stakeholders and materiality analysis

18 STAKEHOLDERS AND MATERIALITY ANALYSIS

STAKEHOLDERS AND MATERIALITY ANALYSIS3.1 Engaging with Interested Parties

The company maintains a strong relationship with interested parties by

engaging them through various channels of communications. This not only

contributes to overcoming corporate issues but also brings the company closer

to achieving its goals. Such engagement can also serve as the foundation

for developing an approach to corporate social responsibility and improving

company performance across a range of areas.

To effectively identifying key stakeholders, Chailease Holding made

reference to the experiences of benchmark companies and industries and

discussions among corporate social responsibility group members from

various departments in following the principles of the AA1000 Stakeholder

Engagement Standard to assess the degree of reliance, influence, attention,

responsibility and diversified viewpoints on the part of stakeholders. After

screening of the overall assessment, the main stakeholders were determined to

be investors, customers, employees, government agencies, members of society

and supplier.

3.2 Stakeholder Communication Channels

Stakeholder Topic Method and Frequency 2019 Performance

Investors

● Corporate

governance ● Operating

performance ● Green products● Information

disclosure ● Privacy policy

● Corporate and investor briefings (quarterly)● Participate in overseas roadshow or Conference(unscheduled)● General Meetings of Shareholders (annually)● English website information disclosures● Established network of communication channels including

Investor Communication Channels, a spokesperson, an

Investor relation Department Telephone and E-mail (Instant)● Company information disclosure at indicated website (instant)● A special area of corporate website.● Whistleblower Protection Procedures● Actively respond to International ESG survey (annually)● Company Website, results presentation, annual report,

financial information, CSR report and stock related services,

etc. (unscheduled)

2019 held 8 corporate briefings and 10

communication meetings at home and abroad

Investors

Stakeholder

ClientsSupplier

Community

members

Government

agencies

Employees

192019 Corporate Social Responsibility Report

Stakeholder Topic Method and Frequency 2019 Performance

Clients● Customer service

management● Risk

management

● A special area for clients on the company website and a search

platform (instant)● SME forum (annually)● Free customer service hotline (real time)● Customer satisfaction survey (annually)

● Customer satisfaction survey averaged 93.4%● Held 8 SME forums

Employees

● Compensation

and benefits● Training and

development● Labor rights ● Environmental

safety

● Employee Welfare Committee meetings (annually)● Education and training(depend on department and position)● Communication meetings and employee feedback webpage

(unscheduled)● Monthly internal newsletter (monthly)● A written complaint mechanism (instant)

● Each employee received an average of 43.5

training hours.

Government agencies

● Information

disclosure● Environmental

policy and

management

system

● Attend regulatory briefings (unscheduled)● Coordinate with the competent supervisory authorities

(unscheduled)● Market Observation Post System (MOPS) company information

disclosure (instant)

● TWSE Corporate Governance Evaluation (top

5%)● TWSE CG 100 Index● FTSE TWSE Taiwan 50 Index

Community members

● Concern for the

disadvantaged

● Charitable donations and community service club grant

(annually)● Youth Camp (annually)● Career talks and workshops (annually)● Internships and company visits (annually)

● 2019 hold 80 activities, and served 6,384

people.● Held 30 volunteer activities attended by 583

volunteers who provided 2,751.5 hours of

service

Supplier● Supplier

Management

● Visits by specialists, meetings, and emails (not on a fixed

schedule)

● 100% of suppliers signed the Supplier CSR

Guidelines

Spokesman Acting Spokesman

Kevin Liao / Chief Strategy Officer

TEL：886-2-8752-6388 #72096

Eric Chen / Finance Accounting officer

TEL：886-2-8752-6388 #72096

Investor Relations CSR

Email：[email protected] Email：[email protected]

Employee Relations Audit

Janny Cheng / Chief HR Officer

TEL：886-2-8752-6388 #76280

Email：[email protected]

Charles Yang / Internal Audit Officer

TEL：886-2-8752-6388 #76281

Email：[email protected]

Customer Service Line Legal Consultancy Service

TEL：886-0800-720-168 TEL：886-2-8752-6388 #76282

2019 Q2 Chailease Holding Investor Conference.


3.3 Identifying Major Issues

The company maintains a strong relationship with interested parties by engaging them through various channels of communications. This not

only contributes to overcoming corporate issues but also brings the company closer to achieving its goals. Such engagement can also serve as the

foundation for developing an approach to corporate social responsibility and improving company performance across a range of areas.

A. Benchmarking：

The company also organized forums to which it invited specialists from industry, the government, and academia to speak on a wide variety of

topics to facilitate us in the collection of information on corporate social responsibility, primarily on topics stressing environmental protection issues,

specifically the development of green products and services, and held Chailease SME Energy-saving Forums.

B. Surveys：

Information on issues that stakeholders were concerned about and the degree to which they were concerned were gathered using questionnaires

in the form of hardcopies, emails, and on the company's official website. Questionnaires were sent out with investor briefings and year-end

customer satisfaction survey information. Offices within the company sent out questionnaires to stakeholders as well as to employees. A total of

1,293 questionnaires were filled out and returned. Questionnaire findings focused primarily on economic issues, such as corporate governance and

operating performance and social issues, including compensation and benefits.

