. On the transaction date, it only sold out 30% of non-performing loan, the others were settled up in the three-month period ended March 31, 3014. Note 2: The carrying amount and the sale price of the debt were USD 4,991.71 thousand dollars and USD 28,049.15 thousand dollars, respectively. Based on the exchange rate of 30.1803 New Taiwan dollars per USD at June 30, 2014. Note 3: The carrying and the sale price of the debt were AUD 2,716.29 thousand dollar, and Aud 2,9878.54 thousand dollar, respectively.Bsae on the exchange rate of 27.6658 New Taiwan dallars per AUD at June 30, 2014.

~166~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (2) Sale of non-performing loans exceeding NT$1 billion (excluding sale to related parties): Counterparty：MACQUARIE BANK LIMITED Transaction date:2013.12.23 UNIT: In thousands of NT Dollars Loan component Loan amount Carrying amount Allocation of sale price Secured $ 1,220,190 $ 1,098,563 $ 1,098,593 --- Corporate Unsecured Total $ 1,220,190 $ 1,098,563 $ 1,098,593 Note 4: The loan amount is the amount that a buyer may claim from the creditor, including the sum of balance of disposal on non-performing loan (book value before deduction of allowance for doubtful debt) and written-off bad debt. Note 5: Allocation of selling price refers to gross selling price that is allocated by the bank according to the evaluation of recoverable amount of various loans upon disposal. G. Information on categories of securitization of assets of subsidiaries applied for and approved in accordance to both financial asset securitization rule and real estate securitization regulations: None.

H. Other significant transactions which may affect the decisions of users of financial reports: None.

~167~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (3) Information on the investees: A. Supplementary disclosure regarding investee companies:

(Expressed In Thousands Of New Taiwan Dollars, Unless Otherwise Indicated) Share-holdings of the Bank and related enterprises Total Pro forma Percentage of Investment information on Percentage ownership Carrying income Share (in number of Share (in of ownership Investee companies Address Main service % value (loss) thousands) stock held thousands) % Note Mega International Commercial No.100, Jilin Rd., Taipei City Banking industry 100.00% Note Note 7,700,000 None 7,700,000 100.00% Bank Co., Ltd.

Mega Securities Co., Ltd. 3, No.95, Sec.2, Zhongxiao E. Securities industry 100.00% Note Note 1,160,000 None 1,160,000 100.00% Rd., Taipei City

MegaBillsFinanceCo.,Ltd. 2~5and9-10F,No.91, Notesandbillsindustry 100.00% Note Note 1,311,441 None 1,311,441 100.00% Hengyang Rd., Taipei City

Chung Kuo Insurance Co., Ltd. No. 58, Sec.1, Wuchang Property insurance industry 100.00% Note Note 300,000 None 300,000 100.00% Street, Taipei City

Mega International Investment 8F, No. 91, Hengyang Rd., Issuing beneficiary 100.00% Note Note 52,700 None 52,700 100.00% Trust Co., Ltd. Taipei City certificates and raising securities investment trust funds.

Mega Asset Management Co., 6F, No. 91, Hengyang Rd., Purchase of financial 100.00% Note Note 200,000 None 200,000 100.00% Ltd. Taipei City creditors’ rights, evaluate or auction of financial creditors’ right and management services.

Mega Venture Capital Co., Ltd. 7F, No. 91, Hengyang Rd., Venture capital 100.00% Note Note 100,000 None 100,000 100.00%

~168~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Expressed In Thousands Of New Taiwan Dollars, Unless Otherwise Indicated) Share-holdings of the Bank and related enterprises Total Pro forma Percentage of Investment information on Percentage ownership Carrying income Share (in number of Share (in of ownership Investee companies Address Main service % value (loss) thousands) stock held thousands) % Note Taipei City

Mega I Venture Capital Co., Ltd. 7F, No. 91, Hengyang Rd., Venture capital 40.00% Note Note 18,000 None 18,000 40.00% Taipei City

Mega Life Insurance Agency Co., 5F., No. 100, Jilin Rd., Taipei Insurance industry 100.00% Note Note 2,000 None 2,000 100.00% Ltd City

Mega International Commercial 36/12P.S.Tower, Asoke, 1.Deposits 100.00% Note Note 400,000 None 400,000 100.00% Bank Public Co., Ltd. Sukhumvit 21 Klongtoey nua, 2. Negotiation, bill for (Thailand) Wattana Bangkok collection and foreign 10110,Thailand exchange 3. Loan(credit, loan and L/C)

Mega International Commercial North York Madison Centre, 1.Deposits 100.00% Note Note 230 None 230 100.00% Bank (Canada) 4950 Yonge Street, Suite 2. Negotiation, bill for 1002, Toronto,Ontario, M2N collection and foreign 6K1, Canada exchange 3. Loan(credit, loan and L/C)

Cathay Investment & Post Office Box 3937 Nassau, International investment and 100.00% $ 51,378 112 5 None 5 100.00% Development Corporation Bahamas exploration (Bahamas)

Mega Management Consulting 7F, No. 91, Hengyang Rd., Management consulting 100.00% 34,713 9,387 1,000 None 1,000 100.00% Corporation Taipei City industry

