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First Financial Holding Co. Ltd. AGM Information 2015

Jul 3, 2015

52222_rns_2015-07-03_b7543aa3-ce31-4c46-8094-9103cee801fd.pdf

AGM Information

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Stock Code: 2892

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Handbook for the 2015 Annual Shareholders’ Meeting

(Summary Translation)

Meeting Time: 9:00 am, Friday, June 26, 2015 Location: 22[nd] Floor, 30 Chung King S. Rd., Sec.1, Taipei 100, Taiwan

This English version handbook is a summary translation of the Chinese version and is for reference only. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.

Table of Contents

I. Meeting Procedure P2
II. Meeting Agenda P3
1. Report Matters P4
2. Recognition Matters P4
3. Discussion and Election Matters P5
4. Extemporary Motions P7
III. Attachments
1. 2014 Business Report (omitted)
2. Audit Committee's Review Report P8
3. 2014 Financial Statements P9
4. Profit Distribution Table P17
5. Nomination List of Directors P18
6. List of the 5th term of Directors’ engagement with peers P22
IV Appendix
1. Articles of Incorporation (omitted)
2. The Rules of Procedure of Shareholder Meetings (omitted)
3. Rules for Election of Directors of the First Financial
Holding Co., Ltd.		 P23
4. Lists of Directors and Respective Stakeholding (omitted)

1

First Financial Holding Co., Ltd.

Procedure for the 2015 Annual Shareholders’ Meeting

  1. Call the Meeting to Order

  2. Chairman Remarks

3. Report Matters

  1. Recognition Matters

  2. Discussion and Election Matters

6. Extemporary Motions

7. Adjournment

2

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Agenda of 2015 Annual Shareholders’ Meeting

Date and Time: June 26, 2015 at 9:00 a.m.

Venue: 22 Fl., No.30, Sec. 1, Chung King S. Rd., Taipei City (the auditorium of the headquarters of First Commercial Bank Co., Ltd.)

  1. The Chairman announces the aggregate shareholding of shareholders present constitute a quorum and call the meeting to order.

  2. Chairman’s remarks

  3. Report Matters:

  4. (a) President reports the business operation of the Company in 2014.

  5. (b) Audit committee report the auditing process of 2014 financial statements.

  6. Recognition Matters:

  7. (a) Please recognize the 2014 business report and consolidated financial statements of the Company.

  8. (b) Please recognize the distribution of 2014 profits.

  9. Discussion and Election Matters:

  10. (a) Please approve the issuance of new shares via capitalization of profits of 2014.

  11. (b) Election for Company’s 5th term of board of directors and independent directors.

  12. (c) Please approve release of restrictions of competitive activities of the 5th term of Directors.

  13. Extemporary motions

  14. Adjournment

3

Report Matters

  1. President reports the business operation of the Company in 2014.

  2. Explanation: The 2014 Business Report is attached as Attachment 1 (omitted).

  3. Audit Committee report the auditing process of 2014 financial statements.

Explanation: The 2014 Audit Committee’s Review Report is attached as Attachment 2.

Recognition Matters

  1. Please recognize the 2014 business report and consolidated financial statements of the Company.

Explanation: The Business Report and the Company’s Consolidated Financial Statements of 2014 have been approved by the Board and examined by the Audit Committee. Among which, the Company’s Consolidated Financial Statements were audited by certified public accountants, James Huang and Charles Lai, of PricewaterhouseCoopers, Taiwan. The 2014 Business Report and Consolidated Financial Statements are attached as Attachment 1 (omitted) and 3.

Resolved:

  1. Please recognize the distribution of 2014 profits.

Explanation:

  • 1) The after tax net income of the Company in year 2014 is NT$14,084,934,792. In accordance with the Articles of Incorporation of the Company and other applicable laws to retain 10% thereof in the amount of NT$1,408,493,479 as the legal reserve, and after taking into account the adjusted accumulated profits NT$7,984,053,471 of the Company, the total distributable profit of this year is NT$20,660,494,784 and is proposed to be distributed as follows: (Please see details as Attachment 4.)

  • A. NT$6,481,478,373 as cash dividends (NT$0.70 per share).

  • B. NT$6,018,515,630 as stock dividends (65 new shares per 1,000 existing shares).

  • C. Year-end balance of accumulated profits is NT$8,160,500,781. The employee bonus is

4

NT$7,403,042 and remuneration of the Directors is NT$126,764,413. Both will be distributed in cash. The gap of NT$1,086,513 between actual and estimated cost will be posted as P/L in year 2015.

  • 2) The adjusted accumulated profits of NT$7,984,053,471 as above sourced from the accumulated profits of NT$7,973,875,446 at beginning of 2015, plus the actuarial gains on defined benefit plans NT$10,178,025 from other comprehensive income.

  • 3) After the distribution of profit is approved by this Meeting, the Board of Directors is authorized both to set a record date for the distribution of cash dividends, and, after the capital increase of the Company is approved by the competent authorities, set a record date for the distribution of stock dividends.

