Mega Bank Annual Report 2017

40 Mega Bank -40- MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (EXPRESSED IN THOUSANDS OF NEWTAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED) 1. HISTORYAND ORGANISATION (1) Mega International Commercial Bank Co., Ltd. (the “Bank”; formerly The International Commercial Bank of China Co., Ltd.) was reorganized on December 15, 1971 in accordance with the “Law for International Commercial Bank of China” as announced by the President of the Republic of China (R.O.C.) (which was then abolished in December, 2005) and other related regulations. As of December 31, 2002, the Bank became an unlisted wholly owned subsidiary of Mega Financial Holding Co. Ltd., through a share swap transaction. With the view to enlarging business scale and increasing market share, the Bank entered into a merger agreement with Chiao Tung Bank Co., Ltd. on August 21, 2006, the effective date of the merger. The Bank was later renamed Mega International Commercial Bank Co., Ltd. Mega Financial Holding Co., Ltd. holds 100% e quity interest in the Bank and is the Bank’s ultimate parent company . (2) The Bank engages in the following operations: (a) commercial banking operations authorized by the R.O.C. Banking Law; (b) foreign exchange and related operations; (c) import and export financing and guarantees; (d) financial operations related to international trade; (e) trust operations; (f) investment services on consignments by clients; (g) loan operations, including mid-term to long-term development loan and guarantee operations; (h) venture capital activities; and (i) other related operations approved by the R.O.C. government. (3) The Bank’s business and operations are widely managed by the head office. The Bank expands its network by opening branches at key locations in both domestic and foreign markets. The Bank was incorporated as company limited by shares under the provisions of the Company Law of the Republic of China (R.O.C.). As of December 31, 2017 the Bank had 108 domestic branches, 22 overseas branches, 5 overseas sub-branches, 3 overseas representative offices, and 1 marketing office. (4) The Trust Department of the Bank is primarily responsible for planning, management and operation of trust investment businesses regulated by the R.O.C. Banking Law. (5) As of December 31, 2017 and 2016, the Bank and subsidiaries had 6,202 and 5,733 employees, respectively. 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 March 16, 2018. 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”) New standards, interpretations and amendments endorsed by the FSC effective from 2017 are as follows: New Standards, Interpretations and Amendments Effective Date by International Accounting Standards Board Amendments to IFRS 10, IFRS 12 and IAS 28, ‘Investment entities: applying the consolidation exception’ January 1, 2016 Amendments to IFRS 11, ‘Accounting for acquisition of interests in joint operations’ January 1, 2016 IFRS 14,‘Regulatory deferral accounts’ January 1, 2016 Amendments to IAS 1, ‘Disclosure initiative’ January 1, 2016 Amendments to IAS 16 and IAS 38, ‘Clarification of acceptable methods of depreciation and amortisation’ January 1, 2016 Amendments to IAS 16 and IAS 41, ‘Agriculture: bearer plants’ January 1, 2016 Amendments to IAS 19, ‘Defined benefit plans: employee contributions’ July 1, 2014 Amendments to IAS 27, ‘Equity method in separate financial statements’ January 1, 2016 Amendments to IAS 36, ‘Recoverable amount disclosures for non- financial assets’ January 1, 2014 Amendments to IAS 39, ‘Novation of derivatives and continuation of hedge accounting’ January 1, 2014 IFRIC 21, ‘Levies’ January 1, 2014 Annual improvements to IFRSs 2010-2012 cycle July 1, 2014 Annual improvements to IFRSs 2011-2013 cycle July 1, 2014 Annual improvements to IFRSs 2012-2014 cycle January 1, 2016 As of the date the consolidated financial statements were issued, the above standards and interpretations have no significant impact to the Bank and subsidiaries’ financial condition and financial performance. (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Bank and subsidiaries. New standards, interpretations and amendments endorsed by the FSC effective from 2018 are as follows: ! !