~169~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Expressed In Thousands Of New Taiwan Dollars, Unless Otherwise Indicated) Share-holdings of the Bank and related enterprises Total Pro forma Percentage of Investment information on Percentage ownership Carrying income Share (in number of Share (in of ownership Investee companies Address Main service % value (loss) thousands) stock held thousands) % Note Cathay Investment & Dominador Bazany Calle 20, 1. Warehousing 100.00% $ 57,936 ($ 912) 1 None 1 100.00% Warehousing Ltd. Manzana 31, P.O.Box 2. Manage and make the 0302-00445 Colon Free Zone, investment for the business Republic of Panama in foreign trade business. 3. Office rental

Ramlette Finance Holdings Inc. Calle 50 y Esquina Margarita Real estate investment 100.00% 1,444 646 2 None 2 100.00% A. de Vallarino Nuevo industry Campo Alegre, Edificio MEGAICBC

YungShingIndustriesCo. 7F,No.100,JilinRd,Taipei Agency business industry, 99.56% 647,096 19,275 298 None 298 99.56% City manage and make the investment for the business in foreign trade business and customer request service.

China Products Trading 7F, No.100, Jilin Rd., Taipei Processing agricultural 68.27% 27,587 87 68 None 68 68.27% Company City product and investment industry.

United Venture Capital Corp. 4F, No.9, Dehui Street Taipei Investment industry 25.31% 1,432 ( 12) 408 None 408 25.31% City

China Insurance Co., (Siam) Ltd. 36/69, 20th Floor, P.S. Tower, Insurance industry 25.25% 20,002 1,457 1,515 None 1,515 25.25% Asoke Sukhumvit 21 Road, Bangkok 10110, Thailand

~170~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Expressed In Thousands Of New Taiwan Dollars, Unless Otherwise Indicated) Share-holdings of the Bank and related enterprises Total Pro forma Percentage of Investment information on Percentage ownership Carrying income Share (in number of Share (in of ownership Investee companies Address Main service % value (loss) thousands) stock held thousands) % Note IP Fundseven Ltd. 7F., No.122, Dunhua N. Rd., Investment industry 25.00% $ 86,768 ($ 22,896) 12,500 None 12,500 25.00% Songshan District, Taipei City

AnFangCo.,Ltd. 3F.,No.139,JhengjhouRd., Automatic Teller Machine 25.00% 12,327 396 750 None 750 25.00% Taipei City rental, configure and maintain.

Taiwan Bills Finance Co., Ltd. 3F, No. 123, Sec. 2 Nanjin E. Proprietary trading, 24.55% 1,505,654 32,489 126,714 None 126,714 24.55% Rd. Taipei City brokerage and underwriting of short-term notes and bills, arrangement of inter-bank call loans, proprietary trading of government bonds and corporate bonds.

Everstrong Iron Steel & Foundry NO.1 Shiquan Rd., Xiaogang Iron and steel making 22.22% 40,876 2,332 1,760 None 1,760 22.22% & Mfg Corp Dist., Kaohsiung City

China Real Estate Management 11F., No.35, Guangfu S. Rd., Real estate and property 20.00% 192,415 1,198 9,000 None 9,000 20.00% Co., Ltd. Taipei City selling

Mega Life Insurance Agency Co., 5F, No. 100, Jilin Rd, Taipei Insurance brokerage 100.00% 44,926 4,400 200 None 200 100.00% Ltd. City

~171~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Expressed In Thousands Of New Taiwan Dollars, Unless Otherwise Indicated) Share-holdings of the Bank and related enterprises Total Pro forma Percentage of Investment information on Percentage ownership Carrying income Share (in number of Share (in of ownership Investee companies Address Main service % value (loss) thousands) stock held thousands) % Note ICBC Asset Management & No.100, Jilin Rd., Taipei City Investment 100.00% $ 49,795 ($ 397) 5,000 None 5,000 100.00% Consulting Co., Ltd consulting,corporate management consulting and venture investment management consulting

Mega Securities Holdings Co., P. O. Box 957, Offshore Investment holdings 100.00% Note Note 14,990 None 14,990 100.00% Ltd. Incorporations Centre, Road Town, Tortola, British Virgin Islands.

MegaFuturesCo.,Ltd. 4F.,No.563,Sec.4, Brokerages of overseas 100.00% Note Note 40,000 None 40,000 100.00% Zhongxiao E. Rd., Taipei City futures business, domestic proprietary trading and futures settlement business

Mega International Securities 10F., No.95, Zhongxiao E. Securities investment 100.00% Note Note 2,000 None 2,000 100.00% Investment Consulting Co., Ltd. Rd., Taipei City consulting industry

Mega Securities(Hong kong) Room 1110-1111, F11, The Investment holdings 100.00% Note Note 120 None 120 100.00% Holdings Co., Ltd. Gateway Tower 6, No.9, Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong

~172~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Expressed In Thousands Of New Taiwan Dollars, Unless Otherwise Indicated) Share-holdings of the Bank and related enterprises Total Pro forma Percentage of Investment information on Percentage ownership Carrying income Share (in number of Share (in of ownership Investee companies Address Main service % value (loss) thousands) stock held thousands) % Note Mega Capital (Asia) Co., Ltd. Room 1109ss, F11, The Investment advisory services 100.00% Note Note 17,000 None 17,000 100.00% Gateway Tower 6, No.9, Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong

Mega Global Asset Management Second Floor, Century Yard, Asset management business 100.00% Note Note 2,340 None 2,340 100.00% Co., Ltd. P.O. Box 448 G.T. Grand Cayman, Cayman Island.