  • 4) Cash dividends was calculated and rounded down to dollar in proportion to stakeholding. The total amount of odd fraction will be counted as other income of Company.

  • 5) If the number of the outstanding shares of the Company is subsequently changed due to any share buy-back by the Company, the transfer, conversion, cancellation of the shares or other circumstances resulting in the increase or decrease of the number of the outstanding shares, the Board of Directors then is authorized to adjust the distribution of dividends as appropriate.

  • 6) This proposal for the distribution of profits has been approved by the 35[th] meeting of the 4[th] term of Board of Directors and duly reviewed by Audit Committee.

Resolved:

Discussion and Election Matters

  1. Please approve the Issuance of new shares via capitalization of profits of 2014. Explanation:

  2. 1) In order to increase the working capital, strengthen the financial structure and boost the capital adequacy, it is proposed to appropriate NT$ 6,018,515,630 from the 2014 distributable earnings as stock dividends pursuant to Article 240 of the Company Act. The par value of the shares to be issued is NT$10 and the total number of the common shares to be issued is 601,851,563 shares and the total paid-in capital would reach NT$98,611,063,810.

5

  • 2) The Board of Directors is authorized to set the record date for the proposed capital increase after the approval of competent authority in connection therewith is granted. The distribution of the new shares should be made to the shareholders with no consideration at the ratio of 65 new shares for every 1,000 shares held by shareholders according to their respective shareholding as stated in shareholders’ register book on the record date. Shareholders may, within five days from the record date for stock dividend, apply to the stock affairs agent of the Company to combine fractional shares into one share. Odd lots less than one share thus collected by the Company will be placed at its par value with specific parties as determined by the Chairman under the authorization of the AGM.

  • 3) The rights and obligations of the new shares to be issued under the proposed capital increase shall be the same as those of the existing shares of the Company.

  • 4) The Board of Directors is authorized to make necessary amendment to the proposed capital increase if so instructed by the competent authority.

  • 5) If the number of the outstanding shares of the Company is subsequently changed due to any share buy-back by the Company, the transfer, conversion, cancellation of the shares or other circumstances resulting in the increase or decrease of the number of the outstanding shares, the Board of Directors is authorized to adjust the distribution of dividends as appropriate.

  • 6) This proposal has been approved by the 35[th] Board Meeting of the 4[th] term of Board of Directors and duly reviewed by Audit Committee.

Resolved:

  1. Election for Company’s 5[th] term of board of directors and independent directors. Explanation:

  2. 1) The term of office of the Company’s 4[th] term of board of directors will expire on June 21, 2015. According to Paragraph 2 of Article 195 of the Company Act, in case no election of new directors is effected after expiration of the term of office of existing directors, the term of office of outgoing directors shall be extended until the time new directors have been elected and assumed their office. It is proposed to elect the 5[th] term of board of directors and independent directors at this year’s (2015) annual general shareholders meeting.

6

  • 2) Pursuant to Article 21 and Article 21-1 of the Company’s Articles of Incorporation, the Company’s Board of Directors is composed of 15 to 21 directors, elected by the shareholders meeting from among persons with disposing capacity in accordance with the Financial Holding Company Act and the Company Act. Starting from the Company’s 5[th] term of board of directors, the election of directors and independent directors shall adopt the candidate nomination system, and the shareholders shall elect directors and independent directors from among the nominees listed in the roster of candidates. The number of independent directors shall not be less than two (2) and not less than one-fifth (1/5) of the total number of directors.

  • 3) In consideration of the Company’s scale of operations and development and in response to practical operational needs, it is proposed to elect 15 directors (including 3 independent directors) for the 5[th] term of board of directors. The term of office shall commence on June 26, 2015 and shall end on June 25, 2018.

  • 4) Names of candidates for directors and independent directors are listed in the Attachment 5. The Company’s 4[th] term of board of directors has examined and approved the qualification of candidates in the 35[th] board meeting of the 4[th] term of board of directors.

  • 5) Please vote.

Election Result:

  1. Please approve release of restrictions of competitive activities of the 5[th] term of Directors.

  2. 1) According to Company Law Act 209-1, Directors shall explain the major impact and seek approval from shareholders meeting with regard to their engagement with peers..

  3. 2) Please refer to Attachment 6 as the explanation of the 5[th] term of Directors’ engagement with peers, upon approving release of restrictions of competitive activities of Directors.

  4. 3) This proposal has been approved by the 35[th] Board Meeting of the 4[th] term of Board. Resolved:

Extemporary Motions

7

Attachment 2

First Financial Holding Co., Ltd.

