CTBC Financial Holding Co., Ltd. Minutes of the 2021 ...

1

CTBC Financial Holding Co., Ltd.

Minutes of the 2021

Annual General Meeting of Shareholders

Stock code: 2891

NoticetoreadersFor the convenience of readers, “The Minutes of the 2021 Annual General Meeting of Shareholders” has been translated into English from the original Chinese version. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language shall prevail.

2

Meeting time: 9:00 am, July 23, 2021

Place: No 12, Sec 1, Zhongxiao East Road, Zhongzheng District,Taipei City 10049

Taiwan(R.O.C.)(Sheraton Grand Taipei Hotel)

Total outstanding shares of CTBC Holding: 19,496,989,569 shares

Total shares represented by shareholders present: 16,578,571,853 shares (including

11,357,033,365 shares represented by shareholders exercising voting rights electronically)

Percentage of shares held by shareholders present: 85.03%

Directors in attendance: Wen-Long Yen, Thomas K.S. Chen , Chao-Chin Tung,

Sheng-Yung Yang, Shih-Chieh Chang, Chih-Cheng Wang

Non-voting delegates: President Daniel I.K. Wu,

Chief Financial Officer Ya-Ling Chiu,

Head of Legal Department Wei-Hsiang Tang,

Accounting Officer Sting Yang,

Acting Chief Risk Officer Chih-Chung Huang,

Pai-Hung Yeh (Taiwan Life Strategy Officer),

Edgar Y. Chen, Vincent Lin (Tsar&Tsai Law Firm lawyers),

Chun-Kuang Chen, Lin Wu (KPMG accountants)

Chairman: Wen-Long Yen

Minute taker: Yi-Chen Shen

The aggregate shareholding of the shareholders present constituted a quorum.

The Chairman called the meeting to order.

3

A. Items to Report (Non-voting Items)

Proposal 1: 2020 Business Report

Explanatory note: Please refer to Attachment 1 for the 2020 Business Report.

Proposal 2: 2020 Audit Committee Report

Explanatory notes:

a. Please refer to Attachment 2 for the 2020 Audit Committee Report.

b. Please see “Communication with Independent Directors with Accountants” and

“Communication with Independent Directors with Internal Audit Supervisors” on the

Company website for details of discussions between the Audit Committee, internal audit

supervisors, and accountants.

Website: http://ir.ctbcholding.com/html/gov_committees.php

Proposal 3: 2020 report on employee and director remuneration distribution

Explanatory notes:

a. Pursuant to the provisions of Article 29 of the Articles of Incorporation (i.e., “If the Company

makes a profit for a year (i.e., pre-tax profit before deducting the distributed employees’

compensation and director compensation), and after accumulated losses are deducted, 0.05%

and no more than 0.7% of any remaining balance shall be allocated to employees’

compensation and director compensation, respectively”), based on the pretax profit of

NT$45,425,223,496 for 2020 before the deduction of employee and director remuneration,

the Company will allocate 0.05%, representing NT$22,712,612, as employee remuneration

and 0.66%, representing NT$299,806,475, as director remuneration.

b. The aforementioned 2020 employee and director remuneration shall be fully issued in cash.

c. This proposal was approved at the 32nd meeting of the seventh term of the Board of Directors.

Proposal 4: Matters relating to the unsecured corporate bonds issued in 2020

Explanatory notes:

a. Pursuant to the provision of paragraph 1, Article 246 of the Company Act, the Company shall

report the reasons for issuing corporate bonds and relevant matters thereof to the

shareholders’ meeting.

4

b. On May 8, 2020, the Board approved a maximum total issuance amount of NT$45 billion in

unsecured corporate bonds, to be issued in one or multiple stages, depending on market

conditions. Of that amount, the Company issued NT$40 billion in unsecured corporate bonds

to repay outstanding debt and bonds that matured in 2020 and to strengthen its capital

structure, the major terms and conditions and relevant matters of which are as follows; after

comprehensive consideration of the overall capital requirements and the allocation of short-

and long-term liabilities, it was decided that the remaining NT$5 billion will not be issued.

Item

2020-1 subordinated

unsecured corporate bonds in

2020

2020-2 senior unsecured

corporate bonds in 2020



Board

resolution

date

Resolution passed at the 17th

meeting of the 7th term of

the Board of Directors on

May 8, 2020

Resolution passed at the

17th meeting of the 7th term

of the Board of Directors on

May 8, 2020

Resolution passed at the

17th meeting of the 7th term

of the Board of Directors on

May 8, 2020

Approval

No. of

competent

authority

June 17, 2020, Zheng-Gui-

Zhai-Zi No. 10900058891

Sept. 10, 2020, Zheng-Gui-

Zhai-Zi No. 10900106411

Jan. 14, 2021, Zheng-Gui-

Zhai-Zi No. 10900148301

Issue date June 24, 2020 Sept. 17, 2020 Jan. 21, 2021

Total issue

amount

NT$10 billion

Tranche A: NT$1.9 billion

Tranche B: NT$8.1 billion

NT$23.5 billion

Tranche A: NT$6.4 billion


Tranche C: NT$4.4 billion

Tranche D: NT$7.4 billion

NT$6.5 billion

Tranche A: NT$3 billion


Issue term Tranche A: 7 years

Tranche B: 10 years

Tranche A: 5 years

Tranche B: 7 years

Tranche C: 9 years

Tranche D: 10 years

Tranche A: 5 years

Tranche B: 7 years

Issue price 100% of par value 100% of par value 100% of par value

Face value NT$10 million NT$10 million NT$10 million

Coupon

rate

Tranche A: Fixed at

0.90% per annum

Tranche B: Fixed at 1.05%

per annum

Tranche A: Fixed at

0.60% per annum


per annum

Tranche C: Fixed at

Tranche A: Fixed at

0.40% per annum


per annum

5

Item

2020-1 subordinated


2020





0.68% per annum

Tranche D: Fixed at 0.69%

per annum

Interest

calculation

and

payment

method

Interest shall be calculated

from the issue date and paid

once a year based on a

simple annual rate. The

interest is paid by rounding

to the nearest NTD for each

NT$10 million in the

principal amount, with

amounts less than NT$1

rounded off. If the payment

date is not a business day for

Taipei banks, the principal

and interest shall be paid on

the next business day, and no

extra interest will be paid. If

the principal and interest are

received later than the

payment date, no delay

interest will be paid.














the next business day, and

no extra interest will be

paid. If the principal and

interest are received later

than the payment date, no

delay interest will be paid.














the next business day, and

no extra interest will be

paid. If the principal and

interest are received later

than the payment date, no

delay interest will be paid.

Terms of

redemption

or early

repayment

None None None

Trustee Bank SinoPac Co., Ltd. Bank SinoPac Co., Ltd. Bank SinoPac Co., Ltd.

Payment

agent CTBC Bank Co., Ltd. CTBC Bank Co., Ltd. CTBC Bank Co., Ltd.

Forms of

bonds

No physical certificates will

be issued and the bonds shall

be registered with Taiwan


be issued and the bonds

shall be registered with


be issued and the bonds shall

be registered with Taiwan

6

Item

2020-1 subordinated


2020





Depository & Clearing Corp. Taiwan Depository &

Clearing Corp.

Depository & Clearing

Corp.

Guaranty Subordinated unsecured

corporate bond

Senior unsecured corporate

bond

Senior unsecured corporate

bond

Qualified

buyers

Qualified buyers are

restricted to professional

investors as defined in the

Taipei Exchange Rules

Governing Management of

Foreign Currency

Denominated International

Bonds.






Foreign Currency


Bonds.






Foreign Currency


Bonds.

Repayment

priority

Holders of the corporate

bond have priority over the

Company’s shareholders’

priority rights in the

allocation of residual assets,

and are subordinate to all

other non-subordinated

creditors, but have the same

priority as other

subordinated bondholders.

The priority of the

bondholders is the same as

the other unsecured creditors

of the Company.

The priority of the

bondholders is the same as

the other unsecured creditors

of the Company.

Issuing

and OTC

listing

location

Listed on the Taipei

Exchange on June 24, 2020


Exchange on Sept. 17, 2020


Exchange on Jan. 21, 2021

Other

If the payment of interest or

the repayment of principal

for the bond causes the

Company’s group capital

adequacy ratio to fall below

the minimum required by

None None

7

Item

2020-1 subordinated


2020





law, the payment of interest

or the repayment of principal

shall be temporarily

deferred. Interest payments

or principal repayments may

be paid only when the

aforementioned ratio meets

the minimum requirement

(interest may be

accumulated; interest on

interest and the repayment of

principal rollovers are

calculated at coupon rates).

Proposal 5: Amendments to the Code of Ethical Conduct

Explanatory notes:

a. The proposal is based on a Taiwan Stock Exchange letter with reference number Taiwan-

Stock-Governance-1090009468, dated June 3, 2020, and pertaining to the regulations of the

Guidelines for the Adoption of Codes of Ethical Conduct for TWSE/GTSM Listed

Companies.

b. A comparison of the original and amended articles of the Code of Ethical Conduct are

attached hereto.

c. This proposal was approved at the 20th meetings of the seventh term of the Board of

Directors.