C. Report analysis：

The company analyzed media reports about issues related to Chailease Holding over the course of the entire year to stay abreast of information

related to these issues and to determine how the public felt about the issues to facilitate comprehensive collection of the direction of key issues.

Reports tended to focus on the company's outlook and layout.

D. Team suggestions：

In addition to leveraging the channels mentioned above, the committee teams gave back to society and carried out exchanges on issues that

key stakeholders found important to obtaining consensus. They went through relevant information and issues and took into consideration the

company's development strategies and key directions.

Stakeholder Interest

Questionnaires

8 divisions

Modified by the CSR Committee

according to views of

management team

Determination of Material Issues

3 aspects

Sustainability Issue

Collection-16 issues

Identification

Prioritization

Review

Validation


Impact on Chailease Business

Level Primary level High level Medium level

issue

● Ethical Corporate Management

● Risk Management

● Training and Development

● Personal Information Protection

● Customer Service Management

● Operating Performance

● Information Disclosure

● Corporate Governance

● Regulatory Compliance

● Environmental Policy and

Management System

● Green Products

● Supplier Management

● Human and Labor Right

● Compensation and Benefits

● ESH

● Charity

Impact on Chailease Business

High

High

Stakeholder Interest

Low

Ethical Corporate Management

Risk Management

Training and Development

Regulatory Compliance

Corporate Governance

Personal Information Protection

Customer Service Management

Information DisclosureEnvironmental Policy and

Management System

Supplier Management

Green Products

Human and Labor

Right

Operating Performance

ESH

Compensation and Benefits

Charity


Material Issues In Chailease Value Chain

Issues Material Issues SDGs GRI Standards Topics GRI Standards No. Chapter Impacts

Value Chain

Direct impact Indirect impactImpact on business relations

Corporate governance General disclosures 102-18~102-22 4.0 Corporate GovernanceViolation of corporate governance laws will result in disciplinary action by competent authorities and damage to the Company's image

H S A CM I C

Operating performance

Economic performance 201-1、201-4 1.2 Business PerformanceThere are numerous banks in the domestic market, and the market is approaching saturation. The level of competition in the overall financial environment remains high.

H S I A

Information disclosure Marketing and labeling 417-1 4.2 Information DisclosureViolation of financial consumer protection laws will result in disciplinary actions from competent authorities and negatively impact the Company's image.

H S I

Regulatory Compliance Anti-corruption 205-1~205-3 4.3 Regulatory ComplianceIf the company fails to comply with operating procedures for the prevention of money laundering, financial fraud, and countering terrorism financing, it will suffer major penalties, which will damage the company's image and business development.

H S I C A

Risk control General disclosures 102-11 4.4 Risk ManagementChanges in the laws of competent authorities, extreme weather that lead to risks of interruptions of operations or reputation or financial losses.

H S I A


General disclosures 102-16、102-174.5 Ethical Corporate Management

Unethical conduct might cause company loss or disciplinary actions by the competent authority, which damages the company's image.

H S I C


Customer privacy 418-15.5 Personal Information Security

The development of new technologies makes it more difficult to protect personal information, which affects customers' rights such as infringing on their privacy or losing their information.

H S C A

Customer service management

General disclosures 102-43~102-44 5.4 Service OptimizationProvide financial services that help customers in their daily lives and intensify connections with customers to maintain competitive advantages.

H S I C

Environmental policy and management system

EnergyWaterEmissionsEffluents and waste

302-1303-3305-1、305-2、305-5306-1~306-2

6.2 Sustainable Operating Environment

Employees without proper education on the environment will impede the development of a sustainable environment and hinder the promotion of sustainability policies

H S A CM

Green products Emissions 302-5 5.2 Sustainable FinanceWe predict that electricity prices will rise in the future as the power structure changes in Taiwan, resulting in an increase in the operating costs of the company.

H S CM I C

Supplier ManagementGeneral disclosuresProportion of spending on local suppliers

102-9204-1308-1414-1

6.3 Supplier ManagementAdjust the amount of materials purchased from suppliers or terminate contractual relations, if a sanction imposed on a supplier negatively influences the Company's image or business reputation.

H S SP

Labor rights

EmploymentLabor management relationsHuman rights assessment

401-1~401-3402-1412-2

7.4 Human Rights Protection

Failure to protect labor rights and promote gender equality will affect talent recruitment and retention and it may even impact the Company's business reputation and brand image and cause the Company to lose business.

H S E A CM

Compensation and benefits

Economic performance 201-1 7.2 Rights and BenefitsThe rise of the FinTech and virtual banks has exacerbated the movement of talent in FinTech and increased hiring costs. Demand for talent changes drastically, and how companies build an environment to attract and retain talent will affect the sustainability of the Company.

H S E

ESHOccupational Health and Safety

403 7.3 Healthy WorkplaceIf the Company does not develop an occupational safety and health system by using a top-down approach, the probability of accidents or health hazards among employees will increase, causing an increase in the Company's personnel costs.