Audit Committee’s Report

The Board of Directors of the Company has prepared and delivered the Business Report, the Consolidated Financial Statements, and earnings distribution proposal for 2014. Wherein, the Consolidated Financial Statements were audited by certified public accountants, James Huang and Charles Lai, of PricewaterhouseCoopers, Taiwan. The Audit Committee has reviewed the above Business Report, the Consolidated Financial Report and earnings distribution proposal and found nothing incorrect. We hereby submit this report in accordance with Article 14-4 and Article 36 of the Securities and Exchange Act and Article 219 of the Company Act.

To: 2015 General Shareholders’ Meeting

Audit Committee of First Financial Holding Co., Ltd.

Independent Director: Tay-Chang Wang

Independent Director: Shyan-Yuan Lee

Independent Director: Yophy Huang

April, 30 2015

8

Attachment 3

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and stockholders of First Financial Holding Co., Ltd

We have audited the accompanying consolidated balance sheets of First Financial Holding Co., Ltd. (the “Company”) and its subsidiaries (collectively the “First Group”) as of December 31, 2014 and 2013, and the related consolidated statements of comprehensive income, of changes in equity and cash flows for the year ended December 31, 2014 and 2013. These consolidated financial statements are the responsibility of the First Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the ”Regulations Governing Auditing and Certification of Financial Statements of Financial Institutions by Certified Public Accountants” and generally accepted auditing standards in the Republic of China. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of First Group as of December 31, 2014 and 2013 and the results of its operations and its cash flows for the years ended December 31, 2014 and 2013 in conformity with the “Regulations Governing the Preparation of Financial Reports by Financial Holding Companies”, “Regulations Governing the Preparation of Financial Reports by Public Banks”, “Regulations Governing the Preparation of Financial Reports by Securities Firms”, “Regulations Governing the Preparation of Financial Reports by Insurance Companies”, “Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants” and International Financial Reporting Standards (“IFRS”), International Accounting Standards (“IAS”), IFRS Interpretations Committee (“IFRIC”), and Standing Interpretations Committee (“SIC”), as endorsed by the Financial Supervisory Commission (“FSC”).

March 19, 2015

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and of cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

9

FIRST FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

ASSETS Notes
6(1)
6(2)
6(3)
6(8)
6(4)
6(5)
6(6)
6(7)
6(9)
6(10)
6(11)
6(12)
6(13)
6(14)		 December 31,2014
Amount
%
$ 62,282,631
3
181,176,379
8
55,800,157
2
84,980,455
4
1,882,206
-
64,860,600
3
1,471,426
-
1,497,260,653
64
912
-
307,625,308
13
3,148,788
-
51,548,266
2
9,437,666
-
28,299,057
1
430,110
-
1,688,887
-
3,815,182
-
$ 2,355,708,683
100		 December 31,2013 December 31,2013
Amount
$ 62,282,631
181,176,379
55,800,157
84,980,455
1,882,206
64,860,600
1,471,426
1,497,260,653
912
307,625,308
3,148,788
51,548,266
9,437,666
28,299,057
430,110
1,688,887
3,815,182
$ 2,355,708,683		 Amount
$ 56,683,394
162,586,971
46,428,396
97,397,287
3,469,271
69,439,025
2,294,922
1,431,075,270
4,690
304,110,961
1,819,442
44,970,823
8,790,550
28,464,750
345,807
1,665,697
3,838,096
$ 2,263,385,352		 %
Cash and cash equivalents
Due from the Central Bank and call loans to banks
Financial assets at fair value through profit or loss
Available-for-sale financial assets
Securities purchased under resell agreements
Receivables, net
Current tax assets
Loans discounted, net
Reinsurance contract assets, net
Held-to-maturity financial assets
Investments accounted for using equity method, net
Other financial assets, net
Investment property, net
Property and equipment, net
Intangible assets, net
Deferred income tax assets, net
Other assets, net
Total Assets		 3
7
2
4
-
3
-
63
-
14
-
2
1
1
-
-
-
100

(Continued)