B. Items for Acceptance (Voting Items)

Proposal 6: 2020 Business Report, Independent Auditors’ Report, and Financial Statements

Explanatory note: The financial statements of the Company for 2020 were approved at the 30th and

32nd meetings of the seventh term of the Board of Directors and duly reviewed by

8

the Audit Committee. Please refer to Attachment 1 for the Business Report and

Appendix 1 for the Independent Auditors’ Report and Financial Statements.

Voting resolution: Shares represented at the time of voting: 16,578,469,853;

votes in favor: 14,747,333,309/88.95% (including 9,540,461,902 votes cast

electronically);

votes against: 27,054,360/0.16%(including 27,054,360 votes cast

electronically);

invalid votes: 0/0.00%;

abstentions/no votes: 1,804,082,184/10.88% (including 1,789,517,103 votes

cast electronically)

Resolution: The above proposal was thereby approved as proposed.

Proposal 7: 2020 earnings distribution plan

Explanatory notes:

a. Please refer to Attachment 3 for the 2020 earnings distribution plan.

b. The Company’s net income for fiscal year 2020 was NT$42,853,406,422. Pursuant to letter

No. Jing-Shang-Zih-10802432410, a 10% legal reserve of NT$4,118,608,112 is set aside,

calculated using the sum of net income plus other items counted in the distributable earnings

for fiscal year 2020 other than net income. In accordance with paragraph 1 of Article 41 of

the Securities and Exchange Act, a special reserve of NT$2,228,811,745 shall be reversed

due to the decrease in the net deduction of other shareholders’ equity. From the initial

undistributed earnings of NT$56,030,989,804, and deducting the remeasurements of defined

benefits plans of NT$143,720,507, the changes in ownership interests in subsidiaries of

NT$2,410,037, and the disposal of investments in equity instruments designated at fair value

through other comprehensive income of NT$1,521,194,763, the Company’s distributable

earnings for fiscal year 2020 are NT$95,327,274,552.

c. The distributable earnings of 2020 are proposed to be distributed as follows:

(a) Pursuant to Articles 6-5 and 6-6 of the Articles of Incorporation, the Company shall

distribute preferred share B and C cash dividends of NT$749,992,500 and

NT$319,987,200, respectively.

(b) The Company has issued a total of 19,496,989,569 common shares. In consideration of

meeting the Company’s business expansion needs and maintaining an adequate capital

level, it is proposed to distribute common share cash dividends totaling

9

NT$20,471,839,047 at NT$1.05 per share.

(c) The common share and preferred share cash dividends shall be allocated to individual

shareholders by rounding down to the nearest NT$1 (decimals are not taken into

account), and the sum of all fractional dividends less than NT$1 shall be recognized as

other income of the Company.

d. The distributable earnings of fiscal year 2020 shall be prioritized for handling all forms of

distribution, with the deficit to be paid using the undistributed earnings from the previous

year.

e. After the proposal has been discussed and approved by the shareholders’ meeting, the Board

of Directors is authorized to set the record date for distributing the cash dividend and

preferred share dividend and handling other relevant distribution matters.

f. If a capital increase or decrease; the buyback, sale, transfer, conversion, or deregistration of

stock; the exercise of employee stock warrant subscription rights; or the disposal of shares by

shareholders causes a change in the number of outstanding shares and the common share

dividend distribution payout ratio on the record date of the cash dividend distribution, a

shareholders’ meeting may authorize the Board of Directors to handle matters regarding the

change of the payout ratio.

g. This proposal was approved at the 32nd meeting of the seventh term of the Board of Directors.



electronically);

votes against: 23,365,737/0.14%(including 23,365,737 votes cast

electronically);


abstentions/no votes: 1,778,094,271/10.72% (including1,763,529,190votes



C. Items for Discussion (Voting Items)

Proposal 8: Amendments to the Regulations for Shareholders’ Meetings

Explanatory notes:

10

a. The proposal is based on letters from the Taiwan Stock Exchange with reference number

Taiwan-Stock-Governance-1090009468, dated June 3, 2020, and Taiwan-Stock-Governance-

1100001446, dated Jan. 28, 2021, and pertaining to the Sample Template for XXX Co., Ltd.

Rules of Procedure for Shareholders Meetings.

b. The key points for this revision are as follows:

(a) Pursuant to the provisions regarding the proposal of provisional motions, paragraph 4

of Article 3 is omitted. (Paragraph 4 of Article 3)

(b) Pursuant to paragraph 5 of Article 172 of the Company Act and Ministry of Economic

Affairs Letter No. 10700105410, a shareholder proposal urging the Company to act in

the public interest or fulfill its social responsibility shall be limited to one item, in

accordance with the relevant provisions of Article 172-1 of the Company Act.

(Paragraph 6 of Article 3)

(c) To improve corporate governance and safeguard the rights and interests of

shareholders, the chairperson shall call the meeting to order as scheduled and announce

relevant information such as the number of non-voting rights and the number of shares

present. (Paragraph 2 of Article 9)

(d) To improve corporate governance and safeguard the rights and interests of

shareholders, the results of directors and supervisors elections, including the elected

directors and the votes received as well as the non-elected directors and the number of

election rights obtained, shall be announced on the spot. (Paragraph 1 of Article 14)

c. A comparison of the original and amended articles of the Regulations for Shareholders’

Meetings are attached hereto; please refer to Attachment 4.

d. This proposal was approved at the 29th meeting of the seventh term of the Board of Directors.



electronically);

votes against: 10,930,487/0.06% (including10,930,487votes cast

electronically);


abstentions/no votes: 1,837,333,108/11.08% (including 1,822,768,027 votes



11

D. Questions and Motions (Voting Items): None

E. Adjournment: 9: 54 am

12

2020 Business Report

In 2020, global political and economic developments centered around several major issues, including the Covid‐19 pandemic, the U.S.–China trade war, the U.S. presidential election, and monetary policy. The global economy experienced tremendous challenges due to the pandemic in particular, with many countries suffering the immense impacts. In Taiwan, however, the virus was successfully contained thus far and the economy enjoyed relative stable growth, surpassing those of all developed countries. The Directorate‐General of Budget, Accounting and Statistics recorded GDP growth of 3.11% for the year, while the Taiwan stock market reached a 30‐year high.

In the early stages of the pandemic, CTBC Holding, as Taiwan’s leading financial institution, established various response measures, including remote backup offices, work‐from‐home policy, and reduced in‐person contact, to ensure the health of employees and customers. We also stepped up and fulfilled our corporate social responsibility (CSR) by supporting the government’s relief loan policy, helping the public overcome the economic difficulties and uncertainties brought by the pandemic.

Even under this challenging environment, CTBC Holding continued to exceed its performance expectations. Looking forward, even with Covid‐19 lingering, we will continue to expand our businesses domestically and internationally while enforcing the pandemic preventive measures to provide the most comprehensive financial services and maximize synergy among our subsidiaries. Furthermore, we will strengthen our risk management, legal compliance, and corporate governance to lay a solid foundation for stable operations, creating mutual benefits for our customers, employees, shareholders, and community and continuing to be the best governed and most trustworthy financial institution in the minds of customers and shareholders.

2020 business plans, strategies and results

We have subsidiaries in banking, securities, insurance, venture capital, asset management, securities investment trusts, security, and the national lottery. In terms of our 2020 profits, 99.75% of our recognized investment gains using the equity method came from our banking and insurance subsidiaries, with the remaining 0.25% coming from our other businesses. Our 2020 consolidated after-tax net profit totaled NT$42.9 billion while our consolidated after-tax return on common shareholders’ equity was 11.53%.

In addition, we made substantial progress in the following areas in 2020:

(1) Accelerate overseas markets operations

We are committed to developing cross-border financial services. To this end in 2020, despite great fluctuations in overseas markets due to the pandemic, we made good progress in our operations as we reaped the benefits both of our long-running efforts to cultivate overseas markets and of our dense international network. Moving forward, we will continue to expand into overseas markets, take advantage of supply chain networks, expand our cross-border services, seize capital market international business opportunities, build a comprehensive cross-border financial platform, and continue to evaluate opportunities for M&As and strategic partners in various markets. Regarding the banking＇s subsidiary, The Tokyo Star Bank, its private equity fund investments, which started in 2012, the bank held 12 funds totaling JPY 6.95 billion as of Dec. 31, 2020, bringing the overall cumulative investment return to 72.5%.

(2) Ensure stable insurance profits

Ever since CTBC Holding entered into the insurance business by acquiring Taiwan Life, the subsidiary has been an important profit engine for the group. It has benefitted from the Company’s diverse channels and rich resources. In addition, its continuous product development which reflected customers’ needs as well as its flexible investment and hedging strategies have contributed to its

Attachment 1

13

strong performance. Taiwan Life’s after‐tax net profit reached NT$16.5 billion in 2020—a new record high for the company. Furthermore, to enhance its operational efficiency, Taiwan Life is integrating new technology according to market needs and is actively implementing a digital transformation to enable its agency channel to provide policyholders with faster and more comprehensive services.

Also in 2020, the Financial Supervisory Commission (FSC) announced that Taiwan would implement International Financial Reporting Standard 17 (IFRS 17) in 2026. As such, Taiwan Life formed a special task force to ensure seamless IFRS 17 adoption and compliance as well as IT system readiness.