H S E A

Training and development

Training and education 404-1、404-3 7.5 Career DevelopmentDigital financial technologies are developing vigorously. If the Company does not cultivate FinTech experts and transform its business models in time, its business development and profits will be affected.

H S E

Charity Indirect Economic Impacts 203-1 8.0 Social InclusionMost charitable activities require long-term continuous investment to reap benefits. We must learn to implement the most effective deployment of resources and integrate them with the core competencies of the finance industry to resolve social or economic issues. We must also conduct careful assessments

H S E CM

H : Holding Company ; S : Subsidiary; E : Employees ; I : Investors ; C : Clients ; A : Authority ;

CM : Community members ; SP : Supplier

Go

vernan

ceEn

viron

men

talSo

cial


Material Issues In Chailease Value Chain

Issues Material Issues SDGs GRI Standards Topics GRI Standards No. Chapter Impacts

Value Chain

Direct impact Indirect impactImpact on business relations

Corporate governance General disclosures 102-18~102-22 4.0 Corporate GovernanceViolation of corporate governance laws will result in disciplinary action by competent authorities and damage to the Company's image

H S A CM I C


Economic performance 201-1、201-4 1.2 Business PerformanceThere are numerous banks in the domestic market, and the market is approaching saturation. The level of competition in the overall financial environment remains high.

H S I A

Information disclosure Marketing and labeling 417-1 4.2 Information DisclosureViolation of financial consumer protection laws will result in disciplinary actions from competent authorities and negatively impact the Company's image.

H S I

Regulatory Compliance Anti-corruption 205-1~205-3 4.3 Regulatory ComplianceIf the company fails to comply with operating procedures for the prevention of money laundering, financial fraud, and countering terrorism financing, it will suffer major penalties, which will damage the company's image and business development.

H S I C A

Risk control General disclosures 102-11 4.4 Risk ManagementChanges in the laws of competent authorities, extreme weather that lead to risks of interruptions of operations or reputation or financial losses.

H S I A


General disclosures 102-16、102-174.5 Ethical Corporate Management

Unethical conduct might cause company loss or disciplinary actions by the competent authority, which damages the company's image.

H S I C


Customer privacy 418-15.5 Personal Information Security

The development of new technologies makes it more difficult to protect personal information, which affects customers' rights such as infringing on their privacy or losing their information.

H S C A


General disclosures 102-43~102-44 5.4 Service OptimizationProvide financial services that help customers in their daily lives and intensify connections with customers to maintain competitive advantages.

H S I C

Environmental policy and management system

EnergyWaterEmissionsEffluents and waste

302-1303-3305-1、305-2、305-5306-1~306-2

6.2 Sustainable Operating Environment

Employees without proper education on the environment will impede the development of a sustainable environment and hinder the promotion of sustainability policies

H S A CM

Green products Emissions 302-5 5.2 Sustainable FinanceWe predict that electricity prices will rise in the future as the power structure changes in Taiwan, resulting in an increase in the operating costs of the company.

H S CM I C

Supplier ManagementGeneral disclosuresProportion of spending on local suppliers

102-9204-1308-1414-1

6.3 Supplier ManagementAdjust the amount of materials purchased from suppliers or terminate contractual relations, if a sanction imposed on a supplier negatively influences the Company's image or business reputation.

H S SP

Labor rights

EmploymentLabor management relationsHuman rights assessment

401-1~401-3402-1412-2

7.4 Human Rights Protection

Failure to protect labor rights and promote gender equality will affect talent recruitment and retention and it may even impact the Company's business reputation and brand image and cause the Company to lose business.

H S E A CM

Compensation and benefits

Economic performance 201-1 7.2 Rights and BenefitsThe rise of the FinTech and virtual banks has exacerbated the movement of talent in FinTech and increased hiring costs. Demand for talent changes drastically, and how companies build an environment to attract and retain talent will affect the sustainability of the Company.

H S E

ESHOccupational Health and Safety

403 7.3 Healthy WorkplaceIf the Company does not develop an occupational safety and health system by using a top-down approach, the probability of accidents or health hazards among employees will increase, causing an increase in the Company's personnel costs.

H S E A


Training and education 404-1、404-3 7.5 Career DevelopmentDigital financial technologies are developing vigorously. If the Company does not cultivate FinTech experts and transform its business models in time, its business development and profits will be affected.

H S E

Charity Indirect Economic Impacts 203-1 8.0 Social InclusionMost charitable activities require long-term continuous investment to reap benefits. We must learn to implement the most effective deployment of resources and integrate them with the core competencies of the finance industry to resolve social or economic issues. We must also conduct careful assessments

H S E CM

H : Holding Company ; S : Subsidiary; E : Employees ; I : Investors ; C : Clients ; A : Authority ;

CM : Community members ; SP : Supplier


Results and Short/Medium/Long-Term Goals of Sustainability Practices in 2019

Material IssueDescription

of Materiality

20192020 Objectives Medium/Long-Term Goals

Objectives Performance level

Corporate governance

Corporate governance is the basis of sustainable corporate development and the core of corporate culture. It improves companies' long-term value and competitiveness

Corporate governance evaluation (top 5%) and increase scored items

● Corporate governance evaluation (top 5%)● Revised the Regulations Governing Evaluation

of the Performance of the Board of Directors and Director Performance Self-assessment Questionnaire in 2019 in accordance with external laws and regulations, and the requirements of TWSE Corporate Governance Evaluation. The amendments and the results have been reported to the Board of Directors and 2019 Shareholders Meeting.