10

FIRST FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

LIABILITIES AND EQUITY Notes
6(15)
6(16)
6(17)
6(18)
6(19)
6(20)
6(21)
6(22)
6(23)
6(24)		 December 31,2014
Amount
%
$ 126,095,434
5
80,968
-
23,387,572
1
-
-
8,723,114
-
10,693,042
1
68,733,743
3
1,680,981
-
1,823,298,294
78
41,900,000
2
7,528,630
-
6,919,954
-
5,062,443
-
795,376
-
69,658
-
66,239,808
3
5,772,703
-
4,350,409
-
2,201,332,129
93
92,592,548
4
18,200,167
1
9,355,102
1
4,128,990
-
22,068,989
1
7,598,954
431,804
-
154,376,554
7
$ 2,355,708,683
100		 December 31,2013 December 31,2013
Amount
$ 126,095,434
80,968
23,387,572
-
8,723,114
10,693,042
68,733,743
1,680,981
1,823,298,294
41,900,000
7,528,630
6,919,954
5,062,443
795,376
69,658
66,239,808
5,772,703
4,350,409
2,201,332,129
92,592,548
18,200,167
9,355,102
4,128,990
22,068,989
7,598,954
431,804
154,376,554
$ 2,355,708,683		 Amount
$ 141,375,782
69,243
15,013,079
7,973
14,215,809
5,791,670
63,210,669
2,302,121
1,731,889,637
49,700,000
2,718,078
13,972,124
5,217,358
558,614
8,694
66,717,864
5,763,392
3,647,092
2,122,179,199
86,535,092
18,200,167
8,266,238
4,128,990
19,446,949
4,151,813
476,904
141,206,153
$ 2,263,385,352		 %
Deposits from the Central Bank and banks
Due to the Central Bank and banks
Financial liabilities at fair value through profit or
loss
Derivative financial liabilities for hedging
Securities sold under repurchase agreements
Commercial papers issued, net
Payables
Current tax liabilities
Deposits
Bonds payable
Other borrowings
Provisions
Provisions for insurance
Provisions for employee benefits
Provisions for guarantee liabilities
Other provisions
Other financial liabilities
Deferred tax liabilities
Other liabilities
Total Liabilities
Equity attributable to owners of the parent
Capital
Common stock
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Other equity interest
Non-controlling interests
Total Equity
TOTAL LIABILITIES AND EQUITY		 6
-
1
-
1
-
3
-
77
2
-
1
-
-
-
3
-
-
94
4
1
-
-
1
-
6
100

The accompanying notes are an integral part of these consolidated financial statements.

11

FIRST FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

Interest income
Interest expense
Net interest income
Net income except interest
Net service fee and commission income
Net (loss) gains from insurance operations
Gains on financial assets (liabilities) at fair
value through profit or loss
Gains on investment property
Realized gains on available-for-sale financial
assets
Foreign exchange gains
(Impairment loss) Reversal of impairment
loss on assets
Share of profit of associates accounted for
using equity method
Net other non-interest income
Net income
Bad debt expense and guarantee liability
provisions
Net change in provisions for insurance
liabilities
Operating expenses
Employee benefits expense
Depreciation and amortization expenses
Other general and administrative expenses
Income from continuing operations
Income tax expense
Profit		 For theyears ended December 31,
Change
Percentage
2014
2013
Notes
Amount
%
Amount
%
$ 42,879,260
126
$ 38,131,760
106
12
(
14,601,666 ) (
43) (
12,199,328 ) (
35)
20
6(30) and 7
28,277,594
83
25,932,432
71
9
6(31) and 7
7,427,518
22
6,631,884
18
12
6(32)
(
6,532,668 ) (
19 )
688,025
2
(
1049)
6(3)(33)
1,372,734
4
858,780
3
60
171,830
-
87,857
-
96
6(34)
416,584
1
314,828
1
32
2,171,638
6
1,368,237
4
59
6(35)
(
5,510 )
-
3,046
-
(
281)
6(10)
(
25,805 )
-
96,810
-
(
127)
6(36)
912,540
3
484,333
1
88
34,186,455
100
36,466,232
100
(
6)
(
4,015,000 ) (
12 ) (
4,046,506 ) (
11) (
1)
6(37)
7,100,719
21 (
397,078 ) (
1) (
1888)
6(38)
(
13,776,282 ) (
40 ) (
12,870,019 ) (
35)
7
6(39)
(
971,182 ) (
3 ) (
880,711 ) (
3)
10
6(40) and 7
(
6,041,665 ) (
18) (
5,222,764 ) (
14)
16
16,483,045
48
13,049,154
36
26
6(41)
(
2,405,399 ) (
7) (
2,172,180 ) (
6)
11
14,077,646
41
10,876,974
30
29

(Continued)

12

FIRST FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

For the
2014
Notes
Amount
6(29)
$ 2,579,511
688,633
12,263
146,337
(
7,235)
3,419,509
$ 17,497,155
$ 14,084,936
(
7,290)
$ 14,077,646
$ 17,542,255
(
45,100)
$ 17,497,155
6(42)
$		 For the years ended December 31, years ended December 31, Change
Percentage
%
2
271
1
73
- (
84)
-
68
- (
257)
3
171
33
44
30
29
- (
38)
30
29
33
43
- (
56)
33
44
1.18
2014 2013
%
Amount
8
$ 695,783
2
398,307
-
75,861
-
87,027
-
4,614
10
1,261,592
51
$ 12,138,566
41
$ 10,888,641
- (
11,667)
41
$ 10,876,974
51
$ 12,242,170
- (
103,604)
51
$ 12,138,566
1.52
$		 2013
Other comprehensive income
Exchange differences on translation
Unrealized gains (losses) on valuation of
available-for-sale financial assets
Actuarial gains on defined benefit plans
Share of other comprehensive income of
associates accounted for using equity method
Income tax related to components of
comprehensive income
Other comprehensive income, net of tax
Total comprehensive income
Profit, attributable to:
Profit, attributable to owners of parent
Loss, attributable to non-controlling interests
Comprehensive income attributable to:
Comprehensive income, attributable to owners
of parent
Comprehensive loss, attributable to
non-controlling interests
Earnings per share
Basic and diluted earnings per share from
continuing operations, net of income tax

The accompanying notes are an integral part of these consolidated financial statements.