(3) Strengthen digital transformation and innovation

CTBC Holding is a pioneer in digital finance development in Taiwan and has drawn a solid blueprint for its digital transformation. In addition to launching business process digitalization, we are actively developing innovative digital financial services, such as optimizing our new‐generation ATMs, developing AI and voice assistants financial services. Our goal is to provide a better customer experience and a more heartwarming, more convenient financial services. In system infrastructure, we are continuing to modernize our core systems and introduce specialized teams, utilizing our strengths in digital convergence and AI to drive digital finance application breakthroughs and expand our digital transformation.

Moreover, we received substantial acclaim in 2020 for excellence in brand value, business development, digital innovation, corporate governance, and CSR, winning 230 major national and international awards. With an estimated brand value of US$549 million, our Company ranked No. 1 for the fifth consecutive year among all Taiwan financial institutions in the Best Taiwan Global Brands 2020. CTBC Bank was ranked 155th among the world’s top 1,000 banks by the Banker, taking first place in Taiwan for the fourth consecutive year. The Bank was the only financial institution in Taiwan to be named one of the 20 Best Banks in Asia Pacific and to receive a Best Bank in Taiwan award from IDC. It was also selected as the Best Bank in Taiwan by Euromoney, Asiamoney, FinanceAsia, and The Asset. In addition, The Asian Banker ranked CTBC Bank No. 1 in Taiwan among the Most Helpful Banks in Asia Pacific during Covid‐19. All of these demonstrated CTBC Bank’s excellent performance in stabilizing business, promoting digital innovation, and working with the government to grant relief loans during the pandemic. Meanwhile, Taiwan Life was selected as the Best Life Insurance Brand in Taiwan for the third consecutive year by Global Brands Magazine, and received an Excellence award in both the Popularity and Best Salesperson categories in Risk Management, Insurance & Finance’s Insurance Quality Awards. In addition for the recognition in business performance, CTBC Holding and its subsidiaries were highly commended last year for its efforts in integrating sustainable economic, environmental, and social development into its operating model, including receiving nine Taiwan Corporate Sustainability Awards 2020.

Our sustainability policy is guided by the three pillars which include sustainable growth, responsible operations, and connected society as well as by TRUST—an acronym we coined to emphasize the importance of corporate governance (Transparency), environmental sustainability (Responsibility), employee welfare (Understanding), customer service (Satisfaction), and community engagement (Together). We strive to honor our commitment to corporate sustainability and create value for our employees, customers, investors, government, community, partners and suppliers, positioning ourselves as a financial holding company that has a significant positive influence on the transition and transformation of the industry and the overall economic environment.

Latest credit ratings and effective dates

Rating agency Credit rating

Outlook Publication date Long‐term Short‐term

Moody's Baa1 Stable Dec. 16, 2020

14

S&P Global Ratings BBB A‐2 Stable Nov. 17, 2020

Taiwan Ratings twAA‐ twA‐1+ Stable Nov. 17, 2020

Impact from the competitive environment, regulatory environment, and overall business environment

Faced with domestic, long-term, low interest rate environment as well as monetary easing and low interest rate policies of governments worldwide in response to the pandemic, banks have encountered greater challenges. Furthermore, the keen market competition following the entry of online-only banks and digital financial service companies amid the fintech boom is driving the financial industry to accelerate its digital transformation. As such, CTBC Bank has launched IT system modernization efforts to guide a fundamental transition of its financial service capabilities. Having a more streamlined and nimble IT core system will enable us to respond faster to customers’ needs and maintain our leading position in the industry.

Operating costs have risen in recent years due to the emphasis and stringency in compliance of anti-money laundering and other financial laws and regulations have increased. The competent authority has also pushed for strengthened corporate governance. We already have a strong track record in this regard; notably, we were the first financial holding company in Taiwan with over 50% of its board seats filled by independent directors. In addition, to align ourselves with the regulator’s policies and for sustainable business development, we had established the Corporate Sustainability Office in 2020 and also the Sustainability Committee as one of the functional committees under the Board of Directors. We will continue to fine-tune our management to stay current with international corporate governance trends and to build sustainability into our operations.

As of writing, there is no clear end in sight to the Covid-19 crisis and the eventual global economic recovery remains shrouded in uncertainty. However, we will continue to focus our efforts in prioritizing the health of our employees and providing our customers with the utmost service. Accordingly, we will strive to ensure business continuity and minimize impacts from the pandemic and shall remain cautious yet hopeful in pushing forth our business strategies.

2021 business overview and strategies

CTBC Holding is committed to pursuing stable growth, taking into consideration of capital allocation and sound financial structure. We will continue to prioritize our customers and to offer market-leading financial services. Our future plans are as follows:

(1) 2021 operational guidelines

A. Expanding overseas business and strengthening cross-border cross-selling platforms

The Company will continue its overseas business development, expanding its cross-border platform linkages, growing its core customer base, and enhancing its cross-border cross-selling. In addition to business development, we will continue to strengthen our middle- and back-office infrastructure to improve our operating efficiency. New risk control technology and systems will be implemented to strengthen risk management. We will also continue to evaluate investment opportunities in overseas markets and actively search for targets suitable for M&A and equity investment to further expand new business.

B. Transforming our insurance business and building a stable foundation for profitability

15

We have grown rapidly since launching the insurance business, which has since become an important profit engine. Faced with challenges including market fluctuations and adoption of new international standards, we are working to develop the most suitable investment strategies, focus on value-added products, dynamically adjust asset–liability matching, increase our income from stable sources, and reduce equity fluctuations. Furthermore, we will transform our sales approach by linking and integrating services to provide the best customer service, develop products that meet customers’ needs, and achieve stable profitability.

C. Strengthening digital finance development and building an innovative model

CTBC Holding and its subsidiaries, through digital transformation, have grown into a leading digital finance institution in Asia with customers’ needs as their core. In addition, our innovative efforts moving forward will enable our business units to use fintech to develop new products and services and build a new generation of information system reengineering for the foundation of long-term digital development. In addition, we will continue to reinforce the culture of innovation within CTBC Holding to maintain our position as a leader in digital finance.

(2) Operational goals

1. CTBC Holding: Strengthen collaboration and cross‐selling efforts between subsidiaries to enhance group synergy and provide comprehensive products as one‐stop shop service to satisfy customers’ needs.

2. CTBC Bank: Maintain its leading position in innovative and digital services in the domestic market, actively expand its international business, and build a comprehensive cross‐border platform.

3. Taiwan Life: Focus on value‐added products, dynamically adjust its investment profile, reduce the impact from market fluctuations, build stable profitability, and prepare for compliance with new regulations.

4. CTBC Securities: Build a smart, automated digital platform and expand its international business opportunities by using diverse products such as offshore trading to increase our competitiveness.

5. CTBC Investments: Design products based on the needs of investors in response to regulatory and environmental considerations and drive business efficiency by establishing a new IT system and making changes in its operating processes.

6. CTBC Venture Capital: Identify companies with strong growth potential, expand academia–industry cooperation projects, seek investment opportunities in emerging biotech and digital industries, and expand overseas investment channels to increase profits.

7. CTBC Asset Management: Actively dispose or rent out invested properties, continue to build its real estate investment portfolio with growth potential or rental benefit projects, and expand its business in urban renewal projects.

8. CTBC Security: Enhance its management quality and continue to offer reliable services.

9. Taiwan Lottery: Continue to develop new products with creative marketing strategies, enhance its synergy and customer experience by partnering with different industries, reposition its brand, and create value by promoting public welfare.

(3) Key operational policies

Reinforce life insurance operations and stabilize life insurance profits. Expand digital finance and improve online financial services. Broaden international operations and strengthen the group’s overseas structure. Cultivate international talent and enhance the brand’s international visibility.

16

Ensure transparent disclosure and continue to improve corporate governance. Actively participate in public welfare and fulfil CSR. Implement corporate sustainability and move toward the goal of becoming a sustainable

financial company.

Future corporate development strategy

With the rapidly changing U.S.–China trade relationship and the unpredictable path of the pandemic despite the vaccine, myriad political and economic uncertainties remain. Operated by our teams of professionals, CTBC Holding will continue to pay close attention to the global economy and the pandemic while prioritizing stable business operations, employees’ health, and customers’ needs in to expand its domestic and overseas business, capture digital finance opportunities, and satisfy customers through innovative services. In addition, we will maintain our commitment to environmental, social, and corporate governance in order to fulfill our CSR and ensure corporate sustainability.

In a world moving toward contactless services and more stringent regulations, we are committed to providing our customers with heartwarming and convenient services. Although uncertainty will continue to cloud the political and economic outlook, we are certain that the worst is behind us. Going forward, we will continue to uphold our “We are family” brand spirit, engage with our community, and stand together to overcome these difficulties. We aspire to have the most robust corporate governance system in place and maintain the complete trust of our customers and shareholders. Together, we are confident these efforts will cement our Company’s status as the “Taiwan Champion, Asia Leader”.