Enter the top 20% of TWSE corporate governance evaluation and strive for the top 5%

To set out a specific goals and objectives for the Board Diversity Policy.


Companies should pursue excellent business performance and profitability to maintain their operations and development, drive economic growth, and create employment opportunities

Annual consolidation/regional revenue growth, consolidation/profit growth by region, and after-tax earnings per share (EPS) per share have all grown compared to 2018

In 2019, annual growth in consolidated revenue was 17%, and annual net earnings per share (EPS) was NT$11.65. This represented 16% growth over the entire year of 2018. The three main operating markets, Taiwan, mainland China and ASEAN, saw revenue growth of 17%, 13% and 43% respectively over the previous year, as profits grew by 16%, 8% and 18%.

● Operating performance (revenue, profit, and EPS) all grew compared to 2019.

● The company maintains good return on assets (ROA) and return on equity (ROE),

● Excellent operating performance and profitable growth in its major markets (Taiwan, China and ASEAN).

● Hold ROE above 20%.

Information disclosure

Information transparency is the basis of sustainable corporate development and the core of corporate culture.

Clearly establish and inform rights and obligations to ensure the information transparency and safety of products and services.

When publishing or broadcasting advertisements and carrying out solicitation or promotional activities, there shall be no falsehood, deception, concealment, or other conducts sufficient to mislead another party, and the truthfulness of the content of advertisements shall verified.

Make sure to the commitment on customer service, information security measures, depositors' rights and interests and standard fee schedules for all types of businesses.

We will enter into contracts with customers regarding the provision of products or services based on impartiality and reason, equality and reciprocity, and good faith. We will fully explain important contents of products, services, and agreements and disclose related risks.


The implementation of regulations to prevent money laundering, financial fraud, and terrorism financing will lower operational risk, benefit international business expansion, and increase the scale of operations.

Approved and Promulgated "Chailease Holding Company Limited Anti-Money Laundering and Combating the Financing of Terrorism Policy"

● The overseas subsidiaries of the Company, Chailease International Financial Services Company (BVI) and Chailease International Financial Services (Singapore) Pte. Ltd., have established their own policies in accordance with "Chailease Holding Company Limited Anti-Money Laundering and Combating the Financing of Terrorism Policy" and FATF 40 Recommendations.

● The subsidiaries of the Company, Chailease Finance Co., Ltd. and Fina Finance & Trading Co., Ltd. have established AML/CFT Working Plan in accordance with external laws and regulations and internal operating procedures, and has established their own AML/CFT databases to conduct customer due diligence and transaction monitoring procedures. In addition to regularly checking the implementation of the Working Plan, by the end of 2019, more than 2,000 people have attend training sessions on AML/CFT.

The Company plans to cooperate with Nice Actimize to build an anti-money laundering system that complies with the legal requirements, and to use the system to assist in the establishment of a connected diagram of the clients. Through the notification of the transaction monitoring system and the daily name screening procedures, the content of the hit list will be reported in time, which will improve operational efficiency significantly.

Continue to plan and carry out the latest AML/CFT based on the needs of training targets, with a view to implementing the top-down legal compliance system and strengthening corporate governance.

Risk Management

In response to rapid changes in domestic and international economic conditions, we have strengthened risk management and complied with internal controls to effectively reduce risk costs and enhance profitability.

● Enhance risk management efficiency and effectiveness with systematic tools

● Establish quantity model to improve audit efficiency

● A video-visiting mechanism has been established, first for the case of micro and small enterprises in Chailease Finance Co., Ltd. (Taiwan).

● An AI voice credit system has been implemented in Chailease Consumer Finance Co., Ltd. (Taiwan).

● Risk models have been developed for various products of the group. More than 10 models were built during the year.

Establish a risk management map of the groupApplication of fintech to accelerate the reviewing process and credit capabilities, is expected to be applied to Taiwan and China subsidiaries in 2022, and promoted to ASEAN subsidiaries in 2024.


Results and Short/Medium/Long-Term Goals of Sustainability Practices in 2019


of Materiality



Corporate governance

Corporate governance is the basis of sustainable corporate development and the core of corporate culture. It improves companies' long-term value and competitiveness

Corporate governance evaluation (top 5%) and increase scored items

● Corporate governance evaluation (top 5%)● Revised the Regulations Governing Evaluation

of the Performance of the Board of Directors and Director Performance Self-assessment Questionnaire in 2019 in accordance with external laws and regulations, and the requirements of TWSE Corporate Governance Evaluation. The amendments and the results have been reported to the Board of Directors and 2019 Shareholders Meeting.

