Corporate Governance

Ownership structure and the rights and interests of shareholders

(Including specific and explicit dividend policy)
Dividend Policy and Implementation Status
A. Dividend Policy:

If SCSB has profit for the year, an amount of not less than 0.1% of the profit for the year shall be distributed as compensation to the employees and an amount not more than 0.6% of the profit for the year shall be distributed as compensation to the directors. However, if SCSB still has accumulated deficits, such deficits shall be offset first.

The profit for the year as referred to in the preceding paragraph shall refer to the profit before income tax for the year before deducting the compensation distributed to employees and the compensation distributed to directors.

Compensation to employees may be distributed by stock or cash; its distribution method and the distribution ratio of compensation to directors shall be resolved by more than one half of consents of the attending directors at a meeting of board of directors attended by more than two-thirds of directors, and shall be reported to the shareholders’ meeting.

The recipients of the above said distribution of employees’ compensation may include the employees of affiliated companies that meet certain conditions.

According to Article 37 of the SCSB Articles of Incorporation: With the net profit made by SCSB in every fiscal year after payment of all taxes and coverage of the loss in previous year(s), if any, the sum shall be duly appropriated according to law as legal reserve unless the accumulation of legal reserve is up to the aggregate total of SCSB’s capital. Then the special reserve shall be set aside or reversed according to law or as the actual requirements in business may justify. For the final surplus, if any, along with the unappropriated retained surplus earnings accumulated in previous year(s), the board of directors shall propose the percentage of allocation to be acknowledged by the regular shareholders’ meeting.

The dividend policy of SCSB shall take into consideration of the environment of banking industry and the growth stage, the purpose of continual expansion of operation scale and the increase in profitability, the interests of shareholders, the balance of dividends, the fund requirements of SCSB, and the long-term financial planning. In distributing dividends, as a principle, the amount of cash dividends distributed for each year may not be less than ten percent of total amount of dividends distributed for the year, in order to seek sustainability and steady development.

B. The Dividend Distribution Proposed by Shareholders’ Meeting
2018 shareholders’ meeting proposed a cash dividend of NT$2 per share.
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