Chairman:

Wen‐Long Yen

President:

Daniel I. Wu

Accounting Officer:

Sting Yang

17


2020 Audit Committee Report

The financial statements, business report, and earnings distribution plan submitted by the Board of

Directors of CTBC Financial Holding Co., Ltd., among which the financial statements have been

audited by external auditors Wu, Lin and Tseng, Kuo‐Yang of KPMG, have been duly examined and

accepted as correct by the Audit Committee in accordance with Article 14‐4 of the Securities and

Exchange Act and Article 219 of the Company Act, and the committee’s report is hereby submitted.

To:

2021 Annual General Shareholders’ Meeting of CTBC Financial Holding Co., Ltd

Audit Committee Convener

Sheng‐Yung Yang

Taipei, Taiwan, R.O.C. April 29, 2021

Attachment 2

18

CTBC Financial Holding

Co., Ltd.

2020 earnings distribution plan

Unit: NT$

Items Total

Net income for fiscal year 2020

Less: 10% legal reserve

Total distributable earnings of the current year

Add: Beginning undistributed earnings(Note 1) 56,030,989,804

Add: Reversal of special reserves appropriated from

the previous year 2,228,811,745

Less: Remeasurements of defined benefits plans (143,720,507)

Less: Changes in ownership interests in subsidiaries (2,410,037)

Less: Disposal of investments in equity instruments

designated at fair value through other

comprehensive income (1,521,194,763)

Total distributable earnings

Less: Cash dividends on preferred shares B (Note 2)

Less: Cash dividends on preferred shares C (Note 2)

Distributable earnings available for common share dividends

Cash dividends on common shares – 19,469,989,569 shares @ NT$1.05 per

share

Ending balance of undistributed earnings

42,853,406,422

(4,118,608,112)

38,734,798,310

56,592,476,242

95,327,274,552

(749,992,500)

(319,987,200)

94,257,294,852

(20,471,839,047)

73,785,455,805

Notes: 1. The ending balance of undistributed earnings in 2019 earnings distribution plan is

NT$56,030,989,805, which was approved by 2020 Annual General Meeting of Shareholders. Considering with the accounting affairs with a decimal point difference of NT$1, the beginning undistributed earnings in 2020 earnings distribution plan is adjust to NT$56,030,989,804.

2. The Company has issued a total of 333,330,000 preferred shares B and will distribute preferred share B dividends totaling NT$749,992,500, calculated at a subscription price of NT$60 per share and a dividend rate of 3.75% per annum. The Company has issued a total of 166,660,000 preferred shares C and will distribute preferred share C dividends totaling NT$319,987,200, calculated at a subscription price of NT$60 per share, at a dividend rate of 3.2% per annum.

3. The distributable earnings of fiscal year 2020 shall be prioritized for handling all forms of distribution, with the deficit to be paid using the undistributed earnings from the previous year.

4. The common share and preferred share cash dividends shall be allocated to individual shareholders by rounding down to the nearest NT$1 (decimals are not taken into account), and the sum of all fractional dividends less than NT$1 shall be recognized as other income of the Company.

Attachment 3

19


Comparison of the original and amended provisions of the

Regulations for Shareholders’ Meetings

Original provisions Amended provisions Explanation

Article 3

Paragraphs 1–3 are omitted.

The election or dismissal of directors;

the amendment of the Articles of

Incorporation; the reduction of

capital; the application for approval

to cease the Company’s status as a

public company; the approval of a

director to engage in business in

competition with the Company; the

distribution of surplus profit in the

form of new shares; the distribution

of reserve in the form of new shares;

the dissolution, merger, or split of the

Company; and any matter relating to

the provisions in paragraph 1 of

Article 185 of the Company Act,

Articles 26‐1 or 43‐6 of the Securities

and Exchange Act, or Articles 56‐1

and 60‐2 of the Regulations

Governing the Offering and Issuance

of Securities by Securities Issuers shall

be itemized in the causes or subjects

to be described and the essential

contents shall be explained in the

notice to convene a shareholders’

meeting and may not be proposed

through an extempore motion; the

essential contents may be posted on

the website designated by the

competent authority in charge of

securities affairs or the Company,

and such website shall be indicated

in the abovementioned notice.

Article 3

Paragraphs 1–3 are omitted.

The election or dismissal of directors;

the amendment of the Articles of

Incorporation; the reduction of

capital; the application for approval

to cease the Company’s status as a

public company; the approval of a

director to engage in business in

competition with the Company; the

distribution of surplus profit in the

form of new shares; the distribution

of reserve in the form of new shares;

the dissolution, merger, or split of the

Company; and any matter relating to

the provisions in paragraph 1 of

Article 185 of the Company Act,

Articles 26‐1 or 43‐6 of the Securities

and Exchange Act, or Articles 56‐1

and 60‐2 of the Regulations

Governing the Offering and Issuance

of Securities by Securities Issuers shall

be itemized in the causes or subjects

to be described and the essential

contents shall be explained in the

notice to convene a shareholders’

meeting and may not be proposed

through an extempore motion.

Paragraph 5 is omitted.

Any shareholder who holds 1% or

more of the total issued shares of the

Company may propose in writing an

1. Regulations changed pursuant

to Taiwan Stock

Exchange letters

dated June 3, 2020,

and Jan. 28, 2021,

and pertaining to

the Sample

Template for XXX

Co., Ltd. Rules of

Procedure for

Shareholders

Meetings

2. Paragraph 4 of Article 3 deleted

pursuant to the

provisions

regarding the

proposal of

provisional motions

3. Article amended

pursuant to

paragraph 5 of

Articles 172 of the

Company Act and in

accordance with

Ministry of

Economic Affairs

Letter No.

1070010541

Attachment 4

20


Any shareholder who holds 1% or

more of the total issued shares of the

Company may propose in writing an

item to be included in the agenda of a

shareholders’ meeting; such

proposals are limited to one item, and

no proposal containing more than

one item will be included in the

meeting agenda. A shareholder

proposal urging the Company to

promote a public interest or fulfill its

social responsibility may still be

included in the list of proposals to be

discussed at a regular meeting of

shareholders by the Board of

Directors. The Board of Directors of

the Company may refuse to include

such items based on the provisions in

paragraph 4 of Article 172‐1 of the

Company Act.

The rest of the article is omitted.

item to be included in the agenda of a

shareholders’ meeting; such

proposals are limited to one item, and

no proposal containing more than

one item will be included in the

meeting agenda. The Board of

Directors of the Company may refuse

to include such items based on the

provisions in paragraph 4 of Article

172‐1 of the Company Act. A

shareholder proposal urging the

Company to act in the public interest

or fulfill its social responsibility shall

be limited to one item, in accordance

with the relevant provisions of

Article 172‐1 of the Company Act.

Any proposal that exceeds one item

shall not be included in the proposal.


Article 9


The chairperson shall call the meeting

to order as scheduled. However, if the

total number of shares represented at

the meeting constitutes less than a

majority of the total number of issued

shares, the chairperson may

announce the postponement of the

meeting for a maximum of two times

with a total duration of no more than

one hour. If there is still no quorum

after two postponements and the

attending shareholders still represent

less than one‐third of the total

number of issued shares, the

chairperson shall declare the meeting

adjourned.

Article 9


The chairperson shall call the meeting

to order as scheduled and announce

relevant information such as the

number of non‐voting rights and the

number of shares present. However,

if the total number of shares

represented at the meeting

constitutes less than a majority of the

total number of issued shares, the

chairperson may announce the

postponement of the meeting for a

maximum of two times with a total

duration of no more than one hour. If

there is still no quorum after two

postponements and the attending

shareholders still represent less than

Article amended to improve corporate governance and safeguard the rights and interests of shareholders

21


one‐third of the total number of

issued shares, the chairperson shall

declare the meeting adjourned.


Article 14

Directors and supervisors shall be

elected in accordance with the

relevant Company bylaws. The

results, including the elected directors

and the votes received, shall be

announced on the spot.


Article 14

Directors and supervisors shall be

elected in accordance with the

relevant Company bylaws. The

results, including the elected directors

and the votes received and the

unelected directors and the number

of election rights obtained, shall be

announced on the spot.


Article amended to improve corporate governance and safeguard the rights and interests of shareholders

Independent Auditors� Report

To the Board of Directors of CTBC Financial Holding Co., Ltd.:

Opinion

We have audited the consolidated financial statements of CTBC Financial Holding Co., Ltd.(�the Company�)and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and theconsolidated statement of comprehensive income, changes in stockholders� equity and cash flows for the yearsended December 31, 2020 and 2019, and notes to the consolidated financial statements, including a summary ofsignificant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Company and its subsidiaries as of December 31, 2020 and 2019, alongwith consolidated financial performanceand its consolidated cash flows for the years ended December 31, 2020and 2019 in accordance with the Regulations Governing the Preparation of Financial Reports by FinancialHolding Companies, the Regulations Governing the Preparation of Financial Reports by Public Banks, theRegulations Governing the Preparation of Financial Reports by Securities Firms, the Regulations Governing thePreparation of Financial Reports by Futures Commission Merchants, the Regulations Governing the Preparationof Financial Reports by Insurance Companies, International Financial Reporting Standards (IFRSs), andInternational Accounting Standards (IASs), interpretations and pronouncements as accepted by the FinancialSupervisory Commission of the Republic of China (�FSC�).