Enter the top 20% of TWSE corporate governance evaluation and strive for the top 5%

To set out a specific goals and objectives for the Board Diversity Policy.


Companies should pursue excellent business performance and profitability to maintain their operations and development, drive economic growth, and create employment opportunities

Annual consolidation/regional revenue growth, consolidation/profit growth by region, and after-tax earnings per share (EPS) per share have all grown compared to 2018

In 2019, annual growth in consolidated revenue was 17%, and annual net earnings per share (EPS) was NT$11.65. This represented 16% growth over the entire year of 2018. The three main operating markets, Taiwan, mainland China and ASEAN, saw revenue growth of 17%, 13% and 43% respectively over the previous year, as profits grew by 16%, 8% and 18%.

● Operating performance (revenue, profit, and EPS) all grew compared to 2019.

● The company maintains good return on assets (ROA) and return on equity (ROE),

● Excellent operating performance and profitable growth in its major markets (Taiwan, China and ASEAN).

● Hold ROE above 20%.

Information disclosure

Information transparency is the basis of sustainable corporate development and the core of corporate culture.

Clearly establish and inform rights and obligations to ensure the information transparency and safety of products and services.

When publishing or broadcasting advertisements and carrying out solicitation or promotional activities, there shall be no falsehood, deception, concealment, or other conducts sufficient to mislead another party, and the truthfulness of the content of advertisements shall verified.

Make sure to the commitment on customer service, information security measures, depositors' rights and interests and standard fee schedules for all types of businesses.

We will enter into contracts with customers regarding the provision of products or services based on impartiality and reason, equality and reciprocity, and good faith. We will fully explain important contents of products, services, and agreements and disclose related risks.


The implementation of regulations to prevent money laundering, financial fraud, and terrorism financing will lower operational risk, benefit international business expansion, and increase the scale of operations.

Approved and Promulgated "Chailease Holding Company Limited Anti-Money Laundering and Combating the Financing of Terrorism Policy"

● The overseas subsidiaries of the Company, Chailease International Financial Services Company (BVI) and Chailease International Financial Services (Singapore) Pte. Ltd., have established their own policies in accordance with "Chailease Holding Company Limited Anti-Money Laundering and Combating the Financing of Terrorism Policy" and FATF 40 Recommendations.

● The subsidiaries of the Company, Chailease Finance Co., Ltd. and Fina Finance & Trading Co., Ltd. have established AML/CFT Working Plan in accordance with external laws and regulations and internal operating procedures, and has established their own AML/CFT databases to conduct customer due diligence and transaction monitoring procedures. In addition to regularly checking the implementation of the Working Plan, by the end of 2019, more than 2,000 people have attend training sessions on AML/CFT.

The Company plans to cooperate with Nice Actimize to build an anti-money laundering system that complies with the legal requirements, and to use the system to assist in the establishment of a connected diagram of the clients. Through the notification of the transaction monitoring system and the daily name screening procedures, the content of the hit list will be reported in time, which will improve operational efficiency significantly.

Continue to plan and carry out the latest AML/CFT based on the needs of training targets, with a view to implementing the top-down legal compliance system and strengthening corporate governance.

Risk Management

In response to rapid changes in domestic and international economic conditions, we have strengthened risk management and complied with internal controls to effectively reduce risk costs and enhance profitability.

● Enhance risk management efficiency and effectiveness with systematic tools

● Establish quantity model to improve audit efficiency

● A video-visiting mechanism has been established, first for the case of micro and small enterprises in Chailease Finance Co., Ltd. (Taiwan).

● An AI voice credit system has been implemented in Chailease Consumer Finance Co., Ltd. (Taiwan).

● Risk models have been developed for various products of the group. More than 10 models were built during the year.

Establish a risk management map of the groupApplication of fintech to accelerate the reviewing process and credit capabilities, is expected to be applied to Taiwan and China subsidiaries in 2022, and promoted to ASEAN subsidiaries in 2024.



of Materiality




Ethical management is an important value of corporate culture. Companies should incorporate ethical management into their operational management strategy.

Implement the ethical management policy

● The Principles have been amendment and adopted by Board of Directors.

● In 2019, twenty one (21) ethical management training have been held, focusing on raising the awareness of business ethics and the importance of legal compliance.

● 2019 Legal Compliance Annual Report has been approved by the Corporate Governance Committee and the Board of the Directors.

Implement the ethical management policy and provide education and training to 100% of employees.

● The Company shall comply with related policies of competent authorities to implement the Company's ethical management policies and include related systems, such as internal controls and internal audits.

● The Company plans to establish the prevention program to analyze which business activities within its business scope which may be at a higher risk of being involved in an unethical conduct, and strengthen the preventive measures based on the risk assessment results.

● The audit department draws up the relevant audit plan based on the results of risks assessment against operational activities to certify the implementation of the mechanism for preventing unethical conduct by itself, or by the Certified Public Accountant.


The only way to effectively protect the Company and customers' interests and achieve sustainable development is through the constant improvement of information security systems and management strategies.