13

FIRST FINANCIAL HOLDING CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

For the year ended December 31, 2013
Balance at January 1, 2013
Appropriation of prior year's earnings (Note)
Legal reserve appropriated
Cash dividends of ordinary shares
Stock dividends of ordinary shares
Net income for the period
Other comprehensive income for the period
Balance at December 31, 2013
For the year ended December 31, 2014
Balance at January 1, 2014
Appropriation of prior year's earnings (Note)
Legal reserve appropriated
Cash dividends of ordinary shares
Stock dividends of ordinary shares
Net income for the period
Other comprehensive income for the period
Balance at December 31, 2014		 Equity attributab le to owners ofthe parent to owners ofthe parent to owners ofthe parent Non-controlling
interest		 Non-controlling
interest		 Total
Common stock Capital surplus R etainedEarnings Other equity Total
Legal reserve Special reserve Unappropriated
earnings		 Exchange
difference on
translation of
foreign financial
statements		 Unrealized gain or
loss on
available-for-
sale financial assets
$ 81,253,607
-
-
5,281,485
-
-
$86,535,092
$ 86,535,092
-
-
6,057,456
-
-
$92,592,548		 $ 18,200,167
-
-
-
-
-
$18,200,167
$ 18,200,167
-
-
-
-
-
$18,200,167		 $ 7,248,854
1,017,384
-
-
-
-
$ 8,266,238
$ 8,266,238
1,088,864
-
-
-
-
$ 9,355,102		 $ 4,128,990
-
-
-
-
-
$ 4,128,990
$ 4,128,990
-
-
-
-
-
$ 4,128,990		 $ 18,450,625
(
1,017,384 )
(
3,656,412 )
(
5,281,485 )
10,888,641
62,964
$19,446,949
$ 19,446,949
(
1,088,864 )
(
4,326,754 )
(
6,057,456 )
14,084,936
10,178
$22,068,989

($ 1,002,850)
-
-
-
-
782,810
($ 220,040)
($ 220,040)
-
-
-
-
2,725,848
$ 2,505,808		 $ 3,864,098
-
-
-
-
507,755
$ 4,371,853
$ 4,371,853
-
-
-
-
721,293
$ 5,093,146		 $ 132,143,491
-
(
3,656,412)
-
10,888,641
1,353,529
$140,729,249
$ 140,729,249
-
(
4,326,754)
-
14,084,936
3,457,319
$153,944,750		 $ 580,508
-
-
-
(
11,667 )
(
91,937)
$ 476,904
$ 476,904
-
-
-
(
7,290 )
(
37,810)
$ 431,804		 $ 132,723,999
-
(
3,656,412)
-
10,876,974
1,261,592
$141,206,153
$ 141,206,153
-
(
4,326,754)
-
14,077,646
3,419,509
$154,376,554

Note ： Directors' and supervisors' remuneration and employees' bonus have been deducted from the consolidated statement of comprehensive income.

The accompanying notes are an integral part of these consolidated financial statements.

14

For theyears ended December 31, For theyears ended December 31,
2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations before tax $ 16,483,045 $ 13,049,154
Adjustments to reconcile income before tax to net cash provided by
operating activities
Income and expenses having no effect on cash flows
Depreciation of investment property 15,929 12,198
Depreciation of property and equipment 735,451 715,353
Amortization expense 219,802 165,358
Provision for bad debt expense 6,308,204 7,214,906
Interest income ( 42,879,260 ) ( 38,131,760 )
Interest expense 14,601,666 12,199,328
Dividend income ( 817,712 ) ( 760,515 )
Net change in insurance liability ( 7,083,924 ) 400,614
Net change in provisions for foreign exchange price fluctuation 18,588 4,440
Share of loss of associates accounted for using equity method 25,805 ( 96,810 )
(Gain) loss on disposal of investment property ( 103,798 ) 22,704
Loss on disposal of property and equipment 5,789 147
Impairment loss (reversal of impairment loss) on assets 5,510 ( 3,046 )
Changes in operating assets and liabilities
Changes in operating assets
Increase in due from the Central Bank ( 2,548,291 ) ( 2,742,552 )
Increase in financial assets at fair value through profit or loss ( 9,371,761 ) ( 27,337,093 )
Decrease (increase) in available-for-sale financial assets 13,036,838 ( 12,807,468 )
Decrease (increase) in receivables 4,895,278 ( 5,325,860 )
Increase in loans discounted ( 72,295,570 ) ( 1,441,874 )
Increase in held-to-maturity financial assets ( 3,514,347 ) ( 25,573,798 )
Decrease (increase) in reinsurance assets 766 ( 834 )
Increase in other financial assets ( 6,606,769 ) ( 23,134,347 )
Decrease in other assets 244,714 10,970
Changes in operating liabilities
Decrease in deposits from the Central Bank and banks ( 15,280,348 ) ( 11,805,915 )
Increase (decrease) in financial liabilities at fair value through
profit or loss 8,374,493 ( 6,851,886 )
Decrease in derivative financial liabilities for hedging ( 7,973 ) ( 36,611 )
Increase (decrease) in payables 5,441,505 ( 2,665,288 )
Increase in deposits and remittances 91,408,657 109,890,687
Decrease in provisions ( 68,748 ) ( 122,807 )
(Decrease) increase in other financial liabilities ( 478,056 ) 26,472,682
Increase in other liabilities 703,317 297,018
Cash flows provided by operations 1,468,800 11,617,095
Interest received 42,531,065 37,743,458
Interest paid ( 14,520,097 ) ( 12,171,414 )
Dividend received ` 818,028 760,831
Income tax paid ( 2,224,157 ) ( 1,719,366 )
Net cash flows provided by operating activities 28,073,639 36,230,604