B. Marketable securities acquired or disposed of, at costs or prices of at least $300 million or 10% of the issued capital: Please refer to Note 17(1) Additional Disclosures for details. C. Information on financial derivative transactions: Please refer to Note 7 for the information of financial instruments. D. Acquisition or disposal of individual real estate, at costs or prices of at least $300 million or 10% of the issued capital: None. E. Allowance for service fees to related parties amounting to at least $5 million: None. F. Receivables from related parties amounting to at least $300 million or 10% of the issued capital: None. G. Sale of non-performing loans: Please refer to Note 17 Additional Disclosures for details. H. Information on categories of securitization of assets of subsidiaries applied for and approved in accordance to both financial asset securitization rule and real estate securitization regulations: None. I. Other significant transactions which may affect the decisions of users of financial reports: None. J. Funds lent to others: None.

~173~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 K. Endorsement / guarantee provided : For the six-month period ended June 30, 2014

Counterparty Ratio of Accumulated Maximum Provision of Provision of Provision of Limits on Endorsement/ Amount of Endorsement/ endorsements endorsements endorsements Nature of Endorsement/ Guarantee Endorsement/Guarantee to Guarantee and guarantees and guarantees and guarantees Endorsement/ Relations Guarantee Amount Net Asset Value of the Amounts by parent by subsidiary to the party in No. Guarantee hips Amounts Maximum Balance Collateralized Latest Financial Allowable company to to parent Mainland (Note 1) Provider Name (Note 2) (Note 3) for the Period Ending Balance by Properties Statements (Note 3) (Note 3) subsidiary company China 1 Mega Securities Mega Securities (Hong 2 $ 171,306 $ 154,024 $ 154,024 NA 44.96% $ 342,612 NA NA NA Holdings Co., Ltd. Kong) Co., Ltd. (HKD 40,000) (HKD 40,000) Total $ 154,024 $ 154,024 44.96% $ 342,612 Note 1：The numeric numbers assigned for Mega Securities Co., Ltd. and subsidiaries: (1) 0 for endorsement issuer. (2) Subsidiaries are numbered in sequence from 1. Note 2：The counterparties of endorsement / guarantees provided are classified into the following groups. (1) Companies that establish business relationships. (2) Subsidiaries of which the Company directly hold more than 50% of the common shares. (3) Investee companies of which the Company and its subsidiaries together hold more than 50% of common shares. (4) Parent companies of which the Company directly holds or its subsidiaries indirectly hold more than 50% of common shares. (5) Companies that are obligated to provide endorsement/ guarantees proportional to relative shareholdings due to mutual investment relationships. Note 3: Pursuant to the rules stipulated in Mega Securities Co., Ltd. "Supervision Management Procedures for Subsidiaries", the subsidiaries are required to follow the subsidiaries’ procedures in providing endorsement / guarantees: (1) The amount of endorsement / guarantees provided by the subsidiaries should not exceed 20% of the Company's net worth. (2) The amount of endorsement / guarantees provided to each individual overseas subsidiary should not exceed 50% of the Company's net worth. The net worth for the six-month period ended June 30, 2014 was $342,612 thousand × 50% = $171,306 thousand. The ratio of accumulated amount of endorsement / guarantee to net asset value of the latest financial statements = $154,024 thousand / net worth for the six-month period ended June 30, 2014 of $342,612 thousand = 44.96%.

~174~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 L. Securities held at the end of period (Expressed in thousands of New Taiwan dollars/thousand shares) At period-end Name of Holding Type and Name of Relationship with the Financial Statement Share Carrying Percentage of Company Marketable Securities Securities Issuer Account ( in thousands) Value Ownership (%) Market Value Note Mega Management Stocks Consulting Corporation 〃 ID Reengineering Inc. Equity investees Equity investments 25 $ 2,159 25.00% $ 2,159 accounted for by the equity method

Mega Venture Capital Formosa Advanced Technologies None Available-for-sale 1,435 $ 36,664 0.32% $36,664 Co., Ltd. Co., Ltd. financial assets ″ Darfon Corporation ″ ″ 364 7,950 0.11% 7,950 ″ Innolux Corporation ″ ″ 623 8,724 0.01% 8,724 ″ Paragon Technologies Co,. Ltd. ″ ″ 763 59,113 0.01% 59,113 ″ Jentech Precision Industrial Co., 224 25,593 0.21% 25,593 LTD. ″ ″ ″ Ju Teng International Holdings 300 6,345 0.03% 6,345 Limited ″ ″ ″ AVer Information Inc. ″ ″ 289 7,508 0.29% 7,508 ″ Lextar Electronics Corporation. ″ ″ 285 8,607 0.05% 8,607 ″ Axiomtek Co., Ltd. ″ ″ 635 48,451 0.81% 48,451 ″ Innolux Corporation ″ ″ 1 13 0.00% 13 ″ AEON MOTOR CO.,LTD. ″ ″ 70 3,038 0.18% 3,038 ″ Tripod Technology Corporation ″ ″ 300 17,280 0.06% 17,280 ″ San Fu Chemical Co., Ltd. ″ ″ 300 8,850 0.34% 8,850 ″ ChipMOS TECHNOLOGIES 672 28,661 0.08% 28,661 (Bermuda) LTD. ″ ″ ″ LEDLINK OPTICS,INC ″ ″ 300 22,800 0.71% 22,800 ″ Intelligent Epitaxy Technology Inc. ″ ″ 272 18,986 0.90% 18,986 ″ Avalue Technology Inc., ″ ″ 600 29,100 1.11% 29,100 ″ ETASIS Electronics Corporation. ″ ″ 576 5,755 2.23% 5,755 ″ Kuo Ching Chemical Co., Ltd. ″ ″ 637 13,452 0.84% 13,452 ″ Skyray Instrument Inc. ″ ″ 525 7,245 0.88% 7,245