Establishing the "Information Security Committee"

● Approved the proposal for establishing the "Information Security Committee" under the helm of the President of the Company.

● In order to effectively improve information security, the Company have established "Chailease Holding Company Limited Information Security Policy" and "Chailease Holding Company Limited Guidelines for Information Security Management", and set up "Information Security Committee" in accordance with relevant measures, which is responsible for the Company's information security improvement and governance.

Continue to improve the information security system to prevent the occurrence of security incidents

Implementation of ISO 27001 Information security management


Protection of customer rights to strengthen the connection with customers and maintain a competitive advantage

Increased customer satisfaction compared to 2018

Chailease Finance and Fina Finance reached to 93.4% respectively, which show that the clients are "satisfied" or higher with our overall service.

Implement prompt processing mechanisms for customer complaints. Each company shall be required to complete customer reconciliation and report the handling of customer complaints within the given deadline.

Improve operation procedure based on customer complaints with the goal to reduce the number of customer complaints compared to the number of the previous year.

Environmental policy and

management system

All companies have the obligation to reduce the emissions of greenhouse gases and reduce energy consumption.

● 10% reduction in per-capita waste● 1% reduction in per-capita electricity

consumption● 1% reduction in per-capita water use

● Implement the Chailease Green Cup: Champion Floor competition: 13% reduction in per-capita trash. 1% increase in per-capita recycling.

● Floor-by-floor checks after work to turn off lights and air conditioners; Replacement of energy-guzzling equipment: 3 refrigerators and 2 water dispensers; Reduction in use time: hydraulic lifts turned off on weekends. This saved 3,562 degrees of electric power for the Neihu headquarters.

Brought in the ISO 14064-1 greenhouse gas inventoryPer-capita electrical consumption at corporate headquarters continues to decline by 1% annually

Green products

Integrate core competencies and fulfill the social responsibility of the financial industry in the financial supply chain in order to achieve sustainable development of the environment, economy, and society.

Solar power plant assets reach 9.8 billion

● We had exceeded the 1,000 solar power plant threshold by the end of 2019, with a total of 1,714. Total power generation capacity was 493.57MW.

● This is estimated to eliminate 327,257 metric tons of CO2 emissions annually, or approximately the amount of carbon absorbed by 851 parks the size of Da'an Forest Park.

Target solar power plant assets of 12.8 billion NT$100 billion in solar power plant assets by 2025

Supplier Management

Work with suppliers to jointly implement corporate social responsibilities and avoid transactions with suppliers that cause significant impact on the environment and society.

Suppliers in areas near business locations shall be prioritized for procurement to reduce carbon emissions in the transportation process and create local job opportunities

Chailease Holding's various purchasing plans all select 100% local manufacturers as targets. Disclose its Supplier Social Responsibility Policy on the company website and

CSR Report in 2020.Utilize and play properly the role of a fund provider and financial product channel to influence customers or partners to fulfill CSR.

Labor rights and Human rights

Labor rights and gender equality are legitimate rights and interests in employment, also are cooperate responsibilities to employees and to the society.

The company shall convene labor-management meetings regularly to smooth opinions exchange.

4 labor-management meetings were held, the company is firmly committed to Improve labor-management relations in order to enhance labor-management cooperation.





of Materiality




Ethical management is an important value of corporate culture. Companies should incorporate ethical management into their operational management strategy.

Implement the ethical management policy

● The Principles have been amendment and adopted by Board of Directors.

● In 2019, twenty one (21) ethical management training have been held, focusing on raising the awareness of business ethics and the importance of legal compliance.

● 2019 Legal Compliance Annual Report has been approved by the Corporate Governance Committee and the Board of the Directors.

Implement the ethical management policy and provide education and training to 100% of employees.

● The Company shall comply with related policies of competent authorities to implement the Company's ethical management policies and include related systems, such as internal controls and internal audits.

● The Company plans to establish the prevention program to analyze which business activities within its business scope which may be at a higher risk of being involved in an unethical conduct, and strengthen the preventive measures based on the risk assessment results.

● The audit department draws up the relevant audit plan based on the results of risks assessment against operational activities to certify the implementation of the mechanism for preventing unethical conduct by itself, or by the Certified Public Accountant.


The only way to effectively protect the Company and customers' interests and achieve sustainable development is through the constant improvement of information security systems and management strategies.

Establishing the "Information Security Committee"

● Approved the proposal for establishing the "Information Security Committee" under the helm of the President of the Company.

● In order to effectively improve information security, the Company have established "Chailease Holding Company Limited Information Security Policy" and "Chailease Holding Company Limited Guidelines for Information Security Management", and set up "Information Security Committee" in accordance with relevant measures, which is responsible for the Company's information security improvement and governance.

Continue to improve the information security system to prevent the occurrence of security incidents

Implementation of ISO 27001 Information security management


Protection of customer rights to strengthen the connection with customers and maintain a competitive advantage

Increased customer satisfaction compared to 2018

Chailease Finance and Fina Finance reached to 93.4% respectively, which show that the clients are "satisfied" or higher with our overall service.