(Continued)

15

For theyears ended December 31, For theyears ended December 31,
2014 2013
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in investments using the equity method ( $ 1,208,814 ) $ -
Acquisition of investment property ( 368,012 ) ( 1,741,880 )
Proceeds from disposal of investment property 396,991 -
Acquisition of property and equipment ( 1,146,226 ) ( 1,246,788 )
Proceeds from disposal of property and equipment 7 2,164
Acquisition of intangible assets ( 300,993 ) ( 201,985 )
Proceeds from capital reduction of other financial assets - 750,000
Increase in other assets ( 222,238 ) ( 311,624 )
Net cash flows used in investing activities ( 2,849,285 ) ( 2,750,113 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in due to the Central Bank and banks 11,725 ( 8,908 )
(Decrease) increase in bills and bonds sold under repurchase agreements ( 5,492,695 ) 6,784,657
Increase in commercial papers payable 4,901,372 1,988,873
Decrease in financial bonds payable ( 7,800,000 ) -
Increase in other borrowings 4,810,552 1,560,008
Distribution of cash dividends ( 4,326,754 ) ( 3,656,412 )
Net cash flows (used in) provided by financing activities ( 7,895,800 ) 6,668,218
Effect of exchange rate changes on cash and cash equivalents 2,724,735 752,402
Net increase in cash and cash equivalents 20,053,289 40,901,111
Cash and cash equivalents at beginning of period 177,331,417 136,430,306
Cash and cash equivalents at end of period $ 197,384,706 $ 177,331,417
The components of cash and cash equivalents：
Cash and cash equivalents as per consolidated balance sheet $ 62,282,631 $ 56,683,394
Due from the Central Bank and call loans to banks qualified as cash and
cash equivalents as defined by IAS No. 7 133,219,869 117,178,752
Securities purchased under resell agreements qualified as cash and cash
equivalent as defined by IAS No. 7 1,882,206 3,469,271
Cash and cash equivalents at end of period $ 197,384,706 $ 177,331,417

The accompanying notes are an integral part of these consolidated financial statements.

16

Attachment 4

FIRST FINANCIAL HOLDING CO., LTD.

Profit Distribution Table

Year 2014

(Expressed in thousands of New Twiwan dollars)

Beginning retained earnings (Jan. 1, 2015)
Add(Less):
Actuarial gains (losses) on defined benefit plans
Adjusted unappropriated earnings
Add(Less):
Profit of the year
Less:
Legal reserve (10%)
Distributable profit
Distributable items:
Cash dividends to ordinary shares @0.7
Stock dividends to ordinary shares @0.65
Unappropriated earnings (Dec. 31, 2015)
Note:
Employee bonus(0.0584%))
Remuneration of the Directors (1%)		 $7,973,875,446
10,178,025
7,984,053,471
14,084,934,792
-1,408,493,479
20,660,494,784
-6,481,478,373
-6,018,515,630
$8,160,500,781
7,403,042
126,764,413