~175~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Expressed in thousands of New Taiwan dollars/thousand shares) At period-end Name of Holding Type and Name of Relationship with the Financial Statement Share Carrying Percentage of Company Marketable Securities Securities Issuer Account ( in thousands) Value Ownership (%) Market Value Note ″ Feature Integration Technology Available-for-sale 572 $ 9,510 1.23% $ 9,510 Inc. None financial assets ″ Excellence Optoelectronics Inc. ″ ″ 1,000 11,130 0.78% 11,130 Mega Venture Capital KUANG MING None Available-for-sale 600 8,166 0.29% 8,160 Co., Ltd. SHIPPING CORP. financial assets ″ ACTi Corporation ″ ″ 315 11,186 0.89% 11,186 ″ E & E Recycling. ″ ″ 1,000 18,073 3.22% 18,073 ″ Pili International Multimedia 251 47,459 0.64% 47,459 Co.,Ltd. ″ ″ ″ SUPERTEC MACHINERY 427 6,341 1.64% 6,341 INCORPORATED. ″ ″ ″ TacBright Optronics Corp. ″ ″ 954 16,247 0.21% 16,247 ″ Pili International Multimedia 125 23,635 0.32% 23,635 Co.,Ltd. ″ ″ ″ Gigastone Corporation. ″ ″ 60 1,560 0.13% 1,560 ″ Sun Art Retail Group Limited. ″ ″ 500 16,959 0.01% 16,959 ″ Cowealth Medical Holding Co., Financial assets at fair 35 4,813 0.00% 4,813 Ltd. value through profit or ″ loss ″ ProbeLeader Financial assets 1,163 26,625 4.16% 26,625 ″ measured at costs ″ MOSA Industrial CORP. ″ ″ 750 14,720 0.56% 14,720 ″ Qisda Corporation ″ ″ 1,363 31,133 5.80% 31,133 ″ SUPERTEC MACHINERY 937 11,217 3.12% 11,217 INCORPORATED. ″ ″ ″ Mesotek Corp. ″ ″ 500 15,000 4.59% 15,000 ″ Taiwan United Medicals Inc. ″ ″ 327 3,924 1.47% 3,924 ″ ORGCHEN TECHNOLOGIES, 762 38,700 1.28% 38,700 INC. ″ ″ ″ HIGH POWER OPTO.INC. ″ ″ 1,515 27,005 0.90% 27,005 ″ Immense Advance Technology ″ ″ 800 5,760 5.33% 5,760 ″ Comchip Technology Co., Ltd. All 880 8,800 4.40% 8,800 Rights Reserved. ″ ″

~176~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Expressed in thousands of New Taiwan dollars/thousand shares) At period-end Name of Holding Type and Name of Relationship with the Financial Statement Share Carrying Percentage of Company Marketable Securities Securities Issuer Account ( in thousands) Value Ownership (%) Market Value Note ″ Chi Lin Technology Financial assets 75 $ 2,210 0.04% $ 2,210 None measured at costs ″ Chi Lin Optoelectronics ″ ″ 187 5,528 0.07% 5,528 ″ Kentec Inc. 630 0.68% 20,550 ″ ″ 20,550 Mega Venture Capital Aidesolar Inc. Financial assets 600 22,605 0.45% 22,605 None Co., Ltd. measured at costs ″ Assem Technology Co., Ltd. ″ ″ 200 13,000 0.93% 13,000 ″ HONG-WEI ELECTRICAL 660 11,880 1.65% 11,880 INDUSTRY & CO., LTD. ″ ″ ″ Taiwan Bifido 636 13,500 1.59% 13,500 ″ ″ ″ JPP Holding Company Limited ″ ″ 300 10,800 1.00% 10,800 ″ ADIMMUNE CORPORATION ″ ″ 700 10,500 1.75% 10,500 $ 832,671 $ 832,671 Mega I Venture Capital Stocks Co., Ltd. 〃 FORMOSA TAFFETA CO.,LTD, None Available-for-sale 1,035 $ 72,845 0.23% $ 72,845 financial assets 〃 Darfon Corporation 〃〃 121 10,000 0.04% 10,000 〃 Paragon Technologies Co., Ltd. 〃〃 639 62,435 0.75% 62,435 〃 Ju Teng International Holdings 600 22,407 0.05% 22,407 〃〃 Limited 〃 AVer Information Inc. 〃〃 289 24,108 0.29% 24,108 〃 G-TECH Optoelectronics 294 35,650 0.11% 35,650 〃〃 Corporation 〃 AEON MOTOR CO.,LTD. 〃〃 70 4,270 0.18% 4,270 〃 Feature Integration Technology 572 19,250 1.23% 19,250 〃〃 Inc. 〃 Thecus Technology Corp. 〃〃 719 16,620 4.01% 16,620 KUANG MING SHIPPING 〃〃〃 600 17,767 0.29% 17,767 CORP. 〃 ACTi Corporation 〃〃 210 13,100 0.59% 13,100 ~177~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Expressed in thousands of New Taiwan dollars/thousand shares) At period-end Name of Holding Type and Name of Relationship with the Financial Statement Share Carrying Percentage of Company Marketable Securities Securities Issuer Account ( in thousands) Value Ownership (%) Market Value Note 〃 JUTA CO., LTD. Available-for-sale 200 $ 11,130 0.78% $ 11,130 None financial assets 〃 Gigastone Corporation. 〃〃 49 1,921 0.11% 1,921 〃 The Harmony Biotech Corporation. 235 8,133 0.68% 8,133 〃〃