Basis for Opinion

We conducted our audit of the consolidated financial statements in accordance with the Regulations GoverningAuditing and Certification of Financial Statements by Certified Public Accountants, Jin Kuan YinNo.10802731571 issued by the Financial Supervisory Commission, and the auditing standards generallyaccepted in the Republic of China. Our responsibilities under those standards are further described in theAuditors� Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We areindependent of the Company and its subsidiaries in accordance with the Certified Public Accountants Code ofProfessional Ethics in Republic of China (�the Code�), and we have fulfilled our other ethical responsibilities inaccordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis of our opinion.

Emphasis of Matter

The judicial cases as stated in Note 9(c). Part of judical cases are still under investigation by the judiciary, andthe results remain uncertain. Our opinion is not modified in respect of this matter.

+ 886 (2) 8101 6666TelephoneFax + 886 (2) 8101 6667

kpmg.com/twInternet

)1015 7 68 (11068F., TAIPEI 101 TOWER, No. 7, Sec. 5,

, Taiwan (R.O.C.)Xinyi Road, Taipei City 110

22

Appendix 1

23

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated interim financial statements for the years ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Assessment of the fair value of financial instruments

Please refer to Note 4 (f) for the related accounting policies of the assessment of the fair value of financial instruments, Note 5 for the accounting assumptions and estimation uncertainty, and Note 6 (au) for the other details.

Description of key audit matter:

Parts of the financial instruments owned by the Company and its subsidiaries as of December 31, 2020 were valued via evaluation model due to the lack of public transaction prices, and parts of the referred input values could not be obtained from the public market. Thus, it demands significant professional judgments from the management by using different valuation techniques and assumptions for input values. Therefore, the assessment of fair value of financial instruments is one of the key audit matters.

How the matter was addressed in our audit:

Our principal audit procedures included: testing the management�s control procedures over the classification,measurement and disclosure of fair value of financial instruments, including evaluating how the management determines the classification of financial instruments and chooses the appropriate evaluation method and the prime parameter hypothesis, and confirming that the presentation and disclosure of financial instruments are in accordance with the International Financial Reporting Standards (IFRSs). For financial instruments with active market prices, we used sampling test to assess the appropriateness of public quoted prices. As to financial instruments using evaluation model to measure their fair value, we used sampling test to confirm the appropriateness of the evaluation method and the prime input values used by the management.

2. Impairment of loans and receivables

Please refer to Note 4 (f) for the related accounting policies of impairment of loans and receivables, Note 5 for the accounting assumptions and estimation uncertainty, and Note 6 (h), (i), (j) and (au) for the other details.


The management assessed the expected credit loss (ECL) of loans and receivables by identifying whether the credit risk of credit assets has significantly increased since initial recognition, then dividing ECL into 12-month ECL and lifetime ECL, and dividing them into collective assessment and individual assessment to measure them by using different impairment methods. For collective assessment, the impairment is calculated by establishing an impairment model and using the past loss experience, current market conditions and forward-looking estimation on assets with similar credit risk characteristic to form basic estimation. For individual assessment, the measurement is based on expected future recoverable cash flows. The aforementioned measurement methods involved significant professional judgments and estimation by the management; therefore, the impairment of loans and receivables is one of the key audit matters.


Our principal audit procedures included: understanding the methodology and related control procedures on how the management assesses and measures the impairment amount of loans and receivables. For collective assessment, we assessed the impairment model adopted by the management and reviewed the appropriateness of the calculation of the impairment parameters (including probability of default, loss given default, exposure at default and recovery rate) via sampling. For individual assessment, we used sampling test to assess the appropriateness of the estimation of future recoverable amounts and the value of collateral.Meanwhile, we assessed whether the allowance for loans and receivables meets the regulation requirements.

3. Provision of insurance liability

Please refer to Note 4 (s) for the related accounting policies of insurance liability, Note 5 for the accountingassumptions and estimation uncertainty, and Note 6 (z) and (ae) for the other details of the provision ofinsurance liability.


The estimation of the Company and its subsidiaries� insurance liability is subject to future uncertainties. Theassumption of life insurance reserve adopts a fixed cost basis, that is to say, the provision is calculated by areserve rate upon the issuance of insurance policy. Provision of unearned premiums is calculated by actuariesaccording to each product� s characteristic and its undue risk. The main assumptions of claim reserve areclaim development factors and expected claims rates. To evaluate the adequacy of insurance liabilities,estimating the discounted future cash flows should take into consideration the future insurance payments,insurance income and related expenses. The aforementioned evaluation involved the professional judgmentsof the management which will affect the recognition amount of insurance liabilities. Therefore, evaluatingthe provision of insurance liabilities is one of the key audit matters.


Our principal audit procedures included: reviewing the analysis of movements in insurance liabilities,adopting the audit of insurance liabilities performed by our actuarial specialists, and inspecting whether thecalculation and applied parameters are in accordance with the related ordinances, administrativeinterpretations and code of conduct announced by the Actuarial Institute of the Republic of China. Also, theassessment on the reasonableness of actuarial assumptions should be in conformity with the empirical dataand product specification in order to build the model of evaluation of insurance liability, as well as theestimation on the reasonableness of the actuarial result adopted by the management should be based on ourunderstanding of industry and market to make sure that the final provision of insurance liability has beenproperly recorded.

Responsibilities of Management and Those Charged with Governance for the Consolidated FinancialStatements

Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with the Regulations Governing the Preparation of Financial Reports by Financial HoldingCompanies, the Regulations Governing the Preparation of Financial Reports by Public Banks, the RegulationsGoverning the Preparation of Financial Reports by Securities Firms, the Regulations Governing the Preparationof Financial Reports by Futures Commission Merchants, the Regulations Governing the Preparation of FinancialReports by Insurance Companies, International Financial Reporting Standards (IFRSs), InternationalAccounting Standards (IASs), interpretations and pronouncements as accepted by the FSC and for such internalcontrol as management determines is necessary to enable the preparation of consolidated financial statementsthat are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company and itssubsidiaries ability to continue as a going concern, disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless management either intends to liquidate the Company andits subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including audit committee) are responsible for overseeing the Company and itssubsidiaries financial reporting process.

24

Auditor�s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor�s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an auditconducted in accordance with the auditing standards generally accepted in the Republic of China will alwaysdetect a material misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, weexercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether dueto fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theCompany and its subsidiaries internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.

4. Conclude on the appropriateness of management�s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that maycast significant doubt on the Company and its subsidiaries� ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditors� report to therelated disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor�s report.However, future events or conditions may cause the Company and its subsidiaries to cease to continue as agoing concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, includingthe disclosures, and whether the consolidated financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Company and its subsidiaries to express an opinion on the consolidated financialstatements. We are responsible for the direction, supervision, performance of the Group audit and developingthe Group audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control thatwe identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and other matters thatmay reasonably be thought to bear on our independence, and where applicable, related safeguards.

25

From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit of the consolidated financial statements of the current period and are therefore thekey audit matters. We describe these matters in our auditors� report unless law or regulation precludes publicdisclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors� report are Wu, Lin and Tseng,Kuo-Yang.

KPMG

Taipei, Taiwan (Republic of China)March 19, 2021

26

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated statement of financial position,financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China.

The independent auditors� audit report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors� audit report and consolidated financial statements, the Chinese version shall prevail.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)CTBC FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2020 December 31, 2019ASSETS Amount % Amount %

11000 Cash and cash equivalents (Note 4 and 6(a)) $ 142,085,440 2 137,215,261 2

11500 Due from the central bank and call loans to banks (Note 6(b), 7 and 8) 357,920,481 5 250,751,058 4

12000 Financial assets measured at fair value through profit or loss (Note 4, 6(c)and (u), and 7 )

529,747,338 8 498,857,526 8

12150 Financial assets measured at fair value through other comprehensive income(Note 4, 6(d) and (u), and 8)

644,711,761 10 575,846,436 9

12200 Investments in debt instruments measured at amortized cost (Note 4, 6(e)and (u), and 8)

1,826,984,725 28 1,721,282,552 28

12300 Financial assets-hedging (Note 4 and 6(f)) 16,394 - 330,764 -

12500 Securities purchased under resell agreements (Note 4 and 6(g)) 3,953,395 - 16,583,359 -

13000 Receivables-net (Note 4, 6(h), (j) and (au), 7 and 8) 179,275,408 3 192,650,599 3

13200 Current income tax assets (Note 4) 1,511,113 - 1,746,169 -

13500 Loans-net (Note 4, 6(i), (j) and (au), and 7) 2,528,287,216 38 2,471,532,195 40

13700 Reinsurance contract assets-net (Note 4 and 6(k)) 3,062,366 - 2,092,664 -

15000 Investment under equity method-net (Note 4 and 6(l)) 31,438,820 1 28,708,210 1

15500 Other financial assets-net (Note 4, 6(j), (m) and (ao), and 8) 127,858,688 2 94,369,618 2

18000 Investment property-net (Note 4 and 6(n)) 86,925,071 1 81,655,764 1

18500 Premises and equipment-net (Note 4 and 6(o)) 49,310,211 1 50,698,386 1

18600 Right-of-use assets-net (Note 4 and 6(p)) 16,209,281 - 16,025,100 -

19000 Intangible assets-net (Note 4 and 6(q)) 24,603,501 - 24,425,065 -

19300 Deferred income tax assets (Note 4 and 6(af)) 18,373,870 - 12,471,402 -

19500 Other assets-net (Note 4, 6(r) and 8) 44,392,100 1 42,192,408 1

TOTAL ASSETS $ 6,616,667,179 100 6,219,434,536 100

December 31, 2020 December 31, 2019LIABILITIES AND EQUITY Amount % Amount %

Liabilities:

21000 Deposits from the central bank and banks (Note 6(s) and 7) $ 55,993,946 1 53,200,298 1

21500 Due to the central bank and banks (Note 6(t) and 8) 16,214,708 - 20,896,160 -

22000 Financial liabilities measured at fair value through profit or loss (Note 4 and6(c))

79,847,010 1 114,679,433 2

22300 Financial liabilities-hedging (Note 4 and 6(f)) 211,672 - 37,437 -

22500 Securities sold under repurchase agreements (Note 4 and 6(u)) 94,461,164 2 105,266,092 2

22600 Commercial papers issued-net (Note 6(v)) 17,005,163 - 44,423,053 1

23000 Payables (Note 6(w) and 7) 95,998,453 2 97,461,845 2

23200 Current income tax liabilities (Note 4) 8,415,865 - 3,635,360 -

23500 Deposits and remittances (Note 6(x) and 7) 3,728,667,552 56 3,360,070,624 54

24000 Bonds payable (Note 6(c) and (y)) 125,380,870 2 98,177,908 2

24600 Provisions (Note 4, 6(j), (z), (ad) and (ae)) 1,760,399,327 27 1,714,432,322 27

25500 Other financial liabilities (Note 4, 6(aa) and (ao)) 176,691,031 3 178,775,585 3

26000 Lease liabilities (Note 4, 6(ab) and 7) 15,442,031 - 14,924,727 -

29300 Deferred tax liabilities (Note 4 and 6(af)) 11,555,649 - 7,875,692 -

29500 Other liabilities (Note 6(ac)) 25,071,998 - 24,358,160 -

Total liabilities 6,211,356,439 94 5,838,214,696 94

Stockholders� equity - parent company:

31100 Capital stock:

31101 Common stock (Note 6(ag)) 194,969,896 3 194,969,896 3

31103 Preferred stock (Note 6(ag)) 4,999,900 - 4,999,900 -

31500 Capital surplus (Note 6(ag)) 58,754,923 1 58,688,782 1

32000 Retained earnings:

32001 Legal reserve 32,003,213 - 27,793,018 -

32003 Special reserve 16,188,405 - 50,412,813 1

32011 Undistributed earnings (Note 6(ah)) 97,217,071 2 46,503,092 1

32500 Other equity interest (Note 6(ag)) 1,097,162 - (2,228,812) -

39500 Non-controlling interests 80,170 - 81,151 -

Total equity 405,310,740 6 381,219,840 6

TOTAL LIABILITIES AND EQUITY $ 6,616,667,179 100 6,219,434,536 100

27See accompanying notes to financial statements.


Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)

2020 2019 ChangeAmount % Amount % %

Interest income (Note 6(ak) and 7)41000 (9)54141,659,89967$ 129,479,139

Less: Interest expenses (Note 6(ak) and 7)51000 (20,425,471) (11) (31,022,593) (12) (34)

Net income of interest (Note 6(ak)) (1)42110,637,30656109,053,668

Net non-interest income (loss)

Service fee and commissions income (Note 6(al) and 7)49800 (6)924,462,1741223,032,223

Net insurance income (Note 6(am))49810 (67)38101,870,7781733,371,291

Gains on financial assets measured at fair value through profit or loss (Note 6(an))49820 151436,037,3312141,472,612

Gains on investment properties49825 46-870,07311,266,342

Realized gains on financial assets measured at fair value through other comprehensive income49835 8614,339,258815,416,442

Gains on derecognition of financial assets measured at amortized cost (Note 6(e))49850 15711,421,15523,653,420

Foreign exchange losses49870 (162)(5)(12,069,187)(16)(31,597,649)

(Provision for) reversal of impairment loss on assets49880 (121)-609,040-(127,468)

Proportionate share of gains from associates or joint ventures under equity method (Note 6(l))49890 (20)11,515,21411,209,857

Losses on reclassification under the overlay approach (Note 6(c))49898 95(5)(12,130,912)-(570,802)

Net other non-interest income (losses)49900 741-(144,502)-926,385

Public-welfare lottery payment58099 (2,700,000) (2) (2,700,000) (1) -

Net revenue 194,406,321 100 264,717,728 100 (27)

58100 Provisions for bad debt expenses, commitment and guarantee liability provision (Note 6(j)) (9,258,231) (5) (5,641,291) (2) 64

58300 Net change in provisions for insurance liabilities (Note 6(ap)) (68,870,986) (35) (139,137,229) (53) (51)

Operating expenses:

Employee benefits expenses (Note 6(aq))58501 (7)(15)(38,908,863)(18)(36,186,621)

Depreciation and amortization expenses (Note 6(ar))58503 5(3)(6,930,687)(4)(7,255,624)

Other general and administrative expenses (Note 6(at))58599 (21,257,802) (11) (22,290,580) (8) (5)

Total operating expenses (64,700,047) (33) (68,130,130) (26) (5)

Profit from continuing operations before tax 1951,809,0782751,577,057 -61003 Less: Income tax expenses(Note 6(af)) 8,721,902 5 8,926,802 3 (2)

Profit 42,855,155 22 42,882,276 16 -69500 Other comprehensive income (losses) :

69560 Components of other comprehensive (losses) income that will not be reclassified to profit or loss

69561 (Losses) gains on remeasurement of defined benefit plans -24,343-(184,587) (858)69565 Change in fair value of financial liability attributable to change in credit risk of liability 11,396,988(1)(1,176,748) (184)69567 Unrealized (losses) gains from investments in equity instruments measured at fair value through other comprehensive income 38,240,344-(711,119) (109)69563 Share of other comprehensive losses of associates and joint ventures accounted for using equity method, components of other

comprehensive income that will not be reclassified to profit or loss-(4,526)(1)(1,571,450) (34,621)

69569 Less: Income tax related to items that will not be reclassified to profit or loss (1,112,315) (1) 284,351 - (491)Components of other comprehensive (losses) income that will not be reclassified to profit or loss (2,531,589) (1) 9,372,798 4 (127)

69570 Components of other comprehensive (losses) income that will be reclassified to profit or loss

Exchange differences on translation of foreign financial statements69571 (3,396,221) (2) (664,238) - (411)69583 Unrealized gains from debt instruments measured at fair value through other comprehensive income 6,519,704 4 16,834,699 6 (61)69575 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other

comprehensive income that will be reclassified to profit or loss-14,515-681,661 4,596

69590 Other comprehensive income on reclassification under the overlay approach 512,130,912-570,802 (95)69579 Less: Income tax related to items that are or may be reclassified to profit or loss 215,462 - 4,224,243 2 (95)

Components of other comprehensive income that will be reclassified to profit or loss 4,160,484 2 24,091,645 9 (83)69500 Other comprehensive income 1,628,895 1 33,464,443 13 (95)

Total comprehensive income 44,484,050$ 23 76,346,719 29 (42)

Net income attributable to:

Parent company 1642,879,8062242,853,406$ -

Non-controlling interest 1,749 - 2,470 - (29)

42,855,155$ 22 42,882,276 16

Comprehensive income attributable to:

Parent company 2976,346,1772344,487,441$ (42)

Non-controlling interest (3,391) - 542 - (726)

44,484,050$ 23 76,346,719 29

Earnings per share (unit: NT Dollars) (Note 6(aj)) 2.15$ 2.16

See accompanying notes to financial statements.28


Consolidated Statements of Changes in Equity



Stockholder�s Equity - parent companyCapital Stock Retained earnings Other equity interest

Commonstock Preferred stock Capital surplus Legal reserve Special reserve

Undistributedearnings

Exchangedifferences of

overseassubsidiaries'

financial reportstranslation

Unrealized gains(losses) on financialassets measured at

fair valuethrough othercomprehensive

income

Change indesignated as

financial liabilitiesmeasured at fair

value through profitor loss attributable

to credit risk

Othercomprehensive

income (losses) onreclassification

under the overlayapproach

Stockholders� equity- parent company

Non-controllinginterests Total equity

Balance at January 1, 2019 $ 194,969,896 3,333,300 50,368,539 24,189,775 29,719,062 48,945,112 (6,844,471) (18,434,666) (310,604) (10,863,479) 315,072,464 76,017 315,148,481

Net income - - - - - 42,879,806 - - - - 42,879,806 2,470 42,882,276

Other comprehensive income (losses) - - - - - 17,410 (798,038) 21,709,409 1,396,988 11,140,602 33,466,371 (1,928) 33,464,443

Total comprehensive income - - - - - 42,897,216 (798,038) 21,709,409 1,396,988 11,140,602 76,346,177 542 76,346,719

Appropriation and distribution of retained earnings:

