Mega Bank Annual Report 2017

71 Annual Report 2017 -71- enhancements to its corporate governance and is committed to continue to implement improvements in its oversight and compliance program. As of the reporting date of these financial statements, the written plan has been submitted whereas a review of U.S. dollar clearing transaction activity has not commenced yet. In addition, the U.S. supervisory authorities has completed subsequent examination in branches across the U.S. and required the Bank and Mega New York Branch to take improvement measures to address deficiencies in risk management and compliance with BSA/AML requirements and OFAC regulations prior to the next examination to avoid further supervisory escalation. The Bank and Mega New York Branch endeavor to implement the measures stipulated in the written plan to address deficiencies in compliance. (32) Employee benefits expenses For the years ended December 31 2017 2016 NT$ US$ NT$ Payroll expenses $ 10,081,195 $ 340,030 $ 8,446,411 Preferential interest deposit for retired employees 1,376,912 46,442 1,245,291 Pension 623,650 21,035 629,156 Staff insurance 645,025 21,756 621,132 Other staff expenses 922,253 31,107 978,219 Total $ 13,649,035 $ 460,370 $ 11,920,209 A. Please refer to Note 1(5) for information on number of employee, the calculating basis was in agreement with employee benefit expense excluding preferential interest deposit for retired employees. B. The Board of Directors of the Bank has approved the amended Articles of Incorporation of the Bank on October 20, 2017. According to the amended articles, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distri buted as employees’ c ompensation. In case there are earnings at the end of each fiscal year, the employees’ compensation of the Bank shall be 2~6% of the amount of net profit before income tax and employees’ compensation, under the Board’s discretion after taking into account the performance indicators and industry benchmark. C. For the years ended December 31, 2017 and 2016, employees’ compensation was accrued at NT$1,275,582 thousand and NT$400,225 thousand, respectively. The above-mentioned amounts were recognized in salary expenses. The employees’compensation resolved by the Board of Directors was NT$ 398,791 thousand, which resulted in a difference of NT($1,434) thousand as compared to the recognized amount of $400,255 in the 2016 financial statements. The difference is accounted for as a change in estimate and has been adjusted in the profit or loss of 2017. Information about employees’ compensation of the Bank as resolved by the Board of Directors and the shareholders at the shareholders’ meeting will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. (33) Depreciation and amortization For the year ended December 31 2017 2016 NT$ US$ NT$ Depreciation $ 535,681 $ 18,068 $ 484,684 Amortization 6,039 204 5,695 Total $ 541,720 $ 18,272 $ 490,379 (34) Other general and administrative expenses For the year ended December 31 2017 2016 NT$ US$ NT$ Taxes $ 2,005,752 $ 67,652 $ 2,241,019 Rental 771,136 26,010 777,716 Professional expenses 1,116,397 37,655 608,141 Computer software maintenance fees 496,004 16,730 476,756 Insurance charges 408,047 13,763 447,493 Donation expenses 220,070 7,423 102,560 Shipping expenses 196,279 6,620 196,785 Postage 212,256 7,159 212,203 Business development 268,922 9,070 297,439 Advertising and printing cost 210,145 7,088 151,769 Water and electricity 127,601 4,304 120,851 Employee training expenses 132,222 4,460 63,421 Traveling expenses 113,369 3,824 78,973 Others 859,797 29,000 713,823 Total $ 7,137,997 $ 240,758 $ 6,488,949