Mega I Venture Capital TAIWAN VIDEO SYSTEM CO., None Financial assets 316 5,879 1.09% 5,879 Co., Ltd. LTD. measured at costs 〃 eChem Solutions Corp. 〃〃 301 3,554 0.69% 3,554 〃 YUNG FA STEEL & IRON 3,466 27,738 9.80% 27,738 〃〃 INDUSTRY Co., LTD. 〃 Mobile Action Technology, Inc. 〃〃 77 1,226 0.43% 1,226 〃 ProbeLeader 〃〃 698 15,975 2.50% 15,975 〃 FIRST DOME CORP. 〃〃 483 12,668 2.06% 12,668 〃 Mesotek Corp. 〃〃 500 15,000 2.29% 15,000 〃 Taiwan United Medicals Inc. 〃〃 327 3,924 1.47% 3,924 〃 HIGH POWER OPTO.INC. 〃〃 1,515 27,005 0.90% 27,005 〃 Chi Lin Technology 〃〃 74 2,192 0.04% 2,192 〃 Chi Lin Optoelectronics 〃〃 185 5,483 0.07% 5,483 〃 Aidesolar Inc. 〃〃 600 22,605 0.45% 22,605 〃 Applied Wireless Identifications - 303 0.93% 303 〃〃 Group,INC. $ 300,448 $ 300,448 Yung Shing Industrial Stocks Co. 〃 H&H Venture Capital Investment None Financial assets 2,468 $ 15,696 8.57% $ 15,696 Corp. measured at costs 〃 Hua-sheng Venture Capital 1,349 13,495 1.67% 13,495 〃〃 Investment Corp. 〃 TaiOne International Ltd. 〃〃 2,660 6,677 19.00% 6,677 〃 Hi-Scene World Enterprise 3,202 7,124 1.54% 7,124 〃〃 CO.LTD. 〃 SysJust Corporation 〃〃 671 6,878 0.26% 6,878 ~178~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (Expressed in thousands of New Taiwan dollars/thousand shares) At period-end Name of Holding Type and Name of Relationship with the Financial Statement Share Carrying Percentage of Company Marketable Securities Securities Issuer Account ( in thousands) Value Ownership (%) Market Value Note 〃 An Fang Co., Ltd. Financial assets 150 $ 1,833 5.00% $ 1,833 None measured at costs Yung Shing Industrial Win Card Co., Ltd. Equity investees Equity investments 200 44,926 100.00% 44,926 Co. accounted for by the equity method 〃 ICBC Assets Management & 5,000 49,795 100.00% 49,795 〃〃 Consulting Co., Ltd. Total $ 146,424 $ 146,424 ICBC Assets Stocks Management & Consulting Co., Ltd. 〃 H&H Venture Capital Investment None Financial assets 1,645 $ 10,464 5.71% $ 10,464 Corporation measured at costs

Cathay Investment & Funds Development Corporation (Bahamas) 〃 AsiaTech Taiwan Venture Fund LP None Financial assets - $ 7,145 - $ 7,145 measured at costs 〃 Tai An Technologies Corp. 〃〃 - 3,550 - 3,550 Accumulated Impairment 49,795 - Total $ 146,424 $ 10,695

~179~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (4) Information on investments in Mainland China:

A. The Company : None.

B. Subsidiaries : MICB (a) Name of investee companies in Mainland China, main business, paid-in capital, investment methods, funds reinvested and withdrawn, percentage of ownership, investment income or loss recognized, carrying amount of investments and investment income received are disclosed as follows: Unit : in thousands of New Taiwan dollars/RMB dollars Name of Investee Accumulated The Company's Investment The remitted Company in amount of Accumulated amount Direct/ Indirect income for the Book value of investment Mainland Investment investment as of Outward of investments Percentage of period investment as of income as of June China Main Business Paid-in Capital method January 1, 2013 remittance Withdrawal as of June 30, 2014 Ownership (%) (Note 2) June 30, 2014 30, 2014 Mega Banking RMB 1,000,000 Branch RMB 1,000,000 $ - $ - RMB 1,000,000 Not applicable $ 186,167 $ - $ - International Commercial businesses Bank approved by the Suzhou local government Branch