17

Attachment 5

First Financial Holding Co., Ltd. Nomination List of Directors

Category Name Delegate Degree Career Background Current Occupation Incumbent Shareholding
Director Ching-Nain Tsai Ministry of Finance M.S. Industrial
Management
National Chengkung
University		 Chairman, Taiwan Futures Exchange;
Chairman, Taiwan Business Bank;
President, Land Bank of Taiwan;
Director-General, National Treasury
Agency of M.O.F.; President, The
Export-Import Bank of R.O.C.		 Chairman, First Financial
Holding		 Yes 13.35%
Director Grace M. L. Jeng Ministry of Finance B.S. Business
Management
National Taiwan
University		 Director, First Bank; Executive Vice
President, First Bank; Chairman, FCB
(USA); G.M. of Yuan-Shan Branch, First
Bank; S.V.P. of Wealth Management
Business Dept., First Bank		 Director and CEO of First
Financial Holding		 Yes 13.35%
Director Po-Chiao Chou Ministry of Finance B.S. Accounting
National Chengkung
University		 Managing Director, First Bank; Executive
Vice President, First Bank; Chairman, First
Venture Capital; S.V.P. of General Affair
Dept.		 Director, First Financial
Holding; President, First Bank		 Yes 13.35%
Director Yi-Hsin Wang Ministry of Finance Ph.D. Accounting
University of Kentucky		 Chairman, Accounting Research and
Development Fundation;
Director-General, The Institute of Internal
Auditors of R.O.C.		 Director, First Financial
Holding; Professor, Dept of
Accountancy, National Taipei
University		 Yes 13.35%

18

Director Hsien-Feng Lee Ministry of Finance Ph.D. Economics
Bielefeld University		 Managing Director, First Bank; Member
of Council, Chunghua Association of
Public Finance; Instructor, Dept. of
Economics, N.T.U.		 Director, First Financial
Holding; Associate Professor,
Dept. of Economics, N.T.U.;
Director, Public Economics
Research Center, N.T.U.		 Yes 13.35%
Director Hung-Chi Huang Ministry of Finance Ph. D. Actuarial Science
Heriot-Watt University		 Director, First Aviva; Dean, Dept. of Risk
Management and Insurance of National
Chengchi University; Deputy
Director-General, Pension Fund
Association, R.O.C.		 Director, First Financial
Holding; Distinguished
Professor, Dept. of Risk
Management and Insurance of
National Chengchi University
Yes		 13.35%
Director Feng-Ming Hao Ministry of Finance Ph. D. Jura
Universite de Droit,
d'Economie et de
Sciences sociales (Paris
2), France		 Vice President/Professor, National
Chungcheng University; Dean of Law
College, National Chungcheng University		 Deputy Minister of Mininstry
of Labor		 No 13.35%
Director Po-Cheng Chen Ministry of Finance M.A. Public Finance
National Chengchi
University		 Deputy Director, Property Tax
Division/Income Tax Division, Taxation
Adminstration of M.O.F.		 Director, Debt Management
Division of National Treasury
Agency of M.O.F.		 No 13.35%
Director Hsiu-Chuan Ko Bank of Taiwan B.S. Public Finance
National Chunghsing
University		 Supervisor, Chang Hwa Bank; Supervisor,
Bank Taiwan Insurance Brokers; Chief
Secretary, National Treasury
Administration of M.O.F.		 Director, First Financial
Holding; Deputy
Director-General of National
Treasury Agency of M.O.F.		 Yes 7.72%

19

Director Chun-Lan Yen Bank of Taiwan M.S. Agricultural
Economics
National Taiwan
University		 Deputy Director, Government-owned
Shares Management Division, National
Treasury Agency of M.O.F.		 Director, Government-owned
Shares Management Division,
National Treasury Agency of
M.O.F.		 No 7.72%
Director Tien-Yuan Chen Golden Garden
Investment Co., Ltd.		 B.A. Foreign Languages
and Literature
Tamkang University		 Managing Director, First Bank; Chairman,
Taiwan Coca-Cola Co.		 Director, First Financial
Holding; Chairman, Golden
Garden Investment Co., Ltd.		 Yes 1.12%
Director Chi-Hsun Chang --- B.S. International Trade
Tamkang University		 Director and CEO, Magna Central
Company		 Director, First Financial
Holding; Chairman, Zhiduan
Co.		 Yes 1.12%
Director An-Fu Chen Global Vision
Investment Co., Ltd.		 B.S. Pharmacy
Taipei Medical University		 Director, Mintai Fire & Marine Insurance
Company		 Director, First Financial
Holding; Chairman, Global
Vision Investment Co., Ltd.		 Yes 1.12%
Independent
Director		 Shyan-Yuan Lee --- Ph.D. Finance
Columbia University		 Commissioner, Financial Supervisory
Commision; Public Director, Taiwan Stock
Exchange Corp.		 Independent Director, First
Financial Holding;
Independent Director,
TransAsia Airways; Professor,
Dept. of Finance, National
Taiwan University		 Yes 0%

20

Independent
Director		 Hau-Min Chu --- Ph.D. Economics
Brown University		 Director, Taiwan Financial Holding;
Managing Director, The Export-Import
Bank of R.O.C.; Director, Taiwan Futures
Exchange Corporation; President,
Hsingkuo University		 Managing Director, Land Bank
of Taiwan; Independent
Director, Walee Industral
Corp. Professor, Dept. of
Money and Banking, National
Chengchi University		 No 0%
Independent
Director		 Hui-Ya Shen --- M.S. Laws
National Chunghsing
University		 Instructor, Dept. of Laws, Fu-Jen Catholic
University; Supervisor, Radio Taiwan
International		 Lawyer, Changchun Law
Office; Consultant, Public
Service Pension Fund
Management Board of
Ministry of Civil Service,
Examination Yuan		 No 0%

21

Attachment 6

List of the 5[th] term of Directors’ engagement with peers

Name of Director Concurrent Job/Title
Tien-Yuan Chen Chairman, Golden Garden Investment Co., Ltd.
An-Fu Chen Chairman, Global Vision Investment Co., Ltd.

