Performance Evaluation of Board of Directors

The Company established the Regulations Governing Performance Evaluation of Board of Directors on December 26, 2012 to regularly conduct self-performance evaluation of Board members every year. The evaluation indicators include compliance with the relevant laws and regulations, degree of participation in the Company's operations, compliance with recusal due to conflict of interests, and number of training hours achieved by directors every year. In 2018, the average score based on the results of performance evaluation of the Board of Directors was 90 and above, and was reported to the Board of Directors on January 22, 2019.

According to Article 20 of the Company's Articles of Incorporation, remuneration paid to the Company's directors may not exceed 2% of the Company's profit in the current year. Reasonable remuneration shall be allocated by taking into consideration the Company's operational results and the directors' contributions to the Company's performance. The procedures for determining remuneration are based on the results of performance evaluation of directors. In addition to taking into consideration the Company's overall operational performance, future business risks and development trends of the industry, reasonable remuneration shall also be allocated in reference to the director's performance achievement rate and contributions to the Company's performance. The relevant performance appraisal and the reasonableness of remuneration allocated shall be reviewed by the Remuneration Committee and the Board of Directors, and the remuneration system shall be reviewed in due course depending on the actual operating conditions and the relevant laws and regulations, so as to strike a balance between sustainable management and risk control in the Company.

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