(b) Limits on investments in Mainland China: Investment amount approved by the Limits on investment amounts established by the Accumulated investment amounts in investment audit commission of the investment commission of the Ministry of Mainland China as of June 30, 2014 Ministry of Economic Affairs Economic Affairs (Note 1) RMB$1,000,000 RMB 1,000,000 $ 123,535,687 Note 1: Limit calculation is the subsidiaries net worth $205,892,811 x 60% = $123,535,687 Note 2: Relevant operating income and expense of the subsidiary, Mega International Commercial Bank Suzhou Branch, have been included in the gains and losses of the subsidiary.

~180~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (5) Significant transactions between parent company and subsidiaries MEGA FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES Business Relationship and Significant Transactions among the Company and its Subsidiaries For the six-month period ended June 30, 2014 (Expressed in Thousands of New Taiwan Dollars / Thousand Shares) Description of Transactions Percentage of No. Transaction Nature of Financial Statement Transaction Consolidated Revenue / (Note 1) company Counterparty relationships (Note 2) Account Amounts Item Assets (Note 3) 0 The Company MBF 1 Commercial paper $ 299,840 （Note 4） 0.01% payables -net 1 MBF TheCompany 2 Commercial paper 299,840 〃 0.01% 2 MS MICB 3 Bills and bonds payable 3,512,136 0.12% under repurchase agreements 〃 3 MICB MS 3 Bills and bonds purchased 3,512,136 0.12% under resale agreements 〃 1 MBF MICB 3 Due from the Central 3,374,642 0.11% Bank and call loans to banks 〃 3 MICB MBF 3 Fundsborrowedfromthe 3,374,642 0.11% central bank and other banks 〃 2 MS MICB 3 Cash and cash equivalents 462,623 〃 0.02% 3 MICB MS 3 Deposits and remittances 462,623 〃 0.02% 1 MBF MS 3 Commercial paper 149,179 0.00% payables -net 〃 2 MS MBF 3 Cash and cash equivalents 149,179 〃 0.00% 1 MBF MICB 3 Cashandcashequivalents 397,053 〃 0.01% 3 MICB MBF 3 Deposits and remittances 397,053 〃 0.01% 4 CKI MICB 3 Cash and cash equivalents 556,937 〃 0.02% 3 MICB CKI 3 Deposits and remittances 556,937 〃 0.02% 5 MITC MICB 3 Cashandcashequivalents 158,383 〃 0.01% 3 MICB MITC 3 Deposits and remittances 158,383 〃 0.01%

~181~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Description of Transactions Percentage of No. Transaction Nature of Financial Statement Transaction Consolidated Revenue / (Note 1) company Counterparty relationships (Note 2) Account Amounts Item Assets (Note 3) 6 Mega Life MICB 3 Cash and cash equivalents 221,789 0.01% Insurance Agency Co., Ltd 〃 3 MICB Mega Life 3 Deposits and remittances $ 221,789 0.01% Insurance Agency Co., Ltd 〃 3 MICB MS 3 Cash and cash equivalents 180,896 〃 0.01% 2 MS MICB 3 Other financial assets,net 180,896 〃 0.01% 6 Mega Life MICB 3 Other commissions 307,659 〃 0.99% Insurance expense Agency Co., Ltd 3 MICB Mega Life 3 Other commissions 307,659 〃 0.99% Insurance income Agency Co., Ltd

Note 1: Transactions between parent company and subsidiaries should be distinguished as follows: 1. Parent company: 0 2. Subsidiaries are numbered in sequence starting from 1. Note 2: Types of transactions with related parties were classified as follows: 1. Parent company to subsidiaries. 2. Subsidiaries to parent company. 3. Subsidiaries to subsidiaries. Note 3: In the computation of percentage of consolidated revenue/assets, if the amount is the ending balance of assets or liabilities, the accounts percentage will be calculated by dividing the consolidated assets or liabilities: if the amount is the amount of income or expense, the accounts percentage will be calculated by dividing the consolidated revenues in the same period.

~182~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 Note 4: For the transactions between the Company and related parties, the terms are similar to those transacted with unrelated parties. (6) MS and MF engaged in futures business and shall meet the requirements of relevant futures transactions regulations. Financial ratio and enforcement of MS and MF are as follows: The table below is prepared according to: “Regulations Governing Futures Commission Merchants” A. MS (Unit: in thousands of NTD)

For the six-month period ended For the six-month period ended Article Calculation formula June 30, 2014 June 30, 2013 Standard Enforcement Calculation Ratio Calculation Ratio Stockholders’ equity 486,533 908,191 Meets the 17 11.13 16.64 ≧1 (Total liability－futures trader’s equity 43,731 54,591 requirements Current assets 519,292 931,534 Meets the 17 2318.27 1617.25 ≧1 Current liabilities 224 576 requirements Stockholders’ equity 486,533 908,191 ≧60% Meets the 22 121.63% 227.05% Minimum paid-in capital 400,000 400,000 ≧40% requirements Adjusted net capital 482,511 903,060 ≧20% Meets the 22 Total amount of customer margins required 2,059 23434.24% 1,622 55675.71% requirements ≧15% for the open positions of futures traders