22

Appendix 2

Rules for Election of Directors of the First Financial Holding Co., Ltd.

Article 1 Except as otherwise provided by law and regulations or by the Company’s Articles of
Incorporation, elections of directors shall be conducted in accordance with the Rules.
Article 2 Qualification and election of independent directors shall be in compliance with the
Securities and Exchange Act, the Regulations Governing Appointment of Independent
Directors and Compliance Matters for Public Companies and other related laws and
regulations.
Article 3 Commencing on the 5th term of the board of directors, the election of directors shall
be conducted in accordance with the candidate nomination system under Article
192-1 of the Company Act and Article 21 of the Company’s Articles of Incorporation.
Election of independent directors shall be conducted in accordance with the candidate
nomination system under Article 192-1 of the Company Act and Article 21-1 of the
Company’s Articles of Incorporation.
Article 4 The plural open cumulative ballot method will be used for election of the directors of
the Company. Attendance card numbers printed on the ballots or shareholder account
numbers may be used instead of recording the names of voting shareholders. Each
share shall have voting rights equivalent to the number of seats to be elected and such
voting rights can be combined to vote for one person or divided to vote for several
persons.
Article 5 Directors of the Company shall be elected by the shareholders meeting from among
persons with disposing capacity. The number of voting rights for directors and
independent directors shall be calculated separately based on the numbers of directors
and independent directors to be elected. Candidates for election of the Company's
directors shall be elected in sequence starting from those who have received the
highest number of votes until the required number of persons are elected. If two or
more persons receive the same number of votes, and resulting in the total number of
such persons exceed the number of positions to be elected, those persons who have
received the same number of votes shall draw straws to decide who is elected. If any
person who has received the same number of votes with others is not present at the
meeting, the chairperson of the meeting shall draw a straw on that absent person's
behalf.

23

Article 6 The Board of Directors shall prepare ballots bearing the attendance card numbers and
the number of voting rights and distribute the ballots to shareholders who are present
at the shareholders meeting or their proxies.
Article 7 Before the election process starts, the chairperson of the meeting shall appoint a
certain number of ballot supervisor(s) and ballot counter(s) to perform the respective
duties. The ballot supervisor(s) shall be selected from among the shareholders.
Article 8 The Board of Directors shall prepare a ballot box used for election of directors and
ballot inspectors shall check the ballot box in front of the meeting before voting.
Article 9 If a candidate is a shareholder of the Company, voters shall fill the candidate’s account
name, shareholder account number and the number of votes cast for such candidate in
the “candidate” column of the ballot; if a candidate is a non-shareholder, the voter shall
fill in the candidate’s full name, identity card number and the number of votes cast for
such candidate. If the candidate is a government agency or a legal entity, the voters
shall fill the name of the government agency or the legal entity in the “candidate”
column of the ballot or the voters may fill in the name of the government agency or the
legal entity and the name of its representative; where there are more than one
representative, the names of the representatives shall be fill in separately.
Article 10 In the event that the sum in “the number of votes cast” column of the ballot is less than
the number of the voting rights specified in the ballot, the exceeding portion of voting
rights shall be deemed waived.
Article 11 An election ballot is deemed null and void under any of the following circumstances:
1.Where the voter does not use the election ballot prepared by the Board of Directors
pursuant to the Rules.
2.Where an election ballot cast into the ballot box is blank.
3.Where “the number of votes cast” column is not filled out in Chinese or Arabic
numerals.
4.Where the handwriting on the election ballot is illegible or has been altered.
5.Where the election ballot is not filled out in accordance with Article 9 of the Rules.
6.Other than the candidate’s account name, shareholder account number or identity
card number and the number of votes cast for such candidate, the election ballot is
found having borne other wording.
7.Where the sum in “the number of votes cast” column of the election ballot exceeds

24

the number of the voting rights specified in the election ballot.
8.Ballots that are not placed in the ballot box.
Article 12 The voting rights shall be calculated on site immediately after the end of the poll and
the chairperson of the meeting shall announce the election result on site immediately.
Article 13 Matters not stipulated in the Rules shall be handled in accordance with the Company’s
Articles of Incorporation, the Company Act, the Securities and Exchange Act and other
relevant laws and regulations.
Article 14 The Rules and any amendments hereto shall be implemented after approval by a
shareholders meeting.
Article 15 The Rules were adopted on May 16, 2004, with the first amendment adopted on June
15, 2007,and the second amendment adopted on June 22, 2012.

25

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