Implement prompt processing mechanisms for customer complaints. Each company shall be required to complete customer reconciliation and report the handling of customer complaints within the given deadline.

Improve operation procedure based on customer complaints with the goal to reduce the number of customer complaints compared to the number of the previous year.

Environmental policy and

management system

All companies have the obligation to reduce the emissions of greenhouse gases and reduce energy consumption.

● 10% reduction in per-capita waste● 1% reduction in per-capita electricity

consumption● 1% reduction in per-capita water use

● Implement the Chailease Green Cup: Champion Floor competition: 13% reduction in per-capita trash. 1% increase in per-capita recycling.

● Floor-by-floor checks after work to turn off lights and air conditioners; Replacement of energy-guzzling equipment: 3 refrigerators and 2 water dispensers; Reduction in use time: hydraulic lifts turned off on weekends. This saved 3,562 degrees of electric power for the Neihu headquarters.

Brought in the ISO 14064-1 greenhouse gas inventoryPer-capita electrical consumption at corporate headquarters continues to decline by 1% annually

Green products

Integrate core competencies and fulfill the social responsibility of the financial industry in the financial supply chain in order to achieve sustainable development of the environment, economy, and society.

Solar power plant assets reach 9.8 billion

● We had exceeded the 1,000 solar power plant threshold by the end of 2019, with a total of 1,714. Total power generation capacity was 493.57MW.

● This is estimated to eliminate 327,257 metric tons of CO2 emissions annually, or approximately the amount of carbon absorbed by 851 parks the size of Da'an Forest Park.

Target solar power plant assets of 12.8 billion NT$100 billion in solar power plant assets by 2025

Supplier Management

Work with suppliers to jointly implement corporate social responsibilities and avoid transactions with suppliers that cause significant impact on the environment and society.

Suppliers in areas near business locations shall be prioritized for procurement to reduce carbon emissions in the transportation process and create local job opportunities

Chailease Holding's various purchasing plans all select 100% local manufacturers as targets. Disclose its Supplier Social Responsibility Policy on the company website and

CSR Report in 2020.Utilize and play properly the role of a fund provider and financial product channel to influence customers or partners to fulfill CSR.

Labor rights and Human rights

Labor rights and gender equality are legitimate rights and interests in employment, also are cooperate responsibilities to employees and to the society.


4 labor-management meetings were held, the company is firmly committed to Improve labor-management relations in order to enhance labor-management cooperation.





of Materiality



Employee Compensation and

benefits

Complete benefit measures and compensation policies highly-linked to performance can attract talents from labor market and meanwhile lower the turnover rate of talents in the organization.

● Continue to promote Employee Stock Ownership Trust plan to motivate employees' long-term performance and better the retention rate of talents.

● We wish the plan become a fund to take care of employees' families and share fruitful result of business with them, meantime jointly reserve extra pension, assist employees to prepare financial planning in advance.

● Continue to increase employee benefit expense to take care of employees with more comprehensive range.

● In addition to level of Assistant Mangers or above who meet certain performance requirement can join the plan, we added Senior Specialist level in 2019 and the total employees rewarded head counts reached to 927, significantly grow over than 30% compare to previous year .

● We have reviewed and added scenarios for employee who can reclaim their shares in trust fund, for the purpose to take care of employees more comprehensively. First, employee or his/her spouse buying a house. Second, specific conditions for emergencies aid, for example employee his/herself or family members encounter nature disasters or major accidents, or employee his/herself or Immediate family members Suffering from severe disease or cancer or long-term care needs of parents or parents in law, spouse or children.

● The expense of benefit of 2019 increase 18% compared to 2018.

● Continue to increase 5%~10% employee head counts in Employee Stock Ownership Trust.

● Continue to increase 5%~10% in expense of benefit● Increase "Family care leave" to 10 days from 7 days, and this leave is not

included to personal unpaid leave days limitiation.

Promote Employee Stock Ownership Trust plan to every employee.

ESH

Creating a safe work environment and improve employee health and enhance corporate competitiveness.

● Enhancement of safety and hygiene in the workplace

● Improvement of safety and health on energy-related sites

● Implementation of monitoring of the work environment in offices, ensuring that lighting and CO2 concentrations conform to regulatory standards.

● Promotion of safety and health counseling, education and training on energy-related sites, with a total of 135 trainings; a total of 1,121 people participated.

This is a 75% participation rate for these sites. Establishment of an occupational safety and health management system


Develop long-term plans on staff's training & career development, to achieve individual and the Group's mutual growth.

● Execute "Chailease Management Associate Program" and expect to send 10 MAs to support overseas subsidiaries development.

● Execute "Chailease Talent Development Program" (CTDP) and expect to have 15 talents to be promoted to junior managerial roles in Taiwan or to be sent to overseas to support subsidiaries' development.

● Execute "NYU training program", assisting 1 management personnel to enroll for NYU Master course in Business Analytics

● Implement "Regional Development Model" to reinforce knowledge sharing in branches, ensuring the average training hour to be at least 20 hours per person

● Improving marketing officers' productivity (measurement: revenue generated per dollar paid) by 5% with the help of "Dual Skills High Competency" and other professional competency trainings.