~183~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 B.MF (Unit: in thousands of NTD)

For the six-month period ended For the six-month period ended Article Calculation formula June 30, 2014 June 30, 2013 Standard Enforcement Calculation Ratio Calculation Ratio Stockholders’ equity 505,036 493,743 Meets the 17 20.36 19.81 ≧1 (Total liability－futures trader’s equity 24,801 24,918 requirements Current assets 1,955,466 2,323,223 Meets the 17 1.19 1.15 ≧1 Current liabilities 1,637,751 2,013,188 requirements Stockholders’ equity 505,036 493,743 ≧60% Meets the 22 126.26% 123.44% Minimum paid-in capital 400,000 400,000 ≧40% requirements Adjusted net capital 463,109 457,709 ≧20% Meets the 22 Total amount of customer margins required 302,769 152.96% 414,908 110.32% requirements ≧15% for the open positions of futures traders

The Prospective Risk For Futures Trading Brokerage department of MF, which is under the consignment of futures’ traders, conducts brokerage services pursuant to the laws and regulations. Uncovered positions are daily adjusted by mark-to-market price of Taiwan Futures Exchange. If margin call is lower than certain level, additional margin calls are requested to maintain limits of guarantee deposits. The Company controls credit risk by constantly monitoring the balance of performance bonds based on market price of positions held by each client, regulations of Taiwan Stock Exchange and the Company to minimize the risk. Futures’ trading and futures option trading are with high financial leverage risk. When MS and MF purchase options, the maximum loss arising from fluctuation on futures index is limited to the paid premium; hence, market price risk is insignificant. When MS and MF sell options, market price risk is the fluctuation of TAIEX Index Option contracts. Futures department of MS and MF have established relevant risk control mechanism and set up stop-loss limits, in order to monitor changes on positions held and their prices. When there is significant fluctuation on futures price, MS and MF will conversely purchase options or TAIEX Index Futures to manage the market price risk, and loss incurred would be controlled.

~184~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 18. DISCLOSURE OF FINANCIAL INFORMATION BY SEGMENTS

(1) General Information

The Group’s operation segment reports are consistent with the internal reports provided to the chief operating decision-maker (“CODM”). The CODM allocates resources to operating segments and evaluates their performance. The Group’s CODM refers to the Board of Directors.

Inter-segmental transactions are arm’s-length transactions, and gain and loss arising from such transactions are eliminated by the parent company upon the presentation of consolidated financial statements. Profit and loss directly attributable to various segments have been considered when segment performance is being evaluated.

The operating segments of the Group comprise banking, securities, bills finance, insurance and other businesses. The operating results are reviewed by the CODM regularly and are referenced when allocating resources and evaluating operating performance.

The Group is based in the global market, comprising four major business segments; there were no changes in the reporting segments for the period.

The operating results have different income items due to different nature of the operating segments, and the CODM evaluates segment performance based on the net profit before tax of various segments. Therefore, performance of all reporting segments is presented by the net amount of operating net profit less various operating expenses. Income from external clients provided for the CODM to review is measured on the same basis with the statement of comprehensive income.

Adjustments of internal pricing and transfer pricing are reflected in segment performance evaluation. Income from external clients has been allocated based on the regulated allocation standard between segments.

The internal management’s operating reports are prepared based on net operating profit, including net interest income, net service fee income, recovered bad debts (provision), loan loss impairment, net gain (loss) on financial instruments and other operating gain (loss). Measurement basis does not include non-recurring items, e.g. litigation expenses.

~185~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 (2) Information about segment profit or loss, assets and liabilities

For the three-month period ended June 30, 2014 (UNIT: In thousands of NT Dollars) Bank Insurance Bills Securities Other Adjustment Items Department Department Department Department Departments and write-off Total Interestincome,net $ 8,879,435 $ 26,345 $ 779,406 $ 192,000 ($ 662,899) $ - $ 9,214,287 Revenues other than interest income, net 4,332,863 247,120 110,523 816,552 9,883,609 ( 8,711,708) 6,678,959 Net revenue 13,212,298 273,465 889,929 1,008,552 9,220,710 ( 8,711,708) 15,893,246 Bad debts expense and provisions for guarantee reserve ( 637,580 ) - 116,462 - - - ( 521,118 ) Provisions for insurance reserve - 68,660 - - - - 68,660 Operating expenses ( 4,190,724 ) ( 201,515 ) ( 188,616 ) ( 679,582 ) ( 340,239 ) 81,708 ( 5,518,968) Income before income tax from continuingoperations 8,383,994 140,610 817,775 328,970 8,880,471 ( 8,630,000) 9,921,820 Incometaxexpense ( 1,188,602) ( 64,107 ) ( 79,972 ) ( 42,090 ) ( 463,481 ) - ( 1,838,252) Net Income $ 7,195,392 $ 76,503 $ 737,803 $ 286,880 $ 8,416,990 ($ 8,630,000) $ 8,083,568