Legal reserve appropriated - - - 3,603,243 - (3,603,243) - - - - - - -

Special reserve appropriated - - - - 20,693,751 (20,693,751) - - - - - - -

Cash dividends of common stock - - - - - (19,496,990) - - - - (19,496,990) - (19,496,990)

Cash dividends of preferred stock - - - - - (749,992) - - - - (749,992) - (749,992)

Issuance of preferred stock - 1,666,600 8,315,300 - - - - - - - 9,981,900 - 9,981,900

Changes in ownership interests in subsidiaries - - 2,773 - - (7,365) - - - - (4,592) 4,592 -

Share-based payments - - 2,170 - - - - - - - 2,170 - 2,170

Disposal of equity instruments designated at fair value through other comprehensive income - - - - - (775,447) - 775,447 - - - - -

Changes in special reserve - - - - - (12,448) - - - - (12,448) - (12,448)

Balance at December 31, 2019 194,969,896 4,999,900 58,688,782 27,793,018 50,412,813 46,503,092 (7,642,509) 4,050,190 1,086,384 277,123 381,138,689 81,151 381,219,840

Net Income - - - - - 42,853,406 - - - - 42,853,406 1,749 42,855,155

Other comprehensive (losses) income - - - - - (143,721) (3,038,239) 5,172,122 (1,158,675) 802,548 1,634,035 (5,140) 1,628,895

Total comprehensive income (losses) - - - - - 42,709,685 (3,038,239) 5,172,122 (1,158,675) 802,548 44,487,441 (3,391) 44,484,050


Legal reserve appropriated - - - 4,210,195 - (4,210,195) - - - - - - -

Cash dividends of common stock - - - - - (19,496,990) - - - - (19,496,990) - (19,496,990)

Cash dividends of preferred stock - - - - - (989,325) - - - - (989,325) - (989,325)

Reversal of special reserve - - - - (34,224,408) 34,224,408 - - - - - - -

Changes in equity of associates and joint ventures accounted for using equity method - - 66,141 - - - - - - - 66,141 - 66,141

Changes in ownership interests in subsidiaries - - - - - (2,410) - - - - (2,410) 2,410 -

Disposal of equity instruments designated at fair value through other comprehensive income - - - - - (1,548,218) - 1,548,218 - - - - -

Changes in special reserve - - - - - 27,024 - - - - 27,024 - 27,024

Balance at December 31, 2020 $ 194,969,896 4,999,900 58,754,923 32,003,213 16,188,405 97,217,071 (10,680,748) 10,770,530 (72,291) 1,079,671 405,230,570 80,170 405,310,740

See accompanying notes to financial statements.29


Consolidated Statements of Cash Flows



2020 2019Cash Flows from Operating Activities:

Net Income Before Tax 51,809,07851,577,057$Adjustments:

Income and expenses items with no effect on cash flow:Depreciation expense 5,929,2616,195,891Amortization expense 1,532,4031,647,763Impairment losses on expected credit loss/ Provisions for bad debt expenses, commitments and

guarantee reserve5,641,2919,258,231

Net gains on financial assets or liabilities measured at fair value through profit (35,615,582)(10,325,974)Interest expense 31,022,59320,425,471Interest income (141,659,899)(129,479,139)Dividend income (8,640,044)(8,170,671)Net change in insurance liabilities 139,137,22968,870,986Net change in other provisions 1,013,33950,192Share-based payments - 2,328Proportionate share of gains from associates or joint ventures under the equity method (1,211,404) (1,515,103)Losses on reclassification by applying overlay approach 570,802 12,130,912Losses (gains) on disposal and retirement of premises and equipment 4,557 (846,441)Gains on disposal of investment properties (253,818) (3,827)Losses on disposal and retirement of intangible assets 1,759 57,385Gains on disposal of assets classified as held for sale - (319,878)Losses on disposal of investments accounted for using equity method 1,547 -Provision for (reversal of) impairment losses on financial assets 1,715 (614,442)Provision for impairment losses on non-financial assets 125,753 5,402Losses (gains) on disposal of foreclosed properties 1,331 (7,894)Unrealized foreign exchange gains on insurance liabilities (23,789,519) (10,749,830)Other adjustments 98,787 (627,435)

Subtotal of income and expense items with no effect on cash flows (65,975,740) (4,128,232)Changes in Operating Assets and Liabilities:

Net Changes in Operating Assets:Decrease (increase) in due from the central bank and call loans to banks (16,806,951)7,958,944Increase in financial assets measured at fair value through profit or loss (89,170,170)(18,661,629)Increase in financial assets measured at fair value through other comprehensive income (86,761,232)(63,947,175)Increase in investments in debt instruments measured at amortized cost (93,138,956)(105,695,449)Decrease (increase) in hedging financial assets 314,370 (296,552)Decrease in receivables 5,362,77213,125,406Increase in loans (112,728,722)(66,055,471)(Increase) decrease in reinsurance contract assets (256,729) 467,770Increase in other financial assets (18,198,710)(33,678,358)Increase in other assets (4,303,547) (4,458,687)

Net Changes in Operating Assets (271,199,638) (415,729,438)Net Changes in Operating Liabilities:

Increase (decrease) in deposits from the central bank and other banks (21,298,394)2,793,648(Decrease) increase in financial liabilities measured at fair value through profit or loss 4,969,978(8,239,384)Increase (decrease) in hedging financial liabilities 174,235 (146,758)Increase (decrease) in payables 3,958,491 (778,879)Increase in deposits and remittances 222,055,296368,596,928Decrease in employee benefits reserve (168,556)(156,627)Decrease in other financial liabilities (13,541,429)(1,585,072)Increase in other liabilities 713,838 8,091,100Net Changes in Operating Liabilities 366,256,057 199,182,358

Net Changes in Operating Assets and Liabilities 95,056,419 (216,547,080)Sum of Adjustments 29,080,679 (220,675,312)

30 See accompanying notes to financial statements.


Consolidated Statements Of Cash Flows



For the years ended December 31

2020 2019

Cash Provided by (Used in) Operating Activities (168,866,234)80,657,736$

Interest received 141,303,860129,914,798

Dividends received 9,917,6528,778,462

Interest paid (25,941,199)(23,142,663)

Income taxes paid (5,456,724) (3,510,811)

Net Cash Flows Provided by (Used in) Operating Activities 190,751,609 (47,096,732)

Cash Flows from Investing Activities:

Purchase of financial assets under equity method (3,799,797) (14,626)

Increase in prepayments for investments - (340,062)

Proceeds from capital reduction of investments accounted for using equity method 7,856,50322,221

Proceeds from disposal of assets classified as held for sale - 843,060

Purchase of premises and equipment (1,506,473) (3,303,050)

Disposal of premises and equipment 89,993 1,337,323

Purchase of intangible assets (1,557,095) (1,350,826)

Disposal of intangible assets 4,481 574

Proceed from disposal of foreclosed collateral 12,905 44,176

Purchase of investment properties (7,367,143)(6,221,763)

Proceeds from disposal of investment properties 731,372 788,222

Net Cash Flows Used in Investing Activities (12,224,156) (1,505,849)

Cash Flows from Financing Activities:

(Decrease) increase in due to the central bank and banks 6,854,385(4,681,452)

(Decrease ) increase in commercial papers payable 5,781,500(27,447,600)

Proceeds from issuing bonds 10,000,00033,500,000

Repayments of bonds (10,550,000)(6,300,000)

Issuance of financial debentures -1,000,000

Repayments of financial debentures -(28,927,720)

(Decrease) increase in securities sold under repurchase agreement 34,741,887(10,804,928)

Payment of lease liabilities (2,739,481)(2,939,487)

Cash dividends paid (20,246,982)(20,486,315)

Proceeds from issuing shares - 9,981,737

Interest paid (2,612,500) (2,898,072)

Net Cash Flows (Used in) Provided by Financing Activities (69,700,002) 30,924,974

Effect of Exchange Rate Changes on Cash and Cash Equivalents (464,638)(1,458,869)

Increase (decrease) in Cash and Cash Equivalents (18,142,245)107,368,582

Cash and Cash Equivalents at the Beginning of the Period 342,323,069 360,465,314

Cash and Cash Equivalents at the End of the Period 449,691,651$ 342,323,069

Composition of Cash and Cash Equivalents:

Cash and cash equivalents recognized in balance sheet 137,215,261142,085,440$

Due from the central bank and call loans to bank which meet IAS 7 definition of cash and cash equivalents 188,524,449303,652,816

Securities purchased under resell agreements which meet IAS 7 definition of cash and cash equivalents 3,953,395 16,583,359

Cash and Cash Equivalents at the End of the Period 449,691,651$ 342,323,069

See accompanying notes to financial statements. 31

CTBC FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIESNotes to the Consolidated Financial Statements