● 11 MAs were sent to support overseas subsidiaries development. Chailease MA Program received the "Excellence in Practice Award" from the Association for Talent Development (ATD) in 2019.

● 17 talents were promoted to junior managerial roles in Taiwan or sent to overseas to support subsidiaries' development.

● 1 manager successfully enrolled for NYU Master course in Business Analytics.

● With the implementation of "Regional Development Model", the average training hour per person was 22 hours.

● The productivity of marketing staff has increased 8% from 2018 to 2019.

● Continue to improve and implement "Chailease Management Associate Program" and expect to send 8 MAs to support overseas subsidiaries development.

● Continue to improve and implement "Chailease Talent Development Program" (CTDP), target to have 15 talents to be promoted in Taiwan or sent to overseas.

● Continue to execute "NYU training program", select and assist 1 management personnel to enroll for NYU Master course.

● Continue to improve and implement "Regional Development Model" to raise the average training hour to 24 hours per person.

● Improve productivity by at least 5% with the help of training and development programs.

● By end of 2024, we target to have 50 MAs to be sent to overseas to support subsidiaries development.

● From 2016 to 2024, we target to have at least 100 talents in our pool to support the Group's growth.

● At least 4 employees graduated from the Master courses awarded by NYU, and the knowledge and expertise can help the Group's future development.

● Continue to improve and execute "Regional Development Model", to increase the average training hour to 30 hours per person.

Charity

Work with customers in cross-sector alliances. Integrate social resources, integrate core competency.

● Through cooperation with key enterprises, we provide workplace internship platforms for students in technical colleges and universities, as a preparation for their job search.

● We provide comprehensive training resources and platforms to assist in nurturing outstanding national sports talent.

● Held a total of 30 events in which 1,353 people participated, with satisfaction ratings averaging 92.3 points.

● Cooperated with 4 universities, high schools and middle schools in Taipei to formally sign 44 players and after training 24 were promoted to Group A. Participated in 27 domestic and foreign events winning 30 gold, 22 silver and 24 bronze medals.

● Continued holding a minimum of 20 career exploration, adaptive

development and related activities, with 1500 participants. Average satisfaction scores reported for these events were over 90 points.

● A total of 30 players were promoted to Group A, and the adult team

was actively strengthened, enhancing the healthy, positive image of the company's talented athletes.

● Held career exploration and career development-related activities

throughout Taiwan, expanding the visibility of the company and the association, and through these events recruited talent interested in coming on board with the company as an employment conduit.

● Continuously put down roots cooperating with middle and high

schools in Central and Southern Taiwan and trained talent who could represent Taiwan in the 2024 Olympic Games in badminton.

:Excellent :Good :Needed to be improved


3.4 Epidemic Prevention

To address issues that affect normal operations or corporate image, possible risks of natural disaster brought on by the environment, or matters

that may negatively impact the company's interests, a risk management mechanism is in place to reduce the time necessary to handle such risks and

minimize any damage.

In response to the novel coronavirus (COVID-19) pandemic spreading around the globe, and to ensure a safe workplace for employees and

avoid affecting operations, a new biological hazard prevention element was added to occupational safety and health meetings. The company initiated

relevant crisis management mechanisms, and added biohazard prevention while Chairman Chen Feng-long regularly convenes meetings on the

pandemic. The company also refers to the National Center for Disease Control to set regulations regarding the pandemic.

Organization Of Chailease Holding's Crisis Management Structure

The prevention issues discussed at pandemic meetings include various preventative measures aimed at preparing the entire company to face the

situation, including data collection on global status, management of employee travel, notifications and medical assistance, employee awareness of

the pandemic and prevention measures, and disinfection of the environment. The company aims to prevent employees from becoming infected at the

workplace and protect them by ensuring a safe workplace environment, so the company can sustain its development.

● Decentralization of work: remote offices, distance work, home offices ● Employee control: control on overseas work and other travel● Promotion of events: promotion of education against the pandemic and reduction

in the number of meetings● Education and training: reduction in the number of face-to-face trainings, and

switching to the use of primarily online courses and on-the-job training● Social distancing: ensuring 1 meter of space as social distance, limit elevators to 6

passengers at a time, and set up partitions in offices to prevent infection● Pandemic response: employee temperature-taking, installation of infrared thermal

imagers at entrances, comprehensive disinfection of offices, distribution of

masks and alcohol, installation of sanitary membranes on elevator buttons, and

temperature-taking for subcontractors. ● Management of visitors: While visitors are on the premises, they must wear masks

at all times, and if their ear temperature registers at 37.5℃ or higher, they are

prohibited from entering the company. Customers, guests and suppliers must

all cooperate in filling out a health declaration (listing areas visited and physical

health status for the past 14 days).

In response to the novel coronavirus epidemic, the company modified its former face-to-face activities to run them online.

Assets Group

Vice President

Risk Notification Window

Legal Group

Information Group

Documents Group

Financial Group

Public Relations

Group

Human Resources

Group

Overall direction

Committee Member