For the three-month period ended June 30, 2013 (UNIT: In thousands of NT Dollars) Bank Insurance Bills Securities Other Adjustment Items Department Department Department Department Departments and write-off Total Interestincome,net $ 7,300,618 $ 24,051 $ 249,057 $ 151,818 ($ 36,584) $ - $ 7,688,960 Revenues other than interest income, net 3,403,782 280,652 546,233 443,698 7,181,975 ( 6,387,193) 5,469,145 Net revenue 10,704,400 304,703 795,290 595,516 7,145,391 ( 6,387,193) 13,158,105 Bad debts expense and provisions for guarantee reserve ( 662,796 ) 9,613 34,671 - - - ( 618,512 ) Provisions for insurance reserve - 62,979 - - - - 62,979 Operating expenses ( 3,967,544 ) ( 228,712 ) ( 204,718 ) ( 541,159 ) ( 180,967 ) 85,982 ( 5,037,118) Income before income tax from continuingoperations 6,074,060 148,583 625,243 54,357 6,964,424 ( 6,301,212) 7,565,454 Incometaxexpense ( 928,358) ( 68,954 ) ( 82,603 ) ( 13,766 ) ( 745,122 ) - ( 1,838,803) Net Income $ 5,145,702 $ 79,629 $ 542,640 $ 40,591 $ 6,219,302 ($ 6,301,212) $ 5,726,651

~186~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 For the six-month period ended June 30, 2014 (UNIT: In thousands of NT Dollars) Bank Insurance Bills Securities Other Adjustment Items Department Department Department Department Departments and write-off Total Interestincome,net $ 17,253,959 $ 51,354 $ 918,428 $ 397,632 ($ 700,101) $ - $ 17,921,272 Revenues other than interest income, net 8,626,020 642,887 931,385 1,461,822 18,435,724 ( 16,987,150) 13,110,688 Net revenue 25,879,979 694,241 1,849,813 1,859,454 17,735,623 ( 16,987,150) 31,031,960 Bad debts expense and provisions for guarantee reserve ( 1,144,040 ) - 481,736 - - - ( 662,304 ) Provisions for insurance reserve - 64,846 - - - - 64,846 Operating expenses ( 8,586,390 ) ( 457,010 ) ( 380,154 ) ( 1,286,201) ( 544,947 ) 162,957 ( 11,091,745) Income before income tax from continuingoperations 16,149,549 302,077 1,951,395 573,253 17,190,676 ( 16,824,193) 19,342,757 Incometaxexpense ( 2,291,063) ( 93,660 ) ( 253,066 ) ( 71,142 ) ( 507,797 ) - ( 3,216,728) Net Income $ 13,858,486 $ 208,417 $ 1,698,329 $ 502,111 $ 16,682,879 ($ 16,824,193) $ 16,126,029

For the six-month period ended June 30, 2013 (UNIT: In thousands of NT Dollars) Bank Insurance Bills Securities Other Adjustment Items Department Department Department Department Departments and write-off Total Interestincome,net $ 14,480,164 $ 44,729 $ 541,193 $ 321,889 ($ 110,210) $ - $ 15,277,765 Revenues other than interest income, net 7,171,475 521,106 1,449,305 966,309 13,916,618 ( 12,868,768) 11,156,045 Net revenue 21,651,639 565,835 1,990,498 1,288,198 13,806,408 ( 12,868,768) 26,433,810 Bad debts expense and provisions for guarantee reserve ( 1,611,796 ) - 132,108 - - - ( 1,479,688) Provisions for insurance reserve - 160,922 - - - - 160,922 Operating expenses ( 8,227,951 ) ( 465,912 ) ( 366,517 ) ( 1,075,212) ( 390,493 ) 178,651 ( 10,347,434) Income before income tax from continuingoperations 11,811,892 260,845 1,756,089 212,986 13,415,915 ( 12,690,117) 14,767,610 Incometaxexpense ( 1,743,547) ( 89,680 ) ( 208,131 ) ( 27,957 ) ( 784,057 ) - ( 2,853,372) Net Income $ 10,068,345 $ 171,165 $ 1,547,958 $ 185,029 $ 12,631,858 ($ 12,690,117) $ 11,914,238

~187~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9 June 30, 2014 Bank Insurance Bills Securities Other Adjustment Department Department Department Department Departments and write-off Total Segments assets $ 2,740,099,667 $ 15,868,111 $ 212,267,882 $ 54,116,398 $ 292,420,907 ($ 280,932,932) $ 3,033,862,756 Segments liabilities $ 2,534,206,856 $ 10,538,487 $ 180,425,405 $ 39,624,645 $ 41,557,446 ($ 18,739,605) $ 2,787,637,946

June 30, 2013 Bank Insurance Bills Securities Other Adjustment Department Department Department Department Departments and write-off Total Segments assets $ 2,496,817,743 $ 15,656,380 $ 218,410,689 $ 45,544,897 $ 259,062,956 ($ 249,181,742) $ 2,786,310,923 Segments liabilities $ 2,320,108,511 $ 10,686,714 $ 186,928,410 $ 31,769,787 $ 45,272,401 ($ 17,618,632) $ 2,577,147,191

~188~ WorldReginfo - d11a9b84-08a5-4807-81dd-1c59f31640f9