CTBC Financial Holding Co., Ltd.BALANCE SHEETS

December 31, 2020 and 2019


(c) Financial statements of the Parent company

December 31, 2020 December 31, 2019Assets Amount Amount

11000 Cash and cash equivalents $ 103,047 - 276,513 -

12150 Financial assets measured at fair value through other comprehensive income 795,600 - 838,350 -

13000 Receivables-net 5,511 - 8 -

13200 Current income tax assets 9,318 - 280,837 -

15000 Investments under equity method-net 466,203,628 100 439,854,276 100

15500 Other financial assets-net 11,609 - 6,600 -

18500 Premises and equipment-net 60,202 - 73,497 -

18600 Right-of-use assets-net 46,705 - 22,634 -

19000 Intangible assets-net 4,544 - 6,383 -

19300 Deferred income tax assets 17,671 - 15,316 -

19500 Other assets-net 27,608 - 21,775 -

Total assets $ 467,285,443 100 441,396,189 100

December 31, 2020 December 31, 2019Liabilities and Equity Amount % Amount %

Liabilities:

22600 Commercial papers payable-net $ 7,099,144 2 31,724,064 7

23000 Payables 1,223,856 - 1,551,435 -

23200 Current income tax liabilities 2,215,608 - 914,799 -

24000 Bonds payable 51,400,000 11 24,200,000 6

24600 Provisions 76,170 - 62,472 -

26000 Lease liabilities 40,095 - 23,063 -

29500 Other liabilities - - 1,781,667 1

Total Liabilities 62,054,873 13 60,257,500 14

Stockholders� Equity - Parent Company

Capital stock:

31101 Common stock 194,969,896 42 194,969,896 44

31103 Preferred stock 4,999,900 1 4,999,900 1

31500 Capital surplus 58,754,923 13 58,688,782 13

Retained earnings:

32001 Legal reserve 32,003,213 7 27,793,018 6

32003 Special reserve 16,188,405 3 50,412,813 11

32011 Undistributed earnings 97,217,071 21 46,503,092 11

32500 Other equity interest 1,097,162 - (2,228,812) -

Total Equity 405,230,570 87 381,138,689 86

Total Liabilities and Equity $ 467,285,443 100 441,396,189 100

(Continued)32

CTBC FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

CTBC FINANCIAL HOLDING CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME


(Expressed In Thousands of New Taiwan Dollars)

2020 2019Amount % Amount %

Income:

Proportionate share of gains from associates or joint ventures under equity

method

$ 10045,815,74910046,833,346

Other income 116,530 - 159,297 -

Expenses and Losses:

Operating expenses (4)(1,820,937)(3)(1,308,565)

Other expenses and losses (556,777) (1) (577,410) (1)

Net Income before Tax 9543,576,6999645,084,534

Less: Income tax expense 2,231,128 5 696,893 2

Net Income 9342,879,8069142,853,406

Other comprehensive income (net amount after tax) 1,634,035 4 33,466,371 73

Total Comprehensive Income 44,487,441$ 95 76,346,177 166

Basic EPS (in NT dollars) $ 2.15 2.16

(Continued)33

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

CTBC FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIESNotes to Consolidated Financial Statements

CTBC FINANCIAL HOLDING CO., LTD.

Statements of Changes in Stockholder�s Equity



Share capital Retained earnings Total other equity interest

Commonstock Preferred stock

Capitalsurplus

Legalreserve

Specialreserve

Undistributedearnings

Exchangedifferences of

overseassubsidiaries�

financial reportstranslation

Unrealized gains(losses) on financialassets measured atfair value through

other comprehensiveincome

Changes indesignated as

financial liabilitiesmeasured at fair

value throughprofit or loss

attributable tocredit risk

Other comprehensiveincome (losses) on

reclassification underthe overlay approach Total equity

Balance at January 1, 2019 $ 194,969,896 3,333,300 50,368,539 24,189,775 29,719,062 48,945,112 (6,844,471) (18,434,666) (310,604) (10,863,479) 315,072,464

Net income - - - - - 42,879,806 - - - - 42,879,806

Other comprehensive income (losses) - - - - - 17,410 (798,038) 21,709,409 1,396,988 11,140,602 33,466,371

Total comprehensive income (losses) - - - - - 42,897,216 (798,038) 21,709,409 1,396,988 11,140,602 76,346,177


Legal reserve appropriated - - - 3,603,243 - (3,603,243) - - - - -

Special reserve appropriated - - - - 20,693,751 (20,693,751) - - - - -

Cash dividends of common stock - - - - - (19,496,990) - - - - (19,496,990)

Cash dividends of preferred stock - - - - - (749,992) - - - - (749,992)

Changes in equity of associates and joint ventures accounted for using equity method - - 2,773 - - (7,365) - - - - (4,592)

Cash from capital surplus - 1,666,600 8,315,300 - - - - - - - 9,981,900

Share-based payment - - 2,170 - - - - - - - 2,170

Disposal of equity instruments designated at fair value through other comprehensive income - - - - - (775,447) - 775,447 - - -

Changes in special reserve - - - - - (12,448) - - - - (12,448)

Balance at December 31, 2019 194,969,896 4,999,900 58,688,782 27,793,018 50,412,813 46,503,092 (7,642,509) 4,050,190 1,086,384 277,123 381,138,689

Net income - - - - - 42,853,406 - - - - 42,853,406

Other comprehensive (losses) income - - - - - (143,721) (3,038,239) 5,172,122 (1,158,675) 802,548 1,634,035

Total comprehensive Income (losses) - - - - - 42,709,685 (3,038,239) 5,172,122 (1,158,675) 802,548 44,487,441


Legal reserve appropriated - - - 4,210,195 - (4,210,195) - - - - -

Cash dividends of common stock - - - - - (19,496,990) - - - - (19,496,990)

Cash dividends of preferred stock - - - - - (989,325) - - - - (989,325)

Reversal of special reserve - - - - (34,224,408) 34,224,408 - - - - -

Changes in equity of associates and joint ventures accounted for using equity method - - 66,141 - - (2,410) - - - - 63,731

Disposal of equity instruments designated at fair value through other comprehensive income - - - - - (1,548,218) - 1,548,218 - - -

Changes in special reserve - - - - - 27,024 - - - - 27,024

Balance at December 31, 2020 $ 194,969,896 4,999,900 58,754,923 32,003,213 16,188,405 97,217,071 (10,680,748) 10,770,530 (72,291) 1,079,671 405,230,570

(Continued)34

CTBC FINANCIAL HOLDING CO., LTD. AND SUBSIDIARIESNotes to the Consolidated Financial Statements

CTBC FINANCIAL HOLDING CO., LTD.Statements of Cash Flows

For the years ended December 31, 2020 and 2019(Expressed in Thousands of New Taiwan Dollars)

For the years ended December 312020 2019

Cash Flows from Operating Activities:Net Income before Tax $ 45,084,534 43,576,699Adjustments: Income and expenses items with no effect on cash flow: Adjustments to reconcile profit (loss)

Depreciation expense 45,700 13,591Amortization expense 1,141 2,166Interest expenses 555,832 577,400Interest income (8,042) (20,217)Dividend income (60,674) (57,056)Share based payment transactions - 51Proportionate share of gains from associates or joint ventures under equity method (45,815,749)(46,833,346)(Gains) losses on disposal and retirement of premises and equipment (284) 3Gains on disposal of intangible assets (628) -Others (65) -

Subtotal of income and expense items with no effect on cash flows (46,300,366) (45,299,811)Changes in Operating Assets and Liabilities:

Net Changes in Operating Assets: (Increase) decrease in receivables (5,503) 9Increase in other financial assets (5,009) (6,600)(Increase) decrease in other assets (5,833) 4,400

Net Changes in Operating Assets (16,345) (2,191)Net Changes in Operating Liabilities:

(Decrease) increase in payables (390,614) 108,553Increase (decrease) in employee benefits liabilities 2,074 (3,958)(Decrease) increase in other liabilities (1,781,667) 1,574,855Net Changes in Operating Liabilities (2,170,207) 1,679,450

Net Changes in Operating Assets and Liabilities (2,186,552) 1,677,259Total Adjustments (48,486,918) (43,622,552)

Interest received 8,043 20,212Dividends received 22,321,505 21,591,282Interest paid (658) (338)Income tax paid (658,830) (1,038,590)

Net Cash Provided by Operating Activities 18,267,676 20,526,713Cash Flows from Investing Activities:

Purchase of investment under equity method - (9,999,600)Purchase of premises and equipment (1,385) (1,756)Disposal of premises and equipment 9,769 28Purchase of intangible assets (3,155) (5,221)Disposal of intangible assets 4,481 -

Net Cash Provided by (Used in) Investing Activities 9,710 (10,006,549)Cash Flows from Financing Activities:

(Decrease) increase in commercial paper payable (24,650,000) 50,000Issuance of corporate bonds 33,500,000 10,000,000Repayments of corporate bonds (6,300,000) (9,600,000)Repayments of lease liabilities principal (47,479) (6,807)Cash dividends paid (20,246,982)(20,486,315)Cash capital increase - 9,981,737Interest paid (467,058) (569,737)

Net Cash Used in Financing Activities (18,450,852) (10,391,789)Net Increase in Cash and Cash Equivalents (173,466) 128,375Cash and Cash Equivalents, at the Beginning of the Period 276,513 148,138Cash and Cash Equivalents, at the End of the Period $ 103,047 276,513

(Continued)35

CTBC Financial Holding Co., Ltd. Minutes of the 2021 ...

Documents

Transcript of CTBC Financial Holding Co., Ltd. Minutes of the 2021 ...